case_text: Comcare submits that there was evidence before the Tribunal which cast doubt on the reliability and honesty of Mr Maganga's evidence of the separate assaults in 1997. Accordingly, Comcare argues that it was "on the cards" ( Alister v The Queen [1984] HCA 85 ; (1983-1984) 154 CLR 404 at 414 per Gibbs CJ) that the summonsed documents might show that Mr Maganga had previously attempted to pass off a non work-related injury to his left knee as a "journey" injury, which was the very issue in the Tribunal proceedings in relation to the fourth injury. Comcare argues that if the summonsed documents showed there was only one left knee injury in 1997, this, together with cross-examination on the summonsed documents, would have reflected on Mr Maganga's reliability and credit in this Tribunal hearing and demonstrated that he had lied to Comcare and to the Tribunal. Accordingly, Comcare submits that the Tribunal denied it procedural fairness in refusing leave to inspect those documents. 23 The proposition put by Comcare is that, in proceedings which depend substantially on the credit worthiness of a party concerning his behaviour or activity, a proper basis exists for inspecting documents relevant to the honesty of that party on an earlier occasion with respect to the same behaviour or activity. This was not a general character attack on Mr Maganga but the information in the summonsed documents would have formed a substantial basis for cross-examination. The Tribunal permitted cross-examination on the 1997 injuries which challenged Mr Maganga's version of events but, Comcare submits, wrongfully withheld the right to inspect documents on the same subject. 24 Mr Maganga submits that in seeking to prove its case Comcare was, as a matter of fairness, obliged to put to Mr Maganga certain matters including the assertion that he lied to the Tribunal concerning the circumstances of the injury and that he submitted a compensation claim to Comcare which he knew to be false. Mr Maganga submits that Comcare did not put any of these matters to him and that Comcare's decision not to do so was not affected by the Tribunal's decision to deny access to the summonsed documents. Accordingly, Mr Maganga says, Comcare is bound by the way it conducted its case and its decision not to challenge Mr Maganga's credit. Mr Maganga also submits that the Tribunal was correct in not allowing access to the summonsed documents in circumstances where those documents went only to credit. 34 A party seeking to inspect documents does not need to demonstrate that relevant documents exist ( Telstra Corporation Ltd v Minister for Communications, Information Technology and the Arts [2007] FCA 1398 at [47] , [52] per Graham J; Alister at 451 per Brennan J). In any event, in this case there was no doubt that the summonsed documents did exist as they were produced to the Tribunal. It was also apparent that they were likely to be relevant to a issue in the proceedings. Further, it is not fishing to seek documents going to the credit of a crucial witness ( Fried at [24]).


case_outcome: cited

case_text: Comcare challenges the Tribunal's decision to refuse leave to inspect the summonsed documents. The alleged deficiencies in the cross-examination of Mr Maganga are not relevant to these grounds. Further, the asserted obligation on the part of Comcare to put these matters to Mr Maganga is misplaced. In Re Ruddock; Ex parte Applicant S154/2002 [2003] HCA 60 ; (2002) 201 ALR 437 , Gummow and Heydon JJ (with whom Gleeson CJ agreed) referred (at [55]) to the rule in Browne v Dunne and noted at [56] that ' ...the rule has no application to proceedings in the tribunal ... administrative decision-making is of a different nature from decisions to be made on civil litigation conducted under common law procedures '. Their Honours went on to note that the rule in Browne v Dunne had no application to proceedings in the Refugee Review Tribunal (at [57]), see also Applicant S214/2003 v Refugee Review Tribunal [2006] FCAFC 166 at [26] ). In Lawrance v Centrelink (2005) 88 ALD 664 Hely J referred to S154/2002 and found that the rule in Browne v Dunne has no application to proceedings in the Tribunal (at [31]). Regardless, it is evident from the cross-examination that did take place, that credit was strongly in issue and that Mr Maganga's version of events in relation to the 1997 injuries was challenged.


case_outcome: applied

case_text: Section 40(1D) of the AAT Act provides that the Tribunal may give a party leave to inspect a document produced under summons. The relevant procedure is generally within the discretion of the Tribunal (s 33(1)(a) of the AAT Act). The Tribunal is required to give proper consideration to matters before it (s 33(1)(b)) and to ensure that every party to a proceeding is given a reasonable opportunity to present his or her case (s 39(1)). A "reasonable opportunity to present his or her case" requires the Tribunal to apply notions of procedural fairness ( Repatriation Commission v Farley-Smith (2007) 96 ALD 348 at [54] per Middleton J; Australian Postal Corporation v Hayes [1989] FCA 176 ; (1989) 23 FCR 320 at 326 per Wilcox J).


case_text: Nonetheless, one of the Tribunal's reasons for considering that it would be unfair to admit the summonsed documents was its view that sufficient relevance could only be established if the material would show that Mr Maganga had made an inconsistent statement in giving evidence to the Tribunal. This is not the correct test. A party seeking to inspect documents does not need to establish, on the basis of probabilities, that the documents will establish anything ( Trade Practices Commission v Arnotts (No 2) (1989) 21 FCR 306 per Beaumont J; Telstra Corporation at [47], [52] per Graham J). Rather, the test of relevance is whether the documents relate to the proceedings such that there is a real possibility that they may assist in the resolution of issues in the proceedings ( Waind per Moffitt P at 384; Bailey v Beagle Management Pty Ltd [2001] FCA 60 ; (2001) 105 FCR 136 at [26] ). 39 Although the Tribunal has a discretion under s 33(1)(a) of the AAT Act as to the relevant procedure for access to summonsed documents, this discretion is subject to the overarching obligation on the Tribunal to ensure that each party is given a reasonable opportunity to present their case. Specifically, the Tribunal must accord the parties procedural fairness. The requirement to accord procedural fairness includes a requirement to allow a party to test the evidence of a witness. While cross-examination to test the credit of a witness where that credit is not in issue may be excluded ( Fried ), credit was the main issue in these proceedings. The summonsed documents were, prima facie, relevant to the proceedings. There was a reasonable possibility that they could have assisted in the resolution of issues in the proceedings. Further, it was clear that the summonsed documents existed and counsel for Comcare was not merely "fishing" in order to seek documents going to the credit of a crucial witness ( Fried at [24]; Bailey at [26]). The Tribunal erred in law in refusing Comcare leave to inspect the summonsed documents.


case_title: Carter v Hayes SM (1994) 61 SASR 451

case_text: Further, the test of relevance for the purpose of inspection is not confined to whether the documents in question will or may establish an inconsistent statement by a witness giving evidence in the proceedings or whether the documents themselves will prove a fact in issue. The Court may allow documents to be inspected if they are apparently relevant or are on the subject matter of the litigation ( Maronis Holdings Ltd v Nippon Credit Australia Ltd [2000] NSWSC 138 ; (2000) 18 ACLC 609 per Bryson J at [20]) or if they might be used for a legitimate forensic purpose in cross-examination ( Maronis at [18], [20]; Carter v Hayes SM (1994) 61 SASR 451 at 453, 456-457 per King CJ, Bollen and Mullighan JJ agreeing; R v Spizzirri [2001] 2 QdR 686 at [24] per Pincus JA, White J agreeing). The summonsed documents, prima facie, were relevant to the claimed fourth injury which claim depended, in turn, on Mr Maganga's credit.


case_text: The Tribunal denied Comcare procedural fairness in not allowing it access to the summonsed documents. That is a question of law for the purposes of s 44 of the AAT Act ( Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143 ; (2003) 131 FCR 28 at [3] - [8] per Gray ACJ and North J). It is also a ground of judicial review (s 5(1)(f) of the ADJR Act). As a result, Comcare was unable to cross-examine Mr Maganga effectively on an issue that was of direct relevance in and central to the proceedings. It is no answer to submit that Comcare's cross-examination of Mr Maganga was insufficient or that Comcare chose not to cross-examine Mr Maganga on certain issues going to credit in a situation where it was denied the opportunity effectively to cross-examine. 41 The appeal is allowed. The matter is remitted to the Tribunal for reconsideration according to law. 42 Comcare does not seek an order that Mr Maganga pay its costs. Accordingly, each party is to pay his or its own costs of the proceedings. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. Associate: Dated: 7 March 2008 Counsel for the Applicant: T Howe QC Solicitor for the Applicant: DLA Phillips Fox Counsel for Mr Maganga: S H Pilkinton Solicitor for Mr Maganga: Pamela Coward & Associates Date of Hearing: 3 October 2007 Date of Judgment: 11 March 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/285.html


case_text: Mr Maganga also submits that the Tribunal is not bound by the rules of evidence in s 33 of the AAT Act, although he accepts that they cannot be ignored ( Dolan v Australian and Overseas Telecommunications Corporation [1993] FCA 202 ; (1993) 42 FCR 206 at 207 per Spender J; Haberfield v Department of Veterans Affairs [2002] FCA 1579 ; (2002) 121 FCR 233 at [58] per Sackville J). Mr Maganga points to s 102 of the Evidence Act 1995 (Cth) where ' evidence that is relevant only to a witness's credibility is not admissible '. Mr Maganga also refers to Fried where Weinberg J set aside a subpoena where it was agreed that the only purpose for which the documents were sought was to attack the credit of a witness (at [21] [30]). In Fried (at [29]) Weinberg J held that it was not appropriate for a court to permit a subpoena to stand which ' does little more than trawl for documents which may be used to impugn the credit of a particular witness '. Mr Maganga submits that the reasoning of Weinberg J is apposite and should be followed.


case_outcome: distinguished

case_text: The reasons for the Tribunal's refusal to give Comcare access to the summonsed documents were: • that it would have been ' unfair ' to admit the material; • that '... it was inappropriate for Comcare to be permitted to go on a fishing expedition to ascertain what the file contained, particularly when the documents sought (if they existed) were sought only to impugn the credit of a witness ...' citing Fried v National Australia Bank [2000] FCA 911 ; (2000) 175 ALR 194 at 200; and • that there ' was no suggestion that the file may contain material relevant to the determination of the factual issue before [the Tribunal]'. 19 Similarly, the Tribunal rejected the tender of other documents by Comcare which included 1997 medical reports. These reports were drafted after the first and second injuries and referred to one fall but not to two and to an injury occasioned on 15 February 1997, the second injury that resulted in the victim claim. There was also a description of the incident as an assault occurring outside a house where Mr Maganga had been sitting. Comcare submitted that the documents would show that Mr Maganga had made inconsistent statements regarding an injury or injuries suffered in 1997. Further, Comcare submitted to the Tribunal that the summonsed documents may well demonstrate that Mr Maganga had knowingly or recklessly given false evidence to the Tribunal. However, the Tribunal rejected the documents as not relevant to the issue in dispute and also on the ground that ' procedural fairness required that Comcare not be allowed to contradict Mr Maganga's answers to questions which went only to his credit '. 30 Mr Maganga also submits that the Tribunal is not bound by the rules of evidence in s 33 of the AAT Act, although he accepts that they cannot be ignored ( Dolan v Australian and Overseas Telecommunications Corporation [1993] FCA 202 ; (1993) 42 FCR 206 at 207 per Spender J; Haberfield v Department of Veterans Affairs [2002] FCA 1579 ; (2002) 121 FCR 233 at [58] per Sackville J). Mr Maganga points to s 102 of the Evidence Act 1995 (Cth) where ' evidence that is relevant only to a witness's credibility is not admissible '. Mr Maganga also refers to Fried where Weinberg J set aside a subpoena where it was agreed that the only purpose for which the documents were sought was to attack the credit of a witness (at [21] [30]). In Fried (at [29]) Weinberg J held that it was not appropriate for a court to permit a subpoena to stand which ' does little more than trawl for documents which may be used to impugn the credit of a particular witness '. Mr Maganga submits that the reasoning of Weinberg J is apposite and should be followed. 31 In Fried Weinberg J accepted that there is authority for the proposition that it may be legitimate to issue a subpoena directed to a third party in order to obtain documents which are to be used solely to impeach the credit of a witness (at [24]). Regardless, the subpoena in Fried was issued to capture documents which might have shown that two non party companies had lodged income tax returns without fully declaring interest earned. The substantive proceedings between the parties in Fried did not concern alleged under-reporting of income tax. Accordingly, the documents in question related only to a credit issue, an issue unrelated to the issues in the proceedings. This was recognised by Weinberg J at [26] where his Honour noted that the documents sought were wholly unconnected with those issues. 32 Unlike Fried, Mr Maganga's credit constituted the main issue in this proceeding. As Weinberg J noted in Fried at [29], there should be a legitimate forensic purpose in seeking the relevant documents which ' must be identifiable, and likely to facilitate the conduct of the proceeding, not merely to oppress a party or witness '. The summonsed documents fulfilled those criteria. The Tribunal erred in finding that the documents sought were going only to a question of credit and hence that they were inadmissible. 33 In the context of credit, the Tribunal noted that it was inappropriate for Comcare to go on a "fishing expedition" to ascertain what the file contained. 34 A party seeking to inspect documents does not need to demonstrate that relevant documents exist ( Telstra Corporation Ltd v Minister for Communications, Information Technology and the Arts [2007] FCA 1398 at [47] , [52] per Graham J; Alister at 451 per Brennan J). In any event, in this case there was no doubt that the summonsed documents did exist as they were produced to the Tribunal. It was also apparent that they were likely to be relevant to a issue in the proceedings. Further, it is not fishing to seek documents going to the credit of a crucial witness ( Fried at [24]). 39 Although the Tribunal has a discretion under s 33(1)(a) of the AAT Act as to the relevant procedure for access to summonsed documents, this discretion is subject to the overarching obligation on the Tribunal to ensure that each party is given a reasonable opportunity to present their case. Specifically, the Tribunal must accord the parties procedural fairness. The requirement to accord procedural fairness includes a requirement to allow a party to test the evidence of a witness. While cross-examination to test the credit of a witness where that credit is not in issue may be excluded ( Fried ), credit was the main issue in these proceedings. The summonsed documents were, prima facie, relevant to the proceedings. There was a reasonable possibility that they could have assisted in the resolution of issues in the proceedings. Further, it was clear that the summonsed documents existed and counsel for Comcare was not merely "fishing" in order to seek documents going to the credit of a crucial witness ( Fried at [24]; Bailey at [26]). The Tribunal erred in law in refusing Comcare leave to inspect the summonsed documents.


case_title: Haberfield v Department of Veterans Affairs [2002] FCA 1579 ; (2002) 121 FCR 233


case_title: Lawrance v Centrelink (2005) 88 ALD 664


case_title: Maronis Holdings Ltd v Nippon Credit Australia Ltd [2000] NSWSC 138 ; (2000) 18 ACLC 609


case_text: The test for permissible inspection is not whether the documents ought to be admitted into evidence ( National Employers' Mutual General Association Ltd v Waind (1978) 1 NSWLR 372 at 385-386 per Glass JA; Albert Hadid v Lenfest Communications Inc [1998] FCA 470 per Lehane J). Mr Maganga no longer seeks to uphold this aspect of the Tribunal's reasons where it held that inspection of the summonsed documents should not occur in circumstances where they may not ultimately be admissible. 37 Nonetheless, one of the Tribunal's reasons for considering that it would be unfair to admit the summonsed documents was its view that sufficient relevance could only be established if the material would show that Mr Maganga had made an inconsistent statement in giving evidence to the Tribunal. This is not the correct test. A party seeking to inspect documents does not need to establish, on the basis of probabilities, that the documents will establish anything ( Trade Practices Commission v Arnotts (No 2) (1989) 21 FCR 306 per Beaumont J; Telstra Corporation at [47], [52] per Graham J). Rather, the test of relevance is whether the documents relate to the proceedings such that there is a real possibility that they may assist in the resolution of issues in the proceedings ( Waind per Moffitt P at 384; Bailey v Beagle Management Pty Ltd [2001] FCA 60 ; (2001) 105 FCR 136 at [26] ).


case_text: The Tribunal noted that the rules of evidence did not apply in the Tribunal (s 33(1)(c) of the AAT Act) but accepted that they had ' a role to play '. The Tribunal cited Piddington v Bennett & Wood Proprietary Limited [1940] HCA 2 ; (1940) 63 CLR 533 at 545 where Latham CJ stated: Any witness may be cross-examined for the purpose of discrediting him. But if questions affect only the credit of a witness and are not relevant to the matters actually in issue in the case, the witness's answers cannot be contradicted by other evidence except in certain exceptional cases. Exceptions to the rule at common law are that after cross-examination of his opponent's witnesses a party may give evidence to show that they are notorious liars, or have given their testimony from a corrupt or other wrong motive, or that they have previously made statements inconsistent with their evidence . The Tribunal stated that counsel for Comcare had "expressly disavowed" any claim that the documents were sought to be tendered in support of an argument that Mr Maganga was a "notorious liar". 21 Ultimately, the Tribunal was satisfied that Mr Maganga '... was a witness who gave his evidence honestly '. The Tribunal also noted that at all times the issue before it was whether the injury to Mr Maganga's knee occurred on his way to work but that '... nevertheless contrary allegations (such as that the injury occurred at home) were not put to him and consequently did not have the opportunity to assess Mr Maganga's veracity when his truthfulness was under direct challenge '. The Tribunal set aside Comcare's decision to deny compensation for the fourth injury.


case_title: R v Spizzirri [2001] 2 QdR 686


case_title: Repatriation Commission v Farley-Smith (2007) 96 ALD 348


case_title: Re Ruddock; Ex parte Applicant S154/2002 [2003] HCA 60 ; (2002) 201 ALR 437


case_text: It is also misplaced to argue that Comcare's cross-examination of Mr Maganga was not affected by the Tribunal's decision to deny access to the summonsed documents. If a denial of procedural fairness can be shown, a court should not refuse relief unless it is confident that the breach could not have affected the outcome ( Re Refugee Review Tribunal; Ex parte Aala [2000] FCA 57 ; (2000) 204 CLR 82 at [104] per McHugh J, citing Stead v State Government Insurance Commission [1986] HCA 54 ; (1986) 161 CLR 141 at 145). In this case, it cannot be shown that the Tribunal's decision not to allow Comcare access to the summonsed documents did not ultimately affect the outcome of the decision. Comcare submits that cross-examination is "at its most effective" when the evidence of a witness is able to be confronted by documents ( Hayes at 326-327). This argument has force in circumstances where credit is, as here, the issue in consideration. The Tribunal's refusal of access to the summonsed documents potentially denied Comcare the opportunity to cross-examine Mr Maganga effectively. In these circumstances it cannot be said that Comcare's cross-examination was insufficient or that Comcare chose not to cross-examine Mr Maganga on certain issues going to credit.


case_title: Stead v State Government Insurance Commission [1986] HCA 54 ; (1986) 161 CLR 141


case_text: A party seeking to inspect documents does not need to demonstrate that relevant documents exist ( Telstra Corporation Ltd v Minister for Communications, Information Technology and the Arts [2007] FCA 1398 at [47] , [52] per Graham J; Alister at 451 per Brennan J). In any event, in this case there was no doubt that the summonsed documents did exist as they were produced to the Tribunal. It was also apparent that they were likely to be relevant to a issue in the proceedings. Further, it is not fishing to seek documents going to the credit of a crucial witness ( Fried at [24]). 37 Nonetheless, one of the Tribunal's reasons for considering that it would be unfair to admit the summonsed documents was its view that sufficient relevance could only be established if the material would show that Mr Maganga had made an inconsistent statement in giving evidence to the Tribunal. This is not the correct test. A party seeking to inspect documents does not need to establish, on the basis of probabilities, that the documents will establish anything ( Trade Practices Commission v Arnotts (No 2) (1989) 21 FCR 306 per Beaumont J; Telstra Corporation at [47], [52] per Graham J). Rather, the test of relevance is whether the documents relate to the proceedings such that there is a real possibility that they may assist in the resolution of issues in the proceedings ( Waind per Moffitt P at 384; Bailey v Beagle Management Pty Ltd [2001] FCA 60 ; (2001) 105 FCR 136 at [26] ).


case_text: Nonetheless, one of the Tribunal's reasons for considering that it would be unfair to admit the summonsed documents was its view that sufficient relevance could only be established if the material would show that Mr Maganga had made an inconsistent statement in giving evidence to the Tribunal. This is not the correct test. A party seeking to inspect documents does not need to establish, on the basis of probabilities, that the documents will establish anything ( Trade Practices Commission v Arnotts (No 2) (1989) 21 FCR 306 per Beaumont J; Telstra Corporation at [47], [52] per Graham J). Rather, the test of relevance is whether the documents relate to the proceedings such that there is a real possibility that they may assist in the resolution of issues in the proceedings ( Waind per Moffitt P at 384; Bailey v Beagle Management Pty Ltd [2001] FCA 60 ; (2001) 105 FCR 136 at [26] ).


case_title: Cheesman v Waters (1997) 77 FCR 221

case_text: The proposition that an intervener becomes a party to the proceedings, the Second Respondent pointed out, also was accepted in Cheesman v Waters (1997) 77 FCR 221 at 227, another decision of the Full Court. Moreover, in United States Tobacco the Court referred with approval to the following passage from the judgment of Hutley JA, with whom Reynolds and Glass JJA agreed, in Corporate Affairs Commission v Bradley [1974] 1 NSWLR 391, 396: "A person accepted as an intervener becomes a party to the proceedings with all the privileges of a party. Thus he can appeal, tender evidence and participate fully in all aspects of the argument. His position is quite different from that of an amicus curiae. Interveners have been allowed to appeal. Thus the Attorney-General of the Commonwealth appealed to the Privy Council in the Boilermakers' case ..., though he was only an intervener in the High Court..." 14 The other case postdating the new intervention rules, cited by counsel for the Commonwealth, Peacock v Human Rights and Equal Opportunity Commission [2005] FCAFC 45 , does not illuminate the present question. In that case the Full Court said, obiter , at [75]: "The Attorney-General certainly was entitled to intervene if he wished: s 78A Judiciary Act . If the Attorney had elected to intervene he would thereby have become a party to the proceeding: Cheesman v Waters (1997) 77 FCR 221."


case_text: The proposition that an intervener becomes a party to the proceedings, the Second Respondent pointed out, also was accepted in Cheesman v Waters (1997) 77 FCR 221 at 227, another decision of the Full Court. Moreover, in United States Tobacco the Court referred with approval to the following passage from the judgment of Hutley JA, with whom Reynolds and Glass JJA agreed, in Corporate Affairs Commission v Bradley [1974] 1 NSWLR 391, 396: "A person accepted as an intervener becomes a party to the proceedings with all the privileges of a party. Thus he can appeal, tender evidence and participate fully in all aspects of the argument. His position is quite different from that of an amicus curiae. Interveners have been allowed to appeal. Thus the Attorney-General of the Commonwealth appealed to the Privy Council in the Boilermakers' case ..., though he was only an intervener in the High Court..."


case_text: The other case postdating the new intervention rules, cited by counsel for the Commonwealth, Peacock v Human Rights and Equal Opportunity Commission [2005] FCAFC 45 , does not illuminate the present question. In that case the Full Court said, obiter , at [75]: "The Attorney-General certainly was entitled to intervene if he wished: s 78A Judiciary Act . If the Attorney had elected to intervene he would thereby have become a party to the proceeding: Cheesman v Waters (1997) 77 FCR 221."


case_text: In maintaining its opposition to the application, counsel for the Commonwealth has submitted that Order 52, r 14 requires in terms that "each party to the proceeding in the court appealed from ... shall be joined as a party ... to the appeal" and he relies upon the observations of the Full Court in United States Tobacco v Minister for Consumer Affairs (1988) 20 FCR 520 where it was said, at 534: "An intervener, whether pursuant to s 12 of the ADJR Act, O 6, r 8(1) of the Federal Court Rules , s 78A of the Judiciary Act 1903 (Cth) or otherwise , becomes a party to the proceedings with the benefits and burdens of that status." (Emphasis added). 5 The proposition that an intervener becomes a party to the proceedings, the Second Respondent pointed out, also was accepted in Cheesman v Waters (1997) 77 FCR 221 at 227, another decision of the Full Court. Moreover, in United States Tobacco the Court referred with approval to the following passage from the judgment of Hutley JA, with whom Reynolds and Glass JJA agreed, in Corporate Affairs Commission v Bradley [1974] 1 NSWLR 391, 396: "A person accepted as an intervener becomes a party to the proceedings with all the privileges of a party. Thus he can appeal, tender evidence and participate fully in all aspects of the argument. His position is quite different from that of an amicus curiae. Interveners have been allowed to appeal. Thus the Attorney-General of the Commonwealth appealed to the Privy Council in the Boilermakers' case ..., though he was only an intervener in the High Court..."


case_text: Order 3 was plainly interlocutory. A court must remain in control of its own interlocutory orders which cannot be allowed to be used as an instrument of injustice; Adam P Brown Male Fashions Pty Limited v Philip Morris Inc [1981] HCA 39 ; (1981) 148 CLR 170 at 178.


case_text: In a rare category of cases the discovery of new facts will not be an essential requirement for the exercise of the power to set an order aside. Where, as in the present case, the enforcement of the order would work an injustice such that the Court's own order would be used to bring about a result that would be contrary to the very purpose of the order, the Court must have power under s 23 of the Federal Court Act 1976 (Cth) to set the order aside; see CSR Limited v Cigna Insurance Australia Limited [1997] HCA 33 ; (1997) 189 CLR 345 (" Cigna ") at 391 392; Cardile v LED Builders Pty Limited [1999] HCA 18 ; (1999) 198 CLR 380 at 393, 399-400, 405 and 421-424.


case_text: In a rare category of cases the discovery of new facts will not be an essential requirement for the exercise of the power to set an order aside. Where, as in the present case, the enforcement of the order would work an injustice such that the Court's own order would be used to bring about a result that would be contrary to the very purpose of the order, the Court must have power under s 23 of the Federal Court Act 1976 (Cth) to set the order aside; see CSR Limited v Cigna Insurance Australia Limited [1997] HCA 33 ; (1997) 189 CLR 345 (" Cigna ") at 391 392; Cardile v LED Builders Pty Limited [1999] HCA 18 ; (1999) 198 CLR 380 at 393, 399-400, 405 and 421-424. 45 If the respondents are correct in their contention, the injustice would consist of a further delay in the carrying out of the scheme contained in Part VAA by sending these matters to a Committee in the absence of any evidence whatsoever of jurisdictional error on the part of the Committee. What the respondents seek to do is to prevent the processes of the Court from being abused and to protect the integrity of its processes; see Cigna at 391. 46 Of course, I have no view either way as to whether there was a live issue raised by Drs Do and Ho in the Committee although it must be noted that Mr Robinson conceded before me on the hearing of these motions that these matters are not "in the main" concerned with Regulation 11(b). 47 I therefore propose to give the applicants and the respondents an opportunity to address me on the question of whether Dr Do or Dr Ho relied on Regulation 11(b) before the Committee. I recognise, as did the Full Court in Oreb , that it may not have been necessary for the applicants to have referred specifically to Regulation 11(b). However, it should appear from the transcript, the evidence and the written submissions, whether the practitioners may be taken to have relied on that Regulation.


case_outcome: referred to

case_text: There is a substantial public interest in the prompt resolution of matters arising under Part VAA of the Act. As the Full Court said in Health Insurance Commission v Grey [2002] FCAFC 130 ; (2002) 120 FCR 470 at [173] the object of the scheme is to protect patients and the Commonwealth against abuse of the system. 39 It would therefore be contrary to the public interest and, as I have said, contrary to the underlying purpose of the Order, to permit it to be used so as to further delay the resolution of these matters unless there is a live issue as to the application of Regulation 11(b), with evidence that the issue was in fact before the relevant Committee at the time of the hearings in 2002. 40 Order 3 was expressed as an agreement but it took effect as a consent order.


case_title: Oreb v Willcock [2004] FCA 1520

case_text: I have before me two Notices of Motion filed by the respondents on 13 March 2006 seeking dismissal of these proceedings pursuant to an order which I made on 3 December 2004. The order which I made provided that subject to certain exceptions which are not presently relevant, the parties accepted that the outcome of the proceedings turned solely upon the result of an appeal from my judgment in Oreb v Willcock [2004] FCA 1520. The respondents contend that the result of the appeal leads to the dismissal of the present proceedings. 2 My judgment in Dr Oreb's matter was handed down three days before the making of the order of 3 December 2004. It dealt with an application for judicial review of three decisions made at separate stages of the peer review-based Professional Services Review Scheme established by Part VAA of the Health Insurance Act 1973 (Cth) ("the Act "). 3 I dismissed Dr Oreb's challenge to an investigative referral made under s 86 of the Act as well as his challenge to an adjudicative referral made under s 93. However, I made an order setting aside the finding of Professional Services Review Committee No 298 that Dr Oreb had engaged in inappropriate practice. I did so because I found that the relevant Committee had erred in its construction of the "exceptional circumstances" exception contained in s 106KA(2) of the Act and Regulation 11(b) of the Health Insurance (Professional Services Review) Regulations 1999 ("the Regulations ") and that it had taken into account an irrelevant consideration, in asking itself whether the circumstances relied upon by Dr Oreb were foreseeable. 17 Counsel for the parties then agreed to the making of orders which included the following:- "3. Subject to issues raised in the constitutional argument, and except for the 'racial issue' in the two Lee matters (N568/03 and N1430/03), all of the parties in the remaining proceedings (Wong, Do, Ho, Lee, Lee and Bartos) accept that the outcome of the proceedings turn solely upon the result of the appeal in Oreb (being an appeal of the judgment contained in Oreb v Willcock [2004] FCA 1520). 4. On the basis of this agreement, the hearings listed in the week of 6 December 2004 in the matters Wong, Do, Ho, Lee, Lee and Bartos, are vacated with the exception of two Lee matters (N568/03 and N1430/03) which are listed on 8 December 2004." 18 The statutory scheme under Part VAA of the Act was set out in some detail in the reasons for judgment of Lander J in Oreb . It is unnecessary to repeat the extensive terms of the relevant provisions. However, for convenience, I will set out the provisions of s 106KA of the Act and Regulation 11. 19 Section 106KA provides as follows:- "(1) Subject to subsections (2) and (2A), if, during a particular period (the relevant period ), the circumstances in which some or all of the referred services were rendered or initiated constituted a prescribed pattern of services, the conduct of the person under review in connection with rendering or initiating services during that period in those circumstances is taken, for the purposes of this Part, to have constituted engaging in inappropriate practice. (2) If the person under review satisfies the Committee that, on a particular day or particular days during the relevant period, exceptional circumstances existed that affected the rendering or initiating of services by the person, the person's conduct in connection with rendering or initiating services on that day or those days is not taken by subsection (1) to have constituted engaging in inappropriate practice. (2A) However, subsection (2) does not affect the operation of subsection (1) in respect of the remaining day or days during the relevant period on which the person rendered or initiated referred services even if the circumstances in which the referred services were rendered or initiated on that day or those days would not, if considered alone, have constituted a prescribed pattern of services. (3) The regulations may prescribe, in relation to: (a) a particular profession; or (b) an identified group or groups of practitioners in a particular profession; circumstances in which services of a particular kind or description that are rendered or initiated constitute, or do not constitute, a prescribed pattern of services for the purposes of subsection (1). (4) The circumstances that may be prescribed under subsection (3) as circumstances in which services that are rendered or initiated constitute a prescribed pattern of services include, but are not limited to, the rendering or initiation of more than a specified number of services, or more than a specified number of services of a particular kind, on each of more than a specified number of days during a period of a specified duration. (5) The circumstances that constitute exceptional circumstances for the purposes of subsection (2) include, but are not limited to, circumstances that are declared by the regulations to be exceptional circumstances. (6) This section only applies to services rendered or initiated after the commencement of this section. (7) This section does not preclude the Committee from making a finding under this Subdivision (other than section 106KB) in relation to conduct during a particular period in connection with rendering or initiating services without considering whether or not the circumstances in which the services were rendered or initiated constituted a prescribed pattern of services."


case_title: Oreb v Willcock [2005] FCAFC 196

case_text: The decision of the Full Court on the appeal was handed down on 16 September 2005; see Oreb v Willcock [2005] FCAFC 196 (" Oreb " ). 6 Dr Oreb's appeal against my findings in relation to the investigative referral and the adjudicative referral was dismissed. The cross-appeal, though stated in the order of the Federal Court to have been allowed, failed in substance. It succeeded only on the form of one of the orders which I made at first instance. 7 The respondents' contention that the application of Dr Do ("Dr Do") and/or Dr Ho ("Dr Ho") must be dismissed is put in two ways. First, it is said to follow from the dismissal of Dr Oreb's appeal. Second, it is said to follow from the reasons given by the Full Court for dismissing the cross-appeal.


case_text: The meaning of Order 3 is to be ascertained by the ordinary rules of construction. It is appropriate, in accordance with the accepted rules of construction to construe the order in the context in which it was made; Repatriation Commission v Nation (1995) 57 FCR 25 at 33-34. 30 The context in which the order was made appears, at least in part, from the transcript of 3 December 2004. This shows that the parties proceeded on the basis that all issues, whether of fact or law, in the remaining cases would be resolved by the result of the appeal in Oreb . Thus, the outcome of the appeal in Oreb , expressed in the orders of the Full Court, would, without more, determine the outcome of the remaining proceedings, including the matters of Dr Do and Dr Ho. 31 There is nothing surprising about this approach to the meaning of my order because, construed in this way, "result" is given its ordinary English meaning. Moreover, this is reinforced by the use of the word "solely" which shows that the intention of the parties was that there were no new issues of fact or law to be determined in the remaining proceedings.


case_text: In Wong v Professional Services Review Committee No 339 [2005] FCA 1351 , I refused to make an order setting aside Order 3 to permit Dr Wong to run a fresh ground of review which was said to be previously unknown to the legal advisers. 36 It is true as I said in Wong at [12] that the principle of finality of litigation applies to interlocutory orders, subject to the moving party establishing that new facts have come into existence. In the present case it cannot be said that new facts have been discovered which could not have been known on 3 December 2004. Rather, through no fault of the legal advisers of the parties, the reasoning process of the Full Court in Oreb opened up a distinction between the construction of s 106KA(2) and Regulation 11 which had not previously been drawn.


case_text: AACo submits that where a party propounds a positive case that it possessed a certain state of mind, it opens up for examination and testing by the Court any evidence as to its actual state of mind. AACo submits that a defence which specifically invokes a positive state of mind is inconsistent with the maintenance of privilege over documents which contributed to that state of mind. As a consequence, AACo submits AMP has necessarily waived privilege in relation to its legal advice. AACo relies upon Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 at 411; Telstra Corporation Ltd & Anor v BT Australasia Pty Ltd & Anor (1998) 85 FCR 152 at 166-7; Fort Dodge Australia Pty Ltd v Nature Vet Pty Ltd [2002] FCA 501 at [11] ; BP Australia Pty Ltd v Nyran Pty Ltd [2002] FCA 1302 at [17] ; Rio Tinto Ltd v Commissioner of Taxation [2005] FCA 1336 at [40] [42]. 30 Many decisions of this and other courts have considered circumstances in which, by its pleadings, a party waives its legal professional privilege. In Fort Dodge , the respondent, in its defence to a claim of misleading and deceptive conduct in relation to a contract, alleged that it had entered into the contract on the basis of representations made by the applicant. As such, it raised a positive case with respect to its state of mind at the time of entering into the contract. Hely J (at [11]) found that by doing so, the respondent: 'opened up for examination and testing the source of, and the basis for, that state of mind. Where a party makes allegations raising the issue of its state of mind, to which legal advice is likely to have contributed, the party cannot continue to claim legal professional privilege for that advice: Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405'. Hely J determined that the pleading of the state of mind was inconsistent 'with the continued maintenance of confidentiality of contemporaneous legal advice as to those matters' (see at [14]). 35 In the present case, the belief pleaded by AMP is not intimately connected with the legal advice given to it at the time: cf Ampolex per Giles CJ Comm D at 411F. AMP's defence does not make assertions as to the content of legal advice given to it; nor does AMP's defence state that its decision to accept the tender of Nebo was based upon legal advice: cf Rio Tinto. AMP does not assert a belief in particular legal requirements or consequences, which could be reasonably expected to have been predicated upon legal advice, in which case legal advice might be material evidence in the proceedings. Rather, AMP has pleaded its belief with respect to the best commercial option which was open to it, a belief informed primarily by commercial advice from Rabo. In these circumstances I do not consider that AMP's pleadings are inconsistent with the maintenance of its legal professional privilege.


case_text: AACo submits that where a party propounds a positive case that it possessed a certain state of mind, it opens up for examination and testing by the Court any evidence as to its actual state of mind. AACo submits that a defence which specifically invokes a positive state of mind is inconsistent with the maintenance of privilege over documents which contributed to that state of mind. As a consequence, AACo submits AMP has necessarily waived privilege in relation to its legal advice. AACo relies upon Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 at 411; Telstra Corporation Ltd & Anor v BT Australasia Pty Ltd & Anor (1998) 85 FCR 152 at 166-7; Fort Dodge Australia Pty Ltd v Nature Vet Pty Ltd [2002] FCA 501 at [11] ; BP Australia Pty Ltd v Nyran Pty Ltd [2002] FCA 1302 at [17] ; Rio Tinto Ltd v Commissioner of Taxation [2005] FCA 1336 at [40] [42].


case_text: AACo submits that the majority judgment in Telstra Corporation remains good law and relies upon Perpetual Trustees (WA) Ltd v Equuscorp Pty Limited [1999] FCA 925 at [16] and DSE Holdings Pty Limited v Intertan Inc & Anor [2003] FCA 384.


case_text: AACo submits that where a party propounds a positive case that it possessed a certain state of mind, it opens up for examination and testing by the Court any evidence as to its actual state of mind. AACo submits that a defence which specifically invokes a positive state of mind is inconsistent with the maintenance of privilege over documents which contributed to that state of mind. As a consequence, AACo submits AMP has necessarily waived privilege in relation to its legal advice. AACo relies upon Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 at 411; Telstra Corporation Ltd & Anor v BT Australasia Pty Ltd & Anor (1998) 85 FCR 152 at 166-7; Fort Dodge Australia Pty Ltd v Nature Vet Pty Ltd [2002] FCA 501 at [11] ; BP Australia Pty Ltd v Nyran Pty Ltd [2002] FCA 1302 at [17] ; Rio Tinto Ltd v Commissioner of Taxation [2005] FCA 1336 at [40] [42]. 18 AMP also submits that the facts in these proceedings are distinguishable from those in Fort Dodge v Nature Vet where the respondent's state of mind became an issue when the respondent introduced it (see at [11] and [14]). 19 AMP further submits that if AACo's submissions are accepted, the consequence would be that in any case in which an applicant placed the respondent's state of mind in issue, the respondent would risk waiving privilege if it did any more than file a mere denial to the claim made against it. AMP submits that such result would be absurd. 20 AMP submits in the alternative that if the Court should find that there has been a waiver of privilege, such waiver cannot extend to advice received throughout the whole of the tender process, since only a limited period is referable to the defence. 30 Many decisions of this and other courts have considered circumstances in which, by its pleadings, a party waives its legal professional privilege. In Fort Dodge , the respondent, in its defence to a claim of misleading and deceptive conduct in relation to a contract, alleged that it had entered into the contract on the basis of representations made by the applicant. As such, it raised a positive case with respect to its state of mind at the time of entering into the contract. Hely J (at [11]) found that by doing so, the respondent: 'opened up for examination and testing the source of, and the basis for, that state of mind. Where a party makes allegations raising the issue of its state of mind, to which legal advice is likely to have contributed, the party cannot continue to claim legal professional privilege for that advice: Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405'. Hely J determined that the pleading of the state of mind was inconsistent 'with the continued maintenance of confidentiality of contemporaneous legal advice as to those matters' (see at [14]). 34 However, I cannot accept the submission of AACo that any positive defence mounted by AMP which raises its state of mind necessarily constitutes a waiver of privilege. In my opinion, in order to waive privilege a party must assert a belief which is likely to have been, or is explicitly said to have been, materially dependent upon legal advice given to that party. In that case the proof or otherwise of the belief is dependent upon the legal advice and accordingly privilege is waived. This is the position in cases where the dispute relates to a party's understanding of its legal position at a given point in time, such as Thomason , Rio Tinto, Ampolex and Fort Dodge .


case_text: AMP submits that the decision in Telstra v BT and other cases propounding a 'state of mind' test should not be relied upon in view of the subsequent decision of the High Court in Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 which established the inconsistency test. Additionally, AMP says the 'state of mind' test only arises in circumstances where the issue of state of mind was raised by the party claiming privilege, which is not the position in the present case. 22 AMP says that the observations in the dissenting judgment of McHugh J in Mann v Carnell at [122], which are relied upon by AACo are inconsistent with the reasons of the majority at [30] and [35] of that decision. 23 Since these proceedings are interlocutory, common law principles with respect to legal professional privilege apply: see Mann v Carnell at 12 [27], 16-17 [41], 45 [143] and 45 [144] and DSE (Holdings) Pty Limited at 504 [11]. 24 The test for waiver of legal professional privilege at common law was enunciated by the High Court in Mann v Carnell . In that case, a majority of the Court at [28]: 'It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege.' 25 The Court added at [29]: 'What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.' 26 Prior to the decision in Mann v Carnell , the leading authority of this Court relating to waiver of legal professional privilege was Telstra Corporation v BT Australasia . In that case, Branson and Lehane JJ observed (at 166): 'A party who initiates an undue influence case puts in issue in the proceeding the quality of his or her consent or assent ... The quality of such consent or assent will ordinarily be affected by relevant legal advice received by the party. The principle that requires that in such circumstances the party not be entitled to maintain the confidentiality of such advice is one of fairness which goes to the integrity of the legal process. To allow a party to put in issue the quality of his or her consent or assent whilst, at the same time, withholding evidence relevant to that issue, would be to allow him or her unfairly to handicap the opposing party to the proceeding, and to compromise the ability of the court realistically to determine the issue.' 28 The effect of Mann v Carnell upon the ratio in Telstra was considered by Allsop J in DSE (Holdings) Pty Ltd v Intertan Inc , where his Honour said (at 501-502 [4]-[5]): 'I have come to the view that the authorities in this Court may require me to be guided by what the majority of the Full Court said in Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152, as necessarily modified by Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 at 12 [27] and 13 [29] ... My own view is that Mann v Carnell evinces more than a modification of the approach of the majority in Telstra and amounts to a rejection of that approach and that the notion of inconsistency of conduct by the holder of the privilege and the maintenance of the confidence in question (though informed where relevant by notions of fairness) works a narrower and more confined operation for implied waiver than as expressed by the majority in Telstra .' 29 I respectfully agree with his Honour with respect to the effect of Mann v Carnell . To the extent that Telstra suggests that fairness is the overriding consideration, it should not be followed. It is clear that following Mann v Carnell , inconsistency of conduct should be the guiding principle in determining whether legal professional privilege has been waived, although fairness remains an element for consideration in determining whether conduct is inconsistent. 36 In respect of AACo's second submission, namely that AMP waived its privilege by communicating its legal advice to Rabo, I consider that the applicant must also fail. In Mann v Carnell , the majority observed that the reasoning of all members of the Court in Goldberg v Ng [1995] HCA 39 ; (1995) 185 CLR 83 'was inconsistent with the proposition that any voluntary disclosure to a third party necessarily waives privilege': see Mann v Carnell at 14 [30]. The majority also noted the observations of Jordan CJ in Thomason at 355, where his Honour said: 'The mere fact that a person on some one occasion chooses to impart to another or others advice which he has received from his solicitor indicates no intention on his part to waive his right to refuse on other occasions to disclose in evidence what that advice was, and supplies no sufficient reason for depriving him of a form of protection which the law has deemed it specially necessary to throw around communications between solicitor and client.' 37 In view of these authorities, the disclosure of legal advice in confidence to a commercial adviser cannot, in my opinion, be considered inconsistent with the retention of privilege. In this respect, McHugh J's observations in Mann v Carnell at [120] are inconsistent with the majority reasoning. 38 For the above reasons, the Court orders that: 1. The applicant's notice of motion be dismissed. 2. The applicant pay the respondents' costs of the motion. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. Associate: Dated: 6 April 2006 Counsel for the Applicant: M Hoffman QC Solicitor for the Applicant: Lipman Karas Counsel for the Respondent: T F Bathurst QC, with S A Goodman Solicitor for the Respondent: Clayton Utz Date of Hearing: 17 March 2006 Date of Judgment: 6 April 2006 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/371.html


case_title: Perpetual Trustees (WA) Ltd v Equuscorp Pty Limited [1999] FCA 925


case_text: AACo submits that where a party propounds a positive case that it possessed a certain state of mind, it opens up for examination and testing by the Court any evidence as to its actual state of mind. AACo submits that a defence which specifically invokes a positive state of mind is inconsistent with the maintenance of privilege over documents which contributed to that state of mind. As a consequence, AACo submits AMP has necessarily waived privilege in relation to its legal advice. AACo relies upon Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 at 411; Telstra Corporation Ltd & Anor v BT Australasia Pty Ltd & Anor (1998) 85 FCR 152 at 166-7; Fort Dodge Australia Pty Ltd v Nature Vet Pty Ltd [2002] FCA 501 at [11] ; BP Australia Pty Ltd v Nyran Pty Ltd [2002] FCA 1302 at [17] ; Rio Tinto Ltd v Commissioner of Taxation [2005] FCA 1336 at [40] [42]. 32 In Rio Tinto , Sundberg J stated (at [43]): '... the question whether the respondent has acted in a manner inconsistent with the maintenance of the privilege remains. In my opinion, however one approaches the question (as to which see [44] and [45]), he has so acted. The inconsistency arises from the combination of the following three facts: • the respondent has, by his Statement, raised as an issue in the instant proceedings his states of mind; • the respondent has, by his response to the applicant's request for particulars of his Statement, disclosed that the privileged scheduled documents had a bearing on those states of mind; and • the respondent has refused to produce those documents in answer to the first notice to produce.' 33 The above authorities establish that the conduct of a party will be inconsistent with the maintenance of privilege if the nature and extent of legal advice has been raised, whether directly or by necessary implication, by that party as an issue in the proceedings. This will usually occur where a state of mind has been positively pleaded in circumstances where legal advice given would be specifically pertinent to the formation of that state of mind or where a party's understanding of their legal position is critical to their defence. 35 In the present case, the belief pleaded by AMP is not intimately connected with the legal advice given to it at the time: cf Ampolex per Giles CJ Comm D at 411F. AMP's defence does not make assertions as to the content of legal advice given to it; nor does AMP's defence state that its decision to accept the tender of Nebo was based upon legal advice: cf Rio Tinto. AMP does not assert a belief in particular legal requirements or consequences, which could be reasonably expected to have been predicated upon legal advice, in which case legal advice might be material evidence in the proceedings. Rather, AMP has pleaded its belief with respect to the best commercial option which was open to it, a belief informed primarily by commercial advice from Rabo. In these circumstances I do not consider that AMP's pleadings are inconsistent with the maintenance of its legal professional privilege.


case_text: AACo submits that where a party propounds a positive case that it possessed a certain state of mind, it opens up for examination and testing by the Court any evidence as to its actual state of mind. AACo submits that a defence which specifically invokes a positive state of mind is inconsistent with the maintenance of privilege over documents which contributed to that state of mind. As a consequence, AACo submits AMP has necessarily waived privilege in relation to its legal advice. AACo relies upon Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 at 411; Telstra Corporation Ltd & Anor v BT Australasia Pty Ltd & Anor (1998) 85 FCR 152 at 166-7; Fort Dodge Australia Pty Ltd v Nature Vet Pty Ltd [2002] FCA 501 at [11] ; BP Australia Pty Ltd v Nyran Pty Ltd [2002] FCA 1302 at [17] ; Rio Tinto Ltd v Commissioner of Taxation [2005] FCA 1336 at [40] [42]. 13 AACo submits that the majority judgment in Telstra Corporation remains good law and relies upon Perpetual Trustees (WA) Ltd v Equuscorp Pty Limited [1999] FCA 925 at [16] and DSE Holdings Pty Limited v Intertan Inc & Anor [2003] FCA 384. 17 AMP submits that the decision in Telstra v BT and other cases propounding a 'state of mind' test should not be relied upon in view of the subsequent decision of the High Court in Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 which established the inconsistency test. Additionally, AMP says the 'state of mind' test only arises in circumstances where the issue of state of mind was raised by the party claiming privilege, which is not the position in the present case. 26 Prior to the decision in Mann v Carnell , the leading authority of this Court relating to waiver of legal professional privilege was Telstra Corporation v BT Australasia . In that case, Branson and Lehane JJ observed (at 166): 'A party who initiates an undue influence case puts in issue in the proceeding the quality of his or her consent or assent ... The quality of such consent or assent will ordinarily be affected by relevant legal advice received by the party. The principle that requires that in such circumstances the party not be entitled to maintain the confidentiality of such advice is one of fairness which goes to the integrity of the legal process. To allow a party to put in issue the quality of his or her consent or assent whilst, at the same time, withholding evidence relevant to that issue, would be to allow him or her unfairly to handicap the opposing party to the proceeding, and to compromise the ability of the court realistically to determine the issue.' 28 The effect of Mann v Carnell upon the ratio in Telstra was considered by Allsop J in DSE (Holdings) Pty Ltd v Intertan Inc , where his Honour said (at 501-502 [4]-[5]): 'I have come to the view that the authorities in this Court may require me to be guided by what the majority of the Full Court said in Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152, as necessarily modified by Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 at 12 [27] and 13 [29] ... My own view is that Mann v Carnell evinces more than a modification of the approach of the majority in Telstra and amounts to a rejection of that approach and that the notion of inconsistency of conduct by the holder of the privilege and the maintenance of the confidence in question (though informed where relevant by notions of fairness) works a narrower and more confined operation for implied waiver than as expressed by the majority in Telstra .' 29 I respectfully agree with his Honour with respect to the effect of Mann v Carnell . To the extent that Telstra suggests that fairness is the overriding consideration, it should not be followed. It is clear that following Mann v Carnell , inconsistency of conduct should be the guiding principle in determining whether legal professional privilege has been waived, although fairness remains an element for consideration in determining whether conduct is inconsistent.


case_text: In Thomason v The Council of the Municipality of Campbelltown (1939) 39 SR(NSW) 347 the New South Wales Court of Appeal was required to decide whether privilege was waived in respect of advice concerning the legal remedies available to the plaintiff, where the exclusive election of a particular remedy was only binding if a person had knowledge of their other options at the time the election was made. In respect of the privilege Jordan CJ said (at 358-9): 'Hence, in effect, one of the issues in the case was what advice if any the plaintiff had received from her legal advisers as to her alternative legal rights. In these circumstances, since the fact and nature of the advice is an issue in the case, I am of opinion that privilege cannot be raised to prevent the proof of the advice.' 34 However, I cannot accept the submission of AACo that any positive defence mounted by AMP which raises its state of mind necessarily constitutes a waiver of privilege. In my opinion, in order to waive privilege a party must assert a belief which is likely to have been, or is explicitly said to have been, materially dependent upon legal advice given to that party. In that case the proof or otherwise of the belief is dependent upon the legal advice and accordingly privilege is waived. This is the position in cases where the dispute relates to a party's understanding of its legal position at a given point in time, such as Thomason , Rio Tinto, Ampolex and Fort Dodge . 36 In respect of AACo's second submission, namely that AMP waived its privilege by communicating its legal advice to Rabo, I consider that the applicant must also fail. In Mann v Carnell , the majority observed that the reasoning of all members of the Court in Goldberg v Ng [1995] HCA 39 ; (1995) 185 CLR 83 'was inconsistent with the proposition that any voluntary disclosure to a third party necessarily waives privilege': see Mann v Carnell at 14 [30]. The majority also noted the observations of Jordan CJ in Thomason at 355, where his Honour said: 'The mere fact that a person on some one occasion chooses to impart to another or others advice which he has received from his solicitor indicates no intention on his part to waive his right to refuse on other occasions to disclose in evidence what that advice was, and supplies no sufficient reason for depriving him of a form of protection which the law has deemed it specially necessary to throw around communications between solicitor and client.'


case_text: Capital Steel submits that the Court did not have the power to make orders against the Commonwealth Bank and it referred to Australian Broadcasting Authority v Lenah Game Meats Pty Limited [2001] HCA 63 ; (2001) 208 CLR 199, Cardile v LED Builders Pty Limited [1999] HCA 18 ; (1999) 198 CLR 380, s 23 Federal Court of Australia Act 1976 (Cth) and O 25A r 5(5) of the Federal Court Rules . I do not need to consider that question. On any view, the reformulated orders involve a substantial interference in the commercial relationship between Capital Steel and the Commonwealth Bank. Even if the orders cover all contingencies in terms of possible loss to the Commonwealth Bank, and I am not completely satisfied that is the case, there will be time and expense involved in establishing any loss which may be suffered. Although the reformulated orders go some way towards addressing the prejudice to Capital Steel and the Commonwealth Bank if interlocutory injunctions are granted, the balance of convenience still favours the refusal of relief.


case_text: The test for the grant of an interlocutory injunction was most recently considered by the High Court in Australian Broadcasting Corporation v O'Neill [2006] HCA 46 ; (2006) 80 ALJR 1672. I refer to the observations of Gleeson CJ and Crennan J at 1682-1683 [19] and Gummow and Hayne JJ at 1691-1692 [65]-[72]. 41 Capital Steel submits that Orrcon has not established that there is a serious question to be tried that the steel pipe Capital Steel supplied under the contract was defective in the sense that it did not comply with the terms of the contract between it and Orrcon. If a serious question to be tried is not established in relation to that matter then, it is submitted by Capital Steel, Orrcon's case falls away. Further, or in the alternative, Capital Steel submits that Orrcon has not established that there is a serious question to be tried that relief would be granted restraining payment under the letter of credit. The focus of the argument here was that there was not a serious question to be tried that Capital Steel has been guilty of unconscionable conduct within s 51AA of the TPA. Further, or in the alternative, Capital Steel submits that the balance of convenience favours refusing the interlocutory relief sought by Orrcon. 42 Orrcon relied on evidence from Dr Graham Powell who is a research metallurgist. He has prepared a report dated July 2007 and a supplementary report dated August 2007. Orrcon also relied on evidence from Dr John Field who is a statistical consultant. He has prepared a report dated 9 August 2007 and a supplementary report dated 12 August 2007. Orrcon also relied on evidence from Mr Victor Konstantinoff who holds a Bachelor of Science degree and is the branch operations manager employed by ETRS Pty Ltd ("ETRS").


case_text: The Court said that the above list may not be exhaustive. The Court made the point that unconscionable conduct within s 51AA was not limited to cases where advantage was taken of a person under a special disability. At the same time the Court said that equity does not provide a remedy simply on the basis that, in the opinion of the judge, conduct is unfair. The section cannot be applied "to unconscionable conduct at large" (at 319 [50]). The Court referred with approval to a passage in the earlier decision of French J in Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) [2000] FCA 2 ; (2000) 96 FCR 491. In that case French J said (at 509): "[It] prohibits conduct in respect of which a judge in equity would have been prepared to grant relief. The imposition of the prohibition precedes any actual or notional judicial decision. The judge deciding a case under s 51AA will be asking himself or herself whether he or she would have been prepared to grant relief at equity on the basis of an assessment of the conduct in question as unconscionable." 64 It is not immediately apparent that the facts alleged by Orrcon fall within one of the five categories identified in Samton . In one sense one can say that it is unconscionable or unconscientious to enforce legal rights oppressively or in bad faith but on one view of the authorities the real question is whether there is oppression or bad faith because the circumstances fall within one of the well-known cases in which equity will intervene on the ground that the conduct is unconscionable or unconscientious. 65 Orrcon referred to three first instance decisions in support of its contention that the facts as pleaded by it arguably constitute unconscionable conduct within s 51AA of the TPA.


case_text: In Boral Formwork and Scaffolding Pty Ltd v Action Makers Ltd (in administrative receivership) (2003) ATPR 41-953 (" Boral Formwork "), Austin J considered whether an order should be made restraining a bank which had issued a letter of credit from paying any amount in excess of an undisputed amount to the beneficiary under the letter of credit. The parties seeking the order alleged that the beneficiary under the letter of credit had engaged in conduct that was unconscionable within s 51AA of the TPA. Austin J noted that the principle of autonomy applicable to a standby letter of credit could not override the provisions of the TPA. He referred with approval to the observations of Batt J in Olex Focas . Austin J considered the significance of the beneficiary being insolvent when the call is made on an irrevocable instrument. He said (at [81]): "If the parties have agreed to protect the beneficiary from credit risk, there is unlikely to be anything unconscionable in the consequence that the beneficiary may (for the benefit of its creditors) call on the irrevocable instrument at the account party's expense, leaving the account party to claim in the beneficiary's insolvency if the dispute is resolved in its favour." A little later, his Honour said (at [94]): "I hope it is clear, that in deciding to grant the relief sought by Boral, I have given anxious consideration to the principle of autonomy and the dangers associated with any judicial intervention with the performance of unconditional commercial obligations. The terms of the irrevocable instrument and the underlying contract, properly construed, are highly relevant to the decision whether conduct in connection with those arrangements is unconscionable for statutory or equitable purposes. It is not normally unfair or unreasonable or otherwise unconscionable to exercise commercial rights under an autonomous commercial contract, even if (for example) for the purpose of applying pressure to resolve a dispute. Even if the conduct is unconscionable, the principle of autonomy is relevant to the exercise of the Court's discretion to grant injunctive relief or leave the plaintiff to other remedies. Here the circumstances, involving as they do a call on the letter of credit on a false basis, are sufficiently special to overcome the hesitation which the principle of autonomy generates." 69 Shortly after his Honour made these orders, the banks applied to have them set aside. Gilmour J refused to set aside the orders: Clough Engineering Ltd v Oil and Natural Gas Corporation Limited (No 2) [2007] FCA 927. His Honour said (at [43]): "I remain satisfied that there is a serious question to be tried as to whether ONGC has acted unconscionably in contravention of s 51AA of the Act in calling on or threatening to call on the performance guarantees despite there being no legal right on its part to do so. As Austin J said in Boral Formwork v Action Makers (2003) ATPR 41-953 at [14] when referring relevantly to s 51AA of the Act: 'the principle of autonomy applicable to a standby letter of credit, cannot override the statute'. I am also satisfied that upon the same factual matrix, there is a serious issue to be tried whether ONGC is in breach if [sic] the negative stipulation conditioning the right to call up the performance guarantees."


case_title: Cardile v LED Builders Pty Limited [1999] HCA 18 ; (1999) 198 CLR 380


case_text: In order to fall within the terms of s 51AA of the TPA the conduct must be unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories. In Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57 ; (2003) 217 CLR 315 the High Court considered the meaning of the terms "unconscientious" and "unconscionable". In the joint reasons of Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ their Honours made the point (at 324 [20]) that the terms are used across a broad range of the equity jurisdiction. It is wrong to suggest that "sufficient foundation for the existence of the necessary 'equity' to interfere in relationships established by, for example, the law of contract, is supplied by an element of hardship or unfairness in the terms of the transaction in question, or in the manner of its performance" (at 325 at [26]). Their Honours discuss the Court's previous decisions in Legione v Hateley [1983] HCA 11 ; (1983) 152 CLR 406 and Stern v McArthur [1988] HCA 51 ; (1988) 165 CLR 489. Their Honours endorse (at 328 [37]) the approach taken by Mason CJ in Stern (at 503) that Legione and Ciavarella v Balmer [1983] HCA 26 ; (1983) 153 CLR 438 established that the Court will not readily relieve against loss of a contract for sale validly rescinded by the vendor for breach of an essential condition "and, in particular, equity was not authorised 'to reshape contractual relations into a form the Court thinks more reasonable or fair where subsequent events have rendered one side's situation more favourable'".


case_text: In Clough Engineering Limited v Oil and Natural Gas Corporation Ltd [2007] FCA 881 , Gilmour J was concerned with an application for leave pursuant to O 8 of the Federal Court Rules to serve an application out of the jurisdiction and for orders to restrain Oil and Natural Gas Corporation Ltd ("ONGC") from taking further steps to demand or obtain payment or renewing or claiming to renew such demand in respect of certain performance guarantees granted by the three respondent banks to ONGC. The applicant, Clough Engineering Limited, sought a declaration that ONGC by demanding and threatening to make a demand on the performance guarantees granted by the banks had engaged in, or proposed to engage in, unconscionable conduct in contravention of s 51AA of the TPA. Gilmour J granted leave to serve and he made an order restraining ONGC from taking any further step to demand or obtain payment or renewing or claiming to renew a demand for payment from the banks under the performance guarantees. Gilmour J said that there was authority which clearly supported the proposition that an inappropriate threat to call or a call on performance guarantees can be unconscionable conduct within s 51AA of the TPA and he referred to the decision in Samton . His Honour considered that it was appropriate to grant an injunction restraining ONGC from making a call on the performance guarantees and he appears to have relied on the fact that there was a serious question to be tried as to whether ONGC's conduct was unconscionable within s 51AA of the TPA. He also relied on another exception to the autonomy principle, namely, breach of a negative stipulation.


case_title: Clough Engineering Limited v Oil and Natural Gas Corporation Limited (No 2) [2007] FCA 927

case_text: Shortly after his Honour made these orders, the banks applied to have them set aside. Gilmour J refused to set aside the orders: Clough Engineering Ltd v Oil and Natural Gas Corporation Limited (No 2) [2007] FCA 927. His Honour said (at [43]): "I remain satisfied that there is a serious question to be tried as to whether ONGC has acted unconscionably in contravention of s 51AA of the Act in calling on or threatening to call on the performance guarantees despite there being no legal right on its part to do so. As Austin J said in Boral Formwork v Action Makers (2003) ATPR 41-953 at [14] when referring relevantly to s 51AA of the Act: 'the principle of autonomy applicable to a standby letter of credit, cannot override the statute'. I am also satisfied that upon the same factual matrix, there is a serious issue to be tried whether ONGC is in breach if [sic] the negative stipulation conditioning the right to call up the performance guarantees."


case_text: It is alleged by Orrcon that it was a term and condition of the contract that Capital Steel was not entitled to make a claim for payment under the letter of credit unless all of the pipe delivered complied with the specification and AS1579 in all respects. Orrcon alleges that such a term and condition arises as a matter of construction from the description and specification of the pipe to be delivered and the requirement that payment was not due unless the pipe was delivered. In the alternative, Orrcon alleges that such a term arises by implication and pleads the well-known factors for the implication of a contractual term (see Codelfa Construction Proprietary Limited v State Rail Authority of New South Wales [1982] HCA 24 ; (1982) 149 CLR 337 (" Codelfa "). 18 In December 2006 and in accordance with the specification, a pre-production meeting was convened at Dongbu's manufacturing plant in Korea for the purpose of reviewing the quality plan and manufacturing procedures to be followed during production of the pipe. The meeting was attended by representatives of Capital Steel, Dongbu and Orrcon. It is said that during the meeting the representatives of Orrcon were told of certain aspects of the manufacturing process which bore upon the minimum yield strength of the pipe and that Pohang Iron and Steel Company (otherwise referred to as "Posco") was to provide the raw material, hot rolled coil. There was discussion about the minimum yield strength of similar sized water pipes manufactured by Dongbu. There then followed communications between Capital Steel and Orrcon, and the upshot of those communications for present purposes was that Orrcon agreed to what it alleges were reduced minimum mechanical properties, the most important one of which was the proposed minimum for yield strength of the steel pipe of 270 MPa (aim 290 MPa). I note that Capital Steel asserts that a figure of 250 MPa was agreed, but it accepts that question is one for trial. 19 On 11 December 2006 Orrcon entered into a formal contract with the State of Queensland for the supply of pipe for the SEQ Water Grid Projects. It alleges that it did so relying on the November conduct and the representations at or about the time of the pre-production meeting. Also relying on those matters it alleges that it instructed Westpac to issue an irrevocable import documentary credit number SD3BM872029 in the amount of AUD19,337,670 in favour of Capital Steel. That was done on 21 December 2006 and the letter of credit was said to contain the following terms: 1. Partial shipments were permitted. 2. Credit was payable within 120 days from the bill of lading date. 3. The latest date of shipment was 20 June 2007. 4. The date of expiry was 11 July 2007. 5. The documents required to be presented to Westpac were a full duplicate set of clean "on board" or "shipped", negotiable marine bill of lading to order blank endorsed marked "freight pre-paid" and commercial invoices. 6. The payment documents must be presented to Westpac within 21 days after issue of the transport document but within the validity of the letter of credit. 97 Before leaving the issue of whether there is a serious question to be tried, I should mention that in the course of submissions Orrcon suggested that the breach of a negative stipulation exception to the autonomy principle may be relevant. Orrcon alleged in its statement of claim that it was a term and condition of the contract that Capital Steel was not entitled to make a claim for payment under the Westpac letter of credit unless all of the pipe delivered complied with the specification and AS1579 in all respects. The Westpac letter of credit refers only to AS1579 and that Australian Standard does not refer to the minimum yield strength alleged by Orrcon. I agree with the submission of Capital Steel that none of the documents which are alleged to form the steel contract contain the words pleaded and, accordingly, there is no express term to the effect alleged. Nor do I think it can be said that there is a serious question to be tried that there was an implied term to that effect, having regard to the factors referred to in Codelfa . 98 There was also a suggestion in Orrcon's written submissions that the presentation of mill test certificates to Westpac was misleading or deceptive conduct and that a contravention of s 52 of the TPA may be sufficient to found interlocutory relief. That submission was not developed in any detail by Orrcon and it is difficult to see how it could succeed in light of the fact that, among other things, mill test certificates are not necessary documents under the Westpac letter of credit. 99 I will consider first the balance of convenience having regard to the interlocutory orders as sought in the application. I will then consider the balance of convenience having regard to the reformulated orders.


case_text: In order to fall within the terms of s 51AA of the TPA the conduct must be unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories. In Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57 ; (2003) 217 CLR 315 the High Court considered the meaning of the terms "unconscientious" and "unconscionable". In the joint reasons of Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ their Honours made the point (at 324 [20]) that the terms are used across a broad range of the equity jurisdiction. It is wrong to suggest that "sufficient foundation for the existence of the necessary 'equity' to interfere in relationships established by, for example, the law of contract, is supplied by an element of hardship or unfairness in the terms of the transaction in question, or in the manner of its performance" (at 325 at [26]). Their Honours discuss the Court's previous decisions in Legione v Hateley [1983] HCA 11 ; (1983) 152 CLR 406 and Stern v McArthur [1988] HCA 51 ; (1988) 165 CLR 489. Their Honours endorse (at 328 [37]) the approach taken by Mason CJ in Stern (at 503) that Legione and Ciavarella v Balmer [1983] HCA 26 ; (1983) 153 CLR 438 established that the Court will not readily relieve against loss of a contract for sale validly rescinded by the vendor for breach of an essential condition "and, in particular, equity was not authorised 'to reshape contractual relations into a form the Court thinks more reasonable or fair where subsequent events have rendered one side's situation more favourable'". 62 It said (at 318 [48]): "Under the rubric of unconscionable conduct, equity will: (i) Set aside a contract or disposition resulting from the knowing exploitation by one party of the special disadvantage of another. The special disadvantage may be constitutional, deriving from age, illness, poverty, inexperience or lack of education Commercial Bank of Australia v Amadio . Or it may be situational, deriving from particular features of a relationship between actors in the transaction such as the emotional dependence of one on the other Louth v Diprose ; Bridgewater v Leahy [1998] HCA 66 ; (1998) 194 CLR 457. (ii) Set aside as against third parties a transaction entered into as the result of the defective comprehension by a party to the transaction, the influence of another and the want of any independent explanation to the complaining party Garcia v National Australia Bank Ltd [1998] HCA 48 ; (1988) 194 CLR 395. (iii) Prevent a party from exercising a legal right in a way that involves unconscionable departure from a representation relied upon by another to his or her detriment Waltons Stores (Interstate) Ltd v Maher ; Commonwealth v Verwayen . (iv) Relieve against forfeiture and penalty Legione v Hateley ; Stern v McArthur . (v) Rescind contracts entered into under the influence of unilateral mistake Taylor v Johnson ."


case_text: In Olex Focas Pty Ltd v Skodaexport Co Ltd [1998] 3 VR 380 (" Olex Focas "), Batt J granted injunctions in respect of mobilisation guarantees given in connection with a construction project on the ground that there was a serious question to be tried as to whether the party making a demand under the guarantee had acted unconscionably within s 51AA of the TPA. His Honour took a broad view of what might constitute unconscionable conduct. I refer to his Honour's observations at 404. In Samton the Full Court said (at 319 [50]) that it did not need to pass on the correctness of the decision in Olex Focas . 67 In Boral Formwork and Scaffolding Pty Ltd v Action Makers Ltd (in administrative receivership) (2003) ATPR 41-953 (" Boral Formwork "), Austin J considered whether an order should be made restraining a bank which had issued a letter of credit from paying any amount in excess of an undisputed amount to the beneficiary under the letter of credit. The parties seeking the order alleged that the beneficiary under the letter of credit had engaged in conduct that was unconscionable within s 51AA of the TPA. Austin J noted that the principle of autonomy applicable to a standby letter of credit could not override the provisions of the TPA. He referred with approval to the observations of Batt J in Olex Focas . Austin J considered the significance of the beneficiary being insolvent when the call is made on an irrevocable instrument. He said (at [81]): "If the parties have agreed to protect the beneficiary from credit risk, there is unlikely to be anything unconscionable in the consequence that the beneficiary may (for the benefit of its creditors) call on the irrevocable instrument at the account party's expense, leaving the account party to claim in the beneficiary's insolvency if the dispute is resolved in its favour." A little later, his Honour said (at [94]): "I hope it is clear, that in deciding to grant the relief sought by Boral, I have given anxious consideration to the principle of autonomy and the dangers associated with any judicial intervention with the performance of unconditional commercial obligations. The terms of the irrevocable instrument and the underlying contract, properly construed, are highly relevant to the decision whether conduct in connection with those arrangements is unconscionable for statutory or equitable purposes. It is not normally unfair or unreasonable or otherwise unconscionable to exercise commercial rights under an autonomous commercial contract, even if (for example) for the purpose of applying pressure to resolve a dispute. Even if the conduct is unconscionable, the principle of autonomy is relevant to the exercise of the Court's discretion to grant injunctive relief or leave the plaintiff to other remedies. Here the circumstances, involving as they do a call on the letter of credit on a false basis, are sufficiently special to overcome the hesitation which the principle of autonomy generates."


case_title: Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57 ; (2003) 217 CLR 315


case_text: In United City Merchants (Investments) Limited v Royal Bank of Canada [1983] 1 AC 168 the plaintiffs sued the defendants under a letter of credit. Lord Diplock, with whom the other law Lords agreed, discussed the autonomy principle and the reasons for it. Although a lengthy passage, I set it out in full. Lord Diplock said (at 182-183): "It is trite law that there are four autonomous though interconnected contractual relationships involved. (1) The underlying contract for the sale of goods, to which the only parties are the buyer and the seller; (2) the contract between the buyer and the issuing bank under which the latter agrees to issue the credit and either itself or through a confirming bank to notify the credit to the seller and to make payments to or to the order of the seller (or to pay, accept or negotiate bills of exchange drawn by the seller) against presentation of stipulated documents; and the buyer agrees to reimburse the issuing bank for payments made under the credit. For such reimbursement the stipulated documents, if they include a document of title such as a bill of lading, constitute a security available to the issuing bank; (3) if payment is to be made through a confirming bank the contract between the issuing bank and the confirming bank authorising and requiring the latter to make such payments and to remit the stipulated documents to the issuing bank when they are received, the issuing bank in turn agreeing to reimburse the confirming bank for payments made under the credit; (4) the contract between the confirming bank and the seller under which the confirming bank undertakes to pay to the seller (or to accept or negotiate without recourse to drawer bills of exchange drawn by him) up to the amount of the credit against presentation of the stipulated documents. Again, it is trite law that in contract (4), with which alone the instant appeal is directly concerned, the parties to it, the seller and the confirming bank, 'deal in documents and not in goods,' as article 8 of the Uniform Customs puts it. If, on their face, the documents presented to the confirming bank by the seller conform with the requirements of the credit as notified to him by the confirming bank, that bank is under a contractual obligation to the seller to honour the credit, notwithstanding that the bank has knowledge that the seller at the time of presentation of the conforming documents is alleged by the buyer to have, and in fact has already, committed a breach of his contract with the buyer for the sale of the goods to which the documents appear on their face to relate, that would have entitled the buyer to treat the contract of sale as rescinded and to reject the goods and refuse to pay the seller the purchase price. The whole commercial purpose for which the system of confirmed irrevocable documentary credits has been developed in international trade is to give to the seller an assured right to be paid before he parts with control of the goods that does not permit of any dispute with the buyer as to the performance of the contract of sale being used as a ground for non-payment or reduction or deferment of payment." 57 Lord Diplock said that there was one established exception to the general statement of principle as to the contractual obligations of the confirming bank to the seller and that was where the seller, "for the purpose of drawing on the credit, fraudulently presents to the confirming bank's documents that contain, expressly or by implication, material representations of fact that to his knowledge are untrue" (at 183). Capital Steel accepts that there are two other exceptions and they are breach of a negative stipulation and unconscionable conduct within s 51AA of the TPA. That concession by Capital Steel appears to be correct having regard to the authorities. 58 In view of Capital Steel's concession, the real issue in this case is whether Orrcon has established a serious question to be tried that Capital Steel has been guilty of unconscionable conduct. 59 Orrcon submits that there was unconscionable conduct in this case because Capital Steel was purporting to exercise a legal right, namely, the right to claim payment under the letters of credit in circumstances in which the purported exercise of that right is harsh or oppressive or unreasonable and in bad faith.


case_title: Williams v Grant [2004] FCAFC 178

case_text: It is common ground that any order on the motion would be an interlocutory order, so that ordinary principles governing summary dismissal of a proceeding should apply. That is, an application under s 84C should be approached with caution and should be allowed only where a clear case for summary dismissal has been made: Williams v Grant [2004] FCAFC 178 at [48] - [49] per Lander J (with whom North and Dowsett JJ agreed); Bodney v Bropho [2004] FCAFC 226 ; (2004) 140 FCR 77 at 89 [51] per Stone J. The general approach, therefore, is consistent with the approach of Courts in other applications to summarily dismiss proceedings, namely that they should be dismissed only in very clear cases: Dey v Victorian Railways Commissioner [1949] HCA 1 ; (1949) 78 CLR 62 at 91 per Dixon J; General Steel Industries Inc v Commissioner for Railways [1964] HCA 69 ; (1964) 112 CLR 125 at 129. As in Williams v Grant at [84] and [87] per Lander J, the first applicants seeking to strike out the Town of Batchelor No 2 application under s 84C have the onus and responsibility of establishing that the second applicants were not authorised by the native title claim group to bring that claim, and so to make out a very clear case of want of authorisation, or a clear failure to comply with one or other of the requirements of ss 61 , 61A or 62 . 15 Section 84C(2) requires the Court to consider an application under s 84C(1) before any further proceedings take place in relation to the main application. But that does not require the Court to hear and determine the question as to whether the application has, in fact, been authorised as required by s 251B in all cases. It is only where the application is obviously without merit, that is, where there is no realistic prospect on the material before the Court of the authorisation being shown to have existed at the time it was purportedly granted, that an order will be made summarily dismissing or striking out the main application under s 84C. Sometimes an applicant faced with an application under s 84C may seek to amend the application to cure an identified deficiency (as discussed by Lander J in Williams v Grant at [57]). Where the application is not clearly without merit, so that it is not dismissed summarily or struck out, the Court may consider directing that an application under s 84C be heard and determined at the same time as the main application. That is a course of action which Wilcox J in Bodney v State of Western Australia [2003] FCA 890 at [45] suggested. The Court may also consider directing that the question of authorisation be heard and determined as a separate question, and be heard and determined prior to the hearing of the main application, under O 29 of the Federal Court Rules . That is a matter for each particular case and its particular circumstances. Whether such an order were appropriate would depend upon the extent to which there would be an overlap in the evidence likely to be called relating to authorisation and on the main application and a range of factors. The apparent attraction of expedition and economy may be misleading. Very often, the proposed evidence of authorisation is to be given by persons who also will give "connection" evidence and evidence of traditional laws and customs. There are often sound reasons in such circumstances why the separate trial of issues should not be ordered: Rocklea Spinning Mills Pty Ltd v Anti-Dumping Authority (1995) 56 FCR 406 ; Energy Australia v Australian Energy Ltd [2001] FCA 1049 at [8] per Stone J. There are also countervailing considerations of potential delay through splitting of issues and the separate processes which follow that course: Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130. So, not uncommonly, as occurred in both Risk and Harrington-Smith (referred to above) the issue of authorisation was heard and determined as part of the principal hearing of the main application.


case_text: It is common ground that any order on the motion would be an interlocutory order, so that ordinary principles governing summary dismissal of a proceeding should apply. That is, an application under s 84C should be approached with caution and should be allowed only where a clear case for summary dismissal has been made: Williams v Grant [2004] FCAFC 178 at [48] - [49] per Lander J (with whom North and Dowsett JJ agreed); Bodney v Bropho [2004] FCAFC 226 ; (2004) 140 FCR 77 at 89 [51] per Stone J. The general approach, therefore, is consistent with the approach of Courts in other applications to summarily dismiss proceedings, namely that they should be dismissed only in very clear cases: Dey v Victorian Railways Commissioner [1949] HCA 1 ; (1949) 78 CLR 62 at 91 per Dixon J; General Steel Industries Inc v Commissioner for Railways [1964] HCA 69 ; (1964) 112 CLR 125 at 129. As in Williams v Grant at [84] and [87] per Lander J, the first applicants seeking to strike out the Town of Batchelor No 2 application under s 84C have the onus and responsibility of establishing that the second applicants were not authorised by the native title claim group to bring that claim, and so to make out a very clear case of want of authorisation, or a clear failure to comply with one or other of the requirements of ss 61 , 61A or 62 . 21 The objection is not simply that hearsay evidence cannot be received on an application such as the present. As I have said, it is common ground that the application is an interlocutory one in respect of which hearsay evidence may be admitted by reason of s 75 of the Evidence Act 1995 (Cth): see e.g. Bodney v Bropho [2004] FCAFC 226 ; (2004) 140 FCR 77 at 92 [64] per Stone J. Section 75 requires evidence of the source of the hearsay material within the affidavit. It is contended that such evidence has not been given, so that that particular part of Mr Petherick's affidavit of 23 April 2007 should not be received, or alternatively that it should not be received by reason of s 135 of the Evidence Act . There is no explanation as to why Ray Petherick should not have given evidence of those facts directly. There is nothing to verify on his part the reliability of his diary, although it has considerable detail within it. However, I think it identifies the source of the information, namely Ray Petherick and there is some independent confirmation of the events to which it refers by Captain Wodidj having signed the affidavit on 10 April 2006 which was filed in support of the Town of Batchelor No 2 application as amended. It is a different question as to the weight to be given to that affidavit of Captain Wodidj generally upon the whole of the evidence. 22 I propose to receive that part of the affidavit of Mr Petherick, but I indicate that I do not think it carries much weight. There is direct evidence from Captain Wodidj as to the fact that he did not intend to authorise the bringing of the Town of Batchelor No 2 application as amended as an authorised applicant or on his behalf as an asserted member of that native title claim group, or to authorise the claim to be brought as a senior member of the Emu Clan. He plainly disavows any interest as a member of any native title claim group which may have native title rights and interests in respect of the Batchelor area. Nevertheless, there is some evidence of attempts made by Thomas Petherick through Ray Petherick to secure Captain Wodidj's agreement to being a nominated applicant for the claim group, and to indicate his preparedness to be a member of the claim group. 23 For reasons which appear below, nothing turns upon the receipt of that evidence in all the circumstances.