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Reviews of judgments

Every Issue

Cite as: (2003) 77(7) LIJ, p.63

High Court Judgments

Cite as: (2003) 77(7) LIJ, p.63

By Thomas Hurley

Administrative law – constitutional writs – jurisdictional error – RRT – failure to appreciate claim made by applicant.

  • Dranichnikov v MIMA [2003] HCA 26 (8 May 2003).

A Full Court concluded, by majority, that the RRT had denied the appellant procedural fairness when it failed to appreciate that his claim for refugee status was based on fear as a businessman in Russia who exposed corrupt practices rather than being a “Russian businessman”: Gummow J with Callinan J; Kirby J; Hayne J; contra Gleeson CJ. The majority made absolute an order nisi in the original jurisdiction of the Court but dismissed the appeal from a Full Court of the Federal Court limited by the former provisions in Part 8 of the Migration Act. Constitutional writ issued.

Appeal – review of findings of fact – issue not raised at appeal – when retrial appropriate.

  • Fox v Percy [2003] HCA 22 (30 April 2003).

The appellant was riding a horse in the company of another horse rider (M) in April 1992 when the horses were hit by a car driven by the respondent. In an action by the appellant for damages for personal injuries, the primary judge found the respondent had negligently been on the incorrect side of the road. The primary judge based this conclusion on the evidence of both the appellant and M and the evidence of a traffic engineer who explained why the skid marks on the respondent’s correct side of the road did not mean the accident did not occur on the other side of the road. The NSW Court of Appeal, by majority, allowed an appeal. It held the skid marks were incontrovertible. It declined to order a retrial. The appellant’s appeal to the High Court was dismissed: Gleeson CJ with Gummow, Kirby JJ; McHugh J; Callinan J. The Court considered when the advantages of trial judges on questions of credibility yielded to facts which were almost “incontrovertible” [37]. The High Court also concluded there was no error in failing to order a retrial [46]. Appeal dismissed.

Criminal law – inquiry after conviction – whether doubt arises as to guilt.

  • Eastman v DPP (ACT) [2003] HCA 28 (28 May 2003).

The High Court agreed with separate judgments given by McHugh J and Heydon J that the power given in s475 of the Crimes Act 1900 (ACT) to hold an inquiry where after conviction there was any doubt or question arising as to his guilt, authorised an inquiry into the question of whether an accused person had been fit to plead. Appeal against contrary construction by Full Court of the Federal Court allowed.

Criminal law – offences – fraudulent application of company by company officer.

  • Macleod v Q [2003] HCA 24 (7 May 2003).

The High Court considered defences made by a company officer to a charge under s173 of the Crimes Act 1900 (NSW) that as a director the appellant had fraudulently taken or applied for his own benefit property of the company. The Court concluded that a defence of “consent” on the part of the company was inappropriate [30], [93] and the nature of the term “fraudulent”[38], [100], [129]. The High Court concluded a claim of “right” was not made out and was distinct from a claim of honest belief [46], [107], [133]: Gleeson, Gummow, Hayne JJ, McHugh J, Callinan J. Callinan J observed the decision of R v Roffel [1985] VR 511 was overruled. Appeal dismissed.

Criminal law – wilful murder – alternative verdicts of murder and manslaughter – directions.

  • Stanton v Q [2003] HCA 29 (29 May 2003).

The High Court considered how a jury should be directed on a charge of wilful murder where alternative verdicts of murder and manslaughter may have been available.

Insurance – obligations of insured – disclosure – whether insured required to disclose decision “probably not” to renew policy.

  • Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd [2003] HCA 25 (8 May 2003).

The High Court concluded, by majority, that an insured who renewed a policy of insurance with an insurer was not obliged by s21 of the Insurance Contracts Act 1984 (Cth) to disclose to the existing insurer a decision “probably not” to renew the policy afterwards: McHugh, Kirby, Callinan JJ; contra Gummow, Hayne JJ. The majority concluded the commercial decision of the insured was not relevant to a decision by the insurer to “accept the risk” within s21(1) (a), (2) [32], [35]. The minority concluded this factor was relevant to the decision of the insurer being the fulcrum on which the provisions turned [70]. The Court agreed that the NSW Court of Appeal had erred in finding an alleged misrepresentation was “fraudulent” [37], [94]. Appeal allowed.

Stamp duties (Qld) dutiable documents – transfer pursuant to contract – duty paid on contract – whether transfer liable to duty.

  • Trust Company of Australia Ltd v Commissioner of State Revenue [2003] HCA 25 (1 May 2003).

A company (Cromwell) was licensed to engage in activities under the Managed Investments Act 1998 (Cth). A condition of its licence required Cromwell not to hold property of a registered scheme and to appoint another person to hold such properties. Cromwell appointed the appellant as “custodian” of a particular scheme. In November 1999 Cromwell (as purchaser) entered into a contract to purchase land from a vendor. The contract referred to roles of the appellant as “custodian”. The contract provided for the vendor to be paid on completion of a transfer from the vendor to the appellant (custodian). The respondent assessed both the contract of sale (between the vendor and Cromwell) and the transfer (between the vendor and the appellant to duty under the Stamp Act 1894 (Qld). The Queensland Court of Appeal answered questions in favour of the validity of the assessment. An appeal by the appellant was allowed by the High Court by majority: Gleeson CJ; Gummow, Hayne JJ; Callinan J; contra Kirby J. The majority concluded the reference in the legislation to “the purchaser” was sufficiently flexible to identify the party who was in substance “the purchaser” under the entire transaction. Appeal allowed; questions answered accordingly.

THOMAS HURLEY is a member of the Victorian Bar. The numbers in square brackets refer to the paragraph numbers in the judgment. The full version of these judgments can be found on the AustLII website

Federal Court Judgments

Cite as: (2003) 77(7) LIJ, p.65

By Thomas Hurley

Administrative law – bad faith – poor standard of decision making.

  • WAFV of 2002 v RRT [2003] FCA 16 (17 January 2003).

French J considered, per dicta, whether “bad faith” in administrative law was tied to questions of moral turpitude and extended to poor or erratic decision-making.

Administrative law – constitutional writ – application of High Court decision.

  • Scargill v MIMIA [2003] FCAFC 116 (3 June 2003).

A Full Court concluded that a correct understanding of the criterion for a visa was a condition precedent to the valid exercise of jurisdiction by the MRT. The Court concluded that where the MRT misunderstood the concept of “usually resident”, it made a jurisdictional error as explained by the High Court and no question of “reconciling” types of errors arose.

Bankruptcy – void transactions – payment to spouse.

  • Official Trustee in Bankruptcy v Lopatinsky [2003] FCAFC 109 (30 May 2003).

A Full Court considered whether payments by a bankrupt of more than one-half interest in the matrimonial home to a spouse pursuant to an informal agreement between them was pursuant to an implied agreement by the wife to forebear to sue.

Constitutional law – implied terms – freedom of association – registration of political parties.

  • Mulholland v Australian Electoral Commission [2003] FCAFC 91 (13 May 2003).

A Full Court concluded that provisions in the Commonwealth Electoral Act 1918 (Cth) providing for the registration of political parties were a burden on political communication because they gave privileges to registered political parties [22]. The Court concluded the burden was reasonably adapted to a legitimate end therefore lawful within Lange v ABC (1997) 189 CLR 520 [40].

Federal Court – jurisdiction – whether claim in associated jurisdiction survives dismissal of primary claim.

  • Petrotimor Companhia di Pertoleos SARL v C of A [2003] FCAFC 83 (6 May 2003).

A Full Court concluded that once it was accepted a claim asserting a “matter” under the Constitution brought under s39B(1)(a) of the Judiciary Act was dismissed, the Court had no jurisdiction to entertain the proceeding further in the absence of a common factual basis of claims in either its accrued or associated jurisdiction. In [2003] FCAFC 82 the same Full Court refused to stay other orders pending an application for special leave to appeal.

Federal Court – proceedings by minor where Minister guardian.

  • SFTB v MIMIA [2003] FCAFC 108 (27 May 2003).

A Full Court considered whether the RRT made a jurisdictional error in refusing a claim for refugee status by a minor for whom the respondent was guardian by virtue of the Immigration (Guardianship of Children) Act 1946 (Cth).

Migration – notice of adverse material.

  • NATL v MIMIA [2003] FCAFC 112 (28 May 2003).

A Full Court concluded the requirements of s424A of the Migration Act had been satisfied where the substance of adverse material was brought to the notice of the applicant.

Migration – privative clause.

  • Koulaxazov v MIMIA [2003] FCAFC 75 (2 May 2003).

A Full Court considered, per dicta, the role of the privative clause in s474 of the Migration Act following the decisions of the Federal Court in NAAV v MIMIA (2002) 193 ALR 449 and the High Court in Plaintiff S157/2002 v C of A (2003) 195 ALR 24. Madgwick J observed that the reasoning of NAAV could not stand after the decision of the High Court [13]. Gyles J [14] agreed with Conti J who concluded that it would be unsafe to deny s474 operation and followed the decision of Gyles J in Lobo v MIMIA [2003] FCA 144.

Migration – refugees – specific claims of persecution.

  • VKAV v MIMIA [2003] FCAFC 87 (9 May 2003).

A Full Court concluded that a person who made claims that he generally feared persecution in Sri Lanka had not made “specific claims” of persecution and the application was not valid.

Migration – refugees – whether RRT failed to consider integer of claims – psychological harm.

  • SCAT v MIMIA [2003] FCAFC 80 (30 April 2003).

A Full Court concluded the RRT and the primary judge had erred in failing to appreciate a claim for potential psychological harm could found a claim for persecution. The Court concluded, by majority, that failing to appreciate this integer of the claim constituted a jurisdictional error [29].

Migration – special need relative.

  • Chow v MIMIA [2003] FCAFC 88 (9 May 2003).

A Full Court concluded that neither the MRT nor the primary judge had erred in concluding the appellant had not established a “permanent or long-term need” for “substantial and continuing assistance” as required by the relevant visa class.

Migration – special need relative – need for assistance.

  • Chow v MIMIA [2003] FCAFC 88 (9 May 2003).

A Full Court considered no error was established in the meaning given by the MRT to the regulation identifying “special need relatives”.

Migration – unpersuasive reasoning – whether jurisdictional error.

  • VGAO of 2002 v MIMIA [2003] FCAFC 68 (23 April 2003).

A Full Court concluded that unpersuasive factual conclusions and reasoning in a decision of the RRT did not cross the line between failing to deal with claims made and failing to give what the Court thinks should be appropriate weight or consideration to privative and logically relevant material [56].

Patents – application for extension of method claim patent – whether product itself within scope of patent.

  • Prejay Holdings Ltd v Commissioner of Patents [2003] FCAFC 77 (30 April 2003).

A Full Court considered whether a claim for a pharmaceutical substance fell within the scope of the claims made in a patent specification for a patent protecting a method of production.

Sales tax – whether yacht applied to own use.

  • C of T (Cth) v Baxter [2003] FCAFC 119 (30 May 2003).

A Full Court considered whether the purchase of a yacht was exempt from tax under the Sales Tax Assessment Act 1992 (Cth) because it was applied to the owner’s own use where it was the subject of a lease entered into before it arrived in Australia.

Trade practices – trade and commerce – documentary film.

  • Hearn v O’Rourke [2003] FCAFC 78 (2 May 2003).

A Full Court concluded that the conduct of the respondent film director in obtaining interviews from young persons for a proposed documentary about racism could, in a strike-out context, be found to be “in” trade or commerce as explained in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594.

Veterans’ affairs – review – procedure – notice to proceed.

  • Johnson v VRB [2003] FCAFC 89 (9 May 2003).

By s155AA(4), the Veterans’ Entitlements Act 1986 (Cth) provided the principal member of the VRB was to give an applicant a notice at the end of the standard review period to establish the applicant was ready to proceed. A Full Court concluded the notice could be given a reasonable time after the expiry of the relevant period [48].

THOMAS HURLEY is a member of the Victorian Bar. The numbers in square brackets refer to the paragraph numbers in the judgment. The full version of these judgments can be found on the AustLII website

Supreme Court Judgments

Cite as: (2003) 77(7) LIJ, p.67

By Greg Reinhardt

Bullock and Sanderson orders

  • State of Victoria v Horvath (No 2) [2003] VSCA 24 (unreported, 4 April 2003, Nos 5304-5313/2001, Winneke P, Chernov and Vincent JJA).

In the January-February 2003 LIJ (page 54), I wrote of the decision of the Court of Appeal in State of Victoria v Horvath & Ors [2002] VSCA 177. Readers will recall that the Court of Appeal held that the trial judge had been wrong to hold that one Christensen, who had been responsible for the planning and execution of a police raid, was liable in negligence and that the damages awarded against him for negligence should be transferred to the State of Victoria (the State). The damages awarded against the police officers who carried out the raid, for injuries resulting from intentional torts, could not be transferred to the State. The individual police officers remained personally liable to the plaintiffs.

Questions of liability for costs were reserved by the Court for later consideration, but on the basis that counsel would liaise with each other in an endeavour to resolve those questions.

The plaintiffs argued that any liability for the costs of the successful defendants should be assumed by the unsuccessful defendants (the police officers who had carried out the raid). They sought a Sanderson order (derived from Sanderson v Blyth Theatre Company [1903] 2 KB 533), the effect of which would be to absolve the plaintiffs from any liability for the successful defendants’ costs so as to impose that liability directly on the unsuccessful defendants. The successful defendants argued that the appropriate order was a Bullock order (derived from Bullock v The London Omnibus Company [1907] 1 KB 264). Such an order would not absolve the plaintiffs from a liability to pay the successful defendants’ costs, but would provide the plaintiffs with an indemnity for those costs as against the unsuccessful defendants.

The successful defendants argued that there was a real risk of impecuniosity in the unsuccessful defendants; if a Sanderson order were made, then they might be left with an order for costs which could not be enforced. Conversely, of course, if a Bullock order were made, the risk that the order for costs could not be met by reason of the unsuccessful defendants’ alleged impecuniosity would be on the plaintiffs.

The Court of Appeal examined the principles on which Bullock and Sanderson orders are made. Vincent JA noted:

“In general terms, a plaintiff who seeks to have the losing defendant pay the costs of the successful defendant pursuant to a Bullock or a Sanderson order must establish that, in the circumstances of the case, it would be reasonable and just for such an order to be made – see, for example, Sanderson, Reid and Gould v Vaggelas. Additionally, a court will ordinarily not make such an order unless a number of requirements are satisfied. For example, a costs order in the Bullock or Sanderson form will not be made if the plaintiffs’ claims against the two or more defendants are not interdependent or are not, in essence, alternative claims. Thus, for example, in Norwest Refrigeration Services Pty Ltd v Bain Dawes (WA) Pty Ltd, the majority refused to make a Bullock order requiring the unsuccessful defendant (the Co-operative) to indemnify the plaintiff against the costs it was required to pay to the successful defendant (the insurer). Their Honours considered that the plaintiff’s unsuccessful claim on the policy was ‘a straightforward action which was not interdependent with or in any real sense alternative to the claim against the Co-operative’. See also in this regard Bankamerica. It is plain enough, we believe, that in this case this requirement is satisfied because the plaintiffs’ essential claim against the State was interdependent with, and was essentially alternative to, its claim against the police defendants. Unless the plaintiffs established that the police defendants had acted tortiously as alleged, the question whether the State was liable pursuant to s123 of the Act (or at all) in respect of that conduct would not have arisen for consideration.

“If that requirement is satisfied, a plaintiff who seeks a Bullock or a Sanderson order must also ordinarily show that it was reasonable for him to have joined the successful defendant and that the conduct of the unsuccessful defendant was such as to make it just to require him to indemnify the successful defendant.” [9]-[10] (endnotes omitted)

There are thus two principal requirements for the making of either a Bullock or a Sanderson order. It was reasonable for the plaintiffs to have joined the State of Victoria as a defendant, particularly because the police defendants had joined the State as a third party. Moreover, it is the Court’s policy to encourage parties to join in the one proceeding all defendants who might be jointly, severally or alternatively liable, so that all matters can be dealt with in the one proceeding. [13]

Whether the appropriate order was a Bullock or a Sanderson order
Vincent JA said:
“Where the court concludes that the losing defendant should bear the costs of the successful defendant, it is entirely within its discretion, subject to it being exercised judicially, whether it makes the relevant costs order in the Bullock or Sanderson form. See, for example, Sanderson, Mayer v Harte, Bankamerica and Vucadinovic. Ordinarily, there is no practical difference between the two forms of order, but that is usually not so where the losing defendant is insolvent or, as here, where there is at least a real risk that he is impecunious. In those circumstances, it seems that the insolvency (or the impecuniosity) of the losing defendant is taken into account, as part of the overall circumstances, for the purpose of determining which form of costs order should be made as a matter of fairness. In that context, it would ordinarily be appropriate to have regard to the comparative hardships that will be experienced by the relevant parties from one or other form of the costs order. But that is only one of the matters to be considered, along with factors such as the relevant conduct of the losing defendant in relation to the proceeding and whether the plaintiff had acted reasonably in joining the successful defendant to the proceeding as well as other matters relevant to determining what form of order would be just in the circumstances.” [15] (endnotes omitted)

His Honour then considered the cases on the effect of impecuniosity of unsuccessful defendants on the making of a Bullock as opposed to a Sanderson order and concluded:

“In the present case there is some indication that the police defendants would be unable to meet any substantial costs order that might be made against them. Hence, their relative impecuniosity becomes a relevant factor in determining what form of costs order should be made here. It seems plain enough that, given the circumstances, the State will suffer unfairness if its trial costs were to be the subject of a Sanderson order. Such a costs order will effectively compel it to bear its own costs notwithstanding that it ultimately succeeded in the proceeding. On the other hand, there would be unfairness to the plaintiffs if they were required to pay the State’s trial costs pursuant to an order in the nature of a Bullock order. In those circumstances, they would not only have to bear their own costs of the trial, but they would have to pay those of the State without being able to recoup them from the police defendants. Be that as it may, as has already been explained, these matters are only some of the factors which go to the resolution of the immediate question. The other matters include the fact that it was reasonable for the plaintiffs to have joined the State as a defendant in the proceedings, that such a course was effectively precipitated by the police defendants and that the plaintiffs have succeeded in establishing their claim after a closely contested and long trial, the bulk of which was taken up with the examination of the impugned conduct of the police defendants. In all of the circumstances, it seems to us that the requirements of justice and reason would be best met by a costs order in the Sanderson form which requires the State’s trial costs to be paid directly by the police defendants.” [19]

It would follow that the risk of impecuniosity of the unsuccessful defendants (the police defendants) would fall on the State rather than the plaintiffs.

The Court then dealt with arguments in relation to the proper basis on which the plaintiffs’ costs should be taxed and held that the trial judge’s order that costs be taxed on a solicitor and client basis and paid by the police defendants should be allowed to effectively stand.

Re-establishing time as of the essence in contracts for the sale of land

  • Greydae Pty Ltd and Robertson v Malinane Pty Ltd and Registrar of Titles [2003] VSCA 27 (unreported, 10 April 2003, No 4549/2001, Winneke P, Charles and Eames JJA).

A contract for the sale of land was governed by the provisions of Table A of the Transfer of Land Act 1958 (Vic) which include clauses 5 and 6, so far as is relevant, as follows:

“5. Time shall be of the essence of this contract. However, if either party defaults under this contract the offended party shall not be entitled to exercise any of his rights arising out of the default other than his right to sue for money then owing until he has served the offender with a written notice specifying the default and his intention to exercise his rights unless the default is remedied and the proper legal costs occasioned by the default and any interest demanded are all paid within fourteen days of service of the notice and the offender fails to comply with the notice.

“6(1). Where the default has been made by the purchaser and is not remedied all monies unpaid under this contract shall become immediately payable and recoverable at the option of the vendor. (2) If the notice also states that unless the default is remedied the contract will be rescinded pursuant to this condition then if the default is not so remedied the contract shall be thereupon rescinded ... ”

As the result of extensions given by the vendor to the purchaser in relation to the completion of the contract, time had ceased to be of the essence in relation to the contract by 22 December 2000. On that date, the vendor’s solicitors gave the purchaser’s solicitors a rescission notice (in fact this was the third such notice which had been given).

The Court of Appeal agreed with the trial judge that the vendor was entitled to reinstate the essentiality of time by serving the notice of rescission on 22 December 2000.

The Court applied the reasons of Pape J in Thornton v Bassett [1975] VR 407 at 423ff; cf Loughridge v Lavery [1969] VR 912, 922, Adam J. The obligation to complete the contract remained notwithstanding the vendor’s earlier waiver of essentiality. By 22 December, the delay in completion was so unreasonable as to entitle the vendor to reinstate time as of the essence.

The notice given by the vendor to the purchaser on 22 December was sufficient to reinstate time as of the essence.

The plaintiff/ appellant purchaser was not, therefore, entitled to specific performance. The appeal was dismissed.

PROFESSOR GREG REINHARDT is executive director of the Australian Institute of Judicial Administration and a member of the Faculty of Law at Monash University. The numbers in square brackets in the text refer to the paragraph numbers in the judgment. The full version of these judgments can be found on the AustLII website


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