case_text: Further, although the applicants pressed strongly that the respondents have known of the substance of the material contained in proposed pars 17A(f) to (k) since 30 May 2006, a quick and obvious riposte is that so have the applicants known of this material. If the applicants had wished this material to be part of their substantive case, it would have been appropriate after 30 May 2006 for them to have then made application to the Court for an amendment of the statement of claim. The respondents have a point when they submit that they have prepared their case on the pleadings before the Court. As said by Mason CJ and Gaudron J in Banque Commerciale SA (en liquidation) v Akhil Holdings Ltd [1990] HCA 11 ; (1990) 169 CLR 279: 'The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) [1916] HCA 81 ; (1916) 22 CLR 490 at 517. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party's right to this basic requirement of procedural fairness.' (at 286)


case_outcome: cited

case_text: I also note similar comments of Weinberg J in Cheers v El Davo Pty Ltd (in liq) [2000] FCA 310.


case_outcome: followed

case_text: In Clarapede & Co v Commercial Union Association (1883) 32 WR 262 at 263 Brett MR observed: 'The rule of conduct of the court in such a case is that, however negligent or careless may have been the first omission, and, however late the proposed amendment, the amendment should be allowed if it can be made without injustice to the other side. There is no injustice if the other side can be compensated by costs...'


case_text: Further, although the applicants pressed strongly that the respondents have known of the substance of the material contained in proposed pars 17A(f) to (k) since 30 May 2006, a quick and obvious riposte is that so have the applicants known of this material. If the applicants had wished this material to be part of their substantive case, it would have been appropriate after 30 May 2006 for them to have then made application to the Court for an amendment of the statement of claim. The respondents have a point when they submit that they have prepared their case on the pleadings before the Court. As said by Mason CJ and Gaudron J in Banque Commerciale SA (en liquidation) v Akhil Holdings Ltd [1990] HCA 11 ; (1990) 169 CLR 279: 'The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) [1916] HCA 81 ; (1916) 22 CLR 490 at 517. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party's right to this basic requirement of procedural fairness.' (at 286) 10 This is also pointed out by Isaacs and Rich JJ in Gould and Birbeck and Bacon at 517: '...pleadings should state with sufficient clearness the case of the party whose averments they are. That is their function. Their function is discharged when the case is presented with reasonable clearness. Any want of clearness can be cured by amendment or particulars.' 11 No real explanation has been given by the applicants as to why, in light of the information the applicants appeared to receive on discovery and which lead to the inclusion in Mr Tracey's statement of evidence in the form of pars 93, 157, 55, 153, 57, 155, 58, and 156, no application has been made before now to amend the amended statement of claim to plead these claims. To have sought to rely on this evidence only by the vehicle of the witness statement is, at best, with respect, unwise. 12 However having said this, the principles I need to apply in relation to this matter are clear.


case_text: In my view notwithstanding the lateness of this application: • Opening submissions have not yet been made in this trial. Trial time has, until today, been occupied with rulings as to admissibility of evidence, one of which has resulted in this application. Although evidence in chief closed some months ago, this is not a case as discussed by Barwick CJ in Leotta where examination and cross examination of witnesses and their evidence has already taken place. • The material has been before the respondents since 30 May 2006 in the form of evidence in a statement of the second applicant. I acknowledge the points made by Mr Bell concerning the substance of the claims, however I also note comments made by Mr Perry to the effect that the substance of these complaints are articulated in the relevant paragraphs of Mr Tracy's affidavit. • The fact that the proposed amendments appear to have substance in substantiating the claims of the applicants militates towards granting leave to allow the amendments to be made, on the basis that disallowing them could have a substantial effect on the outcome of the proceedings. I note in this regard comments of the Full Court of the Federal Court in Hurley v McDonald's Australia Ltd [1999] FCA 1728 at [35] . • Although the respondents have expressed concerns as to compensation by way of costs, the respondents are entitled to apply for costs to compensate them in respect of this late amendment and the Court would entertain such an application. The respondents have already indicated that they are not interested in applying for an adjournment.


case_outcome: applied

case_text: This was to some extent adopted by Lord Griffiths in Ketteman v Hansel Properties Ltd [1987] AC 189 at 220 although his Lordship indicated that the position could be very different if an application were, for example, made at the end of the trial by a defendant seeking to run a defence wholly different from that pleaded. In summary his Lordship said: • Whether an amendment should be granted is a matter for the discretion of the trial judge who should be guided in the exercise of the discretion by an assessment of where justice lies. • Justice cannot always be measured in terms of money. • A judge is entitled to weigh in the balance the strain the litigation imposes on litigants, the anxieties occasioned by facing new issues, the raising of false hopes and the legitimate expectation that the trial would determine the issues one way or the other. • The judge must weigh in the balance the pressure on the courts caused by the greater increase in litigation. 17 His Lordship also said 'Furthermore to allow an amendment before a trial begins is quite different from allowing it at the end of the trial...' (at 220)


case_text: As Barwick CJ said in Leotta v Public Transport Commission (NSW) (1976) 9 ALR 437 at 440: 'It is, of course, proper to allow a plaintiff to amend their pleadings during the course of the trial provided the interest of the defendant can be adequately safeguarded by adjournment and otherwise. That is one thing and a matter of common enough experience. But to my mind it is quite another and a very different thing to allow the plaintiff, after the evidence is closed, evidence which has been taken with a view to the cause of action set up in the pleadings, to then formulate a new claim which has not been the subject of examination in the evidence...The issues for trial need in every case to be settled, preferably before the trial begins. If they need amendment during the trial in order to allow the matter really in difference between the parties to be litigated, then the necessary amendments should be made so that thereafter it can clearly be seen to what the evidence thereafter to be given, ought to be addressed...' 19 In my view notwithstanding the lateness of this application: • Opening submissions have not yet been made in this trial. Trial time has, until today, been occupied with rulings as to admissibility of evidence, one of which has resulted in this application. Although evidence in chief closed some months ago, this is not a case as discussed by Barwick CJ in Leotta where examination and cross examination of witnesses and their evidence has already taken place. • The material has been before the respondents since 30 May 2006 in the form of evidence in a statement of the second applicant. I acknowledge the points made by Mr Bell concerning the substance of the claims, however I also note comments made by Mr Perry to the effect that the substance of these complaints are articulated in the relevant paragraphs of Mr Tracy's affidavit. • The fact that the proposed amendments appear to have substance in substantiating the claims of the applicants militates towards granting leave to allow the amendments to be made, on the basis that disallowing them could have a substantial effect on the outcome of the proceedings. I note in this regard comments of the Full Court of the Federal Court in Hurley v McDonald's Australia Ltd [1999] FCA 1728 at [35] . • Although the respondents have expressed concerns as to compensation by way of costs, the respondents are entitled to apply for costs to compensate them in respect of this late amendment and the Court would entertain such an application. The respondents have already indicated that they are not interested in applying for an adjournment.


case_text: In summary, Mr Bell on behalf of the respondents submitted in reply: • The pleadings in proposed pars (f) to (k) do not indicate why they are misleading or deceptive for the purposes of par 19A of the amended statement of claim. • The respondents do not know the nature of the complaints in proposed pars (f) to (k). By way of example, Mr Bell argued that in relation to proposed par (f) it was unclear whether the applicants were complaining about an issue concerning chemicals, or EBS disease, or some other problem. • As a result, the respondents have not addressed these points in preparing their case, they have not had their witnesses address these points in their statements, and they have not prepared cross-examination on this basis. • Given the history of non-compliance by the applicants with directions of this Court in this matter, it would be unfair to the respondents to permit such a late further amendment to the statement of claim. Mr Bell strongly pressed the point that, notwithstanding the principle articulated by the High Court of Australia in State of Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146 that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim, the extent of the 'dalliance' of the applicants in complying with Court directions is now at the stage of being unfair to the respondents. In this light, Mr Bell submitted that the proposed amendments to the statement of claim do cause the respondents a problem. • An adjournment and a costs order would mean nothing because the applicants have no money. 7 I note that, if I were to allow the proposed amendments to the further amended statement of claim by inclusion of pars 17A(f) to (k), there is potential scope for readmittance to evidence of the paragraphs in Mr Tracy's statement which were deleted following my ruling on Tuesday, and to which I have already made reference in this judgment. I do not decide this issue at this stage. 8 I acknowledge Mr Bell's points concerning lateness of compliance by the applicants with Court directions. This is a source of inconvenience to the Court and the respondents and is an issue in relation to which the respondents could make submissions as to costs during the substantive hearing of this matter. It is unfortunate that this matter has been characterised by what appear to be irregularities in compliance with directions, when the purpose of directions is to provide certainty to the parties and this Court. Obviously, the most recent example of what I describe as these irregularities is the application before me today.


case_text: A prima facie case is made out if, on the material before the Court, inferences are open which, if translated into findings of fact, would support the relief claimed: Western Australia v Vetter Trittler Pty Ltd (in liq) (1991) 30 FCR 102 at 110. The requirement to establish a prima facie case does not suggest the kind of scrutiny that would occur in a submission of no case to answer following the closure of a plaintiff's case at trial. As a matter of practicality, the relevant enquiry is concerned with evidence which discloses in a little detail what the facts are: Merpro Montassa Ltd v Conoco Special Products Inc [1991] FCA 70 ; (1991) 28 FCR 387 at 389. The requirement to satisfy the Court that a plaintiff has a prima facie case for relief will be met where, upon a broad examination, rather than an intense scrutiny, of the material placed before the Court, inferences are shown to be open which, if translated into findings of fact, would support the relief claimed: Bell Group Ltd (In Liq) v Westpac Banking Corporation (1996) 20 ACSR 760 at 763.


case_text: The claim is therefore a civil matter arising under the Corporations legislation, so s 1337B confers jurisdiction on the Court in respect to the claim: IMF (Australia) Ltd v Sons of Gwalia Ltd (Administrator Appointed) (2004) 211 ALR 231 at [43]. Section 21 of the Federal Court of Australia Act 1976 (Cth) and s 39B(1A) of the Judiciary Act 1903 (Cth) are sources of the Court's jurisdiction to make the declarations sought. 12 The kinds of proceedings listed in Order 8 rule 2 include: 1. Proceeding based on a cause of action arising in Australia ... 11. Proceeding based on a breach of a provision of an Act that is committed in Australia ... 13. Proceeding in relation to the construction, effect or enforcement of an Act, regulations or any other instrument having, or purporting to have, effect under an Act ... . 13 The claim against the eighth defendant that is made in the amended originating process and statement of claim falls within each of these categories.


case_text: A person ought to have been joined under Order 6 rule 8(1)(a) if a judgment of the Court will have a direct effect on the rights and liabilities of that person and not one that is merely indirect or inconsequential: Orrcon Operations Pty Ltd v Capital Steel and Pipe Pty Ltd (No 2) [2008] FCA 24 at [35] . This rule is permissive only but should be liberally construed so that all parties to disputes relating to the one subject matter may be dealt with at the one time: John Cooke and Co Ltd v Commonwealth [1922] HCA 60 ; (1922) 31 CLR 394 at 411.


case_title: Merpro Montassa Ltd v Conoco Special Products Inc [1991] FCA 70 ; (1991) 28 FCR 387


case_title: Orrcon Operations Pty Ltd v Capital Steel and Pipe Pty Ltd (No 2) [2008] FCA 24


case_text: The plaintiff must, however, show that it has an arguable case against the proposed defendant to the standard or being able to resist an application for summary judgment by the proposed respondent had that proposed party been sued in separate proceedings: Review Australia Pty Ltd v Redberry Enterprise Pty Ltd [2003] FCA 1009 at [5] . 7 I have read the affidavits of the several investors together with the affidavits of Mr Jones, to which I have referred. The evidence which establishes at least an arguable case includes relevantly: (a) The existence, at all material times, of the relevant companies, namely: (i) the proposed eighth defendant; and (ii) Firepower Holdings Group Limited. (b) The issue of shares in Firepower to Green Triton on 2 June 2005. (c) The absence at all material times of a prospectus, profile statement or offer information statement lodged with the plaintiff in relation to any offer of shares in Firepower: s 727(1). (d) The fact that the shares that were the subject of the alleged contravening offers made by the eighth defendant were among those issued to it on 2 June 2005. (e) The purpose of the issue of the shares to Green Triton was the sale or transfer of the shares: s 707(3), which is to be inferred on the basis of s 707(4) from the sales of shares by Green Triton that are described in the affidavits of Geoffrey Allan, Carol Ashworth, Darryl Edmondson and Nicholas Furlan, and from the transcript of Timothy Francis Johnston on 4 March 2008. In the transcript, Mr Johnston is recorded to say that, in effect, the eighth defendant was (among other things) to bring funds into Firepower through the sale of shares. (f) The alleged contravening offers were made by the first defendant, Axis International Management Pty Ltd as agent on behalf of the eighth defendant. (g) The fact that those offers were made on behalf of the eighth defendant, is referred to in the transcript of the examination of Timothy Francis Johnston on 5 March 2008. In the transcript, Mr Johnston is recorded to say that, in effect, the sixth defendant, Quentin Ward, in his position with the first defendant, had authority to make the offers shown in the share register on behalf of the eighth defendant. (h) The absence of the exemptions set out in ss 708 and 708A: see s 707(3). The exemptions that are potentially relevant for the purpose of this application are those set out in ss 708(8) (sophisticated investors); 708(10) (offer through financial advisers); 708(11) (professional investors - to be read together with the definition of that term in section 9); 708(12) (offers to person associated with Firepower) and 708A(5), (11) and (12) (certain offers of quoted securities). The Investor Affidavits establish, to the requisite degree of proof, the absence of the exemptions found in s 708. Section 708A does not apply because Firepower has never been listed. 8 In the current proceedings Green Triton should be joined as the eighth defendant, in my opinion, as it is a party necessary to ensure that all matters in dispute in the proceeding may be effectually and completely determined and adjudicated upon and, furthermore, ought to have been joined and indeed would have been joined save for the fact that it was thought to have been deregistered at the time proceedings commenced. I will accordingly make an order in terms of para 1 of the motion.


case_title: Western Australia v Vetter Trittler Pty Ltd (in liq) (1991) 30 FCR 102


case_outcome: referred to

case_title: Glencore International AG v Takeovers Panel [2005] FCA 1290

case_text: The Takeovers Panel was established under s 171 of the Australian Securities and Investments Commission Act 1989 (Cth) and continued in existence under the Australian Securities and Investments Commission Act 2001 (Cth), as described in Schedule 3 to the Financial Services Reform Act 2001 (Cth) ('the Panel'). The proceeding should be understood in the context of the Court's orders of 14 September 2005, made in Glencore International AG & Anor v Takeovers Panel & Ors [2005] FCA 1290. 3 The questions in the proceeding depend upon the effect of certain transactions described as ' cash settled equity swaps '. A cash settled equity swap is an arrangement between an investor and a bank whereby the bank agrees to pay the investor an amount equal to the difference between the value of a given number of equity securities at the time of the closing out of the swap and the value of those equity securities at the time when the arrangement was entered into. Under such an arrangement the investor does not acquire any interest in any equity securities and the investor has no right to call for delivery of equity securities or to require the bank to undertake any action involving the acquisition, holding or disposal of equity securities. Closing out of, and settlement under, such a swap will, depending on the terms of the arrangement, be either at the option of one party or be automatic. Of course, it would always be open to the parties to close out a swap by mutual agreement at any time. In order to hedge its risk under such an arrangement, a bank might buy the relevant equity securities. 4 The fourth respondent, Austral Coal Limited ('the Company'), is a miner of coking coal in southern New South Wales. It sells coking coal both domestically and internationally. The second respondent, Centennial Coal Company Limited ('Centennial'), is also a miner and marketer of coal. At relevant times, shares in the Company and Centennial were listed for quotation on Australian Stock Exchange Limited ('ASX'). 28 Chapter 6 of the Act is concerned with ' Takeovers '. Part 6.1 is concerned with Prohibited acquisitions of relevant interests in voting shares and Part 6.2 deals with Exceptions to the prohibition . Parts 6.3 to 6.9 regulate the making and acceptance of takeover offers. Part 6.10 deals with the review of, and intervention in, the conduct of takeovers by the Commission and by the Panel. 29 The pivotal provision of the Act in relation to the regulation of takeovers is s 606. Relevantly, s 606(1) prohibits a person from acquiring a relevant interest in issued voting shares in a company if, because of the transaction, that person's, or someone else's, voting power in the company increases: • from 20 per cent or below to more than 20 per cent; or • from a starting point that is above 20 per cent and below 90 per cent. 30 Section 608(1) provides that a person has a relevant interest in shares if that person: • is the holder of the shares; • has power to exercise, or control the exercise of, a right to vote attached to the shares; or • has power to dispose of, or control the exercise of a power to dispose of, the shares. Section 608(2) provides for extended circumstances in which 'power' and 'control' may arise for the purposes of determining whether a person has a relevant interest in securities.


case_title: R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13

case_text: The Commission was the effective contradictor of Glencore and Fornax. However, the Panel has made written submission as to matters that are said to go to the powers and procedures of the Panel. In its written submissions, the Panel indicated that it endeavoured to confine its submissions to questions of principle and to refrain from presenting a substantive case as to the application of those principles, consistent with the observations of the High Court in R v Australian Broadcasting Tribunal; Ex Parte Hardiman [1980] HCA 13 ; (1980) 144 CLR 13 at 36.


case_text: Under s 657A(1) of the Act, which is in Part 6.10, the Panel may declare circumstances in relation to the affairs of a company to be unacceptable circumstances. Section 657A(1) of the Act expressly provides that the Panel may make a declaration of unacceptable circumstances even in the absence of a contravention of the Act. It follows that the Panel's functions under s 657A include a supervisory role in respect of conduct that is lawful but perceived to be inconsistent with the objects of Chapter 6, as stated in s 602 (see Brierly Investments Ltd v Australian Securities Commission (1997) 78 FCR 255 at pp 261-262). 35 The effect of s 657A(2) of the Act is that the Panel may declare circumstances in relation to the affairs of a company to be unacceptable circumstances if it appears to the Panel that the circumstances are unacceptable, having regard to the effect of the circumstances on : • the control, or potential control , of that company or another company; or • the acquisition, or proposed acquisition , by a person of a substantial interest in that company or another company. The Panel may also make a declaration if it appears to the Panel that circumstances constitute or give rise to a contravention of Parts 6, 6A, 6B or 6C. However, the Panel may only make a declaration if it considers that doing so is not against the public interest and after taking into account any policy considerations that the Panel considers relevant. 36 Under s 657D(1) of the Act, the Panel may make an order under s 657D(2) if it has declared circumstances to be unacceptable under s 657A. However, there are restrictions upon the making of such an order. The Panel must not make an order if it is satisfied that the order would unfairly prejudice any person. Further, under s 657D(1), before making an order, the Panel must give, both to the parties to a proceeding before the Panel and to the Commission, as well as to each other person to whom a proposed order relates , an opportunity to make submissions to the Panel about the matter. 135 The Panel, of course, is expressly empowered by s 657A(1) to make declarations notwithstanding that there has been no contravention of the Act. Part 6.10 of the Act provides flexibility in the regulation of the acquisition of shares in circumstances where the literal operation of the regulatory regime is either unnecessarily restrictive or ineffective to achieve the object of Chapter 6. It is clear enough that the regime involving the Panel is designed to ensure regulation of the acquisition of shares over and above the provisions contained in the balance of Chapter 6 ( Brierley Investments Ltd v Australian Securities Commission (1997) 78 FCR 255 at 261). The Panel made its declaration because, notwithstanding compliance by Glencore and the Banks with the disclosure regime prescribed by the Act, the purposes of Chapter 6, as expressed in s 602, were not achieved. That is precisely the circumstances for which s 657A provides. It is not unreasonable for the Panel, if its decision was otherwise lawful and authorised, to reach that conclusion. The fact that participants in the market do not necessarily make disclosure of cash settled swaps does not necessarily mean that the failure to do so is not unacceptable. 136 I consider that the Panel erred in concluding that the relationship between Glencore on the one hand and the Banks on the other, by reason of the swaps, was such that the Shares in the company held by the Banks should be taken into account in determining whether Glencore had acquired or was acquiring a substantial interest in the Company. I also consider that the Panel erred in concluding that circumstances consisting of the non-disclosure, during the Non-disclosure Period, of the swaps and the relevant interest held by Glencore had an effect on the control or potential control of the Company, or on the acquisition by Centennial of a substantial interest in the Company, that was unacceptable. Having regard to those conclusions, it appears to follow that neither the Declaration nor the Orders can stand. 137 However, the parties have requested that I make no orders until they have had the opportunity of considering the conclusions that I have reached. Accordingly, I propose to stand the matter over for further submissions as to the appropriate orders after the parties have had a reasonable opportunity of considering my conclusions and my reasons for those conclusions. I certify that the preceding one hundred and thirty-seven (137) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate: Dated: 22 March 2006 Counsel for the Applicant: Mr T.F. Bathurst QC, Mr M.J. Leeming and Mr J.R.J. Lockhart Solicitor for the Applicant: Atanaskovic Hartnell Counsel for the First Respondent: Mr R. Strong Solicitor for the First Respondent: Freehills Counsel for the Third Respondent: Mr S. Gageler SC and Mr M.S. Henry Solicitor for the Third Respondent: Australian Securities and Investments Commission Date of Hearing: 9 February 2006 Date of Judgment: 22 March 2006 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/274.html


case_outcome: related

case_text: On 6 November 2007 Rares J delivered reasons for judgment and stood the matter over for argument as to the appropriate relief to be granted ( Tervonen v Minister for Justice and Customs [2007] FCA 1684). On 8 November 2007 Rares J made declarations and orders, the effect of which was to declare invalid and quash successive notices purporting to have been given pursuant to s 16 ( Tervonen v Minister for Justice and Customs (No 3) [2007] FCA 1898). Rares J declined to grant any further relief to the applicant including an order for release.


case_title: Tervonen v Minister for Justice and Customs [2007] FCA 1684


case_outcome: discussed

case_text: At the commencement of the substantive hearing, I raised the issue as to whether satisfaction of the requirements of s 19(1) could be considered in a review pursuant to s 21. I expressed a tentative view in the negative and suggested that challenge to those requirements would need to be by way of a separate proceeding based on administrative law grounds. Counsel for Finland submitted that that view was contrary to current practice, based upon the decisions of Full Courts in Knauder v Moore [2002] FCAFC 404 ; (2002) 127 FCR 327 and Brock v United States of America [2007] FCAFC 3 ; (2007) 157 FCR 121. As those decisions do provide a basis for what was described as the current practice, I was prepared to proceed accordingly in the absence of argument to the contrary. 5 Once that view is taken it is then necessary to grapple with the conduct of the review. There is little controversy as to the conduct of a review of a decision based upon s 19(2). There is little practical difference between the views of Black CJ (at [20] [24] and [29]) and Rares J (at [73] [80]) in Brock [2007] FCAFC 3 ; 157 FCR 121. As was said in Dutton v O'Shane [2003] FCAFC 195 ; (2003) 132 FCR 352 (at 386): " the s 21 review is not one of judicial review in the strict sense. It is by way of rehearing in which the court is authorised to reach its own conclusions on eligibility for surrender, albeit it is limited in so doing by having regard only to the material before the magistrate" 7 The question was discussed by Black CJ in Brock [2007] FCAFC 3 ; 157 FCR 121, particularly at [28] and [30]. It was said (at [30]) that: "the jurisdictional precondition provided for by s 19(1)(d) should not be treated as a jurisdictional fact, subject to review by way of rehearing; that is, absent an error of law, the magistrate's decision, or her 'consideration' under s 19(1)(d) , should be final" for the purposes of a s 21 review. 8 Rares J held that the magistrate in that case had failed to consider a relevant consideration in addressing the question under s 19(1)(d) and for that reason the proceedings lacked any lawful authority ( Brock [2007] FCAFC 3 ; 157 FCR 121 at [115] ). Interestingly, Rares J went on to say that: "Even if the Court is unable to determine this question on a review under s 21 of the Act, s 22 of the Federal Court of Australia Act requires that the Court grant either absolutely, or on such terms and conditions as it thinks just, all remedies to which any of the parties appear to be entitled." Jacobson J upheld the magistrate no matter what legal approach was to be taken ([50] [52]). 9 Uninstructed by authority, I would have thought that, if the review pursuant to s 21 encompasses all aspects of s 19, then there must be the same type of review in relation to all aspects, namely, a rehearing, albeit limited to the materials before the magistrate. Section 21 only provides for one kind of review. On that approach, I would form my own view as to the existence of the preconditions, including s 19(1)(d).


case_text: Once that view is taken it is then necessary to grapple with the conduct of the review. There is little controversy as to the conduct of a review of a decision based upon s 19(2). There is little practical difference between the views of Black CJ (at [20] [24] and [29]) and Rares J (at [73] [80]) in Brock [2007] FCAFC 3 ; 157 FCR 121. As was said in Dutton v O'Shane [2003] FCAFC 195 ; (2003) 132 FCR 352 (at 386): " the s 21 review is not one of judicial review in the strict sense. It is by way of rehearing in which the court is authorised to reach its own conclusions on eligibility for surrender, albeit it is limited in so doing by having regard only to the material before the magistrate"


case_text: Section 21(2) provides that, in circumstances such as the present, the Court "may" quash the magistrate's order and direct the magistrate to order the release of the applicant. That was the relief sought in the application. Indeed, the structure of the subsection assumes that that will be the result where the order is not confirmed. In my opinion, the word "may" in the subsection is a Julius v Bishop of Oxford imperative (see the explanation by Windeyer J in Finance Facilities Pty Ltd v Federal Commissioner of Taxation [1971] HCA 12 ; (1971) 127 CLR 106 at 134 135). Section 21 does not authorise the Court to directly order the release of the person. That course was taken in Knauder [2002] FCAFC 404 ; 127 FCR 327 apparently based upon the submissions and consent of the country respondent (see Conti J at [41]). That may have been a sensible course in order to avoid double handling in a matter affecting the liberty of the subject, but the decision cannot be seen as authority for such a power absent consent.


case_text: At the commencement of the substantive hearing, I raised the issue as to whether satisfaction of the requirements of s 19(1) could be considered in a review pursuant to s 21. I expressed a tentative view in the negative and suggested that challenge to those requirements would need to be by way of a separate proceeding based on administrative law grounds. Counsel for Finland submitted that that view was contrary to current practice, based upon the decisions of Full Courts in Knauder v Moore [2002] FCAFC 404 ; (2002) 127 FCR 327 and Brock v United States of America [2007] FCAFC 3 ; (2007) 157 FCR 121. As those decisions do provide a basis for what was described as the current practice, I was prepared to proceed accordingly in the absence of argument to the contrary. 6 Does that approach apply to review of the requirements of s 19(1)? That question was not clearly or satisfactorily dealt with in Knauder [2002] FCAFC 404 ; 127 FCR 327. Conti J (having noticed the point that troubles me at [36]) dealt with the question at [37] [40]. There is some support in those paragraphs for the view that the question of reasonable time in s 19(1)(d) is an objective fact for determination by the Court pursuant to s 21 but, on a proper reading, it seems to me to be based upon the view that the circumstances in that case were such that there could be no reasonable or rational finding that the applicant had reasonable time in which to prepare for the conduct of the proceedings. Allsop J gave the other leading judgment. His Honour found both that there was an absence of the necessary jurisdictional fact on the basis that the magistrate's view was arbitrary and capricious, and that there was an absence of procedural fairness afforded as a matter of fact and law. His Honour held that the denial of procedural fairness was not cured by the s 21 review as held by the primary Judge but preferred not to decide the question whether failure to satisfy s 19(1)(d) of itself required quashing the orders of the magistrate. Mansfield J confined his reasons for making the orders to the failure of the magistrate to accord procedural fairness to the appellant. How failure to accord procedural fairness comes within the rubric of a s 21 review was not explained (cf Hill J in Republic of South Africa v Dutton (1997) 77 FCR 128 at 136D, noticed by Conti J in Knauder [2002] FCAFC 404 ; 127 FCR 327 at [36] ). 11 Section 21(2) provides that, in circumstances such as the present, the Court "may" quash the magistrate's order and direct the magistrate to order the release of the applicant. That was the relief sought in the application. Indeed, the structure of the subsection assumes that that will be the result where the order is not confirmed. In my opinion, the word "may" in the subsection is a Julius v Bishop of Oxford imperative (see the explanation by Windeyer J in Finance Facilities Pty Ltd v Federal Commissioner of Taxation [1971] HCA 12 ; (1971) 127 CLR 106 at 134 135). Section 21 does not authorise the Court to directly order the release of the person. That course was taken in Knauder [2002] FCAFC 404 ; 127 FCR 327 apparently based upon the submissions and consent of the country respondent (see Conti J at [41]). That may have been a sensible course in order to avoid double handling in a matter affecting the liberty of the subject, but the decision cannot be seen as authority for such a power absent consent.


case_text: In the events which have happened there is no effective dispute between the parties that the requirement of s 19(1)(b) did not exist so much is decided by the relief granted by Rares J. Although there is strictly no estoppel, because the parties are different, counsel for the respondent concedes that I would follow Rares J and that the result would be that the existence of the two successive s 16 notices that were issued prior to the hearing before the magistrate is swept away ( Minister for Immigration v Bhardwaj [2002] HCA 11 ; (2002) 209 CLR 597; Plaintiff S157/2002 v Commonwealth [2003] HCA 2 ; (2003) 211 CLR 476 at 506 [76] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ). It inevitably follows that a necessary precondition to the magistrate's order in question did not exist and the order cannot survive.


case_title: Plaintiff S157/2002 v Commonwealth [2003] HCA 2 ; (2003) 211 CLR 476


case_text: Does that approach apply to review of the requirements of s 19(1)? That question was not clearly or satisfactorily dealt with in Knauder [2002] FCAFC 404 ; 127 FCR 327. Conti J (having noticed the point that troubles me at [36]) dealt with the question at [37] [40]. There is some support in those paragraphs for the view that the question of reasonable time in s 19(1)(d) is an objective fact for determination by the Court pursuant to s 21 but, on a proper reading, it seems to me to be based upon the view that the circumstances in that case were such that there could be no reasonable or rational finding that the applicant had reasonable time in which to prepare for the conduct of the proceedings. Allsop J gave the other leading judgment. His Honour found both that there was an absence of the necessary jurisdictional fact on the basis that the magistrate's view was arbitrary and capricious, and that there was an absence of procedural fairness afforded as a matter of fact and law. His Honour held that the denial of procedural fairness was not cured by the s 21 review as held by the primary Judge but preferred not to decide the question whether failure to satisfy s 19(1)(d) of itself required quashing the orders of the magistrate. Mansfield J confined his reasons for making the orders to the failure of the magistrate to accord procedural fairness to the appellant. How failure to accord procedural fairness comes within the rubric of a s 21 review was not explained (cf Hill J in Republic of South Africa v Dutton (1997) 77 FCR 128 at 136D, noticed by Conti J in Knauder [2002] FCAFC 404 ; 127 FCR 327 at [36] ).


case_text: Reference was made to a passage in the judgment of the Full Court in Williams v Minister for Justice and Customs of the Commonwealth of Australia (2007) 157 FCR 286. That was a proceeding pursuant to s 39B of the Judiciary Act 1903 (Cth) rather than a proceeding pursuant to s 21 of the Act. It is, thus, not directly in point. However, the statement ( Williams 157 FCR 286 at [53]): "The absence of a valid notice under s 16(1) is obviously fatal to the proceedings before the magistrate. The discharge of recognisances would also necessarily follow." does no more than recognise the effect of the text of s 19(1) and s 21(2)(b)(i) of the Act and is consistent with what should happen in this case. 13 Even if there were a discretion to withhold relief pursuant to s 21(2) I would not do so. Counsel for the applicant wishes to raise further questions as to the effect of both s 15 and s 17(2) of the Act. Counsel for Finland contends that the extradition can be revived. All of that is irrelevant to a review of the particular decision pursuant to s 21. That section should operate as enacted. The taking of other steps by one side or the other will be governed by other considerations. The applicant has been in custody since July 2006. He should not be kept in custody for the convenience of the authorities whilst they work out what, if anything, can be done to revive the extradition. There should be no deprivation of liberty that is not clearly authorised by statute. 14 There may be a case for endeavouring to end the proliferation and fragmentation of litigation. However, it would be a mistake, in my opinion, to use this proceeding as a vehicle for seeking to solve all issues connected with this extradition. The hearing was completed and judgment reserved on a particular basis between particular parties. In any event, the amendment sought by the applicant would only select one aspect of the matter and only seeks declaratory relief. The amendment is refused.


case_text: the principles of open justice require that all evidence before a court be open to the public gaze. This achieves the important objective of transparency in judicial decision-making. That is fundamental to the proper administration of justice and public confidence in the integrity and independence of the Courts and their decisions. But, it is an objective which, on occasion, must be balanced against the paramount duty of the Court to do justice. In Scott v Scott [1913] AC 417 at 437-438, Viscount Haldane LC explained these principles, which have been followed and accepted as fundamental in Australia since Dickason v Dickason [1913] HCA 77 ; (1913) 17 CLR 50 at 51 per Barton ACJ, Isaacs, Gavan Duffy, Powers and Rich JJ. One of the exceptions to which his Lordship referred was the protection of secret processes and confidential information.


case_text: Court may only depart from exercising its jurisdiction fully in public where, and then only to the extent that, the departure is necessary in the interests of justice or where legislation has altered the open justice rule: John Fairfax & Sons Ltd v Police Tribunal of New South Wales (1986) 5 NSWLR 465 at 476G-477A per McHugh JA, Glass JA agreeing. Even in the latter situation, the legislative power to affect the conduct of the proceedings of a court exercising the judicial power of the Commonwealth cannot be used to achieve a result that is not compatible with the implied Constitutional freedom of communication on government and political matter: Lange v Australian Broadcasting Corporation [1997] HCA 25 ; (1997) 189 CLR 520 at 567-568 per Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ; John Fairfax Publications Pty Ltd v Attorney-General (NSW) [2000] NSWCA 198 ; (2000) 181 ALR 694 at 703-707 [52] - [75] , 715-716 [114]-[119] per Spigelman CJ, 721 [157] per Priestley JA.


case_title: John Fairfax Publications Pty Ltd v Attorney-General (NSW) [2000] NSWCA 198 ; (2000) 181 ALR 694


case_title: Lange v Australian Broadcasting Corporation [1997] HCA 25 ; (1997) 189 CLR 520


case_title: Scott v Scott [1913] AC 417


case_text: The Commissioner and the liquidator have tendered an agreed statement of facts. They agree that, for the purposes of this proceeding, the facts in this statement are not to be disputed: see s 191 of the Evidence Act 1995 (Cth). I note, however, that "I am not bound to accept facts merely because they have been agreed between the parties. Also I can draw inferences from such of the agreed facts as are accepted": Australian Competition and Consumer Commission v Visy Industries Holdings Pty Limited (No 3) [2007] FCA 1617 at [1] . The facts that follow, while drawn primarily from the agreed statement, are also drawn from other uncontroverted evidence relied on by the parties. 6 On 24 February 2006, John Brown ("Brown") commenced proceedings in the FMC (MLM2112 of 2006). On 8 August 2006, the Commissioner instituted proceedings in this Court (VID 884 of 2006) to wind up A Chaid in insolvency on the basis that it had failed to comply with a statutory demand for a debt due under s 8AAZH of the Act. 7 On 13 September 2006, the FMC ordered that A Chaid sell its hotel business and directed that: the proceeds ... be applied as follows: (a) First to pay all costs, commissions and expenses of the sale. (b) Secondly, to discharge the mortgage to Yarrmu Pty Ltd on the Leasehold of the Hotel. (c) Thirdly, as to any unsecured creditors of A Chaid ... as may be agreed in writing ... (d) The balance then remaining be invested in an interest bearing account in the names of the parties under control of their solicitors on the record.


case_title: Brown v Brown & Ors [2007] FMCAfam 793

case_text: On 21 May 2007, BJT Legal undertook not to deal with the funds in any way until the issue was determined by the court and agreed to abide by any orders of the court made in consequence of that determination. On that basis, BJT Legal was not formally joined as a party to these proceedings. On 23 May 2007, the Commissioner filed for leave to intervene in the FMC proceedings and then lodged the current application on 13 August 2007. The Commissioner's application was transferred to this Court by order of the FMC dated 3 October 2007: Brown v Brown & Ors [2007] FMCAfam 793. On 10 October 2007, the Commissioner filed an amended application, leave having been granted by the FMC on 3 October 2007. Finally, on 13 November 2007, the Commissioner withdrew the proof of debt. 15 Section 260- 5 of the Act, entitled "Commissioner may collect amounts from third party," provides that the Commissioner may give notice to a third party (here, BJT Legal) "if the third party owes or may later owe money" to a debtor (here, A Chaid) who owes a tax-related liability: ss 260- 5 (1) and 260- 5 (2). 16 Section 260- 5 (3) states that a third party is regarded as owing money if, among other things, the third party: (a) is an entity by whom the money is due or accruing to the debtor; or (b) holds the money for or on account of the debtor; or (c) holds the money on account of some other entity for payment to the debtor; or (d) has authority from some other entity to pay the money to the debtor.


case_title: Champtaloup v Thomas [1976] 2 NSWLR 264

case_text: The unequivocal words or conduct referred to by Stephen J may be of two types. As noted by Mahoney JA in Champtaloup v Thomas [1976] 2 NSWLR 264 at 274-275 (quoted in Surfers Paradise at [32]): First, it may be exercised by a conscious act of election. The party having the right may actually determine on his election and, in so far as communication may be necessary ... communicate it to the other party, and an election is thereby made .... Second, the party may do some act which is of such a nature that, irrespective of his actual intention or determination, the law treats him as having exercised his election. This imputation of an election may occur even though the party does not subjectively know that he has the right to elect, or even where he does not intend to elect.


case_text: The parties agree that if the Notice is effective it creates a statutory charge in favour of the Commissioner and thus makes the Commissioner a secured creditor of A Chaid for purposes of the Corporations Act , entitled to priority of payment over unsecured creditors: Clyne v Deputy Commissioner of Taxation [1981] HCA 40 ; (1981) 150 CLR 1 at 17-18 (per Mason J) and 26-27 (per Brennan J); Goodin v Commissioner of Taxation (2002) 169 FLR 282 at 289; Commissioner of Taxation v Donnelly [1989] FCA 399 ; (1989) 25 FCR 432 at 436 (per Lockhart J); Macquarie Health Corp Ltd v Commissioner of Taxation [1999] FCA 1819 ; (1999) 96 FCR 238 , 255-271; Goodger v Ayre (1988) 88 FLR 188 at 191-192.


case_title: Commissioner of Taxation v Donnelly [1989] FCA 399 ; (1989) 25 FCR 432


case_text: Emmett J agreed that a winding-up order could not defeat a prior notice under s 218 of the 1936 Act in Commissioner of Taxation v Macquarie Health Corp (1998) 88 FCR 451 at 469. His Honour said: The only consideration is whether s 468 of the [Corporations Act] operates to prevent effect being given to the words of s 218 themselves. It follows from Clyne's case and Donnelly's case that the winding up of the Taxpayer did not affect any rights which had arisen in favour of the Commissioner by the operation of s 218 upon service of the notices. 31 In this case, the Notice operated against the property of A Chaid no later than 20 October 2006 (the date of its receipt by BJT Legal), and that, of course, was before the 26 October 2006 winding-up orders. Accordingly, the provisions of s 468 do not operate to void or otherwise vitiate the effectiveness of the previously issued Notice: Commissioner of Taxation v Macquarie Health Corp (1998) 88 FCR 451 at 471. As Emmett J said, " I consider that the Liquidator's contention confused the right in property with the remedy. A company taxpayer remains liable in respect of the tax which is the subject of a notice of assessment even after a winding-up order is made ." 32 Secondly, not only does s 468 not affect the efficacy of the Notice, but it also does not bar BJT Legal or the liquidator from complying with the Notice and paying the money. As noted, s 468(1) bars the non-exempt dispositions of company property: Commissioner of Taxation v Macquarie Health Corp (1998) 88 FCR 451 at 472. As Emmett J said, " [t]here is no doubt that the effect of winding up and of sequestration is that there is a restriction imposed on the capacity of a creditor to enforce payment of a debt without the leave of the Court ." However, s 468(2)(a) provides that a disposition by the liquidator is exempt if made pursuant to a power conferred on him by the Corporations Act . Section 477 in turn gives the liquidator broad powers to, inter alia: (1) make arrangements with creditors: s 477(1)(c) ; and (2) "sell or otherwise dispose of, in any manner, all or any part of the property of the company": s 477(2)(c). 33 Moreover, with respect to BJT Legal's position, s 260- 15 of the Act provides: An amount that the third party pays to the Commissioner under this Subdivision is taken to have been authorised by: (a) the debtor; and (b) any other person who is entitled to all or a part of the amount; and the third party is indemnified for the payment. 34 In short, the liquidator can point to nothing in the tax legislation or the Corporations Act that makes the Notice ineffective or otherwise prevents compliance with it.


case_outcome: distinguished

case_text: Furthermore, nothing in the decision of Bryson J in Deputy Commissioner of Taxation v Westpac Savings Bank Ltd (1987) 87 FLR 130 (" Westpac "), relied on by the liquidator, suggests a contrary approach. In Westpac , the bank Westpac held funds in a savings account jointly owned by three tax debtors. Westpac at 131-132. The Commissioner then issued three separate notices to the bank under s 218 of the Income Tax Assessment Act 1936 (Cth) (the 1936 Act) seeking garnishment of the funds to pay tax liabilities owed severally by the debtors: Westpac at 132. Westpac refused to comply on the grounds that it held the money in a joint account and not in a sole account of any of the tax debtors named in the notices: Westpac at 132. 24 Section 218(1)(b) of the 1936 Act, which was the predecessor to s 260-5(3)(b) of the Act, provided that the Commissioner could require a person (ie, Westpac) to pay the Commissioner money held by the person if (at 133): [the] person ... holds or may subsequently hold money for or on account of a taxpayer 25 Based on that language, Bryson J took it to be self-evident that the bank "at the time of delivery of the notices was a person (and I will call such a person the holder) falling within par ... (b) of subs (1)": Westpac at 133. The crucial question, in his Honour's view, was not whether the bank could be said to be a holder of money for or on account of a taxpayer, but "whether, when those paragraphs refer to 'a taxpayer' the identification of the holder extends in any circumstances to a holder of moneys due to or on account of a taxpayer as one of several persons for whom the moneys are held jointly ": Westpac at 133 (emphasis added). Bryson J resolved this question in the negative, with the effect that the notice was deemed invalid and the Commissioner was unable to enforce the notice: Westpac at 137. 26 Here, the circumstances are similar to those in Westpac to the extent that BJT Legal, like Westpac, is a holder within the meaning of s 260-5(3)(b) (or its substantially identical predecessor s 218(1)(b)). To that extent, then, Westpac supports Commissioner's position, not the liquidator's. However, the facts are different to the extent that the funds are held by BJT Legal for and on account of A Chaid solely, unlike in Westpac , where the bank held money on joint account. To that extent, the Commissioner's position in this case is stronger than it was in Westpac . 27 The liquidator submits that, regardless of the foregoing, the Notice could not take effect in light of the 26 October 2006 winding-up order and s 468(1) of the Corporations Act . That submission is unfounded. 28 First, it conflates the effectiveness of the Notice with the ability of BJT Legal or the company (through its liquidator) to comply with the Notice (ie, pay money to the Commissioner). Section 468(1) provides: Any disposition of property of the company, other than an exempt disposition, and any transfer of shares or alteration in the status of the members of the company made after the commencement of the winding up by the Court is, unless the Court otherwise orders, void. (Emphasis added.)


case_text: As Edmonds J explained in Elsinora Global Ltd v Healthscope Ltd (No. 2) [2006] FCA 18 ; (2006) 61 ATR 482 at [63] : Subsection 260-5(3) of Sch 1 to the Administration Act is a deeming provision. It provides when a person (the third party) is taken to owe money to another (the debtor). In its form and context it is exhaustive and extends to situations where, but for the deeming, the third party may not, or would not, be regarded as owing money to the debtor. Paragraph (a) is concerned with the standard situation where the third party is indebted to the debtor whether the debt is due or accruing due to the debtor. To attract the deeming operation, para (b) requires the third party to hold money for or on account of the debtor. Unless there is a holding of money by the third party, the deeming cannot operate . Paragraph (c) also requires the third party to hold money, not for or on account of the debtor, but on account of some other entity for payment by the third party, not the other entity, to the debtor. Finally, para (d) operates to deem the third party to owe money to the debtor if the third party has authority from some other entity to pay the money to the debtor. (Emphasis added.) 22 In this case, it cannot be disputed that BJT Legal is a third party holding money, which money represents proceeds from the sale of A Chaid's business, in trust for and on account of the company pending distribution; indeed BJT Legal itself so stated in its 17 May 2007 facsimile to the Commissioner: see [13] above.


case_text: The liquidator submits, however, that the Notice is ineffective because the funds held by BJT Legal are not owed to A Chaid as a result of the FMC's orders of 13 September 2006, which direct that the proceeds of the hotel sale be paid not to A Chaid but to its unsecured creditors. Therefore, the liquidator submits, it cannot be said that BJT Legal is under any obligation to pay money to A Chaid. Further, the liquidator contends that the moneys held in account number 633/000 128949658 in the name of BJT Legal Pty Ltd at Bendigo Bank Ltd, are not the property of A Chaid or BJT Legal but that of the bank subject to the rights of BJT Legal as a creditor of the bank: see Foley v Hill [1848] EngR 837 ; (1848) 9 ER 1002. 19 The Commissioner submits that the 13 September orders do not affect A Chaid's ownership of the funds; rather, the orders simply impose directions as to how the funds owned are to be applied or distributed. 20 These contentions may be put to one side. It is unnecessary to resolve the debate because the plain language of s 260- 5 (3)(b) states that money is deemed to be owed to a debtor, whether or not it is actually due or payable to the debtor, if it is held for or on account of the debtor.


case_title: Goodger v Ayre (1988) 88 FLR 188


case_title: Goodin v Commissioner of Taxation (2002) 169 FLR 282


case_title: Macquarie Health Corp Ltd v Commissioner of Taxation [1999] FCA 1819 ; (1999) 96 FCR 238


case_text: As the liquidator notes, the relevant law on this point is helpfully summarized in the reasons of Dutney JA (with whom Williams and Jerrard JJA agreed) in Surfers Paradise Investments Pty Ltd (in liquidation) v Davoren Nominees Pty Ltd [2004] 1 Qd R 567 (" Surfers Paradise" ). First, his Honour noted that the regime now codified in s 554E of the Corporations Act dates back to the judgment of Jessel MR in Moor v Anglo-Italian Bank (1879) 10 Ch D 681: Surfers Paradise at [27]. 37 Essentially, a secured creditor wishing to prove a debt may do one of three things: (1) surrender the security and prove for the full amount; (2) realize the security and prove for the difference; or (3) value the security and prove for the difference: Surfers Paradise at [27]. Furthermore (at [27] quoting Moor ): [i]f without doing either of the latter two things, he proves for the full amount, as he cannot prove for the full amount and receive a dividend except on the theory of giving up the security, he shews by that an intention to give up his security; and, if he so proves and receives a dividend or votes, he shews pretty conclusively that he has finally elected to give up his security and take his dividend; in other words, having two funds to resort to, the bankrupt's general estate, so as to get a dividend on the whole amount of his debt, or his security, he elects to take the bankrupt's estate, and in that way gives up his security. It is not forfeiture, it is election; but, the petitioning creditor gets nothing unless he proves. 38 The question, then, is whether a creditor has elected to surrender the security interest. Whether an election has been made is an objective question of fact; that is, regardless of whether a creditor subjectively intended to give up the interest, the court is required to look at objective evidence including whether the creditor has sought to avail himself of rights and remedies of an unsecured creditor such as the dividend and voting rights mentioned in Moor : Surfers Paradise at [28]-[29]. 42 Submission of a proof of debt for the full amount, if it is silent on the question of surrender, is some evidence of an election to surrender but not conclusive evidence: Surfers Paradise at [34] but cf Re International Tyre Co Pty Ltd (in liquidation) (1979) 4 ACLR 553 at 554. On the other hand, the receipt and acceptance of a dividend pursuant to a scheme of arrangement (or the exercise of creditor voting rights) based on the full amount of the debt is conclusive evidence of surrender: Surfers Paradise at [34]; Moor at 689-690. In short, "[t]he two questions here are whether the [Commissioner] was required to elect to surrender the security or not and if so, whether [his] conduct was unequivocal": Surfers Paradise at [36].


case_text: Submission of a proof of debt for the full amount, if it is silent on the question of surrender, is some evidence of an election to surrender but not conclusive evidence: Surfers Paradise at [34] but cf Re International Tyre Co Pty Ltd (in liquidation) (1979) 4 ACLR 553 at 554. On the other hand, the receipt and acceptance of a dividend pursuant to a scheme of arrangement (or the exercise of creditor voting rights) based on the full amount of the debt is conclusive evidence of surrender: Surfers Paradise at [34]; Moor at 689-690. In short, "[t]he two questions here are whether the [Commissioner] was required to elect to surrender the security or not and if so, whether [his] conduct was unequivocal": Surfers Paradise at [36].


case_text: As noted by Dutney JA, the principles applicable to election were stated by Stephen J in Sargent v ASL Developments Ltd [1974] HCA 40 ; (1974) 131 CLR 634 at 646 (quoted in Surfers Paradise at [31]): The words or conduct ordinarily required to constitute an election must be unequivocal in the sense that it is consistent only with the exercise of one of the two sets of rights and inconsistent with the exercise of the other; thus for a lessor to continue to receive rent under a lease will be consistent only with his rights as lessor and inconsistent with the exercise of a right to determine the lease ... However, less unequivocal conduct, only providing some evidence of an election, may suffice if coupled with actual knowledge of the right of election ... There need be no expressed intention to elect, nor will an express disclaimer of such an intention be of any avail in preserving one right if in fact there be an exercise of another inconsistent right ... For an election there need be no actual, subjective intention to elect ... an election is the effect which the law attributes to conduct justifiable only if such an election had been made ...


case_text: As the liquidator notes, the relevant law on this point is helpfully summarized in the reasons of Dutney JA (with whom Williams and Jerrard JJA agreed) in Surfers Paradise Investments Pty Ltd (in liquidation) v Davoren Nominees Pty Ltd [2004] 1 Qd R 567 (" Surfers Paradise" ). First, his Honour noted that the regime now codified in s 554E of the Corporations Act dates back to the judgment of Jessel MR in Moor v Anglo-Italian Bank (1879) 10 Ch D 681: Surfers Paradise at [27]. 37 Essentially, a secured creditor wishing to prove a debt may do one of three things: (1) surrender the security and prove for the full amount; (2) realize the security and prove for the difference; or (3) value the security and prove for the difference: Surfers Paradise at [27]. Furthermore (at [27] quoting Moor ): [i]f without doing either of the latter two things, he proves for the full amount, as he cannot prove for the full amount and receive a dividend except on the theory of giving up the security, he shews by that an intention to give up his security; and, if he so proves and receives a dividend or votes, he shews pretty conclusively that he has finally elected to give up his security and take his dividend; in other words, having two funds to resort to, the bankrupt's general estate, so as to get a dividend on the whole amount of his debt, or his security, he elects to take the bankrupt's estate, and in that way gives up his security. It is not forfeiture, it is election; but, the petitioning creditor gets nothing unless he proves. 38 The question, then, is whether a creditor has elected to surrender the security interest. Whether an election has been made is an objective question of fact; that is, regardless of whether a creditor subjectively intended to give up the interest, the court is required to look at objective evidence including whether the creditor has sought to avail himself of rights and remedies of an unsecured creditor such as the dividend and voting rights mentioned in Moor : Surfers Paradise at [28]-[29]. 39 As noted by Dutney JA, the principles applicable to election were stated by Stephen J in Sargent v ASL Developments Ltd [1974] HCA 40 ; (1974) 131 CLR 634 at 646 (quoted in Surfers Paradise at [31]): The words or conduct ordinarily required to constitute an election must be unequivocal in the sense that it is consistent only with the exercise of one of the two sets of rights and inconsistent with the exercise of the other; thus for a lessor to continue to receive rent under a lease will be consistent only with his rights as lessor and inconsistent with the exercise of a right to determine the lease ... However, less unequivocal conduct, only providing some evidence of an election, may suffice if coupled with actual knowledge of the right of election ... There need be no expressed intention to elect, nor will an express disclaimer of such an intention be of any avail in preserving one right if in fact there be an exercise of another inconsistent right ... For an election there need be no actual, subjective intention to elect ... an election is the effect which the law attributes to conduct justifiable only if such an election had been made ... 40 The unequivocal words or conduct referred to by Stephen J may be of two types. As noted by Mahoney JA in Champtaloup v Thomas [1976] 2 NSWLR 264 at 274-275 (quoted in Surfers Paradise at [32]): First, it may be exercised by a conscious act of election. The party having the right may actually determine on his election and, in so far as communication may be necessary ... communicate it to the other party, and an election is thereby made .... Second, the party may do some act which is of such a nature that, irrespective of his actual intention or determination, the law treats him as having exercised his election. This imputation of an election may occur even though the party does not subjectively know that he has the right to elect, or even where he does not intend to elect. 41 Here, as in Surfers Paradise , there is no question that the Commissioner did not subjectively or consciously intend to give up his security interest. Therefore, only the second type of election is at issue. Such an election "requires unequivocal conduct in the face of a necessary choice. In other words, the circumstances faced by the electing party must require an election to be made between inconsistent positions": Surfers Paradise at [33] (footnotes omitted). 42 Submission of a proof of debt for the full amount, if it is silent on the question of surrender, is some evidence of an election to surrender but not conclusive evidence: Surfers Paradise at [34] but cf Re International Tyre Co Pty Ltd (in liquidation) (1979) 4 ACLR 553 at 554. On the other hand, the receipt and acceptance of a dividend pursuant to a scheme of arrangement (or the exercise of creditor voting rights) based on the full amount of the debt is conclusive evidence of surrender: Surfers Paradise at [34]; Moor at 689-690. In short, "[t]he two questions here are whether the [Commissioner] was required to elect to surrender the security or not and if so, whether [his] conduct was unequivocal": Surfers Paradise at [36]. 43 Addressing those questions in Surfers Paradise , Dutney JA found that there was an election to surrender because the creditor had accepted a dividend based on the full amount of the debt (at [37]): A point at which it became necessary in this case to make an election was, in my view, when the dividend cheque was received. At that point in time the respondent was required to make a choice between accepting the cheque or returning it and notifying the liquidator that a mistake had been made in relation to the proof of debt. Having received the cheque, a payment to which the respondent was entitled in the circumstances of this case only by surrendering the security, the respondent had to decide whether to keep it or return it. The assertion of a right to retain the dividend evidenced by banking the cheque and retaining the proceeds was in my view also sufficient to constitute an affirmative answer to the second question. I regard the assertion of such a right by accepting and retaining the dividend in the context of the earlier communications between the liquidator and the respondent as the unequivocal adoption of one of two inconsistent rights. I do not consider that other conduct unknown to the liquidator but inconsistent with an election to surrender the security can affect the position. In the present case, there is no evidence that the Commissioner has received or accepted a dividend based on the full amount of the tax debt (or indeed any dividend at all). In fact, there is no evidence that the liquidator accepted or even relied upon the proof of debt. Surfers Paradise is thus distinguishable. 44 The issue in this case is whether the lodgement of this proof of debt, without more, constitutes unequivocal conduct demonstrating that the Commissioner elected to surrender his security. It is true that the proof of debt was wholly silent as to the security under the Notice. As noted in [11] above, the proof of debt signed by an employee of the Commissioner stated that " to [her] knowledge or belief the creditor has not, nor has any person by the creditor's order, had or received any satisfaction or security for the sum or any part of it." 45 Lodgement of the proof of debt is thus some evidence that the Commissioner elected to surrender his security under the Notice. However, lodgement of the proof is also consistent with an attempt by the Commissioner to protect his rights in the event he were found not to be a secured creditor (ie, "cover his bases"). Moreover, the express words of the proof quoted above state only that the employee lodging the proof was not aware of a security interest; thus the failure to refer to the Notice is also objectively consistent with the possibility that the person lodging the proof was simply ignorant of the security interest, not that such interest was disclaimed, disavowed or surrendered. Finally, as mentioned before, the lodgement of the proof in this case came at a time when, unlike in Surfer's Paradise , there was no "necessary choice" (ie, exercise of voting or dividend rights) put to the Commissioner. As such, the lodgement of the proof of debt under the facts and circumstances of this case was at most equivocal, and therefore not sufficient or conclusive, evidence of surrender, even if I limit myself to consideration only of the contents of the proof and contemporaneous facts and circumstances: see [41] above. 46 That the 9 November 2006 proof of debt, when objectively viewed in context, did not unequivocally evidence a surrender of the security interest under the Notice is further supported by a review of the subsequent correspondence between the liquidator and Commissioner. As the 11 December 2006 letter from the liquidator shows, he was unclear as to the Commissioner's intentions: see [12] above. Any doubt the liquidator might have had was put to rest on 14 December 2006 when the Commissioner wrote to him in the manner described above: see [12]. Given that the liquidator subjectively did not view the proof of debt as unequivocal evidence that the Commissioner had surrendered his claim under the Notice, it is difficult to see how the court could take that view on an objective basis. The liquidator submits that evidence post-dating the lodgement of the proof of debt is irrelevant because the surrender of the security became complete immediately on the lodging of the proof. While I do not accept this submission, I also note that even if I were to accept it, it would not change the outcome of the analysis for the reasons stated in [45] above. 47 For the foregoing reasons, the Notice was effective and the Commissioner did not surrender the security interest under the Notice by lodging a proof of debt with the liquidator on 9 November 2006. Accordingly, I would grant the application. 48 The orders will be: (1) BJT Legal Pty Ltd pay first from the moneys held in account number 633/000 128949658 in the name of BJT Legal Pty Ltd at Bendigo Bank Limited, 407 Sturt Street, Ballarat, the sum of $244,248.45 in compliance with the Notice to Pay Money to the Commissioner of Taxation under s 260- 5 of Sched 1 of the Taxation Administration Act 1953 (Cth) issued by the Deputy Commissioner of Taxation of the Commonwealth of Australia to BJT Legal on 19 October 2006. (2) The costs of and incidental to this application be costs in the liquidation of A Chaid Pty Ltd (in liquidation) (ACN 109 374 727) (3) The Commissioner serve a copy of this order on BJT Legal Pty Ltd. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon. Associate: Dated: 20 December 2007 Counsel for the Applicant: R Brett QC, C Sievers Solicitor for the Applicant: Australian Taxation Office Counsel for the Third Respondent: A P Young Solicitor for the Third Respondent: DLA Phillips Fox Date of Hearing: 18 December 2007 Date of Judgment: 18 December 2007 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/2073.html


case_text: The principal issue for consideration before the learned Federal Magistrate was whether the RRT erred in law by not taking into consideration the appellant's subjective state of mind when determining whether the appellant had a well-founded fear of persecution on his return to Kenya. The Federal Magistrate found that the RRT had considered the relevant information, including submissions made for and on behalf of the appellant and available country information. His Honour found that once the RRT was satisfied that there was no objective basis for a well-founded fear of persecution, it was not required to further consider the subjective fear of the appellant (following the approach in SCAM v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 964 (" SCAM ") and WAHK v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 81 ALD 22 (" WAHK ")). Accordingly, he dismissed the application. 11 The first respondent submitted that the RRT was not required to consider subjective factors once it had found that the appellant did not have an objective basis to fear persecution. In the respondent's submission, von Doussa J rejected an argument similar to that of the appellant in SCAM . The respondent maintained that the view of Gaudron J in Chan , and therefore the appellant's argument, was further disapproved by a Full Court of this Court in WAHK . The first respondent submitted that an argument such as that now being put by the appellant had been rejected by the Full Court in SVTB v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 104 (" SVTB ") at [16]-[21]. The first respondent maintained that there was no basis for formulating a different standard where it was found that the visa applicant had left his or her country of origin with a well-founded fear of persecution at that time.


case_text: The principal issue for consideration before the learned Federal Magistrate was whether the RRT erred in law by not taking into consideration the appellant's subjective state of mind when determining whether the appellant had a well-founded fear of persecution on his return to Kenya. The Federal Magistrate found that the RRT had considered the relevant information, including submissions made for and on behalf of the appellant and available country information. His Honour found that once the RRT was satisfied that there was no objective basis for a well-founded fear of persecution, it was not required to further consider the subjective fear of the appellant (following the approach in SCAM v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 964 (" SCAM ") and WAHK v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 81 ALD 22 (" WAHK ")). Accordingly, he dismissed the application. 11 The first respondent submitted that the RRT was not required to consider subjective factors once it had found that the appellant did not have an objective basis to fear persecution. In the respondent's submission, von Doussa J rejected an argument similar to that of the appellant in SCAM . The respondent maintained that the view of Gaudron J in Chan , and therefore the appellant's argument, was further disapproved by a Full Court of this Court in WAHK . The first respondent submitted that an argument such as that now being put by the appellant had been rejected by the Full Court in SVTB v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 104 (" SVTB ") at [16]-[21]. The first respondent maintained that there was no basis for formulating a different standard where it was found that the visa applicant had left his or her country of origin with a well-founded fear of persecution at that time. 14 The RRT was not in error when if failed expressly to consider the appellant's subjective state. It is true that, if the applicant were to succeed, then the Tribunal had to be satisfied that he subjectively held a fear of persecution if returned to Kenya and that his fear was well-founded. As the Federal Magistrate found, the Full Court decision in WAHK is contrary to the appellant's claim that the RRT was required to consider subjective factors. In WAHK , Lee and Tamberlin JJ said (at [12]-[14]) as follows (emphasis mine): " Where the RRT has accepted that an applicant had a well-founded risk of persecution at the time of their departure, a question arises concerning the approach that the RRT should take, in view of that finding, at the time it makes its decision concerning whether that applicant would have a well-founded risk of persecution, if they were returned. In [Chan] , Gaudron J, (at 415), accepted that the correct approach to a submission as to changed circumstances is as follows: " If an applicant relied on his past experiences it is, in my view, incumbent on a decision-maker to evaluate whether those experiences produced a well-founded fear of being persecuted. If they did, then a continuing fear ought to be accepted as well-founded unless it is at least possible to say that the fear of a reasonable person in the position of the claimant would be allayed by knowledge of the subsequent changes in the country of nationality. " The above view was not shared by Gummow J, who, in Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21 ; (1999) 197 CLR 611 at 659, said that the view of Gaudron J in Chan (quoted above) did not represent the view of the Court in Chan . Gaudron J accepted that this observation was correct in the case of Re Minister for Immigration and Multicultural Affairs; Ex parte Miah [2001] HCA 22 ; (2001) 206 CLR 57 at [69] . Her Honour considered that her approach was, nevertheless, correct. The relevant question is whether, as at 29 May 2002, the objective facts establish that the appellant had a well-founded fear of persecution. This is to be assessed on an objective basis , and not on the basis that the fear of a reasonable person in the position of the claimant would not be allayed by knowledge of subsequent changes in the country of nationality. The reference to a "well-founded fear" is a reference to the objective factual position at that time. " The majority's approach is directly contrary to the position of the appellant in this case. Consistently with WAHK , if the RRT is not satisfied, objectively speaking, that there was a real chance of persecution then it does not have to further consider an applicant's subjective fear. This is because, without a sufficient objective chance of persecution, the applicant cannot have a well-founded fear of persecution: see also WAKZ v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1065 at [46] - [49] and SVTB at [21].


case_text: In his written submissions, the appellant relied on a passage from the judgment of Gaudron J in Minister for Immigration and Multicultural Affairs; Ex Parte Miah [2001] HCA 22 ; (2001) 206 CLR 57 (" Miah ") at [62], where her Honour said as follows: "For the purposes of this case, it is necessary to note three important matters with respect to the Convention definition of "refugee". The first is that the Convention looks both to the position of the individual and to the conditions which pertain in the country of his or her nationality. More precisely, the question whether a person has a well-founded fear of persecution is one that has both subjective and objective elements and necessitates consideration of the mental and emotional state of the individual and, also, the objective facts relating to conditions in the country of his or her nationality." The approach taken in Miah is consistent with her Honour's approach to the definition of "refugee" in Chan v Minister for Immigration and Ethnic Affairs [1989] HCA 62 ; (1989) 169 CLR 379 (" Chan ") at 415. The appellant submitted that the majority of Mason CJ, Dawson, Toohey and McHugh JJ in Chan also established that the definition of refugee involves mixed subjective and objective elements. 14 The RRT was not in error when if failed expressly to consider the appellant's subjective state. It is true that, if the applicant were to succeed, then the Tribunal had to be satisfied that he subjectively held a fear of persecution if returned to Kenya and that his fear was well-founded. As the Federal Magistrate found, the Full Court decision in WAHK is contrary to the appellant's claim that the RRT was required to consider subjective factors. In WAHK , Lee and Tamberlin JJ said (at [12]-[14]) as follows (emphasis mine): " Where the RRT has accepted that an applicant had a well-founded risk of persecution at the time of their departure, a question arises concerning the approach that the RRT should take, in view of that finding, at the time it makes its decision concerning whether that applicant would have a well-founded risk of persecution, if they were returned. In [Chan] , Gaudron J, (at 415), accepted that the correct approach to a submission as to changed circumstances is as follows: " If an applicant relied on his past experiences it is, in my view, incumbent on a decision-maker to evaluate whether those experiences produced a well-founded fear of being persecuted. If they did, then a continuing fear ought to be accepted as well-founded unless it is at least possible to say that the fear of a reasonable person in the position of the claimant would be allayed by knowledge of the subsequent changes in the country of nationality. " The above view was not shared by Gummow J, who, in Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21 ; (1999) 197 CLR 611 at 659, said that the view of Gaudron J in Chan (quoted above) did not represent the view of the Court in Chan . Gaudron J accepted that this observation was correct in the case of Re Minister for Immigration and Multicultural Affairs; Ex parte Miah [2001] HCA 22 ; (2001) 206 CLR 57 at [69] . Her Honour considered that her approach was, nevertheless, correct. The relevant question is whether, as at 29 May 2002, the objective facts establish that the appellant had a well-founded fear of persecution. This is to be assessed on an objective basis , and not on the basis that the fear of a reasonable person in the position of the claimant would not be allayed by knowledge of subsequent changes in the country of nationality. The reference to a "well-founded fear" is a reference to the objective factual position at that time. " The majority's approach is directly contrary to the position of the appellant in this case. Consistently with WAHK , if the RRT is not satisfied, objectively speaking, that there was a real chance of persecution then it does not have to further consider an applicant's subjective fear. This is because, without a sufficient objective chance of persecution, the applicant cannot have a well-founded fear of persecution: see also WAKZ v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1065 at [46] - [49] and SVTB at [21].


case_text: In his written submissions, the appellant relied on a passage from the judgment of Gaudron J in Minister for Immigration and Multicultural Affairs; Ex Parte Miah [2001] HCA 22 ; (2001) 206 CLR 57 (" Miah ") at [62], where her Honour said as follows: "For the purposes of this case, it is necessary to note three important matters with respect to the Convention definition of "refugee". The first is that the Convention looks both to the position of the individual and to the conditions which pertain in the country of his or her nationality. More precisely, the question whether a person has a well-founded fear of persecution is one that has both subjective and objective elements and necessitates consideration of the mental and emotional state of the individual and, also, the objective facts relating to conditions in the country of his or her nationality." The approach taken in Miah is consistent with her Honour's approach to the definition of "refugee" in Chan v Minister for Immigration and Ethnic Affairs [1989] HCA 62 ; (1989) 169 CLR 379 (" Chan ") at 415. The appellant submitted that the majority of Mason CJ, Dawson, Toohey and McHugh JJ in Chan also established that the definition of refugee involves mixed subjective and objective elements. 11 The first respondent submitted that the RRT was not required to consider subjective factors once it had found that the appellant did not have an objective basis to fear persecution. In the respondent's submission, von Doussa J rejected an argument similar to that of the appellant in SCAM . The respondent maintained that the view of Gaudron J in Chan , and therefore the appellant's argument, was further disapproved by a Full Court of this Court in WAHK . The first respondent submitted that an argument such as that now being put by the appellant had been rejected by the Full Court in SVTB v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 104 (" SVTB ") at [16]-[21]. The first respondent maintained that there was no basis for formulating a different standard where it was found that the visa applicant had left his or her country of origin with a well-founded fear of persecution at that time.


case_text: At the hearing, the appellant raised and focussed almost exclusively on the argument that the RRT committed jurisdictional error by failing to consider whether, independent of the appellant's status as a former member of MwM, the appellant was likely to face persecution in Kenya as a political activist. In effect, this claim had three components. First, the appellant suggested that, apart from his membership in MwM, he might face persecution as a former political activist generally. Secondly, he argued that, given his prior political activity, he would be likely to engage in such activity in the future and would suffer persecution as a result. Thirdly, the appellant raised the possibility that, if returned to Kenya, he would abstain from political activity because of the threat of persecution. Referring to the facts and holding of Appellant S395/2002 v Minister for Immigration and Multicultural Affairs [2003] HCA 71 ; (2003) 216 CLR 473 (" S395 ") the appellant argued that this would itself be considered a form of persecution. 9 Counsel for the appellant noted that, after the hearing before the RRT, the appellant's advisor filed further submissions with the RRT. These submissions included additional country information. Most relevantly, the advisor submitted a report dated 18 February 2005 from the UN Office for the Coordination of Humanitarian Affairs that detailed continuing human rights abuses in Kenya after the fall of the Moi regime. Counsel argued that, faced with this information, the RRT should have considered whether the appellant would be at risk of persecution as a former political activist and as someone who would be likely to engage in political activity if he were to return to Kenya. Counsel also contended that the RRT had failed to have regard to this country information or any other such information relating to the situation in Kenya after the fall from power of Daniel Arap Moi. 13 Further, the first respondent contended that the appellant's argument was without merit. The respondent accepted that, in some circumstances, the RRT might be required to consider a claim that had not been expressly raised before it, but the respondent submitted that the RRT had not been obliged to do so in the present case. The first respondent noted that the appellant had been legally represented before the RRT and that these representatives had filed submissions on his behalf after the RRT's hearing. The respondent cited the following passage from NABE (at [58]): " It has been suggested that the unarticulated claim must be raised 'squarely' on the material available to the Tribunal before it has a statutory duty to consider it SDAQ v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 120 ; (2003) 199 ALR 265 at 273 [19] per Cooper J. The use of the adverb 'squarely' does not convey any precise standard but it indicates that a claim not expressly advanced will attract the review obligation of the Tribunal when it is apparent on the face of the material before the Tribunal. Such a claim will not depend for its exposure on constructive or creative activity by the Tribunal. " The first respondent argued that the appellant's new claims were not apparent on the face of the material before the RRT. The first respondent submitted that a close review of the material before the RRT showed that the appellant clearly limited his claims to his past involvement in MwM and had not referred to activism generally or his activities if returned to Kenya. The RRT was not required, so the respondent submitted, to be creative and the information before the RRT did not give rise to any such claim as that now made. In the first respondent's submission, the country information could not be said to raise such a new claim as it was not specific to the appellant and said nothing about the appellant's future behaviour. Accordingly, the RRT was not in error not to consider whether the appellant might be persecuted as a political activist generally. Further, there was no basis for the appellant's submission that this case raised considerations analogous to S395 . 19 Secondly, an examination of the material before the RRT makes manifest that the appellant clearly limited his claims to his past involvement in MwM. He did not refer to the position of other activists or liken his position to theirs, and he said nothing about his own activities or their curtailment if returned to Kenya. There is no factual basis in this case that would support an approach analogous to that in S395. Further, this is not a case in which it can be said that the RRT has failed to make a finding on "a substantial, clearly articulated argument relying upon established facts" such that there has been a failure to accord procedural fairness or constructive failure to exercise jurisdiction: see and contrast Dranichnikov v Minister for Immigration and Multicultural and Indigenous Affairs [2003] HCA 26 ; (2003) 77 ALJR 1088 at [24] per Gummow and Callinan JJ. This is because there was no such argument. To adapt the language of the Full Court of this Court in NABE , this was not a case that obliged the RRT to consider the claim as it is now formulated by the appellant because the claim did not clearly arise from the material before the RRT: see NABE at [58] and [60]-[62].


case_text: The appellant acknowledged that these claims had not been expressly raised before the RRT. However, he argued that, under NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) [2004] FCAFC 263 ; 144 FCR 1 (" NABE ") per Black CJ, French and Selway JJ, the RRT might be required to consider a claim even though an applicant has not raised the claim explicitly. He submitted that the country information before the RRT should have alerted the RRT to the possibility that the appellant might suffer persecution as a political activist. Thus, in the appellant's view, it committed jurisdictional error by failing to consider that possibility. 13 Further, the first respondent contended that the appellant's argument was without merit. The respondent accepted that, in some circumstances, the RRT might be required to consider a claim that had not been expressly raised before it, but the respondent submitted that the RRT had not been obliged to do so in the present case. The first respondent noted that the appellant had been legally represented before the RRT and that these representatives had filed submissions on his behalf after the RRT's hearing. The respondent cited the following passage from NABE (at [58]): " It has been suggested that the unarticulated claim must be raised 'squarely' on the material available to the Tribunal before it has a statutory duty to consider it SDAQ v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 120 ; (2003) 199 ALR 265 at 273 [19] per Cooper J. The use of the adverb 'squarely' does not convey any precise standard but it indicates that a claim not expressly advanced will attract the review obligation of the Tribunal when it is apparent on the face of the material before the Tribunal. Such a claim will not depend for its exposure on constructive or creative activity by the Tribunal. " The first respondent argued that the appellant's new claims were not apparent on the face of the material before the RRT. The first respondent submitted that a close review of the material before the RRT showed that the appellant clearly limited his claims to his past involvement in MwM and had not referred to activism generally or his activities if returned to Kenya. The RRT was not required, so the respondent submitted, to be creative and the information before the RRT did not give rise to any such claim as that now made. In the first respondent's submission, the country information could not be said to raise such a new claim as it was not specific to the appellant and said nothing about the appellant's future behaviour. Accordingly, the RRT was not in error not to consider whether the appellant might be persecuted as a political activist generally. Further, there was no basis for the appellant's submission that this case raised considerations analogous to S395 . 19 Secondly, an examination of the material before the RRT makes manifest that the appellant clearly limited his claims to his past involvement in MwM. He did not refer to the position of other activists or liken his position to theirs, and he said nothing about his own activities or their curtailment if returned to Kenya. There is no factual basis in this case that would support an approach analogous to that in S395. Further, this is not a case in which it can be said that the RRT has failed to make a finding on "a substantial, clearly articulated argument relying upon established facts" such that there has been a failure to accord procedural fairness or constructive failure to exercise jurisdiction: see and contrast Dranichnikov v Minister for Immigration and Multicultural and Indigenous Affairs [2003] HCA 26 ; (2003) 77 ALJR 1088 at [24] per Gummow and Callinan JJ. This is because there was no such argument. To adapt the language of the Full Court of this Court in NABE , this was not a case that obliged the RRT to consider the claim as it is now formulated by the appellant because the claim did not clearly arise from the material before the RRT: see NABE at [58] and [60]-[62].


case_text: The first respondent submitted that the RRT was not required to consider subjective factors once it had found that the appellant did not have an objective basis to fear persecution. In the respondent's submission, von Doussa J rejected an argument similar to that of the appellant in SCAM . The respondent maintained that the view of Gaudron J in Chan , and therefore the appellant's argument, was further disapproved by a Full Court of this Court in WAHK . The first respondent submitted that an argument such as that now being put by the appellant had been rejected by the Full Court in SVTB v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 104 (" SVTB ") at [16]-[21]. The first respondent maintained that there was no basis for formulating a different standard where it was found that the visa applicant had left his or her country of origin with a well-founded fear of persecution at that time. 14 The RRT was not in error when if failed expressly to consider the appellant's subjective state. It is true that, if the applicant were to succeed, then the Tribunal had to be satisfied that he subjectively held a fear of persecution if returned to Kenya and that his fear was well-founded. As the Federal Magistrate found, the Full Court decision in WAHK is contrary to the appellant's claim that the RRT was required to consider subjective factors. In WAHK , Lee and Tamberlin JJ said (at [12]-[14]) as follows (emphasis mine): " Where the RRT has accepted that an applicant had a well-founded risk of persecution at the time of their departure, a question arises concerning the approach that the RRT should take, in view of that finding, at the time it makes its decision concerning whether that applicant would have a well-founded risk of persecution, if they were returned. In [Chan] , Gaudron J, (at 415), accepted that the correct approach to a submission as to changed circumstances is as follows: " If an applicant relied on his past experiences it is, in my view, incumbent on a decision-maker to evaluate whether those experiences produced a well-founded fear of being persecuted. If they did, then a continuing fear ought to be accepted as well-founded unless it is at least possible to say that the fear of a reasonable person in the position of the claimant would be allayed by knowledge of the subsequent changes in the country of nationality. " The above view was not shared by Gummow J, who, in Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21 ; (1999) 197 CLR 611 at 659, said that the view of Gaudron J in Chan (quoted above) did not represent the view of the Court in Chan . Gaudron J accepted that this observation was correct in the case of Re Minister for Immigration and Multicultural Affairs; Ex parte Miah [2001] HCA 22 ; (2001) 206 CLR 57 at [69] . Her Honour considered that her approach was, nevertheless, correct. The relevant question is whether, as at 29 May 2002, the objective facts establish that the appellant had a well-founded fear of persecution. This is to be assessed on an objective basis , and not on the basis that the fear of a reasonable person in the position of the claimant would not be allayed by knowledge of subsequent changes in the country of nationality. The reference to a "well-founded fear" is a reference to the objective factual position at that time. " The majority's approach is directly contrary to the position of the appellant in this case. Consistently with WAHK , if the RRT is not satisfied, objectively speaking, that there was a real chance of persecution then it does not have to further consider an applicant's subjective fear. This is because, without a sufficient objective chance of persecution, the applicant cannot have a well-founded fear of persecution: see also WAKZ v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1065 at [46] - [49] and SVTB at [21].