case_text: There are further observations in the judgment of the majority which have a relevance to the present controversy. The majority said at [157]: By the time Fontana Films came to be decided, there had been controversy about what are "trading or financial corporations formed within the limits of the Commonwealth". In particular, in R v Trade Practices Tribunal; Ex parte St George County Council [1974] HCA 7 ; [(1974) 130 CLR 533 ; 2 ALR 371] , the court had held that a county council, established under the Local Government Act 1919 (NSW) for "local government purposes", empowered to sell electricity and sell and install electrical fittings and appliances, and pursuing only those activities, was not a trading corporation. In his dissenting opinion, Barwick CJ had said [1974] HCA 7 ; [(1974) 130 CLR 533 at 543] that "a corporation whose predominant and characteristic activity is trading whether in goods or services" was a trading corporation. But this view did not then command the assent of a majority of the court. 14 The majority continued at [158]: In R v Federal Court of Australia; Ex parte WA National Football League [1979] HCA 6 ; [(1979) 143 CLR 190 ; 23 ALR 439] [Adamson] St George County Council was distinguished. Associations incorporated under associations incorporation legislation, whose principal objects were the promotion, control and management of Australian Rules football matches, were held to be trading corporations. Mason J said [1979] HCA 6 ; [(1979) 143 CLR 190 at 233; [1979] HCA 6 ; 23 ALR 439 at 472]: "Trading corporation" is not and never has been a term of art or one having a special legal meaning. Nor, as the Chief Justice pointed out [in St George County Council ], was there a generally accepted definition of the expression in the nineteenth century. Essentially it is a description or label given to a corporation when its trading activities form a sufficiently significant proportion of its overall activities as to merit its description as a trading corporation. 48 The High Court decision of The Queen v Trade Practices Tribunal; Ex Parte St George County Council [1974] HCA 7 ; (1974) 130 CLR 533 ( St George County Council ) is not directly on point, but, in my opinion, is of assistance on the question of characterisation, when one contrasts the powers and activities the subject of consideration in that case, with the powers and activities of the Etheridge Shire Council in the present case. 49 In that case, the St George County Council was established under the Local Government Act 1919 (NSW) for "local government purposes". It was empowered within its district to supply electricity and to supply and install electrical fitting and appliances, and these were its only activities . The Act provided that the county council should "endeavour so to conduct each trading undertaking that without any loss being incurred the service, product, or commodity of the undertaking may be supplied to the consumer as cheaply as possible". 50 The High Court, by a majority (McTiernan, Menzies and Gibbs JJ, with Barwick CJ and Stephen J dissenting) held that the St George County Council was not a "trading corporation" within s 5 of the Restrictive Trade Practices Act 1971-1972 (Cth). The majority accepted that the St George County Council was not a "trading corporation", notwithstanding that it carried on trading activities. 51 It was submitted on behalf of the State of New South Wales, intervening, that a "trading corporation" connotes more than a corporation which trades. It was submitted that "trading" describes the nature or quality of the corporation itself rather than its actual activities. For the Commonwealth of Australia, it was submitted that the St George County Council was set up to sell electrical fittings and appliances, and that to do that was to trade. It was therefore a "trading corporation". It was submitted that "[I]ts actual activities characterize it." 52 Barwick CJ said, at 538: The question raised by the case involves the construction of the expression "trading corporation formed within the limits of the Commonwealth" as it appears in the Act through the definition for the purposes of the Act of a "corporation". Because of identity of language and the fact that the statutory formula is designed to keep the Act within constitutional power, that construction would be applicable to the words of the Constitution , a circumstance which must influence the construction placed on the statutory formula. I ought to point out at the outset that the ultimate question in the case is to be answered in relation to the applicant and not as to all county councils. The powers and functions which under the Act may be transferred to a county council are diverse (cf., e.g. s. 564(1) and (2)). Consequently, considerations which, in my opinion, are definitive in this case may not be so in the case of other county councils with different powers and activities. (Emphasis added). 53 Importantly, Barwick CJ noted, at 539: ... the description "trading corporation", in my opinion, refers not to the purpose of incorporation but to the activities of the corporation at the relevant time. So far then the applicant is evidently a corporation which has been formed within the Commonwealth. It trades in the supply of electricity, of electrical appliances and of electrical services. It has no other purpose or activity. 54 Barwick CJ suggested that there did not appear to have been any generally accepted definition of a trading corporation. He said, at 541: It was assumed, I think, that such a corporation could be identified by its activities. If its nature was being sought, it was to be found in what it did. 55 Barwick CJ said, at 543: To say that a corporation's description for relevant purposes will be determined by its activities does not mean, of course, that a corporation which to any extent engages in trade is a trading corporation. It is evident that the legislative power given by s. 51(xx.) is not a power to legislate with respect to trading. It is a legislative power with respect to some corporations. But a corporation whose predominant and characteristic activity is trading whether in goods or services will, in my opinion, satisfy the description : and a corporation which does nothing but trade and, if it matters, was incorporated so that it could trade, i.e. exercise the trading powers of the constituent local government councils, is, in my opinion, properly described as a trading corporation within the constitutional power. It seems to me that the reason why a corporation trades as its sole or predominant and characteristic activity is irrelevant to the description of the corporation for present purposes, that is to say, the ends which such a corporation seeks to serve by trading are irrelevant to its description. As I have indicated, the purpose of the grant of legislative power includes the control of the corporate activities of the corporation : it is not so concerned with the motives which prompt those activities, nor the ultimate ends which those activities hope to achieve. If, upon that consideration, the corporation can fairly be described by reason of those activities, their extent and relative significance in the affairs of the corporation as a "trading corporation" it will, in my opinion, be nothing to the point that it is also a government or State or municipal corporation. The effect of the trading activities of such a corporation upon and in the community will not be lessened or necessarily affected by the fact that it is a State or municipal instrumentality. (Emphasis added). 56 The first and fourth sentences of this passage identify the basis for his conclusion that, in that case, St George County Council was a trading corporation. 57 Relevant to the contention of the union applicants in QUD 481 of 2006 that the Etheridge Shire Council is a municipal corporation, a tier of State government in its own right, and therefore cannot be also a constitutional corporation, Barwick CJ said, at 544-545: It may be granted that the applicant may properly be styled a "municipal" corporation; it is both the creature and servant of "local government": but it is, none the less, in my opinion, a trading corporation within the statutory definition. It is easily demonstrated that the purpose of the applicant's incorporation and of its activities is the performance of what has come to be regarded as a local government function, its charter being to provide electricity at low cost to the ratepayer. But it is to achieve and satisfy this purpose by trading, both in electricity and in electrical goods and services. It buys and sells an activity recognized by the Act itself as "a trading undertaking" (s.418(1) and (2)). To say that it is a "municipal" corporation is, in my opinion, to say no more than that it is a government, or local government, agency; or, put another way, that it is a municipal trading corporation. 58 Menzies J in the majority said, at 551: The submission of the Solicitor-General for the Commonwealth, who appeared for the respondents, was that the Council is and has always been a trading corporation. He relied exclusively upon the contention that this Council had been established for no purpose other than to trade and he refrained from submitting, in these proceedings, that a local government corporation which has local government purposes other than trading purposes is a "trading corporation" within the meaning of s. 5. (Emphasis added). 59 Later, at 551, Menzies J said: It is because trading of a council is subordinate to its governmental purposes that the Act contains a section such as s. 419. It is this subordination of trading to community purposes that is, to my mind, the real importance of s. 419 in this case. It reveals the very nature of a council to which it applies. 60 Menzies J said, at 552: It seems to me that trading corporations were in 1900 a well-recognized classification of companies. 62 Gibbs J (as he then was) said, at 561: The question ... is whether the County Council is a trading corporation. In my opinion, the words "trading corporation" in s. 51(xx.) do not mean "a corporation which is trading". The word "trading" forms part of a composite expression and indicates the essential attribute of the kind of corporation to which it refers. It is common to describe corporations according to their nature, and to speak, for example, of ecclesiastical, eleemosynary or municipal corporations. There can be no doubt that the words "foreign corporations" and "financial corporations" in pl. (xx.) describe corporations of a particular kind rather than corporations of any kind which happen to act in a particular way. The same is true of the words "trading corporations" which, in their natural meaning, as well as in the context of the placitum, refer to corporations of a particular kind. 63 At 562, his Honour said: A trading corporation is one formed for the purpose of trading. However, as I have indicated, the mere fact that a corporation is trading does not mean that it is a trading corporation. It is necessary to determine the true character of the corporation, upon a consideration of all the circumstances that throw light on the purpose for which it was formed. Thus there is no difficulty in holding that the fact that a corporation carries on some trade which is merely incidental or ancillary to the fulfilment of its main purpose does not give it the character of a trading corporation. 64 Gibbs J said, 564: When all these facts are considered, the proper conclusion in my opinion is that the County Council is a corporation constituted for the purposes of local government to provide an essential service to the inhabitants of an aggregation of local authority areas, under conditions thought most likely to prove beneficial to them. It is properly described as a municipal corporation. The description to the corporations to which the powers of s. 51 (xx.) extend does not include municipal corporations. 65 Gibbs J went on to say, at 565: It seems to me that the purpose of specifically mentioning the corporations intended to be within the power given by s. 51 (xx.) was to exclude from the scope of the power at least those corporations which could properly be characterized as municipal and charitable corporations. ... The purpose of its [the County Council's] formation is more properly described as that of fulfilling a function of local government. 66 Stephen J, who formed a minority with Barwick CJ in St George County Council , was of the view that, (at 570-571): ... when a corporation is formed for the sole purpose of undertaking that [trading] function and undertakes none of the functions of local government which typify the activities of a municipal corporation it is ... inappropriate to describe it as a municipal corporation. 67 The High Court in Adamson , which was differently constituted from the High Court in St George County Council, departed from the purposive reasoning of the majority in St George County Council and favoured the reasoning of Barwick CJ in that case. 68 In Adamson , Barwick CJ said, at 208: The only sure guide to the nature of the company is a purview of its current activities, a judgment as to its nature being made after an overview of all those activities. 72 Toohey J in Hughes summarised the position up until 1986, saying, at 20: The last few years have seen several decisions, particularly by the High Court, in which the notion of a trading corporation has been examined. It is not my intention to refer to those decisions in great detail but rather to state the principles that appear to emerge from them and then to apply those principles to the facts of the present case. 1. The mere fact that a corporation trades does not mean that it is a trading corporation: R v Trade Practices Tribunal; Ex parte St George County Council [1974] HCA 7 ; (1974) 130 CLR 533 at 543, 562 (St George County Council); R v Federal Court of Australia; Ex parte Western Australian National Football League [1979] HCA 6 ; (1979) 143 CLR 190 at 219, 234 (Adamson). 2. The purpose of incorporation, propounded in St George County Council, is no longer a valid test. The test is one of the current activities of the corporation: Adamson; State Superannuation Board v Trade Practices Commission [1982] HCA 72 ; (1982) 150 CLR 282 at 304; (1982) ATPR 40-326 at 43,976-43,977 (State Superannuation Board). 3. But the current activities test is not the sole criterion for determining whether a corporation is a trading corporation. Thus where a corporation has not begun to trade, its character may be found in its constitution. Even when there are current activities, the corporation's constitution is not completely irrelevant: Fencott v Muller [1983] HCA 12 ; (1983) 152 CLR 570 at 602; (1983) ATPR 40-350 at 44,218. 4. Views as to the necessary extent of trading activity have varied. It must be a substantial corporate activity (Barwick CJ in Adamson at 208); the trading activities must form a sufficiently significant proportion of the corporation's overall activities (Mason J in Adamson at 233, with Jacobs J concurring at 237); the trading activities should not be insubstantial (Murphy J in Adamson at 239); the corporation must carry on trading activities on a significant scale: (Mason, Murphy and Deane JJ in State Superannuation Board at 304; 43,976-43,977; Deane J in Commonwealth v Tasmania [1983] HCA 21 ; (1983) 57 ALJR 450 at 559-560. 5. An incorporated sporting body can be a trading corporation if its activities meet the required test: Adamson. 6. In particular, incorporation under a statute such as the Associations Incorporation Act does not prevent a corporate body from being a trading corporation if its activities warrant that description: Adamson at 232. 7. Trading denotes the activity of providing, for reward, goods or services: Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134 at 139; St George County Council at 569-570; Bevanere Pty Ltd v Lubidineuse [1985] FCA 134 ; (1985) 7 FCR 325 at 330-331; (1985) ATPR 40-565 at 46,568. 8. The Trade Practices Act itself draws a distinction between trading corporations and financial corporations; nevertheless the two classes are not mutually exclusive: State Superannuation Board at 303. 73 What his Honour referred to in paragraph 3. above may have an important relevance to a "fully fledged" municipal corporation, like the Etheridge Shire Council, as opposed to what might be described as an ersatz municipal corporation that was the subject of consideration in the St George County Council case. 74 As a practical matter, his Honour concluded that the WACA was a trading corporation, but reached a different conclusion in relation to the Cricket Clubs. At 25, he highlighted some difficulties: Where all activities are income producing, it may not be hard to single out some as trading activities and quantify their significance, even if only in a broad way. But where some activities are income producing and others are not, the exercise is not so straightforward ... A trading activity may represent a significant part of a club's income but be relatively insignificant in an overall consideration of the club's activities. 75 This observation has a particular resonance in the present case, as will appear later. Such trading activity of the Etheridge Shire Council is quite insignificant in relation to the overall consideration of the activities of the Etheridge Shire Council, which, as a local government, exercises extensive legislative and executive functions in the local government area, and is its raison d'être. 81 With respect, there is an element of circularity in this observation, but it is not consistent with the view of Barwick CJ in the St George County Council case, set out in [55] above. 82 It is to be noted that Gibbs J in the St George County Council case, said, at 561: The word "trading" forms part of a composite expression and indicates the essential attribute of the kind of corporation to which it refers. It is common to describe corporations according to their nature ... 83 And later, in the same paragraph: ... the words "trading corporations" ... in their natural meaning, as well as in the context of the placitum, refer to corporations of a particular kind. 84 Both Barwick CJ, at 543, and Gibbs J, at 561, thoroughly rejected the contention that a corporation which to any extent engages in trade is a trading corporation. 85 I therefore proceed to enquire whether the Etheridge Shire Council is a trading corporation or a financial corporation, by considering whether, on the evidence, "the predominant and characteristic activity of the Etheridge Shire Council is trading, whether in goods or services", or whether "the predominant and characteristic activity of the Etheridge Shire Council is in finance." 86 In that enquiry, it is necessary to have regard not only to whether the predominant and characteristic activity of the Council is trading or finance, but also, as Barwick CJ indicated in St George County Council at 543, the extent of that activity and its relative significance in the affairs of the Etheridge Shire Council. 87 The Etheridge Shire Council is established by the LGA, and the powers and activities of the Etheridge Shire Council are governed by that Act. 88 The Etheridge Shire Council was established as a body corporate (in the name Einasleigh Shire Council) in accordance with the Local Government (Divisional Boards) Act 1879 (Qld) by proclamation notice of which was published in the Queensland Government Gazette dated 11 November 1879. 142 Menzies J in St George County Council , said, at 552: In Halsbury's Laws of England ... the distinction between trading and non-trading corporations is conveniently drawn and corporations having statutory powers of local government are included in the classification there appearing of non-trading corporations. It may also be observed that in 1850 James Grant in his Treatise on the Law of Corporations classified "Municipal Corporation" separately from trading bodies and devoted 150 pages of his book to the consideration of municipal corporations. 143 His Honour concluded, at 554: It is not my purpose to attempt to define all that falls within the limits of the classification of "trading corporation". Rather, I am concerned to indicate that the classification has limits and those limits are not to be ascertained simply by asking the question "Does the corporation trade?" As I have indicated, many corporations which do trade are clearly outside the limits of the classification and one group of corporations that is not comprehended is, in my view, corporations of an essentially different character, namely corporations for local government purposes." 144 Mr Herbert of Counsel for the applicants in QUD 481 of 2006 drew attention to the record of the constitutional debates on 17 April 1897, at 793, where Mr Symon said, "In the original Act corporations simply are mentioned. Why this difference?" To which Mr Barton, later an original judge of the High Court, said: The reason of making the difference was this: It having been seen that the word "corporations," as it existed, covered municipal corporations, the term was changed to "trade corporations." 145 In 1891, in the Constitutional debates on whether the corporations power should extend to the registration or incorporation of companies, Sir Samuel Griffiths said, at 686: I do not think we should. There are a great number of different corporations. For instance, there are municipal, trading, and charitable corporations, and these are all incorporated in different ways according to the law pertaining in different states. ... It is sometimes difficult to say what is a trading corporation. What is important, however, is that there should be uniform law for the recognition of corporations. 146 In the light of the observations by the High Court in Adamson and the later cases, in the characterisation of a corporation as a trading corporation, or a financial corporation, the primary focus has to be on the activities of the corporation. 154 I am of the view that all five judges in the St George County Council case would have determined that the Etheridge Shire Council is not a trading corporation. 155 Accepting that the "activities test" is the appropriate test to apply in determining whether local governments are trading corporations, the application of that test points overwhelmingly to the conclusion that the Etheridge Shire Council is not a trading corporation. 156 Equally, it is not a financial corporation. The only financial activities which, on the evidence, it engages, is maintaining interest-bearing deposits of funds prior to their utilisation for the purposes of the shire council.


case_outcome: applied

case_title: R v Federal Court of Australia; Ex parte WA National Football League [1979] HCA 6 ; (1979) 143 CLR 190

case_text: The majority continued at [158]: In R v Federal Court of Australia; Ex parte WA National Football League [1979] HCA 6 ; [(1979) 143 CLR 190 ; 23 ALR 439] [Adamson] St George County Council was distinguished. Associations incorporated under associations incorporation legislation, whose principal objects were the promotion, control and management of Australian Rules football matches, were held to be trading corporations. Mason J said [1979] HCA 6 ; [(1979) 143 CLR 190 at 233; [1979] HCA 6 ; 23 ALR 439 at 472]: "Trading corporation" is not and never has been a term of art or one having a special legal meaning. Nor, as the Chief Justice pointed out [in St George County Council ], was there a generally accepted definition of the expression in the nineteenth century. Essentially it is a description or label given to a corporation when its trading activities form a sufficiently significant proportion of its overall activities as to merit its description as a trading corporation. 25 The majority said, at [55]: The challenge to the validity of the legislation enacted in reliance on the corporations power does not put in issue directly the characteristics of corporations covered by s 51(xx). It does not call directly for an examination of what is a trading or financial corporation formed within the limits of the Commonwealth. (Plainly, a foreign corporation is a corporation formed outside the limits of the Commonwealth.) No party or intervener called in question what was said about trading and financial corporations in R v Federal Court of Australia; Ex parte WA National Football League [1979] HCA 6 ; [(1979) 143 CLR 190 ; 23 ALR 439] , Actors and Announcers Equity Association v Fontana Films Pty Ltd [1982] HCA 23 ; [(1982) 150 CLR 169 ; 40 ALR 609] , State Superannuation Board v Trade Practices Commission [(1982) [1982] HCA 72 ; 150 CLR 282 ; 44 ALR 1] or Fencott v Muller [1983] HCA 12 ; [(1983) 152 CLR 570 ; 46 ALR 41]. 72 Toohey J in Hughes summarised the position up until 1986, saying, at 20: The last few years have seen several decisions, particularly by the High Court, in which the notion of a trading corporation has been examined. It is not my intention to refer to those decisions in great detail but rather to state the principles that appear to emerge from them and then to apply those principles to the facts of the present case. 1. The mere fact that a corporation trades does not mean that it is a trading corporation: R v Trade Practices Tribunal; Ex parte St George County Council [1974] HCA 7 ; (1974) 130 CLR 533 at 543, 562 (St George County Council); R v Federal Court of Australia; Ex parte Western Australian National Football League [1979] HCA 6 ; (1979) 143 CLR 190 at 219, 234 (Adamson). 2. The purpose of incorporation, propounded in St George County Council, is no longer a valid test. The test is one of the current activities of the corporation: Adamson; State Superannuation Board v Trade Practices Commission [1982] HCA 72 ; (1982) 150 CLR 282 at 304; (1982) ATPR 40-326 at 43,976-43,977 (State Superannuation Board). 3. But the current activities test is not the sole criterion for determining whether a corporation is a trading corporation. Thus where a corporation has not begun to trade, its character may be found in its constitution. Even when there are current activities, the corporation's constitution is not completely irrelevant: Fencott v Muller [1983] HCA 12 ; (1983) 152 CLR 570 at 602; (1983) ATPR 40-350 at 44,218. 4. Views as to the necessary extent of trading activity have varied. It must be a substantial corporate activity (Barwick CJ in Adamson at 208); the trading activities must form a sufficiently significant proportion of the corporation's overall activities (Mason J in Adamson at 233, with Jacobs J concurring at 237); the trading activities should not be insubstantial (Murphy J in Adamson at 239); the corporation must carry on trading activities on a significant scale: (Mason, Murphy and Deane JJ in State Superannuation Board at 304; 43,976-43,977; Deane J in Commonwealth v Tasmania [1983] HCA 21 ; (1983) 57 ALJR 450 at 559-560. 5. An incorporated sporting body can be a trading corporation if its activities meet the required test: Adamson. 6. In particular, incorporation under a statute such as the Associations Incorporation Act does not prevent a corporate body from being a trading corporation if its activities warrant that description: Adamson at 232. 7. Trading denotes the activity of providing, for reward, goods or services: Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134 at 139; St George County Council at 569-570; Bevanere Pty Ltd v Lubidineuse [1985] FCA 134 ; (1985) 7 FCR 325 at 330-331; (1985) ATPR 40-565 at 46,568. 8. The Trade Practices Act itself draws a distinction between trading corporations and financial corporations; nevertheless the two classes are not mutually exclusive: State Superannuation Board at 303.


case_outcome: discussed

case_title: Re Dingjan; Ex parte Wagner [1995] HCA 16 ; (1995) 183 CLR 323

case_text: The High Court in the Work Choices Case , by a majority of five to two, held that the Work Choices Act was valid. The majority concluded that the understanding of the power conferred by s 51(xx) as explained by Mason CJ, Deane and Gaudron JJ in Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 ; 128 ALR 81 ; [1995] HCA 16 ( Re Dingjan) and amplified by Gaudron J in Re Pacific Coal Pty Ltd; Ex parte Construction, Forestry, Mining and Energy Union (2000) 203 CLR 346 ; 172 ALR 257 ; [2000] HCA 34 ( Pacific Coal ) should be adopted. 17 The majority in the Work Choices Case , in seeking to determine the ambit of laws which apply to constitutional corporations, referred to the dissenting members of the Court in Re Dingjan [1995] HCA 16 ; (1995) 183 CLR 323. The majority said, at [177]: ... Particular reference need now be made only to the reasons of Gaudron J (with which Deane J agreed). Her Honour's reasoning proceeded by the following steps. [1995] HCA 16 ; [(1995) 183 CLR 323 at 365; [1995] HCA 16 ; 128 ALR 81 at 111]. First, the business activities of corporations formed within Australia signify whether they are trading or financial corporations, and the main purpose of the power to legislate with respect to foreign corporations must be directed to their business activities in Australia. Second, it follows that the power conferred by s 51(xx) extends "at the very least" [1995] HCA 16 ; [(1995) 183 CLR 323 at 365; [1995] HCA 16 ; 128 ALR 81 at 111] to the business functions and activities of constitutional corporations and to their business relationships. Third, once the second step is accepted, it follows that the power "also extends to the persons by and through whom they carry out those functions and activities and with whom they enter into those relationships". [1995] HCA 16 ; [(1995) 183 CLR 323 at 365; [1995] HCA 16 ; 128 ALR 81 at 111].


case_title: Re Pacific Coal Pty Ltd; Ex parte Construction, Forestry, Mining and Energy Union [2000] HCA 34 ; (2000) 203 CLR 346

case_text: The High Court in the Work Choices Case , by a majority of five to two, held that the Work Choices Act was valid. The majority concluded that the understanding of the power conferred by s 51(xx) as explained by Mason CJ, Deane and Gaudron JJ in Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 ; 128 ALR 81 ; [1995] HCA 16 ( Re Dingjan) and amplified by Gaudron J in Re Pacific Coal Pty Ltd; Ex parte Construction, Forestry, Mining and Energy Union (2000) 203 CLR 346 ; 172 ALR 257 ; [2000] HCA 34 ( Pacific Coal ) should be adopted. 18 At [178], the majority of the High Court said: This understanding of s 51(xx) was subsequently amplified by Gaudron J in her reasons in Re Pacific Coal Pty Ltd: Ex parte Construction, Forestry, Mining and Energy Union [2000] HCA 34 ; [(2000) 203 CLR 346 at 375 [83] ; [2000] HCA 34 ; 172 ALR 257 at 275; [2000] HCA 34] where her Honour said: I have no doubt that the power conferred by s 51(xx) of the Constitution extends to the regulation of the activities, functions, relationships and the business of a corporation described in that sub-section, the creation of rights, and privileges belonging to such a corporation, the imposition of obligations on it and, in respect of those matters, to the regulation of the conduct of those through whom it acts, its employees and shareholders and, also, the regulation of those whose conduct is or is capable of affecting its activities, functions, relationships or business. [footnote omitted] This understanding of the power should be adopted. It follows, as Gaudron J said, [2000] HCA 34 ; [(2000) 203 CLR 346 at 375 [83] ; [2000] HCA 34 ; 172 ALR 257 at 275; [2000] HCA 34] that the legislative power conferred by s 51(xx) "extends to laws prescribing the industrial rights and obligations of corporations and their employees and the means by which they are to conduct their industrial relations". 19 The majority concluded, in [198]: ... A law which prescribes norms regulating the relationship between constitutional corporations and their employees, or affecting constitutional corporations in the manner considered and upheld in Fontana Films or, as Gaudron J said in Re Pacific Coal, [2000] HCA 34 ; [(2000) 203 CLR 346 at 375 [83] ; [2000] HCA 34 ; 172 ALR 257 at 275] "laws prescribing the industrial rights and obligations of [constitutional] corporations and their employees and the means by which they are to conduct their industrial relations" are laws with respect to constitutional corporations. 20 In essence, the High Court, by a majority, concluded that the Work Choices Act was valid in its application to constitutional corporations. The central question in these two proceedings is whether the Etheridge Shire Council is such a corporation. 21 If it is, the acceptance by the majority in the Work Choices Case of the ambit of the power of the Commonwealth under s 51(xx) as described by Gaudron J in Pacific Coal , would mean that the Commonwealth has power to regulate the activities, functions, relationships and the business of the Etheridge Shire Council; the creation of rights and privileges belonging to the Etheridge Shire Council; the imposition of obligations on it; and, in respect of those matters, the regulation of the conduct of those through whom it acts, its employees, and also the regulation of those whose conduct is or is capable of affecting its activities, functions, relationships or business.


case_outcome: cited

case_text: The majority said, at [55]: The challenge to the validity of the legislation enacted in reliance on the corporations power does not put in issue directly the characteristics of corporations covered by s 51(xx). It does not call directly for an examination of what is a trading or financial corporation formed within the limits of the Commonwealth. (Plainly, a foreign corporation is a corporation formed outside the limits of the Commonwealth.) No party or intervener called in question what was said about trading and financial corporations in R v Federal Court of Australia; Ex parte WA National Football League [1979] HCA 6 ; [(1979) 143 CLR 190 ; 23 ALR 439] , Actors and Announcers Equity Association v Fontana Films Pty Ltd [1982] HCA 23 ; [(1982) 150 CLR 169 ; 40 ALR 609] , State Superannuation Board v Trade Practices Commission [(1982) [1982] HCA 72 ; 150 CLR 282 ; 44 ALR 1] or Fencott v Muller [1983] HCA 12 ; [(1983) 152 CLR 570 ; 46 ALR 41]. 69 The submissions on behalf of the applicants in QUD 481 of 2006 refer to cases decided by the High Court that have considered the question of whether particular entities are trading or financial corporations: a football club in Adamson's case ; a statutory corporation generating and selling electricity in Commonwealth v State of Tasmania [1983] HCA 21 ; (1983) 158 CLR 1 ( Tasmanian Dams case); a State Corporation conducting financial trading activities in order to finance and operate a superannuation scheme in State Superannuation Board v Trade Practices Commission [1982] HCA 72 ; (1982) 150 CLR 282 ; and a dormant shelf company which had not yet commenced to trade in any capacity in Fencott v Muller [1983] HCA 12 ; (1983) 152 CLR 570. 72 Toohey J in Hughes summarised the position up until 1986, saying, at 20: The last few years have seen several decisions, particularly by the High Court, in which the notion of a trading corporation has been examined. It is not my intention to refer to those decisions in great detail but rather to state the principles that appear to emerge from them and then to apply those principles to the facts of the present case. 1. The mere fact that a corporation trades does not mean that it is a trading corporation: R v Trade Practices Tribunal; Ex parte St George County Council [1974] HCA 7 ; (1974) 130 CLR 533 at 543, 562 (St George County Council); R v Federal Court of Australia; Ex parte Western Australian National Football League [1979] HCA 6 ; (1979) 143 CLR 190 at 219, 234 (Adamson). 2. The purpose of incorporation, propounded in St George County Council, is no longer a valid test. The test is one of the current activities of the corporation: Adamson; State Superannuation Board v Trade Practices Commission [1982] HCA 72 ; (1982) 150 CLR 282 at 304; (1982) ATPR 40-326 at 43,976-43,977 (State Superannuation Board). 3. But the current activities test is not the sole criterion for determining whether a corporation is a trading corporation. Thus where a corporation has not begun to trade, its character may be found in its constitution. Even when there are current activities, the corporation's constitution is not completely irrelevant: Fencott v Muller [1983] HCA 12 ; (1983) 152 CLR 570 at 602; (1983) ATPR 40-350 at 44,218. 4. Views as to the necessary extent of trading activity have varied. It must be a substantial corporate activity (Barwick CJ in Adamson at 208); the trading activities must form a sufficiently significant proportion of the corporation's overall activities (Mason J in Adamson at 233, with Jacobs J concurring at 237); the trading activities should not be insubstantial (Murphy J in Adamson at 239); the corporation must carry on trading activities on a significant scale: (Mason, Murphy and Deane JJ in State Superannuation Board at 304; 43,976-43,977; Deane J in Commonwealth v Tasmania [1983] HCA 21 ; (1983) 57 ALJR 450 at 559-560. 5. An incorporated sporting body can be a trading corporation if its activities meet the required test: Adamson. 6. In particular, incorporation under a statute such as the Associations Incorporation Act does not prevent a corporate body from being a trading corporation if its activities warrant that description: Adamson at 232. 7. Trading denotes the activity of providing, for reward, goods or services: Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134 at 139; St George County Council at 569-570; Bevanere Pty Ltd v Lubidineuse [1985] FCA 134 ; (1985) 7 FCR 325 at 330-331; (1985) ATPR 40-565 at 46,568. 8. The Trade Practices Act itself draws a distinction between trading corporations and financial corporations; nevertheless the two classes are not mutually exclusive: State Superannuation Board at 303. 147 I note, nonetheless, that in the State Superannuation Board v Trade Practices Commission [1982] HCA 72 ; (1982) 150 CLR 282 , Mason, Murphy and Deane JJ said, at 303: ... [T]he decision in Adamson is of importance for two reasons. First, the majority of the Court (Barwick CJ, Mason, Jacobs and Murphy JJ), rejecting the argument that the purpose for which a corporation is formed is the sole or principal criterion of its character as a trading corporation. 148 This passage indicates that the purpose for which a corporation is formed is not the "sole" or "principal" criterion for the purposes of characterisation. The passage suggests, however, that the purpose of the formation of a corporation is not irrelevant in that process. 149 The contention for the applicant in both proceedings in this case is that when one looks at the totality of the evidence, including the historical evidence concerning the function of the Etheridge Shire Council, in particular, the fundamental functions of the shire council, being the legislative and administrative responsibility as a local government for the local government area, it is impossible to conclude that the Etheridge Shire Council is a trading corporation. 150 I have set out in detail the evidence in relation to what is said to be the trading activities of the council. 151 All of them, in my opinion, including even the road works aspect of the activity of the council, after close analysis, entirely lack the essential quality of trade. Almost all of them run at a loss. They are all directed, in my view, to public benefit objectives within the shire. Their scale, even in monetary terms (putting to one side the non-monetary significance of the legislative and executive activity of the shire council), are so inconsequential and incidental to the primary activity and function of the Council as to the deny to the Council the characterisation of a "trading corporation" or a "financial corporation".


case_text: Those submissions also referred to decisions in the Federal Court and other superior courts. Those cases were concerned with entities such as charities: E v Australian Red Cross Society [1991] FCA 20 ; (1991) 27 FCR 310 ; statutory corporations set up under State legislation which conduct various business activities: United Firefighters' Union of Australia v Metropolitan Fire and Emergency Services Board (1998) 83 FCR 346 ; corporations that conduct universities: Quickenden v O'Connor [2001] FCA 303 ; (2001) 109 FCR 243 ; and schools: Educang Limited v Queensland Industrial Relations Commission (2006) 154 IR 436; yachting organisations: Forbes & Anor v Australian Yachting Federation Inc. (1996) 131 FLR 241; legal aid bodies: Aboriginal Legal Service of Western Australia Inc. v Lawrence [2007] WAIRC 435 ; and animal welfare organisations: Orion Pet Products Pty Ltd v Royal Society for the Prevention of Cruelty to Animals [2002] FCA 860 ; (2002) 120 FCR 191. 140 The written submissions on behalf of the Etheridge Shire Council ask the question " How is the significance or substantiality of the trading activities to be assessed?" (a) It is undoubtedly a fact of fact and degree (Adamson at 234); (b) A measurement of what is received from the alleged trading activities against total receipts as an indication of substantiality and significance has been accepted and adopted in a number of cases including:- (i) E v Red Cross [1991] FCA 20 ; (1991) 27 FCR 310 at 345; (ii) United Firefighters Union of Australia v Metropolitan Fire and Emergency Services Board (1998) 83 FCR 346 at 351; (iii) Orion Pet Products v RSPCA [2002] FCA 860 ; (2002) 120 FCR 191 at 219; (iv) Quickenden v O'Connor [2001] FCA 303 ; (2001) 109 FCR 243 at 272 and 273.


case_outcome: considered

case_text: The High Court, in Widgee Shire Council v Bonney [1907] HCA 11 ; (1907) 4 CLR 977 , upheld the validity of a power granted to the Widgee Shire Council, which was a local authority in a country district, to make by-laws made for the protection of roads under their control. In doing so, Griffith CJ said, at 983: In my opinion, the legislature has deliberately and intentionally made the local authority, subject to the approval of the Governor in Council, the sole judge of such matters, subject only to this qualification, that, if a by-law is such that no reasonable man, exercising in good faith the powers conferred by the Statute, could under any circumstances pass such a by-law, it might be held invalid on that ground as being an abuse of the power, and therefore not within it. 44 The Etheridge Shire Council has numerous other powers and responsibilities under the LGA, including making a local law which creates an offence constituted by contravening a local law and fixing a penalty for an offence against a local law: s 26 of the LGA. 45 Having regard to the submissions of counsel for all the parties, it is plain that if the Etheridge Shire Council is not a constitutional corporation, then each of the applicants is entitled to the relief which it seeks.


case_text: Of these powers conferred by the LGA, it is worth noting that in Wingadee Shire Council v Willis [1910] HCA 35 ; (1910) 11 CLR 123 , Barton J, at 136, cited with approval the following passage of the judgment of Field J in the United States Supreme Court case of Meriwether v Garrett [1880] USSC 120 ; 102 US, 472 at 511: Municipal corporations are mere instrumentalities of the State for the more convenient administration of local government. Their powers are such as the legislature may confer, and these may be enlarged, abridged or entirely withdrawn at its pleasure.


case_outcome: related

case_text: Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (ACN 095 154 108) (inliquidation) (No 2) [2006] FCA 157 (27 February 2006) [ Home ] [ Databases ] [ WorldLII ] [ Search ] [ Feedback ] Federal Court of Australia You are here:   AustLII >> Databases >> Federal Court of Australia >> 2006 >> [2006] FCA 157 [ Database Search ] [ Name Search ] [ Recent Decisions ] [ Noteup ] [ Download ] [ Help ] Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (ACN 095 154 108) (inliquidation) (No 2) [2006] FCA 157 (27 February 2006) Last Updated: 28 February 2006 FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (ACN 095 154 108) (in liquidation) (No 2) [2006] FCA 157 TRADE PRACTICES form of relief indemnity for likely loss and damage pursuant to s 87 Trade Practices Act 1974 (Cth), s 87 Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (ACN 095 154 108) (in liquidation) [2006] FCA 146) related Leda Holdings Pty Ltd v Oraka Pty Ltd (1998) ATPR 41-601 cited Oraka Pty Ltd v Leda Holdings Pty Ltd (1997) ATPR 41-558 cited State of Western Australia v Wardley Australia Ltd (1991) 30 FCR 245 cited Wardley Australia Ltd v State of Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 cited AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v GLOBAL PREPAID COMMUNICATIONS PTY LTD (ACN 095 154 108) (IN LIQUIDATION), IN TOUCH NETWORKS PTY LTD (ACN 098 279 746) (IN LIQUIDATION), NICHOLAS YATES, FRANK YATES, NICHOLAS RHODIN, DANIEL ALBERT AND RUSSELL FIELDING NSD 328 OF 2003 GYLES J 27 FEBRUARY 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 328 OF 2003 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT AND: GLOBAL PREPAID COMMUNICATIONS PTY LTD (ACN 095 154 108) (IN LIQUIDATION) FIRST RESPONDENT IN TOUCH NETWORKS PTY LTD (ACN 098 279 746) (IN LIQUIDATION) SECOND RESPONDENT NICHOLAS YATES THIRD RESPONDENT FRANK YATES FOURTH RESPONDENT NICHOLAS RHODIN FIFTH RESPONDENT DANIEL ALBERT SIXTH RESPONDENT RUSSELL FIELDING SEVENTH RESPONDENT JUDGE: GYLES J DATE: 27 FEBRUARY 2006 PLACE: SYDNEY SUPPLEMENTARY REASONS FOR JUDGMENT 1 I delivered reasons for judgment in this matter on 24 February 2006 ( Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (ACN 095 154 108) (in liquidation) [2006] FCA 146) and stood the matter over until today to enable orders to be made. My attention has been drawn to the fact that I did not explicitly deal with the form of order for compensation to be made in respect of Loncaric and Carlon Pty Limited insofar as there was a claim for contingent loss.


case_text: Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (ACN 095 154 108) (inliquidation) (No 2) [2006] FCA 157 (27 February 2006) [ Home ] [ Databases ] [ WorldLII ] [ Search ] [ Feedback ] Federal Court of Australia You are here:   AustLII >> Databases >> Federal Court of Australia >> 2006 >> [2006] FCA 157 [ Database Search ] [ Name Search ] [ Recent Decisions ] [ Noteup ] [ Download ] [ Help ] Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (ACN 095 154 108) (inliquidation) (No 2) [2006] FCA 157 (27 February 2006) Last Updated: 28 February 2006 FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (ACN 095 154 108) (in liquidation) (No 2) [2006] FCA 157 TRADE PRACTICES form of relief indemnity for likely loss and damage pursuant to s 87 Trade Practices Act 1974 (Cth), s 87 Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (ACN 095 154 108) (in liquidation) [2006] FCA 146) related Leda Holdings Pty Ltd v Oraka Pty Ltd (1998) ATPR 41-601 cited Oraka Pty Ltd v Leda Holdings Pty Ltd (1997) ATPR 41-558 cited State of Western Australia v Wardley Australia Ltd (1991) 30 FCR 245 cited Wardley Australia Ltd v State of Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 cited AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v GLOBAL PREPAID COMMUNICATIONS PTY LTD (ACN 095 154 108) (IN LIQUIDATION), IN TOUCH NETWORKS PTY LTD (ACN 098 279 746) (IN LIQUIDATION), NICHOLAS YATES, FRANK YATES, NICHOLAS RHODIN, DANIEL ALBERT AND RUSSELL FIELDING NSD 328 OF 2003 GYLES J 27 FEBRUARY 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 328 OF 2003 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT AND: GLOBAL PREPAID COMMUNICATIONS PTY LTD (ACN 095 154 108) (IN LIQUIDATION) FIRST RESPONDENT IN TOUCH NETWORKS PTY LTD (ACN 098 279 746) (IN LIQUIDATION) SECOND RESPONDENT NICHOLAS YATES THIRD RESPONDENT FRANK YATES FOURTH RESPONDENT NICHOLAS RHODIN FIFTH RESPONDENT DANIEL ALBERT SIXTH RESPONDENT RUSSELL FIELDING SEVENTH RESPONDENT JUDGE: GYLES J DATE: 27 FEBRUARY 2006 PLACE: SYDNEY SUPPLEMENTARY REASONS FOR JUDGMENT 1 I delivered reasons for judgment in this matter on 24 February 2006 ( Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (ACN 095 154 108) (in liquidation) [2006] FCA 146) and stood the matter over until today to enable orders to be made. My attention has been drawn to the fact that I did not explicitly deal with the form of order for compensation to be made in respect of Loncaric and Carlon Pty Limited insofar as there was a claim for contingent loss. 3 I am satisfied that the terms of s 87 are wide enough to authorise the inclusion of orders which have the effect of indemnifying Carlon Pty Limited from claims by the sub-distributors. Burchett J made a similar order in Oraka Pty Ltd v Leda Holdings Pty Ltd (1997) ATPR 41-558. That judgment was set aside on appeal but not because of any fault in the relief granted ( Leda Holdings Pty Ltd v Oraka Pty Ltd (1998) ATPR 41-601). Beaumont J, who dissented in the Full Court, expressly approved that order (at 40,509). It was supported by the authorities referred to by Burchett J. (See also State of Western Australia v Wardley Australia Ltd (1991) 30 FCR 245 at 261 and Wardley Australia Ltd v State of Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 545). Whether such an order should be made is for the discretion of the Court in each case.


case_title: Oraka Pty Ltd v Leda Holdings Pty Ltd (1997) ATPR 41-558


case_title: State of Western Australia v Wardley Australia Ltd (1991) 30 FCR 245


case_title: Wardley Australia Ltd v State of Western Australia [1992] HCA 55 ; (1992) 175 CLR 514


case_text: And finally, there are observations by Heerey J in Andi-Co Australia Pty Ltd v Meyers [2004] FCA 1358 , which are apposite in the context of the affidavit material filed in the present application. Heerey J said of the case before him at [17]: ... Mr Meyers has filed a substantial amount of affidavit material sworn by himself and others. However, it needs to be kept in mind that the issue is not whether his version of events is more plausible than Andi-Co's, but whether the alleged debts are the subject of genuine disputes and whether the alleged offsetting claims are genuine, that is to say, real and authentic as opposed to false, illegitimate, phoney, counterfeit and false. Accordingly, I shall not engage in an assessment of the rival merits. 18 The plaintiff asserts two offsetting claims. The first of the offsetting claims relates to what is said to be a genuine claim of the plaintiff against the defendant for the infringement of three patents, arising out of the defendant's manufacture and sale of water meter assemblies. 19 The second offsetting claim relates to an order for costs made in favour of the plaintiff against the defendant by me on 9 August 2004 in action Q69 of 2003.


case_text: Lockhart J in Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd (1994) 13 ACSR 37 referred to the above observations of Hayne J and Thomas J, and also to the observations of Beazley J in Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1993) 12 ACSR 341 at 356-7.


case_text: Such an order was made by Hely J in Fleur De Lys Pty Ltd v Jarrett (2004) 51 ACSR 238. 56 The application by the plaintiff seeks an order for costs on an indemnity basis, relying on the fact that its solicitor had corresponded with the solicitor for the defendant indicating that the plaintiff claimed that it had a cross demand for damages for infringement of patents. The defendant nonetheless persisted in resisting the setting aside of the statutory demand. 57 In my opinion, it is not appropriate that there be an order for costs on an indemnity basis.


case_text: Austin J in Gujarat NRE Australia v Williams [2006] NSWSC 518 said: [20] Effectively, the standard to be reached to persuade a court that there is an offsetting claim is the same as the standard to be reached to persuade a court that there is a genuine dispute between the alleged debtor and the party claiming to be creditor. The most effective cited description of the standard for establishing a genuine dispute is a passage in the judgment of McLelland CJ in Eq in Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 at 787. There, his Honour said that the expression "genuine dispute" connotes a plausible contention requiring investigation, and raises much the same sort of considerations as the "serious question to be tried" criterion which arises in an application for an interlocutory injunction or for the extension or removal of a caveat. [21] It is of fundamental importance for parties to proceedings of this kind to understand that the court does not enter into the merits of any dispute between the parties. The court merely satisfies itself, to the standard described by McLelland CJ in Eq, that the dispute, or the assertion of an offsetting claim, is "genuine". If it is, then the statutory demand procedure is out of place. The whole purpose of the reforms introduced to corporate insolvency law, when the present Pt 5.4 was introduced, was to remove litigation about disputed claims from the winding up process. That is why courts have said, time and again, that if a creditor is aware that there is a dispute, asserted on behalf of the alleged debtor with sufficient plausibility to meet that relatively low threshold described by his Honour, issuing a statutory demand is wholly inappropriate. The correct course is to have the dispute resolved by proceedings asserting the debt.


case_text: Having regard to the expert evidence of Mr Fox, the claims are, it seems to me, genuine claims put forward in good faith, and which are more than mere assertion. The claims are seriously disputed, as the expert evidence of Mr Collins demonstrates. Without looking too deeply at the issues of validity and infringement, the claims of the plaintiff in respect of damages for infringement are such that they have " some real chance of success ", to use the words of Young J in Intag Microelectronics Pty Ltd v AWA Ltd (1995) 18 ACSR 284 at 289. 41 In my opinion, the conclusion that there is an offsetting claim in respect of the costs orders made by the Court on 9 August 2004 are even stronger. 42 On that day, the Court ordered that the decision of the AAT to affirm the decision of the Commissioner of Patents to decline an extension of time was set aside, and the matter was remitted to the AAT for consideration according to law. The Court ordered that the second respondent pay the costs of the applicant to be taxed if not agreed.


case_text: Palmer J in Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743 at [18] said: In my opinion, a genuine offsetting claim for the purposes of CA s 459H (1) and (2) means a claim on a cause of action advanced in good faith, for an amount claimed in good faith. 'Good faith' means arguable on the basis of facts asserted with sufficient particularity to enable the Court to determine that the claim is not fanciful. In a claim for unliquidated damages for economic loss, the Court will not be able to determine whether the amount claimed is claimed in good faith unless the plaintiff adduces some evidence to show the basis upon which the loss is said to arise and how that loss is calculated. If such evidence is entirely lacking, the Court cannot find that there is a genuine offsetting claim for the purposes of s 459H.


case_text: The expression " genuine claim " was considered by Hayne J in the Supreme Court of Victoria in Mibor Investments Pty Ltd v Commonwealth Bank of Australia (1993) 11 ACSR 362, where his Honour said: ... any application to set aside a statutory demand must be made very quickly; it must be made within 21 days. Second, the statute contemplates a summary procedure, the only outcome of which will be an order affecting the statutory demand, not an order or judgment declaring a debt to be owing or not to be owing or ordering payment of any money sum. Third, the only significance that the statutory demand has is that if there is a failure to comply with it then the company is deemed to be insolvent. Thus the demand is no more than a precursor to an application for winding up in insolvency. Fourth, an application to wind up in insolvency must be determined within 6 months (unless the court is satisfied that special circumstances justify an extension of that time): s 459R. Firth, on the hearing of the application to wind up, the company may not oppose the application on grounds that it might have taken in any application to set aside the demand, unless those grounds are material to proving that the company is solvent. 11 Hayne J then said: These matters, taken in combination, suggest that at least in most cases, it is not expected that the court will embark upon any extended inquiry in order to determine whether there is a genuine dispute between the parties and certainly will not attempt to weigh the merits of that dispute. All that the legislation requires is that the court conclude that there is a dispute and that it is a genuine dispute.


case_text: To like effect are the observations of Thomas J in the Supreme Court of Queensland in Re Morris Catering (Australia) Pty Ltd (1993) 11 ACSR 601, where his Honour said at 605-606: There is little doubt that Division 3 is intended to be a complete code which prescribes a formula that requires the Court to assess the position between the parties and preserve demands where it can be seen that there is no genuine dispute and no sufficient genuine offsetting claim. That is not to say that the Court will examine the merits or settle the dispute. The specified limits of the Court's examination are the ascertainment of whether there is a "genuine dispute" and whether there is a "genuine claim".


case_title: Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1993) 12 ACSR 341


case_title: Stack v Brisbane City Council (1999) 47 IPR 525

case_text: Litigation involving those petty patents in the Federal Court [(1999) 47 IPR 525] resulted in the plaintiff losing on the issue of entitlement, Cooper J otherwise being satisfied that the invention was a manner of new manufacture and was also novel, inventive, and useful. 28 Mr Fox says: 5. GST [the plaintiff] is also the Patentee of three more recent patents ("the three new patents") which also derive from application No. 85236/91 as divisional either directly or indirectly, those patents being No. 780782 (32815/95), No. 781173 (46033/01), and No. 781174 (43779/01) and all three new patents relate to the same "invention" as the two petty patents previously mentioned. In fact, the claims of patent No: 781174 are identical to the claims of one of the petty patents, namely, No: 645740. The claims of patent No: 781173 are identical to the claims of the other petty patent, namely, No: 662284. 29 The tenor of his evidence is that those commercially sold water meter assemblies infringe the patents of the plaintiff.


case_text: The power given to the Court under s 50 of the Federal Court of Australia Act to forbid or restrict the publication of evidence should only be exercised in exceptional circumstances. Section 50 makes it clear that the power should only be exercised in order to prevent "prejudice to the administration of justice or the security of the Commonwealth". In the present case ASIC's concerns relate to prejudice to the administration of justice. It is a fundamental principle of the administration of justice in Australia that the administration of justice be open justice. When considering whether to exercise the power given by s 50 a Court must bear in mind the need to do justice between all relevant parties, taking as its initial position the principle of open justice. The manner in which a Court should approach an application under s 50 of the Federal Court of Australia Act to restrict the publication of evidence was considered by a Full Court of the Federal Court in Applicant Y v Australian Prudential Regulation Authority [2005] FCAFC 222. The Full Court said at pars [14] and [15]: "The public interest, that the Court should effectively endeavour to achieve in considering the exercise of power under s 50, is the object of doing justice between the parties. That is the function that the Court is appointed to discharge. Where refusal to make an order might well undermine or defeat the purpose of achieving justice between the parties, and disappoint the public interest in having the Court deal responsibly with the affairs of citizens, it may be appropriate to make an order pursuant to s 50 ... The Court must, however, take into account what s 50 does not explicitly state, but is the underlying assumption upon which it is based, namely, the principle of open justice. The importance of the principle of open justice is not in doubt. On the other hand, the possibility of prejudice to the administration of justice must be weighed against the public interest in maintaining open justice. Although the principle of open justice is of great importance in exercising the discretion under s 50, it is not necessarily the whole weight of that principle that must be placed on the scales. The derogation from the principle that might be involved in making an order under s 50 may be very great, or it might be very small. The degree of derogation from the principle involved in the proposed order is an important matter to be considered in balancing the principle against possible prejudice to the administration of justice ..." (citation omitted)


case_title: Scott v Scott [1913] AC 417

case_text: The basis upon which the Court should approach an application under s 17(4) of the Federal Court of Australia Act is similar to the approach it should take in relation to an application under s 50. The power to order the exclusion of persons from a hearing should only be exercised in exceptional cases. It is clear from s 17(4) that that power should only be exercised in circumstances where not to exercise it would be "contrary to the interests of justice". The primary principle is that the principle of open justice is to be observed in that Court hearings should be open to the public and only closed where the interests of justice require that closure. As Earl Loreburn said in Scott v Scott [1913] AC 417 at 445: "The inveterate rule is that justice shall be administered in open Court." His Lordship accepted that it was appropriate in the interests of justice that the doors of the Court be closed when the subject-matter of the action would be destroyed by a hearing in open court.


case_text: In Raybos Australia Pty Ltd v Jones [1985] 2 NSWLR 47, Kirby P (as he then was) said at 55: "Many cases report the scrutiny by courts of statutory provisions designed to derogate from the open administration of justice. Running through these decisions is a common theme. It is that, by our tradition, the open administration of justice is the rule. Statutory derogation from openness is the exception. In the defence of the rule, such statutes will usually be strictly and narrowly construed. Unless the derogation is specifically provided for, courts are loathe to expand the field of secret justice ..." Samuels JA, in the course of analysing whether the publication of the names in suit would defeat the ends of justice, said at 61: "The inquiry must start with the proposition, central to our notions of forensic procedure, that the courts customarily conduct their business in public in order that the integrity, fairness and efficiency of the system, and its administrators, may be maintained by its exposure to public scrutiny." 22 The applicant submitted that ASIC should disclose in open hearing what was the reasoning process to support the protection of the information sought by ASIC without disclosing what that information was. It submitted that it should, to the extent possible, identify the reasons why the information was being withheld without disclosing the information. The difficulty with acceding to that submission is that exposing the reasoning process would inevitably disclose the information sought to be protected. There were also a number of matters in respect of the claim for public interest immunity privilege raised in the confidential material which I wanted to discuss with counsel for ASIC but it was not possible to do this in open session without exposing the information that ASIC sought to protect. 23 The difficulty with which I was faced in this application by ASIC was that in order to determine whether orders should be made under ss 17(4) and 50 of the Federal Court of Australia Act I must have regard to the confidential affidavits (not served on the parties) filed by ASIC and its confidential submissions (not served on the parties) in order to understand the basis for the application. I reached the conclusion that in order to preserve the subject-matter of ASIC's claim for public interest immunity privilege I was compelled to make orders under ss 17(4) and 50 of the Federal Court Act in order to avoid prejudice to the administration of justice. If I had not made such orders I would have destroyed the basis for ASIC's claim. The hearing of ASIC's claim in the presence of the parties to the proceeding would have disclosed the very subject-matter and issues which ASIC claimed were protected from disclosure by the public interest immunity privilege. I therefore heard ASIC's application in camera in the absence of the parties to the proceeding.


case_text: The formulation of the content of that contract however requires some attention. People do not always conduct their business dealings in classic text book terms of offer and acceptance. In Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 at 11,117-11,118 McHugh JA (Hope and Mahoney JJA concurring) said: "... in an ongoing relationship, it is not always easy to point to the precise moment when the legal criteria of a contract have been fulfilled. Agreements concerning terms and conditions which might be too uncertain or too illusory to enforce at a particular time in the relationship may by reason of the parties' subsequent conduct become sufficiently specific to give rise to legal rights and duties. In a dynamic commercial relationship new terms will be added or will supersede older terms. It is necessary therefore to look at the whole relationship and not only at what was said and done when the relationship was first formed." His Honour also remarked (ibid): "...it is an error to suppose that merely because something has been done then there is therefore some contract in existence which has thereby been executed ... Nevertheless, a contract may be inferred from the acts and conduct of parties as well as or in the absence of their words. The question in this class of case is whether the conduct of the parties, viewed in the light of the surrounding circumstances, shows a tacit understanding or agreement. The conduct of the parties, however, must be capable of proving all the essential elements of an express contract." These statements were subsequently applied by the New South Wales Court of Appeal in Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61 ; (2001) 53 NSWLR 153 at [74] - [77] (Heydon JA, Mason P concurring) and the Full Court of the Federal Court in Damevski v Giudice [2003] FCAFC 252 ; (2003) 133 FCR 438 at [82] - [88] (Marshall J, Wilcox J concurring).


case_title: Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61 ; (2001) 53 NSWLR 153 at [74] - [77]


case_text: Applying those principles, in my opinion the Work Trial Agreement in the form sent by Mr Mihelcic to Mr Sutczak on 30 December 1996, including cl 4 set out in [18] above, formed part of the contract which was in force at the time Mr Fowle suffered his injury. The Commonwealth and Comcare by their subsequent conduct, and in particular by meeting all Mr Fowle's wages notwithstanding that he was doing work for the Hydro, impliedly accepted the terms in the Work Trial Agreement. Pre-contractual conduct can cast light on the genesis of the contract and its objective aim: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24 ; (1982) 149 CLR 337 at 347-352 , Brambles at [24]. Here the essence of the term appeared in the original Work Trial Agreement ([11] above), which had been prepared by the Commonwealth. Subsequently the Hydro, through Mr Sutczak, emphasised the importance of indemnity ([17] above). The potential for workplace injury, and liability there for, was an obvious matter of concern for a substantial industrial employer like the Hydro. 30 The "liability" in question, a potential liability which might arise at some time in the future, must be the liability of the host employer, the Hydro. "Liability" means any legal liability of the Hydro. Obviously "any injury" does not mean literally any injury suffered by Mr Fowle. An injury which he suffered at home and unconnected with his work would not involve any liability of the Hydro. 31 The expression "liability for any injury" cannot be limited, as the defendants argued, to exclude common law liability. The words are not qualified in any way. It would have been open to Comcare and/or APS, as the preparer of the document, to limit it to accord with their particular circumstances. It is not to the point that entitlement of a Commonwealth employee to sue the Commonwealth for damages at common law is limited in scope and amount by s 45 of the SRC Act. At all relevant times the potential liability of the Hydro included liability at common law for negligence. The Hydro enjoyed no statutory protection comparable to that in s 45 of the Commonwealth Act.


case_text: Counsel for the defendants submitted that the term in question, being an indemnity, should be construed strictly against the Hydro. However, this principle of construction is bound up with another rule, that documents should be construed contra proferentem (against the interest of the party which prepared or drafted the document): Coghlan v S H Lock (Australia) Ltd (1987) 8 NSWLR 88 at 92, Andar Transport Pty Ltd v Brambles Ltd [2004] HCA 28 ; (2004) 217 CLR 424 at [19] , Halford v Price [1960] HCA 38 ; (1960) 105 CLR 23 at 30, 34, 40, 41. However, in the present case it is the Commonwealth which was the drafter or presenter of the document. One can infer that seeking to have a Commonwealth employee placed with an outside employer for the purposes of rehabilitation is a common occurrence. Since this is a benefit to Comcare and the Commonwealth (successful rehabilitation will lessen their financial burden), it is hardly surprising that the Commonwealth and/or Comcare would adopt a standard form of contract in which the outside employer is indemnified against the obvious possibility of liability for workplace injury. The present case is the reverse of the stereotypical situation where the party in the stronger bargaining position imposes a standard term on the weaker party: see Andar at [69] per Kirby J.


case_title: Andar Transport Pty Ltd v Brambles Ltd [2004] HCA 28 ; (2004) 217 CLR 424 at [19]


case_text: I do not think the orders made by the Tribunal which are under challenge constitute a decision under s 44(1) of the AAT Act. The substantive application before the Tribunal was an application for review of the delegate's decision under s 13 of the Act not to grant a certificate of Australian citizenship to the respondent. The right to bring the application for review is contained in s 52A of the Act. The orders of the Tribunal defer or adjourn consideration of the application for review. The orders do not amount to a final decision or determination. In accordance with well-established authority the orders therefore do not constitute a decision within s 44(1) of the AAT Act: Director-General of Social Services v Chaney (1980) 3 ALD 161 per Deane J, with whom Fisher J agreed, at 178, 180; Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 (' Bond ') per Mason CJ at 335; Geographical Indications Committee v The Honourable Justice O'Connor (2000) 64 ALD 325 at 332-333. In my opinion, there is no right of appeal from the Tribunal's orders under s 44(1) of the AAT Act. 30 I do not think the orders made by the Tribunal constitute a decision under s 5 of the ADJR Act. The meaning of 'decision' in s 5 of the ADJR Act was considered by Mason CJ in Bond . His Honour said that a reviewable decision under s 5 of the ADJR Act had a number of characteristics, including the fact that it must be a substantive determination. His Honour said (at 337-338): 'Another essential quality of a reviewable decision is that it be a substantive determination. With the exception of s 3(2)(g), the instances of decision mentioned in s 3(2) are all substantive in character. Moreover, the provisions in sub-ss (1), (2), (3) and (5) of s 3 point to a substantive determination. In this context the reference in s 3(2)(g) to "doing or refusing to do any other act or thing " (emphasis added) should be read as referring to the exercise or refusal to exercise a substantive power. I do not perceive in s 16(1)(b) or in par (e) of Sched 1 or par (a) of Sched 2 to the AD(JR) Act any contrary implication. These exclusions from the AD(JR) Act or from s 13 appear to have been introduced for more abundant caution and it would be unwise to take too much from them. If "decision" were to embrace procedural determinations, then there would be little scope for review of "conduct", a concept which appears to be essentially procedural in character. To take an example, the refusal by a decision-maker of an application for an adjournment in the course of an administrative hearing would not constitute a reviewable decision, being a procedural matter not resolving a substantive issue and lacking the quality of finality. Then it is the "conduct" of the hearing in refusing an adjournment that is the subject of review. To treat the refusal of the adjournment in this way is more consistent with the concept of "conduct" than with the notion of "decision under an enactment".' 31 The applicant submitted that the order deferring or adjourning the application for review was conduct for the purpose of making a decision. It seems to me that that is probably the case, but the question which then arises is whether any of the grounds in s 6 of the ADJR Act are relevant to the grounds upon which the applicant challenges the orders. A number of the grounds, although not all of them, relate to the proposed decision which in this case is the decision to be made on the application for review either to affirm the decision of the delegate or to grant a certificate of Australian citizenship to the applicant. If necessary, I will give the parties the opportunity to make further submissions with respect to this issue. 32 It may not be necessary for the parties to make further submissions because I have also reached the conclusion that this is an appropriate case for relief under s 39B of the Judiciary Act 1903 (Cth). The respondent did not argue that relief under s 39B was not, in theory, available. He submitted that it was not available in this case because there was no jurisdictional error by the Tribunal. For the reasons set out below I reject that submission and hold that the Tribunal erred in a manner going to its jurisdiction. The respondent submitted that the Court would rarely exercise its discretion to issue constitutional writs in relation to a decision by the Tribunal to defer or adjourn an application for review. I agree with that as a general statement, but I think that this is an appropriate case. The Tribunal has erred in concluding that it could exercise the power in s 14A of the Act and it has erred in its consideration of its general power to adjourn in light of the provisions of the Act and, in particular, s 13(11)(a). 33 As I have said, before me both parties submitted that the power to defer in s 14A(1) was a power available to the Tribunal. The section in the AAT Act which confers various powers and discretions of the primary decision-maker on the Tribunal is s 43. It seems appropriate to interpret s 43(1) broadly and proceed on the basis that for the purpose of the subsection the Tribunal would be exercising the power to defer 'for the purpose of reviewing [the] application'. The power to defer is a power available to the Tribunal. It is a power which is subject to a limitation and any exercise of the power by the Tribunal is subject to the same limitation. What is the meaning of the limitation? First, I think the twelve-month period commences from the time the decision to defer is taken. With respect, I reject the view of the Tribunal member that it commences when the offence which is the subject of the charge was allegedly committed. There is no warrant in the section for identifying that as the commencement point. Secondly, I think that it is only possible to defer for a maximum period of twelve months and it is not possible to defer for twelve months on the basis of one charge or set of charges and then later for a further period of up to twelve months on the basis of a second and later charge or set of charges. The terms of the section are such that a deferral or deferrals of consideration of the application for review for longer than twelve months is not permitted. In my opinion, the words of the section are such that if the power to defer is exercised, consideration of the application for review must at least commence within a period of twelve months thereafter. 34 The Tribunal's general power to adjourn is not excluded by the fact that the power to defer is a power available to the Tribunal. The Tribunal is not bound to exercise the power to defer in s 14A. In any event, there is a clear difference between a statutory power to defer an application for review and a power to adjourn an application for review and there may be many reasons for adjourning an application which are unrelated to the matters referred to in s 14(1)(b) of the Act. The Tribunal might adjourn because of the unavailability of a party or witness or for any of the reasons that routinely lead to adjournments of a proceeding before a court or tribunal. 35 However, the general power to adjourn is affected by the provisions of the Act. First, if an application is made to adjourn or defer an application for review on the ground that a charge is pending, it would be appropriate that the decision-maker proceed under s 14A rather than the general power to adjourn in s 40(1). Secondly, and in any event, I doubt that there would be grounds to adjourn because of a pending charge. I say that because the alternative to the granting of an adjournment would not be that the applicant for review would be required to compromise his or her right to silence before the hearing of the criminal charge. The effect of s 13(11)(a) of the Act is quite clear. The decision-maker must not grant a certificate of Australian citizenship to a person while proceedings for a relevant offence are pending in relation to that person. It is not clear what the Tribunal member meant when he said that s 13(11)(a) operated as a prohibition on the exercise of jurisdiction by the Tribunal on review. Certainly the Tribunal could not grant a certificate of Australian citizenship, but it could list the matter for hearing and find that the facts fall within s 13(11)(a) and that it cannot or should not exercise the power in s 14A and, having reached those conclusions, dismiss the application for review and affirm the decision of the delegate. I turn now to apply these principles to the facts of this case. 36 The Tribunal member erred in concluding that the power in s 14A could, in the circumstances, be exercised by him. It is not entirely clear from the direction (see [12] above) what power the Tribunal member considered he was exercising on 8 September 2004 when he directed that the matter not be listed for hearing until after the resolution of the criminal charges. I think it is appropriate to view it as an exercise of the power to defer in s 14A because, for the reasons I have given, it would not have been a proper exercise of the discretion to adjourn the application on the ground referred to in the direction. What that means is that the power in s 14A was spent because consideration of the application did not at least commence within twelve months of 8 September 2004. 37 The exercise by the Tribunal of its general power to adjourn miscarried because it was not entitled to take into account the pending charge in considering whether to adjourn and, in any event, the Tribunal member misunderstood what would occur if the application was not adjourned. If not adjourned, then the application should have been listed and if the facts fell within s 13(11)(a) it should have been dismissed and the delegate's decision affirmed. 38 The applicant is entitled to relief, but I will give the parties leave to make further submissions as to the appropriate relief in light of these reasons. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. Associate: Dated: 27 March 2007 Counsel for the Applicant: Ms S Maharaj QC with Mr R Prince Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: Mr W J N Wells QC with Dr C D Bleby Solicitor for the Respondent: Patsouris and Associates Date of Hearing: 3 October 2006 Date of Judgment: 27 March 2007 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/436.html


case_text: I do not think the orders made by the Tribunal which are under challenge constitute a decision under s 44(1) of the AAT Act. The substantive application before the Tribunal was an application for review of the delegate's decision under s 13 of the Act not to grant a certificate of Australian citizenship to the respondent. The right to bring the application for review is contained in s 52A of the Act. The orders of the Tribunal defer or adjourn consideration of the application for review. The orders do not amount to a final decision or determination. In accordance with well-established authority the orders therefore do not constitute a decision within s 44(1) of the AAT Act: Director-General of Social Services v Chaney (1980) 3 ALD 161 per Deane J, with whom Fisher J agreed, at 178, 180; Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 (' Bond ') per Mason CJ at 335; Geographical Indications Committee v The Honourable Justice O'Connor (2000) 64 ALD 325 at 332-333. In my opinion, there is no right of appeal from the Tribunal's orders under s 44(1) of the AAT Act.


case_title: Geographical Indications Committee v The Honourable Justice O'Connor (2000) 64 ALD 325


case_outcome: distinguished

case_text: PCR has submitted that it is not the true 'aggressor' in the present application and relies upon the decision of Wilcox J in Amalgamated Mining Services Pty Ltd v Warman International Ltd and Anor (1988) 88 ALR 63 (' Amalgamated Mining '). In those proceedings Amalgamated Mining sought a declaration that statements contained in a letter from Warman's solicitors alleging that Warman's copyright had been breached by Amalgamated Mining's supplier were unjustified. In deciding that Amalgamated Mining should not be required to pay security for costs, Wilcox J said (at 67-8): 'If one applies the homely test adopted by Scrutton LJ [in Maatschappij Voor Fondsenbezit v Shell Transport and Trading Co and Ors [1923] 2 KB 166] of asking who, in the litigation, was the attacker and who was the defender, I think it must be said that the first attack came in the letter from [Warman's solicitors] . Although the letter was not written directly to Amalgamated Mining, it is that company which has an interest in defending and, in a commercial sense, probably has very little alternative other than to take that course. I think that it is an accurate analysis of the matter to say, therefore, that it is the respondents to the principal proceeding who are the attackers and that Amalgamated Mining is, in substance, the defender.' His Honour also referred to the decision of the High Court in Willey v Synan [1935] HCA 76 ; (1935) 54 CLR 175. 31 I consider the facts of the present case to be different from those in Amalgamated Mining and Willey v Synan . Those were both cases in which proceedings had been instigated to forestall a threat by a respondent to existing entitlements of the applicant. In these proceedings the respondents have not threatened existing rights of PCR. PCR does not have any specific entitlement to the licence. Although it is true that the decision of ACMA has led to PCR being unable to operate its radio station, PCR only ever held a temporary licence and never had an ongoing right to operate. It cannot be said that the action of either respondent deprived, or threatened to deprive, PCR of its rights such that it was forced to bring these proceedings to protect itself. Accordingly I do not consider that PCR can reasonably be construed as ' the party attacked ' in these proceedings, or that either of the respondents can be considered as the true attacker. 32 PCR also submits that GCB is joined only as an interested party, and not as an 'adversary' to PCR. PCR refers to the fact that no relief is sought against GCB specifically, and says that GCB was only joined in the present proceedings because Wilcox J had required its joinder in the previous litigation. PCR also refers to the fact that, despite the fact that PCR was successful before Wilcox J, GCB was not required to pay PCR's costs, which it submits recognised GCB's non-adversarial status in the proceedings. The submission is that GCB, although joined, has no real need to participate in these proceedings because no relief is claimed against it.


case_text: The above considerations are to be construed in light of the fundamental right of a citizen to have access to the courts: see The Airtourer Co-operative Ltd v Millicer Aircraft Industries Pty Ltd [2004] FCA 1400 at [18] (' Airtourer '). As Morling J observed in Barton v Minister for Foreign Affairs (1984) 2 FCR 463 at 469: 'It has never been the case that impecuniosity on the part of a plaintiff is a ground for ordering him to give security for costs. In Pearson v. Naydler [1977] 1 W.L.R. 899, Megarry V-C said: "The basic rule that a natural person who sues will not be ordered to give security for costs, however poor he is, is ancient and well-established. As Bowen L.J. said in Cowell v Taylor (1885) 31 Ch. D. 34 at 38, both at law and in equity 'the general rule is that poverty is no bar to a litigant'. The power to require security for costs ought not to be used so as to bar even the poorest man from the courts."' However, as Branson J noted in Airtourer at [21]: 'Recognition by this Court of the general rule that poverty is no bar to a litigant has not meant that the Court has proceeded on the basis that an order for security for costs can never be made against a litigant. An order for security for costs is only rarely sought against a litigant who is not impecunious. An order for security for costs made against an impecunious litigant when justified by a factor other than mere impecuniosity does not offend the general rule that poverty is no bar to a litigant.'


case_text: In an often-cited passage of the Full Federal Court, Sheppard, Morling and Neaves JJ in Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1 said at 4: 'In our opinion a court is not justified in declining to order security on the ground that to do so will frustrate the litigation unless a company in the position of the appellant here establishes that those who stand behind it and who will benefit from the litigation if it is successful (whether they be shareholders or creditors or, as in this case, beneficiaries under a trust) are also without means. It is not for the party seeking security to raise the matter; it is an essential part of the case of a company seeking to resist an order for security on the ground that the granting of security will frustrate the litigation to raise the issue of the impecuniosity of those whom the litigation will benefit and to prove the necessary facts.' 23 The fact that PCR has chosen to oppose the application without providing adequate evidence of its financial position poses a difficulty for the Court. However, given the evidence that PCR is a not-for-profit organisation managed by volunteers, I think it is reasonable to infer that those supporters will not benefit from the litigation in any pecuniary sense, especially since these proceedings seek administrative law remedies rather than damages.


case_outcome: referred to

case_text: The application by GCB has been promptly brought, having been filed one day after the first return date for the application. PCR submitted that the motion was premature, because the leave application had not yet been heard. I see no reason why GCB should have waited until after the leave application before bringing its application for security for costs. Had it done so, it would have been open to PCR to submit that GCB had delayed in bringing an application for security for costs, by reason of which expenses had been incurred in prosecuting the application: see Buckley v Bennell Design and Constructions Pty Ltd (1974) 1 ACLR 301 at 308; Gartner v Ernst & Young (No 3) [2003] FCA 1437 at [34] . Further, GCB may have been unable to recover its costs on the leave application if PCR was unsuccessful. It was appropriate for GCB to bring its application when it did.


case_text: In these proceedings PCR has an interest in the litigation since ACMA's decision resulted in PCR's inability to continue to broadcast. This is not a case where PCR is being used as a ' stalking horse to enable someone else to evade personal responsibility ': see Cameron's Unit Services Pty Ltd and Anor v Kevin R Whelpton & Associates (Australia) Pty Ltd and Anor (1986) 13 FCR 46 at 53.


case_text: This passage accords with the comments of Moore J in Chang v Comcare Australia [1999] FCA 1677 at [25] where his Honour said: 'While impecuniosity is not, by itself, sufficient to warrant an order for security, it is generally a relevant consideration ...' 14 Several of the factors outlined above have relevance to the facts of the present case. 15 GCB submitted that PCR's claim was unlikely to succeed since it was brought out of time and was an appeal against a decision made by ACMA on remitter from a successful appeal by PCR to this Court. GCB said that after ACMA's initial decision was set aside, ACMA was concerned to ensure that the process for the award of the licence was thorough and complete and that for this reason PCR's challenge is likely to fail.


case_text: Several authorities of this and other courts have considered the factors which should be taken into account in a security for costs application: see for example Equity Access Ltd v Westpac Banking Corporation & Ors (1989) ATPR 40-972 per Hill J; KP Cable Investments Pty Ltd v Meltglow Pty Ltd and Ors (1995) 56 FCR 189 at 197-8 per Beazley J; Cultivaust Pty Ltd v Grain Pool Pty Ltd [2004] FCA 1366 at [13] per Finn J; Chapman v Luminis Pty Ltd [2002] FCA 496 at [13] per Tamberlin J (' Chapman v Luminis '); Croker v Sydney Institute of TAFE (State of New South Wales) [2003] FCA 942 per Bennett J. In summary, those considerations are: 1) the chances of success of the applicant and whether the claim is bona fide; 2) the risk that the applicant could not satisfy a costs order; 3) whether the application for security for costs has been promptly brought; 4) whether the application for security for costs is being used oppressively to deny an impecunious litigant access to the court; 5) whether the applicant's impecuniosity arises out of the act in respect of which relief is sought; 6) whether there are third parties standing behind the applicant who are likely to benefit from the litigation and if so, whether they have proffered security for the costs of the litigation; 7) whether an order for security for costs would frustrate the litigation; 8) whether there are any public interest considerations to be taken into account; 9) any matters relevant to the discretion which are distinctive to the circumstances of the case. 16 I am unable at this early stage of proceedings to form a conclusion concerning the merits of the application. As Tamberlin J said in Chapman v Luminis at [17]: 'It is neither possible nor appropriate on a security for costs application to reach any firm conclusions as to the prospects of an appeal being successful beyond a general consideration of the reasons for decision and the formation of a general overview.' 17 Although the appeal is from a decision by ACMA rather than from a decision of this Court, I consider Tamberlin J's observations are pertinent. The notice of appeal in these proceedings makes numerous challenges to the decision-making process engaged in by ACMA, and I am not able to assess the merits of those challenges without investigating factual material. The fact that the appellant's challenge relates to the second decision of ACMA does not give rise to the inference that the appeal will not succeed. 18 PCR has not provided any direct evidence to the Court with respect to its incorporation, office-bearers, or financial position, although in its oral submissions it made brief reference to the fact that it was impecunious. The only evidence relating to the current financial status of PCR is the statement contained in the affidavit of Mr Norbert Lindberg, secretary of PCR, that the delay by PCR in bringing proceedings has resulted, in part, from the need to raise funds to finance the litigation. The Court has no information with respect to the success of PCR's fundraising activities and no recent financial statements have been produced. The Court has been provided with financial statements from 2003-2004 but because PCR was still operating the radio station and was in receipt of community grants at this time, the statements provide very little guidance as to the current finances of PCR. Since early 2004 PCR, because of the loss of its broadcasting licence, has not been eligible for the community grants which has presumably had an adverse effect on its financial position.


case_text: Several authorities of this and other courts have considered the factors which should be taken into account in a security for costs application: see for example Equity Access Ltd v Westpac Banking Corporation & Ors (1989) ATPR 40-972 per Hill J; KP Cable Investments Pty Ltd v Meltglow Pty Ltd and Ors (1995) 56 FCR 189 at 197-8 per Beazley J; Cultivaust Pty Ltd v Grain Pool Pty Ltd [2004] FCA 1366 at [13] per Finn J; Chapman v Luminis Pty Ltd [2002] FCA 496 at [13] per Tamberlin J (' Chapman v Luminis '); Croker v Sydney Institute of TAFE (State of New South Wales) [2003] FCA 942 per Bennett J. In summary, those considerations are: 1) the chances of success of the applicant and whether the claim is bona fide; 2) the risk that the applicant could not satisfy a costs order; 3) whether the application for security for costs has been promptly brought; 4) whether the application for security for costs is being used oppressively to deny an impecunious litigant access to the court; 5) whether the applicant's impecuniosity arises out of the act in respect of which relief is sought; 6) whether there are third parties standing behind the applicant who are likely to benefit from the litigation and if so, whether they have proffered security for the costs of the litigation; 7) whether an order for security for costs would frustrate the litigation; 8) whether there are any public interest considerations to be taken into account; 9) any matters relevant to the discretion which are distinctive to the circumstances of the case.


case_title: Cultivaust Pty Ltd v Grain Pool Pty Ltd [2004] FCA 1366


case_title: Equity Access Ltd v Westpac Banking Corporation & Ors (1989) ATPR 40-972


case_title: Gartner v Ernst & Young (No 3) [2003] FCA 1437


case_text: The only limitation upon the exercise of the power provided by s 56 is that it be exercised judicially, which means, as Rich J observed in King v Commercial Bank of Australia Ltd [1920] HCA 62 ; (1920) 28 CLR 289 at 292: '...that in each case the Judge has to inquire how, on the whole, justice will be best served ...' In Oshlack v Richmond River Council [1998] HCA 11 ; (1998) 193 CLR 72, Gaudron and Gummow JJ observed at [22] (in relation to s 69 of the Land and Environment Court Act 1979 (NSW), which confers a similar discretion): 'The power conferred by the section is to be exercised judicially, that is to say not arbitrarily, capriciously or so as to frustrate the legislative intent.'


case_title: KP Cable Investments Pty Ltd v Meltglow Pty Ltd and Ors (1995) 56 FCR 189


case_title: Oshlack v Richmond River Council [1998] HCA 11 ; (1998) 193 CLR 72


case_text: Order 6 r 8(1)(b) of the Federal Court Rules states that the Court may order that a person be added as a party where such joinder ' is necessary to ensure that all matters in dispute in the proceeding may be effectually and completely determined and adjudicated on '. It is important that the Court have an opportunity to hear from GCB in respect of any prejudice which it would sustain because of PCR's delay in bringing these proceedings. Further, GCB has a direct interest in the outcome of these proceedings, since an order by the Court quashing ACMA's decision would affect GCB's right to continue broadcasting: see Re Trade Practices Commission v Milreis Pty Ltd and Ors; Application by Thomson Publications (Australia) Pty Ltd (1978) 18 ALR 17 at 23. In these circumstances, although no relief is sought against GCB, its position is threatened by the relief sought by PCR. GCB's role is not akin to an 'observer' having no active role. Accordingly it is entitled to defend these proceedings and to seek security for its costs in so defending them.