case_text: Thus, whilst there is a promise in an executory contract to pay the balance of the purchase price on settlement, there is no "debt" ( McDonald v Dennys Lascelles ) and no "accrued liability on the part of the purchaser to make the payment" (see Mason CJ in Sunbird Plaza 166 CLR at 254), until completion. This is not to deny, however, that the purchaser's interests will be protected in equity consistent with the nature and extent of the terms of the contract of sale: Stern v McArthur [1988] HCA 51 ; (1988) 165 CLR 489 at 522-23, and that the promise can be otherwise seen as unqualified. 76 The Full Court rejected the argument. In so doing, it referred to and relied on the two passages from Raymor 24 FCR at 97 and 101, cited earlier. This was to support the conclusion that the entry into the obligation to pay for future goods was sufficient for there to be an incurring of the liability to pay for them, even if the obligation was defeasible. Coles Myer [1993] HCA 29 ; 176 CLR 640 was then referred to. At 47 FCR at 573-575 the Full Court expressed its reasons fully for coming to the view that there was an accrued obligation or present liability imposed by definite contractual commitment. The Court said that it was not necessary for the taxpayer to have an interest in the wool, though it was recognised that equity would give protection to the taxpayer's interests. Stern v McArthur [1988] HCA 51 ; 165 CLR 489 was referred to. The Court rejected the argument of the Commissioner based on the requirement of delivery to create a present and accrued liability to pay. It agreed with Lee J's analysis. The Full Court did conclude, however, with the following passage at 47 FCR at 575: In our view, much will depend upon the particular circumstances of the case at hand. If the defeasibility takes the form of a contingency such as drought or a similar frustrating event which ordinarily would be implied as a matter of business efficacy, it is difficult to argue that by reason of the existence of this contingency, no liability to pay the price has accrued. 81 A deduction is referable to the year in which the advantage it secures is enjoyed: Coles Myer 176 CLR at 665; and New Zealand Flax at 207-208. The advantage secured and enjoyed was the binding of the vendor to an unconditional contract (in the sense first discussed) creating contractual rights capable of protection by a court of equity conformable with their extent: Stern v McArthur. This occurred in the 1999 year of income.


case_outcome: discussed

case_text: That the obligation, subject to a revealed contrary intention, to pay the purchase price accrues fully only on settlement was reiterated in Sunbird Plaza Pty Limited v Maloney [1988] HCA 11 ; (1988) 166 CLR 245. In that case, the vendors sought recovery against guarantors of a contract for the sale of land in respect of which an order for specific performance had been made consequent upon repudiation by the purchaser. The proper construction of the guarantee was held not to support a conclusion that the guarantors were liable. Mason CJ (with whom Deane, Dawson and Toohey JJ agreed) said the following at 253-254: The general rule, stated by Dixon J in McDonald v Dennys Lascelles Ltd [1933] HCA 25 ; (1933) 48 CLR 457 , at p 476, is that a vendor of land cannot sue for the price before the contract is completed by conveyance, unless the price is expressed to be payable on a fixed day, not being the day fixed for completion. Here the balance of the purchase price was payable "upon settlement". Settlement has not taken place and there has been no conveyance of the property sold. Once this is accepted, the appellant is faced with a daunting task in making good the submission that the respondent guarantors are liable under their joint and several guarantee to pay the balance of the purchase price and interest thereon, notwithstanding the absence of an accrued liability on the part of the purchaser to make the payment . [emphasis added] In the same case, Gaudron J (with whose reasons in this respect Mason CJ (and so also the other members of the Court) agreed) at 267-268 also referred to McDonald v Dennys Lascelles [1933] HCA 25 ; 48 CLR 457. 45 Thus, whilst there is a promise in an executory contract to pay the balance of the purchase price on settlement, there is no "debt" ( McDonald v Dennys Lascelles ) and no "accrued liability on the part of the purchaser to make the payment" (see Mason CJ in Sunbird Plaza 166 CLR at 254), until completion. This is not to deny, however, that the purchaser's interests will be protected in equity consistent with the nature and extent of the terms of the contract of sale: Stern v McArthur [1988] HCA 51 ; (1988) 165 CLR 489 at 522-23, and that the promise can be otherwise seen as unqualified. 46 These cases were applied by von Doussa J (with whose reasons Jenkinson and Spender JJ agreed) in Gasparin v Commissioner of Taxation (1954) 50 FCR 73. That case concerned the question as to when income was derived from the sale of allotments of land. It was held that each allotment remained trading stock on hand until settlement. After referring to McDonald v Dennys Lascelles , Sunbird Plaza and Automatic Fire Sprinklers Pty Limited v Watson [1946] HCA 25 ; (1946) 72 CLR 435 at 463-464 (as to which case, see below), von Doussa J said at 77 that these cases reflected a general rule about unsettled contracts of sale. His Honours said that at the end of the year of income in question: ...there were no debts owing by the purchasers to the joint venturers. In each case the promise to pay the balance of the purchase price "at settlement" remained executory until settlement occurred at which time a conveyance was executed, accepted and delivered to the purchaser. Until these events there was no accrued liability on the part of the purchaser to pay the balance of the purchase price. [emphasis added] 71 In Woolcombers the taxpayer, in the year of income, entered forward contracts for the purchase of wool that had been shorn or was yet to be shorn. The standard form contracts provided for property in the wool to pass from the woolgrower to the taxpayer upon payment, being 14 days after delivery. The contract provided expressly for the possibility of the grower needing to dispose of the sheep because of drought, flood or disease. In such circumstances, failing agreement as to how many sheep to sell, the matter of disposal would be the subject of arbitration. Thus, the promise to pay for wool to be delivered in the future was made in the year of income (1988). The wool was delivered and paid for in the following year of income. An indemnity as to delivery and quality was given by the grower. In the previous 12 years, all such forward contracts, with one exception, had been completed by the growers. The contracts were to meet contracts by way of on-sales for export entered by companies related to the taxpayer. (It is to be recalled, at this point, that the principle dealt with in Gasparin and Sunbird Plaza was not limited to contracts for the sale of land. The discussion by Dixon J in Automatic Fire Sprinklers 72 CLR at 463-464 made that clear.) 77 As I have said earlier, the application of the principles in Sunbird Plaza to the question of "incurred" has force, unconstrained by authority. So to conclude would lead to a certain harmony in timing between recognition of derivation of income and the incurring of an outgoing. It would give expression to the long-recognised underlying legal analysis in cases such as McDonald v Dennys Lascelles, Automatic Fire Sprinklers, and Sunbird Plaza . It would conform more clearly with the views of Barwick CJ in Nilsen Developments [1981] HCA 6 ; 144 CLR 616. Nevertheless as a single judge, I am clearly bound by Raymor and Woolcombers. The essence of the argument, as I apprehend it, that was put to the Full Court in Woolcombers , was put to me, though, perhaps, in a somewhat more developed form. Unless the last passage that I have quoted above entitles me to find differently, on the authority of both Raymor and Woolcombers , I should find that the obligation to pay the purchase price on settlement was incurred at the time of the exchange of contracts.


case_outcome: referred to

case_text: On the above conclusions, no question of penalty arises. I should, however, express my views. Mr Malouf was cross-examined with some vigour. I do not criticise counsel. The object was, amongst others, to show that Mr Malouf entered the scheme without giving proper consideration to the issues that might bear upon the taxation treatment and his returns. I disagree. The Commissioner was responsible for the ruling which clearly made the outgoing on revenue account. Well-known junior counsel skilled in the revenue field gave a considered and careful advice. It did not touch the corporations aspects of the scheme which led to the winding up of the scheme; but those issues are not determinative of the liability. Taking into account s 226G of the 1936 Act (for the 2000 year of income) and s 284-90(1) item 3 of Part 4-25 of the Taxation Administration Act (for the 2001 year of income) and the cognate principles in Walstern Pty Limited v Commissioner of Taxation [2003] FCA 1428 ; (2003) 138 FCR 1 , in my view a penalty was not legally warranted. Mr Malouf exhibited sufficient care and displayed no impropriety. 83 For the above reasons the decision of the Commissioner disallowing the objection will be set aside. No order for costs is necessary as the proceeding had test case funding. I will provide the parties with an opportunity to agree precise consequential orders dealing with the taxpayer's assessment, if that be thought necessary or appropriate. I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop. Associate: Dated: 22 April 2008 Counsel for the Applicant: Mr D E Russell QC, with Mr D K L Raphael and Ms A Ketas Solicitor for the Applicant: Gibsons Lawyers Counsel for the Respondent: Mr J W deWijn QC with Mr F O'Loughlin Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 24 and 25 September 2007 Date of Judgment: 22 April 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/497.html


case_title: Woolcombers (WA) Pty Limited v Commissioner of Taxation [1993] ATC 4 ,342

case_text: In particular, reliance was placed on the judgments of Lee J at first instance and of the Full Court in the Woolcombers case : Woolcombers (WA) Pty Limited v Commissioner of Taxation [1993] HCA 69 ; 93 ATC 4 ,342 (Lee J) and Commissioner of Taxation v Woolcombers (WA) Pty Limited [1993] FCA 631 ; (1993) 47 FCR 561 (Full Court) and on the Full Court judgment in Commissioner of Taxation v Raymor (NSW) Pty Limited [1990] FCA 193 ; (1990) 24 FCR 90.


case_outcome: cited

case_text: The substantive judgment in this proceeding was handed down on 15 November 2007: APF Properties Pty Ltd v Kestrel Holdings Pty Ltd (No 2) [2007] FCA 1561. Further argument has now been heard as to the amount for which judgment should be entered and the question of costs. 2 I have found that the applicant is entitled to judgment against the first and second respondents (the Robinsons) and the fourth respondent (Mantach) for damages being the difference between the price paid for Broadmoor and Lower Wilmot and the true value of those properties at the time of purchase, together with certain expenses and interest. The Robinsons were the vendors of the properties and Mantach was a valuer which provided a valuation on which the applicant purchaser relied. 3 It was accepted, at least implicitly, at the substantive hearing that if the applicant paid too much for the property it followed that it borrowed too much and the damages should include interest paid on the excess borrowing.


case_title: King v Yurisich (No 2) [2007] FCAFC 51

case_text: In arguing against giving the offer any costs consequence Mr Cawthorn SC for Mantach, supported by Mr Ayliffe for the Robinsons, contended that the form of offer required all of the respondents to accept it. Contrary to O 23 r 2(2) it did not specify separately the offer made to each party. It was not possible for Mantach alone (or as Mr Ayliffe says, the Robinsons alone) to accept the offer in accordance with its terms. Reference was made to the decision of the Full Court of this Court in King v Yurisich (No 2) [2007] FCAFC 51 at [11] where their Honours said: There does not appear to be any basis under the terms of O 23 for the proposition that an offer made to all respondents can be accepted only by one. The fund made an offer which required all four respondents to whom it was made to accept its terms. If one respondent failed to accept, the fact that the other three had sought to would not have been a compliance with the terms of the offer. Moreover, in those circumstances there would be nothing which the respondents who wanted to accept the offer could do to comply with its terms. If the fund were correct in its construction of O 23, this would mean that any respondent who had wanted to accept the offer but was unable to persuade the others to do so, would be responsible for the payment of costs on an indemnity basis notwithstanding that respondent's attempt to satisfy the offer so far as it could. Given that the obliging respondent had no power to compel the others to act reasonably or to accept the offer, the consequence would be unacceptably harsh. Reference was also made to the decision of Byrne J in the Supreme Court of Victoria in Aquatec-Maxcon Pty Ltd v Barwon Water Authority (No 3) [2006] VSC 270 at [20] - [21] . 18 However, it is not necessary to decide whether King prevents such a conclusion. Even if the offer did not comply with Order 23, it was nevertheless not a nullity. The making and non-acceptance of it are facts which happened and which are relevant to the exercise of the discretion as to costs. The only difference is that if Order 23 does not apply there is no presumptive entitlement to indemnity costs: MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236 at 240. 21 Recently a Full Court of the Federal Court in WSA Online Limited v Arms (No 2) [2006] FCAFC 108 said at [16], citing MGCIA : A Calderbank offer does not carry the same presumptive entitlement to indemnity costs, but the public policy of encouraging settlement of litigation should nevertheless lead the Court to make an order for indemnity costs where a Calderbank offer has been made in terms which are clear and where it is appropriate to do so. It is worth noting that one of the aspects of the offer being considered in WSA Online was that it was made to a number of parties and one of them could not accept it independently without the agreement of others. Nevertheless the Full Court said at [18] this "was not a matter which conclusively operates against the costs order sought". In King at [8] the later Full Court cited WSA Online with no suggestion of disapproval.


case_text: In arguing against giving the offer any costs consequence Mr Cawthorn SC for Mantach, supported by Mr Ayliffe for the Robinsons, contended that the form of offer required all of the respondents to accept it. Contrary to O 23 r 2(2) it did not specify separately the offer made to each party. It was not possible for Mantach alone (or as Mr Ayliffe says, the Robinsons alone) to accept the offer in accordance with its terms. Reference was made to the decision of the Full Court of this Court in King v Yurisich (No 2) [2007] FCAFC 51 at [11] where their Honours said: There does not appear to be any basis under the terms of O 23 for the proposition that an offer made to all respondents can be accepted only by one. The fund made an offer which required all four respondents to whom it was made to accept its terms. If one respondent failed to accept, the fact that the other three had sought to would not have been a compliance with the terms of the offer. Moreover, in those circumstances there would be nothing which the respondents who wanted to accept the offer could do to comply with its terms. If the fund were correct in its construction of O 23, this would mean that any respondent who had wanted to accept the offer but was unable to persuade the others to do so, would be responsible for the payment of costs on an indemnity basis notwithstanding that respondent's attempt to satisfy the offer so far as it could. Given that the obliging respondent had no power to compel the others to act reasonably or to accept the offer, the consequence would be unacceptably harsh. Reference was also made to the decision of Byrne J in the Supreme Court of Victoria in Aquatec-Maxcon Pty Ltd v Barwon Water Authority (No 3) [2006] VSC 270 at [20] - [21] .


case_text: In the present case, the applicant alleges the one head of loss and damage: it paid more for Broadmoor and Lower Wilmot than they were truly worth. Each respondent was facing the same monetary liability (as I have held, recent statutory provisions for proportionate liability were not applicable). It was open to either respondent to pay the $800,000 and, failing agreement with the other respondent, to proceed with its cross-claim, in the course of which it could have made its own Order 23 offer or a Calderbank offer (see Calderbank v Calderbank [1975] 3 All ER 333). If either respondent had agreed to pay $800,000, it would have been significantly better off than it now is, each respondent being liable to the applicant for $894,568. True it is Mantach now has a right of indemnity against the Robinsons for the full amount, but as its counsel accepted, it would have had a right of recovery against the Robinsons back in March had it accepted the $800,000 offer. And Mantach would have had greater prospects of effective recovery had the Robinsons' assets not been depleted by a fourteen day trial. Even if Mantach had to run a case against the Robinsons to judgment, that would have been a substantially less expensive exercise than the three cornered contest which in fact took place. 17 Put another way, there would have been no practical difference if the applicant had addressed an offer to the Robinsons offering to accept $800,000, and an otherwise identical document addressed to Mantach also offering to accept $800,000. It would be an odd and formalistic result if the fact that the offers were in the one document made a critical difference. 19 In MGICA there was no Order 23 offer but there had been a Calderbank letter which Lindgren J at 238 accepted as relevant. His Honour pointed out that s 43, and perhaps also 23, of the Federal Court of Australia Act 1976 (Cth) empower the Court to award costs on an indemnity basis. The discretion must of course be exercised judicially. His Honour at 239 reviewed a number of single instance Federal Court decisions and in particular John S Hayes & Associates Pty Ltd v Kimberly-Clark Australia Pty Ltd (1994) 52 FCR 201 at 204-206 and Sanko Steamship Co Ltd v Sumitomo Australia Ltd (unreported, 7 February 1996). In these cases indemnity costs were refused because, although the offeree achieved a worse result at judgment, it could not be said that there was "no chance of success" ( John S Hayes at 206) or that in not accepting the offer the offeree's conduct was "plainly unreasonable" ( Sanko at 9). 21 Recently a Full Court of the Federal Court in WSA Online Limited v Arms (No 2) [2006] FCAFC 108 said at [16], citing MGCIA : A Calderbank offer does not carry the same presumptive entitlement to indemnity costs, but the public policy of encouraging settlement of litigation should nevertheless lead the Court to make an order for indemnity costs where a Calderbank offer has been made in terms which are clear and where it is appropriate to do so. It is worth noting that one of the aspects of the offer being considered in WSA Online was that it was made to a number of parties and one of them could not accept it independently without the agreement of others. Nevertheless the Full Court said at [18] this "was not a matter which conclusively operates against the costs order sought". In King at [8] the later Full Court cited WSA Online with no suggestion of disapproval.


case_title: MGICA Pty Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236

case_text: However, it is not necessary to decide whether King prevents such a conclusion. Even if the offer did not comply with Order 23, it was nevertheless not a nullity. The making and non-acceptance of it are facts which happened and which are relevant to the exercise of the discretion as to costs. The only difference is that if Order 23 does not apply there is no presumptive entitlement to indemnity costs: MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236 at 240. 19 In MGICA there was no Order 23 offer but there had been a Calderbank letter which Lindgren J at 238 accepted as relevant. His Honour pointed out that s 43, and perhaps also 23, of the Federal Court of Australia Act 1976 (Cth) empower the Court to award costs on an indemnity basis. The discretion must of course be exercised judicially. His Honour at 239 reviewed a number of single instance Federal Court decisions and in particular John S Hayes & Associates Pty Ltd v Kimberly-Clark Australia Pty Ltd (1994) 52 FCR 201 at 204-206 and Sanko Steamship Co Ltd v Sumitomo Australia Ltd (unreported, 7 February 1996). In these cases indemnity costs were refused because, although the offeree achieved a worse result at judgment, it could not be said that there was "no chance of success" ( John S Hayes at 206) or that in not accepting the offer the offeree's conduct was "plainly unreasonable" ( Sanko at 9). 23 In the final analysis the award of indemnity costs remains a matter of discretion. In MGICA Lindgren J said at 238 that the obligation to exercise the discretion judicially ... does not mean, and it is wrong to think, that the law requires that the discretion be exercised in a certain way in a particular case because of the presence or absence of factors which may have been persuasive in an earlier case. How the discretion is to be exercised in a particular case depends on all relevant circumstances of that case . (Emphasis in original)


case_text: In MGICA there was no Order 23 offer but there had been a Calderbank letter which Lindgren J at 238 accepted as relevant. His Honour pointed out that s 43, and perhaps also 23, of the Federal Court of Australia Act 1976 (Cth) empower the Court to award costs on an indemnity basis. The discretion must of course be exercised judicially. His Honour at 239 reviewed a number of single instance Federal Court decisions and in particular John S Hayes & Associates Pty Ltd v Kimberly-Clark Australia Pty Ltd (1994) 52 FCR 201 at 204-206 and Sanko Steamship Co Ltd v Sumitomo Australia Ltd (unreported, 7 February 1996). In these cases indemnity costs were refused because, although the offeree achieved a worse result at judgment, it could not be said that there was "no chance of success" ( John S Hayes at 206) or that in not accepting the offer the offeree's conduct was "plainly unreasonable" ( Sanko at 9). 20 Lindgren J noted at 240 that a different approach was taken by Rolfe J in the Supreme Court of New South Wales in Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425. Rolfe J expressed disagreement with John S Hayes and Sanko . His Honour took the view that non-acceptance of an offer which was better than the ultimate result itself prima facie demonstrated unreasonable conduct warranting indemnity costs. Lindgren J at 240 followed the two Federal Court decisions, although he thought that there were many cases, including the one before him, where the different approaches would not produce a different result.


case_title: Sanko Steamship Co Ltd v Sumitomo Australia Ltd (unreported, 7 February 1996)


case_text: Lindgren J noted at 240 that a different approach was taken by Rolfe J in the Supreme Court of New South Wales in Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425. Rolfe J expressed disagreement with John S Hayes and Sanko . His Honour took the view that non-acceptance of an offer which was better than the ultimate result itself prima facie demonstrated unreasonable conduct warranting indemnity costs. Lindgren J at 240 followed the two Federal Court decisions, although he thought that there were many cases, including the one before him, where the different approaches would not produce a different result.


case_text: Recently a Full Court of the Federal Court in WSA Online Limited v Arms (No 2) [2006] FCAFC 108 said at [16], citing MGCIA : A Calderbank offer does not carry the same presumptive entitlement to indemnity costs, but the public policy of encouraging settlement of litigation should nevertheless lead the Court to make an order for indemnity costs where a Calderbank offer has been made in terms which are clear and where it is appropriate to do so. It is worth noting that one of the aspects of the offer being considered in WSA Online was that it was made to a number of parties and one of them could not accept it independently without the agreement of others. Nevertheless the Full Court said at [18] this "was not a matter which conclusively operates against the costs order sought". In King at [8] the later Full Court cited WSA Online with no suggestion of disapproval. 22 In this regard I note that prior to trial the applicant reached a compromise with the fifth respondent Harrison Humphreys Pty Ltd, a valuer against whom the applicant pleaded substantially the same case as it did against Mantach. The terms of that settlement are not known to the Court, and would not be relevant if they were. The point is, however, that it was possible for the applicant in the circumstances of the present case to settle with one of several respondents. Outside the specific requirements of Order 23 the Court is in the area of general discretion as to indemnity costs. The fact that, as a matter of contract law, an offer might not have been capable of acceptance by one respondent is not conclusive against an award of indemnity costs: WSA Online .


case_text: The locus classicus on the subject is still the decision of Sheppard J in Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225. His Honour at 230 noted that the power to order such costs is not "to be circumscribed in any way" and, at 231, that the power "is not so circumscribed that an order of this character may be made only against an ethically or morally delinquent party". His Honour at 233 noted as one of the circumstances which have been thought to warrant the exercise of the discretion "an imprudent refusal of an offer to compromise". 25 In my opinion in the present case the refusal of the applicant's offer was imprudent. It was made when the parties' evidence, or at least the great bulk of it, was available in affidavit form. It would have been apparent to an objective observer that there was, at the lowest, a serious risk of a Court finding that there had been a gross misrepresentation as to the croppable areas of Broadmoor and Lower Wilmot and that this had led, along with other factors, to a gross over valuation, as demonstrated, apart from anything else, by the result of the subsequent sales. The objective observer would also have been aware that it would take a long and expensive trial for the applicant to run its case to judgment. 26 I will order that the Robinsons and Mantach pay the applicant's costs on a party and party basis up until 21 March 2007 (being 14 days from the date of the offer) and thereafter on an indemnity basis. 27 There is no opposition to an extension to 15 February 2008 of the time for filing and serving a notice of appeal. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. Associate: Dated: 19 December 2007 Counsel for the Applicant: M E O'Farrell Solicitors for the Applicant: Ware & Partners Counsel for the First and Second Respondents: W A Ayliffe Solicitors for the First and Second Respondents: Simmons Wolfhagen Counsel for the Fourth Respondent: P G Cawthorn SC and C Madder Solicitors for the Fourth Respondent: DLA Phillips Fox Date of Hearing: 13 December 2007 Date of Judgment: 19 December 2007 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/2016.html


case_outcome: related

case_text: On 4 April 2008 I delivered reasons for judgment ( Hermitage Motel Pty Ltd v P. E. Kafka Pty Ltd [2008] FCA 442) and stood the matter over in order to enable the first applicant to bring in minutes of order to give effect to those reasons. Some issues need to be determined. 2 In principle, the respondents are entitled to costs occasioned by the claim of the second applicant which was not proceeded with. It seems to me that that is likely to be a very slim amount, but that is a matter for agreement, taxation or assessment. 3 The intertwined issues of costs of the adjournment, which took place on 27 November 2006, and the impact upon the running of interest are rather more difficult questions. The case as pleaded and represented by the evidence was a conventional purchase of a business induced by misleading representations, with the evidence on both sides valuing the property purchased at the time of completion. As with other cases in this Court, it is a case-managed proceeding. On the Friday before the hearing, counsel for the respondents raised the spectre of an argument that the proper measure of damage was the difference between the amount paid and the value of the motel at the time of trial, certainly not being the value of the motel at the time of completion. If correct, that would have meant that the applicants had no evidence as to the value at the time contended for. In those circumstances, the applicants sought an adjournment of the proceeding in order that they could meet that potential argument.


case_text: This is an appeal against a judgment of a Federal Magistrate delivered on 16 July 2008 dismissing an application for judicial review of a decision of the Refugee Review Tribunal ("the Tribunal") handed down on 28 February 2008: see SZMBX v Minister for Immigration and Citizenship [2008] FMCA 1090. The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Citizenship to refuse to grant a protection visa to the appellant. 2 The appellant is a citizen of the People's Republic of China who entered Australia on 12 June 2007. He entered on a visitor's visa. On 26 July 2007 the appellant lodged an application for a protection visa with the Department of Immigration and Citizenship. A delegate of the first respondent refused the application for a protection visa on 23 October 2007. On 23 November 2007 the appellant applied to the Tribunal for a review of that decision. 3 In a Statutory Declaration filed in support of his visa application the appellant claimed that, encouraged by his friend, who was a member of the China Democracy Party ("CDP"), he organised a protest against corrupt Communist officials who sold a large piece of farm land which included his family's land, but gave the appellant's family only minimal compensation. He contacted other locals in the village and handed out pamphlets which called on local people not to bear unfair treatment and to strive for their basic human rights. He claimed that he organised a protest, which was attended by about 100 people. The protest was quickly suppressed by the Public Security Bureau ("PSB"). He claimed, that through his relationship with his friend, the PSB came to believe that he was a key member of the CDP and that he had been instructed by the CDP to organise the protest. He claimed that he was wanted by the PSB and therefore went into hiding before illegally leaving China with the help of some friends. He was smuggled to Taiwan and came to Australia on a false Taiwanese passport. 4 During the hearing the appellant said that, on 25 April 2007, he had conducted investigations about people whose land had been taken by the authorities by going to families and asking about any land taken. When he visited the families, he was finding out about the land as well as organising the demonstration. He set a date for the demonstration on 27 April 2007. On 26 April 2007, 5,000 copies of the pamphlet were printed and he gave pamphlets to anyone he encountered in the street. At the protest the police told him the protest was anti-government, and that the protestors were breaking the law. The police held him by his jacket. There were about 20-30 police officers and there were now 200-300 people involved in the demonstration which became chaotic. After he fled the demonstration he lived at a friend's home. Three police cars went to his home on 28 April 2007. 5 The Tribunal found, on the evidence as a whole, that the appellant was not a credible witness. The Tribunal considered that the Statutory Declaration completed by the appellant was detailed and comprehensive and that, therefore, new claims made at the hearing raised doubts about his credibility and the veracity of his claims. The Tribunal found the appellant's evidence about how he organised the protest to be internally inconsistent, vague and unclear. The Tribunal found the appellant's alleged organisation of a large protest was implausible and it did not accept that the protest took place.


case_text: The appellant complained that the Tribunal had failed genuinely to assess evidence favourable to him when it questioned the fact that the appellant raised substantial new claims at the hearing, and, in rejecting his claims, had made an unfair decision. The Federal Magistrate noted that s 420 of the Act provided that, in carrying out its functions, the Tribunal was to pursue the objective of providing a mechanism for review that was fair, just, economical, informed and quick. The Federal Magistrate referred to the observations of Brennan J in Attorney-General NSW v Quin [1990] HCA 21 ; (1990) 170 CLR 1 at 35-36 and concluded that no breach of ss 420 or 425 of the Act had occurred. 12 The appellant complained that the Tribunal failed to comply with its obligations under s 424A(1) by failing to give the appellant particulars of information, failing to ensure that the appellant understood that it would be relevant to his review application and failing to give the appellant the opportunity to comment on the information. The Federal Magistrate found that the appellant had been given an opportunity to comment on the information at the hearing. The issue of the [appellant's] credibility "was squarely before the appellant, or should have been," and that the appellant should not have been taken by surprise that his application was not accepted. The Tribunal was not satisfied as to the appellant's credibility or the credibility of his account. That finding was open to the Tribunal. 13 The Federal Magistrate was unable to find any other arguable case for jurisdictional error and dismissed the application.


case_text: In the course of the trial I rejected some opinion evidence tendered on behalf of Cadbury about consumer behaviour: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2006) 228 ALR 719 (the evidence ruling). Subsequently I gave judgment dismissing Cadbury's substantive claim: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 4) (2006) 229 ALR 136 (the trial judgment). Cadbury appealed to the Full Court, which held that the evidence was wrongly rejected, set aside my judgment and remitted the matter to me for further hearing: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 72 IPR 261 (the first Full Court judgment).


case_title: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 72 IPR 261


case_text: Subsequently Cadbury brought a motion before the same Full Court asking that its previous order be varied and that the matter be remitted for a new trial, that is to say a hearing de novo . The Full Court dismissed the motion: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 2) [2007] FCAFC 102 (the second Full Court judgment). 5 Cadbury then brought a motion seeking an order that I excuse myself from further hearing the matter on the ground of apprehended bias. The application was based on what I said in the course of the evidence ruling and the trial judgment. I dismissed the motion and stated that I would give my reasons later. Those reasons are as follows. 6 In the evidence ruling I was primarily concerned with the proffered evidence of Dr Brian Gibbs, Associate Professor of Marketing and Behavioural Science in the Melbourne Business School, although there were two other witnesses from Cadbury who would have given similar or related opinions and a Darrell Lea witness who would have given opinion evidence of the same kind but to opposite effect.


case_outcome: applied

case_text: The test to be applied is not in dispute. It was laid down by the High Court in Johnson v Johnson [2000] HCA 48 ; (2000) 201 CLR 488 at [11] namely: "whether a fair minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide." 39 In the present case, although the apprehended bias application is based entirely on remarks in the evidence ruling and trial judgment, the hypothetical lay observer must be credited with knowledge not only of those remarks but what the Full Court said in its first and second judgments. The fair minded observer is not "a person wholly uninformed and uninstructed about the law in general or the issue to be decided": Johnson at [53]. 40 The lay observer would be aware that Cadbury had criticised the remarks in question, and had on two occasions sought a trial de novo before another judge. The lay observer would understand that the Full Court saw no problem in having the matter further considered by me. In particular the observer would consider what the Full Court said in its second judgment at [112] [114] quoted above and the observation of Emmett J, speaking for the Court, in the course of argument (see [30] above). 41 The observer, in considering the criticisms of the utility of expert opinion in consumer cases I have made on policy grounds, would see from reading the first Full Court judgment that similar views had been expressed by other judges of the Federal Court, and had been referred to by the Full Court in the present case without any disapproval. 42 The observer would see that, while there were critical comments on some aspects of Dr Gibbs' evidence, read as a whole and in context the real thrust of the remarks in the evidence ruling was concerned with the effects of expert evidence of this kind in this kind of case, in other words with the policy rationale for what the judge thought the law to be wrongly, as it turned out. Regrettably, the primary judge proceeded upon the assumption that this evidence would not be admissible at common law, an assumption which the Full Court accepted (the heading of s 80 tells us "Ultimate issue and common knowledge rules abolished"). The primary judge should have been aware of s 80(b) , and counsel should have directed his attention to it. Judges, like other citizens, do not always agree with laws. But judges have to administer the law as it stands. The observer would think, as did the Full Court, that this will happen in the present case. 43 Of course there are practical problems. The reasonable lay observer would recognise the difficulty of a judge's task in taking into account new evidence when he or she has already reached a decision on a great deal of other evidence, including, although not limited to, evidence going to the same issues as the wrongly excluded evidence. But that is inherent in the power given by s 28(1)(c) of the Federal Court of Australia Act 1976 (Cth) which gives explicit powers to Full Courts to do what the Full Court has done in the present case. 44 Cadbury's motion will be dismissed with costs. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice HEEREY. Associate: Dated: 16 August 2007 Counsel for the Applicant: W T Houghton QC and M D Wyles Solicitors for the Applicant: Mallesons Stephen Jaques Counsel for the Respondent: C D Golvan SC and S Ricketson Solicitors for the Respondent: Middletons Date of Hearing: 9 August 2007 Date of Judgment: 16 August 2007 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/1245.html


case_text: In their letter of 15 March 2006, which was headed "without prejudice save as to costs", the solicitors for Mr Rambaldi and Irlmond made an offer to resolve the proceeding and invoked Calderbank v Calderbank [1975] 3 All ER 333 (" Calderbank "). Under the Calderbank principle, costs may be awarded on an indemnity basis where a proceeding is unduly prolonged by an imprudent refusal of an offer of compromise: see Colgate-Palmolive at 233 per Sheppard J. A party may rely on a Calderbank offer notwithstanding that the party has not complied with the procedure set out in O 23 of the Federal Court Rules : see, for example, Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97 at 101 per Spender J; Alpine Hardwoods (Aust) Pty Ltd v Hardys Pty Ltd (No 2) (2002) 190 ALR 121 at 124-125 per Weinberg J; and Henderson v Amadio Pty Ltd (No 3) [1996] FCA 184 per Heerey J.


case_text: Mr Rambaldi's submissions did not specifically invoke the principle in Calderbank . There may be a number of reasons for this. First, it may be that the offer did not amount to a genuine offer of compromise. The offer, which was stated to be open until noon on 16 March 2006, was made on the basis that Mr Spalla discontinue the proceeding as against Mr Rambaldi and Irlmond and provide full releases to them; that he also make appropriate arrangements with the first to eighth respondents (as they then were) to discontinue; that Mr Spalla, Mr Rambaldi and Irlmond each bear their own costs of the proceeding; and that there be no order as to costs including no order as to any reserved costs. In Vasram v AMP Life Limited [2002] FCA 1286 , Stone J held (at [12]) that where a respondent invited an applicant to discontinue with no order being made as to costs, the invitation could not be regarded as a Calderbank offer: see also Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (No 2) (2002) 201 ALR 618 at [59]-[60] per Hill J. In any event, even if the offer was in the nature of a Calderbank offer, the rejection of the offer would be only one factor to be taken into account in the Court's exercise of discretion. Further, in order for there to be an indemnity costs order, the respondents would need to show that Mr Spalla's rejection of their offer was so unreasonable as to justify indemnity costs: see, for example, Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (No 2) (2004) 212 ALR 281 at 287-290 per Hely J. As I have said, Mr Rambaldi did not seek to rely on the Calderbank principle and to discharge this onus.


case_text: In Colgate-Palmolive , Sheppard J set out some relevant principles (at 232-235) concerning indemnity costs and referred to some of the circumstances in which courts have ordered that costs be paid on an indemnity basis. These circumstances included "the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud", "evidence of particular misconduct that causes loss of time to the Court and to other parties", "the fact that the proceedings were commenced ... in wilful disregard of known facts or clearly established law", and "the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions": see also Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 400-401 per Woodward J and Australian Transport Insurance Pty Ltd v Graeme Phillips Road Transport Insurance Pty Ltd (1986) 10 FCR 177 at 178 per Woodward J. In Cook v Pasminco Ltd (No 2) [2000] FCA 1819 ; (2000) 107 FCR 44, the Court made an order for indemnity costs against the applicants' solicitors in a representative action upon the ground that the proceeding was not only untenable but "brought irresponsibly without any, or any proper, consideration of the question whether it had any prospect of success": see [66] per Lindgren J.


case_text: I would, however, accede to the submission made by the Deloitte parties that Mr Spalla should pay indemnity costs in respect of the first four days of the hearing. From time to time the courts overcome their reluctance to order indemnity costs against a self-represented litigant: see, for example, Bhagat v Global Custodians Ltd [2002] FCAFC 51 at [57] and [60] per O'Loughlin, Whitlam and Marshall JJ and Ogawa v The University of Melbourne (No 2 ) [2004] FCA 1275 per Kenny J. In any event, as the Deloitte parties noted, the conduct relied upon in support of the application for indemnity costs in respect of the first four days of the hearing occurred while Mr Spalla was represented by counsel. I note that Mr Rambaldi also relied on this conduct in support of his costs application.


case_text: On the one hand, litigants in person, even if partially assisted by lawyers, often produce significant difficulties and unnecessary expense for the parties against whom they proceed: see Bhagat v Royal & Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159 at [13] per Hodgson CJ in Eq. These difficulties arise from their lack of knowledge of the law, unfamiliarity with court practice and, sometimes, lack of objectivity and want of lawyerly skills in reading and writing. Mr Spalla suffers, to some degree, from the disabilities of most self-represented litigants. There may be other factors too that compound a self-represented litigant's inability to utilise court procedures appropriately. On the other hand, a person's capacity to gain redress for legal wrongs in the courts should not depend on his or her ability to pay for legal representation. In seeking to balance these considerations, the courts have been generally more reluctant to make orders for indemnity costs against self-represented litigants than against legally represented litigants.


case_text: In their letter of 15 March 2006, which was headed "without prejudice save as to costs", the solicitors for Mr Rambaldi and Irlmond made an offer to resolve the proceeding and invoked Calderbank v Calderbank [1975] 3 All ER 333 (" Calderbank "). Under the Calderbank principle, costs may be awarded on an indemnity basis where a proceeding is unduly prolonged by an imprudent refusal of an offer of compromise: see Colgate-Palmolive at 233 per Sheppard J. A party may rely on a Calderbank offer notwithstanding that the party has not complied with the procedure set out in O 23 of the Federal Court Rules : see, for example, Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97 at 101 per Spender J; Alpine Hardwoods (Aust) Pty Ltd v Hardys Pty Ltd (No 2) (2002) 190 ALR 121 at 124-125 per Weinberg J; and Henderson v Amadio Pty Ltd (No 3) [1996] FCA 184 per Heerey J. 25 Mr Rambaldi's submissions did not specifically invoke the principle in Calderbank . There may be a number of reasons for this. First, it may be that the offer did not amount to a genuine offer of compromise. The offer, which was stated to be open until noon on 16 March 2006, was made on the basis that Mr Spalla discontinue the proceeding as against Mr Rambaldi and Irlmond and provide full releases to them; that he also make appropriate arrangements with the first to eighth respondents (as they then were) to discontinue; that Mr Spalla, Mr Rambaldi and Irlmond each bear their own costs of the proceeding; and that there be no order as to costs including no order as to any reserved costs. In Vasram v AMP Life Limited [2002] FCA 1286 , Stone J held (at [12]) that where a respondent invited an applicant to discontinue with no order being made as to costs, the invitation could not be regarded as a Calderbank offer: see also Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (No 2) (2002) 201 ALR 618 at [59]-[60] per Hill J. In any event, even if the offer was in the nature of a Calderbank offer, the rejection of the offer would be only one factor to be taken into account in the Court's exercise of discretion. Further, in order for there to be an indemnity costs order, the respondents would need to show that Mr Spalla's rejection of their offer was so unreasonable as to justify indemnity costs: see, for example, Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (No 2) (2004) 212 ALR 281 at 287-290 per Hely J. As I have said, Mr Rambaldi did not seek to rely on the Calderbank principle and to discharge this onus.


case_text: The power of the Court to make an order for costs derives from s 43 of the Federal Court of Australia Act 1976 (Cth). Costs ordinarily follow the event (that is, the successful party receives costs) and are awarded on a party and party basis, unless there are particular or special circumstances that warrant the Court departing from this practice and making some other order: see Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 (" Colgate-Palmolive ") at 232-233 per Sheppard J and Ruddock v Vadarlis (No 2) [2001] FCA 1865 ; (2001) 115 FCR 229 at 234 per Black CJ and French J. 17 In Colgate-Palmolive , Sheppard J set out some relevant principles (at 232-235) concerning indemnity costs and referred to some of the circumstances in which courts have ordered that costs be paid on an indemnity basis. These circumstances included "the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud", "evidence of particular misconduct that causes loss of time to the Court and to other parties", "the fact that the proceedings were commenced ... in wilful disregard of known facts or clearly established law", and "the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions": see also Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 400-401 per Woodward J and Australian Transport Insurance Pty Ltd v Graeme Phillips Road Transport Insurance Pty Ltd (1986) 10 FCR 177 at 178 per Woodward J. In Cook v Pasminco Ltd (No 2) [2000] FCA 1819 ; (2000) 107 FCR 44, the Court made an order for indemnity costs against the applicants' solicitors in a representative action upon the ground that the proceeding was not only untenable but "brought irresponsibly without any, or any proper, consideration of the question whether it had any prospect of success": see [66] per Lindgren J. 24 In their letter of 15 March 2006, which was headed "without prejudice save as to costs", the solicitors for Mr Rambaldi and Irlmond made an offer to resolve the proceeding and invoked Calderbank v Calderbank [1975] 3 All ER 333 (" Calderbank "). Under the Calderbank principle, costs may be awarded on an indemnity basis where a proceeding is unduly prolonged by an imprudent refusal of an offer of compromise: see Colgate-Palmolive at 233 per Sheppard J. A party may rely on a Calderbank offer notwithstanding that the party has not complied with the procedure set out in O 23 of the Federal Court Rules : see, for example, Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97 at 101 per Spender J; Alpine Hardwoods (Aust) Pty Ltd v Hardys Pty Ltd (No 2) (2002) 190 ALR 121 at 124-125 per Weinberg J; and Henderson v Amadio Pty Ltd (No 3) [1996] FCA 184 per Heerey J.


case_title: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397


case_text: The rationale for an indemnity costs order can be variously stated. In Hamod v New South Wales (2002) 188 ALR 659 at [20], Gray J, with whom Carr and Goldberg JJ agreed, said: "Indemnity costs are not designed to punish a party for persisting with a case that turns out to fail. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs."


case_title: Henderson v Amadio Pty Ltd (No 3) [1996] FCA 184


case_text: Referring to Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242 (" Huntsman "), Mr Rambaldi submitted that Mr Spalla was put on notice by letters dated 26 May 2005 and 15 March 2006 that, if he persisted with his application, Mr Rambaldi and Irlmond would apply for their costs to be paid on an indemnity basis. Mr Rambaldi contended that no party, even if unrepresented, is entitled to commence or maintain proceedings "irresponsibly and without regard to the prospects of success". Moreover, Mr Rambaldi argued that an award of indemnity costs was justified upon the ground that Mr Spalla maintained unfounded and unnecessary allegations of dishonesty and deceit against him with respect to his conduct both before and after 29 April 2005. 6 Mr Rambaldi submitted that "[t]here is no reason why Mr Spalla's belated and self-imposed 'litigant in person status' should displace the award of indemnity costs if it [were] otherwise appropriate". Furthermore, Mr Rambaldi argued that there were various other factors that made it appropriate to order indemnity costs "even were Mr. Spalla to be viewed as a litigant in person". According to Mr Rambaldi, these factors were: • When the case began on 14 March 2006, Mr Spalla had had the benefit of the advice of both senior counsel (Mr Richter QC) and junior counsel in the weeks leading up to the trial. • Mr Spalla was represented by both a solicitor (Mr Still) and counsel (Mr O'Connor) for the hearings on 14, 15 and 16 March 2006. • It was Mr Spalla's decision to terminate the retainers of his solicitor and counsel on 17 March 2006. • Thereafter, Mr Spalla continued to rely on written submissions and outlines earlier prepared by his then retained counsel. 7 Finally, Mr Rambaldi submitted that Mr Spalla's conduct of the case caused "undue delay and needless waste of time", which also led "costs to be unduly incurred". In this regard, Mr Rambaldi asserted that: • Mr Spalla kept on changing his mind as to whether he would or would not call Mr Hayes QC as a witness. • Mr Spalla gave no adequate consideration to the obvious and looming problem of legal professional privilege and waiver, which would attend any attempt to call Mr Hayes QC or to tender his various advices. 21 Mr Rambaldi relied on certain observations of Kirby P in Huntsman (at 249-250), in support of his submission that his case for indemnity costs was strengthened by the fact that he had given Mr Spalla early warning that costs would be sought on an indemnity basis if Mr Spalla was unsuccessful. In that case Kirby P stated that such a warning might be most desirable in commercial litigation, because it provided a basis for the court to conclude that the risk had been appreciated by a party who has "pressed on regardless". This may very well be correct where parties are represented. A court may not, however, be as willing to conclude that a self-represented litigant has appreciated the risk and pressed on regardless even though the other party has signalled an intention to seek indemnity costs. Whether a court draws this conclusion in the case of an unrepresented litigant will depend on all the circumstances of the case. I consider it unlikely that Mr Spalla pressed on with the hearing with an appropriate appreciation that his application was likely to fail and that the occasion for the consideration of Mr Rambaldi's application for indemnity costs was likely to arise. I would not, therefore, regard the giving of early notice to Mr Spalla of an indemnity costs application as carrying much weight on this costs application. 22 I have already found that Mr Spalla gave his evidence honestly, and without any intention to mislead the Court. Moreover, although time was lost that should not have been had Mr Spalla been represented, as a self-represented litigant, Mr Spalla presented his case reasonably responsibly. Time was lost through Mr Spalla's lack of legal knowledge and legal skills. These were merely attributes of his self-represented status. As I have previously said, Mr Spalla has been intensely and emotionally involved in this and related proceedings for some years now. He has an emotional investment in this and related litigation. As previously said, on account of this, and his strong commitment to pursuing his grievances in this and related litigation, he has drawn some conclusions that have not proved correct. This was true of his principal application to set aside the settlement, as well as his bias application. 23 Leaving aside the first four days of the hearing, Mr Spalla should be characterised as an unsuccessful self-represented litigant against whom the ordinary costs order should be made. I would not order indemnity costs against him for the whole of the hearing. Further, for much the same reasons, I would not order indemnity costs in respect of his unsuccessful bias application.


case_title: Ogawa v The University of Melbourne (No 2 ) [2004] FCA 1275


case_title: Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (No 2) (2004) 212 ALR 281


case_text: The power of the Court to make an order for costs derives from s 43 of the Federal Court of Australia Act 1976 (Cth). Costs ordinarily follow the event (that is, the successful party receives costs) and are awarded on a party and party basis, unless there are particular or special circumstances that warrant the Court departing from this practice and making some other order: see Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 (" Colgate-Palmolive ") at 232-233 per Sheppard J and Ruddock v Vadarlis (No 2) [2001] FCA 1865 ; (2001) 115 FCR 229 at 234 per Black CJ and French J.


case_text: When the trial began on Monday, 14 March 2006, junior counsel for Mr Spalla announced an appearance with senior counsel, stating that senior counsel was unwell. I subsequently refused an application for an adjournment. In my judgment of 18 April 2006 (see Spalla v St George Wholesale Finance Pty Ltd [2006] FCA 416 at [11] ) which rejected Mr Spalla's bias application, I said: "Mr Spalla first raised the issue of my decision to continue with the hearing despite the illness of his senior counsel. As the respondents noted, this was a qualified decision. After a colloquy with the applicant's junior counsel (who has apparently over ten year's experience at the bar) I ruled that the hearing should continue in order that the applicant might present his evidence in chief notwithstanding the absence of senior counsel. The applicant's counsel apparently conceded that he could cope with the presentation of evidence in chief although not cross-examination. I ruled that I would adjourn the hearing, if needs be, to allow the applicant the benefit of senior counsel in the cross-examination of the respondents' witnesses. A date was nominated, which was available to the Court, and, on the information before me at that time, gave the applicant a sufficient opportunity to order his affairs. The respondents opposed any adjournment. My decision favoured neither party. It was a straightforward example of case management, which took account of the interests of all parties, as well as broader interests in the timely progression of cases in order that other litigants might also be heard. Decisions such as these are routine and are not proper bases for disqualifying the trial judge." As I said on this earlier occasion, the Court owed a duty to both Mr Spalla and the respondents to ensure that the trial was conducted fairly and in as timely a fashion as possible. Although he did not have the benefit of senior counsel as he may have wished, during the first four days of the hearing Mr Spalla had the benefit of experienced junior counsel and a solicitor. 29 In the first four days of the hearing, much time was lost in dealing with Mr Spalla's suggestion that he might call another senior counsel (who had been involved at the time of the settlement) to give evidence. Mr Spalla made this suggestion after the hearing began and despite specific orders requiring witnesses to be named well prior to trial. The transcript of the hearing between 14 and 17 March 2006 bears out Mr Rambaldi's submission that Mr Spalla kept changing his mind as to whether he would or would not call Mr Hayes QC as a witness: see, for example, the transcript at pages 34-38, 41, 165-171, 175, 186, 192-194. Further time was lost because Mr Spalla had given insufficient consideration to the status of communications otherwise subject to legal professional privilege in the event Mr Hayes gave evidence or Mr Spalla tendered his written opinions. The transcript of the hearing bears out Mr Rambaldi's submission that Mr Spalla gave no adequate consideration to the obvious problems of legal professional privilege and waiver, which would attend any attempt to call his former senior counsel or to tender his various opinions: see, for example, the transcript at pages 30-31, 34-35, 41-42, 102-112, 140, 142, 160, 166, 170-171, 176-191, 194-195. 30 Notwithstanding that I said I would not require junior counsel to conduct any cross-examination of the respondents' witnesses, the conduct of the hearing over these four days strongly indicated that Mr Spalla was seeking to delay the hearing as much as he possibly could. Ultimately he secured an adjournment for some five and a half weeks when he terminated the retainers of his legal representatives. Junior counsel stated that that he had "instructions to withdraw" from the trial at 3:23 pm on Thursday, 16 March 2006. He appeared in court on the morning of Friday, 17 March 2006 and confirmed that his retainer had been terminated. Also on the Friday morning, at 11:22 am, the solicitor who had been acting for Mr Spalla announced that his retainer had been withdrawn. The solicitor subsequently filed an affidavit sworn 20 March 2006, which confirmed that Mr Spalla had instructed him to terminate junior counsel's retainer at about 3:20 pm on 16 March 2006. He deposed that his own retainer was also terminated that day and that he received confirmation of this on the morning of 17 March 2006. The solicitor's affidavit makes it clear that it was Mr Spalla's decision to terminate the retainers of his solicitor and counsel. Thereafter, as I have said, Mr Spalla represented himself at the trial.


case_text: On 12 September 2006, the Court refused the applicant's motion and otherwise dismissed the proceeding, which sought to set aside a settlement entered into by the respondents. When the Court delivered its reasons for judgment, it gave the parties an opportunity to make written submissions on costs: see Spalla v St George Motor Finance Ltd (No 7) [2006] FCA 1177. 2 The first, second and seventh respondents ("the St George parties"), the third to sixth respondents ("the Deloitte parties") and the eighth respondent (Mr Rambaldi) filed submissions on costs in late September 2006. The applicant (Mr Spalla) stated his position on costs in a letter addressed to my associate dated 17 October 2006. 3 In this letter, Mr Spalla said: "I wish to reply to the request that a response be provided in relation to costs of this proceeding. On the day that Her Honour delivered Judgement, I understood that a date in October or November was indicated by her Honour as a day to hear oral submissions on costs. I regret my misunderstanding has caused any inconvenience. It is my submission, with respect that any costs award should be on the normal basis of party party. I respectfully submit that I in no way abused the Court process and further submit that any extended trial time was due to the fact that I was denied the opportunity to secure the representation of properly briefed Senior Counsel, who unfortunately fell seriously ill on the eve of the commencement of the trial. As the Respondents have sought to claim solicitor client or indemnity costs against me because of the predicament I faced in having to conduct my own case due to the illness of my Senior Counsel, is, I respectfully submit, grossly unfair and unwarranted. I further submit that there is no valid argument that I should be liable for any Order that costs be paid forthwith. As I have lodged an Appeal against Her Honour's decision, I further submit that any consideration of costs should be deferred pending the outcome of that Appeal. The Respondents in my respectful submission will not suffer any prejudice if any consideration of costs is deferred until after the Appeal is determined. At the very least I submit that any costs be taxed on a party party basis and made payable after the Appeal, if it is unsuccessful. As an unrepresented litigant I am unable to address the legal submissions made by the Respondents in relation to precedent." 4 Mr Rambaldi seeks an order that the costs of the hearing, including reserved costs, be paid on an indemnity basis. He acknowledged that, generally speaking, courts are reluctant to order indemnity costs against a self-represented litigant but submitted that, in this case, there were "strong grounds" for an award of indemnity costs against Mr Spalla. First, he submitted that Mr Spalla's allegation that Mr Rambaldi engaged in dishonest and deceitful behaviour depended on (a) the proper construction of the Litigation Funding Agreement; (b) the proper construction of the 29 April 2005 Deed of Settlement; (c) the post 29 April 2005 conduct of Mr Rambaldi; and (d) the solvency of the ninth respondent ("Irlmond"). He submitted that Mr Spalla's contentions with respect to these matters were not just fundamentally flawed, they were manifestly wrong. In relation to Mr Spalla's failed bias application, Mr Rambaldi submitted that it had "proceeded from a misunderstanding of the role of the trial judge", ought never to have been brought, and had been doomed to fail.


case_title: Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97


case_title: Vasram v AMP Life Limited [2002] FCA 1286


case_text: matter has been before me on a number of occasions in connection with the appellant's attempts to overturn the decision of Rares J given on 1 May 2009 ( Ackers v Austcorp International Ltd [2009] FCA 432) which found reflection in orders made by his Honour on 8 May 2009. The nature and timing of the applications before me provide some of the context for my consideration of the present application. I shall briefly refer to some matters of history later in these Reasons. On 21 September 2009, Ms Monnox, who is the solicitor for the respondents, telephoned Mr Tzovaras, who is the solicitor for the appellant, and inquired of him as to whether the security for costs ordered by me was going to be provided and, if so, when. Mr Tzovaras' response was noncommittal. In effect, he did not inform Ms Monnox of any concrete proposal concerning the provision of the security. On 22 September 2009, Ms Monnox followed up Mr Tzovaras who was at that time unavailable. She left a message for him to contact her urgently. Mr Tzovaras did not respond. Later that day, Ms Monnox wrote a letter to Mr Tzovaras in which she pointed out that the security had not been provided as ordered. She drew Mr Tzovaras' attention to the fact that her clients' undertakings not to enforce the judgment debts were now extinguished and that the respondents proposed to issue creditor's statutory demands to the appellant in respect of the judgment debts which each of the respondents had against the appellant. In that letter she also foreshadowed an application that the appeal be dismissed for want of prosecution. In that letter, Ms Monnox made very clear that she was instructed to take steps to have the appeal dismissed. The appellant originally sought leave to appeal from the decision of Rares J because it believed that that decision was not a final judgment. After argument, I made orders on 22 July 2009 granting leave to appeal from the decision of Rares J should that leave be necessary and extending the time within which a Notice of Appeal could be filed in the event that, as I thought, the judgment of Rares J was in fact a final judgment (see Austcorp International Limited v Owers [2009] FCA 774).


case_text: appellant originally sought leave to appeal from the decision of Rares J because it believed that that decision was not a final judgment. After argument, I made orders on 22 July 2009 granting leave to appeal from the decision of Rares J should that leave be necessary and extending the time within which a Notice of Appeal could be filed in the event that, as I thought, the judgment of Rares J was in fact a final judgment (see Austcorp International Limited v Owers [2009] FCA 774).


case_title: Bell Wholesale Co Ltd v Gates Export [1984] FCA 34 ; (1984) 2 FCR 1

case_text: submitted by the solicitor for the respondents, the discretion which the Court might exercise to order security under s 56(1) of the Federal Court Act is broad and unfettered but must be exercised judicially ( Bell Wholesale Co Ltd v Gates Export (1984) 2 FCR 1 at 3 4). A similar approach should be taken to the power to dismiss an appeal pursuant to s 56(4). The Court should have regard to all of the circumstances of the case in exercising its discretion.


case_text: have already referred to the relevant circumstances in some detail, and it seems to me that, in the absence of any attempt at all by the appellant to explain itself or to provide assistance to the Court as to when security might be provided, the only appropriate course is for me to dismiss the appeal pursuant to s 56(4) of the Federal Court Act. As Hely J said in Truth about Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2001] FCA 1603: It is a serious thing to terminate proceedings when there has not been a hearing on the merits. But in circumstances where there has been an unexplained failure to comply with an order of the Court, which itself was made in the circumstances which I have outlined, it seems to me that the proper exercise of the Court's discretion is to make the orders sought. Accordingly, pursuant to s 56(4) of the Federal Court Act, I dismiss the appeal and I order the appellant to pay the costs of the respondents of and incidental to the Notice of Motion filed by the respondents on 23 September 2009 and of the appeal. I also order that, to the extent necessary, the respondents be released from the undertaking given to the Court and noted in paragraph 8 in the orders of the Court made on 12 August 2009. I should add that my present view is that that undertaking became spent according to its terms when the appellant failed to provide the security for the respondents' costs of the appeal which it had been ordered to provide, that is to say, at 4.00 pm on 21 September 2009. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. Associate: Dated: 1 October 2009 Solicitor for the Appellant: Mr D Riedstra (Agent for Tzovaras Legal) Solicitor for the Respondents: Ms C Monnox of Maurice Blackburn Pty Limited Date of Hearing: 30 September 2009 Date of Judgment: 30 September 2009 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2009/1112.html


case_text: Mr Gibson noted that the Federal Magistrate had relied upon the judgment of Ryan J in Applicants in V 722 of 2000 v Minister for Immigration & Multicultural Affairs [2002] FCA 1059 (" Applicants V 722 ") in dealing with the ascertainment of foreign law. His Honour's approach was approved, on appeal, by the Full Court in VHAJ v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 186. 30 In substance, Ryan J held, at [32]-[33], that while findings relating to the law of a foreign country are questions of fact, and therefore susceptible to proof by expert evidence, it is not necessary to resort to such evidence to make "a finding as to the effect of a relevant law of a foreign country". He stated at [33]: "If, for example, the text of a presumably relevant statute of that country or an authoritative statement in a legal text book or other authority appears to suggest with sufficient precision the effect of the law in question, the court or tribunal is entitled, in the absence of contradictory expert evidence, to make a finding accordingly ( Evidence Act (Cth) 1995 s 174(1)). " 31 It should be noted that Ryan J did not stipulate that the only way in which foreign law can be proved is through one of the means set out above. These were examples, rather than an exhaustive statement of the methods of proof that were legally permissible. 32 In any event, Mr Gibson submitted that Ryan J's judgment needed to be understood in context. He contended that, to the extent that his Honour's reasoning might be thought to broaden the types of evidence upon which a finding as to foreign law could be made, Applicants V 722 was distinguishable from the present case on the following bases: "i) the issue requiring an examination of foreign law in that case was the entitlement of the applicants to remain in, or re-enter Italy ii) this was a different issue to that of establishing nationality, and in any event, there were a number of evidentiary matters raising a presumption that they would not be precluded from returning to Italy i.e. long term residence coupled with possession of valid passports endorsed with Australian visitor's visas. The presumption was strengthened by their possession of unexpired Italian temporary residence permits and had pending applications for permanent residence permits. iii) Raising a rebuttable presumption regarding the entitlement of a non-citizen to re-enter a foreign state is not the same thing as establishing that a person holds the nationality of a foreign state, and as the judgment shows a lesser evidentiary basis may suffice in the former situation. iv) The case is otherwise distinguishable on its facts as it was accepted that the passport was valid. Here the First Appellant's case was that his passport and its renewal had been acquired by fraudulent means purchase through the agency of a corrupt policeman by payment of massive bribes without which he would not have been able to secure documentation ... In light of the basis on which his case was put, acceptance by the Tribunal ... that he may have paid some bribes without any further explanation (or rejection of any aspect of this story) totally undermines any prima facie presumption of nationally by reason of the issue and possession of a FYROM passport". 33 Mr Gibson then submitted that nothing said by Ryan J in Applicants V 722 detracted from his central proposition that the issue of nationality, and particularly nationality derivatively acquired, raised a question of fact, and had to be proved. He further submitted that it was no answer for the Minister to contend, as her counsel had, that it had been open to the husband to provide evidence of the relevant law governing nationality in FYROM. He submitted that before the Tribunal could properly make any finding on a critical issue of this nature, it was obliged to ensure that it had sufficient material before it to support such a finding. 34 With regard to the husband's possession of the FYROM passport, Mr Gibson submitted that the Tribunal had acknowledged, and accepted, the husband's account of how he had initially acquired that passport, and later had it renewed. It was always the husband's case that upon the expiry of his former Yugoslav passport, he had managed to purchase a FYROM passport through his contacts with a corrupt policeman. In other words, his claim, which it was submitted had been accepted by the Tribunal, was that he had obtained the passport only through the payment of bribes. It was submitted that whatever weight might ordinarily be given to the possession of a particular passport when considering the question of nationality, no weight could attach to that fact in circumstances where the passport had only been obtained through bribery. 35 Mr Gibson also criticised certain aspects of the reasoning of the Federal Magistrate. At one point, his Honour had put forward the hypothesis that even though the husband may have paid bribes in relation to the passport, it did not necessarily follow that the passport could not provide some evidence of nationality. His Honour's reasoning, implicitly at least, was that the husband may have been entitled to the issue of a FYROM passport, but paid a bribe in ignorance of that fact. Alternatively, the husband may have paid bribes simply in order to speed up the process of obtaining the passport to which he was, in fact, in any event entitled. Mr Gibson submitted that each of these hypotheses consisted of nothing more than speculation and conjecture. He further submitted that they indicated that the Federal Magistrate had failed to appreciate the fact that the case before the Tribunal had been put on a basis that did not admit of any such reasoning. That was because, implicit in that case, was the contention that the husband obtained his passport by bribery, and that he was not legally entitled to one. 36 Mr Gibson therefore submitted that, contrary to the Federal Magistrate's findings, the Tribunal had considered and evaluated the husband's claims against the wrong country. It ought to have carried out its statutory task by reference to Bosnia-Herzegovina, the country of which the husband was an acknowledged national, and not by reference to FYROM, a country in which he had only occasionally resided. 37 Mr Horan, counsel for the Minister, acknowledged that whether the husband was a national of FYROM did indeed raise a question of fact. He submitted that the Tribunal had determined that question of fact lawfully, and in an appropriate manner. It had identified the relevant issue correctly, and had properly concluded, on the basis of the material before it, that the husband was a national of FYROM. 38 Mr Horan submitted that there was, in fact, a substantial body of evidence and other material before the Tribunal to support that conclusion. This included, in particular, the various matters set out in the passage from the Tribunal's reasons for decision extracted above at [8]. He submitted that it could not be said that the Tribunal had failed to address any of the husband's claims, or that it had misconstrued, misunderstood or overlooked any relevant criteria for the grant of a visa. In classic terms, it could not be said that the Tribunal had identified a wrong issue, asked itself a wrong question, ignored relevant material or relied on irrelevant material. 39 Mr Horan submitted that, contrary to Mr Gibson's contention, there were no "irreducible minimum evidentiary requirements" to be satisfied in order to establish that the husband was a national of FYROM. Nor was there any "minimum standard of proof" that had to be met. He contended that Mr Gibson's submission, when properly understood, amounted to nothing more than a claim that there was insufficient evidence to support the Tribunal's finding. Even if that claim could be substantiated, it would not demonstrate the existence of jurisdictional error. The appellants would have to go further, and show that there was "no evidence" to support the Tribunal's finding. This they plainly could not do.


case_text: It is at the next stage that the appellants' argument breaks down. In my view, the possession and regular use by the husband of a FYROM passport provided some evidence that he was, as the Tribunal found, a national of that country. At common law, the issue of a passport involved an exercise of the royal prerogative by which the protection of the Crown was extended to a citizen of the country in whose name the passport was issued who travelled abroad: see Joyce v Director of Public Prosecutions [1946] AC 347 at 369-70; and Minister for Immigration and Ethnic Affairs v Petrovski (1997) 73 FCR 303 at 307. Under ss 7 and 8 of the Australian Passports Act 2005 (Cth), an Australia passport can only be granted to an Australian citizen. The same appears to be generally true of other countries. The issue of a passport does not, of itself, amount to a grant of citizenship. It may not amount to conclusive evidence of nationality, but it seems to me to be at least some evidence of that fact.


case_title: Minister for Immigration and Ethnic Affairs v Petrovski (1997) 73 FCR 303


case_text: Of course, while remaining constitutional monarchies, both Australia and the United Kingdom have by statute adopted the concept of "citizenship". See Nationality and Citizenship Act 1948 (Cth) (now titled the Australian Citizenship Act 1948 (Cth)), and see also the British Nationality Act 1981 (UK). The notions of citizenship and nationality were considered by the High Court in Nolan v Minister for Immigration and Ethnic Affairs [1988] HCA 45 ; (1988) 165 CLR 178 at 186, and in Re Patterson; ex parte Taylor [2001] HCA 51 ; (2001) 207 CLR 391 at 467 (per Gummow and Hayne JJ).


case_title: Nottebohm Case (Liechtenstein v Guatemala) (Second Phase) [1955] ICJ Rep 4

case_text: Questions of nationality are generally determined in accordance with the municipal laws of the State concerned: Convention on Certain Questions Relating to Nationality , opened for signature 12 April 1930, LNTS 179 89, arts 1 and 2 (entered into force 1 July 1937, ratified by Australia 10 November 1937) and Tji at 513-14. There are, however, limits on the extent to which such municipal laws will be recognised under international law: See Nottebohm Case (Liechtenstein v Guatemala) [1955] ICJ 4 at 20-23; R v Burgess; ex parte Henry [1936] HCA 52 ; (1936) 55 CLR 608 at 649 per Latham CJ, and 673 per Dixon J; and Sykes v Cleary [1992] HCA 60 ; (1992) 176 CLR 77 at 105-6 per Mason CJ, Toohey and McHugh JJ, 112 per Brennan J, 127 per Deane J, 131 per Dawson J, and 135 per Gaudron J.


case_text: Mr Gibson, counsel for the appellants, developed these submissions in the course of a helpful argument. He contended that at common law, and under customary international law, a person's nationality had to be determined by the municipal law of the State in relation to which nationality was claimed. He cited Tji v Minister for Immigration and Ethnic Affairs (1998) 55 ALD 508 at 513-4 per Finkelstein J, and Oppenheimer v Cattermole (Inspector of Taxes) [1976] AC 249 as authority for this proposition. He next submitted that a distinction should be drawn between what Finkelstein J in Tji referred to as "original acquisition of nationality", and what his Honour described as "derivative acquisition of nationality": see Tji at 516. In international law, generally speaking, original acquisition of nationality, that is nationality acquired at birth, was based on descent from a national, or birth within the territory of a State, or both. Derivative acquisition of nationality (which Mr Gibson contended was at issue in this case) could take place in one of only two ways. These were through naturalisation (in consequence of an application for citizenship), or by operation of law (for example, through the emergence of a new State, and principles of succession). See generally the discussion of these principles in Tji at 516.


case_title: R v Burgess; ex parte Henry [1936] HCA 52 ; (1936) 55 CLR 608


case_title: Re Patterson; ex parte Taylor [2001] HCA 51 ; (2001) 207 CLR 391


case_text: Mr Horan relied upon the following observation of the Full Court regarding the "no evidence ground" in SFGB v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 231 at [20] : "On the other hand, if there is sufficient evidence or other information before the Tribunal on which it could reach the conclusion it did then it is for the Tribunal to determine what weight it gives to that evidence. Indeed, unless the relevant fact can be identified as a 'jurisdictional fact', there is no error of law, let alone a jurisdictional error, in the Tribunal making a wrong finding of fact: Attorney-General (NSW) v Quin [1990] HCA 21 ; (1990) 170 CLR 1 at 35-36. It is for the Tribunal to determine the merit of the claim. The line between merit review and jurisdictional error may not be a 'bright line', but it is nevertheless an essential one: Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 272." 46 Mr Horan noted that Mr Gibson had not submitted that the question of the husband's nationality gave rise to a "jurisdictional fact". It was clear that it did not. 47 Mr Horan therefore submitted that the appellants' case, taken at its highest, amounted to nothing more than an assertion that the Tribunal's finding that the husband was a national of FYROM was factually incorrect. However, consistently with SFGB and numerous other authorities, even if factual error of that kind could be demonstrated, it would not give rise to jurisdictional error. And the second limb of Mr Gibson's argument, namely his submission that the Tribunal had been required to refer to direct evidence only of the relevant laws of FYROM, was unsupported by any authority, and could not be sustained. 48 It should be noted, at the outset, that the concept of "nationality", which is central to this appeal, is a term somewhat lacking in precision. It is generally used to signify the legal connection between an individual and a State. The primary relevance of nationality under international law is to provide a basis upon which a State can exercise jurisdiction over persons. However, the term is employed in different ways in international law, and domestic law.


case_text: Questions of nationality are generally determined in accordance with the municipal laws of the State concerned: Convention on Certain Questions Relating to Nationality , opened for signature 12 April 1930, LNTS 179 89, arts 1 and 2 (entered into force 1 July 1937, ratified by Australia 10 November 1937) and Tji at 513-14. There are, however, limits on the extent to which such municipal laws will be recognised under international law: See Nottebohm Case (Liechtenstein v Guatemala) [1955] ICJ 4 at 20-23; R v Burgess; ex parte Henry [1936] HCA 52 ; (1936) 55 CLR 608 at 649 per Latham CJ, and 673 per Dixon J; and Sykes v Cleary [1992] HCA 60 ; (1992) 176 CLR 77 at 105-6 per Mason CJ, Toohey and McHugh JJ, 112 per Brennan J, 127 per Deane J, 131 per Dawson J, and 135 per Gaudron J. 50 One of the terms that is often used synonymously with "nationality" is "citizenship". It has become usual to employ the term "citizen" instead of "subject" in States that adopt a republican form of government. In Sykes v Cleary , Brennan J observed at 109, in relation to the expression "subject or citizen of a foreign power" in s 44(i) of the Commonwealth Constitution , "subject being a term appropriate when the foreign power is a monarch of feudal origin; citizen when the foreign power is a republic."


case_text: Mr Gibson, counsel for the appellants, developed these submissions in the course of a helpful argument. He contended that at common law, and under customary international law, a person's nationality had to be determined by the municipal law of the State in relation to which nationality was claimed. He cited Tji v Minister for Immigration and Ethnic Affairs (1998) 55 ALD 508 at 513-4 per Finkelstein J, and Oppenheimer v Cattermole (Inspector of Taxes) [1976] AC 249 as authority for this proposition. He next submitted that a distinction should be drawn between what Finkelstein J in Tji referred to as "original acquisition of nationality", and what his Honour described as "derivative acquisition of nationality": see Tji at 516. In international law, generally speaking, original acquisition of nationality, that is nationality acquired at birth, was based on descent from a national, or birth within the territory of a State, or both. Derivative acquisition of nationality (which Mr Gibson contended was at issue in this case) could take place in one of only two ways. These were through naturalisation (in consequence of an application for citizenship), or by operation of law (for example, through the emergence of a new State, and principles of succession). See generally the discussion of these principles in Tji at 516. 49 Questions of nationality are generally determined in accordance with the municipal laws of the State concerned: Convention on Certain Questions Relating to Nationality , opened for signature 12 April 1930, LNTS 179 89, arts 1 and 2 (entered into force 1 July 1937, ratified by Australia 10 November 1937) and Tji at 513-14. There are, however, limits on the extent to which such municipal laws will be recognised under international law: See Nottebohm Case (Liechtenstein v Guatemala) [1955] ICJ 4 at 20-23; R v Burgess; ex parte Henry [1936] HCA 52 ; (1936) 55 CLR 608 at 649 per Latham CJ, and 673 per Dixon J; and Sykes v Cleary [1992] HCA 60 ; (1992) 176 CLR 77 at 105-6 per Mason CJ, Toohey and McHugh JJ, 112 per Brennan J, 127 per Deane J, 131 per Dawson J, and 135 per Gaudron J.


case_text: Mr Gibson noted that the Federal Magistrate had relied upon the judgment of Ryan J in Applicants in V 722 of 2000 v Minister for Immigration & Multicultural Affairs [2002] FCA 1059 (" Applicants V 722 ") in dealing with the ascertainment of foreign law. His Honour's approach was approved, on appeal, by the Full Court in VHAJ v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 186.


case_text: Whether the parties to an instrument intend to enter into a contract binding at law in the terms of the instrument is a question of fact to be determined objectively: Thompson v White & Ors [2006] NSWCA 350 ; (2007) NSW Conv R 56-171 at [99] , [100] per Tobias JA (Ipp and McColl JJA agreeing). In Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27 ; (2000) 22 WAR 101 , Ipp J (as he then was) referred to the qualities or characteristics of 'completeness' and 'certainty' of the terms of the instrument in question, saying at [23]: 'Where some terms are uncertain or where terms which one would expect to be in a contract of the kind entered into are missing, inferences may be drawn that the parties lacked the requisite intention to contract.' Earlier, his Honour had said at [23]: 'Thus, in dealing with the overall submission, it is not possible to divorce issues of completeness and uncertainty from the intention to contract.' 132 In undertaking the task of determining, objectively, what the parties' intention was, the Court may have regard to all the relevant circumstances. 'Intention' in this sense means intention to contract, not what the parties intended by the terms of the contract. The relevant circumstances may include prior negotiations or subsequent conduct, although direct expressions of intent made after the contract was arrived at, are not admissible: Bramble Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at [26] per Heydon JA; Anaconda Nickel at [26]; Thompson v White at [100].


case_text: As to (1), DFE contends that the warranty was in all circumstances, something so essential to the decision to invest, pursuant to which the deed was being entered into, as to be an essential term of the contract: see Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632 (reversed on other grounds at (1938) 61 CLR 286) ; Ankar Pty Ltd v National Westminster Finance (Australia) Ltd [1987] HCA 15 ; (1987) 162 CLR 549 at 556. 102 Additional factors that favour treating clause 5.1(1) as a condition of the contract are (see Ankar, op. cit., [1987] HCA 15 ; 162 CLR 549 at 557): (a) the difficulties in proving quantum of damage as a suitable remedy, as evidenced by the dispute between the experts on this topic; (b) the plain purpose of the clause in facilitating a properly informed decision as to whether to enter into the SSD in the first place; and (c) the special nature of a share subscription deed in the context of an unlisted public company in which an investor legitimately requires that the decision to invest be one that is made on a fully informed basis by way of a contractual obligation on the company, as the repository of the relevant information, to disclose rather than on any obligation for the investor to hunt out and discover. The warranty is only of real utility if it is a condition permitting rescission. 103 To meet this condition, DFE contends that nothing less than provision of a copy of the two heads of agreement, or at least whichever was considered current to Mr Sharp, was required. Indeed, it was of sufficient moment to be annexed to the SSD, but of course then Mr Sharp would not have signed it and he would not have handed over his cheque. 104 As to (2), the accounting experts called on behalf of the parties, Dr Martin Bloom ('Mr Bloom') on behalf of DFE and Mr Paul Carter ('Mr Carter') on behalf of the respondents, appear to be in agreement that if the first heads of agreement constituted a binding agreement, then it should have been disclosed in the financial accounts of APIR for the year ended 30 June 2003: see the common ground referred to in [117] below.


case_text: In Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622 at 628 (affirmed by the Court of Appeal as G R Securities v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631), McLelland J said that there was really a fourth category of case, namely, where the parties were content to be bound immediately and exclusively on the terms which they had agreed upon whilst expecting to make a new contract in substitution for their first contract, containing, by consent, additional terms.


case_text: In undertaking the task of determining, objectively, what the parties' intention was, the Court may have regard to all the relevant circumstances. 'Intention' in this sense means intention to contract, not what the parties intended by the terms of the contract. The relevant circumstances may include prior negotiations or subsequent conduct, although direct expressions of intent made after the contract was arrived at, are not admissible: Bramble Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at [26] per Heydon JA; Anaconda Nickel at [26]; Thompson v White at [100].


case_text: The pleadings in the SFASC rely on a number of statutory regimes: the regimes under the Corporations Act 2001 ; the ASIC Act; the TP Act and the ACT Act. Section 51AF of the TP Act provides in subs (1) that Part V (Consumer Protection) does not apply to the supply, or possible supply, of services that are financial services and subs (2) provides, inter alia , in para (a) that, without limiting subs (1), s 52 does not apply to conduct engaged in or in relation to financial services. The term 'financial services' is defined in s 4 of the TP Act by reference to the meaning it has in Division 2 of Part 2 of the ASIC Act and includes 'dealing' in a 'financial product' (subs 12BAB(1)(b)), which is defined to include a security (subs 12BAA(7)). The term 'dealing' is defined to include applying for or acquiring, or issuing, a security (subs 12BAB(7)). It is clear from these provisions, in my view, that s 52 of the TP Act does not apply to conduct which consists of DFE's application for and APIR's issue of the 200,000 shares at $2.65 per share nor, in my view, to DFE's acquisition of the 81,904 shares in APIR at $2.65 per share from existing shareholders: see Cleary & Anor v Australian Co-operative Foods Ltd & Ors (Nos. 2 and 3) [1999] NSWSC 991 ; (1999) 32 ACSR 701 per Austin J at [1-107] [1-109]; Re NRMA Ltd; Re NRMA Insurance Ltd [2000] NSWSC 408 ; (2000) 34 ACSR 261 per Santow J at [125] [129].


case_outcome: distinguished

case_text: Subsection 1041I(1) of the Corporations Act 2001 is predicated on a person having suffered loss or damage by the contravening conduct of another person. Subsection 1325(1) is predicated on a person who is a party to the proceeding having suffered, or likely to suffer, loss or damage because of the contravening conduct of another person. Putting aside that the latter provision also applies where a person is likely to suffer loss or damage, and that the nexus in the former provisions is 'by', and in the latter is, 'because of', there can be no dispute that the loss or damage of which both provisions speak must be an actual loss or damage; risk of loss is not sufficient: Wardley Australia Ltd v Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 525. The contravening conduct, while concerned with s 82 and s 87 of the TP Act, is equally applicable to s 1041I and s 1325 of the Corporations Act 2001 in this respect. However, it was submitted on behalf of the respondents that, in the present context, actual loss meant realised loss and that DFE would suffer no loss, if any, until its shares in APIR were sold; only then would it be possible to say whether or not there is an actual loss. Reliance for this was placed on Wardley Australia, Commonwealth v Cornwell [2007] HCA 16 ; (2007) 229 CLR 519 and Murphy v Overton Investments Pty Ltd [2004] HCA 3 ; (2004) 216 CLR 388 , as well as other authorities. 187 The remaining case relied upon by the respondents on this issue, Commonwealth v Cornwell , was a limitation case. It turned on when a loss actually took place in respect of the plaintiff having joined the wrong superannuation fund due to being give the wrong information many years earlier, which he only discovered much later. The High Court found that his actual loss matured only at the end of his service and upon the occurrence of one or more of the statutory contingencies which had to be met for him to be entitled to any statutory benefit at all: at [19]. Until he had an entitlement, which might never arise, he could not suffer a loss in respect of that entitlement.