Hearings this week in the High Court of Australia

The High Court will today commence hearings in three related cases arising out of the NSW Government’s response to findings made by the Independent Commission Against Corruption following investigations into the grant of various exploration licences.

The first two cases involve Mr Travers Duncan and Cascade Coal Pty Ltd. In June 2009, following a process of expressions of interest to the NSW Department of Primary Industries, Cascade was chosen as the successful applicant for proposed coal exploration licences for areas known as Mount Penny and Glendon Brook.  In October 2009 licences issued under the Mining Act 1992 (NSW) to each of two newly incorporated subsidiaries of Cascade, Mt Penny Coal Pty Limited and Glendon Brook Coal Pty Limited. Mt Penny Coal subsequently carried out extensive exploration and development work, and in December 2010 lodged an application for environmental approval of a proposed open-cut coal mine at Mount Penny.

The third case involves an exploration licence issued under the Mining Act 1992 (NSW) to Doyles Creek Mining Pty Limited.  In early 2010 the shares in DCM were purchased by NuCoal Resources Ltd.  In November 2012 DCM applied for a renewal of its exploration licence.

In July 2013 the ICAC published a report entitled “Investigation into the Conduct of Ian Macdonald, Edward Obeid Senior, Moses Obeid and Others”.  Findings made by ICAC in its report included that Mr Duncan and the other directors of Cascade had engaged in corrupt conduct by taking steps to deceive public authorities as to the involvement of the Obeid family in the Mount Penny tenement.  In August 2013 the ICAC published a report entitled “Investigation into the Conduct of Ian Macdonald, John Maitland and others (Operation Acacia)”.  In that report ICAC made findings of corrupt conduct against several of NuCoal’s shareholders who had in the past been directors of NuCoal and DCM.  A further ICAC report, “Operations Jasper and Acacia – addressing outstanding questions”, was published in December 2013.  That report contained findings by ICAC that the Mount Penny tenement was created as a result of corrupt conduct and that Cascade had acquired the benefit of the Glendon Brook tenement as the result of a corrupt agreement it had made in relation to Mount Penny.  It also found that the grant of the exploration licence to DCM was tainted by corruption and that NuCoal’s purchase of DCM had not been at arm’s length. ICAC recommended that the NSW Government cancel the licences issued to Mt Penny Coal and Glendon Brook.  It also recommended that the NSW Government cancel DCM’s exploration licence and refuse applications associated with it.

On 31 January 2014 the Mining Amendment (ICAC Operations Jasper and Acacia) Act 2014 (NSW) added Schedule 6A to the Mining Act. Schedule 6A declares the application for environmental approval void, cancels the various exploration licences issued to Mt Penny Coal, Glendon Brook and DCM, and obliges the various companies to continue to provide reports and other information obtained from their mining exploration activities to the Government.  Schedule 6A also provides that the Government is not liable to pay compensation for any consequence of the operation of the Schedule.

Mr Duncan and the Cascade parties submit that Schedule 6A determines rights and imposes punishment, thereby amounting to an exercise of judicial power.  They contend that the exercise of such power is beyond the law-making power given to the New South Wales Parliament by s 5 of the Constitution Act 1902 (NSW), with the result that Schedule 6A is not a valid law.  All plaintiffs also contend that, being an exercise of judicial power, Schedule 6A is invalid because it falls outside the integrated system prescribed by Chapter III of the Commonwealth Constitution.  This is because that system involves the supervision by the relevant Supreme Court, and ultimately by this Court, of any exercise of judicial power in a State.

NuCoal submits that in passing the Amendment Act, the New South Wales Parliament purported to assign guilt and impose punishment.  NuCoal contends that the Parliament has never possessed such power.  That lack of power, NuCoal submits, is borne out by relevant colonial-era statutes in relation to the establishment and powers of both the Parliament and the Supreme Court of New South Wales, and the Constitution Act 1902 (NSW) as impacted by the Commonwealth Constitution.  NuCoal submits in the alternative that even if the Parliament has such power, the power must be exercised judicially.  Such exercise would involve hearing from affected parties, considering only relevant information and avoiding arbitrariness.  NuCoal submits that Schedule 6A operates arbitrarily in that it punishes shareholders of the company who had no involvement in any corruption.

The Cascade parties and NuCoal additionally contend that clause 11 of Schedule 6A, which authorises certain officials to use information obtained under the Mining Act is, pursuant to section 109 of the Commonwealth Constitution, invalid to the extent of its inconsistency with the Copyright Act 1968 (Cth).

Upcoming judgments this week in the High Court of Australia

The High Court will deliver judgment in three cases this week.

On Wednesday, 11 February 2015 the Court will deliver judgment in Plaintiff S297/2013 v Minister for Immigration and Border Protection.  The Plaintiff is a national of Pakistan who arrived in Australia by sea in May 2012 without a visa, whereupon he was placed in detention.  Initially prevented from lodging a valid application for a protection visa by s46A(1) of the Migration Act 1958 (Cth), he was later permitted to lodge such an application after a determination by the Minister under s46A(2) of the Act.  The Plaintiff’s application however was refused by a delegate of the Minister in February 2013. Upon a review of that refusal, the Refugee Review Tribunal remitted the Plaintiff’s visa application to the Minister for reconsideration, having found that the Plaintiff satisfied the visa criterion prescribed by s36(2)(a) of the Act. On 4 March 2014 the Minister made a determination under s85 of the Act that the maximum number of protection visas that could be granted in the 2013-2014 financial year was 2,773.  When that figure came to be reached (on 24 March 2014), the Plaintiff’s visa application still had not been determined and the Plaintiff remained in immigration detention.  On 20 June 2014, in Plaintiff S297/2013 v Minister for Immigration and Border Protection [2014] HCA 24 the High Court held the limit imposed on the number of protection visas was invalid. A writ of mandamus was issued to the Minister, commanding him to determine the Plaintiff’s application for a protection visa according to law.  On 17 July 2014 the Minister refused the Plaintiff’s application, on the ground that he did not satisfy the criterion imposed upon a grant of a protection visa in clause 866.226 of the Regulations, which provides “[t]he Minister is satisfied that the grant of the visa is in the national interest.”  Although the Minister refused to grant a protection visa, he immediately granted the Plaintiff a seven-day safe haven visa and a three-year humanitarian visa (both under s 195A(2) of the Act) and released him from detention.  The Minister then filed a notice certifying his compliance with the writ of mandamus. The Plaintiff now challenges the sufficiency of the Minister’s compliance with the writ of mandamus.  The Plaintiff contends that clause 866.226 is invalid, on the basis that it is inconsistent with ss501(3) and 501C of the Act.  An alternative basis of the alleged invalidity of clause 866.226 is that it departs from the scheme of protection visas provided for by various provisions of the Act, including ss36 and 501.

The court will also deliver judgment in Lavin v Toppi, an appeal from the NSW Court of Appeal Lavin and Toppi were directors and equal shareholders of Luxe Studios Pty Ltd which had a loan from the National Australia Bank. By written guarantee each of Lavin, Toppi and others associated with them became guarantors of Luxe’s obligation to repay that loan.  When Luxe defaulted, the Bank sued the guarantors. Lavin reached an agreement with the Bank, which was set out in a “Deed of Release and Settlement”.  Under the Deed, Lavin paid the Bank an amount that was less than half of the balance owed to it by Luxe under the loan.  The Bank in return covenanted not to continue its claim against Lavin or to make a new claim against her.  Its claim against Lavin was then dismissed by consent. Toppi subsequently paid out the rest of Luxe’s debt to the Bank.  She then sued Lavin for an equitable contribution to the difference between the amounts they had each paid to the Bank. Lavin contended that the Deed had limited her liability as a co-surety such that her liability to the Bank was no longer co-ordinate with Toppi’s.  At first instance Rein J ordered Lavin to pay Toppi equitable compensation of $726,000, being half of the difference between the amount of Lavin’s payment to the Bank and the amount paid by Toppi.. The NSW Court of Appeal unanimously dismissed Lavin’s appeal, finding that none of the terms of the Deed amounted to a release of Lavin from her liability to the Bank.  There was merely a promise not to sue, which in no way constrained the rights of other guarantors as against Lavin.  Toppi was therefore entitled to equitable contribution from Lavin as a co‑surety.  The appeal raises a question of whether or not co-sureties are subject to co‑ordinate liabilities where one co-surety receives from the creditor a covenant not to sue, and the proceedings brought by the creditor against that co-surety are dismissed.  It also raises a question of whether equitable compensation is available where the co-surety derives no practical benefit from the payment made to the creditor because, by reason of the covenant not to sue, they could not be required to satisfy any remaining liability to the Bank.

Then on Thursday, 12 February 2015 the Court will deliver judgment in Commissioner of the Australian Federal Police v Zhao.  The respondents in this case are husband and wife.  They husband has been charged with various offences relating to dealing with cash taken from illegal sex workers.  The wife has not been charged with any offence. Orders were made on the application of the AFP Commissioner to restrain the disposal of properties and other personal items owned by the respondents under the Proceeds of Crime Act 2002 (Cth).  The AFP Commissioner then sought orders for the forfeiture of the property.  The respondents sought a stay of the forfeiture proceedings ending the determination of the charges against the husband.  This was refused at first instance but granted on appeal.  At issue in the appeal is the effect of the earlier decision of the High Court in Lee v The NSW Crime Commission (2013) 302 ALR 363 and in Lee v The Queen (2014) 308 ALR 252 on the circumstances in which it is appropriate to stay forfeiture proceedings pending determination of criminal charges.

This week in the High Court of Australia

The High Court of Australia will hear argument in three cases this week, the High Court's last sitting week for the year.

On Tuesday, 9 December 2014 the Court will hear the latest chapter in the ongoing saga of Plaintiff S297/2013 v Minister for Immigration and Border Protection.  The Plaintiff is a national of Pakistan who arrived in Australia by sea in May 2012 without a visa, whereupon he was placed in detention.  Initially prevented from lodging a valid application for a protection visa by s46A(1) of the Migration Act 1958 (Cth), he was later permitted to lodge such an application after a determination by the Minister under s46A(2) of the Act.  The Plaintiff’s application however was refused by a delegate of the Minister in February 2013. Upon a review of that refusal, the Refugee Review Tribunal remitted the Plaintiff’s visa application to the Minister for reconsideration, having found that the Plaintiff satisfied the visa criterion prescribed by s36(2)(a) of the Act. On 4 March 2014 the Minister made a determination under s85 of the Act that the maximum number of protection visas that could be granted in the 2013-2014 financial year was 2,773.  When that figure came to be reached (on 24 March 2014), the Plaintiff’s visa application still had not been determined and the Plaintiff remained in immigration detention.  On 20 June 2014, in Plaintiff S297/2013 v Minister for Immigration and Border Protection [2014] HCA 24 the High Court held the limit imposed on the number of protection visas was invalid. A writ of mandamus was issued to the Minister, commanding him to determine the Plaintiff’s application for a protection visa according to law.  On 17 July 2014 the Minister refused the Plaintiff’s application, on the ground that he did not satisfy the criterion imposed upon a grant of a protection visa in clause 866.226 of the Regulations, which provides “[t]he Minister is satisfied that the grant of the visa is in the national interest.”  Although the Minister refused to grant a protection visa, he immediately granted the Plaintiff a seven-day safe haven visa and a three-year humanitarian visa (both under s 195A(2) of the Act) and released him from detention.  The Minister then filed a notice certifying his compliance with the writ of mandamus. The Plaintiff now challenges the sufficiency of the Minister’s compliance with the writ of mandamus.  The Plaintiff contends that clause 866.226 is invalid, on the basis that it is inconsistent with ss501(3) and 501C of the Act.  An alternative basis of the alleged invalidity of clause 866.226 is that it departs from the scheme of protection visas provided for by various provisions of the Act, including ss36 and 501.

On Wednesday, 10 December 2014 the Court will hear argument in Lavin v Toppi, an appeal from the NSW Court of Appeal Lavin and Toppi were directors and equal shareholders of Luxe Studios Pty Ltd which had a loan from the National Australia Bank. By written guarantee each of Lavin, Toppi and others associated with them became guarantors of Luxe’s obligation to repay that loan.  When Luxe defaulted, the Bank sued the guarantors. Lavin reached an agreement with the Bank, which was set out in a “Deed of Release and Settlement”.  Under the Deed, Lavin paid the Bank an amount that was less than half of the balance owed to it by Luxe under the loan.  The Bank in return covenanted not to continue its claim against Lavin or to make a new claim against her.  Its claim against Lavin was then dismissed by consent. Toppi subsequently paid out the rest of Luxe’s debt to the Bank.  She then sued Lavin for an equitable contribution to the difference between the amounts they had each paid to the Bank. Lavin contended that the Deed had limited her liability as a co-surety such that her liability to the Bank was no longer co-ordinate with Toppi’s.  At first instance Rein J ordered Lavin to pay Toppi equitable compensation of $726,000, being half of the difference between the amount of Lavin’s payment to the Bank and the amount paid by Toppi.. The NSW Court of Appeal unanimously dismissed Lavin’s appeal, finding that none of the terms of the Deed amounted to a release of Lavin from her liability to the Bank.  There was merely a promise not to sue, which in no way constrained the rights of other guarantors as against Lavin.  Toppi was therefore entitled to equitable contribution from Lavin as a co‑surety.  The appeal raises a question of whether or not co-sureties are subject to co‑ordinate liabilities where one co-surety receives from the creditor a covenant not to sue, and the proceedings brought by the creditor against that co-surety are dismissed.  It also raises a question of whether equitable compensation is available where the co-surety derives no practical benefit from the payment made to the creditor because, by reason of the covenant not to sue, they could not be required to satisfy any remaining liability to the Bank.

On Thursday, 11 December 2014, the Court will hear argument in Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher.  Fletcher is one of the liquidators of the Octaviar group of companies. In the winding up of one of the companies (Octaviar Administration Pty Ltd), the relation-back day is 3 October 2008.  The liquidators faced a three-year time limit from that date, under s588FF(3)(a) of the Corporations Act 2001 (Cth) (“the Act”), in which to apply for orders under s588FF(1) of the Act in respect of any voidable transactions made by Octaviar Administration.  The liquidators applied for an order under s588FF(3)(b) of the Act to extend the time in which they could make any application under s588FF(1) from 3 October 2011 to 3 April 2012.  In doing so, the Liquidators identified certain entities which may have been parties to voidable transactions with Octaviar Administration.  Those entities did not include the Appellants.  On 19 September 2011 Ward J in the Supreme court of NSW made the order sought (“the extension order”).  On 3 April 2012 the liquidators commenced proceedings against the Appellants that included an application under s588FF(1).  The liquidators also applied to vary the extension order such that it would expressly permit the claim against the Appellants.  The Appellants meanwhile applied to set aside or vary the extension order such that the claim against them would not be permitted.  The question for determination by the High Court is does the power under s588FF(3)(b) to extend time for the making of an application under s588FF(1) with respect to voidable transactions only extend to transactions (or categories of transactions) that are identified as the subject of the proposed application.

This week in the High Court of Australia

The High Court of Australia will hear argument in three cases this week.

Starting Tuesday, 2 December 2014 the High Court will hear argument in State of Queensland v Congoo.  The case involves a native title application made by the Bar Barrum people in relation to land on the Atherton Tableland in Far North Queensland.  During the Second World War, extensive portions of that land were subject to five successive military orders made pursuant to the National Security Act 1939 (Cth) and its Regulations. The issue for determination is the effect of these orders on the Bar Barrum peoples’ claim to native title.

On Thursday, 4 December 2014 the Court will hear argument in Commissioner of the Australian Federal Police v Zhao.  The respondents in this case are husband and wife.  They husband has been charged with various offences relating to dealing with cash taken from illegal sex workers.  The wife has not been charged with any offence. Orders were made on the application of the AFP Commissioner to restrain the disposal of properties and other personal items owned by the respondents under the Proceeds of Crime Act 2002 (Cth).  The AFP Commissioner then sought orders for the forfeiture of the property.  The respondents sought a stay of the forfeiture proceedings ending the determination of the charges against the husband.  This was refused at first instance but granted on appeal.  At issue in the appeal is the effect of the earlier decision of the High Court in Lee v The NSW Crime Commission (2013) 302 ALR 363 and in Lee v The Queen (2014) 308 ALR 252 on the circumstances in which it is appropriate to stay forfeiture proceedings pending determination of criminal charges.

On Friday, 5 December 2014 the Court will hear argument in CMB v Attorney General for New South Wales.  This case considers who bears the onus of proof in an application under section 5D of the Criminal Appeal Act 1912 (NSW).  That section provides that the Attorney-General may appeal to the Court of Criminal Appeal against sentence, and that the Court of Criminal Appeal may in its discretion vary the sentence and impose such sentence as may seem proper.  The Court of Criminal Appeal held that it was the offender who bore the onus of establishing that the discretion should be exercised not to re-sentence him.