| | | | | | | NCAT Legal Bulletin Issue 1 of 2018
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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.
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| Commissioner of the Australian Federal Police v Hart; Commonwealth of Australia v Yak 3 Investments Pty Ltd; Commonwealth of Australia v Flying Fighters Pty Ltd
7 February 2018 - Kiefel CJ, Bell, Gageler, Gordon and Edelman JJ
In brief: The three appeals involved the construction and application of ss 102(3) and 141 of the Proceeds of Crime Act 2002 (Cth), which empower a court to make orders relating to the transfer of forfeited property, and to enforce a pecuniary penalty order, respectively.
In separate judgments, the majority (Kiefel CJ, Bell, Gageler and Edelman JJ) (at [6]) and Gordon J (at [48]) determined that the construction of s 102(3), and its application to the relevant assets, required an understanding of its statutory context and consideration of its three limbs, described by Gordon J (at [50]) as follows:
The first is that the property was not used in, or in connection with, any unlawful activity (the "use limb"). The second is that the property was not derived or realised, directly or indirectly, by any person from any unlawful activity (the "source limb"). The third is that the applicant acquired the property lawfully (the "lawfully acquired limb").
The judgments focused on the scope of the “source limb” and concluded that it applied to property wholly or partly derived from unlawful activity (eg Gordon J at [95]).
As to the construction of s 141, which allows the Commonwealth to require that property under the effective control of a criminal be used to meet any pecuniary penalty the criminal owes, the key question was whether the relevant time for assessing “effective control” was the time of the initial restraint of the property or the time when the s 141 application was determined. The High Court held that the correct date was the latter (Gordon J at [283], the plurality agreeing at [2]):
Consistent with the statutory language of ‘is’ in s 141(1)(c), the court must be satisfied that the particular property is not subject to the effective control of the person subject to a pecuniary penalty order at the date of the s 141 order.
Read the decision on the High Court of Australia website.
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| Falzon v Minister for Immigration and Border Protection [2018] HCA 2
7 February 2018 - Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ
In brief: The High Court held that the cancellation of a visa, under s 501(3A) of the Migration Act 1958 (Cth), by reference to the fact of previous criminal offending involves neither the imposition of a punishment for an offence, nor an exercise of judicial power infringing Ch III of the Constitution ([47]).
The plaintiff sought to rely on the principle in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 27; [1992] HCA 64 (Lim) that the power to adjudge and to punish guilt for an offence against a law of the Commonwealth is exclusive to the Ch III judiciary, submitting that the exclusive power is to "adjudge guilt of, or determine punishment for, breach of the law" (at [15]).
Kiefel CJ, Bell, Keane, and Edelman JJ rejected this contention (at [47]):
It has long been recognised that the deportation of aliens does not constitute punishment. The cancellation of a visa as a step necessary to achieve the removal of a person from Australia should be viewed in the same light.
Read the decision on the High Court of Australia website.
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| Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4
14 February 2018 - Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ
In brief: The High Court dismissed an appeal from the NSW Court of Appeal. Kiefel CJ, Bell, Keane, Nettle and Gordon JJ held that the Supreme Court did not have the jurisdiction to make an order in the nature of certiorari to overturn the determination of an adjudicator under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the NSW Act), except in the case of jurisdictional error.
As to the availability of certiorari to quash an adjudicator's determination, it was held (at [28] – [29]) that:
“The function of an order in the nature of certiorari is to remove the legal consequences, or purported legal consequences, of an exercise or purported exercise of power which has, at the date of the order, a discernible or apparent legal effect upon rights.
The principal basis for making such an order is jurisdictional error, thus enforcing the limits of a decision-maker's functions and powers. ….” (footnotes omitted)
The Supreme Court’s jurisdiction to grant certiorari in the case of jurisdictional error cannot be excluded by statute, see Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 580‑581 [98]; [2010] HCA 1. As to non-jurisdictional error, the Supreme Court’s jurisdiction to grant relief in the nature of certiorari for error of law on the face of the record can be excluded by statute and it was held that the NSW Act implicitly “evinces a clear legislative intention” ([35]) to exclude the jurisdiction of a Supreme Court to make an order in the nature of certiorari for error of law on the face of the record – [29] – [30] and [35].
Read the decision on the High Court of Australia website.
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| Maxcon Constructions Pty Ltd v Vadasz [2018] HCA 5
14 February 2018 - Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ
In brief: The High Court dismissed an appeal from the Supreme Court of South Australia, with a majority (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ) holding that, for the same reasons given in Probuild (summarised above), the Supreme Court may only make an order in the nature of certiorari to quash the determination of an adjudicator, appointed under the Building and Construction Industry Security of Payment Act 2009 (SA) (the SA Act), for jurisdictional error.
This appeal concerned an Act based on the NSW Act, the scheme and purposes of which are described in the reasons in Probuild. That analysis applies equally to the Act in issue in this appeal, which was heard at the same time.
There were three questions on appeal, namely: do the adjudicator's reasons disclose an error of law? If so, is disclosure of such an error of law sufficient for the Supreme Court to make an order in the nature of certiorari to quash the adjudicator's determination? If not, is the error of law a jurisdictional error? ([31]).
The majority held that the adjudicator had made no error of law (at [16] – [25]), accordingly there was no need to consider the other issues raised in the appeal.
Read the decision on the High Court of Australia website.
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| Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3
14 February 2018 - Kiefel CJ, Gageler, Keane, Nettle and Gordon JJ
In brief: The High Court allowed an appeal from the Full Federal Court, with a majority (Keane, Nettle and Gordon JJ) holding that there is an implied power in s 546 of the Fair Work Act 2009 (Cth) (the Act) to make a Bragdon order against a union official, meaning that they must pay a pecuniary penalty personally and not seek or accept indemnity from the union.
In determining the extent of the power under s 546, the Court found that preventing a contravener from seeking indemnity from a co-contravener achieved the deterrent effect for which pecuniary penalties are designed (at [116]):
[T]he principal object of an order that a person pay a pecuniary penalty under s 546 is deterrence: specific deterrence of the contravener and, by his or her example, general deterrence of other would-be contraveners. According to orthodox sentencing conceptions as they apply to the imposition of civil pecuniary penalties, specific deterrence inheres in the sting or burden which the penalty imposes on the contravener. … Ultimately, if a penalty is devoid of sting or burden, it may not have much, if any, specific or general deterrent effect, and so it will be unlikely, or at least less likely, to achieve the specific and general deterrent effects that are the raison d'être of its imposition. (footnotes omitted)
On the issue of enforcing a Bragdon order, including the vexed question of identifying the source of funds used for payment, the Court noted (at [131]) that:
There is no point in a court making orders that cannot be enforced, and, if orders do go unenforced, the lack of enforcement is likely to detract from the prestige of the court and, ultimately, the efficacy of its processes. Even so, it should not be thought that difficulties of enforcement are necessarily determinative.
Having regard to the particular circumstances of the parties (at [131]) – the ABCC being the industry regulator with the statutory function of enforcing the Act and orders arising under it, and the CFMEU being “well-known to the court for its contumacious disregard of court orders” – the Court considered that the task of determining the source of funds actually used to pay pecuniary penalties would be unlikely to prove “overly burdensome and certainly not insurmountable.”
Accordingly, the Court held (at [137]) that the matter should be remitted to the Full Court of the Federal Court for the re-imposition of penalties according to law.
Read the decision on the High Court of Australia website.
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| | El-Wasfi v State of New South Wales; Kassas v State of New South Wales (No 2) [2018] NSWCA 27
27 February 2018 - Leeming JA, Simpson JA, Payne JA
In brief: In a separate costs decision, the Court of Appeal considered the effect of two offers of compromise (in 2010 and 2014), in the form of “walk-away” offers, whereby the defendant proposed that a verdict be entered against it, and that the parties each pay their own costs of the proceedings ([6]). The Court held (at [11]) that:
An order that the parties “pay their own costs of the proceedings” at the conclusion of the litigation does not without more have the implied effect of vacating the earlier [costs] orders between the parties as to discrete aspects of the litigation.
In relation to the first offer, made in 2010, the Court found (at [12]) that it did not disclose a true compromise, and it was therefore not unreasonable for the plaintiff to refuse it:
[O]nce it is appreciated that what was being offered on December 2010 on its proper construction excluded any compromise in relation to the seven costs orders made in 2008, 2009 and 2010, it is difficult to see that there was any substantial compromise being put forward by the State in December 2010.
However, the position in relation to the second offer, made in 2014, was different as substantial costs had been incurred by that date ([13]):
It follows that the 15 January 2014 offer of compromise involved a significant element of compromise … It was unreasonable for each of the plaintiffs not to accept those offers. Accordingly, the State is entitled to have its costs of the proceedings at first instance on an indemnity basis from 15 January 2014 onwards.
Read the decision on the NSW Caselaw website.
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| Boyce v Allianz Australia Insurance Ltd [2018] NSWCA 22
20 February 2018 - Basten JA, Macfarlan JA, Sackville AJA
In brief: The Court of Appeal allowed an appeal, holding that the failure of a medical assessment review panel to interview and clinically examine the appellant, who had requested an interview and examination, involved a constructive failure to carry out their statutory function, and constituted a denial of procedural fairness because she was deprived of the opportunity to put her case fully before the review panel.
Basten JA noted (at [80]) the principle in Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145; [1986] HCA 54 that relief in cases of denial of procedural fairness may be withheld where there is no miscarriage of justice because further submissions or evidence could not have made a difference to the result. However, at [81], it was emphasised that this principle was to be applied with caution because, as the High Court observed ( in Stead at 145-146):
It is no easy task for [an appellate body] to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact. And this difficulty is magnified when the issue concerns the acceptance or rejection of the testimony of a witness at the trial.
Basten JA concluded that denying the appellant the opportunity to put her case fully before the review panel amounted to procedural unfairness and the panel’s finding should be set aside because (at [95]):
It cannot be demonstrated that the absence of such opportunities “did not deprive [the appellant] of the possibility of a successful outcome”, and hence relief should not be refused.
Read the decision on the NSW Caselaw website.
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| Ipstar Australia Pty Ltd v APS Satellite Pty Ltd [2018] NSWCA 15
14 February - Bathurst CJ, Beazley P, Leeming JA
In brief: The Court of Appeal, dismissing the appeal, held that conduct of an experienced commercial party, in imposing a price increase on another experienced commercial party, was in all the circumstances unconscionable.
In doing so, the Court (Bathurst CJ, with Beazley P and Leeming JA agreeing) considered the interplay of the Australian Consumer Law with the unwritten law, noting that (at [199]):
The approach taken in cases dealing with unconscionability under the unwritten law is of assistance in determining whether conduct is unconscionable within the meaning of s 22 of the ACL.
Bathurst CJ went on to cite Paciocco v Australia and New Zealand Banking Group Ltd (2016) 258 CLR 525; [2016] HCA 28, holding that the notion of “moral obloquy”, together with consideration of all the circumstances, can be helpful to establish whether conduct was against conscience. His Honour held (at [194]-[197]), with Beazley P and Leeming JA agreeing (at [268] and [269], respectively):
[194] In Paciocco HC at [188], Gageler J described the question raised as whether the “conduct was objectively to be characterised as ‘unconscionable’ according to the ordinary meaning of the term, requiring as it does a ‘high level of moral obloquy’ on the part of the person said to have acted unconscionably”.
[195] It seems to me that it is unhelpful to seek to redefine the statutory concept of unconscionability. However, the use of terms such as “moral obloquy” may be of assistance to the extent that they emphasise that what is required is such a departure from accepted community standards as can objectively be seen to be against conscience.
[196] In this context, it is important to bear in mind that the question of whether certain conduct is unconscionable does not involve an idiosyncratic determination of what is “fair” and “just” in a particular case. Rather, it involves a consideration of all the circumstances to conclude whether or not the conduct in question falls below acceptable norms, standards or values such as to warrant it being determined to be unconscionable.
[197] In considering that question, it is appropriate to have regard to, first, the terms of the statute itself, second, the approach taken by the courts in dealing with cases under the unwritten law, whilst recognising these cases do not limit the scope of the provision, and third, judgments in related areas including cases involving want of good faith. It is also necessary to have regard to all the circumstances surrounding the transaction. This was emphasised in Paciocco HC by Gageler J at [189] and Keane J at [294].
Read the decision on the NSW Caselaw website.
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| Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd [2017] NSWCA 339
21 December 2017 - Beazley P, Payne JA, Barrett AJA
In brief: The Court of Appeal allowed an appeal, ordering that a developer (the appellant) was required to pay commission on the sale of units in a development notwithstanding “minor” breaches, by the corporate agent (the respondent), of the Property, Stock and Business Agents Act 2002 (NSW) (the Act) and the Property, Stock and Business Agents Regulation (2003) (the Regulations). (Note: The Regulations have since been replaced by the Property, Stock and Business Agents Regulation 2014 (NSW))
The issues on appeal included whether the agency agreements failed to comply with the Regulations, so as to disentitle the respondent from recovering commission under s 55(1) of the Act, and whether the respondent was nevertheless entitled to relief pursuant to s 55A.
In preferring a construction that “promotes the coherent operation of the Act and the Regulations” (at [84]), the Court (Payne JA, with Beazley P and Barrett AJA agreeing) noted (at [85]):
Section 55 of the Act has been described as operating in an absolute and unforgiving way: Kukolovski v Georges [2011] NSWSC 359 per Barrett J at [34]. I accept that in the circumstances of this case the construction I prefer has a harsh consequence for this respondent. That, however, is the result of the application of the legislation before the addition of s 55A into the Act …
For an order to be made under s 55A, the Court must be satisfied that the failure of the agency agreement to comply with the requirements of the Regulations is a “minor failure”, the principal has suffered no “loss” as a result, and declining to make the order would be “unjust” ([87]). As these terms are not defined in the Act, their meaning must be ascertained from the relevant context ([88]).
Payne JA held (at [97]) that “[w]hat constitutes a minor failure must be determined in all of the relevant circumstances of the particular case”:
…. In this case the relevant circumstances included the fact that the appellant was a sophisticated business entity that negotiated the Second Agreement at arm’s length with the respondent. … The equivalent bargaining powers of each entity and the absence of information asymmetry is to be contrasted with the position which often characterises relations between consumers and experienced real estate agents. An inequality of bargaining power or information asymmetry was absent here.
Applying this reasoning to the facts at hand, the Court held that the respondent was entitled to relief under s 55A; concluding (at [102]):
In the present case it would be unjust to deny the respondent its commission when its sophisticated counter party, the appellant, has received what it bargained for in the Second Agreement and expressly waived reliance on the minor failures to comply with the Regulations upon which it now relies.
Read the decision on the NSW Caselaw website.
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