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| | | NCAT Legal Bulletin Issue 7 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.
The latest issue features case summaries of recent decisions from the High Court of Australia and NSW Court of Appeal, including: - Ancient Order of Foresters in Victoria Friendly Society Limited v Lifeplan Australia Friendly Society Limited [2018] HCA 43, regarding the principles governing the order of an account of profits against a knowing participant in a breach of fiduciary duty;
- Rodi v Western Australia [2018] HCA 44, which looked at the circumstances in which fresh evidence may give rise to a significant possibility of acquittal;
- UBS AG v Tyne [2018] HCA 45, involving the power to permanently stay proceedings as an abuse of court process;
- Johnson v The Queen [2018] HCA 48, regarding the admissibility of childhood incidents of sexual misconduct, for “contextual” purposes, in respect of adult offences;
- Nobarani v Mariconte [No 2] [2018] HCA 49, on whether litigation costs, incurred by the executrix of a will, could be ordered to be paid from the estate the subject of the will; and
- Attorney General for New South South Wales v Gatsby [2018] NSWCA 254, which concluded that the Tribunal is not a “court of State”, and that it had no jurisdiction to determine the matter of Johnson v Dibbin; Gatsby v Gatsby [2018] NSWCATAP 45.
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| Ancient Order of Foresters in Victoria Friendly Society Limited v Lifeplan Australia Friendly Society Limited [2018] HCA 43
10 October 2018 - Kiefel CJ, Gageler, Keane, Nettle and Edelman JJ
In brief: The High Court dismissed an appeal from the Full Court of the Federal Court, finding that the appellant knowingly took advantage of breaches of fiduciary duty, by two employees of one of its competitors, in order to enhance its business by appropriating its competitor’s business connections ([2]).
The plurality (Kiefel CJ, Keane, and Edelman JJ) agreed with the orders proposed by Gageler J, but gave different reasons, finding that the appellant “could not limit its liability to disgorge profits by claiming that only limited profits were caused by particular acts of knowing assistance when the consequences of those acts were inseparable from the consequences of [the employees’] general scheme of breach of fiduciary duty.” ([5])
Gibbs J, in Consul Development Pty Ltd v DPC Estates Pty Ltd (1), noted that a “business connection” could be a relevant “benefit” ([6]-[7]):
“a person who knowingly participates in a breach of fiduciary duty is liable to account to the person to whom the duty was owed for any benefit he has received as a result of such participation.”
The appellant’s acts were “an integral part” of “the strategy for despoiling the business of [the respondent].” ([8]) By providing “the commercial vehicle which would acquire and exploit the [respondent’s] business connections” ([10]), the appellant knowingly facilitated the plan’s success ([12]). The causation test was set out as follows [9]):
“The equitable disgorgement principle with which we are concerned is a "prophylactic rather than a restitutionary principle". It is sufficient to show that the profit would not have been made but for dishonest wrongdoing.” (footnote omitted)
As to quantification, on the facts, there was no principled basis for requiring the appellant to disgorge anything less than the whole value of the business connections obtained ([21]-[25]).
(1) (1975) 132 CLR 373 at 397; [1975] HCA 8
Read the decision on the High Court of Australia website.
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| Rodi v Western Australia [2018] HCA 44
10 October 2018 - Kiefel CJ, Bell, Keane, Nettle and Gordon JJ
In brief: The High Court unanimously allowed an appeal from the WA Court of Appeal, finding that the appellant’s drug conviction should have been set aside in light of fresh evidence, which gave rise to a significant possibility of acquittal had it been before the jury.
The Court found that there had been a miscarriage of justice, as the fresh evidence indicated a “significant possibility that the jury's verdict would have been different” ([34]):
“The [fresh] evidence meant that what was advanced by the prosecution as "the crux" of its case for the rejection of the appellant's evidence as demonstrably false was a contention that could not be sustained.”
Regarding the credibility of Detective Coen, whose contradictory testimony constituted the fresh evidence, it was beside the point to say that his “explanation for his change of opinion was credible and cogent” ([37]-[38]):
“In the context of a challenge to a verdict based on fresh evidence, the requirement that the fresh evidence relied upon be "credible and cogent" is a requirement relating to evidence which impugns the verdict at trial. Detective Coen's evidence was directed to sustaining the verdict against the attack based on the fresh evidence. …
Whether Detective Coen's explanation was a sound basis for accepting his evidence and rejecting that of the appellant was a matter for the jury in the light of all the relevant evidence.”
Read the decision on the High Court of Australia website.
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| UBS AG v Tyne [2018] HCA 45
17 October 2018 - Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ
In brief: The High Court allowed an appeal from the Full Court of the Federal Court, with a majority (Kiefel CJ, Bell and Keane JJ) finding that the “pursuit of substantially the same claim by serial proceedings conducted by different entities under common control” enlivened the power to permanently stay proceedings as an abuse of court process ([46]).
While the circumstances which may amount to an abuse “do not lend themselves to exhaustive statement”, either of two conditions enlivens the power ([1]):
- “where the use of the court's procedures occasions unjustifiable oppression to a party, or”
- “where the use serves to bring the administration of justice into disrepute.”
Given that the “central concern” is “whether the processes of the court are being abused”, the fact that the abuse was “effected by the use of multiple entities orchestrated by a single mind and will is no reason to tolerate it.” ([45]-[46])
Although the Supreme and Federal Court rules both provide that “discontinuance of proceedings is no bar to bringing fresh proceedings for the same relief (2) ” ([47]), the majority found that, “[w]here discontinuance of proceedings brings the proceedings to an end, the later commencement of fresh proceedings may work no unfairness to the defendant.” ([52])
"That was not the case here ([58]-[59]):“The fact that UBS is a large commercial corporation does not deny that permitting the Trust's claim to proceed will subject it to unjustifiable oppression. … At its core is the vexation of being required to deal again with claims that should have been resolved [in the proceedings below]. …
For the Federal Court to lend its procedures to the staged conduct of what is factually the one dispute prosecuted by related parties under common control with the attendant duplication of court resources, delay, expense and vexation, … is likely to give rise to the perception that the administration of justice is inefficient, careless of costs and profligate in its application of public moneys.” (footnotes omitted).
(2) Uniform Civil Procedure Rules 2005 (NSW), r 12.3(1); Federal Court Rules 2011 (Cth), r 26. 14.
Read the decision on the High Court of Australia website.
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| Johnson v The Queen [2018] HCA 48
17 October 2018 - Kiefel CJ, Bell, Gageler, Nettle and Gordon JJ
In brief: The High Court unanimously dismissed an appeal from the SA Court of Criminal Appeal, holding that evidence of the accused's sexual misconduct towards the complainant, his sister, on occasions other than the occasion charged, was admissible under Div 3 of Pt 3 of the Evidence Act 1929 (SA) where use of the evidence is confined to “contextual” purposes.
The “critical issue” was whether the evidence adduced in support of three childhood incidents was admissible on the trial of the remaining adult offences; “if it was, the Court of Criminal Appeal was right to reject that the trial of the remaining counts miscarried.” ([49])
The Court found that the evidence of the childhood incidents was necessary background knowledge if the complainant’s claims, that her brother had sexually assaulted her over a number of years, were to be believed ([54]):
“If accepted, the relevance of these early incidents was to understanding the highly dysfunctional family in which [the complainant] and the appellant were raised; … Without an understanding of this background, [the complainant]'s evidence of the offences charged in the remaining counts was likely to have presented as implausible.”
Accordingly, the “probative value” of the complainant's evidence of the childhood incidents and the later incidents of sexual intercourse “substantially outweighed any prejudicial effect on the appellant.” ([60])
The majority determined that there had been no miscarriage of justice, finding, inter alia, that there was no reason to consider that the jury's finding, that the appellant understood the wrongness of his childhood conduct, infected its consideration of his adult offences ([61]).
Read the decision on the High Court of Australia website.
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| Nobarani v Mariconte [No 2] [2018] HCA 49
17 October 2018 - Kiefel CJ, Gageler, Nettle, Gordon and Edelman JJ
In brief: The High Court unanimously ordered that litigation costs, incurred by the executrix of a will, be paid from the estate of the deceased ([6]).
In doing so, the Court noted the “general rule … that costs properly and reasonably incurred by the executor in connection with the administration of the estate are payable from the estate.” ([2])
Litigation expenses may be recoverable under this rule, as was the case here: where the respondent, as executrix, “reasonably and properly sought and obtained a grant of probate in solemn form, and then reasonably and properly resisted appeals seeking to set aside that grant of probate.” ([3]) On this point, the Court held that ([5]):
“The co-existing interest of the respondent as executrix and as the sole beneficiary under the 2013 Will does not detract in this case from the reasonableness or the propriety of the proceedings brought by the respondent as executrix, or her defence of the appeal to the Court of Appeal and the appeal to this Court as executrix.” (footnote omitted)
Read the decision on the High Court of Australia website.
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| | Attorney General for New South Wales v Gatsby [2018] NSWCA 254
6 November 2018 - Bathust CJ, Beazley P, McColl, Basten and Leeming JJA
In brief: (Headnote published with the judgment): Pursuant to s 77(iii) of the Constitution, s 39(2) of the Judiciary Act 1903 (Cth) invested the “Courts of the States” with federal jurisdiction in “all matters in which the High Court has original jurisdiction or in which original jurisdiction can be conferred upon it”, subject to certain exceptions and conditions, but including jurisdiction in “all matters … between residents of different States” under s 75(iv) of the Constitution.
In 2015, two separate proceedings under the Residential Tenancies Act 2010 (NSW) (the RT Act) were commenced “between residents of different States” in the Civil and Administrative Tribunal of New South Wales. One proceeding involved an application to the Tribunal for an order terminating a residential tenancy agreement under s 87 of the RT Act. The other proceeding involved two applications to the Tribunal for orders for various forms of compensation. After both proceedings were determined by the Tribunal, the unsuccessful party in each proceeding appealed to the Appeal Panel of the Tribunal.
Prior to the hearing of the appeals, the Appeal Panel raised questions about the jurisdiction of the Tribunal to determine proceedings “between residents of different States”. The hearing of both appeals was then stood over pending the decision of the Court of Appeal in Burns v Corbett [2017] NSWCA 3. Upon the assumption that the Tribunal was not a “court of a State” within the meaning of s 39(2) of the Judiciary Act 1903 (Cth) and s 77(iii) of the Constitution, the Court held that the Tribunal did not have jurisdiction to determine matters “between residents of different States”. The High Court of Australia later affirmed this decision in Burns v Corbett [2018] HCA 15, albeit on different grounds.
Following the decision of the Court of Appeal, the Appeal Panel of the Tribunal directed that a separate hearing be held on two questions relating to the jurisdiction of the Tribunal to determine matters “between residents of different States”. The first question was whether the Tribunal had been exercising judicial power in making the orders sought under the RT Act. The second question was, if the Tribunal were exercising judicial power in making the orders sought under the RT Act, whether the Tribunal was a “court of a State” within the meaning of s 39(2) of the Judiciary Act 1903 (Cth) and s 77(iii) of the Constitution, which had been assumed, but not decided, in Burns v Corbett [2017] NSWCA 3.
The Attorney General for New South Wales was joined as a party to the proceedings before the Appeal Panel. In relation to the first question, the Attorney General submitted that the Tribunal was exercising judicial power in making the orders sought under the RT Act, and that it therefore had jurisdiction to determine the proceedings. In relation to the second question, the Attorney General submitted that the Tribunal did not have jurisdiction to determine the proceedings because it was not a “court of a State” within the meaning of s 39(2) of the Judiciary Act 1903 (Cth) and s 77(iii) of the Constitution.
In relation to the first question, the Appeal Panel determined that the making of the orders sought under the RT Act was an exercise of judicial power. In relation to the second question, the Appeal Panel determined that the Tribunal was a “court of a State” within the meaning of s 39(2) of the Judiciary Act 1903 (Cth) and s 77(iii) of the Constitution. The Attorney General then sought leave to appeal from this determination in the New South Wales Court of Appeal under s 83(1) of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act).
The issues on the appeal were: - Whether the Court had jurisdiction under s 83(1) of the NCAT Act to determine the appeal;
- Whether the Tribunal was exercising judicial power in making an order under s 87 of the RT Act terminating a residential tenancy agreement; and
- Whether the Tribunal is a “court of a State” within the meaning of s 39(2) of the Judiciary Act 1903 (Cth) and s 77(iii) of the Constitution.
Whether the Court had jurisdiction under s 83(1) of the NCAT Act
(i) Section 83(1) permits a party to a proceeding before the Appeal Panel to appeal on a question of law against “any decision” made in the proceedings. The phrase “any decision” is broad enough to encompass the answers given by the Appeal Panel to the questions identified for separate determination, regardless of whether that determination gave rise to a directly enforceable legal obligation: [96] (Bathurst CJ); [197] (Beazley P); [198] (McColl JA); [208] (Basten JA); [280]-[289] (Leeming JA).
Whether the Tribunal was exercising judicial power
(ii) The Tribunal was exercising judicial power in making an order under s 87 of the RT Act terminating a residential tenancy agreement because the discretion exercised by the Tribunal to make an order under the section was analogous to that exercised by courts under the general law, since the section required the Tribunal to identify whether the contract constituting such an agreement existed, whether the contract was breached, and whether the breach was sufficient to justify termination. Further, such a termination order was enforceable by the Tribunal: [125]-[137] (Bathurst CJ); [197] (Beazley P); [198]-[200] (McColl JA); [279] (Leeming JA).
Silk Bros Pty Ltd v State Electricity Commission (Vic) (1943) 67 CLR 1; [1943] HCA 2; Precision Data Holdings Ltd v Wills (1991) 173 CLR 167; [1991] HCA 58; Attorney-General (Cth) v Alinta Ltd (2008) 233 CLR 542; [2008] HCA 2, Dattilo v Commonwealth (2017) 249 FCR 347; [2017] FCAFC 17; Odzic v Commonwealth [2017] FCAFC 28, considered.
Federal Commissioner of Taxation v Munro (1926) 38 CLR 153; [1926] HCA 58; Peacock v Newtown Marrickville and General Co-operative Building Society No 4 Ltd (1943) 67 CLR 25; [1943] HCA 13; R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1971) 123 CLR 361; [1970] HCA 8; Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245; [1995] HCA 10; Attorney-General (Cth) v Breckler (1999) 197 CLR 83; [1999] HCA 28; Sue v Hill (1999) 199 CLR 462; [1999] HCA 30, referred to.
(iii) The Tribunal was not exercising judicial power in making an order under s 87 of the RT Act terminating a residential tenancy agreement because there was no “matter” before it for the purpose of s 75(iv) of the Constitution. Where State legislation does not confer jurisdiction on a court of a State to determine a proceeding, there will be no “matter” arising under that legislation. Since no right, duty or liability established by the RT Act was enforceable by a court until the Tribunal had determined an application under s 87, there was no “matter” before the Tribunal for the purpose of s 75(iv) of the Constitution: [229]-[248] (Basten JA).
South Australia v Victoria (1911) 12 CLR 667; [1911] HCA 17; In re Judiciary Act 1903-1920 and In re Navigation Act 1912-1920 (1921) 29 CLR 257; [1921] HCA 20; Abebe v Commonwealth (1999) 197 CLR 510; [1999] HCA 14, considered.
R v Hegarty; Ex parte City of Salisbury (1981) 147 CLR 617; [1981] HCA 51; Bushell v Repatriation Commission (1992) 175 CLR 408; [1992] HCA 47; Palmer v Ayres (2017) 259 CLR 478; [2017] HCA 5; TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation [1988] FCA 198; (1988) 82 ALR 175, referred to.
Whether the Tribunal was a “court of a State”
(iv) Although the Tribunal had many of the features of a “court” and exercises the judicial power of the State in some cases, the Tribunal was not a “court of a State” within the meaning of s 39(2) of the Judiciary Act 1903 (Cth) and s 77(iii) of the Constitution. The Tribunal was not designated a “court of record” and was expressly distinguished from a “court of law”. Further, most members of the Tribunal did not have the tenure and protection comparable to that held by judges under the Act of Settlement 1701 (UK) and its equivalents, and lacked the necessary institutional independence and impartiality which were required for a body to be described as a “court of a State”: [184]-[192] (Bathurst CJ); [197] (Beazley P); [198], [201]-[205] (McColl JA); [223]-[228] (Basten JA); [279] (Leeming JA).
Forge v Australian Securities and Investments Commission (2006) 228 CLR 45; [2006] HCA 44; Trust Company of Australia Ltd v Skiwing Pty Ltd (2006) 66 NSWLR 77; [2006] NSWCA 185; Commonwealth v Anti-Discrimination Tribunal (Tas) (2008) 169 FCR 85; [2008] FCAFC 104; Director of Housing v Sudi (2011) 33 VR 559; [2011] VSCA 266; Qantas Airways Ltd v Lustig (2015) 228 FCR 148; [2015] FCA 253, considered.
Commonwealth v Hospital Contribution Fund of Australia (1981) 150 CLR 49; [1982] HCA 13; Harris v Caladine (1991) 172 CLR 84; [1991] HCA 9; North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146; [2004] HCA 31; K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501; [2009] HCA 4; Assistant Commissioner Condon v Pompano Pty Ltd (2013) 252 CLR 38; [2013] HCA 7, referred to.
(v) The insertion of Part 3A into the NCAT Act by the Justice Legislation Amendment Act (No 2) 2017 (NSW) was a clear legislative statement that the Tribunal was not a “court of a State” for the purpose of s 39(2) of the Judiciary Act 1903 (Cth) and s 77(iii) of the Constitution. The premise of Part 3A was that the Tribunal lacked jurisdiction to determine matters “between residents of different States” under s 75(iv) of the Constitution: [197] (Beazley P); [205] (McColl JA); [292]-[304] (Leeming JA).
Read the decision on the NSW Caselaw website.
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| In addition, the Court of Appeal publishes a regular bulletin containing summaries of its latest decisions of interest. Find below links to several such decisions, from recent bulletins.
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| Lordianto v Commissioner of the Australian Federal Police [2018] NSWCA 199
CORPORATIONS – service of originating process – service effected almost 6 months after filing – Uniform Civil Procedure Rules r 6.2 provided for service within 6 months – Supreme Court (Corporations) Rules r 2.7 provided for service as soon as practicable after filing and, in any case, at least 5 days before date fixed for hearing – construction of r 2.7 – whether r 2.7 inconsistent with r 6.2 – whether r 2.7 breached – consequences of breach of r 2.7 – power to set aside service of originating process where irregularity PRACTICE – service – application to set aside service of originating process – contravention of obligation to serve as soon as practicable after filing and in any case at least 5 days before date fixed for hearing – liquidators delayed service until litigation funding agreement in place – relevance of compliance with rule requiring service within 6 months – relevance of explanation for delay – relevance of actual and presumptive prejudice – leave to appeal not warranted STATUTORY CONSTRUCTION – interaction between Supreme Court (Corporations) Rules and Uniform Civil Procedure Rules – significance of rules governing application and inconsistency – consideration of Supreme Court (Corporations) Rules rr 1.3, 2.7 – consideration of Uniform Civil Procedure Rules rr 1.7 and 6.2 – consideration of Civil Procedure Act 2005 (NSW) ss 11 and 63
Read the decision on the NSW Caselaw website.
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| Choy v Tiaro Coal Ltd (in liq) [2018] NSWCA 205
CRIME – proceeds of crime – whether primary judge erred in declining to make exclusion order in respect of appellants’ interests in bank accounts in their names – whether appellants acquired an “interest” in “property” each time a deposit was made into their bank accounts within the meaning of Proceeds of Crime Act 2002 (Cth) – whether appellants were a “third party” under Proceeds of Crime Act, s 330(4)(a) – whether appellants acquired their interests in the bank accounts for sufficient consideration – whether circumstances would have aroused a reasonable suspicion that appellants’ interests in the bank accounts were proceeds of an offence
Read the decision on the NSW Caselaw website.
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| Secretary, Department of Family and Community Services v Hayward (a pseudonym) [2018] NSWCA 209
CHILD WELFARE – care and protection – risk of significant harm reports – whether reports admissible in criminal proceedings – whether person can be compelled to produce or give evidence regarding contents of report in criminal proceedings – whether court in criminal case can compel disclosure of identities of makers of report – Children and Young Persons (Care and Protection) Act 1998 (NSW), ss 24, 29, 29(1)(f)(ii) CRIMINAL PROCEDURE – where accused in criminal trial sought disclosure of identities of persons who made risk of significant harm reports – whether District Court in criminal trial has power to order disclosure of identities – Children and Young Persons (Care and Protection) Act 1998 (NSW), ss 24, 29(1)(f)(ii) STATUTORY INTERPRETATION – principle of legality – where statute prohibited disclosure of identity of makers of reports that child at risk of serious harm – where accused in criminal trial sought disclosure of identities – whether statute affected element of general system of law – whether principle of legality supported construing prohibition as not applicable to criminal proceedings STATUTORY INTERPRETATION – contextual construction – use of legislative history and extrinsic materials to determine legislative purpose WORDS AND PHRASES – “any proceedings” – “relating to” – “proceedings relating to”
Read the decision on the NSW Caselaw website.
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| Fuller-Wilson v State of New South Wales [2018] NSWCA 218
CIVIL PROCEDURE – summary disposal – dismissal of proceedings – primary judge summarily dismissed proceedings on basis that defendant did not owe plaintiffs a duty of care – where weight of current authority against existence of duty of care – where argument available that common law should be extended to recognise duty of care – whether proceedings should have been summarily dismissed NEGLIGENCE – duty of care – police officers – plaintiffs allegedly discovered remnants of deceased family member at scene of fatal motor vehicle accident – plaintiffs alleged negligence of police officers in failing to remove remains from accident scene caused them psychological injury – whether reasonably arguable that officers owed plaintiffs duty of care – whether officers assumed responsibility at accident scene – whether duty would give rise to incoherence or inconsistent obligations –salient features analysis – relevance of principle in Hill v Chief Constable of West Yorkshire [1989] AC 53 NEGLIGENCE – public authorities – duty of care – circumstances in which public authorities will owe duty of care in performance of statutory functions – whether duty of care precluded on basis it gives rise to inconsistent obligations – consideration of Sullivan v Moody (2001) 207 CLR 562; [2001] HCA 59
Read the decision on the NSW Caselaw website.
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| Talifero v Asbestos Injuries Compensation Fund Limited as Trustee for the Asbestos Injuries Compensation Fund [2018] NSWCA 227
TRUSTS – scheme established by three interrelated instruments to compensate victims of asbestos-related diseases – instruments comprise the James Hardie Former Subsidiaries (Winding Up and Administration) Act 2005 (NSW) (Winding Up Act), a Trust Deed and a Final Funding Agreement – application by Trustee for judicial advice under s 55 of the Winding Up Act – victim of mesothelioma exposed to asbestos both in Australia and overseas – victim claims damages against a “liable entity” based solely on exposure to asbestos in Australia – whether Trustee is justified under the scheme in paying only the proportion of the damages award attributable to exposure to asbestos in Australia – whether Trustee is obliged to pay the victim’s estate the whole of the damages award – whether the definition of “payable liability” in the instruments is satisfied if the victim’s claim relates solely to exposure to asbestos in Australia. PRACTICE AND PROCEDURE – appeal purportedly lodged as of right from judicial advice sought by the Trustee – appeal lodged by a non-party – leave required – whether appropriate to substitute different advice on an appeal from judicial advice given under s 55 of the Winding Up Act.
Read the decision on the NSW Caselaw website.
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| Robinson v State of New South Wales [2018] NSWCA 231
TORTS – intentional torts – false imprisonment and wrongful arrest – where no decision to charge made at time of arrest – whether arrest lawful – purpose of arrest – Law Enforcement (Powers and Responsibilities) Act 2002 (NSW), s 99
STATUTORY INTERPRETATION – contextual construction – relevance of pre-existing common law to construction of statutory scheme – principle of legality – use of legislative history and extrinsic materials
WORDS AND PHRASES – “arrest” – Law Enforcement (Powers and Responsibilities) Act 2002 (NSW), s 99
Read the decision on the NSW Caselaw website.
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