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

On Friday, 15 March 2013 the Melbourne panels of the High Court were feeling very generous and granted special leave to appeal in four cases.  There were no grants of special leave to appeal from the Sydney panels.

The first case is Legal Services Board v Gillespie-Jones, in which a barrister successfully claimed against the Fidelity Fund in respect of moneys that had been paid by a client to a solicitor on trust for the purposes of paying the barrister’s fees, but which moneys were misappropriated by the solicitor. 

The second case is a series of appeals in Pantazis v The Queen; Issa v The Queen and Elias v The Queen in which the High Court will be called upon to consider the common law principle that in sentencing a person for a State criminal offence a sentencing judge is required to take into account the less punitive regime of another State offence, or a Commonwealth offence, that was a more appropriate offence than the offence upon which the accused fell to be sentenced.

The third case is Nguyen v The Queen.  In this case two co-accused had been convicted of murder and attempted murder, either on the basis of acting in concert with the killer, on the basis of extended common purpose, or on the basis that they aided and abetted the killer.  The Victorian Court of Appeal quashed the convictions and entered verdicts of acquittal in respect of one of the co-accused, on the grounds that a reasonable jury properly directed must have entertained a doubt as to the guilt of that co-accused of murder or an alternative charge of manslaughter (and the associated attempt) .  The other co-accused now appeals against the dismissal of his appeal, and raises the question of whether or not a viable alternative verdict of manslaughter based on acting in concert or extended common purpose ought to have been left to the jury.

Finally, the High Court has granted special leave to appeal in the long-running Bell Litigation in which a syndicate of banks was ordered to pay more than $2 billion to the liquidator of Alan Bond’s failed Bell Group, which collapsed in 1991.

Next week in the High Court of Australia

After a marathon hearing in relation to the Commonwealth’s Mineral Resources Rent Tax this week, next week the High Court of Australia will hear argument in three cases.

The first is the appeal from the Full Federal Court in SZOQQ v Minister for Immigration and Citizenship, to be heard on Tuesday, 12 March 2013.  In this case the appellant is an Indonesian national from the West Papuan province of Irian Jaya.  Following persecution at the hands of the Indonesian government he travelled from Papua New Guinea to Australia in 1985 and was granted a serious of temporary visas until ultimately being granted a Protection Visa in 1996.  In 2000 he was arrested and detained after assaulting his de facto spouse, who died in hospital four days later.  He pleaded guilty in 2001 to manslaughter and was sentenced to seven years’ imprisonment.  In 2003 his Protection Visa was cancelled under the character provisions in section 501 of the Migration Act. In 2005 and again in 2007 the appellant requested the Minister to exercise the power under section 48B of the Act to lift the bar imposed by section 48A(2) of the Act to enable him to apply for a new Protection Visa. These applications were refused, but in December 2008 the Minister decided to exercise the power under section 48B and allowed the appellant to make a fresh Protection Visa application.  In 2009 the Minister’s delegate determined that the appellant satisfied the criteria of Art 1A(2) of the Refugees Convention.  However, the delegate determined that the appellant was not a person to whom Australia owed “protection obligations” for the purposes of section 36 of the Act because, having been convicted of a particularly serious crime and constituting a danger to the Australian community, he was excluded by Art 33(2) of the Refugees Convention.  Successive challenges to that decision on the grounds that the Minister should have balanced the threat posed by the appellant to the community against the dire consequences to the appellant should he be returned to Indonesia were rejected.  The question for determination is whether Art 33(2) of the Refugees Convention (the exception to the non-refoulement obligation) is imported into section 36 of the Act in determining whether or not the appellant is a person to whom Australia owes protection obligations.  If the appellant is a person to whom Australia owes protection obligations (ie because he satisfies Art 1 of the Refugees Convention - Art 33(2) being irrelevant for the purposes of section 36 of the Act) then further questions arise as to whether the Minister is then required to consider whether the discretion under section 501 should be exercised to prevent the grant of that visa, and if so what are the factors relevant to the exercise of that discretion.

The second is the appeal from the NSW Court of Appeal in Wallace v Kam, an interesting failure to warn case.  The plaintiff suffered from a temporary condition known as bilateral femoral neuropraxia following spinal surgery.  This was caused by lying prone for an extended period during surgery, and was not a result of the procedure itself.  The plaintiff had not been warned of the risk of this condition, but the trial judge held that had he been warned he would have gone ahead with the surgery nonetheless.  However, the plaintiff also claimed that he had not been warned of the risk of paralysis as a result of damage to the spinal nerves from the surgery itself.  Had he been warned of that risk, he would not have proceeded with the surgery.  The trial judge and the Court of Appeal held that this risk was irrelevant, as it was not the risk that materialised, and the plaintiff was not entitled to recover damages for the risk that did materialise, because he was prepared to accept that risk.

Finally, the Court will hear argument in Commissioner of Taxation v Unit Trend Services Pty Ltd  in which the High Court will be called upon to determine the proper construction of the anti-avoidance provisions of the GST legislation.

Forthcoming judgments in the High Court of Australia

The High Court of Australia will deliver four outstanding (ie reserved, not necessarily spectacular) judgments next week.

On Wednesday, 13 March 2013 two judgments will be delivered.  The first is the judgment in TCL Air Conditioner (Zhongshan) Co Ltd v The Judges of the Federal Court of Australia, a challenge to the power of the Federal Court to enforce arbitral awards made in accordance with the UNCITRAL Model Law on International Commercial Arbitration and pursuant to the International Arbitration Act 1974 (Cth).  In a nutshell, the argument is that by requiring the Federal Court to enforce an award notwithstanding the errors of law apparent on the face of the award and notwithstanding limitations placed on the parties’ arbitration agreement. By excluding the court’s traditional supervisory jurisdiction with respect to arbitral awards, the amendments made to the International Arbitration Act 1974 (Cth) in 2010 are said to substantially impair the institutional integrity of the Federal Court and impermissibly vest Commonwealth judicial power in arbitral tribunals by making their awards binding and conclusive. 

The second is the judgment in Huynh v The Queen, a series of three appeals arising out of a murder by stabbing in the course of a brawl at the end of an 18th birthday party.  The appeals raise for consideration the extent to which a jury must be directed as to the element of “participation” in a joint enterprise liability for murder (ie where the accused is not alleged to have been the stabber, but was a party to an arrangement or understanding to kill the victim).

Then, on Thursday, 14 March 2013 a further two judgments will be delivered.  The first is in Assistant Commissioner Michael James Condon v Pompano Pty Ltd, in which the Court will consider the constitutional validity of the Queensland  Criminal Organisation Act 2009 in an application by Queensland Police for a declaration that the Finks Motorcycle Club was a “criminal organisation” and that the respondent company Pompano Pty Ltd was a “part” of that organisation. 

The second is the judgment in Yates v The Queen, an application for special leave heard as if on an appeal, in which the appellant challenges the imposition of an indeterminate prison sentence under section 662 of the Western Australia Criminal Code following his conviction in 1987 of deprivation of liberty and aggravated sexual assault on a 13 year old girl when he was aged 25.  This “deviant behaviour” is said to be a result of various factors unlikely ever to change, including including brain damage, effectively rendering his sentence a lifetime of imprisonment.  

The Mining Tax: This week in the High Court of Australia

This week, commencing on Wednesday, 6 March 2013 the High Court will hear argument in Fortescue Metals Group Ltd v Commonwealth, the challenge by Andrew Forrest to the Commonwealth’s Mineral Resources Rent Tax, more common known as the Mining Tax.

The Fortescue Group raises four different grounds for challenging the Mining Tax:

First, it is a law with respect to taxation that discriminates between States contrary to section 51(ii) of the Constitution;

Second, it is a law or regulation of trade, commerce or revenue that gives preference to one State over another, contrary to section 99 of the Constitution;

Third, it is a law that contravenes the Melbourne Corporation doctrine in that it interferes with or curtails in a substantial manner the exercise by a State of its constitutional powers;

Fourth, to the extent the Mining Tax applies in respect of iron ore, it contravenes section 91 of the Constitution which preserves (it is said) the right of a State to provide aid to or a bounty on the mining or, inter alia, metals.

One feature of the Mining Tax as ultimately enacted is the way in which State mining royalties are treated for the purposes of determining the amount of Mining Tax payable.  The Mining Tax is payable on the miner’s “mining profit” after deducting from such mining profit the amount of the miner’s “MRRT allowances”.  The mining profit is, as might be expected, the difference between “mining revenue” and “mining expenditure”.  The “MRRT allowances” include State royalties.  In this way, in a State where the miner pays a higher royalty, the amount on which the Mining Tax is levied is correspondingly reduced and a lower amount of Mining Tax is payable.  Conversely, in a State with a lower royalty payable, a higher amount of Mining Tax is payable.

The arguments raised by Fortescue Metals Group that rely upon discrimination are based upon the proposition that a miner’s actual liability to pay the Mining Tax will vary from State to State, depending upon the royalty payable in each State.  However if this amounted to prohibited discrimination, then it would potentially have the effect that all income tax in its current form would be prohibited, because income for taxation purposes is ordinarily net of various imposts that vary from State to State (such as payroll tax and stamp duty).  This has never been thought to amount to discrimination.

The arguments based on section 91 of the Constitution (the bounties provision) are based on the proposition that a State cannot reduce or give a concession on the royalty rate payable by a miner in order to assist production, because any such reduction or concession will result in a corresponding increase in the Mining Tax, effectively neutralising the State assistance.  As discussed below, that is hardly a realistic concern given the current State royalty environment.  But more fundamentally, section 91 is a carve-out from the operation of other provisions of the Constitution that would prohibit the grant of aid and of bounties to assist mining activities (in particular section 90 - which prohibits the States from levying excise and providing bounties, and perhaps section 92 - which requires freedom of interstate trade and commerce), and does not seem to be a prohibition on the exercise of Commonwealth legislative power.

The arguments based the Melbourne Corporation doctrine are to some extent dependent upon the States’ effective inability to use royalty rates as the economic levers by which a State stimulates its economy and provides for the development of its mineral resources and, importantly, the associated infrastructure and facilities that benefit not only the miners but the State community as a whole. However, with very limited exceptions reduction in royalties seems to be a throwback to the past, as the States have (understandably, given the resources boom) been content to reap the benefits of their royalty regimes and have not regarded the miners as entities requiring assistance. The Melbourne Corporation arguments go further and suggest that historically, and Constitutionally, the States’ control and management of its waste lands (including the minerals therein) are inherent features of the very existence of the States, and the Mining Tax interferes with that control to such an extent as to be invalid.  If this sounds like “reserved powers redux”, that’s probably because it is.

In any event, the High Court has in recent times been highly unpredictable when it comes to what has hitherto been considered constitutional orthodoxy, particularly in the revenue and spending powers of the Commonwealth.  Only time will tell whether there is another rabbit in the hat.  In a case being argued by a Queenslander (David Jackson QC) before a bench led by a West Australian (Robert French) with a new intellectual powerhouse in its ranks, also from Queensland (Patrick Keane), it will be interesting to see how the cards ultimately fall.