(Other than Applications for Special Leave to Appeal)
JUNE 2000
RE MACKS & ORS; EX PARTE SAINT (A6/2000)
RE MACKS & ORS; EX PARTE JOHNSON & ORS (A9/2000)
The firstnamed 8th respondent (Macks) in each of these High Court proceedings is the liquidator of 64 companies comprising the Emanuel Group of companies, the secondnamed 8th respondents. Sixty-three of the 64 companies were wound up by orders of one of the 1st to 3rd and 5th and 6th respondents, being Judges and Registrars of the Federal Court of Australia, between June 1995 and January 1996.
On 8 December 1998 Mansfield J, the 4th respondent, made orders on the application of Macks (in Federal Court proceedings No. SG 3080 of 1995), confirming Macks' power, as liquidator of the Emanuel Group, to enter into a liquidator's funding arrangement with GIO Insurance Limited (GIO) and the Commonwealth Bank of Australia Limited (the CBA). Pursuant to this arrangement, Macks would borrow moneys from the CBA to fund certain actions in the Supreme Court of South Australia and the obligation to repay those moneys was insured by GIO. Two of those actions were Action No. 409 of 1998 and Action No. 410 of 1998. The applicant in the High Court proceeding A6/2000 (Saint) is a defendant in Action No. 409 of 1998. He was a partner in the firm of solicitors practising under the name Thomsons. The applicants in the High Court proceeding A9/2000 (Johnson & Ors) are defendants in Action No. 410 of 1998. They were partners in a firm of solicitors practising under the name Johnson Winter and Slattery (Johnsons). The Supreme Court actions claimed legal and equitable damages and an account of profits in respect of the participation by Thomsons and Johnsons in certain arrangements by the Emanuel Group in early 1995.
By the current proceedings each applicant contends that the 8th respondents should not be permitted to rely on the orders made in the Federal Court, as they were made in the purported exercise of jurisdiction conferred on the Federal Court of Australia by the cross-vesting scheme. On 17 June 1999 this scheme was held to be invalid by the High Court in Re Wakim. Each applicant seeks an extension of time to seek that a writ of certiorari should issue to quash the orders of the Federal Court made between June 1995 and January 1996. Prohibition is also sought, first, against the Federal Court, prohibiting it from taking any further steps to give effect to the orders or taking any steps to wind up the companies; and secondly, against the liquidator, prohibiting him from taking any steps in the winding-up of the companies, or in the prosecution of the Supreme Court actions.
On 19 August 1999, the Federal Courts (State Jurisdiction) Act 1999 (SA) came into force (the remedial legislation). The effect of the remedial legislation is to make any orders, previously made by the Federal Court and which would otherwise be "ineffective judgments" as a result of Re Wakim, valid judgments of the Supreme Court of South Australia.
Insofar as Macks has to rely on the remedial legislation to claim authority to proceed in the winding up, each applicant contends that the liquidator fails as the provisions are invalid as beyond the power of the Parliament of South Australia.
The validity of a number of sections in the South Australian remedial legislation was the subject of the proceedings in the High Court in A5/2000 Residual Assco Group Ltd v. Spalvins & Ors. On 25 May 2000 the Court pronounced orders (with reasons to be published at a later date) in A5/2000. The Court found that s11 of the remedial legislation was valid, but found it unnecessary to answer whether a number of other sections were invalid.
Macks contends that the orders of the Federal Court are not void, but voidable, as a consequence of Re Wakim. Macks contends that the orders remain valid and operative until such time as they are set aside. In the present cases Macks contends that the High Court should not grant the extension of time sought by each applicant in seeking certiorari because there has been substantial, unexplained delay and that numerous third party rights have intervened since the orders were made. Further, Macks submits that the Court, in any event, should not exercise its discretion in favour of each applicant to grant the relief sought because of the intervention of third party rights.
The Deputy Commissioner of Taxation, a substantial creditor of a number of the companies, commenced, or participated in, the winding up applications in the Federal Court. The Deputy Commissioner was joined as the 9th respondent to each proceeding, by order of Gummow J on 3 April 1999.
There have been a number of other proceedings in the Supreme Court of South Australia involving Macks, the Emanuel Group of companies and Saint and Johnson & Ors. Some of these have previously been the subject of applications seeking to remove the proceedings into the High Court on the basis that it was intended to challenge the validity of the remedial legislation. A31/1999, an application by the Attorney-General for South Australia, discontinued prior to hearing. A32/1999 and A8/2000, applications by Saint and Johnson & Ors respectively, were heard by the High Court on 24 March 2000 and were each dismissed as premature.
On 10 April 1999 Gummow J ordered that each application for prerogative relief be made by notice of motion to a Full Court.
Notices of a constitutional matter have been given and a number of Attorneys-General have indicated that they will be intervening. GIO has filed a notice of motion seeking to be joined as a party or, alternatively, seeking leave to intervene.
EBNER v. THE OFFICIAL TRUSTEE IN BANKRUPTCY (M131/99)
Court appealed from: Full Federal Court of Australia
Date of judgment: 10 March 1999
Date special leave granted: 9 December 1999
The respondent commenced proceedings seeking orders against the applicant, arising out of the transfer to the applicant by her husband (a bankrupt) of a half interest in certain land at Mount Eliza (the property). On the first day of the hearing the primary judge disclosed that a family trust of which he was a director owned some 9000 shares in the ANZ Bank. He noted that the ANZ Bank was not a party to the proceedings, but it was one of the creditors. After obtaining instructions, counsel for the applicant informed the Court that the ANZ Bank was funding the action "up to a certain level" and that the applicant objected to the judge hearing the case. The judge applied the relevant test as being a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party or another. The primary judge went on to conclude that there was no reasonable apprehension of such bias in the matter before him, and he proceeded to hear the matter. The primary judge declared that the registered transfer of a half interest in the property executed by Maxwell Ebner (the bankrupt) to his wife (the applicant) was void as against the respondent pursuant to ss120 and 121 of the Bankruptcy Act 1966 (Cth) (the Act).
The applicant appealed to the Full Court. One of the grounds was whether the primary judge ought to have disqualified himself by reason of his declared interest in a trust which, in turn, held shares in the Australia and New Zealand Banking Group Ltd (the Bank). The Full Court held that the primary judge did not have a direct pecuniary interest in the outcome of the litigation because the Bank was not a party to the proceedings. The applicant had also relied on the recent House of Lords decision in R v. Bow Street Metropolitan Stipendiary Magistrate; Ex parte Pinochet Ugarte (No 2) [ 1999] WLR 272 (Pinochet's case). However the Full Court distinguished it on the basis that Pinochet's case involved a non-pecuniary interest.
Special leave to appeal was granted limited to one ground.
The ground of appeal is :
- The Full Court erred in upholding the primary judge's ruling that he not disqualify himself on the basis that he had a direct pecuniary interest in the outcome of the proceeding.
CLENAE PTY LTD & ORS v. AUSTRALIA & NEW ZEALAND BANKING GROUP LTD (M2/2000)
Court appealed from: Court of Appeal, Victoria
Date of judgment: 9 April 1999
Date special leave granted: 9 December 1999
The respondent (the Bank) began proceedings claiming various amounts from the applicants, principally in connection with an advance made by the Bank to the first applicant of $AUD1 million in June 1985, in the form of foreign currency loans. The matter was heard by Mandie J over 18 days over a three-month period and judgment was reserved on 2 May 1996. On 14 July 1996 Mandie J's mother died. Mandie J and his brother were named as executors of her estate and probate was subsequently granted to them. By the will, Mandie J and his brother were bequeathed the deceased's residuary estate. This included 4,800 shares in the Bank and a debenture for $200,000 secured over the assets of Esanda Finance Corporation Limited (Esanda). Esanda was a wholly-owned subsidiary of the Bank. In October 1996 Mandie J was registered as shareholder of 2,400 shares in the Bank. Judgment was delivered on 9 October 1997, in which each of the applicants' claims that the Bank had acted in breach of the various obligations alleged against it, were rejected. On 10 October 1997, his Honour made orders. Shortly thereafter the applicants' solicitors ascertained that Mandie J and his brother were the registered owners of the shares in the Bank.
The applicants appealed to the Court of Appeal. Their first argument was that the trial judge was disqualified from giving judgment by reason of direct pecuniary interest. They contended that if a judge had a direct pecuniary interest in the outcome of the proceedings, automatic disqualification resulted and that direct pecuniary interest was established by the shareholding in the Bank, however small. The Court dismissed the appeal. Charles JA (with whom Winneke P agreed), after reviewing the authorities, doubted whether the so-called "automatic disqualification" rule by reason of direct pecuniary interest had survived the development by the High Court of the "reasonable apprehension on the part of a fair-minded and informed observer" test. If there was a separate rule, unrelated to a reasonable apprehension of bias, Charles JA was of the view that the irrebuttable presumption only arises (subject to questions of waiver or necessity) where the judicial officer has a direct pecuniary interest in the outcome of the proceeding. On that test Charles JA would have concluded that the trial judge's interest in the Bank would not have been affected by the outcome of the proceedings. Applying the "reasonable apprehension" test to the present case did not lead to the conclusion that the judge ought to have disqualified himself from giving judgment. Charles JA referred to the judgment of the Full Federal Court in Ebner's case, given after the appeal was heard. He did not agree with that Court's assumption (probably obiter in any event) that any shareholding, however small, in one of the parties to the litigation was sufficient to disqualify the judge. Callaway JA held that even if the trial judge was disqualified, the judgment should not be set aside having regard to the circumstances of the trial and the death of one of the crucial witnesses. Both Winneke P and Charles JA agreed with this view.
The grounds of appeal are:
- Their Honours erred in holding that the trial judge was not disqualified by virtue of his holding shares in the respondent; and
- Their Honours erred in holding that the doctrine of necessity applied.
RYAN v. THE QUEEN (S248/1999)
Court appealed from: NSW Court of Criminal Appeal
Date of judgment: 2 March 1998
Date of grant of special leave: 30 November 1999
The appellant pleaded guilty before Nield DCJ to a large number of offences which had been committed against young boys with whom he came into contact as a priest in the Newcastle area. The offences were committed over a period of about 20 years. In consequence of his pleas of guilty, the appellant was sentenced by Nield DCJ to a total effective sentence of 16 years comprising a minimum term of 11 years and an additional term of 5 years, the sentences to commence on 23 May 2000.
The appellant had been dealt with earlier (30 May 1996) by Rummery DCJ for 20 similar offences. On that occasion he was sentenced to imprisonment for a total of 6 years involving a minimum term of 4 years and an additional term of 2 years. The sentences imposed by Nield DCJ were made cumulative upon the sentences imposed by Rummery DCJ. Accordingly, the appellant was sentenced to a total effective period of 22 years penal servitude to date from 23 May 1996.
The earlier sentencing proceedings and a subsequent unsuccessful appeal had been accompanied by considerable publicity. As a consequence of that publicity 3 men, who as children had been victims of the appellant many years previously, came forward and gave information to the police. When the police interviewed the appellant, who was by that time in custody, he made admissions concerning the new allegations and in addition informed the police of a great number of other offences and victims. There was no evidence to suggest that any of these additional victims volunteered by the appellant had proposed to come forward to the police.
Nield DCJ said that the appellant's admissions of previous undisclosed crime went to his credit, showed his contrition and entitled him to a discount in punishment. His Honour did not identify the extent of the discount which was said to have been extended to the appellant. A number of testimonials were tendered to Nield DCJ who observed that the appellant's unblemished character and reputation did not entitle him to any leniency whatsoever.
The appellant appealed against sentence to the Court of Criminal Appeal (CCA) on the grounds that the sentence was, in the circumstances, gross and excessive and that the judge did not take into account nor give proper weight to the subjective features of the case.
The CCA found that the sentences imposed were severe, but the objective criminality involved in his behaviour was extreme. The appeal was dismissed.
The grounds of appeal include:
- The Court of Criminal Appeal erred in concluding that the overall sentence imposed upon the appellant was not manifestly excessive having regard to the relevant matters to be taken into account for the purpose of sentence;
- The Court of Criminal Appeal erred in finding that the sentence imposed upon the appellant took sufficient account of the subjective case of the appellant;
- The Court of Criminal Appeal erred in assessing that the learned sentencing judge took into account or gave sufficient credit to the appellant for the appellant's very substantial disclosure of offences which were not otherwise known to the authorities; and
- The Court of Criminal Appeal erred in upholding a severely retributive sentence for offences which were not known apart from the offender's confession.
Full Court Matters
(Other than Applications for Special Leave to Appeal)
BRISBANE CIRCUIT SITTINGS
JUNE 2000
PP CONSULTANTS PTY LTD v. FINANCE SECTOR UNION OF AUSTRALIA (S104/2000)
Court appealed from: Full Court of the Federal Court of Australia
Date of judgment: 10 September 1999
Date of grant of special leave: 14 April 2000
The appellant seeks special leave to appeal from a decision of the Full Court of the Federal Court on the construction of s149(1)(d) of the Workplace Relations Act 1996 ("the Act").
Until September 1997, the St George Bank ("the bank") operated one of its branches from premises in a shopping centre at Byron Bay, New South Wales. PP Consultants ("the appellant") operated a pharmacy in the same shopping centre.
On 10 September 1997 the appellant entered into a so-called "bragency" agreement with the bank. This agreement was to provide a "bragency" of the bank within the Pharmacy operated by the appellant located in Byron Bay. On 12 September 1997 the bank closed its branch office.
The appellant employed two of the bank's previous employees, one of whom was Mrs Patricia Moffatt. The respondent applied to the Federal Court for declarations that the appellant, by virtue of s149(1)(d) of the Act, was a successor, assignee or transmittee of part of the business of the bank so as to bind the appellant with the St George Bank Employees Award in respect of the employment of Mrs Moffatt.
At first instance the trial judge refused to order such declarations. An appeal to the Full Court was successful. The approach taken by the appellant before the Full Court concentrated on the nature of the transaction between the old employer and the new employer, while the respondent's approach was to look at the degree of identity between the activities carried out by the two employers. The Full Court favoured the latter approach and the matter was remitted to the trial judge for further hearing and determination.
The grounds of appeal are:
- The Full Court erred in holding that the question whether an award of the Australian Industrial Relations Commission was binding by operation of s149(1)(d) of the Workplace Relations Act 1996 was to be determined only by the degree of identity between the activities of the two employers concerned;
- The Full Court erred in holding that the words "part of a business" in s149(1)(d) denote "a particular bundle of activities that constitute an identifiable portion of the total activities that constitute a business" previously carried out by the successor, assignor or transmittor;
- The Full Court erred in failing to hold that for the purposes of s149(1)(d) the part of a business under consideration must itself constitute a business; and
- The Full Court erred in holding that the appellant was, within the meaning of s149(1)(d), a successor, assignee or transmittee to or of the business or part of the business of St George Bank Limited.
CONCUT v. OFFICIAL TRUSTEE IN BANKRUPTCY (B85/1999)
Court Appealed from: Court of Appeal of the Supreme Court of Queensland
Date of Judgment: 5 February 1999
Date of grant of special leave: 30 November 1999
The appellant employed Mr Geoffrey Wells (of whose estate the respondent was trustee), some time prior to 1980. In November 1980 Mr Wells was appointed as Queensland manager of the appellant's business pursuant to an oral agreement. On 1 December 1986 the appellant and Mr Wells entered into a written contract recording the terms and conditions of employment of Mr Wells as Queensland manager of the appellant.
The agreement was for a term of five years and included a term that the employee "... shall serve the company faithfully and diligently and use his utmost endeavours to promote the interests of the company ...". Mr Wells' employment was terminated on 1 February 1988. Subsequently, the appellant became aware of conduct by Mr Wells that had probably occurred during the time that Wells was employed under the oral agreement, ie prior to 1 December 1986. It was significant misconduct, sufficient to justify the termination of Wells' employment.
Mr Wells commenced proceedings in the District Court of Queensland, for damages for unlawful termination of his employment contract. The damages included the balance of the remuneration he would have received if he had been able to continue performance of his contract for the balance of its five year term. The appellant counterclaimed for damages for breach of the employment contract. The appellant was successful at first instance.
On appeal, Mr Wells submitted that the 1986 contract stood apart from the earlier oral contract, that his misconduct had only breached the earlier contract, and that, as he had no duty to disclose his earlier misconduct, the appellant was not entitled to terminate his existing contract. The appeal was allowed by a majority, Shepherdson J dissenting.
The respondent's solicitors have filed a notice of motion seeking to substitute Ivor Worrell and Morgan Lane (now the registered trustees in the bankruptcy of Mr Wells) as the named respondents.
The grounds of appeal are:
- That the majority of the Court of Appeal erred in law in concluding that the Appellant was not entitled to terminate the employment of the Respondent and, in particular, that the Appellant was not entitled to terminate the employment of the Respondent by reason of misconduct of the Respondent on the ground that a new written contract had been entered into between the parties after the occurrence of misconduct, even though:
1. the Appellant was wholly unaware of such misconduct at the time of entry into that new contract; and
2. the prior undisclosed and unremedied misconduct by the Respondent was inconsistent with the continued existence of the relationship of confidence between employer and employee;
- That the majority of the Court of Appeal erred in law in proceeding to that conclusion on the basis of a principle that the obligation of fidelity by an employee to an employer does not require the disclosure and rectification of past breaches of the obligation of fidelity by the employee in respect of the same employer where disclosure or rectification would require the employee to incriminate himself or herself; and
- That the majority of the Court of Appeal erred in law in concluding that it was not impliedly warranted in a contract of employment entered into as replacement for, or an extension of, an existing contract of employment, that the employee was not then guilty of any undisclosed misconduct inconsistent with the relationship of confidence between employer and employee.
MONEYWOOD PTY LTD v. SALAMON NOMINEES PTY LTD (B22/2000)
Court Appealed from: Court of Appeal of the Supreme Court of Queensland
Date of Judgment: 22 December 1998
Date of grant of special leave: 10 March 2000
The respondent was the registered proprietor of undeveloped land. On or about 1 March 1994, the respondent orally appointed the appellant (trading as an office of LJ Hooker) as its agent to find a buyer for the land. On 31 March 1994, the respondent entered into a contract to sell the land to BMD Constructions Pty Ltd for the price of $6,825,000 ("the original contract").
The original contract contained clause 30 of the standard conditions of sale adopted in Queensland by the Real Estate Institute of Queensland and approved by the Queensland Law Society. The contract named the appellant as the vendor's agent.
After entry into the original contract, but prior to settlement, the local Council indicated an intention to acquire a portion of the land. In order to save stamp duty on the purchase price of the whole land, two new contracts were entered into with the respondent, one by the Council to purchase a portion of the land and the other by the original purchaser for the balance of the land. The purchase prices were roughly apportioned.
The original contract was not terminated since the respondent was anxious to preserve it in case the two new contracts failed.
The new contracts also incorporated the standard conditions; however, no vendor's agent was named. As a result the respondent refused to pay commission to the appellant in relation to the sales.
The appellant sued the respondent for the commission and at first instance the appellant succeeded in the District Court and recovered the commission plus interest.
On appeal to the Court of Appeal, the majority held that the respondent could successfully defend the appellant's claim for commission by relying on s71(1)(c) of the Auctioneers' and Agents' Act 1971 (Qld) which provides:
"No person shall be entitled to sue or recover or retain any fees, charges, commission, reward or other remuneration for or in respect of any transaction as ... a real estate agent, ... unless –
(c) the engagement or appointment to act as ... real estate agent ... in respect of such transaction is in writing signed by the person to be charged with such ..., or the person's agent or representative ...".
The majority of the Court of Appeal found that the appellant was precluded from receiving commission on the sale which was the subject of the second contract as the appointment of the agent as evidenced by the original contract did not constitute an appointment "in respect of " that sale.
The respondent has filed a notice of contention.
The grounds of appeal are:
- That the Court of Appeal erred in finding that, in order to satisfy s76(1)(c) of the Auctioneers' and Agents' Act 1971 (Qld) ("the Act"), the appointment of an agent was required to contain documentary evidence which had specific reference to the very transaction out of which the claim for commission arises; and
- That the Court of Appeal erred in concluding that the appointment, evidenced by clause 30 of the contract of sale of land from the Respondent to BMD Constructions Pty Ltd ("BMD") dated 31 March, 1994 was specific only to that contract and did not operate to satisfy section 76(1)(c) of the Act in respect of a subsequent contract for the sale of land from the Respondent to BMD dated 14 June, 1995.
The respondent contends:
That the appellant did not earn its commission because it was not the effective cause of the sale of part of the land to BMD Constructions Pty Ltd.