Number 12
29 June 2005
This issue
Reinstatement where the employment relationship has irrevocably broken down
Admissibility of expert evidence
Implications of providing misleading information in the security clearance process
A municipal council's duty of care to swimmers at surf beach
AAT awards compensation for breach of privacy
Misuse of market power and price fixing
Quoting the substance of legal advice in negotiations may make it subject to FOI
Reinstatement where the employment relationship has irrevocably broken down
Canberra
Virginia Masters Senior Lawyer
T 02 6253 7470
F 02 6253 7381
virginia.masters@ags.gov.au
A recent Full Bench decision of the Australian Industrial
Relations Commission establishes that the Commission
is unlikely to order reinstatement of an APS employee
where the employment relationship has irrevocably broken
down. The decision has significant implications for APS
employers as it suggests that, even if the Commission
finds that the termination of an employee's employment
was harsh, unjust or unreasonable, the Commission will
refuse to order the employee's reinstatement if
it considers that the employee could not return to a
harmonious working environment.
Walsh v Australian Taxation Office
Australian Industrial Relations Commission, 4 March 2005
Full Bench, PR 956205
Decision at first instance
In March 2004 Ms Walsh sought relief in the Australian
Industrial Relations Commission under s 170CE of the Workplace
Relations Act 1996 (the WR Act), following the termination
of her employment by the Australian Taxation Office (ATO)
for breaching the APS Code of Conduct. Alleging that the
termination of her employment was harsh, unjust or unreasonable,
Ms Walsh sought reinstatement to the position in which
she was employed immediately before the termination and
also sought compensation for lost earnings.
Although at first instance the Commission found (PR951810)
that there was a valid reason for the ATO to terminate
Ms Walsh's employment, Commissioner Eames found that
the termination was harsh because, amongst other things,
it was disproportionate to the gravity of Ms Walsh's
misconduct. This finding was triggered by the fact that
in making its decision to terminate Ms Walsh's employment,
the ATO had not complied with its own policies and procedures
and had taken into account a record of previous misconduct
by Ms Walsh that should have been removed from her file.
The Commission considered that it had been inappropriate
for the ATO to rely on the prior misconduct in concluding
that Ms Walsh had engaged in a 'pattern of behaviour',
which was a key reason for the ATO's decision to
terminate Ms Walsh's employment.
Despite this finding, Commissioner Eames refused to reinstate
Ms Walsh to her former position within the ATO. Considering
Ms Walsh's proven misconduct, documented unsuitability
for her employment and persistent behaviour of making inappropriate 'jokes' and
offers of 'inducement' to supervisors, Commissioner
Eames found that there was no basis on which Ms Walsh could
return to the ATO on harmonious terms. Finding that Ms
Walsh's employment relationship with the ATO was
incapable of being repaired, the Commissioner refused to
order Ms Walsh's reinstatement and instead awarded
Ms Walsh compensation equivalent to six months' salary
for her unfair dismissal.
Full Bench decision
On 26 October 2004, Ms Walsh sought leave to appeal to
a Full Bench of the Commission against Commissioner Eames' decision,
claiming that the Commissioner had erred in the exercise
of his discretion concerning reinstatement by making findings
of fact which were either not open or which were based
on a mistaken view of the relevant facts. Ms Walsh also
argued that Commissioner Eames had erred in law by failing
to take account of each of the considerations set out in
s 170CH of the WR Act and in finding that there was a valid
reason for termination.
The Full Bench rejected all of these arguments and refused
leave to appeal on the basis that the application disclosed
no appellable error and no public interest consideration
required that leave be granted.
In upholding Commissioner Eames' refusal to order
Ms Walsh's reinstatement under s 170CH of the WR
Act, the Full Bench placed considerable emphasis on the
breadth of the discretion conferred under subsections (3)
and (6) of s 170CH of the WR Act and the fact that Commissioners
must exercise their discretion having regard to the evidence
and material before them.
The Full Bench (Senior Deputy Presidents Duncan and Lloyd,
Commissioner Cribb) expressly endorsed the Commissioner's 'apparently
contradictory' findings that a valid reason for termination
had existed due to Ms Walsh's breach of the Code
of Conduct, but that the termination was harsh due to its
disproportionate nature.
The Full Bench noted that in addressing the question of
whether or not it was appropriate to reinstate Ms Walsh,
Commissioner Eames was required to have regard to all of
the factors enumerated in s 170CH(2) of the WR Act. The
Full Bench was satisfied that evidence of an irrevocably
broken down employment relationship could be a relevant
factor arising under the 'any other matters' consideration
in s 170CH(2)(e) and was in fact critical in this case.
The Full Bench noted that this approach was consistent
with the established principle that the restoration of
trust is a relevant factor when reinstatement is considered.
Conclusion
The significance of the Walsh decisions for APS agencies
is that they confirm that even a large agency can resist
a reinstatement order when the Commission has determined
that the termination of an employee's employment
was harsh, unjust or unreasonable, if there is sufficient
evidence that the relationship of trust has broken down.
In preparing for arbitration of unfair dismissal cases,
agencies should ensure that they consider applying this
line of argument.
The decision is also a salutary reminder of the importance
of APS agencies complying with their own policies and procedures.
Text of the Full Bench decision is available at: <http://www.airc.gov.au/decisionssigned/html/PR956205.htm>.
Virginia Masters acts for and advises a range
of government clients in relation to employment-related
disputes including workers' compensation claims,
disciplinary proceedings, discrimination complaints and
unfair dismissal applications.
Admissibility of expert evidence
Melbourne
Steven Small Senior Lawyer
T 03 9242 1311 F 03 9242 1237
steven.small@ags.gov.au
The New South Wales Court of Appeal on 20 May 2005 overturned
a decision of Austin J made on 7 March 2005 in respect
of expert evidence. The court held that for expert evidence
to be admissible it need only disclose the facts and reasoning
process used by the expert, rather than the true factual
basis upon which the expert's opinion was formed.
Additionally, the court held that the probative value
of expert evidence needs to be assessed when the Court
is exercising discretionary powers to exclude evidence.
Australian Securities & Investments Commission
v Rich & Ors
New South Wales Court of Appeal, 20 May 2005, [2005] NSWCA
152
Background
On 7 March 2005 Austin J in ASIC v Rich & Ors [2005]
NSWSC 149 handed down a decision that expert evidence tendered
on behalf of ASIC ('the Carter Report') was
inadmissible because it failed to disclose the real factual
basis and true reasoning process of the opinions expressed.
This arose because of the expert's involvement with
ASIC prior to his engagement to provide expert evidence.
Alternatively, Austin J held that as a matter of discretion
the Carter Report should be excluded because of the risk
that the expert had taken account of information he had
not disclosed. Austin J held that this created a risk that
his evidence would be unfairly prejudicial to the defendants
and mitigated against its probative value.
ASIC appealed this decision and on 20 May 2005 the Court
of Appeal ruled in its favour.
The court held that the trial judge, once he had found
that the Carter Report set out the facts asserted by the
expert to support his opinions and his reasoning process,
should have found the Carter Report admissible under s
79 of the Evidence Act 1995 (NSW) ('Evidence Act').
It was not necessary that the Carter Report disclose the
true factual basis on which it was formed, although the
existence of undisclosed facts would be a matter going
to the weight to be given to the expert's evidence.
The court said:
The mere fact that the expert's opinion is based
on facts that are assumed (and not proved) at the time
the expert gives evidence is no reason to exclude the
evidence at that stage. The assumed facts may be proved
later by other evidence. The fact that the opinion was
initially formed or later reinforced by reference to
other facts, not said by the expert in his evidence to
be proved or assumed, is irrelevant to the question of
admissibility. [136]
The court also found that the discretionary power to exclude
evidence provided by s 135 of the Evidence Act required
the trial judge to weigh up the probative value of the
Carter Report against the risk it would be unfairly prejudicial,
misleading or confusing, or cause or result in undue waste
of time. The court found that the trial judge did not conduct
a systematic analysis of the Carter Report's probative
value and that this was a fundamental error. Determining
the impact of an expert's access to material not
before the court requires a 'process of assessment' by
the trial judge. It is not a matter which can be determined
in the abstract. [168] The court said:
The mere fact that there must have been use of some extraneous
material ... does not of itself necessarily lead to a conclusion
that the evidence is of low probative value. [170]
The court set aside the trial judge's ruling that
the Carter Report was inadmissible or should be excluded.
Implications
This Court of Appeal decision assists in clarifying the
circumstances under which expert evidence will be admissible
(the corresponding provisions of the Evidence Act 1995 (Cth) are in relevant terms the same as those considered
in this decision).
However, it also highlights the risks of engaging a person
to provide expert evidence where that person has a prior
relationship with the party engaging the expert. Agencies
should exercise caution when engaging expert witnesses
in these circumstances.
Text of the decision is available at: <http://www.austlii.edu.au/au/cases/nsw/NSWCA/2005/152.html>.
Steven Small has conducted litigation for a
number of government departments and agencies and specialises
in taxation litigation.
Implications of providing misleading information in the security clearance process
Canberra
Damien O'Donovan Senior Executive
Lawyer
T 02 6253 7424 F 02 6253 7384
damien.o'donovan@ags.gov.au
Canberra
Virginia Masters Senior Lawyer
T 02 6253 7470 F 02 6253 7381
virginia.masters@ags.gov.au
A recent decision of the Australian Industrial Relations
Commission confirms that an APS employee who provides
false and misleading information in the security clearance
process can be dismissed for breach of the APS Code of
Conduct.
Corey v Attorney-General's Department
Australian Industrial Relations Commission, 25 February
2005
Deegan C, PR956106
The Australian Industrial Relations Commission upheld
the termination of Mr Corey's employment. He was
dismissed for:
- providing false and misleading information in security
clearance interviews - failing to advise his superiors of a sexual relationship
conducted with an employee he was managing - engaging in excessive and inappropriate use of the
department's email.
Background
Mr Corey was an ongoing Executive Level 1 within the Protective
Security Coordination Centre Watch Office. He required
a 'Top Secret' security clearance to hold that
position. A clearance was granted after an initial security
clearance interview was conducted but Mr Corey was placed
on an 'after care' program, which required
regular review of his fitness to hold a clearance.
After concerns were raised about the content and volume
of personal emails sent by Mr Corey, a Code of Conduct
investigation commenced, Mr Corey was suspended and his
security clearance was reviewed.
Doubts were raised about the accuracy of information provided
by Mr Corey during his initial and 'after care' security
interview. The department determined that he had breached
the APS Code of Conduct and his employment was terminated.
The hearing
The hearing explored the following issues:
- whether Mr Corey had provided false and misleading
information to his vetting officer at his initial security
clearance interview and the 'after-care' interview - whether Mr Corey breached the department's policy
concerning appropriate email content and volume - whether Mr Corey continued to supervise a subordinate
employee, despite having established an intimate relationship
with her, and whether Mr Corey had actively concealed
that relationship.
The false and misleading information related to Mr Corey's
answers to questions from the vetting officer about extramarital
relationships, the state of his marriage, drinking habits
and circumstances during his prior employment.
Mr Corey contended that he did not tell the vetting officer
of his extramarital affairs because 'he did not consider
the relationships in which he had been involved outside
his marriage constituted affairs'. He also denied
giving misleading answers about the state of his marriage.
In respect of his previous employment, Mr Corey had failed
to mention misconduct which led to termination of his employment
at the Australian Federal Police, where a 16-year-old boy
in his custody was made to get on the ground and 'oink
like a pig'. He also failed to disclose that more
recently he had been accused of falsely claiming flex credits,
prior to resigning from the Child Support Agency.
Findings
Commissioner Deegan concluded that there were a number
of valid reasons for the termination of Mr Corey's
employment. She observed:
… the applicant committed what I consider the
worst breach of the Code of Conduct at the very commencement
of his EL1 employment when he provided false and misleading
information as part of his security interview. [155]
Commissioner Deegan found that Mr Corey did not provide
information to the vetting officer that was relevant to
the security vetting process even though asked direct questions,
and that many of the answers he gave were dishonest and
misleading. She concluded:
Given the nature of the employment and seniority of
the position the Department could not be expected to
retain in employment a person with such a blatant disregard
for the truth. [149]
The Commission also upheld the department's findings
that the employee had a clear conflict of interest in continuing
to supervise an employee with whom he had formed a intimate
relationship and that excessive use of the email system
constituted an improper use of departmental resources,
in breach of the APS Code of Conduct.
Implications
The decision is significant because of its strong statements
about the importance of employees being truthful in the
security clearance process. There is a high onus of disclosure
on employees to ensure answers are honest and not misleading.
The decision illustrates that serious consequences will
follow where an employee who has been granted a clearance
is found not to possess qualities of honesty, integrity
and trustworthiness. Failure to volunteer critical information
may be regarded as seriously as providing positively false
answers.
This decision demonstrates that the security clearance
process and the APS Code of Conduct can operate interdependently.
The Protective Security Manual (PSM) lists integrity, honesty
and trustworthiness as key suitability indicators for employees
who hold a security clearance while the APS Code of Conduct
specifies 'an APS employee must behave honestly and
with integrity in the course of APS employment':
section 13(1) of the Public Service Act 1999. Failure to
provide honest answers would normally justify a refusal
to grant a clearance, and would also amount to a breach
of the Code of Conduct, and provide a ground for termination:
section 29(3)(f) of the Public Service Act 1999.
Alternatively, if an agency becomes aware that an employee
has provided false or misleading information in a security
clearance process, the employee's security clearance
may be withdrawn in accordance with the PSM. It may then
be possible to terminate employment on the ground that 'the
employee lacks, or has lost, an essential qualification
for performing his or her duties': section 29(3)(b)
of the Public Service Act 1999.
Text of the decision is available at: <http://www.airc.gov.au/decisionssigned/html/PR956106.htm>.
Damien O'Donovan appeared as counsel and Virginia
Masters acted as solicitor for the Attorney-General's
Department.
Damien O'Donovan is regularly briefed
as counsel in the Administrative Appeals Tribunal, Federal
Court, ACT Supreme Court and the Australian Industrial
Relations Commission. He regularly acts in and advises
in employment law matters arising under the Public
Service Act 1999, and the Safety, Rehabilitation
and Compensation Act 1988 and appears in the AIRC
on matters arising under the Workplace Relations
Act 1996.
Virginia Masters acts for and advises a range
of government clients in relation to employment-related
disputes including workers' compensation claims,
disciplinary proceedings, discrimination complaints and
unfair dismissal applications.
High Court Rules 2004
Melbourne
Libby Haigh Senior Executive Lawyer
T 03 9242 1499 F 03 9242 1265
libby.haigh@ags.gov.au
The High Court has adopted new procedural rules, the
High Court Rules 2004, which came into effect on 1 January
2005. This note highlights the main changes.
Outline of the High Court Rules 2004
The High Court Rules 2004 (SR No 304 of 2004) were notified
in a Special Gazette on 14 October 2004 ('the Rules').
The Rules comprise five chapters, which are organised according
to subject matter. Chapter 1 contains general rules applicable
to all proceedings in the Court. Chapter 2 deals with proceedings
in the original jurisdiction of the Court. Election petitions
are dealt with in Chapter 3 and proceedings in the appellate
jurisdiction of the Court in Chapter 4. Chapter 5 deals
with costs. All forms are found in Schedule 1 to the Rules.
It is intended that the rule number will identify the
chapter and part to which the rule belongs. For example,
rule 25.03 is found in Chapter 2, Part 25. The end of each
chapter is clearly denoted and includes a note advising
with which part the next chapter commences.
Commencement
The Rules became effective from 1 January 2005, at which
time the High Court Rules 1952 were repealed. For proceedings
commenced before 1 January 2005, the new Rules govern all
steps taken on or after 1 January 2005, unless the Court
orders otherwise.
Changes to note
Most of the changes to the Rules may merely be noted.
Some changes of note include the abolition of the distinction
between a Justice sitting in Court and sitting in Chambers
(see rule 6.04.3) and the rule that amendment will now
always require the leave of the Court or a Justice (rule
3.01). Under rule 5.03(b), parties raising a constitutional
matter within the meaning of section 78B of the Judiciary
Act 1903 are now required to provide relevant documents
to interveners. Practitioners should also be aware of rule
1.08, which prescribes the requirements for all documents
filed with the Court, and rule 1.05, which deals with the
procedure after remittal. It should also be noted that
the Rules do not permit electronic filing of documents.
Chapter 3 contains the rules regarding election petitions.
They are largely unchanged from the rules provided by the
High Court Rules 1952.
Practice Directions No 3 of 1996, No 1 of 2000 and No 2
of 2001, which deal with written submissions and lists
of authorities, will continue to apply.
Part 25 – Mandamus, prohibition, certiorari, habeas
corpus and quo warranto
Part 25 governs applications for writs of mandamus, prohibition,
certiorari, habeas corpus and quo warranto. In accordance
with the principles of plain English, the Rules no longer
refer to an 'order nisi'. Instead, the term 'order
to show cause' is used.
All applications for an order to show cause relating to
these writs must now be made on notice (rule 25.03.1).
Therefore, all hearings will be held inter partes and the
parties will be referred to as plaintiff and defendant
(rule 25.02.1).
If an order to show cause is granted, the Rules provide
that the plaintiff is confined to the relief sought and
grounds stated in that order (rule 25.04). Therefore, applicants
may not raise new grounds during the application for final
relief.
The time limits for applications for writs of mandamus
and certiorari under the High Court Rules 1952 are retained.
That is, applications for a writ of mandamus must be filed
within 2 months of the refusal to determine a matter and
applications for a writ of certiorari must be filed within
6 months of the judgment or decision (rules 25.06.1, 25.07.2).
Outline of submissions
When an application for a writ under Part 25 is served,
a summons and an outline of submissions must be filed and
served with it. This outline must state why the matter
should not be remitted to another court, or, if the plaintiff
submits that it should be remitted, identifying the court
to which it should be remitted. The outline should also
indicate what the future conduct of the case should be.
That is, the plaintiff is required to make submissions
on what, if any, further steps should be taken in the Court
and the times by which, and the manner in which, such further
steps are to be taken (see rule 25.03.2). The summons,
returnable before a Justice, is to specify the orders sought
by the plaintiff on the future conduct of the case (to
which the outline of submissions will relate).
In the case of applications for a writ under Part 25,
these documents must be served with the application, which
may not be served more than 90 days after the date on which
it was issued unless an order of the Court or a Justice
allows further time (rules 25.01(g), 25.03.1, 25.03.2).
When a plaintiff serves a writ of summons under Part 27,
a similar outline of submissions must be filed and served
together with a summons for directions returnable before
a Justice concerning the future conduct of the case (see
rule 27.06). The time for filing the summons for directions
is no later than 14 days after the time prescribed for
an appearance (see rules 27.01(d), 27.06). The writ may
not be served more than 12 months after the date on which
it was issued unless an order of the Court or a Justice
allows further time (see rule 27.01(f)).
Part 41 – Applications for leave or special leave
to appeal
Among the significant changes are those to the procedure
governing applications for leave or special leave to appeal.
Procedures for unrepresented applicants
To relieve respondents of the time and expense involved
in responding to unmeritorious applications, applications
by unrepresented applicants will now first be considered
on the papers filed by the applicant. Unrepresented applicants
will be required to present their argument to the Court
by filing a draft notice of appeal and written case. These
documents are filed in place of the applicant's summary
of argument under rule 41.05 and are not to be served on
a respondent unless directed by the Court or a Justice
(rule 41.10.1). If the written case is not filed within
28 days of filing the application, the application shall
be deemed to be abandoned unless the Court or a Justice
has otherwise ordered (rule 41.10.4).
Once a written case has been filed by an unrepresented
applicant, two Justices may determine to dismiss the application
on the papers (rule 41.10.5). If the Justices do not make
a direction to dismiss the application, then a direction
will be given to the applicant to serve a copy of the written
case on the respondent. This written case will operate
as the applicant's summary of argument. The procedure
of Part 41 in relation to the respondent's summary
of argument, reply, application book, etc., will be followed
from this point, as though the applicant was represented
(rule 41.10.6).
It should be noted that the rules regarding the application
for leave or special leave to appeal (rules 41.01 – 41.03)
and notices of appearance (rule 41.04) do not distinguish
between represented and unrepresented applicants. Therefore,
unrepresented applicants will still be required to file
an application within 28 days of judgment, and serve the
application, with the documents prescribed in rule 41.01.2,
within 7 days of filing the application. Within this time,
a copy of the application must also be lodged with the
Prothonotary, Registrar or other proper officer of the
court below (rule 41.03.2). Notices of appearance (Form
7) must be filed and served within 14 days of service of
the application (rule 41.04).
Determining applications on the papers
Rule 41.11.1 provides that any application for leave or
special leave to appeal may be determined by any two Justices
on the papers. This applies to represented and unrepresented
parties. The rule is stated in permissive, not mandatory,
terms.
Deemed abandonment of applications
Applications can be deemed to have been abandoned (unless
the Court or a Justice has otherwise ordered) in the following
circumstances:
- failure to serve on the respondent a copy of the application
and documents filed under rule 41.01.2, or failure to
lodge with the court below a copy of the application,
within 3 months of filing the application; or - failure to file and serve a summary of argument and
draft notice of appeal under rule 41.05.1, or failure
to file and supply the required copies of the application
book under rule 41.09.11 within 6 months of filing the
application (see rule 41.13.1).
Costs consequences of deemed abandonment
If an application is deemed to be abandoned under rule
41.13.1, the Registrar shall provide a certificate of deemed
abandonment, if requested to do so by the respondent. Once
this certificate is issued, rules 41.12.2, 41.12.3 and
41.12.4 apply. Therefore, unless the Court or a Justice
has otherwise ordered, the applicant shall pay the respondent's
costs in respect of the application and such costs shall
be taxed, unless otherwise agreed (rule 41.12.2).
Rule 41.12.2 is not applied to applications by unrepresented
applicants which are deemed to be abandoned under rule
41.10.4. Presumably this is because the respondent is unlikely
to have incurred costs beyond those associated with filing
a notice of appearance.
Costs
Parties may now request that a Taxing Officer make an
estimate of the bill of costs, if it were taxed. In response
to such a request, the Taxing Officer will make an estimate
and notify each party in writing of the estimate. A party
has 14 days in which to file and serve a notice of objection
to the estimate under rule 57.02. If no such notice is
filed and served, the bill will not be taxed and a Certificate
of Taxation shall be issued for the amount of the estimate.
If a notice of objection is filed, the filing party is
first required to pay $1,250 into Court as security for
the costs of the taxation (see generally rule 57.01).
Costs of, and incidental to, the taxation shall be ordered
against the party filing a notice of objection if that
party fails to reduce the estimate by 1/6 or more (rule
58.02.1). If on taxation the amount of the bill of costs
is reduced by 1/6 or more, the party entitled to the costs
will not be allowed costs for drawing or copying the bill
or for attending the taxation (rule 58.03(a)).
Text of the new rules is available at: <http://www.austlii.edu.au/au/legis/cth/consol_reg/hcr2004170/>.
Libby Haigh leads a specialist administrative
law team in our Melbourne office. She has considerable
litigation experience principally in the Federal and
Federal Magistrates Courts and the Administrative Appeals
Tribunal. Libby is one of our most experienced migration
lawyers.
A municipal council's duty of
care to swimmers at surf beach
Canberra
Paul Sykes Senior Lawyer
Litigation & Dispute Management
T 02 6253 7050 F 02 6253 7302
paul.sykes@ags.gov.au
The High Court by a majority of 3 to 2, allowed the
plaintiff's appeal, restoring the jury verdict
at first instance in the plaintiff's favour. The
verdict was that the defendant municipal council, which
managed a surf beach open to the public, was negligent
in failing to protect the plaintiff from underwater sand
build-up that constituted a concealed hazard in an area
the council had designated for swimming by the use of
marker flags.
The decision shows that a civil jury verdict on an
issue of liability can be more difficult to overturn
on appeal than a judgment on the same issue given by
a judge sitting without a jury and delivering reasons.
Swain v Waverley Municipal Council
High Court of Australia, 9 February 2005
[2005] HCA 4; (2005) 213 ALR 249
Facts
In November 1997 the plaintiff was surfing at Bondi Beach,
which was under the defendant council's management.
He was in an area marked for swimming by flags. He dived
into a wave not realising that the water ahead of him was
more shallow than expected on account of the natural movement
of sand on the seabed. The plaintiff struck the seabed 'head
first' sustaining serious injury rendering him a
quadriplegic.
Proceedings below
The jury verdict in favour of the plaintiff was subject
to a finding of 25% contributory negligence. The plaintiff
was awarded $3.75 million in damages. This verdict was
overturned by a majority of the NSW Court of Appeal (see
[2003] NSWCA 61, 3 April 2003). The Court of Appeal majority
found that there was no evidence upon which a reasonable
jury could have based the verdict. The plaintiff was given
special leave to appeal to the High Court.
Main issues in the decision
The majority judgments (Gleeson CJ, Gummow and Kirby JJ)
did not address the applicable principles of negligence
law. Rather they concentrated on whether the Court of Appeal
majority below had been correct in ruling that there was
no evidence on which the jury could have reasonably made
a finding of negligence.
Majority judgments
Gleeson CJ observed that the ability of an appeal court
to discern error in a jury finding of liability was, in
practical terms, more limited than it was with the same
finding made by a judge sitting without a jury and delivering
reasons for judgment. He said:
Juries give no reasons for their decisions … The
jury will reach [its] verdict after receiving directions
from the trial judge as to the relevant principles of
law, and their relationship to the evidence in the case
and the arguments of opposing counsel. … So long
as individual jurors act in accordance with the directions
they are given, different jurors might be impressed by
different parts of the evidence, or by different arguments
of counsel. … They may arrive at their joint conclusion
by different paths. There may be no single process of
reasoning which accounts for a jury verdict. [3]
Gleeson CJ went on to point out that the case of the defendant
council at the trial had been that, irrespective of the
submerged sand conditions either side of the marker flags,
the submerged sand bank which the plaintiff struck 'did
not constitute a sufficient danger to warrant moving, or
even considering moving, the flags'. That was a case
which the jury rejected. He concluded:
Many judges, and many juries, might have accepted the
[council's case]. … However, under the procedure
that was adopted at this trial, the assessment of the
reasonableness of the respondent's conduct was
committed to the verdict of a jury. The question for
an appellate court is whether it was reasonably open
to the jury to make an assessment unfavourable to the
respondent, not whether the appellate court agrees with
it. The Court of Appeal should have answered that question
in the affirmative. [19]
Gummow J rested his decision on s 108(3) of the Supreme
Court Act 1970 (NSW) which provides that a civil trial
verdict could only be set aside on appeal if the appellant
was entitled to a verdict as a matter of law. There had
been an insufficient basis for the Court of Appeal majority
finding that such an entitlement existed.
The third member of the High Court majority, Kirby J,
said:
What the jury made of the evidence was, within very
large boundaries, a matter for them. It was so, as long
as they acted within the ultimate legal requirement of
reasonableness as established in the cases. They were
not obliged to accept the Council's evidence or
argument. They were entitled to conclude that the lifeguards
on duty had the capacity to perceive a trough adjacent
to a sandbank. They could then conclude that this represented
a hazard on the particular day that misled the appellant
as to the water's depth and contours and caused
his injury. Yet, the lifeguards on duty had failed to
shift the flags to a position where that hazard was not
present. And they gave no evidence, although they had
every reason to do so if it had been the case, that there
was no safer place for the flags than that maintained
by them throughout the fateful day. [230]
Kirby J concluded that, while the jury's verdict
was in some senses 'a surprising one', he was 'not
convinced that the jury's conclusion was such that
no jury performing their functions properly could reasonably
have been satisfied of the facts necessary to sustain the
verdict in favour of the [plaintiff]' (see [234]).
Minority judgments
In dissent, McHugh J said that a plaintiff bears 'the
legal and evidentiary burden of establishing a prima facie
case of negligence'. He said that the plaintiff must
be able to point to 'a reasonably practicable precaution
or alternative course of conduct that could have avoided,
or reduced the consequences of, the injury to the plaintiff.' It
was not sufficient for a plaintiff to prove the existence
of the risk and then allege that the defendant took no
steps to guard the plaintiff against that risk. What was
required in the present case was evidence that 'the
conditions at some part of the beach to the north or south
of or even in a section of the centre flagged area were
such that the risk of injury from the sandbank, rips and
guttering was much lower than the risk existing at the
point where [the plaintiff] suffered his injury'.
McHugh J noted that no such evidence was led. He concluded:
In my opinion, there was no evidence upon which the
jury could reasonably find that the Council was guilty
of negligence and, as a result, caused Mr Swain's
injury. [104]
Heydon J agreed with McHugh J on this point, but went
further stating:
the factual question whether it was reasonably foreseeable
that there was a risk of injury to the plaintiff of the
kind he suffered in the circumstances should also be
answered in the negative. [236]
Text of the decision is available at: <http://www.austlii.edu.au/au/cases/cth/high_ct/2005/4.html>.
Paul Sykes assists AGS lawyers on a range of
litigation practice and compliance issues, such as conflicts
of interest, as well as helping to keep them informed
about developments in the law.
AAT awards compensation for breach of
privacy
Canberra
Justin Hyland Senior Lawyer
T 02 6253 7417 F 02 6253 7381
justin.hyland@ags.gov.au
For the first time, the Administrative Appeals Tribunal
has considered and upheld an application for a review
of a determination of the Federal Privacy Commissioner
not to award damages for breach of privacy. In a unanimous
decision, AAT President Justice Downes and the other
members set out the principles relevant to assessment
of compensation under the Privacy Act 1988. The Tribunal
held the complainant was entitled to 'a restrained
but not minimal' award of compensation of $8,000
for injury to his feelings and humiliation.
Rummery and Federal Privacy Commissioner and Department
of Justice and Community Safety
Administrative Appeals Tribunal, 22 November 2004
[2004] AATA 1221
In Rummery the applicant sought review of a determination
of the Privacy Commissioner as to the amount of compensation.
The Privacy Commissioner determined (Determination No 5
of 2004) that Mr Rummery's privacy had been interfered
with by the ACT Department of Justice and Community Safety
(JACS) when personal information concerning his work performance
and former employment was disclosed to the Ombudsman's
office in the course of an investigation of a complaint
made to that office by Mr Rummery. The Privacy Commissioner
held that the personal information disclosed was not relevant
to the complaint being investigated and said that JACS
should apologise. However, the Privacy Commissioner decided
that Mr Rummery was not entitled to any financial compensation.
The AAT noted that the Privacy Act specifically provides
that compensable loss or damage includes injury to the
complainant's feelings and humiliation. The AAT considered
the approach to compensation awards under the Commonwealth
Sex Discrimination Act 1984 and in other jurisdictions
and decided in the circumstances that an award of $8,000
should be made. In reaching its decision, the AAT set out
the principles that it considered should apply in determining
whether financial compensation is appropriate in a particular
case:
- where a complaint is substantiated and loss or damage
is suffered, the legislation contemplates some form of
redress in the ordinary course - awards should be restrained but not minimal
- in measuring compensation the principles of damages
applied in tort law will assist, although the words of
the statute are the ultimate guide - in an appropriate case, aggravated damages may be
awarded - compensation should be assessed having regard to the
complainant's reaction and not to the perceived
reaction of the majority of the community or of a reasonable
person in similar circumstances.
The claim that disclosure of the personal information
was necessary to show that Mr Rummery's complaint
to the Ombudsman was frivolous and vexatious, was rejected
by the Privacy Commissioner and quoted with approval by
the Tribunal. The Tribunal also noted (without taking it
into account) that JACS had persisted during evidence before
the Tribunal in maintaining that Mr Rummery's conduct
was not bona fide and commented that JACS had incurred
considerable expense in maintaining that position, a position
that 'was always doomed to failure'. The Tribunal
was critical of the department's apology saying it
was 'as limited as it could be and would not convey
any real sense of regret to a reasonable reader' [45].
Agencies should take close note of this decision particularly:
- the large sum of damages awarded (Privacy Commissioner
awards for 'hurt feelings' have been mostly
in the range of $500 to $1000) - the amount of compensation is to reflect the perception
and reaction of the complaint to the breach and not the
notional reaction of the 'reasonable person' - apologies need to be more than mere platitudes as
in another case this could influence the quantum of damages
awarded.
Text of the decision is available at: <http://www.austlii.edu.au/au/cases/cth/aat/2004/1221.html>.
Justin Hyland advises government agencies on
information access law, appears for government agencies
in defending administrative law decisions and conducts
administrative law training.
Misuse of market power and price
fixing
Melbourne
Graham Thorley Senior Executive Lawyer
T 03 9242 1244 F 03 9242 1278
graham.thorley@ags.gov.au
On 10 September 2004 the High Court refused to grant
special leave to appeal to both the Australian Competition & Consumer
Commission (ACCC) and also to Australian Safeway Stores
(Safeway) and Mark Jones (Jones) in respect of the judgment
of the Full Federal Court. Consequently, the decision
of the Full Federal Court stands. The ACCC has succeeded
in establishing four contraventions of the misuse of
market power provisions of the Trade Practices Act and
one instance of price fixing.
ACCC v Australian Safeway Stores and Mark Jones
Federal Court of Australia, Full Court, 30 June 2003
[2003] FCAFC 149; (2003) 198 ALR 657
Background
This note is an update of an earlier AGS Casenote (15
August 2003) that discussed the proceeding in detail and
the decision of the Full Federal Court. On nine occasions
Safeway refused to accept supplies of bread products of
a major plant baker (e.g. Tip Top Bakeries) at one of its
supermarkets while that plant baker supplied secondary branded bread sold at a discounted price by an independent
retailer located in the vicinity of the Safeway supermarket.
Jones was Safeway's bread category manager responsible
for arranging the supply of bread.
The deletion of bread was alleged to be intended to deter
the baker from supplying cheap bread and to damage the
independent retailers. The conduct was alleged to be a
misuse of market power in contravention of s 46 of the
Trade Practices Act 1974 (TPA). The ACCC also alleged that
Safeway and Tip Top had made a price fixing agreement as
to the type of bread products to be sold at Tip Top's
Preston Market stall and the price of products, in contravention
of s 45 of the TPA.
Safeway denied the allegations. Safeway's primary
defence was that it only deleted bread products having
first made a request for a case deal from the plant baker
for the supply of proprietary brand bread and the request
had been refused. Safeway had to delete the bread as it
was seen by consumers to be uncompetitive on price.
Trial judge
At first instance, Goldberg J dismissed all claims of
the ACCC: ACCC v Safeway (No 2) [2001] FCA 1861; (2001)
119 FCR 1. Goldberg J held that Safeway had not breached
s 46, on the grounds that there had not been a taking advantage
of market power. Safeway would have acted in the same manner
without market power. Secondly, a case deal was sought
in five incidents, which was considered to be inconsistent
with Safeway having an anti-competitive purpose.
In relation to the Preston Market price fixing allegations,
on the evidence Goldberg J was not satisfied that the participants
to discussions had a meeting of minds in order to give
rise to a proscribed arrangement.
Since Safeway was not found to have contravened the Act,
the Judge did not consider it necessary to deal with the
issue of Jones's liability as an accessory.
Full Federal Court on appeal
The Full Federal Court, by majority, held that Safeway
had contravened s 46 in relation to four incidents where
there had been a deletion of bread products: ACCC v
Safeway [2003] FCAFC 149; (2003) 198 ALR 657.
Also, the Full Court was unanimously of the view that
a price fixing arrangement had been made in relation to
the Preston Market incident.
The Full Court made declaratory orders against Safeway
in relation to the four incidents found to contravene s
46 and ordered Safeway to pay 80 per cent of the ACCC's
costs of the appeal: ACCC v Safeway (No 2) [2003] FCA 811.
High Court special leave applications
The ACCC, Safeway and Mark Jones each filed separate applications
seeking special leave to appeal to the High Court. The
applications were heard on 10 September 2004. The High
Court refused to grant special leave in respect of all
applications. The Court stated that the issues of fact
and law raised did not warrant the grant of special leave.
Further, as the conduct in issue occurred some years ago,
it was not considered in the interests of justice to further
extend the litigation.
Outcome
The refusal of special leave means that the declaratory
orders of the Full Federal Court stand.
This is the first case in which the ACCC has succeed in
obtaining as a final outcome in a contested proceeding,
declaratory orders of contravention of s 46. (Earlier cases
where the ACCC has succeeded in obtaining declarations
of contravention of s 46 have been set aside on appeal.
See, for example, the decisions in Boral, Rural Press and
Universal Music.)
Important points to emerge from the Full Federal Court
judgment are:
- the focus on the conduct of the respondent and inferences
arising in ascertaining whether there has been a contravention - pleading a policy based on a course of conduct can
give rise to scope for argument - the purpose asserted by the respondent is not necessarily
determinative of whether a proscribed purpose exists - a defence based on the fact that a request had been
made for a similar deal to that provided to a competitor
is not necessarily inconsistent with a purpose of damaging
the competitor or deterring competitive conduct.
Under the orders of the Full Federal Court, the proceeding
is remitted to Goldberg J to hear and determine the pecuniary
penalties to be imposed, injunctive relief, the liability
of Mark Jones and costs of the trial.
The judgment of the Full Federal Court is available at <http://www.austlii.edu.au/au/cases/cth/FCAFC/2003/149.html>.
Graham Thorley and Gavin Carroll of AGS Melbourne acted
on behalf of the ACCC in conduct of the proceeding.
Graham Thorley specialises in trade practices
and commercial litigation and acted for the ACCC in the
Safeway proceeding.
Quoting the substance of legal advice in negotiations may make it subject to FOI
Canberra
Tony Beal Senior executive Lawyer
T 02 6253 7231
F 02 6253 7306
tony.beal@ags.gov.au
Canberra
Paul Sykes Senior Lawyer
Litigation & Dispute Management
T 02 6253 7050
F 02 6253 7302
paul.sykes@ags.gov.au
The Full Federal Court has confirmed that quoting the
substance of legal advice in negotiation can waive legal
professional
privilege. As a result agencies might be required to
make the full text of their legal advice and opinion
available under Freedom of Information or court related
discovery.
Bennett v Chief Executive Officer of the Australian Customs
Service
Federal Court of Australia, Full Court, 25 August
2004
[2004] FCAFC 237; (2004) 210 ALR 220
Mr Bennett was in dispute
with Customs over certain public comments he had made about
Customs' operations and
subsequent disciplinary action that had been taken. In
the course of the dispute, various statements were made
on behalf of Customs about legal advice it had obtained;
for example, that it had obtained legal advice that Mr
Bennett:
is not correct in asserting that he is not subject
to the Act and Regulations if he makes public statements
about
Customs-related matters in his capacity as President
of COA [the Customs Officers' Association]. It
is a matter for [Mr Bennett], in the light (perhaps)
of legal
advice ... whether he adheres to or moderates his position
on this question ... [5]
At some later time, Mr Bennett
made an FOI request to Customs. That request, among other
documents, covered the legal
advice to Customs. Customs refused access to documents
containing the advice, claiming that they were exempt under
s 42 of the Freedom of Information Act 1982 as being privileged
from production in legal proceedings on the ground of legal
professional privilege.
AAT and Federal Court at first
instance
Mr Bennett challenged this exemption on review
to the AAT, claiming that the reference to the advice constituted
a
waiver of legal professional privilege. The AAT, purporting
to apply Mann v Carnell (1999) 201 CLR 1, ruled that the
privilege had not been waived. Mr Bennett appealed to the
Federal Court on the issue, as raising a question of law.
The primary judge also ruled that there had been no waiver.
Only the conclusion of the advice had been disclosed, not
the reasoning underlying that conclusion. No inconsistency
was involved in these circumstances in continuing to maintain
the privilege.
On appeal, Full Court found the privilege
waived
On appeal, the Full Court (Tamberlin and Gyles JJ,
Emmett J dissenting) overturned the primary judge's
decision on this point whilst upholding the primary judge's
decision on several FOI specific points. On the waiver
of privilege point, Gyles J said:
Each of the Tribunal and
the primary Judge correctly identified the decision in
Mann v Carnell as providing appropriate
guidance as to the law to be applied. However, in my respectful
opinion, the test has been misunderstood at least in part.
The test looks to inconsistency between the disclosure
that has been made by the client on the one hand and the
purpose of confidentiality that underpins legal professional
privilege on the other. It is not a matter simply of applying
general notions of fairness as assessed by the individual
judge. The authorities to which I have referred show that
it is well established that for a client to deploy the
substance or effect of legal advice for forensic or commercial
purposes is inconsistent with the maintenance of the confidentiality
that attracts legal professional privilege. [68]
Tamberlin
J, who agreed with the judgment of Gyles J, added:
It may
perhaps have been different if it had been simply asserted
that the client has taken legal advice and that
the position which was adopted having considered the advice,
is that certain action will be taken or not taken. In those
circumstances, the substance of the advice is not disclosed
but merely the fact that there was some advice and that
it was considered. However, once the conclusion in the
advice is stated, together with the effect of it, then
in my view, there is imputed waiver of the privilege. The
whole point of an advice is the final conclusion. This
is the situation in this case. [6]
Emmett J differed from
the majority in holding that the challenge to the correctness
of the AAT's decision
on waiver of legal professional privilege involved a question
of fact rather than one of law [36]. Section 44 of the
Administrative Appeals Tribunal Act 1975 confines appeals
from the AAT to the Federal Court to questions of law.
As he saw it, the question of waiver had been a matter
of judgment for the AAT.
Conclusion
Use of legal advice needs to be carefully managed
if you wish to ensure that the advice will be protected
by legal
professional privilege and not have to be disclosed under
Freedom of Information requests or under court disclosure
processes such as pre-trial discovery.
The decision increases
the odds that a disclosure of the substance or effect of
legal advice to a third party (by
expressing the conclusion of the advice) will be found
to constitute a waiver of legal professional privilege
in the whole advice. A statement as simple as 'in
accordance with legal advice received, the decision maker
came to the decision that ... ' may be sufficient
to waive privilege.
Following this decision, the application
of the test for waiver of common law legal professional
privilege, in factual
situations such as occurred here, may have similar effect
to that for waiver of client privilege under section 122
of the Evidence Act 1995 (Cth) (and its identical counterpart
in the Evidence Act 1995 (NSW)). The relevant part of the
section states:
(2) Subject to subsection (5), this Division
does not prevent the adducing of evidence if a client
or party has knowingly
and voluntarily disclosed to another person the substance
of the evidence …
However, the requirement that the
disclosure be done 'knowingly
and voluntarily' arguably still imposes a stricter
test for waiver under s 122, excluding those cases sometimes
described as involving 'imputed waiver'. (The
difference in these waiver tests – noted in Mann
v Carnell at [23] – is one issue under consideration
by the Australian Law Reform Commission in its examination
of the operation of the Evidence Act 1995 (Cth) under a
reference of July 2004 from the Attorney-General.)
Inappropriate
use of legal advice in negotiations is only one of many
ways in which privilege can be waived. Agencies
seeking or making use of legal advice should be familiar
with the consequences and what needs to be done to ensure
legal professional privilege is maintained wherever that
is desirable. To assist agencies in achieving this, AGS
has developed a range of training programs and follow up
material which can be customised to their specific needs.
Text
of the decision is available at: <http://www.austlii.edu.au/au/cases/cth/FCAFC/2004/237.html>.
Tony
Beal is a member of AGS's Commercial Group specialising
in transactional risk management for major projects, and
information and communications technology law.
Paul Sykes assists AGS lawyers on a range of litigation practice
and compliance issues, as well as helping to keep
them informed about developments in the law.
Decisions in brief
Griffith University v Tang
[2005] HCA 7; (2005) 213 ALR
724, 3 March 2005
In this decision the High Court (Gleeson
CJ, Gummow, Callinan and Heydon JJ, Kirby J dissenting)
upheld the traditional
interpretation of the words 'a decision of an administrative
character made ... under an enactment' as they appear
in the Administrative Decisions (Judicial Review) Act
1977 (ADJR Act) and corresponding State legislation.
Under this
interpretation, extending back to the decision of the Full
Court of the Federal Court in Australian National
University v Burns (1982) 43 ALR 25, a decision affecting
the employment of a member of a university's academic
staff engaged under a contract was not, on account of the
university being incorporated under Commonwealth legislation,
an administrative decision made under an enactment for
the purposes of the ADJR Act. In the present case, the
courts below had given the corresponding words in the Judicial
Review Act 1991 (Qld) a broader interpretation, conferring
upon a PhD student dismissed from her course for academic
misconduct by a university incorporated under Queensland
legislation, a right to judicial review under the Judicial
Review Act. The High Court majority rejected this broader
interpretation.
Gleeson CJ said:
The question in the present case turns
upon the characterisation of the decision in question,
and of its legal force or
effect. That question is answered in terms of the termination
of the relationship between the appellant [the university]
and the respondent [the student]. That termination occurred
under the general law and under the terms and conditions
on which the appellant was willing to enter a relationship
with the respondent. The power to formulate those terms
and conditions, to decide to enter the relationship, and
to decide to end it, was conferred in general terms by
the Griffith University Act, but the decision to end the
relationship was not given legal force or effect by that
Act. [23]
Likewise, in their joint judgment, Gummow, Callinan
and Heydon JJ said:
If the decision derives its capacity
to bind from contract or some other private law source,
then the decision is
not "made under" the enactment in question.
[81]
Kirby J, in dissent, opened his judgment with the observation:
For the second time in less than two years, this Court
adopts an unduly narrow approach to the availability of
statutory judicial review directed to the deployment of
public power. The Court did so earlier in NEAT Domestic
Trading Pty Ltd v AWB Ltd (2003) 198 ALR 179. Now it does
so in the present case. [99] *
http://www.austlii.edu.au/au/cases/cth/high_ct/2005/7.html
*
For a discussion on Neat see AGS Litigation Notes No.
10, 30 October 2003.
For further information contact AGS Senior
Lawyer Paul Sykes on (02) 6253 7050, paul.sykes@ags.gov.au.
Commissioner
of Taxation v Sleight
[2004] FCAFC 94, (2004) 206 ALR 511,
4 May 2004
On 4 February 2005 the High Court (Gleeson CJ
and Hayne J) refused Kevin Sleight special leave to appeal
from the
Full Federal Court's decision in Commissioner
of Taxation v Sleight upholding the application of Part IVA
of the Income tax Assessment Act 1936 to the Northern Rivers
Tea Tree tax scheme in which Mr Sleight was an investor.
Mr
Sleight sought to raise two special leave points:
- that
the Full Court's decision that Part IVA applied
was inconsistent with the earlier Full Court decision
in Commissioner
of Taxation v Cooke 2004
ATC 4268 as there was little factual distinction between the two schemes
involved in these cases - that the Full Court's finding that it was not
open to an applicant to challenge an assessment giving
effect
to a Part IVA determination
in a tax
appeal by showing an error in the exercise of the discretion to make the
particular determination was wrong.
The Court was not attracted by either argument and
decided to refuse to grant special leave without hearing
from
Counsel for the Commissioner.
The decision preserves the full force of the Full
Federal Court's judgment in Sleight which is expected
to be relevant for remaining cases before the Federal Court
and the AAT involving mass marketed tax schemes with
similar
features to those considered by the Full Court in Sleight.
http://www.austlii.edu.au/au/cases/cth/FCAFC/2004/94.html
For
further information contact Graeme
Windsor on (08) 6268 1102.
Seven
Network (Operations) Limited v Media Entertainment and
Arts Alliance
[2004] FCA 637, 21 May 2004
The Federal Court held that
individuals who believe their privacy has been, is being,
or may be breached
by a Commonwealth
agency or a private sector organisation may,
without first making a complaint to the Privacy Commissioner,
go directly
in the Federal Court or the Federal Magistrates
Court for an injunction restraining the agency or
organisation from
engaging in the conduct that is, or would constitute,
a breach of privacy.
In this decision, among other things, the High Court held
that Seven Network (Operations) Limited (Seven) was entitled
take action in the Federal Court under section 98 of the
Privacy Act 1988, without first making a complaint to the
Privacy Commissioner. Seven could seek an injunction restraining
MEAA (a union representing workers at Seven) from engaging
in conduct that would constitute a contravention of the
National Privacy Principles in the Privacy Act to which
MEAA was bound [35–40].
In so holding, the Court
said there was no reason to think that the position would
be any different if Seven had been
taking action against an (public sector) agency in relation
to an alleged breach of the Information Privacy Principles,
and after examining the merits of Seven's claim,
and considering whether MEAA had breached certain of the
National Privacy Principles, Seven was entitled to an injunction.
The court also indicated that it would grant positive
orders requiring MEAA to take certain actions, in terms
to be
agreed at a later date.
http://www.austlii.edu.au/au/cases/cth/federal_ct/2004/637.html
For
further information contact AGS Senior Lawyer Justin
Hyland on (02) 6253 7417, justin.hyland@ags.gov.au.
AGS contacts
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ISSN 1329-458X (Print)
ISSN 2204-6542 (Online)
For enquiries regarding supply of issues, change of address
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