| | | | | | | | NCAT Legal Bulletin Issue 1 of 2017
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| The NCAT Legal Bulletin provides a summary of relevant and interesting case law of significance to the work of the NSW Civil and Administrative Tribunal. This issue covers the period of December 2016 to February 2017.
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| ElecNet (Aust) Pty Ltd v Commissioner of Taxation [2016] HCA 51
21 December 2017 - Kiefel, Gageler, Keane, Nettle, Gordon JJ
In brief: The High Court unanimously dismissed an appeal from the Full Court of the Federal Court of Australia, which had held that the Electricity Industry Severance Scheme was not a “unit trust” within the meaning of Div 6C of Pt III of the Income Tax Assessment Act 1936 (Cth). In dismissing the appeal, the Court deferred to textual considerations of the legislation, finding that:
“[56] There is no reason in the text or context of Div 6C to attribute to the undefined expression "unit trust" any meaning other than the meaning evident from the language of Div 6C. That meaning accords with the common usage of the expression "unit trust". As the Commissioner rightly observed, there is no reported case, in Australia or elsewhere, in which the expression "unit trust" has been applied other than in circumstances where, under the applicable trust deed, the beneficial interest in the trust fund is divided into units, which when created or issued are to be held by the persons for whom the trustee maintains and administers the trust estate.”
Read the decision on the High Court of Australia website.
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| Southern Han Breakfast Point Pty Ltd (in liquidation) v Lewence Construction Pty Ltd [2016] HCA 52
21 December 2017 - Kiefel, Bell, Gageler, Keane, Gordon JJ
In brief: The High Court unanimously allowed an appeal from the Court of Appeal of the Supreme Court of New South Wales and found that the existence of a reference date under a construction contract is a necessary precondition to the making of a valid payment claim under s 13(1) of the Building and Construction Industry Security of Payment Act 1999 (NSW). In doing so, the Court held that the task of statutory interpretation, in the present case, involved examining the context and legislative history of the relevant provisions of the Act:
“[48] The statutory analysis required to resolve the competing constructions of s 13(1) ultimately involves forming a view as to the place of that provision within the structure of the Act read in light of its legislative history.”
Read the decision on the High Court of Australia website.
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| RP v The Queen [2016] HCA 53
21 December 2017 - Kiefel, Bell, Gageler, Keane, Gordon JJ
In brief: The High Court unanimously found that the New South Wales Criminal Appeal had erred in finding that the convictions of the appellant, a child of 11 years old, were not unreasonable in circumstances where there was insufficient evidence to rebut the presumption that he did not know his behaviour was seriously wrong in a moral sense. The plurality of the High Court (Kiefel, Bell, Keane and Gordon JJ) held that the prosecution failed to lead sufficient evidence to rebut the presumption that the appellant was doli incapax, finding that:
“[35] The conclusion drawn below that the appellant knew his conduct, in having sexual intercourse with his younger sibling, was seriously wrong was largely based on the inferences that he knew his brother was not consenting and that he must have observed his brother's distress. It cannot, however, be assumed that a child of 11 years and six months understands that the infliction of hurt and distress on a younger sibling involves serious wrongdoing...
[36] … [T]here was no evidence about the environment in which the appellant had been raised or from which any conclusion could be drawn as to his moral development. The circumstance that at the age of 11 years and six months he was left at home alone in charge of his younger siblings does not so much speak to his asserted maturity as to the inadequacy of the arrangements for the care of the children, including the appellant. No evidence of the appellant's performance at school as an 11‑year‑old was adduced. In the absence of evidence on these subjects, it was not open to conclude that the appellant, with his intellectual limitations, was proved beyond reasonable doubt to have understood that his conduct, charged in counts two and three, in engaging in sexual intercourse with his younger brother was seriously wrong in a moral sense.”
Read the decision on the High Court of Australia website.
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| Mercanti v Mercanti [2017] HCA 1
5 January 2017 - Kiefel J
In brief: Kiefel J (sitting alone) ordered that injunctions granted to the applicant, Jason Mercanti, against the first and second respondents, should be extended until the determination of Mr Mercanti’s application for special leave to appeal to the High Court. Her Honour affirmed the Court’s judgment in Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [No 1] (1986) 161 CLR 681 at 685, finding that:
‘[13] It does not seem to me that the prospects of a grant of special leave [in the present case] can be said to be insubstantial. As to the other considerations referred to in Jennings Construction, the applicant has not failed to take steps necessary to seek orders from the Court of Appeal, even though the term of the orders sought should have been longer in order to obviate the need for an application to this Court. It is not apparent that the grant of a stay or injunction will cause any loss to a respondent. Without a grant of a stay or injunction any appeal rights may be rendered futile. The balance of convenience clearly favours the continuation of the regime of injunctions which has been in place for some time.”
Read the decision on the High Court of Australia website.
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| Re Culleton [No 2] [2017] HCA 4
3 February 2017 - Kiefel, Bell, Gageler, Keane, Nettle JJ
In brief: The High Court unanimously held that Rodney Norman Culleton was a person convicted and subject to be sentenced for an offence punishable by imprisonment for one year or longer at the time of the 2016 federal election and was, therefore, incapable of being chosen as a Senator under s 44(ii) of the Australian Constitution. Relevantly, Mr Culleton was convicted, in his absence, for the offence of larceny on 2 March 2016. Following the federal election on 2 July 2016, Mr Culleton was elected to the Senate of the Parliament of the Commonwealth. On 8 August 2016, Mr Culleton’s conviction was annulled pursuant to s 10(1) of the Crimes (Appeal and Review) Act 2001 (NSW).
The Court, however, held that the effect of the annulment did not affect Mr Culleton’s incapacity to be chosen as a Senator at the time of the election, finding:
“[62] It should be accepted, however, that, since the necessary implication of a conviction ceasing to have effect upon annulment is that the conviction continues to have effect until and unless it is annulled, a conviction that is susceptible to annulment under the Appeal and Review Act continues to have effect up to the date of annulment. It should also be accepted that, since a conviction that is susceptible to annulment under the Appeal and Review Act continues to have effect up to the date of annulment, it remains determinative of the convicted person's convict status in relation to events occurring up to that point.”
Read the decision on the High Court of Australia website.
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| Palmer v Ayers [2017] HCA 5
8 February 2017 - Kiefel, Gageler, Keane, Nettle, Gordon and Gageler JJ
In brief: The High Court unanimously held that s 596A of the Corporations Act 2001 (Cth), which provides for the mandatory examination of certain persons in relation to a corporation’s examinable affairs, does not confer non-judicial power on federal courts or on courts exercising federal jurisdiction. The plurality of the High Court (Kiefel, Keane, Nettle and Gordon JJ) held (at [31]) that a summons under s 596A is a “matter” in the constitutional sense and that its determination engages the judicial power of the Commonwealth, finding that:
“[T]he s 596A power is a procedure that gives a liquidator the right to seek to examine certain persons involved in the corporation about the affairs of that corporation and thereby seek to establish, and then enforce, a potential right to relief against those with liabilities to the corporation, including alleged wrongdoers. Although the application arose out of events that had already occurred, the claim – one of potential rights, liabilities or wrongdoing – was a controversy where rights and liabilities could be established by a determination of the court made in due course in possible further litigation by reference to legal rules, principles or standards. In that context, the Summons Order made by the Federal Court under s 596A was made in the exercise of judicial power.”
Therefore, the Court dismissed the plaintiffs’ argument that s 596A was invalid on the basis that it is contrary to Chapter III of the Constitution.
Read the decision on the High Court of Australia website.
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| Commissioner of State Revenue v ACN 005 057 349 Pty Ltd [2017] HCA 6
8 February 2017 - Kiefel, Bell, Gageler, Keane, Gordon JJ
In brief: The High Court unanimously allowed two appeals from the Court of Appeal of the Supreme Court of Victoria and held that the Commissioner of State Revenue was not under a duty, under s 19 of the Land Tax Act 1958 (Vic), to issue amended land tax assessments and refund an excess amount of land tax that he had been paid. Accordingly, the Court held that s 90AA of the Act applied to bar proceedings brought by the respondent.
Read the decision on the High Court of Australia website.
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| Western Australia Planning Commission v Southregal Pty Ltd [2017] HCA 7
8 February 2017 - Kiefel, Bell, Gageler, Keane, Nettle JJ
In brief: By majority, the High Court allowed two appeals from the Court of Appeal of the Supreme Court of Western Australia. A majority of the High Court held that an owner of land is entitled is to compensation at the date that the land is reserved for a public purpose under a planning scheme, pursuant to the Planning and Development Act 2005 (WA), but a subsequent purchaser of injuriously affected land is not entitled to such compensation.
Read the decision on the High Court of Australia website.
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| | Randall v City of Canada Bay Council [2017] NSWCA 1
1 December 2016 - Basten, Simpson and Payne JJA
In brief: The Court of Appeal determined that the conduct of an appellant, a litigant in person, had reached such point that it amounted to an abuse of process, finding that:
“[10] There is little doubt that these proceedings are now an abuse of process. Leniency appears to have been accorded to [the appellants] at all stages, probably on the assumption that neither the court nor a public authority should be diligent to apply procedural rules to litigants in person. However, there comes a point at which basic principles require that procedural breaches not be ignored. The result in this case has clearly been the incurring by the Council, a public authority, of excessive legal costs, in addition to a judgment which is probably unrecoverable. Undue resources of the courts have been expended on this litigation, which is not merely a cost to the public purse, but results in the determination of legitimate claims pursued by other litigants being delayed, with the inconvenience, cost and potential for injustice that attends such circumstances.”
Read the decision on the NSW Caselaw website.
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| Wesiak v D&R Constructions (Aust) Pty [2016] NSWCA 353
15 December 2016 - Beazley P, Simpson JA and McDougal J
In brief: The Court of Appeal considered the question of repudiation, in a matter regarding a dispute between the owners and a builder.
The Court observed (at [88]) that, following the decision of the majority of the High Court in Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61, there are “two senses in which the word “repudiation” is used”:
“[88] The first sense, their Honours said, “may be termed renunciation”. In this sense, “repudiation” encompasses “conduct which evinces an unwillingness or an inability to render substantial performance of the contract … conduct … which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party’s obligations”...”
“[89] The second sense in which “repudiation” is used, their Honours said, is to “refer to any breach of contract which justifies termination by the other party”. Their Honours explained at [47] to [49] that a breach of contract by one party might entitle the other to terminate either where the obligation breached was one agreed by the parties to be essential (a condition), or where it was a sufficiently serious breach of a non-essential term.””
McDougall J (Beazley P and Simpson JA agreeing) clarified that, when determining whether a party has repudiated a contract, the Court will apply an objective test:
“[90] A finding that a party to a contract has renounced the contract or its fundamental obligations under it (has “repudiated” the contract, in the first sense referred to above) does not depend on the subjective state of mind or intention of that party. The question is whether, regarded objectively, that party’s conduct would convey to a reasonable person in the situation of the other party that the first party renounces the contract or some essential obligation under it.””
Accordingly, the Court held that the question of repudiation is considerably “fact-dependent”:
“[92] In either of the senses identified by the joint reasons in Koompahtoo, the question, whether one party has repudiated the contract or its obligations to the other, is fact-dependent. Where the question is whether one party has renounced the contract or its fundamental obligations, the question is entirely one of fact, involving the characterisation of the conduct to see whether it meets (or is capable of meeting) the requisite standard. Where repudiation in the second sense is alleged, then there may be a legal issue as well, relating to the proper construction of the contract and the classification of the term said to have been breached. And in both cases, of course, the factual inquiry is not one carried out at large. It is one intended to ascertain whether the conduct in question satisfies the test for repudiation.”
Ultimately, in this case, the Court (at [100]-[126]) found that the Appeal Panel had failed to give consideration to the factual context of the parties’ conduct. As such, the Court held (at [127]) that the Appeal Panel’s decision was wrong in law on the following bases:
“[127] … First, on the whole of the evidence, the Appeal Panel could not rationally find that the owners had repudiated the contract. In the words of Mason CJ in Hope, that finding was not reasonably open on all the evidence. And in the words of Jordan CJ in Australian Gas Light Company, the primary facts found are necessarily outside (or inconsistent with) a conclusion of repudiation. And secondly, again on the whole of the evidence, the only finding reasonably open was that the builder had repudiated the contract.”
Read the decision on the NSW Caselaw website.
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| Griffin v The Council of the Law Society of New South Wales [2016] NSWCA 364
16 December 2016 - Ward JA, Gleeson JA and Sackville AJA
In brief: Mr Griffin was a solicitor who wrote an offensive letter personally addressed to a Judge, in response to a decision made against him. The Judge referred the letter to the Council of the Law Society of New South Wales (Council), who then made a complaint against Mr Griffin. The Council commenced proceedings in NCAT and sought orders against Mr Griffin on the grounds that his conduct, in sending the letter to the Judge, amounted to “professional misconduct” under s 497(1) of the (now repealed) Legal Profession Act 2004 (NSW) (the LPA).
At first instance, the Tribunal determined that Mr Griffin’s conduct amounted to professional misconduct and made orders, including a costs order under s 566 of the LPA, against him. Mr Griffin appealed the decision to the Court of Appeal on the grounds that, inter alia, (1) his conduct did not amount to “professional misconduct”, (2) the contents of his letter were protected under the implied constitutional freedom of political communication, and (3) the Tribunal applied the incorrect legislation in awarding costs against the solicitor.
The Court of Appeal unanimously dismissed the appeal. On the issue of whether the alleged conduct constituted professional misconduct, Sackville AJA (Ward JA and Gleeson JA agreeing), following Clyne v Bar Association New South Wales (1960) 104 CLR 186; [1960] HCA 40, stated that:
[101] “[T]here are no precise limits to conduct that may warrant the imposition of disciplinary sanctions on a legal practitioner.”
Furthermore, his Honour held that the judicial observations concerning the conduct of barristers “apply with equal force” to the conduct of solicitors:
[105] “While both Cummins and Ziems involved the conduct of barristers, the observations in those cases apply with equal force to the conduct of a solicitor appearing as an advocate on behalf of a client in judicial proceedings.”
His Honour (at [108]) also rejected the appellant’s submission that offensive and derogatory comments made by a practitioner to or about a judge could not constitute professional misconduct, except in cases where the communication caused detriment to the client, finding that “[t]he line may be crossed even where the client’s interests are not necessarily adversely affected.”
Responding to the appellant’s submissions that the contents of letter were protected under the implied freedom of political communication, the Court observed that:
[88] “The first question that must be asked is whether the concept of “professional misconduct”, as a finding of necessary for the imposition of disciplinary sanctions on a legal practitioner, effectively burdens the freedom of communication on governmental or political matters. The difficulty for the Solicitor’s contention is that the concept of professional misconduct, whether arising under the common law or statute, is not concerned with communications on governmental or political matters.”
The Court affirmed that the Tribunal correctly dealt with the disciplinary action against the appellant in applying the LPA, and not the Legal Profession Uniform Law 2014 (NSW), as the complaint had been made prior to 1 July 2015, as explained in detail at [57] - [74].
On the issue of the determination of costs, the Court held (at [119]) that the Tribunal had erred in applying s 566 of the LPA. Instead, the Tribunal should have applied Sch 5 Pt 4 cl 23 of the NCAT Act. Nevertheless, the Court observed (at [122]) that:
“[h]ad the Tribunal correctly identified Sch 5 Pt 4 cl 23 of the NCAT Act as the provision governing the award of costs, it is inevitable that it would have reached the same conclusion.”
Read the decision on the NSW Caselaw website.
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| Torbey Investments Corporated Pty Ltd v Ferrara [2017] NSWCA 9
7 February 2017 - McColl, Basten, Simpson JJA
In brief: The Court of Appeal considered an application for judicial review of a decision of the District Court in an appeal from a home building decision of the CTTT. The Court could only set aside the decision if there was jurisdictional error or an error of law on the face of the record. One topic considered by the Court was whether there had been an error of law in determining factual issues.
As a starting point, Basten JA (McColl JA and Simpson JA) observed that in some cases there will be a difficulty in distinguishing errors of law from errors of fact, finding that:
“[53] What is important in the present case is to recognise that an error of law may be identified (a) in an ultimate finding, (b) in the process by which the finding was reached, or (c) in the written statement of reasons explaining how the finding was reached. However the error is said to have occurred, the starting point must be to identify the issue, in the determination of which the error is said to have arisen. Neither the particulars in the ground, nor the submissions for the applicant, engaged adequately with this exercise.”
The Court then considered the elements required to support the proposition that overlooking critical evidence amounted to a jurisdictional error or an error of law. In doing so, the Court examined the reasoning of Robertson J in Minister for Immigration and Citizenship v SZRKT (2013) 212 FCR 99, which was subsequently adopted and applied by a Full Court of the Federal Court in Minister for Immigration and Border Protection v SZSRS (2014) 309 ALR 67 (Katzmann, Griffiths and Wigney JJ), finding that (footnotes omitted):
“[63] The statement of principle articulated in SZRKT involved three elements. The first is sometimes described as a constructive failure to exercise jurisdiction, which occurs when the tribunal misapprehends the full extent of, or limitations on, its functions under the law. That involves an exercise in statutory construction in order to determine the scope of the functions. However, that cannot be an end of the matter. If the function of the Tribunal is to determine an application validly before it, an assessment must be made of whether that exercise has been undertaken. As explained by Gummow and Callinan JJ in Dranichnikov v Minister for Immigration and Multicultural Affairs “[t]o fail to respond to a substantial, clearly articulated argument relying upon established facts” can amount to a constructive failure to exercise jurisdiction.
[64] The second proposition concerns the means by which the failure may be established. For example, if it could be shown that an amended application, containing a fresh ground with real prospects of success, was not before the Tribunal because it had been misplaced in the Registry, that might be sufficient. An alternative approach might be to look at the reasons of the Tribunal. Accepting that, in accordance with the statutory mandate to give reasons, the reasons will disclose the actual reasoning process adopted by the Tribunal, it may become apparent that the process was flawed because a substantial clearly articulated claim was not addressed in any form.
[65] The third proposition, which is critical for the present case, is that there may be no bright line distinction between a claim made by the applicant and evidence in support of the claim. In other words, to ignore or overlook apparently credible and relevant information, which might support an essential step in the reasoning process if the claim were to be upheld, may itself constitute a constructive failure to exercise the function conferred on the Tribunal. This point was made by Selway J in SHKB v Minister for Immigration and Multicultural and Indigenous Affairs in a passage extracted and adopted by Robertson J in SZRKT.”
Nevertheless, the Court observed that while the principles summarised above apply to a tribunal:
“[66] [I]t is appropriate to strike a note of caution. A tribunal, like a court, is not obliged to refer to all the material before it which may be thought by a party, or even by the reviewing court, to constitute relevant evidence. Evidence is often repetitive and will be of variable reliability. Hundreds of pages of evidence may need to be reduced to a clear and succinct statement of written reasons. Comprehensiveness is a relative concept and must be balanced against other relevant values. …
[68] In short, although one can describe the overlooking of critical evidence as an error of law, it is important to understand the purpose and context of such a description. In this case, it is patent that the Tribunal did not ignore the material identified in the particulars: indeed, the particulars identified the material by reference to the reasons of the Tribunal and the appeal judgment. The complaint is merely that, for reasons she gave, the Tribunal member preferred other evidence. This ground did not establish an error of law on the part of the Tribunal, nor on the part of the District Court which correctly rejected it.”
Basten JA (McColl JA and Simpson JA) held that, in the circumstances, the Court of Appeal maintained a discretion to intervene and set aside the order of the District Court [72]. In exercising its discretion, however, the Court declined to intervene [80].
Read the decision on the NSW Caselaw website.
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| | Bartlett v Weatherill [2017] NSWSC 31
6 February 2017 - Adamson J
In brief: Dr Weatherill wanted to purchase a Cessna 400 aircraft. After making inquiries with a local seller, he was told he would not that he would be unable to purchase a Cessna 400 in Australia for less than $500,000. Dr Weatherill contacted Mr Bartlett, a Licensed Aircraft Maintenance Engineer, to ask for an estimate on the cost of bringing a Cessna 400 from the US to Australia. Mr Bartlett provided an estimate of $52,395 (excluding GST). Ultimately, Dr Weatherill then purchased a Cessna 400 for $490,000 from the US, comprising $370,000 for the aircraft and $120,000 for the cost of bringing it to Australia.
At first instance, the Local Court determined that Mr Bartlett had engaged in misleading and deceptive conduct in breach of s 18 of the Australian Consumer Law (ACL). During proceedings, Dr Weatherill maintained that he was willing to pay up to $438,000 to purchase a Cessna 400. Curran LCM awarded Dr Weatherill damages of $25,000. This figure aimed to compensate Dr Weatherill for the $52,000 difference between his price ceiling and the price he actually paid, after taking into account the advantage he obtained in relation to the aircraft.
On appeal to the Supreme Court, Mr Bartlett challenged the award of damages under s 236 of the ACL. The Court reiterated at [17] that:
“[a] finding of fact for which there is some evidence does not reveal an error of law: Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156.”
It went to note two principal errors in the Local Court’s approach:
“[26] First, it ignored the principle that the wronged party needs to establish actual loss before an award of damages can be made. Secondly, it contaminated the assessment of damages by including “expectation” loss and by using what Mr Weatherill was prepared to pay as an integer in the calculation.”
The High Court summarised the principles for assessment of damages for breach of s 18 in Marks v GIO Australia Holdings Limited [1998] HCA 69 at [48] to [52]:
“[48] A party that is misled suffers no prejudice or disadvantage unless it is shown that that party could have acted in some other way (or refrained from acting in some way) which would have been of greater benefit or less detriment to it than the course in fact adopted. Thus, the party that is misled will have suffered loss if a chose in action which was acquired was worth less than the amount paid for it. There may well be other ways in which it might suffer loss or damage. For example, consequential loss may be suffered. But no loss of that kind was alleged in this case and, putting that kind of loss to one side, we focus only on loss said to be suffered by the making of the contract.
[49] It is necessary, then, to determine whether the value of what was acquired is less than what was paid. How is value to be assessed? It is to be assessed objectively, not according to what either or both of the parties to the contract believed that it would obtain from the contract. That is, the value of what in fact was acquired is to be identified according to what price freely contracting, fully informed parties would have offered and accepted for it. It is only by comparison with the value assessed in this way that there can be an assessment of whether the party that is misled could have obtained some greater benefit or incurred less detriment. What is important is what that party could have done, not what it might have hoped for or expected. Some examples may serve to illustrate the point.
[50] If a person agrees to pay $50,000 for goods which the vendor falsely represents are worth $100,000 but which are, in fact, worth $50,000, what loss has the purchaser who is misled suffered by agreeing to buy (assuming no more is known)? If a person agrees to pay interest at the rate of 10 per cent for a loan which the lender falsely represents would ordinarily command interest at a rate of 15 per cent but which, in fact, would ordinarily command interest at 12 per cent, what loss has the borrower who is misled suffered by agreeing to borrow (again, assuming no more is known)? And so the examples could be multiplied.
[51] The reason that neither of these persons suffers a loss is that viewed objectively each obtained rights having a value (a value determined objectively) at least equal to what it paid for those rights. It is only if some alternative (less detrimental or more beneficial course) were available, that it can be said that the contract which was made was less valuable to the party that was misled than had been represented — for it is only then that a comparison of value can be made.
[52] The fact that each of the misled parties in the examples given may have thought that it was to obtain some advantage from the transaction is not to the point. The contravening conduct has left the party that was misled no worse off than it was before the contravention occurred.”
Applying these principles, Adamson J concluded that Dr Weatherill had suffered no loss:
“[36] Applying the correct principles to the present case, in order to obtain an award of damages pursuant to s 236 of the Australian Consumer Law, Dr Weatherill was obliged to prove that he had suffered actual loss as a result of his purchase of the Cessna 400 aircraft in reliance on Mr Bartlett’s estimate. Before he relied on the estimate, Dr Weatherill did not own a Cessna 400 aircraft. As a result of his reliance on the estimate, he owned a Cessna 400 aircraft worth $500,000 and he had spent $490,000. Therefore he was $10,000 better off. His situation is not unlike that of the hypothetical injured party referred to in [50] of Marks v GIO, who bought goods for $50,000 believing them to be worth $100,000 when they were only worth $50,000, although Dr Weatherill, unlike the hypothetical purchaser, was better off by $10,000.
[37] Although Dr Weatherill spent more than he had either hoped or expected in its acquisition, the value of the aircraft exceeded the total sum he had paid for it. Accordingly, he suffered no actual loss. …”
Read the decision on the NSW Caselaw website.
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