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Federal Court judgments

Federal Court judgments

By Dan Star QC

Courts Judgment Practice & Procedure Torts 

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Administrative law and corporations law

Judicial review of decision of Australian Government Takeovers Panel – allegation of apprehended bias against president of the Panel

In Aurora Funds Management Ltd v Australian Government Takeovers Panel (Judicial Review) [2020] FCA 496 (17 April 2020) the Court dismissed an application for judicial review of a decision of the Australian Government Takeovers Panel (Panel). The applicant had sought judicial review of the Panel’s finding that the applicant and another listed entity (Keybridge Capital Ltd (Keybridge)) were “associates” within the meaning of s12(2) of the Corporations Act 2001 (Cth) and its determination that there were unacceptable circumstances under s657A of the Corporations Act 2001

An additional ground raised was a reasonable apprehension of bias in relation to the sitting president of the Panel, Ian Jackman SC. The issues before the Panel were the extent to which the applicant and Keybridge were “associates” and whether the degree of influence exercised over them by a Mr Bolton was itself a separate basis for concluding that there were “unacceptable circumstances”. It was based on events largely between October 2016 and June 2017. Many years earlier, Mr Bolton was involved in a commercial dispute that led to a proceeding in the Supreme Court of New South Wales (the Supreme Court proceeding) against a number of defendants over the affairs of a unit fund on the ASX, the Brookfield Prime Property Fund (the fund). This had nothing to do with the parties or persons before the Panel, however Mr Bolton was a common integer in both. In 2015, a company associated with Mr Bolton commenced the Supreme Court proceeding against a number of defendants over the affairs of the fund including its trustee, Brookfield Multiplex Capital Management Ltd (Brookfield). Brookfield retained King & Wood Mallesons (KWM) to act on its behalf in the Supreme Court proceeding and in November 2015 they delivered a first brief in the proceeding to Mr Jackman SC. The Court found that Mr Jackman SC in fact did no work on the first brief (at [69]-[70]). Mr Jackman SC was contacted by the Panel in late May 2017 to see if he would be available to form part of a panel. Mr Jackman SC’s evidence was that the Supreme Court proceeding simply did not cross his mind in May 2017 when the Panel contacted him (at [74]). The Panel’s decision was on 14 June 2017 (at [76]) and its decision effectively rejected sworn evidence of Mr Bolton (at [85]). In February 2019, KWM delivered a fresh second brief in the Supreme Court proceeding to Mr Jackman SC and he performed work pursuant to that retainer (at [81]). On the facts as Court assumed them to be, Mr Jackman SC was briefed for Brookfield in the Supreme Court proceeding while serving on the Panel but he had never done any work on the brief and he had no knowledge of the role or company associated with Mr Bolton in that proceeding (at [86]).

The Court applied the accepted principles, in particular the test from Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 (at [87]-[88]). The Court held that the test for apprehended bias in Ebner was not satisfied. Perram J stated at [98]: “The result of the Panel’s deliberations could have no impact on the issues in the Supreme Court Proceeding and Mr Jackman SC had no knowledge either that Mr Bolton would be called in the Supreme Court Proceeding or any proposal to traduce his credit should he do so. Consequently, an apprehension of bias does not arise”. 

Appeal and tort law

Principles that guide appellate review of findings of fact 

In Jadwan Pty Ltd v Rae & Partners (A Firm) [2020] FCAFC 62 (9 April 2020) the Full Court dismissed an appeal challenging the trial judge’s dismissal of the appellant’s applications against the respondent solicitors seeking damages for alleged professional negligence. The appellant had sought damages against its former solicitors for alleged professional negligence arising out of the revocation of its approval under the National Health Act 1953 (Cth) as a Commonwealth-funded nursing home by a delegate of the Minister for Health and Family Services.

The appeal judgment is lengthy and deals with numerous issues. There was a dispute between the parties concerning the principles applicable to the review on appeal of the findings of fact made by the trial judge that were challenged by the appellant (at [402]-[415]). The Full Court considered the relevant well-known authorities such as, among many others, Devries v Australian National Railways Commission, Fox v Percy and Robinson Helicopter Company Inc v McDermott. Bromwich, O’Callaghan and Wheelahan JJ observed that statements of principle in appellate judgments about these matters (such as non-interference of fact findings in the absence of “incontrovertible facts or uncontested testimony”) should not be treated as if they were provisions of a statute (at [411]).

Costs

Maximum costs order under rule 40.51

In Houston v State of New South Wales [2020] FCA 502 (17 April 2020) the Court dismissed an interlocutory application seeking a maximum costs order under r40.51 of the Federal Court Rules 2011 (Cth). Rule 40.51(1) provides: “A party may apply to the Court for an order specifying the maximum costs as between party and party that may be recovered for the proceeding”. The applicant sought an order that the maximum party and party costs which the applicant and respondent could recover from the other is nil. 

The relevant principles guiding the exercise of the Court’s discretion under r40.51 were not in dispute (at [17]). Griffiths J said at [19]: “It has been acknowledged in various cases relating to r40.51 that the principal purpose of the provision (and its predecessor, order 62A) was not so much a desire to limit the exposure of a respondent to an adverse costs order in complex and lengthy commercial litigation, but rather with concerns as to access to justice, public interest, and a desire to limit the costs of all parties, particularly in less complex and shorter cases . . .” 

In dismissing the application, the Court discussed the concept and relevance of whether the litigation was in the public interest (at [22]-[30]).

Representative proceedings

Application for production of respondent’s insurance documents 

In Evans v Davantage Group Pty Ltd (No 2) [2020] FCA 473 (9 April 2020) the Court refused the applicant’s application for production of various insurance documents that may respond to any of the applicant’s and group members’ claims made against the respondent. The applicant relied on ss33ZF(1), 37M and 37P of the Federal Court of Australia Act 1976 (Cth) (FCA Act). The insurance documents were sought for laudable objectives, in particular so that the applicant better inform himself on a range of issues such as whether it was commercially viable to prosecute the group proceeding to judgment and whether it was appropriate to settle the matter and if so for what quantum. 

The Court refused the application. Beach J explained (at [4]): “. . . resort to the mantra of contemporary case management theory and the innovative properties of s33ZF(1) do not justify my acceding to the applicant’s application. As to the latter, there has recently been a set back in the evolutionary development of s33ZF(1). As to the former, case management practices of the type encouraged by ss37M and 37P are designed to produce litigation which is run efficiently and fairly in the interests of all parties. But such provisions are not designed to distort the playing field so as to confer an asymmetric commercial advantage in favour of one party at the expense of another . . . The protective role reflected in provisions such as s33ZF(1) is there to ensure that each group member’s claim, given their non-party and presumed absent status, is litigated and resolved as well as or as close to as well as if they had been a named applicant with their own legal representation. Further, the protective role is to be viewed in the context of the pursuit of a grouped procedure to the advantage and efficiency of all. By ‘all’, I mean the applicant, the group members, the respondent and the Court. But the protective role is not designed to put a respondent at an asymmetric commercial disadvantage. It is not designed to give a group member any greater rights vis-a-vis a respondent, other than ones that necessarily flow from the grouping of multiple claims per se, than they would have had if they had separately pursued individual proceedings against that respondent. Recourse to the protective role is not to be applied like some thick layer of varnish to gloss over the flawed substratum of the applicant’s arguments.” 

The Court held it had the power to order production of the documents under s23 of the FCA Act but declined to exercise its power to do so (at [5], [16] and [111]-[112]).

The judgment contains reference to legal principles establishing that insurance policies are not normally discoverable where they are not relevant to the determination of a fact in issue (at [46]) and that case management principles of themselves do not justify an order for production of an insurance policy that was not otherwise discoverable in accordance with the Rules of Court (at [77]-[80] and [95]-[97]). ■


Dan Star QC is a Senior Counsel at the Victorian Bar, ph (03) 9225 8757 or email danstar@vicbar.com.au
The full version of these judgments can be found at www.austlii.edu.au. Numbers in square brackets refer to paragraph numbers in the judgment.

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