Key Decisions Database


The Key Decisions Database contains the key recent judgments of the Supreme Court of Queensland which have been selected by the Editors for possible inclusion in the Queensland Reports. This database is arranged by subject titles. It contains the Editors’ brief summary of the case, a link to the full text of the judgment and information about the status of any appeal from the judgment. Decisions are removed from this database once they are reported in the Queensland Reports.


Area Of Law

Administrative Law back to top

NK Collins Industries Pty Ltd v The President of the Industrial Court of Queensland [2013] QCA 179

This case concerned an appeal against a conviction of the appellant by the respondent under the Workplace Health and Safety Act. The main issue on the appeal was whether or not the alleged breach of the Act was adequately particularised? The discussion of the necessary requirements for the particularisation of an offence has a wider application than offences under the Act under consideration.
The first issue considered by the Court was whether or not the decision of the High Court in Kirk v Industrial Relations Commission (NSW) could be distinguished in relation to the requirement of a prosecutor to identify in a charge the actual nature of the contravention; being the measure that the prosecutor alleges was not taken which resulted in the contravention? In Kirk it was identified that it was 'necessary that the statement of offence identify the act or omission said to contravene the relevant section and, more particularly, with regard to the defences available, the measure said not to have been taken to obviate the relevant risk'. The Court held that under the Workplace Health and Safety Act 'it was incumbent on the prosecution to identify the measure or measures which should have been taken to ensure workers’ safety from the risk'. The result was the granting of certiorari to quash the decision of the President of the Industrial Court.

Appeal Status: No Appeal Pending - Appeal Period Expired

Maycock v Queensland Parole Board [2013] QSC 302

In this interesting case, Jackson J considered the question of the entitlement of an applicant for parole to appear in person before the Parole Board. The circumstances of this matter were quite unusual in that there had been substantial delay between the date on which the application was made and the date on which it was finally determined (501 days). The essential question was whether or not the applicant was entitled, as a matter of natural justice, to appear before the Parole Board to answer matters raised against his application in certain medical reports. The applicant had been afforded an opportunity to respond in writing, but he claimed that he was entitled to appear before the Board to persuade them in his favour. His Honour undertook an extensive analysis of the right to appear on an application for parole and, in particular, the principle that where the Court does not expressly require that the rules of natural justice are to be applied, the court must construe the legislation to ascertain whether or not the rules were to be excluded? His Honour undertook a close consideration of the legislation in question and concluded that it could not be said that an intention existed in the legislation to exclude a right of appearance in every case. On the facts of the case before him, his Honour concluded that the applicant was not entitled to appear before the Board to try to persuade its members of his case. However, on the facts of the matter before the Court it was held that the Parole Board had failed to take into account all of the matters which it was required to consider. The Board’s decision was set aside.

Appeal Status: No Appeal Pending - Appeal Period Expired

Remondis Australia Pty Ltd v Ipswich City Council [2014] QSC 27

In this case his Honour, Justice P Lyons, was required to assess whether statutory orders of review, sought pursuant to the Judicial Review Act 1991 (Qld) (“JRA”) ought be granted. The Applicant, Remondis, sought a review of two rating decisions of the Ipswich City Council which resulted in a dramatic increase in their property rates. The documents which evidenced the decision of the Council had been acquired by Remondis pursuant to an FOI request. Issues arose as to whether or not time should or needed to be extended to permit the applicant to pursue the proceedings. In his reasons for judgment, his Honour, Justice P Lyons was particularly concerned with two issues:
(1) The definition of ‘decision’ under s 26(1) of the Judicial Review Act 1991 (Qld) (“Section 26(1)”): specifically, the “nature of a decision”, and whether or not that could include a document which merely set out the decision, rather than just decisions “provided pursuant to the statute under which the decision was made” [11]; and
(2) The circumstances in which it is appropriate to grant an extension of time for the making of an application.

Definition of Decision under s 26(1)
Section 26(1) provides that:
“an application to the court for a statutory order of review in relation to a decision that has been made and the terms of which were recorded in writing and set out in a document that was given to the applicant . . . must be made within . . . [28 days of the relevant date]; or (b) such further time as the court . . . allows.”

In considering the proper definition of ‘decision,’ Lyons J canvassed a number of approaches to statutory interpretation, including the purposive approach. His Honour ultimately dismissed this approach concluding that it was of little use given the ‘true’ purpose of Section 26(1) is simply to “identify the time within which an application must be made” and that, in the circumstances a departure from the natural language and the plain-meaning of the provision was unnecessary. [14], [23] In interpreting the term, his Honour also considered the context of the provision, noting that the “legislation which introduces this remedy is beneficial” and this conclusion militates against adopting an interpretation that would restrict this intended benefit. [18]-[19] Following this reasoning, his Honour concluded that a Section 26(1) ‘decision’ need not have been provided pursuant to the statute under which it was made. [20] Consequently the ‘rates decision’ was a ‘decision’ for the purposes of Section 26(1).

In then addressing the question of the necessary substance or content of a document required for it to be considered a “decision” for the purposes of s 26(1) Lyons J considered cases dealing with analogous provisions in the Administrative Decisions (Judicial Review) Act (1977) Cth which indicated that the document must “set out the terms” of the decision; not merely provide information which would allow a person to “infer the terms.” [22]

Granting an Extension of Time
Pursuant to s 26(1) of the JRA the applicant ought to have made its application to the court for the statutory order of review within 28 days following its receipt of “a document setting out the terms of [the] decision.” [7] Having failed to do this, the applicant applied, under s 26(1)(b) of the JRA, for an extension of time for both rating decisions. In granting an extension, His Honour considered a number of factors to be influential, including: the public interest in the review of decisions; the length and reason for any delay, the consequences of the decision and any prejudice suffered as a consequence of the delay. [32]-[42] He relied particularly upon his findings that the Applicant’s delay was a consequence of its attempts to resolve the dispute without recourse to litigation [33] and that the Respondent had not been prejudiced by the delay. [42]

Appeal Status: No Appeal Pending - Appeal Period Expired

McLaren v Rallings [2014] QSC 68

This comprehensive and interesting decision of Jackson J concerns the existence and scope of an obligation to accord procedural fairness where an administrative decision is based upon “sensitive” or confidential information. In this specific case, his Honour was asked to consider inter alia whether the makers of two decisions, namely, a maximum security classification (“MSC”) and (subsequent) maximum security order (“MSO”) under the Corrective Services Act (“the CSA”), were required to accord procedural fairness, specifically whether there was a requirement to provide notice of the decision to be made and to disclose the information to be taken into consideration by the decision-maker in making or reviewing either the MSC or MSO?
Procedural Fairness and the MSO
Upon an examination of the relevant case law and academic literature, Jackson J concluded that though it was not the case that every administrative decision authorized under an enactment required a decision-maker accord procedural fairness – though this would often be the case – in a decision made pursuant to the CSA there is an obligation to provide “information adequate for a prisoner to respond [to the decision]”. While meeting this obligation is made considerably more difficult, and in certain cases may be impossible, where the information to be relied upon is confidential and there exists a valid claim of public interest immunity, on the evidence, this case was not one where it was “impossible to fairly inform the person accused of the conduct without raising a risk to the security and good order of [the] correctional facility”, [44], and that procedural fairness had been denied, [47]. In reaching this decision, his Honour considered that the risks involved in disclosing the information used in the decision-making process were not such as to reduce the requirement of procedural fairness to “nil” [48]–[49] – any “risks” created by its disclosure were of a kind that could, and were regularly, managed by correctional facilities. [52]. As a consequence, his Honour set aside the MSO.
Procedural Fairness and the MSC
Unlike the issuing of an MSO, pursuant to s 17(1) of the CSA, the issuing of an MSC is not subject to Pt 4 of the Judicial Review Act 1991 (“JRA”), [30]–[31]. As this decision was not subject to the JRA, the issue before the Court was, firstly, whether the decision was subject to judicial review, namely whether upon proper construction the provisions of the CSA “limit” or “extinguish” the obligation to accord procedural fairness [86] – the “right to procedural fairness by notice or disclosure of information to be taken into account [being] not readily excluded in many contexts”. [103]. After a careful examination of the provisions of the CSA as they relate to the review of an MSC, Jackson J concluded that the decision-maker was “not required to give … a prisoner facing … review of his security classification … under s 13 of the CSA notice of the review or disclosure of the information which may be taken into consideration by the decision-maker before the decision on review was made”. [106]. In explaining this decision, his Honour observed that the CSA’s requirements that reasons be provided following a review, if the security classification of the prisoner was increased, and that a prisoner be afforded an opportunity to make submissions if a reconsideration of the decision was requested, created a scheme which implied that the statutory intention was to confine the provision of information regarding the review of an MSC to the period following the making of the decision. [97]–[99]. Consequently, Jackson J concluded that the MSC was not invalidated because of a failure to accord procedural fairness to the prisoner prior to a decision being made.

Appeal Status: No Appeal Pending - Appeal Period Expired

Goldsborough v Bentley [2014] QSC 347

In this recent matter, the Supreme Court considered the scope of the principle that a prosecutorial decision not to prosecute is not to be susceptible to judicial review. The specific issue before his Honour, Justice McMurdo, was whether a coroner may investigate the reasoning behind a prosecutor’s decision not to prosecute, or whether this amounts to an act outside the scope of their powers under the Coroner’s Act 2003 (“CA”). [4].

Following an investigation into the death of a tourist by Fair & Safe Work Qld (“the agency”), the respondent, the Northern Coroner, began its own investigation into both this death and “the adequacy of the [previous] investigation.” [5].  During this investigation the respondent directed an employee of the agency to answer questions regarding the agency’s decision not to prosecute the tourism operator involved. This line of questioning was objected to on the grounds that it was beyond the scope of permitted subjects that coroners may investigate or comment upon. In particular, the agency relied upon s 46(3) of the CA which prohibits coroners from making a statement that a person is or may be guilty or civilly liable for something and the “well established principle that a decision whether or not to prosecute is not susceptible to judicial review.” [15].  The inquest was stayed subject to these proceedings determining the scope of the respondent’s power.

Under the Coroner’s Act, coroners have very extensive investigative powers, [10] – in addition to a duty to determine, where possible, details surrounding the suspected death, see s 45.  Pursuant to s 46(1) corners may also, where appropriate, “comment on anything connected with a death investigated ... that relates to ... the administration of justice; or ways to prevent deaths from happening in similar circumstances in the future.” [12]. In determining whether a coroner may investigate the reasoning of a decision not to prosecute, specifically whether this was a matter which fell within “the subject matter of ‘the administration of justice’ upon which a coroner is expressly authorised to comment” [16], McMurdo J considered the decision of the Supreme Court in Doomadgee v Clemens. In that case, the Court concluded that the coroner’s scope of inquiry, pursuant to s 45, was extensive, [17], and included the power to expose some “failing deficiency or wrong” connected to the death under investigation, which is in the public interest. [20]-[21].

Applying this reasoning to the instant case, his Honour concluded that the agency’s decision not to prosecute was “of a kind which relates to the administration of justice.” [21]. Consequently, subject to two considerations – the general principle that a decision whether to prosecute is not subject to judicial review; and the prohibition of s 46(3), [21] – it was an issue upon which a coroner could comment, see s 46(1), and thus could investigate. Addressing the first consideration, his Honour concluded that given the investigative, rather than adjudicative function of a coroner, the purposes of this principle, namely to disassociate the courts from the (executive) process by which cases come before them, was not applicable such that there was no general prohibition preventing coroners from investigating or commenting upon this type of decision. [23] In then considering the express limitations provided by s 46(3) his Honour concluded that though in the instant matter it would be difficult for the respondent to comment upon the “agency’s decision not to prosecute if [the decision] was made after an assessment by the agency that there was a case that could be prosecuted”, it was “conceivable” that an inquiry into this subject might result in a comment which would not offend s 43(6) and was ‘appropriate’ pursuant to s 46(1). [24]-[25].  Given the conclusion that this subject was not necessarily irrelevant to an appropriate comment, the Court did not intervene and the application was refused.

Appeal Status: No Appeal Pending - Appeal Period Expired

Mid Brisbane River Irrigators Inc v The Treasurer and Minister for Trade of the State of Queensland [2014] QSC 196

The issue raised in this recent action before the Supreme Court was the reviewability of a decision made by the Treasurer and Attorney-General (the “QCAA Ministers”) under the auspices of the Queensland Competition Authority Act (the “QCAA”).  This matter arose out of a report and recommendations made by the Queensland Competition Authority (the “Authority”), and subsequently accepted by the QCAA Ministers regarding water allocations and irrigation pricing. Pursuant to the QCAA, the Authority undertook to investigate irrigation prices and subsequently provided a report, including recommendations, to the QCAA Ministers. [2]–[4] Pursuant to s 36 the QCAA Ministers were then required to either accept or reject those recommendations and then to refer it to the “relevant minister” pursuant to s 37.  It was this decision of the QCAA Ministers, to accept the Authority’s recommendations, which the Mid Brisbane River Irrigators Inc (the “applicant”) sought to have reviewed.  The principle issue before the Court was whether there were circumstances which enlivened the Court’s power under s 20 of the Judicial Review Act (the “JRA”), namely that: the decision was “a decision to which this act applies”; the applicant was “aggrieved by” the decision and that the application was made upon one or more of the grounds outlined in s 20(2). [19]. 

His Honour first considered whether the decision was one to which the JRA applied, namely whether it was “made . . . under an enactment.”  The respondents alleged that the QCAA Ministers decision did not “confer, alter or otherwise affect legal rights or obligations” and thus did not meet this requirement as it was explained in Tang. [21]–[22]. His Honour did not agree.  He concluded that the QCA Act required the making of a decision by the QCAA Ministers on the basis that if the QCAA Ministers accepted the QCAA’s recommendation they were then obliged to then refer this recommendation to the relevant minister pursuant to s 37. [23]–[24].  It followed that the making of the identified “decision” resulted in the creation of a relevant obligation which was sufficient for the Tang principles.  Also, albeit more briefly, considered was whether the decision was both sufficiently final and determinative and whether or not subsequent actions taken by the relevant minister operated to render the decision at issue a “spent force”. In both instances the Court held this was not the case – the decision was not a “step along the way in the course of reasoning to an ultimate decision, see [25], nor was it spent given that any decision made by the relevant minister was not made by the same repository of decision-making power as the QCAA Ministers’ decision, see [26].

Given these conclusions, the Court was then required to turn to the question of whether the MBRI was “a person aggrieved” by the decision. See [29]–[30]. As an incorporated association, MBRI does not “simply acquire the ‘interests’ or standing of its members,” see [32]–[33], instead it was required to demonstrate a “sufficient interest”. See discussion [34]–[36]. Upon considering the facts before the Court, however, his Honour concluded that the QCAA Ministers’ decision to accept the recommendations did not adversely affect the interests of MBRI or MBRI’s members – any adverse impact was a consequence of the subsequent actions of the relevant minister. [39] Given this conclusion there was no reason to rule whether MBRI had standing in the present matter, [38], and the Court dismissed the application.

Appeal Status: No Appeal Pending - Appeal Period Expired

Johnston v Brisbane City Council [2014] QSC 268

In this case the Court reviewed an application for judicial review of a decision of the Brisbane City Council Councillor Conduct Review Panel (the “Panel”), made under the City of Brisbane Act (the “Act”).  Pursuant to the Act, complaints about the conduct of Brisbane City Councillors are heard by the Panel, which may impose various sanctions and penalties if the complaint is upheld.  [1].  The facts giving rise to this application are as follows.  A complaint had been made, and subsequently upheld, against Councillor Johnston (the “applicant”).  Pursuant to this decision, the Panel ordered the applicant pay a fine and make an apology in a specified manner – dictating not only the place and time, but also the language to be used.  [4], Schedule A.  The applicant failed to make the apology, and a further complaint was made against her and upheld – the Panel, this time, ordering that (a) the applicant make the apology; (b) pay a further fine; and (c) that a copy of the Panel’s decision be given to the Chief Executive Local Government.  The applicant challenged the decision and orders (a) and (c), arguing that the Panel did not have jurisdiction to: (a) make any decision regarding her conduct; and (b) make orders in the form that it did.  [18].

Pursuant to s 178(8)(a) of the Act, decisions of the Panel are not subject to appeal.  Though, prima facie, excluding review, the Court noted that this provision would not prevent the Court reviewing the Panel’s decision were the applicant to establish that it was affected by jurisdictional error, see Kirk v Industrial Court of NSW.   [17].  A tribunal or inferior court will fall into jurisdictional error where it “misconstrue[s] . . . the relevant statute thereby misconceiving the nature of the function which [it] is performing or the extent of its powers in the circumstances of the particular case.”  [19]; [21].

Making a Decision

Addressing the question of whether the Panel had exceeded its authority by making the impugned decision, the Court concluded that the Act did authorise the making of such a decision.  [35]. In doing this it rejected the applicant’s contention that because her impugned conduct occurred within the course of a council meeting the Panel lacked jurisdiction.  [34].  Though s 178(2) of the Act appears to remove the discipline of councillors at a meeting from the ambit of the Panel’s powers, [24]-[25], the Panel argued, and the Court agreed, that the structure of the disciplinary provisions in Chapter 6, Part 2 of the Act, leant itself to the inverse conclusion.  Specifically, the Court relied upon the distinction between the powers given to the chairperson to deal with disorderly conduct – a breach of the Council’s rules of procedure in a meeting – under s 186A in Division 7 and the Panel to deal with misconduct – defined as including “a refusal to comply with an order of the Panel, s 178(3)(b)(iv) – under s 178 in Division 6.  [27]-[30].  Given the structure of the Act, the Court considered that s 178(2) must have a specific meaning, and held that properly read this provision simply reiterates the rule that powers under Division 6 are not to be exercised in response to conduct breaching procedural rules (disorderly conduct).  [31], [34].  Given the applicant’s conduct was misconduct for the purposes of the Act, the Panel had jurisdiction to make a decision. 

Form of Orders

Turning to a consideration of the second alleged ground of jurisdictional error, that the Panel acted without jurisdiction when stipulating the “where, when, how, and in what terms the apology should be[] made,” [36], the Court concluded that a proper interpretation of the Act did not provide for this level of prescription.  [56], see also [45]-[47].  It did, however, suggest that it may have been reasonable for the Panel to “give directions about how and when the apology should have been given” to ensure that the correct meeting procedures were complied with.  [52]-[56]  In reaching this decision the Court relied upon the fact that:

  • Section 183(2)(b) of the Act was sparsely expressed – providing only that the Panel may make “an order that the councillor make . . . an apology.”  [39];
  • The relevant sub-section simply provides a list of orders that the Panel may impose, and does not imply “any power to exercise any additional or expanded discretion.”  [41], see also [39]-[40];
  • Adjacent sub-sections are expressed in a significantly more detailed matter – the Court considering that it would be inconsistent to interpret another part of the same section as conferring the same level of detail in the absence of a similar form of expression.  [42]-[44]; and 
  • The severity of the consequences for not complying with an order are such that “[s]pecifying how the apology should be given, in explicit detail” is excessive and “potentially oppressive.”  [45].

Finally the Court addressed whether the Panel’s order that a copy of its decision be delivered to the Chief Executive Local Government “with a view . . .  to amend relevant legislation” to allow for the removal or suspension of a councillor for misconduct was also beyond the scope of the Panel’s authority.  [59].  Given its previous conclusion that s 183 of the Act must “be interpreted . . . as a provision which comprehensively and concussively lists the orders the Panel is empowered to make” and that the power to make ‘recommendations,’ such as this, is not listed, the Court held that it too went beyond the boundaries of the Panel’s jurisdiction.  [59]-[61]. 

Given these conclusions, the Court granted the applicant declaratory relief to the effect that the offending orders of the Panel were void and would be set aside.  [73]-[74].

Appeal Status: No Appeal Pending - Appeal Period Expired

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Ostwald Accommodation Pty Ltd v Western Downs Regional Council [2015] QSC 210

This is a recent decision in which the court considered the merits of an application for statutory order of review of three decisions made by the respondent concerning the levying of a differential general rate that would apply to the applicant’s land. [1]. The applicant contended that the decisions were invalid and consequently, that he was not liable to pay the relevant rates.

By way of background, the applicant owned land, known as “The Eastwood”, in the respondent’s local government area, which had been developed under a joint venture arrangement.  The development approval authorised an accommodation building containing 201 rooms. [9].

In accordance with s 104 of the Local Government Act 2009, in mid 2014 the respondent adopted a revenue statement for 2014/2015. [2]. That statement provided for numerous rating categories, which were divided into a series of numbered codes. Of those, rating category 4/84 for 2014/2015 (“the challenged rating category”) was defined as follows:

“Land used or intended to be used, in whole or in part, for providing intensive accommodation for more than 100 persons but less than or equal to 200 persons (other than the ordinary travelling public) in rooms, suites, dongas, or caravan sites specifically build or provided for this purpose.  Land within this category is commonly known as ‘Worker’s Accommodation’, ‘Single Person’s Quarters’, ‘Work Camps’, ‘Accommodation Village’, ‘Barracks’, or ‘Other Multi Accommodation Units’.” [3].

On 13 June 2014, the respondent adopted the challenged rating category among the rating categories adopted for 2014/2015: “the first decision”. [5]. On the same date, the respondent also decided to levy a differential general rate of 2.982 cents in the dollars of the rateable value of the land, with a minimum rate of $115,425, for the challenged rating category, as part of levying the differential general rates for 2014/2015: “the second decision”.  [6]. On 21 February 2015, the respondent applied the challenged rating category to the applicant’s land: “the third decision”.  [8].

The application for a statutory order of review, brought pursuant to s 20 of Judicial Review Act 1991, was made on the following grounds:

As to the first decision, that:

(a) the respondent exercised the power to levy differential general rates in a way that was so unreasonable that no reasonable person would have exercised the power;
(b) the decision involved errors of law;
(c) the purported exercise of the power was done in such a way that the result was uncertain.  [13].

As to the second and third decisions, that:

(a) the respondent failed to take into account relevant considerations;
(b) the respondent exercised the power in a way that was so unreasonable that no reasonable person could have so exercised the power;
(c) the decisions involved errors of law;
(d) there was no evidence or other material to justify the making of the decisions;
(e) the purported exercise of the power to make the decisions was done in such a way that the result was uncertain.  [14].

At the outset, his Honour considered the machinery provisions which empower local authorities to levy rates [15]–[28], together with the observations of the High Court in MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 which recognise that liability for laws with respect to taxation is imposed by reference to sufficiently general criteria which mark out the objects and subject matter of the tax.

In comprehensively dismissing all of the grounds for statutory review in relation to all three decisions, his Honour noted that in some cases, statutory provisions for a local government to impose or levy differential general rates like those in question have been described as “quasi-legislative” [62]: see Marrickville Metro Shopping Centre Pty Ltd v Marrickville Council (2010) 174 LGERA 67, 92 [99]; Tarong Energy Corporation Ltd v South Burnett Regional Council [2012] 1 Qd R 171, 190 [78]. With specific reference to differential rates, he provided this valuable guidance, encapsulating the issues at trial:

“A differential general rate will impose a higher or lower burden or incidence of taxation on the owners of some land as opposed to the owners of other land of the same unimproved value. The individual burden of a ratepayer is a function of both the unimproved value and the differential general rate that applies to the land.  The statutory provisions do not require that the differential general rates must be levied only by reference to the costs or expenses which the local government will incur in relation to land in the rating category chosen.  It would be erroneous to construe the statutory provisions as being subject to that limitation. Once it is accepted that the use of land in its improved state can be a relevant factor in setting rating categories, and in levying differential general rates, in my view, it follows that the economic use and value of that land use may be taken into account as a relevant factor, unless there is some express or implied limit on the scope of the power to levy differential general rates”.

In the result, his Honour ordered that the application be dismissed, and the costs of the application be borne by the applicant. 

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Tonkin v Queensland Parole Board [2015] QSC 334, 30 November 2015

This recent decision of Justice Peter Lyons contains an interesting and important discussion of the fundamental rights of freedom of political communication and how they may arise in various situations.  In this case in relation to conditions placed on an offender’s parole.

The applicant, formerly convicted of manslaughter, and sentenced to life imprisonment, [2] applied for a statutory order of review of the respondent’s decision to impose additional conditions on her parole, including that she not publish any document substantially connected with or describing any detail of the offence for which she is on lifetime parole, nor any offence committed by any other person.  [1]. The relevant decision was originally communicated to the applicant by letter dated 3 December 2013; [7] then later varied on 20 December 2013; [8] and confirmed on 21 February 2014. [11]. The decision was purportedly made on the basis that the respondent held the view that the applicant posed an unacceptable risk of committing an offence in proposing to write a book and, in doing so, profiting from crime.  [12].

The Application for a Statutory Order of Review comprised the following grounds:–

  1. The decision under review in its terms, operation or effect, impermissibly burdened the applicant’s freedom to communicate about government and/or political matters;
  2. The decision under review was not reasonably proportionate to the power under which it was made;
  3. In making the decision under review the respondent exceeded the authority conferred upon it by the Corrective Services Act 2006, particularly s 200(2) of the Corrective Services Act 2006;
  4. The decision was so unreasonable that no reasonable person could so exercise the power; and
  5. There was no evidence or other material to justify the making of the decision. [20].

The applicant sought an order that the respondent’s decision was invalid and of no effect. [21]. She particularly submitted that the ban on her publishing any manuscript substantially connected with, or detailing any detail of her offence or any offence committed by any other person, impermissibly burdened her freedom of communication. [23].

With reference to Miller v TCN Channel Nine Pty Ltd (1986) 161 CLR 556, his Honour made these observations regarding the decision made by the parole board, and the constraints on its scope of power:

“A statute may not confer a discretionary power on an entity, to act in a way that would conflict with a constitutional limitation.  If a statute confers a power in terms which, if read literally might authorise its exercise both in ways which would be consistent with a constitutional limitation, and in ways which would not be, then the grant is to be construed as limited to authorising the exercise of the power in ways consistent with the constitutional limitation.  … the repository of the power, when exercising it, must bear in mind the constitutional limitation, at least in the sense that a failure to observe such a limitation may well result in a purported exercise of the power which is outside the statutory grant.” [40].

Whilst acknowledging that the proposed book might “be regarded as sensationalistic, and would attract a great deal of publicity”, [70] his Honour relevantly noted that there was no rational basis for suggesting that such publicity might prejudice the applicant’s continued good conduct.  In all the circumstances, his Honour concluded that the parole board exceeded its power when it imposed the condition, based on the erroneous view that the applicant would commit an offence if she received profit from a book about her earlier offence. Accordingly, it followed that the decision should be set aside.

In the result his Honour effectively quashed the ruling, by the board, that the applicant would be breaking the law by profiting from her crime. The relevant provisions of the Criminal Proceeds Confiscation Act 2002 did not make it a crime for her to receive “financial reward” from a book, but merely allowed the State, should it choose to do so, to obtain an order for the forfeiture of an amount to be assessed by the Court as the value of the benefit which the applicant might derive from a book describing her offence or “thoughts, opinions or emotions about that offence”. [64].

Appeal Status: No Appeal Pending - Appeal Period Expired


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Tep v ATS Australasian Technical Services Pty Ltd [2013] QCA 180

 In this matter the plaintiff has sued his employer as a result of injuries which he had sustained in the course of his employment. In the course of the appeal it became apparent that the order from which the appeal was made had not been entered. In this latter respect UCPR 661(4)(b) provides that no appeal may be brought against an order which has not been filed unless the Court gives leave. Although no application was made during the course of the appeal, the Court nevertheless made such an order, nunc pro tunc. In relation to the main part of the decision, the trial judge had made a determination of the cause of the accident which was not the subject of any allegation in the pleadings. The cause found by the trial judge was not an alternative which the defendant had alleged in the pleading or which was the subject of agitation at trial and the decision could not be sustained given the decision of the High Court in Suvaal v Cessnock City Council (2003) 77 ALJR 1449. The result was that the matter had to be remitted to the trial court for further determination. There is an interesting discussion in the reasons of the Court as to whether or not the Court of Appeal could make any determination as to the quantum of damages under UCPR 766 in the circumstances of the case.

Appeal Status: No Appeal Pending - Appeal Period Expired

Markan v Bar Association of Queensland [2014] QCA 34

The principle issue before the Court of Appeal in this appeal was whether the primary judge ought to have recused himself. During the original proceedings, the Appellant had, requested that the primary judge recuse himself principally because of his past connections with the Respondent, The Bar Association of Queensland. Specifically he claimed that the judge’s connection was close because his Honour had (1) regularly taught at the Bar Practice Course; (2) spoken at a recent Bar Association conference, at which his accommodation had been provided by the Respondent and; (3) that his son was “most likely” a member of the Bar Association. [11]
On appeal the court considered whether, in the circumstances, a “fair-minded lay observer might reasonably have apprehended that the primary judged might not bring an impartial mind to the resolution” of the case. [13]. Before applying this test, however, the Court discussed the characteristics of the person referred to as the “lay observer”. It held that such a person is “reasonable”; aware and considerate of the “exigencies of modern litigation”; “understand[s] the strong professional pressures on judges to uphold traditions of integrity and impartiality” and is not “unduly sensitive or suspicious”. [14]–[15] Applying this test to the circumstances of the case, the Court concluded that the connection created by the primary judge’s previous instructing role, attendance at the Respondent’s events and receipt of “paltry” benefits were not such that a “fair-minded lay observer” would consider that his impartiality was at risk. Also significant in the Court’s reasoning was the historical (and largely unavoidable) connection between the Bar and the judiciary and the necessary “high ethical traditions” of both groups which militated against concluding that the primary judge ought to have recused himself – see [17]–[21]. The appeal was dismissed.

Appeal Status: No Appeal Pending - On 6 August 2014, the High Court dismissed an Application for Special Leave to Appeal from this decision.

R v Conde [2015] QCA 63

This recent Court of Appeal decision arose from an appeal against conviction on one count of unlawful stalking with a circumstance of aggravation. The appellant, a vexatious litigant, was sentenced to imprisonment for 15 months, suspended after seven months, for an operational period of five years. [6].

The complainant, a solicitor, had represented the appellant’s former partner in an application for a domestic violence order. The charge related to a protracted course of 59 separate acts. [8]; [9].

The appellant contended that the trial judge had erred in various aspects of his summing up and directions to the jury, with the end result that the conviction was unsafe or unsatisfactory. [28]. It was also submitted that one act committed by the appellant did not meet the definition of unlawful stalking. [40].

In considering ground one (unsafe verdict), the Court determined that the verdict was properly open to the jury [35], which evidently accepted the complainant’s evidence. [35]. The Court also determined that it was open to the jury to conclude that a series of emails sent by the appellant contained content which the appellant did not have a legitimate interest in giving. Nor were those emails in the public interest. [36]; [37].

In relation to the second ground of appeal (scope of the offence), the appellant argued that “act 1” which he had allegedly committed – an attempt to file a summons upon information for an offence in the Federal Magistrates Court on 20 July 2010 – did not fall within the definition of unlawful stalking pursuant to s 359B of the Criminal Code. The respondent differed, contending that “act 1” was relevant as part of a course of conduct which caused detriment. [43].

In considering ground two, the Court noted that a natural reading of s 359B of the Code supported the view that “notwithstanding that s 359B identifies conduct which constitutes an offence, … it [is] sufficiently clear that the offence is intended to include a course of conduct consisting of more than one of the acts identified in s 359B(c), even where it is not established that each act, taken in isolation, would cause or caused the relevant fear, apprehension or detriment.” [45]. 

In delivering his reasons, his Honour, Justice Peter Lyons noted the breadth of the section, which is intended to encompass any approach to a person, or contact with a person, which causes detriment.  He stated:

“The serving of Court documents, or the communication of distressing news, may well amount to conduct which satisfies the provisions of this section, based on its language. …That s 359B is intended to have a wide field of operation is also apparent from s 359C.  There can be little doubt that the provisions are intended to affect the exercise of a person’s right to be in a public place, or on property in which the person has an interest, in certain circumstances, even to the point where the right might not be exercised at all.  In my view it is clear that these provisions demonstrate with sufficient clarity an intention to interfere with fundamental rights, if the conduct otherwise satisfies the requirements of s 359B (subject to s 359D)”. [51].

Accordingly, the appellant did not succeed on ground two, the Court declining to find that act 1, when considered in context, was not a potentially relevant act. [47].

In the course of argument, the appellant was granted leave to add a third ground of appeal – namely, that the trial judge had erred in failing to direct the jury as to the need for unanimity on the identity of the two or more occasions said to constitute the course of conduct amounting to unlawful stalking. [29]. The appellant relied upon the High Court decision of KBT v The Queen (1997) 191 CLR 417 and R v Hubbuck [1999] 1 Qd R 314. The respondent contended that since stalking is a “course of conduct” offence, it was unnecessary for the jury to agree about particular acts [58], and in the alternative, the provisions of s 668E(1A) of the Criminal Code could be applied to maintain the conviction, as the vast majority of the acts had been admitted by the appellant. [59].

In considering this final ground, Peter Lyons J observed that it is indeed the case that in order to convict, all members of the jury must agree that a defendant carried out a particular act, being an act that satisfies that the description found in s 359B(c), and that the act was protracted; or alternatively that the defendant carried out two acts satisfying the description found in s 359B(c), and if more than two such acts are alleged then they must agree about the same two acts. This is established by KBT v The Queen (1997) 191 CLR 417 and R v Hubbuck [1999] 1 Qd R 314. In relation to this aspect, the Court thus concluded that the directions given to the jury were not sufficient. [67]. The failure to give the direction as to unanimity was an error of law. 

Nonetheless, by operation of s 668E(1A) of the Criminal Code, in all the circumstances, the Court dismissed the appeal as it considered that no substantial miscarriage of justice had actually occurred, despite the absence of the direction as to unanimity – his Honour Justice Lyons noting:

“The case is unusual, primarily because of the jury’s finding on the circumstance of aggravation; and because of the extensive admissions made by the appellant”. [88].

It followed that a retrial was not warranted.  

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Cowan; R v Cowan; Ex Parte Attorney-General (Qld) [2015] QCA 87

The factual background to this appeal is notorious and will not be unnecessarily repeated here. The crux of the appeal was that the trial judge erred in not excluding both the evidence of admissions made by the appellant to undercover police officers and the evidence obtained as a result of those admissions.  It was also asserted that the trial judge had erred in misdirecting the jury as to drawing inferences in relation to the evidence of Douglas Jackway and Leslie McLean. [2].

The Attorney-General of Queensland separately appealed against the sentence imposed on count 1 (murder), contending that it was manifestly inadequate. [3].

The court rejected the grounds of appeal against conviction, dismissing both the appeal against conviction and the appeal against sentence. [5]. Each separate ground of appeal is briefly canvassed below.

The appeal against conviction

Should the admissions and the resulting evidence be excluded?

At the pre-trial hearing, the appellant argued that the admissions and the evidence directly obtained as a result of them should have been excluded either under s 10 of the Criminal Law Amendment Act 1894, or in the exercise of discretion. [13]. That evidence comprised police interviews with the appellant preceding the coronial inquest; the questioning of the appellant and related matters at the coronial inquest; and the covert police investigation.

Ultimately, most emphasis was placed upon the detailed admissions the applicant unwittingly made to covert operatives on several separate occasions, his counsel arguing that this was inadmissible on the grounds that the appellant was induced by a person in authority. The appellant further contended that questioning of him at the inquest amounted to an inducement under s 10 of the Criminal Law Amendment Act 1894 (to provide the coroner with a stronger exculpatory alibi). [55]. 

The trial judge discounted these contentions, finding that the prosecution had proved on the balance of probabilities that the appellant's confessions were made voluntarily, and accordingly, the confessions should not be excluded on the basis that it would be unfair to admit them into evidence. [54].

In relation to this ground of appeal, specifically referencing the conduct of the inquest, her Honour the President said:

“… in vigorously encouraging the appellant to give truthful answers under oath at the inquest, and in exploring the strength of the evidence against him, counsel cross-examining the appellant were acting in accordance with the Coroners Act.  The coroner's questioning was also consistent with the coroner's statutory role.  Neither the coroner nor counsel at the inquest acted improperly or made any threat or promise to the appellant amounting to an inducement under s.10.” [70].

Regarding the appellant’s confession to the undercover police officers, her Honour concluded:

   “I am satisfied the appellant made the confessions, not because of any threat or promise held out at the inquest but voluntarily to remain part of the criminal gang, to participate in the ‘big job’ and to receive his $100,000 share of the proceeds.  If there was a threat or promise from a person in authority for the purposes of s 10, the appellant was not acting upon it when he confessed to the undercover police officers.  The primary judge was right to conclude that the appellant's confessions to the undercover police officers were not induced by any threat or promise held out at the inquest.  This aspect of the appellant's grounds of appeal against conviction fails.” [73].

The court was unpersuaded that questions of fairness warranted the exclusion of the confessional and derivative evidence.  The primary judge's decision not to exclude the evidence was endorsed as “a sound discretionary exercise”.  The failure to exclude the confessions and derivative evidence was not determined to have caused a miscarriage of justice.  [91].  In coming to this conclusion, the court importantly noted that, evidently, the appellant would not have made the admissions had he known the true identity of the undercover police officers – however, they were not exercising the coercive power of the state when he confessed:  “He believed he was amongst his criminal friends.  They stressed the need for him to tell the truth so that they could help him.  He was free to leave their company at any time”. [90].

Did the judge err in directing the jury as to inferences in relation to the evidence of Douglas Jackway and Leslie McLean?

The appellant's final ground of appeal concerned the judge's directions to the jury.  Part of his defence at trial was that it was open to the jury to decide that he may have falsely confessed to the offences to appeal to the criminal gang to which he believed the covert police officers belonged.   It was thus open to the jury, he contended, to reasonably infer from the evidence that his knowledge of the offences may have come through Mr McLean from Mr Jackway, who he suggested might in fact have committed the offences.  [92].

In considering this ground of appeal, the court examined substantial extracts from the trial judge’s summing up [104], deeming them uncontroversial and unexceptional [105–113]. The President concluded that, “When read as a whole, the judge's directions to the jury fairly explained the defence case and instructed them, before convicting the appellant, to be satisfied beyond reasonable doubt that the defence hypothesis was not open.  There has been no misdirection on a matter of law”.  [115].

Attorney-General’s appeal against sentence

The Attorney-General of Queensland contended that the primary judge's order postponing parole eligibility for the respondent, Brett Peter Cowan, on his life sentence for murder by only five years, was manifestly inadequate; plainly unreasonable and unjust as per House v The King (1936) 55 CLR 499, 504–505. [117].

In addressing the merits of these arguments, the President noted that whilst the respondent's offending deserved a heavy penalty to reflect “pertinent sentencing principles of general and personal deterrence, protection of the community and denunciation of such wickedly antisocial behaviour”  [131], it was apparent that the trial judge had afforded appropriate weight to all relevant factors in determining that the appropriate sentence for the respondent for count 1 was life imprisonment, with parole eligibility delayed by five years beyond the minimum. [132]. As such, the court declined to interfere with the sentence imposed, particularly in the absence of any error of law. [133].

Appeal Status: No Appeal Pending - Appeal Period Unexpired

R v DBI [2015] QCA 83

This matter involved a consideration of whether evidence given after the trial pursuant to s 671B(1)(c) of the Criminal Code by the complainant, had it been available at trial, would have led the jury to entertain a significant and reasonable doubt as to the appellant’s guilt of particular offences.  The court was required to determine whether the fresh evidence, in the form of a recantation, was relevant, credible and cogent.  [28]

By way of brief background, at the conclusion of a six day jury trial, on 8 September 2014 the appellant was convicted of 10 counts of rape and one count of common assault against his stepbrother. At the time of his conviction, the appellant was 18 years old.  At the time of the majority of the alleged offences, he was a juvenile. [2]–[3]. The complainant, the appellant’s stepbrother, gave a further interview to police on 30 September 2014, during which he retracted the evidence he had given at the trial. The appellant was subsequently granted bail on 3 October 2014. [4]

Consequently, the appellant appealed against conviction on the grounds that the verdicts of the jury were unreasonable or could not be supported having regard to the evidence; and further, that the evidence admitted by leave on the appeal demonstrated that a miscarriage of justice had occurred. [6].

The evidence against the appellant primarily consisted of pre-recorded evidence provided by the complainant in the course of two separate interviews with police, in which he described several occasions of sexual abuse over a period of some five years.  [7] In delivering the lead judgment, Atkinson J noted that cross-examination of the complainant uncovered significant difficulties in accepting his evidence [13]. Further, scant evidence existed implicating the appellant in the commission of the offences apart from the complainant’s own evidence. [18]. Finally, at appeal the Crown conceded that it was unable to submit that there was not a real possibility that a jury, acting reasonably on the trial evidence together with the fresh evidence, would have acquitted the appellant.  [19].

In considering the matter, the court observed the principles governing the admission of fresh evidence, as contained in authorities including Gallagher v The Queen (1986) 160 CLR 392; Mickelberg v The Queen (1989) 167 CLR 259; and R v VI [2013] QCA 218. Her Honour noted that “[t]he particular difficulty faced in this case is that it is recantation evidence.  Such evidence after a trial should be approached with caution”. [28].

Nonetheless, it was the court’s view that, having regard to the particular circumstances of the case, especially the cogent reasons given as to why the complainant lied at the trial [36], and the undermining of the credibility of the account told by the complainant at trial by other family members, [37] the fresh evidence should be accepted as being reliable and accordingly the appeal was allowed. [38]

Appeal Status: No Appeal Pending - Appeal Period Expired

Hamcor Pty Ltd v State of Queensland [2015] QCA 183, 2 October 2015

This interesting matter arose from the contamination of a property following its immersion in contaminated fluid known as “fire-water” in the aftermath of a fire.  “Fire-water” is water containing toxic fire suppressant chemicals. [3]. Proceedings were subsequently commenced against the State of Queensland for alleged negligence on the part of the Queensland Fire and Rescue Service in the course of fighting the fire. The plaintiffs also sued an insurance broker and its authorised representative for alleged failures to advise that they ought to have been named as insureds under a liability insurance policy. [5]. The claimed cost of remediation of the contaminated land was more than $9 million, many times its value. [4].

At first instance both claims were dismissed. [6]. The appellants appealed solely against the decision involving the State of Queensland. [7].

The decision at first instance

Whilst finding that QFRS owed a common law duty to the plaintiffs to take reasonable care to protect its property, which it breached, [10]–[11] the learned primary judge noted that QFRS was expressly authorised to apply water to the fire by s 53(1) of the Fire and Rescue Service Act 1990, and hence entitled to the immunity conferred by the first limb to s 129(1). [13]. In view of the scarcity of evidence, the learned primary judge took the view that she was not in a position to make findings as to causation of loss on which damages could be assessed. [14].

The appeal

On appeal the appellants had four grounds of appeal, three which are discussed below.

Ground one

The appellants submitted that the learned primary judge erred in holding that QFRS was acting pursuant to the Act and was therefore entitled to an immunity under s 129(1), when upon the proper construction of that provision, the QFRS was only entitled to immunity only where it acted bona fide and without negligence.  [28]. The appellants contended that the application of water to a fire by QFRS personnel for any of the purposes listed in s 53(1) was not an act done pursuant to the Act, and therefore the immunity could not apply. [29]. The appellants relied upon Colbran v State of Queensland [2006] QCA 565, contending that statutory immunity provisions ought to be interpreted “jealously”. [31].

Noting that her Honour had evidently formed the view that the application of water to extinguish a fire is in fact a reasonable measure to protect persons, property or the environment, and, as such, authorised by s 53(1) [43], the court did not accept the appellants’ submissions, agreeing that although as a principle of statutory interpretation statutory immunity for acts done pursuant to a statute should be construed as extending only to acts directly authorised by the statute, there is nonetheless no “companion proposition, that in order to be directly authorised by a statute, an act must be specifically listed in it as authorised by it … an act will be directly authorised by a statute if it falls within a broad description of acts authorised by the statute.  Such an authorisation may be in terms which permit the taking of “any reasonable measure”. [45]. (emphasis added).

Accordingly, the court’s finding was that since it was a reasonable measure undertaken for any of those purposes, the application of water to a fire was done pursuant to the Act. [46].

Grounds two and three

The appellants additionally argued that the learned primary judge erred in failing to find that the act or omissions of the QFRS in fighting the fire were “unreasonable” within the meaning of s 36(2) of the Civil Liability Act 2003; and furthermore that she failed to properly construe ss 53 and 129(1) of the Fire and Rescue Service Act 1990.

In essence, the appellants submitted that whilst it was theoretically possible that conduct may be negligent, yet not “manifestly unreasonable” in the Wednesbury sense, the learned primary judge failed to provide reasons explaining why the negligent conduct of the QFRS officers was not, at the same time, unreasonable in the Wednesbury sense. [52].

Discounting these criticisms, the court found as follows:

“it does not at all follow … that the strategy adopted by QFRS was illogical, irrational or lacking in intelligible justification.  It would indeed be difficult to reach such a conclusion given her Honour’s unchallenged findings that the application of large volumes of water was appropriate at four installations or facilities.” [60].

Accordingly, the court upheld her Honour’s finding that the conduct of QFRS was not unreasonable in the Wednesbury sense.  It also determined that her reasons for not so finding were adequate. [61].

The appeal was dismissed.

Appeal Status: No Appeal Pending - Appeal Period Unexpired


Building and Construction back to top

Ooralea Developments Pty Ltd v Civil Contractors (Aust) Pty Ltd [2013] QSC 254

This case involved an application seeking a declaration that an adjudication made under BCIPA was void for jurisdictional error. The main argument was that the contractor was not licensed under the Queensland Building Services Authority Act to perform the “building work” in respect of which it claimed payment and, therefore, it had no entitlement to payment under the contract into which it had entered and pursuant to which it purportedly performed the work. The alleged “building work” was the construction of stormwater, sewerage and water pipe works. If that work was “building work” within the meaning of the QBSA Act it would follow that the contractor was not entitled to any monetary consideration for its performance. Daubney J considers at length the meaning of the expression “building work” and its extended definition in the QBSA Act as including “any fixed structure” and, in particular, noted that a structure did not have to be a building but was anything that was constructed. His Honour concluded that stormwater drains, sewer and water reticulation piping would fall within the definition of a “fixed structure”. In the result the work done by the contractor was “building work” within the QBSA Act. His Honour also considered that a “road” constructed on private property would also constitute a “fixed structure” within the meaning of the QBSA Act. As a result the adjudicator did not have jurisdiction to make the award that was made and it was set aside.

Appeal Status: No Appeal Pending - Appeal Period Expired

Queensland Building Services Authority v J M Kelly (Project Builders) Pty Ltd [2013] QCA 320

This case concerned the validity of certain directions made by the appellant under the Queensland Building Services Authority Act 1991. The directions under the Act requiring the respondent to rectify building work "within 28 days from the date of the notice" had been given in notices sent by the Authority. The notice was sent to the respondent through the mail with the result that the notice in that form was invalid as it did not afford the respondent the time required by the Act. However, the notice had also been sent by email to the respondent on the day that it issued. The question before the Court was as to the identity of the date when the notice was given. That would determine when the direction was made and whether or not the respondent had been afforded 28 days to comply as required by the Act. The Court of Appeal disagreed with the trial judge and held that the notice had been given on the day that it was sent by email. The following matters arose from the decision of Fraser JA (with whom the other members of the Court agreed):

• That under the Act, the appellant would have effectively directed the respondent to rectify the building work if the appellant had communicated that direction to the respondent in any way which led to the respondent actually being informed of the contents of the direction on 17 December 2010.

• The Act by its terms does not require that the document containing the notice be "served" on a person or "delivered", "given", "notified" or "sent" or that the manner of making the direction needs to be in a manner which was ejusdem generis with "serve";

• If the Act requires that the respondent be actually informed of the contents of the direction that will have occurred if the electronic direction attached to the email was received and opened by an employee who was authorised by the respondent to receive the direction on its behalf.

• As the respondent was the party which bore the onus in seeking the declaration that the notice was void it bore the onus of proving the facts necessary to justify that conclusion. That meant that it had to establish that the electronic direction attached to the email was not received and opened by an employee of the respondent acting within the scope of their employment.

• On the evidence available the inference to the above effect could not be made.

The case also provides a most interesting discussion and analysis of the sufficiency of evidence required to enable a Court to draw inferences from practices in an organization. In summary, mere generalizations about the operation of a business will not suffice. The particular inference to be drawn has to be identified and precise evidence concerning that issue has to be adduced.

Appeal Status: No Appeal Pending - Appeal Period Expired

J & D Rigging Pty Ltd v Agripower Australia Ltd [2013] QCA 406

The first instance decision in this very important case has been previously referred to in this publication. The Court of Appeal decision is also likely to generate interest given the large amount of construction work performed in and around mining sites. Given the similarity of legislation across Australia, this latest decision will also be of national importance.

On this appeal the Court considered the scope of the expression “forming, or to form, part of land” in the definition of “construction work” in the Building and Construction Industry Payments Act 2004. The brief facts were that the contract in question provided for the contractor to dismantle and remove to another site, certain mining plant and equipment consisting of a large storage and treatment plant. The plant was designed to be capable of movement from place to place despite its size. The essential question for the Court was whether or not the contracted work was “construction work” which was defined to include, inter alia, the “dismantling of buildings or structures, whether permanent or not, forming, or to form, part of land”. If the work was not within that defined meaning the adjudication decision made in favour of the contractor would have been void. The focus of the decision of the Court was upon the meaning of the expression “forming or to form part of the land” and whether or not that expression imported into BCIPA the common law principles relating to fixtures? The Court of Appeal adopted an intensely purposive approach to the construction of the relevant BCIPA provisions. In doing so, it eschewed the notions that the word “land” in the statute was used in its “legal, technical sense” and that the Parliament intended to import the common law concepts of “fixtures” in that context. It was held that the importation of such concepts was inappropriate when considering statutes which did not deal with property rights but dealt with the rights of contractors to recover payments for the carrying out of construction work. In construing BCIPA the Court held that the “ordinary” as opposed to technical meaning of the word “land” applied and in determining whether or not the structure was part of the land it was not relevant to consider the intention of the parties. The Court provided the guidance about determining the question of whether the structure formed part of the land in the following terms:

“The ordinary meaning of the words in s 10 anticipates a practical inquiry into the physical relationship between an item and land, by asking in the case of s 10(1)(a) whether the building or structure forms, or is to form, part of land. … The inquiry is into the physical state of things, not the intention of parties at the time the building or structure was constructed, possibly many years earlier.”

The Court also rejected the contention that the existence of a Mining Lease over the land in question did not impact upon the construction of the Act and the issue was whether or not the building in question formed part of the physical land. In the result it was held that the temporary structures did form part of the land.

Appeal Status: No Appeal Pending - Application for Special Leave to Appeal refused by the High Court on 16 May 2014

B M Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd [2013] QCA 394

In this matter the respondent, which had constructed a dam for the appellant, had lodged a payment claim under BCIPA and had subsequently obtained an award (as a progress payment) from an adjudicator for the sum of about $25 million.  The primary judge found that the adjudicator had made a jurisdictional error but had then exercised his discretion not to make a declaration of invalidity on the condition that the respondent repay all but a certain amount of the money received as a progress payment.

The first question which arose was whether or not an error in the construction of the contract between the appellant and the respondent by the adjudicator amounted to a jurisdictional error or was merely an error within jurisdiction?  After considering the relevant principles from the decisions in Craig v South Australia (1995) 184 CLR 163 and Kirk v Industrial Court (NSW) (2010) 239 CLR 531, the Court identified that it is necessary to identify with precision what the adjudicator did and how, by reference to the provisions of the Act, it was alleged that he exceeded his powers. In the matter before the Court it was observed that an erroneous construction of a provision of the building contract as to whether or not certain work was or was not within the scope of the contract, could amount to a jurisdictional error.

The second issue determined by the Court was that once it is identified in contested proceedings that an administrative decision is infected by jurisdictional error, the decision is void for that reason and the Court has no ability to give it any effect.  Such an administrative decision is not one which is binding unless and until set aside.  If, however, the decision is not challenged it can be assumed to have effect, however, that is a different case.  In the result, the appellant was entitled to recover all of the money it had paid in satisfaction of the adjudicator’s decision. 

A final matter dealt with by the Court was the rate of interest which was payable on the amount which had to be returned to the appellant.  It appears that the Court did not endorsed the principle that interest was payable at an established rate unless some other rate is shown to be more appropriate.  It also seems that the Court did not accept that the practice of the Court was, necessarily, to award interest on that rate specified in practice directions from time to time relating to default judgments.  Section 58(3) of the Civil Proceedings Act 2011 provides for the payment of pre-judgment interest “at the rate the court considers appropriate”.   However, in the circumstances of the case the Court ordered that interest be payable at the rate of 8.75% being the rate of interest prescribed by Practice Direction No 7 of 2013, pursuant to s 59(3) of the Civil Proceedings Act 2011 (Qld), in respect of money orders. 

Appeal Status: No Appeal Pending - Appeal Period Expired

Conveyor & General Engineering Pty Ltd v Basetec Services Pty Ltd [2014] QSC 30

In this matter the Applicant challenged an adjudication decision made under BCIPA on the basis that it was not duly served and, as a consequence, was denied natural justice by reason of not being able to respond to submissions made by the contractor who had sought the adjudication. The contractor had sent an email to the Applicant which had attached to it Adjudication Application forms and a letter. However, within the email was an earlier email which had links to Dropbox which contained the actual adjudication applications. Those Adjudication Applications were not accessed by the Applicant who was not aware of them. The Dropbox files contained the contractor’s submissions to the adjudicator and some evidentiary material. Importantly, it was observed that the files in the Dropbox files were not part of the email and its attachments and the question arose as to whether or not the Applicant had been properly served. In determining that the Applicant was not correctly served, McMurdo J identified the following points:
• BCIPA requires that the adjudication application (which includes any relevant submissions) is to be “served on the respondent”.
• Whilst s 39 of the Acts Interpretation Act permits the service of document by sending them by post, telex, facsimile or other similar facility, the expression “other similar facility” does not include email as the other mentioned modes are means of conveying a document to a particular place whereas an email is stored electronically on a server at a remote location not usually located in the intended recipient’s premises and further the receipt of an email requires some positive action on the part of the recipient to receive and read the email.
• Section 11 of the Electronic Transactions Act was inapplicable in the present case because (a) the Applicant had not consented to be served electronically and, further, (b) the material in the Dropbox files were not part of the electronic communications. The material in the Dropbox had not “been itself electronically communicated, or in other words communicated “by guided or unguided electromagnetic energy”. Rather, there was an electronic communication of the means by which other information in electronic form could be found, read and downloaded at and from the Dropbox website”. [28]
• Section 24 of the Electronic Transactions Act (which provides that an electronic communication is received when it “becomes capable of being retrieved by the addressee at an electronic address designated by the addressee”) was also inapplicable because the use of the Dropbox facility was not, itself, an electronic communication.
• In the result there was no “sending” of the entire adjudication application to the Applicant and no service of it.
• Apart from the above, the Applicant had not been “served” on the basis that it had become aware of the documents as in order for service to occur there had to be receipt of the document and it is insufficient merely to notify the intended recipient of the location of where the documents might be obtained.
In the result the adjudicator’s decision was void and of no effect.

Appeal Status: No Appeal Pending - Appeal Period Expired

Namour v Queensland Building Services Authority [2014] QCA 72

The nature of the obligation of licensees under the insurance scheme provided for under the QBCC Act has been the subject of a number of recent important decisions.  This further case deals with the scope of a licensee’s ability to challenge liability once the Commission has made a payment under the scheme.  Directors of corporate building contractors are responsible for the liabilities of their companies. Relevantly, s 71(1) of the QBCC Act provides that:

“If the authority makes any payment on a claim under the insurance scheme, the authority may recover the amount of the payment, as a debt, from the building contractor by whom the relevant residential construction work was, or was to be, carried out or any other person through whose fault the claim arose.”

In the matter before the Court, the Commission had revoked the licensee’s licence as the result of its allegedly refusing to provide documents to the Commission, as result of which it was unable to continue the construction of a number of houses.  The house owners made a claim under the statutory insurance scheme and the QBCC made certain payments in respect of those claims.  It then sought to recover the amount of those payments from Mr Namour, the director of the licensee company.  He opposed this on a number of grounds.  In dismissing his appeal the Court made the following observations:

Whether or not the licensee company’s licence was wrongly suspended did not affect the right of the QBCC to recover under the insurance scheme as the director’s liability under the second limb of s 71 was not preconditioned upon there being any “fault”.  See Mahony v Queensland Building Services Authority [2013] QCA 323.
In recovery proceedings by the QBCC, there is limited ability to raise a justiciable question that the payments purportedly made under the insurance scheme could not be properly described as such.  In particular:
There can be no argument that the loss which the consumer sustains as a result of the non-completion of building work is only loss which is sustained when the building contract is terminated by the consumer for some wrongdoing by the contractor.
The provisions of the Act make it irresistibly clear that the director of a company which is a building company under the Act will be liable in the defined circumstances to make a payment which would otherwise be payable only by the company.
It was not possible for the licensee to argue in the recovery proceedings, that the loss arose only as a result of the wrongful suspension of the company’s licence.  Any such dispute must be pursued in the review proceedings provided for elsewhere in the Act.
The scheme of the Act is to the effect that anyone who wishes to challenge whether the making of a payment under the insurance scheme (such as where it is alleged that there has been a wrongful suspension of a licence) is appropriate, must do so in proceedings before the payments are made.
Further, “[n]either the reasonableness of a payment made by the [QBCC] nor the amount owing by a claimant under the insurance scheme to the contractor is made a criterion of liability under s 71(1)”.  However, in the circumstances of the case, the Court did not decide whether or not any such issue was justiciable in recovery proceedings under s 71.

Appeal Status: No Appeal Pending - Appeal Period Expired

Northbuild Construction Sunshine Coast Pty Ltd v Beyfield Pty Ltd [2014] QSC 80

This interesting decision by McMurdo J deals with, in part, that difficult issue in relation to jurisdictional errors by adjudicators under BCIPA where the question is whether the adjudicator has intended not to apply the contract or has merely committed an error in the application of the contract. It also deals with that related issue concerning natural justice where the adjudicator makes a determination by an erroneous construction of the contractual rights by a reasoning process which had not been argued and of which the parties have had no notice.
The matter before the Court concerned three claims under a building contract, the most important of which were extension of time claims. In relation to the latter issue the principal contended before the adjudicator that the extension of time claims were not available to the contractor under the contract because the contractual requirements for making extension of time claims had not been made before the occurrence of the relevant “reference date”. The Adjudicator determined that as the relevant delays had occurred before the reference date (even if the claims in relation to them had not been made before then) the claim should be allowed. This was clearly in error. However, the question then raised was whether or not it was a “jurisdictional error” which would be of no effect under the Act. In finding that the error was not a jurisdictional error McMurdo J noted that:

  • In an adjudication the identification of the terms of the relevant contract and their interpretation are matters within the scope of the obligations of the adjudicator such that any error committed in that process is not a jurisdictional error.
  • However, where an adjudicator is not meaning to apply the contract but instead allows the claim on some other basis the adjudicator thereupon misunderstands the scope of their jurisdiction.
  • In ascertaining which path an adjudicator had taken (either erring in applying the contract or not intending to apply the contract at all) it is necessary to carefully characterize the reasoning of the adjudicator.

In the matter before his Honour, it was found that the adjudicator had sought to apply the contract such that the error was not of a jurisdictional kind. However, as the manner in which the adjudicator had reached his decision was something which had not been agitated between the parties and of which the applicant did not have any notice, there had been a denial of natural justice in determining the matter on that basis without affording the applicant an opportunity to make submissions about it. The decision on the extension of time claims was therefore void.
It is noted that, in relation to some minor claims which the adjudicator had allowed, McMurdo J held that the adjudicator had not sought to apply the contract with the result that the determinations in those respects were also infected by jurisdictional error.

Appeal Status: No Appeal Pending - Appeal Period Expired

Civil Mining & Construction Pty Ltd v Isaac Regional Council [2014] QSC 231

This recent decision of the Supreme Court considers the interaction between contractual and statutory dispute resolution mechanisms.  The parties had entered a contract whereby the applicant, CMC, agreed to undertake road works for the respondent, the Issac Regional Council (the “Council”) – a contract in part governed by the provisions of the Building and Construction Industry Payments Act 2004 (“BCIPA”).  Following disputes regarding payment for work completed, CMC initiated a number of claims under the BCIPA to recover amounts it alleged were owed to it by the Council.  The first two of these claims were the subject of adjudications favourable to CMC, which were challenged by the Council and later declared void by the Court.  Subsequently CMC initiated proceedings under the dispute resolution provisions of its contract with the Council, and also made and then referred a new claim for adjudication.  See [4]–[11].  The Council challenged this claim alleging that, in the circumstances, it was an abuse of the statutory scheme as: (1) the present claim is almost entirely incorporated in previous claims which have been adjudicated, and these decisions have subsequently been set aside; (2) that the claim is substantially disputed by the Council and CMC is aware of this; and (3) that CMC has already invoked the dispute resolution provisions of the parties’ contract with regards to this same issue. [3].  CMC then applied to this Court for a declaration that its conduct – in referring an additional claim for adjudication despite being engaged in concurrent contractual enforcement proceedings – was not an abuse of process.  [1]

In addressing the Council’s contentions, the Court firstly considered the significance of the previously voided adjudications. Central to its reasoning was the fact that though previously set aside by this Court, this action was a consequence of procedural, rather than substantive defects in the previous adjudications and, thus the decision to set aside the adjudications simply put the parties in the same position as if there had been no adjudication.   [13]. Given this, and the fact that s 17(6) of the BCIPA permits subsequent claims which include amounts the subject of a previous claim, it was held that the previous adjudications did not make the claim-in-issue an abuse of process.  Id.  Briefly turning to the question of the effect of CMC’s knowledge that the Council “substantially disputed” the claim, the Court considered that this “could never be a bar to the pursuit of a claim under the [BCIPA], which provides claimants with the remedy of an adjudication in the very circumstance where their claims are disputed.” [14]. Finally, the Court considered whether CMC’s conduct in commencing and continuing effectively parallel proceedings under the parties’ contract, meant that its statutory claim was an abuse of process.  In addressing this question, the Court initially looked to the decision of the NSW Court of Appeal in Falgat Constructions v Equity Australia Corporation Pty Ltd, where Handley JA held, in similar circumstances, that there was no impediment to the concurrent pursuit of statutory and contractual proceedings so long as this “did not interfere with the fair trial of the court proceedings.” [15]-[16].  In light of this decision, and the absence of conduct by CMC, such as a breach of an undertaking to a court, see J Hutchinson Pty Ltd v Galform Pty Ltd; see also [18]-[21], which would operate to negate the well-established principle that the pursuit of concurrent remedies is not an abuse of process, [22], the Court denied the Council’s application.   

Appeal Status: No Appeal Pending - Appeal Period Expired

McNab Developments (Qld) Pty Ltd v MAK Construction Services Pty Ltd [2014] QCA 232

In this matter the Court of Appeal was concerned with an appeal from a refusal to set aside an adjudicator’s decision made under BCIPA for jurisdictional error.

In determining whether or not the adjudicator fell into jurisdictional error Gotterson JA accepted, as had the trial judge, that an error by the adjudicator who “misconstrues or misapplies a relevant contractual provision, and as a result, does not correctly decide the amount of the progress payment, if any, to be paid to the claimant does not, for that reason alone, make a jurisdictional error.”  See BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd [2012] QSC 346 at [56].  His Honour then dealt with the various grounds of appeal.

In relation to the allegation that the appellant was denied natural justice because the adjudicator did not inform it that she did not intend to determine that the date for practical completion was the date identified by either of the parties, his Honour:

  • accepted that a denial of natural justice would amount to a jurisdictional error thus rendering it void.
  • also accepted that a denial of natural justice will occur when, inter alia, “an adjudicator decides a dispute on a basis for which neither party has contended, unless it can be said that no submission could have been made to the adjudicator which might have produced a different result.” [30].
  • held that in the circumstances of the matter before the Court, the adjudicator had not determined the matter before her on the basis for which neither party had contended.

The appellant also relied upon “Wednesbury” unreasonableness as a ground for setting aside the adjudication based on the appellant’s reliance on a liquidated damages clause which it claimed had the effect of reducing the respondent’s claim.  In doing so it relied upon the proposition advanced in Queensland Bulk Water Supply Authority v McDonald Keen Group Pty Ltd to the effect that a decision which displays an extreme degree of unreasonableness being akin to that described in Associated Provincial Picture Houses Ltd v Wednesbury Corporation, does not amount to a decision for the purposes of s 26 of the BCIPA.  In this respect, his Honour held that:

  • Recently in the High Court in Minister for Immigration and Citizenship v Li the High Court confirmed that “unreasonableness” in the making of an administrative decision only applies to the exercise of a discretionary power granted by statute.  The power exercised by an adjudicator under BCIPA is not of that nature.
  • It is relevant that unreasonableness of the Wednesbury kind was not identified as a species of jurisdictional error in Kirk v Industrial Court of New South Wales.

In relation to certain variation claims, in respect of which the appellant had asserted the respondent sub-contractor had not complied with the contractual pre-requisites, the adjudicator had determined that it was for the appellant to establish that the contractual pre-requisites had not been met as that was not shown she allowed the respondent’s claim for the additional work done.  In relation to this claim, Gotterson JA:

  • noted that it was well established that an adjudicator was not entitled to allow amounts of a claim on quantum meruit basis.
  • agreed that if the effect of the adjudicator’s decision was to allow part of the claim on the basis of some extra-contractual common law right the decision would have been vitiated for jurisdictional error.
  • determined that the adjudicator may have made an error of law as to the construction of the contract, however, she had not allowed part of the claim on an impermissible basis.

It was shown that the adjudicator had wrongly failed to take into account a backcharge claimed by the appellant in respect of some of the work performed by the respondent sub-contractor.  The question which arose in this respect was whether or not this vitiated the decision?  In relation to this point Gotterson JA:

  • referred to and accepted the decision in Brookhollow Pty Ltd v R & R Consultants Pty Ltd to the effect that the mere failure by an adjudicator to consider each and every aspect of the claim does not mean that the adjudicator failed to address in good faith the issues raised by the parties.
  • held the failure to consider one small backcharge claim in the context of a large complex claim was attributable to oversight with the result that there was no absence of good faith on the part of the adjudicator and it did not invalidate the adjudication.

However, Morrison JA and Jackson J did not agree with Gotterson JA on this last point.  Morrison JA held that:

  • there have been substantial reservations expressed as to the validity of the approach in Brookhollow particularly because the concept of “lack of good faith” is unclear and issues raising that concept should be dealt with on the basis of a denial of natural justice.
  • there has been a long-standing and, as yet, unresolved debate about whether or not the concept of “lack of good faith” for jurisdictional error is narrow or wide.
  • the necessary requirement is that the adjudicator consider the provisions of the Act, the contract which he or she believes to be relevant, and the submissions of the parties which are believed to have been made.  A mere accidental or erroneous omission to consider a particular provision of the Act, a particular provision of the contract or a particular submission cannot wholly invalidate a decision.

Jackson J did not agree with either of the above approaches in relation to the failure of an adjudicator to deal with part of a claim or a response.  However, on the facts of the matter before the Court, his Honour held that the error was capable of being an “accidental slip or omission” within the meaning of s 28(2) of BCIPA and therefore was capable of being rectified by the adjudicator. 

Appeal Status: No Appeal Pending - Appeal Period Expired

Lean Field Developments Pty Ltd v E & I Global Solutions (Aust) Pty Ltd [2014] QSC 293

This interesting case concerned the interaction between statutory entitlements granted under BCIPA and the specific contractual terms agreed upon by parties to a construction contract.  Pursuant to the BCIPA, a person who has undertaken construction work is entitled to progress payments, and these become payable from a “reference date”, BCIPA s 12; the reference date being either the “date stated in, or worked out under, the contract” (emphasis added) or, if not provided for, the last day of the month in which the work was carried out.  BCIPA Sch 2.  

The dispute arose following the applicant’s, Lean Field Developments’ (“Lean Field”), failure to pay the first respondent’s, E & I Global Solutions’ (“E & I”), claimed progress payment.  Lean Field had engaged the services of E & I to supply services relating to high voltage and fibre optic cables.  [2].  Pursuant to this agreement, E & I was required to submit a draft claim for payment on a specified date each month (cl 33.7(a)), and, fourteen days later, submit a Payment Claim (cl 33.8(a)) – for the purposes of the BCIPA this later date was to be the “reference date”.  [8].  This process, however, was not followed and E & I issued a number of invoices for progress payment without first providing a draft payment claim – these invoices were paid without complaint.  [9]–[11].  In March 2014, E & I issued an invoice which Lean Field disputed, and, before the adjudicator, argued that it was invalid of the basis that E & I failed to comply with cll 33.7 and 33.8 by delivering a draft payment claim.  It was alleged that the consequence was that a “reference date” could not arise.  The adjudicator rejected Lean Field’s argument.  Lean Field sought to quash the adjudicator’s decision.  The Court addressed three questions, namely:

Did cl 33.8 provide how the “reference date” was to be worked out?
If so, were cll 33.7 and 33.8 “of no effect in respect of [E & I’s] statutory entitlement to a progress payment because of s 99 of the Act;” and
Was Lean Field precluded on the grounds of waiver or estoppel from relying on non-compliance with cll 33.7 and 33.8?

“Worked Out”

The Court first addressed the question of whether cl 33.8 provided how the reference date was to be “worked out”, specifically whether the statutory definition allowed a “reference date” to be “worked out” by reference to post-formation conduct, rather than by application of the terms of the contact alone.  [23]–[25].  Looking to the ordinary meaning of “worked out” – “a process of calculation”, [30], the Court concluded that there was nothing in the Act which precluded the application of this definition, [32] and thus a reference date could be “worked out” using a contractual formula which utilised a post-formation fact, including one dependent upon the conduct of a contractual party as a pre-requisite for the determination of a reference date.   [36]–[38].   The Court considered, however, that in order to preserve the Act’s objective to provide a statutory entitlement to a progress payment, that s 12 of the Act provides there were limits on the validity of contractual provisions which regulate when a reference date will arise.  These limits are expressly articulated in s 99 which operates to void provisions of a relevant agreement which are contrary to the BCIPA, and thereby invalidates those contractual conditions which would “prevent or inordinately delay” a reference date from arising.  [34], [35]; see also [49]–[80].  Given this conclusion, the Court then addressed whether the requirements of cll 33.7 and 33.8 operated to “prevent or inordinately delay” a reference date from arising and as such were invalidated by the application of s 99.  Though “contractual provisions captured by the unambiguous terms of the definition of “reference date” can qualify the statutory entitlement to a progress payment,” [64], see John Holland v Coastal Dredging, the Court concluded that cll 33.7 and 33.8 were not captured by this definition as the requirement to submit a draft payment claim was held to lack utility in making a payment claim under the BCIPA and being paid upon that claim and thus was an “impermissible constraint” on the right to claim for payment.  [87]–[88].  On this basis the Court held the cll 33.7 and 33.8 were ineffective by reason of s 99 of the BCIPA.  [91], see also [92]–[94].   

Waiver

Though unnecessary given its previous conclusion, the Court briefly considered whether Lean Field had waived or was estopped from insisting upon compliance with cll 33.7 and 33.8 given its previous conduct.  [98].  On the evidence before it, the Court concluded that Lean Field’s conduct had not amounted to an election between inconsistent rights, nor was it such as to represent to E & I that a different relationship existed between the parties,  [104]–[108], and thus held that neither waiver nor estoppel had been established.  [110].

For the aforementioned reasons the Court held that the adjudicator’s decision was not affected by jurisdictional error and dismissed Lean Field’s application.  [111]–[112].

Appeal Status: No Appeal Pending - Appeal Period Expired

CMF Projects Pty Ltd v Riggall [2014] QCA 318

In this matter the appellant had entered into a “costs plus” contract with the respondent in relation to the renovations of the respondents’ residence.  In response to the defence that the plaintiff was not entitled to recover because the contract did not comply with the requirements of the Domestic Building Contracts Act 2000 (the “DCBA”) in respect of “costs plus contracts” the appellant pleaded an alternative claim for a quantum meruit.  At first instance the paragraphs of the pleading in relation to the quantum meruit claim was struck out on the basis that DCBA impliedly excluded such a claim.

The Court of Appeal (Gotterson JA with whom Holmes and Morrison JJA agreed) upheld the appeal on the basis that the common law claim for a quantum meruit was not excluded by the operation of the Act.  The following points arise from the decision of Gotterson JA:

A claim in quantum meruit is not a claim on, or for the enforcement of, the contract but a claim which is independent of contract.

By the quantum meruit claim in the present matter the appellant was not attempting to enforce the cost plus contract which was not in accordance with the DCBA.

Although there existed a provision in the DCBA which provided for a builder who had not complied with the requirements of a cost plus contract to apply to QCAT for an award of the cost of providing the contracted services and a reasonable profit (s 55(4)), that provision did not impliedly exclude the right to recover upon a quantum meruit

In determining whether or not the statutory provision excluded the claim, Gotterson JA considered that there was a presumption of statutory interpretation against the abrogation of common law rights and that if such rights are to be abrogated such an intention should be clearly expressed even if that be by necessary implication.

Here there was no necessary intention to exclude the right to recover under a quantum meruit claim.  The right granted by s 55(4) was not a right to recover a sum of money as compensation for the work done.  The right created by that section is much more limited than the rights which are enforceable by a quantum meruit claim such that those rights cannot be seen to have been provided in lieu of the right to pursue the quantum meruit claim.

[Editor’s Note for an explanation as to why the action of indebitatus assumpsit (being in this case the quantum meruit claim) was not an action “on the contract” see the discussion in Gino D’Alessandro Constructions Pty Ltd v Powis [1987] 2 Qd R 40.] 

Appeal Status: No Appeal Pending - Appeal Period Expired

Saipem Australia Pty Ltd v GNLG Operations Pty Ltd (No 2) [2015] QSC 173

This is a recent decision involving an interlocutory injunction application to restrain the respondent from demanding payment under two bank guarantees pursuant to a contract to construct a gas pipeline. [1].

The contract was entered into in 2011. [3]. Clause 5 required the applicant contractor to provide bank guarantees to secure its performance. [4] Clause 21.1(b) required the completion of certain stages of the work by specified dates. [5]. In the event mechanical or practical completion was likely to be delayed, cl 21.2 required the applicant to provide notice to the respondent. [6]. Pursuant to cl 35(a), if the applicant did not achieve completion by the required date, it was required to pay liquidated damages to the respondent. [7].

Respondent’s claims of delay under the contract

On 18 December 2014, the respondent gave two notices for delay, claiming liquidated damages. [9]. It required payment by 9 January 2015, reserving its rights. [11]. The appellant argued that it was entitled to extensions of time under cl 21, which would have the effect of extending the dates for completion.  It initiated the dispute resolution process under the contract.  [12].

Appellant’s case

The appellant sought an order that until determination of its originating application, the respondent be restrained from having any recourse to the bank guarantees, on the basis that:

  1. Clause 5.5(a) of the contract only entitles the respondent to enforce the bank guarantees “to recover any debt due”. The liquidated damages claimed are not debts due, and would be disallowed by an arbitrator;
  2. Section 67J of the Queensland Building and Construction Commission Act 1991 operates similarly, to restrict the respondent to using the bank guarantees for a circumstance where there is in fact an “amount owed”.  This cannot apply where there is no amount owed;
  3. The respondent did not comply with s 67J(2) of the Act as it did not give notice within 28 days after it became aware, or ought reasonably to have become aware, of its right to obtain the amount owed.  [17]–[21].

Issue (1)

Citing the authority of Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199, 241 – in which the High Court held that “[t]he basic proposition remains that where interlocutory injunctive relief is sought in a Judicature system court, it is necessary to identify the legal (which may be statutory) or equitable rights which are to be determined at trial and in respect of which there is sought final relief which may or may not be injunctive in nature” – the respondent submitted that the appellant had no case for final determination which could provide a legitimate basis for an interlocutory injunction. [23].

Preferring the alternative approach, his Honour characterised the declarations sought as final relief, albeit noting that there was a claim for “further or other orders” in lieu of any specific claim for a final injunction:

“Accepting for present purposes that this court could not determine the merits of the disputes as to whether GLNG is entitled to liquidated damages as it is claimed, it does not follow that no final relief can be granted as is sought by the Originating Application.” [26].

It followed that the appellant’s application for interlocutory relief was not precluded, due to its claim of contractual rights which triggered injunctive relief prior to final adjudication.  [27].

Issue (2)

The appellant contended that s 67J(1) only allows the contracting party for a building contract to use a security where there is an actual amount owed to it.  [28]. His Honour held that this was not the case. [32] Instead, the section merely affects the right of a contracting party to use a security or retention amount by requiring the notice which it describes.  [33].

Issue (3)

In relation to issue (3), his Honour found that the respondent’s notice in relation to the mechanical compliance had been given too late to be compliant with s 67J(2): “Saipem has proved that GLNG may not use the securities for its claim for delay in achieving Mechanical Completion”. [35] In relation to the practical completion, his Honour noted that the respondent’s practical completion certificate was dated 10 December 2014.  Its notice was given within 28 days of that certificate.  However, the certificate certified the date of practical completion as 9 October 2014.  As such, in excess of 28 days passed between that date and the notice under s 67J. [39]. However, having regard to all the circumstances and to correspondence passing between the parties on the subject of completion, his Honour concluded that the applicant’s contention that the notice was too late for the practical completion claim was a weak one:

“As I construe the contract, there was no entitlement to liquidated damages until the date of Practical Completion was certified.  If I am incorrect in that construction, the question would be about when GLNG knew or ought to have known that Practical Completion had been achieved, because there could be no awareness of the amount owed without an awareness of the period of delay.  I would accept that if, upon the proper construction of the contract, that is a relevant question, then there would be some case for Saipem, from the fact that GLNG ultimately certified the date for Practical Completion as early as 9 October 2014.” [43].

Discussion – balance of convenience and construction of agreement

It was acknowledged that reputational damage would inevitably be suffered by the applicant in the event the guarantees were enforced [44] – recognised in the contract as a risk that should be borne in this circumstance. [60]. Therefore, the central question for determination was whether the addition of the cases of non-compliance with s 67J should offset the balance in favour of an injunction. [61], [62].

Evidently there would be no prejudice to the respondent were an injunction granted, as it would retain security of the guarantees.  However, it would not have the benefit of the money to which it was entitled.  [63].

Finding it “at least probable that Saipem could pay the amounts claimed, if it has to do so to avoid a demand upon the guarantees” [65], thus avoiding the prospect of substantial reputational damage, and in view of the relatively weak case in relation to s 67J for the notice about practical completion, his Honour made the following orders [68]–[69]:

  1. there will be an interlocutory injunction, until determination of the Originating Application or further earlier order, restraining GLNG from having recourse to any of the bank guarantees referred to in the interlocutory application filed 7 January 2015, to recover any of the sum claimed in relation to Mechanical Completion in a letter of 18 December 2014 from GLNG to Saipem.
  2. there will be an injunction for a period of 14 days restraining the respondent from having recourse to any of those guarantees for the payment of any of the sum claimed in relation to Practical Completion in a letter from GLNG to Saipem of 18 December 2014.

Appeal Status: No Appeal Pending - Appeal Period Expired

Nichols v Earth Spirit Home Pty Ltd [2015] QCA 219, 6 November 2015

In this matter, the applicant sought leave to appeal against a decision of QCAT confirming a decision at first instance to enforce a wholly oral building contract. The relevant oral agreement had been entered into by the parties following the partial construction of 10 houses. It was agreed that the applicant and others would pay the respondent a weekly management fee to complete the project, and that $250,000 would be paid to the Master Builders Association in order to secure that amount. [5]. Subsequently, a dispute regarding payment of the weekly management fee arose.  Both at first instance and on appeal, QCAT determined that the applicant was liable to pay the respondent the weekly management fee, and that the sum of $250,000 held by the Master Builders Association be paid to the respondent. [7].  The appeal tribunal rejected the applicant’s submission that s 67G of the Queensland Building and Construction Commission Act 1991 rendered the wholly oral building contract unenforceable. [8]. That section provides that a building contractor who enters into a building contract that is not in writing commits an offence.

Applicant’s submissions

The applicant argued leave to appeal should be granted since the appeal raised an important question regarding the enforceability of an entirely oral building contract in circumstances where it was an offence to undertake building work above a certain cost without a written contract. [12].  It was further submitted that the Appeals Tribunal had erred in its interpretation of the Act in finding that a wholly oral building contract was not void or unenforceable, and failed to consider whether, as a matter of public policy, such an agreement was enforceable at the suit of a builder who committed an offence by entering into it.  Referring to Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410, it submitted that as a matter of principle, a contract at the suit of a party who has entered same with the object of committing an illegal act should not be enforced. [13].

Respondent’s submissions

The respondent argued that there was no basis in law to find that the wholly oral building contract was illegal, nor that public policy required that it ought not to be enforceable.  It also contended that the applicant would not be subjected to any substantial injustice, since the respondent would be entitled to payment on a restitutionary basis. [15]. Relying upon Freedom Homes Pty Ltd v Botros [2000] 2 Qd R 377, the respondent argued a building contract not reduced to writing is not invalidated, even if the failure to do so constitutes an offence. [16] In any event, the respondent submitted that even if the building contract was indeed illegal and unenforceable, it was entitled to the sum due, based on quantum meruit and unjust enrichment: see Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498, as a clear legislative intent is necessary to abrogate or curtail common law rights: see CMF Projects Pty Ltd v Riggall [2014] QCA 318. [18].

Leave to appeal

The court did not hesitate to grant leave to appeal given the appeal raised a matter of law regarding the proper interpretation of significant statutory provisions and involved almost $250,000.  [19].

Enforceability of the contract

Noting the principles applicable to the enforcement of contracts whose making or performance is illegal, as summarised in Miller v Miller (2011) 242 CLR 446 – specifically, that whether an Act impliedly prohibits such agreements is always a question of construction, the same process applying in cases where the policy of the law renders contractual arrangements ineffective or void – the court considered the applicant’s contention that the contract between the parties was impliedly prohibited by the Queensland Building and Construction Commission Act 1991.

The court relevantly noted that s 67G of the Act, whilst providing that a builder who enters into a contract which is not in writing commits an offence, does not provide for any other consequences of a failure to comply with it.  The court contrasted ss 67U and 67W, which operate to specifically render particular contractual provisions void. [22]. As such, in delivering the lead judgment his Honour Justice Boddice indicated that that lent support for the view that s 67G did not impliedly render the contract unenforceable:

“The absence in the Act of any other consequences for a failure to reduce the contract to writing strongly supports a conclusion that neither the statutory provision nor consideration of the scope and purpose of the statute favours a finding that the Act impliedly prohibits enforcement of a wholly oral building contract.  There is no other purported illegality, and no other immoral transaction”. [24].

His Honour also referred to s 67E(1) of the legislation, which expressly states that if by entering into the building contract a party to that contract commits an offence, that fact alone does not have the effect of making the contract void or voidable.  [25].

As for the argument that as a matter of public policy, the agreement was unenforceable at the suit of a builder who committed an offence by entering into it, the court, noting the observations of Justice Kirby in Fitzgerald v FJ Leonhardt Pty Ltd (1997) 189 CLR 215, formed the view that in the absence of any deliberate attempt by the respondent to circumvent the statutory scheme established by the Act [30] nor anything in his conduct justifying such a conclusion, having regard to the legislative provisions and all of the circumstances of the case, principles of public policy simply did not favour a finding that the wholly oral building contract was unenforceable. [31], [32].

In the result, leave to appeal was granted but the appeal was dismissed with the applicant ordered to pay the respondent’s costs of the appeal on the standard basis.

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Gambaro Pty Ltd as Trustee for the Gambaro Holdings Trust v Rohrig (Qld) Pty Ltd; Rohrig (Qld) P/L v Gambaro P/L [2015] QCA 288

In this matter the Court of Appeal considered the situation where a principal who had paid to a contractor the amount found to be due by an adjudicator, sought to recover the sum in curial proceedings.

Gambaro had engaged Rohrig to undertake construction and refurbishment work on a building in Caxton Street.  The contract was a “guaranteed maximum price” contract.  Rohrig made various claims for progress payments, the last of which related to work done up to 24 April 2014.  The contract contained the standard form provision for the making of progress payments (“clause 37”).  On 27 April 2014, Rohrig issued a final payment claim which was in excess of $2m.  Gambaro disputed the claim save for $57,000 which it paid.  The adjudication process was pursued by Rohrig and the adjudicator determined that Gambaro was required to pay a further $956,788.  Gambaro paid substantially all of that amount; being a sum of $913,014.  It then commenced proceedings for a declaration that it was not liable for the payment of that amount, an order that Rohrig make restitution of the amount and various consequential orders.  The final certificate for amounts payable would issue after the defects liability period, which was a year after the date of practical completion.

The main issue on the appeal was whether, in the absence of any determination of the contractual remuneration to which Rohrig will be entitled upon final completion of the contract (being after the defect liability period has expired), Gambaro is entitled to restitution of the amount by which the adjudicated amount in respect of variations exceeds the total amount of the claim on the ground that it is unjust for Rohrig to retain the excess because that was not payable as a progress payment under the contract?  In this respect, Gambaro sought to contest the validity of the assessment of the liability on the progress claims as opposed to any assessment of the entitlement of the parties on all of the merits and contractual disputes. Gambaro asserted that it was entitled to seek declarations as to the entitlement of Rohrig as to the payment of the progress claims regardless of what the rights of the parties might be once the contract is completed. 

The Court rejected Gambaro’s claim.  It observed that the payment of progress claims were “on account” of the amount to be finally paid under the contract and the adjudicated amount under Building and Construction Industry Payments Act 2004 (BCIPA) wears the same character as a progress payment.  That was said to be consistent with “the purpose of BCIPA, as revealed by its provisions, which seek ‘to preserve the cash flow to a builder notwithstanding the risk that the builder might ultimately be required to refund the cash’ and ‘might not be able to refund moneys ultimately found to be due a risk which, as a matter of policy in the commercial context in which [BCIPA] applies, the legislature has, prima facie at least, assigned to the owner’.”  In this respect it was noted that the pleading in the present case did not contain an allegation that the amount paid by way of adjudication amounts did not exceed the contractual consideration on account of which the adjudicated amount was paid.  The allegation was merely that the adjudicated amount was in excess of the amount calculated by the superintendent, however, it was well established that the statutory right to payment was unaffected by the calculations undertaken by a superintendent or other authority appointed to value work under a contract.  It followed that even if it were the case that Rohrig was not contractually entitled to progress payment on account of the contractual remuneration cannot make it unjust for it to retain the amount on account of the amount actually due under the contract.  The Court considered the scope of the provisions of BCIPA and rejected Gambaro’s “rather startling proposition that the operation of Pts 2 and 3 of BCIPA were exhausted upon its payment of the adjudicated amount, in the sense that Rohrig thereupon, and without more, became liable to repay the adjudicated amount”. [39]. The Court summarised the position by saying:

“[40]        In summary, Gambaro’s pleaded claim must fail because it relies only upon contractual provisions  concerning the amount of progress payments to be paid on account of the contractual remuneration which do not detract from the statutory rights and liabilities created by  Pt 2 and Pt 3 of BCIPA, rather than upon contractual provisions which determine Gambaro’s liability for and Rohrig’s entitlement to the contractual remuneration on account of which the adjudicated amount of a progress payment was paid.” [40].

For the above reasons the appeal was dismissed and Gambaro’s statement of claim was struck out. 

Appeal Status: No Appeal Pending - Appeal Period Expired

Monadelphous Engineering Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2015] QCA 290

In this matter, the Appellant, Monadelphous Engineering Pty Ltd, entered into a contract with the respondent, WICET, for certain construction work relating to the construction of a coal export terminal at the Port of Gladstone.  The issue in dispute before the Court was whether or not the contract was a “building contract” for the purposes of Building and Construction Industry Payments Act 2004 (BCIPA).  In order to succeed it was required to establish that the earlier decision of the Court of Appeal in Monadelphous Engineering Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2014] QCA 330, had been wrongly decided.

The question of whether or not the contract was within the scope of BCIPA was relevant to the value of a bank guarantee given by to secure performance of the contract and the giving of notices by WICET if the bank guarantees were called on.  The Appellant asserted that the contract was not within the scope of the exclusionary regulations; that is that the work was not “of a kind” excluded by Sch 1AA of the Regulation.

The Court accepted that in order for the exclusion to apply the work only had to be of a kind referred to in the regulation and it did not have to be specifically referred to therein.  [9].  At first instance the Court had held that the work in question had a close connection with the construction of the jetty and wharf so that they would be of a kind referred to in item 19 of Sch 1AA; “Construction, maintenance or repair of harbours, wharfs and other maritime structures, unless the structures are buildings for residential purposes, or are storage or service facilities”.  

The Court rejected the submission that the decision in Monadelphous Engineering Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2014] QCA 330 was erroneous for a number of reasons:

The submission that the decision concluded that temporary works could not be “building work” was wrong.  What had been determined was that:

  • “certain works could be described as “temporary” in the sense that they were closely connected to the construction of the maritime structure, were not undertaken for any other purpose and would not endure beyond the performance of the contract.  These ‘temporary’ works had a sufficiently close relationship to the construction of the maritime structure to be work of a kind described in Item 19.”
  • The reference to the temporary character of works in the first decision was a relevant consideration in applying a broad and practical interpretation of the item in the regulation.  The Court was not imposing a temporal requirement in the words of the regulation where none existed.
  • There was no consistent theme amongst the matters listed in item 19 which would give rise to an interpretive genus which impacts upon the construction of the matters.  That is, there was no consistent theme as to why some matters were excluded from the general operation of the Act. [17].
  • The argument that the exception would only operate in respect of work “on” the maritime structure itself and not work which was physically separate from it was rejected.  Although the heading of Item 19 referred to “on” the words of the items refers to “construction ‘of’ harbours wharves and other maritime structures”.  Whilst the heading may be taken into account, proper effect had to be given to the words of the enactment.
  • Nor is there anything in the Item which requires that the work physically take place at the site of the harbour, wharf or other maritime structure.  The work may include building work associated with the construction of such facilities; such as work which is involved in the assembly of parts of one of those structures. There was no warrant for introducing a test of physically separation in relation to the construction of the Item.  The Court said:
  • “[22]   A broad and practical interpretation of such an exclusion is called for, and reliance on Item 19 would be defeated if a party could point to the fact that some work was not undertaken on the jetty itself.  The construction of harbours, wharves and other maritime structures necessarily require some works to be undertaken onshore.  For example, stairs, gangways and other means of access by which construction workers may safely move across the site and undertake construction work will typically need to be constructed.  The safety of workers and public safety may be enhancing by requiring gangways to be bolted to the ground and, on one view, such items become a ‘fixed structure’ notwithstanding their temporary character.  Such means of access have an obviously close relationship to the construction of the maritime structure.”
  • “The fact that part of the work of constructing a maritime structure occurs on land, and is undertaken in an area that is physically separated from the maritime structure that is eventually constructed does not necessarily prevent the work from being part of the construction of the maritime structure, and thereby fall within Item 19.”  [23].
  • Examining the closeness of the relationship between the work in question and the construction of the harbour, wharf or other maritime structure is a necessary part of the application of the Act.  In this case the temporary nature of the works confirmed the close relationship between the work in the installation of the items in question and the construction of a harbour, wharf or other maritime structure.
  • “The approach in MMM No 1 of considering the closeness or otherwise of the relationship between the works relied upon and the construction in question was appropriate.  Inquiring into the closeness of the relationship between the work in question and the creation of an item, such as a maritime structure, is a practical approach.  The ‘temporary’ character of certain structures which are erected simply for the purpose of carrying out the construction and which will not endure beyond the performance of the contract, points to the closeness of the relationship.  It is a relevant matter to take into account in applying the statutory test of whether work is of a kind referred to in an item in Schedule 1AA of the Regulation.” [39].

In the result the appeal was dismissed. 

Appeal Status: No Appeal Pending - Appeal Period Expired


Clubs and Associations back to top

Pine Rivers, Caboolture and Redcliffe Group Training Scheme Inc v Group Training Association Qld and NT [2013] QCA 358

The respondent was an incorporated association which consisted of members who were called “Group Training Organisations” or “GTOs”.  Those GTOs competed with each other to provide apprentice and training services to third parties.  Two of the appellants were members of the association’s management committee.  They sought orders under s 72 of the Associations Incorporations Act (“AIA”) that they were entitled, in the capacity as members of the management committee, to inspect and take copies of identified business documents of the association.  The question on the appeal was whether “a member of an incorporated association has a legally enforceable right under rules of the association which vest management of the association in a management committee to insist that the association permit management committee members to inspect and make copies of the association‘s documents for the purpose of fulfilling their duties to the association”?  The appellants were concerned as to the manner in which the association had been dissipating government funding to various GTOs and had sought production of financial documents relating to the disposition of that money to two particular projects.  In holding that the appellants were entitled to inspect the documents in question, the Court considered the authorities concerning the rights of company directors to inspect and copy documents for the purposes of the performance of their directors’ duties.  It was observed that such rights existed at common law and were not dependent upon the existence of statutory rights.  It was also noted that similar principles were applied by analogy in favour of persons charged by or under a statute with the management of corporations, statutory bodies, trade unions and government authorities.  The Court held that members of the management committee of incorporated associations would have the same rights as those other persons and those rights might be enforced under the AIA.  The right to inspect and copy documents was said to arise from the terms of the provisions of the AIA which contemplated incorporated associations which engaged in substantial financial transactions and that such associations would have management committees, the members of which would need to have access to the association’s documents for the purposes of carrying out their functions.  It was also said to arise from the fact that the characteristics of incorporated associations were substantial similar to the characteristics of companies.  In the result it was determined that members of a management committee of incorporated associations owe fiduciary duties to carry out their functions in the best interests of the association and access to documents was necessary to perform that duty.  In the result the Court ordered that the two committee members should have access to the documents in question.

Appeal Status: No Appeal Pending - Appeal Period Expired

Robson v Commissioner of Taxation [2015] QSC 76

This matter concerned the application of Pt 5.7B of the Corporations Act 2001 (Cth) to the winding up of an incorporated association. 

By way of background [4]–[6]:

On 2 August 2013, the court ordered, pursuant to s 90 of the Associations Incorporation Act 1981, that the second plaintiff be wound up as it was effectively insolvent.  The first plaintiffs were appointed as the liquidators.

The first plaintiffs claimed from the defendant “the sum of $117,616.00 as an unfair preference pursuant to the Corporations Act 2001”, on the basis that pursuant to s 588FF(1)(a) of the Corporations Act 2001 (Cth), the plaintiffs were entitled to apply for an order that the defendant pay to the second plaintiff an amount equal to some or all of the money that the second plaintiff paid to the defendant.

Section 588FF(1)(a) provides that a court may make such an order where it is satisfied that a transaction is voidable because of s 588FE of the Act.

The plaintiffs alleged that the second plaintiff made payments to the defendant with a view to reducing its taxation liabilities, and that those transactions amounted to unfair preferences under s 588FA(1) of the Corporations Act 2001 (Cth), since if the defendant were allowed to retain the payments, it would receive a greater amount than it would otherwise if each of the transactions were nullified, and the defendant was required to prove in the winding up. The plaintiffs contended that in any event, the transactions were insolvent transactions under s 588FC of the Act, and voidable under s 588FE(2). [7].

The parties separately applied for orders for the decision of a question separately before the trial of the proceeding, specifically whether the provisions of Pt 5.7B of the Corporations Act 2001 (Cth), including s 588FF, applied in the winding up of the second plaintiff as an incorporated association. [8].

In relation to the operation of Pt 5.7B, his Honour provided the following guidance:

   “On the proper construction of the CA, taken as a matter of the text of the whole of the legislation and as presently enacted, neither s 582 nor s 583 of the CA is the source of the liquidator’s power to apply for or the source of the Court’s power to make an order under s 588FF of the CA.  Instead, the source of those powers in the case of a Part 5.7 body lies in the provisions of Pt 5.7B and s 588FF themselves, by reason of the defined meanings of “company” and ‘transaction’ in s 9 of the CA”. [37].

Given the circumstances of the dispute, and preferring the interpretation that would best achieve the purpose of the legislation, his Honour determined that, on its proper construction, s 91(2) of the Associations Incorporation Act 1981 did not operate to apply Pt 5.7B of the Corporations Act 2001, including s 588FF(1)(a), to the winding up of an incorporated association under s 90 of the Associations Incorporation Act 1981 as neither s 582 nor s 583 of the Corporations Act 2001 (Cth) applies Pt 5.7 or s 588FF to a Part 5.7 entity. [69].

In the result, his Honour determined that the provisions of Pt 5.7B of the Corporations Act 2001 (Cth) and in particular s 588FF did not apply in the winding up of the second plaintiff, entering judgment for the defendant in the proceeding started by claim. [71].  

Appeal Status: No Appeal Pending - Appeal Period Expired

Gould v Isis Club Incorporated [2015] QSC 253, 28 August 2015

In this matter, the applicant’s membership of the respondent association – a social club incorporated under the Associations Incorporation Act 1981 [4] – had been terminated following her alleged breach of its rules. The issue before his Honour was whether there had been a breach of natural justice effectively negating that decision.

In addressing whether the respondent’s decision should be set aside, his Honour observed that s 71(3) of the Act required that, as an incorporated association, the respondent follow the rules of natural justice in adjudicating upon the rights of its members as conferred by its rules. [5]. He also noted that the rules themselves dictated that prior to the termination of a member’s membership, the member be given “a full and fair opportunity to show why the membership should not be terminated”. [8].

The requirements of natural justice are not inflexible but depend on “the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject matter that is being dealt with and so forth”: see Russell v Duke of Norfolk [1949] 1 All ER 109 at 118 per Tucker LJ quoted in Ex Parte Angliss Group (1969) 122 CLR 546 at 552; 43 ALJR 150 at 151; and Kioa v West (1985) 159 CLR 550 at 563 per Gibbs CJ, 594 per Wilson J, 612–615 per Brennan J. Whilst social clubs are still bound by the rules, they are somewhat relaxed: see Australian Workers’ Union v Bowen (No 2) (1948) 77 CLR 601 at 628. However, that is not to say that the fundamental rules – such as accessibility to a fair hearing – are able to be disregarded by such entities: see Hall v The NSW Trotting Club Limited [1997] 1 NSWLR 378. [12].

In examining the factual background to the matter, his Honour noted that the applicant had been a participating member of the respondent club since 2011. In October 2014 a new management committee was elected. [17]. On 15 February 2015 that committee decided to terminate the applicant’s membership, [18] due to alleged “injurious and prejudicial” behaviour and conduct. [19]. The various correspondence between the parties indicated that the management committee consequently banned her from entering the club premises. The applicant stated that she was the only person in the district who had been so banned or had their membership terminated, and stated that these actions caused her personal and professional detriment. [32].

The applicant’s central complaints were threefold:

  • There was an apprehension of bias, based on the language and tone of the letters of 20 February and 25 March, suggesting that the committee had pre-judged the matter;
  • That correspondence “failed to identify the critical issues and to contain sufficient information to enable her to properly respond to the allegations”;
  • That insufficient time was allowed to allow her to properly and adequately prepare her defence to the charges outlined. [35].

Adequate Notice

His Honour identified “several difficulties with the processes” adopted by the management committee [37] from an adequate notice perspective. The applicant was not afforded any proper notice of the charge against her [38] and the letter advising her that she had until 31 March 2015 to demonstrate why her membership should not be terminated was lacking in detail. [38]. His Honour took the view that she had been left “in the dark and could make no meaningful response” [40] in circumstances where she was not fully informed as to the precise allegations. [48].

Time to Respond

His Honour also noted that the applicant had been given a very short period of time within which to prepare her defence: an initial six weeks, but then a mere six days to meet further detailed allegations. In his view, six days was “far too short a period to enable any meaningful defence to be raised to the allegations” [52] and it was “simply unfair” to expect her to. [54].

Apparent Bias

With regards to the issue of apparent bias, his Honour stressed that it is fundamentally important to keep an open mind until a defence is heard. [61]. Whilst recognising the difficult position the committee found itself in, of being both prosecutor and judge [62], in applying the test in Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 he found that the relevant determination in the matter preceded hearing from the defence, since the committee stated that they felt “compelled” to terminate the applicant’s membership. [63]. In his Honour’s view, doing so prior to the defence case being heard “indicates pre-judgement that is the very antithesis of affording natural justice”. [63].

Conclusion

After viewing the decision-making process in its entirety and not being satisfied that the requirements of natural justice were met, his Honour declared that the decision of the committee terminating Ms Gould’s membership was void and ordered that it be set aside. He ordered that the respondent pay the applicant’s costs. [78].

Appeal Status: No Appeal Pending - Appeal Period Unexpired


Constitutional Law back to top

Scriven v Sargent [2014] QCA 133

This most interesting decision of the Court of Appeal considered the effect of the Constitution, in particular s 51(xxxi) – power to acquire property on just terms – on the operation of State legislation. This matter arose from a decision of the District Court refusing the applicant’s request for leave to amend his notice of appeal.  The Applicant had previously been convicted in the Magistrates’ Court of contravening s 4.3.1 of the Integrated Planning Act 1997 (“IPA”) (carrying out “assessable development”, specifically in this matter the clearing of freehold land, without a permit).  Before the District Court the applicant sought to amend his notice of appeal to include the ground that the Vegetation Management and Other Legislation Amendment Act 2004, (VMOAA), which had amended the definition of “assessable development” such that it encapsulated his conduct, was invalid. The applicant contended that this invalidity arose because the amendment had been made pursuant to an agreement or an informal arrangement between Queensland and the Commonwealth, and it constituted an acquisition of property within the meaning of s 51(xxxi) on other than just terms. [3]. The primary judge considered the proposed amendment was futile and refused to grant the applicant’s request. It is this decision that was before the Court.

For the purposes of the appeal the Court assumed in favour of the defendant that there had been an “agreement” between the State and the Commonwealth and that State legislation which restricted clearing of vegetation conferred a benefit on the Commonwealth under its international obligations and, in particular, the commitments of the Kyoto Protocol.  It therefore confined its reasons to two issues: firstly, whether there had been an acquisition of property; and secondly, whether the challenge to the validity of the State legislation was arguable.

Acquisition of Property

Central to the applicant’s claim was that it was arguable that there had been an actual “acquisition of property by the Commonwealth, the State or another”. [16]. In addressing this issue, the Court first undertook an examination of the first instance decision of Emmett J in Spencer v Commonwealth (which subsequently made its way to the High Court in relation to the principles to be applied in granting summary judgment).  In that case it had been held that it was arguable that despite not creating any binding obligations on the Commonwealth, its ratification of the Kyoto Protocol and the consequent benefit it derived “in relation to its international obligations by reason of restrictions imposed on the clearing of native vegetation and that to achieve that benefit by other means could incur substantial expense” could amount to an acquisition of property by the Commonwealth, see discussion [17]–[19]. This decision, however, is somewhat countered by the High Court’s decision in JT International SA v Commonwealth where the majority of the Court concluded that the interest “acquired” must be a proprietary interest. [23]. Despite the High Court’s decisions in these cases and the apparent strength of the respondents’ arguments, see [20]–[24], however, the Court considered that, though it was difficult to see “how the Commonwealth might have obtained any proprietary interest relating to the applicant’s land” in the circumstances given the evidentially underdeveloped nature of the matter, the proposition was not so “manifestly untenable” that it would be futile to allow the applicant’s proposed amendments.  [25].

Challenge to Validity of State Legislation

Crucial to the applicant’s claim was that the State legislation which effected the alleged acquisition was arguably invalid because the applicant was not compensated for this acquisition. [26]. More specifically, the applicant contended that the VMAOO 2004 was invalid pursuant to s 51(xxxi), because the alleged acquisition “was carried out pursuant to an agreement or informal arrangement with the Commonwealth entered into for the purpose of avoiding … s 51(xxxi) of the Constitution.” [29]. The Court was wholly unconvinced by this argument, concluding that it was “established beyond argument … that State legislative power is not limited [by s 51(xxxi)]. [20]. In reaching this conclusion, the Court looked to decisions of both the High Court and Federal Court, in particular PJ Magennis v Commonwealth which had held that “the motives of the State and Commonwealth legislatures were “legally unimportant” and that if the legislatures acted within the law, “the intent of either or both to evade the constitutional limitation of Commonwealth legislative power is immaterial” in determining validity; [31]  and the subsequent affirmation of this principal in Pye v Renshaw. [36]–[37], [46].  As a consequence, the Court refused the application.  [48].

Appeal Status: Application for Special Leave refused.

Flegg v Hallet [2014] QSC 278

(This summary was prepared by Mr David Ananian-Cooper of Counsel)

This decision concerned the admission of evidence relating to the tabling of a lobbyist register at an estimates hearing of the Transport, Housing and Local Government Committee of the Legislative Assembly. During the estimates hearing, the plaintiff, at that time the Minister for Housing and Public Works, stated his belief that the lobbyist register was “very accurate” (the accuracy statement). The defendant subsequently published statements relating to the plaintiff including disputing the accuracy of the register. The plaintiff brought proceedings against the defendant in defamation. The accuracy of the lobbyist register is in issue because the plaintiff alleges as a basis for an award of aggravated damages that the defendant published the relevant statements, making the pleaded imputations, when he knew or ought to have known those imputations to be untrue. The defendant denies this allegation on the ground that at the time he did not believe the imputations to be untrue.

Peter Lyons J considered the application of ss 8, 9 and 36 of the Parliament of Queensland Act 2001 (“Parliament Act”) to the admissibility of the defendant’s evidence tendered to prove that he believed the imputations to be true. The plaintiff submitted that evidence impermissibly “impeached” the lobbyist register. Counsel instructed by the clerk of the Parliament was invited and made submissions amicus curiae.

Reflecting art 9 of the Bill of Rights (1 W & M, 2d sess, c 2, 1688), s 8 of the Parliament Act provides that: “The freedom of speech and debates or proceedings in the Assembly can not be impeached or questioned in any court or place out of the Assembly.” It was held that this privilege belonged to the Assembly, and not its members. Consequently, it was held that the privilege was unaffected by the fact that a member of the Assembly had commenced proceedings the defence of which, in the defendant’s view, called for impeachment of the speech, debates or proceedings of the Assembly: applying Prebble v Television New Zealand Ltd [1995] 1 AC 321 and Rann v Olsen (2000) 76 SASR 450; disapproving Wright and Advertiser Newspapers Limited v Lewis (1990) 53 SASR 416.

His Honour then considered the exception in s 9(3) of the Parliament Act applicable to documents tabled to a committee, and authorized by that committee to be published. In regards to such documents, s 8 is deemed not to apply “in relation to a purpose for which [the document] was brought into existence other than for the purpose of being tabled in, or presented or submitted to, the Assembly or a committee or an inquiry”. Having regard to the relevant terms and objects of the Public Records Act 2002, the Right to Information Act 2009 and the Information Privacy Act 2009, it was held that a purpose for which the lobbyist register was brought into existence was “the creation and maintenance of a reliable record of contacts between lobbyists … and a Minister … to enable public scrutiny of such contacts and their outcome” (at [33]). Consequently, and giving the phrase “in relation to” a broad reading, it was held that there was a sufficient connection between the purpose for which the lobbyist register was brought into existence and the circumstances in which the proposed challenge to the register would arise in the proceedings.

Separately, s 36(1) purports to exclude any evidence “of an answer given by a person before the Assembly or a committee, or of the fact the person produced a document or other thing to the Assembly or a committee”. While acknowledging the broad literal meaning of this exclusion, it held to have a narrow meaning limited to the privilege against self-incrimination. The following considerations were relevant to this conclusion:

  1. the major intrusion that such an extension of parliamentary privilege would represent: Daniels Corporation International Pty Ltd v ACCC (2002) 213 CLR 543 at [11];
  2. the inconsistency with the effect of the application of the exception in s 9(3), described above;
  3. the reference to the privilege against self-incrimination in the heading to the provision’s immediate predecessor in s 26(9) of the Parliamentary Committees Act 1995; and
  4. the parliamentary intention expressed in the Explanatory Note to s 36(1) to “faithfully” reproduce s 26(9), and thus not to modify the field of operation of the section other than perhaps to expand it to a case where objection to evidence is taken on the basis of privacy and irrelevance.

Consequently, it was held that the exclusion in s 36 should be read as operating only in respect of an answer given, or to the production of a document, as the result of compulsion notwithstanding objection, either under ss 33(5)-(8) or ss 32(5) and (6) of the Parliament Act. As such, it was held that s 36 did not apply to the evidence proposed to be adduced in the proceedings.

Appeal Status: No Appeal Pending - Appeal Period Expired


Contracts back to top

Jamieson v Westpac Banking Corporation [2014] QSC 32

This decision is one of the more important handed down by the Supreme Court in a number of years. Its principal concerns are the related topics of causation and the assessment of damages. Of particular importance is the discussion of causation of damage in pure economic loss cases both at common law and under statute. In it, Jackson J carefully dismantles the reasoning of the High Court in Murphy v Overton revealing that it lacks either coherency or consistency in the areas of causation and assessment of loss. The identification of those significant inconsistencies effectively consigns it, at long last, to desuetude.
The circumstances concerned the provision of investment advice by the defendant bank, Westpac, which had been prepared by one of its financial advisers to the effect that the plaintiffs should borrow $5 million from Macquarie Bank and invest it in a managed investment scheme. Advice was also given that the plaintiffs make certain “undeducted” contributions to their self-managed superannuation fund. Both investments were unsuccessful. The Bank, by its financial adviser, had contravened the ASIC Act and had failed to exercise reasonable care in breach of contract and in breach of the common law duties which it owed.
The major issue was the scope of the loss which the plaintiffs had sustained. The Bank asserted that the loss should be limited to the difference between the purchase price of the investment and its true value at the time of purchase. In discussing the matter his Honour made a number of important observations concerning causation and the measure of loss:

  • • Even though the parties before the Court had not raised the applicability of s 11 of the Civil Liability Act the Court was required to consider that provision when considering causation.
  • • That the decision in Potts v Miller is consistent with the compensatory measure of damages, being to restore the plaintiff to the equivalent economic position that they would have been in had they not acted on the wrongful inducement. However, a wronged plaintiff in these types of circumstances is not limited to recovering the difference between the price paid and the true value, and they do not fail to recover by not proving what similar or alternative transaction they would have entered into if they had not entered into the transaction which they did.
  • • That the decision in Murphy v Overton gives rise to substantial difficulties and is not consistent with the compensatory principles of damages where a party has been induced to act on a wrongful misrepresentation. Instead it works to allow “expectation losses” for essentially tortious conduct. After a lengthy analysis of that decision his Honour said:

“[196] …The High Court’s reasoning in Murphy appears to permit and encourage an approach under which, unlike the limits of the compensation principle at common law, a plaintiff can recover the difference in value between an expected benefit or protection and the actual outcome, perhaps even though the induced transaction overall was profitable.
[197] The proof of the pudding, that Murphy is a difficult case, lies in the absence of any later robust analysis that will support the outcome. If there was a firm foundation for the decision, one might have expected that by now there would be cases that have applied the reasoning or referred to it as establishing some useful principle. There is not much of that kind.”

  • • That an appropriate alternative to assessment of loss by the application of Potts v Miller is the “net gains or losses” approach. That approach was appropriate in the circumstances of the present case such that there was no requirement for the plaintiffs to establish what the position would have been had they acted differently.

By applying these principles it was held that the plaintiffs were entitled to recover losses sustained by reason of the general market decline brought on by the GFC (which damages should be “grossed up” being before tax) as well as the ongoing interest payments in respect of which the plaintiff was “locked into”.

Appeal Status: Appeal Pending

Fearnley v Finlay [2014] QCA 155

This interesting case raised the question of “whether a person who is engaged in the business of agisting cattle on their land has a storer’s lien on the cattle for their lawful charges for storage, preservation and other expenses in relation to the cattle, under s 3 of the Storage Liens Act 1973 (Qld)?”.  The answer to that question is important given the vast size of the pastoral industry in Queensland and frequency with which agistment of livestock takes place, especially in times of drought.  The decision of the Court is also important as it deals with some important points of statutory construction.

The agreement for agistment was, as is common, founded upon an oral contract that the respondent would agist cattle on certain properties in consideration for the payment of agistment fees.  Based upon that simple agreement the respondent claimed that a lien arose under the Storage Liens Act for outstanding agistment fees and charges over the cattle which had been agisted under the agreement.  The Storage Liens Act 1973 was the updated and modernised Warehousemen’s’ Liens Act which was amended in 1995 to modernise the language.  The effect of the change of the wording in the Act from “Warehousemen” to “Storers” together with the wide definition of goods had the effect that the ordinary meaning of the words in s 3, “goods deposited with the storer for storage”, might have encompassed the situation where livestock were agisted. 

The decision of the Court was delivered by Jackson J (with whom Holmes and Morrison JJA agreed).  His Honour made a number of very important points with respect to statutory interpretation and, in particular, in relation to the varying weight to be given to the text as opposed to “context”.

  • His Honour succinctly identified the approach to the construction of statutes as:

“The method of the modern law of statutory interpretation requires that the ‘task of statutory construction must begin with a consideration of the text itself’ and ‘[s]o must the task of statutory construction end’, whilst also not forgetting that the ‘the modern approach to statutory interpretation ... insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise’”.

  • In relation to the matter before the Court, cattle were within the definition of “goods” in the Storage Liens Act.
  • However, for the Storage Liens Act to apply the goods must have been deposited with the storer “as bailee for reward” although that could apply to the holding of livestock in some circumstances.
  • His Honour identified that the agistment of cattle is not merely a contract of storage; livestock are agisted for the purposes of production as were the circumstances in the present matter.
  • Statutory “purpose” or “intention” for s 14A of the Acts Interpretation Act or for the purpose of the common law rules of construction are objective concepts and are matters which exist within the text and structure of the statute but may be ascertained by consideration of history and the surrounding common law.
  • An examination of the history of the legislation indicated an intention to alter the law to benefit warehousemen who did not have a common law lien in respect of storage costs.  The revision of the legislation did not operate to affect that position.
  • The long title of the Act identifying it as an “act to amend the law relating to the warehousing of goods” was also identified as an important part of the context of the Act.

In his reasons for decision, his Honour also identified at some length the nature of contracts of agistment, which may be of different kinds and which may or may not involve the owner parting with possession of the livestock.  He also discussed the principle of “legality” as it applied in the present case where an interference with property rights brought the principle into operation.

In the result the Court found that no lien arose under the contract of agistment.

Appeal Status: No Appeal Pending - Appeal Period Expired

Lean Field Developments Pty Ltd v E & I Global Solutions (Aust) Pty Ltd [2014] QSC 293

This interesting case concerned the interaction between statutory entitlements granted under BCIPA and the specific contractual terms agreed upon by parties to a construction contract.  Pursuant to the BCIPA, a person who has undertaken construction work is entitled to progress payments, and these become payable from a “reference date”, BCIPA s 12; the reference date being either the “date stated in, or worked out under, the contract” (emphasis added) or, if not provided for, the last day of the month in which the work was carried out.  BCIPA Sch 2.  

The dispute arose following the applicant’s, Lean Field Developments’ (“Lean Field”), failure to pay the first respondent’s, E & I Global Solutions’ (“E & I”), claimed progress payment.  Lean Field had engaged the services of E & I to supply services relating to high voltage and fibre optic cables.  [2].  Pursuant to this agreement, E & I was required to submit a draft claim for payment on a specified date each month (cl 33.7(a)), and, fourteen days later, submit a Payment Claim (cl 33.8(a)) – for the purposes of the BCIPA this later date was to be the “reference date”.  [8].  This process, however, was not followed and E & I issued a number of invoices for progress payment without first providing a draft payment claim – these invoices were paid without complaint.  [9]–[11].  In March 2014, E & I issued an invoice which Lean Field disputed, and, before the adjudicator, argued that it was invalid of the basis that E & I failed to comply with cll 33.7 and 33.8 by delivering a draft payment claim.  It was alleged that the consequence was that a “reference date” could not arise.  The adjudicator rejected Lean Field’s argument.  Lean Field sought to quash the adjudicator’s decision.  The Court addressed three questions, namely:

Did cl 33.8 provide how the “reference date” was to be worked out?
If so, were cll 33.7 and 33.8 “of no effect in respect of [E & I’s] statutory entitlement to a progress payment because of s 99 of the Act;” and
Was Lean Field precluded on the grounds of waiver or estoppel from relying on non-compliance with cll 33.7 and 33.8?

“Worked Out”

The Court first addressed the question of whether cl 33.8 provided how the reference date was to be “worked out”, specifically whether the statutory definition allowed a “reference date” to be “worked out” by reference to post-formation conduct, rather than by application of the terms of the contact alone.  [23]–[25].  Looking to the ordinary meaning of “worked out” – “a process of calculation”, [30], the Court concluded that there was nothing in the Act which precluded the application of this definition, [32] and thus a reference date could be “worked out” using a contractual formula which utilised a post-formation fact, including one dependent upon the conduct of a contractual party as a pre-requisite for the determination of a reference date.   [36]–[38].   The Court considered, however, that in order to preserve the Act’s objective to provide a statutory entitlement to a progress payment, that s 12 of the Act provides there were limits on the validity of contractual provisions which regulate when a reference date will arise.  These limits are expressly articulated in s 99 which operates to void provisions of a relevant agreement which are contrary to the BCIPA, and thereby invalidates those contractual conditions which would “prevent or inordinately delay” a reference date from arising.  [34], [35]; see also [49]–[80].  Given this conclusion, the Court then addressed whether the requirements of cll 33.7 and 33.8 operated to “prevent or inordinately delay” a reference date from arising and as such were invalidated by the application of s 99.  Though “contractual provisions captured by the unambiguous terms of the definition of “reference date” can qualify the statutory entitlement to a progress payment,” [64], see John Holland v Coastal Dredging, the Court concluded that cll 33.7 and 33.8 were not captured by this definition as the requirement to submit a draft payment claim was held to lack utility in making a payment claim under the BCIPA and being paid upon that claim and thus was an “impermissible constraint” on the right to claim for payment.  [87]–[88].  On this basis the Court held the cll 33.7 and 33.8 were ineffective by reason of s 99 of the BCIPA.  [91], see also [92]–[94].   

Waiver

Though unnecessary given its previous conclusion, the Court briefly considered whether Lean Field had waived or was estopped from insisting upon compliance with cll 33.7 and 33.8 given its previous conduct.  [98].  On the evidence before it, the Court concluded that Lean Field’s conduct had not amounted to an election between inconsistent rights, nor was it such as to represent to E & I that a different relationship existed between the parties,  [104]–[108], and thus held that neither waiver nor estoppel had been established.  [110].

For the aforementioned reasons the Court held that the adjudicator’s decision was not affected by jurisdictional error and dismissed Lean Field’s application.  [111]–[112].

Appeal Status: No Appeal Pending - Appeal Period Expired

CMF Projects Pty Ltd v Riggall [2014] QCA 318

In this matter the appellant had entered into a “costs plus” contract with the respondent in relation to the renovations of the respondents’ residence.  In response to the defence that the plaintiff was not entitled to recover because the contract did not comply with the requirements of the Domestic Building Contracts Act 2000 (the “DCBA”) in respect of “costs plus contracts” the appellant pleaded an alternative claim for a quantum meruit.  At first instance the paragraphs of the pleading in relation to the quantum meruit claim was struck out on the basis that DCBA impliedly excluded such a claim.

The Court of Appeal (Gotterson JA with whom Holmes and Morrison JJA agreed) upheld the appeal on the basis that the common law claim for a quantum meruit was not excluded by the operation of the Act.  The following points arise from the decision of Gotterson JA:

A claim in quantum meruit is not a claim on, or for the enforcement of, the contract but a claim which is independent of contract.

By the quantum meruit claim in the present matter the appellant was not attempting to enforce the cost plus contract which was not in accordance with the DCBA.

Although there existed a provision in the DCBA which provided for a builder who had not complied with the requirements of a cost plus contract to apply to QCAT for an award of the cost of providing the contracted services and a reasonable profit (s 55(4)), that provision did not impliedly exclude the right to recover upon a quantum meruit

In determining whether or not the statutory provision excluded the claim, Gotterson JA considered that there was a presumption of statutory interpretation against the abrogation of common law rights and that if such rights are to be abrogated such an intention should be clearly expressed even if that be by necessary implication.

Here there was no necessary intention to exclude the right to recover under a quantum meruit claim.  The right granted by s 55(4) was not a right to recover a sum of money as compensation for the work done.  The right created by that section is much more limited than the rights which are enforceable by a quantum meruit claim such that those rights cannot be seen to have been provided in lieu of the right to pursue the quantum meruit claim.

[Editor’s Note for an explanation as to why the action of indebitatus assumpsit (being in this case the quantum meruit claim) was not an action “on the contract” see the discussion in Gino D’Alessandro Constructions Pty Ltd v Powis [1987] 2 Qd R 40.] 

Appeal Status: No Appeal Pending - Appeal Period Expired

Baldwin v Icon Energy Ltd [2015] QSC 12

This case concerns an application for strikeout brought in the context of litigation chiefly concerning a pre-contractual Memorandum of Understanding (“MOU”). The Plaintiffs had executed the MOU with the Defendants, two related gas supply companies, as a prelude to negotiations to be conducted with a view to entering into a contract for the supply and purchase of gas. The MOU provided inter alia that the parties must exercise “reasonable endeavours to negotiate by 30 August 2008 … a Gas Supply Agreement”. The same provision included a framework for the negotiations by defining matters and indicative terms which had to be within the intended contract to be negotiated. The MOU also provided for the parties to “work in good faith to progress the Gas Supply Agreement”. All of these provisions were dealt with cumulatively as incidents of the parties’ imputed obligations for “reasonable endeavours” to negotiate.

No contract was ultimately concluded between the parties. The Plaintiffs commenced proceedings, alleging that the Defendants did not negotiate as they had promised and that consequently, the Second Plaintiff had lost the opportunity to conclude the contract envisioned in the MOU and reliance costs in its performance of the MOU. The Defendant pleaded relevantly that the agreement to negotiate was uncertain and thereby unenforceable.

Part of the Claim was made by the First Plaintiff, Mr Baldwin, who acted as agent to introduce the Second Plaintiff to Defendants for the purpose of concluding a supply contract from which the First Plaintiff would receive a commission. The merits of the First Plaintiff’s claim depended upon those of the Second Plaintiff. Accordingly, the principal issue in this case was whether the requirement for “reasonable endeavours” to negotiate under the MOU was enforceable.

The obligation of “reasonable endeavours” to negotiate

Of some weight were the further provisions of the MOU which stated:

“These terms and conditions are indicative only and are submitted as a means of encouraging discussion … It is understood for the avoidance of doubt that this document does not obligate any party to enter into any further agreement.”  [20]−[21].

His Honour distinguished the High Court decision (cited in argument by the Plaintiffs) of Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd because it concerned an obligation to make “reasonable endeavours” to make available further quantities of gas under an existing contract, rather than to negotiate the creation of a new contract.  [28].

In determining the issue, his Honour considered a number of Australian appellate court decisions directly on the point of “reasonable endeavours” to negotiate. [32]−[38].  This analysis made out that whilst Australian law does allow scope for the enforcement of an obligation of reasonable endeavours to negotiate, that does not extend to circumstance where the subject of the negotiation is as open-ended as the formulation of the contract itself.  [45]−[51].

The prime instances where the obligation of “reasonable endeavours” to negotiate have been upheld are in the context of dispute resolution clauses, where such disputes arise out of an existing contract. (citing Con Kallergis Pty Ltd v Calshonie Pty Ltd (1998) 14 BCL 201; Strzelecki Holdings Pty Ltd v Cable Sands Pty Ltd (2010) 41 WAR 318; AMCI (IO) Pty Ltd v Aquila Steel Pty Ltd [2010] 2 Qd R 101.) 

Echoing the reasoning of Allsop P in United Group Rail Services Ltd v Rail Corporation of New South Wales (2009) 74 NSWLR 618, his Honour affirmed that this was because the scope of that negotiation would be delimited by finite rights and obligations which have already been determined at the execution of the contract.  [44]−[45]. By contrast, terms requiring reasonable endeavours to negotiate the very terms of a contract are inherently uncertain and it would be impossible for the court to identify the legal content of that promise.  The mere fact that the MOU provided for matters to be included in the intended contract could not determine the extent of the legal obligation to negotiate and avoid uncertainty. [52]−[53]. (citing similar factual circumstances in Coal Cliff Colleries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1.)

The provisions requiring “reasonable endeavours” to negotiate were held to be unenforceable for uncertainty.

His Honour ordered that the Statement of Claim be struck out, but refused to strike out the Claim as well, citing that further pleadings may make out what was a conceivable cause of action for breach of other enforceable provisions of the MOU prohibiting negotiations with third parties.  [70]–[72]. 

Appeal Status: No Appeal Pending - Appeal Period Expired

Goggin v Majet [2015] QCA 244, 27 November 2015

This appeal concerned the proper entitlement to retention of a deposit consequent upon the buyer of residential property defaulting and termination of the contract of sale.

The brief facts of the matter are as follows.  The first and second respondents entered into a contract to sell their residential property and, thereupon, a deposit of $139,000 was paid. [1]. The contractual completion date was “on or before 150 days of contract date”. The contract was subject to a special condition – for the benefit of the third party buyer – that the two contracts (the second contract being relating to the sale of the purchaser’s property) were to be completed contemporaneously. [2]. Despite the special condition, the contracts were not completed. [3]. In the interim, the third party had been declared bankrupt and a sequestration order made against his estate. On 29 April 2014, pursuant to s 133(1A) of the Bankruptcy Act 1966 (Cth), the trustees signed a written notice to the first and second respondents purporting to disclaim the contract, headed “Notice of Disclaimer of Onerous Property.” [4].

Proceedings were commenced in the Supreme Court and the respondents obtained orders declaring that they were entitled to the deposit on the basis that the disclaimer amounted to a breach of the agreement entitling the respondents to terminate. [9]. The salient issue on appeal (comprising 5 grounds) was whether the learned primary judge erred in finding the disclaimer pursuant to s 133 of the Bankruptcy Act 1966 (Cth) was conduct which amounted to an anticipatory breach or alternatively a repudiation of the contract, entitling the sellers to terminate.  The respondents argued that it was as the effect of the disclaimer was to release the buyer from any obligation to further perform the contract. [16].

At first instance, the trial judge took the view that the disclaimer clearly manifested an unwillingness or inability to perform the contract such as to characterise the disclaimer as a repudiation of it by anticipatory breach. [26], [35].  On appeal, the appellants challenged that on the basis that s 133(2) operated to relieve both Buyer and Seller from further obligations to perform the contract and as such, there could be no anticipatory breach.  [27].

In delivering the lead judgment and referring to Rothwells Ltd (In Liq) v Spedley Securities Ltd (In Liq) (1990) 20 NSWLR 417 at 422; Re Real Investments Pty Ltd [2002] 2 Qd R 555; and Official Assignee of Bowen v Watt [1922] NZLR 702 at 706, Gotterson JA did not see merit in the appellant’s contentions, providing these helpful observations pertaining to the operation of disclaimers:

“A disclaimer does not undo a completed transaction or divest rights which have accrued under it.  What this disclaimer determined forthwith was the rights, interests and liabilities of Mr Brett-Hall in the contract.  It also discharged the trustees from all personal liability in respect of the property disclaimed from the date of vesting.  The rights or liabilities of the Majets were unaffected by the disclaimer except so far as was necessary for release of Mr Brett-Hall and the trustees from liability.  Thus, in so far as the Majets had a Seller’s contingent beneficial interest in the deposit or a contingent contractual right to it when the disclaimer was made, the interest or right was unaffected by the disclaimer”. [30].

In the result, the court held that the disclaimer was repudiatory of the contract.  In determining the Buyer’s obligations under the contract it operated immediately to fracture the agreed bargain embodied in the contract, as an actual, rather than an anticipatory, breach of contract [37] – see Ex parte Barrell: In re Parnell (1875) 10 Ch App 512. Consequently, albeit whilst accepting that the primary judge’s reliance on anticipatory breach of contract was “open to question”, the court formed the view that the conclusion that he reached with respect to the deposit was the correct one: the disclaimer constituted a default of the Buyer and as such the first and second respondents were entitled to it. [41]. The appeal was dismissed with the trustees ordered to pay the first and second respondents’ costs of the appeal on the standard basis. [46], [47]. 

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Lupker v Shine Lawyers [2015] QSC 278, 1 October 2015

This important recent decision concerned the termination of a “no win no fee” retainer with the respondent,  the respondent then claiming an entitlement to recovery for work done and services rendered.

The applicant’s former de facto spouse, a passenger on flight MH17, was killed in July 2014.  [1]. He retained Shine Lawyers in relation to his compensation claim for her loss. [2]. He subsequently terminated the retainer and, in so doing, provided authority to the respondent to transfer his file to another firm. [3].

In August 2015 the new firm asked the respondent to make the applicant’s file available. [5]. The respondent refused on the basis that it was entitled a possessory lien over the file until its professional fees, amounting to $20,643.50 plus GST, were paid. [6].

In response, the applicant sought:

1.  A declaration that the retainer was terminated by the applicant on 4 August 2015;

2.  A declaration that the respondent was not entitled to retain the applicant’s file pursuant to the retainer; and

3.  An order that all files, documents, correspondence or other material prepared by or on behalf of the applicant and all copies be delivered up to the applicant. [7].

Did Shine Lawyers have a right to payment from the applicant?

Shine’s retainer was a conditional costs agreement within the meaning of s 323 of the Legal Profession Act 2007. [12]. However, it was non-compliant with s 323(3) in various respects, and therefore void pursuant to s 327(1). [14]. It followed that the respondent’s legal costs were recoverable “according to the fair and reasonable value of the legal services provided” (see s 319(1)(c)), but it was not entitled to recover any amount “in excess of the amount [it] would have been entitled to recover if the costs agreement had not been void” (see s 327(3)).

The relevant issue for his Honour’s consideration was what the respondent’s rights would have been “on the hypothesis that the Act had not rendered the costs agreement void”. [17]. The respondent submitted that it would have had a contractual right to payment (either from an implied term or as a matter of construction) [24] which survived the termination of the retainer; or in the alternative a restitutionary claim to recover as on a quantum meruit for the fair value of the work done. [18].

His Honour dismissed the argument that a term ought be implied into the retainer outright, finding that the proposed term did not satisfy two limbs of the test prescribed in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283, namely that it was not necessary to give business efficacy to the contract; nor so obvious that "it goes without saying”. [26]. In his Honour’s assessment, from the respondent’s point of view, those conditions were “insurmountable hurdles”. [27].

His Honour also rejected the construction argument, explaining as follows:

“Shine acknowledged that the contract should be regarded as an ‘entire’ contract, such that prima facie, it would not be entitled to charge fees until the matter was completed and then only if the applicant was successful.  That acknowledgement was significant for the analysis of Shine’s rights because it meant that, even if the cap and the condition were to be construed in the way for which Shine contends, there would still be no mechanism by which a contractual right to payment could be regarded to have accrued due prior to termination.  And after termination, … the retainer, viewed as a source of enforceable rights and obligations, has ceased to exist. That conclusion is fatal to this part of the applicant’s argument.”  [33]–[34].

Turning to the respondent’s alternative argument that had the costs agreement not been void, it would have had an entitlement to be paid as on a quantum meruit, his Honour noted that as a general proposition, in circumstances where a contract for work or services is terminated by the client, the provider of same would have a restitutionary claim to recover as on a quantum meruit for work done and services provided up to the date of termination: see Legal Services Commissioner v Baker (No 2) [2006] 2 Qd R 249 at [3] and [32].  However, the terms of the terminated contract remain directly relevant to the scope of the restitutionary claim: see Lumbers v W Cook Builders Pty Ltd (2008) 232 CLR 635.  The question for the court was how the claim reconciled with the contract between the parties. [41]–[42].

Observing that the retainer in question contained an implied term that the applicant could withdraw from it at any time without reasons [37], and further provided that the entitlement to be paid was contingent on recovery [43], his Honour formed the view that the “critical questions” for consideration as to this aspect were:

  1. whether the applicant, as a reasonable person, should have realised that if he exercised his right to terminate the retainer without cause and prior to any recovery, Shine would expect to be paid in full without waiting for any recovery to be obtained; and
  2. whether it would be unjust for the applicant to take the benefit of the services Shine provided without paying a reasonable sum for them, and notwithstanding that no recovery had yet been obtained.  [47].

The respondent submitted that it should not be regarded as having knowingly putting its fees at risk in litigation conducted by a stranger to the agreement. [48].  In circumstances where there was an implied term that the applicant could withdraw from the retainer at any time; the retainer made no provision for what should happen in relation to fees should the applicant exercise his right to withdraw; the only promise to pay was qualified; and there was a clear statement that if there was no recovery then the client would not have to pay; [50], his Honour concluded that  a reasonable person in the applicant’s position “would have appreciated that Shine would expect to be paid, but would not have appreciated that if the contractual right to withdraw from the retainer was exercised Shine would expect to be paid in full for the services it had provided and without waiting for any recovery to be obtained.  Such a person would think that Shine was prepared to wait for payment until recovery was obtained, so that the person could pay, having then been put in funds”. [51].

Accordingly, finding that there was no injustice for the applicant to take the benefit of the services provided without paying a reasonable sum for them, his Honour answered his critical questions in the negative. [51]. He dismissed Shine’s contention that had the costs agreement not been void, it would have had the right to payment, as on a quantum meruit.  [54]. His Honour concluded that Shine’s legal costs were recoverable “according to the fair and reasonable value of the legal services provided” (see s 319(1)(c) of the Act), but Shine was not entitled to recover any amount in excess of the amount it would have been entitled to had the costs agreement not been void (see s 327(3) of the Act).  [55]. Shine had a statutory right to payment contingent upon certain events happening – which remained unfulfilled [58] – and thus no present entitlement to recovery.

In the result, his Honour held that Shine did not have any effective possessory lien. [79].

Appeal Status: No Appeal Pending - Appeal Period Expired

Schultz v Bank of Queensland Ltd [2015] QCA 208

The central issues for determination in this appeal concerned the circumstances when it can be said that there exists a material misunderstanding as to the nature and effect of a financial transaction and when a person may be regarded as being at a special disadvantage.

The appellant owned two apartments, at Highgate Hill and Cotton Tree.  Both were mortgaged. [5] She married her former husband in 1999. [6]. He inherited vacant land at Mudjimba Beach and the appellant funded the building of the family home on that land by selling the Highgate Hill property. She was consequently registered as a co-owner of the Mudjimba Beach property. [6].  Subsequent to the establishment of a family trust, the appellant sold her unit in Highgate Hill, loaning its proceeds of sale to Camelon Pty Ltd (the trustee for the family trust, of which the appellant and her husband were directors).  The funds were invested in a portfolio of securities.  [8]. Concurrently, the Mudjimba Beach property was transferred to the appellant’s name in order to protect the property from the husband’s creditors. [8]. The appellant entered into two guarantees, secured by the Cotton Tree and Mudjimba Beach properties, in return for the respondent’s loan of funds to the trust, and did not receive independent legal advice prior to doing so, signing a waiver. [9], [13]. Both waivers confirmed that:

the appellant had been told to seek independent legal and financial advice, but decided not to do so;
the appellant understood the practical legal effect of the documentation and transaction; and
the appellant understood that if the borrower defaulted, the respondent would be entitled to sue the appellant, as guarantor, to recover the monies due.

At trial, the appellant contended she did not appreciate the nature and effect of the transaction she had entered into with the respondent, and that she had done so as a “volunteer”.  She argued that, given her position as a wife providing a surety for a loan to a company controlled by her husband, the respondent had an obligation to explain the nature and effect of the guarantee to her, yet failed to do so. [14].

The primary judge dismissed the claim, [3] finding that she was not under any material misunderstanding as to the consequences for failing to pay amount payable pursuant to the guarantee. [18].

Grounds of appeal

The appellant submitted that the primary Judge erred in:

  1. failing to draw an inference that there was a misunderstanding by her that if there was default on the loan, she could be pursued for any shortfall and be made bankrupt, and that the mortgage over her Cotton Tree unit secured more than $150,000; 
  2. placing the onus on her to prove there was a requisite misunderstanding; 
  3. failing to give adequate reasons; and
  4. finding that she was not at a special disadvantage.  [22]–[24].

Relevant authorities

In its initial consideration of the issues, the court had regard to the principles identified in Yerkey v Jones (1939) 63 CLR 649, Garcia v National Australia Bank Ltd (1998) 194 CLR 395; [1998] HCA 48 and State Bank of New South Wales Ltd v Chia (2000) 50 NSWLR 587, observing that it is generally accepted that a creditor may avoid a surety’s claim not to have understood the effect of a transaction if it explains the transaction sufficiently. [33].  In other words, an adequate explanation as to the nature and effect of a transaction should indicate that a creditor took reasonable steps to ensure that the consent to become a guarantor was properly obtained. That onus lies on the creditor: see Barclays Bank PLC v Boulter [1999] 1 WLR 1919 at 1925.

Was there a misund​erstanding?

In delivering the lead judgment, his Honour Justice Boddice, after considering the factual findings, and the appellant’s evidence as a whole (which provided an indication as to the relevant degree of knowledge of the applicant) [41]–[42], took the view that there was no material misunderstanding concerning the nature and effect of the guarantee:

“The appellant knew that by giving the guarantee, she could be called upon to repay the loan, should that sum not be repaid in accordance with the loan facility.  The appellant also knew the respondent could sell the mortgaged properties in an effort to recover the loan amount”. [42].

He further determined that the respondent was under no obligation to either expressly advise the appellant that she could be made personally bankrupt as part of the process of recovering the remaining outstanding amount for which she was liable; nor tell the appellant that the mortgage over the Cotton Tree unit was not limited to $150,000.  [43].

Lastly, he was of the view that the reasons at first instance had been adequate and “[t]here was no need for the primary Judge to traverse every aspect of the evidence”. [45].

Onus of proof

In relation to where the onus of proof lay, the court found that the mere fact that the primary Judge did not form a concluded view on the issue did not affect the correctness of his ultimate conclusion. [50].

Unconscionability

The court observed that in order for the appellant to obtain relief pursuant to the equity in Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447, or s 12CA of the Act, she would need to be under a special disadvantage which adversely affected her “ability to make a judgment as to [her] own best interests”, [51] and demonstrate unfair advantage on the creditor’s part (see Kakavas v Crown Melbourne Limited (2013) 250 CLR 392). The court was unable to accept that, as contended [52], that the appellant was not informed that Camelon Pty Ltd was in default of the terms of the $444,000 loan previously provided to it by failing to provide financial documentation within 180 days as required by the terms of the facility placed her in such a position and thus met the test.

In the result, the court, finding that none of the grounds of appeal had been made out, [54] dismissed the appeal ordering that the appellant pay the respondent’s costs. [55].

Appeal Status: Appeal Pending

Case Links:

Nichols v Earth Spirit Home Pty Ltd [2015] QCA 219, 6 November 2015

In this matter, the applicant sought leave to appeal against a decision of QCAT confirming a decision at first instance to enforce a wholly oral building contract. The relevant oral agreement had been entered into by the parties following the partial construction of 10 houses. It was agreed that the applicant and others would pay the respondent a weekly management fee to complete the project, and that $250,000 would be paid to the Master Builders Association in order to secure that amount. [5]. Subsequently, a dispute regarding payment of the weekly management fee arose.  Both at first instance and on appeal, QCAT determined that the applicant was liable to pay the respondent the weekly management fee, and that the sum of $250,000 held by the Master Builders Association be paid to the respondent. [7].  The appeal tribunal rejected the applicant’s submission that s 67G of the Queensland Building and Construction Commission Act 1991 rendered the wholly oral building contract unenforceable. [8]. That section provides that a building contractor who enters into a building contract that is not in writing commits an offence.

Applicant’s submissions

The applicant argued leave to appeal should be granted since the appeal raised an important question regarding the enforceability of an entirely oral building contract in circumstances where it was an offence to undertake building work above a certain cost without a written contract. [12].  It was further submitted that the Appeals Tribunal had erred in its interpretation of the Act in finding that a wholly oral building contract was not void or unenforceable, and failed to consider whether, as a matter of public policy, such an agreement was enforceable at the suit of a builder who committed an offence by entering into it.  Referring to Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410, it submitted that as a matter of principle, a contract at the suit of a party who has entered same with the object of committing an illegal act should not be enforced. [13].

Respondent’s submissions

The respondent argued that there was no basis in law to find that the wholly oral building contract was illegal, nor that public policy required that it ought not to be enforceable.  It also contended that the applicant would not be subjected to any substantial injustice, since the respondent would be entitled to payment on a restitutionary basis. [15]. Relying upon Freedom Homes Pty Ltd v Botros [2000] 2 Qd R 377, the respondent argued a building contract not reduced to writing is not invalidated, even if the failure to do so constitutes an offence. [16] In any event, the respondent submitted that even if the building contract was indeed illegal and unenforceable, it was entitled to the sum due, based on quantum meruit and unjust enrichment: see Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498, as a clear legislative intent is necessary to abrogate or curtail common law rights: see CMF Projects Pty Ltd v Riggall [2014] QCA 318. [18].

Leave to appeal

The court did not hesitate to grant leave to appeal given the appeal raised a matter of law regarding the proper interpretation of significant statutory provisions and involved almost $250,000.  [19].

Enforceability of the contract

Noting the principles applicable to the enforcement of contracts whose making or performance is illegal, as summarised in Miller v Miller (2011) 242 CLR 446 – specifically, that whether an Act impliedly prohibits such agreements is always a question of construction, the same process applying in cases where the policy of the law renders contractual arrangements ineffective or void – the court considered the applicant’s contention that the contract between the parties was impliedly prohibited by the Queensland Building and Construction Commission Act 1991.

The court relevantly noted that s 67G of the Act, whilst providing that a builder who enters into a contract which is not in writing commits an offence, does not provide for any other consequences of a failure to comply with it.  The court contrasted ss 67U and 67W, which operate to specifically render particular contractual provisions void. [22]. As such, in delivering the lead judgment his Honour Justice Boddice indicated that that lent support for the view that s 67G did not impliedly render the contract unenforceable:

“The absence in the Act of any other consequences for a failure to reduce the contract to writing strongly supports a conclusion that neither the statutory provision nor consideration of the scope and purpose of the statute favours a finding that the Act impliedly prohibits enforcement of a wholly oral building contract.  There is no other purported illegality, and no other immoral transaction”. [24].

His Honour also referred to s 67E(1) of the legislation, which expressly states that if by entering into the building contract a party to that contract commits an offence, that fact alone does not have the effect of making the contract void or voidable.  [25].

As for the argument that as a matter of public policy, the agreement was unenforceable at the suit of a builder who committed an offence by entering into it, the court, noting the observations of Justice Kirby in Fitzgerald v FJ Leonhardt Pty Ltd (1997) 189 CLR 215, formed the view that in the absence of any deliberate attempt by the respondent to circumvent the statutory scheme established by the Act [30] nor anything in his conduct justifying such a conclusion, having regard to the legislative provisions and all of the circumstances of the case, principles of public policy simply did not favour a finding that the wholly oral building contract was unenforceable. [31], [32].

In the result, leave to appeal was granted but the appeal was dismissed with the applicant ordered to pay the respondent’s costs of the appeal on the standard basis.

Appeal Status: No Appeal Pending - Appeal Period Unexpired

William James Watson & May Marlene Watson as trustee for the WJ & MM Watson Superannuation Fund v Scott [2015] QCA 267

This appeal involved a dispute regarding an alleged guarantee in a “Property Syndicate Agreement”, the last in a long series of loan agreements between the appellants’ Superannuation Fund and respondent’s company.  The first loan agreement was entered into in 2001, with nine subsequent agreements following between 2003 and 2013. [43].  All agreements were in the same form, contained the same clauses, and identified the respondent as “Guarantor”. [3], [44].

Relevantly, the respondent recommended the inclusion of an insurance clause in the agreement, to ensure that should he die or become incapacitated the appellants would be reimbursed in full. [4].

Upon the company defaulting under the loan agreement, the appellants terminated the agreement and demanded repayment of all amounts owing, which it failed to meet. Accordingly, the appellants then made demand on the respondent as guarantor together with several alternative claims including damages or compensation under the Australian Consumer Law.  They sought summary judgment, together with interest and costs. [1], [5]. The appeal was from the order dismissing their application, on the basis that the judge erred in:

  1. finding their claim on the guarantee involved contested facts;
  2. finding their claim under the Consumer Law was not so clear that summary judgment should be given; and  
  3. failing to find that the respondent had no real prospect of defending their claim. [1].

The case at first instance

In dismissing the application for summary judgment, the primary judge found that the terms of the guarantee, particularly its lack of a specific clause whereby the respondent expressly guaranteed payment of the debt owed, [21] were not so clear as to warrant summary judgment, and  nor was the case sufficiently clear on the deceptive and misleading conduct claim. [20].

The respondent’s contentions on appeal

The respondent argued that consideration of whether the agreement obliged him to guarantee the company’s performance, in the absence of a specific clause prescribing same, was an unsuitable matter for summary judgment, instead warranting additional fact finding to assist in its construction: see Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, 352. [23]. It was further claimed that all that could possibly be construed as an operative clause was contained in the definition section of the agreement, thus negating its operative effect: see Red Hill Iron Ltd v API Management Pty Ltd [2012] WASC 323, [127]. Were that section to be turned into an unequivocal undertaking by the respondent to guarantee the repayment of the loan, the Court would need to insert words into the agreement.  [25].

Conclusion

Unpersuaded that the primary judge erred in refusing summary judgment on the appellants’ Consumer Law claim, the court determined that it was not possible to form a conclusion on that matter without fully considering, “at the least, details of and the background to the other case brought against the respondent and his defence to it and making findings of fact about what the parties said, knew and did in this case.  On the material before the primary court it could not be said under r 292 Uniform Civil Procedure Rules 1999 that the respondent had no real prospect of successfully defending the claim so that there was no need for a trial.  If that were the appellants’ only ground of appeal, the appeal would have been dismissed.” [29].

As to the respondent’s liability for the company’s debt as guarantor under the agreement, the court undertook an exercise of examining the objective intention of the parties as embodied in the words used in the agreement by what a reasonable person would have understood the terms to mean: see Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253. [30]. The court noted that the agreement ought to be construed in a commercially sensible way – although minds may differ as to what equates to “business commonsense”: see Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181.  Evidence of surrounding circumstances is only admissible to assist in interpretation of a contract if the language is ambiguous or susceptible to more than one interpretation: Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24. Further, in construing a commercial contract a court should have regard to the commercial purpose of the contract. [30]. The court observed that the ultimate issue to be addressed is the objective meaning of what the parties agreed to, not what they meant to agree to.

With reference to the above, the court examined the agreement to ascertain whether the terms of the respondent’s guarantee were susceptible of more than one meaning so that evidence of surrounding circumstances was admissible to aid in its construction.  If that were not the case, with the result that the guarantee had the meaning for which the appellants contended, they would be entitled to summary judgment.

In delivering the lead judgment, her Honour, the President, observed:

“… the term “guarantor” is defined in cl 1, Definitions and Interpretation, cl 1.1.8, as meaning “the person shown in the Schedule and any other person who has guaranteed, or who in the future guarantees, the borrower’s obligations and performance under this agreement”.  The guarantor in Schedule 1 is stated to be the respondent.  I consider the ordinary, unambiguous meaning of those words as conveying that the person named in the Schedule as guarantor (the respondent) has guaranteed Denbraise’s obligations and performance under this agreement.”  [34].

The court did not accept the argument that, in view of the objective background facts surrounding the signing of the agreement; its terms read as a whole; and adopting a commercially sensible approach to an unsecured loan of this kind; ambiguity existed as to the obligations of the respondent as guarantor.  [36]. The context made it clear that the respondent as guarantor was guaranteeing the company’s obligations to the appellants under the agreement. 

Accordingly in the result, allowing the appeal with costs and ordering judgment for the appellants, [40] the court concluded that the primary judge erred in finding that the terms of the guarantee were not so clear as to warrant summary judgment, and summary judgment for the appellants against the respondent ought to have been entered. [39].

Appeal Status: No Appeal Pending - Appeal Period Expired

Leximed Pty Ltd v Morgan [2015] QSC 318, 12 November 2015

In this recent matter before the Supreme Court, the Court had cause to consider the circumstances in which a party may be able to contract with itself, in particular whether a trustee can contract with itself.  This issue arose out of a dispute between owners of a business conducted by the applicant company, Leximed Pty Ltd.   The business provides medico-legal opinions and is conducted as a trustee of two trusts – the McCosker Trust, controlled by Debra McCosker and the Medicolegal Trust, controlled by the respondent, Dr Morgan.  Leximed uses the services of many legal practitioners, including Dr Morgan.  Under the agreement between the owners, Morgan is permitted to provide medico-legal services outside this business, subject to a qualification that the number of appointments for medico-legal opinions cannot rise by more than 10 per cent each year.  The relationship between McCosker and Morgan became strained and McCosker became concerned that Morgan’s medico-legal practice outside Leximed is increasing by more than the permitted rate. Given this concern, McCosker brought the present proceeding to access documents and information to assess this matter.  [1]–[4].   

The Partnership Agreement

The operation of Leximed is governed by the “Partnership Agreement”.  The Partnership Agreement provides that each “Partner” has a duty to be “just and faithful to the other Partners and Directors ... and give to them full information and truthful explanations of all matters relating to the affairs of the Partnership”.  [14].  The issue before the Court was whether this agreement bound Dr Morgan. Following a careful consideration of the language and terms of the “Partnership Agreement” the Court concluded that Morgan could not be considered a “Partner” for its purposes and thus that the document did not impose any contractual obligations upon him.  In reaching this conclusion, the Court noted that Partnership Agreement distinguished between the so-called Partners – the Leximed as trustee for the McCosker Trust and Leximed as trustee for the Medicolegal Trust – and their associated directors, McCosker and Morgan, see [7]–[19], [30].

“Two-Party” Rule

Despite the language of the “Partnership Agreement”, the applicant argued that the document must be construed as imposing contractual obligations upon Dr Morgan because otherwise it would have no legal effect.  [20].  In support of this argument, the applicant cited the common law principle that there must be at least two parties to a contract and that therefore a party cannot contract with a nominee for itself or with its own agent, see Ingram v Inland Revenue Commissioners.  [21].  The applicant argued that without her proposed construction, the Partnership Agreement had no effect because Leximed, on behalf of one trust purports to contract with itself on behalf of the other trust.  A trustee that contracts in its capacity as trustee does not do so as an agent for another; it is the trustee which is liable to perform the contract and the trustee cannot be considered more than one legal entity see Suncorp Insurance & Finance v Commissioner of Stamp Duties.  [22]. 

In reply, Morgan argued that although it was generally the case that a party cannot contract with itself – a rule arising out of the common law principle that no man can be at the same time plaintiff and defendant, see Clay v Clay – there was “compelling authority for the validity of a contract ... where a trustee acting in one capacity enters into a contract with itself in another capacity”.  Though disagreeing with the reasoning the authority cited by Morgan, see [24], [33] and Rowley, Holmes & Co, the Court concluded that in these circumstances, s 59 of the Trusts Act removed the basis for the rule and thereby excluded it.  [33]. Section 59 of the Trusts Act provides that notwithstanding any rule of law to the contrary, “a trustee ... in that capacity may sue, and be sued by, himself or herself in any other capacity whatsoever…”.  Despite considering this question at length, the Court did not reach a concluded view considering it unnecessary in light of the fact that upon the evidence, [37]–[90], the information sought had already been provided by Morgan. [102].

The Court dismissed the application.  

Appeal Status: No Appeal Pending - Appeal Period Expired

Keeley v Horton [2016] QCA 68, 22 March 2016

This appeal concerned whether damages assessed at first instance were inadequate in a proceeding for breach of warranty and overvaluation of a business.

The first appellants had acquired issued share capital in the second appellant from the respondents. [11]. In respect of that purchase, the respondents breached two warranties, one of which affected the calculation of the purchase price. [22], [28]. Nominal damages in the amount of $100.00 were awarded on the basis that the appellants had suffered no actual loss with respect to a warranty relating to earnings. It was further ordered that the appellants pay 90 per cent of the costs incurred by the respondents in the proceeding. [12], [31].

The appellants challenged the adequacy of the damages award as well as the orders made as to costs.

The deficiencies in the share sale agreement concerned the earnings of the company as well as the position regarding any pending claims against it. [11], [18]–[19] Specifically, the first appellants were led to believe that the company and business were more profitable than they in fact were in circumstances where the respondents had not disclosed correspondence received advising that its distributorship of certain products, which generated considerable revenue, would be cancelled. [22]. In addition, a claim for compensation which had been served on the company with respect to a workplace injury was not disclosed. [28].

The court determined that the proper course was to assess the damages suffered by the first appellants by comparing the position in which they found themselves on completing their contract with the respondents, with the position in which they would have been had the warranties as to the trading position of the company been accurate, with a view to:

“… properly reflect[ing] the position … if the accounts and records for the company revealed the actual earnings and not those that had been inflated by the inclusion of income from the lost distributorship. It is only in this way that the benefit of the bargain lost through the breach of the earnings warranties can be captured.” [44].

(see Clark v Macourt [2013] HCA 56; (2013) 253 CLR 1 at 31–32).

The court further held that the primary judge had erred in concluding that the first appellants suffered no loss in consequence of the breach of the earnings warranties, [62] and that the correct measure of damages for the breach should have been the difference between the price paid and what price, would have correctly been advised had the loss of the distributorship at the time the business was valued been disclosed. [65].

Applying the Clark v Macourt approach to the facts of the case, and undertaking a revised assessment of damages, the court concluded that the nominal award of damages for breach of the earnings warranty should be set aside and, in lieu thereof, damages in the sum of $96,367 substituted. [69].

As for the “claims warranties”, and any loss was suffered in consequence of their breach, in the absence of any direct evidence substantiating that the existing claim had resulted in increases in the premium payable by the company to WorkCover, the court accepted that no error had been demonstrated in the award of damages at first instance for the breach of the claims warranties. [73].

In the result, it was ordered that leave be granted to the first appellants; and the appeal be allowed in part by setting aside the nominal damages award and substituting the amount of $96,367.

Appeal Status: No Appeal Pending - Appeal Period Expired

QNI Resources Pty Ltd v Sino Iron Pty Ltd [2016] QSC 62, 23 March 2016

In this ultimately unsuccessful proceeding, the plaintiffs argued that the defendants’ refusal to make royalty payments to a related corporation constituted unconscionable conduct under s 21 of the Australian Consumer Law, [4]–[9], [21] and further, that the lack of payment to the plaintiffs by the related corporation prevented them converting some of their plant and thereby saving costs of approximately $137,500,000. [11]. The costs savings not made were claimed as loss or damage. The defendants applied to strike out the claim and statement of claim.

The primary issues for his Honour were twofold:

  • whether the allegation of unconscionable conduct was adequately supported by pleaded facts; [2] and
  • whether the loss or damage that the plaintiffs claim was recoverable in law as loss or damage suffered because of the defendants’ alleged conduct. [3].

In relation to the alleged unconscionable conduct, the defendants argued that a breach of contract is not, without more, capable of constituting unconscionable conduct and a “high level of moral obloquy” is required: see Body Bronze International Pty Ltd v Fehcorp Pty Ltd (2011) 34 VR 536, 556 [92] and Attorney-General (New South Wales) v World Best Holdings Pty Ltd (2005) 63 NSWLR 557, 583 [121] respectively. The defendants further contended that the plaintiffs’ alleged case of unconscionable conduct was contingent on the allegations that the refusals to make the royalty payments were deliberate and intentional, done for to apply pressure to renegotiate, and done in bad faith.  [38]. It was also submitted that none of the unconscionable facts was pleaded as required by the UCPR, [39] and that the alleged facts were insufficient to make out a reasonably arguable basis from which to infer the unconscionable facts. [53], [67].

Concerning the application to strike out the claim and statement of claim under UCPR 171, his Honour relevantly observed that the court should be loathe to interfere by dismissal or the grant of a stay of a proceeding as an abuse of process, in a way which might undermine the procedure for summary judgment: see Sino Iron Pty Ltd v Palmer [2014] QSC 259, [13].  That said, it is ultimately a matter for the exercise of a discretionary judgment. [62]. He further noted that there are several particular instances where the inadequacy of a pleading may result in a decision to strike it out [65] including such a lack of particularity that a party’s right to the basic requirement of procedural fairness might be inhibited: see Harvey v Henzell [2015] QCA 261. 

Turning to the ultimate question of whether the proceeding, as presently constituted, amounted to an abuse of process – namely, whether the allegations were insufficient for the proceeding to go to trial based on the alleged unconscionable facts, his Honour determined that the answer was “yes”, [70] and held that conclusion as to the insufficiency of the pleaded facts was enough to found an order dismissing the proceeding. [72].

His Honour also determined (see [73]–[101]) that the statement of claim did not disclose a reasonable cause of action because the loss or damage claimed by the plaintiffs was not recoverable as loss or damage suffered “because of” the alleged contravening conduct of the defendants, resulting in an error not capable of correction: see for example I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109, Elna Australia Pty Ltd v International Computers (Aust) Pty Ltd (No 2) (1987) 16 FCR 410 , Henville v Walker (2001) 206 CLR 459, [103]. The result was that the proceeding was dismissed on that ground as well. [104].

Appeal Status: No Appeal Pending - Appeal Period Expired

GBAR (Australia) Pty Ltd v Brown [2016] QSC 234, 14 October 2016

The extent to which a restraint of trade clause will be enforced is an area of law under constant development.  In this recent decision of his Honour, Justice Lyons, on an application for an interlocutory injunction to enforce covenants in restraint of trade given by an individual the Court had reason to consider the circumstances and extent to which these clauses are enforceable.  A brief summary of the facts giving rise to this matter follows. 

The respondent, an individual, was the sole director and shareholder of an asbestos removal business.  In 2013 the applicant was incorporated for the purpose of purchasing the respondent's business, this transaction being effected by the allocation of 20 per cent of the shares in the respondent.  As part of this transaction, three agreements were entered into:

  1. a contract for the sale of the respondent's company, including its goodwill was executed.  This contract included a clause restricting the respondent's company from competing with the applicant for a period of three years;
  2. an employment agreement whereby the applicant employed the respondent; and
  3. an option deed whereby the respondent's company granted an option to purchase its shares in the applicant for a sum if the respondent's employment was terminated within three years.

Approximately 18 months later in January 2015 the respondent decided to terminate his employment with the applicant.  After negotiations, a settlement agreement was reached between the parties (Settlement Agreement).  This agreement included a restraint clause which, in summary, restrained the respondent from being interested directly or indirectly in a business similar to or in competition with the applicant.  The respondent has since commenced business providing asbestos removal services, and the applicant, by this action and in reliance upon the relevant restraint clause in the Settlement Agreement, sought to restrain this conduct.   [2]–[13]. 

In reaching a decision on this application, the Court considered a number of issues, including:

  1. the “nature” of the interest to be protected by the relevant restraint clause;
  2. the enforceability of the restraint if it was to be regarded as an employee’s covenant; and
  3. the enforceability of the restraint if it was to be regarded as a vendor's covenant.

Nature of the Interest

Given the well-established differences between the enforcement of restraint of trade clauses for the benefit of employers, as opposed to the purchaser of a business, in considering the enforceability of the restraint imposed by the Settlement Agreement, the Court first considered whether, in the circumstances, the clause sought to protect the employer's interests or the goodwill of the business sold, see Vision Eye Institute Ltd v Kitchen.  [26]. 

In arguing that the transactions which occurred in January 2015 ought to be regarded as a sale of goodwill, the applicants relied upon the Court's decision in Pioneer Concrete Services, where it was held that where a sale of a business carried on by a company is effected by means of a sale of the issued capital of the company, “it is commonplace … to require that promises on the part of the vendors be given [both] to the purchaser … [and] the company whose shares are the subject of the sale”.  [31].  In reflecting upon this submission, his Honour noted, however, that critical to this reasoning was the extent of the interest acquired, and that for this reasoning to hold the purchase would need to be of a controlling shareholding in that company. [34].  Further, though a sale of an asset effected through the sale of shares in a company tends to suggest that it is a sale of a business and / or its goodwill, that a transaction is effected in this manner, as it was in the matter presently before the Court, is not decisive. [47]. 

Turning to the facts before the Court, his Honour concluded that the sale of shares in January 2015 was ancillary (secondary) to the termination of the employment of the respondent.  [48].    On the facts it appeared that the goodwill was no longer the property of the respondent, and further that the goodwill was substantially under the control of the applicant.  Id.   Given that the primary transaction related to the employment of the respondent, his Honour considered that the validity of the restraint imposed ought to be assessed by the principles relating to an employer and an employee, and not those relating to the vendor and purchaser of a business.  [49]. 

Enforceability if regarded as an “employee's covenant”

Analysed in this light, the Court considered that the restraint extended well beyond what was reasonable to protect the interest in question, namely the applicant's interest as an employer of the respondent.  [51].  In particular the Court noted that, on the evidence before him, the only interest the applicant might seek to protect was the respondent's connection with customers.  In this regard the Court considered that the restraint, extending as it did to restraining the respondent from having even an indirect interest in a competitor even where he had no active involvement with the business could not be regarded as reasonably required to protect the applicant's relationship with its customers.  Id.  For this reason the Court concluded that the applicants had weak prospects of establish that the restraint was enforceable.  [52].

Enforceability if regarded as a “vendor's covenant”

Given the interlocutory nature of the application, and that the Court did not consider the applicants had no prospect of establishing that the restraint clause should be assessed by reference to the principles applicable to the sale of a business, his Honour then considered whether, if it was held that the restraint clause in the Settlement Agreement sought to protect the goodwill of the business sold, whether it went to beyond what was reasonable to protect that interest, and in particular whether that interest extended to the potential future expansion of the business. 

The reasonableness of a restraint is determined by reference to the circumstances at the date when the parties entered into the relevant agreement,   [54], see further Vision Eye Institute.  Further, the “scope” of any covenant cannot be more extensive than that of the business sold, [56], though it is not necessary for the purchaser to demonstrate, particularly in the case of a large business, that the business was conducted in every part of the area identified in the covenant. [57].  A person who buys a business may be able to take up a covenant against competition covering the area of the potential expansion of the business based on its having goodwill at the time of the sale which extends beyond its current operating area, or the area of potential expansion by way of further penetration into an area in which the business already operates. [41]–[44], [68].  Such covenants, however, must not extend beyond the “conveyed goodwill full-grown”.  [61], see also Hall Manufacturing Co v Western Steel & Iron Works; McAllister et al v Cardinal

Applying these principles to the facts, his Honour concluded that the area of the restraint sought, being a restraint across the entire country, was unreasonable.  At the time of the entering into of the Settlement Agreement, the business was only conducted in Queensland and Western Australia.  In addition to this, the applicant was unable to establish that it's “goodwill” extended beyond a relatively confined area in South-East Queensland and, to a lesser extent, Perth.  [70]–[73].  On this basis, the Court considered that even a vendor's covenant extending over such an area was unreasonable, and was unlikely to be enforceable. 

For these reasons, the Court dismissed the applicant's interlocutory application. [92]. 

Appeal Status: No Appeal Pending - Appeal Period Expired

Principal Properties Pty Ltd v Brisbane Broncos Leagues Club (No 2) [2016] QSC 252, 7 November 2016

This important decision examined the concept of loss of valuable commercial opportunity, specifically in circumstances where overall a plaintiff was more likely to make a loss than to make a profit.

Briefly, the facts were as follows.

  1. A call option for the sale of land from the defendant to the plaintiff was subject to development approval and required the development to have 149 car parking spaces for the defendant’s use.
  2. The Call Option Deed provided that the plaintiff would prepare and lodge a “Development Permit Application” with a view to obtaining a “Development Permit”. In the event a satisfactory Development Permit was obtained the plaintiff was to be entitled to acquire the Land and to develop it.
  3. In late 2011, the plaintiff submitted a draft development application to the defendant, the land owner, for its approval and consent to lodge the application with Council. [1]–[3].
  4. The defendant withheld its approval and the plaintiff claimed damages for breach of contract. [5].

The amended statement of claim alleged that the Call Option Deed required the parties to set up and maintain a “Committee” of representatives who were to approve the proposed Development Permit Application prior to lodgement with the Council. [6]. Pursuant to that arrangement, the plaintiff alleged that one representative of the plaintiff, a key member of the Committee, failed to agree to the Committee approving its proposed Development Permit Application for lodgement, in breach of contract by the defendant. The plaintiff alleged that as a consequence it was unable to obtain a Development Permit that would have entitled it to exercise the Call Option to purchase the Land and to carry out the proposed development. [7]. It further argued that in repeatedly failing to cause its representative on the Committee to approve the proposed Development Permit Application, the defendant repudiated the contract. [8].

Importantly, it was apparently conceded by both parties that the express provision of the Call Option Deed that the Committee must not unreasonably withhold its approval to a complying Development Permit Application involved an implied contractual promise on the defendant’s behalf that its representative would not do so. [9].

His Honour took the view that the defendant’s failure or refusal to agree to approval of the proposed Development Permit Application breached cl 15.2 of the Call Option Deed, which provided that the Committee must not “unreasonably withhold or delay its approval” and must provide its approval or refusal within five days of the request for approval. In addition, his Honour found there was a breach of the defendant’s obligation under cl 16.5 to sign as registered owner all forms, plans and other documents reasonably necessary to facilitate the making of the application. [105]. He did not regard any of the defences raised by the defendant as being meritorious. [106].

In relation to whether the breaches amounted to a repudiation or breach of contract justifying termination, referring to DCT Projects Pty Ltd v Champion Homes Sales Pty Ltd [2016] NSWCA 117 and in the absence of any ground other than the unsuccessful defences already raised in answer to the conclusion that its continuing failure or refusal to approve the proposed Development Permit Application was a repudiation of the Call Option Deed by the defendant, his Honour concluded that  the plaintiff had successfully established that the defendant had repudiated the Call Option Deed. [110].

In its claim for damages for breach of contract, the plaintiff alleged that it was deprived of the valuable commercial opportunity to acquire the land so as to carry out the proposed development. [111]. The particulars of the alleged loss contained a gross profit calculation of the profits that the plaintiff claimed it would have made in the event the proposed development had come to fruition. It argued that damage ought to be assessed by finding that the lost commercial opportunity was to receive a benefit that was valuable, followed by an assessment on the “probabilities” that it would have made the alleged loss of profit. [113].

In Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 it was explained that, generally in a case of alleged loss of a valuable commercial opportunity, damages should be ascertained by reference to the court’s assessment of the prospects of success of that opportunity had it been pursued. That is dependent upon the plaintiff first demonstrating that some loss or damage was sustained by the contravening conduct, and that the commercial opportunity had some tangible value. [118], [119].

Applying the Sellars methodology to whether the plaintiff had indeed suffered the loss of a valuable commercial opportunity, his Honour bluntly noted that proposed developments carry with them an innate risk that the developer might make a loss:

“The project may not have been saleable. Yet, if the planets had aligned, the developer may have made money. At the point of assessment, the developer may have significant sunk costs that would have been recoverable only from revenue gained by completing the project.” [125].

In considering the matter, his Honour noted that a number of “hurdles” had to be overcome by the plaintiff in order to acquire the land and successfully develop it – and the burden rested with it to prove that it would have overcome each obstacle on the balance of probabilities. [151]. (emphasis added) Those matters included the risks that it may not have been able to pay the purchase price of the Land ($1.1 million); [213]; that it might not have been able to obtain development finance; that it might not have been able to obtain sufficient pre-sales to satisfy the conditions any development finance; and that its expenses might have exceeded those budgeted for. [163].

In his overall assessment, his Honour formed the view that the plaintiff was more likely to lose money than it was likely to make profits due to unachievable proposed sale prices. [320]. Having regard to that matter, amongst the other numerous contingencies, he held that in the circumstances there was no loss of a valuable commercial opportunity. [326]. Bearing in mind that although the plaintiff succeeded on the claim for breach of the Call Option Deed as a breach of contract, however failed to prove that it suffered loss or damage by reason of the breach of contract, he ordered judgment for the plaintiff against the defendant for nominal damages of $100. [330].

Appeal Status: No Appeal Pending - Appeal Period Expired


Conveyancing back to top

Caprice Property Holdings Pty Ltd v McLeay [2013] QCA 125

This decision of the Court of Appeal concerned the question of whether or not a party to a standard land contract, in which time was of the essence, was in breach of the terms of the agreement if they failed to settle at the nominated time of day agreed for settlement but were ready, willing and able to do so 20 minutes later and before 5.00pm? In the case before the Court the time for settlement was nominated by the sellers as being at 3.00pm at the offices of the mortgagee. It was also said that the time was tentative and the seller reserved the right to settle at any time on the appointed day. The seller was not ready to settle at 3.00pm as the encumbrancer had not arrived with a release of mortgage. The buyer left the nominated premises at 3.05pm notwithstanding the intimation that the encumbrancer’s representative would be in attendance within 10 to 15 minutes. The Court held that the seller’s inability to hand over a discharge of the mortgage at 3.00pm was not a breach of the agreement because it was able to do so at 3.20pm. Jackson J held that the term of the contract making time of the essence meant that the parties agreed to the risk of breach if they were not able to settle at any time between 9.00am and 5.00pm on the date nominated for settlement. His Honour went on to hold that:
“[25] … there was no agreement and no practise by which each of them also agreed to the risk of being in breach of contract if they were, as in this case, late for the agreed time of day for the settlement by 20 minutes where the time was still between 9.00 am and 5.00 pm and they would be ready to settle within those hours.”
It followed that the buyer was in breach of the agreement by failing to settle the contract before 5.00pm.

Appeal Status: No Appeal Pending - Appeal Period Expired

Modi v SDW Projects Pty Ltd [2013] QCA 221

This decision is yet another in the long line of decisions concerning the adequacy of warning notices attached to contracts for the sale of land, which notices are required by the Property Agents and Motor Dealers Act. In this case it was alleged that the letters sent with the contracts and information sheets did not direct the attention of the purchasers to those documents. The letters enclosing the contracts only said words to the effect of “We now enclose Contract of Sale and Disclosure Statement for your attention”. As is often the situation in relation to cases of the present nature, by the time that the matter is dealt with the courts and, in particular, by the Court of Appeal, the requirements of this ever evolving legislation have changed. So too in this case the provisions under discussion have since been amended. Nevertheless, the case remains important as it relates to the construction of legislation which is likely to be relevant to a number of decisions. The Court of Appeal focused attention on the words of the sections in question and asked the question of whether or not the letters drew attention to the information sheet and warning statement? The Court of Appeal distinguished its earlier decision in Boyland v Gallagher [2012] 1 Qd R 420 which had seemed to suggest that there was no need for specific reference to the relevant documents and that a general statement would be sufficient. The Court effectively held that the decision in Boyland v Gallagher should be confined to its particular facts. The consequence was that the letter enclosing the contracts was insufficient compliance with the PAMDA requirements and the purchasers were entitled to terminate the contracts.

Appeal Status: No Appeal Pending - Appeal Period Expired

Goggin v Majet [2015] QCA 244, 27 November 2015

This appeal concerned the proper entitlement to retention of a deposit consequent upon the buyer of residential property defaulting and termination of the contract of sale.

The brief facts of the matter are as follows.  The first and second respondents entered into a contract to sell their residential property and, thereupon, a deposit of $139,000 was paid. [1]. The contractual completion date was “on or before 150 days of contract date”. The contract was subject to a special condition – for the benefit of the third party buyer – that the two contracts (the second contract being relating to the sale of the purchaser’s property) were to be completed contemporaneously. [2]. Despite the special condition, the contracts were not completed. [3]. In the interim, the third party had been declared bankrupt and a sequestration order made against his estate. On 29 April 2014, pursuant to s 133(1A) of the Bankruptcy Act 1966 (Cth), the trustees signed a written notice to the first and second respondents purporting to disclaim the contract, headed “Notice of Disclaimer of Onerous Property.” [4].

Proceedings were commenced in the Supreme Court and the respondents obtained orders declaring that they were entitled to the deposit on the basis that the disclaimer amounted to a breach of the agreement entitling the respondents to terminate. [9]. The salient issue on appeal (comprising 5 grounds) was whether the learned primary judge erred in finding the disclaimer pursuant to s 133 of the Bankruptcy Act 1966 (Cth) was conduct which amounted to an anticipatory breach or alternatively a repudiation of the contract, entitling the sellers to terminate.  The respondents argued that it was as the effect of the disclaimer was to release the buyer from any obligation to further perform the contract. [16].

At first instance, the trial judge took the view that the disclaimer clearly manifested an unwillingness or inability to perform the contract such as to characterise the disclaimer as a repudiation of it by anticipatory breach. [26], [35].  On appeal, the appellants challenged that on the basis that s 133(2) operated to relieve both Buyer and Seller from further obligations to perform the contract and as such, there could be no anticipatory breach.  [27].

In delivering the lead judgment and referring to Rothwells Ltd (In Liq) v Spedley Securities Ltd (In Liq) (1990) 20 NSWLR 417 at 422; Re Real Investments Pty Ltd [2002] 2 Qd R 555; and Official Assignee of Bowen v Watt [1922] NZLR 702 at 706, Gotterson JA did not see merit in the appellant’s contentions, providing these helpful observations pertaining to the operation of disclaimers:

“A disclaimer does not undo a completed transaction or divest rights which have accrued under it.  What this disclaimer determined forthwith was the rights, interests and liabilities of Mr Brett-Hall in the contract.  It also discharged the trustees from all personal liability in respect of the property disclaimed from the date of vesting.  The rights or liabilities of the Majets were unaffected by the disclaimer except so far as was necessary for release of Mr Brett-Hall and the trustees from liability.  Thus, in so far as the Majets had a Seller’s contingent beneficial interest in the deposit or a contingent contractual right to it when the disclaimer was made, the interest or right was unaffected by the disclaimer”. [30].

In the result, the court held that the disclaimer was repudiatory of the contract.  In determining the Buyer’s obligations under the contract it operated immediately to fracture the agreed bargain embodied in the contract, as an actual, rather than an anticipatory, breach of contract [37] – see Ex parte Barrell: In re Parnell (1875) 10 Ch App 512. Consequently, albeit whilst accepting that the primary judge’s reliance on anticipatory breach of contract was “open to question”, the court formed the view that the conclusion that he reached with respect to the deposit was the correct one: the disclaimer constituted a default of the Buyer and as such the first and second respondents were entitled to it. [41]. The appeal was dismissed with the trustees ordered to pay the first and second respondents’ costs of the appeal on the standard basis. [46], [47]. 

Appeal Status: No Appeal Pending - Appeal Period Unexpired


Corporations back to top

White v Australian Securities and Investments Commission [2013] QCA 372

The first instance decision in this matter, Australian Securities and Investments Commission v Managed Investments Limited (No 5) [2013] QSC 313; Fryberg J, was considered in [2013] 46 QLR. The relevant facts were that ASIC had commenced an action against a company and five persons associated with it. The allegations concerned the improper operation of a managed investment scheme by the company, including allegations of breaches of duty relating to the payment of large sums of money. The allegations against the individuals were based on their derivative liability. Civil penalties were sought against the company and the individuals. The matter had taken some years to prepare for trial and, no doubt, the parties had spent substantial sums. Shortly before the trial was to commence the New Zealand Financial Markets Authority filed two criminal charges against two of the defendants in the action which related to the operation of the managed investment scheme. Those two defendants sought an adjournment / stay of the trial until the determination of the criminal proceedings in New Zealand such that their rights to remain silent in respect of the allegations in the New Zealand Courts would be protected. At first instance Fryberg J refused the stay.
The Court of Appeal refused the appeal and upheld the decision of Fryberg J. The appeal was refused on the day on which it was heard (such that the trial might continue) and the reasons of the Court were delivered a few week’s thereafter. The Court of Appeal reaffirmed that the principles relevant to the exercise of the Court’s discretion to grant a stay were those identified by Wotten J in McMahon v Gould (1982) 7 ACLR 202. It largely accepted the application of those principles by the learned judge at first instance. The Court rejected the suggestion that an applicant for a stay had to, in effect, abandon their privilege by setting out in their evidence on the application precise details of what evidence would or might be given in the trials. That had not been required by the Court below. However, it was observed that there had to be evidence which would show that the applicants would be at a disadvantage were they have to give evidence. It is noted that appellants sought to challenge the correctness of the decision in Gould which has, at times, been questioned. The Court, however, observed that even if the principles were reconsidered, there was no suggestion of “an unconditional right to the stay of civil proceedings, the continuation of which might have the practical result of forcing a defendant in the civil proceedings to take steps which would waive the defendant’s right of silence and thus disadvantage the defendant in criminal proceedings being prosecuted in a different jurisdiction.” In the absence of any such absolute right to a stay the interests of other parties and the public interest have to be taken into account. The Court thereupon determined that the countervailing interests outweighed the protection of the appellants’ right to avoid self incrimination.

Appeal Status: No Appeal Pending - Appeal Period Expired

Re Equititrust Limited [2013] QSC 346

In this matter McMurdo J considered a number of hitherto unresolved issues concerning whether or not a “proof of debt” lodged for the purposes of the second meeting of creditors in an Administration could be regarded as a “proof of debt” for the purposes of the subsequent liquidation of the company? In the circumstances of the case the creditor which lodged the initial proof of debt asserted that it had no effect after the meeting of creditors in administration and that it was entitled to lodge a different proof of debt in the liquidation. His Honour held that a proof lodged for the purposes of an Administration would not normally be effective as a proof of debt in a subsequent liquidation. In reaching his conclusion his Honour made the following determinations:

• The Corporations Act does not make provision for the lodgment of formal proofs of debt within an Administration and nor does it empower the Administrator to require one. The regulations only permit a liquidator to require a formal proof debt.
• The regulations concerning the content of a formal proof of debt confirm that its use is in the context of liquidations.
• However, as there is authority to the contrary it can be accepted that the reference in reg 5.6.23 to a formal proof of debt can apply to a meeting under s 439A.
• Nevertheless, a document which is a formal proof of debt which is lodged at a meeting of creditors of a company under administration does not automatically become a proof of debt in the subsequent liquidation of the company:
   - There is no provision in the Act or in the regulations to the effect that a proof lodged when the company is in administration will become a proof in liquidation.
   - The date at which the creditor’s indebtedness is to be ascertained differs depending on whether the proof of debt is for an administration or for a liquidation.
   - For the purposes of a liquidation a formal proof of debt must be delivered or sent to the liquidator and that is not satisfied by mere reliance on a proof lodged for the purposes of administration meetings. The position may be different where the creditor has asked the liquidator to treat the original as a proof in the liquidation and the liquidator has agreed.
   - A proof of debt which has been lodged in the course of an administration and has been rejected is of no on-going effect.

Appeal Status: No Appeal Pending - Appeal Period Expired

Promoseven Pty Ltd v Prime Project Development (Cairns) Pty Ltd (Subject to a Deed of Company Arrangement) [2013] QCA 405

In this matter the issue before the Court was whether or not a Deed of Company Arrangement (DOCA) ought to be set aside under ss 445D, 447D or 600A of the Corporations Act. The DOCA had been supported by a number of creditors who were related to the company then under administration; being Prime Project Development (Cairns) Pty Ltd (“Prime”). The party seeking to set aside the DOCA claimed that if the DOCA proceeded it would follow that an agreement which was alleged to have had the effect of removing assets from Prime would not be scrutinized. The Court of Appeal (Morrison JA with whom Holmes, Fraser JJA agreed) rejected the approach of the trial judge which had focused upon whether or not the creditors would receive more or less from the performance of the DOCA or the winding up of the company. The Court held that a wider consideration is required and that s 445D permitted the Court to terminate a DOCA where effect cannot be given to the deed “without injustice” and that included where the deed had the effect of denying proper liquidation scrutiny of past transactions. Indeed, the Court had the power to terminate the DOCA for some other reason and that included circumstances where the creditors are effectively bribed for the purpose of passing the DOCA to prevent the directors being investigated. The powers of the Court to terminate a DOCA had to be exercised in the interests of the creditors as a whole and taking into account the public interest. For this reason the Court does not merely act on the assent of the creditors or a majority of them, but takes into account commercial morality as well. In the matter before the Court it was considered that it was difficult to justify the commercial purpose of the agreement which Prime had entered into and which would be scrutinized in the course of a liquidation. Also relevant to the consideration of the Court was the likelihood that a creditor would fund a liquidator to investigate the transactions engaged in by the companies and the effect on individual creditors per se and in comparison to one another. The Court held that, in the circumstances of the existence of the impugned transactions, it was contrary to commercial morality to dispense with the opportunity to investigate the affairs of the company in the course of a liquidation with the result that the DOCA was terminated.

Appeal Status: No Appeal Pending - Appeal Period Expired

Perrin v Williams [2014] QSC 21

This case is an important decision analysing the specific procedural rights and duties of creditors and liquidators in proof of debt proceedings. In this matter, the first respondent, Williams, was the liquidator for a company in voluntary liquidation. The second respondent, Bricknell (nee Perrin), a creditor of this company, entered a proof of debt claim; however prior to Williams adjudicating this claim or declaring a first interim dividend, Bricknell lodged a second, substantially lower proof of debt claim. Williams subsequently admitted this proof. Concurrent with this, Bricknell and the applicant, her soon-to-be, ex-husband, were engaged in property maintenance proceedings. Following the liquidators admission of Bricknell’s substantially lower proof, Perrin appealed this decision pursuant to s 1321 of the Corporations Act 2001 (Cth) (“Section 1321”), which provides that “a person aggrieved by an act, omission or decision of a liquidator … may appeal to the court . . . [which may] make such orders . . . [or] directions as it thinks fit.” [1]. Arising, after a fashion, out of Perrin’s application the following questions were put before Jackson J: 

(1) Whether the liquidator had made a decision to reject Bricknell’s first proof of debt; 
(2) Whether the liquidator had made a decision regarding whether Bricknell’s second proof of the debt was the basis for Bricknell’s only claim against the Company; and 
(3) Whether Perrin, was “an aggrieved person” pursuant to Section 1321. [3]. 

In addressing the first two questions his Honour undertook an analysis of the structure and interaction of the Corporations Act and the Corporations Regulations particularly, the “sequence of the procedural rights of a creditor with a right to prove and to rank for payment in a winding up.” [31]-[34], [37]-[44]. Especially relevant to this analysis was reg. 5.6.56 of the Corporations Regulations 2001 (Cth) which provides that the variation or reduction of a proof of debt claim cannot be made without the consent of the liquidator. [32]. Accordingly, his Honour concluded that a creditor lodging an additional proof of debt does not, by lodgment alone, elect to prove its debt via that second proof – until it receives the liquidator’s consent, it is the first proof which engages all relevant rights and obligations. [44]. Where the liquidator then treats the second proof as reducing or varying the first, they (implicitly) consent to the reduction or variation of the first proof in accordance with the second. [47], [49]. In applying this analysis to the first question, his Honour concluded that Williams’ decision was not, as alleged by Perrin, to reject the first proof, but rather to consent to Bricknell’s implicit request to vary the first proof. In considering the second question, Jackson J, departed from what he acknowledged to be a corollary conclusion – that ‘yes’, Williams had made a decision regarding whether the second proof of debt was the basis for Bricknell’s claim against the Company. Though generally this would be the correct answer, his Honour concluded that “the liquidator’s decision that the second proof of debt was the basis for admission or rejection was not itself a ‘decision’” pursuant to Section 1321. [52]-[53]. To stretch the concept of decision to the extent that the ‘decision’ of the second question was a separate, appealable decision would be “a risk that the efficient administration of liquidations of this kind will be impaired.” [53]. 

Though unnecessary given his prior conclusions, for the sake of completeness his Honour discussed whether or not Perrin could be considered “an aggrieved person”? At the time of Williams’ admission of the proof, and Perrin’s consequent filing, no order had been entered in the divorce proceedings and thus Perrin was not a creditor of Bricknell and had no legal interest in the debt. [60]. Whilst acknowledging that a legal interest was not “necessarily required”, Jackson J concluded that Perrin was not an aggrieved person. His Honour considered that it was “important that there not be multiple persons who can assert potentially inconsistent rights on appeal from a decision to accept or reject a proof of debt” and that, given Bricknell’s clear right to appeal in this case, had she been aggrieved, it was inappropriate to extend the definition of ‘aggrieved person’ to encompass Perrin. [65]. 

Appeal Status: No Appeal Pending - Appeal Period Expired

Venerdi Pty Ltd v Anthony Moreton Group Funds Management Ltd [2013] QSC 219

In this matter Jackson J was asked to determine whether a contract containing an “exclusory and disclaimer” clause (“the reliance exclusion clause”) could be relied upon by a defendant in an action for misleading or deceptive conduct brought pursuant to s 12DA of the Australian Securities Investment Commission Act 2001 (Cth) (“ASIC Act”). The defendant sought to rely upon the existence of the exclusion / disclaimer clause in a standard form contract as the foundation of a counterclaim for:
(1) misleading and deceptive conduct by the plaintiff – the defendant’s loss or damage being their liability to the plaintiff on the plaintiff’s claim; or
(2) breach of contract – the defendant seeking damages “measured by the [plaintiff’s] claim”.
The defendants alleged that, if the plaintiffs were to make out their claim for misleading and deceptive conduct then, it would follow that, the agreement in the contract to terms of the reliance exclusion disclaimer was false. The plaintiff’s conduct, so it was said, would also have been misleading and deceptive as the defendants would not have entered into the contract had they known this and, as a consequence, the defendants counterclaimed for damages equivalent to their liability to the plaintiff.
While there is a significant body of case-law concerning the reliance on exclusion clauses as a defence to a claim to a s 52 TPA claim; his Honour was faced with a paucity of precedent which considered the specific issue of whether or not it could be relied on offensively? [29]. After undertaking a thorough examination of the available, relevant case-law, (see [36]–[38], [41]–[44]), his Honour concluded that, despite the absence of any “overt illegality,” – there being no express prohibition of reliance on exclusion clauses to found an action in the ASIC Act – the present claim was invalid for “public policy illegality,” as to give effect to the clause would operate to “cut down” the statutory norm protected. [45].
His Honour then considered whether the defendants’ liability to the plaintiff for loss or damage suffered as a consequence of their violation of s 12DA of ASIC Act, could be “‘loss or damage’ that the defendant suffered ‘by’ the plaintiff’s misleading or deceptive conduct in contravention of s 12DA (or s [18])?” [48]. To answer this question the Court looked to the construction of the relevant provisions of the ASIC Act, deciding that the interpretation which would “best achieve the purpose” of the Act was that the defendants’ liability could not be defined as “loss or damage”. [51]. His Honour articulated a number of reasons for this conclusion, specifically that this interpretation would require the acceptance that what is, in reality, a contingent liability is equivalent to “loss or damage” as it is generally understood [52]; and that the defendants’ interpretation would otherwise interfere with the operation and purpose of the ASIC Act, [53]–[54], see further [56]–[61].
In the result Jackson J struck out the defendants’ counterclaim.

Appeal Status: No Appeal Pending - Appeal Period Expired

Kern Consulting Group Pty Ltd v Opus Capital Ltd [2014] QCA 111

In this important case the Court of Appeal considered the identity of the proper plaintiff to commence actions in relation to the business of managed investment schemes. Prior to this judgment there was relatively little authority on this point. 

The respondent, Opus Capital Limited, (“Opus”), was the Responsible Entity of the Opus  Property Trust No 12 which was a registered managed investment scheme. The Public Trustee  of Queensland (“PTQ”) was the Custodian under the scheme and held a lease (as lessor) of a commercial property in Cairns for the scheme. The appellants had been tenants in that  commercial property. A dispute arose as to amounts alleged to be owing under the lease and  Opus commenced proceedings for their recovery. At no time was Opus the owner of the real  property in question and nor was it a party to the lease or to any guarantees given as security for the lease. Opus claimed that it was empowered by ss 601FB and 601FC of the Corporations Act and the Constitution of the scheme to bring the proceedings to recover the allegedly outstanding rent. The appellants sought to strike out part of the pleading on the basis that Opus did not have any cause of action to pursue them under the lease or associated 
guarantees. 
In upholding the claim that Opus was not the correct party to bring the proceedings, the Court of Appeal (Jackson J with whom Fraser and Gotterson JJA agreed) made the following points:

  • The claims under the lease and guarantee were contractual in nature and there was no  plea that that the PTQ was the trustee and Opus was the beneficiary of any benefit or contractual chose in action relating to the lease or guarantee; 
  • Even if Opus was a beneficiary of the trust of a chose in action that did not convert Opus  into a party to the lease. 
  • Under the Managed Investment Scheme provisions in the Corporations Act the  Responsible Entity of a scheme holds the scheme property as trustee for the members,  however, it is also authorized to appoint an agent to hold scheme property separately. 
  • An agent for the Responsible Entity may enter into a contract for the Responsible Entity  for the purposes of the scheme’s business, but it does not necessarily follow that the  Responsible Entity, as trustee, is entitled to sue on that contract. 
  • That where a Custodian holds property for the Responsible Entity under a custodian  agreement, it may be that the beneficial interest in the property so held is vested in the members of the scheme and not in the Responsible Entity. That particular issue did not  have to be fully determined in the present case. 
  • The case before the Court could be analysed on general trust principles being that legal title to the land and to the contractual rights in the lease and guarantees vested in PTQ  and neither the provisions of the Constitution nor the Corporations Act operated to vest in Opus the right to commence proceeding in respect of those agreements. 
  • It followed that Opus had no right to commence the proceedings in question and the pleading did not disclose any relevant cause of action.

Note: It is important to recognise Jackson J’s endorsement of an approach by which questions of law, which are decisive in the action, are considered at an early stage in the litigation by way of a strike out or other summary procedure. His Honour identified that this was in accordance  with the philosophy stated in UCPR 5 and that it was likely to result in the saving of costs over the long term.  

Appeal Status: No Appeal Pending - Appeal Period Expired

Australian Securities and Investments Commission v Managed Investments Pty Ltd [2014] QSC 72

In the course of proceedings brought by ASIC against Managed Investments Pty Ltd, Douglas J allowed an affidavit of Jason Maywald (“Maywald”) to be read into evidence (reserving questions of admissibility) despite the fact that, aside from stating that he had signed it, Maywald refused, upon claiming his privilege against self-incrimination, to answer any further questions about its contents on cross-examination. The defendants objected to the admissibilityof the affidavit and his Honour had to determine whether or not Maywald’s affidavit and its exhibits ought to be admitted. In doing so it considered: the source of the power to admit evidence via affidavit; whether there was a common-law discretion to exclude admissible evidence; and if such a discretion existed, how it ought to be exercised. [2]
Source of Power
In determining how Maywald’s evidence ought to be treated, Douglas J first considered the source of power to admit the affidavit as evidence specifically, whether it was to be found in UCPR 367(3)(d) or s 92 of the Evidence Act (the “EA”). This distinction was significant because of the wide discretion granted to the Court pursuant to s 98(1) of the EA to reject a statement otherwise admissible under s 92 (“inexpedient in the interests of justice”) when compared to the discretion to reject an affidavit pursuant to UCPR 439(4) (author “does not attend the court in compliance with the courts order”). [17] Upon an analysis of the origins of both UCPR 367(3)(d)), which permits evidence at trial to be given via affidavit and which operates as an exception to the general rule that evidence at a trial must be given orally, and s 92 EA which permits the proof of statements upon a number of conditions, pertinently that the maker is called as a witness, see [10]–[15], his Honour concluded that, though there may be overlap, s 92 does not supersede the provisions of the UCPR. [15]–[16]. Consequently, it was held that the power to admit those parts of Maywald’s affidavit which contained evidence that could have been given orally was derived from UCPR 367(3)(d), [19]; by contrast its power to admit those parts of the affidavit which sought to prove business records which would have been inadmissible except via s 92 EA, was sourced from s 92 EA, and thus the broader discretion was applicable. [20].
Common Law Discretion
Despite concluding that, in the circumstances, this determination was unnecessary [25], his Honour undertook a brief examination of case-law concerning the existence of a common-law discretion to exclude evidence in civil cases. [21]–[23]. Though noting authority suggesting the existence of a (narrow) discretion to exclude otherwise admissible, similar fact evidence, which is “only remotely relevant or has small probative value,” [23], his Honour concluded that, in these circumstances, given that the evidence was not similar fact evidence, nor was it illegally obtained, this discretion was not available. [25] The absence of a common law discretion to exclude, however, is confined to that evidence which could have been established orally by Maywald. By contrast, Douglas J held that those documents exhibited to the affidavit and admissible because of s 92 EA were nevertheless subject to the statutory discretion to exclude contained in s 98 EA. [26].
Exercise of Discretion
In considering the exercise of the exclusionary discretion his honour noted that the mere fact that a party is unable to cross-examine the author of an affidavit is not determinative of its admissibility. He said, “the limit placed on the ability to cross-examine caused by [a] claim of privilege [is] simply one of the misfortunes of litigation … which parties are obliged to suffer.” [30]. Instead, in determining whether any discretion to exclude the affidavit ought to be exercised, the principle consideration of the Court was the relative prejudice suffered or to be suffered by the parties. [27]. His Honour concluded that in the circumstances the “relative degrees of prejudice” were fairly evenly balanced. [32]. This, combined with the fact that there was no inference that the affidavit was false, that the documents sought to be proved by the affidavit were not “vigourously opposed” and that the majority of relevant defendants wanted to have parts of the affidavit admitted, persuaded his Honour that it ought be allowed. [33]. As a consequence, Douglas J directed that, pursuant to UCPR 439(5)(b), Maywald’s affidavit could be used without Maywald being cross-examined in relation to it, though his Honour noted that he would “bear in mind the inability of the parties to further examine [Maywald]” when evaluating its evidential weight. [37]

Appeal Status: No Appeal Pending - Appeal Period Expired

Jensen v RQYS Marina Ltd [2014] QSC 243

In this recent application the Court considered the circumstances in which it is appropriate to grant leave, pursuant to s 237(1) of the Corporations Act 2001 (Cth), for members of a company to bring a proceeding on the company’s behalf against both other (related) companies and numerous former and current directors of the company.  Section 237(1) provides that leave to bring a proceeding on behalf of a company may be granted where: “(a) it is in the best interests of the company that the applicant be granted leave; (b) there is a serious question to be tried; and (c) the applicant is acting in good faith.”  [12]. 

Turning to the immediate matter, this application was brought by a number of members of the Marina Co (the “applicant”) who sought to commence proceedings against, among others, the a number of current and former directors of the Marina Co (the “Company”) and the Royal Queensland Yacht Squadron (the “Squadron”), a related company (the “respondents”).   The specific facts and circumstances which led to this application are both lengthy and complex, a situation compounded by the content of the applicant’s proposed claim, which ran to 93 pages and “advance[d] a variety of claims” many of which the learned judge said, “seem[ed] to go nowhere in terms of [explaining the] loss and damage alleged to have been suffered by the [Company]” [13]–[15].  The core submission of the proposed proceeding appeared to be, however, that “the directors and some other officers of the [Company] are alleged to have subordinated the best interests of the Company and the fiduciary duties they owed to it to the interests of the Squadron,” [16].   See [13]–[18].    

In resolving the application the focus of the Court was, what action was in the best interests of the Company?  In addressing this question, the Court firstly considered the substantive merits of the proposed claims.  Upon concluding that the constitution of the Company authorised and, at times, required that the Company “support” the Squadron, [29]–[34], and that it appeared that the directors of the Company had been acting in accordance with their fiduciary duties, see [55]–[108], the Court concluded that in respect to the proposed pleading, the Company “appeared to have poor prospects” of establishing these claims.  [109].  Given this conclusion, the Court then returned to the contested issues in the application, specifically (1) whether, in light of this previous conclusion and the other circumstances of the case, permitting the Company to bring the proposed proceeding was not only in its best interests, but that there was a serious question to be tried and, (2) whether the applicant had brought the present application in good faith.

Section 237(2)(c) requires that the Court must satisfied that the proposed action is in the Company’s best interests.  [113].  Whilst undertaking this rather a fact-specific enquiry the Court should consider “the prospects of success of the action, the likely costs and likely recovery if the action is/is not successful [and] the nature [if any] of an indemnity the applicant has offered the company . . . . the resources the company will be required to devote to the action . . . [and] whether some other remedy is available . . . so as to make the proposed action unnecessary.”  Id.  In considering the evidence before the Court, and in light of its previous determination, the Court was not convinced that it was in the best interests of the company that leave be granted.  Though it is in the best interests of a company to have its property returned, [117], the Court was not convinced that the Company’s property had, in fact, been misappropriated, [119], and furthermore that the consequences were the Company to be unsuccessful, vastly outweighed any benefit that would be received following a successful action, [120]–[128].  Though unnecessary given this conclusion, the Court then briefly addressed the question of whether the application had been brought in good faith. [137]–[140].  Though a somewhat difficult element to prove, to succeed the applicant is required to provide some positive evidence of their good faith, [112] – a requirement which the present applicant was unable to meet.  Though reaching no conclusion, the Court did suggest that a finding of good faith was difficult, in the circumstances, given the great disparity between the cost of running this highly complex litigation and any amount likely to be recovered.  [139]–[140].  Given its findings, the Court dismissed the application.  [141].  

Appeal Status: Appeal Determined.

Re Quality Blended Liquor Pty Ltd [2014] QSC 234

This is an interesting decision concerning the appropriate conduct of company “controllers” appointed pursuant to s 418A of the Corporations Act 2001.    The case arose out of a loan allegedly made by Mr Tschennen’s (“Tschennen”) company, Toyco, to the Lewis family’s company, Quality Blended Liquor (“QBL”).  Originally invited to make a capital investment, ultimately, Toyco’s (alleged) investment in QBL was be by way of a loan.  Documents relating to this loan were drawn up and executed in January 2014 and bear the signatures of Tschennen’s niece, Alicia Gorham (“Gorham”), as a director of Toyco, and Eliza Lewis.  Relations between the Tschennens and the Lewises quickly deteriorated and in February Toyco, of which Gorham was, by now, the sole director and shareholder, asserted defaults under the loan and appointed Mr Tschennen to be “controller” of the QBL business.  In the period following this, all interested parties met with a meditator and signed a deed under which Tschennen’s controllership continued and, though not involved in the day-to-day operations of the business, the applicants were to be allowed access to all business premises. [10].  The applicants brought the present proceedings seeking to have Tschannen removed as controller and for an inquiry into his conduct in that role.  [11].  The  applicants alleged that Tschannen manipulated himself into the role of controller of the entire business as a means of gaining unfettered access to its assets and using the available value for his own purposes.  [12]. 

Validity of Appointment

In considering the validity of Tschennen’s appointment as “controller”, there were three separate allegations made by the appellant: (1) that the documents concerning the alleged loan were improperly executed; (2) that, in any event, the default relied upon for appointment never occurred; or (3) that the security documents were void pursuant to s 588FP of the Corporations Act.  [24].  The first two complaints were found to be of no substance.  [36].  Thereupon, the Court considered s 588FP which voids a security interest “if a step is taken by a secured party [an officer of the company or a person associated with a person who is an officer] to enforce [it] within six months [of its creation] . . . without the leave of the court.  [38].  The principle issue before the Court was whether Toyco was an “associate” of Gorham, a director of both QBL and Toyco at the time the security interest was granted – if so, Toyco’s appointment of Tschannen, during Gorham’s directorship, meant that Tschannen’s appointment (being within six months of the creation of the security interest), was invalid.  [39].  The Corporations Act defines “associate” as including “a person in concert with whom the primary person is acting or proposes to act,” and a person is taken to have acted in concert where “they take concerted action with a common purpose or object”.  [40]–[41].  Given that evidence of a common-directorship alone does not satisfy the “associate” requirement of s 588FP, [43], and in the absence of evidence of “an understanding or arrangement between Gorham and Toyco as to a common purpose or object over and above the transaction involving the default notice itself,” [43], the Court held there was no basis for concluding that the actions of Gorham or Toyco violated s 588FP.  See [44]–[46].

Inquiry into Conduct

Having concluded that Tschannen was validly appointed as controller, the Court then considered whether, pursuant to s 423 of the Corporations Act, it ought to order an inquiry into his performance in this role.  [49].  The court’s discretion to order an inquiry is only enlivened where there is a prima facie case that the controller has not faithfully performed their functions pursuant to the instrument by which they were appointed, further, in deciding whether to exercise this discretion, the court will consider a number of matters, including: “the strength and nature of the allegations; any answers offered by the [controller]; other available remedies; . . . the likely benefit to be derived from [the inquiry]; and the legitimate interest of the applicant in the outcome.  [52]; [49]–[50].  Turning to the evidence presented, the Court, though having concluded that the evidence presented by the appellants was not sufficient to warrant a declaration that Tschannen’s appointment was invalid, was troubled by a number of aspects of the process, particularly Tschannen’s inability to produce proof of Toyco’s loan to QBL and his ‘manipulation of Gorham and, by extension, those companies of which she was a director.  [53]–[54], see also [70].  Though these events preceded the appointment, and thus could not be taken into account in determining whether an inquiry was warranted, they did provide a frame of reference for analysing the appellant’s specific allegations regarding Tschannen’s performance.  See [54].  On the evidence provided the Court considered that there was a prima facie case that Tschannen had not properly performed his functions as a controller – there was evidence that he had prevented the appellant’s from accessing both QBL’s physical premise and its records [57]–[59]; and that he had ceased any trading by or on behalf of QBL, failed to pay creditors, purchase additional stock, or undertaken a number of the necessary steps to secure the lawful, effective and continuing conduct of the business, in contravention of both the mediation agreement and a court undertaking.  [60]–[67].  The Court considered that this conduct compelled the conclusion that Tschannen had not faithfully performed his controller functions and that, as a consequence, it was appropriate to order an inquiry.  [73]. 

The Court declared Tschannen’s appointment as controller of QBL valid, however, ordered an inquiry into his conduct in undertaking that role.  

Appeal Status: No Appeal Pending - Appeal Period Expired

Westpac Banking Corporation v Jamieson [2015] QCA 50

This is an important decision concerning the nature of the damages recoverable and the assessment of the same in actions involving misleading or deceptive conduct.  The appeal was from a decision of Jackson J in Jamieson v Westpac Banking Corporation (2014) 283 FLR 286; [2014] QSC 32 which has previously been reported in this publication.  It is important to note that whilst the appeal was dismissed, there are a number of important issues which were dealt with in the decision below and which were not the subject of the appeal.

The matter arose out of alleged misleading or deceptive conduct in relation to the provision of financial advice by the Bank pursuant to which Mr Jamieson invested in an agribusiness managed investment scheme which permitted him to pay no income tax.  The investment strategy involved Mr Jamieson borrowing a large amount from Macquarie Bank to invest in a Macquarie managed investment scheme.  It also involved borrowing money to contribute to a self-managed superannuation scheme. 

The trial judge found that the Bank was liable for breach of retainer and in negligence.  The Bank’s conduct also amounted to misleading or deceptive conduct under s 12DA of the ASIC Act 2001 (Cth).  In essence the advice given did not disclose the totality of the cost of the investments nor the level of risk associated with the investments.  It was also found that had Mr Jamieson been informed of the relevant matters he would not have invested in accordance with the strategy, but he would have invested in an alternative strategy.

Although the appeal included grounds relating to alleged errors of fact by the trial judge, from the decision of Applegarth J a number of important points of principal emerge:

  • That the obligation on financial advisers requires them to spell out in simple terms the risks involved in undertaking of investments.  That also requires the identification of any assumptions inherent in the level of risks involved with an investment.
  • In relation to the attribution of responsibility for losses which have been sustained, questions arises as to whether or not it is appropriate to attribute all or only some of the loss to the wrongdoer.  The answer to that question has to be determined in the light of s 11(1)(b) of the Civil Liability Act 2003.  In relation to breaches of statutory provisions different considerations about the apportioning of liability may apply where the breach is of consumer protection legislation.  Where a loss has been caused by a breach of such legislation the Court has to determine what reason there might be for not attributing the whole of the loss to the contravener.
  • In this case a measure of damage in accordance with the rule in Potts v Miller (being the difference between the price paid for the investment and the true value at the time of acquisition) was not appropriate.  The bank was responsible for all losses incurred as a result of entering into the transaction because Mr Jamieson would not have entered into the transaction had the correct advice been given and the risk of loss of the kind suffered was the very thing which Mr Jamieson had sought to avoid by obtaining advice.
  • The rule in Potts v Miller is a second order rule which is applicable whenever the valuation method is employed, however, the court is entitled to simply assess the loss flowing directly from a transaction without reference to any particular date.
  • The rule in Potts v Miller will not usually apply where the misrepresentation continues to operate after the date of the acquisition so as to induce the plaintiff to retain the asset or where the plaintiff is locked into the property.
  • The losses which occurred by reason of the GFC and poor market performance were not losses which were extraneous or arose from supervening events.
  • In cases such as the present the plaintiff may well do better on the non-contractual tortious measure rather than on the contractual measure as the contractual measure takes account of what advice should have been given rather than putting the plaintiff back into the position that they would have been in had the tort not been committed.  [133]–[137].
  • In calculating loss it is not necessarily speculation to consider what counterfactual investment might have been entered into the by the investor.  However, determining how much worse off the investor may have been may turn on whether or not the investor would have pursued a different investment.  However, a plaintiff in a “no transaction” case is not required to prove what alternative investments might have been undertaken and the Court is not always required to hypothesise as to what alternative investment might have been made.  The evidential burden will be on the defendant to establish that if the representation had not been made the plaintiff would have incurred a loss in any event.
  • That where the recoupments obtained in an action will be taxable it is appropriate to gross up the damages to take into account the amount of tax that will have to be paid.  This is because of the operation of s 20-20 of the Income Tax Assessment Act 1997 (Cth).  However, the amount of damages awarded by the grossing up process are not, themselves, recoupments which need also to be grossed up.

This important decision contains a discussion of many important issues relating to the assessment of damages in a commercial context.

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Robson v Commissioner of Taxation [2015] QSC 76

This matter concerned the application of Pt 5.7B of the Corporations Act 2001 (Cth) to the winding up of an incorporated association. 

By way of background [4]–[6]:

On 2 August 2013, the court ordered, pursuant to s 90 of the Associations Incorporation Act 1981, that the second plaintiff be wound up as it was effectively insolvent.  The first plaintiffs were appointed as the liquidators.

The first plaintiffs claimed from the defendant “the sum of $117,616.00 as an unfair preference pursuant to the Corporations Act 2001”, on the basis that pursuant to s 588FF(1)(a) of the Corporations Act 2001 (Cth), the plaintiffs were entitled to apply for an order that the defendant pay to the second plaintiff an amount equal to some or all of the money that the second plaintiff paid to the defendant.

Section 588FF(1)(a) provides that a court may make such an order where it is satisfied that a transaction is voidable because of s 588FE of the Act.

The plaintiffs alleged that the second plaintiff made payments to the defendant with a view to reducing its taxation liabilities, and that those transactions amounted to unfair preferences under s 588FA(1) of the Corporations Act 2001 (Cth), since if the defendant were allowed to retain the payments, it would receive a greater amount than it would otherwise if each of the transactions were nullified, and the defendant was required to prove in the winding up. The plaintiffs contended that in any event, the transactions were insolvent transactions under s 588FC of the Act, and voidable under s 588FE(2). [7].

The parties separately applied for orders for the decision of a question separately before the trial of the proceeding, specifically whether the provisions of Pt 5.7B of the Corporations Act 2001 (Cth), including s 588FF, applied in the winding up of the second plaintiff as an incorporated association. [8].

In relation to the operation of Pt 5.7B, his Honour provided the following guidance:

   “On the proper construction of the CA, taken as a matter of the text of the whole of the legislation and as presently enacted, neither s 582 nor s 583 of the CA is the source of the liquidator’s power to apply for or the source of the Court’s power to make an order under s 588FF of the CA.  Instead, the source of those powers in the case of a Part 5.7 body lies in the provisions of Pt 5.7B and s 588FF themselves, by reason of the defined meanings of “company” and ‘transaction’ in s 9 of the CA”. [37].

Given the circumstances of the dispute, and preferring the interpretation that would best achieve the purpose of the legislation, his Honour determined that, on its proper construction, s 91(2) of the Associations Incorporation Act 1981 did not operate to apply Pt 5.7B of the Corporations Act 2001, including s 588FF(1)(a), to the winding up of an incorporated association under s 90 of the Associations Incorporation Act 1981 as neither s 582 nor s 583 of the Corporations Act 2001 (Cth) applies Pt 5.7 or s 588FF to a Part 5.7 entity. [69].

In the result, his Honour determined that the provisions of Pt 5.7B of the Corporations Act 2001 (Cth) and in particular s 588FF did not apply in the winding up of the second plaintiff, entering judgment for the defendant in the proceeding started by claim. [71].  

Appeal Status: No Appeal Pending - Appeal Period Expired

Re CMI Industrial Pty Ltd (In Liq); Byrnes v CMI Limited [2015] QSC 96

This matter arose from an application brought by the applicant liquidators of CMI Industrial Pty Ltd (“CMI”) for directions under s 511(1) of the Corporations Act 2001 (Cth) regarding a question arising in the course of winding up the company. By way of brief background:

The applicants were initially appointed joint and several administrators of CMI on 26 April 2012, then liquidators on 29 May 2012, pursuant to a resolution of the company’s creditors.  [1].

Receivers were appointed to CMI on 26 April 2012 by Ford Motor Company of Australia Limited which was the holder of a fixed and floating charge.  Two other secured creditors, National Australia Bank Limited and the respondent, had priority over the Ford charge.  The secured debt to the NAB has been paid. [2].

On 17 February 2014 the receivers paid $1,281,901.62 to the liquidators for distribution to priority creditors. [3].

Following their appointment, the receivers continued to conduct various aspects of the company’s business, whilst seeking purchasers for it. To this end, the receivers purchased additional inventory.  Ultimately, the business remained unsold and its assets were subsequently realised.  Arising from the period of trade using the additional inventory purchased subsequent to their appointment, the receivers generated an “inventory trading profit”.  The respondent claimed that that profit should rightfully be distributed to it, in accordance with its charge, but, in the absence of direct binding authority, the applicants contended that the appropriate course would be for it to be paid to the priority creditors as part of their statutory entitlement. [4].

Accordingly, the question for determination by the court was which party was the most appropriate recipient of those surplus funds – and specifically, whether they should be paid to satisfy employee entitlements pursuant to s 433 and/or s 561 of the Act; or alternatively, paid directly to the respondent.  [5].

At the outset, her Honour noted that the amount owing to the priority creditors significantly exceeded the combined value of the surplus funds and assets which were the subject of the floating charge at the date the receivers were appointed.  [5] It was also noted that no existing authority had previously decided the specific issue raised by the application. [12].

Given the operation of both s 433 and s 561 of the Act were directly influenced by the relevant floating charge as created, her Honour considered the terms of the Ford charge pursuant to which the receivers were appointed.  It was determined that, in view of the terms of the deed, the charge was a floating charge on all of the rest of the charged property, and  became fixed upon the chargee taking any step to enforce the charge after an event of default occurred.  [31]. It followed that the deed of charge no longer operated as a floating charge after any step to enforce the charge – an example being the appointment of the receivers.  [32]. As for the respondent’s charge, her Honour found that it too was in standard terms, relevantly noting that it created a floating charge over the company’s stock-in-trade and the proceeds of any debt, and was subject to crystallisation on the occurrence of certain specified events, including the appointment of any receiver.  [33].

The applicants submitted that s 433 of the Act was enlivened upon the appointment of a receiver by the holder of the floating charge, and that had the section been intended to be restricted to property in existence as at that date, such a limitation would be made expressly clear by the terms of the provision. [34]. In the alternative, the applicants argued that the receivers were liable under s 561 to pay the priority creditors with the proceeds of the inventory trading profit. [38]. Conversely, the respondent contended that the property which was the subject of the obligation under s 433(3) of the Act was that which came into the hands of the receivers on the date of the appointment, and that was the subject of the floating charge as created.  The respondent submitted that property did not include any profit flowing from the assets of the business following the appointment, as once s 433 of the Act is enlivened, the only relevant date is the date of the appointment of the receiver.  [40].

Her Honour provided the following guidance regarding the construction of s 433:

“Section 433 of the Act is a remedial provision that favours the specified priority creditors giving them a statutory entitlement to be paid from assets that would have otherwise not been available, because those assets would have become the subject of a fixed charge, when the floating charge crystallised on the appointment of the receivers.  [45].

The scheme of the priority … revolves around the date of the appointment of the receivers and operates in respect of the assets that are identified on the basis that they would have been the subject of the floating charge, as created, had the charge not crystallised on that date.  [46].

The scheme under s 433 of the Act does not extend to conferring any statutory entitlement to the priority creditors in respect of the trading profit made by the receivers conducting the business of the company after the date of their appointment.” [47].

In the result, her Honour concluded that the priority creditors had no statutory entitlement under s 433 of the Act to the inventory trading profit, as it was not an asset which was identifiable at the date of the appointment of the receivers [51], ordering that the applicants’ costs on the indemnity basis be paid from the priority creditor entitlement in priority to priority creditors. [52].     

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Thorne Developments Pty Ltd v Thorne [2015] QSC 156

This is a recent decision of the Supreme Court considering the interaction between the Trusts Act 1973 and those provisions of the Corporations Act 2001 (Cth), ss 601–601AH, which address how the trust property of a deregistered corporate trustee is to be dealt with. 

This matter arose out of an application brought by the corporate trustee, Thorne Developments Pty Ltd, of a family discretionary trust, Thorne Family Trust No 3 (the Thorne Trust), against the respondent, Suzanne Maree Thorne, a former trustee of the Thorne Trust, seeking a declaration that her appointment, whilst the applicant was deregistered, was invalid.   The facts giving rise to this application are as follows.  The applicant was trustee until its deregistration in December 2011.  [1].  At that time its only director was Brett Thorne who, following the applicant’s deregistration and pursuant to cl 16.3 of the trust deed appointed his wife, the respondent, as trustee of the Thorne Trust.  [10]. Brett Thorne became bankrupt in March 2012.  Upon its registration being reinstated in September 2013, at the request of Brett Thorne’s trustee in bankruptcy, the applicant brought the present application, seeking the Courts consideration of the following issues:

  1. Whether the respondent was precluded from being appointed a trustee without the Commonwealth’s consent;
  2. Whether the deed of appointment validly appointed the respondent a trustee of the Thorne Trust;
  3. Whether the respondent’s appointment as trustee was bona fide; and if unsuccessful on all these;
  4. Whether the respondent was deemed to have vacated the office of trustee on the basis that she was “subject to any bankruptcy law” within the meaning of the trust deed.

Operation of ss 601–601AH Corporations Act

Prior to July 2007, when a company was deregistered all of its property vested in ASIC.  The Act was amended in 2007, and relevantly for this matter, a distinction between the vesting of property held by a deregistered company of trust and that held in its own name was made.  [18].  Incorporating these amendments, s 601AD(1A) of the Corporations Act now provides that on deregistration, “all property that [a deregistered] company held on trust immediately before deregistration vests in the Commonwealth”, and s 601AE(1) provides that where property is so vested the Commonwealth may act as trustee or apply to a court for the appointment of a new trustee. 

The applicant’s contention was that these sections, along with ss 601–601AH of the Act, contained an exclusive code for the removal of the Commonwealth as trustee of trust property vested in the Commonwealth by the operation of s 601AD(1A) and, as a consequence, a trustee could not be appointed pursuant to the Trusts Act or a trust deed.  [16]. The Court rejected this argument for the following reasons.  The idea of the scheme set up by ss 601AD and 601AE of the Act is to ensure that there is an entity to deal with the property owned by a deregistered company upon its ceasing to exist.  The Court considered that whether or not the Commonwealth is considered a ‘full trustee’ in respect of the trust property of a deregistered company was irrelevant to whether or not a trustee could be appointed pursuant to the trust deed or the Trusts Act. [36].  Even if the Commonwealth is a full trustee, the proper construction of ss 601–601AH is the effect that the rights vested in the Commonwealth “may be affected or divested by the application of the other laws within which the scheme operates”, including the Trusts Act, and there is nothing in the Act which mandates that the Commonwealth must consent prior to any such appointment taking affect.  [37] , see further [20]–[34], Chalker v Barwon Coast Committee of Management Inc [2005] VSCA 101.  In delivering its reasons for dismissing the applicant’s application on this issue, the Court affirmed the analysis of Gillard J in Chalker.  [37].

Validity of Deed of Appointment

The applicant submitted that no occasion arose for the exercise by Mr Thorne of his power under the trust deed or s 12(1) of the Trusts Act to nominate a new trustee on the basis that there was “no vacancy in the office of trustee occupied by the applicant, because of the operation of ss 601AD and 601AE of the Act”.  [40].  For the same reason that the Court rejected the previous submission, namely that ss 601–601AH of the Act do not displace the operation of the laws that apply generally to trusts, the Court dismissed the applicant’s application as it related to this issue.  Section 12(1)(h) of the Trusts Act provides for the appointment of a new trustee by the person nominated under the trust deed for this purpose – in the present case, Mr Thorne – following the “dissolution” of a corporate trustee.  [43]. When the Trusts Act was enacted the relevant companies’ legislation provided for dissolution, rather than deregistration of a corporation.  The issue of statutory interpretation before the Court was whether deregistration under s 601AB of the Act is caught by s 12(1)(h) of the Trusts Act.  [44]. The Court, agreeing with the submissions of the respondent, [45]–[46], considered that, for the present purposes, these terms were interchangeable and the word “dissolved” in s 12(1)(j) of the Trusts Act should be construed as covering deregistration.  [47]. For these reasons the applicant did not succeed on its arguments related to this issue.

Bona Fide Appointment

The Court also considered, and rejected, the applicant’s argument that the appointment by Mr Thorne of his wife as a trustee was not a bona fide exercise of his power of appointment.  In support of this contention the applicant relied, solely, upon the relationship between the respondent and Mr Thorne.  [53].  This fact was not sufficient to support an inference that the respondent was appointed so that Mr Thorne would be able to influence her decisions, and thus the Court dismissed this part of the applicant’s application.  [54].

“Subject to Any Bankruptcy Law”

The final issue before the Court was whether the respondent’s appointment had been vacated because, following the receipt of a bankruptcy notice in February 2015 and her subsequent application to have this set aside, she was “subject to any bankruptcy law” and thus no longer eligible to be a trustee pursuant to cl 17.1 of the trust deed.  The applicant argued that the issue of a bankruptcy notice is a proceeding under the Bankruptcy Act 1966 (Cth) and that in applying to have this set aside, the respondent had engaged the Bankruptcy Act and was now subject to the Bankruptcy Act regardless of the outcome of her application.  The Court rejected this interpretation, adopting a “common sense approach” to the construction of the “subject to any bankruptcy law” clause of the trust deed and held that the deed should not be construed as to require a person to vacate office as trustee unless and until the Bankruptcy Act had “effected a change in the status of the respondent”.  [59].  

The Court dismissed the application.  [60].  

Appeal Status: Appeal Pending

Sutherland v Jot Property Solutions Pty Ltd [2015] QSC 249, 25 August 2015

This is a recent decision of the Supreme Court of Queensland considering the standing requirements for a claim made under s 228(1) of the Property Law Act 1974 (PLA).  The defendants in the substantive matter brought the present application in an effort to strike out the plaintiffs proceeding against them, alleging that the claim be set aside or struck out on the ground that the plaintiff lacked standing.  The substantive action had been brought by the plaintiff liquidators to have a series of transactions involving the plaintiff and the defendant made prior to the plaintiff going into liquidation, declared void and reversed, pursuant to s 228, on the basis that there had been an “intent to defraud creditors” and the transactions amounted to an “alienation of property”.  [6].  This application turned on the question of whether the plaintiff liquidators could be considered a “person prejudiced by the alienation of property”.

The plaintiffs were the liquidators of Blue Chip Property Services.  Pursuant to s 477 of the Corporations Act 2001 (Cth), as liquidators they have the power to “bring or defend any legal proceeding in the name and on behalf of the company ...” (emphasis added).  [18].  In the substantive matter, however, the liquidators did not bring the claim on behalf of the company, but instead insisted that the matter had been brought on behalf of the creditors of the company, [21], claiming that they had the power to do so courtesy of s 477(2)(m) which confers on liquidators the power to “do all such ... things ... necessary for winding up the affairs” of a company.  [25].  The Court considered that though this interpretation did not “rest easily” with the existence of s 477, and the fact that it expressly allowed for a liquidator to bring or defend a legal proceeding, see [26]–[27], the Court accepted that s 477(2)(m) might empower liquidators to institute proceedings pursuant to s 228 of the PLA.  [28].  The real issue was whether the liquidator was a person to whom s 228 applied.  

Pursuant to s 228, the liquidator could only bring this action if it could establish that it was “prejudiced by the alienation”.  Though, in the circumstances, it was arguable that the company was prejudiced, the Court considered that this prejudice did not extend to the liquidators as individuals.  In reaching this decision the Court addressed the applicant’s contention that even accepting the plaintiff’s assertion or prejudice – which was, of itself questionable, see [31]–[32] – it was not occasioned “by the alienation of property”.  [33].  The Court considered that the language of s 228 required a causative link between the prejudice complained of, being in this case that it has remuneration outstanding, and the alienation.  In this case, the plaintiff had no relevant interest at the time when the alienation is alleged to have occurred, the alienation occurring long before the liquidator assumed any connection with the company.  [34]–[35].  Instead, the Court concluded, any prejudice suffered by the liquidator was caused by the liquidator’s decision to take on the appointment, and thus it lacked standing under s 228. 

For these reasons, the Court struck out the statement of claim for its failure to disclose a reasonable cause of action.  [42]. 

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Ashala Model Agency Pty Ltd (in liq) v Featherstone [2016] QSC 121, 6 June 2016

In this recent matter, the Court considered the application of the insolvent transaction provisions of the Corporations Act 2001 (Cth), in particular s 588FE(5), and in particular whether an unfair preference is capable of constituting an uncommercial transaction (s 588FB) where no undervalue is involved.  Section 588FE(5) provides that a transaction of a company may be voidable if:

  1. “it is an insolvent transaction of the company;
  2. the company became a party to the transaction for the purpose, or for purpose including the purpose, of defeating, delaying, or interfering with, the rights of any or all of its creditors on a winding up on the company; and
  3. the transaction was entered into … during the 10 years ending on the relation-back date.”

The facts giving rise to this application are as follows.  On 1 July 2005, the first defendant, Featherstone, leased premises to the plaintiff company for three years for approximately $160,000 payable yearly in advance, but agreed that no rent would be payable until a demand was made.  Between May 2005 and August 2007, the plaintiff company, though making a trading surplus, which, by August 2007 was approximately $464,000, did not pay any amount to the first defendant on account of their lease agreement, nor had it paid any tax owing to the ATO – the first defendant was aware of both these circumstances.  See [47]–[58].  In early August 2007, the first defendant and the plaintiff company executed a document recording that the first defendant would accept $460,000 as “full and final” payment for all rent owing – according to the lease the rent that was payable under the original agreement was $498,150.  [65]–[66].  Subsequently, the plaintiff company, on the first defendant’s behalf, paid a $23 000 deposit for the purchase of a residential unit and then the $435 000 balance.  [69]–[77].  As a consequence of these events the plaintiff company’s cash position and current assets were reduced by $460,000, [79], its current liabilities were reduced in the same amount and it was left with approximately $3800 in assets.  [80].  It was the plaintiff’s contention that this transaction was voidable on the basis that it was an insolvent transaction.

Relationship between Parties

Central to this matter was the relationship between the first plaintiff and the first defendant.  While Featherstone alleged that the first plaintiff was, at all relevant times, a completely distinct entity outside of his control, following a consideration of the evidence, the Court concluded that this was not the case.  The Court concluded that Featherstone controlled the first plaintiff, see [30]–[38].  In reaching this conclusion, the Court noted the uncommercial arrangements between the parties, for instance that the first respondent personally paid for the operating expenses of the first plaintiff. [36].  The Court ultimately found that the first defendant was a director of the first plaintiff – he was the “directing mind and controller of the first plaintiff during the events constituting the alleged voidable transaction.  See [38]–[46]; Buzzle Operations Pty Ltd v Apple Computer Australia and s 9 of the Act.

Insolvency of Plaintiff Company

The first issue for the Court was whether the first plaintiff was insolvent at the time the first defendant withdrew the monies for the purchase of the apartment in August 2007.  From the liquidators report it was apparent that at least following its purchase of the Quay West unit, given that the plaintiff company had made no provision for its (substantial) tax liabilities, its current liabilities well exceeded its current assets and the plaintiff company was insolvent.  [91].  In making this finding, the Court rejected the first defendant’s submission that the first plaintiff was not insolvent because the first defendant had agreed to “indemnify … the [first plaintiff] from all costs, claims and expenses that [it] may be subject to” and that he had sufficient assets to do so”.  In doing so, the Court referred to the decision in Re Cube Footwear where the Court had found that whether there was the support of a creditor, shareholder or director who has the means was relevant to the question of insolvency, holding that the “most important consideration [was] the degree of commitment to the continuation of financial support”.  [94].  On the facts the Court considered that this commitment was absent.  [95]–[105].  Accordingly, the Court concluded that at the time of making the challenged payments, the plaintiff company was either insolvent or the making of these payments made it so.  [105], see also [182]. 

Uncommercial Transaction

Pursuant to s 588FE(5) a transaction is voidable if it is was entered into during the 10 years ending on the relation-back day, was an insolvent transaction of the company; and the company became a party to the transaction to either avoid or interfere with the rights of its creditors on winding up.  See [7].  A transaction is an uncommercial transaction where “it may be expected that a reasonable person in the company’s circumstances would not have entered into the transaction, having regard to the benefits … [and] detriment to the company of entering into the transaction; and the respective benefits to other parties to the transaction of entering into it…”.  s 588FB (1); see [117].  It is the second plaintiff’s (the first plaintiff’s liquidator) submission, that the uncommercial transaction was constituted by the two payments in August 2007 which it alleges were used to fund the purchase of the Quay West unit. [118]. It alleged that a reasonable person would not have entered into this transaction.  Id.

Challenged Payments – Alleged Transaction

Critical to addressing the plaintiff’s contention was what constituted the relevant transaction.  Transaction is defined as a “transaction to which the relevant body [the first plaintiff] is a party, including a payment”.  [120].  The case-law considering this term has recognised that “where a course of conduct, plan or series of steps is involved, it may be appropriate to take a wide view of what constitutes the transaction” though these steps “must be linked as showing that the company [for example] disposed of property … in an ‘uncommercial’ way to its disadvantage” and that it must be noted that these individual steps may also, in and of themselves constitute transactions.  [120], see further Capital Finance Australia v Tolcher.  Considering the circumstances before it, the Court concluded that the challenged payments were clearly a transaction [121], however the Court noted that the “transaction” could not be isolated to the purchase of the Quay West unit – the “transaction” also included both the discharge of the rental debt owed, and the agreement to reduce the rent payable.  [122].

The Court then turned to consider whether the identified transaction was uncommercial.  “Although the most common instance of an uncommercial transaction will be one which occurs at an undervalue … [a]ny situation in which a reasonable person in the company’s circumstances would not have entered into the transaction, even if it were for full value, justifies the conclusion that it is uncommercial.  [123], see Old Kiama Wharf Company Pty Ltd v Betohuwisa Investments Pty Ltd.  On the facts it was apparent that the impugned transaction did not have a detrimental effect on the assets of the plaintiff company – any reduction in the assets of the plaintiff company caused by the challenged payments was matched or exceeded by the reduction in the liability for the rent.  See [125]–[126].  The detriment, if there was any, comprised the reduced liquidity of the plaintiff company.  The plaintiff alleged that the benefit obtained by the first defendant was that he received the benefit of receiving the preferential payments, converting the rent payable to him on demand as a creditor into cash receipts.  [128].  It was also alleged to be significant that the effect of these payments was to leave the first plaintiff in a position that where it was unable meet its debts to the ATO, and thus not able to meet the claims of its creditors upon its insolvency; and that the purpose behind the first defendant’s conduct in causing the payments to be made was to delay or defeat the ATO as creditor.  [129]. 

Given that the plaintiff had only pleaded that the payment would engage liability under s 588FE(5) by reason of an uncommercial transaction only, the Court then had cause to consider whether an unfair preference also constitutes an uncommercial transaction, despite the fact that the Act distinguishes between the two in the context of s 588FE(5).  [133].  As a matter of statutory interpretation the Court concluded that this was not the case, and that without more an unfair preference does not constitute an uncommercial transaction within the meaning of s 588FB.  [134]-[145], see also Tosich Construction v Tosich.  The Court noted, however, that there were circumstances where a transaction involving a preferential payment “may constitute an uncommercial transaction even though the payment has all the hallmarks of a preference and did not necessarily entail any disposition of the company’s property at an undervalue”.  [147], see [148]; Re Sofire Pty Ltd (in liq).  In Re Solfire Pty Ltd the Court held that the development and implementation of a method by which “the ordinary processes of the law … could be circumvented so that the company having used all its resources to pay creditors … other than those judgment creditors the moneys that were owing to them, could go into liquidation leaving its judgment creditors with judgments and unsatisfied statutory demands which would be worthless … may properly be characterised as ‘an uncommercial transaction’.”  The issue in the present case was whether an intention (which the Court ultimately considered the first defendant had, see [164]–[178], [184]; Brigenshaw v Brigenshaw) to make the challenged payments as preferences to advantage one creditor in the impending insolvency of the company was an uncommercial transaction within the meaning of s 588FB.  [154].  The first defendant alleged that, unlike the relevant statutory provisions in Re Solfire, the text of s 588FB is “directed to [a consideration] of the company’s position, not the creditor’s positions” and thus any consideration of whether a reasonable person would have entered into the transaction should be (solely) considered from that perspective.  [159].  The Court rejected this submission.  Relying upon the NSW Court of Appeal’s decision in Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd, the Court noted that the “detriment” referred to in the section “is not limited to a detriment that can necessarily be measured in money terms [but rather] refers to commercial detriment.”  [161].  The Court concluded that if the plaintiff could show that the first defendant’s purpose in causing the payments to be made was that he would be paid as a creditor leaving other creditors to remain unpaid in a contemplated winding down, the transaction was uncommercial because “it may be expected that a reasonable person in the company’s circumstances would not have entered into the transaction.  [162]. 

Applying this to the evidence presented at trial, the Court concluded that the transaction was uncommercial.  See [179]–[181].  Given this finding, and its findings regarding the insolvency of the plaintiff company and the intentions of the first defendant, the Court concluded that the transaction of the first plaintiff in making the challenged payments was a voidable transaction under s 588FE(5) of the Act.  [179]–[186].   

Appeal Status: No Appeal Pending - Appeal Period Expired


Criminal Law back to top

DHG v State of Queensland [2013] QSC 89

This is an important case given the practice of Government regulators to record on their websites the details of enforcement action. The circumstances of this case were that the applicant pleaded guilty before the Industrial Magistrate in relation to a contravention of the Workplace Health and Safety Act 1995 (Qld). He was fined a substantial sum and required to pay costs. However, the Industrial Magistrate ordered that that no conviction be recorded. Subsequently, the Department of Justice and Attorney-General entered on its webpage particulars of the prosecution of the employer and the applicant. It specifically named the applicant and it further recorded details of his sentence. Boddice J held that the entries on the Department’s webpage had recorded the conviction contrary to the provisions of the Penalties and Sentences Act 1992 (Qld). His Honour rejected the argument that the making of the record on the website which included details of the applicant was necessary for the legitimate performance of functions of the department.

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Major [2013] QCA 114

In this matter the Court of Appeal had to consider the application of s 270 of the Criminal Code in relation to a charge of manslaughter. That section provided that it is lawful for a person “to use such force as is reasonably necessary to prevent the repetition of an act or insult of such a nature as to be provocation to the person for an assault, if the force used is not intended, and is not such as is likely, to cause death or grievous bodily harm”. An initial question for the Court was whether or not the defence under s 270 was available to a charge of manslaughter? The Court held that, for reasons similar to those which support self-defence under s 271 as a defence to manslaughter, s 270 was also a defence where death has resulted. The next question was whether or not the defence was only available where there was evidence which raised a “reasonable possibility” of the provocative act or insult being repeated? The Court held that once the defence was raised the Crown had to prove beyond reasonable doubt that on the objective evidence there was no reasonable possibility of the provocative act or insult being repeated. This does not require that the accused held a reasonable apprehension of the possibility of a repetition of the act or insult. It was further held that it was not a requirement for the raising of the defence that the act of provocation occur in the sight of the accused for it to occur in the accused’s presence as required by the section. This case, whilst undoubtedly correct, gives support for those who call for the abolition of provocation as a defence to assault on the basis that it is “fraught with legal, conceptual and practical difficulties” as identified in the New Zealand Law Commission, The Partial Defence of Provocation, Report No 98 (2007) 11.

Appeal Status: No Appeal Pending - Appeal Period Expired

State of Queensland v Bank of Queensland [2013] QCA 225

In this unusual matter a Bank’s customer’s accounts had been made subject to certain freezing orders under the Criminal Proceeds Confiscation Act. These orders prohibited any dealings on the customer’s accounts including a loan facility which the customer held with the Bank. Certain property of the customer was sold and the proceeds were paid to the Bank which then credited the amount against the indebtedness on the loan account. The customer thereupon further drew down on the loan account and increased the indebtedness again. On the sale of certain land over which the Bank held security in respect of the indebtedness on the customer’s accounts, the Bank claimed that it was entitled to retain an amount sufficient to satisfy all of the customer’s indebtedness to it. It was accepted that the dealing by the Bank with the proceeds of the sale of property paid to it and allowing additional credit to be withdrawn was a dealing with the customer’s property in breach of the freezing orders. The question for the Court of Appeal was whether or not the transaction by which the customer withdrew money from the loan facility and thereby increased the Bank’s interest in the land was void by reason of the illegality arising because the transaction was in breach of the freezing orders. The Court (Gotterson JA and Martin J) passed a number of observations as to the operation of s 53 of the Criminal Proceeds Confiscation Act which operates in some circumstances to render void transactions which have been made in breach of a court order freezing assets. However, in relation to the issue of whether or not the transaction was void by reason of illegality at common law, the majority held that the mere fact that a transaction is in breach of a court order does not render it void. Their Honours held that much will depend upon the circumstances of the case and the intent with which the act was done. Further, there was nothing in the legislation from which a legislative intention could be found that anything done in breach of an order made under the Act was void. It should be noted that Atkinson J wrote a strong decision in dissent which is well worth considering.

Appeal Status: No Appeal Pending - Special Leave to Appeal refused by the High Court on 14 February 2014

R v Bossley [2012] QSC 292

This decision followed an application under s 590 of the Criminal Code to exclude evidence of a search where the accused was charged with trafficking MDMA. The accused was attending a music festival where he was spotted by police officers who considered that he appeared excited, talkative and hyperactive compared to others around him. The accused was searched and found to be carrying a trafficable quantity of MDMA. The issue for Dalton J was whether or not the evidence obtained from the search was admissible. Under s 29 of the Police Powers and Responsibilities Act a search may be conducted without a warrant if the police “reasonably suspects” the relevant circumstances; in this case that the person was in possession of dangerous drugs. Apparently, merely attending a “music festival” does not give rise to a prima facie inference that such is the case. Therefore, her Honour considered what was comprehended by the expression “reasonably suspects” and identified it in the following terms (footnotes omitted):
“The term “reasonably suspects” is defined in Schedule 6 to the PPRA as meaning, “suspects on grounds that are reasonable in the circumstances”. There is also well-established common law authority in relation to both the concept of suspicion and the concept of reasonable suspicion. The meaning of suspicion in this context is discussed by the High Court in George v Rockett. A suspicion and a belief are different states of mind. A suspicion is a state of conjecture or surmise. It is more than idle wondering. It is positive feeling of apprehension or mistrust, but it is a slight opinion without sufficient evidence. Facts which reasonably ground a suspicion may be quite insufficient to reasonably ground a belief. Nonetheless, to have a reasonable suspicion some factual basis for the suspicion must exist. There must be sufficient factual grounds reasonably to induce the suspicion. The facts must be sufficient to induce the suspicion in the mind of a reasonable person. The suspicion must be reasonable, as opposed to arbitrary, irrational or prejudiced. That a young man is driving a smart car with some panel damage is not sufficient to give rise to a reasonable suspicion.”
Although her Honour found that there were no grounds for the “reasonable suspicion” under the PPRA her Honour considered that the accused had consented to the search and, in reaching that conclusion, consideration was given to the nature of the consent required.

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Saba [2013] QCA 275

In this case the accused had been convicted of the offence of dishonestly obtaining a benefit, namely that he changed the ASIC records in relation to two companies such that he was shown as the controlling director of those companies. The charge alleged that the "benefit" obtained was that the accused "acquired the public appearance of being legitimately appointed sole director and sole shareholder in each of the companies" and that he thereupon acted as a director of the companies. Jackson J (with whom the other members of the Court agreed) noted the difficulties associated with the circular definitions of "benefit" and "property" in the Code as well as the connection between the concept of "benefit" and "advantage". His Honour assayed a variety of instances where the concept of "benefit" was used in the Code, noting that the scope of the concept is dependent upon the context in which it is used. Turning to the case at hand it was observed that the allegation against the accused was not that he gained the powers of a director but that he gained the "appearance" of control of the company such that other persons would assume that he had become the duly appointed director of the company. It was held that the potential that some person might make the assumption in the future is not a benefit or advantage for the purpose of s 408C(1)(d). Whilst the obtaining of the appearance of being a director might have been a step along the way to the gaining of an advantage, it was not, in itself, such an advantage.

Appeal Status: No Appeal Pending - Appeal Period Expired

R v BCO [2013] QCA 328

In this matter the Court had to consider the exercise of a discretion to record a conviction against a juvenile and, in particular, whether or not the recording of a conviction would adversely affect his prospects of employment. The appellant had committed certain sexual offences when he was 15 years and 11 months old. He was convicted on a count of rape and a conviction was recorded. The discretion as to whether or not to record a conviction was controlled by s 176 of the Youth Justice Act. The matters relevant to the exercise of the discretion included the impact of recording a conviction on the child’s chances of obtaining and retaining employment. The sentencing judge made the assumption that there was no starting point that the recording of a conviction would adversely impact on the ability of the child to obtain employment. The Court of Appeal (Mullins J with whom the President and Morrison JA agreed) disagreed. It was observed that Courts should proceed, and have done so in the past, on the assumption that the recording of a conviction will impinge adversely on a child’s rehabilitation and employment prospects. Mullins J said:

"The authorities therefore strongly support as the starting point for a youth of the applicant’s age being sentenced under the Act the inference that the recording of a conviction would have an adverse impact on the youth in respect of prospects for rehabilitation and employment. There was nothing in the circumstances applying to the applicant that justified the assumption that was made by the sentencing judge that the applicant would not be so affected by the recording of a conviction."

The Court altered the sentence by ordering that no conviction be recorded.

Appeal Status: No Appeal Pending - Appeal Period Expired

R v WAV [2013] QCA 345

Although the substance of the case before the Court of Appeal concerned an appeal against sentence, the Court was required to deal with the preliminary issue of whether or not the indictment could be amended after the accused had pleaded guilty to the offence charged.  The offence relevant to the accused’s circumstances was s 364 of the Criminal Code, being the offence of having lawful care or charge of a child under the age of 16 and causing harm to the child by failing to provide the child with adequate medical treatment when the person “knew or ought reasonably to have known [that conduct] would be likely to cause harm to the child”.  The form of the indictment omitted those last words concerning the knowledge of the accused as it was based on Form 211 of Schedule 3 of the Criminal Practice Rules and no modification was made to adapt it to the circumstances of the case.  The Court noted that, s 707 of the Criminal Code provides to the effect that “a form prescribed under a rule of court for a criminal proceeding is taken to be sufficient for the purpose for which it is to be used, and if used, is a sufficient statement of the relevant offence”. The Court considered a number of cases where the wording of the indictment differed from the wording of the words of the offence and observed that there was a limit to which there might be any divergence.  From those cases the relevant principle was identified as being:

“[16]    The point that seems to have emerged from those cases is that where the disparity in the wording, between that in the approved form and that in the statute, changes the essential nature of the charge, as it did in Dearnley and in Aniba, s 707 of the Criminal Code will not avail.  However, where the disparity is such that the essential nature of the charge is still plainly clear on the face of the indictment, such that it cannot be said that the plea of guilty was to a charge not known at law, then s 707 will be given full operation.”

Appeal Status: No Appeal Pending - Appeal Period Expired

Attorney-General v Fardon [2013] QCA 365

The matter before the Court concerned the application of the Dangerous Prisoners (Sexual Offences) Act 2003. The respondent, Mr Fardon had successfully applied for an order releasing him from continuing detention subject to an order imposing conditions under the Act. Although it was slightly irregular the Court of Appeal also considered the validity of the Criminal Law Amendment (Public Interest Declarations) Amendment Act 2013 which amended the Criminal Law Amendment Act and which afforded to the Governor in Council the power to detain Mr Fardon despite an order of the Court releasing him. The effect of the amending legislation was challenged on the basis of the Kable principles to the effect that State Legislatures may not confer on the State Courts powers which are repugnant to or incompatible with their exercise of the judicial power of the Commonwealth; that is, the power conferred cannot be repugnant to or incompatible with the institutional integrity of the State Court in its position in the Australian Legal System. The Court applied its reasoning from the decision in Attorney-General v Lawrence [2013] QCA 364 in holding that the legislation was invalid because it contravened the Kable principles. As to the question of whether or not Mr Fardon should be on supervised liberty pursuant to the provisions of the DPSOA, the Court noted:
• The Attorney-General carries the onus of establishing the proportions of the risk that a relevant person will reoffend and that this has the consequence that any imprecision in the evidence from the expert psychiatrists will adversely affect the Attorney’s case;
• That the learned judge at first instance had correctly identified that the paramount consideration was ensuring the adequate protection of the community.
• In considering the risk of reoffending in the future it was appropriate for the judge at first instance to take into account the nature of the offending which Mr Fardon had committed in the past.
• That in assessing the risk for the purposes of determining whether or not a supervision order can manage adequate protection of the community, the Act does not require that the arrangements to manage that risk are watertight.

Appeal Status: No Appeal Pending - Appeal Period Expired

Attorney-General v Lawrence [2013] QCA 364

This matter was heard together with the matter in Attorney-General v Fardon [2013] QCA 365. This decision sets out the substantive reasoning for the conclusion that certain parts of the Criminal Law Amendment Act which were amended by the Criminal Law Amendment (Public Interest Declarations) Amendment Act 2013 were invalid because they contravened the Kable principles. The Court of Appeal noted that:
• A public interest declaration under the Criminal Law Amendment Act would have the effect of depriving a person of supervised liberty which had been ordered by the Supreme Court in accordance with the DPSOA.
• Mr Lawrence had standing to challenge the amended provisions of the Criminal Law Amendment Act because the enactment of the subject provisions impacted upon any judgment of the Supreme Court made on an application brought by him under the DPSOA.

• That the operation of the Declarations Act itself undermined the authority of the Supreme Court by impugning every order made by the Supreme Court made under DPSOA by rendering them mere provisional orders.
• That:
“These amendments are within that exceptional category of legislation which is invalid on the ground that it is repugnant to that institutional integrity of the Supreme Court which is entrenched under the Commonwealth [Constitution] as ‘the highest court for the time being in the judicial hierarchy of the State’.”

Appeal Status: No Appeal Pending - Appeal Period Expired

Attorney-General for the State of Queensland v Kanaveilomani [2013] QCA 404

In this matter the Court of Appeal had occasion to examine the necessary prerequisites of an application for an order under Pt 2 div 3 of the Dangerous Prisoners (Sexual Offenders) Act 2003 (“DPSOA”) (a continuing detention or supervision order) in the context of an order sought for a prisoner that had, during his term of imprisonment for a serious sexual offence, committed another offence for which he was subsequently imprisoned and was, at the time of the determination of the application, serving out this second term of imprisonment. This important decision of the Court of Appeal discusses a number of important principles in the DPSOA.
The central issue before the Court was whether or not a custodial sentence, “backdated” pursuant to s 159A(3)(c) of the Penalties and Sentences Act 1992 (“PSA”) was deemed to start from the first day of pre-sentence custody. The Court considered a number of decisions concerning the effect of a declaration made pursuant to s 159A(3)(c) PSA, concluding that where s 159A applies, time spent in pre-sentence custody is automatically deemed to be time served under the sentence [166] and that the period of imprisonment commences from the start of the relevant pre-sentence custody: [43], [66]. Therefore, in the particular circumstances of this case, the s 159A(3)(c) declaration by the sentencing judge had the effect that the Respondent’s period of imprisonment was “unbroken”: [68]. His term of imprisonment for the second offence was deemed to commence on the day following the conclusion of his previous sentence and, pursuant to s 4 PSA, the Respondent was thus serving a single period of imprisonment, which, significantly for this case, included a term of imprisonment for a serious sexual offence as defined by s 5(6) of the DPSOA. Consequently, though the DPSOA application filed by the Appellant, prior to the Respondent’s conviction for the second offence, was valid, following his conviction, the Appellant’s application was moot, because by the time the primary judge heard the application for a final order the Respondent was “serving a period of imprisonment that include[d] a term of imprisonment for a serious sexual offence” and thus the correct time for the Appellant to apply for an order was within six months of the end of this (combined) period of imprisonment. In reaching this decision, the Court rejected, because of its failure to give “full credit” to the order of the sentencing judge, the contention of the Appellant that a declaration under s 159A(3)(c) was “an artificiality” and that it simply allowed for time to be deducted from the sentence, rather than moving the date of its commencement: [67]. Though the Court’s conclusion on this issue was determinative of the appeal, it did briefly consider the interpretation of s 13 DPSOA, in particular the point in time at which the court should determine whether a serious sexual offender is a “serious danger to the community in the absence of a division 3 order”: [118]. In considering both the language and structure of the section, in particular the tense used, their Honours concluded that the section requires the court to make “a hypothetical assessment of a prisoner’s future risk assuming he is presently released” rather than, as argued by the Respondent, at the date of his (potential) release: [121]. Given this reasoning, the fact that the Respondent was in custody at the time of the hearing was not a relevant consideration. [124]

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Smith [2013] QCA 397

In this application for leave to appeal against sentence the Court of Appeal was required to consider the proper application of s 160B(2) of the Penalties and Sentences Act 1992, specifically whether the sentencing judge ought to have fixed a date that the Applicant be released on parole, rather than a date that the Applicant was eligible for parole. On the facts before the Court the Applicant had committed a series of offences whilst she was on parole; however she was not sentenced until after the original end-date of her period of imprisonment –the question was whether her parole order had been cancelled during her period of imprisonment. After undertaking a careful analysis of the relevant sections of both the Penalties and Sentences Act 1992 and the Corrective Services Act 2006 (“CSA”), in particular s 209 of the CSA, their Honours unanimously concluded that a parole order is cancelled automatically upon the commission of an offence, and it is irrelevant (to this analysis) whether or not the sentencing for that offence occurs after the period of parole has expired. Consequently, in this appeal, the Court affirmed the sentencing judge’s decision to fix the date that the Applicant was eligible for parole.

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Cunningham [2014] QCA 88

This recent important decision of the Court of Appeal concerns the Court’s discretion as to whether or not to record a conviction in relation to a juvenile offender. The Court’s decision provides a comprehensive overview of the authorities and an analysis of the factors relevant to the exercise of the discretion. It also contains a consideration of s 299A, which is a recent amendment to the Youth Justice Act 1992 (“YJA”).
In this matter, the sole issue on appeal was whether or not the primary judge had erred in recording a conviction against the appellant, a juvenile. Prima facie, under s 183 YJA, a conviction is not to be recorded against a juvenile; see also [11], though a sentencing judge has a discretion to do so where, upon considering all the circumstances, including those articulated in s 184(1) – nature of the offence; age; and impact on rehabilitation – it is appropriate and in the public interest to do so. See [60], [64(f)]. In weighing these factors, particular emphasis is given to the impact that recording a conviction will have generally upon the juvenile’s rehabilitation and particularly upon their employment prospects. [50].
Though, given the nature of this inquiry, any determination is highly fact-specific, [63], in reaching a decision, the Court was particularly swayed by:

  • The escalating and ongoing nature of the appellant’s criminal conduct; particularly given that the offences at issue were committed whilst the appellant was subject to other orders of the Court;
  • The lack of specific evidence pertaining to the appellant’s prospects of rehabilitation, and the likelihood, given the intent of the appellant, that he would return to “the deleterious environment in which he lived” whilst engaging in this conduct;
  • The absence of evidence allowing an assessment of the impact of recording a conviction on the applicant’s employment prospects;
  • That the appellant already had a conviction recorded against him. [64]

Accordingly, their Honours held that convictions ought to be recorded for these offences and denied the appeal.
Following the Courts hearing of the appeal, but prior to rendering its decision, amendments, applicable to this case, were made to the YJA provisions prohibiting the publication of identifying information about a child who is not a first time offender. [65]. Similar to s 183, the new s 299A sets out a series of factors which the court ought consider in deciding whether or not to prohibit the publication of identifying information about a juvenile offender – these factors include, the number of previous convictions; the seriousness of the offence; the need to protect the community; the impact of publication on the safety and rehabilitation of the juvenile and, like s 183, “any other relevant matter”. [66]. Again, this is a highly fact-centric inquiry, and in reaching a conclusion, “the relative weight to be ascribed to each of the … factors will depend on the circumstances of each case.” [72] Unlike the presumption required by s 183 YJA, however, the prima facie position under s 299A is that, in the case of repeat offenders, the offender ought to be named. [69]. In applying each of the enumerated factors to the circumstances before them, their Honours were not persuaded that it was in the interests of justice to make a publication prohibition order, see [73].

Appeal Status: No Appeal Pending - Appeal Period Expired

R v CBL; R v BCT [2014] QCA 93

In this recent decision the Court of Appeal discussed a number of procedural and evidentiary aspects of the criminal trial, including inter alia the operation of s 590AA of the Criminal Code; and the admissibility of a “prior inconsistent statement” as evidence of its truth. The cases (which were heard together on appeal) arose out of the appellants’ conviction for the rape and torture of a three year old child – BCT’s daughter. On appeal, both CBL and BCT raised a number of grounds of appeal, including that certain evidence ought to have been excluded; and that the trial judge’s direction regarding the effect of a “prior inconsistent statement” was in error. The Court’s reasoning on these grounds will be discussed below.
Exclusion of Evidence – Section 590AA
On appeal CBL argued that on a number of occasions, the trial judge erred in failing to exclude evidence following an application pursuant to s 590AA. In particular, CBL argued that s 590AA imposed an “obligation on the Court to make a ruling on any application made by a party under that section”, and thus the trial judge’s decision not to rule on an application under this section, on the basis that it was premature, was erroneous. [74]. Though the language of s 590AA is of a permissive nature (“a judge may … [make] a direction or ruling … deciding questions of law including the admissibility of evidence”) (emphasis added), this is not determinative of whether or not the section imposes an obligation or duty upon the Court to act. [78]–[80]. “[A]lthough the word ‘may’ is … permissive[,] in a particular enactment its operation may be such as to oblige the court to act.” [80]. With regard the instant section, however, the Court concluded that it would be “a remarkable construction … to conclude that a court … could not … rule that the application was premature,” particularly given that the section was enacted to simplify criminal trials, not place additional burdens upon the parties and the court. [83]. Consequently, their Honors ruled that this ground was not made out.
Jury Directions
On appeal BCT argued that the trial judge’s direction that a witnesses’ prior inconsistent statement was evidence of its truth, where it was not “proved” that the witness had made the statement was erroneous; and even if not erroneous, the trial judge ought to have directed the jury to exercise caution about the weight to be given to the prior inconsistent statement. [140].
In addressing the first issue, their Honours initially considered the interaction between s 101(1) and s 18 of the Evidence Act determining that the relevant question before the Court was whether, in her testimony, the witness had proved the prior inconsistent statement in accordance with the requirements of s 18. [144]–[146]. Upon reviewing the testimony of the witness it was apparent that at no stage did she “distinctly admit that she had made [the prior inconsistent] statement” and thus s 18(1) was not triggered. See the discussion at paragraphs [151]–[152]. Their Honours emphasised that the “mere acceptance” [148] of the making of a prior statement could not be used as proof of its contents. Thus, the Court concluded the trial judge’s direction was erroneous. Further, significantly for the outcome of this case, their Honours held that it was essential that the jury be made aware of the limited use to which an unproved previous statement may be put. Consequently, given the erroneous direction; the absence of any other “corrective” direction, and the damaging nature of the testimony at issue, the Court held that this ground of appeal was established.
The Court ultimately dismissed CBL’s appeal in its entirety, however, it considered that the trial judge’s error on direction was such that BCT’s appeal ought to be granted, her guilty verdicts set-aside and a re-trial ordered.

Appeal Status: Appeal Pending - Application for Special Leave to Appeal made to the High Court in respect of CA 76/2013

R v Stanley [2014] QCA 116

In this decision the Court of Appeal considered the availability or lack thereof of multiple appeals against conviction and the impact of the recent decision of the Northern Territory Supreme Court in DPP v Moseley on this case.  Although the discussion of the decision in Mosely may have been obiter, the discussion by Morrison JA sheds substantial and important light on the topic.

The applicant in this matter initially sought, and was refused, an appeal against conviction. [5]. Ten years later, he filed an application for an extension of time in which to appeal his conviction. [6]. During the period between his original appeal and this application two events occurred: (1) the CMC conducted an investigation into some of the police involved in the investigation and prosecution of the applicant; and (2) the applicant obtained an expert report that indicated he could not have been in the area of the offence at the time of its occurrence. [7]–[8]. If the extension of time was granted, the applicant intended to adduce these events as evidence that he should have been acquitted.

Pursuant to s 668D of the Criminal Code, a person convicted on indictment has a right to appeal their conviction to the Court of Appeals.  [9]. In considering whether it was appropriate to grant the applicant’s request, the Court concluded that, generally, it was well-established that where an appeal had been decided on the merits, as in this case, “the right conferred by s 668D is exhausted and [the Court of Appeals] has no jurisdiction [of any type] to entertain a further appeal” [10]; Grierson v The King. However, the Court also noted the existence of certain narrow exceptions to this principle, including the possibility “to set aside orders obtained by fraud”.  In the matter before the Court it was determined that the circumstances alleged did not reach this threshold. [13]–[16]. Further, their Honours considered that any reference to “merits” was purely directed to the distinction between an appeal that had been heard and one that had been abandoned, rather than, as the applicant contended, one that was heard, but on “improper” grounds. [10].

Finally, the Court addressed the applicability of the recent decision in DPP v Moseley, which held that the NT Supreme Court had “equitable jurisdiction to set aside a judgment of the Court of Criminal Appeal, in circumstances where the judgment was actuated by fraud”. [22]. Both Fraser JA and Mullins J dealt with this issue very quickly, concluding that the case was inapplicable, given its holding that though the NT Supreme Court possessed equitable jurisdiction to overturn an appeal, the Court of Criminal Appeal, the equivalent to this Court, did not. [2], [35]–[36]. Justice Morrison agreed with the decision of his colleagues, adding also that the “fraud” alleged in this matter was a type wholly different to that found in Moseley – in the case before the Court the “fraud” consisted of bribes to give false evidence. [71]–[77] Despite being unnecessary given this conclusion, his Honour, then went on to closely examine the “correctness” of the NT Supreme Court’s reasoning and ultimately holding that the case was improperly decided. See this very interesting discussion at paras [37]–[70].

The Court refused the application.  

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Hopper; Ex Parte Attorney-General [2014] QCA 108

Decisions concerning the adequacy of sentences imposed for offences are not usually reported.  However, this matter is of substantial interest and it considers a number of important principles in relation to sentencing.

The female appellant, aged 17, had pleaded guilty to dangerous driving causing death and was sentenced to two and a half years imprisonment, wholly suspended for three years and was disqualified from holding a licence for three years. The Attorney-General appealed on the ground that the sentence was manifestly inadequate.

After deciding that it was manifestly inadequate, the Court considered the circumstances in which the Court ought to exercise its residual discretion not to interfere with the sentence.

At the time of the offence, the Respondent was driving along Beerburrum Road and looking at a map on her mobile phone when she hit two pedestrians who were walking on the verge, killing one and causing serious injuries to the other. [2]–[4]. The respondent cooperated completely with the investigation and pleaded guilty to dangerous driving causing death and grievous bodily harm. [1] The Crown appealed, contending that wholly suspending the imprisonment was “plainly unreasonable and unjust”, given the extent of the damage sustained by the victims and the Court’s previous holding that “in a case of dangerous driving which causes death … it [would] be a rare case that does not attract a custodial term”. [14].

Manifestly Inadequate

In reaching a unanimous conclusion that the sentence imposed was manifestly inadequate, the Court scrutinized the circumstances of the case and the respondent’s personal circumstances against the principles of sentencing and the previous decisions of the Court, specifically its decisions in R v Gruenert; Ex parte Attorney-General, and R v Hart; [23]. In its reasons, the Court emphasised the importance of general deterrence in cases such as this, where the conduct causing the offence, namely the use of a mobile phone whilst driving is ubiquitous and “the sentence might sensibly operate to deter others from similar offending”. [25]. Further, though the respondent’s age and general good character were relevant, the Court highlighted the limitations on this factor given that the offence was one that was often committed by young people of good character. [30]. Finally, the Court considered that while her co-operation and evident remorse was a factor favouring leniency, it was somewhat undermined by her conduct, only 5 months later, in using a mobile phone whilst driving. [32]. In light of the Court’s previous decisions, and given the relevance of “personal deterrence … [and] the importance of seeking to deter others from committing a similar offence”, the “sentence was rendered impermissibly lenient by the absence of any period of actual custody”. [36]

Residual Discretion

On the issue of whether to exercise its residual discretion not to interfere with the sentence as imposed, courts retain a residual discretion to not allow a Crown appeal against sentence where to do so would create an injustice. Such circumstances include: “delay in the hearing and determination of the appeal, the imminent or past occurrence of the respondent’s release on parole or unconditionally, and the effect of re-sentencing on progress towards the respondent’s rehabilitation.” [39]. In the circumstances of this case, the majority (Fraser JA and Boddice J) concluded that the respondent’s efforts towards rehabilitation and reintegration, her psychological vulnerability and the relatively short period of actual custody that would be imposed outweighed the desirability of correcting the (insufficient) sentence on appeal. [40]–[42]. Thus the Court declined to intervene and dismissed the appeal.

Morrison JA wrote a strong dissenting judgment on this point, considering in detail the rationale underlying the existence of the residual discretion.  He considered that a distinction existed between a case where the offender has been sentenced to a term of imprisonment and then released before an appeal against sentence is determined and one where the offender has not served any period of imprisonment.  In addition, he considered that the factors of the seriousness of the offence and the need for general deterrence should be given greater weight. He would have suspended the sentence after five months imprisonment. 

Appeal Status: No Appeal Pending - Appeal Period Expired

Thiess Pty Ltd v Industrial Magistrate Elizabeth Hall [2014] QCA 129

This is an interesting but complex judgment of the Court of Appeal addressing the application of ss 43 and 48 of the Justices Act 1886 (the “JA”). This appeal arises from a decision of Boddice J on an application for review of orders holding that “an industrial magistrate had power, where the prosecutor had elected to proceed with only one of two counts described as alternatives . . . to strike out the other”. [2] Upon review his Honour held that industrial magistrates had an implied power to strike out parts of a complaint where it is necessary to do so to enable the court to act within its jurisdiction and that this right was not inconsistent with either s 43 or s 48 of the JA [3]. Thiess appealed this conclusion, arguing that Boddice J erred in implying this power and in holding that it was consistent with s 48.

Legislation      

Given the nature of this appeal, it is (unfortunately) necessary to set out in large part the relevant sections of the Justices Act, ss 43 and 48. Section 43 prescribes what may be contained in a complaint:

(1)      Every complaint shall be for 1 matter only, and not for 2 or more matters except –

(b)           in cases other than cases of indictable offences — if the matters of complaint — …

(iii)     are founded on substantially the same facts;

(2)         When 2 or more matters of complaint are joined in the 1 complaint each matter of complaint shall be set out in a separate paragraph.

(3)         At the hearing of a complaint in which 2 or more matters of complaint have been joined but which does not comply with the provisions of this section —

(a)      if an objection is taken to the complaint on the ground of such noncompliance — the court shall require the complainant to choose 1 matter of complaint on which to proceed at that hearing; or

(b)           if no such objection is taken to the complaint — the court may proceed with the hearing and may determine the matters of complaint …

Section 48 confers the power to amend:

“If at the hearing of a complaint it appears to the justices that –

(a)      there is a defect therein in substance or in form, other than a noncompliance with the provisions of section 43;

then –

(d)      if an objection is taken for any such defect or variance – the justices shall; or

(e)      if no such objection is taken – the justices may;

   make such an order for the amendment of the complaint, summons or warrant as appears to them to be necessary or desirable in the interests of justice.”

The procedural history of this matter is complicated. The substantive complaint, a claim under the Workplace Health and Safety Act, was initially filed in the Industrial Magistrates Court.  The original complaint was improperly drafted – it alleged separate charges as alternatives – and, despite the appellant’s objections, the presiding Magistrate granted leave to amend the complaint, allowing the excising of the phrase “in the alternative”. [8] This decision was appealed, first to the Industrial Court and then to the Supreme Court where Applegarth J concluded that “the inclusion of the words ‘in the alternative’ rendered the complaint defective” and the “complaint did not comply with s 43 because the two matters were charged as alternatives” whereas for s 43(3) to apply they must be joined. [10]. Further, his Honour concluded that as the complaint did not comply with s 43, “the power to amend under s 48” was unavailable; See the discussion at [10]–[12]. The matter was then remitted back to the Industrial Magistrates Court for determination.  There, Magistrate Hall decided that the complainant was entitled to proceed on one complaint and choose not to call evidence on the remaining one.  That decision was appealed to the Industrial Court and then (again) to the Supreme Court where Boddice J upheld the Magistrate’s ruling.  It is the appeal from that decision which is the subject of the Court’s judgment.  In considering the appeal, the Court addressed two separate issues:

  1. In spite of Applegarth J’s judgment, whether the two matters in the complaint could be pleaded in the alternative and whether the words “in the alternative” could be removed?
  2. Whether the Industrial Magistrate’s Court had power to require the complainant to elect?

Alternative Charges in Complaint

The Court of Appeal held that given the complainant did not appeal the order of Applegarth J, the Court could not now reconsider his Honour’s order that “the two matters of complaint could not be pleaded in the alternative and that the words ‘in the alternative’ could not be removed from the complaint”.  Nevertheless, the Court recorded its differing conclusion in relation to that issue. [26]. After a thorough examination of the authorities, their Honours concluded that the rule that “alternative charges” could not be brought together was no longer good law;  See the discussion at [28]–[30].  Not only was there no “general” rule that alternative charges could not be brought in the one complaint, there was nothing in the language of s 43 which prevented the bringing of alternative charges in summary proceedings, provided, however, that all subsections of s 43 were complied with.  [33].

Power to Require Election Under s 43(3)(a)

Despite its conclusion regarding the pleading of alternative charges the Court, as it was bound to do, proceeded on the basis of Applegarth J’s judgment. Upon analysing the language of s 43, and contrary to the arguments made by the appellant, the Court concluded that s 43(3) was “directed at the correction of complaints charging more than one matter in a form not authorised by s 43”. [40]. Further their Honours considered that charges, included in the same complaint or indictment for the “purpose[s] of having them heard at the same time, ought be regarded as “joined”. [41]. Given these conclusions, it followed that although, as per the judgment of Applegarth J, the charges were alternatives and did not comply with the provisions of s 43, it was nonetheless the case that the matters were also “joined”, albeit incorrectly. Thus, s 43(3) was enlivened once an objection had been made. [42] It followed that the Magistrate had an express power to require election under s 43(3)(a) and, as a corollary an implied strike-out power. [43] Despite concluding that the applicant had established that there was not an implied power of election, the Court considered that it was in the interests of justice that, notwithstanding the fact that this issue was initially raised by the court, to determine the s 43(3) issue and dismissed the appeal.  

Appeal Status: No Appeal Pending - Appeal Period Expired

R v CBM [2014] QCA 212

In this matter the appellant had been charged with committing sexual offences against two children.  Each were cousins of each other and of the appellant.  The complaints were of similar age. The nature and circumstances of the sexual offences were similar and they were committed in consecutive time periods. A single indictment was presented against the appellant alleging offences against both complainants.  A pre-trial application was made to have the charges relating to each of the complainants heard separately.  That application was refused on the basis that there were many factors which evidenced an underlying unity between the offending described by each complainant.  The trial was conducted by a different judge.

At the conclusion of the evidence in the trial and before addresses, the prosecutor sought a “similar fact direction”, submitting that the effect of the pre-trial ruling was that the evidence of each complainant was “cross-admissible on a similar fact basis … going both ways between the two”.  That application was resisted and the trial judge ruled that no similar fact direction would be given to the jury.  Unfortunately, the trial judge did not deal with what the jury should be told in the light of his decision; ie the inability to use the evidence in relation to one of the complainants in relation to the charges concerning the other complainant.

Henry J (with whom Gotterson JA and North J agreed) allowed the appeal. The following important points were made in his Honour’s careful reasons:

  • At common law there is a long established principle in relation to cases involving sexual offences that “because such cases are peculiarly likely to give rise to prejudice, against which a direction to the jury is unlikely to guard, if an accused is charged with multiple sexual offences the charges should not be tried together if the evidence on one count is not admissible on another count”: Sutton v The Queen and De Jesus v The Queen.
  • In Queensland, however, the joinder of more than one charge in the one indictment against the same person is permissible under s 567 of the Criminal Code, where the charges are “founded on … a series of offences of the same or similar character”. 
  • Although the charges in the present matter were, prima facie, joinable, under s 597A(1) of the Code, the court may order a separate trial of different counts in an indictment if, whether before or during the trial, the court forms the opinion the accused person may be prejudiced in his/her defence by reason of being charged with more than one offence in the same indictment.
  • In many cases where an application is made for separate trials relating to separate complainants, the argument is often made by the prosecution that the evidence of the complainants is cross-admissible as “similar fact evidence”.  It follows that on an application for a separate trial a judge should consider whether the evidence relating to the two complainants would amount to relevant propensity evidence because it has a high level of cogency to justify admission: Pfennig v The Queen. The focus of the court should be on whether each complainant’s evidence has a high degree of probative force in aiding to prove charges relating to another complainant or complainants and in doing so the Court has to precisely identify the circumstantial reasoning by which the evidence of one complainant is said to have probative force in aiding to prove offending against the other complainant.
  • If all that can be determined after the above consideration is that the accused has a propensity or disposition to commit a sex offence the evidence will not be admissible for lack of cogency.  The situation is different where there is a “particular distinctive propensity”.
  • In the circumstances of the present case, the circumstances of offending were so similar that it was appropriate that the evidence of each complainant was cross-admissible and could be used as supporting the proof of the charges in respect of the other complainant.
  • However, when similar fact evidence is to be used in this manner it was necessary to give the jury an appropriate direction as to the manner in which the evidence might be used.  In this case, the jury should have been warned in accordance with the determination about similar fact evidence that the evidence could not have been so used.  No direction was given and, as a result, a new trial was ordered.

Appeal Status: No Appeal Pending - Appeal Period Expired

Flegg v Hallett [2014] QSC 220

In this recent application for a stay of proceedings Flanagan J was required to consider the circumstances in which a stay of a civil proceeding may be granted, pending the outcome of an allegedly “related” criminal proceeding.  This present application arose out of a civil defamation claim brought by Dr Bruce Flegg MP (the “plaintiff”) against his former senior media advisor, Greg Hallett, (the “defendant”).  The facts giving rise to the plaintiff’s defamation action, and thus the defendant’s present application, are relatively well-known, and for present purposes only those critical to the Court’s decision will be parsed.  Following his dismissal from the plaintiff’s staff, the defendant is alleged to have threatened Anderson, the Director of the Government Media Unit, that he would divulge information about the plaintiff unless he was provided with another job – it is this conversation which is the subject of the criminal charge against the defendant, [4] – the defendant is charged with threatening an agency of government pursuant to s 54A of the Criminal Code.  Subsequently, the defendant conducted a number of interviews in which he allegedly defamed the plaintiff, see [5]–[8], “carrying out” his threat.  The plaintiff then commenced these proceedings against the defendant, and in response, the defendant pleaded a defence of privilege at common law and a defence of qualified privilege pursuant to s 30 of the Defamation Act 2005.  [13]–[14].  Pleadings closed, and the defendant subsequently brought the present application for a stay of the defamation proceeding pending the outcome of the criminal proceeding. 

As a matter of general principle, an individual the subject of both criminal and civil proceedings, does not have an automatic right to the stay of the civil proceeding simply because its continuation may have the practical effect of forcing them in the civil proceedings to act in a manner which would waive their right of silence and thus disadvantage them in the criminal proceeding.  [32], See generally [28]–[33].  In considering whether to grant a stay, the court must weigh a number of factors including: the effect of publicity upon the subsequent criminal proceeding; the possibility of a miscarriage of justice; the potential impact on the defendant’s right to silence and the burden on the defendant of preparing for the proceedings concurrently and determine whether the circumstances are such that it is just to interfere with a plaintiff’s ordinary rights.  See the discussion at [28]–[40].   Upon considering the arguments presented by the defendant, his Honour concluded that Hallett had failed to demonstrate how, “in defending the defamation proceedings at trial, his criminal proceedings [would] be prejudiced, or his right to silence affected”. [47]. Central to this conclusion was that the defendant’s conversation with Anderson, was not “the subject of any pleaded publication of defamatory matter,” [48], and nor were any material facts related to this conversation pleaded in the current pleadings. [49]  Given that no imputations were pleaded with respect to the defendant’s conversation with Anderson, Flanagan J concluded that it would be unnecessary for the defendant to reveal aspects of his defence to the criminal charge in the process of arguing his pleaded defences, that in presenting his defence he may wish the Court have regard to the surrounding circumstances was not “central to the defences raised” [53].  See [52]–[55].  Further, all that is required for a conviction pursuant to s 54A is evidence of a threat of detriment – that this threat was actually carried out is not required to be proven and thus the “publications” subject of the civil proceeding were not an essential element of the criminal proceeding. [51].  Finally the Court did not consider that the likely publicity surrounding this proceeding would prejudice the criminal proceeding, particularly given the considerable intervening period, [58] and it was also concerned with the negative impact that delay would have on the plaintiff, and his prospects of obtaining any real relief should the claim be made out, [59] see [46].  It is for these reasons that the Court considered there was no “real danger of injustice” in the criminal proceeding if the defamation proceeding was not stayed, and thus the defendant’s application was denied. 

Appeal Status: No Appeal Pending - Appeal Period Expired

R v PAR [2014] QCA 248

In this recent appeal against conviction, the Court considered the manner in which complaints about jurors should be dealt with and the circumstances which would warrant the discharge of an individual juror.  This question arose by way of an appeal of conviction by PAR (the “applicant”) who argued that, inter alia, there had been a miscarriage of justice during his trial because: (a) there had been a “fundamental irregularity in the conduct of the trial, namely, the way in which a juror was discharged from it,” and (b) “because the information provided to the trial judge about the [the juror in question] was insufficient to support her discharge”.  [40]. The relevant facts of this matter are as follows.  During the initial trial a note was passed up to the judge expressing the concern of a number of jurors about the suitability of juror 4, whom they alleged did “not seem to understand the importance of this task [being a juror] and ha[d] no input with discussions”.  [41].  Following receipt of this note the judge and both counsel questioned a number of the jurors, including the speaker regarding their impressions of juror 4 and (obliquely) her capacity to make a decision.  They also questioned juror 4.  [42]–[49].  The appellant, in the present application, alleged that: (a) the information received by the judge did not justify the subsequent individual interrogation of the jurors; [51], and (b) even if this conduct had been warranted, the information obtained did not justify the discharge of juror 4.  [52].

Though acknowledging the difficulties faced by trial judges when circumstances such as these arise, see [54], the Court ultimately concluded that the “enquiry which preceded the discharge of juror number 4 miscarried”.  The Court reasoned that the initial note received by the judge did not suggest that juror 4 lacked “deliberative capacity”, rather, that it merely expressed an opinion about her attitude to her role, [55], and the fact that at the particular stage of the proceeding she had not engaged in any discussion about the case was not significant given that the evidence had not been completed.  [56], see also R v Roberts.  While some action was required to respond to the note and the concerns of some of the jurors, the Court considered that instructions to the jury as a whole may have been more appropriate, though it did not fault the trial judge for separately questioning the note’s author – this conduct fell within the trial judge’s discretion.  [58]. The trial judge did, however, fall into error when he proceeded to separately question the other jurors as the circumstances giving rise to the risk that a “true verdict” would not be reached and that questioning was confined to the issue of the “deliberative capacity” of a single juror which could have been determined from information supplied by a reliable source, [62], or through precise and careful questioning of juror 4 by the trial judge. See also [67].  Though a trial judge has the discretion to permit counsel to question a juror in relation to the possible discharge of that or another juror, the circumstances in which this would be appropriate are rare.  [63].  Further, the risks associated with individually questioning numerous jurors, for example that the information obtained will be contradictory – as was the case here – mean that it is a very rare situation where multiple jurors are separately interrogated.  [61], [64].  Despite, however, the determination that the process engaged in by the trial judge, with the consent of both counsel, was flawed and the necessity for the order discharging the juror arose from these errors, it concluded that the order was appropriate and lawful.  [68]–[69].  Further, the Court considered that there had not been a miscarriage of justice as there was no “failure to observe a mandatory legislative provision relating to the constitution or authority of the jury”, [73], and despite the errors, the appellant was found guilty by a properly constituted jury following a fair trial. [72]-[75].  For these reasons the appeal was denied.

Appeal Status: Appeal Pending - Application for Special Leave to Appeal made to the High Court.

DBH v Australian Crime Commission [2014] QCA 265

In this recent case, the Court of Appeal had reason to address the content of the common-law principles of open justice and natural justice.  The issues arose after the appellant’s unsuccessful application under s 25A(13) of the Australian Crime Commission Act (“the Act”), to compel the Australian Crime Commission (the “respondent”) to make available the transcripts of interviews it had conducted with his co-defendants – the fourth, fifth and sixth respondents.  The appellant and the fourth, fifth and sixth respondents were charged with related drug offences and were all the subject of compulsory examination by the respondent.  It was the evidence of these examinations which was the subject of a non-publication direction under s 25A(9) of the Act.  [1].  Facing prosecution, the appellant applied under s 25A(13) for the transcripts of the evidence of the fourth, fifth and sixth respondents be made available to him.  In the course of hearing this application, the primary court excluded the appellant and his representatives whilst taking submissions from the respondent.  [8]–[18].  The application was subsequently refused, and it is this decision that was the subject of this appeal.  Aside from arguments that the court had made an error of fact, the appellant also argued that the primary court, in excluding him and his representatives during the hearing amounted to a denial of procedural fairness. 

Exclusion During Hearing

“The requirements of procedural fairness are not fixed, and they may certainly be modified by parliament.”  [32].  The Act sets up a scheme whereby evidence the subject of a non-publication order pursuant to s 25A(9) may only be made available to the applicant where the court is initially satisfied that it may be in the interests of justice that this occurs, Australian Crime Commission Act, s 25A(12); and following an examination of the evidence “is satisfied that the interests of justice so require,” Australian Crime Commission Act, s 25A(13).  It is only if, after this examination, the Court is satisfied that it would be in the interests of justice that the applicant have access to this evidence that the court will make it available.  By this additional requirement that the court consider the subject matter of the application without disclosing it to the applicant, the legislature has effected a “substantial modification” of the rules of procedural fairness – the issue for the Court was whether this modification extended to “denying an applicant access to the submissions of an examinee with the contrary interest of preserving the material’s confidentiality”. [33]

In addressing this question, the Court, applying the general principles of statutory interpretation, looked to the Act for guidance.  Turning to the purpose of the Act, the Court considered that though the Act was generally addressed to the public interest in the investigation of serious and organised crime, s 25A exists specifically to protect the interests of the person examined.  Accordingly, the release of any material from an examination is prohibited unless and until the judge decides to release it.  [37].  Given this structure, the Court concluded that, the purpose of ss 25A(9), (12) and (13) would be entirely defeated were the applicant not excluded from proceedings the subject of which were submissions relating directly to the content of the examination, regardless of the level of generality.  [38].  The Court also noted that the appellant was not prevented from making submissions to the Court on any point he considered to be relevant to the  consideration of the transcripts, including informing it of any defences he wished to raise and the areas of the Crown’s case that potentially related this.  [45]. 

The Court also addressed the alternative procedures proposed by the appellant, namely that the Court could have appraised him, in general terms, of the topics raised whilst he was excluded or that the primary court could have provided his counsel with copies of the transcripts  on appropriate undertakings.  With regard the first suggestion, the Court considered that this would “have done nothing to improve his opportunity to be heard”.  Further, with regards his second suggestion, the Court considered it imprudent to release these types of transcripts to counsel, holding it to be “untenable to expect counsel to examine the transcript . . . for the purpose of ascertaining whether he could ascertain any advantage to his client . . .  and then, were provision of it refused, to put the entirety from his mind”.  [43]. For the aforementioned reasons, the Court denied the appeal.  

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Dunn [2014] QCA 254

This is an interesting decision considering both the lawfulness of searches of judicial premises and a defendant’s fitness to stand trial.  The matter arose from the conviction of the appellant for (1) intentionally giving false testimony touching a material matter in a judicial proceeding, and (2) using fabricated evidence in a judicial proceeding.  Both of these were crimes under the Commonwealth Crimes Act 1914.  Two separate issues were raised on appeal.  The first that the principal piece of evidence had been unlawfully obtained in circumstances amounting to contempt of court; and second that there had been a miscarriage of justice as the appellant was not fit to stand trial.  [2]. The circumstances giving rise to this appeal are as follows.  Prior to the instant matter, the appellant, whilst on trial for making menacing telephone calls, produced and tendered a tape recording allegedly of the menacing phone calls.  If genuine this tape would have exonerated the appellant. The jury was subsequently unable to reach a verdict and the matter was adjourned with the court ordering that all “exhibits to be returned”. [4].  Pending its return to the appellant, the tape was held in the criminal registry of the Cairns District Court.  However, before it could be returned the Australian Federal Police (“AFP”), pursuant to a warrant, seized that tape.  The appellant was subsequently charged and tried on the basis that the tape was a fabrication.  In this second trial the tape was the key piece of evidence.  The appellant was convicted and it is this conviction which is the subject of the present appeal.

Admissibility of the Tape Recording

The appellant argued that the seizure of the tape from the Cairns Registry amounted to a contempt of court and that this should have resulted in its exclusion from the trial.  In considering this argument, the Court first addressed whether a warrant could be lawfully issued to search premises of the judicial arm of a State government.  Section 3E(1) of the Crimes Act 1914 (Cth) (“Section 3E(1)”) authorises the issuing of a warrant to search “premises” where there are “reasonable grounds for suspecting that there is . . . evidential material at the premises relevant to a Commonwealth offence”.  Crimes Act 1914 (Cth), s 3E(1), see also [17].   The High Court, considering a comparable provision, held that a search warrant could be issued for the search of a State government department.  [18].  Nothing in the terms of Section 3E(1) or the decision of the High Court would suggest that this conclusion ought be different in respect of warrants to search the judicial arms of State government, [19], and in light of this, the Court held that such a search warrant could be lawfully issued.  [20].  Given that a warrant could be lawfully issued, the Court then turned to the question of whether, in the specific circumstances, the AFP’s conduct amounted to a contempt of court – an “act or omission that [has] a tendency to [unreasonably] interfere with or undermine the authority, performance or dignity of the courts of justice.”  [21].  In relation to this it was concluded that the AFP’s seizure did not amount to any unreasonable interference even though the trial had not concluded.  The AFP had obtained a (lawful) warrant the AFP and in seizing the tape the AFP was not acting in defiance of the court’s order.  [23].  Further, rather than interfering with the administration of justice, the evidence suggested that the tape had instead been seized in an effort to assist in its administration.  Id.  Given this evidence the Court declared that the tape’s seizure was lawful and that it had been properly admitted into evidence.  [26]. 

Fitness to Stand Trial

Pursuant to s 668E(1) Criminal Code the Court of Appeals is “bound to allow [an] appeal and set aside the conviction [where] there has been a miscarriage of justice”.  [63].  A miscarriage of justice arises, inter alia, where “there is a real and substantial question to be considered about an accused’s fitness to plead,” and only where the court is satisfied that “no tribunal, acting reasonably, could conclude that the accused was not fit, may that court determine that no miscarriage of justice has occurred. In this matter, however, this strict standard was countered by the fact that the physicians’ reports relied upon were made in the months following the relevant trial, given that "it is very rare . . . for a later reconstruction, even by distinguished psychiatrists  . . .  to persuade the court that notwithstanding the earlier trial process and the safeguards built into it that the appellant was unfit to plead.”  [57], see also [68].  In determining whether the appellant was fit to be tried the Court considered “whether he had the ability to understand the nature of the charge; to plead to it and exercise a right of challenge; to understand the nature of the proceedings . . . to follow the course of the proceedings; to understand the substantial effect of any evidence . . . and to make a defence or answer . . . the charge.”  [56]; R v Presser [1958] VR 45, 48.  On the totality of the evidence adduced, the Court concluded that there was a “real and substantial question about the appellant’s fitness to stand trial.”  [69].  The appellant had severe memory difficulties and this, combined with a psychotic disorder meant that his ‘memories’ were a mixture of fact and delusion, which the Court considered prevented him understanding the trial and contributing to his defence.  [65].  Further, unlike in other similar cases, the issue regarding the appellant’s fitness to stand trial arose within a matter of months of the trial, [66], and an examination of the original trial transcript revealed that, at the time, there were concerns raised about his fitness, [67].  Thus, in the absence of evidence persuading it that reasonable court could find the appellant fit, the Court allowed the appeal against conviction and set aside the original guilty verdict.  [70].  

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Smith [2014] QCA 277

(This summary contributed by Mr Martin Burns QC)

The appellant was convicted by a jury of rape. He appealed on various grounds, one of which concerned the operation of ss 59A, 60 and 70 of the Jury Act 1995. Section 59A permits a trial judge to ask a jury to reach a majority verdict if, after the prescribed period, the judge is satisfied that the jury is unlikely to reach a unanimous verdict after further deliberation. “Prescribed period” is defined by sub-s 59A(6) to be eight hours of deliberations or such further period as the judge considers reasonable having regard to the complexity of the case.

Shortly after the eight-hour mark had passed, the trial judge received a note from the jury that advised they were having difficulty agreeing. The note also disclosed their voting pattern, which the trial judge advised counsel he did not intend to reveal. His Honour indicated that, as the jury had been deliberating for over eight hours, he proposed to tell the jury “of the majority verdict option and ask whether an 11/1 vote would resolve the issue”. Counsel did not oppose that course. Accordingly, the jury was brought in for that purpose and then asked to retire to consider their verdict. They returned some 20 minutes later with a majority verdict.

On appeal, it was argued that the trial judge should have revealed the voting numbers to counsel because that information was relevant to the exercise of the discretion under s 59A. In support of that argument, the appellant relied on a number of decisions of the Victorian Court of Appeal which concerned a provision of the Juries Act 2000 (Vic) to similar (although not identical) effect. Relevantly, in HM v R (2013) 231 A Crim R 349; [2013] VSCA 100, the majority held that a trial judge to whom voting numbers had been revealed by a jury was obliged to disclose that information to counsel and a failure to do so would amount to a denial of procedural fairness.

Holmes JA (with whom Philippides and Dalton JJ agreed) declined to adopt the view of the majority in HM v R, holding instead that the trial judge was right not to reveal the voting numbers to counsel, a result which was consistent with the long-standing practice in the criminal courts in Queensland as reflected in the obiter remarks of Gotterson JA in R v Millar (No 2) (2013) 227 A Crim R 556; [2013] QCA 29. Her Honour observed that such information could have no relevance to a determination of the “prescribed period” under s 59A or, indeed, the exercise of the discretion under that provision to allow a majority verdict or, under s 60, to discharge the jury. Section 70 required jury deliberations to be kept confidential and, as such, the statutory intent was that information regarding voting numbers was not among the matters properly to be taken into account in the exercise of the discretions conferred by ss 59A and 60. Nor, for that reason, was it a denial of procedural fairness to withhold that information from counsel.

It is likely that this decision will prompt a revision of the standard directions contained in the Supreme and District Courts Benchbook. In this regard, Holmes JA noted that the Victorian Criminal Charge Book contains a direction to the effect that the jury must not include on any note the numbers involved in any vote and then said, “It may be that giving a similar direction should be standard practice in Queensland” and, at [101], Philippides J said, “if juries are directed in that manner, the issues raised in this case would be obviated.” 

Appeal Status: Appeal Pending - Application for Special Leave to Appeal made to the High Court.

R v Stevens [2014] QCA 286

(This summary was prepared by Mr Martin Burns QC)

After a trial in the District Court, the appellant was convicted of stealing a bobcat. The bobcat had been stolen from its owner by another person in January 2008 and, some months later, the appellant purchased it from an intermediary. Later in 2008, the appellant applied for finance and, consequent upon that application, a valuer was asked to examine the bobcat for security purposes. The valuer discovered that it was stolen and notified the appellant accordingly, adding that he had also telephoned the owner to make sure that “it hadn’t been recovered or anything”. The valuer informed the appellant that he had not “told them where it is or anything”. The appellant then contacted the person from whom he had acquired the bobcat and demanded his purchase money back in exchange for the return of the machine. At the same time, the appellant made clear that he had no intention of informing the police provided he got his money back. The exchange took place on the following day and, when subsequently questioned by police, the appellant denied any knowledge of the bobcat.

On appeal it was argued that it was not open to the jury to conclude that the appellant had fraudulently converted the bobcat within the meaning of s 391 of the Criminal Code. To do so, the appellant would have needed to form an intention to “permanently deprive the owner of the thing of it” [s 391(2)(a)] but, it was argued, the appellant had not formed any intention beyond recovering the money he had paid for the bobcat and distancing himself from it. It was further argued that the evidence was insufficient to establish that the appellant had actually turned his mind to the impact his return of the bobcat would have on the true owner who was, in all events, unknown to him. As such, it was contended, a jury properly instructed could not be satisfied beyond reasonable doubt that the appellant had positively formed an intention to permanently deprive the unknown owner of the bobcat.

Muir JA (with whom Fraser and Morrison JJA agreed) accepted that the appellant was motivated in his actions by a desire to get his money back but his Honour, applying R v Reid [2007] 1 Qd R 64, cautioned that “intention” is not to be confused with “motive” or desire”: [12]. Specifically, His Honour held that the jury was entitled to infer an intention on the part of the appellant to deny the owner’s right to permanent possession of the bobcat and that it was open to the jury to find, without having recourse to s 391(2), that such an intention was fraudulent. This was because, by returning the bobcat to the intermediary in return for his money, the appellant had dealt with the bobcat in a manner inconsistent with the owner’s rights: [17].  His Honour said (at [18]):

“It would have been apparent to the appellant that the person with whom he was dealing would have had no interest in returning the bobcat to its rightful owner. The fact that the appellant made it plain that he was not informing the authorities because that might interfere with his ability to get his money back demonstrated his awareness that his returning the bobcat to the person who supplied it to him was inconsistent with the owner’s rights. The appellant’s denial of knowledge of the bobcat in his police interview also assists the conclusion that the appellant’s acts evidenced an intention to deprive the owner of its rights.”

The appeal was accordingly dismissed.

Appeal Status: No Appeal Pending - Appeal Period Unexpired

R v Shipley [2016] QCA 23, 12 February 2016

The appellant in this matter, charged with unlawful possession of methylamphetamine and cannabis, appealed her conviction contending that a miscarriage of justice had occurred since she pleaded guilty through a misapprehension on her part of the law as a consequence of which her pleas were not attributable to a genuine consciousness of guilt, [15] and consequently an allocutus was administered in respect of both grounds, [2] notwithstanding her not guilty plea upon arraignment. The issues on appeal were:

Ground 1: whether the decision directing that pleas of guilty (as per a ruling made by another judge of the trial division on 10 December 2014, in reliance of s 600(2) of the Criminal Code), be entered to the charges on the indictment was wrong in law; and
Ground 2: whether the appellant’s convictions constituted a miscarriage of justice.

Briefly by way of background, the ruling was made in circumstances where:

  • the appellant had pleaded guilty to the charges in accordance with the registry committal procedure governed by s114 of the Justices Act 1886 [4]; 
  • on 13 December 2013, the appellant’s then solicitor signed a Notice of Intention to Proceed via Registry Committal document which stated that the appellant was charged with three indictable offences.  The first two offences charged corresponded with Counts 1 and 2 on the indictment.  The document indicated the appellant consented to proceed via registry committal; and wished to elect to enter pleas of “guilty” and be committed for sentence at the District Court at Rockhampton. [4].
  • the appellant subsequently pleaded guilty to all three charges. [5].
  • the appellant was committed for sentence by way of registry committal on 28 February 2014, and arraigned on 24 November 2014.  On that occasions she pleaded “not guilty” to each of the two counts. [6].
  • the Crown submitted that regardless of the “not guilty” pleas, the Court should instead proceed to enter pleas of guilty and proceed accordingly. [6].

As it transpired, at first instance directions were made for determination under s 590AA of the Criminal Code of two issues, namely whether the appellant could lawfully withdraw the pleas of not guilty and whether, if so, evidence of the pleas of guilty could be admitted at her trial.  The application was heard on 3 December 2014 and the ruling made shortly thereafter. [7].

The change of pleas

The appellant’s decision to enter pleas of “not guilty” to the charges is able to be accounted for when viewed in the context of the state of the evidence available to be led in the Crown case.  [8]. The learned primary judge examined the evidence with a view to determining whether it was capable of proving that the appellant was in possession of the drugs at the relevant time.  [9]. He determined it was problematic in relation to the element of “control”, observing that possession was not proved in circumstances where the appellant denied any knowledge of the presence of the drugs; there was no direct evidence that she was aware of their presence; and she made no claim to them or exercised any overt control over them. [10].

As such, the learned primary judge concluded that the appellant’s submission that the evidence available at the time of her registry committal and the entry of her plea was not sufficient to sustain a conviction on either charge ought to be accepted. [12].

The grounds of appeal

Ground 1:

The appellant argued that s 600(2) could not apply in circumstances where a person has been committed for sentence upon a registry committal.  Accordingly, the direction that pleas of “guilty” be entered was made without power. [14].

The appellant contended that the power to direct a plea of “guilty” for an offence under s 600(2) is conditional upon the court being satisfied that the person duly admitted before the justice that he or she was guilty of the offence.  The appellant merely signed an “Acknowledgement of Plea” document for the purposes of s 114(2) of the Justices Act, making no admission of guilt before a justice. [22] That resulted in a miscarriage of justice. [23].

Conversely, the respondent argued that the clause “that the person duly admitted before the justice that the person was guilty of the offence charged” in s 600(2) ought be interpreted as including a written statement signed by a person stating that he or she pleads guilty to an offence under the registry committal procedure. [25].

In considering the matter, the court observed that the language in which the conditioning clause in s 600(2) is cast is clearly expressed. In upholding the ground of appeal and rejecting the respondent’s arguments, it concluded that it is not the case that upon enactment of the registry committal procedure, s 600(2) ought thereafter be interpreted to accommodate it.  That proposition is independent of s 114(5). [30]. Under the registry committal procedure, written statements of evidence are filed with the clerk of the court.  They need not be sworn.  There is no provision in s 114 conferring upon them the status of a deposition (which may be compared with s 110A(12) of the Justices Act). [41]

As for the operation of s 114(5), it is prospective; not retrospective: 

“It is not cast in the language of a deeming provision such as might give to the procedure by which a plea of guilty is made under s 114(2) the identity of the procedure under s 113 in which a defendant admits guilt before a justice.” [33].

The court lastly noted that:

“Had the legislature been minded to ensure that s 600(2) applied to the [registry committal] procedure, then it could have amended it accordingly when the provisions for the procedure were enacted.” [36].

Ground 2:

The appellant argued that a miscarriage of justice occurred since her plea of guilty was not founded upon a genuine consciousness of guilt. [15]. In view of the success of Ground 1, it was unnecessary for the court to consider this ground.  [42].

In the result, the appeal was allowed, the convictions set aside, and the order that pleas of “guilty” be entered to the charges on indictment set aside. [44].

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Hamdan v Callanan; Younan v Callanan [2014] QCA

This is an interesting case which addressed the capacity of the legislature to abrogate, through statute, fundamental rights.  Specifically, the Court addressed the question of whether ss 185 and 190 of the Crime and Misconduct Act 2001 (the “Act”) abrogate an individual’s right to silence and its corollary, the privilege against self-incrimination. 

This matter came before the Court following an order of the Supreme Court dismissing the appellants’ application for a statutory order of review of the decision of the respondent, as delegate of the Chairperson of the Crime and Misconduct Commission (“CMC”), to issue an attendance notice upon them.  The appellants, Hamden and Younan, were suspects in a murder investigation referred to the CMC.  An investigative hearing into the murder was authorised by the CMC and the appellants were issued with attendance notices, which required them to attend the hearing and answer, under oath, any questions put to them.  Appearing before the Supreme Court, the appellants argued that the decision to issue these notices was not authorised by the enactment and involved an error of law.  The judge at first instance dismissed this application.

The principle issue before the Court was whether, as a matter of construction, the CMA abrogated the appellants’ right to silence.  [10].  This right, accepted as being “a fundamental freedom or principle”, and thereby attracting “the principle of legality” cannot be abrogated except where the legislature “in the provisions of the Act, ‘made its intention in that regard unambiguously clear’” through the use of “clear words” or by “necessary implication.”  [11]–[12], see further [14]–[16].  The Court noted, however, that this principle should not be extended beyond its rationale – “it exists to protect [fundamental freedoms] from inadvertent … alteration” not to shield them against deliberate acts of the legislature.  [17]–[19].

Turning then to the specific provisions before the Court, under the Act the CMC has the power to require an individual to attend a CMC hearing to give evidence – failure to do so without a “reasonable excuse” being a criminal offence.  Crime and Misconduct Act 2001, s 82.  It is not a reasonable excuse to claim the privilege against self-incrimination, though under s 197 if an individual claims self-incrimination privilege and would, but for the terms of the Act, not be required to answer the question, the answer is not admissible against them in any civil, criminal or administrative proceeding.  The appellants proceeded on the basis that the provisions of the Act do not “abrogate self-incrimination privilege in the case of a person suspected of a major crime under investigation by the CMC because the application of the relevant provisions of the Act to claims of privilege by a suspect [are] not expressly stated”.  [48]. The Court rejected this contention, holding that there was a sufficiently clear and identifiable legislative intention to abrogate the privilege against self-incrimination.  [49].  This intention, the Court considered, was evidenced by the fact that given the stated purposes of the Act those persons suspected of a major crime would often be amongst those required to attend a CMC hearing, and that the provisions of the Act explicitly abrogated the privilege.  [50]–[53].

Given this conclusion, the Court dismissed the appeal, however this decision is now the subject of a special leave application.  

Appeal Status: Application for Special Leave refused.

R v Conde [2015] QCA 63

This recent Court of Appeal decision arose from an appeal against conviction on one count of unlawful stalking with a circumstance of aggravation. The appellant, a vexatious litigant, was sentenced to imprisonment for 15 months, suspended after seven months, for an operational period of five years. [6].

The complainant, a solicitor, had represented the appellant’s former partner in an application for a domestic violence order. The charge related to a protracted course of 59 separate acts. [8]; [9].

The appellant contended that the trial judge had erred in various aspects of his summing up and directions to the jury, with the end result that the conviction was unsafe or unsatisfactory. [28]. It was also submitted that one act committed by the appellant did not meet the definition of unlawful stalking. [40].

In considering ground one (unsafe verdict), the Court determined that the verdict was properly open to the jury [35], which evidently accepted the complainant’s evidence. [35]. The Court also determined that it was open to the jury to conclude that a series of emails sent by the appellant contained content which the appellant did not have a legitimate interest in giving. Nor were those emails in the public interest. [36]; [37].

In relation to the second ground of appeal (scope of the offence), the appellant argued that “act 1” which he had allegedly committed – an attempt to file a summons upon information for an offence in the Federal Magistrates Court on 20 July 2010 – did not fall within the definition of unlawful stalking pursuant to s 359B of the Criminal Code. The respondent differed, contending that “act 1” was relevant as part of a course of conduct which caused detriment. [43].

In considering ground two, the Court noted that a natural reading of s 359B of the Code supported the view that “notwithstanding that s 359B identifies conduct which constitutes an offence, … it [is] sufficiently clear that the offence is intended to include a course of conduct consisting of more than one of the acts identified in s 359B(c), even where it is not established that each act, taken in isolation, would cause or caused the relevant fear, apprehension or detriment.” [45]. 

In delivering his reasons, his Honour, Justice Peter Lyons noted the breadth of the section, which is intended to encompass any approach to a person, or contact with a person, which causes detriment.  He stated:

“The serving of Court documents, or the communication of distressing news, may well amount to conduct which satisfies the provisions of this section, based on its language. …That s 359B is intended to have a wide field of operation is also apparent from s 359C.  There can be little doubt that the provisions are intended to affect the exercise of a person’s right to be in a public place, or on property in which the person has an interest, in certain circumstances, even to the point where the right might not be exercised at all.  In my view it is clear that these provisions demonstrate with sufficient clarity an intention to interfere with fundamental rights, if the conduct otherwise satisfies the requirements of s 359B (subject to s 359D)”. [51].

Accordingly, the appellant did not succeed on ground two, the Court declining to find that act 1, when considered in context, was not a potentially relevant act. [47].

In the course of argument, the appellant was granted leave to add a third ground of appeal – namely, that the trial judge had erred in failing to direct the jury as to the need for unanimity on the identity of the two or more occasions said to constitute the course of conduct amounting to unlawful stalking. [29]. The appellant relied upon the High Court decision of KBT v The Queen (1997) 191 CLR 417 and R v Hubbuck [1999] 1 Qd R 314. The respondent contended that since stalking is a “course of conduct” offence, it was unnecessary for the jury to agree about particular acts [58], and in the alternative, the provisions of s 668E(1A) of the Criminal Code could be applied to maintain the conviction, as the vast majority of the acts had been admitted by the appellant. [59].

In considering this final ground, Peter Lyons J observed that it is indeed the case that in order to convict, all members of the jury must agree that a defendant carried out a particular act, being an act that satisfies that the description found in s 359B(c), and that the act was protracted; or alternatively that the defendant carried out two acts satisfying the description found in s 359B(c), and if more than two such acts are alleged then they must agree about the same two acts. This is established by KBT v The Queen (1997) 191 CLR 417 and R v Hubbuck [1999] 1 Qd R 314. In relation to this aspect, the Court thus concluded that the directions given to the jury were not sufficient. [67]. The failure to give the direction as to unanimity was an error of law. 

Nonetheless, by operation of s 668E(1A) of the Criminal Code, in all the circumstances, the Court dismissed the appeal as it considered that no substantial miscarriage of justice had actually occurred, despite the absence of the direction as to unanimity – his Honour Justice Lyons noting:

“The case is unusual, primarily because of the jury’s finding on the circumstance of aggravation; and because of the extensive admissions made by the appellant”. [88].

It followed that a retrial was not warranted.  

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Cowan; R v Cowan; Ex Parte Attorney-General (Qld) [2015] QCA 87

The factual background to this appeal is notorious and will not be unnecessarily repeated here. The crux of the appeal was that the trial judge erred in not excluding both the evidence of admissions made by the appellant to undercover police officers and the evidence obtained as a result of those admissions.  It was also asserted that the trial judge had erred in misdirecting the jury as to drawing inferences in relation to the evidence of Douglas Jackway and Leslie McLean. [2].

The Attorney-General of Queensland separately appealed against the sentence imposed on count 1 (murder), contending that it was manifestly inadequate. [3].

The court rejected the grounds of appeal against conviction, dismissing both the appeal against conviction and the appeal against sentence. [5]. Each separate ground of appeal is briefly canvassed below.

The appeal against conviction

Should the admissions and the resulting evidence be excluded?

At the pre-trial hearing, the appellant argued that the admissions and the evidence directly obtained as a result of them should have been excluded either under s 10 of the Criminal Law Amendment Act 1894, or in the exercise of discretion. [13]. That evidence comprised police interviews with the appellant preceding the coronial inquest; the questioning of the appellant and related matters at the coronial inquest; and the covert police investigation.

Ultimately, most emphasis was placed upon the detailed admissions the applicant unwittingly made to covert operatives on several separate occasions, his counsel arguing that this was inadmissible on the grounds that the appellant was induced by a person in authority. The appellant further contended that questioning of him at the inquest amounted to an inducement under s 10 of the Criminal Law Amendment Act 1894 (to provide the coroner with a stronger exculpatory alibi). [55]. 

The trial judge discounted these contentions, finding that the prosecution had proved on the balance of probabilities that the appellant's confessions were made voluntarily, and accordingly, the confessions should not be excluded on the basis that it would be unfair to admit them into evidence. [54].

In relation to this ground of appeal, specifically referencing the conduct of the inquest, her Honour the President said:

“… in vigorously encouraging the appellant to give truthful answers under oath at the inquest, and in exploring the strength of the evidence against him, counsel cross-examining the appellant were acting in accordance with the Coroners Act.  The coroner's questioning was also consistent with the coroner's statutory role.  Neither the coroner nor counsel at the inquest acted improperly or made any threat or promise to the appellant amounting to an inducement under s.10.” [70].

Regarding the appellant’s confession to the undercover police officers, her Honour concluded:

   “I am satisfied the appellant made the confessions, not because of any threat or promise held out at the inquest but voluntarily to remain part of the criminal gang, to participate in the ‘big job’ and to receive his $100,000 share of the proceeds.  If there was a threat or promise from a person in authority for the purposes of s 10, the appellant was not acting upon it when he confessed to the undercover police officers.  The primary judge was right to conclude that the appellant's confessions to the undercover police officers were not induced by any threat or promise held out at the inquest.  This aspect of the appellant's grounds of appeal against conviction fails.” [73].

The court was unpersuaded that questions of fairness warranted the exclusion of the confessional and derivative evidence.  The primary judge's decision not to exclude the evidence was endorsed as “a sound discretionary exercise”.  The failure to exclude the confessions and derivative evidence was not determined to have caused a miscarriage of justice.  [91].  In coming to this conclusion, the court importantly noted that, evidently, the appellant would not have made the admissions had he known the true identity of the undercover police officers – however, they were not exercising the coercive power of the state when he confessed:  “He believed he was amongst his criminal friends.  They stressed the need for him to tell the truth so that they could help him.  He was free to leave their company at any time”. [90].

Did the judge err in directing the jury as to inferences in relation to the evidence of Douglas Jackway and Leslie McLean?

The appellant's final ground of appeal concerned the judge's directions to the jury.  Part of his defence at trial was that it was open to the jury to decide that he may have falsely confessed to the offences to appeal to the criminal gang to which he believed the covert police officers belonged.   It was thus open to the jury, he contended, to reasonably infer from the evidence that his knowledge of the offences may have come through Mr McLean from Mr Jackway, who he suggested might in fact have committed the offences.  [92].

In considering this ground of appeal, the court examined substantial extracts from the trial judge’s summing up [104], deeming them uncontroversial and unexceptional [105–113]. The President concluded that, “When read as a whole, the judge's directions to the jury fairly explained the defence case and instructed them, before convicting the appellant, to be satisfied beyond reasonable doubt that the defence hypothesis was not open.  There has been no misdirection on a matter of law”.  [115].

Attorney-General’s appeal against sentence

The Attorney-General of Queensland contended that the primary judge's order postponing parole eligibility for the respondent, Brett Peter Cowan, on his life sentence for murder by only five years, was manifestly inadequate; plainly unreasonable and unjust as per House v The King (1936) 55 CLR 499, 504–505. [117].

In addressing the merits of these arguments, the President noted that whilst the respondent's offending deserved a heavy penalty to reflect “pertinent sentencing principles of general and personal deterrence, protection of the community and denunciation of such wickedly antisocial behaviour”  [131], it was apparent that the trial judge had afforded appropriate weight to all relevant factors in determining that the appropriate sentence for the respondent for count 1 was life imprisonment, with parole eligibility delayed by five years beyond the minimum. [132]. As such, the court declined to interfere with the sentence imposed, particularly in the absence of any error of law. [133].

Appeal Status: No Appeal Pending - Appeal Period Unexpired

R v DBI [2015] QCA 83

This matter involved a consideration of whether evidence given after the trial pursuant to s 671B(1)(c) of the Criminal Code by the complainant, had it been available at trial, would have led the jury to entertain a significant and reasonable doubt as to the appellant’s guilt of particular offences.  The court was required to determine whether the fresh evidence, in the form of a recantation, was relevant, credible and cogent.  [28]

By way of brief background, at the conclusion of a six day jury trial, on 8 September 2014 the appellant was convicted of 10 counts of rape and one count of common assault against his stepbrother. At the time of his conviction, the appellant was 18 years old.  At the time of the majority of the alleged offences, he was a juvenile. [2]–[3]. The complainant, the appellant’s stepbrother, gave a further interview to police on 30 September 2014, during which he retracted the evidence he had given at the trial. The appellant was subsequently granted bail on 3 October 2014. [4]

Consequently, the appellant appealed against conviction on the grounds that the verdicts of the jury were unreasonable or could not be supported having regard to the evidence; and further, that the evidence admitted by leave on the appeal demonstrated that a miscarriage of justice had occurred. [6].

The evidence against the appellant primarily consisted of pre-recorded evidence provided by the complainant in the course of two separate interviews with police, in which he described several occasions of sexual abuse over a period of some five years.  [7] In delivering the lead judgment, Atkinson J noted that cross-examination of the complainant uncovered significant difficulties in accepting his evidence [13]. Further, scant evidence existed implicating the appellant in the commission of the offences apart from the complainant’s own evidence. [18]. Finally, at appeal the Crown conceded that it was unable to submit that there was not a real possibility that a jury, acting reasonably on the trial evidence together with the fresh evidence, would have acquitted the appellant.  [19].

In considering the matter, the court observed the principles governing the admission of fresh evidence, as contained in authorities including Gallagher v The Queen (1986) 160 CLR 392; Mickelberg v The Queen (1989) 167 CLR 259; and R v VI [2013] QCA 218. Her Honour noted that “[t]he particular difficulty faced in this case is that it is recantation evidence.  Such evidence after a trial should be approached with caution”. [28].

Nonetheless, it was the court’s view that, having regard to the particular circumstances of the case, especially the cogent reasons given as to why the complainant lied at the trial [36], and the undermining of the credibility of the account told by the complainant at trial by other family members, [37] the fresh evidence should be accepted as being reliable and accordingly the appeal was allowed. [38]

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Keen [2015] QSC 7

This matter involved an application to exclude evidence under s 590AA of the Criminal Code.  The careful reasons of Jackson J provide a clear exposition of the relevant principles to be taken into account when making a determination as to whether or not relevant and probative evidence which had been obtained should be excluded.

The applicant was charged with five counts of possession of a dangerous drug.  He had been committed for trial, but had not yet entered a plea. [1]. He sought a ruling that the search of his motor vehicle undertaken by police where the dangerous drugs were found was conducted without lawful authority and, therefore, an order that the results of that search should be excluded from the evidence to be admitted at trial.  [2].

At the time of the search, the applicant and an acquaintance were standing outside, but near the rear, of a motor vehicle. They were approached by two police officers who had driven to the scene in a marked police car. [4]. The police officers identified themselves and asked the applicant and his acquaintance for their names, which they provided. [5]. Shortly afterwards, one officer then advised both parties that he was going to search the vehicle.  He then advised that they were detained whilst he conducted the search of the vehicle.  The other police officer stood with the parties next to the vehicle during the course of the search. [6].

Relevantly, the officer searching the vehicle then located:

  • a small plastic tub containing what appeared to be cannabis in the vehicle. The applicant said that it belonged to him [7];
  • a small tub containing a pink crystalline substance.  Neither party took ownership [7]; 
  • a plastic water pipe on the floor underneath the driver’s seat.   The applicant said it was his, and he had used it to smoke cannabis [8];
  • a sports bag containing two large vacuum sealed plastic bags that contained what appeared to be cannabis.  The applicant’s acquaintance stated that both items belonged to him. [9].

At the conclusion of the search, other police attended the scene, arresting both parties.  [10].

Of note, the officer who searched the vehicle had attended a briefing earlier the same day conducted by a senior officer in charge of a drug operation.  The officer had been informed that the applicant was a target of that operation, and advised that it was believed the applicant was intending to collect dangerous drugs from the principal target of the operation, and would thereafter be in possession of them. [11]. The plan was that the officers would make a deliberate “traffic” interception of the vehicle carrying the applicant, then conduct a search.  [12].

The application

The basis of the application regarding the lawfulness of the search, and the admissibility of evidence at the applicant’s trial on the indictment, was threefold [17]:

  1. Were the applicant and his acquaintance “occupants … detained”, within the meaning of s 31(1)(c) of the Police Powers and Responsibilities Act 2000 when the power to search was exercised, despite the fact that they were standing outside the vehicle? 
  2. Was the officer who searched the vehicle acting under dictation or undue influence from a superior officer when he purported to exercise the power to search under s 31?  (It was argued that if he was, then no independent or lawful exercise of the power to search existed under that provision). 
  3. Did the officer who searched the vehicle reasonably suspect that there were unlawful drugs in the vehicle?  (It was argued that he had insufficient information to form a reasonable suspicion).

Vehicle occupants

In assessing whether the applicant and his acquaintance were properly characterised by the police as occupants of the vehicle for the purposes of s 31 of the Act, his Honour, taking into account the guidance provided by the authorities of R v Versac (2013) 227 A Crim R 569, R v Pohl [2014] QSC 173 and Legal Services Board v Gillespie-Jones (2013) 249 CLR 493 observed:

“The ordinary meaning of the expression “occupants of a vehicle” extends to all those in the vehicle, namely the driver and any passengers.  However, the scope of the expression becomes more difficult when the … persons are no longer in the vehicle.  For example, the persons in a stationary vehicle may get out, either voluntarily or under instruction from the police officer who has approached the vehicle and detained them for the purpose of exercising the power of search.  If they were in the vehicle when the police officer approached the vehicle, in my view, those persons are occupants of the vehicle under s 31.  The contrary view would make s 31 unworkable.  The Court is “to adopt a construction that will avoid a consequence that appears irrational or unjust”. [29].

Applying the above, his Honour took the view that it was plainly the intention of the Act – bolstered by the context in which s 31 appears in it [33] – that the applicant and his acquaintance could not be regarded as occupants of the vehicle, in circumstances where they were not in the vehicle when the officer who conducted the search arrived at the scene. [38]. They were not inside the vehicle when approached, before the power to detain the vehicle and them was exercised. [39].

Acting under dictation or undue influence

Turning to the next issue for consideration, the applicant submitted that the officer who conducted the search was directed to make the intercept, and as such did not independently exercise the powers under s 31. [41] Noting that if a repository of statutory power acts in accordance with an external direction or policy, an exercise of the power may be invalidated (see Bread Manufacturers of New South Wales v Evans (1980) 180 CLR 404), his Honour nonetheless discounted this argument, taking the view that:

   “SC Cameron was an experienced officer who was well familiar with s 31.  He did not purport to exercise power under s.31 without turning his mind to whether he had the required reasonable suspicion.” [44].

Accordingly, he was satisfied that the powers under s 31 were in fact exercised personally. [47].

Reasonable suspicion

Lastly, in circumstances where the officer who conducted the search did so following a comprehensive briefing including the background of the investigation, the principal target, and an outline of the telecommunication intercepts, [54] his Honour took the view that there was “no question” [50] that, on the balance of probabilities, ample evidence to form a reasonable suspicion existed.

Lawfulness of the search of the vehicle and admissibility

Concluding that the search was not authorised by s 31 of the Act – albeit only because the applicant and his acquaintance were not occupants of the vehicle when the power was exercised – his Honour then considered whether the evidence obtained as a result of the search ought be excluded from evidence.  Taking into account that the question involves the exercise of discretion to allow or exclude unlawfully procured evidence on public policy grounds (see Versac and Pohl, above) [61], his Honour observed that in circumstances where the unlawful search of the vehicle did not involve a deliberate or reckless disregard for the law [65]; the evidence was compelling as to the commission of the offences [66] and vital to the successful prosecution of the applicant [67], on balance the proper course was to allow its admission:

   “the public interest in bringing a wrongdoer to justice and the factors favouring admission of the evidence outweigh the factors supporting its exclusion”. [74].

As a result, the application was dismissed.

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Dillon; Ex parte Attorney-General (Qld) [2015] QCA 155

In this important decision the Court of Appeal has held that the test for “dishonesty” adopted from the decision in R v Ghosh, which has long been held to apply in Queensland, is no longer appropriate.

The matter before the Court of Appeal arose following a referral from the Attorney-General under s 668A of the Criminal Code.  It considered the important question of what the Crown must prove in order to satisfy the element of “dishonestly” as that term is used in the offence of “Fraud” in s 408C. The specific question referred was:

“To satisfy the element of dishonesty does the Crown have to prove that:

     (a) what the accused person did was dishonest by the standards of ordinary honest people; and

     (b) the accused person must have realised that what he or she was doing was dishonest by those standards?” [4].

The respondent, a director and shareholder of companies which sold and rented used forklifts, had been charged with 11 counts of fraud pursuant to s 408C of the Criminal Code.  It was alleged that he had issued false invoices to a finance company on the basis that his companies had purchased forklift machines, when that was not the case. [1]. 

The prosecution applied for a pre-trial ruling as to what must be proven to satisfy the element of “dishonestly” in s 408C. [2]. At first instance the judge, applying R v Laurie [1987] 2 Qd R 762 and R v White (2002) 135 A Crim R 346; [2002] QCA 477, held that the term “dishonestly” has the meaning given to it in R v Laurie – namely that the directions in R v Ghosh [1982] QB 1053 are the appropriate directions to give the jury. [3].  Those directions require that a jury will use the two-part test of dishonesty established in Ghosh: 1) determine whether an act was dishonest in accordance with ordinary standards of a reasonable and honest person.  2) determine whether the defendant must have realised the act was dishonest.  A conclusive finding as to both parts of the test results in a finding that the act was dishonest.

The Attorney-General’s submissions

Noting that the word “dishonestly” is not defined in the Criminal Code, the Attorney-General argued that its meaning derives from the ordinary sense of the word in the English language: see R v Harvey [1993] 2 Qd R 389. 

The Attorney-General contended that the appropriate test for determining the meaning of “dishonestly” in s 408C was that set out by the High Court in Peters v The Queen (1998) 192 CLR 493 and Macleod v The Queen (2003) 214 CLR 230, which revised the previous Queensland decisions relied upon by the judge at first instance. As the High Court is the final arbiter of State criminal law, it followed that the decisions in Peters v The Queen and Macleod v The Queen are binding in Queensland: see Phillips v The Queen (2006) 225 CLR 303, 322–323 [60].

Accordingly, consistent with its reasoning, the question posed in the reference should be answered: “No” – since the jury ought be instructed that the question of dishonesty is to be determined according to the standards of ordinary decent people. [6]. The prosecution need not, additionally, prove that the accused person realised that the relevant act was dishonest by the standards of ordinary honest people. [6].

The respondent’s submissions

The respondent argued that the primary judge correctly determined that “dishonestly” in s 408C has the meaning given to it in R v Laurie and confirmed by subsequent Queensland authority. [13].  It contended that the meaning is a question of statutory construction and not the application of the common law, and as such Peters v The Queen and Macleod v The Queen should be distinguished and the long established construction of “dishonestly” applied. [13].

The respondent contended that “dishonestly” in s 408C is used in a special sense, submitting that the question posed in the reference should be answered: “Yes”. [21].

The point of law referred

In considering the question posed in the reference, the court acknowledged that since R v Laurie, Queensland courts have consistently adhered to the Ghosh approach in directing juries as to the meaning of “dishonestly” in s 408C: see R v Allard [1988] 2 Qd R 269 and R v Sitek [1988] 2 Qd R 284. [28]; [45].

As to whether “dishonestly” in s 408C is used in its ordinary sense or a special sense – the “central question” to the appeal [39] – the court particularly considered R v Salvo [1980] VR 401. The relevant offence in that case involved the elements of both “deceit” and “dishonesty”.  Fullagar J, with whom Murphy J agreed, held that the word “dishonestly” in s 81(1) of the Crimes Act 1958 (Vic) was used in a special sense. [40].  In that case, it was noted that the concept involved in “dishonestly” in s 81(1) shares similarities with the common law requirement of “intent to defraud” or absence of a claim of right, yet is subjective in the sense of an intention to defraud another without any belief in a legal right to do so. The word “dishonestly” indicates that the accused person has no belief that they have a legal right to the property. [40].

The approach of the court in R v Salvo has been followed by Victorian courts, and juries have been directed that “dishonestly” in s 81(1) offences means without a belief in a claim of right. In the 2012 case of SAJ v The Queen (2012) 36 VR 435, the court stated that:

“Certainly it seems clear, as a result of Macleod, that the second limb of the Ghosh test now has no place in the common law of Australia.” [65].

By contrast with the Victorian position, the President observed that since Peters v The Queen and Macleod v The Queen, Queensland courts have continued to direct juries in accordance with the Ghosh test: see R v White (2002) 135 A Crim R 346, 349; [2002] QCA 477; R v Ferreri  [2012] QCA 308 and R v Alwis [2004] QCA 19. [45].  Prior to the appeal, the only case in the Court regarding s 408C where Peters and Macleod were discussed was R v Seymour [2004] QCA 19.

That was an appeal against conviction on 11 counts of fraud under s 408C on grounds which included that the trial judge, in giving the Ghosh direction, erred in not directing the jury in accordance with Peters v The Queen and Macleod v The Queen.  The Court of Appeal held that the directions sufficiently complied with the requirements set out in Peters and Macleod.  As such, that judgment was of limited assistance to the Attorney-General’s case since the issue of whether the Peters meaning of dishonesty should replace the Ghosh meaning was not addressed. [45].

Ultimately, after considering all the authorities, her Honour the President concluded that:

“I am persuaded that the term ‘dishonestly’ in s 408C has its ordinary meaning rather than a special meaning importing that, to be found guilty, the accused person must obtain the property without a belief in a legal entitlement to it. [47].

As ‘dishonestly’ in s 408C has its ordinary meaning, this Court must follow the meaning given to ‘dishonestly’ by the High Court in Peters and Macleod.  Despite the previously settled approach in Queensland since 1987, Queensland Courts must now construe the term ‘dishonestly’ in s 408C as requiring the prosecution to prove only that what the accused person did was dishonest by the standards of ordinary honest people.  To secure a conviction, the prosecution need not prove that the accused person must have realised that what he or she was doing was dishonest by those standards.  This construction works harmoniously with the defence provisions of the Criminal Code.” [48].

Accordingly, in response to the point of law referred, the court unanimously answered “No”. [50]–[52].

Appeal Status: No Appeal Pending - Appeal Period Unexpired

R v Jones [2015] QCA 161, 1 September 2015

This interesting case on evidence arose from an appeal against a murder conviction on the sole ground that a miscarriage of justice occurred as a result of a ruling by the trial judge that expert opinion evidence was inadmissible. [2].

The deceased – the appellant’s mother – died from the infliction of multiple wounds (totalling 31), upon her by the appellant.  Relevant issues for the jury included the defence against a provoked assault under s 272 of the Criminal Code; the defence of “self defence against an unprovoked assault” under s 271 of the Criminal Code; the partial defence of provocation under s 304 of the Criminal Code and that of killing in an abusive domestic relationship under s 304B of the Criminal Code, [3] in the context of what appeared to be a fraught domestic situation. [4]–[6].

At trial, counsel for the defence sought to lead psychiatric opinion evidence. The trial judge directed that that evidence not be opened to the jury but that a voir dire might subsequently be held to determine its admissibility. [7]. When called at the voir dire, the consultant psychiatrist, albeit conceding it was very difficult to provide a diagnosis on someone who had not been seen, expressed his opinion that the information he had to hand was consistent with the appellant’s mother suffering a borderline personality disorder, possibly a bi-polar disorder and most likely alcohol abuse and/or dependence. [8], [20].

The appellant contended that the opinion evidence of the doctor was admissible pursuant to s 132B of the Evidence Act 1977, given it formed part of the admissible evidence designed to support a defence under s 304B of the Criminal Code.  The court discounted this, since the opinion evidence was not evidence of the “history of the domestic relationship between” the appellant and his mother within s 132B(2), his Honour Justice North outlining:

“There is an obvious distinction between the concepts of opinion evidence and the historical account of the events within a “domestic relationship” that s 132B of the Evidence Act is concerned with … The “relevant” evidence that s 132B makes admissible is the account by the witnesses such as the appellant and others recalled of the events (namely a history) of the relationship between mother and son that put the events or circumstances the subject of the charge in a context relevant to that charge and any defence.  Section 132B does not facilitate the admissibility of evidence at large such as propensity evidence rather it permits the reception of “relationship” evidence”. [14].

Turning to “the more fundamental issue raised by the appeal” – namely whether the emotional state and resultant behaviour of the appellant that the specialist theorised was admissible as expert opinion evidence – had any bearing upon any of the matters outlined by  ss 304B(1)(a), (b) and (c) of the Code [16], his Honour referred to the test outlined in Clark v Ryan (1960) 103 CLR 486, which dictates that opinion evidence is not admissible unless the inquiry is into a subject matter, the nature of which, is such as to require a course of study into a body of knowledge or experience which is sufficiently organised or recognised to be accepted as reliable, so that the opinion of the expert may be of assistance to the court. With those constraints in mind, he distilled that the relevant issue for the trial judge’s consideration was whether the jury would be able to form a sound judgment concerning the appellant’s state of mind in the circumstances in which he found himself when he killed his mother without the assistance of the expert evidence. [18]. Notably, his expert opinion was that the appellant had no personality, psychotic or anxiety based disorder. [20].

In the court’s view, the jury had been properly instructed and was in a sound position to properly understand the matters the specialist spoke of as to the likely effect upon the appellant of exposure to his mother’s behaviour, and to consider the matters raised by s 304B of the Criminal Code together with the other defences, without the benefit of that opinion evidence:

“While the experiences the appellant and other witnesses spoke of were sordid and, happily, probably beyond the personal experience of most, if not all, of those who might sit on a jury or who sat on this jury, the matters Dr Arthur spoke of in relation to the appellant were not the subject of difficult or complex scientific or technical substance”.  [21].

As such, the court determined that the trial judge had been correct in ruling the opinion evidence inadmissible.  There being no miscarriage of justice [21], the appeal was dismissed. [24].

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Chief Executive Administering the Environmental Protection Act 1994 v Linc Energy Ltd [2015] QCA 197, 16 October 2015

This interesting matter arose from the issuance of two warrants for the business premises of the respondent, pursuant to s 456 of the Environmental Protection Act 1994, on the information of the second appellant, an officer of the Department of Environment and Heritage Protection.  [1]. During their execution, items of property were seized, including backup tapes for computer-stored data, a hard drive disk, and a storage device described as “the QNAP device”. Data stored on computers was also downloaded. [5].

The respondent applied for a declaration that both the seizure and the retention of the backup tapes and devices was unlawful and sought a mandatory injunction for their return. [6]. At first instance it was declared that the seizure of the backup tapes and the QNAP device was unlawful and the appellants were not permitted to retain them. The issue on appeal was whether that was correct.

Reasons at first instance

In his Honour’s view, the power used by officers during the seizure was not legitimately exercised. He took the view that it was an instance of what Lord Justice Eveleigh described in R v Inland Revenue Commissioners Ex parte Rossminster Ltd [1980] AC 952 as a seizure of “a whole mass of documents, unexamined, in the hope that one of them might reveal some valuable evidential information”. Accordingly on that basis he determined that the seizure of the backup tapes and the QNAP device was unlawful. [16].

Grounds of appeal

The appellants contended that the finding at first instance was in error, since:

  1. it was unnecessary to consider the state of mind of those executing the warrants. Under s 461(1) of the Environmental Protection Act 1994, the state of mind of the warrant holder is irrelevant;
  2. the learned Primary Judge failed to take into account the formal concessions made by the Respondent that the lawfulness of the seizures did not depend upon the state of mind of the second Applicant and those assisting her;
  3. the Learned Primary Judge made erroneous factual findings;
  4. the Learned Primary Judge failed to consider and give effect to the decision of the Queensland Court of Appeal in TLC Consulting Services Pty Ltd v Paul Michael White [2003] QCA 131. [17].

Grounds 1 and 2

Observing that it was indeed concluded by the learned primary judge that a state of mind that the thing seized answers the description in the warrant was necessary for a valid seizure under s 461(1)  [21], the court was unable to reach a similar conclusion, [22] noting:

“… the relevant provisions are structured in such a way that the validity of a seizure of a thing under s.461(1) is not dependent upon the authorised person being satisfied on reasonable grounds that it has evidential relevance to an offence nominated in the warrant.” [22].

The court accordingly discounted the notion that any belief on the part of the authorised person as to the document’s evidential value for proof of any of the offences referred to in the warrant was requisite. [28].

Ground 3

In circumstances where this ground was not argued as an independent ground of appeal, and/or not pressed on appeal, it was not separately considered by the court. [29].

Ground 4

This ground of appeal was relevant to two paragraphs of the Judge at first instance’s  reasons, wherein he took the view that authorised persons executing the warrant knew that some, but not all, of the information stored on the backup tapes and the QNAP device could have assisted in proof of the offences nominated in the warrant. [30]. On that basis, his Honour’s approach was that unless all of the information stored was deemed to have that evidential quality, then seizure of either the tapes or the device would not be lawful.  [31].

The appellant submitted that the learned primary Judge ought to have, but failed to, consider and give effect to the “powerfully persuasive” [34] decision of the Queensland Court of Appeal in TLC Consulting Services Pty Ltd v Paul Michael White [2003] QCA 131 – that as the Second Applicant was satisfied that there was some information relevant to the warrant, she was entitled to seize the entire electronic storage mediums comprising the QNAP device and backup tapes. That decision was referred to in the appellant’s written submissions and in the course of oral argument. [34]. It concerned a challenge to the seizure and removal of a server in execution of a warrant issued pursuant to s 89(3) of the Fair Trading Act 1989. The court rejected an argument that the server was not a record of information as defined in the Act.  [36]. It held that, in a situation where there was no consensus as to which portion of the records (the appellant) was entitled to, there was no limitation imposed by the statute to the effect that the relevant record must relate solely to the particular service in question or the subject of a particular investigation being undertaken in order to be retained. [37].

The court saw merit in the approach taken in TLC Consulting Services Pty Ltd. It dismissed the respondent’s contention that neither a backup tape nor a QNAP device could be a particular “thing” within the meaning of s 456(4) and thus could not properly constitute “the evidence” for the purposes of that section, [39] stating:

“What s 456(4)(a) requires is that the particular thing be something that may provide evidence of the commission of a relevant offence.  A thing may provide evidence by being a repository from which evidence may be sourced.  Thus a thing on which information probative of an offence is stored, is capable of providing evidence of the commission of the offence.  Significantly, s 456(4)(a) does not stipulate that the particular thing in itself, constitute, or may constitute, evidence of the same.  Had the section be so framed, then the respondent’s submission would have force.”

In the result, ground 4 of the appeal was upheld and the appeal allowed, with the respondent ordered to pay the appellant’s costs of the appeal on the standard basis. [43]. The mere fact that the QNAP device and the back-up tapes also contained some material not of evidential value did not mean that those items could not be seized, as coming within the description of “the evidence” for which the warrant was issued.  

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Berg v Director of Public Prosecutions (Qld) [2015] QCA 196, 16 October 2015

The appellant in this matter appealed a decision of the Mental Health Court made on 17 October 2014 that he was “fit for trial” with respect to a reference concerning 37 charges, as defined in the Mental Health Act 2000.

The relevant charges included procuring a sexual act by false pretence; grievous bodily harm; assault occasioning bodily harm; obtaining financial advantage by deception and 28 counts relating to various offences of fraud, attempted fraud and uttering forged documents.  The offences were alleged to have occurred between 1999 and 2004 [8] and arose from the applicant’s claims that he was an overseas trained doctor/ psychiatrist.  

The appeal raised three issues [10]:

  1. whether a person who is self-represented can ever be “fit for trial” as that term is defined in the schedule to the Act; 
  2. whether the learned primary judge erred in relying on evidence from the previous Mental Health Court reference in determining the appellant’s current fitness for trial; and
  3. whether the learned primary judge’s determination that the appellant was fit for trial was infected with apparent and/or actual bias. 

Issue 1

The appellant argued that it is necessarily implied, by virtue of the phrase “fitness to instruct counsel” within the definition of the term “fit for trial”, that a defendant is represented.  Consequently, he sought orders that:

  1. he was “conditionally fit for trial, being unfit only in the absence of professional representation”;
  2. “[s]uch an unfitness is of permanent nature”; and
  3. the Court should “put all of the [a]ppellant’s charges on permanent stay”. [15].

With reference to the guidance provided by his Honour Justice Connolly in R v House [1986] 2 Qd R 415, the court observed that a finding of unfitness for trial cannot be properly made without a positive conclusion reached in relation to each of the statutory criteria. [20] The criteria are to be considered conjunctively, and an inability to meet one criteria “equates to an inability to be ‘fit for trial’”. [21]. In delivering the lead judgment, his Honour Justice Flanagan endorsed the learned primary judge’s observation that if “fit to instruct counsel” were read literally in the sense that a defendant must always have counsel present to be fit for trial then an absurdity would result, [24] unequivocally stating:

“To determine whether a person has the capacity to instruct counsel does not require counsel to be present.  The relevant assessment is of the person’s capacity or ability to instruct counsel.  That is, the person’s fitness to instruct counsel.  The full definition of “fit for trial” by reference to a person’s fitness to endure the person’s trial, with serious adverse consequences to the person’s mental condition unlikely, permits the Mental Health Court to determine fitness for trial even where a person is self-represented.”  [25].

In view of the above, the court found that the primary judge had correctly construed the term “fit for trial” and noted that the appellant understood the charges and was capable of putting forward his defence [55] – therefore meeting the minimum comprehension necessary in terms of the R v Presser [1958] VR 45 criteria.

Issue 2

The appellant submitted that the learned primary judge had incorrectly relied upon evidence from the previous reference to the Mental Health Court. Due to the change in circumstances since the previous reference, including the absence of legal representation, the appellant contended that the evidence of the previous reference was “entirely” based on the assumption that legal counsel was present. [57]. The court found that the appellant had not established that this was erroneous, [58] stating:

“The evidence from the previous reference remains relevant to the present reference.  The change in circumstances does not detract from the relevance of this evidence.” [59]. 

Issue 3

The appellant contended that the primary judge’s decision was influenced by both apparent and actual bias. [64], [72]. Specifically, he submitted that apparent bias arose from the fact that the learned primary judge sat on the appellant’s appeal in respect of the previous reference, and that by failing to recuse herself, her Honour viewed “the present reference from the standpoint of the previous one”.  With respect to actual bias, it was submitted that the learned primary judge conducted the proceedings in a “biased, interrupting and influencing manner”.

In considering both allegations, the court closely examined her Honour’s analysis of the applicable evidence and reasons, including reviewing relevant passages of the transcript [65]. From that exercise, it was gleaned that no fair minded lay observer might have reasonably apprehended that her Honour might not bring an impartial and unprejudiced mind to the resolution of the reference on the basis that she had sat on the appeal from the earlier reference [71] – the court noting that the appellant, being aware of that, had not requested that her Honour recuse herself. [66]. In any event, the mere fact that her Honour sat as a member of the Court of Appeal in respect of the previous reference was not in itself sufficient to give rise to a reasonable apprehension that her Honour might not bring an impartial and unprejudiced mind to the present reference: see Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, 344–345 [6]; Livesey v New South Wales Bar Association (1983) 151 CLR 288; Johnson v Johnson (2000) 201 CLR 488, 492 [11].  The allegation of actual bias was also dismissed by the court, as it was unable to identify any bias on her Honour’s part in conducting the proceedings, despite closely dissecting the transcript [73], [75], [77], [79]. 

In the result, the appeal was dismissed. [81].

Appeal Status: Appeal Pending

R v Koani [2015] QSC 325, 3 November 2015

This was a ruling made in the course of a recent trial concerning an accused who had tried to plead guilty to manslaughter but not guilty to murder. The accused claimed that, whilst he had loaded a firearm, pointed it at his then girlfriend and cocked or attempted to cock the firing pin, he did not intend to kill his girlfriend as the firearm had discharged unexpectedly. The deceased was shot in the head.

As her Honour succinctly put it, due to the specific factual situation, it was a case where there was a “real possibility that the jury may conclude on the evidence before it that, at the time the gun the defendant was holding discharged:

  • the defendant intended to kill his girlfriend and, to that end, had loaded the gun and, from close range, had presented it, and at her; that he went to cock the gun with the plan that he would then discharge the weapon to effect his intention,
  • but that because of a peculiarity of the gun, they are left with a reasonable doubt that he, in fact, pulled the trigger or otherwise deliberately discharged the gun”. [p.2, 5–10].

Given the dichotomy of arguments presented to the jury –

  1. on the one hand that the actual death-causing act had not been a voluntary one (based upon the unusual propensity of the gun to fire due to a certain slippage of the thumb or finger position); and
  2. on the other, that the defendant deliberately caused the gun to discharge with intent or alternatively was in charge of a dangerous thing and failed to take care of it at a time when he had intent;

her Honour formulated a flowchart to assist with their deliberations, appended to her ruling.

The defence submitted that s 23(1)(a) of the Criminal Code applied with the result that the defendant was not criminally responsible for the act or omission, since it occurred independently of the exercise of his will. As such, it was contended that the only offence the jury could convict the defendant of was manslaughter by reason of a breach of duty under 289 of the Code.  It was argued that in the absence of mens rea and actus rea, murder was simply not available.

Her Honour described that submission as “an unattractive one”, referring to the comments of Mason CJ in Royall v The Queen (1990) 172 CLR 378, 391–392. [p.2, 40–45]. That is, that the job of the jury is to assess the question having regard to a commonsense understanding of the facts, and where death is solely the result of acts of the accused, the precise manner and time of the occurrence of death is not a relevant factor:

“It is enough that the accused has the requisite intent at the outset of his or her execution of a series of acts designed to cause, and causative of, death”.  (per Mason CJ at 292).”

With that in mind, and with reference to R v Demirian (1989) VR 97 as authority for proposition that  “f a person creates a situation intended to kill and it does kill it is no answer to a charge of murder that it caused death at a time or in a way that was to some extent unexpected”, [p 4, 35] her Honour however noted that there was an inherent difficulty in conclusively determining the matter given the lack of Queensland authority specifically on point, observing that neither Royall nor Demirian involved the application of the Queensland Criminal Code. [p 5,15]

Taking the view that in Queensland when considering s 23(1)(a) the death-causing act must be focussed on and comprise only of, in a gunshot case, pulling the trigger or otherwise deliberately causing the weapon to discharge [p 6, 400]; and that the defence under s.23(1)(a) must be left to the jury as a separate matter from their being told that they must be satisfied of intention to kill at the time of the discharge of the gun (see Murray v R (2002) 211 CLR 193, 199–200), her Honour ultimately concluded that:

“I think that the jury should be instructed that they need, in this case, to be certain that the intent endured right up until the point of discharge of the firearm before they could convict of murder… I would also say that that policy reason did not stand in the way of the law in the non-code states, and I would particularly refer to the extract of Brennan J’s judgment in Royall and the passage from Demirian which I have cited above. 

So, in my view, then, the case ought to be left to the jury, that if the Crown has not satisfied them beyond reasonable doubt that the defendant deliberately discharged the shot which killed Ms Leaney, they then ought to consider whether or not there was a breach of section 298.  If they consider that there was, they may still find the defendant guilty of murder if they find that, at the time the shot was fired, he had an intention to kill or do grievous bodily harm”.  [p 11, 5–15]

The relevant scenarios and causal linkages were carefully reflected in her Honour’s flowchart, provided to the jury subsequent to the ruling as an aid in their deliberations.

Appeal Status: No Appeal Pending - Appeal Period Unexpired

R v Baden-Clay [2015] QCA 265, 8 December 2015

Unfortunately, the media has made this case somewhat of a cause célèbre over the past three years.  Its latest instalment, being the handing down of the decision of the Court of Appeal on Mr Baden-Clay’s appeal, occurred recently.  The Court set aside the verdict of murder and substituted a verdict of manslaughter.  In terms of the consideration of the question of the sufficiency of evidence which is necessary to establish an intent to kill or to do grievous bodily harm, the decision is entirely orthodox.  It is neither remarkable for its factual nor legal complexity.   Ultimately, the outcome of the appeal turned on the purely factual question of whether there was sufficient evidence of the relevant intention.  The facts of this circumstantial case are clearly set out in the reasons of the Court and, when they are considered, the result is not in the least surprising.  Perhaps what is surprising is that the jury reached the conclusion which they did on the evidence before them.  It would be far from unreasonable to assume that the amount of pre-trial publicity which this matter received had no small impact on the verdict such that the correction by the Court of Appeal was both necessary and inevitable. It might be expected that as the media is completely unrestrained in the manner in which it comments on matters before the Court, this type of situation where the Court is required to correct suspected media driven verdicts will become more common.

As is usual, there has been much ill-informed comment made about the Court of Appeal’s decision in Queensland’s perennially unsophisticated media.  That should be ignored in favour of what the Court actually held.  The reasons of the Court are not lengthy and, given the erroneous and unwarranted publicity which the decision has received, all practitioners ought to take the time to consider it in full. 

The facts

The case against the accused was that he had killed his wife (possibly by smothering her) and had disposed of her body under a road bridge.  The evidence against him was circumstantial focusing on his extra-marital affairs, poor relationship with his wife, blood stains in a family vehicle and certain scratch marks on his face.  The relevant facts are set out in the decision of the Court.

The grounds which did not succeed

The first ground of appeal concerned the issue surrounding the cause of the scratch marks on the appellant’s face.  He maintained throughout the trial that the marks on his face had been caused by shaving with a blunt razor and that they were not scratch marks caused by fingernails.  The Court of Appeal held that it was entirely open to the jury to hold that they were caused by the latter mechanism rather than by the accused’s explanation.

In relation to the issue of the disposal of the body of Mrs Baden-Clay, the trial judge had directed the jury that this would be relevant for them in their determination as to whether or not the accused had killed his wife although not that he had murdered her. The accused contended that “if the jury were not satisfied that he put his wife’s body in the creek, they could not be satisfied beyond reasonable doubt that he caused her death; so that that matter was a necessary link in reasoning to guilt and had to be proved beyond reasonable doubt.”  A similar submission was made in relation to the bloodstain in the family vehicle.  This was rejected by the Court which observed that, whilst each was relevant to or capable of assisting in a verdict of murder, neither was essential to that conclusion.

The verdict was unreasonable

Whilst the appellant accepted that it was reasonably open to the jury to hold that he had killed his spouse, he contended that it was not open to them to be satisfied that he had the necessary intent to murder her.  [38].  That, he claimed, was particularly so in the context of the absence of injuries on the body of a kind which might indicate an intent to murder or cause grievous bodily harm.  There was no evidence of violence at the home around the time that Mrs Baden-Clay died nor any suggestion of violence in the relationship.

The Court of Appeal identified that the jury would not have hesitated in concluding that there had been an altercation at the Baden-Clay’s home and that Mrs Baden-Clay had suffered a lethal injury there.  They were entitled to conclude that the appellant had taken the body to Kholo Creek and left it there.  However, as the Court identified, “the critical question was whether it was also open to conclude that when the appellant caused his wife’s death he intended to do so, or at least to cause her grievous bodily harm”.  In this respect the Court noted that, at the trial, the Crown did not allege that the killing of Mrs Baden-Clay was in any way premeditated or that the appellant stood to benefit from her death.  In effect the Crown’s case relied upon a consciousness of guilt surrounding the disposal of the body.  Although it was accepted by the defence that it could be regarded as evidence of manslaughter or murder, the Court held that whilst such evidence is admissible for consideration in the context of the case as a whole, it does not follow that it might support a finding of intent for which there was no other evidence.

In relation to the fact that the jury had the benefit of seeing the appellant give evidence, the Court said:

“The jury could properly have rejected every word the appellant said as a lie.  But that would, with the exception of his explanation of the scratches on his face, have done nothing to advance the Crown case.  Conclusions that he had lied in that regard and that he had taken steps to dispose of his wife’s body were properly to be taken into account, as evidence of a consciousness of guilt, in the context of all the evidence in the case.   But the lies, or the lies taken in combination with the disposal of the body, would not enable the jury to draw an inference of intent to kill or do grievous bodily harm if there were, after consideration of all the evidence, equally open a possibility that all of that conduct was engaged in through a consciousness of a lesser offence; in this case, manslaughter.”

In the result, the post-offence conduct of the appellant had very little relevance to the question of the accused’s intent.  Their Honours found that the case was of the type that fell into that category described by the Victorian Court of Appeal in Ciantar:

“… there may be some circumstances in which post-offence conduct is equally consistent with two or more possible offences or is otherwise intractably neutral.  Where that is so, it may not be open, even on the totality of the evidence, to draw an inference that the accused had a consciousness of guilt of some particular conduct at the time that he told lies or performed some act which the prosecution relies upon as constituting post-offence conduct”.

In the case before the Court the post-offence conduct was neutral on the issue of intent or, to put it another way, there remained a reasonable hypothesis consistence with innocence of murder.  In the result, as there was such a reasonable hypothesis remaining the jury could not have been satisfied beyond reasonable doubt that the appellant had the element of intent to kill or to do grievous bodily harm.

Appeal Status: Appeal Decided. Overturned.

Calanca v The Queensland Parole Board, 8 January 2016

This is a recent decision of the Supreme Court concerning what, if any, remedies are available to an applicant for parole where the Queensland Parole Board fails to make a decision as required by the Corrective Services Act 2006 (“CSA”) within the time provided under the statute.  What follows is a brief summary of the relevant facts. 

The applicant in this matter was sentenced to life imprisonment in February 1994 and became eligible for parole, pursuant to s 181 of the CSA, in February 2006.  Following a number of unsuccessful applications to the Board, on 5 February 2014 the applicant made a further application which was (ultimately) refused on 22 May 2015 – 471 days after it had been made. [3].  Subsequently the applicant made the present application to the Court for a statutory order of review pursuant to s 20 of the Judicial Review Act 1991 (the “Act”) seeking a declaration that the decision refusing parole was made in contravention of s 193 CSA and an order directing the defendant to make the decision. [7]. The plaintiff submitted that the decision was reviewable for two reasons:

  1. Because the defendant failed to decide the plaintiff’s application within the time specified by s 193 CSA and thus:
    • the procedures required by law to be observed in the making of the parole decision were not observed, s 20(2)(b) JRA; or
    • the decision ought be regarded as an improper exercise of the power conferred by s 193 CSA, s 20(2)(e) JR, in the sense that the decision was “so unreasonable that no reasonable person could so exercise the power”, s 23(g) JRA; and
  2. The Board had a duty to make a decision pursuant to s 227 CSA and para 5.6 of the Ministerial Guidelines and failed to do so, s 22(2) JRA.  [22].

Failure to act within the specified time

The Court first turned to consider the plaintiff’s submission that the parole decision was improper because it was made outside of the time provided for in s 193 of the CSA, namely 210 days. [24].  Though undeniable that there had been a delay, the issue before the Court was the consequences, if any, of this delay.  [26]. 

In the absence of any indication in the CSA about the consequences of a delay of this nature, and also whether s 193 was a procedural provision or one which went to the jurisdiction to make the decision, the Court had recourse to extrinsic material.  [26], see [27]–[28].  Upon reviewing the relevant extrinsic material, in particular the relevant Explanatory Notes which indicated that the defendant “would continue to have the jurisdiction to decide the [parole] application” even where the timeframe was exceeded, [27]–[28], the scheme of the CSA and the “purpose” of the Act, the Court concluded that a failure by the defendant to decide a parole application within the time limit provided by s 193 CSA did not deprive it of its jurisdiction to make the decision.  [29].  In fact, the Court noted, to conclude otherwise would, in fact, relieve the Board of its obligation to decide it, forcing the applicant to reapply.  Id.

Accepting that despite the delay the defendant remained authorised to make the decision, the Court then considered whether the defendant’s failure to make a decision within the prescribed statutory period gave rise to a ground of review and concluded that it did.  In reaching this decision the Court noted that though s 193 CSA did not affect the jurisdiction of the Board, it was nevertheless an important procedural provision that the defendant was not free to ignore and accordingly the Court held that the plaintiff had made out this ground of review.  [32].  The Court did however explicitly state that not every failure to satisfy the requirement of s 193 CSA would give rise to a ground of review under either ss 21 or 22 of the JRA, [34], and that though it was not necessary to examine the reasons for any delay, in certain cases this may be of relevance. [35].

Failure to Make Decision Required by s 227 CSA and para 5.6 of the Ministerial Guidelines

Section 227 CSA provides that “[t]he Minister may make guidelines about the policy to be followed by [the defendant] when performing its functions”, whilst para 5.6 provides that “[w]hen an application is refused and reasons for the refusal given, the response should also give an indication to ... the prisoner ... of the improvements or activities that would be of benefit in reducing the risks posed to the community by the prisoner”.  [36]–[37].  The plaintiff alleged that the defendant had failed to comply with this paragraph because it had not provided him with an indication as required by para 5.6.  [38]. The defendant submitted that it had complied, citing statements made in its refusal, such as that “any close relationships that [the plaintiff] may establish on parole would need to be closely monitored and that his offending history would need to be disclosed to such persons” as sufficient to satisfy this guideline.  [39].  The Court rejected these submissions, concluding that the observations made by the Board were “not made in any remedial sense” and offered no indication of the improvements or activities that might be of benefit in reducing the apparent risk that the plaintiff would pose if/when released on parole.  Given this finding, the Court then considered the status of the Ministerial Guidelines.  As a statutory instrument, and thus capable of being judicially reviewed, the Guidelines must be followed by the defendant when making decisions, though not so rigidly as to “deny a true and honest assessment of the merits”.  [40].  While the Court agreed that the giving of the indication was not inconsistent with the functions to be performed by the defendant, it was not convinced that the combined effect of s 227 CSA and para 5.6 of the Guidelines was that the defendant had a duty to give the indication, the language in which this requirement was expressed was less than mandatory – “should ... give an indication”.  [44]–[45].  The Court considered the purpose of para 5.6 was to guide the defendant to a “consideration of, and decision on, whether an indication should be given” and that this must be followed – the defendant upon refusing a parole application is obliged to then consider whether or not to give an indication.  [46]–[47].  On the facts, however, the Court was not convinced that this consideration and decision had taken place. [48]. Accordingly, given that the defendant had a duty to decide whether to give an indication, and no decision was made a ground of review under s 22(2) JRA was made out. 

In determining the relief to address the defendant’s failures the Court considered that though the procedures required by s 193 CSA were not followed there would be a practical benefit in making a declaration with regards this failure and declined to do this.  [51].  With regard to the relief to address the defendant’s failure to decide whether to give an indication as required by para 5.6 of the Guidelines, however, the Court directed that the defendant decide whether to give such a declaration.  [52]. 

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Oliver, 16 February 2016

This was an appeal against a murder conviction, the appellant contending that the learned trial judge erred in failing to direct the jury not to use consciousness of guilt evidence in assessing whether the prosecution had proved an intent to kill. The issue for the court was whether the non-direction caused a miscarriage of justice.

Briefly, the appellant had been convicted of shooting the deceased, whose body was located in a barrel encased in concrete, in the Caboolture River. [4]. There were no witnesses to the incident. [6].

Consciousness of guilt evidence

In the aftermath of the offence, upon arriving at his sister’s property with the deceased’s body inside a borrowed vehicle, [10] he informed her and his brother-in-law that he had killed the deceased because the deceased had attacked him. [11]. Neither witness observed any injuries on the appellant. [11]. The appellant returned three days later and, with the assistance of his brother-in-law, concreted the body into a 44 gallon drum.  [12].

Afterwards, when disposing of the soiled vehicle which he had travelled in with the deceased’s body, he told an associate that he “had just got sick of” the deceased.  [13].

He then disposed of a gun and ammunition at an associate’s home. [15]–[17].

Lastly, it was apparent that when questioned by police on 2 January 2011, the appellant advised that he last saw the deceased on or about 22 December 2010; subsequently varying that account and claiming to have last seen the deceased on 20 December 2010. [21].

Appellant’s evidence

The appellant claimed that he drove the deceased, who was drug affected, in his vehicle under duress. [22]. He was then threatened and assaulted by the deceased. [23]. The deceased threw petrol over him and lunged at him with a knife, then picked up a lighter. [24]. In order to save his life, the appellant then fired at the deceased. [25]. He was unable to account for injuries to the deceased’s neck and throat. [25].

The appellant admitted that he had disposed of the deceased’s body with the assistance of his family; retained the hand gun and ammunition; burnt the vehicle which he had travelled in with the deceased’s body; and disposing of various items including a telephone, a bag, gloves, a knife, a container for the petrol, the drugs and associated paraphernalia.  He further admitted having lied to police in order to protect himself. [27].

Findings open to the jury

The consciousness of guilt evidence was clearly admissible as proof of the appellant’s presence at, and participation in, the death of the deceased.  It was also relevant to negativing the defence of self-defence which the appellant sought to rely upon. It was admitted without any objection. [28].

The ground of appeal

The sole ground of appeal was that the trial judge erred in failing to direct the jury not to use consciousness of guilt evidence in determining whether the prosecution had proved an intent to kill- amounting to a substantial miscarriage of justice. [36].

Whilst accepting that the consciousness of guilt evidence was relevant to other elements of the offence, (such as presence, causation and to negativing self-defence), the appellant argued that it was neutral as to the intentional element of murder. [37]. As clarified by Gotterson JA:

“Put another way, the proposition is that, on the one hand, each act and each lie constituting the consciousness of guilt evidence is wholly explicable by a consciousness of guilt of having unlawfully killed the deceased, that is to say, of manslaughter (or the acts founding manslaughter), and, on the other, none of them is explicable by consciousness of guilt of acting with an intention of killing or doing grievous bodily harm to the deceased”. [37].

The appellant contended that the trial judge should have told the jury that they could not safely use the lies and other acts to infer that he was conscious of having intentionally killed the deceased- and the failure to do so constituted a misdirection. [38].

In considering this ground of appeal, the court undertook an examination of the directions on the consciousness of guilt evidence that were given, with due regard for contextual considerations.

The appellant argued that notwithstanding that her Honour identified the evidence on which the prosecution relied for an inference of intent to kill or to do grievous bodily harm, the other directions provided were likely to result in the jury understanding that the consciousness of guilt conduct was capable of evidencing all of the elements of murder, including intention.  Those directions did not make an exception for intention. [46].  Additionally, the appellant contended that those directions were mis-directions on the basis that the consciousness of guilt conduct was neutral as between murder and manslaughter.  [47].

As to whether there was in fact a misdirection, the court made these pertinent observations:

“… the jury were not instructed in a way which made it clear that the consciousness of guilt evidence could constitute circumstances supporting a conclusion of murder, as opposed to manslaughter, only if they were satisfied that it did go to establishing the necessary intent. Moreover, the directions that they were given ran the risk that, despite their own misgivings, they might think that that conduct was capable of evidencing a consciousness of guilt of murder without examining its relevance to the requisite intent because the directions were given with the authority of a trial judge.  In argument, counsel for the respondent was unable to advance submissions which adequately answered these criticisms.” [58].

Nonetheless, it was held that no error had been made regarding the failure to direct that the consciousness of guilt evidence could not be used in assessing whether the intent to kill was proved.  It was an error, however, to fail to direct the jury as to how the evidence could be used; that its relevance to a finding of murder rather than manslaughter turned on whether it in fact demonstrated an intent to kill. In relation to that aspect alone, the court accepted the appellant’s submission that the jury was misdirected. [60].

Did the misdirection result in a miscarriage of justice?

Ultimately, the court found that the misdirection could not be considered productive of an actual miscarriage of justice given the degree of likelihood that the jury might have resorted to the consciousness of guilt evidence for the purpose of deciding whether they were satisfied beyond reasonable doubt of the element of intent for murder, noting that the respondent submitted that the likelihood was so low as for it to be unrealistic to suppose that the jury did resort to that evidence. [67].

It was not satisfied that the onus upon the appellant had been discharged. [73].

In the result, there being no apparent miscarriage of justice, the appeal was dismissed. [74], [75].

Appeal Status: No Appeal Pending - Appeal Period Unexpired

R v Duckworth [2016] QCA 30, 17 February 2016

This appeal against conviction on one count of rape was allowed (albeit with her Honour Justice Philippides JA dissenting); the guilty verdict set aside; and a new trial ordered. The alleged offence, against a heavily inebriated 21 year old complainant, took place in a Surfers Paradise hotel room, with a number of witnesses who later gave varying accounts of alleged events. [30]–[58].

The central aspect to the appeal concerned directions the trial judge gave the jury regarding what the prosecution alleged were three categories of post-offence lies told by the appellant.  Initially advanced by the prosecution as only relevant to the jury’s assessment of the appellant’s credit, after the trial judge expressed the view that each of the alleged categories of lies was capable of probative use, they went to the jury, overriding the appellant’s counsel’s objection.  [29].

The appeal also queried the adequacy of directions regarding a possible defence of mistake and whether a direction should have been given at all with respect to the defence of accident.  Finally, it was submitted that the conviction was both unsafe and unsatisfactory. [29].

Ground 1 – Lies

During the appellant’s record of interview, conducted some five weeks after the relevant events, [59] he allegedly lied about the course of the evening, as is evidenced by the transcript.

The approach taken by the trial judge was to outline the three categories of the appellant’s answers in his police interview to be considered by the jury as capable of indicating a guilty mind.  In so doing, she proposed three conditions which the jury were required to be satisfied prior to using those answers as demonstrating an awareness of guilt of the offence of rape, giving directions as to each of those conditions.  These conditions were that the appellant had told a deliberate untruth; that the lie was connected to the offence; and that the appellant told the lie knowing the truth would implicate him in the alleged rape. [3].

Specifically, the trial judge directed the jury that the following categories of alleged lies in the appellant’s police record of interview were capable of probative use:

  1. that he “got into an empty bed”;
  2. that he “had no awareness” of the complainant being in the bed with him; and
  3. that he “never spoke to his two friends about [the] allegations”, nor had no memory of having done so. [85].

The jury was directed that, if satisfied in accordance with the three conditions, such evidence might “strengthen the Crown case”. [85]. None of the categories of lies were advanced as corroboration of the complainant’s account.  [93].

Whilst finding that there was no error in directing the jury as to the first two categories of alleged lies, the court detected error in the trial judge’s directions concerning the third category of answers given by the appellant, stating that:

“the jury should not have been invited to consider the third category of alleged lies for probative use.  To be capable of use by the jury in that way, the alleged lies needed to be deliberate, material to the case, and explicable only on the basis that the truth would implicate the accused.”  [96]: see Edwards v The Queen HCA 63 at [10], [14]; (1993) 178 CLR 193 at 209 – 211 per Deane, Dawson and Gaudron JJ.

The court found the context of the alleged incident to be of particular relevance to the third category of answers. Specifically, the evidence indicated that the appellant had consumed a considerable quantity of alcohol throughout the evening and, it appeared, had to be roused by a witness prior to the alleged conversations the subject of the third category taking place. Given the appellant’s state of impairment and the fact that the interview took place some five weeks later, it appeared possible that the appellant’s memory of the alleged conversations when interviewed could have been impeded. [97]. That being the case, the court took the view that it could not be said that the appellant’s answers could properly be regarded as admissions against interest, nor safely concluded by the jury that the only explanation for his answers was that the appellant “knew that the truth would implicate him in the offence”.  [98]. In the circumstances, the court held that this ground of appeal should be upheld.

The appellant further submitted that the trial judge ought to have isolated each of the specific statements from the appellant’s record of interview which was relied on as a lie capable of demonstrating a consciousness of guilt for the jury. [99]. The court rejected this entirely, indicating that such an approach would be flawed in that it might carry with it the risk that the alleged lies were given undue prominence.

Ground 2 – unsafe and unsatisfactory

This ground was not actively progressed, with the appellant’s counsel conceding that there was “very little, if anything, in” [it]. [101].  The court agreed, observing that there was ample evidence on which it was open for the jury to convict.

Ground 3 – mistake

In considering the merits of this ground, the court referred to the observations of the President in R v Cook [2012] QCA 251, wherein she expressed the view that trial judges “must be particularly astute in determining whether s 24 is raised in cases where, as here, there is evidence that the complainant was intoxicated or asleep at the time of the sexual assault”.

In examining the directions given at trial in terms of adequacy, the court noted that the trial judge failed to direct the jury that the appellant’s state of intoxication was relevant to the jury’s consideration whether he had an honest belief that the complainant was consenting : see R v O’Loughlin [2011] QCA 123 at 8 [28] per Muir JA. That was then compounded by the fact that the trial judge had clearly advised the jury that the appellant’s intoxication was not relevant to the question of criminal responsibility. The court concluded that the net effect was that it could not:

“… be assumed that the jury gave proper consideration to the existence of the possible defence under s 24 or, more accurately, came to a properly reasoned conclusion that such a defence had been excluded by the Crown beyond reasonable doubt.  As in R v O’Loughlin, the ‘jury may have been confused about how intoxication was to be taken into account, if at all, in considering mistake. … The appellant was entitled to have the jury properly directed in relation to the role of intoxication in the operation of the exculpating circumstance of mistake.  The direction given was inaccurate in part, confused and potentially misleading.  It had a distinct potential to confuse and distract the jury’.” [106].

In the result, this ground of appeal was also upheld. [109].

Appeal Status: No Appeal Pending - Appeal Period Unexpired

R v Gee, 23 February 2016

In this matter, his Honour considered how a jury ought to be directed where the defendant was charged with the unlawful assault of his four month old son (as an alternative to the first count of attempted murder), [1] the issue being the inability of an infant to either provide or withhold consent. [2], [3], [5].

In addressing whether consent can be implied by law to some conduct which would otherwise constitute an assault, and thus whether such conduct might be regarded as authorised, his Honour cited the case of Horan v Ferguson [1995] 2 Qd R 490, in which the court considered whether certain physical contact between teachers and students might amount to an assault.  In that case, Fitzgerald P referred to the judgment of Robert Goff LJ in Collins v Wilcock [1984] 1 WLR 1172, 1177, in which his Lordship formerly said:

“Generally speaking, consent is a defence to battery; and most of the physical contacts of ordinary life are not actionable because they are impliedly consented to by all who move in society and so expose themselves to the risk of bodily contact.  (His Lordship then provided examples) … Although such cases are regarded as examples of implied consent, it is more common nowadays to treat them as falling within a general exception embracing all physical contact which is generally acceptable in the ordinary conduct of daily life.”

His Honour observed that, expanding upon the above, in Re F (Mental Patient: Sterilisation) [1990] 2 AC 1, 72 his Lordship referred to these implied consent examples as “a broader exception … to allow for the exigencies of everyday life”. He went on to stress that “it is difficult to impute consent to those who, by reason of their youth … are unable to give their consent.”  That being so, he considered it more fitting to place such cases within a general exception comprising “all physical contact which is generally acceptable in the ordinary conduct of everyday life”.

It was correctly noted by Fitzgerald P in Horan v Ferguson [1995] 2 Qd R 490 at 492 that whilst the theory of implied consent as a basis for accepting “physical contact which is generally acceptable in the ordinary conduct of everyday life” carries weight, the broad common law exception cannot be applied in Queensland given the constraints of the provisions of the Criminal Code. In formulating his directions, his Honour endorsed this approach, albeit forecasting scope for application of the approach taken by Lord Goff: 

“Conceptually, it seems to be there are two bases on which that might be so, particularly in the case of a very young child, or of a person whose mental condition, or perhaps state of unconsciousness, may mean that that person cannot give consent.  One is a consent implied by law, for conduct falling within Lord Goff’s exception.  The other is to recognise an implied authorisation by the community in respect of such conduct.  On either approach, conduct embracing physical contact which is generally regarded as acceptable in the ordinary conduct of everyday life would not fall within the scope of the offence.”  [12].

Accordingly, his Honour directed the jury that they would not find the defendant guilty on the assault count unless satisfied beyond reasonable doubt that he performed the acts alleged by the prosecution, and that those acts extended beyond what would be regarded as generally acceptable in the ordinary conduct of everyday life.  He indicated that in applying that direction, the jury should take into account, for the purpose of determining what is acceptable, the relationship between the defendant and the child. [13].

Appeal Status: No Appeal Pending - Appeal Period Expired

Foster v Shaddock [2016] QCA 36, 4 March 2016

In this matter, the court considered whether the power of the authorities to suspend a court ordered parole order can arise only once a prisoner has been released on parole – and whether an infringement of liberty by continuing a period of detention otherwise results.

The appellant had been sentenced to periods of imprisonment on 17 offences, [3] the Magistrate setting a parole release date on the total period of imprisonment of 22 July 2014.  [6].

A court ordered parole order was then made by the first respondent, as delegate of the second respondent, the Chief Executive, under s 199(1) of the Corrective Services Act 2006 on 16 July 2014 in accordance with the parole release date which had been fixed by the court on 7 April 2014. [9].

Subsequently, prior to the appellant’s release on parole the first respondent then purported to suspend the appellant’s parole, pursuant to s 201 of the Act. [10]. That decision was successfully challenged by way of judicial review. [13]. The third respondent then suspended the appellant’s parole for an indefinite period pursuant to s 205 of the Act. [14]. Consequently, the appellant served the remainder of his sentence. [15].

The appellant argued that the power of the Chief Executive and the parole board to suspend a court ordered parole order can only arise once the prisoner has been released on parole – and any discretion to exercise the powers contained in Ch 5 Pt 1 of the CSA did not arise until the prisoner had been released. [16], [21].

 Referring to Bond v Rockett (Unreported Supreme Court of Queensland 24 August 2007), wherein de Jersey CJ  held that where the court fixes a parole date the Chief Executive must issue a Court Ordered Parole Order and the prisoner must be released [24], he sought:

  1. An order quashing or setting aside the third respondent’s decision.
  2. A declaration that the third respondent’s decision was invalid.
  3. Consequential costs orders. [18].

The respondents contended that once a court ordered parole order was made as required by s 199, the Act gave a parole board the power to amend, suspend or cancel it in the circumstances outlined in the legislation. [28]. The respondents submitted that once a prisoner has been sentenced, the exercise of the judicial function is complete and the prisoner passes into the control of the administrative arm of government which then determines whether the prisoner should be released on parole: see Crump v New South Wales (2012) 247 CLR 1 at [28] and [58].  [29]

The court unequivocally found that the appellant was not entitled to an order quashing or setting aside the third respondent’s decision, nor to a declaration that the decision was invalid, dismissing the appeal.   The court importantly clarified that there is no temporal limitation on when the power to vary a person’s parole order prior to release may be exercised once a parole order has been made [42], and further that the plain meaning of the statute suffices to provide the power to curtail what would otherwise be the right of the prisoner to be released on parole under a court ordered parole order. [44].

In delivering the lead judgment, her Honour Justice Atkinson provided these succinct observations:

“In this case … there is no ambiguity. There is a clear expression of a statutory curtailment on the unfettered or absolute right to be released on the parole date set by the sentencing court as the parole release date.  The parole board may amend, suspend or cancel a parole order under s 205 of the CSA whether before or after a prisoner is released on parole.” [44].

As to costs, it was ordered that unless the appellant filed submissions on costs within 14 days, with any response by the respondents within 7 days of receipt, the appellant was to pay the respondents’ costs of the appeal. [45].

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Chardon [2016] QCA 50, 4 March 2016

This is an interesting matter considering the Court of Appeal’s jurisdiction to make declarations in criminal matters.  In this matter, the applicant sought leave to file an application for a “declaration that that the applicant should be tried ... by a judge without a jury”.  [11]. 

The applicant had been charged with three counts of indecent treatment of a child and one count of rape.  At a pre-trial hearing in the District Court at Southport, the applicant applied for two pre-trial directions under s 590AA(1) of the Criminal Code (“the Code”), to have the matter (a) transferred to Brisbane; and (b) tried by a judge sitting without a jury.  These applications were denied and the applicant filed a notice of appeal against the dismissal orders.  [8].  Section 590AA(4) of the Code provides that such directions must not be subject to interlocutory appeal.  As the applicant had not yet been convicted this avenue was not available to the applicant, and at the hearing the appeal was dismissed, and instead the present application for leave was filed.  [9]–[10].

Jurisdiction

At first instance, the Court considered the question whether it had the jurisdiction necessary to make the declaration sought.  On this point, the applicant argued that the jurisdictional basis for the declaratory relief sought was in the “exercise of a supervisory jurisdiction over the District Court”.  [15].  In support of this submission, the applicant referred the Court to an observation by Byrne J in R v Long (No 1) that the Court of Appeal “may by declaration effectively pronounce on the correctness of interlocutory orders in proceedings upon indictment”.  Id.  The Court identified two difficulties with this submission.  First, that the “relief sought by the application [was] not appropriate for the exercise of a supervisory jurisdiction.”  [16].  In this regard, the Court noted that the relief would not operate in a supervisory fashion upon any order made by a judge of the District Court and thus would not “pronounce upon the correctness” of any order.  The Court also noted that the court and/or judge whom it was sought to have supervised was not a party to the application.  Id.  Second, the Court also observed that the statement by Byrne J went no further than “canvass[ing] a possibility”, it was not an expression of an opinion that such a jurisdiction exists.  [17].

In the alternative, the applicant alleged that the Court possesses an original jurisdiction to make the sought declaration.  [18].  The nature and extent of the jurisdiction to make declarations concerning criminal proceedings was considered in Sankey v Whitlam where Gibbs ACJ observed that the discretion is “wide and loose” and “includes what might more precisely be described as privileges, powers and immunities”.  This observation has subsequently been held as authority for the proposition the Courts of Appeal have jurisdiction to determine the legal validity of an indictment presented in a lower court. [20], see Anderson v A-G (NSW).  In making its case, the applicant sought to rely upon the decisions of this Court in Bacon v Rose and Bourke v Hamilton where declarations had been made concerning criminal proceedings.  [18].  The Court noted, however that in those cases what was at issue was “the legal validity of a step or finding concerning the applicant for relief”.  In the present case there was no such question, see [21].  Despite these observations, given the lack of argument on this issue, the Court refrained from making a determination of it.

Discretionary Considerations

Turning then to the substantive aspect of the application, the Court concluded that the discretionary considerations “weigh[ed] conclusively against the granting of the declaratory relief sought”.  In making this determination, the Court noted Byrne J’s observation that “if a declaratory jurisdiction existed, it would not be exercised in other than most exceptional circumstances”. [24], see also Sankey v Williams; Anderson.  In addition to the absence of “exceptional circumstances”, the Court considered the following weighed against the granting of such a declaration: (i) that the declaration did not seek to vindicate any legal right, privilege or immunity; (ii) that there was no right of appeal at an interlocutory stage of pre-trial directions and rulings; and (iii) that making the sought declaration would be contrary to the policy underlying s 590AA(4) to avoid fragmenting the criminal trial process.  [25]–[27], see also Re Rozenes; Ex parte Burd.  

Appeal Status: No Appeal Pending - Appeal Period Eexpired

Crump v The Attorney-General and Minister for Justice for Queensland [2016] QCA 56, 16 March 2016

This matter concerns an applicant who had been sentenced to life imprisonment for the murder of his de facto wife and who had exhausted all appeal options.  His application for a pardon raised important issues regarding judicially reviewable and excluded decisions.

The applicant had made concerted efforts to obtain a pardon from the Governor based upon a purported “anomaly of trial” due to the unreliability of evidence. In response to the receipt of a second pardon, His Excellency, the Governor referred the matter to the respondent, the Attorney-General. [2]. Thereupon,  following advice from Crown Law, the respondent decided not to refer the matter to the Court of Appeal pursuant to s 672A of the Criminal Code Act 1899. [3]. Consequently, his Excellency, refused the petition to exercise the Crown Prerogative.

The applicant applied for a statutory order of review of the Governor’s refusal, arguing that he had been denied natural justice and procedural fairness by the respondent’s failure to refer the matter to the Court of Appeal. [5]. The salient issues for consideration by the court were whether the respondent’s decision to not refer a petition for the exercise of the prerogative power of mercy was reviewable; and whether there was a breach of the rules of procedural fairness.

The Grounds of Review

The applicant, dissatisfied with the evidence led against him at trial, in particular the lack of DNA evidence nor anything connecting him to the scene other than the evidence of one witness, argued that the verdict was unsafe [21] and a pardon should be granted. [41]. The case against him was substantial but it was, nevertheless, a circumstantial one.  The applicant had appealed to the Court of Appeal against his conviction, however, that appeal was not successful.

Was the decision of the Attorney-General pursuant to s 672A of the Criminal Code reviewable?

The core issue raised by the application was whether the decision by the Attorney-General was reviewable.  Whilst her Honour acknowledged that it was made “pursuant to an enactment”, she also observed that there was a line of authority that the power to refer a petition for pardon to a Court of Appeal is also unreviewable. [25]. In relation to that proposition, the respondent contended that there are some decisions which are not considered subject to review primarily because of the nature of the power, specifically to commence, to control or to terminate legal proceedings, [26] and as such do not lend themselves to “supervision by the courts”: see Barton v The Queen (1980) 147 CLR 75, 110; Maxwell v The Queen (1996) 184 CLR 501, 534. The respondent submitted that the exercise of the prerogative of mercy, similarly, is not reviewable [29]: see the direct authority of Horwitz v Connor (1908) 6 CLR 38.  That said, several recent decisions have queried the extent to which exercise of the prerogative of mercy may be reviewed by the courts, thus departing from the traditional view that such exercise is not reviewable: see, for example,  Yasmin v Attorney-General of the Commonwealth of Australia [2015] FCAFC 145.  The judgement contains a useful discussion of the authorities concerning the reviewability of decisions of the Governor in Council in the exercise of the prerogative of mercy.

Having regard to the approach taken by the court in Eastman v Australian Capital Territory (2008) 163 ACTR 29, 39–40 [33], [37] her Honour determined that, given the applicant was unrepresented, the appeal did not offer a suitable vehicle for the resolution of the question as to whether the decision was reviewable. [38].  For that reason, her Honour considered the merits of the decision.

Turning to an assessment of the merits, her Honour was unable to discern any apparent error on the face of the decision, particularly given the absence of any new material nor fresh evidence identified by the applicant which was not ventilated at trial. [41].

In the result, the application was dismissed on the merits. [43].

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Graham, 1 April 2016

In this matter, the court determined that the jury’s finding of a circumstance of aggravation of the appellant’s offence of burglary (being that he used actual violence) ought be set aside, ordering that the matter be remitted for resentencing upon that conviction.

The applicant had been convicted of burglary (with aggravating circumstances of being in company and using actual violence) and extortion. He was sentenced to concurrent terms of two years for the burglary offence and 18 months for the extortion offence and it was ordered that he serve six months prior to release on parole. [2]. The grounds of appeal were that:

  • the verdicts were unreasonable or could not be supported by the evidence;
  • the verdicts were illogical and unreasonable in their inconsistency with other verdicts of the jury;
  • inadmissible and prejudicial parts of his interview by police were not excluded from the evidence. [3].

A brief precis of the alleged relevant incident, aptly described by his Honour Philip McMurdo as “an exercise of self-help, with a tow truck and an angry resolve”, [71] is as follows:

  • the appellant and two others attended the complainant’s home in order to recoup property which they believed was stolen. The appellant was armed with a small axe; 
  • according to the complainant, the appellant then punched him in the side of his face (count 3 on the indictment);
  • following a discussion about the whereabouts of the stolen property, the complainant then alleged that the appellant again punched him in the face, causing injury. (count 6);
  • the complainant said that one of the appellant’s co-defendants then punched him in the jaw, (count 4, by which each of the defendants was charged with unlawful assault);
  • the complainant said that he was then coerced to author a document regarding the appellant’s proposal to take the complainant’s car. That document was the subject of count 2 by which the appellant was charged with extortion, for making a demand with intent to gain possession of the car, threatening a detriment (violence to the complainant);
  • the complainant said that whilst he was writing this document, a female kicked him in the back of his leg (count 7, by which each of the defendants was charged with unlawful assault). [4]–[13].

At trial, the appellant denied any intended threatened or actual violence on his behalf. That position was consistent with his contemporaneous police interview. [25]. Accordingly, he contended that the aggravating circumstance of the use of actual violence was not established. [26]. He further argued that he had not entered the complainant’s house with an intention to commit any offence and was innocent on the charge of burglary. [26]. Regarding the extortion charge, it was argued that the prosecution had not proved that the appellant had threatened to cause a detriment to the complainant, there being no express threat. [27].

Inconsistent verdicts

In essence the appellant argued there was inconsistency between the verdict of acquittal on count 3 and his convictions on counts 1 and 2. [29]. On the other hand, the prosecution alleged the appellant had entered the house intending to threaten violence and/or to assault the complainant. As such, there was no inconsistency between the fact of that intention and there being no assault by the appellant, leaving it open to the jury to potentially reason, for instance, that the appellant entered intending to threaten violence but did not actually assault the complainant. [33]. In other words:

“… the jury could have concluded that although the appellant had not used actual violence, he had assisted or aided Williams to do so”. [35].

On appeal, two central issues arose as to the aggravating circumstance of actual violence by the appellant – namely, whether a circumstance of aggravation within s 419(3) of the Criminal Code was able to be established against a defendant by the application of s 7(1)(c) of the Code; and whether s 7(1)(c) was able to be used in the proof of the aggravating circumstance against the appellant, when the elements of the offence under s 419(1) were sought to be proved against him only by the operation of s 7(1)(a) of the Code. [39].

Referring to R v Barlow (1997) 188 CLR 1, the court noted that the proposition that the word “offence” in both s 7 and s 8 takes its meaning from the definition in s 2 is authoritative, as confirmed by the language of s 7(1)(a) which corresponds with the definition in s 2. [50]. The court further observed that s 7(1)(c) requires the proof of the offence by the perpetrator, together with the proof of a certain state of mind on the part of the person responsible under s 7(1)(c). Importantly, the effect of s 7(1)(b), (c) or (d) is to impose a criminal responsibility by deeming a person to have done the act by which the perpetrator committed the offence and not to “deem the secondary party to be liable to the same extent as the principal offender”: see R v Barlow (1997) 188 CLR 1, 10.  [51]. There is no express reference in s 7 to a circumstance of aggravation. [52].

Given the above, in delivering the lead judgment his Honour Philip McMurdo, whilst declining to  express a concluded view as to whether there was scope for s 7(1)(c) to ever be used to prove an aggravating circumstance of burglary, [58] remarked:

“How could s 7 be interpreted so as to make a s 7(1)(c) offender liable to a punishment as if he or she had done an act which for that offence is a circumstance of aggravation? The only possibility would appear to be an interpretation of “the offence” as being constituted by the perpetrator’s act or omission attended by the circumstance of aggravation. There would appear to be substantial difficulties in such an interpretation”. [53].

As to whether s 7(1)(c) was able to be applied in the proof of the aggravating circumstance, when the elements of the offence under s 419(1) were to be proved against the appellant by the operation of s 7(1)(a), the court formed the view that, bearing in mind the offence of burglary committed by Williams (a co-defendant) was a distinct and separate offence from that committed by the appellant,  the way in which that part of the case was put to the jury was erroneous, since it failed to distinguish between the offences of burglary which were alleged against the separate parties. The court concluded that in the absence of violence on appellant’s part, any assistance he had provided to Williams in the commission by Williams of his offence was immaterial to the proof of violence as a circumstance of aggravation of the appellant’s offence. [63].

It followed that the jury’s finding of that aggravating circumstance against the appellant could not stand [63] but aside from that, the court found that there was no inconsistency between the verdicts. [64].

Unreasonable verdicts

In addressing whether it was open to the jury to convict the appellant of burglary under s 419(1) and extortion, having regard to certain facts which were clearly indicative of the less than civil nature of the incident, [67]–[70] the court found that in the circumstances it was open to the jury to find that the appellant attended the premises intending to threaten violence and did so, thus rejecting the argument that the verdicts were unreasonable. [71].

Police interview

Lastly with respect to the third ground of appeal, after comprehensively examining the relevant passages of interview for relevance, together with the directions given in summing up, the court determined that there was no miscarriage of justice apparent from the admission of any or all of the passages from the police interview. [79].

In the result, having rejected the appellant’s arguments except that there was an inconsistency between the acquittal on count 3 and the jury’s finding of the circumstance of aggravation of actual violence for count 1, the court ordered that:

  1. The jury’s finding of a circumstance of aggravation of the appellant’s offence of burglary, being that he used actual violence, be set aside.
  2. The appeal against convictions be otherwise dismissed.
  3. The sentence imposed for the offence of burglary be set aside.
  4. The matter be remitted to the District Court of Queensland for the appellant to be resentenced upon the conviction of burglary. [80].

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Pickering, 6 May 2016

This very interesting matter examined whether a lack of directions about s 31(1)(c) of the Criminal Code given in the course of a murder trial occasioned a miscarriage of justice.

The appellant was convicted of manslaughter following a struggle with the deceased in which he was allegedly endeavouring to avoid him out of fear of being assaulted himself. [7]. Ultimately, the deceased was stabbed after either falling or climbing on top of the appellant. [8].

If s 31(1)(c) was not excluded by s 31(2), was there a miscarriage of justice?

The respondent contended that the absence of any instruction to the jury regarding s31(1)(c) did not amount to a miscarriage of justice since it was not “reasonably possible” that the failure “may have affected the verdict”, in circumstances where the jury’s verdict implied that they had rejected any notion of self-defence under s 271(1) of the Code, [10] accordingly establishing that the jury would have been satisfied that the prosecution had also excluded any application of s 31(1)(c). [12]

The appellant submitted that the trial judge merely left s 271(2) for the jury’s consideration. Alternatively, it was argued that, even if the jury considered s 271(1), it did not follow from the verdict that the jury inevitably would have rejected any application of s 31(1)(c); it was open to the jury to potentially find that the prosecution had excluded s 271(1) on the ground that the force used by the appellant was likely to cause death or grievous bodily harm. [12].

In considering the submissions, the court regarded the appellant’s alternative argument as having merit, making these observations:

“There is no necessary inconsistency between a conclusion, with reference to s 31(1)(c), that the prosecution did not prove beyond reasonable doubt that the appellant’s conduct was not reasonably necessary to resist violence threatened by the deceased and a conclusion that s 271(1) was excluded on the ground that the force used by the appellant in stabbing the deceased was likely to cause death or grievous bodily harm. That requirement of s 271(1) is not reflected in s 31(1)(c).” [13].

The respondent argued that the trial judge’s directions precluded the jury from rejecting s 271(1) on that ground and that s 31(1)(c) was inapplicable, either since there was no threatened violence or because any such threat was not unlawful (given it was provoked). [14].

In addressing the above, the court importantly noted that the jury’s verdict did not establish that the deceased did not assault the appellant (so that the deceased did not threaten violence to the appellant for the purposes of s 31(1)(c)), or that the appellant incited any assault by the deceased (so that any assault by the deceased was not unlawful for the purposes of s 31(1)(c)). [16]. Upon examining the record of trial, the court noted that there was a reasonable possibility that the failure to direct the jury about s 31(1)(c) may have affected the verdict, thus finding that it could not be concluded that no “substantial miscarriage of justice ha[d] actually occurred” for the purposes of the provision in s 668E(1A). [17]. Accordingly, it took the view that that there was a miscarriage of justice if s 31(2) did not exclude any application of s 31(1)(c). [18].

Did s 31(2) exclude any application of s 31(1)(c)?

The appellant argued s 31(2) did not exclude the application of s 31(1)(c) as s 31(2) applied only to s 31(1)(d), and, secondly, manslaughter was not an offence in relation to which s 31(2) applied. Noting that the appellant’s arguments concerning s 31(1)(d) were considered and rejected in R v Fietkau  [1995] 1 Qd R 667 at 671–672, the court made these comments:

“…it is not easy to accept that s31(1)(a) was designed to relieve a person from criminal responsibility for an act done in the execution of the law which (in terms of the exception in s 31(2)) would constitute offences as serious as murder and unlawfully doing grievous bodily harm, even where the killing or grievous bodily harm resulted from the act being done with unnecessary force such as to be rendered unlawful by s 283. The context supplied by s 283 and the other provisions concerning execution of sentences, court process, and warrants thus supplies further support for the construction in R v Fietkau, under which s 31(2) applies to all of the paragraphs of s 31(1), including (c).” [31].

Is s 31(2) inapplicable on the ground that it does not refer to manslaughter?

The appellant argued that the “act” for the purposes of s 31(1)(c) was the stabbing of the deceased. [38]. The issue for determination was the proper construction of the phrase in s 31(2) “act … which would constitute … an offence … of which grievous bodily harm to the person of another is an element”. [39], having particular regard to the words “would constitute”. [41].

The court took the view that the provision should be construed “according to its natural meaning and without any presumption that it was intended to do no more than to re-state the existing law… (see R v LK (2010) 241 CLR 177 at 220). With respect to the context in which s 31 is found [43] and the desirability of adopting a construction which does not produce surprising results [44]–[46] the court concluded that, correctly construed, s 31(2) operates to exclude any protection which otherwise might have been conferred upon the appellant by s 31(1)(c). [47]. In so doing the court relevantly noted that:

“Upon the medical evidence, there could be no doubt that the injuries sustained by the deceased as a result of the “act” amounted to grievous bodily harm. I understood that so much was not in issue in this appeal. The guilty verdict was inconsistent with that act having been done in self-defence, accidentally, or under an operative mistake of fact”. [47].

In the result the appeal was dismissed. [48].

Appeal Status: No Appeal Pending - Appeal Period Expired

Abbott v Commissioner for Police [2016] QSC 95, 3 May 2016

This was an application for review of an extradition order that the applicant be returned to Western Australia. [1].

The applicant submitted that an application for his extradition to Western Australia amounted to an abuse of process and was unduly oppressive in circumstances where he had already served a lengthy prison sentence in Queensland; the Attorney-General of Western Australia had twice refused to agree to his transfer to that State, and the Attorney-General of Western Australia had failed to request his transfer. [3]. As such, he argued that to be compelled to serve the balance of a term of imprisonment imposed on him in that State in the 1980s and face further charges was an abuse of process.

The background facts are notorious and only require a brief precis:

  • The applicant escaped custody in Western Australia in 1989;
  • He was later imprisoned in Queensland for a variety of offences, then released on parole in 2016;
  • At that time, a warrant previously issued in 1989 following his escape out of legal custody was renewed upon an application to return him to Western Australia;
  • It was then ordered by the Deputy Chief Magistrate pursuant to s 83 of the Service and Execution of Process Act 1992 (Cth) that the applicant be returned to Western Australia.

The issue for determination was if ss 83 and 86 of the Service and Execution of Process Act 1992 (Cth), properly construed, exclude the inherent power of the court to dismiss proceedings for an abuse of process as a ground for refusal of an application for extradition, they are invalid because they require a court to act in a way which is inconsistent with its essential character. [13], [16] (see Loveridge v Commissioner of Police for South Australia (2004) 89 SASR 72).

The proper construction of ss 83 and 86

In Loveridge v Commissioner of Police for South Australia (2004) 89 SASR 72, her Honour Justice White interpreted ss.83 and 86 as admitting a power to decline to make an order for extradition where a court is satisfied that the application constitutes an abuse of the court’s process. The provisions of the Service and Execution of Process Act 1992 (Cth), as a whole, are generally considered to be laws with respect to “the service and execution throughout the Commonwealth of the … criminal process and the judgments of the courts of the States” within the meaning of s 51(xxiv) of the Australian Constitution. [19].  The process of statutory construction must commence with a close examination of the statutory text. That said, the context of the words or purpose of the statute may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning: see Project Blue Sky Mining Inc v Australian Broadcasting Authority (1998) 194 CLR 355. 

His Honour identified four aspects of particular relevance to the questions of construction, [30] as follows:

There was no indication in the legislation that either the magistrate on the initial application for extradition under s 83, or the court on a review of the magistrate’s decision under s 86 was not to order extradition if to do so would be an abuse of process (in the sense of an abuse constituted by delay or oppression). [31]. 
The history of the Service and Execution of Process Act 1992 (Cth) indicates that the original Act contained an express provision in s 18 empowering the extraditing magistrate or court to refuse to order extradition to the requesting State on the ground that it would be an abuse of process. Sections 83 and 86 contain no equivalent express power. [33], [34].
The second reading speech for the bill which became the Service and Execution of Process Act 1992 (Cth) clarified that it was not intended that a magistrate or court of extradition have regard to general discretionary factors such as abuse of process. [35]
Countering the above, the applicant argued that the powers to make an order to extradite under s 83 or s 86 attracted the operation of the “principle of legality”, that general words are construed as limited to the objects of an Act and as not altering the law in any way that would infringe upon fundamental rights (see Lee v New South Wales Crime Commission (2013) 251 CLR 196.) [36].

Noting that the principle of legality “does not exist to shield those [fundamental] rights, freedoms, immunities, principles and values from being specifically affected in the pursuit of clearly identified legislative objects by means within the constitutional competence of the enacting legislature” (see Lee v New South Wales Crime Commission (2013) 251 CLR 196, 310 [313]) and following  Lavelle v The Queen (1995) 125 FLR 110, his Honour formed the view that the Deputy Chief Magistrate was clearly correct in considering that abuse of process based on delay or oppression in bringing the application before him was not available as a ground of dismissal of the application under s 83 of the Service and Execution of Process Act 1992 (Cth), properly construed. [39]. It was further held that consistent with the weight of authority, the power of the Supreme Court of Queensland on review under s 86 was no broader than the power of the Magistrates Court in making the original decision under s 83. Abuse of process based on delay or oppression in bringing the application under s 83 was unavailable as a ground to revoke an extradition order made under s 83, nor to dismiss the application for such an order. [40].

In the result the application for review was dismissed. [71].

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Shambayati [2016] QCA 100, 19 April 2016

In this recent matter the Court of Appeal had cause to consider the jury empanelment process and particularly in what circumstances a challenge will be effective.  This issue arose out of the appellant’s conviction by a jury for unlawful assault occasioning bodily harm – the appellant appealing this condition on the ground (amongst others) that the jury was not empanelled according to law.

Pursuant to the Jury Act 1995, in a criminal trial the defence is entitled to eight peremptory challenges and that these challenges may be made by the defendant or their representative and “must be made before the [bailiff] begins to recite the words of the oath to the person challenged”.  Jury Act s 44, see also [4]–[5].  In this case the Court order sheet relevantly recorded only that the jury was empanelled, and the official transcript recorded that before the jury was empanelled the appellant was informed of his right of challenge.  The transcript does not record that the appellant personally challenged the empanelment of any juror.  [6]. 

The appellant’s argument upon this ground depended upon fresh evidence in the form of an affidavit of defence counsel and an affidavit by the defendant.  Leave to adduce this evidence was not opposed by the respondent.  The effect of these affidavits was that during the later stages of the empanelment process whilst a potential juror approached the bailiff the appellant called out “challenge” or a word or words to that effect loud enough for someone seated in the trial judge’s position to hear.  The appellant was advised by his counsel to keep quiet and at a later stage the appellant’s counsel sought and was granted an adjournment to speak with the appellant. 

During the appeal the recording of the relevant part of the empanelment was played.  When the relevant potential juror was called the word “challenge” could “just” be heard as a whisper. [9].  This was closely followed by a conversation which was difficult to hear (consistent with it being a conversation between the appellant and his counsel) and subsequently defence counsel asks to speak with his client and the dock microphone is covered. The microphone is uncovered and the empanelment process continues. The transcript also records an exchange between defence counsel and the trial judge (whilst the jury is not present) to the effect that defence counsel would remind the appellant that “unless he’s called upon directly, I am [defence counsel] his mouthpiece in this trial”.  [10].  A report from the trial judge received by the Court stated that her Honour did not hear the appellant challenge the juror, but did recall him being agitated in the dock.  [11]. 

The appellant contended the jury was not empanelled according to law because during the selection process the appellant personally exercised his right to challenge a juror, that this challenge was validly made and his counsel had no authority to withdraw that challenge.  The appellant alleged that the swearing-in of this juror, notwithstanding the appellant’s challenge, was an irregularity which resulted in the conviction being tainted by a miscarriage of justice, see Johns v The Queen.  [12].  In reply, the respondent submitted that the appellant had not made an effective challenge because it was not audible to the court, but did concede that if an effective challenge had been made the jury had not been empanelled according to law and that, as a consequence, there was a fundamental error such that a retrial ought be ordered.  [13], see Criminal Code s 668E(1)A; Johns v The Queen; Wilde v The Queen

The sole issue before the Court was whether or not the appellant made any effective challenge to the juror in question.  The Court considered that given the requirement of s 39(b) of the Jury Act that the defendant or their representative “make the challenge before the person is sworn as a juror” necessarily implied that the “intended challenge is … made in a way which is sufficient to bring to the Court’s attention before the juror is sworn that the appellant challenges the juror”.  [15].  Thus, for the appellant’s challenge to have been effective it must have been “audible to the court”.  [16], see also Hopestill Tyndal’s Case; R v Harrington and Hanlon.  The question was thus whether, on the evidence before the Court, the word “challenge” spoken by the appellant was audible to the court.  [17]. The Court considered that the recording did not support the affidavit evidence that the appellant’s speech was loud enough for the trial judge to hear.  [18]–[19].  For this reasons the Court concluded that the appellant did not make an effective challenge and dismissed this ground of appeal.  [20].  

Appeal Status: Appeal Pending

Commissioner of the Australian Federal Police v Hart [2016] QCA 215, 29 August 2016

This complex recent matter comprised 3 separate appeals arising from the conviction of a former accountant, Hart, of income tax fraud in contravention of s 29D of the Crimes Act. [1], [839].  The essential point in issue concerned the entitlement of third parties who own property which was partly acquired with the proceeds of criminal activity.  His Honour Justice Peter Lyons wrote the lead judgment, with Justice Douglas concurring as to the orders made and Justice Morrison dissenting.

Overview

After Hart had exhausted his rights of appeal in respect of his conviction certain property which had formerly been acquired by entities associated with Hart were forfeited pursuant to s 92 of POCA even though the companies had their own interests in the properties.  Those properties had previously been made the subject of an order restraining any dealing with them.  Subsequently, the Commonwealth Director of Public Prosecutions applied under ss 116 and 134 of the Act for a pecuniary penalty order against him, which was granted, with Hart ordered to pay to the Commonwealth $14,757,287.35. [6], [840]. That sum amounted to the net value of benefits derived by him from the offences of which he was convicted on 26 May 2005, and from the unlawful activity of a company known as "Overseas Credit Ltd". [6].

The Commonwealth sought an order under s 141 of the Act that the forfeited property be applied to reduce the pecuniary penalty order. [841]. Subsequently, Hart’s companies sought orders pursuant to s 102 directing that their interests in the forfeited property be transferred to them, or that they be paid an equivalent amount. [842]. The Commonwealth then sought orders that if any of the Hart Companies did recover an interest in any of the forfeited property, it be applied to reduce the pecuniary penalty order. [8].

At first instance, the trial judge ordered that the Hart companies pay $1.6 million less the proceeds of sale of two properties to the Commonwealth, within 60 days; in which event, the Commonwealth would remove caveats over the subleases of two hangars, and three aircraft were to be transferred to the company Flying Fighters Pty Ltd.  That property was part of the forfeited property.  Otherwise, the applications were dismissed. [9], [845].

The appeals

Three appeals were brought, two by the Commonwealth and one by Hart and the Hart Companies, comprising in excess of 60 grounds. [10]. The appeals proceeded on the basis that the applicable version of the Act was that as in force at 13 July 2006. [848].

The nature of the issues common to all three appeals, condensed by his Honour Justice Morrison, were:

  1. should s 102(3)(a) be construed as if it read that “the applicant substantially acquired the property lawfully”;
  2. does s 102(1)(d)(i) authorise an order transferring assets without determining the monetary value of the interest in them, and without making an order declaring the “nature, extent and value” of that interest;
  3. does s 102 authorise the making of conditional orders;
  4. for the purposes of s 141(1)(c) is the date of effective control the date on which a restraining order was made;
  5. if the court cannot declare the monetary value of the interest in assets, should the court have made orders for the transfer of assets;
  6. what was the correct approach to the evidentiary burden, and the application of the onus of proof, in relation to the assets accumulated by the Hart Companies; and
  7. should the court have granted an adjournment to the Hart Companies, and not permitted the Commonwealth to amend its pleadings. [11].

Those issues which lend themselves to brief summation are outlined below.

Central issues:

Conditions in s 102(3)(a) of the POCA

At first instance, the applications of the Hart companies were based upon s 102(3). That has two limbs, relating to the use of property (use test); and the source of property (source test). [872]. The learned primary Judge held that, to satisfy the source test, an applicant must establish that the property was not substantially derived or realised, directly or indirectly, by any person from any unlawful activity: see  Director of Public Prosecutions v Diez [2003] NSWSC 238 at [42]–[44]. The Commonwealth contended that the learned primary Judge had erroneously imported the notion of substantiality into the reading of the section. [874], [875].

In relation to the issue, his Honour noted that s 102 is discretionary [881] and remedial, [918] and thus ought be construed “so as to give the fullest relief which the fair meaning of its language will allow”: see Bull v Attorney-General (NSW) (1913) 17 CLR 370, 384. Referring to Director of Public Prosecutions v Allen [1988] VicSC 661 and DPP v Lynch Unreported; Supreme Court of Western Australia; Commissioner Templeman; 2 February 1990; BC 9001 509, he concluded that “the source test is not satisfied simply because a person’s interest in property is a consequence of the combined effect of unlawful activity, and other matters which do not involve unlawful activity”. [923].

The power to make orders under s 102(1) of the POCA

Regarding the scope of orders under s 102, there was consensus amongst the judges that a Court may make an order declaring the nature and extent of an applicant’s interest in property under s 102(1)(c), and an order directing the transfer of the interest in the property to the applicant under s 102(1)(d), without a determination of the value of that interest, [924] and further that the power to make orders in s 102(1) authorises the making of conditional orders. [925].

Onus of proof

The Commonwealth parties submitted that the learned primary Judge erred:

  1. in relation to the onus of proof which fell on the Hart companies under s 102(3), by regarding the onus as satisfied if they demonstrated that the property was not derived from unlawful activity specifically alleged by the Commonwealth “without the companies adducing evidence to the activity from which the property was derived”;
  2. in finding that the Hart companies had satisfied the onus, if the Commonwealth had not raised a reasonable suspicion that specific unlawful activity had occurred; or had not quantified the benefits from the activity, and traced them to the acquisition or derivation of property; and
  3. in assuming that the Hart companies would have been generally engaged in lawful activity, and in inferring the lawfulness of particular transactions on which they had called no evidence. [933].

Upon a review of the reasons for judgment, which his Honour Justice Lyons noted were “replete with statements recognising that the onus lay on the Hart companies to establish the matters raised by s 102(3)” [935], his Honour was not convinced that the approach taken by the learned primary Judge was indicative of error. [941].

Mr Hart’s effective control of assets and the discretion under s102 of the POCA

Referring to Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, 40 the Commonwealth parties argued that effective control of the assets was a relevant consideration to the exercise of the discretion under s 102. [1202], [1204]. They further submitted that the learned primary Judge, in finding that s 102 did not confer a discretion to refuse to make an order on the basis that Mr Hart was in effective control of the forfeited property; or that he was the subject of a Pecuniary Penalty Order; and in not refusing to make the orders, erred. [1214].

At first instance, the learned primary judge determined:

  1. that the fact that Mr Hart was in effective control at the date of the restraining orders was not something that was required to be taken into account when determining whether to exercise the discretion to make orders under s 102;
  2. that such control was not decisive;
  3. that such control was not relevant. [1212].

In delivering the lead judgement, his Honour Justice Lyons reasoned that whilst a person whose property was under the effective control of the suspect is excluded from success under s 102(2), that is not the case for s 102(3).  He formed the view that the learned primary Judge correctly concluded that Mr Hart’s effective control at the date of the restraining order was not decisive under s 102(3). [1219]. He also clarified:

“Relief might be sought under s 102 only by a person who claims an interest in forfeited property.  The classes of persons who, in the context of the Act, might seek relief, are quite limited.  One class of person who might do so is a person whose property was forfeited because it was under the effective control of the suspect when a restraining order was made.  In my view, it is inconsistent with the fact that the legislation makes the relief available to persons of that class, to say that membership of that class is a factor weighing against the grant of relief.  I therefore consider that the learned primary Judge was right to conclude that this matter is irrelevant”. [1220].

Finally, he regarded Mr Hart’s effective control of the assets at the time of the restraining order, in isolation, as “a factor of very little weight”. [1221].

Given the above, his Honour did not agree that the learned primary Judge erred in granting relief to the Hart companies under s 102, since the property had been under the effective control of Mr Hart at the time when the restraining orders were made; and a Pecuniary Penalty Order existed against him. [1227].

Order for payment to Commonwealth of $1.6 million

In relation to the question whether the order for payment of the sum of $1.6 million should have been made, whilst noting that the learned primary Judge gave brief ex tempore reasons on 6 May 2013, his Honour observed that they did not address the issue. [1236]. In the circumstances, the court encountered difficulty in clearly identifying the intended purpose the learned primary Judge had when dealing with the sum of $1.6 million in his reasons, and in his references to that sum in the orders. [1241].

Whilst each asset was subject to a charge, the court did not regard that as affecting the nature of the interest of the Hart companies in any relevant asset: see In re Bank of Credit and Commerce International SA (No 8) [1998] AC 214, 226. His Honour Justice Lyons concluded that since a company under the effective control of Mr Hart no longer held the charges, and the Commonwealth did not have any assignment of the debts which would enable it to enforce them, the charges had nil practical effect, stating:

“It would follow that the determination of the nature and extent of the interest of the Hart companies as being diminished by $1.6 million dollars was erroneous; and so were orders made to give effect to such a determination.” [1243].

In the absence of any statutory authorisation for it, it was held that there was no proper basis for the making of such an order [1244] and that the orders should not have required the Hart companies to pay $1.6 million to the Commonwealth. [1246].

Outcome of application under s 102

Given it was not submitted that, in the event findings were made which differed from those of the learned primary Judge as to whether s 102(3) of the POCA was satisfied, there were discretionary grounds for refusing relief, the court ordered that, where it had concluded that the relevant company had established that the conditions in issue were met, the property or proceeds of sale ought be transferred to it. [1247].

Date for effective control for s 141 of the POCA

Regarding the relevant date for determining whether the property is subject to the effective control, at first instance his Honour proceeded on the basis that it is the date of the restraining order, in any event refusing to make the declaration. [1250]. The Commonwealth parties appealed against that refusal. [1251]. Resorting to the natural reading of the section, [1268] his Honour Justice Lyons held that the question of effective control is to be determined at the date of the determination of the application under s 141.

Conclusion

In the result, the court (by majority) dismissed the appeals by the Commonwealth parties. [1273]. In Appeal 3908 of 2013 the appellants were granted leave to amend their Notice of Appeal and the orders of the learned primary Judge set aside.  Relief in relation to property where no submissions were advanced on behalf of the Hart companies was not granted.  Otherwise the court made declarations as to the interests of the relevant appellant in the forfeited property, immediately prior to forfeiture, in accordance with its reasons; and in each case ordered the transfer of the property, or retained proceeds from the sale of the property, to the relevant appellant. 

The parties were invited to agree on the form of an appropriate order. [1273].

Appeal Status: No Appeal Pending - Appeal Period Expired

R v JX [2016] QCA 240, 23 September 2016

This was a successful appeal against conviction by an appellant convicted on two counts of rape of a child. The appeal was brought on three grounds:

  1. That the verdicts were unreasonable and could not be supported by the evidence; 
  2. That by reason of a note from the jury seeking further directions before the return of the verdicts, a fair minded lay observer might reasonably apprehend that the jury did not bring an impartial and unprejudiced mind to determining his guilt so that the verdicts should be set aside;
  3. That the primary judge erred in law in failing to give the jury the further directions they sought prior to returning their verdict. [1].

Relevant aspects of the trial were as follows. After selection of the jury and in her opening remarks, the trial judge informed them of the importance of impartiality, and the obligation to determine the case solely on the evidence produced in the courtroom. [3], [4]. All jurors indicated that they could be impartial.  In the course of her evidence, the complainant, aged 19, alleged that when she was in year one or two at the time the alleged offending against her took place. [7]. She did not report the incident contemporaneously, disclosing it some years later. [8], [9], [11]. The complainant maintained her account and gave a rational explanation for not making a contemporaneous complaint. Her account was uncontradicted.

Upon retiring to consider their verdict, the jury sent the judge a note seeking “direction” on “one member of the jury informing of being raped as a younger woman”. Upon receipt of the note, the judge met with counsel and advised that she intended to reconvene the court with the whole jury and remind them of the need for both impartiality and apparent impartiality, and that they must decide the case on the evidence.  Shortly thereafter, and before she had a chance to do so, the bailiff informed her that the jury had reached a verdict.  The jury then delivered their verdict of guilty on both counts. [17].

The issues arising were whether the note created an apprehension or suspicion that the jury was not impartial, or indicated uncertainty about the jury’s corporate state of mind.

The appellant’s contentions

The appellant argued that each charge against him was defective in that it pleaded a continuing offence, noting that the offence was alleged to have occurred between 30 September 1999 and 29 September 2003.  [18]. Specifically, with respect to ground one, he contended that the complainant’s evidence was unsupported by independent evidence and there were limited opportunities for the offending to have occurred.  He also pointed to the very significant delay between the alleged offending and the complainant’s reporting to others. [19]. With respect to ground two, the appellant submitted that the appropriate test to be applied was identified by Mason CJ and McHugh J in Webb v The Queen (1994) 181 CLR 41, 53: namely “whether the incident is such that, notwithstanding the proposed or actual warning of the trial judge, it gives rise to a reasonable apprehension or suspicion on the part of a fair-minded and informed member of the public that the juror or jury has not discharged or will not discharge its task impartially.” The appellant argued that in circumstances where a juror raised with the jury during their deliberations that she had been raped as a young woman, that resulted in  a reasonable apprehension that a juror or the jury has not discharged its task impartially in returning a verdict of guilty. [20]. Regarding ground three, the appellant, referring to R v TAB [2002] NSWCCA 274, R v Knight Unreported, New South Wales Court of Criminal Appeal, Hunt, Wood, McInerney JJ, 18 December 1990, R v McCormack (1996) 85 A Crim R 445, [70], R v Salama [1999] NSWCCA 105, R v Hickey [2002] NSWCCA 474 and R v Lapins [2007] SASC 281, [35], argued that it is generally accepted that where the jury has asked the judge for a direction on a matter of law, that direction should be given before a verdict is taken.  The appellant noted that there was no appreciable delay between when the judge received the note and the jury reaching a verdict, and argued that particularly in view of the circumstances, the judge’s failure to direct the jury as to the irrelevance of the female juror’s experience gave rise to a miscarriage of justice.  [21].

Conclusion

The court shared the view that the counts against the appellant were defective in that they charged the rapes as continuing offences. To remedy that, the court allowed the respondent to amend the indictment to insert the words “on a date unknown” between “that” and “between” in each count: see s 572(3) Criminal Code 1899, which permits the amendment of an indictment where no injustice will be done, which includes amending an indictment after verdict at appellate level: see also R v Fahey [2002] 1 Qd R 391. [23].

The court did not accept that the first or second grounds of appeal were made out. [25], [26]. Rather, it was of the view that given the evidence, it was open to the jury to conclude beyond reasonable doubt that the appellant was guilty of both offences; and it did not necessarily follow from the fact that the jury informed the judge that one juror was “raped as a younger woman” that either the juror was partial, or that she infected other jurors and the verdict.

As to ground three, the court held that it was “problematic for the respondent”, in that her Honour took a “course [un]supported by a body of high legal authority” in deciding – against her earlier inclination to reconvene and remind the jury of the need to be, and be seen to be, impartial, and that they must decide the case on the evidence – to instead proceed to take the verdict after being informed that one had been reached. [27]. In the court’s view the preferable course would have been to follow the line of authority accepted at appellate level in New South Wales and South Australia that, as a general rule, a trial judge should not take a verdict until any requests from the jury for direction have been answered as fully as possible. [33]. Given that did not occur, the jury was without the benefit of the directions foreshadowed by her Honour before returning their guilty verdicts and there was a consequent error of law. [34].

Given the above, the court determined that the appropriate course was to allow the appeal and order a retrial, “to ensure justice is seen to be done in this case and to maintain confidence in the criminal justice system”. [34]. 

Appeal Status: No Appeal Pending - Appeal Period Unexpired

R v SCL; R v SCL; Ex parte Attorney General (Qld) [2016] QCA 107

Here, the court considered whether a guilty verdict of one count of rape of a seven year old girl (“C”) was unreasonable or insupportable on the evidence. Concurrently, it considered an appeal against sentence of the Attorney-General who contended that it was manifestly inadequate having regard to the seriousness of penile rape and the appellant’s position of loco parentis.

The background to the complaint was quite important. Briefly, at the time of the alleged offence the appellant was in a relationship with the complainant’s mother. The duration of that relationship was some 3 years, during which time a child was born. [4]. After the relationship broke down disputes arose as to access to the child. [5], [6]. After one such dispute, which involved a physical altercation, C’s grandmother complained to police that the appellant had raped C many times. [7]. The complaint was investigated and C was interviewed. [8]. Subsequently the appellant was interviewed, denied any offending behaviour, and made several statements which, at the trial, the prosecution argued were lies which were explained by a consciousness of guilt, as such corroborating C’s testimony.  [9]. 

Those lies related to his denial that he had ever been alone with the complainant’s mother’s children nor slept in the same bed as the complainant.  At trial, the complainant’s mother gave evidence that she had once found the appellant asleep in the complainant’s bed in the bedroom that she shared with her sister. The prosecution alleged the inconsistencies between the appellant’s evidence and the evidence of the complainant’s mother were suggestive of three lies told by the appellant. [23], [31]–[34].

Was there a miscarriage

The core issue on appeal was whether that part of the prosecution case, and the way in which the jury was instructed by the judge about it, resulted in a miscarriage of justice. [9]. In summing up, the learned trial judge identified four lies [46] and directed the jury that they must be satisfied that an alleged lie revealed a knowledge of the offence in order to be probative of guilt, but suggested a line of reasoning not specifically explained by the prosecutor. [38]. Ultimately, after objection from defence counsel, [56] the learned trial judge redirected the jury as to the third lie. Given that sequence of events, the appellant contended that the trial judge erred in giving the direction on the alleged lies and that the direction was otherwise deficient. The issue for determination was whether the misdirection and characterisation of the lies caused a miscarriage of justice.

In the event the jury was satisfied that a lie related to a material issue, but they had to be persuaded that the appellant told the lie in circumstances in which the explanation for the lie was that he knew the truth would implicate him in the offence: see Edwards v The Queen  (1993) 178 CLR 193, 211.  This required not only the precise identification of the lie, but also “the circumstances and events that are said to indicate whether it constitutes an admission against interest”: see Edwards v The Queen  (1993) 178 CLR 193, 210–211.

At that point in their deliberations, the jury then had to be satisfied of two things, described in Edwards as:

“And the jury should be instructed that they may take the lie into account only if they are satisfied, having regard to those circumstances and events, that it reveals a knowledge of the offence or some aspect of it and that it was told because the accused knew that the truth of the matter about which he lied would implicate him in the offence, or, as was said in Reg v Lucas (Ruth), because of ‘a realisation of guilt and a fear of the truth’.” (see R v Lucas (Ruth) [1981] QB 720, 724).

In other words, the critical aspect was what (if anything) the lie itself revealed about the appellant’s mind. [61].

In addressing whether it was open to the jury to conclude that the lie revealed a knowledge of the offence or some aspect of it and a fear of the truth, the court examined each separately. [62]–[66]. Following that exercise it formed the view that “none of the alleged lies should have been left for the jury to consider as Edwards lies.  There was, thereby, a miscarriage of justice.  Indeed if any of them was incapable of being considered an Edwards lie, there was a miscarriage of justice because of a real possibility that the jury’s use of the lie in that way deprived the appellant of an acquittal”. [67].

In addition to the above, the court observed that the jury’s role had been further complicated by the imprecision in the prosecutor’s identification of the lies; the way in which the prosecutor’s argument differed from what was said by his Honour to the jury when describing it; [68] and the required redirection, which was “likely to have contributed to the burden of the jury’s task”. [71]. The court concluded that in all the circumstances, the prospect of an acquittal had been “lost” to the appellant from impermissible reasoning by the jury about the alleged lies. [72]. 

Notwithstanding the above conclusion, in its consideration of whether the verdict was unreasonable, in that it was not open to the jury to convict the appellant, it was determined that it was open to the jury to be satisfied beyond reasonable doubt that the appellant was guilty. [78].

Given its decision to set aside the conviction, the court did not consider the appeal by the Attorney‑General against the sentence.  It was ordered as follows:

  1. Allow the appeal against conviction.
  2. Quash the conviction.
  3. Order that the appellant be retried.
  4. Dismiss the appeal against sentence by the Attorney‑General. [79].

Appeal Status:

R v Adcock [2016] QCA 264, 20 October 2016

Here, the appellant, found guilty of one count of torture, one count of unlawful assault causing bodily harm and being armed with a weapon and in company with others, and one count of unlawfully detaining a person in a dwelling against their will, appealed against his conviction on two grounds:

  1. the verdict was unreasonable or could not be supported having regard to the evidence; and
  2. the learned trial judge erred in admitting the statement of a witness into evidence, causing a miscarriage of justice. [7].

The appellant had allegedly participated in an incident in which the complainant was held captive in a unit, tortured and assaulted over a period of 19 hours. The complainant was injured so extensively that it was some days before her eyes opened. [18]. There were three co-offenders, one of which the complainant identified as the appellant, albeit not in her initial police interview, but in her second police interview after prompting by a police officer. That was the basis for the first ground of appeal, with the appellant contending that the verdict was unreasonable because the complainant could not clearly identify him.

In relation to the second ground, a witness had provided a statement to the police after the offences occurred, but died prior to the trial commencing. [58]. As a consequence at trial, the appellant contended that the statement should not be admitted as evidence as it could not be tested in court, and nor was it reliable. The trial judge determined to admit the statement into evidence, with the appellant arguing that his discretion in allowing the statement to be admitted miscarried.

Ground one

In independently examining the identification evidence to determine whether it was open to the jury to be satisfied of the guilt of the convicted person on all or any counts, beyond reasonable doubt (see SKA v The Queen (2011) 243 CLR 400, at [20]–[22]), and Shepherd v The Queen (1990) 170 CLR 573) the contention that it was not open to the jury to be satisfied that the appellant was the assailant was rejected by the court.  [48]. Amongst other matters, the court relevantly noted that there was a considerable degree of consistency and particularity of the complainant’s evidence; [49] it was not only the complainant who offered evidence as to the identity of the assailant; [51] the complainant’s description of her male assailant reasonably matched the applicant; [52] and the jury was given “very strict” warnings against readily accepting the complainant’s identification evidence. [54].

Ground two

In addressing whether ground two was made out, the court provided the following useful guidelines with respect to exclusion on discretionary grounds under s.98 or s.130 of the Evidence Act:

  1. “reliability” often will be the focus of consideration in deciding how to exercise the discretion, but it is not the only consideration;
  2. “reliability” is used in its narrow sense to mean the reliability of the evidence to be admitted per se;
  3. used in a broader sense, “reliability” refers to general issues affecting reliability;
  4. section 98 goes beyond “reliability” and embraces exclusion in the interests of justice, and for reasons of unfairness or public policy; and
  5. a statement, the content of which is manifestly unreliable in the narrow sense, may well be more safely and fairly left to a jury, than evidence the reliability of which is potentially affected by external factors less obvious and less capable of being explored. [70].

In circumstances where the “probative effect” and reliability of the statement were considered at trial, [73] the witness was not recounting a complicated or prolonged set of events but merely observations over a short period, [75] and lived at the particular unit where he identified the participants [83] the court took the view that the learned trial judge’s discretion did not miscarry. [72]. The court agreed that the correct approach was that the evidence in the statement should be left to the jury, with appropriate warnings as to the fact that cross-examination of the witness was not possible.  [84].

In the result the appeal was dismissed. [91].

Appeal Status: No Appeal Pending - Appeal Period Expired

Case Links:

R v Koani [2016] QCA 289, 11 November 2016

The appellant in this matter pleaded guilty to manslaughter on the basis of criminal negligence, but was convicted of murder, after killing his girlfriend with a shotgun at close range. He sought to appeal his conviction on the grounds that the trial judge erred in directing the jury they could consider an alternative basis for conviction of murder in the event they were not satisfied the shot was discharged by the appellant’s willed act; and further that her Honour erred in permitting the prosecution to re-examine a witness in order to prove a prior consistent statement. [1].

The evidence

The prosecution case alleged that the appellant shot the deceased in their home during an argument whilst handling a modified shot gun. [4]. Specifically, the prosecution particularised its case of murder as the appellant unlawfully killing the deceased by either:

1. (a)           deliberately causing a gun to discharge; and

     (b)          as a result, the deceased suffered injuries which resulted in her death; or

2. breaching a duty required of him in that –

    (a)            he was in charge of and/or control of a dangerous thing; and

    (b)           he failed to use reasonable care and/or take reasonable precaution in relation to the use and/or management of the gun; and

    (c)            as a result of his failure the gun discharged; and

    (d)           the deceased suffered injuries which resulted in her death.

- and that in either scenario, he did so with intent to cause death or grievous bodily harm. [3].

The judge’s directions

In order to assist their deliberations the trial judge provided the jury with a flowchart clearly setting out the elements they needed to consider in relation to each of the matters they needed to consider. She also provided them with fulsome verbal instructions as to how she intended that they progress through that question trail. [23], [24].

Ground one

The appellant submitted that, according to the High Court’s approach in Murray v The Queen (2002) 211 CLR 193, by allowing the jury to use s 289 of the Criminal Code as a path to a murder conviction the trial judge erred, since that provision is directed to criminal negligence and cannot result in a conviction for murder under s 302(1)(a) (as murder under s 302(1)(a) is not an offence of negligence). [26]. It was argued that, consistent with Murray v The Queen (2002) 211 CLR 193, s 289 is only applicable once the jury has rejected the notion that the accused person has done a willed act with murderous intent, and then it is limited as a pathway to manslaughter by way of criminal negligence, as opposed to being “part of a composite consideration of murderous intent coupled with negligently causing death”. According to the appellant, the judge erred in specifically directing the jury that s 23(1)(a) was inapplicable on a criminal negligence path to murder: see Ugle v The Queen (2002) 211 CLR 171; [2000] WASCA 381. [27].

The appellant argued that the appropriate course was to set the conviction for murder aside and order a retrial, pointing to the facts arguably consistent with innocence on the murder charge, including that the front door was open at the time the deceased was shot and the events occurred in the company of others. [28].

In response, the respondent argued that the jury was entitled to be satisfied beyond reasonable doubt that, at the time the appellant caused the death, he intended to kill or do grievous bodily harm, given his actions in loading the gun, walking towards the deceased, aiming the gun and cocking it, together with his comment that he would shoot the deceased and the context of prior arguments. In addition, the respondent contended that it was unforeseeable that the legislative scheme under the Criminal Code was intended to allow someone to escape liability for murder where death resulted from a deliberately reckless act with an intention to kill or do grievous bodily harm: see R v Demirian [1989] VR 97, 115 and Royall v The Queen (1991) 172 CLR 378 [29].  Finally, the respondent argued that no requirement existed that s 23 must be considered if the jury found that the appellant acted under s 289 with the requisite intention. [29].

In rejecting the first ground (her Honour, the President, dissenting), the court by majority held that there indeed exists an alternative route to a finding of guilt for murder, which was appropriately depicted by the trial judge in the question trail as an alternative to a willed act carried out with an intention to cause death or grievous bodily harm. [81]. Their Honours, Gotterson JA and Atkinson J reasoned:

“Where a person who holds a murderous intent towards another picks up a gun to shoot the other person and, as a result of a failure on the person’s part to take reasonable care and precaution, the gun discharges, it would be incongruous that, because the gun discharged earlier and not in precisely the way the person intended, the person who kills is guilty of manslaughter and not murder. Such an outcome would be almost paradoxical and would fail sufficiently to take into account the fact that the person unlawfully killed, intending to kill.” [77].

As to the application of Murray v The Queen (2002) 211 CLR 193, whilst acknowledging that that decision concerned similar facts, their Honours noted that the case was ultimately determined on the basis of a failure by the trial judge to direct accurately as to the onus of proof, rendering additional remarks by the judges as obiter dicta; and the issue of whether s 289 can form a step in a pathway to a murder conviction appeared not to have been directly raised for the Court’s consideration. [78].

Given the above, the appeal was dismissed. [85].  

Appeal Status: Appeal Pending


Defamation back to top

Cerutti v Crestside Pty Ltd [2014] QCA 33

In this recent appeal the Court of Appeal comprehensively canvassed the principles relating to the assessment of damages in a defamation action.

In 2006, the Respondent, a former client of the Appellants, wrote a letter making six allegations of unethical conduct and dishonest business practices against the Appellants. [11]-[12]. In addition to sending this letter to the Appellant, the Respondent also sent copies of the letter to three organisations with which the Appellants were closely associated. [11]. The Appellants sued the Respondent in defamation claim and the jury found in their favour and further found that each letter had been published with malice. It also found that two of the imputations were “substantially true.” [13]. Subsequently, the trial judge awarded general and aggravated damages, but discounted this award, by 50 percent, to  reflect the jury’s finding that two of the imputations were true. At a later stage the trial judge also refused to award interest. The Appellants appealed this award. 

Damages for Defamation
The Court began its reasoning by identifying and undertaking a detailed examination of the three purposes of an award of general damages for defamation; being (1) “reparation for the harm done to the personal, and … business reputation of the person defamed” (2) “consolation for the personal distress and hurt caused to the plaintiff by the publication”; and (3) “vindicat[ion of] the plaintiff’s reputation.” [25]. The Court emphasized that in determining the quantum, there must be an “appropriate and rational relationship between the harm sustained … and the amount ... awarded” [27] and though it is appropriate to refer to previous, comparable awards, this may be difficult, given the infrequency of damages awards for defamation and the fact-centric nature of the calculation. [46]-[49]. Their Honours also noted that other factors, including the making of a sincere apology addressed to both the defamed and those to whom the defamatory statements were published, and proof that “one or more of the imputations … was substantially true” may mitigate damages. [44]

In reviewing the trial court’s award, the Court highlighted that general damages for defamation are awarded as a consequence of the act of defamation; rather than as compensation for the plaintiff’s damaged reputation even though the latter concept is relevant to the quantum of damages. [27]. Consequently, the Appellants were not required to submit evidence of their ‘injury’. [59]. After considering the facts of the case the Court of appeal agreed with the trial judge’s determination that this was an appropriate case for an award of aggravated damages given the jury’s finding that publications were made with malice [67] and that the Respondent’s conduct, in “persist[ing] in alleging dishonesty through to the end of the trial,” had been particularly “improper, unjustifiable [and] lack[ing] bona fides.” [39-40], [75]. However, the court concluded that the quantum awarded was manifestly inadequate. Though the scope of publication was limited, the nature of the imputations, addressed as they were to the Appellants’ professional reputation and honesty, made an award that “vindicated” their reputation of “particular importance” [60] and, as a consequence, their Honours substantially increased the starting figure of both awards. Further, their Honours concluded that a 50 percent discount based upon the jury’s conclusion that two of the six imputations were “substantially true” was excessive, particularly given that the imputations found to be “untrue were apt to do far more harm … [than those] found to be true.” [67], [73]. Thus, though their Honours did discount the final award based upon this finding, it was by a significantly smaller percent.

Award of Interest
In their decision, the Court also briefly addressed the appropriate exercise of the discretion to award interest in defamation actions. The Court noted that the determination of the appropriate amount of interest is more complicated in defamation cases because the award for damage to reputation “accrues at the date of publication and ... in many cases … reflect[s] an amount for a continuing injury to feelings and reputation to the date of judgment.” [91]. This fact, alongside other factors such as unreasonable delay in bringing a matter to trial ought be considered in assessing the level of the ultimate award, however neither justifies a refusal to award interest at all. [95]-[98]. In applying this reasoning to the appeal before them, their Honours concluded that an award of interest, appropriately reduced to account for the delay, ought to have been ordered. [102].

Appeal Status: No Appeal Pending - Appeal Period Expired

Mather v Smith (No 1) [2014] QCA 65

In this matter the Court of Appeal considered the elements and application of the “traditional qualified privilege” defence in defamation proceedings.  Broadly, that defence arises in relation to allegedly defamatory conduct in circumstances “where one person has a duty or interest to make the statement and the recipient of the statement has a corresponding duty or interest to receive it.” [7]. To understand the nature of this appeal, it is first necessary to have an understanding of the procedural history of the matter. It initially proceeded before a jury which, after a full hearing of the evidence, was charged with determining a series of questions put to it by the primary judge. Following the receipt of the answers and the discharge of the jury, a dispute arose as to whether judgment ought to be given for or against the plaintiff, the issue being whether or not, from the questions put to the jury, a determination had been made regarding “traditional qualified privilege”. The primary judge concluded that the jury had not addressed this question, and undertook to make her own decision, holding that qualified privilege did not apply because the extent of the publication was too broad, and the applicant was thus liable. The applicant appealed this determination on two bases: that the trial judge ought not to have undertaken the “fact-finding exercise” as the respondents had not challenged “traditional qualified privilege” on the basis found; and, alternatively, that the primary judge’s decision was incorrect.  [9]

Ought the Trial Judge Have Made a Determination of her own?

In determining whether it was appropriate for the trial judge, in the circumstances, to undertake this so-called “fact-finding exercise” the Court focused upon whether the issue of the “extent of publication” had been before the court. After a close analysis of somewhat “confusing and imprecise” pleadings and the evidence received at trial, it concluded that the extent of the publication had been put in issue, [12]–[14] and had not been determined by the jury.  Further, significantly it held that even if the jury’s answers could have required the primary judge to accept the respondent’s claim of traditional qualified privilege, they could not be construed to foreclose judicial consideration of the question of the existence of the claimed privilege.  Section 22(2) of the Defamation Act provides that it is a function of the jury “to determine whether . . . any defence raised by the defendant has been established”.  However, nothing in s 22 “requires or permits a jury to determine any issue that, at general law, is an issue to be determined by the judicial officer.” Citing both High Court and state court decisions, the Court held that the question of whether a statement is the subject of qualified privilege or not is for the judge to determine as matter of law, [27]–[29], and thus the primary judge was right to decide the question.

Was the Publication Protected by Traditional Qualified Privilege?

The issue of whether or not qualified privilege applied turned upon the extent of publication and, specifically, whether traditional qualified privilege “might subsist if the defamatory imputations were published to an audience which extended beyond persons … [with] a legitimate interest in receiving the communication.” [31] Though this privilege is not necessarily lost the instant that the relevant communication is published to persons without a legitimate interest in receiving it, ultimately, the privilege, in this extended form, is available in only the most exceptional of cases. [33]. Applying this standard to the matter before it, the Court concluded that this was not one of those “exceptional” cases, see [35]–[36], and thus that the primary judge had not erred in holding that the claimed privilege was not established.

Appeal Status: No Appeal Pending - Appeal Period Expired


Discrimination and Equal Opportunity back to top

Chivers v State of Queensland (Queensland Health) [2014] QCA 141

In this matter the Court of Appeal considered the scope and operation of the definition of “genuine occupational requirements” under to s 25 of the Anti-Discrimination Act 1991 (“ADA”).

This matter arose following the filing of a complaint by the appellant, a nurse, against the respondent, her employer, alleging that its conduct amounted to discrimination pursuant to s 15(1) ADA.  During her nursing studies the appellant had suffered a head injury. Upon commencing the probation period of her employment with the respondent it became apparent that, as a consequence of side-effects related to this injury, she was unable to work the night-shift. Due to her failure to undertake night-duty, the respondent repeatedly extended her probation period: see discussion [7]–[23].  The appellant ultimately resigned and filed a complaint against the respondent alleging contraventions of inter alia s 11(1) of the ADA. QCAT dismissed her claim and she appealed to the Court of Appeal.

The principle issue before the Court was whether the capacity to work the night-shift was a “genuine occupational requirement” of nurses.  If so, pursuant to s 24 of the ADA any discrimination was not unlawful. In addressing this question the Court first looked to the decisions of High Court in Qantas Airways v Christie and X v The Commonwealth which had considered analogous provisions in Commonwealth legislation and held that:

“[W]hether a requirement is inherent in a position must be answered by reference not only to the terms of the employment contract but also be referenced to the function which the employee performs as part of the employer’s undertaking and …by reference to that organisation.”

[41]. In applying this test to the matter before it, the Court paid particular attention to the appellant's function and role as part of the respondent's overall undertaking, namely the provision of 24/7 nursing care.  On this basis the Court concluded that "the roster system for 24/7 wards” and, as a consequence, the ability to work all shifts, was a “genuine occupational requirement”; [58], see also [59]-[61]. To confine the genuine occupational requirements of a nurse to the physical tasks and functions, as advocated by the appellant would fail to account for the actual purpose of the appellant’s role and the reasons for her employment. See the discussion at para [50]. Further, despite evidence that some nurses were working on a basis other than the normal, full-time 24 hour shift, the Court concluded that given that these arrangements were temporary, the evidence “failed to suggest that the requirement was not genuine” [45] and “the fact that exceptions [were] made from time to time in order to administer humanely a system that is essential to a particular employment, does not deprive it of its genuineness.” [51]. As a consequence, the Court dismissed the appeal. 

Appeal Status: No Appeal Pending - Appeal Period Expired

Lyons v State of Queensland [2015] QCA 159, 28 August 2015

This was an application for leave to appeal a decision of the Appeal Tribunal of QCAT, pursuant to s 150 of the Queensland Civil and Administrative Tribunal Act 2009.  The applicant for relief was deaf and was aggrieved because she had been excluded from jury service by a Deputy Registrar.

She had made complaints of indirect and direct discrimination pursuant to ss 10 and 11 of the Anti-Discrimination Act 1991, which the Member had dismissed. The grounds of the proposed appeal were that:

the Appeal Tribunal had erred in its construction of s 11 of the Anti-Discrimination Act by failing to conclude that terms constituting indirect discrimination had been imposed on the applicant;
in considering direct discrimination, the Appeal Tribunal had erred by failing to consider whether the applicant’s impairment was a substantial reason for her treatment;
the Appeal Tribunal had erred in taking account of the applicant’s need for the assistance of an Auslan interpreter in determining whether she had been treated less favourably; and
the Appeal Tribunal had erred in concluding that the Deputy Registrar had correctly construed and applied the Jury Act 1995. [5].

In opposing the granting of leave to appeal, the respondent contended that, in the event leave were granted, the Appeal Tribunal should have held that if the conduct in question were unlawful, the Anti-Discrimination Act ought be read as being impliedly repealed by the Jury Act to the extent that the former Act made the conduct unlawful. [6].

At the outset, her Honour Holmes JA (with whom the other members of the court agreed), indicated that she had formed a view of the merits of the prospective appeal grounds and in accordance with that assessment, concluded that leave to appeal should not be granted. [7].

The relevant Anti-Discrimination Act provisions

Examining ss 6(1); 10 and 11 of the Act [8]–[10], her Honour observed that the applicant’s case before the Tribunal was that the Deputy Registrar had discriminated against her on the basis of impairment in the provision of services, contrary to ss 9 and 46 of the Act. Alternatively she argued that discrimination had occurred in the administration of a State law (the Jury Act) and program (the administration of the jury system), contrary to ss 9 and 101 of the Act.  [11]. There was an inherent difficulty in the argument that the determination of eligibility for jury service could be construed as involving the supply of a service under s 46 of the Act.

Grounds of appeal:

Indirect discrimination – alleged error in construction and application of s 11

The applicant argued that in determining whether a term of the kind contended for (that she be able to communicate by conventional speech in the jury room) [20] had been imposed on her, it was necessary to consider whether the Deputy Registrar had imposed “any form of qualification or prerequisite” (see Waters v Public Transport Corporation (1991) 173 CLR 349 at 393) as a condition precedent to her obtaining a relevant status or benefit.  It was unnecessary to show that there was any positive act or statement by the Deputy Registrar; a term could be implicit in conduct.  [23]. The applicant did not identify how it was that the Appeal Tribunal had erred in its construction or application of s 11 in its consideration as to whether the Tribunal Member should have formulated a different term. [24].

In a context where it was not within the confines of the Deputy Registrar’s role to determine the conditions for the applicant’s eligibility for jury service; that was a matter for the statute – and The Deputy Registrar merely determined as a question of fact that the statutory conditions for eligibility were not met [26], in relation to this ground her Honour determined that:

“The conclusion that the Deputy Registrar did nothing amounting to the imposition of a term or condition, as opposed to the application of an existing statutory requirement, was plainly available.  There is no real prospect of the applicant’s demonstrating error in the Appeal Tribunal’s conclusion that it was irrelevant to speak of the imposition of a term.” [27].

Direct discrimination – alleged error in failing to consider whether impairment was “a substantial reason”

The applicant argued that both the Appeal Tribunal and the Tribunal Member had incorrectly sought to determine the reason for the Deputy Registrar’s exclusion of her, in lieu of considering whether her impairment was a substantial reason for the exclusion. [29]. She also argued that her need for an Auslan interpreter was inextricably connected to her deafness. [30].

In closely examining the applicant’s submissions together with the Appeal Tribunal’s decision, her Honour took the view that there was no misapprehension as to the appropriate test under s 10(4) apparent in the Tribunal’s reasons.  It was not the case that more than one reason for the Deputy Registrar’s conduct had been identified – and the Tribunal Member had plainly found that her conduct was not based upon the applicant’s deafness, nor her requirement for Auslan services.  That was a finding of fact with which the Appeal Tribunal saw no reason to disagree. As such, the question of the impairment’s being a “substantial reason” for less favourable treatment simply did not arise. [33].

Direct discrimination – alleged error in taking the requirement for a special service into account in determining the “comparator”

The Appeal Tribunal had rejected a submission that by taking into account the applicant’s need for an Auslan interpreter in the jury room, the Tribunal Member had disregarded s 10(5). [34].

Seeking to distinguish the High Court’s decision in Purvis v New South Wales (2003) 217 CLR 92, the applicant submitted that the Tribunal Member and Appeal Tribunal erred in formulating the characteristics of the “comparator” for the purpose of s 10(1) by failing to exclude from consideration the need for an interpreter.  As a result, contrary to s 10(5), that amounted to taking into consideration the applicant’s need for special services. It was submitted that the appropriate comparator was a person without the applicant’s disability who wished to perform jury service. [35].

In relation to this ground, her Honour agreed that the appropriate comparator was indeed a person without the applicant’s attribute of deafness or need to communicate through Auslan. However, she articulated that:

“… to posit a comparator with no further qualification than a desire to perform jury service is meaningless; it is to disregard the circumstances in which the relevant treatment of the applicant occurred.  Here the circumstances in which the Deputy Registrar made her decision were that she was required to apply a law which, at least in her view, precluded the presence of an outsider in the jury room.  That was not a question of the applicant’s needing a special service: the Registrar did not exclude her because of her need for the assistance of an interpreter but because of the perceived impossibility of an interpreter, as a person extraneous to the jury, being present in the jury room.  The Tribunal Member appropriately had regard to that consideration as part of the circumstances of the relevant treatment in formulating the comparator of a person with hearing seeking the assistance of another in the jury room.” [39].

Alleged error by the Appeal Tribunal in concluding that the Deputy Registrar correctly applied the Jury Act

The final ground of appeal was one which the court determined was not strictly necessary for it to form a view on, since it had not detected any error of law by the  Appeal Tribunal and in any event, the Tribunal had considered the appeal before it on the grounds there advanced. [40].

Nonetheless, the court – for completeness [40] – determined that this ground had little prospect of success. [47]. It noted that even if a trial judge were able to exercise the power to grant leave enabling an interpreter to communicate with jurors, the difficulties in having someone other than a sworn juror present during deliberations would remain. 

Section 50 of the Jury Act requires that the members of the jury be prevented from disclosing anything relating to their deliberations “except as allowed or required by law”.  Given the ambit of that section, the court found it difficult to see how jury members could potentially discuss the case in the presence of an interpreter without breaking their oath, or how a trial judge could grant leave for that to occur. [47].

Conclusion

In the circumstances, the court held that the applicant’s proposed appeal had insufficient merit to warrant the granting of leave to appeal, and refused the application. [48].

Appeal Status: Appeal Pending


Environment and Planning back to top

Queensland Heritage Council v The Corporation of the Sisters of Mercy of the Diocese of Townsville [2014] QCA 165

This recent judgment of the Queensland Court of Appeal considers how tension between separate legislative provisions acting on the same subject matter ought to be dealt with. In this case, the issue was the interaction between s 162(1) of the Queensland Heritage Act (“QHA”) and ss 496(1) and 496(2) the Sustainable Planning Act (“SPA”) as they impacted appeals to the Planning and Environment Court (“PE Court”) from decisions of the Queensland Heritage Council.  Section 162(1) provides that an appeal of a decision of the Queensland Heritage council “may only be made on the ground that the place the subject of the appeal does or does not satisfy the cultural heritage criteria”.  By contrast s 496(1) provides that appeals to the PE Court are “by way of hearing anew” and that in deciding an appeal, the PE Court may “set aside the decision appealed against and make a decision replacing the decision set aside”.

This matter arises out of the applicant’s decision to enter the respondent’s property into the Queensland Heritage Registrar. [12].  The (now) respondent appealed this decision to the PE Court, which, early in the appeal process entered an order allowing the (now) respondent to amend its appeal to include, as grounds of appeal, matters relating to the “physical condition and structural integrity” of the property – a potential factor in the applicants decision whether or not to enter a property in the Register, see s 51(3) QHA – in  addition to its cultural importance.  [13]–[15], [19].  It is an appeal of this order that was before the Court.

Powers of PE Court

Upon concluding that there was a right of appeal the Court on this issue, see [24]–[27], the Court then proceeded to determine the powers of the PE Court on the appeal to it.  In addressing this question the Court returned to the basic principles of statutory interpretation and concluded that upon considering “the provisions as a whole and seeking to give [the Acts] harmonious goals” that a ground of appeal related to the cultural heritage criterion referred to in s 162(1) of the QHA must be established before the PE Court is able to exercise any powers open to it under s 496(1) or (2) of the SPA.  [35], see [31]–[34].  This conclusion was supported by a review of the history of the relevant Acts from which it was apparent that the legislature had intended to “separate the consideration of whether a place satisfied the cultural heritage criteria from an examination of the . . . structural integrity of the place”.  [28].  If, however, a ground of appeal related to the cultural heritage criteria is made out, the Court considered that it was open to the PE Court, pursuant to s 496(1) of the SPA, to hear the matter anew, and to, potentially, “set aside the decision appealed against and make a decision replacing it” pursuant to s 496(1).  In doing this the PE Court may examine all issues which the applicant had to examine, including whether the physical condition of the property prevented its cultural significance being preserved.  [36].  In reaching this decision the Court applied the well-established principle that “a broad view should be given to the grant of power to a court”, and concluded that upon establishing a statutory ground of appeal a litigant ought be able to argue that the PE court should make a decision replacing the decision set aside with “reference to all the issues actually considered by the [Queensland Heritage] Council”. [38].  In the instant matter, however, that the respondent had not established that its property did not satisfy the cultural heritage criterion, before arguing other matters, the Court allowed the appeal.

Appeal Status: No Appeal Pending - Appeal Period Expired

Queensland Heritage Council v The Corporation of the Sisters of Mercy of the Diocese of Townsville [2014] QCA 165

This recent judgment of the Queensland Court of Appeal considers how tension between separate legislative provisions acting on the same subject matter ought to be dealt with. In this case, the issue was the interaction between s 162(1) of the Queensland Heritage Act (“QHA”) and ss 496(1) and 496(2) the Sustainable Planning Act (“SPA”) as they impacted appeals to the Planning and Environment Court (“PE Court”) from decisions of the Queensland Heritage Council.  Section 162(1) provides that an appeal of a decision of the Queensland Heritage council “may only be made on the ground that the place the subject of the appeal does or does not satisfy the cultural heritage criteria”.  By contrast s 496(1) provides that appeals to the PE Court are “by way of hearing anew” and that in deciding an appeal, the PE Court may “set aside the decision appealed against and make a decision replacing the decision set aside”.

This matter arises out of the applicant’s decision to enter the respondent’s property into the Queensland Heritage Registrar. [12].  The (now) respondent appealed this decision to the PE Court, which, early in the appeal process entered an order allowing the (now) respondent to amend its appeal to include, as grounds of appeal, matters relating to the “physical condition and structural integrity” of the property – a potential factor in the applicants decision whether or not to enter a property in the Register, see s 51(3) QHA – in  addition to its cultural importance.  [13]–[15], [19].  It is an appeal of this order that was before the Court.

Powers of PE Court

Upon concluding that there was a right of appeal the Court on this issue, see [24]–[27], the Court then proceeded to determine the powers of the PE Court on the appeal to it.  In addressing this question the Court returned to the basic principles of statutory interpretation and concluded that upon considering “the provisions as a whole and seeking to give [the Acts] harmonious goals” that a ground of appeal related to the cultural heritage criterion referred to in s 162(1) of the QHA must be established before the PE Court is able to exercise any powers open to it under s 496(1) or (2) of the SPA.  [35], see [31]–[34].  This conclusion was supported by a review of the history of the relevant Acts from which it was apparent that the legislature had intended to “separate the consideration of whether a place satisfied the cultural heritage criteria from an examination of the . . . structural integrity of the place”.  [28].  If, however, a ground of appeal related to the cultural heritage criteria is made out, the Court considered that it was open to the PE Court, pursuant to s 496(1) of the SPA, to hear the matter anew, and to, potentially, “set aside the decision appealed against and make a decision replacing it” pursuant to s 496(1).  In doing this the PE Court may examine all issues which the applicant had to examine, including whether the physical condition of the property prevented its cultural significance being preserved.  [36].  In reaching this decision the Court applied the well-established principle that “a broad view should be given to the grant of power to a court”, and concluded that upon establishing a statutory ground of appeal a litigant ought be able to argue that the PE court should make a decision replacing the decision set aside with “reference to all the issues actually considered by the [Queensland Heritage] Council”. [38].  In the instant matter, however, that the respondent had not established that its property did not satisfy the cultural heritage criterion, before arguing other matters, the Court allowed the appeal. 

Appeal Status: No Appeal Pending - Appeal Period Expired

Fraser Coast Regional Council v Walter Elliott Holdings Pty Ltd [2016] QCA 19, 12 February 2016

In this recent matter, the applicant Council sought leave to appeal pursuant to s 498 of the Sustainable Planning Act 2009 on the ground that the primary judge had made an error of law in incorrectly construing a development approval as being only for 2 bedroom relocatable dwellings, and in so doing, concluding that it lacked power to issue an infrastructure charges notice. [7].

In delivering the lead judgment, (with Morrison JA dissenting), the President outlined the relevant background to the dispute: [1]–[6].

  • The respondent sought to further develop a property on the Fraser Coast.  The existing development consisted of 98 relocatable homes. 
  • The applicant was in dispute with the respondent regarding unpaid infrastructure charges concerning the existing development. 
  • On 23 May 2014 the respondent sought retrospective approval for existing assessable development and a new approval for the development of another 86 relocatable homes.  It applied for a development permit for a material change of use.  The planning report accompanying its application sought an infrastructure charge for each of the proposed dwellings, calculated at the rate applicable for 2 bedroom houses.
  • On 16 October 2014 the respondent sought declarations in the Planning and Environment Court that its development application concerned 2 bedroom, not 3 bedroom relocatable homes and that the applicant had no power to issue in respect of the development approval an adopted infrastructure charges resolution for 3 or more bedroom relocatable dwellings.
  • On 20 November 2014, the Council approved the respondent’s development application and issued an adopted infrastructure charges notice calculated on the basis that the proposed dwellings were 3 bedroom dwellings.
  • Consequently, the respondent amended its application in the Planning and Environment Court to seek a declaration to the effect that its development application as approved by the Council related to a relocatable home park comprising 2, not 3, bedroom relocatable homes; and as such the Council had no power to decide the development application for a relocatable home park comprising 3 bedroom relocatable homes.
  • The respondent sought an order that the Council accordingly amend its charge notice by recalculating the infrastructure charges at the rate payable for 2 bedroom dwellings, together with an order that the Council consider whether to apply a subsidy to the infrastructure charges.
  • The primary judge essentially found in favour of the respondent, declaring that Council acted beyond power by resolving then issuing an infrastructure charges notice imposing a charge for 3 or more bedroom relocatable dwellings.

The development application and approval

The respondent’s development application included example house plans, depicting rooms labelled “bed 1”, a smaller “bed 2”, and a third smaller room, either “MPR”, or “Study”. [17]. In examining the Council’s development Decision Notice, the court noted that neither the approved plan for the development approval nor the Proposal Description specified the number of bedrooms per dwelling. [19].

The primary judge’s reasons

His Honour took the view that since the example house designs were not part of the approved plans, he was accordingly unable to discern any justification for the Council to regard the rooms labelled “MPR” or “Study” as a third bedroom for the purpose of its adopted infrastructure charges resolution- as that would be speculative. [21].

Submissions of the applicant

The Council argued that the primary judge incorrectly referred to the planning report which accompanied the development application in his analysis of the development approval in circumstances where the report was not incorporated in the approval, in lieu of following established principles [25] including that a development approval should be construed without reference to extrinsic evidence: see Winn v Director-General of National Parks and Wildlife (2001) 130 LGERA 508, 513, 544–545;  Hillpalm Pty Ltd v Heaven’s Door Pty Ltd (2004) 220 CLR 472, 501, [89]; Auburn Municipal Council v Szabo (1971) 67 LGRA 427, 434; and  Sericott Pty Ltd v Snowy River Shire Council (1999) 108 LGERA 66, [42].

It was further contended that the judge’s declarations were based upon a false premise.  The Council submitted that it was empowered under ss 635 and 636 of the Sustainable Planning Act to determine the additional demand placed upon infrastructure that the respondent’s approved development would necessitate, and it found that this should be calculated on 3 bedroom rather than 2 bedroom dwellings.  [28]. In addition, the Council contended the primary judge erred in making the declarations as the issue for determination was whether the Council’s decision was beyond power. [29].

In short, the court favoured the approach proffered by the Council, concluding that the primary judge erred in law in finding that it was bound to treat the development application as relating to future 2 bedroom homes based upon the information contained in the respondent’s planning report attached to its development application.  In the lead judgment, the President explained:

“To find otherwise would mean a developer, by referring to apples as oranges in material attached to a successful development application, could force a local authority to treat apples as oranges in subsequently determining infrastructure charges. His Honour impermissibly used the declaratory powers under s 456 to usurp the function of the Council as the planning authority.” [47].

In the result, leave was granted and the appeal allowed with costs. [53].

Appeal Status: No Appeal Pending - Appeal Period Unexpired


Equity back to top

Chapman v Wilson [2013] QCA 235

The first instance decision in this matter has been referred to previously in this publication. The case concerned a disposition in a testamentary trust which provided for a life interest in the “income and profits” of an estate. The central issue which arose was whether or not that gift included “unrealized” capital gains which had been generated in the assets of the estate? The Court of Appeal (Gotterson JA with whom Holmes JA and Applegarth J agreed) held that one of the main questions was whether or not the terms of the trust displaced the usual rule that “where the trust corpus is augmented, the augmentation accrues for the benefit of all beneficiaries and thus is to be treated as capital and not as income”. The appellant argued that the displacing of the usual rule of construction arose from the words used to create the trust as well as the scheme of dispositions in the will. The Court considered the various meaning of the expression “profits” as well as the concept of the derivation of profits including the meaning given in various cases where it was noted that “derivation” did not require that the profits be realized. It was noted that the meaning given to the words “profits” and “derivation” are often dependent upon the context in which they are used and, in the case of the former, there is no universal legal meaning. Ultimately, it was held that in order for profits to be handed over to the beneficiary they have to be realized profits and, therefore, unrealized profits would not be capable of being subject to the gift. It was further held that the scheme of the dispositions under the will did not indicate any intention to require the trustees to pay to the beneficiary an amount on account of unrealized capital gains.

Appeal Status: No Appeal Pending - Appeal Period Expired

Cornerstone Property & Development Pty Ltd v Suellen Properties Pty Ltd [2014] QSC 265

This matter concerned allegations against a director for misusing information known to her in that capacity to divert a business opportunity to another company of which she was the sole director and shareholder. Ms Rushbrook, the first defendant, and Mr and Mrs Chalmers incorporated the plaintiff, Cornerstone Property & Development Pty Ltd (CPD), for the purpose of acquiring and pursuing the development of a parcel of land in Chinchilla, Queensland (Lot 7). They were each a director and shareholder of CPD. A contract for the purchase of Lot 7 was executed. However, before the contract became unconditional or could settle, the Chalmers fell out with Ms Rushbrook, deliberately ceased all business involvement with her, forcefully intimated that they expected nothing further from her in relation to Lot 7 and resigned as directors of CPD. They remained shareholders of CPD. Subsequently, while CPD lay moribund and engaged in no business, Ms Rushbrook, as the sole director of the first defendant, Suellen Properties Pty Ltd (SP) caused it to enter into a contract to buy Lot 7 “effectively in substitution for CPD’s contract”, although she did not seek the Chalmers’ express consent to that contract.  Ms Rushbrook later sold her shares in SP to a third party investor.  All the while, the Chalmers were aware of the steps being taken by Ms Rushbrook, but did nothing. However, following the completion of the sale of Lot 7 to SP, Mr Chalmers sought and obtained leave under s 237 of the Corporations Act 2001 (Cth) to bring a statutory derivative action on behalf of CPD against both Ms Rushbrook and SP, seeking the full range of equitable relief, including as against SP a constructive trust in respect of Lot 7.

The claims against Ms Rushbrook

CPD alleged that Ms Rushbrook breached her fiduciary and other statutory duties to CPD. Jackson J dismissed these allegations. It was held that the scope of Ms Rushbrook’s “trust and agency” to CPD had been reduced by the circumstances of the ending of the relationship between the Chalmers and Ms Rushbrook such that her conduct on behalf of SP was outside that scope.

Alternatively, it was emphasised that “what is required for a fully informed consent is a question of fact in all the circumstances” (Maguire v Makaronis (1997) 188 CLR 449 at 466).  It was thus inferred from the circumstances that the Chalmers gave such consent to the diversion of the opportunity to purchase Lot 7, albeit it was emphasised that this was a rare result and particular to the facts.

It was also held that the Chalmers’ conduct in doing nothing to bring their claim to Ms Rushbrook or the investors’ attention was objectively calculated to cause them to assume that the Chalmers did not wish to proceed with CPD’s Lot 7 contract, and that the claim now made was one “adventitiously made through Mr Chalmers lying by”. In those circumstances, it was held to be unconscientious for CPD to assert that either of the defendants was liable: Chan v Zacharia (1984) 154 CLR 178; and consequently unnecessary to analyse the facts as an estoppels.

On the Corporations Act claims, it was held Ms Rushbrook did not breach her statutory duties not improperly to use her position: s 182(1); and to exercise her powers and discharge her duties in good faith in the best interests of the corporation and for a proper purpose: s 181(1). It was found that any lack of appreciation that she was not free to continue with the project separately to CPD was in all the circumstances not in bad faith or improper: referring to R v Byrnes (1995) 183 CLR 501 at 514–515.

The claims against SP – Third party liability for breach of fiduciary obligation

As against SP, CPD’s primary case was based on the grounds for the liability of third parties recited in obiter by Lord Selborne in Barnes v Addy (1873-74) LR 9 Ch App 244, namely where such a party would “receive and become chargeable with some part of the trust property” (“the first limb”), or “assist with knowledge in a dishonest and fraudulent design on the part of the trustees” (“the second limb”).

In respect of the first limb, accepting that liability under that limb extended to a breach of fiduciary duty by a company director involving misapplication of the company’s property, it was emphasised that the true sense in which CPD’s interest in the land was diverted was limited to SP taking advantage of the opportunity to purchase Lot 7 because it knew of that opportunity from Ms Rushbrook.  By virtue of SP’s indefeasibility of title under s 184, Land Titles Act, it was held that CPD did not have any proprietary interest in Lot 7: Farah Constructions v Say-Dee Pty Ltd (2007) 230 CLR 89.  As such, the question was narrowed to whether CPD could make out any personal claim against SP. On that issue, it was held that where a company director provides information to or otherwise assists a third party to acquire property in breach of fiduciary obligation not to act in conflict of duty or personal interest, the property acquired by the third party is not trust property within the operation of the first limb.

Interestingly, this decision can be seen to differentiate on liability under the first limb, between fiduciary obligations concerning custody of another’s property, typical of trustees but also imposed on company directors, and those concerning loyalty, including avoiding conflicts of duty and personal interest.

Further, in reaching the above conclusion, a number of negative impacts were identified which might flow from an acceptance that information may constitute trust property in this context, including the result on a tracing analysis that a beneficiary could recover an unfairly enlarged gain, at least without proper allowance for expenditure, skill and effort. Particularly, in his Honour’s view, there is no reason per se why a third party should be subjected to the strict burden imposed on defaulting fiduciaries.

In respect of the second limb, the focus was on the requirement of proof of a dishonest and fraudulent design by Ms Rushbrook. Rejecting the view that all save trivial breaches of duty were dishonest, it was held that there must be a transgression of ordinary standards of honest behavior to engage the second limb: see Hasler v Singtel Optus Pty Ltd (2014) 311 ALR 494, cf Westpac Banking Corporation v Bell Group (2011) 44 WAR 1. In that light, even assuming a breach of duty, it was found that there was no dishonest and fraudulent design because, throughout the process, Ms Rushbrook did not know that the Chalmers, as the only other persons interested in the plaintiff’s affairs, had any ongoing interest in Lot 7.

With respect to the other bases for liability, it was noted that there was some authority in favour of an “alter ego basis” for third party liability: see Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; such that the corporate alter-ego of the wrongdoing fiduciary might be made liable. However, his Honour was skeptical of such a broad basis of liability, particularly in a context of changes of control and ownership. In the circumstances of the other findings, it was not necessary to decide the question.

Relief

As against the possibility of error, his Honour considered the question of relief. It was held to be inequitable to impose a remedial constructive trust in the circumstances. That was because while significant costs and expenses were incurred in obtaining the interest in Lot 7, there was no evidence that those could be reimbursed by CPD.  In relation to any equitable compensation, it was found that the plaintiff had not proved any loss or damage because the evidence was that the value of Lot 7 was uncertain, SP not having yet found a buyer and there was the possibility that the development may have missed the market for accommodation for workers brought in by the expansion in the coal seam gas mining industry.

However, as against Ms Rushbrook, it was held that there might have been relief for the consideration paid to her for her shares in SP, there being no evidence of any allowance to be made for work and skill in her part in making that profit.

Appeal Status: No Appeal Pending - Appeal Period Expired

Canehire Pty Ltd v Themis Holdings Pty Ltd [2014] QCA 296

This is an important decision addressing how and when property, purchased ostensibly on trust, vests.  In this matter the appellants, Ham and his company Canehire, were acting as trustees for the Holzapfel Property Trust (the “HPT”).  Canehire, acting as trustee of the HPT, acquired the lessee’s interest in a Crown lease, and subsequently acquired the freehold in the same property using money advanced by another company, SEPD, controlled by Ham.  The property was later sold and the proceeds were used to discharge indebtedness to Canehire’s secured lender and the balance was paid to SEPD – none of the proceeds were paid to the HPT or its beneficiaries.  [6]-[17].  At trial, Holzapfel, one of the beneficiaries of the HPT, gave evidence that, prior to the ‘freeholding’ of the property, it was agreed between himself and Ham that the freehold interest was to be acquired on trust for the HPT, [21] – the court accepted this evidence and this ruling was not challenged on appeal, [3].  The trial court ordered Ham/Canehire pay the respondent equitable compensation in an amount equal to the net sale proceeds of the property.  The appellants submitted that the trial court’s order was predicated upon a finding not open to it; namely that the freehold interest had been acquired by Canehire on an express trust for the HPT.  [4].  The main issues on appeal were whether “the freehold interest vested in Canehire in its capacity as trustee of the HPT immediately upon the deed of grant taking effect and, if not, did Canehire hold the freehold interest from that time until sold on a constructive trust.”  [5]. 

As to the question of whether the freehold interest was purchased on trust for the HPT, the Court initially considered the circumstances giving rise to its purchase.  Pursuant to ss.166 and 165A of the Land Act 1994 (Qld) Canehire, as lessee, had the exclusive right to apply to convert the lease to freehold.  This right, however, had accrued to Canehire by virtue of its capacity as trustee of the HPT, [29].  That was unaffected by any intention held by Ham prior to the issue of the deed of grant, to ignore the rights of the beneficiaries of the HPT and to purport to authorise or cause Canehire to act in breach of its duties as trustee.  Such an intention held by Ham did not affect the rights and interests of the beneficiaries of the HPT or the capacity in which Canehire held the land.  [29], [32]-[33].  Further, that the profit derived by Canehire in acquiring the freehold interest pursuant to the Land Act would have been otherwise unavailable to the HPT, due to their financial constraints, was irrelevant.  [38]; Furs Ltd v. Tomkies; see also [62]-[63].  Its conclusion, the Court stated, was supported by the general principle that “a court of equity will presume that a person acts pursuant to and not in violation of his obligations as trustee.”  [35], see also [36]-[42].

Further, the Court concluded that even if, contrary to its holding, the freehold interest, when acquired by Canehire, was not held by it in its capacity as trustee of the HPT, it was held on constructive trust for the beneficiaries of the HPT and that all rights and duties remained the same.  [43]; see also [45]-[50].  The Court concluded that the name given to the trust claimed by the respondent was “a matter of semantics.”  [52]  In the circumstances even were it characterised as a constructive trust it arose in precisely the same manner as the trust described by the respondent, coming into existence immediately upon the freehold interest being acquired by Canehire, as even if Canehire had acquired the property other than as trustee of the HPT, it would have done so in breach of its fiduciary duty.  [53]-[54].

For these reasons the Court considered that none of the grounds of appeal were made out and ordered that the appeal be dismissed.  [73].

Appeal Status: No Appeal Pending - Appeal Period Expired

Pope v Madsen [2015] QCA 36

In this matter, the court considered the capacity of Australian law to accommodate the right of a respondent to bring a claim for equitable compensation for breach of fiduciary duty alleged against a parent on the basis of physical and sexual abuse.

The respondent originally brought a claim for loss and damage, as a consequence of a breach of fiduciary duty, against her biological father, Pope (the “applicant”).  The respondent alleged that the applicant, in subjecting her to physical, sexual and emotional abuse, [6], had breached the fiduciary duty he owed to her to “care for her and protect her from harm ...”.  [5].  At first instance the applicant brought an application to have the matter struck out on the ground that the cause of action, as pleaded, could not as a matter of law succeed.  The primary judge dismissed this application.  The applicant sought leave to appeal pursuant to s 118(3) of the District Court of Queensland Act 1967.

The central issue in this matter was whether, under Australian law, “a child who suffered personal injury ... arising from ... abus[ive] ... conduct [by] the child’s parents can maintain a claim of breach of fiduciary duty giving rise to equitable compensation against the child’s parents.”  [14]. The Court ultimately upheld the appeal, concluding that this was not a cause of action known under Australian law.  Justice Mullins (with whom Holmes JA and Henry J agreed) noted that the statements of principle in authorities such as Breen v Williams (1996) 186 CLR 71, Paramasivam v Flynn (1998) 90 FCR 489  and Cubillo v Commonwealth (2001) 112 FCR 455 overwhelmingly indicated that the Court should be loathe to impose fiduciary obligations in an expansive manner, and so depart from established principles: “merely because parties may be in the type of relationship where fiduciary duties are imposed does not mean that all aspects of their relationship are subject to the imposition of fiduciary obligations.  The term “fiduciary” may be applied to the relationship of a parent and child in some circumstances, but the existence of a fiduciary duty that is enforceable by way of equitable remedies depends on the application of the settled established principles as to the circumstances when fiduciary obligations are imposed”.  [24], see also [20]–[23]

Justice Mullins also held that, as a matter of principle, there was “no room for the superimposition of fiduciary duties on common law duties simply to improve the nature and extent of the remedies available.” [29] Whilst acknowledging that some international jurisdictions, particularly New Zealand and Canada, had recognised the existence of a fiduciary relationship giving rise to a fiduciary duty in similar terms to the one presently agitated, the Court concluded that such a duty was not known in Australia.  [31]. 

In the court’s view, the circumstances in which it is appropriate to analyse the conduct of a party to a relationship in terms of breach of fiduciary duty must necessarily remain limited. The court also noted that the primary judge had regarded it as unlikely that a court would, after a full hearing of the respondent’s claim of breach of fiduciary duty, allow the cause of action to succeed.  [33].

Accordingly, the Court held that the interests of justice required the granting of the application for leave to appeal, and the appeal was allowed, with the respondent paying the appellant’s costs.

Appeal Status: No Appeal Pending - Appeal Period Expired

Sino Iron Pty Ltd v Clive Frederick Palmer (No 3) [2015] QSC 94

This decision concerned proceedings brought by two companies, Sino Iron Pty Ltd (Sino Iron) and Korean Steel Pty Ltd (Korean Steel), in relation to the operation of a bank account held by Mineralogy Pty Ltd (Mineralogy), and controlled by the first defendant, Mr Palmer (Operations Account).  Both plaintiffs had executed agreements with Mineralogy the commercial objective of which were to provide for the construction and use of facilities to receive, unload, handle and load mining products to be shipped from a port at Cape Preston, in the Pilbara region of Western Australia (Facilities Deeds).  Both Facilities Deeds required contributions by Sino Iron and Korean Steel to an Administrative Fund for use by Mineralogy for specific purposes (clause 5), including the payment of Administrative Costs the subject of an annual budget (clause 7).  They also required Mineralogy to keep “separate records” (clause 9.2(a)), to reconcile the amount of contributions it had received against their use of the facilities, and to reimburse any overpayment of contributions or any unused contributions (clauses 10.2 and 15(a)).

The dispute involved two withdrawals from the Operations Account, effected by the drawing of cheques – the first cheque for $10,000,000 was made out to the second defendant, Cosmo Developments Pty Ltd (Cosmo); the second for $2,167.000 was made out to Media Circus Network Pty Ltd.  Both cheques were signed by Mr Palmer, who was a director of Mineralogy, a signatory on the Operations Account and the sole director of Cosmo.  The plaintiffs commenced proceedings against Mr Palmer, claiming that he dishonestly procured or was involved in or assisted breaches of trust by Mineralogy, or knowingly assisted Mineralogy in dishonest and fraudulent breaches of trust; and against Cosmo, claiming that it received the payment in breach of trust and with knowledge of that breach of trust.

The matters in dispute between the parties shifted significantly at the commencement of the hearing.  The defendants, up to the outset of the hearing, had maintained “an apparently unsustainable and possibly deliberately false plea that Mineralogy had made the challenged payments for an authorised purpose under an oral contract … for the provision of port management services” (at [203]).  That plea was abandoned on the morning of the first day of the hearing, and replaced by a number of concessions including (1) that if the plaintiffs were successful in establishing that a trust existed, then the challenged payments were in breach of trust, and (2) that if the plaintiffs were successful in establishing that Mr Palmer had the required knowledge, then it follows that he procured the breaches of trust.  Also notable was the fact that, before the hearing began, Mineralogy paid to the plaintiffs the sum of $12,167,000, which they accepted, on account of the challenged payments.  Nonetheless, the plaintiffs persisted in their claim for relief by asserting an entitlement to statutory interest, and to an inquiry in relation to any profits that may have been made by Mr Palmer and Cosmo.

The first question was whether the circumstances gave rise to a relationship of trustee and beneficiary between Mineralogy as trustee of the Administrative Fund, and Sino Iron and Korean Steel as beneficiaries of that fund.  His Honour held that the plaintiffs’ contributions to the Administrative Fund were not held on trust by Mineralogy, because the contractual obligations of Mineralogy did not extend to an obligation not to deposit into and thereby mix other moneys in the bank account.  His Honour in particular considered and ultimately applied the judgment of McPherson A-CJ in Jessup v Queensland Housing Commission [2002] 2 Qd R 270 and the recent decision of the High Court in Korda v Australian Executor Trustees (SA) Ltd (2015) 317 ALR 225, observing that in both cases the Court in question declined to recognise the existence of a trust if no trust was expressly provided for by the contract and the terms of that contract did not prohibit the mixing of the fund in question.  Relevantly, his Honour held that no term prohibiting the mixing of the Administrative Fund could be implied in this case as being necessary to give business efficacy to the Facilities Deeds because the remaining provisions of the Facilities Deeds “work perfectly well as a matter of contract without it”, and because “commercial necessity” was not made out “merely because it is considered necessary to find an intention to create a trust to commercially protect the putative beneficiary” (at [107]).

His Honour then considered the question of the defendants’ liability for any breach of trust, in the event that his Honour’s findings on the trust issue were overturned.  That question turned on Mr Palmer’s knowledge of the breach of trust.  On the one hand, Cosmo’s liability turned on the plaintiffs establishing that it, by Mr Palmer, had the level of knowledge or notice required for a stranger to a trust to be liable for receiving trust property, known as liability under the first limb of Barnes v Addy (1874) LR 9 Ch App 244; on the other hand, Mr Palmer’s personal liability turned on the plaintiffs’ establishing that he had the level of knowledge or notice required for a person to be liable who knowingly procures or induces a breach of trust, or alternatively who assists with knowledge in a dishonest and fraudulent design on the part of the trustees.

The controversy in this case centred on whether the defendants were required to have knowledge of the fact that there was a trust.  While his Honour found that knowledge was required in respect of each claimed liability, there was no relevant difference in the level of notice or knowledge required.  His Honour concluded, after considering the relevant authorities in some detail, that “[t]o require that a defendant must actually appreciate that the relevant facts constitute a trust in law would favour the legally ignorant over the legally aware, when the facts and knowledge otherwise are identical” (at [144]).  Thus his Honour held that it was enough that the defendants be proved to have knowledge, in general, of the provisions of the Facilities Deeds for contributions to be made to the Administrative Fund, how they were to be dealt under those Deeds, and that the challenged payments were made in breach of the contractual obligation to pay only the authorised costs and reimbursements under the Facilities Deeds.  His Honour found that Mr Palmer, and thus Cosmo, had the necessary knowledge.

His Honour, however, declined to consider the question whether Mineralogy’s breach of trust was dishonest and fraudulent, because it was not necessary to do so where liability for knowingly procuring or inducing a breach of trust was established, and because such findings could cause significant reputational damage to Mr Palmer, particularly where the way in which the case had been conducted admitted of the possibility that the plaintiffs sought not only the relief but also to embarrass Mr Palmer at the same time (at [145]).

Finally, his Honour struck out the defendants’ clean hands defence.  The defendants sought to plead that the plaintiffs and a third party, CITIC Pacific Mining Management Pty Ltd (CITIC), had engaged in a campaign to improperly apply pressure on Mr Palmer and Mineralogy to agree to replace certain agreements with agreements more favourable to the plaintiffs and CITIC.  His Honour emphasised that allegations of that kind could rarely, if ever, found a defence of unclean hands (at [153]).  In regards to the more particular allegations about the plaintiffs and CITIC’s conduct in bringing various legal proceedings, his Honour struck out an allegation about what had occurred at without prejudice meetings held in respect of the present proceedings, on the basis of the privilege [155], and also struck out numerous allegations in respect of both the present and other proceedings that, in each case, the plaintiffs or CITIC did not believe that they had a sound basis for maintaining their denials or allegations, on the basis that the facts alleged by the defendants from which the pleaded non-belief could be inferred were either not pleaded or did not support the inference [163], [171], [176], [183], [192] and [205].

Appeal Status: No Appeal Pending - Appeal Period Expired

Schultz v Bank of Queensland Ltd [2015] QCA 208

The central issues for determination in this appeal concerned the circumstances when it can be said that there exists a material misunderstanding as to the nature and effect of a financial transaction and when a person may be regarded as being at a special disadvantage.

The appellant owned two apartments, at Highgate Hill and Cotton Tree.  Both were mortgaged. [5] She married her former husband in 1999. [6]. He inherited vacant land at Mudjimba Beach and the appellant funded the building of the family home on that land by selling the Highgate Hill property. She was consequently registered as a co-owner of the Mudjimba Beach property. [6].  Subsequent to the establishment of a family trust, the appellant sold her unit in Highgate Hill, loaning its proceeds of sale to Camelon Pty Ltd (the trustee for the family trust, of which the appellant and her husband were directors).  The funds were invested in a portfolio of securities.  [8]. Concurrently, the Mudjimba Beach property was transferred to the appellant’s name in order to protect the property from the husband’s creditors. [8]. The appellant entered into two guarantees, secured by the Cotton Tree and Mudjimba Beach properties, in return for the respondent’s loan of funds to the trust, and did not receive independent legal advice prior to doing so, signing a waiver. [9], [13]. Both waivers confirmed that:

the appellant had been told to seek independent legal and financial advice, but decided not to do so;
the appellant understood the practical legal effect of the documentation and transaction; and
the appellant understood that if the borrower defaulted, the respondent would be entitled to sue the appellant, as guarantor, to recover the monies due.

At trial, the appellant contended she did not appreciate the nature and effect of the transaction she had entered into with the respondent, and that she had done so as a “volunteer”.  She argued that, given her position as a wife providing a surety for a loan to a company controlled by her husband, the respondent had an obligation to explain the nature and effect of the guarantee to her, yet failed to do so. [14].

The primary judge dismissed the claim, [3] finding that she was not under any material misunderstanding as to the consequences for failing to pay amount payable pursuant to the guarantee. [18].

Grounds of appeal

The appellant submitted that the primary Judge erred in:

  1. failing to draw an inference that there was a misunderstanding by her that if there was default on the loan, she could be pursued for any shortfall and be made bankrupt, and that the mortgage over her Cotton Tree unit secured more than $150,000; 
  2. placing the onus on her to prove there was a requisite misunderstanding; 
  3. failing to give adequate reasons; and
  4. finding that she was not at a special disadvantage.  [22]–[24].

Relevant authorities

In its initial consideration of the issues, the court had regard to the principles identified in Yerkey v Jones (1939) 63 CLR 649, Garcia v National Australia Bank Ltd (1998) 194 CLR 395; [1998] HCA 48 and State Bank of New South Wales Ltd v Chia (2000) 50 NSWLR 587, observing that it is generally accepted that a creditor may avoid a surety’s claim not to have understood the effect of a transaction if it explains the transaction sufficiently. [33].  In other words, an adequate explanation as to the nature and effect of a transaction should indicate that a creditor took reasonable steps to ensure that the consent to become a guarantor was properly obtained. That onus lies on the creditor: see Barclays Bank PLC v Boulter [1999] 1 WLR 1919 at 1925.

Was there a misund​erstanding?

In delivering the lead judgment, his Honour Justice Boddice, after considering the factual findings, and the appellant’s evidence as a whole (which provided an indication as to the relevant degree of knowledge of the applicant) [41]–[42], took the view that there was no material misunderstanding concerning the nature and effect of the guarantee:

“The appellant knew that by giving the guarantee, she could be called upon to repay the loan, should that sum not be repaid in accordance with the loan facility.  The appellant also knew the respondent could sell the mortgaged properties in an effort to recover the loan amount”. [42].

He further determined that the respondent was under no obligation to either expressly advise the appellant that she could be made personally bankrupt as part of the process of recovering the remaining outstanding amount for which she was liable; nor tell the appellant that the mortgage over the Cotton Tree unit was not limited to $150,000.  [43].

Lastly, he was of the view that the reasons at first instance had been adequate and “[t]here was no need for the primary Judge to traverse every aspect of the evidence”. [45].

Onus of proof

In relation to where the onus of proof lay, the court found that the mere fact that the primary Judge did not form a concluded view on the issue did not affect the correctness of his ultimate conclusion. [50].

Unconscionability

The court observed that in order for the appellant to obtain relief pursuant to the equity in Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447, or s 12CA of the Act, she would need to be under a special disadvantage which adversely affected her “ability to make a judgment as to [her] own best interests”, [51] and demonstrate unfair advantage on the creditor’s part (see Kakavas v Crown Melbourne Limited (2013) 250 CLR 392). The court was unable to accept that, as contended [52], that the appellant was not informed that Camelon Pty Ltd was in default of the terms of the $444,000 loan previously provided to it by failing to provide financial documentation within 180 days as required by the terms of the facility placed her in such a position and thus met the test.

In the result, the court, finding that none of the grounds of appeal had been made out, [54] dismissed the appeal ordering that the appellant pay the respondent’s costs. [55].

Appeal Status: Appeal Pending

Case Links:

QNI Resources Pty Ltd v Sino Iron Pty Ltd [2016] QSC 62, 23 March 2016

In this ultimately unsuccessful proceeding, the plaintiffs argued that the defendants’ refusal to make royalty payments to a related corporation constituted unconscionable conduct under s 21 of the Australian Consumer Law, [4]–[9], [21] and further, that the lack of payment to the plaintiffs by the related corporation prevented them converting some of their plant and thereby saving costs of approximately $137,500,000. [11]. The costs savings not made were claimed as loss or damage. The defendants applied to strike out the claim and statement of claim.

The primary issues for his Honour were twofold:

  • whether the allegation of unconscionable conduct was adequately supported by pleaded facts; [2] and
  • whether the loss or damage that the plaintiffs claim was recoverable in law as loss or damage suffered because of the defendants’ alleged conduct. [3].

In relation to the alleged unconscionable conduct, the defendants argued that a breach of contract is not, without more, capable of constituting unconscionable conduct and a “high level of moral obloquy” is required: see Body Bronze International Pty Ltd v Fehcorp Pty Ltd (2011) 34 VR 536, 556 [92] and Attorney-General (New South Wales) v World Best Holdings Pty Ltd (2005) 63 NSWLR 557, 583 [121] respectively. The defendants further contended that the plaintiffs’ alleged case of unconscionable conduct was contingent on the allegations that the refusals to make the royalty payments were deliberate and intentional, done for to apply pressure to renegotiate, and done in bad faith.  [38]. It was also submitted that none of the unconscionable facts was pleaded as required by the UCPR, [39] and that the alleged facts were insufficient to make out a reasonably arguable basis from which to infer the unconscionable facts. [53], [67].

Concerning the application to strike out the claim and statement of claim under UCPR 171, his Honour relevantly observed that the court should be loathe to interfere by dismissal or the grant of a stay of a proceeding as an abuse of process, in a way which might undermine the procedure for summary judgment: see Sino Iron Pty Ltd v Palmer [2014] QSC 259, [13].  That said, it is ultimately a matter for the exercise of a discretionary judgment. [62]. He further noted that there are several particular instances where the inadequacy of a pleading may result in a decision to strike it out [65] including such a lack of particularity that a party’s right to the basic requirement of procedural fairness might be inhibited: see Harvey v Henzell [2015] QCA 261. 

Turning to the ultimate question of whether the proceeding, as presently constituted, amounted to an abuse of process – namely, whether the allegations were insufficient for the proceeding to go to trial based on the alleged unconscionable facts, his Honour determined that the answer was “yes”, [70] and held that conclusion as to the insufficiency of the pleaded facts was enough to found an order dismissing the proceeding. [72].

His Honour also determined (see [73]–[101]) that the statement of claim did not disclose a reasonable cause of action because the loss or damage claimed by the plaintiffs was not recoverable as loss or damage suffered “because of” the alleged contravening conduct of the defendants, resulting in an error not capable of correction: see for example I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109, Elna Australia Pty Ltd v International Computers (Aust) Pty Ltd (No 2) (1987) 16 FCR 410 , Henville v Walker (2001) 206 CLR 459, [103]. The result was that the proceeding was dismissed on that ground as well. [104].

Appeal Status: No Appeal Pending - Appeal Period Expired


Evidence back to top

Flori v Commissioner of Police [2014] QSC 284

This decision concerned the use in disciplinary proceedings brought against the Applicant, a police officer, under the Police Service Administration Act 1990 (PSAA) of information derived from property seized pursuant to a search warrant issued under s 150(1)(a) of the Police Powers and Responsibilities Act 2000 (PPRA). The Police suspected that the Applicant had obtained and improperly provided CCTV footage of an incident which occurred at a Queensland police station to the media. For the purpose of investigating offenses under ss 92A and 408C of the Criminal Code1899 which may thereby have been committed by the Applicant, a search warrant with regard to the Applicant’s personal residence was sought, issued and executed.

Disciplinary proceedings were subsequently commenced against the Applicant under s 7.4 of the PSAA on the ground of misconduct, listed in s 9(1)(f) of the Police Service (Discipline) Regulations 1990. The Respondents proposed to use information derived from the property seized under the search warrant in those disciplinary proceedings. The Applicant sought a declaration that the Respondents are not entitled to use, rely on or otherwise take into account in the disciplinary proceedings the property seized under the search warrant, nor any data, evidence or information derived from that property.

In her reasons Atkinson J first emphasised that there was no issue as to the validity of the search warrant itself, there being no allegation that it had been sought for an improper purpose, or that the Police’s suspicion of the commission of an offence was other than reasonable.

In that light, the sole issue in contention was the limit of the permissible uses of the property seized by the execution of the search warrant, and of any information derived therefrom. Her Honour accepted that the PPRA contained no express limit on the use of such property and information. However, her Honour nonetheless held that it was implied that the uses to which such property and information could lawfully be put were limited by the purposes for which the coercive power to seize the property in question were conferred. In so finding, her Honour applied by analogy to the PPRA a number of Commonwealth and New South Wales authorities relating to search warrants issued under the equivalent provisions of the Crimes Act 1914 (Cth): see Grollo v Macauley (1995) 56 FCR 533, 551; Williams v Keelty (2001) 111 FCR 175, [233] and ASIC v Rich (2005) 220 ALR 324, [262]. In each of those cases, the Court considered that use of the seized property and the information and evidence derived therefrom in parallel civil proceedings or investigations would be impermissible.

Her Honour held that the purpose of a search warrant issued under the PPRA was to obtain evidence in the investigation and prosecution of criminal offenses, and that such a purpose did not extend to the prosecution of administrative disciplinary proceedings against a police officer under the PSAA. Whilst her Honour accepted that this limitation on the use of the seized property and the information derived therefrom was subject to the owner of the seized property’s freely formed consent, it was clear that no such consent had been provided by the Applicant: c.f. ASIC v Rich (2005) 220 ALR 324. On that basis, her Honour granted the declaration sought.

Appeal Status: No Appeal Pending - Appeal Period Expired

R v Cowan; R v Cowan; Ex Parte Attorney-General (Qld) [2015] QCA 87

The factual background to this appeal is notorious and will not be unnecessarily repeated here. The crux of the appeal was that the trial judge erred in not excluding both the evidence of admissions made by the appellant to undercover police officers and the evidence obtained as a result of those admissions.  It was also asserted that the trial judge had erred in misdirecting the jury as to drawing inferences in relation to the evidence of Douglas Jackway and Leslie McLean. [2].

The Attorney-General of Queensland separately appealed against the sentence imposed on count 1 (murder), contending that it was manifestly inadequate. [3].

The court rejected the grounds of appeal against conviction, dismissing both the appeal against conviction and the appeal against sentence. [5]. Each separate ground of appeal is briefly canvassed below.

The appeal against conviction

Should the admissions and the resulting evidence be excluded?

At the pre-trial hearing, the appellant argued that the admissions and the evidence directly obtained as a result of them should have been excluded either under s 10 of the Criminal Law Amendment Act 1894, or in the exercise of discretion. [13]. That evidence comprised police interviews with the appellant preceding the coronial inquest; the questioning of the appellant and related matters at the coronial inquest; and the covert police investigation.

Ultimately, most emphasis was placed upon the detailed admissions the applicant unwittingly made to covert operatives on several separate occasions, his counsel arguing that this was inadmissible on the grounds that the appellant was induced by a person in authority. The appellant further contended that questioning of him at the inquest amounted to an inducement under s 10 of the Criminal Law Amendment Act 1894 (to provide the coroner with a stronger exculpatory alibi). [55]. 

The trial judge discounted these contentions, finding that the prosecution had proved on the balance of probabilities that the appellant's confessions were made voluntarily, and accordingly, the confessions should not be excluded on the basis that it would be unfair to admit them into evidence. [54].

In relation to this ground of appeal, specifically referencing the conduct of the inquest, her Honour the President said:

“… in vigorously encouraging the appellant to give truthful answers under oath at the inquest, and in exploring the strength of the evidence against him, counsel cross-examining the appellant were acting in accordance with the Coroners Act.  The coroner's questioning was also consistent with the coroner's statutory role.  Neither the coroner nor counsel at the inquest acted improperly or made any threat or promise to the appellant amounting to an inducement under s.10.” [70].

Regarding the appellant’s confession to the undercover police officers, her Honour concluded:

   “I am satisfied the appellant made the confessions, not because of any threat or promise held out at the inquest but voluntarily to remain part of the criminal gang, to participate in the ‘big job’ and to receive his $100,000 share of the proceeds.  If there was a threat or promise from a person in authority for the purposes of s 10, the appellant was not acting upon it when he confessed to the undercover police officers.  The primary judge was right to conclude that the appellant's confessions to the undercover police officers were not induced by any threat or promise held out at the inquest.  This aspect of the appellant's grounds of appeal against conviction fails.” [73].

The court was unpersuaded that questions of fairness warranted the exclusion of the confessional and derivative evidence.  The primary judge's decision not to exclude the evidence was endorsed as “a sound discretionary exercise”.  The failure to exclude the confessions and derivative evidence was not determined to have caused a miscarriage of justice.  [91].  In coming to this conclusion, the court importantly noted that, evidently, the appellant would not have made the admissions had he known the true identity of the undercover police officers – however, they were not exercising the coercive power of the state when he confessed:  “He believed he was amongst his criminal friends.  They stressed the need for him to tell the truth so that they could help him.  He was free to leave their company at any time”. [90].

Did the judge err in directing the jury as to inferences in relation to the evidence of Douglas Jackway and Leslie McLean?

The appellant's final ground of appeal concerned the judge's directions to the jury.  Part of his defence at trial was that it was open to the jury to decide that he may have falsely confessed to the offences to appeal to the criminal gang to which he believed the covert police officers belonged.   It was thus open to the jury, he contended, to reasonably infer from the evidence that his knowledge of the offences may have come through Mr McLean from Mr Jackway, who he suggested might in fact have committed the offences.  [92].

In considering this ground of appeal, the court examined substantial extracts from the trial judge’s summing up [104], deeming them uncontroversial and unexceptional [105–113]. The President concluded that, “When read as a whole, the judge's directions to the jury fairly explained the defence case and instructed them, before convicting the appellant, to be satisfied beyond reasonable doubt that the defence hypothesis was not open.  There has been no misdirection on a matter of law”.  [115].

Attorney-General’s appeal against sentence

The Attorney-General of Queensland contended that the primary judge's order postponing parole eligibility for the respondent, Brett Peter Cowan, on his life sentence for murder by only five years, was manifestly inadequate; plainly unreasonable and unjust as per House v The King (1936) 55 CLR 499, 504–505. [117].

In addressing the merits of these arguments, the President noted that whilst the respondent's offending deserved a heavy penalty to reflect “pertinent sentencing principles of general and personal deterrence, protection of the community and denunciation of such wickedly antisocial behaviour”  [131], it was apparent that the trial judge had afforded appropriate weight to all relevant factors in determining that the appropriate sentence for the respondent for count 1 was life imprisonment, with parole eligibility delayed by five years beyond the minimum. [132]. As such, the court declined to interfere with the sentence imposed, particularly in the absence of any error of law. [133].

Appeal Status: No Appeal Pending - Appeal Period Unexpired

R v Jones [2015] QCA 161, 1 September 2015

This interesting case on evidence arose from an appeal against a murder conviction on the sole ground that a miscarriage of justice occurred as a result of a ruling by the trial judge that expert opinion evidence was inadmissible. [2].

The deceased – the appellant’s mother – died from the infliction of multiple wounds (totalling 31), upon her by the appellant.  Relevant issues for the jury included the defence against a provoked assault under s 272 of the Criminal Code; the defence of “self defence against an unprovoked assault” under s 271 of the Criminal Code; the partial defence of provocation under s 304 of the Criminal Code and that of killing in an abusive domestic relationship under s 304B of the Criminal Code, [3] in the context of what appeared to be a fraught domestic situation. [4]–[6].

At trial, counsel for the defence sought to lead psychiatric opinion evidence. The trial judge directed that that evidence not be opened to the jury but that a voir dire might subsequently be held to determine its admissibility. [7]. When called at the voir dire, the consultant psychiatrist, albeit conceding it was very difficult to provide a diagnosis on someone who had not been seen, expressed his opinion that the information he had to hand was consistent with the appellant’s mother suffering a borderline personality disorder, possibly a bi-polar disorder and most likely alcohol abuse and/or dependence. [8], [20].

The appellant contended that the opinion evidence of the doctor was admissible pursuant to s 132B of the Evidence Act 1977, given it formed part of the admissible evidence designed to support a defence under s 304B of the Criminal Code.  The court discounted this, since the opinion evidence was not evidence of the “history of the domestic relationship between” the appellant and his mother within s 132B(2), his Honour Justice North outlining:

“There is an obvious distinction between the concepts of opinion evidence and the historical account of the events within a “domestic relationship” that s 132B of the Evidence Act is concerned with … The “relevant” evidence that s 132B makes admissible is the account by the witnesses such as the appellant and others recalled of the events (namely a history) of the relationship between mother and son that put the events or circumstances the subject of the charge in a context relevant to that charge and any defence.  Section 132B does not facilitate the admissibility of evidence at large such as propensity evidence rather it permits the reception of “relationship” evidence”. [14].

Turning to “the more fundamental issue raised by the appeal” – namely whether the emotional state and resultant behaviour of the appellant that the specialist theorised was admissible as expert opinion evidence – had any bearing upon any of the matters outlined by  ss 304B(1)(a), (b) and (c) of the Code [16], his Honour referred to the test outlined in Clark v Ryan (1960) 103 CLR 486, which dictates that opinion evidence is not admissible unless the inquiry is into a subject matter, the nature of which, is such as to require a course of study into a body of knowledge or experience which is sufficiently organised or recognised to be accepted as reliable, so that the opinion of the expert may be of assistance to the court. With those constraints in mind, he distilled that the relevant issue for the trial judge’s consideration was whether the jury would be able to form a sound judgment concerning the appellant’s state of mind in the circumstances in which he found himself when he killed his mother without the assistance of the expert evidence. [18]. Notably, his expert opinion was that the appellant had no personality, psychotic or anxiety based disorder. [20].

In the court’s view, the jury had been properly instructed and was in a sound position to properly understand the matters the specialist spoke of as to the likely effect upon the appellant of exposure to his mother’s behaviour, and to consider the matters raised by s 304B of the Criminal Code together with the other defences, without the benefit of that opinion evidence:

“While the experiences the appellant and other witnesses spoke of were sordid and, happily, probably beyond the personal experience of most, if not all, of those who might sit on a jury or who sat on this jury, the matters Dr Arthur spoke of in relation to the appellant were not the subject of difficult or complex scientific or technical substance”.  [21].

As such, the court determined that the trial judge had been correct in ruling the opinion evidence inadmissible.  There being no miscarriage of justice [21], the appeal was dismissed. [24].

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Chief Executive Administering the Environmental Protection Act 1994 v Linc Energy Ltd [2015] QCA 197, 16 October 2015

This interesting matter arose from the issuance of two warrants for the business premises of the respondent, pursuant to s 456 of the Environmental Protection Act 1994, on the information of the second appellant, an officer of the Department of Environment and Heritage Protection.  [1]. During their execution, items of property were seized, including backup tapes for computer-stored data, a hard drive disk, and a storage device described as “the QNAP device”. Data stored on computers was also downloaded. [5].

The respondent applied for a declaration that both the seizure and the retention of the backup tapes and devices was unlawful and sought a mandatory injunction for their return. [6]. At first instance it was declared that the seizure of the backup tapes and the QNAP device was unlawful and the appellants were not permitted to retain them. The issue on appeal was whether that was correct.

Reasons at first instance

In his Honour’s view, the power used by officers during the seizure was not legitimately exercised. He took the view that it was an instance of what Lord Justice Eveleigh described in R v Inland Revenue Commissioners Ex parte Rossminster Ltd [1980] AC 952 as a seizure of “a whole mass of documents, unexamined, in the hope that one of them might reveal some valuable evidential information”. Accordingly on that basis he determined that the seizure of the backup tapes and the QNAP device was unlawful. [16].

Grounds of appeal

The appellants contended that the finding at first instance was in error, since:

  1. it was unnecessary to consider the state of mind of those executing the warrants. Under s 461(1) of the Environmental Protection Act 1994, the state of mind of the warrant holder is irrelevant;
  2. the learned Primary Judge failed to take into account the formal concessions made by the Respondent that the lawfulness of the seizures did not depend upon the state of mind of the second Applicant and those assisting her;
  3. the Learned Primary Judge made erroneous factual findings;
  4. the Learned Primary Judge failed to consider and give effect to the decision of the Queensland Court of Appeal in TLC Consulting Services Pty Ltd v Paul Michael White [2003] QCA 131. [17].

Grounds 1 and 2

Observing that it was indeed concluded by the learned primary judge that a state of mind that the thing seized answers the description in the warrant was necessary for a valid seizure under s 461(1)  [21], the court was unable to reach a similar conclusion, [22] noting:

“… the relevant provisions are structured in such a way that the validity of a seizure of a thing under s.461(1) is not dependent upon the authorised person being satisfied on reasonable grounds that it has evidential relevance to an offence nominated in the warrant.” [22].

The court accordingly discounted the notion that any belief on the part of the authorised person as to the document’s evidential value for proof of any of the offences referred to in the warrant was requisite. [28].

Ground 3

In circumstances where this ground was not argued as an independent ground of appeal, and/or not pressed on appeal, it was not separately considered by the court. [29].

Ground 4

This ground of appeal was relevant to two paragraphs of the Judge at first instance’s  reasons, wherein he took the view that authorised persons executing the warrant knew that some, but not all, of the information stored on the backup tapes and the QNAP device could have assisted in proof of the offences nominated in the warrant. [30]. On that basis, his Honour’s approach was that unless all of the information stored was deemed to have that evidential quality, then seizure of either the tapes or the device would not be lawful.  [31].

The appellant submitted that the learned primary Judge ought to have, but failed to, consider and give effect to the “powerfully persuasive” [34] decision of the Queensland Court of Appeal in TLC Consulting Services Pty Ltd v Paul Michael White [2003] QCA 131 – that as the Second Applicant was satisfied that there was some information relevant to the warrant, she was entitled to seize the entire electronic storage mediums comprising the QNAP device and backup tapes. That decision was referred to in the appellant’s written submissions and in the course of oral argument. [34]. It concerned a challenge to the seizure and removal of a server in execution of a warrant issued pursuant to s 89(3) of the Fair Trading Act 1989. The court rejected an argument that the server was not a record of information as defined in the Act.  [36]. It held that, in a situation where there was no consensus as to which portion of the records (the appellant) was entitled to, there was no limitation imposed by the statute to the effect that the relevant record must relate solely to the particular service in question or the subject of a particular investigation being undertaken in order to be retained. [37].

The court saw merit in the approach taken in TLC Consulting Services Pty Ltd. It dismissed the respondent’s contention that neither a backup tape nor a QNAP device could be a particular “thing” within the meaning of s 456(4) and thus could not properly constitute “the evidence” for the purposes of that section, [39] stating:

“What s 456(4)(a) requires is that the particular thing be something that may provide evidence of the commission of a relevant offence.  A thing may provide evidence by being a repository from which evidence may be sourced.  Thus a thing on which information probative of an offence is stored, is capable of providing evidence of the commission of the offence.  Significantly, s 456(4)(a) does not stipulate that the particular thing in itself, constitute, or may constitute, evidence of the same.  Had the section be so framed, then the respondent’s submission would have force.”

In the result, ground 4 of the appeal was upheld and the appeal allowed, with the respondent ordered to pay the appellant’s costs of the appeal on the standard basis. [43]. The mere fact that the QNAP device and the back-up tapes also contained some material not of evidential value did not mean that those items could not be seized, as coming within the description of “the evidence” for which the warrant was issued.  

Appeal Status: No Appeal Pending - Appeal Period Unexpired


Family Law back to top

A & B v C [2014] QSC 111

In this matter, the Court was presented with an application for orders under the Status of Children Act 1978 that a person, referred to as “B” is a legal parent of two children born to the biological mother, “A”, using sperm from a known donor.  B and A were in a same sex relationship.  Further orders were sought that the Register of Births be corrected to show B and A as the parents of the two children.  The application followed certain legislative changes in 2010 to recognise retrospectively that the two women, and the children which they had planned, have the same rights as if they had been born to a heterosexual couple using donated gametes.  It was not in dispute that C was the donor of the sperm and the biological father of each child.  Unrepresented, C appeared at the hearing of the application and indicated that he would abide the order of the Court, but he did not consent to the orders. He had not been in any relationship with the biological mother nor with B.  He had been contacted through a “gay community website” in A and B’s local area.  At the time of the birth of the first child, same sex de facto relationships were not recognised by State or Commonwealth law.  Consequently, there was no method by which B could have been recorded as a parent on the certificate.  A claimed that she named C as the father on the child’s birth certificate because her failure to do so would have adversely affected her social security benefits.

Ann Lyons J was required to apply the provisions of the Surrogacy Act which commenced on 1 June 2010 and which had made significant changes to the Status of Children Act and the Births, Deaths and Marriages Registration Act 2003.  The Surrogacy Act provides that persons in the position of the applicants were capable of being registered as “mother” and “parent” of the child and that the donor male was to have no rights or liabilities with respect to the child.  It would appear that an irrebuttable presumption is imposed by s 19C of that Act to the effect that the de facto couple are the parents of the child.  By reason of the Status of Children Act the provisions of the Surrogacy Act applied to de facto couples.  Under the Births, Deaths and Marriages Registration Act a rebuttable presumption arose to the effect that the persons named on the birth certificate were the parents of the child.  By an unusual provision in s 30 of the Status of Children Act it was provided that where two conflicting presumptions arise, it is for the Court to determine which presumption is “most likely to be correct”. 

It was held that the presumption that the de facto same sex couple were the parents of the children was more likely to be the correct presumption.  Given the above, and holding that the Register of Births, Deaths and Marriages should be “complete and accurate” it was ordered that the children’s birth certificates should show the de facto same sex couple as the parents of the children and that there should be no reference to C who was the biological father.  It was recognised that the Register under the Act was not a register of genetic material.

Appeal Status: No Appeal Pending - Appeal Period Expired


Health Law back to top

Cairns and Hinterland Hospital and Health Service v JT by JT's Guardian [2014] QSC 251

In this matter the issue was whether the Court, in exercising its parens patrie jurisdiction, might make an order that the continuation or commencement of life-sustaining medical measures would be inconsistent with good medical practice.  This issue came before the Court following an application by the Cairns and Hinterland Hospital Service (the “Cairns Hospital”) for declarations in relation to JT, a 37 year old man who, previously healthy, had suffered a severe hypoxic brain injury which had left him in an apparently permanent unconscious state.  The declarations sought were that it would be in the best interests of JT that certain life-sustaining measures then being applied to him cease, that they would be inconsistent with good medical practice and that their cessation would be lawful.  The respondent’s guardian supported this application. 

The legal parameters relating to the ability to withdraw life-sustaining treatment are difficult to establish – the struggle lies in drawing the distinction between the case where an unconscious individual requires urgent medication and is taken to impliedly consent to interference with their body and those in JT’s position.  In exercising its parens patrie jurisdiction, being that jurisdiction which “empowers the Court to protect those who cannot help themselves”, the question for the Court is whether it is in the “patient’s best interests, and therefore lawful, to have the treatment” which is currently being provided.  The logical analogue of this conclusion is that “its withholding or withdrawal would be lawful”. In assessing what is in the best interests of the patient a broad consideration of their welfare, encompassing not only their medical, but also psychological and social well-being, must be undertaken.  Further, this test must be applied subjectively, having “regard to the actual state of the person to be protected regardless of how extraordinary that person’s circumstances might be thought to be by references to objectively healthy people,” and the Court must try to place itself in the position of the individual and determine what their preference would have been. 

In considering what was in JT’s best interests, the Court first turned to the expert medical testimony given by JT’s physicians.  Despite the majority of medical experts testifying that JT was in a persistent or permanent vegetative state, a single practitioner testified that he considered that he was in a minimally conscious state – this practitioner testified that JT could “notice” movement; however, there was no evidence that this movement was being “interpreted”.  Given this divergence in opinions the Court was unwilling to conclude that JT was in a persistent vegetative state, however, it noted that the practical reality was really no different and that given it had been more than two years since the injury and there had been no improvement in his neurological functioning, any improvement was unlikely.  Against these conclusions, the Court then turned its attention to JT’s broader welfare, taking into account the uncontested evidence of his family and friends that he would not wish to remain in this state.  Adopting a subjective approach, the Court concluded that were JT aware of the situation he would not wish it to continue.  Given the evidence and the aforementioned conclusions, the Court granted the application.

Appeal Status: No Appeal Pending - Appeal Period Expired

Central Queensland Hospital and Health Service v Q [2016] QSC 89, 26 April 2016

This very confronting case involved an application on behalf of a 12 year old girl, the patient of a public hospital, for authorisation to terminate her pregnancy. As such, the case raised serious issues of a child’s capacity to give informed consent and criminal responsibility.

The girl, 9 weeks pregnant, had consistently indicated to a number of professionals including a general practitioner, a social worker, two specialist obstetricians, and a psychiatrist, that she wished to terminate. [8]. She maintained that view when giving evidence to His Honour, who was satisfied that she had reached her own independent view of what she thought was the best course. [9].

His Honour had regard to a number of factors which would be incompatible with continuing the pregnancy, amongst them the girl’s history of emotional distress (including suicide attempts), no desire to be a mother, and need for assistance with some aspects of her own self care. [10]–[12]. In addition to the above, he noted that the consensus of the medical specialists and counsellors who had examined the girl; her parents; and the Department of Communities, Child Safety and Disability Services were that the pregnancy should be terminated. [13]. That view was bolstered by opinions proffered by the girl’s psychiatrist and obstetrician, who both indicated that her continuation with the pregnancy would likely result in decompensation and possibly a “lifelong burden which is likely to affect mental health”. [15], [16].

In view of the above, his Honour reasoned:

“… the evidence is all one way. While termination of the pregnancy carries some risks those risks are far outweighed by the alternative.” [17].

The parens patriae jurdisdiction

In relation to the authority of State of Queensland v Nolan [2002] 1 Qd R 454 at [7], his Honour noted that the purpose of the court’s parens patriae jurisdiction is to protect the person and property of subjects, particularly children who are unable to look to their own interests, with the dominant focus being what is in the best interests of the child in question. [18]. Whilst that jurisdiction applied to the 12 year old girl it did not apply to her unborn child: K v T [1983] 1 Qd R 396 at 400–401.

Regardless, his Honour took the view that there was no doubt that the jurisdiction allowing the Court to intercede existed. [19].

With respect to the court’s intervention two significant issues arose:

  1. the issue of consent. Could the 12 year old give informed consent to the proposed medical or surgical treatments?
  2. potentially complex issues of criminal responsibility concerning the question of termination.

Informed consent – capacity of child

In relation to the first issue, being of informed consent, prior to achieving “a sufficient understanding and intelligence to enable him or her to understand fully what is proposed” a child is not regarded as capable of providing an informed consent: see Gillick v West Norfolk & Wisbech Area Health Authority [1986] AC 112; and Marion's Case (1992) 175 CLR 218 at 236–238. Further, with specific reference to terminating a pregnancy, a parent’s consent is arguably insufficient: see State of Queensland v B [2008] 2 Qd R 562.

Criminal responsibility

The cumulative effect of ss 224, 225, 226, 282 and 286 of the Criminal Code render termination of a pregnancy unlawful unless authorised, justified or excused by law. [25]. Section 282 of the Code authorises the administration of a drug or surgery or other medical procedure to enable a termination in circumstances where it is warranted for the patient’s benefit or to preserve the mother’s life, having regard to the patient’s state at the time and to all the circumstances of the case. Section 286 states that it is the duty of a person who has care of a child under 16 years take the precautions that are reasonable in all the circumstances to avoid danger to the child’s life, health or safety.

In view of the facts of the matter, his Honour took the view that danger to a child’s health includes danger to her mental health: see State of Queensland v B [2008] 2 Qd R 562. [28]. He further concluded that the definition of “person who has care of a child” was capable of extending to the hospital and doctors who had undertaken the care of a child in the girl’s predicament: see State of Queensland v Nolan [2002] 1 Qd R 454.

Capacity to consent

Querying the patient’s ability to comprehend the long term consequences of a decision not to terminate, his Honour determined that it was appropriate to invoke the jurisdiction of the court. [33].

Lawfulness of a termination

The Queensland courts have consistently adopted the approach in R v Davidson [1969] VR 667 in relation to the conflict between ss 224 and 225 on the one hand and ss 282 or 286 of the Code. That case held that for the use of an instrument with intent to procure a miscarriage to be lawful on therapeutic grounds, the accused must have honestly believed on reasonable grounds that the act done by him was:

  1. necessary to preserve the woman from serious danger to her life or her physical or mental health (not being merely the normal dangers of pregnancy and childbirth) which the continuance of the pregnancy would entail; and
  2. in the circumstances, not out of proportion to the danger to be averted. [38].

Conclusion

Having formed the view that it was clearly in the girl’s best interests for termination of her pregnancy to proceed in order to avoid danger to her mental and physical health, and noting that the two conditions in R v Davidson were present, [40], [41] his Honour ordered that termination was necessary and that her identity be suppressed. [48].

Appeal Status: No Appeal Pending - Appeal Period Expired


Insurance back to top

Liberty International Underwriters v The Salisbury Group Pty Ltd (in liq) [2014] QSC 240

In this matter an insurer sought a declaration that its policy did not respond to a claim made against its insured, the Salisbury Group Pty Ltd (in liq) (TSG).  TSG had operated an investment advice business.  Mr Weaver was an authorised representative of TSG.  It has been alleged that Mr Weaver had provided advice to Treadstone Pty Ltd of which his wife and son were directors. Treadstone was the director of the Weaver family trust which was a discretionary trust of which Mr Weaver, his wife and sons were beneficiaries.  Treadstone commenced an action against TSG, Mr Weaver, Avanteos Investments Limited and the Commonwealth Bank.  As against TSG and Mr Weaver it was alleged that, as a result of certain misleading or deceptive conduct in the giving of financial advice, Treadstone suffered substantial losses.  It made claims for negligence breach of contract and also pursued various statutory remedies.  The Insurer was notified under the policy of the claim but declined indemnity on the basis that the claim was made by a “related entity” to the insured and was, therefore, within the exclusions in the policy.  The question which arose for the Court was whether Treadstone was within the scope of identified related entities?

Somewhat surprisingly, Flanagan J held that the trustee of the discretionary trust of which Mr Weaver was the beneficiary was not a “related entity” such that the claim was not within the exclusion.   His Honour made the following points:

  • An insurance policy is a commercial contract and is to be given a businesslike interpretation (McCann v Switzerland Insurance Australia) and an exclusion clause is to be construed according to its natural and ordinary meaning read in the light of the contract as a whole giving weight to the context in which it is used and contra proferentem in cases of ambiguity; (Darlington Futures Ltd v Delco Australia Pty Ltd).
  • It was also observed that an exclusion clause will not be construed so broadly as to defeat the indemnity granted under the policy and render the cover practically illusory.
  • The insurer argued that the claim Treadstone, as trustee of the family trust, was made “on behalf of Mr Weaver, his wife and his son” and therefore within the scope of the exclusions.  The expression “on behalf of” was not defined in the Policy and the insurer asserted that it was a term of wide import and that the application of a broad construction was warranted in the present case where the purpose of the clause was to prevent claims on an insured by another insured or the insured’s family.  However, his Honour considered that the context of the use of the words “on behalf of” did not include the circumstance where the trustee of the discretionary trust was making a claim in that capacity for the benefit of the trust.
  • That a claim made by a trustee is not made in any representative capacity or as an agent but made by the use of the unfettered discretion of the trustee in regard to the objects of the trust. It is therefore not made on behalf of the beneficiaries as that term is used.
  • Further, Mr Weaver, as a beneficiary of the discretionary trust, did not have a “financial interest” in the assets of the trust or in the action against the insurer

The decision may possibly undermine many exclusion clauses excluding claims by “insureds against insureds” or claims by “related entities”.  It is well established that the purpose of such clauses is to prevent the insured (or persons associated with them) from benefiting from the insured’s own wrongdoing.  

Appeal Status: Appeal Pending - A notice of appeal was filed on 29 October 2014

Matton Developments v CGU Insurance Ltd [2016] QCA 208, 23 August 2016

Here, the appellant argued that it should have been entitled to indemnity under a policy of insurance it had entered into with the respondent in respect of a 100 tonne crane which was damaged beyond economical repair. [13]. The incident occurred whilst the crane was “carrying a 39 tonne panel on a seven degree slope in clear contravention of the manufacturer’s manual and the Australian Standards”. [1]. The respondent refused indemnity under the policy, relying upon the “accidental overload clause” in the “Additional Benefits” section of the agreement.  The appellant submitted that the primary judge erred in characterising the facts as a deliberate courting of the risk such as to render the overloading and consequential damage neither unexpected nor unforeseen and thus not accidental.

The critical issue on appeal was whether the overloading was “accidental” overloading within the meaning of the accidental overload clause, and whether the damage was “accidental, sudden and unforeseen”. If the definition of “insured damage” was read into the accidental overload clause, the clause read:

“We will pay for accidental sudden and unforeseen physical loss of or damage to a machine caused by or resulting from accidental overloading which is non-deliberate and clearly unintentional. The onus rests with you to substantiate any claims relating to accidental overload.” [30].

The words “overloading” and “overload” were not defined within the policy. [31].

At the time of the incident, the crane was operating on a slope when the boom collapsed. The primary judge concluded that its operation did not comply with the manufacturer’s guidelines that the recommended ground slope for normal operation was 0.3 degrees, which additionally warned of the risk of structural overload in the event the crane was not operated on level ground.  His Honour also concluded that its operation on a slope contravened Australian Standards concerning the safe use of mobile cranes. [29].

By majority on appeal (his Honour Justice Fraser dissenting), the court determined that the structural overloading which caused the incident was, in terms of the policy, “accidental...non-deliberate and clearly unintentional” and the resulting damage to the crane “accidental sudden and unforeseen”. [11]. In forming that view, it was noted that the appellant’s case at trial differed materially from its case on appeal. [4].

Importantly, the President took the view that the fact that the crane driver’s negligence caused the structural overloading and resulting damage was not determinative. That was because it was a precondition that, for the appellant to be deprived of the benefit of the accidental overload clause, the overloading and damage must have been expected: see Westco Australia Pty Ltd v Manufacturers Mutual Insurance Ltd (Unreported, Supreme Court of Queensland, Derrington J, D M Campbell and Kelly JJ agreeing, 22 May 1984).  If each could be categorised as “an unlooked-for mishap or an untoward event which is not expected or designed”: Fenton v Thorley & Co Ltd. [1903] AC 443, 448 then they would be rendered accidental.  [5].

Importantly the President noted that the crane driver was cognisant that the crane needed to be operated on near level ground, and took certain precautions consistent with common practice to level the subject area, [6], [88], her Honour formed the view that his conduct simply “was not so hazardous and culpable that the subsequent overloading and the resulting damage could not be called an accident”. She held that whilst he clearly took a risk that did not equate to “inviting the disaster which ensued”.  An important consideration was that the parties involved had the common design of ensuring, for professional, financial and personal safety reasons, that the crane safely traversed the raised ground to deliver its load, and “no other interest”.  [10]. In short, the conduct of the contractor and crane operator did not involve such a level or recklessness or risk-taking that it could not be regarded accidental, [101], [102].

In the result, the appeal was allowed with costs and the judgment below set aside. The respondent was ordered to pay the applicant the agreed quantum for the total loss of the crane and the agreed sum for the loss of revenue, amounting to some $2,254,904, together $378.00 per day being the agreed daily rate for loss of revenue from 15 April 2015 to the date of the order and interest. [12]. 

Appeal Status: No Appeal Pending - Appeal Period Unexpired


Intellectual Property back to top

Coles v Dormer (No 2) [2016] QSC 28, 26 February 2016

This was an adjunct to an earlier matter heard by his Honour, regarding infringement of the plaintiff’s copyright in construction plans for a residential dwelling.

Briefly, the first and second defendants had constructed a house for the third defendant which substantially replicated the plaintiff’s home nearby, using plans that were adopted substantially from the plaintiffs.  Finding for the plaintiff in the earlier matter, his Honour granted an injunction requiring the removal of the most publicly visible external indicia of replication. The issue of determination of the balance of relief was adjourned to allow time for completion of the necessary remedial works. [1].

In addressing the balance of relief to be ordered, his Honour noted that s 115(2) of the Copyright Act 1968 (Cth) provides:

“Subject to this Act, the relief that a court may grant in an action for an infringement of copyright includes an injunction (subject to such terms, if any, as the court thinks fit) and either damages or an account of profits.”

As between damages or an account of profits the plaintiff elected to seek damages [4] – namely, compensatory damages. [6].

In ascertaining the appropriate measure of damages in view of the value of the copyright and its inherent commercial worth, his Honour relevantly stated:

“The mischief Mr Coles here sought to prevent by acquiring the assignment of the plans to his house … lay in preserving the uniqueness of his home - the very feature that had motivated his acquisition of it in the first place – and thus in preserving his pride and pleasure in owning it and in preserving its value. The loss to the plaintiff in consequence of the infringement was therefore his loss of enjoyment of a locally unique residence and a potential loss of that residence’s value.”  [11].

Balancing the plaintiff’s right to compensation for loss of enjoyment with the defendants’ compliance with remedial orders (costing some $43,750), [15] his Honour observed that the relevant loss only lasted approximately two years, with no evidence of any loss materialising from any decrease in property value over that period.  [13]. In that regard, his Honour rejected the plaintiff’s argument that the remaining publicly visible “general similarity in proportion and style of the two properties” would prolong any ongoing loss of enjoyment and/or potential loss of property value.  [14].

In determining compensation for the plaintiff for temporary past loss of enjoyment of his locally unique residence prior to the remedial works, together with his slight loss of future enjoyment (resulting from his knowledge of the internal and non-publicly visible external replication of his residence), his Honour awarded $10,000. [15]. His Honour however also allowed for additional damages pursuant to s115(4) of the Act, in view of the “calculated commercial risk in the pursuit of their own benefits” taken by the defendants in disregard of the plaintiff’s rights, [22] indicative of “reckless indifference to the rights conferred by copyright law” warranting deterrence. [23]. Accordingly $60,000 in additional damages were awarded. [26].

Appeal Status: No Appeal Pending - Appeal Period Expired


Local Government back to top

Ostwald Accommodation Pty Ltd v Western Downs Regional Council [2015] QSC 210

This is a recent decision in which the court considered the merits of an application for statutory order of review of three decisions made by the respondent concerning the levying of a differential general rate that would apply to the applicant’s land. [1]. The applicant contended that the decisions were invalid and consequently, that he was not liable to pay the relevant rates.

By way of background, the applicant owned land, known as “The Eastwood”, in the respondent’s local government area, which had been developed under a joint venture arrangement.  The development approval authorised an accommodation building containing 201 rooms. [9].

In accordance with s 104 of the Local Government Act 2009, in mid 2014 the respondent adopted a revenue statement for 2014/2015. [2]. That statement provided for numerous rating categories, which were divided into a series of numbered codes. Of those, rating category 4/84 for 2014/2015 (“the challenged rating category”) was defined as follows:

“Land used or intended to be used, in whole or in part, for providing intensive accommodation for more than 100 persons but less than or equal to 200 persons (other than the ordinary travelling public) in rooms, suites, dongas, or caravan sites specifically build or provided for this purpose.  Land within this category is commonly known as ‘Worker’s Accommodation’, ‘Single Person’s Quarters’, ‘Work Camps’, ‘Accommodation Village’, ‘Barracks’, or ‘Other Multi Accommodation Units’.” [3].

On 13 June 2014, the respondent adopted the challenged rating category among the rating categories adopted for 2014/2015: “the first decision”. [5]. On the same date, the respondent also decided to levy a differential general rate of 2.982 cents in the dollars of the rateable value of the land, with a minimum rate of $115,425, for the challenged rating category, as part of levying the differential general rates for 2014/2015: “the second decision”.  [6]. On 21 February 2015, the respondent applied the challenged rating category to the applicant’s land: “the third decision”.  [8].

The application for a statutory order of review, brought pursuant to s 20 of Judicial Review Act 1991, was made on the following grounds:

As to the first decision, that:

(a) the respondent exercised the power to levy differential general rates in a way that was so unreasonable that no reasonable person would have exercised the power;
(b) the decision involved errors of law;
(c) the purported exercise of the power was done in such a way that the result was uncertain.  [13].

As to the second and third decisions, that:

(a) the respondent failed to take into account relevant considerations;
(b) the respondent exercised the power in a way that was so unreasonable that no reasonable person could have so exercised the power;
(c) the decisions involved errors of law;
(d) there was no evidence or other material to justify the making of the decisions;
(e) the purported exercise of the power to make the decisions was done in such a way that the result was uncertain.  [14].

At the outset, his Honour considered the machinery provisions which empower local authorities to levy rates [15]–[28], together with the observations of the High Court in MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 which recognise that liability for laws with respect to taxation is imposed by reference to sufficiently general criteria which mark out the objects and subject matter of the tax.

In comprehensively dismissing all of the grounds for statutory review in relation to all three decisions, his Honour noted that in some cases, statutory provisions for a local government to impose or levy differential general rates like those in question have been described as “quasi-legislative” [62]: see Marrickville Metro Shopping Centre Pty Ltd v Marrickville Council (2010) 174 LGERA 67, 92 [99]; Tarong Energy Corporation Ltd v South Burnett Regional Council [2012] 1 Qd R 171, 190 [78]. With specific reference to differential rates, he provided this valuable guidance, encapsulating the issues at trial:

“A differential general rate will impose a higher or lower burden or incidence of taxation on the owners of some land as opposed to the owners of other land of the same unimproved value. The individual burden of a ratepayer is a function of both the unimproved value and the differential general rate that applies to the land.  The statutory provisions do not require that the differential general rates must be levied only by reference to the costs or expenses which the local government will incur in relation to land in the rating category chosen.  It would be erroneous to construe the statutory provisions as being subject to that limitation. Once it is accepted that the use of land in its improved state can be a relevant factor in setting rating categories, and in levying differential general rates, in my view, it follows that the economic use and value of that land use may be taken into account as a relevant factor, unless there is some express or implied limit on the scope of the power to levy differential general rates”.

In the result, his Honour ordered that the application be dismissed, and the costs of the application be borne by the applicant. 

Appeal Status: No Appeal Pending - Appeal Period Unexpired


Partnerships back to top

Dreamtouch Pty Ltd v Ganbros Pty Ltd [2013] QSC 19, 19 February 2013

In this matter the Court considered the procedural rules relating to suits involving partners.  All parties in the present matter were former partners in a single undertaking – there was no question that the partnership had been dissolved, though the partnership accounts had not been finalised.  [1]–[3].  The only remaining matter of substance concerned a claim against the former partners by a third-party creditor, the Maroochy Tavern, the directors of which were related to the applicants.  [5].  The applicants, who did not oppose Maroochy Tavern’s claim, applied to the Court to appoint receivers for the partnership.  The purpose of this intervention was to prevent the other former partners, the respondents, from being able to defend the claim as intended.  [8].  In pursuit of this result, the applicants sought an order that “the court appoint receivers and confer upon the receivers the power to “defend” any proceedings … in the name of the partnership”.  The applicants argued that receivers ought to be appointed because there were other matters concerning the former partnership that needed to be finalised, because relations between the former partners had irretrievably broken down; and because the individual responsible for managing the accounts of the former partnership was no longer willing to act in this role.  [10]–[11].  It was noted, that these arguments lacked substance and that it was apparent that the intention of this proceeding was to stifle any defence of Tavern’s claim.  [12].  In the alternative the applicants argued they ought be protected by an indemnity against Tavern’s costs and against liability of for the respondent’s costs.  [14].

Before considering the merits of appointing a receiver, the Court first considered effect of the relationship of the parties to this matter and the nature of the claim.  Pursuant to Chan v Zacharia though altered by its dissolution, the partnership relationship “retains its fiduciary character in respect of the partnership property to be realised and applied”.  [16].  The defence of Tavern’s claim, however, was not partnership property – it was the “defence of a claim brought be a third party for a joint debt”.  [17].  The rules relating to proceedings against partners in the firm name are procedural – they do not alter the cause of action and accordingly the Court considered that there was no reason why the former partners could appear, or not, in answer to the Tavern’s claim as they chose.  Id.  In support of this conclusion, the Court referred to the common law position whereby when joint contractors were sued together they could sever their pleas or join together and that a successful defence by one of joint promisors would operate to discharge all.   The applicants also sought to rely upon UCPR 87 which requires that a defence filed “for the partnership” may only do so in the partnership name.  The Court considered that in these circumstances it was appropriate to direct that the respondents file and serve their defences to the Tavern’s claim not in the name of the partnership. 

Turning to the question of indemnity, the Court concluded that an indemnity against the respondents’ costs was unnecessary given that the applicants would not be a party to any costs agreement with the respondent’s lawyers.  An indemnity against the costs of the Tavern was, however, a live issue.  Though there is authority addressing the supply of an indemnity in similar circumstances where there was an ongoing partnership, [23], and in cases where a partner wishes to start a proceeding in the firm name (rather than in their own name only as in the present circumstances), [24], the Court was unable to find authority supporting the granting of an indemnity to dissenting partners.  In the absence of such authority, the Court was not prepared to order the respondents to give such an undertaking.  [26].  Finally, addressing the order sought that the business and affairs of the partnership be wound up, the Court considered that such an order was unnecessary – “little remain[ed] to be done.”  [27].  The only order the Court was prepared to make on the application was a declaration that the partnership was dissolved.  [27]–[28].  

Appeal Status: No Appeal Pending - Appeal Period Expired


Powers of Attorney back to top

Nielsen v Capital Finance Australia Ltd [2014] QCA 139

In this interesting matter the Court of Appeal held that the donee of a Power of Attorney was able to bind the Principal to an agreement even though the donee executed the document in their own name and without designating that they were exercising the power as an Attorney.

The donor of the power had, some years before the relevant agreement was signed, granted a general Power of Attorney to a Mr Shane Heal.  A few years after the granting of the power and unbeknownst to the appellant, Mr Heal signed an agreement which made the appellant a guarantor to a chattel lease which was entered into by a company controlled by Mr Heal.  Mr Heal signed his name against the printed name of the appellant and did not execute the document in a manner which showed that he did so as an attorney.  Section 69 of the Powers of Attorney Act provides that an attorney may execute an instrument with the attorney’s own signature but that “an instrument executed by an attorney must be executed in a way showing that the attorney executes it as attorney for the principal”.  An instrument so executed was held to have effect as if it were done by the Principal.  A number of Queensland authorities had held that the failure to exercise the power of attorney in the manner prescribed by s 69 rendered the purported exercise ineffective – Caltabiano v Electoral Commission of Queensland (No 4) [2010] 2 Qd R 1; Wright Enterprises Pty Ltd v Port Ballidu Pty Ltd [2008] QSC 78; and J Wright Enterprises Pty Ltd (in liq) v Port Ballidu Pty Ltd [2010] QSC 213 – although in none of those cases was the point in question before the Court of Appeal argued.

The appellant claimed that he was not bound by the guarantee so executed.  The respondent claimed that at common law a donee of the power of attorney was able to bind the Principal with a signature under their own hand and without showing that they executed as an attorney.

The President undertook an extensive consideration of the common law relating to the power of attorneys to bind a principal by executing a document in their own name.  Her Honour concluded that, at common law, an attorney was required to execute a document in the name of the Principal.   However, it was held that because Mr Heal had executed the document in his own name by placing his signature against the printed name of the appellant he had actually executed the document in the name of the appellant.  Muir JA also conducted a detailed analysis of the common law but reached the same conclusion by a different method; namely that regardless of whether or not the Attorney executed the agreement as attorney, as the Attorney was the agent at common law the signature bound the Principal in any event.  It seems that all members of the bench considered that non-compliance with the provisions of the Powers of Attorney Act did not invalidate the signature. 

Appeal Status: No Appeal Pending - Appeal Period Expired


Practice and Procedure back to top

Arrowsmith v Micallef [2013] QCA 143

In this matter orders were made in the Supreme Court in relation to the distribution of an estate. The appellant appealed those orders primarily on the ground that an adjournment should have been granted to enable her to adduce further evidence. That further evidence was claimed to be relevant to the terms of an agreement between the parties on which the judgment of the Court was based and what had occurred in a mediation between the parties. It was claimed that the evidence which might have been adduced was extrinsic evidence relevant to the terms of the settlement. Peter Lyons J (with whom the other members of the Court agreed) held:
 -     That where there has been a refusal to grant an adjournment the proper course is to appeal against the final decision and not against the refusal of the adjournment. The rationale for that approach is that if the refusal to grant an adjournment was erroneous then the party has not had a fair hearing and the decision of the Court should be set aside.
 -     That where the order of a court incorporates an agreement between the parties, the Court order is, to that extent, to be construed in the same manner as any agreement between parties. In this respect, extrinsic evidence is admissible to construe the order by the application of the Codelfa principles. In the case before the Court extrinsic evidence was admissible because there was a relevant ambiguity and given that it contained a release, such a clause has to be construed in the context of its background facts.
    -     That in the circumstances of the case the discretion to refuse an adjournment had miscarried as there was relevant evidence which the appellant was entitled to adduce for the purposes of construing the agreement.

Appeal Status: No Appeal Pending - Appeal Period Expired

Norman Nominees Pty Ltd (in liq) v Zervos Pty Ltd [2011] QSC 320

Occasionally it is the case that an important judgment of the Court is not immediately identified as meeting the criteria for reporting in the Queensland Reports. Such are the circumstances of this case which was handed down by Dalton J in November 2011. It will now be reported in this year’s edition of the Reports. The Editors are grateful to Justice Margaret Wilson for drawing this case to their attention.

By an application to amend a claim and a statement of claim, the plaintiff sought to add claims that the fourth and fifth defendants repay money on the basis that they received the money as unfair preferences or through uncommercial transactions within the scope of the Corporations Act. The claims were outside the times permitted for such action in the Act. Dalton J noted that, on the institution of Commonwealth proceedings in a State Court, the procedural regulation of the matter is dealt with by the State law which is picked up by s 79 of the Judiciary Act. The relevant procedural rule was UCPR 376, however, the difficulty for the applicant/plaintiff was that the causes of action did not arise out of the same set of facts. Her Honour considered the application of s 81 of the Supreme Court Act 1981 which had been amended after the decision in Draney v Barry where it had been identified as a source of power to allow an amendment to add a cause of action out of time free of the restrictions in the rules. The question which then arose was which of s 81 of the Supreme Court Act or UCPR 376 was the appropriate power. That question turned on the scope of UCPR 376 which was, in turn, dependent upon the meaning of the phrase "relevant period of limitation" in the rule. Her Honour held that the expression was not limited to a period of limitation under the Limitation of Actions Act with the result that the s 81 could not apply to permit the amendment of a statement of claim to add the Commonwealth statutory actions.

Appeal Status: No Appeal Pending - Appeal Period Expired

Kinsella v Gold Coast City Council [2014] QSC 65

The decision in this matter contains an interesting and important discussion of the law regarding representative actions in Queensland. In this case, the Kinsellas (“the Plaintiffs”) sought to sue the Gold Coast City Council (“Defendant”), as the representative of a defined group of owners of property in the Arundel Hills Country Club Estate (“the Estate”), for negligence. The Plaintiff alleges that the Defendant owed a duty of care to the Plaintiff and each of the represented owners “to take reasonable care in occupying, operating and controlling the Suntown Landfill Facility [which abutted the Estate] … to protect the plaintiffs and each of the represented … owners from suffering economic loss,” specifically the diminution in the value of their properties. The specific issue before the court was whether the case was able to proceed as a “representative action” pursuant to UCPR 75, which provides that “a proceeding may be started … by or against 1 or more persons who have the same interest in the subject matter of the proceeding as representing all of the persons who have the same interest and could have been parties”. [26].
In determining the scope of UCPR 75 the Court emphasised the importance of ensuring that the objectives of the representative procedure, namely the “avoidance of [a] multiplicity of proceedings and the efficient determination … of controversies in which … parties have the same interest,” [32], was well-served. As a consequence, the Court held that for a matter to proceed as a representative action pursuant to UCPR 75 two conditions must be satisfied. First members of the class must share the “same interest” in the subject matter of the proceeding. This requirement, however, does not prohibit representative actions where all parties do not share the same cause of action; nor does it exclude cases “where not every issue of law or fact is common” to all parties. [33]; see also [27]–[32]. The second condition is that, through the relief claimed, an order must be able to be made which would bind not only the parties to the proceeding, but also all members of the represented class. [36]. Again this does not require complete unanimity amongst all members of the represented class – the quantum awardable to individual class members may differ. [35]–[36]
Common Issues
In considering whether, in the immediate case, there was a “significant common issue,” his Honour analysed the Plaintiffs’ pleadings. As pleaded, the issues of law and fact in the negligence claim were identical across the causes of action of both the Plaintiffs and the represented owners, and, if the Plaintiffs were to prove their case as pleaded, both the Plaintiffs and the represented owners would have suffered the same damage caused by the Defendant’s breach of its duty of care. [39]. Further, though the Defendant argued that the content and existence of the duty may differ depending on the precise knowledge of individual owners, in the absence of any evidence to this effect, his Honour held that it was inappropriate to made such determinations and orders at this stage. [47]–[51].

Common Relief
His Honour then considered whether or not the relief sought by the Plaintiffs, namely damages and a series of declarations, was able to bind both the parties to the proceeding and the represented persons, and were permissible at law. Upon concluding that damages was an appropriate form of relief in a representative action, particularly where (as in the instant case) the “damages can be calculated according to a formula” [56], his Honour then turned to a consideration of whether the declarations sought were permissible at law. From an analysis of the relevant High Court authority, it was apparent that interlocutory or interim declarations cannot be made. Any declaration ordered must conclusively resolve an issue between the parties and cannot be contingent upon the determination of another aspect of the proceedings, see discussion [62]–[66]. In the instant case, the Court concluded that the declarations sought were of this nature and thus that, at least in respect of the negligence claims, this case was able to be brought as a representative proceeding.
This important decision underscores the deficiency in the rudimentary class action provisions in Queensland.

Appeal Status: No Appeal Pending - Appeal Period Expired

Linc Energy Ltd v Chief Executive Administering the Environmental Protection Act 1994 [2014] QSC 172

In this recent Supreme Court case, Justice P McMurdo considered the principles behind the valid execution of a search warrant, and in particular, the distinction between documents seized versus documents copied.  This case arose out of the execution of two search warrants under the Environmental Protection Act 1994 (the “EPA”) on the applicant’s premises, pursuant to which the respondents both seized files and copied and removed electronic material from the applicant’s Chinchilla and Brisbane offices.  These warrants were issued on the basis that there were reasonable grounds for suspecting that there was or might be “a particular thing . . . that may provide evidence of the commission of an offence,” namely the wilful causing of serious and/or material environmental harm at the applicant’s Chinchilla site.  [6]–[7].  In executing these warrants a “vast amount of material, a great deal of which was outside the scope of the warrant” was either seized or copied onto the respondent’s “storage media” and removed.  [23].  Following this the applicant sought a declaration that the seizure and retention of the electronic backup tapes and the storage media was unlawful.  [35]–[36]. 

The Act

Pursuant to s 460(1)(e) of the EPA an authorised person, with a warrant, may “take extracts from, or make copies of, any documents”. This is to be contrasted with s 461 of the EPA which allows an authorised person, with a warrant, to “seize the evidence for which the warrant was issued”. The Chapter then goes on to describe additional requirements for the retention and return of items the subject of a seizure – the statutory language making it apparent that “the subject matter of a seizure under a warrant is something which is located at and physically taken from the relevant place,” [31], clearly distinct from a document that has been copied. [32], see discussion [31]–[34]. 

Seizure vs Copying

The initial issue before the Court was the significance, if any, of the difference in the means by which documents had been removed from the applicant’s premises. More specifically, whether the distinction between documents physically removed, pursuant to s 461 of the EPA and those copied onto the respondent’s “storage media” and removed, pursuant to s 460, was legally significant.  The applicant posited that “those devices onto which electronic material had been copied during . . . the execution of the warrants were themselves items which could be and were seized” [39]; a position with which the respondent was willing to acquiesce for the purposes of this application. [40]. The Court, however, did not accept the applicant’s submission, contrary as it was to the “ordinary meaning of seizure in this context”. [39], and, citing the general principle that the Court cannot resolve hypothetical disputes, see [41], refused to adopt the proposed submission for the purposes of this application.  Consequently, the application was confined to those items actually seized, namely the backup tapes.  [42].

Validity of Seizure

The Court then turned to the substantive issue, namely whether the backup tapes had been lawfully seized.   In determining the validity of the seizures undertaken the Court first considered the authorising legislation which provides that the “power of seizure [is] limited to something which constitute[s] evidence”. [43]. Thus, prima facie, the lawfulness or otherwise of the respondent’s seizure was dependent upon whether “the item in question was something which might provide evidence of the commission of a relevant offence”. [43].  However, after reviewing the relevant authorities, the Court was not satisfied of the sufficiency of this and instead considered that those executing the warrant must have considered and were reasonably satisfied that the material seized was evidence.  [45]–[48].  Applying this to the circumstances of the case the Court concluded that the necessary consideration of the connection “between [the] document and facts or circumstances which might be relevant to [the] prosecution” had not been undertaken and accordingly, the Court held the seizures unlawful.  [49]–[51].  

Appeal Status: Appeal Pending - Application for extension of time for appeal filed on 7 November 2014

McDermott v Robinson Helicopter Company (No 2) [2014] QSC 213

This important decision concerns the question of costs where the plaintiff was unsuccessful in an action arising out of a helicopter crash where it had been asserted that there had been inadequate maintenance or maintenance practices.  Although the plaintiff failed in its action, the defendant had raised a number of defences which had failed.  The action had been subject to substantial case management however there were a number of adjournments during the course of the trial for the purposes of allowing the parties to recalibrate their case.  The successful defendant sought its costs under UCPR 681(1), however, the plaintiff also sought costs orders in his favour in relation to issues on which he had succeeded.  In doing so he relied on Thiess v TCN Channel 9 Pty Limited (No 5) to the effect that there is “a predilection in favour of distributing costs according to the outcome or ‘event’ of particular issues in the action”.

In his careful reasons for judgment Peter Lyons J identified the source of the Court’s power to make an order for costs (s 15 of the Civil Proceedings Act) and the rules which regulate the manner in which the power might be exercised (UCPR 681, 682 and 684).  Thereafter, his Honour identified a number of important points about the operation of the above sections and rules:

  • For the purposes of the principle that costs follow the event, the “event” can be identified as a head of controversy which is a unit of the litigation and specific orders for costs can be made in relation to them.
  • The words “the costs shall follow the event” permit orders for costs to be distributed according to the results of the several issues in the litigation although the party who is successful on the whole gets the general costs.
  • Under UCPR 681 and 684, events in an action are to be identified by reference to individual issues or questions in the action.  The “event” is not simply the result or outcome of the action.
  • It is sometimes said that there is, in the rules, a predilection in favour of distributing costs according to the outcome or event of particular issues in an action.  However, that principle has not been universally adopted and the view has been expressed that a party against whom an unsustainable claim is prosecuted is not to be forced, at his peril in respect of costs, to abandon every defence he is not sure of maintaining. 
  • The view has also been expressed that, ordinarily the fact that the successful plaintiff fails on a particular issue does not mean that the plaintiff should be deprived of some of its costs.
  • Despite there being a degree of variability in the authorities, the application of UCPR 681 and 682 reflected the decision in Sequel Drill & Blast P/L v Whitsunday Crushers P/L (No 2) [2009] QCA 239 is to the effect that:

“The application of the general principle may lead to costs orders which reflect different results on separate events or issues, unless the court considers that some other order is more appropriate.”

  • It is important to note that the approach in other jurisdictions, in particular in New South Wales, is different.
  • There is no difference in the approach to be taken depending on whether the party who is overall successful but who has failed on some issues is the plaintiff or the defendant.

On the basis that the unsuccessful plaintiff in the present case had, nevertheless, been successful on a major issue, his Honour ordered that the plaintiff pay the defendant 80% of its costs on a standard basis.

Appeal Status: No Appeal Pending - Appeal Period Expired

Flori v Commissioner of Police [2014] QSC 284

This decision concerned the use in disciplinary proceedings brought against the Applicant, a police officer, under the Police Service Administration Act 1990 (PSAA) of information derived from property seized pursuant to a search warrant issued under s 150(1)(a) of the Police Powers and Responsibilities Act 2000 (PPRA). The Police suspected that the Applicant had obtained and improperly provided CCTV footage of an incident which occurred at a Queensland police station to the media. For the purpose of investigating offenses under ss 92A and 408C of the Criminal Code1899 which may thereby have been committed by the Applicant, a search warrant with regard to the Applicant’s personal residence was sought, issued and executed.

Disciplinary proceedings were subsequently commenced against the Applicant under s 7.4 of the PSAA on the ground of misconduct, listed in s 9(1)(f) of the Police Service (Discipline) Regulations 1990. The Respondents proposed to use information derived from the property seized under the search warrant in those disciplinary proceedings. The Applicant sought a declaration that the Respondents are not entitled to use, rely on or otherwise take into account in the disciplinary proceedings the property seized under the search warrant, nor any data, evidence or information derived from that property.

In her reasons Atkinson J first emphasised that there was no issue as to the validity of the search warrant itself, there being no allegation that it had been sought for an improper purpose, or that the Police’s suspicion of the commission of an offence was other than reasonable.

In that light, the sole issue in contention was the limit of the permissible uses of the property seized by the execution of the search warrant, and of any information derived therefrom. Her Honour accepted that the PPRA contained no express limit on the use of such property and information. However, her Honour nonetheless held that it was implied that the uses to which such property and information could lawfully be put were limited by the purposes for which the coercive power to seize the property in question were conferred. In so finding, her Honour applied by analogy to the PPRA a number of Commonwealth and New South Wales authorities relating to search warrants issued under the equivalent provisions of the Crimes Act 1914 (Cth): see Grollo v Macauley (1995) 56 FCR 533, 551; Williams v Keelty (2001) 111 FCR 175, [233] and ASIC v Rich (2005) 220 ALR 324, [262]. In each of those cases, the Court considered that use of the seized property and the information and evidence derived therefrom in parallel civil proceedings or investigations would be impermissible.

Her Honour held that the purpose of a search warrant issued under the PPRA was to obtain evidence in the investigation and prosecution of criminal offenses, and that such a purpose did not extend to the prosecution of administrative disciplinary proceedings against a police officer under the PSAA. Whilst her Honour accepted that this limitation on the use of the seized property and the information derived therefrom was subject to the owner of the seized property’s freely formed consent, it was clear that no such consent had been provided by the Applicant: c.f. ASIC v Rich (2005) 220 ALR 324. On that basis, her Honour granted the declaration sought.

Appeal Status: No Appeal Pending - Appeal Period Expired

Saipem Australia Pty Ltd v GNLG Operations Pty Ltd (No 2) [2015] QSC 173

This is a recent decision involving an interlocutory injunction application to restrain the respondent from demanding payment under two bank guarantees pursuant to a contract to construct a gas pipeline. [1].

The contract was entered into in 2011. [3]. Clause 5 required the applicant contractor to provide bank guarantees to secure its performance. [4] Clause 21.1(b) required the completion of certain stages of the work by specified dates. [5]. In the event mechanical or practical completion was likely to be delayed, cl 21.2 required the applicant to provide notice to the respondent. [6]. Pursuant to cl 35(a), if the applicant did not achieve completion by the required date, it was required to pay liquidated damages to the respondent. [7].

Respondent’s claims of delay under the contract

On 18 December 2014, the respondent gave two notices for delay, claiming liquidated damages. [9]. It required payment by 9 January 2015, reserving its rights. [11]. The appellant argued that it was entitled to extensions of time under cl 21, which would have the effect of extending the dates for completion.  It initiated the dispute resolution process under the contract.  [12].

Appellant’s case

The appellant sought an order that until determination of its originating application, the respondent be restrained from having any recourse to the bank guarantees, on the basis that:

  1. Clause 5.5(a) of the contract only entitles the respondent to enforce the bank guarantees “to recover any debt due”. The liquidated damages claimed are not debts due, and would be disallowed by an arbitrator;
  2. Section 67J of the Queensland Building and Construction Commission Act 1991 operates similarly, to restrict the respondent to using the bank guarantees for a circumstance where there is in fact an “amount owed”.  This cannot apply where there is no amount owed;
  3. The respondent did not comply with s 67J(2) of the Act as it did not give notice within 28 days after it became aware, or ought reasonably to have become aware, of its right to obtain the amount owed.  [17]–[21].

Issue (1)

Citing the authority of Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199, 241 – in which the High Court held that “[t]he basic proposition remains that where interlocutory injunctive relief is sought in a Judicature system court, it is necessary to identify the legal (which may be statutory) or equitable rights which are to be determined at trial and in respect of which there is sought final relief which may or may not be injunctive in nature” – the respondent submitted that the appellant had no case for final determination which could provide a legitimate basis for an interlocutory injunction. [23].

Preferring the alternative approach, his Honour characterised the declarations sought as final relief, albeit noting that there was a claim for “further or other orders” in lieu of any specific claim for a final injunction:

“Accepting for present purposes that this court could not determine the merits of the disputes as to whether GLNG is entitled to liquidated damages as it is claimed, it does not follow that no final relief can be granted as is sought by the Originating Application.” [26].

It followed that the appellant’s application for interlocutory relief was not precluded, due to its claim of contractual rights which triggered injunctive relief prior to final adjudication.  [27].

Issue (2)

The appellant contended that s 67J(1) only allows the contracting party for a building contract to use a security where there is an actual amount owed to it.  [28]. His Honour held that this was not the case. [32] Instead, the section merely affects the right of a contracting party to use a security or retention amount by requiring the notice which it describes.  [33].

Issue (3)

In relation to issue (3), his Honour found that the respondent’s notice in relation to the mechanical compliance had been given too late to be compliant with s 67J(2): “Saipem has proved that GLNG may not use the securities for its claim for delay in achieving Mechanical Completion”. [35] In relation to the practical completion, his Honour noted that the respondent’s practical completion certificate was dated 10 December 2014.  Its notice was given within 28 days of that certificate.  However, the certificate certified the date of practical completion as 9 October 2014.  As such, in excess of 28 days passed between that date and the notice under s 67J. [39]. However, having regard to all the circumstances and to correspondence passing between the parties on the subject of completion, his Honour concluded that the applicant’s contention that the notice was too late for the practical completion claim was a weak one:

“As I construe the contract, there was no entitlement to liquidated damages until the date of Practical Completion was certified.  If I am incorrect in that construction, the question would be about when GLNG knew or ought to have known that Practical Completion had been achieved, because there could be no awareness of the amount owed without an awareness of the period of delay.  I would accept that if, upon the proper construction of the contract, that is a relevant question, then there would be some case for Saipem, from the fact that GLNG ultimately certified the date for Practical Completion as early as 9 October 2014.” [43].

Discussion – balance of convenience and construction of agreement

It was acknowledged that reputational damage would inevitably be suffered by the applicant in the event the guarantees were enforced [44] – recognised in the contract as a risk that should be borne in this circumstance. [60]. Therefore, the central question for determination was whether the addition of the cases of non-compliance with s 67J should offset the balance in favour of an injunction. [61], [62].

Evidently there would be no prejudice to the respondent were an injunction granted, as it would retain security of the guarantees.  However, it would not have the benefit of the money to which it was entitled.  [63].

Finding it “at least probable that Saipem could pay the amounts claimed, if it has to do so to avoid a demand upon the guarantees” [65], thus avoiding the prospect of substantial reputational damage, and in view of the relatively weak case in relation to s 67J for the notice about practical completion, his Honour made the following orders [68]–[69]:

  1. there will be an interlocutory injunction, until determination of the Originating Application or further earlier order, restraining GLNG from having recourse to any of the bank guarantees referred to in the interlocutory application filed 7 January 2015, to recover any of the sum claimed in relation to Mechanical Completion in a letter of 18 December 2014 from GLNG to Saipem.
  2. there will be an injunction for a period of 14 days restraining the respondent from having recourse to any of those guarantees for the payment of any of the sum claimed in relation to Practical Completion in a letter from GLNG to Saipem of 18 December 2014.

Appeal Status: No Appeal Pending - Appeal Period Expired

Lupker v Shine Lawyers [2015] QSC 278, 1 October 2015

This important recent decision concerned the termination of a “no win no fee” retainer with the respondent,  the respondent then claiming an entitlement to recovery for work done and services rendered.

The applicant’s former de facto spouse, a passenger on flight MH17, was killed in July 2014.  [1]. He retained Shine Lawyers in relation to his compensation claim for her loss. [2]. He subsequently terminated the retainer and, in so doing, provided authority to the respondent to transfer his file to another firm. [3].

In August 2015 the new firm asked the respondent to make the applicant’s file available. [5]. The respondent refused on the basis that it was entitled a possessory lien over the file until its professional fees, amounting to $20,643.50 plus GST, were paid. [6].

In response, the applicant sought:

1.  A declaration that the retainer was terminated by the applicant on 4 August 2015;

2.  A declaration that the respondent was not entitled to retain the applicant’s file pursuant to the retainer; and

3.  An order that all files, documents, correspondence or other material prepared by or on behalf of the applicant and all copies be delivered up to the applicant. [7].

Did Shine Lawyers have a right to payment from the applicant?

Shine’s retainer was a conditional costs agreement within the meaning of s 323 of the Legal Profession Act 2007. [12]. However, it was non-compliant with s 323(3) in various respects, and therefore void pursuant to s 327(1). [14]. It followed that the respondent’s legal costs were recoverable “according to the fair and reasonable value of the legal services provided” (see s 319(1)(c)), but it was not entitled to recover any amount “in excess of the amount [it] would have been entitled to recover if the costs agreement had not been void” (see s 327(3)).

The relevant issue for his Honour’s consideration was what the respondent’s rights would have been “on the hypothesis that the Act had not rendered the costs agreement void”. [17]. The respondent submitted that it would have had a contractual right to payment (either from an implied term or as a matter of construction) [24] which survived the termination of the retainer; or in the alternative a restitutionary claim to recover as on a quantum meruit for the fair value of the work done. [18].

His Honour dismissed the argument that a term ought be implied into the retainer outright, finding that the proposed term did not satisfy two limbs of the test prescribed in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283, namely that it was not necessary to give business efficacy to the contract; nor so obvious that "it goes without saying”. [26]. In his Honour’s assessment, from the respondent’s point of view, those conditions were “insurmountable hurdles”. [27].

His Honour also rejected the construction argument, explaining as follows:

“Shine acknowledged that the contract should be regarded as an ‘entire’ contract, such that prima facie, it would not be entitled to charge fees until the matter was completed and then only if the applicant was successful.  That acknowledgement was significant for the analysis of Shine’s rights because it meant that, even if the cap and the condition were to be construed in the way for which Shine contends, there would still be no mechanism by which a contractual right to payment could be regarded to have accrued due prior to termination.  And after termination, … the retainer, viewed as a source of enforceable rights and obligations, has ceased to exist. That conclusion is fatal to this part of the applicant’s argument.”  [33]–[34].

Turning to the respondent’s alternative argument that had the costs agreement not been void, it would have had an entitlement to be paid as on a quantum meruit, his Honour noted that as a general proposition, in circumstances where a contract for work or services is terminated by the client, the provider of same would have a restitutionary claim to recover as on a quantum meruit for work done and services provided up to the date of termination: see Legal Services Commissioner v Baker (No 2) [2006] 2 Qd R 249 at [3] and [32].  However, the terms of the terminated contract remain directly relevant to the scope of the restitutionary claim: see Lumbers v W Cook Builders Pty Ltd (2008) 232 CLR 635.  The question for the court was how the claim reconciled with the contract between the parties. [41]–[42].

Observing that the retainer in question contained an implied term that the applicant could withdraw from it at any time without reasons [37], and further provided that the entitlement to be paid was contingent on recovery [43], his Honour formed the view that the “critical questions” for consideration as to this aspect were:

  1. whether the applicant, as a reasonable person, should have realised that if he exercised his right to terminate the retainer without cause and prior to any recovery, Shine would expect to be paid in full without waiting for any recovery to be obtained; and
  2. whether it would be unjust for the applicant to take the benefit of the services Shine provided without paying a reasonable sum for them, and notwithstanding that no recovery had yet been obtained.  [47].

The respondent submitted that it should not be regarded as having knowingly putting its fees at risk in litigation conducted by a stranger to the agreement. [48].  In circumstances where there was an implied term that the applicant could withdraw from the retainer at any time; the retainer made no provision for what should happen in relation to fees should the applicant exercise his right to withdraw; the only promise to pay was qualified; and there was a clear statement that if there was no recovery then the client would not have to pay; [50], his Honour concluded that  a reasonable person in the applicant’s position “would have appreciated that Shine would expect to be paid, but would not have appreciated that if the contractual right to withdraw from the retainer was exercised Shine would expect to be paid in full for the services it had provided and without waiting for any recovery to be obtained.  Such a person would think that Shine was prepared to wait for payment until recovery was obtained, so that the person could pay, having then been put in funds”. [51].

Accordingly, finding that there was no injustice for the applicant to take the benefit of the services provided without paying a reasonable sum for them, his Honour answered his critical questions in the negative. [51]. He dismissed Shine’s contention that had the costs agreement not been void, it would have had the right to payment, as on a quantum meruit.  [54]. His Honour concluded that Shine’s legal costs were recoverable “according to the fair and reasonable value of the legal services provided” (see s 319(1)(c) of the Act), but Shine was not entitled to recover any amount in excess of the amount it would have been entitled to had the costs agreement not been void (see s 327(3) of the Act).  [55]. Shine had a statutory right to payment contingent upon certain events happening – which remained unfulfilled [58] – and thus no present entitlement to recovery.

In the result, his Honour held that Shine did not have any effective possessory lien. [79].

Appeal Status: No Appeal Pending - Appeal Period Expired

Pittaway v Noosa Cat Australia Pty Ltd [2016] QCA 4, 2 February 2016

This was an application for leave to appeal under s 118(3) District Court of Queensland Act 1967 from an order dismissing proceedings. The applicant and respondent had entered into two related agreements, the “Shed Agreement”, under which the applicant was to build a shed for the respondent, and the “Boat Agreement”, under which the respondent would build a boat for the applicant. [2].

The applicant alleged that he built the shed, but that the respondent did not pay the full amount for it, nor build the boat as required by the agreements. The applicant thus commenced proceedings for breach of contract. Various orders were made in the District Court, with which the applicant did not comply. The respondent was ultimately successful in an application to dismiss the proceedings for want of prosecution.

The issues raised by the application were whether:

  1. an appeal was necessary to correct a substantial injustice; and
  2. there was a reasonable argument that there was an error to be corrected. [6].

Errors to be corrected

The applicant submitted that at first instance, a number of specific errors [7], [8] had been made by the learned primary judge, amongst them:

  1. when considering the question of prejudice caused by the delay, (i) assuming, without evidence, that the costs incurred would prevent a fair trial, and (ii) wrongly taking into account all the legal costs incurred since the commencement of the proceedings, rather than those caused by the delay;
  2. failing to give proper weight to the fact that no prejudice had been suffered in terms of the ability to have a fair trial;
  3. not giving due regard to the fact that long periods of delay were caused by Noosa Cat;
  4. concluding that the amended statement of claim was defectively pleaded;
  5. giving insufficient weight to the applicant’s circumstances, including unsuccessful attempts to secure new legal representation;
  6. the result was unreasonable or plainly unjust. (see House v The King (1936) 55 CLR 499 at 505).

In relation to the primary judge’s approach to the prospects of success in the proceedings, the court concluded that it was in error since the pleadings did not sustain her conclusion that there was no evidence the applicant held a registered builders licence. [19]. In addition, the court observed that the learned primary judge had appeared to proceed on the basis that the applicant’s response to the third respondent’s affidavit was deficient in its detail. [21]. That was not the case. [22]. With reference to Schneider v Alusa Pty Ltd [2011] QSC 366 at [17], his Honour Justice Morrison clarified:

“In my view nothing … warrants the approach that the only way to ‘meet the evidence’ is to engage, blow for blow, with an affidavit in great detail to answer another affidavit in great detail.  In my view, to do so is to turn the r.280 application into something it is not.” [25].

Prejudice to Noosa Cat

At first instance, the respondent contended that it had been subjected to delay since the orders were made on 30 May 2014, [34] due to the incurring of legal costs over the totality of the proceeding, in an inferred sum between $150,000 and $200,000 (as distinct from submitting it could not have a fair trial). [38], [40]. Her Honour the primary judge found that Noosa Cat had indeed suffered prejudice relevant to the application to strike out. [39].

Referring to Spitfire Nominees Pty Ltd v Ducco [1998] 1 VR 242 at 247–248, the Court observed that the costs that the learned primary judge referred to were those that had been incurred over the entirety of the proceedings, instead of being limited to those that were directly caused by the relevant delay. That approach is in error, since the prejudice caused by the relevant delay alone ought to be taken into account.  [41]. The court also noted that no attempt had been made to ascertain whether the delay, and therefore costs, for that period was solely the applicant’s fault or rather, shared by both parties.  [42].

It was thus the court’s view that the learned primary judge did not correctly address whether the delay resulted in prejudice such that there was an inability to ensure a fair trial. [45].

Responsibility for delay

At first instance, it was held that the applicant had also failed to provide timely disclosure, and to respond to a letter dated 9 September 2014 from the respondent’s solicitors. [46]  In particular, it was determined that since the matter was transferred to the District Court it had made little progress, through no fault of Noosa Cat’s. [55]. On appeal the Court found that that conclusion could not be sustained [56] and overall, that both parties ought to share responsibility for the various periods of inactivity and delay evident in the matter’s progression. [48], [59, [61], [62].

Delay because of, and following, the change of solicitors

Lastly, in relation to the breakdown in the relationship between Mr Pittaway and his former solicitor and its impact upon matters, the Court noted that at first instance, it was essentially held that “Mr Pittaway’s unexplained failure to comply with the consent orders from May 2014 [could not] be attributed to either Noosa Cat or his solicitor and favour[ed] his claim being dismissed”. [66]. In delivering the lead judgment, and examining the chronology of the breakdown in the relationship and its aftermath [64] Morrison JA identified “a number of difficulties with [the relevant] findings” of the learned primary judge. [67]. In particular, his Honour observed:

“… the prism of two particular issues: one is the undoubted inability of Mr Pittaway to adequately represent himself; the second is the questionable ability of Mr Pittaway to supply what was necessary for the new solicitors to adequately assume control of the proceedings and respond to the orders”. [73].

In those circumstances, the court concluded that the matters that affected the applicant’s ability to comply with the consent orders of 30 May 2014 did not exhibit that degree of inattention or disregard that they should have been taken to support dismissal of the claim. [74].

The court held that the learned primary judge fell into error in concluding that the dismissal of the claim was warranted, and that that amounted to a substantial injustice. [75]. The appeal was allowed and the orders below set aside. [76].

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Lee v Abedian, 28 April 2016

In this interesting and very significant recent matter the plaintiff, a former employee of a government body in the United Arab Emirates, sought damages of approximately $10 million alleged to have been caused by his arrest, incarceration and prosecution.  The plaintiff alleged that his incarceration had occurred due to the wrongful conduct of the first, second and third defendants in acting falsely to implicate him in conduct contrary to the laws of the United Arab Emirates and of Australia. [5].

The applications before the Court were two strike out applications concerning claims for conspiracy to injure, malicious prosecution and negligence, as follows:

  1. The fourth defendants sought to strike out the plaintiff’s claim and statement of claim insofar as it concerned them on the grounds that the duty of care which lay at the base of the alleged negligence case is not one known to law. [9].
  2. The Sunland defendants also sought to strike out the plaintiff’s third statement of claim. They supported the fourth defendants’ application, but also raised a number of attacks on the adequacy of the manner by which the plaintiff had expressed his causes of action. [10].

The questions raised were whether the plaintiff had pleaded causes of action in the manner which the law requires and, with respect to the negligence case advanced against the third defendant and the fourth defendants, pleaded a cause of action known to the law. [37].

Ultimately the court struck out fairly substantial claims and paragraphs of the pleading but gave leave to re-plead in respect of some paragraphs. The background to the matter and his Honour’s reasoning follow.

Power to strike out

At the outset his Honour recognised that the power to strike out is only to be exercised with restraint and in clear cases: see General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125 at 129 to 130. The power cannot be exercised “once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it”: see Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 per Dixon J. That said, the court will not be averse to striking out a pleading which is defective because it does not disclose a reasonable cause of action, has a tendency to prejudice or delay a fair trial, contains allegations which are unnecessary, scandalous, vexatious or embarrassing, or is otherwise an abuse of the processes of the Court. (See A v Ipec Australia Ltd [1973] VR 39 at 43 per Menhennitt J;  Robert Bax & Associates v Cavenham Pty Ltd [2011] QCA 53 at [16] per White JA; Radisich v McDonald (2010) 198 IR 244 at 251). 

The application of the fourth defendants

The plaintiff’s sole claim against the fourth defendants, DLA Phillips Fox, was in negligence.  He claimed that DLA Phillips Fox, in drafting a report for their client (Sunland) regarding potential legal proceedings for legal action in Australia which could then be given to the Assistant Prosecutor General in Dubai, [44] “owed him a duty to take reasonable care to avoid causing him to suffer loss resulting from the careless expression of an opinion as to his liability, or possible liability, to Sunland”. [45]. In other words, he argued that he, the third party who was the client’s potential adversary, was owed a duty to avoid loss which might arise from the criminal prosecution which might eventuate from a careless expression of opinion in the legal report. [46].

Noting the “stumbling block” to this argument presented by the views articulated by Brennan CJ in Hill v Van Erp (1997) 188 CLR 159 at 167 (in which he stressed that the solicitor’s duty to the client cannot be tempered by the existence of a duty to any third person whose interests in the transaction are not coincident with the interests of the client), [50] his Honour was not prepared to accept that the alleged duty extended to the plaintiff as a potential opponent of its client (see Al-Kandari v J R Brown & Co [1988] QB 665). In doing so, he observed that to find differently would have the undesirable result of also:

“… bring[ing] about a significant expansion of the tort of negligence into spheres of conduct that are otherwise regulated, particularly by professional ethical standards and, as the fourth defendants put it, the intentional torts which are specifically directed towards providing redress for abuse of legal processes.” [61].

Concluding the law could not recognise such a duty in tort, the proceeding against the fourth defendants was struck out, his Honour determined that it was unnecessary to consider the alleged pleading inadequacies on which the fourth defendants relied in support of the strike out application. [65].

The application of the Sunland defendants

The Sunland defendants contended that the manner by which the plaintiff pleaded his damages claims:

  1. against the first, second and third defendants for the separate torts of conspiracy to injure by unlawful means and conspiracy to injure by lawful means; and
  2. against the Sunland defendants for the tort of malicious prosecution, for “instigating” or “maintaining” his prosecution in the UAE;

were inadequate in terms of their structure, form, and were ambiguous.

The issues as a whole were voluminous and will be summarised only in brief here for that reason.

  1. In relation to the conspiracy to injure causes of action, his Honour identified that they were problematic in that the plaintiff did not differentiate between the two torts (ie conspiracy to injure by lawful means and conspiracy to injure by unlawful means) and that resulted in difficulties for the defendants in not understanding which facts were relied upon in support of which cause of action. [78].
  2. In relation to the complaints concerning pleas of conduct said to be subject to immunity from suit, his Honour was of the view that neither the striking out of:
  • the allegations made as to the commencement of civil proceedings against the plaintiff and others in Dubai; and
  • the allegations made as to the giving of instructions to an advocate to appear before the Court during the Dubai criminal proceedings to submit that the plaintiff should be convicted quickly and the highest penalties imposed,

were justified, since the conspiracy to injure causes of action did not seek to establish liability for that conduct. [97]. (see Taylor v Director of the Serious Fraud Office [1999] 2 AC 177 at 215). As for the question of reliance on the allegations concerning the provision of the legal report, he concluded that it was inappropriate to determine that question on a strike out application. [99]. In view of the above, in relation to the conspiracy to injure causes of action, his Honour ordered that [80] to [85] of the pleading should be struck out, with leave to re-plead. [103].

 3. In relation to the cause of action for damages for the tort of malicious prosecution, the Sunlands defendants’ submitted that it involved the objectionable “rolling up of matters” which should have been pleaded separately, misconceptions about the elements of the cause of action and reliance on facts which did not make out the cause of action. [104].  In relation to this part of the application, His Honour:

  • His Honour agreed that ambiguity existed and that each of the defendants was entitled to a distinct pleading of the cause of action against them. [120]–[121]. He accordingly ordered that the paragraphs alleging the cause of action for malicious prosecution be struck out and recast; and
  • His Honour did not agree that the parts of the pleading relied upon to plead that the first, second and third defendants instigated the prosecution did not make out that element of the cause of action [124] (albeit acknowledging “an underlying validity to the complaint about the inadequacy of the pleading of the requisite facts concerning the impact of the defendants’ conduct on the prosecutorial discretion”): see [125].

Appeal Status: No Appeal Pending - Appeal Period Expired

Case Links:

Harrison v President of the Industrial Court of Queensland [2016] QCA 89, 12 April 2016

In this matter, the Court of Appeal considered whether an error had occurred when an Industrial Magistrate found that complaints made to prosecute offences under the Mining and Quarrying Safety and Health Act 1999 were nullities or incapable of amendment under s 48 of the Justices Act 1886, such that he lacked jurisdiction to proceed. The decision was upheld on appeal by the Industrial Court. [7]. For the reasons identified below the Court of Appeal held that the conclusions of the Industrial Magistrate and the Industrial Court were in error.

The relevant complaints had been made against the second, third and fourth respondents following an industrial accident at the George Fisher Mine near Mt Isa in which the driver of a mine vehicle was seriously injured. [4], [5]. The Industrial Magistrate formed the view that in the absence of the legal and factual ingredients requisite to disclose an offence known to law, and since each was duplex, the complaints were deficient. He accordingly dismissed them. [6]. On appeal the Industrial Court found that each complaint was a nullity, since it failed to identify the act or omission that comprised the offence, namely the particular obligation which had not been met and the measure that could have been taken to meet it. [7].

The applicant sought orders in the nature of certiorari to quash the orders dismissing each appeal and orders that the matter be remitted to the Industrial Magistrate, with costs. [8]. He argued that the first respondent’s decision involved an error of law amounting to a jurisdictional error and in so doing misconstrued the functions or powers of the Industrial Court. [9].

The specific questions for determination on appeal were:

  1. was it a jurisdictional error for the Industrial Court to find that each complaint was a nullity or incapable of amendment under s48 of the Justices Act 1886?
  2. if “yes” to (a), and in the absence of any discretionary reasons for declining the orders, should orders in the nature of certiorari be made quashing the orders of the Industrial Court and directing that court to proceed according to law? [10].

Review of the Industrial Court: a question of jurisdictional error

Since no avenue of appeal from the Industrial Court to the Court of Appeal exists, an application for judicial review of its orders may only be made in the exercise of the court’s supervisory jurisdiction on the ground of jurisdictional error: see s 349 Industrial Relations Act 1999. [27]. It is essential that the jurisdictional error must be one by the Industrial Court itself, and not an individual Magistrate: see Parker v President of the Industrial Court of Qld [2010] 1 Qd R 255.  [28], [29]. The concept of whether both an Industrial Magistrate and the Industrial Court had made jurisdictional errors in failing to dismiss a complaint that did not identify the relevant acts or omissions constituting the offences was examined in NK Collins Industries Pty Ltd v President of the Industrial Court of Qld [2014] 2 Qd R 304, with her Honour, Justice Holmes (as her Honour then was) stating that the [Industrial Court] correspondingly committed jurisdictional error by upholding a conviction for which there was no jurisdiction. [37].

The question before the court – “by no means easy to decide” [88] – was whether, if the same error or a similar error was made by the Industrial Court on appeal from the orders of the Industrial Magistrate, was there a constructive refusal or failure to exercise the jurisdiction of the Industrial Court on appeal or merely an error within jurisdiction. [82].

In addressing whether the Industrial Court’s order was reviewable for jurisdictional error, the court applied the principles of Craig v South Australia (1995) 184 CLR 163; Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 and Kirk v Industrial Court of New South Wales (2010) 239 CLR 531, together with considering the relevant authorities as to the scope of the powers of the Industrial Court. [61]. In so doing, the court pertinently noted that:

“… it cannot be said that every decision maker who has the power to rightly decide that they have jurisdiction must also have the power to wrongly decide that they do not” [73] (see Kirk v Industrial Court of New South Wales (2010) 239 CLR 531, 567–568 [57].)

The court took the view that if the decision of the Industrial Court involved an error of law that the Industrial Magistrate had no jurisdiction to proceed as the complaints were nullities, it should follow that the error amounted to jurisdictional error. [89]. In that regard it observed that if the facts alleged in the particulars included the required essential elements of a properly pleaded charge, the complaint was one capable of amendment even though the limitation period may have expired after the particulars were provided (Cf. Director of Public Prosecutions v Kypri (2011) 33 VR 157, 166 [27].)

It was determined that the complaints were indeed capable of amendment in a way that would comply with the requirements for a properly pleaded charge of an offence against s 38(1)(a) of the Act. In delivering the lead judgment, his Honour Justice Jackson pithily put it this way:

“… the complaint was not so defective that it did not even engage the jurisdiction of the Industrial Magistrate or that it was beyond the reach of the power of amendment under s.48. No doubt, the surgery required was major. But there was enough in the complaint to repel the conclusion that it was foredoomed from the beginning.” [161].

Accordingly, the Industrial Court fell into jurisdictional error when it reached the conclusion that each complaint was a nullity and incapable of amendment, and it dismissed the appeal in each case. [173]. In lieu of an order setting aside the decision (unavailable to the court since the application was brought for judicial review of the order made by the first respondent dismissing the appeal from the decision of the Industrial Magistrate), an order in the nature of certiorari quashing the Industrial Court’s orders in each case was made and the matter remitted to the first respondent for hearing and determination according to law. [175].

Appeal Status: Appeal Pending

Ure v Robertson [2017] QCA 20

The facts of this matter can be stated briefly. On 16 September 2016, the primary judge dismissed for want of prosecution a claim brought by the appellant against the respondent, and a counterclaim brought by the respondent against the appellant. [4].

On appeal, the appellant argued that the primary judge had misconstrued rr 371 and 389 of the Uniform Civil Procedure Rules 1999 (“UCPR”) and erred in not following the approach taken to the equivalent provisions in the former Rules of the Supreme Court in Perez v Transfield (Qld) Pty Ltd [1979] Qd R 444 (“Perez”). [6]. In addition, it was argued that the primary judge erred in not attributing significance to the fact that the prosecution of the claim was ‘stalled and frustrated’ by the respondent. [7].

In considering the first issue, Bond J (with whom Gotterson and Morrison JJA agreed) began by outlining the relevant rules of the UCPR and contrasting them with the previous rules. [10]. The relevant provisions are outlined below.

Rule 371 deals with the effect of a failure to comply with the rules and provides in subsection (1) that:

“A failure to comply with these rules is an irregularity and does not render a proceeding, a document, step taken or order made in a proceeding, a nullity.”

In addition, by r 371(2) of the UCPR, the Court is given various powers, including to the ability to set aside a proceeding and to declare a document or step taken to be effectual or ineffectual if there has been a failure to comply with the rules.

Rule 389 of the UCPR addresses the continuation of a proceeding after delay. Specifically, r 389(2) provides:

“If no step has been taken in a proceeding for 2 years from the time the last step was taken, a new step may not be taken without the order of the court, which may be made either with or without notice.”

Bond J observed that there were two key changes in the UCPR from the old rules which could “immediately be observed”. [11]. First, r 371 does not reproduce a provision in the old rules which stated that:

“An application to set aside for irregularity any proceedings, any step taken in any proceedings or any document, judgment or order therein shall not be allowed unless it is made within a reasonable time, nor if the party applying has taken any fresh step after knowledge of the irregularity.”

Second, r 371 introduced a new express power (which did not exist in the former rules) to declare a step effectual or ineffectual. [13].

The appellant’s argument centred around steps taken in the proceeding on 20 March 2015. It was common ground that by that date no step had been taken in the proceeding for more than two years. [21]. The effect was that, pursuant to r 389, no step could be taken without an order of the court. Notwithstanding this requirement, on 20 March 2015, the solicitors for the appellant provided a list of documents to the respondent. [22]. However, the “failure to comply with r 389(2) was an irregularity and did not render the step a nullity”. [33].

The appellant sought to argue that “because the irregular step was not a nullity, once it had been taken, it became the ‘last step’ for the purpose of the operation of r 389(2) going forward”. [34]. While she recognised that this would be subject to the ability of the respondent to bring an application to declare that step ineffectual, the appellant argued that the rule in Perez would apply “such that if an opponent failed to bring an application under r 371 to declare ineffectual the hypothesised last step within a reasonable time, the opponent would lose its rights to rely on r 389(2)”. [35]. In sum, the appellant submitted that because an application had not been brought to declare the step ineffectual within a reasonable time, it was taken to be the last step in the proceeding for the purposes of r 389(2). The appellant argued that the primary judge erred in concluding that an order under r 389(2) was required when two years had not elapsed since the making of the last step. [36].

In rejecting the appellant’s construction of the section, Bond J noted that the “evident intention of r 389 is that a stay should be imposed on proceedings in certain circumstances and to require any person who seeks to lift the stay to approach the Court to seek an order”. [38]. His Honour considered that the construction of r 389 contended for by the appellant would defeat that intention: 

“By the simple expedient of ignoring the requirements of r 389 and taking a step after the expiry of the two year period without approaching the court, a noncompliant litigant would avoid the need ever to comply with r 389(2). If the irregular step taken in breach of r 389(2) is a step for the purposes of r 389(2), once the irregular step was taken it could no longer be said of that proceeding that no step had been taken for two years since the last step. The two year time period would have started running again by virtue of the irregular step.”

The proper construction of r 389(2), according to his Honour, was that the “last step” contemplated “must be the last effectual step, namely a step which was effectual because it was regular when taken, or a step which, although irregular when taken, has since been declared to be effectual under the rules”. [40].

His Honour also agreed with the conclusion of the primary judge that the decision in Perez “no longer represented the law”. [44]. His Honour noted that the result in that case was driven by the provision in the former rules (outlined above) which required an application to be made within a reasonable time. [44]. “[T]he fact that the UCPR did not reproduce any equivalent of [the section] rendered Perez inapplicable”. [44].

For these reasons, Bond J concluded that the primary judge had not erred in concluding that the proceeding had been stayed and that Perez no longer represented the law. [43]–[44]. His Honour also rejected the appellant’s contention that the primary judged “erred in not finding, and not attributing significance to, the fact that the delay in the prosecution of the claim was stalled and frustrated by the respondent”. [51]. The primary judge had not mistaken the facts and there was “no merit in this complaint”. [52].

The appeal was dismissed with costs.

Appeal Status: No Appeal Pending - Appeal Period Unexpired


Prisons back to top

Tonkin v Queensland Parole Board [2015] QSC 334, 30 November 2015

This recent decision of Justice Peter Lyons contains an interesting and important discussion of the fundamental rights of freedom of political communication and how they may arise in various situations.  In this case in relation to conditions placed on an offender’s parole.

The applicant, formerly convicted of manslaughter, and sentenced to life imprisonment, [2] applied for a statutory order of review of the respondent’s decision to impose additional conditions on her parole, including that she not publish any document substantially connected with or describing any detail of the offence for which she is on lifetime parole, nor any offence committed by any other person.  [1]. The relevant decision was originally communicated to the applicant by letter dated 3 December 2013; [7] then later varied on 20 December 2013; [8] and confirmed on 21 February 2014. [11]. The decision was purportedly made on the basis that the respondent held the view that the applicant posed an unacceptable risk of committing an offence in proposing to write a book and, in doing so, profiting from crime.  [12].

The Application for a Statutory Order of Review comprised the following grounds:–

  1. The decision under review in its terms, operation or effect, impermissibly burdened the applicant’s freedom to communicate about government and/or political matters;
  2. The decision under review was not reasonably proportionate to the power under which it was made;
  3. In making the decision under review the respondent exceeded the authority conferred upon it by the Corrective Services Act 2006, particularly s 200(2) of the Corrective Services Act 2006;
  4. The decision was so unreasonable that no reasonable person could so exercise the power; and
  5. There was no evidence or other material to justify the making of the decision. [20].

The applicant sought an order that the respondent’s decision was invalid and of no effect. [21]. She particularly submitted that the ban on her publishing any manuscript substantially connected with, or detailing any detail of her offence or any offence committed by any other person, impermissibly burdened her freedom of communication. [23].

With reference to Miller v TCN Channel Nine Pty Ltd (1986) 161 CLR 556, his Honour made these observations regarding the decision made by the parole board, and the constraints on its scope of power:

“A statute may not confer a discretionary power on an entity, to act in a way that would conflict with a constitutional limitation.  If a statute confers a power in terms which, if read literally might authorise its exercise both in ways which would be consistent with a constitutional limitation, and in ways which would not be, then the grant is to be construed as limited to authorising the exercise of the power in ways consistent with the constitutional limitation.  … the repository of the power, when exercising it, must bear in mind the constitutional limitation, at least in the sense that a failure to observe such a limitation may well result in a purported exercise of the power which is outside the statutory grant.” [40].

Whilst acknowledging that the proposed book might “be regarded as sensationalistic, and would attract a great deal of publicity”, [70] his Honour relevantly noted that there was no rational basis for suggesting that such publicity might prejudice the applicant’s continued good conduct.  In all the circumstances, his Honour concluded that the parole board exceeded its power when it imposed the condition, based on the erroneous view that the applicant would commit an offence if she received profit from a book about her earlier offence. Accordingly, it followed that the decision should be set aside.

In the result his Honour effectively quashed the ruling, by the board, that the applicant would be breaking the law by profiting from her crime. The relevant provisions of the Criminal Proceeds Confiscation Act 2002 did not make it a crime for her to receive “financial reward” from a book, but merely allowed the State, should it choose to do so, to obtain an order for the forfeiture of an amount to be assessed by the Court as the value of the benefit which the applicant might derive from a book describing her offence or “thoughts, opinions or emotions about that offence”. [64].

Appeal Status: No Appeal Pending - Appeal Period Expired


Private International Law back to top

Robinson v Studorp Ltd [2013] QSC 238

This interesting decision of Jackson J concerned the question of whether or not an action should be stayed on the grounds that the Supreme Court of Queensland was “a clearly inappropriate forum”. As his Honour identified, a stay on that ground was based on the underlying principal that it may be oppressive, vexatious or an abuse of process to continue proceedings in a Court even if it is within the usual territorial jurisdiction of that Court. The plaintiff suffered asbestos related disease which was caused by exposure to asbestos which, he claimed, occurred in New Zealand where he frequently accompanied his father who was a builder and who worked with asbestos related products. The defendant was formerly James Hardie & Coy Pty Ltd. The plaintiff had lived on the Tweed Coast for a number of years. Proceedings had been commenced in the Dust and Diseases Tribunal of New South Wales although those proceedings had not been pursued on the basis of indications that the NSW DDT was an inappropriate forum. His Honour’s reasons contain an interesting and useful discussion of the relationship between the Australian Common Law and that of New Zealand where his Honour identifies the close connection between the two. That issue was relevant to the question of whether or not the Queensland Supreme Court would have any difficulty in applying the New Zealand law of negligence. In reaching his conclusions his Honour considered at length the Trans-Tasman Proceedings Act 2010 (Cth) and the corresponding New Zealand Act on the basis that it will come into effect in mid October 2013 and that it will regulate the proceedings if the matter were to be heard here. His Honour also considered the difficult issue of whether or not because the lex causa was the law of New Zealand, the ascertaining of the applicable principles would render the Queensland Supreme Court inappropriate. On this issue his Honour’s reasons contains a very helpful analysis of the New Zealand law of negligence and helpfully identifies those matters which are relevant to the determination of whether or not the “lex causa issue” should have substantial effect in any “forum non conveniens” determination.

Appeal Status: Appealed - Appeal dismissed: see [2014] QCA 174


Professions and Trades back to top

Institution of Engineering & Mining Surveyors v Surveyors Board of Queensland [2014] QSC 190

In this recent application, Applegarth J  was tasked with reviewing a decision of the Surveyors Board of Queensland holding that the possession of a tertiary qualification was a pre-requisite to registration as a surveyor.  Pursuant to s 39(1) of the Surveyors Act 2003 the Surveyors Board of Queensland (the “Board”) is empowered to establish the competency frameworks “appropriate for the qualifications, skills, knowledge and experience” needed for registration as a surveyor. [12].  Exercising this power, the Board, in April 2013, published the competency framework for surveyors, providing that, in addition to other requirements, in order to obtain registration applicants must possess a tertiary qualification in surveying – “applicants need to demonstrate that they have completed a course of study of at least three years full time duration acceptable to the Board or have previously been registered as a surveyor by the Board.” [2]. The Institution of Engineering & Mining Surveyors (the “Institution”) challenged the validity of this framework, arguing that the board did not possess the necessary power to require a person possess a relevant tertiary qualification in order to obtain registration. 

In making this application the Institution argued that though a tertiary or academic qualification was within the “natural and ordinary meaning of the phrase ‘qualifications, skills, knowledge and experience’”, the Board’s interpretation was ultimately too restrictive, see [3(a)-(f)]. The Court, however, was ultimately unpersuaded by the Institution’s submissions and concluded that the Board’s framework was valid. In reaching this conclusion the Court initially directed its attention to the language of the s 37(1) of the Act and, upon concluding that it was unambiguous, confined itself to an analysis of the natural and ordinary meaning of the phrase, “qualifications, skills, knowledge and experience,” within the context of the Act.  [24], see [22]–[23].

A “composite expression”, the phrase “qualifications, skills, knowledge and experience,” requires that applicants possess all four of the listed qualities, however, the exact “selection and blending” of these requirements was left by the legislature to the discretion of the Board. Id. Focusing upon the term “qualification” the Court concluded that its “plain-meaning” permitted, though did not require, the imposition of a tertiary qualification, again, the nature of which was left for the Board to determine, “subject to the implied conditions upon the exercise of power” and the other requirements of the Act. [24].  Further, that the term “qualification” was expressly included in the Act suggested that the “type of qualification [comprehended] . . . [was one that was] attained not simply by the possession of skills, knowledge and experience,”– to hold otherwise would be to render the term unnecessary, [26] (holding that “[w]ere it otherwise, the word “qualifications” would be unnecessary.”).  Given the plain-meaning of the term and the context in which it appeared in the Act, the Court held that the Act left it to the discretion of the Board to determine whether or not an academic qualification should be included in the requirements for registration, and thus denied the Institution’s application.

Appeal Status: No Appeal Pending - Appeal Period Expired

Institution of Engineering & Mining Surveyors v Surveyors Board of Queensland [2014] QSC 190

In this recent application, Applegarth J  was tasked with reviewing a decision of the Surveyors Board of Queensland holding that the possession of a tertiary qualification was a pre-requisite to registration as a surveyor.  Pursuant to s 39(1) of the Surveyors Act 2003 the Surveyors Board of Queensland (the “Board”) is empowered to establish the competency frameworks “appropriate for the qualifications, skills, knowledge and experience” needed for registration as a surveyor. [12].  Exercising this power, the Board, in April 2013, published the competency framework for surveyors, providing that, in addition to other requirements, in order to obtain registration applicants must possess a tertiary qualification in surveying – “applicants need to demonstrate that they have completed a course of study of at least three years full time duration acceptable to the Board or have previously been registered as a surveyor by the Board.” [2]. The Institution of Engineering & Mining Surveyors (the “Institution”) challenged the validity of this framework, arguing that the board did not possess the necessary power to require a person possess a relevant tertiary qualification in order to obtain registration. 

In making this application the Institution argued that though a tertiary or academic qualification was within the “natural and ordinary meaning of the phrase ‘qualifications, skills, knowledge and experience’”, the Board’s interpretation was ultimately too restrictive, see [3(a)-(f)]. The Court, however, was ultimately unpersuaded by the Institution’s submissions and concluded that the Board’s framework was valid. In reaching this conclusion the Court initially directed its attention to the language of the s 37(1) of the Act and, upon concluding that it was unambiguous, confined itself to an analysis of the natural and ordinary meaning of the phrase, “qualifications, skills, knowledge and experience,” within the context of the Act.  [24], see [22]–[23].

A “composite expression”, the phrase “qualifications, skills, knowledge and experience,” requires that applicants possess all four of the listed qualities, however, the exact “selection and blending” of these requirements was left by the legislature to the discretion of the Board. Id. Focusing upon the term “qualification” the Court concluded that its “plain-meaning” permitted, though did not require, the imposition of a tertiary qualification, again, the nature of which was left for the Board to determine, “subject to the implied conditions upon the exercise of power” and the other requirements of the Act. [24].  Further, that the term “qualification” was expressly included in the Act suggested that the “type of qualification [comprehended] . . . [was one that was] attained not simply by the possession of skills, knowledge and experience,”– to hold otherwise would be to render the term unnecessary, [26] (holding that “[w]ere it otherwise, the word “qualifications” would be unnecessary.”).  Given the plain-meaning of the term and the context in which it appeared in the Act, the Court held that the Act left it to the discretion of the Board to determine whether or not an academic qualification should be included in the requirements for registration, and thus denied the Institution’s application.  

Appeal Status: No Appeal Pending - Appeal Period Expired


Real Property back to top

Re Brooks' Caveat [2014] QSC 76

The issue in this case was whether the respondent ought to compensate the applicants for any loss caused by its alleged unreasonable lodging and continuation of a caveat over a property in Cairns. The facts of this case are relatively straightforward: the applicants were the executors of an estate which included the Cairns property which, on completion of the administration of the estate, would be held on trust for the respondent. Keeping the Cairns property became financially unviable, and the applicants endeavoured to put the property to auction. Upon becoming aware of this, the respondent lodged a caveat to prevent the sale, the property was taken off the market and the applicants incurred approximately $3,000 worth of damages.
Section 130 of the Land Title Act (“LTA”) provides that “a person who lodges or continues a caveat without reasonable cause must compensate anyone else who suffers loss or damage as a result,” and that the onus is upon the caveator to demonstrate “reasonable cause”: s 130(3). Following the language of this provision, his Honour concluded that “all” that the caveator was required to prove was that the relevant “caveat was lodged or continued with reasonable cause” and no more. [17]. In reaching this conclusion, the Court departed from the decisions of other states – though this departure is attributable to the presumption, made explicit in s 130(3) of the LTA that the caveat was lodged without reasonable cause – given that such a presumption is not found in the (congruent) legislation of other states. See discussion at paras [16]–[19].

Reasonable Cause
In addressing the question whether the “caveat was lodged or continued with reasonable cause”, the Court began by considering whether the applicant had reasonable grounds for considering that she possessed a caveatable interest in the Cairns property. The identity of those possessing a caveatable interest is set out in s122(1) of the LTA, which provides that a caveat may be lodged by “a person claiming an interest in a lot”. Thus, the applicant could only lodge a caveat if her position, as a (future) beneficiary of a trust, could be considered to create an interest in the Cairns property. After a thorough analysis of both the relevant statutes and cases, the Court held that a broad interpretation of “interest,” encompassing interests “well beyond legal or equitable” was sufficient. [30]–[33]. Further, though the interest in the present matter was yet to “ripen”, the Court considered that the “certainty” of the interest was sufficient to “ground a present right to protect” it. [40]. Given that there was, at a minimum, a “reasonable argument” that the respondent had a caveatable interest, his Honour concluded that there was thus reasonable grounds for her belief that a caveatable interest existed and that this was sufficient (in the circumstances) to conclude that the caveat was lodged with reasonable cause. [43].

Reasonable Continuation
The Court then addressed whether the caveat was continued without reasonable cause. Prima facie, given the conclusion, based upon the nature of the respondent’s interest in the Cairns property, that the caveat was lodged with reasonable cause and that this interest did not change, it followed that the respondent had reasonable cause to continue the caveat. This conclusion, the Court considered, may be altered however where there were developments in the parties’ dispute, as opposed to changes in the interest, which would challenge the propriety of the argument that “reasonable cause persisted”. [44]. Though in the present matter there were a number of developments in the dispute, including that the respondent was issued with a Requisition Notice [45], [51] and that the respondent voluntarily withdrew the caveat [52], the Court considered that these were not of a nature to detract from the conclusion that the caveat was continued with reasonable cause. In particular, when considering the impact of the respondent’s decision to withdraw the caveat, his Honour noted that the fact that a caveat was withdrawn did not mean that it was previously continued without reasonable cause, and that considering the facts of this case in their entirety there was no suggestion that there was an improper purpose behind this caveats continuation – despite the fact that it was withdrawn only shortly after the property was taken off the market. [52]. See the discussion at paras [53]–[56]. On this basis, the Court held that the respondent had discharged her onus under s 130(3) of the LTA and the application was dismissed..

Appeal Status: No Appeal Pending - Appeal Period Expired

Mekpine Pty Ltd v Moreton Bay Regional Council [2014] QCA 317

This appeal from the Land Appeal Court presented the Court with issues concerning both the Land Title Act 1994 (“LTA”) and the Retail Shop Leases Act 1994 (“RSLA”).  This case arose out of a lease entered into by the appellant, Mekpine, in 1999 in relation to land registered as Lot 6 on RP 809722 (“Lot 6”) which described the common areas under the lease by reference to the boundaries of the Lot.  Pursuant to this lease, Mekpine had the ability to use the common areas subject to the direction of the lessor.  The lessor subsequently purchased the adjoining lot, Lot 1 (“old Lot 1”), and obtained development approval to extend their property across both lots, conditional upon their amalgamation.  The registration of both these lots was consequently cancelled and the land was amalgamated into a new registered lot, Lot 1 (the “new Lot 1”).  Mekpine’s lease was endorsed on the registered survey plan of the new Lot 1.  In 2008 the Moreton Bay Regional Council (“MBRC”) resumed a part of Lot 1 that was wholly outside the old Lot 6, Mekpine, however, applied for compensation for its interest in the resumed land.  Though successful at first instance, the Land Appeal Court overturned this decision, holding that at the date of resumption Mekpine did not have an interest in the resumed land.  It is this decision which was the subject of the present appeal. 

This appeal raised two questions of law, first, whether upon registration of the amended lease s.182 of the Land Title Act conferred on the applicant a compensable interest in the resumed land; and second, whether the RSLA amended the applicant’s lease such that, on the registration of the new Lot 1, the common areas under the applicant’s lease accorded with the “common areas” as defined in the RSLA.  [9].

Effect of s 182 of the Land Title Act

Pursuant to s 182 of the Land Title Act the registration of an instrument operates to transfer the interest in accordance with the instrument and vest the interest in accordance with the instrument.  Mekpine’s contention was that upon the registration of the new Lot 1 with the lease endorsed on it, references in their lease to Lot 6 became references to the new Lot 1, and thus the common areas of their lease were determined by reference to the new Lot 1, not to the now non-existent Lot 6.  [11]. The Court, (McMurdo P and Morrison JA, Holmes JA dissenting), accepted this contention, concluding that Mekpine did have an interest in the resumed part of the new Lot 1, notwithstanding the fact that the lease had originally referred to Lot 6. 

The system of property registration in Queensland does not contemplate the creation of parallel freehold title, thus the old Lot 6 and Lot 1 ceased to exist on registration of Lot 1.  [95].  The Court concluded that the effect of s 182 registration was that the registration of survey plan with the applicant’s lease noted on it “transferred or created a leasehold interest on the part of the applicant in the new, amalgamated Lot 1”.  [18]. Thus, given that Lot 6 ceased to exist, any reference to “land” in the lease became a reference to the land in the new Lot 1.  [21]–[22], see also [131].  This conclusion it was considered, was consistent with the objective intention of the parties when creating the lease and the objects of the Lands Title Act.  [19]. 

Effect of Retail Shop Leases Act

Though unnecessary given that its previous conclusion disposed of the appeal, the Court considered it desirable to consider Mekpine’s second contention, namely that the RSLA amended the definition of “common areas” in Mekpine’s lease.  [23].  Sections 18, 19 and 20 RSLA provide that: the provisions of the RSLA are to be taken to be included in all retail leases; that parties may not contract out of the provisions of the RSLA; and that where there is an inconsistency between provisions of a lease and the RSLA, the RSLA will prevail.  [28].  Section 6 of the RSLA defines “common area” in a different manner to its definition in the parties lease, and thus the question before the Court was whether this difference resulted in an inconsistency between the Act and the lease and that, as a consequence, this provision had no application.  [152]; RSLA, ss 18–20. 

The Land Appeal Court had relied upon the decision in Gibb v Federal Commissioner of Taxation, concluding that because the relevant definition appeared in the definition clause, it was merely an aid to construction and only provided a definition for the word as it was used in the statute.  [36].  Upon a detailed consideration of the RSLA the Court concluded the contrary holding, that the s 6 definition of “common areas” was to be incorporated into retail shop leases.  [37].  This decision was reached following a consideration of the legislative intent of the RSLA, in particular the Court was swayed by the object and structure of the Act, specifically the location of the definition (outside the “Standard” definition clause); its substantive operation, see [158]–[161], and the express provisions prohibiting contracting out of the RSLA and the supremacy of the provisions of the Act were any inconsistency to arise in a contract dealing with inconsistencies.  [37], see also [157]. 

The Court allowed the appeal. 

Appeal Status: Appeal Pending - Application for Special Leave to appeal to the High Court granted.

Sutherland v Jot Property Solutions Pty Ltd [2015] QSC 249, 25 August 2015

This is a recent decision of the Supreme Court of Queensland considering the standing requirements for a claim made under s 228(1) of the Property Law Act 1974 (PLA).  The defendants in the substantive matter brought the present application in an effort to strike out the plaintiffs proceeding against them, alleging that the claim be set aside or struck out on the ground that the plaintiff lacked standing.  The substantive action had been brought by the plaintiff liquidators to have a series of transactions involving the plaintiff and the defendant made prior to the plaintiff going into liquidation, declared void and reversed, pursuant to s 228, on the basis that there had been an “intent to defraud creditors” and the transactions amounted to an “alienation of property”.  [6].  This application turned on the question of whether the plaintiff liquidators could be considered a “person prejudiced by the alienation of property”.

The plaintiffs were the liquidators of Blue Chip Property Services.  Pursuant to s 477 of the Corporations Act 2001 (Cth), as liquidators they have the power to “bring or defend any legal proceeding in the name and on behalf of the company ...” (emphasis added).  [18].  In the substantive matter, however, the liquidators did not bring the claim on behalf of the company, but instead insisted that the matter had been brought on behalf of the creditors of the company, [21], claiming that they had the power to do so courtesy of s 477(2)(m) which confers on liquidators the power to “do all such ... things ... necessary for winding up the affairs” of a company.  [25].  The Court considered that though this interpretation did not “rest easily” with the existence of s 477, and the fact that it expressly allowed for a liquidator to bring or defend a legal proceeding, see [26]–[27], the Court accepted that s 477(2)(m) might empower liquidators to institute proceedings pursuant to s 228 of the PLA.  [28].  The real issue was whether the liquidator was a person to whom s 228 applied.  

Pursuant to s 228, the liquidator could only bring this action if it could establish that it was “prejudiced by the alienation”.  Though, in the circumstances, it was arguable that the company was prejudiced, the Court considered that this prejudice did not extend to the liquidators as individuals.  In reaching this decision the Court addressed the applicant’s contention that even accepting the plaintiff’s assertion or prejudice – which was, of itself questionable, see [31]–[32] – it was not occasioned “by the alienation of property”.  [33].  The Court considered that the language of s 228 required a causative link between the prejudice complained of, being in this case that it has remuneration outstanding, and the alienation.  In this case, the plaintiff had no relevant interest at the time when the alienation is alleged to have occurred, the alienation occurring long before the liquidator assumed any connection with the company.  [34]–[35].  Instead, the Court concluded, any prejudice suffered by the liquidator was caused by the liquidator’s decision to take on the appointment, and thus it lacked standing under s 228. 

For these reasons, the Court struck out the statement of claim for its failure to disclose a reasonable cause of action.  [42]. 

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Meridien Airlie Beach Pty Ltd (Receivers and Managers Appointed) (in Liq) v Karamist Pty Ltd [2015] QCA 192, 13 October 2015

This was an appeal against a prior successful application for relief against forfeiture pursuant to s 124 of the Property Law Act 1974. The appellants contended that, in granting the relief, the primary judge erred in law; otherwise misdirected himself in relation to the legal test to be applied in cases of relief against forfeiture; fettered his discretion; and essentially reversed the onus in circumstances where the discretion is at large and it was a matter for the respondent to prove that it was entitled to the relief sought. [3].

By way of brief background, the appellants (sublessors) and respondent (sublessee) entered into two subleases for recreational purposes. The terms of both were for almost 100 years. [5]. The respondent defaulted in payment of the deferred rent of $50,000 for each sublease within the required timeframe. [6]. The appellants lodged notices of surrender of the subleases [12] and thereupon the respondent eventually paid the deferred rent.  Nonetheless, the appellants refused to reinstate the subleases after negotiations failed. [14]. An application for relief against forfeiture was heard on 31 October 2014 [16] and granted [40] on the basis that the primary judge detected no reason for exercising the discretion against the application in circumstances where the respondent was solvent; all outstanding rent had been brought up to date; and there was to be no recurrence of the triggering default because the deferred rent had been paid in full. [38].

First ground of appeal: the primary judge misdirected himself in relation to the legal test

Upon analysing the reasons at first instance, the court did not agree that conclusion that his Honour had actually reversed the onus was a valid one. On the contrary, the court took the view that he had indeed balanced all of the factors that were required to be considered in the exercise of the discretion [46], and had been “acutely aware” that the discretion was at large. [44]. Her Honour Justice Lyons noted that the primary judge had undertaken significant analysis in gauging both the likelihood of any future breaches, together with evidence indicating that the loss of liquidity was interim, not permanent. [45].

Second ground of appeal: the primary judge did not give adequate reasons

It was further contended that the primary judge did not provide proper reasons since he failed to state the basis which led to his conclusion concerning the disputed factual questions and did not list the findings on the contested issues. [47].  In particular, it was submitted that the finding that the default was not considered wilful was not sufficiently based upon the available evidence.

It was additionally contended that the specific basis upon which the primary judge was satisfied that the relief should be granted should have been identified [48]: see Sunland Group Ltd v Townsville City Council [2012] QCA 30 and Loader v Moreton Bay Regional Council [2013] QCA 269.

With reference to the New South Wales Court of Appeal decision of Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, the court observed that there is generally no duty on a judge to make a decision in respect of every matter of fact or law which was raised in a particular proceeding, nor is it their duty to make a decision on every matter raised in argument.  Furthermore, reasons need not ordinarily be given in procedural applications or in applications for leave where the considerations of fact and law are clear.  Put differently, it is not essential for a judge to itemise every factor found to be relevant or irrelevant. See also Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378, 385–386. With that in mind, and finding that the primary judge “did sufficiently grapple with the evidence before him and did indicate the evidence he was relying on” [52], the court was not of the view that this aspect of the appeal had been made out. [53].

The appeal was dismissed with costs. [54], [67].

Appeal Status: No Appeal Pending - Appeal Period Unexpired


Specific Performance back to top

Evans v Robcorp Pty Ltd [2014] QSC 26

This important decision addresses the question of whether or not the Court ought to order specific performance in circumstances where such an order would impose great hardship upon the respondent? The general principle involved in the decision is the discretionary nature of the equitable remedy of specific performance. In the matter before his Honour, an application for specific performance had been made, pursuant to s70 of the Property Law Act 1974 (Qld), by the applicant, a vendor in an unperformed contract for the sale of land. [1-5] In resisting this application on grounds related to their current impecuniosity, the respondents gave evidence to the effect that though at the time of making the contract they believed they would be in a position to perform their obligations, at the date of settlement, they were unable to do so and that, were the Court to make such an order, they would be unable to comply. [6] In determining whether or not an order for specific performance ought to be made in these circumstances, His Honour, Justice P Lyons canvassed decisions from a number of jurisdictions. In particular, his Honour noted the decision of the New Zealand Supreme Court in Nicholas v Ingram; subsequently cited with approval by Demack J in Ready Construction Pty Ltd v Jenno [1984] 2 Qd R 78, at 82, which considered it authority for the principle that “mere financial inability on the part of a purchaser is not a reason for refusing to decree specific performance” [10]. His Honour, however, was more persuaded by, and ultimately followed the reasoning of the NSW Supreme Court in Boyarsky v Taylor [2008] NSWSC 1415 and its citations to Spry’s Equitable Remedies to the effect that “the courts will not require that to be done which cannot be done” and that “there is no reason … why a source of hardship should be ignored merely because it did not exist at the time when the contract was entered into.” [12-15] On the basis of this reasoning, Peter Lyons J refused to make an order for summary judgment.

Appeal Status: No Appeal Pending- Appeal Period Expired


Statutes back to top

Sojitz Coal Resources Pty Ltd v Commissioner of State Revenue [2015] QSC 9

This is an interesting decision in which the Court took the opportunity to address the relationship between the Acts Interpretation Act 1954 (“AIA”); the Duties Act 2001 (“Duties Act”) and the Mineral Resources Act 1989 (“MRA”), specifically with regard to interpretation of the phrase an “interest in land”.  This matter arose following the conclusion, by the Commissioner of Taxation (the “respondent”) that Minerva Coal Propriety Ltd (the “appellant”) was a “land rich corporation”, under s 165, for tax purposes.  The appellant disputed this classification, arguing that its mining leases were not “interests in land” for the purposes of the Duties Act.  It is this dispute which was before the Court.

Pursuant to Ch 3 of the Duties Act a corporation is a “land rich corporation” where its land-holdings have an unencumbered value of over $1,000,000 and comprise 60% or more of the unencumbered value of all of its property.  Duties Act, s 165.  For the purposes of the Duties Act, a land-holding is defined as a corporation’s “interest in land”.  Duties Act, s 167.  This definition, however contains an editor’s note which directs the reader to the definition of ‘interest,’ as it relates to land, in the AIA -- “(a)  a legal or equitable estate in the land or other property; or (b) a right, power or privilege over, or in relation to, the land or other property.”  Id.  Pursuant to s 36 of the AIA, “in an Act” the definitions in s 36 apply, except insofar as the “context or subject matter otherwise indicates or requires”.  AIA, s 32A. 

A mining lease, under the MRA, does not create an estate or interest in land.  MRA s 10.  Further, it was accepted by both parties, that the appellant’s interests in its mining leases would not be considered an interest in land as the phrase was understood at common law, [3], [13]–[17]; or under paragraph (a) of the definition of “interest” in s 36.  [10]. The appellant’s interests in its mining leases were not within paragraph (a) of the definition in the AIA.  Both parties agreed that if, and only if, paragraph (b) of the s 36 definition applied, then the mining leases were “interests in land” for the purposes of the Duties Act.  [17]–[19].  Thus the issue before the Court was whether the application of the definition of interest in the AIA was limited to paragraph (a). 

In addressing this question, the Court considered the language of the provision, looking closely at the use of the term “interest” and the context in which it arose.  The appellants argued, and the Court ultimately agreed, that the definition of “interest” in the AIA could not apply ... because the word “interest” was used [in s 167] specifically and unambiguously in a way which was qualified by the words “in land”.  [20], [58].  The Court considered that the application of the entire s 32 definition, including paragraph (b), would negate the deliberate use of this qualifier given that it would incorporate many “rights, powers or privileges in relation to land” into the section which could not be regarded as interests in land.  [21].   That an interest in land is distinguished from an interest in relation to land has previously been discussed and accepted, see CCM Holdings Trust v Chief Commissioner of State Revenue; Sorrento Medical Service v Dept Main Roads; [22]–[26], and the Court concluded that to apply the s 36 definition as argued for by the respondent, would, most significantly, operate to alter the express meaning of the section.  [57], see also [27]–[32].  Given this conclusion, the Court allowed the appeal.  

Appeal Status: No Appeal Pending - Appeal Period Expired

Commissioner of Taxation v Croft [2016] QSC 190, 26 August 2016

This case tangentially involved the vexed issue of the ability of the Commissioner of Taxation to compromise taxation liabilities despite the absence of any express power to do so.  Ultimately, there was no need for the court to determine the point because the taxpayer had agreed to pay the full amount of the taxation liability such that all that had occurred was that the Commissioner had entered into an agreement to facilitate the payment of the taxation liability.  He had not compromised that liability in any way.  In cases of this nature a difficulty might arise because, by the compromise of a taxation liability, the Commissioner is effectively waiving the obligation imposed by the legislature on a taxpayer.  The tensions in that are obvious.  There are very few authorities on this point and what there are arise at first instance on the question of costs when the issue is raised as to whether the Commissioner acted reasonably in not accepting a settlement offer.  Of those cases which do exist on point, none, before this, have undertaken any detailed analysis of issues involved.  Indeed, many of the decisions have rested on the obiter of a single judge of the Federal Court whose comments on this point were not attended by authority or reasoning.  That said, the Courts have recognised the obvious practicality of recognising the Commissioner’s power to compromise taxation liabilities as part of the general powers of the administration of the taxation legislation and that, without such a power, the legislation may be administratively unworkable.  Naturally, both of those matters are relevant to the discerning of the legislative intent contained in the Commissioner’s powers.

In this matter the issue arose in a most interesting manner.  The Commissioner sued the defendants upon a guarantee and indemnity in relation to the tax-related liabilities of Croft Steel Pty Ltd.  At the relevant time the company had a liability in excess of $2m and a deed of agreement was entered into whereby the company agreed to pay the tax debt by a series of instalments and the defendants agreed to guarantee the payment of the same.  For his part, the Commissioner agreed not to pursue further steps in the recovery of the tax debt.  The company eventually defaulted in payment of the instalments and the Commissioner issued the present proceedings against the guarantors. 

The defendants raised two main arguments in defence of the summary judgment application brought by the Commissioner:

  • First, that the Commissioner did not have power to enter into the contract for repayment of the tax debt or the guarantee comprised in the deed;
  • Second, that the person who entered into the deed on the part of the Commissioner did not have appropriate delegation to do so. 

The defendants submitted that the power of the Commissioner in s 3A of the Taxation Administration Act, which provides, “The Commissioner has the general administration of this Act” was insufficient to confer a power to settle proceedings.  Section 3AA of the same Act was important as it gave effect to Sch 1 which provided, inter alia, that the objects of Pt 4-15 of the Act was to “ensure that unpaid amounts of tax-related liabilities and other related amounts are collected or recovered in a timely manner”.  Specific power was given to the commission in sub-division 255-B to the effect that the Commissioner was entitled to defer the time at which an amount of a tax related liability is or would become due and payable and a specific power was given to allow a taxpayer to pay by instalments.

In relation to the power to enter into the compromise agreement the Commissioner relied upon a number of first instance authorities which suggested that the general power of administration was wide enough for the purposes of empowering the Commissioner to compromise a taxation liability.  The defendants asserted that the power was not so wide and that the other provisions permitting the Commissioner to ameliorate the obligation to pay the tax debts indicated that the alleged general power was not so wide.  In effect the defendants called into aid the maxims expressio unius est exclusio alterius or expressum facit cessare tacitum

In dealing with this question, Jackson J also noted the obverse situation where an individual asserts that the Executive might contract out of a statute or be estopped from relying upon a statute.  His Honour noted a number of well-established cases which have held that an estoppel cannot run against a statute, especially where the statute imposes charges.  Other cases are those which provide that a person charged with a statutory duty is not entitled to contract out of the performance of the duty.  However, as his Honour noted, the situation in the case before him was different to other such cases because the contract in question was concerned to effect the collection of the actual taxation amount due:

“[43]        The particular point of interest in the present case is that there can be a difficulty about the application of private law principles of contract law or estoppel in answer to the recovery of a sum due under a statute, particularly a taxing statute. But the present case differs from those cases, because the contract relied upon by the plaintiff is not alleged to operate in a way that would contradict the liability of a person under the taxing statute for an amount provided by the statute.”  (emphasis added)

His Honour concluded:

“[45]        In my view, in a similar way, s 3A is wide enough to empower the plaintiff to enter into a contract of compromise over a tax-related liability with the taxpayer and with a third party to pay the tax-related liability. This is consistent with not only the cases relied on by the plaintiff referred to previously, but also with general principles as to governmental contracting power of the Commonwealth.”

In reaching this conclusion his Honour held that the specific powers of the Commissioner in the TAA in relation to affording time to pay did not have the consequence that the general power ought to be construed narrowly.

The second question considered by Jackson J was whether or not there had been any appropriate delegation to the relevant officer to empower that officer to enter into the agreement as the relevant delegations did not delegate the powers contained in s 3A of the TAA.  Whilst his Honour considered that there may have been some force in that submission, it did not matter as it was clear that the Commissioner of Taxation had ratified the contract of guarantee and indemnity by the time that the present application was brought. 

Appeal Status: No Appeal Pending - Appeal Period Unexpired


Succession back to top

Neuendorf v Public Trustee of Queensland [2013] QSC 156

Martin J has delivered the above recent decision which discusses the operation of s107 of the Powers of Attorney Act which is a provision unique to Queensland.  Such applications are becoming more common and his Honour’s decision is the first to give any detailed consideration to the scope of the section or the matters which the Court should consider when applying it.
The matter came about when the applicant, who held a power of attorney, sold a house belonging to the grantor of the power who had become mentally impaired.  At the time of selling the house the applicant was not aware that the house had been left to the applicant by the terms of the will of the grantor of the power of attorney. Section 7 of the Powers of Attorney Act permitted the Court to make an order for compensation if a person’s interest in an estate of another was lost because of a sale or dealing with the principal’s property by an attorney of the principal.  Martin J noted that the discretionary power vested in the Court was untrammelled and identified a number of considerations which were likely to be relevant in any given case.  Of substantial importance in the present case was that the sale by the attorney was for the benefit of the testator and it did not result in any benefit to the attorney.
It is likely that this type of application will become more prevalent in the future with the increasing popularity of enduring powers of attorney.

Appeal Status: No Appeal Pending - Appeal Period Expired

McElligott v Public Trustee of Queensland [2013] QSC 314

In this matter McMurdo J had to consider the nature of a gift under a will of a right to the "full use" of a rural property for a period of five years. The estate had insufficient other assets to meet its expenses such that the important question was whether or not the interest under the will was merely personal or, alternatively, was an equitable interest in the rural land? His Honour identified that the word "interest" when used in respect of land has a chameleon like quality such that it will carry with it different connotations when used in different contexts. In the matter before his Honour the question turned on a consideration of the full rights which the beneficiaries were given and the relationship with other rights given to other beneficiaries. It was particularly important that the gift was given to young children of whom it was thought could not be expected to carry on a business on the land. Although it is not said in the reasons for judgment, it would appear that the will was made in the expectation of an impending death such that it could have been assumed that the named beneficiaries would receive the gift as minors. In the circumstances it was held that the gift of the right to use the land for five years conferred only a personal right and did not create an equitable interest in the land. The case also contains a discussion of the application of s 33C of the Succession Act which permits the admission of extrinsic evidence concerning the testator’s intention.

Appeal Status: No Appeal Pending - Appeal struck out by Court of Appeal on 24 March 2014: see [2014] QCA 54

The Trust Company Limited v Gibson [2012] QSC 183

This probate matter, decided in 2012, is an important Queensland judgment on the doctrine of ademption.  It has not yet been reported, however it will be in the near future.  The case is particularly noteworthy because, in reaching a conclusion on the issue of whether a specific devise had been adeemed, Mullins J refused to follow two earlier Queensland Supreme Court decisions, but rather followed a more recent decision of the New South Wales Court of Appeal. In this matter the marital home, bequeathed to the deceased’s children (“the Respondents”), had been sold to finance the move of the testator’s wife to a nursing facility and the remaining proceeds transferred to the testator’s bank account. Whilst, prima facie, ademption occurred as the specific devise was disposed of on the (incapacitated) testator’s behalf prior to his death [21], the parties to the proceeding submitted that, given the facts of the case, specifically the mental incapacity of the testator, the exception to ademption, espoused in Viertel, applied. [22] However, prior to making an order, her Honour’s attention was drawn to a New South Wales Court of appeals decision, RL v NSW Trustee and Guardian [2012] NSWCA 39, which had concluded that Viertel was wrongly decided and that the exception to ademption provided for in Jenkins v Jones (1866) LR 2 Eq 323, upon which the decision in Viertel was based, ought to be confined to cases “where the subject matter is extinguished by fraud or tortious acts unknown to the testator”. [27] Persuaded by the comprehensive reasoning provided by the NSW Court of Appeal, Mullins J concluded that the bequest of the marital home was adeemed by its sale and the balance of the proceeds formed part of the testator’s residual estate. 

This decision is particularly relevant given Australia’s aging population and the increasing prevalence of cases where “properties owned by incapacitated persons [are] sold under the authority of enduring powers of attorney, to fund accommodation bonds and other necessities and comforts.” [25]

Appeal Status: No Appeal Pending - Appeal Period Expired

Van der Meulen v Van der Meulen [2014] QSC 33

This case is an important decision outlining the factors for determining whether or not, pursuant to s 21 of the Succession Act 1981, a Court should authorise a will to be made for a person without testamentary capacity. Given the necessarily fact-centric nature of this determination, an exposition of the facts before Jackson J is necessary. This application concerned Christopher Millar, a 44 year old man with severe intellectual impairment, and was brought by his sister and guardian/administrator, Annake. Despite his sever intellectual impairment he had made a number of property and financial transactions. Further, though currently lacking testamentary capacity and, according to satisfactory medical evidence, unlikely to ever regain this capacity, Christopher had also previously drafted two “wills” in which he left his estate to Annake and his brother Joffrey in equal shares, with a gift over to Anneke’s or Joffrey’s children should either predecease him. Further in 2012, Christopher had proposed that his estate be divided between Annake and his mother, Margaret, with the contingency that if Margaret predeceased him that her share be divided amongst his nieces and nephews and at the hearing he expressed a wish that his estate be divided between Annake and Joffrey, however, if Joffrey did not want a share, then the entire estate should go to Annake. Finally Joffrey had expressed his intention to renounce, on Christopher’s death, any benefit under the will.
In determining whether to authorise the proposed will under s 21, his Honour was required to first consider whether, in the circumstances, it was appropriate to grant leave to apply for the order under s 22 of the Succession Act. In deciding to grant Annake leave, Jackson J considered the evidence before him with respect to the factors set out in s 23 of the Succession Act, [19]–[28], and ultimately concluded that there was sufficient evidence before the court to grant leave. [30]. Though the evidence before the Court regarding some of the listed factors was limited, given the relatively small size of the estate and the uncontested/controversial nature of the proceeding, Jackson J considered that it was appropriate, in the circumstances to adopt as broad of an analysis of the evidence as the Succession Act permitted. [29]. The only question under s 23 to give his Honour pause was whether the proposed will was the will that Christopher would make if he had the testamentary capacity to do so. Before the Court were four different and separate statements of Christopher’s actual intention. Though it was significant that Christopher had expressed basically the same intention over an extended period of time, given the extent of Christopher’s mental impairment his expressed intention could not, solely, answer this question. [17]. To conclusively answer this question, his Honour directed his attention to a consideration of what Christopher would be aware of were he to have testamentary capacity, but otherwise be in his present situation. [48]–[49], [52].
Ultimately, Jackson J granted leave to apply for an order under s 21, considering it appropriate in the circumstances, particularly given that it was reasonably likely that Christopher’s previous “wills” were reasonably likely to be invalid, [30], and, in the same proceeding, authorized a will to be made for Christopher in the terms proposed by the parties. In presenting his reasons, however, his Honour, was explicit in identifying that there was “no definitive principle” that could be used to determine future cases of this nature; rather each application must be determined according to its specific facts. [51].
Note: For a recently published excellent text book on statutory wills see: Richard Williams and Sam McCullough, Statutory Will Applications: A Practical Guide, 2014 (LexisNexis).

Appeal Status: No Appeal Pending - Appeal Period Expired

The Public Trustee of Queensland v The Public Trustee of Queensland [2014] QSC 47

In this recent case, the Supreme Court was faced with a particularly interesting question, namely whether the executor and sole beneficiary of a valid will (“Nielsen”), subsequently convicted of assisting the testator (“Ward”) to commit suicide, was subject to the common law forfeiture rule.
The forfeiture rule – “that a person responsible for the death of another cannot be allowed to benefit from that other person’s estate” [7] – is well entrenched in the common law of both the UK and Australia. [7]-[9]. Further, its application is deemed to be without discretion – where death is the result of a crime the rule is applied. [9]. This specific issue, namely where death was the result of “assisted suicide” however, had never previously been considered by an Australian court. [11].
While not the case in other Australian jurisdictions, Queensland’s forfeiture legislation does not expressly exclude or include “assisted suicide” within its definition of “unlawful killing,” and thus, in addressing this question, the Chief Justice was required to directly apply the common law. [14]. Despite a number of circumstances favouring the exercise of some form of discretion, including that Neilsen had acted entirely in accordance with Ward’s wishes, see [15], the Court concluded that the law was clear – the application of the forfeiture rule is without discretion. [16]. That Nielsen’s crime was motivated by an “honourable” purpose, and at the request of the deceased was irrelevant [19]. Upon being convicted of causing Ward’s death, Nielsen had forfeited any entitlement under the estate. In accordance with this, the Court concluded that Nielsen was not “capable” of acting as executor under the will and had forfeited any benefit he would otherwise have taken.

Appeal Status: No Appeal Pending - Appeal Period Expired

King v Wogandt; Re Beutel (deceased) [2014] QSC 175

This matter concerned the power of the Court to rectify or construe a testator’s valid, but imprecise will. Arising out of the division of Beutel’s (the “testator”) estate, the central issue in this case was the identity of the beneficiary to the late-testator’s home in Rosewood. The relevant facts of the case are as follows.  Prior to his death, the testator had executed two wills within 9 days – the first made no explicit reference to the Rosewood property, and as such it was left to the residual beneficiaries – the respondent’s three children. [6]–[7].  In the second and final will, the testator, in cl 3a, directed that his home be given to “my late wife’s niece, JEANETTE KING.”  [20]. It is unclear from this disposition to whom the property was bequeathed – though it referred to the testator’s step-daughter by name; the description was incorrect and the only “niece” was the respondent, the “late wife’s niece” by marriage. [47]–[48].  The testator died in 2003, and as of 2014 the respondent had yet to complete the administration of the estate.  In light of this delay, and alleging that she was entitled to the proceeds from the sale of the Rosewood property, the respondent, the testator’s step-daughter, filed this application for an order that the respondent, the testator’s niece, show cause why she had failed to execute the will. The respondent, subsequently filed a cross-application seeking rectification of the will so that she is the named beneficiary under cl 3a, or alternatively that cl 3a, properly construed, names her as the beneficiary or fails for uncertainty. [1]

Cross-Application

The first question before the Court was, who was entitled to the Rosewood property? Upon considering the evidence before the Court, his Honour was unsatisfied with the respondent’s testimony regarding the events surrounding the testator’s execution of his final will and concluded that she had failed to establish that her name was accidently omitted as the beneficiary of the Rosewood property with the consequence that rectification, pursuant to s 31 was inappropriate.  See [20]–[37].  Further, the Court held that “any doubt” regarding the intended beneficiary because of the inconsistency between the expressed relationship and the name, ought be “resolved in favour of the name,” [49], see [47]–[48], and thus that the applicant was the beneficiary identified in cl 3(a).

Show Cause Application

In then addressing the applicant’s “show-cause” application the Court reviewed the progress of the administration of the estate, concluding that the respondent had “delayed the resolution of the affairs of the estate” and had also improperly dealt with its assets. [62]. Given the evidence presented, his Honour concluded that the respondent had not “shown cause why she had not complied with the applicant’s request,” and thus ordered that subject to any order of costs, that the respondent pay the applicant the balance proceeds of sale of the Rosewood property as a legacy under cl 3(a).  [63]. 

Allocation of Costs

His Honour then turned to the question of costs of the proceedings.  The respondent submitted that the parties costs ought be paid out of the estate as a “testamentary expense” and that, as the testator “caused the problem” the Court ought exercise its discretion and order that the costs be paid out of the fund held to discharge the gift in cl 3a. [65], see also [68]–[69].

The costs of obtaining legal advice, including “the costs of any application to the Court as to the interpretation of [a] will may be [considered] ‘testamentary expenses”. [67].  In the instant matter, however, the Court was not entirely persuaded by the respondent’s submission, [70],  as though there was a valid question regarding the construction of cl 3(a) the respondent had not confined her opposition to this question, nor had she addressed this issue promptly, and thereby “avoid[ed] undue delay, expense and technicality”. [70] For these reasons the Court concluded that though the estate ought bear some of the costs of the proceedings and, given that they related specifically and only to the gift in cl 3(a), these should be paid from the fund held to discharge that gift, see [31], the respondent ought be required to personally pay the balance of the applicant’s costs. [73]. Accordingly the Court ordered that $30,000 – being $15, 000 each of the applicant’s and respondent’s costs of the cross-application  - be paid out of the proceeds of the sale of the Rosewood property; and that otherwise the respondent bear the costs of the matter, without further indemnity from the assets of the estate. [74]. 

Appeal Status: No Appeal Pending - Appeal Period Expired

GAU v GAV [2014] QCA 308

(This summary contributed by Mr Richard Williams of Counsel)

This decision marks the first occasion on which the Court of Appeal has considered the provisions of the Succession Act that provide for the authorisation of the making, alteration or revocation of a will on behalf of a person who lacks testamentary capacity (ss 21 to 28 of the Act).  Such wills are referred to as ‘statutory wills’ or ‘court-authorised wills’.  This decision is of particular interest because there has been only one other Australian appellate decision to date in respect of statutory will applications, Boulton v Sanders (2004) 9 VR 495.

The decision at first instance, ADT v LRT [2014] QSC 169, was previously mentioned at [2014] 31 QLR 6, and the facts are stated there.  By way of a brief summary, an application was made by the testatrix’s husband of more than 55 years, seeking authorisation of the making of a codicil to alter her will.  The codicil would have the effect of removing as a beneficiary under the will the testatrix’s daughter-in-law, who had recently separated from the testatrix’s son, and of placing real property that the son would otherwise have received as an outright gift into a testamentary discretionary trust for the benefit of the son and other family members, but excluding the daughter-in-law.

A two-stage process applies under the Act: leave must first be sought under s 22, to make the substantive application under s 21.  At the leave stage, the Court must be satisfied of various matters, including that the proposed alteration ‘is or may be’ one that the person would make if they were to have testamentary capacity (s 24(d)) and that ‘it is or may be appropriate for an order under s 21 to be made in relation to the person’ (s 24(e)).

At first instance, Flanagan J found that the s 24(d) requirement was met (at least in respect of the alteration of the gift of the real estate) but s 24(e) was not.  Accordingly, leave was refused.  The basis on which the s 24(e) requirement was found not to be met was (at [82]) that the proposed codicil and the use of testamentary trusts had as its purpose protecting the assets the testatrix’s son was to inherit, from pending Family Court proceedings.  While it could not be assessed at that stage whether any such attempt to place the assets beyond the reach of the Family Court would be successful, his Honour found that the proposed codicil ‘may have a direct or indirect impact on the property pool available in the present Family Court proceedings’.  It was further found that the proposed codicil did not offend ‘the policy of the law’ in terms of seeking to defeat creditors or avoiding the operation of the Bankruptcy Act, as identified in Hausfeld v Hausfeld [2012] NSWSC 989, but it was intended to impact pending Family Court proceedings.  In those circumstances, his Honour was not satisfied that ‘it is or may be appropriate’ for an order to be made under s 21.

On appeal, the Court of Appeal considered in particular the function of the s 22 leave requirement.  The appellant submitted that s 22 served as a ‘screening’ role, to prevent baseless or unmeritorious applications from proceeding.  The respondent, on the other hand, argued that s 22 performed a more significant role, and that once leave was given, it was extremely unlikely that an order under s 21 would be refused by the Court.  The Court of Appeal determined that the role of the leave requirement is best ascertained from the words of s 22 itself and its statutory setting.  The discretionary power to grant leave is distinctly separate from the discretionary power conferred by s 21.  Both powers are contained within a subdivision of the Act that confers a jurisdiction that is protective in nature and is informed by the protective jurisdiction historically exercised by the court over persons without testamentary capacity.  That jurisdiction is purposive; the purpose being at its highest level of abstraction, protection of a person in need of protection: Secretary, Department of Family & Community Services v K [2014] NSWSC 1065 at [60], [61] per Lindsay J.  The nature and extent of the enquiry that the court needs to undertake at the leave stage, in relation to s 24(e), is discerned by reference to the words of that sub-section: the enquiry need only be one that is sufficient for the court to be satisfied that it ‘is or may be’ appropriate to make an order under s 21.  The assessment, at the leave stage, of the appropriateness of making an order is made objectively with reference to the information provided to the court under s 23 and such other matters as the court considers relevant.  Importantly, it is undertaken with conscious regard for the fact that making an order under s 21 is an exercise of a jurisdiction which is protective in nature and informed by what is for the benefit, and in the interests, of the person who requires protection.

The Court of Appeal found that the primary judge had failed to have regard to the likely wishes of the testatrix and to the resolve with which she herself would likely act to see to it that they were carried out, if she had testamentary capacity.  At first instance, primacy had been given to the competing interests of the son and daughter-in-law as between themselves in the Family Court proceedings.  The testatrix’s interest in how her testamentary power over her own property fell to be exercised in the circumstances appeared to have been overlooked.  The purpose of the application for the statutory codicil, as found at first instance, had some relevance, but such relevance was ‘towards the margins’, given the competing claims of the testatrix’s son and daughter-in-law in the Family Court proceedings were over their marital property, not claims upon the testatrix’s bounty.

The husband’s appeal was allowed.  The decision to refuse leave was set aside.  The Court of Appeal proceeded to grant leave under s 22.  In considering the application under s 21, the Court observed that the making of the proposed codicil was a step that the testatrix would be freely able to take herself in organising the testamentary fate of her own property, were she able to do so.  As had been conceded behalf of the respondent (the daughter-in-law) in argument, for the testatrix to take such a step would neither offend the policy of the law nor exhibit moral obloquy on her part.  An order was made authorising the alteration of the will, pursuant to s 22, in terms of a codicil substantially in the form of the one that had been proposed at first instance, but with a minor modification. 

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Eatts v Gundy [2014] QCA 309

This is an interesting and important decision concerning the intersection of succession law and Aboriginal tradition.  This matter arose following the intestate death of Doreen Eatts (the “deceased”).  The deceased had been unable to have children and in accordance with the customs of her tribe, the Maiawali Karwali People, had informally adopted her sister’s child, Bradley Gundy (the “respondent”), and raised him as her own.  Following Doreen Eatts’ death, pursuant to s 35(1) of the Succession Act 1981 (“Succession Act”), Joslin Eatts (the “appellant”), as her sole surviving parent, became entitled to the whole of the residuary of the deceased’s estate.  The respondent filed an application seeking, inter alia a declaration that he took the whole of the deceased’s estate as the “surviving child of the intestate,” or, in the alternative, a declaration that adequate provision had not been made for him from the estate, and an order, pursuant to Pt 4 of the Succession Act, that the estate make the necessary provision.  [3].  The appellant filed an interlocutory application for an order that the respondent’s application be struck out as an abuse of process, and at first instance, the trial court dismissed this application, holding that the evidence showed the respondent may be able to prove at trial “that he is a child or descendant and therefore the ‘issue’ of the deceased,” [4], and that “because according to Aboriginal tradition [he] was . . . [a] child of the deceased [he] was entitled to make a claim for family provision out of the estate,” id.  The appellant appealed this decision, contending that the trial court had erred in its decision. 

At first instance, and on appeal, the respondent argued that he was entitled to the whole of the deceased’s estate, pursuant to Pt 3 of the Succession Act, on the basis that he was her “issue” and “child” within the meaning of Pt 2 of Sch 2 and s 36A of the Succession Act; and, in the alternative, was entitled to provision under Pt 4 on the basis that he was a “child” of the deceased within the meaning of that section.  [10]–[11].  Though his relationship with the deceased was not expressly provided for in the Succession Act, the respondent argued that his relationship with the deceased was encompassed by the Succession Act, as the definitions of “child” and “issue” were extended by the combined operation of s 36 of the Acts Interpretation Act 1954 (“Acts Interpretation Act”) which defines ‘Aboriginal tradition’ as “the body of traditions, observances, customs and beliefs of Aboriginal people generally or of a particular community or group . . .” and descendant as including “in relation to Aboriginal people –a descendant under Aboriginal tradition,” and ss 4(2) and 4(3)(j) of the Legislative Standards Act 1992 (“Legislative Standards Act”) which require that legislation have “sufficient regard to Aboriginal tradition and Island custom.”   [22]–[24].  The Court, on appeal, was unable to accept this approach, and concluded that his claim failed “upon the correct construction of the statutory provisions” and that he did not have “more than a fanciful prospect of success.”  [7].  

In reaching this conclusion, the Court considered it significant that:

  • The ordinary and prima facie legal meaning of ‘issue’ is “descendants or progeny” and that ‘child’ “usually connotes a descendant in the first generation.”  [16], see [17]–[18]
  • Any ‘extensions’ of the meaning of either term – ‘issue’ or ‘child’ – are expressly provided for in the relevant act.   [17], [19]. 
  • The Succession Act focuses upon biological relationships, only providing for succession beyond biology by specific provision.  [19].
  • The definition of ‘adopted child’ in the Succession Act which is confined to an adoption made in accordance with the law of the place where the adoption was undertaken.  [20].
  • Were the respondent’s construction to be accepted, a person could be both the ‘issue’ and ‘child’ (under Aboriginal tradition) of an intestate and (under the ordinary meaning of the terms in the Succession Act) the child of a brother or sister of an intestate who predeceased the intestate (s 35(1A)).  [21].

Further, in response to the respondent’s argument that the ordinary meaning of both ‘issue’ and ‘child’ were extended by the definitions within the Acts Interpretation Act, introduced by the Legislative Standards Act, the Court held that the Legislative Standards Act simply had no potential application in relation to the Succession Act as it was intended to only operate prospectively.  [24]–[26].  The Court also held that the respondent could not seek  declaration as to his parentage under the Status of Children Act as this Act was concerned with resolving issues of disputed biological parentage, [28]–[31].  The Court concluded that “in the absence of any definition or even any reference in [the Succession Act] to Aboriginal tradition, the well-understood terms “child” and “issue” are not open to a construction which comprehends a biological nephew of an intestate on the basis that, in accordance with an Aboriginal tradition, the nephew is treated as a child of the deceased.”  [36]. 

For these reasons the Court allowed the appeal and set aside the orders made in the Trial Division.  [38], [40].  

Appeal Status: Application for Special Leave refused.

Re Spencer (deceased) [2014] QSC 276

This case raises an interesting point of intersection between the operation of s 18 of the Succession Act 1981, which allows the Court to dispense with the execution requirements for a will, and the requirements for testamentary capacity.  The ‘would-be’ testator (“Mr Spencer”) in this matter had consulted with a solicitor a number of times regarding his intention to draw-up a new will and the precise content of that document.  Upon becoming aware that he was ill, Mr Spencer again contacted his solicitor informing him of his illness and confirming his previous instructions.  Mr Spencer’s health quickly deteriorated and he contacted his solicitor to urgently draw up a document in accordance with his previous instructions (the “unsigned document”) and bring it to the hospital.  The following day the solicitor attended the hospital with the unsigned document, however, it was apparent that Mr Spencer now lacked testamentary capacity.  [11]–[12].  Mr Spencer died the following day, without having executed the unsigned document.  [13].  The issue before the Court was whether the unsigned document could be admitted as Mr. Spencer’s will to probate.

In considering the legal effect of the unsigned document, the Court first turned its mind to whether Mr Spencer had had the necessary testamentary capacity to execute a will.  After a careful consideration of the evidence given at trial, see [14]–[41], the Court concluded that at the necessary times, being the times in which he gave instructions to his solicitor regarding the terms of his proposed will, Mr Spencer had testamentary capacity.  [42]–[44].  That Mr Spencer may not have had testamentary capacity when he asked his solicitor to attend the hospital, and did not have testamentary capacity on the morning that the solicitor tried to have him execute the will, the Court concluded, was of no effect in this case s on these occasions he was not giving instructions as to the contents of his will.  [45]–[46]. 

Pursuant to s 18(2) of the Act the court may dispense with the execution requirements for a will where there exists: (a) an unexecuted document purporting to embody the testamentary intentions of the deceased relevant document; and (b) evidence to satisfy the Court that it was the deceased’s intention that the subject document would operate as their will.  [48]–[49].  To satisfy these requirements “there must simultaneously be an extant document and the requisite intention.”  [53].  Though the Court was satisfied that there existed an unexecuted document that purported to state Mr Spencer’s testamentary intention, more problematic was whether Mr. Spencer had intended this document, being the document brought to the hospital, to be his will.  [56].  Two issues concerned the Court: (1) whether Mr Spencer needed to have an intention that the unsigned document, in its then form, would operate as his will, [54]; and (2) the effect, if any, of Mr Spencer’s lack of testamentary capacity when shown the unsigned document, [56].  

In briefly addressing its first concern, the Court concluded that Mr Spencer had demonstrated the requisite intention, despite the fact that the unsigned document had been prepared by a solicitor, and thus it would have been intended to take effect only after it had been properly executed.  [55].  The Court noted that the Act does not require the deceased to have the intention that the subject document operate without more as their will, and was satisfied from the evidence before it that Mr Spencer intended the unsigned document to be his will, rather than merely a draft for his consideration.  Id.  Turning to its second concern, by analogy with cases, such as Parker v Felgate, where the court had held that “a will prepared in accordance with the testator’s instructions is valid, though at the time of execution the testator remembers only that he has given instructions and believes the will to be in accordance with them,” [63] the Court concluded that Mr. Spencer had demonstrated the necessary intention that the unsigned document operate as his will.  While, at the time of execution, Mr Spencer did not have testamentary capacity, from the evidence led about his behavior at the hospital the Court concluded that he was not beyond forming an intention, and the intention he had formed was that the unsigned document was to operate as his will.  [60], [64].  Accordingly the Court declared the unsigned document to be Mr Spencer’s will.

Appeal Status: No Appeal Pending - Appeal Period Expired

Masci v Masci [2015] QCA 245, 25 November 2015

In this appeal, the appellant submitted that the primary judge erred in holding that the will executed by her deceased husband and herself [1] constituted a mutual will, and further by ordering that probate of the will be granted to the first respondent. [21].

The will in question was in pre-printed form and completed in handwriting, with both husband and wife participating in its preparation. [2]. It read as follows:

“This is the last Will and Testament of me, Fernando Masci & Elizabeth Masci (name) of 1 Iceland Court, Merrimac (address) in the State of Queensland 4226.

1. I revoke all Wills and other documents of testamentary intent previously made by me; this is my last Will and Testament.

2. I appoint Mrs Susan Elizabeth Camm and Graham Silvano Masci (name) of 4 Hero’s Drive Gembrook, Victoria to be Executor or Executrix and Trustee of this my Will.

I give Fernando Masci my husband is to stay in the house above and to handle all monies untill his demise. (death) Elizabeth Masci is to stay in the house above and handle all monies if Fernando Masci is deceased before her. On the death of both Mrs Susan Camm of 4 Hereo’s Drive, Gembrook. Victoria 3783 Ph: 0359681831 and Graham Silvano Masci of Suite 2 155 Canterbury Rd, Kilsyth. VIC. 3137 are to sell all possessions and 50% is to go to Mrs Susan Camm and 50% to Diane Collins, daughter of Fernando Masci, Ricky Fernando Masci son of Fernando Masci and Graham Silvano Masci son of Fernando Masci. This is to be reversed if either is deceased first. This is the last will and testament of Fernando Masci and Elizabeth Masci.”

(The words in italics were handwritten in the will.  The other words were pre-printed.  The name “Silvino” was misspelt in the will.) [3].

The nonstandard wording of the will resulted in interpretational issues and a protracted administration of the estate. [4]. In December 2013, the appellant commenced selling a residential property at Merrimac which she had owned as a joint tenant with the deceased. [4]. Thereupon, the first respondent, as executor and trustee of the will, brought an application seeking that Susan Camm (the second respondent) be removed as executor and trustee and declarations or orders pursuant to s 96 of the Trusts Act 1973 to the effect that the will was a mutual will; that the joint tenancy of the Merrimac property had been severed; that the estate owned that property as tenants in common in equal shares, subject to a life interest in favour of the appellant; and fourthly, that the words “all monies” in the will meant only monies jointly held by Fernando Masci and the appellant at the date of his death. [5]. He was largely successful in that application, [8] with the primary judge determining that despite its drafting shortcomings, the will was capable of being admitted to probate.  Her Honour was of the view that the will and respective family circumstances indicated a broad intention that “the survivor of Fernando and Elizabeth was to be looked after during their lifetime but, on their death, the property of both testators was to be equally divided so that it went half to Mr Masci’s children and half to Mrs Masci’s children” [10] and that the first respondent was the appropriate executor and trustee of the will in circumstances where the residential property had already been sold by the appellant. [20]. Importantly, she also found that since the deceased did not revoke the will, the appellant’s conscience was bound. [17].

On appeal, the appellant contended that her Honour had “strained the language of the will beyond reason to a point of imposing words not found in it”; [25] that the only evidence of an agreement for mutual wills was the joint will itself; [34] that the parties could not have intended an agreement not to revoke without notice since the residential property was jointly owned; [35] and that her Honour did not refer to “unchallenged evidence” of the appellant. [36].

The court was wholly unpersuaded by these arguments, detecting no error in articulation, evidentiary basis, nor application of principle on her Honour’s part. In dismissing the appeal with no order as to costs, [41] his Honour Justice Gotterson made these pertinent comments regarding testamentary intention:

t is significant that the husband and wife evidently thought it necessary to provide for rights in relation to the residential property after the death of the first of them to die.  The provision that they did make is premised upon a notion of the estate of the first to die having an interest in the ownership of that property after the death such that there was a need to make it clear that, notwithstanding that interest, the survivor was assured of being able to reside in the property thereafter.  Had they envisaged and intended that ownership of the residential property pass to the survivor of them, then the provisions they did make would have been entirely unnecessary.  The survivor, as owner of the entirety of that property, could have done as he or she wished with it.  No need to give any assurance to the survivor with respect to his or her staying in the residential property would have been perceived”. [26].

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Bennett v The Royal Australian Institute of Architects [2015] QSC 85

This fairly convoluted matter arose from a gift made in a will to a beneficiary to establish and administer a scholarship for final year students of architecture in Queensland. The deceased’s residuary estate was divided into thirteen parts, with five of those left to the first respondent. [3]. The value of the share of the residuary estate given to the first respondent was estimated as being between $1.2m and $1.3m. [6]. Guidelines for the granting of the scholarship were attached to the will as a schedule. [4].

As a result of correspondence between the applicants’ solicitors and the first respondent, in which the first respondent indicated that it was “reluctantly inclined to disclaim the gift on its present terms” [14], the applicants formed the view that the first respondent had disclaimed the gift. Accordingly, the applicants then approached Queensland University of Technology, the University of Queensland, Griffith University and Bond University advising of this, and asking each to submit cy pres proposals.  Each university responded in November 2013 with a proposal, and then in October 2014 with amended proposals.  [8]; [9].

In bringing the proceeding, the applicants sought a declaration that in making the gift in his will, the deceased had a general charitable intention; and an order pursuant to s 105(1)(a)(iii) and/or s 105(1)(e)(iii) of the Trusts Act 1973 that the property which is the subject of that gift be applied cy pres by paying it to QUT on trust to pay scholarships. [10].  The first respondent disputed that it had disclaimed the gift and opposed the application, contending that it was the only appropriate beneficiary of the gift. [11].

The issues considered by her Honour were essentially threefold:

  1. whether the first respondent effectively disclaimed the gift;
  2. whether there was a general charitable intention on the part of the deceased, or whether the gift is for a charitable purpose;
  3. whether and what cy pres or other order should be made. [13].

Upon closely examining the various items of correspondence passing between the applicants and the first respondent, her Honour noted that the specific language of one item, dated 9 December 2013, was instructive in “leaving no doubt” that the first respondent had disclaimed the gift:

“The conclusion in the first respondent’s December letter that the first respondent would be prepared to accept the gift if the purposes and directions of the gift were reformed to address the issues raised by the first respondent in that letter and to respond to cy pres proceedings commenced by the applicants amounts to a rejection by the first respondent of the gift …That rejection was communicated by the first respondent to the applicants and is consistent only with, and amounts to, disclaimer of the gift.” [43].

Her Honour found that the disclaimer in the December letter was conclusive, and therefore effective.  [47].

In terms of whether there was a general charitable intention on the part of the deceased, or whether the gift was for a charitable purpose, her Honour concluded that the nature and structure of the gifts made under the will readily supported the view that the deceased had a general charitable intention – for the advancement of education – that went beyond the specific gift to the first respondent:  Attorney-General (NSW) v Perpetual Trustee Co (Ltd) (1940) 63 CLR 209, 225. [51].

In the circumstances, however, and noting the first respondent was the deceased’s preferred choice for implementing the scholarship for architecture students, her Honour determined that the revised proposal of the first respondent should be the basis for the application of the gift cy pres, since it was best placed to achieve the deceased’s purpose and intention in making the gift.  [56].

Her Honour ordered that costs be paid from the property which was the subject of the gift, on the indemnity basis. [58].

Appeal Status: No Appeal Pending - Appeal Period Expired

Donald v Guillesser [2015] QCA 92

This matter addressed the entitlements of potential beneficiaries to an estate in circumstances where a beneficiary dies at approximately the same time as a testator.

By way of brief factual background:

  • On 1 October 2012 Mr John Dawson and his wife Carol were killed in an aeroplane crash.  It could not be ascertained which of them died first. [2] Mr Dawson was six months older than his wife.  Accordingly, the trial judge found that pursuant to s 65 of the Succession Act she was therefore deemed to have survived him “for a period of 1 day”. [5]
  • Mr Dawson left a will essentially gifting everything to Mrs Dawson (cl 4), but providing that should she die first, then everything would be split: 50 per cent to his sister‑in-law, Mrs Guillesser; 25 per cent his brother; and 25 per cent shared amongst three named nieces and nephews (cl 5). [3]
  • Clause 5 was specifically worded as follows:

“I give the residue of my estate to Carol A. Dawson my wife …

But if he/she predecease me then I give the residue of my estate in parts to: (named family members)”. [34].

  • Mrs Guillesser applied for a grant of letters of administration.  Mr Dawson’s mother, Mrs Donald (the appellant), claimed an entitlement to the entire estate, contending that by operation of s 33B and s 65 of the Succession Act 1981 the gifts failed, and therefore the estate fell to be distributed as on intestacy. [4].
  • The trial judge determined that the estate should be administered by Mrs Guillesser, and not as on intestacy.  Mrs Donald appealed that finding. [6].
  • Shortly prior to the appeal, Mrs Guillesser died.  Orders were made that Mr Guillesser act as administrator until further order. [7].

The issues for determination by the court on appeal were:

  1. the construction of s 33B of the Succession Act 1981;
  2. the application of s 33B to the will; and
  3. the proper construction of the will. [8].

 

In considering s 33B of the Succession Act, his Honour Justice Morrison remarked that its purpose is to avoid multiple administrations where gifts lapse.  [14]. It follows that:

 “s 33B does no more than impose the simple rule of construction, that in the particular circumstance of a disposition to a beneficiary who dies within 30 days after the testator, the will is to be construed, in relation to the disposition, as if the beneficiary had died before the testator.  It will yield if the will expresses a contrary intention to the rule imposed, but s 33B does not have any wider impact on how to construe the provisions of the will”. [31].

Applying s 33B to the will, the court noted that Mr Dawson’s will was in a pre-prepared form in which cl 4 was intended for special gifts and cl 5 for the residue.  Gifts were provided to Mrs Dawson in both. [32]. It was not in dispute that the will took effect, by reason of s 33B(1), as if Mrs Dawson had died immediately before Mr Dawson. [35]. Accordingly, the gift in cl 4 failed.  [36]. As for cl 5, the parties argued as follows:

  • The respondent contended that it should be read as containing two gifts, the first of the residue to Mrs Dawson, which lapsed because of s 33B(1); and the second to the specified family members, which did not lapse;
  • The appellant contended that it contained only one disposition, being the gift of residue to Mrs Dawson and the entitlements under the pre-decease clause, and that whole disposition failed because of s 33B(1); and
  • The appellant contended that its second sentence should be read as if it said “actually predecease”, in the sense that the date of Mr Dawson death was actually before that of Mr Dawson. [37].

The central argument advanced by the appellant was that s 33B, as a lapse provision, operates to negate gifts to persons who do not survive the testator by 30 days. [38].

In considering the proper construction of the will and the plain meaning of cl 5, his Honour Justice Morrison carefully concluded that:

“[T]he evident intention of Mr Dawson was that Mrs Dawson should receive the whole estate, unless she died first or is taken to have died first, in which case the estate would be split as in the second sentence of cl 5. 

In my view cl 5 of the will works in a simple way, taking into account s 65 and s 33B:

  • it is a deemed fact under s 65 that Mrs Dawson died after Mr Dawson;
  • however, because of s 33B(1) the will takes effect, for the purposes of the disposition in the first sentence of cl 5, as though she died first;
  • therefore the gift to her in the first sentence of cl 5 fails;
  • the second sentence gifts the residue to the others if Mr Dawson predeceases, whether in fact or by statutory presumption;
  • that gift in the second sentence is enlivened because of s 33B(1) and does not fail”. [53]–[54].

In the result, the court dismissed the appeal and ordered that Mr Guillesser be appointed as administrator of the estate. [59]–[60].

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Spencer v Burton [2015] QCA 104

This is a recent decision of the Court of Appeal which allowed an appeal dealing with a trial judge’s decision, eleven months after a four day trial, to revoke Letters of Administration on Intestacy over an estate.

Briefly the appellant originally obtained Letters of Administration on Intestacy on the basis that he was the deceased’s de facto partner.  Five months later, the deceased’s mother filed an application seeking a declaration that the appellant was not a spouse or de facto partner of the deceased and orders that the Letters of Administration on Intestacy be revoked in her favour.

The trial judge made declarations and orders in terms of the application as his Honour was not satisfied, on the balance of probabilities, that the appellant and the deceased had lived together as a couple on a genuine domestic basis for the required two year period prior to her death having regard to the criteria enunciated in s 5AA of the Succession Act 1981 and s 32DA of the Acts Interpretation Act 1954.

In the lead judgment, A Lyons J (with whom Holmes and Gotterson JJA agreed) succinctly distilled the appellant’s twelve grounds of appeal as follows [37]:

“In essence, the appellant argues that the primary judge:

(a)      did not come to terms with the evidence due to delay, and misconstrued or attributed little weight to significant aspects of the evidence and generally acted against the weight of evidence.

(b)      erred in the application of the criteria set out in s.32DA of the Acts Interpretation Act and, in particular, attributed greater weight to financial and property matters.”

The Court allowed the appeal on both grounds.  As to the former, it determined that the appellant established that the primary judge “failed to come to terms with the evidence”. [98].  Inter alia, the Court noted the trial judge analysed evidence of 20 witnesses “in very short compass” within seven paragraphs. [26].  It considered that: there was a body of evidence not referred to in the judgment [67]; various evidence was given little or no weight [79]–[81], [86]–[94]; some evidence was not taken into account when it should have been [96]; and the reasons for dismissing some of the evidence was inadequate. [96].

In relation to the latter, the Court stated:

“[123]      It is clear that the criteria in s.32DA are all to be weighed up and analysed together with other factors or circumstances the judge considers relevant. It is also clear that one criterion is not to be considered more significant than any other. Neither is it necessary for all the criteria to be present in order for a declaration to be made. It is clear that the question as to whether two people are living together as a couple on a genuine domestic basis is to be determined by circumstances which include but are not limited to those listed in s.32DA.

[124] I am satisfied that the reasons given by the primary judge do reveal an overemphasis on financial and property matters and a discounting of the other indicia which were clearly present.

[125] I consider that has been an error in the application of the indicia set out in s.32DA of the Acts Interpretation Act.”

Consequently the Court set aside the primary decision and remitted the matter for determination by another trial judge.  [140].  In noting the lapse of time since the death of the deceased (July 2012) and “the significant costs which have now clearly been expended on this appeal”, the “interests of justice require[d] that any new trial be given an expedited hearing”.  [139].

Despite the respondent having filed an application to adduce further evidence and a notice of contention, the Court, in light of the well-established authority of Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404, dismissed the application as it was not satisfied reasonable diligence occurred on part of the respondent, and held that documents could have been obtained prior to the trial occurring.  [135]–[136].  Because the notice of contention relied upon the admission of further evidence, the Court also dismissed it.  [138]. 

Appeal Status: No Appeal Pending - Appeal Period Expired

Lindsay v McGrath [2015] QCA 206, 27 October 2015

This is a recent decision considering the application of s 18 of the Succession Act, and particularly considering the evidence necessary to establish an intention that the relevant document was intended to form the deceased’s will.  A brief summary of the relevant facts follows.  The appellant was the deceased’s son, and administrator of her estate.  The respondent is her previously estranged daughter.  It was believed that the deceased died intestate, and on this basis the appellant had sought and was granted Letters of Administration.  The appellant subsequently located a handwritten document and brought an application seeking an order that this document form the deceased’s last Will.   [36]–[37].  The document in question consisted of five, handwritten pages.  They were enclosed in an envelope which also contained the deceased’s birth certificate and a pro forma sheet completed by the deceased setting out her personal and financial circumstances. It is apparent that this document has been amended at different times. The substance of the document was that the deceased left her entire estate to the appellant, and, expressly, disinherited the respondent and her two children – providing quite extensive reasons for this decision.  [39]–[41].  In addition to this, affidavits were introduced into evidence which swore to conversations between the deceased and others which indicated that she intended to leave everything to the appellant. [47].  On the basis of the evidence before the Court, the primary judge found that though the handwritten document did contain a bequest of the deceased’s estate to the appellant, that statement was insufficient to satisfy the requirements of s 18(2) that there be sufficient evidence that the deceased regarded the document as final, noting in particular that the document stated that it was to be “for the purpose of making the Will” rather than being the Will itself. [48].  The appellant appealed this conclusion.

Section 18 provides that a document that has not been executed under the Succession Act may nevertheless form a will if the Court is satisfied that the deceased intended as much.  [56].  In applying this section, the Court had regard to a number of cases, in particular Plummer v Hill for the principle that the document must state the Deceased’s (voluntary) intentions regarding the disposal of their property.  In relation to the requirement that the Court be satisfied that the deceased intended the document to operate as their Will, it was necessary that evidence establish more than that the document sets out the deceased’s testamentary intentions.  [59].  The evidence “must establish on the balance of probabilities that the deceased wanted the particular document to be [their] final Will”. [62].  The document cannot be a “provisional, preliminary or tentative proposal”, but must instead record the deceased’s intentions in a “complete and concluded way”.  Id

Turning to the evidence before the Court, there were a number of items which supported the appellant’s contention that it was the deceased’s intention that the appellant receive the estate, in particular the specific bequest to the appellant in the relevant document, the specific provision in the document excluding the respondent and finally the deceased’s statement to the appellant that she had made her Will and left everything to him.  [65].  This evidence, however, was insufficient given that s 18 requires that the evidence demonstrate that “the deceased intended the particular document to form her last Will”.  [66].  On this point, the respondent drew the courts attention to the use of the “equivocal” phrase “for the purpose of making her will” in the document [67]; the fact that it was unclear whether the "Will" referred to in conversations between the deceased and the appellant was the document in issue [68]–[69]; and that the document had clearly been altered and there was no evidence that the deceased had formed the intention that she would not further alter it – it was in an unsealed envelope and was not formally signed, [70]–[73].  Given the lack of evidence that the document was in its final form rather than being subject to “further thought, deliberation or possible revision”, the Court concluded that the evidence did not establish, on the balance of probabilities, that the handwritten document was intended, by the deceased, to, in its present form, be her last Will.  [74]. The conclusion reached by the primary Judge was open on the proven facts, and accordingly, the appeal was dismissed.  [75].

The Court however, was not unanimous in this conclusion.  Her Honour Philippides JA dissented and was particularly persuaded by the “form and content” of the document, [17], the formality of the language used [18], the fact that it was signed and that many of the deletions/corrections were initialled [19]–[20], and that the document was placed in an envelope which stated “the envelope contains the will of” and was accompanied by a copy of the deceased’s birth certificate and record of her personal and financial circumstances. [21].  Her Honour did not consider that it could be inferred from the amendments made that the document “was the subject of ongoing deliberation”, nor was this inference available because the document failed to deal with a (very) small portion of her estate.  [23]–[24].  Finally, Philippides JA considered that given the deceased’s age at the time the document was created and that she was of ill health, an inference should be drawn that she intended it to take effect upon her death.  [26].  For these reasons, her Honour would have allowed the appeal.  

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Case Links:

Mullavey v Verri [2016] QSC 83, 11 April 2016

The applicant in this matter, a beneficiary, sought a declaration for the force and validity of one of various wills, namely the last will in time of the testator. The respondent contended that the testator was not of sound mind, memory and understanding and did not know and approve the contents of the will and codicil.

The issues raised were whether there was arguable substance to the respondent’s claim, and whether the testator did not know and approve the contents of the will and codicil?

In his final will the testator left $100,000 to his granddaughter; his share in his company to the applicant and the residue of his estate to the respondent. [10]. His will also contemplated that money in the company’s two investment accounts would be shared equally by the applicant and the respondent. [11]. Prior to making the final will, the testator had transferred a share representing half of the interest in the company directly to his son, the respondent, remarking that the respondent would eventually inherit the company in any case. The final will altered that. [12].

An examination of a number of earlier wills made by the testator, indicated that the final will was more advantageous than those earlier ones to the granddaughter (whose entitlement increased from $25,000 to $100,000); and to the applicant (whose entitlement increased from $50,000 to potentially over a million dollars). [15].

Relevantly, until his death the testator was an in-patient in an Aged Care Facility. [29]. His final will and the codicil were both prepared by a solicitor whom he had previously engaged for some 19 years, and who was aware of the particular importance of testamentary capacity given the testator’s old age, coupled with the potential that the material dispositive change in the final will might give rise to a challenge by the respondent. As such, considerable care was taken to ensure testamentary capacity by both questioning the testator and obtaining a medical opinion. [30].

The respondent contended that there had been a substantial decline in the testator’s mental capacity since he “had a turn” in late 2009, and was subsequently admitted to hospital. [32].

In addressing the deceased’s testamentary capacity, his Honour made this distinction:

“The allegation the testator was not of sound memory and understanding is essentially an allegation of lack of testamentary capacity. The allegation the testator did not know and approve the contents goes beyond testamentary capacity, for, even if the testator was able to understand what he was doing and its effect, it is a different question whether the testator in fact did know and approve of the contents”. (see Hoff v Atherton [2005] WTLR 99.) [44].

His Honour also observed that “[t]he party impeaching the will must establish circumstances supporting a well-grounded suspicion that the instrument might not express the will of the testator”. (see Veall v Veall [2015] VSCA 60). [45].

On balance, his Honour found that there was a lack of relevant information before him suggesting that the respondent had any real prospect of successfully raising a well-grounded suspicion that the testator was not mentally competent at the time of executing the final will, nor for that matter the codicil. [49], [51].

In particular, he noted that both documents were rational and duly executed; measures had been undertaken by the deceased’s solicitor in establishing that he was mentally competent at the time of the final will providing “powerful affirmative evidence of testamentary capacity”; and the bulk of entries in medical records relied upon by the respondent to indicate the testator’s mental frailty covered dates later in time than the execution of the final will. [46]–[47].

In relation to whether the testator fully comprehended the effect of leaving his half share in the company to the applicant rather than to the respondent, which represented a substantial reduction in what he had previously been bequeathed, his Honour did not regard that variation in his previous testamentary dispositions as “particularly remarkable” when considered in context [59] and with regard to the deceased’s personal relationships.

In disposing of the matter, the component of the application seeking the grant of probate of the final will, with or without the codicil, was dismissed and the balance of the application adjourned. [66].

Appeal Status: No Appeal Pending - Appeal Period Expired


Taxes and Duties back to top

Sojitz Coal Resources Pty Ltd v Commissioner of State Revenue [2015] QSC 9

This is an interesting decision in which the Court took the opportunity to address the relationship between the Acts Interpretation Act 1954 (“AIA”); the Duties Act 2001 (“Duties Act”) and the Mineral Resources Act 1989 (“MRA”), specifically with regard to interpretation of the phrase an “interest in land”.  This matter arose following the conclusion, by the Commissioner of Taxation (the “respondent”) that Minerva Coal Propriety Ltd (the “appellant”) was a “land rich corporation”, under s 165, for tax purposes.  The appellant disputed this classification, arguing that its mining leases were not “interests in land” for the purposes of the Duties Act.  It is this dispute which was before the Court.

Pursuant to Ch 3 of the Duties Act a corporation is a “land rich corporation” where its land-holdings have an unencumbered value of over $1,000,000 and comprise 60% or more of the unencumbered value of all of its property.  Duties Act, s 165.  For the purposes of the Duties Act, a land-holding is defined as a corporation’s “interest in land”.  Duties Act, s 167.  This definition, however contains an editor’s note which directs the reader to the definition of ‘interest,’ as it relates to land, in the AIA -- “(a)  a legal or equitable estate in the land or other property; or (b) a right, power or privilege over, or in relation to, the land or other property.”  Id.  Pursuant to s 36 of the AIA, “in an Act” the definitions in s 36 apply, except insofar as the “context or subject matter otherwise indicates or requires”.  AIA, s 32A. 

A mining lease, under the MRA, does not create an estate or interest in land.  MRA s 10.  Further, it was accepted by both parties, that the appellant’s interests in its mining leases would not be considered an interest in land as the phrase was understood at common law, [3], [13]–[17]; or under paragraph (a) of the definition of “interest” in s 36.  [10]. The appellant’s interests in its mining leases were not within paragraph (a) of the definition in the AIA.  Both parties agreed that if, and only if, paragraph (b) of the s 36 definition applied, then the mining leases were “interests in land” for the purposes of the Duties Act.  [17]–[19].  Thus the issue before the Court was whether the application of the definition of interest in the AIA was limited to paragraph (a). 

In addressing this question, the Court considered the language of the provision, looking closely at the use of the term “interest” and the context in which it arose.  The appellants argued, and the Court ultimately agreed, that the definition of “interest” in the AIA could not apply ... because the word “interest” was used [in s 167] specifically and unambiguously in a way which was qualified by the words “in land”.  [20], [58].  The Court considered that the application of the entire s 32 definition, including paragraph (b), would negate the deliberate use of this qualifier given that it would incorporate many “rights, powers or privileges in relation to land” into the section which could not be regarded as interests in land.  [21].   That an interest in land is distinguished from an interest in relation to land has previously been discussed and accepted, see CCM Holdings Trust v Chief Commissioner of State Revenue; Sorrento Medical Service v Dept Main Roads; [22]–[26], and the Court concluded that to apply the s 36 definition as argued for by the respondent, would, most significantly, operate to alter the express meaning of the section.  [57], see also [27]–[32].  Given this conclusion, the Court allowed the appeal.  

Appeal Status: No Appeal Pending - Appeal Period Expired

Westpac Banking Corporation v Jamieson [2015] QCA 50

This is an important decision concerning the nature of the damages recoverable and the assessment of the same in actions involving misleading or deceptive conduct.  The appeal was from a decision of Jackson J in Jamieson v Westpac Banking Corporation (2014) 283 FLR 286; [2014] QSC 32 which has previously been reported in this publication.  It is important to note that whilst the appeal was dismissed, there are a number of important issues which were dealt with in the decision below and which were not the subject of the appeal.

The matter arose out of alleged misleading or deceptive conduct in relation to the provision of financial advice by the Bank pursuant to which Mr Jamieson invested in an agribusiness managed investment scheme which permitted him to pay no income tax.  The investment strategy involved Mr Jamieson borrowing a large amount from Macquarie Bank to invest in a Macquarie managed investment scheme.  It also involved borrowing money to contribute to a self-managed superannuation scheme. 

The trial judge found that the Bank was liable for breach of retainer and in negligence.  The Bank’s conduct also amounted to misleading or deceptive conduct under s 12DA of the ASIC Act 2001 (Cth).  In essence the advice given did not disclose the totality of the cost of the investments nor the level of risk associated with the investments.  It was also found that had Mr Jamieson been informed of the relevant matters he would not have invested in accordance with the strategy, but he would have invested in an alternative strategy.

Although the appeal included grounds relating to alleged errors of fact by the trial judge, from the decision of Applegarth J a number of important points of principal emerge:

  • That the obligation on financial advisers requires them to spell out in simple terms the risks involved in undertaking of investments.  That also requires the identification of any assumptions inherent in the level of risks involved with an investment.
  • In relation to the attribution of responsibility for losses which have been sustained, questions arises as to whether or not it is appropriate to attribute all or only some of the loss to the wrongdoer.  The answer to that question has to be determined in the light of s 11(1)(b) of the Civil Liability Act 2003.  In relation to breaches of statutory provisions different considerations about the apportioning of liability may apply where the breach is of consumer protection legislation.  Where a loss has been caused by a breach of such legislation the Court has to determine what reason there might be for not attributing the whole of the loss to the contravener.
  • In this case a measure of damage in accordance with the rule in Potts v Miller (being the difference between the price paid for the investment and the true value at the time of acquisition) was not appropriate.  The bank was responsible for all losses incurred as a result of entering into the transaction because Mr Jamieson would not have entered into the transaction had the correct advice been given and the risk of loss of the kind suffered was the very thing which Mr Jamieson had sought to avoid by obtaining advice.
  • The rule in Potts v Miller is a second order rule which is applicable whenever the valuation method is employed, however, the court is entitled to simply assess the loss flowing directly from a transaction without reference to any particular date.
  • The rule in Potts v Miller will not usually apply where the misrepresentation continues to operate after the date of the acquisition so as to induce the plaintiff to retain the asset or where the plaintiff is locked into the property.
  • The losses which occurred by reason of the GFC and poor market performance were not losses which were extraneous or arose from supervening events.
  • In cases such as the present the plaintiff may well do better on the non-contractual tortious measure rather than on the contractual measure as the contractual measure takes account of what advice should have been given rather than putting the plaintiff back into the position that they would have been in had the tort not been committed.  [133]–[137].
  • In calculating loss it is not necessarily speculation to consider what counterfactual investment might have been entered into the by the investor.  However, determining how much worse off the investor may have been may turn on whether or not the investor would have pursued a different investment.  However, a plaintiff in a “no transaction” case is not required to prove what alternative investments might have been undertaken and the Court is not always required to hypothesise as to what alternative investment might have been made.  The evidential burden will be on the defendant to establish that if the representation had not been made the plaintiff would have incurred a loss in any event.
  • That where the recoupments obtained in an action will be taxable it is appropriate to gross up the damages to take into account the amount of tax that will have to be paid.  This is because of the operation of s 20-20 of the Income Tax Assessment Act 1997 (Cth).  However, the amount of damages awarded by the grossing up process are not, themselves, recoupments which need also to be grossed up.

This important decision contains a discussion of many important issues relating to the assessment of damages in a commercial context.

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Can Barz Pty Ltd v Commissioner of State Revenue [2016] QSC 59, 21 March 2016

The applicants in this matter sought declaratory relief that garnishee notices under s 50 of the Taxation Administration Act 2001 issued by the Commissioner to the second and third respondents in respect of debts owed by first and second applicants were invalid and ineffective. [7].

Briefly, the circumstances were that the first applicant held real estate on trust for the second applicants, [4] who in turn held monies on trust for the beneficiaries of a self-managed superannuation fund. The second and third respondents owed monies to the first applicant. The first applicant had contracted to sell the real estate. [5]. Prior to settlement, the Commissioner issued garnishee notices:

  1. to the real estate agents and the purchasers seeking to have those persons pay to the Commissioner the monies which they would otherwise have paid the first applicant; and
  2. to the first applicant, seeking to have it pay to the Commissioner monies which it would otherwise have paid the second applicants [6], [25].

The Commissioner advised that, in the event it were held that the notice did not require the garnishee to pay an amount to the Commissioner, she would repay the amount to the applicants or as the Court directed.  Accordingly, at settlement, after the appropriate expenses were met, the balance of the monies which would ordinarily have been remitted to the first applicant were redirected to the Commissioner. [26].

The critical issue was whether the validity of the relevant notices was affected by the first and second applicants holding the monies on trust.

The applicants submitted that it was not within the scope of s 50 for a notice to be issued to a garnishee in respect of monies which the garnishee was liable to pay a taxpayer, but the right to receive which was not beneficially held by the taxpayer. They contended that s 50 only applies to funds which rightfully “belong” to the taxpayer and are beneficially held by the taxpayer. [8]. Alternatively, it was argued that giving effect to the garnishee notices would give rise to a matter arising under the Constitution or involving its interpretation, since:

  1. it would result in operational inconsistency between s 50 and the Superannuation Industry (Supervision) Act 1993 (Cth); and
  2. the requirement to pay superannuation fund monies to meet a state tax debt would be inconsistent with the requirements of the Superannuation Industry (Supervision) Act 1993 (Cth) as to the manner in which the trustees of the superannuation fund were required to deal with the fund – consequently meaning the state law would be invalid or inoperative to the extent of the inconsistency. [10].

In considering the proper construction of s 50, his Honour declined to read into it the intention that the Commissioner should be paid tax out of property which the Commissioner must have reasonably believed in equity did not belong to the taxpayer at the time of receipt of the relevant notice: see Zuks v Jackson McDonald (a firm) (1996) 33 ATR 40. He provided this useful clarification:

“where s 50 refers to ‘liable to pay an amount to the taxpayer’ I would construe that phrase as encompassing only circumstances in which the right to payment from the garnishee was legally and beneficially held by the taxpayer and the taxpayer was free to use the right in the taxpayer’s own interest. To take any other view would be to attribute intention to the parliament in a way which I am not prepared to do.” [39].

In coming to that view, he noted that it was apparent that the Commissioner was familiar with the relevant facts.

In particular, none of the garnishee notices could be regarded as those in respect of which the Commissioner, at the time they were issued, had a reasonable belief that the garnishee was “liable or may become liable to pay an amount to the taxpayer”.  Plainly, the Commissioner must be taken to have reasonably known that the taxpayer to whom the debt was owed did not have a full legal and beneficial interest in the debt. [40]. Specifically, the relevant information before the Commissioner indicated that the monies which the first applicant sought to receive on settlement would necessarily be held on trust for the second applicants, and the monies the second applicants sought to obtain would necessarily be held on trust as part of the superannuation fund: that is, all were choses in action held on trust. [28].

In the result, his Honour concluded that the applicants were entitled to declarations that the garnishee notices were not valid nor effective to impose obligations on them to pay monies as they sought to do. [43].

Appeal Status: Appeal Pending


Torts back to top

Gratrax Pty Ltd v T D & C Pty Ltd [2013] QCA 385

This matter before the Court of Appeal concerned the application of the requirements of the Civil Liability Act in relation to the issue of causation.  In particular, it involved the issue of s 11(1)(b) of the Act concerning whether or not the it was appropriate to extend liability to the defendant.  The circumstances were that the defendant, a road designer, had negligently specified a grade of road base when designing a road for the plaintiff.  There was no doubt that the plaintiff had suffered loss in acquiring the inferior grade road base.  However, in the usual course of road building, once the base had been laid it ought to have been tested and inspected by the local authority before proceeding further.  It was not and the plaintiff proceeded to complete construction of the road.  As a result, once the defective road base was identified, the plaintiff was required to expend substantially more money in dismantling the constructed road.  It seems to have been accepted that had the road base been tested and inspected before work on the road continued the inferior quality of the road base would have been detected and could have easily been replaced. The trial judge held that the loss sustained by the construction of the road after the road base had been put in place and the subsequent deconstruction of the road was not caused by the defendant’s negligence but was brought about by the defendant’s own conduct.  That decision was upheld on appeal.  In discussing the application of s 11(1) of the Act Fraser JA (with whom Morrison JA and Wilson J agreed) made the following points:

•        Section 11 is not concerned with concurrent tortfeasors or wrongdoers.  It “concerns the effect upon the necessary causal connection between the breach of duty and the claimant’s loss of a supervening act or decision of the claimant which is a more immediate cause of the claimant’s loss than the wrongdoer’s breach of duty”.

•        The methodology which s 11(1)(b) requires for determining a scope of liability issue, is to be applied in the resolution of any matter regardless of the methodology at common law, even if the methodologies applied at common law might be useful guides.

•        The relevant distinction found in s 11(1) is that s 11(1)(a) is concerned with factual causation (being the application of the “but for” test, whereas s 11(1)(b) requires a normative determination of whether or not it is appropriate for the scope of the negligent person’s liability should extend to the harm which has been sustained.  See Wallace v Kam (2013) 87 ALJR 648. 

•        In relation to the issue of legal liability the normative question is determined, in an established class of case, by reference to precedent and, in a novel case, by reference to the criteria provided for by the section.  Within the scope of this question, the liability for the consequences of negligence is often co-extensive with the duty of the negligent party.

•        In determining whether or not a defendant should be liable for losses which have been sustained in circumstances where there was an intervening act by the plaintiff, it is appropriate to consider the reasonableness of the action of the plaintiff and that serious conduct such as fraud is not required.

Appeal Status: No Appeal Pending - Appeal Period Expired

Butler v State of Queensland [2013] QCA 354

This interesting matter concerned the liability of the State of Queensland to certain land owners in the suburb of Collingwood Park whose land had subsided. The plaintiffs alleged that the State had owed them a duty of care which they had breached by granting mining licences for the extraction of minerals under their land, in failing to supervise and monitor the mining under the land, the failure to warn of on-going risk of subsidence and the failure to undertake remediation work.
Of particular interest in this case is his Honour’s identification of the circumstances in which a public authority will owe a duty of care to members of the public in respect of the exercise of statutory powers. The following principles relating to the identification of a duty of care can be identified:
• An essential requirement is that the relevant authority had the power to act in the manner in which it is said would have avoided the damage.
• Whether or not a statutory regime casts upon the authority a duty of care is determined by a close examination of the terms, scope and purpose of the legislative provisions and ascertaining whether or not the regime facilitates a relationship between the authority and a class of persons that displays the characteristics of a duty of care?
• An evaluation of the relationship between the holder of the power and the person or persons to whom it is said that the duty is owed has to be undertaken. That multi-faceted inquiry necessarily involves a consideration of the foreseeability of harm, the degree of vulnerability of the affected persons and the consistency between the existence of a duty of care and the terms, scope and purpose of the relevant power. His Honour accepted that the non-exhaustive list of matters identified by Allsop P in Caltex Refineries (Qld) Pty Ltd v Stavar (2009) 75 NSWLR 649 at 676 [103] were appropriate matters to be considered in this process.

• It was also observed that where the loss in question involves the suffering of pure economic loss the five relevant factors referred to in Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 at 529-531 have to be assessed.
• In identifying that a duty of care existed, his Honour noted that the powers of the State to impose conditions on the mining activities and to monitor them were consistent with the existence of a duty of care. In particular, the State had a substantial amount of control over the risk of harm being sustained by the land owners from the mining activities through its powers of monitor and supervise compliance with mining conditions.
It was held that the duty of care was breached by a failure to properly monitor compliance with the conditions of mining and that the plaintiffs’ losses were caused by the breach of duty.

Appeal Status: No Appeal Pending - Appeal Period Expired

JNJ Resources Pty Ltd v Crouch & Lyndon [2014] QSC 13

This important decision by Jackson J concerns the difficult question of identifying when a cause of action arises where rights are immediately affected but the sustaining of actual damage is possibly contingent on other matters. The facts of this matter are complex but nevertheless should be fully stated. The plaintiff in the matter, which was owned and directed by a husband and wife, carried on business as a stock feed supplier. It did so from a parcel of land referred to in the case as Lot 53. The land was owned by the directors and there was no agreement in place for the company’s occupation of the land. The directors merely permitted it to use the land for its business. No fees or rent was paid for the occupation. The directors wished to sell a major portion of the land to a third party but wished to retain that part from which the company carried on its business. It is claimed that instructions were given to the defendant solicitors that the sale of the land was to be subject to a simultaneous purchase of a sub-divided part of the land being that part on which the business was conducted. The sale went ahead with the directors entering into a simultaneous contract to acquire the relevant portion of Lot 53. That contract, however, was subject to the obtaining of sub-division approval in respect of that relevant portion. As a result of an alteration to the town planning laws the sale could not proceed and the new purchaser of Lot 53 terminated the contract. That said, a five year lease had been granted by the new owner to the directors and, in 2011 that lease was extended for a further five years. The plaintiff company alleged that the solicitors were negligent because the contract for the sale of Lot 53 was not made conditional upon the “completion” of the sale of the sub-divided portion or that the solicitor should have advised the directors that the possibility existed that the sub-division may not occur. The company alleged that had that the directors been given appropriate advice they would not have sold the land.

The plaintiff company claimed in negligence and alleged that it had suffered damage arising from the giving of negligent advice to the directors in their personal capacity in that it would not be able to sell the stockpile of material stored on the land resulting in a loss of profits and further that the material would degrade with the result that substantial sums will have to be expended in disposing of it. It also aserted that it will suffer loss and damage on the basis that it would not be able to continue to undertake business on the land and that its security of tenure was weakened.
The defendant sought to strike out the action on the basis that the contract for the sale of Lot 53 settled more than six years before the action was commenced.
In relation to the argument that the cause of action arose when the sale was completed, Jackson J identified the importance of carefully analyzing the rights of the party whose is said to have suffered loss and the manner in which those rights were affected by the transaction. In doing so, his Honour noted that, given the loose arrangement between the plaintiff company and the directors as to the company’s occupation of the land (which involved no legal right of occupation) the sale of Lot 53 had no impact on the company’s rights. The company had no right which was made less valuable by reason of the transaction regardless of whether or not the directors suffered any loss. Whilst his Honour noted that the parties did not seek to agitate that the loss of the expectation by the company that it would be granted occupancy rights in the future was a loss which was compensable in an action for negligence, he did consider that the closest analogue to the case before him was that line of cases of which Hill v Van Erp is the highest authority. However, it was observed that in Hill v Van Erp the expectation of the beneficiaries was, at the relevant time, backed by a concrete proposal which was not so in the matter before the Court.

Nevertheless, his Honour did consider what the position would be if the loss of the opportunity of future occupation was a valuable right which was lost to the plaintiff. In this respect it was noted that, from the company’s point of view, the risk was that the conditional contract for the sale of the subdivided portion would not complete. In these situations it is necessary to keep in mind the distinction identified in Wardley between circumstances of actual loss on the one hand and circumstances where the risk or fact of loss is contingent on the other. His Honour considered a number of authorities concerning this issue and identified that risk of loss becomes actual loss when the circumstances are such that actual loss will occur with some certainty. It was not possible to determine that point in an interlocutory application before the Court.

Appeal Status: No Appeal Pending - Appeal Period Expired

State of Queensland v Kelly [2014] QCA 27

In this case, the Respondent had been rendered a partial tetraplegic by injuries he sustained running down a sand dune and falling awkwardly into Lake Wabby on Fraser Island. On appeal, the central issue was whether the risk of serious injury which materialised was an “obvious risk” for the purposes of s 13 of the Civil Liability Act 2003 (“CLA”). The question before the Court was whether “the risk of serious injury from an accident caused by running down the sand dune into the lake … (was) a risk that, in the circumstances, would have been obvious to a reasonable person in the position of the respondent”. [40]
In addressing this question in the totality of the circumstances, the Court paid particular attention to the significance of two “warning” signs posted by the Appellant. Though they were considered to be relevant as to whether the risk would have been obvious to a reasonable person, in the circumstances, the nature of the risk conveyed by the signs was not the risk that materialised in the circumstances – the signs warned of the risk of serious injury or death from “running and diving” rather than “running or diving” [43]. Further, the reason for the danger conveyed by the signs, namely that the lake was shallower than it appeared, would likely have been “lost in the mind of a reasonable person ... [on] discovery that the depth of the lake was ... readily ascertainable”. [45] The Court also took into account that the signs failed to communicate the unusually high probability of the risk’s occurring and that others were apparently safely engaging in the same behaviour in concluding that “the cumulative effect of the circumstances ... militate[d] against a conclusion that [the] risk was so clear” to have been obvious to a reasonable person in the Respondent’s position. That the Respondent’s own evidence indicated that had he read the signs he would not have acted as he did were relevant to whether he was contributorily negligent, but were not inconsistent with the conclusion that the risk was not obvious. The appeal was dismissed.

Appeal Status: No Appeal Pending - Appeal Period Expired

Howl at the Moon Broadbeach Pty Ltd v Lamble [2014] QCA 74

This recent decision of the Queensland Court of Appeal further adds to the body of case law concerning the scope of vicarious liability. This case arose out of the assault of a (recently) ejected nightclub patron by a non-security employee (Cerantonio) of the nightclub, ostensibly defending/protecting another employee, directly outside the venue. The principle issue before their Honours was whether the employer could be considered vicariously liable for the actions of one of its employees in the absence of a relevant connection with the nature of the employment.
In exploring the extent of the scope of vicarious liability, their Honours undertook a detailed analysis of the related case law, focusing particularly upon the High Court judgments – Deatons v Flew, Hollis v Vabu and NSW v Lepore. Upon undertaking an examination of the specific facts of the instant case, particularly in the light cast by these previous decisions, it was held that whilst “the general performance of the normal functions of security staff” [27] was not within the terms of Cerantonio’s employment, his actions, in protecting another employee, were in the “course of his employment”. In reaching this decision, their Honours particularly focused upon the rationale for imposing vicarious liability, namely that where the “employer’s enterprise [has] created the risk that produced the tortuous act … the employer must bear responsibility for it”. [36]. Though “security” was not specifically within the general scope of Cerantonio’s duties, it was in the interests of the nightclub that the “fracas … be stopped” and the other employee be protected. [29]. Further, their Honours considered it relevant that, though the evidence indicated that this was a relatively “tame” nightclub, their conduct in providing alcohol, gave rise to the risk that staff may face situations where they needed to act in their own or other employees defence [35] and were not convinced that the fact that this act occurred beyond the nightclub’s perimeter placed it outside the scope of Cerantonio’s duties, given that it was the continuation of an internal incident. [33]. The Court concluded that the trial judge had not erred, and denied the appeal.

Appeal Status: No Appeal Pending - Appeal Period Expired

Hall v WorkCover Queensland [2014] QCA 135

In this matter the Court of Appeal considered the application of the Limitation of Actions Act to “dependency claims”.  The appellant was the widow of Mr Hall who had died in May 1995 of mesothelioma.  He had been employed by each of the relevant respondents at different times between 1966 and 1978 during which he had been exposed to asbestos dust.  At the date of his death the three year limitation period for the commencement of an action for damages for negligence or breach of duty had expired under s 11 of the Limitation of Actions Act.  The question for the Court was whether or not the plaintiff’s action for a dependency claim was also barred?

The first issue was whether or not s 11(1) of the Limitation of Actions Act applied to dependency claims?  That section imposed a three year limitation period for certain actions in which the damages claimed by the plaintiff consist of or include damages in respect of personal injuries to any person “or damages in respect of injury resulting from the death of any person”.  The highlighted words were added in 1981 and, at the same time provision was made for the extension of the limitation period in the circumstances referred to in s 29 or s 31 of the Act.  In 1995 the provisions giving rise to the existence of dependency claims was moved from the Common Law Practice Act and subsequently to the Civil Proceedings Act in 2011.  At first instance it was held that the limitation period of three years in s 11(1) did apply to the dependency claims.  That conclusion was accepted by the Court of Appeal although that did not conclude the matter.

The next question concerned the application of s 11(2) of the Limitation of Actions Act which provided that right of action relating to personal injury resulting from a dust-related condition is not subject to limitation period under an Act or law or rule of law.  The precise issue was whether or not this had the effect of providing that dependency claims relating to dust related diseases were within the scope of s 11(2)?  The Court held that the words “a right of action relating to personal injury” were of wide import by the use of the expression “relating to” which was close to “in relation to” with the result that dependency claims were within s 11(2) such that no limitation period applied in relation to such claims where they arose out of a dust related disease.

The discussion of the Court (Muir JA with whom McMurdo P and Atkinson J agreed) is interesting as, in part, it prefers an interpretation informed by the intention of the Minister who introduced the legislation into the Parliament than one which appeared from the natural reading of the words.  The Court relied on an approach to statutory interpretation which identified that if the target of a legislative provision is clear, the court’s duty is to ensure that it is hit rather than to record that it has been missed.

It is also to be noted that the Court held that the mere fact that the limitation period for Mr Hall’s (the deceased’s) personal injuries action had expired on his death did not prevent the dependency claim from arising as, at the date of his death, he had an entitlement to damages.  In the result it was held that there was no relevant limitation period which prevented the bringing of the dependency claim.

Appeal Status: No Appeal Pending - Appeal Period Expired

Black Diamond Group Pty Ltd v Manor of Maluka Pty Ltd [2014] QSC 219

In this matter Jackson J considered, and indeed questioned, the appropriate manner of assessing damages in detinue cases.  His Honour further considered the necessity of making a valid demand upon a person in actual possession of the goods in question.

The facts of the matter were relatively simple.  Black Diamond Group Pty Ltd (Black Diamond) was a company engaged in the business of hiring demountable accommodation buildings, typically associated with mining operations.  Manor of Maluka Pty Ltd (Maluka) was in the business of providing accommodation services at mine sites and, in particular, it operated the Banana Accommodation Village near Banana in Central Queensland.  For that purpose Maluka had hired 21 buildings from Black Diamond.  The venture, however, was not successful.  Maluka fell behind in the rental payments in respect of the demountable buildings it had hired and Black Diamond intimated its intention to recover possession of them.  Maluka refused to return the buildings, however, it subsequently went into liquidation.  The second defendant, Go Country Group Pty Ltd (GCG), was the owner of the land on which the demountable buildings were located, but it too refused to return the buildings.  Black Diamond sought damages against GCG for the wrongful detention of its buildings said to have been about $60,000 per month representing the rate of hire of the buildings as agreed under the agreement with Maluka.  In effect the plaintiff relied upon what was said to be a special rule for damages for the tort of detinue, where the plaintiff carries on business of hiring the chattels in question for reward and the defendant makes use of them.  It is said that the plaintiff is then entitled to its usual rate of hire for the chattels as the measure of damages.

It was conceded by GCG that, if there were some inappropriate detention of the goods, the plaintiff would be entitled to damages representing the usual rate of hire regardless of whether that loss would be the usual compensatory measure of damages in tort.  That approach was derived from the decision in Strand Electric and Engineering Co Ltd v Brisford Entertainments Ltd [1952] 2 QB 246.  Jackson J considered that the approach in that case was not consistent with the decision of the High Court in Butler v Egg and Egg Pulp Marketing Board which was to the effect that damages in tort are compensatory, such that a plaintiff may not recover more than the “sum of money [that] would be required to place it in the same position as it would have been in if the appellants had [not converted the chattels]”.  However, his Honour noted that, as the decision in Strand Electric had been followed by Australian intermediate appellate courts, he was bound to follow it.

For the cause of action in detinue to be fully constituted it was necessary that the person entitled to the chattels makes a demand on a possessor and the possessor refuses to return them.  After considering whether or not there was a sufficient demand in the present case, it was held that there was or, if the solicitor’s letter requiring the return of the goods was not adequate, the commencement of the proceedings was.  See UCPR 375.

However, at the time of the relevant letter of demand, there was a question as to whether or not GCG was in possession of the land on which the buildings were located as the land was subject to an agreement between GCG and Maluka for Maluka to use the land for its venture.  Hence, the question for the Court was whether, if Maluka did have possession of the land, does that affect the claim in detinue brought by Black Diamond against GCG?  His Honour reasoned that possession of the land – and, therefore, of the demountable buildings – by GCG was essential to the plaintiff’s claim for detinue as possession by a defendant of goods is a necessary element of their detention.  In the present case, GCG did not adopt the position that, as it was not in possession of the land and, therefore, the buildings, it could not have been liable for detinue.  Instead, even though it did not have possession of the land when the goods were demanded, it asserted a right to prevent Black Diamond from entering onto the land to recover them.  In the circumstances of the case his Honour thought that it was not necessary to answer the question of whether or not GCG had relevant possession of the goods when the demand was made.

On the question of the rate of damages, under the Strand Electrical principle the defendant who wrongfully detains the plaintiff’s goods which are ordinarily used for hiring is liable for the usual hiring rates, but only if the defendant, itself, used the goods.  The principle cannot apply where the wrongful detainer of the goods does not use them but merely allows them to lie idle: Bunnings Group Ltd v Chep Australia Ltd (2011) 82 NSWLR 420 applied.  In the present case, GCG had not deployed the buildings in any way in the course of its business or at all.  It followed that the plaintiff’s claim for damages based on the usual rate of hire failed.

Appeal Status: No Appeal Pending - Appeal Period Expired

Melisavon Pty Ltd v Springfield Land Development Corporation Pty Limited [2014] QCA 233

This case concerned the identification of the time when damage occurs in relation to defective construction work where the defect remains latent for a number of years.  Springfield Land Development Corporation (“SLDC”) developed a residential golf course community.  In about January 2000, SLDC contracted with Melisavon Pty Ltd, the appellant, which conducted the business of civil and structural engineering consultants, to design a clubhouse and surrounds.  The design was completed in mid-2003 and, so it was alleged by SLDC, the work was completed in accordance with that design.  It was further alleged that the design was defective in that it did not provide for adequate footings given the soil conditions and as a result of “ground heave” parts of the building have failed and have been damaged causing economic loss. On 16 June 2011 the respondent filed a claim and statement of claim alleging that the appellant negligently caused the respondent economic loss of $866,258 flowing from a latent defect, namely the appellant's negligent engineering design.  The appellant defended the action claiming that the loss first occurred in 2003 / 2004 when cracking appeared in the slabs surrounding the clubhouse and the action was barred by the Limitation of Actions Act. It was not in doubt that in 2003 / 2004 the cracks were identified and it was surmised that they had been caused by ground heave although various causes of the ground heave were considered such as inadequate drainage or overwatering around the building.  The appellant brought a summary judgment application on the basis of the Limitation defence but was not successful at first instance.  It appealed claiming that SLDC’s cause of action was complete and had accrued when the cracking first occurred and appeared, being well prior to six years before the action was commenced.

The President (with whom Ann Lyons J agreed) took an approach which focused upon the existence of knowledge (actual or constructive) of the link between the manifest damage and the cause of the latent defect in the building (ie negligent design).  This, the President described as being an “orthodox approach” in line with the decision in Pullen v Gutteridge Haskins & Deavey Pty Ltd. Her Honour said:

“The preceding discussion of the relevant cases shows that for the purposes of s 10(1)(a) Limitations Act, the respondent's cause of action, which is at least arguably solely for economic loss, arose when it suffered economic loss, that is, when the latent defect, the alleged negligently engineered design of the clubhouse, first became known or manifest in the sense of being discoverable by reasonable diligence.  That is because it was only then that the respondent suffered an actual diminution in the market value of the clubhouse.”

Her Honour later said:

“Until the High Court says otherwise, the cause of action in the present case was complete when the respondent suffered economic loss, that is, when the respondent had actual knowledge of the appellant's faulty engineering design or when the faulty design itself became manifest or could be discovered by reasonable diligence.”

Holmes JA (who dissented) would have allowed the appeal adopting, what her Honour said, was the “conventional approach”.  That being one which accepts that a cause of action for negligence may expire before a plaintiff is aware of the existence of the right of action.  Her Honour posed the question as being, “whether, when there is physical damage emanating from a latent building defect, the cause of action in a claim for economic loss arising from the defect accrues on the appearance of the damage or only once the damage is traceable to its source by the application of reasonable diligence?”  Her Honour adopted the approach that the question had been settled by the decisions of the High Court in Sutherland Shire Council v Heyman, Hawkins v Clayton and Bryan v Maloney, being that the economic loss first occurs when some actual adverse consequence of the negligence is known or becomes manifest and, in the case of buildings, that is when there is consequent damage to the fabric of the building.  In other words her Honour held that, “upon evidence of an underlying defect emerging in the form of physical damage, such as cracks, any resulting economic loss is then sustained, whether or not that damage is then capable of being attributed to the defect.”  That, she said, was the conventional approach that the cause of action accrues where actual damage caused by latent defect is manifested or the existence of the defect is known or ought to be known.  It was not necessary that the link between the latent defect and the manifestation of the damage is known or ought to be known.

In the result the appeal was dismissed.

Appeal Status: Appeal Pending - Application for Special Leave to Appeal made to the High Court.

Oram v BHP Mitsui Coal Pty Ltd [2014] QSC 230

This recent decision of McMeekin J provides a detailed and comprehensive discussion of the law regarding negligently inflicted psychiatric injury and the circumstances in which it is appropriate to grant an extension to a limitation period.  The Court had reason to consider this issue following the filing of a claim by Colin Oram (the “applicant”) seeking damages from his former employer BHP (the “respondent”) for negligently-inflicted psychiatric injury.  This matter traverses a considerable period of time.  In 1994 the applicant was a witness to the Moura Mine disasters – he was supposed to have been working on that day, however swapped with a colleague who was subsequently killed in the disaster.  Following this, in the period between the disaster and 2011 the applicant developed and was diagnosed with “a Major Depressive Disorder with symptoms seen in Post Traumatic Stress Disorder (“PTSD”)”.  [1].  The applicant subsequently filed a claim against BHP for his psychiatric illness, attributing its onset and development to the lack of care provided following the disaster.  [2]. This application was (assumed) to have been made outside the limitation period, and thus the applicant filed an application to extend.  [3].  It is this application which was before the Court.

Pursuant to s 31 of the Limitation of Actions Act 1974 (“the Act”), the applicant is entitled to an extension if he can satisfy the Court that:

  1. a decisive, material fact relating to the action was not within his means of knowledge until twelve months before the limitation period expired;
  2. there is evidence to establish the right of action; and
  3. it is otherwise just to permit the extension

At issue in this matter was whether the applicant could point to presently-available evidence sufficient to prove his case.  [28]. 

Liability of Employer for Psychiatric Harm

Though a duty to protect against psychiatric injury has previously been recognised, at issue in this case was whether the law, when faced with these specific circumstances, provided a remedy for the psychiatric injury incurred.  [46].  The applicant’s case turned on the question of whether the respondent’s liability for the consequences of the explosion extended to psychiatric injury suffered by those who ought to have worked that day and who bore the “guilt” of “knowing that a man died who had taken [their] place”.  [47].  See also discussion [48]–[49]. 

In addressing what an employee must prove to establish the liability of an employer for psychiatric injury, McMeekin J firstly looked to the case law considering the issues of duty of care and the reasonable foreseeability of psychiatric injury.  Though finding a number of cases concerning the liability of a party for the negligent-infliction of psychiatric injury, such as the High Court’s decision in Tame v NSW; Annetts v Australian Stations Pty Ltd (“Tame and Annetts”), these decisions were of little assistance to his Honour given that these cases were focused upon the question of the existence of a duty of care, rather than, as in the present case, the foreseeability of the resultant psychiatric injury.  [58]–[60].  McMeekin J reasoned that given the existing employer/employee relationship between the applicant and the respondent, that the respondent owed a duty to take reasonable care to eliminate all risks of psychiatric injury was incontestable.  Id.  Turning then to the general principles regarding foreseeability and applying these to the facts before him, McMeekin J concluded that though in the same circumstances many employees may have been relieved that they did not attend work that day, this was not the only foreseeable response, [66] and the risk that an employee would suffer psychiatric injury in the circumstances was not one which was “far-fetched or fanciful.” [61], [64]–[66].  This conclusion was reached in the absence of any expert testimony, his Honour noting that though it may be relevant, proof of this concept does not require expert evidence and that ultimately the test is “what the lay member of the community may be expected to foresee”.  [53]–[56].  His Honour also concluded that arguments relating to the so-called “true cause” of the applicant’s illness or injury, being his personal “make-up” rather than the explosion were no answer to his claim for damages, [67]–[71], and that the decision of the New South Wales Court of Appeal in Rowe v McCartney did not preclude recovery. [72], see [73]–[86]. 

Prejudice

Given that he considered that the applicant had “at least reasonable prospects of persuading the eventual tribunal of fact that his psychiatric illness was a reasonably foreseeable consequence in the circumstances, his Honour then turned to the issue of whether the applicant had satisfied the Court that “the justice of the case require[d] the exercise of [its] discretion in his . . . favour”.  [87], see also Brisbane South Regional Health Authority v Taylor.   More specifically, whether the applicant’s delay in bringing the claim, was prejudicial to the respondent and made the chances of a fair trial unlikely.  [88]–[91].  McMeekin J ultimately concluded that the respondent would suffer specific prejudice as evidence necessary for it to properly defend the claim, specifically the applicant’s medical records, was no longer available.  [93]; [94]–[102].  His Honour considered that in these circumstances the risk of the prejudice was sufficiently great that a fair trial was unlikely and, on this basis, denied the application.

Accrual of Cause of Action

In delivering this judgment however, his Honour did note that there was a “potential difficulty” with the present proceedings not dealt with by the parties.  This difficulty relates to when the applicant’s cause of action in negligence actually accrued, more specifically when the psychiatric injury he sustained was “beyond what can be regarded as negligible”. [13]; Cartledge v E Joplin & Sons.  The evidence was silent upon this point, and given the potential implications that the date of accrual could have on the application, see [17]–[23] the Court delayed making orders to allow the parties to address this issue.  [24]–[25].  

Appeal Status: No Appeal Pending - Appeal Period Expired

Morris v Redland City Council [2015] QSC 135

The primary issue for consideration in this terribly tragic case was whether the defendants breached their duty of care in failing to adequately, or at all, warn the plaintiff of the existence of a cliff face, and its potential for risk of harm, nearby his holiday rental.

Briefly, the plaintiff, together with friends, had rented a house on Mooloomba Road at Point Lookout, North Stradbroke Island. [6]. At about 9pm on the evening of 5 February 2010, whilst affected to at least some extent by alcohol, the plaintiff and two friends left the house to locate steps to the beach. [7]. The plaintiff alleged that they travelled as far as a “well-worn track/path leading off from the boardwalk” [12], which they assumed was the path leading to steps to the beach. [13]. Upon reconvening in that area, the plaintiff grabbed hold of a tree, which snapped, causing him to lose his balance. He fell over the cliff [15]–[16] and sustained significant injuries including fractures of the spine and ribs. He now has paraplegia. Quantum was settled prior to trial. [2].

The weight of the evidence at trial was strongly indicative that there was no path, man-made or otherwise, via the headland to the cliff. [28]. As such, as succinctly put by his Honour, the accident occurred in circumstances where:

“the Plaintiff:

  1. wandered through an area about which he knew nothing,
  2. which was mostly covered by thick natural vegetation,
  3. which became steeper as he approached the top of the cliff,
  4. on a dark night.” [29].

Requisite foreseeability

In assessing whether the Council breached its duty owed to the Plaintiff, his Honour noted that the risk lying at the foundation of the plaintiff’s case is the risk “that a person might attempt to walk, at night, from the boardwalk and cross through the bushes on the headland, reach the top of the cliff, and fall from it”. [37]. In circumstances where the natural vegetation was thick; there was no path; and the topography was not easy to traverse, the risk that someone might fall from the top of the cliff was regarded as too remote to be considered reasonably foreseeable. [40].

Warning signs

The Plaintiff contended that the Council should have installed warning signs or signs prohibiting entry to the area. [42]. In this regard, his Honour endorsed the reasoning in Vairy v Wyong Shire Council [2005] HCA 62, wherein the High Court observed that warning signs would be rendered ineffectual “if a public authority, having the control and management of a large area of land open to the public for recreational purposes, were to set out to warn entrants of all hazards, regardless of how obvious they were, and regardless of any reasonable expectation that people would take reasonable care for their own safety”. His Honour relevantly noted that the plaintiff called no evidence regarding the type of signs which might have satisfied the duty the plaintiff said existed; and that non-illuminated signs would not have been visible at night in any event. [46]. In the circumstances, the court found that it could not be accepted that, had there been signs, the plaintiff would necessarily have seen them and, “given the determination shown by each of the men in forcing their way through the bush, … the plaintiff would have stopped looking for the steps”. [50].

In short, his Honour expressed the view that, regrettably, the risk of injury to the plaintiff would have been apparent to any reasonable person in his position. [57].

Consumption of alcohol

The plaintiff estimated that he had consumed approximately 8 beers over a period prior to the incident. [6] Expert evidence estimated that as such, he would have had a range of .054 to .065 per cent blood alcohol concentration at the relevant time. Accordingly, his Honour held that had he found that the Council had indeed been negligent, then he would have held the plaintiff’s contributory negligence amounted to 50%. [65].

Orders

In the result, the court dismissed the claims against both defendants, ordering that the plaintiff pay the second defendant’s costs of the action on the indemnity basis. [78].

Appeal Status: No Appeal Pending - Appeal Period Expired

Hamcor Pty Ltd v State of Queensland [2015] QCA 183, 2 October 2015

This interesting matter arose from the contamination of a property following its immersion in contaminated fluid known as “fire-water” in the aftermath of a fire.  “Fire-water” is water containing toxic fire suppressant chemicals. [3]. Proceedings were subsequently commenced against the State of Queensland for alleged negligence on the part of the Queensland Fire and Rescue Service in the course of fighting the fire. The plaintiffs also sued an insurance broker and its authorised representative for alleged failures to advise that they ought to have been named as insureds under a liability insurance policy. [5]. The claimed cost of remediation of the contaminated land was more than $9 million, many times its value. [4].

At first instance both claims were dismissed. [6]. The appellants appealed solely against the decision involving the State of Queensland. [7].

The decision at first instance

Whilst finding that QFRS owed a common law duty to the plaintiffs to take reasonable care to protect its property, which it breached, [10]–[11] the learned primary judge noted that QFRS was expressly authorised to apply water to the fire by s 53(1) of the Fire and Rescue Service Act 1990, and hence entitled to the immunity conferred by the first limb to s 129(1). [13]. In view of the scarcity of evidence, the learned primary judge took the view that she was not in a position to make findings as to causation of loss on which damages could be assessed. [14].

The appeal

On appeal the appellants had four grounds of appeal, three which are discussed below.

Ground one

The appellants submitted that the learned primary judge erred in holding that QFRS was acting pursuant to the Act and was therefore entitled to an immunity under s 129(1), when upon the proper construction of that provision, the QFRS was only entitled to immunity only where it acted bona fide and without negligence.  [28]. The appellants contended that the application of water to a fire by QFRS personnel for any of the purposes listed in s 53(1) was not an act done pursuant to the Act, and therefore the immunity could not apply. [29]. The appellants relied upon Colbran v State of Queensland [2006] QCA 565, contending that statutory immunity provisions ought to be interpreted “jealously”. [31].

Noting that her Honour had evidently formed the view that the application of water to extinguish a fire is in fact a reasonable measure to protect persons, property or the environment, and, as such, authorised by s 53(1) [43], the court did not accept the appellants’ submissions, agreeing that although as a principle of statutory interpretation statutory immunity for acts done pursuant to a statute should be construed as extending only to acts directly authorised by the statute, there is nonetheless no “companion proposition, that in order to be directly authorised by a statute, an act must be specifically listed in it as authorised by it … an act will be directly authorised by a statute if it falls within a broad description of acts authorised by the statute.  Such an authorisation may be in terms which permit the taking of “any reasonable measure”. [45]. (emphasis added).

Accordingly, the court’s finding was that since it was a reasonable measure undertaken for any of those purposes, the application of water to a fire was done pursuant to the Act. [46].

Grounds two and three

The appellants additionally argued that the learned primary judge erred in failing to find that the act or omissions of the QFRS in fighting the fire were “unreasonable” within the meaning of s 36(2) of the Civil Liability Act 2003; and furthermore that she failed to properly construe ss 53 and 129(1) of the Fire and Rescue Service Act 1990.

In essence, the appellants submitted that whilst it was theoretically possible that conduct may be negligent, yet not “manifestly unreasonable” in the Wednesbury sense, the learned primary judge failed to provide reasons explaining why the negligent conduct of the QFRS officers was not, at the same time, unreasonable in the Wednesbury sense. [52].

Discounting these criticisms, the court found as follows:

“it does not at all follow … that the strategy adopted by QFRS was illogical, irrational or lacking in intelligible justification.  It would indeed be difficult to reach such a conclusion given her Honour’s unchallenged findings that the application of large volumes of water was appropriate at four installations or facilities.” [60].

Accordingly, the court upheld her Honour’s finding that the conduct of QFRS was not unreasonable in the Wednesbury sense.  It also determined that her reasons for not so finding were adequate. [61].

The appeal was dismissed.

Appeal Status: No Appeal Pending - Appeal Period Unexpired

Maggs v RACQ Insurance Ltd [2016] QSC 41, 9 March 2016

This is a recent decision considering whether ‘fund management fees’ are damages that may be recovered under the Civil Proceedings Act 2011 (“CPA”).  This matter arises out of a tragic set of facts – the applicant is a non sui juris, the consequence of a motor vehicle accident in 2012, when she was a one year old, in which both of her parents were killed.  The applicant, through her litigation guardian, brought the present application for orders sanctioning the terms of a settlement of her claim for damages under s 64 of the CPA sustained as a result of her parents’ death.  The issue before the Court was whether the applicant was entitled to receive, as part of this damages award, a component by way of fund management fees. 

Given the age of the applicant, the agreed settlement sum for the applicant’s loss will necessarily have to be managed on her behalf.  [5]–[6].  The applicant submitted that this sum ought to include the “inevitable” costs of the administration of this fund – a “plainly foreseeable” cost given the loss being compensated resulted from the death of the applicant’s parents.  [7].  In reply, the respondent argued that though fund management fees are a recoverable head of damage in the assessment of damages at common law for negligence, the CPA did not allow for their recovery as damages in the applicant’s claim brought pursuant to a statutory cause of action.  [8]. 

Section 64 of the CPA provides that a person who causes the death of another by a wrongful act or omission is liable for damages, the Court however may only award to the deceased’s family “the damages it considers to be proportional to the damage to them resulting from the death”.  [10]–[11].  Prior to the commencement of the CPA, claims for damages of this type were determined in accordance with the Lord Campbell’s Act.  The measure of damages in such a claim was explained in Horton v Byrne as “compensation for material loss … [which] represent[s] the balance of the loss … which the deceased’s relatives incur in consequence of [the] death after deducting the pecuniary gains which on the other hand accrue to them from that event.  The loss is usually a prospective one and all reasonable expectations of material advantage are to be taken into account”.  [12]–[13], see also Baker v Dalglish Steam Shopping Co Ltd.  Fund-management fees, however were generally considered a “post-degree” matter, which though arising as a consequence of the death were not amounts which could be considered a loss recoverable as “compensation for the loss of the chance that the particular claimant would have derived … had the [deceased] lived”.  [14]–[15], see Fox v The Commissioner for Main Roads; Rouse v Shepherd.  Though these cases were decided prior to the commencement of the CPA, given s 7 of the CPA which provides that a court “must give the same effect as it did immediately before the commencement of this section to all … equitable duties and liabilities; and … legal claims and demands … [already] existing” and a consideration of the explanatory notes and second reading speech, the Court concluded that there had been no intention to change the types of damage properly recoverable in such a cause of action.  [16]–[17].  In light of this, the Court considered there was no basis to extend the recoverable damages to include damage not resulting from the death, but arising post-assessment and thus held that the fund management fees sought by the applicant were not recoverable as damages resulting from the death of the applicant’s parents.  [18]–[19].  

Appeal Status: No Appeal Pending - Appeal Period Expired

Sinnamon v Maher, 14 March 2016

This is a recent decision of the Supreme Court addressing how the management fees of an administrator are to be calculated.  This issue arose out of tragic circumstances – in 2010 the plaintiff suffered a severe traumatic brain injury as a result of a road traffic accident.  Following proceedings brought by his litigation guardian the plaintiff’s claim was settled in late 2015 and sanctioned pursuant to s 59(1) of the Public Trustee Act 1978 by orders which, in addition to stating the amount of the damages to be paid and ordering the appointment of an administrator and its powers, included an order that the proceeding be adjourned for a hearing on the assessment of management fees – the present matter before the Court.  [1]–[3].  The sole issue for determination in this matter was whether, as a matter of legal principle, the cost of investing the settlement amount ought to be allowed as damages. 

The dispute concerned what were referred to as “Super Platform Costs” (SPC) – these being the costs incurred by the administrator of investing the compensation amount in a superannuation fund.  At the hearing evidence was led by the administrator that this form of investment was chosen because income on such a fund is taxed at a lower rate and in the long term the corpus would grow.  [17].  The defendants challenged the SPC on the basis that “the notional income tax on the compromise sum ha[d] already been taken into account in the selection of the discount rate … for all future heads of damage.  Accordingly, the plaintiff should not be entitled to seek the additional cost of investing in a superannuation platform because this will further reduce the likely tax payable by the plaintiff”.  [28].  The Court, the defendant submitted, would be “impermissibly supplementing the award to allow the plaintiff to gain a higher rate of net return” if the SPC was allowed as damages.  [29].

The Court ultimately rejected this submission, holding that the “mere fact that a particular investment may achieve present taxation advantages is ultimately irrelevant in determining whether the management fees properly constitute part of the plaintiff’s damages award” and that it was “sufficient to constitute part of the award of damages that the [SPC] [were] an actual cost to be incurred by the administrator during the intended life of the fund”.  [38].  In reaching this conclusion the Court drew upon the principles which govern the assessment of damages for personal injuries, in particular that “the court has no concern with the manner in which the plaintiff uses the sum awarded to [them]” and that damages are calculated “as the amount that will place the plaintiff … in the position [they] would have been in had the tort not been committed”.  [19], [22].  Thus where a plaintiff is incapable of managing their own affairs as a consequence of the defendant’s negligence the damages awarded will include the costs of administering the fund.  [19]–[26], see further Todorovic v Waller; Gray v Richards, the plaintiff being entitled to “all the direct costs associated with holding and deriving an income stream from the fund created by the award of damages”. [33], see Bell v Pfeffer.  The Court noted that this did not extend to the cost of managing the predicted future income of the managed fund, [23]–[26] however, for the purposes of this matter it was conceded that no part of the SPC constituted the cost of managing income predicted to be earned and reinvested as part of the funds under management.  [27].  Given these principles the Court considered that the fact that, as in this case, there are (presently) taxation advantages to be derived from the investment was irrelevant and that the SPC, as an actual cost to be incurred by the administrator during the intended life of the fund, properly constituted part of the plaintiff’s damages award. [35]–[38].    

Appeal Status: No Appeal Pending - Appeal Period Expired

Downes v Affinity Health Pty Ltd [2016] QCA129, 13 May 2016

This application for leave to appeal was brought by a registered nurse who contended that the respondent was in breach of its duty to her when she aggravated a spinal condition whilst lifting a post-operative patient into bed, by failing to provide full length cot rails. [4].

The salient issues were whether:

  1. an appeal was necessary to correct a substantial injustice; and
  2. there was a reasonable argument that there was an error to be corrected. [7].

The applicant submitted that at first instance, the primary judge erred by:

  1. not finding that the hospital’s failure to provide a bed with full length cot rails was a breach of duty;
  2. not finding that there was a causal link between the breaches of duty and the injury; and
  3. inadequately assessing the component of past economic loss, in particular by applying a discount factor (one third) that was too high. [10].

The Hospital sought to affirm the decision on the basis that there should have been a finding of no breach of duty in respect of the heightened vigilance ground. [11].

At the outset the court noted that the applicant had provided a number of contrary versions of events in her evidence. [15]–[17]. In addition, another witness gave evidence which conflicted with the applicant’s regarding how the incident occurred. [18]. The learned trial judge accepted that each witness was honest, but unreliable as to the circumstances in which the incident occurred, [20] impeding his ability to form a conclusion as to the physical actions that were involved in the applicant’s interaction with the patient. [26]. Ultimately he was unable to make a finding as to whether the applicant sustained her injury in the way she alleged. [33].

Breach of the duty of care

At issue on appeal was what, in all the circumstances of the case, was the content of the duty of care; and whether the evidence established that there had been a breach of that duty. [40]. In examining this, the court referred to Roads and Traffic Authority (NSW) v Dederer [2007] HCA 42 at [18] and the two-step process in Wyong Shire Council v Shirt (1980) 146 CLR 40, 47–48 per Mason J.  In analysing whether the provision of a full rail bed would have avoided the risk to the applicant, the court noted that the essential inquiry is directed to whether the omitted step would have avoided the incident: see Wolters v The University of the Sunshine Coast [2014] 1 Qd R 571, at [40]–[42]. [78].

The court held that the learned trial judge’s inquiry “strayed from the proper frame of reference” in that he referred to a bed with full length cot rails not preventing “any such attempt” to get out of bed, and that the presence of such a bed may have created an “even more precarious situation” of attempting to climb over the side rails. In the court’s view, neither scenario focussed on the incident alleged, that is that the patient got out of bed via the gap between the end of the rails and the end of the bed. [79]. The court noted that the evidence supported the conclusion that had a bed with full length cot rails been provided, then the incident would likely have been prevented and the risk obviated. [80].

Need for heightened vigilance

The court found the Hospital’s Notice of Contention, in which it sought to affirm the decision on the basis that there should have been a finding of no breach of duty in respect of the heightened vigilance ground, lacked merit. [86]. In delivering the lead judgment, his Honour Justice Morrison commented:

“In my view, it was open to the learned trial judge to rely, as he did, on the evidence of Ms Billman and Dr Barnett to conclude that more should have been done in the handover to ensure that all the available information was passed on at handover, and more to make clear to Ms Downes the need for heightened vigilance”. [85].

Causation generally

The court noted that there was a delay of 21 months between the trial and judgment at first instance. [106]. With reference to the requirements in Expectation Pty Ltd v PRD Realty Pty Ltd (2004) 140 FCR 17 at [69]–[72], it nonetheless accepted the learned trial judge’s analysis of the evidence relevant to his finding that he could not be satisfied as to the reliability of the two witnesses as sound [106] (and thus consequently the finding that he could not be satisfied that there was a causal link between the negligence and the injury suffered by Ms Downes). [87]

His Honour Justice Morrison observed:

“The learned trial judge had the advantage, which this Court does not, of seeing and hearing Ms Downes and Ms Wendland give evidence. That advantage must be given substantial weight in the exercise of determining whether his Honour’s findings as to reliability should be overturned. Those findings underpin the learned trial judge’s rejection of a causal link between the negligence and the injury”.  [103].

Causation in respect of the heightened vigilance breach

The applicant submitted that the instructions or information that should have been given would have enabled her to “proactively address, in a more timely way, attempted movement” by the patient, and that “seconds mattered”. [108]. However, the weight of the evidence at trial resulted in the trial judge concluding that if the need for heightened vigilance had been brought to the applicant’s attention she would not have done anything materially different. [111]. Upon reviewing the evidence and findings, the court concurred, stating that the finding was “amply justified”. [113].

Ultimate finding on causation

Given the proposed grounds of appeal were without merit, the court upheld the finding that “it has not been established, on the balance of probabilities, that any … breach of duty, was causative of any injury to [Ms Downes]”. [114].

In the result, by majority the application for leave to appeal was refused and the Notice of Contention dismissed [117] (His Honour Justice Philip McMurdo dissenting). [118]–[137].

Appeal Status: No Appeal Pending - Appeal Period Expired

Rogers v Roche [2016] QCA 340, 16 December 2016

Here, the Court of Appeal allowed an appeal against orders made striking out the appellant’s claims for breach of retainer, negligence and breach of fiduciary duty and the paragraphs of the Fresh Statement of Claim relating to those claims.  The case is important because it considers the application of the recent High Court decision in Attwells v Jackson Lalic Lawyers Pty Ltd [2016] HCA 16 concerning the boundaries of advocates’ immunity. 

The rather complex background to the matter was as follows. Following a personal injuries trial the appellant was awarded judgment for $593,708.46, incorporating $480,000 for economic loss ($130,000 for past economic loss and $350,000 for future economic loss). [1]. The appellant regarded the award for economic loss as inadequate compensation for the economic loss he had sustained.  Consequently he initiated proceedings against the respondents, his former legal representatives, to recover the balance and for other relief.  He claimed damages for breach of retainer, negligence, and breach of fiduciary duty, a declaration that the first and second respondents were not entitled to the payment of fees they had charged, and consequential orders for repayment of those fees. [2]. Amongst other complaints, it was alleged that the appellant’s claim for economic loss was inadequately prepared at the PIPA stage. [12], [13].

The respondents sought to strike out parts of the Fresh Statement of Claim and the claim.  [3]. The primary judge ordered that the claims for breach of retainer, negligence and breach of fiduciary duty, and the parts of the Fresh Statement of Claim relating to those claims, ought be struck out as they were an abuse of process (see Lewis v Hillhouse [2005] QCA 316), effectively re-litigating an issue determined in the personal injuries judgment, and were not maintainable by reason of advocate’s immunity (see Giannarelli v Wraith (1988) 165 CLR 543 and D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1. [4].  Critically, he also found that the appellant had not clearly alleged that he lost the chance of obtaining a higher award of damages by the respondents’ alleged breaches of retainer, negligence, and fiduciary duty. [17]. Further, he dismissed the argument that had the proper evidence been presented, a better outcome may have resulted. [19]. 

The appellant appealed against the orders below. [5]. 

Advocate’s Immunity

The decision below preceded the High Court’s judgment in Attwells v Jackson Lalic Lawyers Pty Ltd [2016] HCA 16. That decision clarified the scope of advocate’s immunity, the court finding that whilst Giannarelli and D’Orta should not be overturned, the scope needed to be narrowed so that the principles therein did not extend to negligent advice regarding the settlement of a case.  The majority concluded that what determines whether immunity should apply is a “functional connection between the advocate’s work and the judge’s decision” (see [2016] HCA 16 at [5]–[6]). The case is authority for the principle that advocate's immunity does not apply to advice that does not help reach a judicial determination in court, but simply leads to an agreement between the parties to settle the dispute; or put differently, advocate’s immunity is not attracted by out of court work which does not progress the litigation towards a judicial determination. [26]. Importantly to this appeal, the majority concluded that advice not to settle in a case in which litigation proceeds to judgment after a trial is not protected by the immunity. [28].

Abuse of process

Central to the appeal was consideration of the test for abuse of process in a case in which a claim set up by one party to litigation had been denied in previous litigation involving that party and a person who was not party to the litigation already on foot: see Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at [25]. See also Reichel v Magrath (1889) 14 App Cas 665 at 668 wherein Lord Halsbury said that “it would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again. … [T]here must be an inherent jurisdiction in every Court of Justice to prevent such an abuse of its procedure…”.

Alleged breaches of fiduciary duty relating to the retainer

The appellant’s case was, essentially, that the first and second respondents breached fiduciary duties they owed as his solicitors by prioritising their own interests over his. [33]. Referring to Sims v Chong [2015] FCAFC 80 at [87], he argued that advocate’s immunity does not apply to claims for breaches of fiduciary duty. [35].

The court agreed that advocate’s immunity was not applicable, stating: 

“The alleged conduct of the first and second respondents which is charged as breaches of fiduciary duty was not the work of an advocate.  It concerned the formation and continuing existence of the retainer of the first and second respondents, rather than any decision by them which affected the taking of any particular step in court.  The alleged conduct (including non-disclosures) did not have a direct or functional connection with the in court conduct of the appellant’s personal injuries claim.  The test for advocate’s immunity is not satisfied in relation to this part of the appellant’s claim.” [40]. 

In addition the court accepted the appellant’s submissions that no part of his claim amounted to a re-litigation abuse of process, [42] noting that the mere fact that a person against whom a re-litigation abuse of process is alleged was a party in two sets of proceedings and seeks to litigate an issue decided in the earlier proceedings does not in itself suffice to give rise to abuse of process: see Morgan v WorkCover Corporation (2013) 118 SASR 297 at [145] (5). See also Cleary v Jeans (2006) 65 NSWLR 355 where the New South Wales Court of Appeal endorsed decisions which had found that it was not an abuse of process for a litigant to sue the litigant’s solicitor to recover loss resulting from negligence which were not protected by advocate’s immunity.

His Honour Justice Fraser made these careful observations:

“It is an aspect of all parts of the appellant’s claim that he was deprived of a full opportunity of obtaining the entire amount of his economic loss by the wrongful conduct of the first and second respondents.  To shut out litigation of this part of the appellant’s claim would be more likely to bring the administration of justice into disrepute than would conflicting judicial decisions about the appellant’s economic loss reached upon different evidence.” [50].

Disposition

In the result the court determined that the primary judge had erred in finding that any part of the appellant’s claim was a re-litigation abuse of process. [51]. It was further held that advocate’s immunity impeded the appellant’s claim only to the extent of allegations of wrongful conduct by the respondents in relation to the preparation of his claim during the litigation stage, including alleged failures by the third respondent to inform the appellant about her alleged conduct in the preparation of the litigation. [65]. The ultimate result was that the appellant was entitled to claim that the first and second respondents did not perform their retainer (except in so far as that allegation referred to the alleged inadequacies in preparation of the claim during the litigation stage).  [66].

The appeal was allowed and the appellant was granted leave to file and serve an amended statement of claim. [69].

Appeal Status: No Appeal Pending - Appeal Period Expired


Trade Practices back to top

Hadgelias Holdings and Waight v Seirlis [2014] QCA 177

The principle issue before the Court in this appeal was the process of apportioning liability under the Trade Practices Act 1974 (Cth), pursuant to ss 87CB and 87CD (since repealed and replaced by the Competition and Consumer Act 2010 (Cth)).  This appeal arose from