Monday, December 8, 2014

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 cosurety.  The appeal raises a question of whether or not co-sureties are subject to coordinate 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.

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