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Reviews of judgments


Every Issue

Cite as: (2009) 83(03) LIJ, p. 60


High Court Judgments

Cite as: (2009) 83(03) LIJ, p. 60

Administrative law

Collateral challenge in AD(JR) proceedings

In Priestley v Godwin [2008] HCA 59 (17 December 2008) French J dismissed an application for prerogative writs sought against judges of the Federal Court hearing an application.

Contract terms

Construction – requirement that payment be “punctual” – what constitutes waiver – residual category of unfairness

In Agricultural and Rural Finance Ltd v Gardiner [2008] HCA 57 (11 December 2008) the High Court considered loan agreements that required the borrower pay instalments “punctually” and found he had not. The Court considered a contention that the lender had “waived” the term which was expressed in terms of election, forbearance and renunciation. The High Court considered each of these and allowed the appeal by the lender: Gummow, Hayne, Kiefel jointly; Kirby J and Heydon J sim. In the joint judgment Gummow, Hayne and Kiefel JJ observed that the silence of the Court on the existence of a residual principle of “unfairness” in contract law was not to be taken as endorsement of it [98]. Appeal allowed.

Criminal law

Special leave – bail pending special leave – exceptional circumstances – delay

In Tilley v Q [2008] HCA 58 (19 December 2008) Hayne J refused bail to T who sought special leave to appeal against a decision to affirm a conviction which due to delay was delivered four years into his five-year term of imprisonment.

Family law

Property – right of wife to due administration of trust

In Kennon v Spry [2008] HCA 56 (3 December 2008) the High Court considered that the right of the wife to the due administration of a trust established by the husband where the children of the marriage were the beneficiaries was property in respect of which the Family Court could make orders under s79 of the Family Law Act 1975 (Cth). Appeal by wife allowed by majority: French CJ; Gummow with Hayne JJ; Kiefel J; contra Heydon J.


THOMAS HURLEY is a Victorian barrister, ph 9225 7034, email tvhurley@vicbar.com.au. 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 at http://www.austlii.edu.au.

Federal Court Judgments

Cite as: (2009) 83(03) LIJ, p. 61

Bankruptcy

Whether bankruptcy notice misled debtor

In Cumins v Deputy C of T [2008] FCAFC 185 (9 December 2008) a Full Court concluded a bankruptcy notice did not contain statements that would mislead the debtor, when an extension of time under s33(1)(c) of the Bankruptcy Act 1966 (Cth) should be given to dispute the bankruptcy notice and when arguments could be raised on appeal that were not raised below.

Biodiversity Act

Approval of controlled action – relevant matters

In Lansen v Minister for Environment and Heritage [2008] FCAFC 189 (17 December 2008) a Full Court allowed an appeal and concluded the minister had not considered the matters required by s134(4)(a) and (b) of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) before approving a controlled action.

Copyright

T-shirt design – where literary or artistic work – whether a dichotomy between idea and expression of idea

In Elwood Clothing Pty Ltd v Cotton On Clothing Pty Ltd [2008] FCAFC 197 (23 December 2008) a Full Court concluded a design on a T-shirt of words, numerals and logos was a drawing and thus an artistic and not a literary work. It also concluded that by taking a layout that reproduced a look and feel the respondents had taken an original artistic element and thus a substantial part of the artistic work. The Court considered whether there was a distinction between the idea and the expression of the idea.

Copyright

When a logo is a label

In Polo/Lauren Co LP v Ziliani Holdings Pty Ltd [2008] FCAFC 195 (18 December 2008) a Full Court considered when a logo was a “label” incorporated into the surface of an article so that reproduction of it was deemed by s44C of the Copyright Act 1968 (Cth) not to be infringement.

Freedom of information

Cabinet documents – purpose for which document prepared – findings of fact by AAT

In Fisse v Secretary, Department of Treasury [2008] FCAFC 188 (11 December 2008) a Full Court considered how the purpose for which a document claimed to have been prepared for Cabinet was to be proved under s36 of the FoI Act (Cth ).The appellant sought access to documents concerning amendments to the Trade Practices Act. Before the AAT the respondent relied on correspondence and the evidence of a public servant familiar with the operation of Cabinet to establish the purpose for which the documents were prepared. The Full Court concluded this gave the AAT evidence from which it could find the purpose for which the documents were prepared and this finding of fact by the AAT could not be disturbed.

Income tax

Income – damages to corporation for defamation

In C of T v Sydney Refractive Surgery Centre Pty Ltd [2008] FCAFC 190 (18 December 2008) a Full Court concluded damages paid to a corporation for injury to business reputation by defamatory publications were not assessable as income.

Industrial law

Demand for wages during industrial action – penalty for minor contravention of WR Act – declarations

In Cruse v Multiplex Ltd [2008] FCAFC 179 (5 November 2008) a Full Court by majority allowed an appeal against a decision of a single judge who declined to impose a penalty on a union for demanding payment for workers who took industrial action following a death on a building site. He found the shop stewards who arranged the action were not aware it was unlawful. The Full Court concluded a penalty was appropriate. Consideration of when a court should make a declaration that reflects an agreement of the parties rather than the court’s conclusion. Appeal allowed.

Patents

Infringement – terms in claims not defined – disagreement by experts as to terms

In Nufarm Ltd v Jurox Pty Ltd [2008] FCAFC 180 (11 November 2008) a Full Court dismissed an appeal against a finding that a patent for veterinary medicine had not been infringed where the respondent’s product was arguably within a class of product excluded by examples in the patent.

Patents

Nature of opposition proceedings – appeal to Federal Court – evidence

In Commissioner of Patents v Sherman [2008] FCAFC 182 (20 November 2008) a Full Court considered whether in an appeal against a decision of the Commissioner in opposition proceedings the evidence that was before the Commissioner was irrelevant. Consideration of the nature of the appeal to the Federal Court under s60(4) Patents Act.

Practice

Vexatious proceedings

In Manolakis v Carter [2008] FCAFC 183 (21 November 2008) a Full Court reviewed authority as to when a proceeding should be dismissed as frivolous, vexatious or an abuse.

Private international law

Ownership of film – Australian copyright – proceedings in American courts

In TS Production LLC v Drew Pictures Pty Ltd [2008] FCAFC 194 (19 December 2008) a Full Court set aside orders of the primary judge to stay a proceeding in the Federal Court concerning ownership of copyright in Australia of a film. The Full Court decided the fact that the parties were in litigation in America about ownership of the film did not mean the Australian rights were not to be decided. Anti-suit order to restrain the American proceedings not granted.

Superannuation

Military superannuation – date death benefit payable

In Nowicka v Superannuation Complaints Tribunal [2008] FCAFC 191 (19 December 2008) a Full Court considered when a death benefit under the Military Superannuation and Benefits Act 1991 (Cth) was payable and the consequences of delay in payment.

Taxation

Powers of FCT – garnishee – power to require third party pay to FCT money due to creditor

In C of T v Bruton Holdings Pty Ltd (In Liq) [2008] FCAFC 184 (1 December 2008) a Full Court considered the operation of s260-5 of Schedule 1 of the Taxation Administration Act 1953 (Cth) and concluded this authorised the Commissioner to require a third party (a firm of solicitors) holding trust funds on behalf of a taxpayer to pay them to the Commissioner.

Taxation

Review of decisions

In Perdikaris v Deputy C of T [2008] FCAFC 186 (5 December 2008) a Full Court concluded a decision by the Commissioner that money had not been deducted by a PAYE or PAYG employer as claimed by the employee/taxpayer was not amendable to review under the AD(JR) Act.

Trade practices

Misleading conduct – “was/now” prices in catalogue

In ACCC v Prouds Jewellers Pty Ltd [2008] FCAFC 199 (23 December 2008) a Full Court generally accepted that a consumer confronted by a catalogue that contrasted “was/now” prices would be misled into thinking the items had a usual price, the difference was a saving even where the items had not previously been offered for sale or larger savings were available by discounting.

Trade practices

Tort – misleading conduct and passing off

In Hansen Beverage Co v Bickfords (Aust) Pty Ltd [2008] FCAFC 181 (14 November 2008) a Full Court concluded the primary judge had erred in considering whether an energy drink had acquired a reputation in Australia by reference to a mark used overseas so that use of the mark in Australia by a competitor was misleading.

THOMAS HURLEY is a Victorian barrister, ph 9225 7034, email tvhurley@vicbar.com.au. The full version of these judgments can be found at http://www.austlii.edu.au.

Supreme Court judgments

Cite as: (2009) 83(03) LIJ, p. 63

Equitable set-off

Re Interesting Developments Pty Ltd; De Simone Nominees Pty Ltd v Pital Business Pty Ltd [2009] VSC 12 (unreported, 21 January 2009, No 8250/2007, Robson J).

Pital Business Pty Ltd (Pital) sought to enter judgment pursuant to terms of settlement entered into between it and the respondents, Giuseppe De Simone Nominees and others.

The respondents sought to resist judgment, asserting a cross-claim by way of equitable set-off based on the alleged breach by Pital of certain warranties said to have been given by Pital regarding its entitlement to certain assets under a joint venture agreement.

For the purpose of the argument, Robson J assumed the correctness of the respondents’ contention. His Honour then said (at [30]-[33]):

“A set-off is said to exist where a defendant, in answer to a plaintiff’s claim, is able to plead successfully that a countervailing claim, which he has against the plaintiff, absolves him, wholly or partially, from liability to the plaintiff. At common law, the right of set-off was unknown and was established by statute. At law, a claim can not ground a plea for set-off unless it is liquidated. Equity, however, allows a set-off in certain circumstances as a defence to a legal or equitable claim. The authors of Meagher, Gummow and Lehane’s Equity Doctrines and Remedies assert that it is tolerably clear that in equity a claim for an unliquidated amount is sufficient to establish an equitable set-off. They say that in equity the set-off must go to the root of, be essentially bound up with and ‘impeach’ the title of the plaintiff. In Indrisie v General Credits Ltd, the Full Court of the Supreme Court of Victoria comprising Young CJ, Crockett and Nicholson JJ held that:

‘In order to rely upon a cross-claim as an equitable set-off, there must be such a nexus between the claim and cross-claim that the cross-claim can be said to impeach the plaintiff’s claim’.

“In Meagher, Gummow and Lehane’s Equity Doctrines and Remedies, the authors say:

‘The defendant, in order to make out an equitable set-off, had to establish that he possessed some equitable right to be protected from the plaintiff’s claim’.

“The authors assert that the most famous exposition of this doctrine is that of Lord Cottenham LC in Rawson v Samuel. This case is relied upon by the respondents in support of their equitable set-off defence. In that case, the defendant to a suit of law sought to restrain the plaintiff at law from executing on an action for damages until an account of complicated dealings between the parties had been taken. It was uncertain whether, on the taking of that account, the plaintiff at law would end up owing any money to the defendant at law or rather the defendant at law would end up owing money to the plaintiff. The Lord Chancellor said:

‘It was said that the subjects of the suit in this Court, and of the action at law, arise out of the same contract; but the one is for an account of transactions under the contract, and the other for damages for the breach of it. The object and subject-matters are, therefore, totally distinct; and the fact that the agreement was the origin of both does not form any bond of union for the purpose of supporting an injunction.

‘The question then comes to this: Is the Defendant, in a suit in this Court for an account, the balance of which I will suppose to be uncertain, to be restrained from taking out execution in an action for damages against the other party to the account until after the account shall have been taken, and it shall thereby have been ascertained that he does not owe to the Defendant at law, upon the balance of the account, a sum equal to the amount of the damages? If so, it cannot be open upon the ground of set-off, because there is not at present any balance against which the damages can be set off; nor can it be because the damages are involved in the account, for certainly they can form no part of it.

‘We speak familiarly of equitable set-off, as distinguished from the set-off at law; but it will be found that this equitable set-off exists in cases where the party seeking the benefit of it can shew some equitable ground for being protected against his adversary’s demand. The mere existence of cross-demands is not sufficient; Whyte v O’Brien [(1824) 1 Sim & St 551; 57 ER 218]; although it is difficult to find any other ground for the order in William v Davies [(1829) 2 Sim 461; 57 ER 860], as reported. In the present case, there are not even cross-demands, as it cannot be assumed that the balance of the account will be found to be in favour of the Defendants at law. Is there, then, any equity in preventing a party who has recovered damages at law from receiving them, because he may be found to be indebted, upon the balance of an unsettled account, to the party against whom the damages have been recovered? Suppose the balance should be found to be due to the plaintiff at law, what compensation can be made to him for the injury he must have sustained by the delay? The jury assess the damages as the compensation due at the time of their verdict. Their verdict may be no compensation for the additional injury which the delay in payment may occasion. What equity have the Plaintiffs in the suit for an account to be protected against the damages awarded against them? If they have no such equity, there can be no good ground for the injunction.’

“The applicability of this test was affirmed by Gummow J in Re Just Juice Corp Pty Ltd. See also the observations of Tadgell J in Eagle Star Nominees Limited v Merril. In Galambos v McIntyre Woodward J, sitting as a judge of the Supreme Court of the Australian Capital Territory, examined this principle of equitable set-off and in particular the decision in Rawson v Samuel. Woodward J concluded the prerequisites of an equitable set-off to be:

‘(i) Clear cross-claims for debts or damages, which

(ii) were so closely related as to the subject-matter that the claim sought to be set-off impeached the other in the sense that it made it positively unjust that there should be recovery without deduction’.” [endnotes omitted]

It could not be said that the warranties given by Pital, the breach of which was disputed by the respondents in proceedings before the New South Wales Supreme Court, could give rise to an equitable set-off sufficient to deny Pital judgment. The claims for breach of warranty were contingent. Pital was entitled to judgment.


PROFESSOR GREG REINHARDT is executive director of the Australasian Institute of Judicial Administration and a member of the Faculty of Law at Monash University, ph 9600 1311, email Gregory.Reinhardt@law.monash.edu.au. The numbers in square brackets in the text refer to the paragraph numbers in the judgment. The full version of this judgment can be found at http://www.austlii.edu.au/databases.html.

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