Full Court Matters - April 2000


(Other than Applications for Special Leave to Appeal)

APRIL 2000


YU SHING CHENG v THE QUEEN (A8/99)

GANG CHENG v THE QUEEN (A9/99)

CHAN v THE QUEEN (A25/99)

Court appealed from: Court of Criminal Appeal, South Australia

Date of judgment: 13 May 1999

All three applicants (together with 2 others) were charged with being knowingly concerned in the importation of a prohibited import, contrary to s233B(1)(d) of the Customs Act 1901 (Cth) ("the Act"). It was also alleged that the amount concerned was a "commercial" quantity thereby potentially attracting the highest range of penalties provided in s235 of the Act. The structure of the Act is that s233B prescribes the relevant offences and refers the reader to s235 for the appropriate penalty. The appropriate maximum penalty set out in s235 depends on the nature of the substance in relation to which the offence was committed, the quantity of the substance, in some cases whether there has been a previous conviction and in some cases the purpose for which the offence was committed. The applicants asserted that they were concerned with a small amount of prohibited substance, but unbeknown to each of them, the sealed items with which each was involved later turned out to have originally contained over 9 kilos of heroin.

The applicants sought to challenge, by way of demurrer, the validity of s233B(1)(d) in combination with s235, as being contrary to s80 of the Constitution. The applicants asserted that the decision of the High Court in Kingswell v. R (1985) 159 CLR 265 (which had previously upheld the validity of those provisions) was wrongly decided. The trial judge overruled the demurrer and upheld the provisions, following Kingswell. The applicants thereupon pleaded guilty to the charges. They were subsequently sentenced on the basis of being penalised for the full 9 kilos of the drug, notwithstanding that the sentencing judge accepted that each applicant positively believed he was only concerned with a small quantity. The applicants each appealed against conviction and sentence.

The applicants sought to argue before the Court of Criminal Appeal that s235 of the Act as it applied to them was unconstitutional as it purports to impair their right to trial, by jury, of every element of the offence alleged against them, such right being guaranteed by s80 of the Constitution. The Court of Criminal Appeal (Doyle CJ, Bleby & Wicks JJ) dismissed the appeals against conviction.

The questions of law said to justify the grant of special leave in each case are:

  • Are sections 233B & 235 of the Customs Act 1901 (Cth) in reserving determination of the quantity of narcotic goods and hence the seriousness of the offence and the relevant penalty range to the judge rather than the jury contrary to section 80 of the Constitution 1901 (Cth); and
  • Does the Crown have to prove beyond reasonable doubt: (a) knowledge that the quantity of narcotic goods was a commercial quantity; (b) a disputed factual circumstance as aggravating the offence.
  • The applications for special leave came before Gaudron, Kirby & Hayne JJ on 8 October 1999 and at that hearing the applications were referred to an enlarged panel of the Court.
  • Notices of Constitutional Matter have been given. The Commonwealth will be intervening at the referred hearing of these applications for special leave to appeal.

GRINCELIS v. HOUSE (C20/1999)

Court Appealed from: Full Court of the Federal Court of Australia

Date of Judgment: 1 July 1998

Date of grant of special leave: 8 October 1999

The appellant, then a Canberra Solicitor, suffered personal injuries including brain damage in a motor vehicle collision on 15 February 1989. This created a need for full time supervision and care. His damages included a component in respect of past care. Family members, on a gratuitous basis, had cared for the appellant. There was no applicable statutory restriction or modification to the calculation of damages for care.

The matter initially came before a Master of the Supreme Court of the Australian Capital Territory who made an award for damages which did not include interest on the past care component. There was an appeal and cross appeal to the Full Court of the Supreme Court, who varied the overall award but did not allow interest on the past care component. A further appeal and cross appeal to the Full Court of the Federal Court resulted in an award (by majority) of interest on past care at 2%, the rate for damages such as general damages, which are assessed as at the date of trial. The minority of the Court awarded interest on damages for past care at commercial rates.

The respondent has filed a notice of cross appeal.

The grounds of appeal are:

  • That the Full Court misapplied the distinction between the rate at which interest should be calculated on damages for past loss in respect of:

(a) damages, such as general damages, which although referable in whole or in part to the past are assessed at values current at the date of trial (which attract an interest rate of 2%); and

(b) damages, such as damages for past care and past economic loss, which are calculated by reference to actual historical rates from time to time (which attract commercial interest rates).

The ground of the cross appeal is:

  • That the Full Court erred in allowing any interest in relation to the damages awarded to the appellant for past services which had been provided to the appellant gratuitously.

JONES v. BARTLETT & ANOR (P59/1999)

Court Appealed from: Full Court of the Supreme Court of Western Australia

Date of Judgment: 22 February 1999

Date of grant of special leave: 21 October 1999

In November 1992, the appellant's parents entered into a Residential Tenancy Agreement under the Residential Tenancies Act 1987 (WA) to lease premises at Mount Pleasant owned by the respondents. The initial tenancy was for a period of 12 months upon the expiration of which the appellant's parents remained in possession of the premises under a periodic tenancy on a fortnightly basis, otherwise subject to the terms of the original Residential Tenancy Agreement.

The agreement provided for the use of the premises as a private dwelling to be occupied by not more than three persons. There was no requirement that the respondents or agent approve the third person.

Prior to the expiration of the initial 12 month period, the appellant went to live with his parents at the premises and remained there.

The premises was a house built in the late 1950's or early 1960's and there was a glass door from the dining room to the outside of the home. The door was constructed with a wooden frame and a full length glass pane which was not of laminated or strengthened glass. The glass was of the type recommended by the first Australian Standard in 1957 (which was concerned only with wind loads and not human impact). At the date the premises were let to the appellant's parents, the 1989 Australian Standard required replacement glass in such a door to be 10mm thick or toughened or laminated safety glass.

In November 1993, the appellant's mother went through the dining room door on her way outside. The appellant followed, wrongly assuming that the door was open as his mother had just used it. The appellant suffered a severe injury to his right leg caused by the shattering glass.

The appellant issued proceedings in the District Court of Western Australia for damages resulting from the respondent's:

(a) breach of the Residential Tenancy Agreement; and/or

(b) breach of the respondents' duties as landlords and occupiers; and/or

(c) breach of the respondents' common laws of duties of care saved by the Occupiers Liability Act 1985 (WA).

The appellant was successful, the District Court finding that the respondents owed a duty to the appellant pursuant to s5(1) of the Occupiers Liability Act 1985. There was an apportionment made for contributory negligence.

On appeal to the Full Court of the Supreme Court of Western Australia, the respondents were successful. Essentially, the Full Court held that the appellant's actions were the sole cause of the injury. The Full Court held that the respondents' failure to organise an expert inspection of the door did not constitute a breach of duty.

The grounds of appeal include:

  • That the Full Court erred at law in concluding that the appellant could not enforce the "residential tenancy agreement".
  • That the Full Court erred at law in concluding that the respondents had not breached the duties they owed as "occupiers" of the premises to the appellant as a lawful entrant pursuant to sub-section 5(1) of the Occupiers Liability Act 1985 (WA).
  • That the Full Court erred at law and in fact in concluding that:-

(a) the risk that a person would walk into the door with sufficient force to shatter the glass pane was extremely unlikely; and

(b) there was a very remote prospect of a collision between a person and the glass in the door,because these conclusions were precluded by the proper inferences which could be drawn from the facts clearly ascertained at trial.

 

  • The Full Court erred at law and in fact in concluding that this was not a case where the risk of injury being received would be reduced by a warning by the respondents to the appellant or his parents.
  • That the Full Court erred at law in concluding that, if duties owed by the respondents as occupiers and landlords to the appellant pursuant to the Occupiers Liability Act 1985 (WA) were non-delegable, that such duties did not impose a "higher standard of care" pursuant to sub-section 9(3) of the Occupiers Liability Act 1985 (WA) thereby constituting an overriding common law duty owed by the respondents to the appellant.
  • The Full Court erred at law in not overturning the Commissioner's finding of contributory negligence against the appellant.


PILMER & ORS v. THE DUKE GROUP LIMITED (IN LIQUIDATION) & ORS (A46/1999)

Court appealed from: Full Court, Supreme Court of South Australia

Date of judgment: 13 August 1999

Date of grant of special leave: 30 November 1999

This appeal arises from litigation relating to loss suffered by Kia Ora Gold Corporation NL ("Kia Ora") in its successful takeover bid for Western United. Prior to commencing the takeover procedure Kia Ora retained accountants practising in Perth under the name of Nelson Wheeler Perth ("NWP") to prepare a report for the shareholders in Kia Ora. The takeover offer proposed by Kia Ora to Western United Limited ("Western United") shareholders was four fully paid ordinary shares in Kia Ora for every fully paid ordinary share in Western United or five fully paid ordinary shares in Kia Ora for two fully paid ordinary shares in Western United together with $1.20 for each Western United share. In their report NWP concluded that the proposed takeover price was fair and reasonable in the circumstances and placed a value on Western United shares of $3.22 per share.

On 9 October 1987 Kia Ora sent out a notice to shareholders calling a meeting to vote on the proposed takeover. The meeting was scheduled to take place on 26 October 1987. On 19 October 1987 the stock market crash occurred, having an immediate adverse effect on the market price of Kia Ora and Western United shares and significantly reducing the value of Western United. Despite the stock market crash, Kia Ora's directors proceeded with the meeting on 26 October 1987, which resolved to authorise the directors to make the offer. The takeover was successfully completed by January 1988.

Kia Ora (now the Duke Group Limited (In Liquidation)) commenced proceedings against NWP. Kia Ora alleged that NWP had prepared the report negligently, in breach of the contract of retainer and in breach of its fiduciary duty to Kia Ora. Kia Ora alleged that it suffered loss as a result of the takeover resulting from the accountant defendants' breach of the alleged duties.

The trial judge (Mullighan J) found, inter alia, that NWP were negligent in the discharge of their obligations to Kia Ora and that they were liable to Kia Ora in contract and in tort. His Honour rejected Kia Ora's claim that there was a fiduciary relationship between Kia Ora and NWP.

NWP lodged an appeal from the trial judge's findings on liability. The plaintiff cross-appealed against the finding that there was no fiduciary relationship between Kia Ora and NWP. All the parties to the appeals challenged the trial judge's assessment of damages.

On 20 May 1999 the Full Court of the Supreme Court of South Australia (Doyle CJ, Duggan and Bleby JJ) delivered reasons for decision in the appeals. The Full Court upheld the trial judge's findings of negligence and breach of contract. The Full Court upheld the plaintiff's argument that NWP owed a fiduciary duty to Kia Ora. On 13 August 1999 the Full Court made orders dismissing the appeals brought by NWP.

On 30 November 1999 NWP were granted special leave to appeal from part of the judgment and order of the Full Court of the Supreme Court. The grant of special leave was limited to one ground concerning the quantification of damages.

The ground of appeal is:

  • The Court below erred in law in holding that Kia Ora suffered loss by the issue and allotment of its shares to Western United shareholders as part of the consideration for the takeover of Western United whereas the Court below should have held that the Kia Ora did not suffer any loss by the issue and allotment of its shares to the shareholders of Western United.

 

 

SIMOS v. YATES (S29/1999)

Court appealed from: Full Court of the Federal Court of Australia

Date of judgment: 5 August 1998 & 30 November 1998

Date of grant of special leave: 12 February 1999

Proceedings were brought in the Federal Court by Yates Property Corporation (YPC) against legal advisers who had formerly acted for it in proceedings brought by it in the Land & Environment Court of NSW seeking compensation upon the resumption of certain land at Darling Harbour. The three respondents in the proceedings were Abbott Tout, the firm of solicitors on the record in the resumption proceedings; Theodore Simos, senior counsel and John Webster, junior counsel. The proceedings were primarily in negligence and for misleading and deceptive conduct. YPC also claimed it had been inadequately compensated in the resumption proceedings by virtue of the failure of its former advisers to pursue a claim for compensation based on the special value of the land to it. On 5 June 1997, the trial judge dismissed the application against all three respondents.

On 14 August 1997 the trial judge ordered that YPC pay the costs of the respondent on certain nominated bases. The trial judge also ordered that Ian Francis Yates, the principal of YPC who was not a party to the proceedings, be jointly and severally liable with YPC to meet the costs.

YPC appealed from the whole of the judgment of the trial judge. YPC and Ian Yates appealed from the judgment of the trial judge on costs. These three appeals were consolidated. On 7 October 1997 the Federal Court ordered that YPC provide security for costs in respect of each respondent to YPC's appeals. On 16 January 1998 that order was varied. YPC failed to provide security and on 13 February 1998 the Court ordered that YPC's appeals be dismissed.

Ian Francis Yates' appeal against personal liability for costs (the only appeal to which the appellant was a party) was heard on Friday 20 March 1998 by the Full Federal Court. The Full Court set aside the order for costs made in favour of Mr Simos against Ian Francis Yates.

Special leave to appeal was granted on the grounds, inter alia, that:

  • that part of the judgment which allowed the appeal by Mr Yates gave no reasons for the proposed order in that regard; and
  • the Court lacked power to set aside the final order of the trial judge.

SPIES v. THE QUEEN (S263/1999)

Court appealed from: Supreme Court of NSW, Court of Criminal Appeal

Date of judgment: 17 September 1998

Date of grant of special leave: 10 December 1999

The appellant, a director of Stirling Nicholas Duty Free Pty Limited (SNDF), was convicted under s176A of the Crimes Act 1900 (NSW) of the offence of defrauding the creditors of SNDF in their dealings with the company. (An alternative charge of an offence under s229(4) of the Companies Code concerning improper use of position by an officer of a corporation to gain an advantage was presented. However, as the appellant was convicted on the s176A charge and the second charge was an alternative, no verdict was taken on this charge).

The Crown case turned on the contention that the appellant caused SNDF to purchase the shares in Stirling Nicholas Holdings Pty Limited (SNH) with the purpose of making himself a secured creditor at the time when the company was about to go into liquidation and entered upon another transaction as a means to give the appearance of worth to the share deal. The direction to the jury was, broadly, that the jury was charged to find that the accused intended to defraud creditors. The appellant was sentenced to 18 months imprisonment to be served by periodic detention.

The appellant appealed. The Court of Criminal Appeal found that the direction which the trial judge had given to the jury was defective. It held that as a specific mechanism for the fraud had been identified, the jury should have been given a direction of the elements of knowledge that are implicit in that case. The trial judge should have directed the jury that the state of mind of the appellant encompassed at least an understanding of the circumstances which made the value of the shares fictitious. It held that the trial judge had failed to do this and allowed the appeal from the conviction.

The Court further found that the finding of the jury on the charge of intending to defraud creditors encompassed a finding that there was an improper use of position and that the objective of the transaction was intended to benefit the appellant. Therefore it held that it could be said that the jury was satisfied of facts which proved the appellant guilty of the alternative charge under s229(4) of the Companies Code. Accordingly, the Court (pursuant to s7(2) of the Criminal Appeal Act 1912) substituted for the verdict of the jury a verdict that the appellant was guilty of the alternative charge on the indictment.

The grounds of appeal include:

  • The Court of Criminal Appeal erred in concluding that the finding of the Jury on a charge of fraud by the appellant must have encompassed a finding that there was improper use of the position of the appellant as a director within the meaning of s229(4) Companies Code (NSW), thus enlivening the Court of Criminal Appeal's power under the Criminal Appeal Act 1912 (NSW) s7(2) to substitute a verdict on the alternative charge made under s229(4) Companies Code (NSW).
  • The Court of Criminal Appeal erred in concluding that the Jury's finding that the appellant had the requisite subjective intent to defraud the creditors of SNDF for s176A Crimes Act purposes was without more determinative of the objective test of intent under s229(4) Companies Code against the appellant.
  • The Court of Criminal Appeal erred by equating a subjective intent on the part of the appellant to defraud the creditors of SNDF with an objective intent on the part of the appellant to improperly use his position to advantage himself as an officer of SNDF.

RE THE MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS; EX PARTE AALA (S185/1999)

The prosecutor is an Iranian citizen. He arrived in Australia on 8 August 1991 on a visitors visa. He married in Australia on 17 September 1991, but is now divorced. On 13 August 1992 he attacked his wife with a knife and was convicted of malicious wounding and sentenced to 21 months imprisonment. On 8 September 1996 he was released from prison and taken into migration detention. He is still in migration detention.

On 20 August 1996 (shortly before his release from prison) the prosecutor applied for a protection visa. He claimed that should he be returned to Iran his life will be in danger. He sought to demonstrate that he had a well-founded fear of persecution for a Convention reason by reference to three particular sets of activities in which he had been involved over a span of almost twenty years. These were: work he had performed for Savak (the Shah's secret police) for approximately six months in 1973; support that he had given the Mujahadeen (the largest group opposing the government in Iran) in 1981 or 1982; and, illegal real estate activities in which he had been engaged between 1981 and 1988-9 which involved him in selling properties in Iran which had belonged to the Shah or members of the Shah's family.

The prosecutor's application for a protection visa was refused on 2 October 1996. On 4 October 1996 he applied to the Refugee Review Tribunal for a review of this decision. The Tribunal affirmed the decision. The prosecutor sought a review of that decision by the Federal Court. At first instance he was unsuccessful. He appealed and on 18 December 1997 the Full Federal Court ordered that the decision of the Tribunal be set aside and the matter be remitted to the Tribunal to be dealt with according to law. On 3 April 1998 the Tribunal differently constituted, and having heard further evidence from the prosecutor, again affirmed the decision to refuse the prosecutor a protection visa. The prosecutor made an application to the Federal Court for review. This application came before Branson J at first instance. On 17 December 1998 her Honour affirmed the decision of the Tribunal. An appeal to the Full Federal Court was dismissed on 3 June 1999.

The prosecutor seeks writs of prohibition, mandamus and certiorari against the Refugee Review Tribunal and the Minister for Immigration and Multicultural Affairs on the grounds that, inter alia, the decision of the Refugee Review Tribunal was made in breach of the rules of natural justice. The main basis for the denial of natural justice ground appears to be the prosecutor's contention that the (2nd) Tribunal misled him by making a statement that it had read all of the Federal Court papers and that this created a legitimate expectation that the hearing would be determined on the evidence before the Tribunal on the old and new Tribunal files and on the papers before the Federal Court. The prosecutor argues that part of the papers before the Federal Court were various letters that the prosecutor had sent off to the Federal Court.

On 21 December 1999 McHugh J granted an order nisi.

 

COAL & ALLIED OPERATIONS PTY LIMITED v. THE FULL BENCH OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION & ORS (S158/1999)

Court appealed from: Full Court of the Federal Court of Australia

Date of judgment: 6 November 1998

Date of grant of special leave: 10 September 1999

In 1996 and 1997 the 2nd, 3rd and 4th respondents (the unions) and their members employed by the appellant at the Hunter Valley No 1 Coal Mine made industrial claims, supported by industrial action, on the appellant with respect to wages and conditions of employment at that mine.

In early 1997 the unions, by notice to the appellant, initiated bargaining periods pursuant to s170MI of the Workplace Relations Act 1996. The purpose of initiating the bargaining periods was the desire of the unions to negotiate an agreement in relation to the wages and conditions of their members at the mine. The existence of these bargaining periods meant that the Commission could not exercise arbitration powers in relation to any matter that was in dispute and that the unions had immunity from civil suit in relation to industrial action taken during the bargaining periods.

On 31 October 1997 the unions applied to the Commission for the termination of the bargaining periods under the Act. Boulton J found that the industrial action at the mine was threatening to cause significant damage to an important part of the Australian economy. He granted the applications and terminated the bargaining periods.

The appellant appealed from the orders terminating the bargaining periods, and on 29 January 1998 a Full Bench of the Commission upheld the appeal and ordered that the orders of Boulton J be quashed.

The unions then applied to the High Court for orders nisi for writs of prohibition, certiorari and mandamus in relation to the decision and on 23 March 1998 those applications were remitted to the Federal Court. The Full Federal Court on 6 November 1998 ordered the issue of writs of certiorari and mandamus directed to the Full Bench. The Full Court held that the Full Bench had no general supervisory role over the exercise of discretionary powers by single members of the Commission and that the appeal to the Full Bench in the present case was to be regarded as an appeal from the exercise of a discretion and governed by House v. The King (1936) 55 CLR 499. The Full Court held that the Full Bench had erred in determining that the appeal before it was by way of a re-hearing.

The grounds of appeal include:

  • The Full Court erred in holding that the Full Bench had constructively failed to exercise jurisdiction under s45 of the Workplace Relations Act ("the Act"), and that this was a proper case for mandamus.
  • In the circumstances where two members of the Full Bench had purported to apply House v. The King in the appeal before it, the Full Court erred in critically reviewing in the manner of a court of appeal the process by which the Full Bench held that the conclusions and findings at first instance in the Commission were not reasonably open on the evidence in the case.
  • The Full Court erred in denying the proposition that, in an appeal under s.45 of the Act involving a decision under s.170MW of the Act, the Full Bench was entitled to review the facts found at first instance in the Commission and to assess, or to re-assess the sufficiency of those facts for the purposes of the relevant test contained in s.170MW.