Grants of Special Leave to Appeal in the High Court of Australia

Today the High Court granted Special Leave to appeal in four cases, and in a fifth case granted an application for removal into the High Court.  The description of what the cases involves based upon my reading of the decision from which the appeal has been taken.  They may not necessarily reflect the issues that will ultimately arise in the appeal before the High Court.

In Attorney-General for the State of South Australia v Corporation of the City of Adelaide the High Court granted special leave in a case which raises the validity of a local government by-law prohibiting preaching, canvassing or haranguing or the distribution of leaflets in Rundle Mall, and in particular whether the by-law contravenes any constitutionally-implied freedom of communication.

In Douglass v The Queen the High Court granted special leave in a case which raises the important question of the application and discharge of the burden of proof where the prosecution case depends solely on an out of court statement and unsworn evidence of a young child contradicted in court by the accused’s sworn evidence where that sworn evidence is not rejected by the trial judge.*

In Andrews v Australian and New Zealand Banking Group Limited the High Court has removed proceedings pending in the Federal Court in a class action by customers of the ANZ Bank alleging it charged excessive fees for overdrafts, overdrawn accounts, dishonour fees and over-the-limit credit card accounts.

In Public Service Association and Professional Officers’ Association Amalgamated of NSW v Director of Public Employment the High Court granted special leave to appeal from the Industrial Court of NSW in a case that raises the question of whether a provision in the NSW Industrial Relations Act 1996 that requires the Industrial Relations Commission to give effect to certain aspects of government policy on public sector employment contravenes the so-called  Kable principle.

In Cooper v The Queen the High Court granted special leave in a case that, in the intermediate appeal, raised two issues: first, whether there was a miscarriage of justice by reason of the inadequate representation of the accused at trial (it being asserted that medical evidence should have been led that would have established that the deceased was mentally ill at the time the accused asserted he was acting in self-defence); the second relating to the adequacy of the directions given in relation to the law of joint criminal enterprise.

A notable omission from the grants of special leave was the application in the long-running class action against Merck in which it was alleged that Vioxx had caused the plaintiff’s heart attack.  The Full Federal Court had ruled against the plaintiff on the issue of causation, the evidence being insufficient to exclude any number of other possible causes of the heart attack.  Having regard to the findings of fact made by the Full Federal Court which were not challenged on appeal, the High Court determined that it was not an appropriate vehicle in which to address the matters of principle that might otherwise have arisen, and in particular whether an increase in risk of an adverse event was sufficient to establish causation, and whether some special rule of causation ought be developed to address the difficulty of proving causation in such cases.


* An earlier version of this post recorded the case of Douglass v The Queen as being an "appeal against the severity of a 3 year custodial sentence imposed upon a 55 year old male who indecently assaulted his three year old granddaughter (described as “a single touching of the penis in the context of urination”).  The basis upon which it is said to be manifestly excessive seems to arise out of the role the appellant plays in looking after his mother and his partner, both of whom are in poor health, and his own poor health."  This description was based upon the High Court's listing of the Special Leave results indicating it was an appeal from [2011] SASCFC 6.  Having read the transcript it appears to be an appeal from [2010] SASCFC 66.  Thank you to Jeremy Gans for alerting me to this.

This week in the High Court of Australia

This week there are three cases being heard by the High Court.

The first, commencing on Tuesday, 8 May 2012 is PT Garuda Indonesia Ltd v Australian Competition and Consumer Commission.  This case arises out of proceedings commenced by the ACC against Garuda and Malaysian Airlines alleging that each was a party to price fixing, market sharing and anti-competitive cartels contrary to section 45 of the Trade Practices Act 1974.  Garuda claimed that it was entitled to immunity from the jurisdiction of Australian courts under the Foreign States Immunities Act 1985.  Garuda is owned as to 95.5% by the Indonesian Government, and 4 out of 5 members of its Board of Commissioners were at the relevant time senior Indonesian government officials.  As such, Garuda would ordinarily be entitled to the immunity from the jurisdiction of Australian courts conferred on foreign states by section 9 (applying by virtue of section 22) of the Act.  There are exceptions to this general immunity, and question for determination is whether or not the proceedings “concern a commercial transaction” for the purposes of section 11 of the Act, with the consequence that the immunity from the jurisdiction of Australian courts does not apply. 

The second case, commencing on Wednesday, 9 May 2012 is Mansfield v The Queen.  This appeal arises from a prosecution of the two appellants for insider trading.  At issue is whether or not it is necessary for the Crown to establish that the “inside information” possessed by the appellants is “truthful information” or alternatively “a factual reality”.

The third case, commencing on Thursday, 10 May 2012 is Papaconstuntinos v Holmes a Court.  This case arises out of the bid made by Holmes a Court and Russell Crowe in 20005 to inject money into the South Sydney Rugby League Club, a bid that was bitterly opposed by the appellant.  In the course of the antagonistic machinations prior to the Extraordinary General Meeting that approved the bid, Holmes a Court wrote a letter to Andrew Fergusson (state secretary of the CFMEU, of which the appellant was a member) accusing the appellant of making misleading statements about the bid, and making allegation of a misuse of Souths’ funds a few years earlier at a time when the appellant’s son was employed by Souths.  The letter was found to be defamatory.  At issue is whether or not Holmes a Court was entitled to succeed on a defence of qualified privilege at common law.

High Court rejects challenge to "truth in sentencing" law

Today the High Court of Australia delivered judgment in Crump v NSW in which the Court rejected a challenge by Kevin Crump to section 154A of the Crimes (Administration of Sentences) Act 1999 (NSW).

In 1974 Crump and a co-offender were sentenced to life imprisonment for murdering Ian Lamb, and for conspiring to murder Virginia Morse.  The sentencing judge recommended that Crump never be released.  At the time he was sentenced, that recommendation had no statutory force and it was open to Crump to apply for, and to be, released on parole.   

As a result of subsequent amendments to the sentencing regime dealing with “truth in sentencing” Crump applied for a re-determination of his sentence. Ultimately in 1997 McInerney J made a re-determination with the effect that Crump was required to serve a minimum sentence of 30 years in prison.  In accordance with the parole system in force at that time, Crump would then have been eligible for parole. 

Following that re-determination by McInerney J, section 154A of the Crimes (Administration of Sentences) Act 1999 was enacted.  This section provides the Parole Authority with the power to release a prisoner the subject of a “not for release” recommendation, but only if the prisoner lacks the physical ability to harm any person, or is in imminent danger of dying, and in addition poses no risk to the community.  Crump did not satisfy these conditions. 

The effect of section 154A was that, whereas at the time of the re-determination of his sentence he would have been eligible for parole, section 154A meant that he could not be released, except in limited circumstances that did not apply to him. 

Crump challenged the law on the basis that it had the effect of altering or detracting  from rights or entitlements created by, as distinct from existing independently of, the orders of the Supreme Court, and therefore contravened the so-called Kable doctrine.

The High Court unanimously rejected this challenge.  It held that the redetermination of the sentence provided the factual basis upon which the statutory system of release on parole then operated.  Section 154A imposed strict limiting conditions upon the exercise of the executive power to release on parole offenders who were the subject of a non-release recommendation. While it altered a statutory consequence of the re-determined sentence, it did not alter the legal effect of the sentence itself.  The controversy that had been quelled by the re-determination was whether a sentence providing for a minimum term should be made, and if so upon what terms. The minimum term marked the time at which the plaintiff could apply for parole, but it said nothing about the criteria for a grant of parole or the plaintiff's prospects of success in obtaining it.  The responsibility of the executive branch of government (via the Parole Authority) for the future of the plaintiff thereafter remained regulated by the statutory parole system, as amended from time to time.

NSWSC Equity Practice Note 11

There has been a little disquiet about the new NSW Supreme Court Equity Division Practice Note relating to Disclosure (PN11).

In general terms, the Practice Note has introduced what is being referred to as a “timing requirement”, to the effect that a party will not be entitled to “disclosure” prior to the service of its evidence, except in “exceptional circumstances”.

The disquiet seems to have arisen as a result of the use of the term “disclosure”, and various rumours, murmurs and rumblings that “disclosure” includes notices to produce and subpoenas.  The disquiet has not been helped by the fact that the Practice Note does not define what it means by “disclosure”.  The elucidation of the effect of the Practice Note has been left to a series of seminars delivered by the Chief Judge in Equity and a number of her puisne judges. 

I did not have the opportunity to attend either of the seminars, and what I am about to say is based upon a report to me from a colleague who attended the seminar on Wednesday, 2 May 2012.  I make that observation because what has been reported to me seems to differ slightly from reports I have received of the seminar given on Monday, 30 April 2012.

In short form, the relevant propositions are these:

Firstly, although paragraph 4 of the Practice Note would suggest that “disclosure” means “disclosure of documents”, according to Brereton J in the Q&A “disclosure” means discovery and interrogatories.  So it would seem to go beyond discovery, and goes beyond documents.

Secondly, the Practice Note in terms does not apply to subpoenas or notices to produce.  However, subpoenas and notices to produce are liable to be set aside as an abuse of process if their object is to circumvent the timing requirement.  It should be noted that this will apply even to properly drawn subpoenas and notices to produce (i.e. ones that are not liable to be set aside on the basis they are being used as a substitute for discovery). It appears they will be readily allowed if used in aid of interlocutory applications.

Thirdly, according to Brereton J paragraph 5 of the Practice Note does not change the test for discovery.  This is rather curious as paragraph 5 requires that the disclosure be “necessary”, which is currently the test under the UCPR for interrogatories but not for discovery (where the lower threshold of “relevance” is used).  Bergin CJ in Eq said the same thing in relation to subpoenas.  “Necessity” is certainly not a threshold required by the UCPR, and I cannot recall ever hearing of a subpoena being set aside on the grounds it was not “necessary”.

Fourthly, the requirement that evidence be served includes both testimonial evidence and documentary evidence.

Fifthly, disclosure may be allowed where the documents are required for the purposes of briefing an expert, but even then the Court may require lay evidence to served first.

Sixthly, it would appear that a party will still be entitled to call for documents referred to in an originating process or pleading (on the basis that the notice to produce calling for such documents is not seen to be circumventing the timing rule), and a document referred to in an affidavit or witness statement will also be allowed, as the testimonial evidence will by then of course have been served.

In short, a little re-drafting of the Practice Note wouldn't go astray, if only to make clear those things that are now apparent only as a result of attending a seminar given by members of the Court.

ASIC wins in the High Court against James Hardie directors

Today the High Court of Australia unanimously upheld an appeal by the Australian Securities and Investments Commission in its ongoing pursuit of civil penalty proceedings against seven non-executive directors of James Hardie Industries Ltd (“JHIL”).  The plurality judgment in ASIC v Hellicar was delivered by French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ.  Heydon J wrote a separate judgment to arrive at the same ultimate outcome.

The effect of the decision is that the seven directors have been found to have contravened their duties under section 180 of the Corporations Act 2001 (the obligation to exercise due care and diligence).  The proceedings have been remitted to the NSW Court of Appeal to enable that Court to consider the directors’ appeals in relation to the question of whether or not they should be relieved from liability in respect of those contraventions, and if not in relation to penalty.

The proceedings by ASIC (so-called “civil penalty proceedings”, in effect a quasi-criminal prosecution by the corporate regulator) arose out of the desire of the James Hardie Group to establish its ultimate holding company offshore in the Netherlands.  This was to be done be incorporating a new Dutch company that would own all of the shares in JHIL which, until that time, had been the ultimate holding company of the group.  Two of JHIL’s wholly-owned subsidiaries had manufactured and sold products containing asbestos.  For many years each had been, and continued to be, the subject of personal injury claims by persons who had come into contact with asbestos.  A decision was made by JHIL to restructure the group and to separate the asbestos subsidiaries.  As part of this separation, JHIL proposed to establish a foundation (the Medical Research and Compensation Foundation, or MRCF) to manage and pay out asbestos claims, and to conduct research into the causes of and treatment for asbestos-related diseases.

On 15 February 2001 the JHIL board met to consider the separation proposal.  Following that meeting an announcement was made to the Australian Stock Exchange by JHIL in which it said, amongst other things, that MCRF had sufficient funds to meet all legitimate compensation claims anticipated from persons injured by exposure to asbestos.  It was further stated that the directors of JHIL had determined the level of funding required by the MCRF and the directors were satisfied that MCRF had sufficient funds to meet anticipated future claims.  In fact, the MCRF did not have sufficient funds.  At trial and in the NSW Court of Appeal it was held that the directors of JHIL ought to have known that the statements about the level of funding were misleading.  That finding was not challenged in the High Court.

What was at issue ultimately was whether or not a draft of the announcement to the ASX was tabled at the meeting of 15 February 2001, and if so whether or not the directors approved it.  The trial judge answered both those questions in the affirmative, and made findings of contravention against each of the non-executive directors.  In a subsequent hearing Gzell J declined to excuse the contraventions, and imposed penalties on the directors in respect of those contraventions. 

On appeal, the NSW Court of Appeal held that ASIC had failed to prove those matters, and set aside the findings of contravention and the penalties imposed.  Having found no contravention, the Court of Appeal did not have to consider the directors’ appeals against the failure to excuse their conduct, and against the severity of the penalty. These matters will now need to be determined.

It must be said, as was emphasised by the High Court, that the directors faced considerable hurdles in seeking to argue that the draft announcement had not been tabled at the February 2001 meeting, and that it had not been approved by the Board.  The minutes of the 15 February 2001 meeting recorded both the tabling and the approval.  Those minutes had been confirmed as a correct record at the subsequent meeting of the Board on 3-4 April 2001, and “signed as a correct record” by the Chairman.  That meeting was attended by all but one of the directors that had attended the 15 February 2001 meeting. 

The directors sought to impugn the accuracy of the meeting minutes.  The irony of seeking to defend the finding of contravention by impugning the accuracy of the minutes, which would itself constitute a contravention of the obligations relating to the keeping of minute books and to ensure the accuracy of corporate records, was not lost on the High Court.

In any event, the High Court held that simply identifying other inaccuracies in the minutes did not necessarily imply that the relevant parts of the minutes were inaccurate.  Nor did the fact that the minutes were prepared in draft before the meeting mean that they were not a true record of what occurred during the meeting.  This conclusion rested upon an unstated premise that the draft prepared before the meeting was not considered after the meeting, a premise that was demonstrably false.  In any event, the time at which the minutes were prepared could not obscure the fact that they were subsequently adopted by the Board as being a correct record of what occurred, a matter which the Court of Appeal had given little significance.

The most significant and controversial part of the NSW Court of Appeal’s judgment centred around the failure by ASIC to call as a witness an external solicitor for JHIL who had attended the meeting, Mr Robb.  The Court of Appeal held that a body in the position of ASIC, having regard to the scope of its powers and the public interest in the exercise of its functions, had an obligation of fairness in the conduct of its prosecution that required it to call Mr Robb as a “witness of such central significance to critical issues that had arisen in the proceedings.”  The failure to call Mr Robb, according to the Court of Appeal, undermined the cogency of ASIC’s case on the tabling of the draft ASX announcement and its approval. 

The High Court addressed firstly the content of the obligation of fairness, saying that although there was no doubt ASIC had an obligation to conduct litigation in which it was a party fairly, there was no properly articulated basis for the jump from the generality of that obligation to the more specific obligation to call Mr Robb.  Even assuming such an obligation existed, the remedy would be to direct ASIC to call the witness or stay the proceedings until they did so, or on appeal to determine whether the failure gave rise to a miscarriage of justice necessitating a retrial.  There was no proper basis for requiring a court to apply some indeterminate discount to the cogency of the evidence otherwise called in support of ASIC’s case.

Next, the High Court noted that there was in fact no unfairness in not calling Mr Robb.  The Court of Appeal had held Mr Robb should have been called even if it was only to say that he could not recall what had occurred at the meeting.  However, the High Court held that the Court of Appeal should have examined what evidence Mr Robb would in fact have been prepared to give.  The evidence he was likely to give, as distinct from what evidence he might theoretically have been in a position to give, was critical to any determination of unfairness.  The conclusion that it was “unfair” of ASIC to not call Mr Robb proceeded on the assumption that the directors had thereby been deprived of some advantage.  This was said to be the opportunity to cross-examine him, but there was no reason to suppose that he would have sworn to a positive recollection that a draft announcement was neither tabled nor proved.  Anything less than that would not have advanced the directors’ defence.

Similarly, the High Court rejected the Court of Appeal’s reliance upon the principles in Blatch v Archer (that all evidence is to be weighed according to the proof which it was in the power of one side to have produced) and Jones v Dunkel (that the unexplained failure to call evidence entitled a court more comfortably to draw an inference favourable to the opposing party, where that inference was otherwise available on the evidence) had no relevant application.  ASIC’s case did not depend upon inference but upon direct evidence in the form of the minutes of the February 2001 meeting.  The most that could be inferred form the failure to call Mr Robb was that Mr Robb could not give evidence from his own recollection of what had happened at the February meeting.  There was certainly no basis for inferring that his evidence would have been adverse to ASIC’s case.

Accordingly, the High Court re-instated the findings of contravention made by Gzell J at first instance.  The saga continues, as the parties gear up for the determination of that part of the original appeal that has yet to be determined by the NSW Court of Appeal.

"If a man elects to intrude into another’s marriage...he must expect a hiding from the husband"

In the case of R v David Allen Laundess a husband who took matters into his own hands following the discovery that his wife was having relations with the milkman was sentenced by a local magistrate to a month in prison.  He received a rather more sympathetic hearing and lenient sentence upon appeal.  His Honour Judge Cross delivered the following judgment (the judgment was delivered on 8 March 1973, but appears in the Autumn 2012 issue of Bar News, the journal of the NSW Bar Association).

It has been said that revenge is a kind of wild justice.  And, though the courts may not approve the infliction of deliberate injury, still one’s heart goes out in sympathy to all those who are moved to violence in defence of their family.  Circumstances, which understandably give rise to a degree of passion may properly be regarded as mitigating factors on the question of sentence for violent conduct. 

In the present case Mr Laundess had been happily married for seven years and has four small sons.  The evidence reveals that about a week before 18th February, 1973 his wife informed him that she wanted him to leave the home in Grenfell as she no longer loved him.  The surprised Mr Laundess asked if there was another man.  No, lied the wife, she had merely fallen out of love with him.  In an understandably bewildered state Mr Laundess was shortly afterwards informed by a friend that a local milkman named Keys had been carrying on with his wife.  Mr Laundess confronted Keys, who admitted it.  Mr Laundess then confronted his wife with his information, whereupon she confessed her past misconduct with the milkman, said she was madly in love with the milkman, could not live without him, etc.  etc.  She told Mr Laundess that he would have to leave home, and he subsequently found his bags had been packed for him.  He was understandably confused.  Of course, he could have ordered his wife out of the house; but there were four small sons in need of a mother’s care.  Considerations such as these, added to the understandable bewilderment and confusion, led him to accept his wife’s direction and he moved out. 

He felt, of course, some sense of injustice.  He approached Keys and complained of the milkman’s intrusion into his marriage.  He pointed out the possible disadvantage to the children, and he asked Keys if Keys was really going to take on all the responsibilities that the wife was asking him, Mr Laundess, to abandon.  Keys replied that he would give the situation a week’s trial and let Mr Laundess know! 

This statement by Keys that he would take the wife for a week, apparently on appro., no doubt deepened the husband’s gloom.  He felt that he - at least he - was getting the wrong end of the stick.  He brooded over a few drinks with his brother on the night of 17th February.  Thoughts turned to resolve and resolution to action; and about 3am on 18th February, Mr Laundess and his brother arrived at the matrimonial home. 

They entered the house, and Mr Laundess entered the bedroom.  He found the wife and the milkman both naked in bed together.  In Mr Laundess’s own words, ‘I lifted him up and got into him’.  When he finished getting into the milkman, Mr Laundess told him to get out.  The milkman raised a minor objection to appearing in the Grenfell streets at night totally unclad.  The husband, becoming irritated at the thought of the milkman’s sense of propriety being offended by these sartorial or thermometric considerations, happened to notice a rifle on the top of the wardrobe, which he remembered was loaded, perhaps not inappropriately, with rat-shot.  He grabbed the rifle and asked the milkman to leave.  The milkman had by then donned some clothes and commenced to move off. 

All this time, the wife — as some wives, tend to do in these situations — had remained noticeably audible.  She had put on a dressing gown and now decided to leave with the milkman.  At this stage the husband, becoming even more irritated at the slow rate of the milkman’s departure, at his wife’s wailings and at her pursuit of the milkman, decided to fire some rat-shot at or near the milkman’s feet to speed him on his way.  At that very moment, however, the wife had run up near the milkman; and perhaps by another piece of wild justice (and partly due to the husband’s inexperience at shooting from the hip) the pellets hit the wife’s legs and not the milkman’s.  This development did not cause the wife to fall silent.  The husband’s brother then took the rifle from him.  The milkman helped the wife into the milk truck which was parked outside and, getting his priorities into an order that may not have instinctively occurred to all persons, drove first to the police station to demand that the husband be charged and only then to the hospital, where the devoted surgical staff removed eight pellets from the skin of the wife’s lower legs.  Since that night the wife’s mother has visited her in Griffith and I am informed that there is some possibility that the wife with the children may move to the mother’s home at Katoomba; and there was a suggestion that the milkman’s ardour has cooled. 

It is in the light of that background that it falls to this court to determine an appropriate sentence on the two charges preferred against the husband — one, a summary charge of assault on the milkman and the second, an indictable charge of ‘Malicious’ wounding of the wife.  The learned magistrate felt that an appropriate penalty for the husband assaulting the milkman was one month’s imprisonment with hard labour. 

The affair between the wife and the milkman had been carried on for some time before the husband knew of it.  The husband was acting as father, husband and provider while the milkman was clandestinely the wife’s lover.  When spoken to by the husband the milkman replied in terms which were on any analysis contemptuous of the husband and indeed contemptuous of the wife.  It appears to me that if a man elects to intrude into another’s marriage, putting the welfare of the children as well as that marriage at peril, he must expect a hiding from the husband.  On any realistic basis this milkman appeared to have asked for what he got.  In my opinion the circumstances surrounding this assault on the milkman are such as to reduce its seriousness below the level which attracts a prison sentence, even one to the rising of the court. 

TO THE PRISONER: In lieu of the learned magistrate’s penalty you are fined the sum of twenty cents, which you must pay to the Clerk of Petty Sessions, Cowra, within seven days; otherwise imprisonment with hard labour for twenty-four hours. 

As to the shooting it must be said that rat-shot from a .22 rifle from some distance away is scarcely lethal.  There was clearly no intention to do serious injury to any person nor was any serious injury done.  The incident occurred at a time when your mind was cursed by domestic affliction.  And it must also be remembered that it was the milkman and your wife who created this explosive situation which you in an understandable excitement merely detonated.  You do not present any threat to society; you are conceded by the police to be an honest and hard worker; and you have already spent fourteen days in Bathurst Gaol as the result of the magistrate’s order.  Compassion blends with responsibility in inducing me to defer passing sentence on you entering into a recognisance yourself in the sum of $400 to be of good behaviour, for a period of two years and to be liable to be called up at any time for sentence for any breach committed within that period.  That recognizance may be taken before a magistrate. 

As to the appeal, I formally say that the appeal is dismissed, the learned magistrate’s conviction and findings are confirmed, but in lieu of the learned magistrate’s penalty of one months’s [sic] imprisonment, you are fined the sum of twenty cents, in default imprisonment with hard labour for one day.