Earlier this year, the Honourable Chief Justice caused to be published Supreme Court Practice Direction 1 of 2023 – Commercial List (the Practice Direction and the List).  As its name implies, the Practice Direction concerns the conduct of matters on the Commercial List of the Supreme Court.  The Practice Direction commenced operation on 30 January 2023, and applies to proceedings listed on the List as at that date and to proceedings placed on the List thereafter. 

The Practice Direction ought to be read in conjunction with the following documents, published by the Court on or around the same date:

• Commercial List Note to Parties and the Profession;
• Commercial List Note About Electronic Filing and Document Management;
• Commercial List Note About Expert Evidence; and
• Commercial List Note About Draft Directions. 

The Notes concerning electronic filing and document management and expert evidence in Commercial List proceedings are beyond the scope of this brief article and will not be considered further here.

A matter is eligible to be placed on the List “if the issues involved are, or are likely to be, of a general commercial character, or generally arise out of trade and commerce, including eCommerce”.[1]  With the exception of the addition of the words “including eCommerce”, the quoted words are drawn from the predecessor Practice Direction[2] (PD 3 of 2002, now repealed); thus, there is no substantive change occasioned by the Practice Direction to the type of matters eligible to be placed on the List. 

Administration of the List

The Practice Direction designates:

• a single Judge of the Court to administer the List, and to be known as the “Commercial List Principal Judge”; and

• one or more Judges of the Court to conduct and manage matters on the List, and to be known as “Commercial List Judges”.

The Note to Parties and the Profession names his Honour Justice Applegarth  as the Commercial List Principal Judge.  His Honour is also nominated a Commercial List Judge, together with their Honours Justices Brown, Bradley, Freeburn, Kelly, Cooper and Hindman.[3] 

Placing a matter on the List

A party may request that a matter be placed on the List by, preferably, completing the online “Commercial List request form”,[4] accessible here.  Alternatively, a party may make that request by sending an email to the Associate to Justice Applegarth, in his Honour’s capacity as the Commercial List Principal Judge.[5]

A request to place a matter on the List may be made at any time after (or, in an “exceptional case” requiring urgent resolution, before) the filing and service of the relevant originating process.[6] 

Matters placed on the List will fall into one of three categories: urgent, “Fast Track” matters; proceedings expected to involve a trial of 5 days duration or less (including submissions); and proceedings expected to involve a trial of more than 5 days’ duration.[7]

Where a matter is particularly urgent, the party seeking to have the matter placed on the List ought to make such urgency known to the Associate to Justice Applegarth.[8]  Such matters will be subject to the “Fast Track Directions” and the processes applicable to such matters, set out in paragraphs 42-44 of the Practice Direction.

Communications with the Court in relation to a matter on the List

Once a matter is placed upon the list and allocated to a Commercial List Judge, the parties’ principal point of contact with the Court in relation to the matter is to be the relevant Judge’s Associate.[9] 

Significantly – and in a departure from ordinary practice – the Practice Direction permits the legal representatives of a party to a matter on the list to communicate with the Associate of the relevant Judge without first obtaining the consent of the other party or parties to the litigation,[10] provided that the communication is “factual, civil and uncontroversial”. 

Reviews and directions

A proceeding will usually be listed for review within 5 business days of the matter being assigned to a Commercial List Judge.[11]  It is anticipated that urgent, Fast Track matters will be listed sooner.

The associated Note About Draft Directions provides an extensive set of template directions dealing with issues often arising in the context of matters of the kind likely to be placed upon the List.  The template directions concern orders to confer, reports as to status, alternative dispute resolution processes, document plans, document management and disclosure (including draft orders limiting the scope of disclosure), expert evidence, statements of issues to be tried, trial plans and directions, reviews and case conferences. 

Parties to matters on the List are specifically encouraged to “adapt common forms of draft directions” to the individual circumstances of the matter at hand[12] and to agree (or at least propose) suitable draft directions in a timely fashion.[13]

The template orders set out in the relevant Note are extensive.  It is anticipated that those template orders will be a useful resource for practitioners; they provide a common starting point from which orders suitable to the circumstances of a given matter might be crafted and agreed.

Interlocutory applications

The Practice Direction expressly provides that contested interlocutory issues may be decided at a review.  Parties are directed to “approach reviews” on that basis.  Where substantive issues are to be determined at a review, the parties are required to provide “any necessary material, concise written outlines and proposed orders to the Associate to the Judge” by 4pm the day prior to the review.[14]  In those circumstances, practitioners would be well-advised to comply in all other respects with Practice Direction 12 of 2022 – Applications, mutatis mutandis.

Where a party seeks to make an interlocutory application in relation to a matter on the List (other than an urgent or Fast Track matter), correspondence exchanged between the parties pursuant to rules 444 and 445 of the Uniform Civil Procedure Rules 1999 (Qld) pertaining to the contested issue must be sent to the Associate of the relevant Commercial List Judge by the party intending to apply, before the interlocutory application will be listed for hearing.[15] 

Practitioners familiar with the Commercial List jurisdiction will recognise many similarities between the former list and the “new” Commercial List. 

However, in numerous, and quite material respects, the new List differs in its operation to the former List.  Those changes (indeed, the entire Practice Direction) are clearly directed toward further enhancing the Court’s capacity – through the Commercial List – to facilitate the “just, expeditious and efficient resolution of commercial matters at a minimum of expense”.  

The Practice Direction and its numerous supporting Notes are too substantive to be comprehensively summarised in a brief article such as this.  Those documents are essential reading for all who practise in commercial matters before the Supreme Court.

[1] Practice Direction, paragraph 11; see also a non-exhaustive list of the types of matters which might be appropriate for placement on the Commercial List, at paragraph 13 of the Practice Direction.

[2] Practice Direction 3 of 2002, paragraph 7(a)(i).

[3] Commercial List Note to Parties and the Profession.

[4] Practice Direction, paragraph 18.

[5] Practice Direction, paragraph 16.

[6] Practice Direction, paragraph 17.

[7] Practice Direction, paragraph 14.

[8] Practice Direction, paragraph 43.

[9] Practice Direction, paragraph 10.

[10] Practice Direction, paragraph 36.

[11] Practice Direction, paragraph 30.

[12] Practice Direction, paragraph 15.

[13] Practice Direction, paragraph 23; Commercial List Note to Parties and the Profession, paragraph 9.

[14] Practice Direction, paragraph 26.

[15] Practice Direction, paragraph 29.

The capacity of State and Territory regulatory laws to bind Commonwealth entities and agencies has been a contentious and largely unresolved issue for at least two decades now.  A large part of that controversy has concerned the capacity of state environmental laws to govern activity on the Defence estate.  The debate centred on the discharge or escape of contaminants from military bases off-site into surface water, sediments and groundwater.  The most high-profile examples have been the RAAF base at Williamtown in New South Wales and the site of the former Army Aviation Centre at Oakey here in Queensland. 

In the civil context, the issue has been the subject of parliamentary inquiries, class actions and a Four Corners program in 2017.  In the regulatory context, the Commonwealth position has essentially been that State environmental pollution laws have no application to Defence bases and Defence land.  That position is advanced on two primary bases.  The first is that as a matter of statutory interpretation State laws do not apply in their terms.  The second is that State laws cannot apply where there is an “operational inconsistency” with Commonwealth law.  The Defence position has not been the subject of any curial determination of which I am aware. 

Rather, the Commonwealth and the States and Territories have sought to implement a rather uneasy arrangement under which activities on the Defence estate will, as far as possible, be undertaken in a way that seeks to achieve at least the equivalent requirements of State legislation.

The broader issue has recently arisen in proceedings in the Northern Territory involving the National Parks estate rather than the Defence estate.  That matter would now seem destined for determination in the High Court.

Over the course of March and April 2019, the Director of National Parks performed construction works on a walking track at Gunlom Falls, in the Kakadu National Park.  Those works included excavating and clearing trees, rock, soil and vegetation, and inserting concrete steps at various points.  The area in which those works were performed is sacred to the Jawoyn Aboriginal people, and is a ‘sacred site’ as defined in the Sacred Sites Act. 

That is Territory legislation which is designed to protect sacred sites, and which criminalises carrying out works without an authorising certificate.

It was common ground between the parties that the performance of those works would constitute an offence by the Director under the legislation and would attract criminal penalty – subject to any question of Commonwealth immunity or operational inconsistency with the Commonwealth Environment Protection and Biodiversity Conservation Act 1999 (Cth). 

In September 2020, the Aboriginal Areas Protection Authority brought a criminal prosecution against the Director of National Parks in relation to the works.  In October 2021, a special case was stated for the opinion of the Full Court of the Supreme Court.  So far as is relevant for these purposes, the Director and the Commonwealth Attorney-General asserted in that special case that the offence and penalty prescribed under the Territory legislation did not apply to the Director as a matter of statutory construction.

The Commonwealth position is based on the general presumption that legislation regulating rights or conduct does not apply to the executive government.  However, that presumption can be displaced by a contrary legislative intention – either by express words or implied from the statutory context.  Where the question is whether regulatory legislation binds the executive government of another polity in the Federation, it is necessary to identify an intention to bind the executive of that other polity. 

The Commonwealth position is based on the general presumption that legislation regulating rights or conduct does not apply to the executive government. 

There is a related presumption – which is sometimes treated as distinct and sometimes not.  It derives from the historical conception that criminal offences are breaches of the ‘King’s peace’, such that the Crown cannot itself be guilty of a criminal offence.  While no longer cast in such absolute terms, the presumption is that a statute will not impose criminal liability on the executive – including government agencies and instrumentalities with the same legal status – without the clear indication of a legislative intention and purpose to do so.  That presumption applies with perhaps even stronger force to the imposition of criminal liability on the executive of a polity other than the enacting polity.

The first detailed consideration of that presumption by the High Court appears in the 1946 decision in Cain v Doyle.[1]  Commonwealth legislation designed to protect returning servicemen made it a criminal offence for an employer to terminate a reinstated employee without reasonable cause. 

The legislation also provided that the term “employer” included the Crown and its statutory authorities unless the contrary intention appeared. 

A criminal prosecution had been commenced against the manager of a Commonwealth munitions factory for aiding and abetting the termination of a reinstated employee in breach of the prohibition. 

A majority of the High Court held that the provision did not create an offence of which the Commonwealth could be guilty, and the manager therefore could not be convicted of aiding and abetting the commission of that offence. 

Justice Dixon (as his Honour then was) said that there was the strongest presumption against the imposition of criminal liability upon the Crown.  That presumption was subject only to a clear expression of a contrary legislative intention to resolve upon so important and serious a course.  While accepting that the definition of “employer” included the Commonwealth Crown, his Honour concluded that the legislative intention was only to subject the Crown to injunction, mandamus or ordinary civil remedies.  It was not to impose criminal liability on the Crown.  Chief Justice Latham and Justice Rich came to a similar conclusion.

That same distinction between civil and criminal liability was made in the 1996 decision of the High Court in State Authorities Superannuation Board v Commissioner of State Taxation (WA).[2]  The Western Australian stamp duty legislation under consideration exempted instruments to which the Crown or any Crown instrumentality designated by the Minister was a party or otherwise liable to pay duty.  The ‘Crown’ was defined to mean only the Crown in right of the State of Western Australia. 

The question arising was whether the New South Wales Superannuation Board, which was an instrumentality of the Crown in right of the State of New South Wales, was liable to duty under the Western Australian legislation as the purchaser of real estate in Perth. 

Chief Justice Brennan and Justices Dawson, Toohey and Gaudron found that the provision for exemption manifested a clear intention that the Crown in any of its other capacities should be bound by the provisions of the legislation. 

Adopting a different approach, Justices McHugh and Gummow framed the question as whether the Western Australian legislature intended to tax agreements for the purchase of property in Western Australia by another State authority, and concluded that the legislation applied according to its terms.  Accordingly, the New South Wales authority was bound to pay duty. 

However, all members of the Court applied Cain v Doyle to find that the presumption that the Crown cannot be criminally liable ‘must prevail over anything but the clearest expression of intention’.  No such intention was manifest in the stamp duty legislation – notwithstanding that the provisions imposing duty otherwise applied.  Accordingly, any provision in the legislation which created a criminal liability for such things as failing to pay duty or failing to submit an instrument for stamping had no application to the New South Wales authority.

However, all members of the Court applied Cain v Doyle to find that the presumption that the Crown cannot be criminally liable ‘must prevail over anything but the clearest expression of intention’.

The statement of principle from Cain v Doyle was again endorsed in the 1999 decision of the High Court in Telstra Corporation Ltd v Worthing.[3] The New South Wales workers compensation legislation under consideration was expressed to bind ‘the Crown, not only in right of New South Wales but also, so far as the legislative power of Parliament permits, in all its other capacities’. 

The Commonwealth telecommunications legislation provided that Telecom (as it was styled at the relevant time) enjoyed the same immunity from State law as the Commonwealth itself.  A central provision of the New South Wales legislation was the requirement, under the sanction of a criminal penalty, that an employer maintain a compliant policy of insurance.  The High Court stated unanimously that it would require the clearest indication of a legislative purpose to demonstrate that these penal provisions attach to the Commonwealth, and no such indication was apparent.

The 1990 decision of the High Court in Bropho v Western Australia[4] considered a situation with parallels to the one currently presenting in the Northern Territory.  The question in Bropho was whether a statutory development corporation was immune from prosecution for a contravention of State heritage legislation. 

The statute which created the development corporation provided expressly that it was an agent of the Crown in right of the State of Western Australia which enjoyed the status, immunities and privileges of the Crown. 

The purpose of the heritage legislation was to preserve places and objects traditional to Aboriginal people, irrespective of where those things were found or situated in the State. 

The plurality in Bropho identified the presumption to be that, in the absence of a contrary intention, the general words of a statutory provision do not extend to bind the executive government and its servants or agents.

However, the Court said that the requirement for a contrary intention did not import a formalised test of exacting stringency.  That was because many of the considerations underlying the presumption have diminished in their relevance with the evolution of ‘the Crown’ to include a myriad of governmental instrumentalities with commercial and industrial functions. 

The plurality said that a contrary intention could ‘be found in the provisions of the statute – including its subject matter and disclosed purpose and policy – when construed in a context which includes permissible extrinsic aids’.  In that analysis it is possible that the legislation under consideration may evince a legislative intent not to impose criminal liability the Crown or an instrumentality, but to bind employees and agents.

The plurality in Bropho concluded that the heritage legislation evinced a clear legislative intent that the offence provision which proscribed damage to an Aboriginal site without the necessary authorisation or consent did have application to employees and agents of government instrumentalities in the course of their duties.  That intention was discerned on the basis that the heritage legislation applied indifferently to natural persons, including government employees. It was unnecessary to decide whether the development corporation itself was also liable to prosecution and conviction.  Once it had been concluded that the offence provision applied to the employees or agents who had carried out the work, neither the corporation nor the Crown had power to authorise the performance of proscribed activities.

The plurality in Bropho concluded that the heritage legislation evinced a clear legislative intent that the offence provision which proscribed damage to an Aboriginal site without the necessary authorisation or consent did have application to employees and agents of government instrumentalities in the course of their duties. 

A number of matters should be recognised about the decision in Bropho generally, and specifically in its application to the Northern Territory case.  First, the decision in Bropho is not authority for the proposition that the statutory development corporation was subject to the offence provisions in the heritage legislation notwithstanding its agency of the Crown.  Second, the decision in Bropho was concerned with the imposition of criminal liability on the agents of the executive of the polity which enacted the legislation, rather than the executive of another polity.  Third, the decision in Bropho predated the decisions in the Western Australian stamp duty caseand the Telstra Corporation case,both of which reaffirmed the strength of the presumption against the imposition of criminal liability on the Crown. 

One of the matters in contention in the Territory case is whether the presumption against the imposition of criminal liability on the Crown is limited to the Crown itself, or whether it is capable of extension to agents and instrumentalities of the Crown. 

The narrow view is based on dictum which refers to the presumption only in terms of its application to the Crown.  This is said by advocates of the narrow view to limit the presumption in relation to criminal liability to the body politic in its narrowest conception. 

The more expansive view is that it is not possible to draw rigid taxonomical distinctions based on the different manifestations and emanations of the Crown.  On that view, the presumption extends to the executive branch of government represented by the Ministry and the administrative bureaucracy which tends to its business. 

In the ordinary conception, that administrative bureaucracy includes authorities and instrumentalities of the Crown, including statutory corporations. 

Although the question has not been authoritatively determined by the High Court, there are considered dicta which suggest that the presumption has application to government instrumentalities if on proper characterisation they are intended to have the same legal status as executive government in the relevant aspects. 

Speaking specifically of the presumption against the imposition of criminal liability, the plurality in Bropho stated that it was not ‘confined to the Sovereign herself, but extends to confer prima facie immunity in relation to the activities of governmental instrumentalities or agents acting in the course of their functions or duties as such’.[5] 

Similarly, in the 1999 Western Australia Mining Act Case, Chief Justice Gleeson and Justice Gaudron expressed the presumption with reference to ‘members of the executive government of any of the polities in the federation, government instrumentalities and authorities intended to have the same legal status as the executive government, their servants or agents’.[6] 

That approach is also implicit, if not express, in the finding in the Western Australian stamp duty case to which I have already referred.  That finding was that if the New South Wales Superannuation Board did form part of the Crown in the relevant sense, it could not be criminally liable for offences created by the Western Australian stamp duty legislation.[7] 

The operative question is whether on proper characterisation the body in question is intended – either expressly or by implication – to have the same legal status as executive government in relation to the application of the presumption.

In the 1979 decision of the High Court in Superannuation Fund Investment Trust v Commissioner of Stamps (SA),[8] a question arose as to whether the Superannuation Trust could claim an exemption under South Australian stamp duty law for conveyances or transfers ‘to the Crown, or to any person on behalf of the Crown’. 

The Trust was a body corporate established by Commonwealth legislation.  Those members of the High Court who considered it necessary to decide the issue were divided on the result, but not on the basic principles to be applied in making the characterisation. 

First, the fact that an entity is incorporated is not determinative of whether it forms part of the executive government for the purpose of privileges and immunities.  It has long been accepted that governmental functions may be carried out through statutory corporations for the convenience and efficiency that affords in the management and enforcement of contractual rights in commercial transactions.    

Secondly, the enquiry is one of statutory interpretation to determine the relevant legislative intent, rather than the mechanical application of any particular test. 

Thirdly, the ability of the executive government to control the membership and activities of the entity in question is of central importance to the relevant legislative intention.  The higher the degree of direction or control the more likely the legislative intention that the entity be treated as the alter ego of the Crown.  However, that assessment turns upon the existence of a statutory ability to control, rather than an examination of the extent to which a particular action is the result of the actual exercise of control by the executive. 

Fourthly, the interpretive process will also involve a consideration of whether the entity performs fundamentally governmental functions, whether it is funded by the executive government, and whether it is accountable to the executive government in terms of finances and outcomes.

The subsequent 1982 decision in Townsville Hospital Board v Townsville City Council[9] may be seen as an application of those principles.  The question was whether the Hospital Board enjoyed the exemption from the building by-laws for buildings erected by or on behalf of the Crown.  The land on which the building was to be erected was Crown land, and the Hospital Board required the Minister’s approval to borrow money for the proposed works.  Those connections notwithstanding, Chief Justice Gibbs (with whom the other members of the Court agreed) determined that the Hospital Board did not enjoy the privileges and immunities of the Crown. 

That conclusion was reached largely on the basis that the provision of hospital services is not necessarily a governmental function; the Hospital Board retained an independent discretion to decide whether to conduct building work; and the Board rather than the Crown bore responsibility for the repayment of any moneys borrowed for that purpose.

Going back then to the Northern Territory matter, the Full Court determined that the Director was intended to have the same legal status as executive government in relation to the application of the presumption.

It found that while the Director’s functions include commercial and developmental activity in National Parks, the entry by the Commonwealth into the management of national parks was not an expansion by government into commercial and developmental activities in the general marketplace in the same way as, for example, the establishment of a government development corporation. 

It was not until the mid-1970s that the Commonwealth took a substantial role in the management of the national environment through the creation of the National Parks and Wildlife Service and the Australian Heritage Commission, and the enactment of uniform environmental protection legislation.  Those initiatives invoked the implied nationhood power in support of a new field of Commonwealth governmental activity.  The Director was established and incorporated as part of those initiatives.

The Director’s functions under legislation are intrinsically executive governmental functions directed to the stewardship and management of Commonwealth places.  In discharging those functions the Director is clearly to pursue the national or public interest, and to follow policies determined by the executive government. 

As the facts agreed for the special case disclosed, the Director is appointed by the executive government, the Director is generally subject to Ministerial control, and the Director is accountable to the executive government in terms of finances and other matters.  Moneys appropriated by the Commonwealth government comprise the majority of the Director’s income.

Although the Commonwealth legislation imposes criminal liability on the Director under offence provisions involving narrowly defined activities in the management of national parks, that does not answer the question whether the Northern Territory Sacred Sites Act evinces an intention to impose criminal liability on the executive government of the Commonwealth.

The Sacred Sites Act provides expressly that, ‘[t]his Act binds the Territory Crown and, to the extent the legislative power of the Legislative Assembly permits, the Crown in all its other capacities’.  However, that statement was not conclusive or determinative of the question whether there is a legislative intention to impose liability on government instrumentalities and authorities of the Commonwealth. 

There was no corresponding provision made for the imposition of criminal liability on other polities in the federation.

Amendments enacted in 2005 incorporated a further provision stating expressly that if the Territory Crown ‘in any of its capacities’ commits an offence against the Act, the Territory Crown is liable to be prosecuted.  The express purpose and intention of the amending legislation, at least in the subjective sense, was to clarify the liability of the Territory Crown to be prosecuted for offences against the legislation.  There was no corresponding provision made for the imposition of criminal liability on other polities in the federation.

The Full Court determined that it was not possible to make the necessary implication that the Northern Territory legislation intended to impose criminal liability on the Commonwealth executive given the very deliberate legislative choice made to limit the imposition of criminal liability to the Territory Crown. 

That determination is subject to an application for special leave to the High Court.  In the event that leave is granted, these issues concerning the scope of the presumption and its extension to government agencies and instrumentalities will be subject to specific consideration by the High Court for the first time.

In the event that leave is granted, these issues concerning the scope of the presumption and its extension to government agencies and instrumentalities will be subject to specific consideration by the High Court for the first time.

As I said at the outset, the second basis on which the Commonwealth contends that State laws cannot apply is “operational inconsistency” with Commonwealth law.  I want to deal very briefly with that and the Cigamatic doctrine.

The 1962 decision of the High Court in Cigamatic[10] held that a State could not validly enact legislation which abolished or controlled the Commonwealth’s priority of payment of debts by a company in liquidation.  That decision was founded on the principle that the legislative powers of the States do not extend to the destruction, modification or qualification of the capacities of the Crown in right of the Commonwealth. 

The doctrine expressed in Cigamatic was endorsed in the 1997 decision in Henderson[11] , which concerned whether the Defence Force Housing Authority could be subjected to State tenancy legislation.  The plurality in Henderson proceeded on the basis that State laws cannot modify or restrict a power granted to the Commonwealth under Commonwealth law or a prerogative power conferred by the Constitution on the basis that such a law would be offensive to s 61 of the Constitution.  

Once the Commonwealth has exercised a choice to enter into a field of activity, its executive power is not affected merely because the incidents of the activity are regulated by a State law. 

However, the doctrine was said to be subject to an important limitation.  Although the States have no legislative authority to interfere with the capacities of the Commonwealth, they do have legislative authority to regulate transactions and activities into which the Commonwealth instrumentality may choose to enter.  Once the Commonwealth has exercised a choice to enter into a field of activity, its executive power is not affected merely because the incidents of the activity are regulated by a State law. 

The modified Cigamatic doctrine is quite different to the notion of “operational inconsistency”.  Cigamatic is a doctrine implied from the conferral of executive powers, capacities and prerogatives on the Crown in right of the Commonwealth by s 61 of the Constitution. 

The principle of “operational inconsistency” is based on the express provision in s 109 of the Constitution providing for Commonwealth laws to prevail over State laws to the extent of any inconsistency.  In the absence of some direct textual collision between the two laws, the determination of operational inconsistency will ordinarily involve contested matters of fact.

Where the Commonwealth Statute does not evince an intention to ‘cover the field’, the question will be whether the performance of functions under the Commonwealth law gives rise to some inconsistency or anomaly with the rights and obligations arising under the State law. 

Going back to the Northern Territory case, it could not be said that the Commonwealth legislation is intended to cover the field in circumstances where it expressly recognises the obligations arising under sacred sites legislation.

In those circumstances, the inquiry must be whether the powers conferred under the Commonwealth law are intended to be exhaustive once exercised.  In that event, the State law is inoperative only once the Commonwealth power is exercised, and only in relation to the person, thing or event over which it is exercised. 

The Western Australian Mining Act Case to which I referred earlier provides an instructive example.  The Commonwealth defence regulations under consideration made provision for the Commonwealth executive to authorise defence activities on defence practice areas.  At the same time, the State mining legislation make provision for the State to grant exploration licences.  A majority of the High Court held that an operational inconsistency would only arise once both the Commonwealth and State powers of authorisation and grant respectively were sought to be exercised over the same land at the same time.

Whether the exercise of power by the Director of National Parks to undertake the construction works in Kakadu National Park gave rise to an operational inconsistency with the Territory sacred sites legislation is not an issue which will be determined in the special case proceedings.  Those proceedings are limited to the questions whether the Director enjoys the presumption against criminal liability on the part of the Commonwealth, and whether as a matter of statutory interpretation the Territory sacred sites legislation evinces an irresistibly clear intention to displace the presumption. 

[1] Cain v Doyle (1946) 72 CLR 409.

[2] State Authorities Superannuation Board v Commissioner of State Taxation (WA) (1996) 189 CLR 253.

[3] Telstra Corporation Ltd v Worthing (1999) 197 CLR 61.

[4] Bropho v Western Australia (1990) 171 CLR 1.

[5] Bropho v Western Australia (1990) 171 CLR 1, 15-16, 27.

[6] Commonwealth v Western Australia (Mining Act Case) (1999) 196 CLR 392, [33].

[7] State Authorities Superannuation Board v Commissioner of State Taxation (WA) (1996) 189 CLR 253, 270, 294. 

[8] Superannuation Fund Investment Trust v Commissioner of Stamps (SA) (1979) 145 CLR 330.

[9] Townsville Hospital Board v Townsville City Council (1982) 149 CLR 282.

[10] Commonwealth v Cigamatic Pty Ltd (in liq) (1962) 108 CLR 372.

[11] Re Residential Tenancies Tribunal (NSW) and Henderson; Ex parte Defence Housing Authority (1997) 190 CLR 410.

The issue of implied terms in contracts was considered in the recent High Court decision in Realestate.com.au Pty Ltd v Hardingham [2022] HCA 3.  Although in agreement as to the result, three separate decisions were handed down.

A summary of the case was included in Queensland Law Reporter in the following edition: 27 Jan 2023 – [2023] 3 QLR which can be viewed here.

Queensland Law Reporter is a free service and registration to its weekly updates is recommended.

In Hearsay Issue 89 reference was made to the decision in St Mary’s Hog’s Pty Ltd v HBCA Pty Ltd [2022] FCA 52, concerning the onus of proof pertaining to the consideration of “stultification” of a proceeding in the event of an order for security for costs being made but not serviced (https://www.hearsay.org.au/applications-for-security-for-costs-some-recent-issues/). A security order was made there in a class action.

That decision of Markovic J went on appeal to the Full Court of the Federal Court. The appeal was dismissed, the appeal decision going by the name Goodwin v HBCA Pty Ltd [2022] FCAFC 166. The Full Court – in the context of security for costs – afforded some useful observations as to the case management of class actions.

Middleton and Lee JJ – with whom Derrington J substantially agreed – wrote:

…

[42] The argument that the primary judge placed no or insufficient weight on the fact that the exercise of discretion to award security was happening in the context of a class action suffers from the difficulty of seeking to elevate a discretionary conclusion reached based on the evidence in one case into a principle of broader application. This flaw can be seen in the submission made by the representative applicants that error is said to be revealed by reason of the fact that the primary judge did not adopt the approach taken in Abbott v Zoetis Australia Pty Ltd (No 2) [2019] FCA 462; (2019) 369 ALR 512 (per Lee J at 523 [33]–[41]).

[43] But this submission pays insufficient attention to a point stressed in that case. As Lee J observed (at 513 [2]):

Given the heterogeneity of class actions, to speak in definitive and broad terms about how principles of practice and procedure should generally be applied is to court danger. Of course, there are some rules, largely statutory in nature, which necessarily apply to all proceedings, but there is a real danger of elevating statements concerning practice and procedure made in one context into statements of Talmudic significance which must be invariably or uncritically applied. Case management and the application of the practice and procedure provisions of both Part IVA of the [FCA Act] and the provisions of the Federal Court Rules 2011 (Cth)… is a task to be performed on a bespoke basis depending upon the particular facts and circumstances that present themselves. Put another way, care must be taken to “avoid reading judgments on fact specific interlocutory issues of practice and procedure as if they were determinative of precepts and principles of general application”: see Regent Holdings Pty Ltd v Victoria [2012] VSCA 221; (2012) 36 VR 424 at 429 [19] (Nettle, Redlich and Osborn JJA); Gill v Ethicon Sàrl (No 2) [2019] FCA 177 at [6] (Lee J).

[44] In Abbott (at 523–525 [33]–[41]), the following points were made:

(1) the nature of the claim advanced in the relevant class action is highly relevant;

(2) that the respondent in that case could not realistically expect to obtain an order for security in an individual case brought by such claimants and that this was relevant;

(3) that it was relevant that generally group members are entitled to play a passive role while the claims of the applicant and common issues are determined;

(4) the stage at which the provision of security is proposed is relevant;

(5) an award of security in that case would have caused complications (and not only to group members) and that this was relevant;

(6) it is simplistic to apply indiscriminately to Part IVA proceedings the approach to stultification adopted in ordinary, inter partes proceedings; and

(7) it was at least relevant that the Court ought not to put barriers in the way of self-funding class actions.

[45] The primary judge (at J [134]–[138]) identified factors considered by her Honour to be relevant to the circumstances presented in this commercial class action with identifiable group members. The primary judge made reference to Abbott (at J [123]) which her Honour described, correctly, as a mass tort or product liability open class action. To have an appeal ground that asserts error because the primary judge failed “to conduct an analysis of the position of the first and second appellants in accordance with the approach adopted” in a quite different case is insufficient.

[46] In Abbott, after considering the Full Court decisions in Bray v F Hoffman-La Roche Ltd [2003] FCAFC 153; (2003) 130 FCR 317 and Madgwick v Kelly [2013] FCAFC 61; (2013) 212 FCR 1, Lee J observed (at 517 [15]):

Critically, however, context is everything, and nothing in Bray or Madgwick should be seen as delimiting or attenuating the broad discretion the Court has to order, or decline to order, security. It is a discretion to be exercised judicially, having regard to a consideration of the particular facts of the case: Merribee Pastoral Industries Pty Ltd v Australia and New Zealand Banking Group Ltd [1998] HCA 41; (1998) 193 CLR 502. If they are relevant, the factors that may be taken into account are unrestricted, and the weight to be given to them depends upon the fact’s own intrinsic persuasiveness and its impact on other circumstances which have to be weighed: see Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (1985) 1 NSWLR 114; Morris v Hanley [2000] NSWSC 957 at [11]–[21]; Acohs Pty Ltd v Ucorp Pty Ltd [2006] FCA 1279; (2006) 155 FCR 181 at 185–186 [12].

[47] As the Full Court explained in Zoetis Australia Pty Ltd v Abbott [2019] FCAFC 153 (at [7]–[9] per Allsop CJ, Perram and Beach JJ), in refusing the application for leave to appeal, this paragraph revealed a balancing had taken place of all matters considered relevant, including those identified above (at [44]).

[48] It may be accepted that just because group members can obtain the benefit of s 33ZB orders from the answers to common questions, it is simplistic to apply indiscriminately to class actions the approach to stultification adopted in ordinary, inter partes proceedings. It may also be accepted that aspects of her Honour’s reasons might be thought to reveal an approach to stultification which apparently placed minor significance on the special role of group members and the structure and policy of Pt IVA. But read fairly, a balancing also took place in the present case. The primary judge was alive to the proceeding being a class action but thought it was appropriate to characterise the representative proceeding as being commercial in nature and, given the ability to identify the group members, considered, in all the circumstances, there should have been some evidence of the ability and willingness of group members to contribute to any order for security.

(emphasis added)

In Danis v Oliveri Legal Pty Ltd [2023] NSWSC 89, Elkaim AJ, on an appeal from the Magistrates Court, upheld a ground of appeal based on apprehended (cf actual) bias by the Magistrate ruling that the self-represented plaintiff – who was suing the defendant’s solicitors for recovery of service fees – was prohibited from taking notes which would enable him to respond in re-examination.

The appeal contention of apprehended bias was wider – extending to alleged curtailment of the self-represented plaintiff’s cross-examination of one of the defendants so as to complete the trial within the allotted day – but the affirmative appeal finding was much narrower.

[22] The core of the plaintiff’s current complaints seems to arise from her Honour not giving the plaintiff enough hearing time, in particular curtailing his cross-examination of the second defendant, and a refusal to allow him or a friend, to take notes during the hearing. These complaints fall within grounds 8 and 12 of the amended summons. The relevant part of the latter ground is the asserted failure “to afford each party the opportunity to present their case”.

[23] The matter had been allocated one day for the hearing. Apparently, the Magistrate dealt with another matter for 10 minutes before commencing this hearing at about 10:10am. The plaintiff submitted that a normal hearing day is from 9.30am to 4.30pm. He is wrong. Courts do often sit prior to 10am but this is usually to deal with mentions, directions and other interlocutory matters. Courts very rarely sit after 4pm. At best the plaintiff lost 10 minutes of the hearing day that had been allocated. To that extent his complaint has no merit.

[24] More important is the curtailment of his cross-examination of the second defendant in order to ensure the matter finished by 4pm. The plaintiff said that another half an hour would have been sufficient. Based on his meandering cross-examination of the second defendant, I doubt that would have been correct. Nevertheless, the point is whether her Honour, by shortening the cross-examination, gave rise to an apprehension of bias.

[25] The defendant submitted that the Magistrate had actually attempted to assist the plaintiff rather than impede his progress. For example, her Honour told him that the contract issue was “straightforward”, depending on whether the alleged conversation had occurred or not.

[26] The Local Court is a very busy court dealing with many thousands of matters within the overall constraint of trying to achieve this objective efficiently and within the scope of s 56 of the Civil Procedure Act 2005 (NSW).

[27] Further, to have allowed the plaintiff to have continued his cross-examination would almost certainly have caused the matter to have been part heard. In a busy court the adjourned date would probably not have been the next day, but rather some months ahead.

[28] However, estimates can be unreliable, and cases may need to be part heard. An estimate which is incorrect to the extent of no more than, say two hours, is unfortunate but not unusual. In deciding whether the matter should go part heard, the court might take into account that in providing an estimate, one of the parties was self-represented. Other than perhaps vexatious litigants, self-represented parties generally have little experience in estimating hearing times.

[29] Taken alone, the Magistrate’s decision to have the case completed within the single day, while perhaps harsh, is not, without more, enough to establish apprehended bias.

[30] The action of her Honour, which I think takes the matter “over the line”, is her refusal to allow the plaintiff to take notes while being cross-examined.

[31] The refusal also extended to a friend of the plaintiff who was seated in the court.

[32] The defendants submitted that the refusal to allow notetaking was no more than an expression of her Honour’s control of her court. They said that, in respect of the plaintiff, when he entered the witness box he assumed the status of a witness, not a party. A judicial officer observing a witness would be most concerned that the witness was not diverted by constantly taking notes.

[33] Especially in a case involving the credit of a witness, the fact-finder will take the opportunity to observe the witness. A witness taking notes could well impede this exercise. I think there is some validity in this argument, but the issue must be viewed against the background of the plaintiff being self-represented.

[34] Following his cross-examination, the plaintiff would have been entitled to make some statement to the court by way of re-examination. He did not have a lawyer taking notes as a basis for a re-examination. He would have been reliant entirely on his memory.

[35] Had the Magistrate allowed him to take notes, but then seen that his notetaking was excessive, some limitation could have been imposed. However, in this case, the refusal was at the commencement of the plaintiff’s evidence and was unconditional:

DANIS: Is it possible that I take in notepad so I make notes of some, (unintelligible)?

HH: No.

[36] Regarding the friend, the refusal is less controversial because, at the time, the plaintiff was at the bar table and capable of taking a note himself. The request however was once again treated somewhat stridently. Her Honour obviously noticed a person making a note in the back of the court. She said:

Right, mam, what are you writing down back there, thank you. Now put that pen down and your notebook, thank you mam. People don’t write notes in the courtroom, put it away, thank you. I permit lawyers to write, ah, but otherwise no, thank you.

[37] The question that arises is whether these directions to the plaintiff and the person in the back of the court, combined with her Honour’s curtailment of the cross-examination, gives rise to a sustainable case of apprehended bias.

[38] I think that they do. In my view a fair-minded observer, cognisant of the fact that the plaintiff was self-represented, could reasonably apprehend that her Honour was not bringing an impartial mind to the resolution of the case; but rather was more concerned with completion of the case and not allowing distractions, such as notetaking. If the friend was helping the plaintiff, I can see no reason why that friend should have been prevented from taking a note.

[39] But much more importantly, I think disallowing the plaintiff from taking a note while in the witness box, being cross-examined, would, to the fair-minded observer, raise a real question of her Honour’s impartiality.

[40] My initial impression was that her Honour may have been entitled to the “protection” suggested by Meagher JA in Galea v Galea (1990) 19 NSWLR 263 at 283 :

In my view, if a reasonable disinterested bystander had heard the passage at arms complained of in the present case he would not have reasonably apprehended that the trial judge was prejudiced, he would only have noted that an exceptionally irritating witness had eventually succeeded in irritating the judge.

[41] Unfortunately, because as will be seen below, I think her Honour was correct in her findings about the existence of a contract, but I do not think I can “excuse” the directions given about notetaking here. While the plaintiff may have been “irritating” before entering the witness box, the case had only been running for that day and the witness, not having commenced his evidence, was flatly prevented from taking a note.

[42] I accept that a judicial officer is in charge of the court and that “the procedure to be followed at a trial of any proceedings is to be determined by the Court”: r 2.6 of the Local Court Rules 2009 (NSW). However, I know of no rule that says notes may not be taken. The current LawAccess page on the NSW Government Communities & Justice website, which gives guidance on behaviour in court, states:

You are not allowed to use a mobile phone or record anything in the courtroom but you can take notes during the hearing of your case.

(emphasis added)

While, at an overarching level his Honour’s decision is correct, there is cause for pause. One could well imagine that the note-taking litigant may use that task as a means of circumventing proper attention to answering questions asked in cross-examination. The better view, it is submitted, is that at commencement of cross-examination of the self-represented litigant, they ought be told that they can take notes for re-examination, but they should attend the question and only take any necessary note after they have answered the question, or series of questions. The cross-examiner would need to be involved in establishment of such protocol, by keeping the questions on any particular factual issue or sub-topic to no more than about 10 questions, and indicating as much during cross-examination. The issue, however, is not without procedural difficulty. If a sensible protocol is put in place by the presiding judge or magistrate – other unrelated impugned judicial conduct aside – it is difficult to believe that apprehended bias would be demonstrated.

In Ashraf v Lester Dominic Solicitors & Ors [2023] EWCA Civ 4 (13 January 2023), the Court of Appeal of England and Wales – on a successful appeal by a plaintiff executor from a first instance order striking out the plaintiff’s proceeding – concluded, on the facts, that it was arguable a duty of care was owed to the testator mortgagor, Mr Ul Haq, by the solicitor for the outgoing mortgagee of land.  The solicitor was a Mr Kilvert, who was a consultant to a firm of solicitors, Rees Page, one of the defendants.  Following earlier general conduct acting upon his firm’s retainer with the mortgagee, the critical conduct consisted in Mr Kilvert completing a Land Registry “AP1” form with information which enabled the mortgaged land to be transferred, albeit (in the circumstances) without the full mortgage debt being discharged.  The facts pertaining to the accuracy of the information was contentious and a matter for trial (there being no suggestion of professional misconduct on Mr Kilvert’s part), but the application below and on appeal was dealt with (conventionally) on the assumption of the facts being proved at trial.

Nugee LJ –  with whom Arnold LJ and Sir Christopher Floyd agreed – wrote:

53. It is well established that the general rule is that a solicitor acting on behalf of his client owes a duty of care only to his client. A convenient statement to this effect can be found in White v Jones [1995] 2 AC 207 at 256B per Lord Goff. As he there points out, it has accordingly been held that in normal conveyancing transactions a solicitor acting for the seller does not generally owe a duty of care to the buyer (Gran Gelato Ltd v Richcliff Group Ltd [1992] Ch 560 (“Gran Gelato”) per Sir Donald Nicholls V-C); and that a solicitor acting for a party in adversarial litigation does not as a general rule owe a duty of care to his opponent (Al-Kandari v J R Brown & Co [1988] QB 665 (“Al-Kandari”) at 672 per Lord Donaldson MR). A more recent statement to very similar effect can be found in the judgment of Lord Wilson JSC in NRAM Ltd v Steel [2018] UKSC 13 (“NRAM”) at [25], referring to Ross v Caunters [1980] Ch 297 at 322 per Megarry V-C for the proposition that a solicitor generally owes no duty to the opposite party, and to Jain v Trent Strategic Health Authority [2009] AC 853 for the proposition that a litigant does not owe a general duty of care to his opponent. (NRAM was a Scottish appeal but it is not suggested that there is any relevant difference between the law of Scotland and that of England and Wales).

54.  None of this is surprising. Where a solicitor is acting for a client, there will almost always be a contract of retainer under which the solicitor agrees to act for the client in pursuit of some end for the client, whether it be non-contentious business such as conveyancing or making a will, or contentious business such as litigation. Like anyone else providing a professional service, the solicitor prima facie impliedly agrees to carry out that service with reasonable care and skill. (This implication is now, and has for a long time been, statutory: see s. 12 of the Supply of Goods and Services Act 1982 (“there is an implied term that the supplier will carry out the service with reasonable care and skill”) and s. 49 of the Consumer Rights Act 2015 for consumer contracts (“…  treated as including a term that the trader must perform the service with reasonable care and skill”). Although a solicitor generally owes his client a concurrent liability in tort, it therefore remains the case that the source of the duty of care owed by a solicitor to a client is the contract of retainer, and as the statutory formulations show, the core content of the duty of care is to carry out the service he has agreed to carry out with skill and care. Indeed I find it helpful to regard the core content of the duty of care owed to a client as a duty of competence: a solicitor who has agreed to do something for a client has to attain a minimum level of competence in doing what he has agreed to do. I should make it clear that I am not seeking to define the outer limits of a solicitor’s duty to his client: there may be cases where his obligation to promote and safeguard his client’s interests (cf Ross v Caunters at 322A per Megarry V-C: “a solicitor’s duty to his client is to do for him all he properly can”) requires him to do things that he has not been specifically instructed to do. But the core duty owed by a solicitor to his client is to carry out the services he has agreed to carry out with reasonable care and skill, that is reasonable competence.

55. Seen in this light it is obvious why in general the solicitor owes no similar duty to those who are not his clients. He does not owe them any obligation to perform his services with competence for the simple reason that he has not agreed to provide any service to them at all. It is sometimes said that one of the reasons why a solicitor does not owe duties to the other party to a conveyancing transaction, or the other party to litigation, is because their interests diverge from those of his client. This may very often be the case, and is a good illustration of the practical difficulties that can arise if such a duty is held to be owed, but I do not myself think this is the main reason why no such duty is owed. In my view the main reason is because a solicitor acting for a seller is not providing a service to the buyer, and this is so even if it is in the buyer’s interests as much as the seller’s for the transaction to be completed competently. Equally a solicitor acting for a party in litigation has not agreed to provide a service to any other party in the litigation (and this includes not only those on the other side but also those whose interests are aligned with his client but for whom he does not act). In each case the solicitor has not agreed to act for other parties, and has not agreed to provide a service to them, and it follows that he owes them no obligation to perform his services with care and skill.

56.  But it is recognised that there are special cases which are exceptions to the general rule. They seem to me to fall into a number of different groups, and I think it is helpful to keep them distinct. One group of cases is where the very purpose of the solicitor’s retainer by his client A is to confer a benefit on a particular third party B, the classic example being where a testator engages a solicitor to make a will in favour of a beneficiary. Here the solicitor by agreeing to act for A is agreeing to provide a service for the benefit of B, and there seems to me little conceptual difficulty in the conclusion that the solicitor owes a duty not only to the client A who retains him to provide that service but also to the intended beneficiary B for whose benefit he has agreed to provide the service. That that is indeed the law was finally established by the decision of the House of Lords in White v Jones (approving the decision of Megarry V-C in Ross v Caunters), although the speeches in that case, which was only decided by a majority of three to two, show that even this modest extension of the law was regarded as far from straightforward. This type of case plainly has no relevance here: the Bank did not on any view engage Mr Kilvert to confer a benefit on Mr Ul Haq.

57. A second group of cases is where the solicitor for one party makes representations to the other party on which the other party relies. Here the general principle that no duty of care is owed usually applies. That was decided by Sir Donald Nicholls V-C in Gran Gelato in relation to ordinary conveyancing transactions, and the whole question was re-examined more recently by the Supreme Court in NRAM. Lord Wilson identified the general principle at [25], considered six particular cases, including Gran Gelato, at [26]-[31], and concluded at [32] that they demonstrated that a solicitor will not assume responsibility towards the opposing party unless it was reasonable for the latter to rely on what the solicitor said, and reasonably foreseeable by the solicitor that he would do so. This will not normally be the case as such reliance by an opposing party is “presumptively inappropriate”. In NRAM itself the solicitor for a borrower who was selling part of a charged property and intending to use the proceeds to redeem a part of the loan secured on it sent an e-mail to the lender, who was unrepresented, saying (quite inaccurately) that the whole loan was being discharged. The Supreme Court held that no duty was owed.

58. But Lord Wilson recognised that there were cases where it was reasonable and foreseeable that representations would be relied on by the other party. One example was Allied Finance and Investments Ltd & Haddow & Co [1983] NZLR 22. Here the solicitor for a borrower certified to the lender that an instrument of security over the borrower’s yacht was binding on him. It was the giving of the certificate that made it foreseeable that the lender would be likely to rely on it. To similar effect are Connell v Odlum [1993] 2 NZLR 257 where a solicitor certified that he had explained a pre-nuptial agreement to an intending wife, and it was held to be highly arguable that in giving the certificate the solicitor owed a duty of care to her future husband; and Dean v Allin & Watts [2001] 2 Ll Rep 249 where solicitors acting for borrowers were held to owe a duty of care to the lender in relation to third party security, where the solicitors knew or should have known that the lender was relying on them in that regard. (Dean v Allin is a bit different as it was not a representation case, but it was one of reliance: see per Robert Walker LJ at [69]). Again I do not think that this group of cases has any relevance to the present case. Mr Kilvert did not give any certificates, or make any other representations, to Mr Ul Haq on which Mr Ul Haq relied, nor is this pleaded as a reliance case.

59.  A third type of case is exemplified by another of Lord Wilson’s six cases, namely Al-Kandari. Here in litigation between wife and husband a consent order was agreed under which the husband surrendered his passport (which also included the children on it) to his solicitors. They agreed that their London agents could take it to the Kuwaiti embassy to have the children’s names removed, where the husband succeeded in deceiving the embassy into letting it into his possession. This Court, upholding French J although for slightly different reasons, held that the husband’s solicitors were in breach of a duty of care to the wife. On the question of whether a duty of care was owed, Lord Donaldson MR said this (at 672D):

“In voluntarily agreeing to hold the passport to the order of the court, the solicitors had stepped outside their role as solicitors for their client and accepted responsibilities towards both their client and Mrs Al-Kandari and the children.”

60.  Bingham LJ gave a concurring judgment in which he also referred to the solicitors stepping aside from their role as solicitor for one party, as follows (at 675H to 676D):

“Ordinarily … in contested civil litigation a solicitor’s proper concern is to do what is best for his client without regard to the interests of his opponent.

It may nevertheless happen, even in the course of contested civil litigation, that a solicitor for a limited purpose steps aside from his role as solicitor and agent of one party and assumes a different role, either independent of both parties or as agent of both. The most common example is where he is deputed to hold a fund pending a decision on its ownership or application. The solicitor is selected for such a role, not because he is one party’s solicitor, but despite that fact; he is selected because the parties know they can rely on him as a solicitor to act with probity and in accordance with the terms of the trust he has undertaken.

… It was not necessary for the plaintiff’s protection that it should have been the defendants who held the passport. The court or a bank or an entirely independent firm of solicitors could have done it. But the plaintiff and her advisers were content that the defendants should hold the passport because they were confident that the passport would be as safe with them as in any other independent hands.

In so holding the passport the defendants were not acting as solicitors and agents of Mr Al-Kandari, their client, but as independent custodians subject to the directions of the court and the joint directions of the parties. I have no doubt that in this situation the defendants owed the plaintiff a duty of care, since the purpose of holding the passport at all was to protect her lawful rights.”

61.  The principle that solicitors can owe a duty of care when they have stepped outside their normal role (which I will call the Al-Kandari principle) was accepted by Lord Wilson in NRAM at [32]. There is a question in the present case whether it applies to the filling in and lodging of the AP1 form by Mr Kilvert on 21 June 2011. That is a point I will come back to below. But up until that date I do not see that the Al-Kandari principle has any arguable application to the present case. Mr Kilvert did nothing between being first instructed and 21 June 2011 which could arguably be regarded as stepping outside his role as solicitor for the Bank, and taking on a role as acting for all parties or as acting also for Mr Ul Haq.

62.  It can be seen that the circumstances that generate the duty of care in these three types of case (instructions to solicitors by A to confer a benefit on B, representations or actions by solicitors reasonably and foreseeably relied on by other parties, and solicitors stepping outside their role) are all rather different. Beyond these three types of case there is scant authority for solicitors owing duties of care to those that are not their clients.

63.  That brings me to P&P Property Ltd v Owen, White and Catlin LLP [2018] ESCA Civ 1082, where appeals in two unrelated cases were heard together. In both cases solicitors had innocently acted for a fraudster who posed as the owner of a registered property and instructed the solicitors to act for him in a sale of the property to a genuine purchaser. The purchaser in each case paid the purchase money on completion, but the fraud was discovered before registration of title and they acquired no interest in the property. In each case the defrauded purchaser sought to make the solicitors liable for, among other things, breach of a duty of care owed to them. The suggested duty was a duty to take reasonable care to carry out anti-money laundering (AML) checks to verify their client’s identity. Patten LJ (with whom Floyd and Gloster LJJ agreed) held that no such duty was owed.

64.  At [72] Patten LJ pointed out that the claims in negligence were not based on misrepresentations. At [74] he said that the imposition of liability in negligence towards a third party who is not the solicitor’s client clearly requires something more than it being foreseeable that loss will be caused to the third party by a lack of care in carrying out the relevant task. Nor is proximity sufficient. The incremental approach approved in Caparo Industries plc v Dickman [1990] 2 AC 605 required all these and any other relevant factors to be taken into account, including any relevant policy considerations. At [75] he said that the Supreme Court in NRAM had recently affirmed the assumption of responsibility as the foundation of liability in negligence in such cases, continuing at [76] as follows:

“As Lord Wilson JSC explains in his judgment, the requirement that there should be an assumption of responsibility is to some extent a legal construct in the sense that in many cases the defendant solicitor or other professional will be treated as having assumed responsibility to the third party for his actions by virtue of the proximity between them and the obvious effect which any failure on his part would have on the third party. There will rarely be an actual, conscious and voluntary assumption of responsibility not least because the solicitor or other professional will have a client to whom he is contractually bound. But, on the basis that the court is deciding whether to treat the defendant as having assumed legal responsibility to the third party, non-client, for his actions, it will be necessary to balance the foreseeability that the third party will rely on the professional to perform their task in a competent manner against any other factors which would make such an imposition of liability unreasonable or unfair.”

65.  He then proceeded to consider the factors in the cases under appeal, namely: there was no actual assumption of responsibility [77]; the AML requirements were not imposed for the benefit of any particular class of persons, such as the purchasers, but for the benefit of society at large, the principal purpose being to deter money laundering and terrorism rather than to combat identity fraud [78]; unlike cases such as White v Jones and Dean v Allin where the instructions the solicitors received were intended to benefit both their clients and the third party, in the present cases the vendors and purchasers were very much at arm’s length and the AML checks were carried out to satisfy the regulations and not as part of a transaction designed to benefit the purchasers [79]-[80]; the solicitors could have been asked for undertakings or assurances, but were not [81]; it was not objectively reasonable to assume that the AML checks would be complete and the solicitors legally accountable to the purchasers [81]; and Parliament had not intended breach of the regulations to confer a right of action on the purchasers [81]. Taking all these factors into account, it would not be fair and reasonable to treat the solicitors as having assumed responsibility to the purchasers for the adequacy of the due diligence performed in relation to their client’s identity [82].

(emphasis added)

It is submitted what is canvassed in Ashraf mirrors Australian law.

As to the first category of case referred to by Nugee LJ, the seminal decision is that of the High Court of Australia in Hill v Van Erp (1997) 188 CLR 159.  As to qualification of that decision – turning on the principal obligation owed by the solicitor to the testator, despite a posited secondary obligation owed to the beneficiary – see Queensland Art Gallery v Henderson Trout [2000] QCA 93, Howe v Fischer [2014] NSWCA 286 and Badenach v Calvert (2016)  257 CLR 440.  As to complications arising from a testator’s incapacity, see McFee v Reilly [2018] NSWCA 322.

The other categories adverted to in Ashraf are canvassed at length – in respect of both non-contentious business and litigation – in Abadee & Ors “Professional Liability in Australia” (Fourth Edition, 2023, Thomson Reuters) at [3.625] and [3.630].  Those learned authors opine, also, at [4.190], that a barrister may owe a duty of care to a non-client in circumstances where there is  “a coincidence of interest between client and a third party”.

The following is a transcript of a panel discussion conducted at a CPD session from 2012, which focussed on  practical ways that Junior Counsel could improve performance and practice. The panel comprised Danny Gore QC, Graham Gibson QC and Phil Morrison QC and the session was chaired by Richard Douglas S.C.

RICHARD DOUGLAS SC:

We have the pleasure of six highly regarded members of our Bar Association favouring us with their presentation this evening. The format will be as follows:

• the three junior counsel, Adrian Duffy, Damien O’Brien and Liam Dollar will address you, for about 15 minutes each, on a range of topics on the practical aspects of the silk/junior paradigm.
• that will be followed by a panel discussion where our three silk panellists, Danny Gore QC, Graham Gibson QC and Phil Morrison QC, will canvass their views in response to a number of questions put by me, and of which as a matter of courtesy I have given them some advance notice. That should take about 30 to 35 minutes.
• that will then leave us with 10 to 15 minutes for questions.

Dr Cliff Pannam QC, who among other things wrote the book “The Horse and the Law”, said on an occasion like this in Victoria about a decade ago:

… there is no more satisfying experience and rewarding professional experience that junior and senior counsel can enjoy than working, arguing and making decisions together for the purpose of presenting and advancing a client’s cause. The otherwise loneliness of the professional task becomes a shared experience with the opportunity of being able to bounce ideas off one another; to have argument and tactics mutually evaluated; and to share from possibly (and hopefully) different perspectives how an advice should be formulated, pleadings structured, or a case conducted.

I proceed to our speakers.

ADRIAN DUFFY, DAMIEN O’BRIEN AND LIAM DOLLAR THEN SPOKE — SEE THEIR PAPERS ON BAQ CPD WEBSITE.

RICHARD DOUGLAS SC:

Danny Gore, in matters in which you are asked to nominate a suggested Junior Counsel, what are the attributes that you look for in such nomination? Is it your experience with them as your Junior, that they have been opposed to you, or is it is as simple as they are in the room next door or up the corridor?

DANNY GORE QC:

Damien [O’Brien} has really touched upon this group of issues in talking about what Silk a Junior should select. It obviously depends upon the nature of the case. You have to think of a Junior who is appropriate to the particular subject matter of the case. And also for the style of case that it is, whether it is a trial, application or an appeal. We all have different skills and some Juniors are better at say outlines of argument than they are at examining or cross-examining witnesses. So, if as a Silk you want someone to do a good outline of argument, you will look in that direction. If you want someone to handle some of the major witnesses in the case, you would look in that direction. As Damien has also said, communication is important. You can’t work as a team unless you are able to communicate together.

John Gallagher will be disappointed if I didn’t tell a story from time to time in responding to these questions.

I do not remember the first case where I appeared as a Junior to a Silk, but I recall the first case where I appeared with the late and great Peter Connolly QC. He was clearly the leader at the Bar when I was finishing my studies as a Judge’s Associate. For me he was “Mr Connolly”: “Yes Mr Connolly I will tell the Judge that … blah blah blah”. When I came to the Bar I was in the small old lift in the old Inns of Court and I said “Good Morning Mr Connolly”, and he turned on me and said ‘Gore, you are at the Bar now you either call me Peter or you call me Connolly, there is no Mr at the Bar”. I said “Yes Mr Connolly, ah yes Peter, ah yes ummm….”. So how Peter picked me for our first case together I don’t know. Maybe because he knew I would be someone he could ride rough-shod over, I don’t know.

RICHARD DOUGLAS SC:

Phil, given Danny’s comments of Junior selection based on who has experience in a particular field of expertise do you think that means the junior Juniors struggle all the more to get the Junior briefs.

PHIL MORRISON QC:

I think it does. And whilst I agree with those comments I think the ability to leave small appropriate and very expensive gifts has really been overlooked [MUCH LAUGHTER]. But I can say from my own experience two things.

One is as a Silk I am not looking for some patsy to come and say yes and nod their head and sit around like a yard of pump water. I actually like people who come and contribute, stand up, speak their mind, object and intervene when they disagree, not mindlessly agree. I want someone who will bring something to the case, not just come along and be a patsy. That has its own vices. It does lead to a catch 22. I can remember when I started, I think it might have been about 10 years before I got Junior brief to anybody. Simply because I wasn’t fashionable. I didn’t have expensive gifts you know! Graham Gibson and people like David Jackson were very fashionable and they were off with Silks all the time and it used to drive me nuts. So I think that catch 22 does work.

The counter point of all that is, what can you do to make yourself sort of more attractive to Silks? There is only one answer to that … gifts! [MORE LAUGHTER]

RICHARD DOUGLAS SC:

Graham, Damien O’Brien spoke of a practice, an inimical practice as he has described it, of Juniors for a variety of reasons sending drafts to instructing solicitors of their pleadings and advices. I have certainly struck it and the excuse given, unsatisfactorily in my view, is that it is nothing to do with me, it is the relationship that they have with the solicitor that got me the Silk brief in the first place. What’s your view of that practice?

GRAHAM GIBSON QC:

The provision of “draft” opinions to solicitors must be positively discouraged. There can be no upside in that at all. You might think that there is an upside in terms of fostering or maintaining a relationship with a solicitor. It might work that way for a short period of time but inevitably it will come to grief at some stage. There is one exception I think that comes to mind. For example, you might be briefed on an issue of particular specialty or expertise, say a stamp duty matter, by a solicitor who has extensive experience in that field.  In such a case, especially if the brief does not include a memo of the solicitors’ views, or a letter of advice from the solicitor to the client, it may be appropriate for Counsel to seek the solicitor’s views on a draft of the opinion. 

RICHARD DOUGLAS SC:

Phil, Adrian [Duffy] raised the point about disputes between Junior and Senior arising on the run so to speak in Court. What is your view about that?

PHIL MORRISON QC:

That’s a simple one. I agree with Adrian. You have got to do it [disputation], as it were, out of sight of the Court. You can’t have a family barney going on when the Judges can hear every word you are saying and it goes down on the record and the other side can see it as well. If you disagree about objections, the practical reality of that is that mostly it will be settled by the Silk either by taking the objection or not taking the objection. If you feel really strongly about it either way, either the Silk feels that an objection should be taken or a Junior feels an objection should be taken, it is not just the person on their feet who can take an objection.

I have experienced a situation where I was taking a witness on my side and the person who was actually taking the witness on the other side didn’t take the objection, but rather the Silk did. At the time I thought it a bit unusual.

So you can do it, but resolve it as quietly as you can. There is always an opportunity, when either if it’s an examination in chief that comes to an end or alternatively it’s cross examination. There is always a pause of some sort and if necessary you can say we need five minutes to sort this out.

DANNY GORE QC :

Can I respond to that one? Because it enables me to tell another Peter Connolly story.

RICHARD DOUGLAS SC:

Certainly. They are very important these stories.

DANNY GORE QC:

They are important because these are important names for members of the Bar and most of you didn’t even appear before Peter Connolly.

RICHARD DOUGLAS SC:

One of the great members of our Bar and our Bench .

DANNY GORE QC:

Absolutely. He should have been on the High Court. He had that intellect. He was appearing before the High Court in one case. Sir Garfield Barwick was presiding. Connolly was in difficulty over a point. Barwick was really pressing him on this point. Connolly’s Junior, who I won’t name but he later became a District Court Judge, put up a CLR volume and said to him “Connolly read this, read this, read this!” This is the sort of thing that Adrian [Duffy] raised. So Connolly quickly read it, stalled on the point and said “oh look your Honour we rely upon what Justice Kitto said in the matter of so and so and so and so…”. Barwick responded to Connolly that Justice Kitto was in the dissent. And Connolly picked up the book and threw it across the Bar table and turned to his Junior and said “Whose bloody side are you on?”.

Look, I agree with what Phil [Morrison] said on the objection question, as a Silk if you say to a Junior: “Look I think you should object”. You just sense straight away the hesitation for whatever reason, if as a Silk you think you should object, up you get. There used to be an old English practice that only the examining Counsel could object, but I think the practice in Queensland is different and nationally is different. It was also a practice in England that you couldn’t split witnesses, in other words you couldn’t partly examine with the leader and partly with the Junior. I think that practice is still prevalent in Queensland, but that may change.

RICHARD DOUGLAS SC:

Probably best to raise those issues with the Judge if you are going to do it in a larger trial?

DANNY GORE QC:

Exactly. I agree. It is unfair to Counsel on his or her feet for someone sitting down to say please ask this. I mean, I hate it as a Silk and the Junior should hate it as well. So as a Silk you don’t do it unless you think you really have to. You know what level of discussion you have had with the Junior about the point. If you think it is so important it needs to be asked and you feel that the Junior is probably not across the detail, you just have to ask for an adjournment. You then go outside and talk to you Junior about it and let him or her go after that.

PHIL MORRISON QC:

Let me tell a Danny Gore story that tells you about the resolution of conflicts between Junior and Silk. I was Danny’s Junior in a case. We were at a long bar table in the District Court, Planning Court I think. There was a dispute going on between Danny and the opposing Silk about a call for a document. Danny’s opponent wasn’t responding to his call. Finally, things got tense. I was sitting to Danny’s right and the other Silk was to my right again. In front of my eyes about this far off the Bar table, this bound volume, which was the document called for, went sailing through the air. The other Silk had thrown it the air the length of the Bar table and went way past my eyes and went crash and over went the glasses of water. I thought ‘Wow this is exciting’. I reached out to get it and Danny’s hand landed firmly on my arm. He stood there and said “Your Honour, that is not a proper response to the call.” That conflict was resolved.

RICHARD DOUGLAS SC:

The stories are more important than the theory. I will go to you Graham. Liam Dollar raised the issue about disparate views being expressed by Junior and Senior Counsel. These are a good thing in terms of producing a proper result. But what if those disparate views persist in relation to the provision of opinions, trial theory, cross examination? I am not saying it happens a lot, but I have seen it happen. How does one deal with that?

GRAHAM GIBSON QC:

Well you have covered a number of different topics there. If one takes for example an opinion. Frankly, I think a frank discussion of views is to be encouraged between Silk and Junior. Now for many of you who won’t have had the experience, if the Silk has views on the topic, and you have your different views, persist if you think that is the right way to go. I think it is a most productive aspect of Counsel working together.

In respect of the presentation of a case in court, if  things become intractable, ultimately the Silk bears responsibility [for the result].  But only after much talking about a case that is usually months in preparation or in execution.  Discussion is to be encouraged and, if necessary, a persistent and fundamental difference may have to be reflected in the expression of differing views in an opinion.

I can’t let Danny have a monopoly on the Peter Connolly stories.  Peter Connolly had an awesome reputation as a barrister and a fearsome reputation.  On the subject of Juniors, and their performance, he expressed the view, or at least it’s attributed to him, that there are two kinds of junior…..those who pop in after a case to enquire as to how it has gone…..and those who don’t! 

RICHARD DOUGLAS SC:

On that question of conflict, Phil or Danny, any additional comments?

PHIL MORRISON QC:

I know through the Bar Practice Course I was doing that one of the things that I have always told the Bar Prac people who are going to be Junior Barristers: they ought never try and pretend to know more than they do. It will hurt you time and time again. We should all do that and I try to do that. Who knows I have got enough ignorance. So when you get a conflict like that, both as a Junior and the Silk, you should be doing this as well. You shouldn’t just assume that you know every damn thing in the world. You [Silk] should be open to the fact that there is a contrary view, and it may well be right.

This is why I say to you I want Juniors who are not just sitting around doing nothing. I actually want people who are a proper sounding board to test what I am doing and to say that they think I am doing it wrong or have it wrong, or got some decision wrong, or I don’t understand the law or whatever else. You don’t actually have to have a brawl about it; you have a mature discussion.

One of you will give ground and if you ultimately don’t then you simply have to live with one another, maintaining your opposite views. The judge will tell you which one is right eventually.

DANNY GORE QC:

Just a brief comment on that. The way I have normally found it is if say on a point of law you and your Junior have a different view, it is quite easy to handle. In a joint opinion you identify the two competing arguments and then when you deal with prospects your assessment of prospects will reflect the differing views that you have.

So if you were both in favour of a particular point you might assess the prospects as being say 60% in favour of winning that point. But if the Silk is in favour of it and the Junior is against it but a very competent Junior you might assess the prospects a bit within the range of 40 to 60%. So you have dropped the prospects below that 50% to reflect the fact that there is recognition of a contrary argument. And you don’t even have to spell out in the opinion if you don’t want to that the Junior supports one argument and the Silk supports another. There are ways of dealing with it. Learn how to deal with it.

RICHARD DOUGLAS SC:

Senior and Junior Counsel are often involved in litigation over a period of months and there are important and not so important points in the interlocutory phases. There are some Silks who want to have everything run past them. Some are irritated by the fact that they are cc’d on every email on every interlocutory instant. Phil what is your view about that?

PHIL MORRISON QC:

I am very much in the latter [camp]. I don’t want to know everything at all. And I get very irritated if I get mindlessly copied in on things that I don’t need to know. It is normally solved if nipped in the bud very early by one or other of us saying “I don’t want to know about this’, or me saying ‘Listen, don’t bother me about all of that stuff, bother me about these things. And please, (and this has been happening very recently) tell the bloody client not to hit reply all on every damn email he gets because suddenly I start getting client emails which I don’t want.”

I suspect the true answer is it depends on your relationship with your Junior. If you are briefed with somebody – this goes both ways – if you are briefed with somebody in whom you don’t have complete confidence then you are naturally going to be a little more edgy.

RICHARD DOUGLAS SC:

Danny, have you any comment on that?

DANNY GORE QC:

The kind of advice I give to a Junior is to treat the case as your own. Pretend that you don’t have a leader. Weigh up your own skills because you will be developing outlines of arguments and pleadings, and so on, which ultimately will be reviewed appropriately by your leader and you will see how well you meet the standard. As a Junior you shouldn’t think this is easy. You should actually think this is hard because I am going to be tested by my own leader, and he or she could be really quite rude to me if I get it wrong.

If you treat the case as your own the rest will sort itself out. The leader will know that you are actually doing a great job because you are taking on all of that responsibility. The leader will let you know also how often he wants you to know something about that case.

RICHARD DOUGLAS SC:

Can I ask you, Graham, about the issue of division of labour which was canvassed by Adrian [Duffy]. He spoke about the agreed division of issues and witnesses and the like. The question I have for you is this: how early in the process of the brief would that the agreed? Should the briefing solicitor be involved in that division of labour?

GRAHAM GIBSON QC:

Although the subject of the division of witnesses and issues will evolve during the preparation of a case, they are matters that should be addressed and resolved — even if only tentatively — in good time before the hearing.  As a Junior, to avoid any nasty shocks, you should discuss these topics candidly with your leader at the earliest opportunity. 

As to the second aspect, it is a courtesy to involve the solicitor, and I think that should be done.   That said, if I have made up my mind about it in conjunction with my Junior it won’t really matter what the solicitor says about it.  But occasionally solicitors have strong views about such things and it is an issue to bear in mind. 

RICHARD DOUGLAS SC:

There might be a bit of a shock, for instance, at trial for a Junior to find he or she must take a particular witness?

GRAHAM GIBSON QC:

Well, that is what I had in mind when saying so that it is hardly in anybody’s interest that anyone suffer shocks.  The nature of litigation is that we suffer enough shocks unintentionally and we don’t want to inflict any more on ourselves.   That depends on the nature of the case.  Responding to an injunction application, for example, requires decisions to be made immediately and dealing with the matter as if it were a commando raid.   If a trial is months away and there are lots of witnesses it will evolve.  It can’t be left until the last minute obviously. 

What I do is to share my evolving views with the Junior I am working with to see to what extent that they agree with that and are comfortable with it. I should emphasise that I would not expect an inexperienced Junior to be taking witnesses. But it it is not actually doing the Juniors a favour to give them easy ride of sitting quietly in the chair doing nothing because part of the exercise is getting experience. It is a balancing exercise.

RICHARD DOUGLAS SC:

Sometimes the Junior won’t even be in court at a shorter trial. They may not be present half the time they might be out preparing the submissions, assuming they have to make submissions.

Phil and Danny, any comment on that particular issue — division of labour, involvement of solicitor, flexibility?

DANNY GORE QC:

Another Peter Connolly story I am afraid. I was Peter’s Junior in a demurrer.

RICHARD DOUGLAS SC:

You should publish these!

DANNY GORE QC:

Along with the restaurant guide. In a demurrer to a claim for specific performance of a lease and we had a conference with the clients and Peter confidently told the client that we could successfully demur on the basis that the statement of claim didn’t identify the date of commencement of the lease. And he said to me “Gore, you go away and do an outline of argument”. It was in the Full Court of course. So I went and did some research and I found a couple of [English] Court of Appeal decisions which said that you couldn’t demur in those circumstances. I think from memory Lord Denning was on in one I had just come out of university and I thought “This is hot!”

So I went back to Connolly’s chambers and knocked tentatively on the door and he ripped the door open and said “What do you want, you haven’t got a consultation”. I said “I know Peter … Connolly … Mr Connolly, but I have found these decisions of the English Court of Appeal which say that we can’t demur in that matter of so and so…”, he said “They are wrong”. He didn’t bat an eyelid, he just said they are wrong. “Go away and do an outline of argument that says they are wrong.” I said “Why I didn’t think of that?”. As John Cleese said in A Fish Called Wanda — “We won the case”. Peter had his own style. He was a bit rough. In fact he came down to my chambers the next morning and he knocked quietly on the door and I didn’t know who it was and I opened it and he said “Gore I want to come in and say I was a bit tough on you yesterday, I apologise”.

RICHARD DOUGLAS SC:

But he still wanted you to do the outline?

DANNY GORE QC:

He still wanted me to do the outline.

RICHARD DOUGLAS SC:

I have one more question because I want to give an opportunity to these people to ask questions if they wish. It concerns dissatisfaction with Junior Counsel. There must have been occasions where you have been dissatisfied with the performance of Junior Counsel either because of their application to tasks, perhaps their ability, so much so that you think that the client’s interests would be best served by them not continuing as Junior. And perhaps they are a little resistant to that. What’s your view about that issue?

PHIL MORRISON QC:

I don’t think there is any doubt about what should happen, unless you are exercising some sort of prejudice, and hopefully you are not doing that. I have been in a situation where I formed the view that the client’s best interests required a change of Junior. I had no hesitation just as I would expect if the Junior really formed the view that I was such a gallactically stupid person that I couldn’t continue in the case. The Junior should raise it with the solicitor. So I don’t really think there is much doubt about what should happen.

And I will tell you a story, not a Peter Connolly story, a Senior Judge Administrator [Byrne J] story when he was at the Bar and in my chambers. He was fairly tough on Junior barristers even within his chambers as you may not be surprised to hear, particularly when they were working for him as his Junior. If he gave you a task, say a pleading, but usually not a full blown opinion necessarily, he would ask you, or give it to you at 4 o’clock in the afternoon and the next morning say “Have you done that yet?” If you said “No” he would say “Oh dear, we don’t have that much time, perhaps we had better get another Junior in immediately”. So he would discuss switching you out if you couldn’t do it and I think that’s the answer to it. It’s the client’s case, it has to be run the best it can be.

RICHARD DOUGLAS SC:

Graham?

GRAHAM GIBSON QC:

Fortunately perhaps I have never been in that situation but if worst comes to worst, that is right. But one would hope that it could be avoided by counselling.

RICHARD DOUGLAS SC:

Danny can I offer the microphone to anyone to wants to ask questions? Or do you want to tell another Peter Connolly story?

PHIL MORRISON QC:

While you are thinking of questions, can I give you a story about division of labour. You have to be flexible. If you divide the labour up you really have to be flexible. When I was Junior to Pincus, I was taking a particular witness, I knew that and so when that witness was giving the evidence I was there taking every note in the world and concentrating so hard my brain popped. And then the evidence finished and I stood up to cross-examine.

Well I tried to stand up to cross-examine and I got half the way out of my chair and this big hand next to me went thump on my shoulder. Pincus had decided he would take the witness after all. He didn’t bother telling me, just banged me down in my seat and stood up and did it off the top of his head. So be flexible!

RICHARD FRYBERG THEN ASKED A QUESTION ABOUT HOW JUNIORS WERE SELECTED.

GRAHAM GIBSON QC:

It is the exception rather than the rule for me to be contacted by a solicitor and asked ‘Who would you like briefed as a Junior?’  Usually the Junior has been contacted by the solicitor already, or the solicitor will have a Junior in mind. 

If I am contacted the solicitor will say “We would like you to take this brief, we are thinking of briefing X as the Junior, are you comfortable with that.”  And I don’t think I have ever said “No, I am not comfortable with that”.  Although there are circumstances when there has been a discussion – especially when the solicitor has mentioned a few names – as to the nature of the case, the degree of the experience, the sort of matters Danny was talking about at the outset.  “What is the skill set likely to be required?”  In my case, I’m quite sure that much of my work comes from the recommendation of Juniors, and so the opportunity to positively recommend a Junior is somewhat limited.

RICHARD DOUGLAS SC:

Danny?

DANNY GORE QC:

It is probably a little bit more evenly divided in the case of my particular practice. Sometimes, you know, 50% of the time I will be recommending the Junior or vice versa.

One strong piece of advice I want to give to you all, or to the Juniors of course, you should make it one of your goals to be asked to be a Junior to a Silk that you don’t know. Because in a sense then you will know you have really made it because the Silk will really only have approved of that recommendation on your reputation if you don’t know him. So it might be that he was against you in a case, you were doing a case by yourself, you were a Junior to somebody else, or he was sitting in the back of the Court in the Court of Appeal one day and saw you fully argue a case. For whatever reason when a Silk asks for a Junior that he hasn’t worked with before, as I say, you will know you have made it.

RICHARD DOUGLAS SC:

I adverted earlier to what Dr Pannam QC said some years ago. Can I quote further from Dr Pannam from that same occasion. He expressed himself in a manner which fairly resonates with a number of comments this evening pertaining to the role of a junior when briefed with a silk:

For my part I find that there is nothing more interesting and challenging than to work up a case in common with junior counsel, especially with a junior who has particular views about the matter in hand whatever they might be. It is then that the client is best served by having both senior and junior counsel. Juniors whose sole contribution is to rubber stamp senior counsel’s views without any independent examination should just return the brief. They are of little or no use. A reasoned agreement with senior counsel’s views is a very different matter.

I would ask you all to show your appreciation for your participating colleagues in the usual way.

Thank you and have a good evening.

On 13 January this year The Law Society Gazette (UK) reported on the First use of AI-based technology in a murder trial at the Old Bailey. 

A link to the full article can be viewed here.

Failure to afford continuous disclosure, civil penalty and issues with undertaking to court.

In a decision handed down on 16 February 2023, Lee J of the Federal Court of Australia in Australian Securities and Investments Commission v GetSwift Limited (Penalty Hearing) [2023] FCA 100 imposed a $15m penalty against the respondent company (now in liquidation) for breaches of the continuous disclosure obligations under the Corporations Act 2001 (Cth) (s.674 et al), along with other beaches of the Australian Securities and Investments Commission Act 2001 (Cth). Former directors and General Counsel were disqualified and also fined. His Honour expressed himself colourfully when considering the operation of the respondent company and its failure to meet the continuous disclosure obligations. An issue also arose as to undertaking given to the Court by the company, and the company subsequently falling into liquidation. Sufficient is excerpted below to give the reader the gist of the liability and penalty cases respectively. Such civil penalty is substantial, but plainly apt on the findings made. One doubts any portion thereof will be paid.

A INTRODUCTION AND PREVIOUS FINDINGS

1 To adapt the famous remark of Ted Heath, GetSwift Limited (in liq) (GetSwift), and those primarily responsible for its wrongful conduct, could be described as representing the unacceptable face of start-up capitalism.

2 GetSwift was a public “early stage technology company” that generated operating losses in every year of its existence. Notwithstanding this, from an issue price of 20 cents in December 2016, within a year, its share price had risen to well over $4, prior to a trading halt announcement. It raised a total of $104,000,000 from investors in two placements. It became a market darling because it adopted an unlawful public-relations-driven approach to corporate disclosure instigated and driven by those wielding power within the company.

3 This eventually became apparent. Three days after the publication of an article in January 2018 in the Australian Financial Review entitled “GetSwift: Too Fast For its Own Good” (cogently explaining that GetSwift had failed to update the market about losing materially significant contracts), Get Swift Logistics Pty Ltd (Get Swift Logistics) (a wholly owned subsidiary) transferred $72,000,000 to a bank account held by GetSwift, Inc (another wholly owned subsidiary incorporated in the United States). On 22 August 2018, following the commencement of an investigation by the Australian Securities and Investments Commission (ASIC) in February 2018, Get Swift Logistics transferred an additional $8,500,000 to an offshore bank account held by GetSwift, Inc., bringing the total funds transferred to $80,500,000. These transactions were unexplained by any evidence before me.

4 More remarkably, well after the balloon had gone up, the share price had plummeted, a class action had been started, and at around the same time the evidence concluded in the liability phase of the ASIC regulatory case before me, GetSwift sought to re-domicile to Canada. GetSwift convinced another judge of this Court to allow it to do so, partly on the basis of an undertaking that GetSwift Technologies Limited (GetSwift Technologies) would not take any steps to wind up GetSwift and would indemnify GetSwift in relation to penalties imposed in this case or in relation to an adverse judgment in the class action. ASIC did not pre-emptively make an application to me to restrain the removal of GetSwift from Australia when the highly unusual course was proposed during the pendency of the regulatory proceeding (although it is fair to record it did oppose the scheme approval in the separate proceeding).

5 The undertaking was not worth the paper it was written on. GetSwift Technologies (as GetSwift’s only member) resolved in July 2022 to place GetSwift into voluntary liquidation. The absence of any likely return means the class action brought by shareholders (Webb v GetSwift Limited & Anor, NSD 580 of 2018) has now settled with no recovery by those who suffered loss by reason of GetSwift’s breaches. In approving settlement of the class action on 2 February 2023, Murphy J observed that GetSwift’s “own misconduct has now brought it to its knees” and that its actions represented a “scandalous episode of corporate misconduct”. One can only agree with his Honour’s observations.

6 What is the response of the people responsible for this dreadful state of affairs?

7 Mr Bane Hunter, the former executive chairman and chief executive officer, and principal instigator of the wrongdoing of GetSwift, has not returned to Australia to defend his position and did not appear at the penalty hearing. His lieutenant, Mr Joel Macdonald, after initially appearing at a case management hearing, has also not turned up to defend himself. He also signed the resolution winding up GetSwift.

8 After putting ASIC to proof in every aspect of its intricate case and requiring expenditure of vast public resources, neither Mr Hunter nor Mr Macdonald have shown the slightest degree of remorse or contrition, nor have they made any acknowledgement they behaved improperly. Additionally, ASIC has been unable to explore where all the money raised from investors went.

9 It is against this singular background that I am required to consider the civil penalty to be paid by the liquidated malefactor, Messrs Hunter and Macdonald and by Mr Brett Eagle (a solicitor who remains in Australia and who has, by contrast, engaged with the penalty case). I am also required to consider whether each of the individuals should be disqualified from managing corporations in the future and, if so, for how long. I have already said enough to make it obvious that this is an unusual civil penalty case, which has no ready analogue.

10 My mercifully unreported liability judgment in this matter (Australian Securities and Investments Commission v GetSwift Limited (Liability Hearing) [2021] FCA 1384 (Liability Judgment)) was 2,618 paragraphs long. As I then explained, its size was the result of the case advanced by the ASIC being vast in scope, involving the need to wade doggedly through a prodigious documentary case and make innumerable findings. These reasons assume familiarity with the findings relevant to each of the contraveners, and adopt the definition of terms in the Liability Judgment.

.….

G PENALTY AGAINST GETSWIFT

….

79 The final penalty figure reached is the result of a synthesis arrived at after considering a large number of contraventions. As such, in the end, it is necessary to stand back and ensure that the total figure reflects the totality of wrongdoing: Garuda (at [240] per Perram J). I am amply satisfied that the offending conduct, and the steps taken (and not taken) by the company in the wake of that conduct, justify a total penalty of $15,000,000. This figure (approximately 68% of the total available maximum of $22,000,000) may seem conservative to some, particularly in the light of the statutory maximum and the penalties ordered against offenders in a number of cases helpfully summarised by ASIC in oral and written submissions: see, for example, ASIC v Rio Tinto (No 2) (75% of statutory maximum for one contravention of s 674(2)); Australian Securities and Investments Commission v Sino Australia Oil and Gas Ltd (in liq) [2016] FCA 1488; (2016) 118 ACSR 43 (80% of statutory maximum in respect of one contravention of s 674(2)). Of course, the appropriate range for penalty should not be assessed by reference to the maximum potential penalty alone, not least where the contraventions relied upon may be considered to amount to an ongoing course of conduct: ACCC v Yazaki (at 291 [231], 296 [234] per Allsop CJ, Middleton and Robertson JJ). I simply refer to these (to a limited extent) roughly comparable cases to demonstrate why the figure arrived at seems to me to be appropriate in all the circumstances. The contraventions were serious, serial and at the heart of GetSwift’s culture.

L GETSWIFT’S VOLUNTARY LIQUIDATION

155 In closing, I will say something further of GetSwift’s entry into voluntary liquidation despite the undertakings given to this Court.

156 Following reflection, I have determined that it is a matter for the Judge in the separate proceeding (and who received and acted upon the undertaking) to determine what, if anything, should happen next, including whether the matter should be referred to the Principal Registrar of the Court for contempt proceedings to be instigated. In any event, given my findings as to the conduct of the persons concerned, it would be inappropriate for me to hear any such proceeding.

157 It became apparent that at the time of appointment, the liquidators were not aware of the undertaking given to the Court. But the liquidators did become aware of the undertaking on 8 August 2022. The Court was not informed of any breach of the undertaking until ASIC filed its submissions on penalty and other relief. Although I express no conclusion, this silence causes me some pause. Without the benefit of detailed submissions, I am not presently convinced it was appropriate for this information not to have been communicated to the Court to further the interests of the proper administration of the company. The solicitor for the liquidators (who was given leave to appear) informed me that “there was really nothing that the liquidators could do to reverse what had happened” (T44.35–36) and, implicitly, that the liquidators did not consider they had any legal obligation to disclose to the Court the fact that the foundation of their appointment was based upon a resolution passed in defiance of a solemn promise made to this Court, potentially punishable by contempt. This may all be correct, but, in the absence of argument, it is, at least to my mind, intuitively surprising.

158 The Court has supervisory jurisdiction over external administrators and external administrations pursuant to the Insolvency Practice Schedule (Corporations), being Schedule 2 of the Corporations Act (IPS), which has effect pursuant to s 600K of the Corporations Act. The purpose of ss 90-10, 90-15 and 90-20 of the IPS is to “serve the public interest by advancing and promoting the regulation, supervision, discipline and correction of liquidators in the interests of honest and efficient administration of the estates of companies subject to the winding up” (Djordjevich v Rohrt [2021] VSC 178 (at [189] per Delany J); see also Hall v Poolman [2009] NSWCA 64;(2009) 75 NSWLR 99(at 121–122 [63]–[64] per Spigelman CJ, Hodgson JA and Austin J)). Section 90-5 provides that the Court may, on its own initiative during proceedings before the Court, inquire into the external administration of a company. For the purposes of such an inquiry, the Court may require a person who is or has at any time been the external administrator of the company to give information; or provide a report; or produce a document to the Court in relation to the external administration of the company.

159 Despite having power to do so, I do not think it is appropriate for me to investigate this issue further in this proceeding. It is linked to what appears to me to be a clear breach of the undertaking and, if it is thought appropriate to enquire further into the circumstances of the Court only finding out about it at the heel of the hunt, that further issue can be addressed in the context of any broader examination of what happened by another Judge and following procedural fairness being provided to all concerned.

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In 123 259 932 Pty Ltd v Cessnock City Council [2023] NSWCA 21 (20 February 2023), the New South Wales Court of Appeal examined the law pertaining to, and applied same resulting in an award of reliance (cf expectation) damages for breach of contract.  Overturning the decision of the trial judge, the court awarded substantial reliance damages, namely $3,697,234.01 plus interest.  In the course of giving treatment to the award it was found that a damage exclusion clause contained in the relevant contract was not invoked by the breach.  The judgment of the court was written by Brereton JA, with whom Macfarlan and Mitchelmore JJ agreed.

[2]  The respondent Cessnock City Council (“the Council”) is the registered proprietor of land near Pokolbin on which is located the Cessnock Airport, also known as Hunter Valley Airport (“the airport”). By an agreement for lease bearing the date 16 January 2008 but made on or about 26 July 2007 (“the Agreement”), the Council promised to grant to the appellant 123 259 932 Pty Limited — formerly, Cutty Sark Holdings Pty Limited (“Cutty Sark”) — a lease (“Proposed Lease”) of a part of the airport, on which Cutty Sark intended to construct an aircraft hangar from which it would operate a business conducting joy flights and advanced flight aerobatic training, which was to become Lot 104 in a proposed 25 lot subdivision, for a term of thirty years from the registration of the plan of subdivision (“the Plan”). The Council — which was not only the applicant but also the relevant consent authority for approval of the subdivision — promised to take all reasonable action to apply for and register the Plan by 30 September 2011 (“Sunset Date”), and in the meantime granted Cutty Sark a licence to occupy proposed Lot 104. Cutty Sark proceeded to construct the hangar, at a cost of in excess of $3 million.

[3]  The Council’s obligation to take all reasonable action to apply for and obtain registration of the Plan required it to take all reasonable action to fulfil the conditions of the development consent, including that the proposed lots be connected to Hunter Water Corporation’s reticulated sewerage system. The Council did not comply with that condition, asserting that it did not have and could not reasonably obtain the $1.3 million required to do so. Consequently, the Plan was not registered by the Sunset Date, or at all, and the Proposed Lease was not granted.

[4]  Prior to the Sunset Date, Cutty Sark had ceased to operate businesses from the hangar, as they were not successful. After the Sunset Date, by mid-2012, Cutty Sark vacated proposed Lot 104 and the hangar on it. Cutty Sark was deregistered by the Australian Securities and Investments Commission (ASIC) on 7 September 2015. The Council terminated the Agreement and, on 11 May 2016, paid ASIC $1 for the acquisition of the hangar, in reliance on a provision of the Proposed Lease which entitled the Council to acquire the hangar for $1 upon termination for any reason. On 6 December 2016, Council granted a lease of the hangar to a new tenant for a term of five years.

[5]  Cutty Sark was reinstated by order of the Supreme Court of South Australia on 5 June 2017. It commenced these proceedings against the Council claiming damages for breach of contract on 29 September 2017. The primary judge held that the Council had breached the Agreement by failing to take all reasonable action to apply for and obtain registration of the Plan by the Sunset Date in accordance with its contractual obligation to do so, but that Cutty Sark was entitled only to nominal damages in the sum of $1. Cutty Sark appeals, contending that it should have been awarded substantial reliance damages, representing the amount that it had expended in constructing the hangar.

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[22]  Clause 12.3 of the Agreement relevantly provided:

12.3 Release

The Lessee releases the Lessor from, and agrees the Lessor is not liable for, all liability or loss arising from, and costs incurred in connection with:

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(b) anything the Lessor is permitted or required to do under this Lease;(c) a Service being unavailable, being interrupted or not working properly;(d) the Aerodrome or Aerodrome Infrastructure Facilities not being available for use by the Lessee;(e) loss of the Lessee’s profits; and(f) any liability for damage to the Land or the Lessee’s property or for any other loss (however that loss was caused or arose), including but not limited to:

(1) financial or economic loss to the Lessee or to any other person;(2) loss of goodwill in relation to the business being carried on by the Lessee;(3) indirect or consequential loss;(4) loss resulting from:

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(C) any change in the flow of members of the public in or around the Land or Aerodrome for any reason.

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[99]  Clause 12.3 of the Agreement has been set out above; relevantly, it had the effect that Cutty Sark released the Council from, and agreed that the Council was not liable for, all liability or loss arising from the Aerodrome or Aerodrome Infrastructure Facilities not being available for use by Cutty Sark, and for any loss resulting from any change in the flow of members of the public in or around the Land or Aerodrome for any reason.

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[102]  Although it is undoubtedly correct that the Council was not contractually obliged to implement the commercial development of the airport, the Council is not being sued for breach of any such promise. The claim for reliance damages does not proceed on the basis that it was so bound, and involves no hypothesis that the Council must have developed the airport. Rather, the claim depends on expenditure incurred in reliance on the Council performing the obligation which it indisputably had, of taking all reasonable action to procure registration of the Plan. The fact that the Council did not promise to develop the airport does not mean that Cutty Sark did not incur expenditure on construction of the hangar in reliance on the Council’s promise to take all reasonable steps to procure registration of the Plan.

[103]  It cannot be said that Cutty Sark was not entitled to rely on the Council performing its contractual obligations. The fact that the Council did not promise to develop the airport is beside the point. The one risk that matters is that which eventuated — that the Council repudiated its obligations to take all reasonable action to procure registration of the Plan — and that risk was one which Cutty Sark did not accept. The reliance damages claim does not ask the Council to bear the risk either of future development occurring or not occurring, or of any events that might affect the extent to which members of the public might visit the airport. The risk which it is being asked to bear is that resulting from its own failure to take all reasonable action to procure registration of the Plan, in breach of its contractual obligation to do so. …

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[161]  A plaintiff who is unable or does not undertake to demonstrate whether or to what extent the performance of a contract would have resulted in a profit may claim to recoup its wasted expenditure. In such a case, expenditure incurred by a plaintiff in reliance on a contractual promise made by the defendant and “wasted” because of non-performance by the defendant is recoverable, except to the extent that the defendant shows that the plaintiff would not have recouped its expenditure had the contract been performed. Relevant expenditure is not confined to expenditure under or required by the contract, but extends (subject to the rule in Hadley v Baxendale) to any detrimental change of position by the promisee in reliance upon the defendant’s promise. Such expenditure is regarded as “wasted” if the promise in reliance on which it was made is not performed, except to the extent that it is shown that the plaintiff has received some offsetting benefit, whether under or dehors the contract. The value of the reliance interest is the quantum of the net detriment, after allowing for any offsetting benefit accruing to the plaintiff from the expenditure. It suffices to enliven the presumption that expenditure has been incurred in reliance on a defendant’s contractual promise which the defendant has failed to perform.

[162]   Amann Aviation and McRae do not constitute a category of case which depends on the nature of the breach rendering assessment of damages on the usual basis “impossible”; they apply when the plaintiff does not claim or the evidence does not establish any loss of profits. It is not a precondition to that presumption arising that the plaintiff first establish that it is “impossible” to prove expectation damages. Ground 1 succeeds.

[163]  The facts that the Council did not promise to develop the airport, and that the contract allocated significant risks to Cutty Sark, are beside the point. The one risk that matters is that which eventuated — that Council repudiated its obligations to take all reasonable action to procure registration of the Plan — and that risk was one which Cutty Sark did not accept. Cutty Sark was entitled to rely on the Council performing its contractual obligations. Insofar as the primary judge held that the presumption did not arise because the contractual allocation of risk meant that Cutty Sark did not or could not reasonably rely on the Council’s promise to take all reasonable steps to procure registration of the plan, Ground 3 succeeds.

[164]  Termination of the contract by the innocent party is not invariably a precondition to recovery of reliance damages. In any event, clause 13.3 of the Agreement had the effect that Cutty Sark’s rights in respect of a breach by the Council before termination were not affected by termination, and Cutty Sark’s right to claim to recover its expenditure incurred in reliance on the Council’s promise to take all reasonable steps to procure registration of the Plan, which the Council had repudiated, was thus preserved.

[165]  Cutty Sark incurred substantial expenditure in constructing the hangar on proposed Lot 104 in reliance upon the Council’s promise to take all reasonable action to procure registration of the Plan. Even if some of the construction expenditure was incurred before the Agreement was made, it is recoverable as it was plain when the contract was made that it would be wasted if the promise was not performed.

[166]  The presumption arose. Cutty Sark, although it did not prove (nor endeavour to prove) that it had incurred any expectation loss, did prove that it had incurred expenditure in reliance on the Council’s performance of its obligation to take all reasonable steps to procure registration of the Plan. Council’s repudiation of that obligation rendered certain that Cutty Sark would not receive the benefits for which it had contracted, and that its expenditure would be wasted in the relevant sense. That sufficed to engage the presumption, so as to cast on the Council the onus of showing the value of any offsetting benefit received by Cutty Sark, and/or that its expenditure would not have been recouped had the contract been performed. Moreover, even if the presumption arises only if the defendant’s breach “denies, prevents or precludes the existence of circumstances which would have determined the value of the plaintiff’s contractual benefits”, that requirement was satisfied here: the Council’s breach rendered impossible a true assessment of the probable outcome of performance of the contract and whether it would have enabled Cutty Sark at least to recoup its expenditure. Ground 2 succeeds.

[167]  The presumption was not rebutted. In circumstances where what would have transpired had the Council performed its obligations was speculative, but there was a high degree of likelihood (given that the Council was also the consent authority) that the Plan would be registered, and there was at least a prospect of further development of the airport producing a more conducive commercial environment for Cutty Sark’s business operations, if not immediately then sometime over the ensuing thirty years of the lease to which Cutty Sark would have been entitled, the Council could not and did not show that Cutty Sark would not over a 30-year lease have recouped its expenditure. The primary judge erred in concluding otherwise….

[168]  It was plainly in the contemplation of the parties when the Agreement was made that Cutty Sark would incur substantial expenditure in erecting the hangar; and it was, or ought to have been, plain to both parties, had they turned their minds to the question when the contract was made, that non-performance by the Council of its relevant obligation would result in Cutty Sark wasting the expenditure it had incurred and was going to incur in constructing the hangar. The loss incurred in the nature of wasted expenditure is therefore reasonably to be supposed to have been in the contemplation of both parties when the contract was made, within the second limb of Hadley v Baxendale , and the primary judge erred in holding otherwise. …

[169]  In the light of Mr Johnson’s broad-brush but unchallenged evidence on the question, and the conduct of the trial, the proper finding is that Cutty Sark incurred expenditure of $3,697,234.41 on construction of the hangar. …

[170]  The appeal should be allowed. The judgment below should be set aside and in lieu thereof there should be judgment for Cutty Sark for $3,697,234.41 and interest. The Council must pay Cutty Sark’s costs of the proceedings at first instance and on appeal. …

The full decision can be found at  https://www.caselaw.nsw.gov.au/decision/1865dcfaa9ebfb5d9e06af19