High Court of Australia Judgment Summary Notes

Minister for Immigration and Citizenship v SZIZO [2009] HCA 37 (23 September 2009)

Failure by the Refugee Review Tribunal (RRT) to comply with a notification requirement under the Migration Act 1958 (Cth) does not necessarily result in an unfair hearing or a denial of natural justice, the High Court has held.   Section 441G of the Migration Act relevantly provides that, if a person applies to the RRT for review of a decision and authorises another person (the authorised recipient) to do things on his or her behalf, including receive documents from the RRT, then the RRT must give the authorised recipient, instead of the applicant, any documents it would otherwise have given to the applicant (including a written invitation to the applicant to attend the RRT hearing of his or her application).   SZIZO and his family arrived in Australia from Lebanon in March 2001. They applied for protection visas on 14 November 2005. The Minister’s delegate refused the applications and SZIZO and his family applied to the RRT to review the delegate’s decision. On the application form SZIZO nominated his eldest daughter, SZIZQ, as his authorised recipient. SZIZQ’s address was the address where all the visa applicants resided, including SZIZO (the family residence). The RRT sent a notice of a hearing to be held on 23 March 2006 and a response form, addressed to SZIZO at the family residence.   SZIZO neither speaks nor reads English. His daughter SZIZQ speaks and reads Arabic, French and English. The response form was completed in English and signed by SZIZO. SZIZO and all his family, including SZIZQ, attended the RRT hearing on 23 March 2006, as did a number of witnesses who gave evidence supporting the family’s application. SZIZO and SZIZQ provided further written submissions and supporting documents to the RRT following the hearing. On 6 June 2006 the RRT affirmed the delegate’s original decisions. The Federal Magistrates Court dismissed SZIZO’s appeal. The Full Court of the Federal Court however found that, in failing to give notice of the hearing to SZIZO’s authorised recipient, the RRT had failed to comply with the notification method mandated by section 441G of the Migration Act and had thereby committed a jurisdictional error. The Full Court allowed SZIZO’s appeal. The High Court granted special leave to the Minister to appeal the Full Court’s decision.   The High Court considered that the notification regime set up in Division 7A of Part 7 of the Migration Act, including section 441G, is designed to ensure that an applicant in the RRT has adequate time to prepare his or her case and is given effective notice of a hearing.  The regime provides a manner for ensuring an applicant is given effective notice of a hearing, but the manner of so doing is not an end in itself. In the circumstances of this case, where SZIZO and his family were aware of the hearing date, were able to present witnesses in support of their case and were able to provide written submissions after the oral hearing had concluded, the RRT’s failure to notify SZIZO’s authorised recipient of the hearing date did not result in a denial of natural justice to SZIZO or an unfair hearing, a fact acknowledged by SZIZO’s legal representative. In other circumstances the RRT’s failure to give a hearing notice to an authorised recipient may result in an applicant not receiving a fair hearing but this was not such a case. The Court allowed the Minister’s appeal and ordered that SZIZO’s appeal to the Full Court of the Federal Court be dismissed.

Fellowes v Military Rehabilitation and Compensation Commission [2009] HCA 38 (23 September 2009)

Under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act) a person who suffers permanent impairment as a result of a work-related injury is entitled to receive compensation, the amount of which is determined under the Guide to the Assessment of the Degree of Permanent Impairment (the Guide). Where the person suffers a subsequent work- related injury which results in a similar kind and degree of permanent impairment, she is nonetheless entitled to compensation for the subsequent injury, the High Court has held.   Robyn Fellowes enlisted in the Australian Army in November 1986. In 1986 she suffered a work-related injury to her left knee, and in 1987 she suffered a work-related injury to her right knee. Ms Fellowes claimed compensation for her injuries under the SRC Act, which at that time was the legislation under which the Military Rehabilitation and Compensation Commission (the Commission) assessed claims for compensation. The Commission determined that Ms Fellowes suffered a degree of permanent impairment assessed at 10% as a result of the injury to her left knee and paid her compensation in respect of the permanent impairment. However, although Ms Fellowes suffered a degree of permanent impairment assessed at 10% resulting from the right knee injury, the Commission determined that under the SRC Act and the Guide it was not liable to pay compensation for that permanent impairment because it had already compensated Ms Fellowes for a degree of permanent impairment assessed at 10%. A Commission review officer affirmed the determination on review, as did the Administrative Appeals Tribunal. Ms Fellowes appealed to the Federal Court of Australia against the Tribunal’s decision and a Full Court of the Federal Court dismissed her appeal. The High Court granted her special leave to appeal.   Under section 24 of the SRC Act, where a work-related injury results in a permanent impairment, the Commission was liable to pay compensation in respect of the injury. No compensation was payable if the degree of permanent impairment resulting from the injury was less than 10%. Section 24(5) provides that the degree of permanent impairment resulting from the injury should be determined under the provisions of the Guide approved under section 28 of the SRC Act. The Guide contains Tables which set out criteria against which the degree of permanent impairment is assessed.   Under Table 9.5 – “Limb Function — Lower Limb” – the criterion “[c]an rise to standing position and walk BUT has difficulty with grades and steps” described the impairment resulting from each of Ms Fellowes’ injuries. According to the Guide, this criterion was equivalent to a 10% degree of impairment. The issue for the Court to determine was whether separate compensation was payable in respect of each injury; or whether, having already been assessed as having a 10% permanent impairment under Table 9.5 as a result of the left knee injury, Ms Fellowes should be assessed as having a 0% impairment resulting from the right knee injury because the degree of her impairment under Table 9.5 had not increased beyond the level at which she had previously been assessed under that Table

A majority of the Court considered that permanent impairment resulting from an injury is to be identified by the effect of the injury on the functional capacity of a normal healthy person, and not by reference to the pre-existing capacities of the particular applicant for compensation. In the case of Ms Fellowes two separate injuries led to two separate losses of use of, or damage to, two separate parts of her body. The majority concluded that, as the impairment resulting from the injury to Ms Fellowes’ right knee satisfied the criterion “[c]an rise to standing position and walk BUT has difficulty with grades and steps” then, irrespective of the impairment assessment made in relation to her left knee injury, the degree of permanent impairment resulting from the right knee injury should be assessed as 10%. The High Court set aside the decisions of the Federal Court and the Administrative Appeals Tribunal and directed the Commission to determine the lump sum compensation amount payable to Ms Fellowes in respect of the right knee injury on the basis of her having a 10% degree of permanent impairment.

Minister for Immigration and Citizenship v SZIAI [2009] HCA 39 (23 September 2009)

The High Court has held that the Refugee Review Tribunal (RRT) had not fallen into jurisdictional error when it failed to make further inquiry concerning the authenticity of certain certificates relied on by an applicant in his claim for a protection visa.

SZIAI, a Bangladeshi citizen, claimed to have a well-founded fear of persecution if he were to return to Bangladesh. While living in Bangladesh he had converted from the Sunni Muslim faith to become an Ahmadi Muslim. He said that, following his conversion, his life had been threatened by Sunni Muslims and would be again if he were to return. He supported his claims with certificates signed by persons who were purportedly associated with the Ahmadiyya Muslim Jamaat at Khulna in Bangladesh (AMJ Khulna). The certificates stated that SZIAI had taken a responsible role in AMJ Khulna and was always engaged in its activities. The RRT wrote to the Ahmadiyya Muslim Association Australia Inc, enclosing copies of the certificates and asking whether SZIAI was known to Ahmadiyya Muslim Jamaat in Bangladesh (AMJ Bangladesh). The Association responded, enclosing a letter from the National Ameer of AMJ Bangladesh which stated that AMJ Bangladesh had no record of SZIAI and that the certificates were “fake and forged”. In accordance with section 424A of the Migration Act 1958 (Cth) the RRT wrote to SZIAI’s solicitors seeking comment on a number of things, including the letter from the National Ameer. The solicitors responded to the suggestion that SZIAI was not an Ahmadi, stating “…the applicant disagrees with the information forwarded and states that he is an Ahmadi. He cannot, however, otherwise prove that to be so.”   Having regard to the information in the National Ameer’s letter and the response from SZIAI’s solicitors, the RRT concluded that SZIAI was not a witness of truth and that there was no truth to the claims made in support of his application for a protection visa. As a result, the RRT affirmed the decision of a delegate of the Minister for Immigration and Citizenship refusing SZIAI a protection visa.   SZIAI’s application to the Federal Magistrates Court for judicial review was dismissed. On appeal, a judge of the Federal Court considered that the RRT ought to have made inquiries of the authors of the certificates concerning the National Ameer’s statement that they were forged. The Federal Court held that the RRT’s failure to inquire had rendered its decision manifestly unreasonable, and this constituted a jurisdictional error on the part of the RRT. The High Court granted the Minister special leave to appeal against the Federal Court’s decision.   The High Court noted that a failure on the part of the RRT to make an obvious inquiry about a critical fact, the existence of which is easily ascertained, could in some circumstances be sufficient to constitute a failure by the RRT to undertake its core function, which is to review decisions. However, the High Court found that it was not necessary to explore that principle in this case, for two reasons. First, none of the information available to the RRT indicated that any further inquiry into the authenticity of the certificates would yield a useful result. Secondly, the response from SZIAI’s solicitors indicated that SZIAI could add nothing beyond a bare denial of the assertions in the National Ameer’s letter. There was no factual basis to conclude that the RRT’s failure to inquire meant it had failed to exercise its jurisdiction or committed jurisdictional error. The Court also held that, by giving SZIAI an opportunity to respond to the information in the National Ameer’s letter, the RRT had discharged its responsibility to alert SZIAI to any information the RRT considered would be the reason, or part of the reason, for affirming the decision under review. The High Court allowed the Minister’s appeal and set aside the decision of the Federal Court.

Minister for Immigration and Citizenship v SZJGV; Minister for Immigration and Citizenship v SZJXO [2009] HCA 40 (30 September 2009)

A decision-maker must disregard conduct in Australia engaged in by an applicant for a protection visa if the conduct is engaged in for the purpose of strengthening the person’s claim to be a refugee. However, the decision-maker may have regard to the same conduct to make a finding adverse to the person’s claim to be a refugee, the High Court has held.   The appeals of SZJGV and SZJXO were heard together, as each appeal concerned the same issue — the interpretation of section 91R(3) of the Migration Act 1958 (Cth), which provides that, in determining whether a person has a well-founded fear of being persecuted for one or more of the reasons set out in the Refugees Convention, a decision-maker must disregard any conduct engaged in by the person in Australia unless the person satisfies the Minister that the person engaged in the conduct otherwise than for the purpose of strengthening the person’s claim to be a refugee.   SZJGV, a citizen of China, arrived in Australia on 25 January 2006. On 2 February he applied for a protection visa, claiming to have been a practitioner of Falun Gong in China since 1997, and therefore to have a well-founded fear of persecution should he return to China. The Refugee Review Tribunal (RRT) affirmed the original decision to refuse the application. The RRT considered that SZJGV lacked the detailed knowledge of the practice of Falun Gong to be expected of a person who had been practising Falun Gong since 1997. The RRT found that SZJGV’s interest in Falun Gong was “a recent invention designed to assist him in his endeavour to remain in [Australia] by strengthening his claims”. The RRT disregarded his Falun Gong practice in Australia in accordance with section 91R(3). However, in finding that SZJGV had a tendency to exaggerate and tailor his evidence, the RRT had regard to “his lack of knowledge about Falun Gong [and] his recent attempts to construct a profile of a Falun Gong practitioner”. In view of its assessment of his lack of credibility, the RRT was not satisfied that he had a well-founded fear of persecution in China resulting from Falun Gong activities.   SZJXO is a Chinese national who arrived in Australia on 22 April 2006 and claimed to have been practising Falun Gong since 1997. He claimed he would be imprisoned if he returned to China because of his participation in Falun Gong activities, including protests in Australia against China’s treatment of Falun Gong practitioners. The RRT considered that his claims lacked credit: his evidence did not disclose that the Falun Gong faith was important in his life; it was devoid of significant supporting detail. It did not appear to arise from first-hand experience. The RRT was satisfied that his involvement in Falun Gong in Australia was to strengthen his claim to be a refugee and, applying section 91R(3), disregarded that evidence. In concluding that SZJXO did not have a well-founded fear of persecution should he return to China, the RRT did refer to its findings about his motives for his contact with Falun Gong in Australia, concluding there was no reason to believe he would practise or be significantly involved with Falun Gong if he returned to China.   The appellants challenged the decisions of the RRT in the Federal Magistrates Court but their applications for judicial review were dismissed.  The Full Court of the Federal Court allowed their appeals from the decisions of the Federal Magistrates Court.  It accepted the argument that if section 91R(3) required a decision-maker to disregard an applicant’s conduct in Australia then the conduct must be disregarded for all purposes. The Full Court held that to the extent that the RRT had had regard to conduct in Australia to assess the credibility of SZJGV, and to conclude there was no reason to believe SZJXO would be persecuted if he returned to China, it had fallen into jurisdictional error. The High Court granted the Minister for Immigration and Citizenship special leave to appeal the Full Court’s decisions.   A majority of the High Court found that the Full Court of the Federal Court had misconstrued section 91R(3) of the Migration Act. The legislative purpose of section 91R(3) was to overcome the perceived anomaly that a refugee applicant could engage in conduct outside of his or her country of nationality for the sole purpose of creating or strengthening a claim to have a well-founded fear of persecution should that person be returned to his or her country of nationality. The majority concluded, on the basis of textual and contextual analyses of section 91R(3), that the only conduct which is to be disregarded in accordance with that section is conduct which would strengthen a person’s claim to be a refugee within the meaning of the Refugees Convention. If the conduct does not strengthen a person’s claim to be a refugee, then the conduct may be taken into account. The High Court determined by majority that the RRT had not erred in either matter. It ordered that the Minister’s appeals be allowed and the orders of the Full Court of the Federal Court be set aside, save as to costs.

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41 (30 September 2009)

Under the Taxation (Administration) Act (NT) the acquisition of shares in a land-holding company can be assessed for stamp duty by reference to the value of the land held by the company where that value exceeds 60 per cent of the value of the company’s assets. The High Court has held that the Act required the value of leases held by a company to be assessed under the Act without regard to options to renew those leases.   In January 2001 Alcan acquired 70 per cent of the issued capital in Gove Aluminium Ltd (GAL) from CSR Investments Pty Ltd. At the same time GAL entered into a share buy-back agreement with AMP Life Ltd for the remaining 30 per cent of its shares. By these two transactions Alcan became the sole shareholder in GAL. The total value of the acquisition was $740.1 million. In 2005 the Commissioner of Territory Revenue assessed Alcan’s total liability in respect of the transactions at $47,517,997.00, made up of stamp duty calculated at $31,050,000.00, based on the value of “land” which had passed from GAL to Alcan under the transactions, together with a penalty of $16,467,997.00.   The Commissioner’s assessment was made under Div 8A of Part III of the Taxation (Administration) Act (NT) (the Act) (which has since been renamed the Stamp Duty Act (NT)). According to the then-Treasurer of the Northern Territory, Div 8A had been inserted into the Act to “introduce measures to counter the avoidance of conveyance duty” in circumstances where shares in a land-holding corporation were sold, and stamp duty paid only on the share transaction rather than on the value of the land held by the corporation. The new provisions only apply where the value of the land holdings (including leases) of the corporation exceeds 60 per cent of the value of its assets.   At the time of Alcan’s acquisition of GAL shares GAL held leases for the operation of a bauxite mine and alumina refinery, a township and associated facilities. Most of the leases were granted for a term of 42 years commencing in 1969, with an option to renew for a further 42 years. The Commissioner assessed the value of the options to renew the leases in determining that stamp duty was payable under Div 8A and in calculating the amount of stamp duty payable by Alcan. Alcan’s objections to the assessment were disallowed by the Commissioner. Alcan appealed and was successful before the primary judge but the Commissioner’s appeal to the Court of Appeal of the Supreme Court of the Northern Territory was allowed and the Commissioner’s assessment reinstated. Alcan was granted special leave to appeal to the High Court.   The Court had to determine whether the “land” referred to in Div 8A of Part III of the Act included an option to renew a lease. The definition of “land” in section 4 of the Act includes “a lease of land”. The definition of “lease” specifically excludes “an option to renew a lease”. The definitions in section 4 of the Act apply throughout the Act “unless the contrary intention appears”. The Court of Appeal concluded that there was a contrary intention for Div 8A of Part III of the Act, such that “land” included “an option to renew a lease”. This conclusion depended upon that Court’s analysis of the history of the legislation from 1978 to 2000, particularly its conclusion that the purpose of the relevant amendments to Div 8A was to increase the capacity of the Northern Territory to raise revenue through the imposition of stamp duty.   The High Court considered that the Court of Appeal had not paid sufficient attention to the express terms of the legislation. The definition of “land” in section 4 of the Act included “lease”. The words “‘lease’ … does not include … an option to renew a lease” bore their natural and ordinary meaning, which was not displaced by contextual or historical considerations. The general purpose of the Act to raise revenue was insufficient to support an intention to exclude a clearly expressed definition and substitute a quite different meaning. The Court allowed Alcan’s appeal and ordered that the Commissioner’s appeal to the Court of Appeal should be dismissed with costs.

Sydney Water Corporation v Turano [2009] HCA 42 (13 October 2009)

When the Sydney Water Corporation (then known as the Metropolitan Water Sewerage and Drainage Board) laid a water main in 1981 which ultimately affected the root system of a tree on the side of a road near where the water main was laid, it could not reasonably be expected to have foreseen a risk that the tree might fall on users of the road in 2001, the High Court has held.    On 18 November 2001 Maria Turano’s husband, Napoleone, died after a eucalyptus tree fell on his car while he was driving along Edmondson Ave, near Liverpool in New South Wales. Mrs Turano and her two children were also in the car and were injured. Mrs Turano issued proceedings in the New South Wales District Court, claiming from City of Liverpool Council and Sydney Water Corporation damages for her injuries, on behalf of her children for their injuries, and for the death of her husband. In the District Court Mrs Turano was successful against Liverpool Council but failed to establish Sydney Water’s liability. The Court of Appeal of the Supreme Court of New South Wales upheld both Liverpool Council’s appeal and Mrs Turano’s appeal against Sydney Water, determining that Sydney Water owed Mrs Turano a duty of care which it had breached. Sydney Water sought and was granted special leave to appeal.   In the 1960s a culvert was built under Edmondson Ave, Austral, a semi-rural area near Liverpool. Water drained from the culvert into an outlet pit and from there into pasture land lying beyond the pit. The tree which killed Mr Turano stood about four metres from the outlet of the culvert on the western shoulder of Edmondson Ave. In about 1981 Sydney Water laid a water main under the western shoulder of Edmondson Ave, which cut across the culvert’s outlet pit. The way in which it was laid caused it to obstruct the free flow of water from the culvert. The water main was laid on a bed of sand 300mm deep, which was much more permeable than the clay of the outlet pit. Water periodically collected in the outlet pit and drained along the sand bed in which the water main was laid. Excess water probably travelled along the sand bed to reach the roots of the tree in question. This intermittent water-logging of the tree’s root system had facilitated the infection of the root system with the phytophthera pathogen. The tree fell in a wind storm. The infection of its root system was an underlying cause of that fall.   The Court of Appeal concluded that Sydney Water had a duty to install the water main in such a way that the integrity of the culvert drainage system was not compromised. The Court of Appeal found Sydney Water had breached that duty in two ways — it had laid the water main so that it caused periodic damming of the drain; and, by laying the water main in sand, it had caused the dammed water to drain towards the tree roots, thus undermining the root system.   The High Court found that the Court of Appeal had wrongly imposed a strict duty on Sydney Water requiring that it preserve the existing drainage in the vicinity of its water main as distinct from a duty to take reasonable care to avoid foreseeable injury to road users. In the view of the High Court, the laying of the water main had not created an immediate risk of harm to road users. In considering whether Sydney Water owed a duty of care to Mrs Turano it was relevant to consider the interval between the installation of the water main and the accident. A related factor was that in the intervening 20 years the tree was growing on land owned by Liverpool Council and the risk of its failure was one over which the Council and not Sydney Water had control. The Court found that the trial judge had been correct to conclude that Sydney Water did not in the circumstances owe a duty of care to Mrs Turano. It reinstated the trial judge’s verdict in Sydney Water’s favour.

Jeffery & Katauskas Pty Limited v SST Consulting Pty Ltd; Jeffery & Katauskas Pty Limited v Rickard Constructions Pty Limited [2009] HCA 43 (13 October 2009)

The Supreme Court of New South Wales did not have the power to make a costs order against a company which was not a party to litigation merely because the company had, for commercial gain, funded litigation by an insolvent plaintiff without indemnifying the plaintiff against an adverse costs order. The Supreme Court could only make such an order if the funding arrangement amounted to an abuse of the court’s process. The proposition that a party who funds another’s litigation commits an abuse of process if that party does not agree to meet adverse costs orders imposed on the funded party was too broad and had no basis in legal principle, the High Court has held.   On 22 December 2000 Rickard Constructions Pty Ltd entered into a deed of company arrangement (DOCA) with its director Charles Rickard, SST Consulting Pty Ltd and SST Services Pty Ltd (together – the Secured Creditor). Under the DOCA the parties agreed, amongst other things, that Mr Rickard and the Secured Creditor would fund, up to a limit of $150,000, Rickard Constructions’ application filed on 5 September 2000 in the Supreme Court of New South Wales against Jeffery & Katauskas and others, in relation to a failed pavement construction. During the course of the litigation Jeffery & Katauskas obtained two separate orders that Rickard Constructions pay security for costs totalling $187,750. After the agreed funding limit had been reached SST Consulting continued to fund Rickard Constructions’ litigation. Rickard Constructions’ application was eventually dismissed and it was ordered to pay the costs of the successful defendants. The shortfall between Jeffery & Katauskas’ trial costs and the security provided exceeded $450,000. Rickard Constructions was insolvent and incapable of paying the shortfall. Jeffery & Katauskas sought from the primary judge an order for costs against SST Consulting and its directors under rule 42.3(2) of the Uniform Civil Procedure Rules 2005 (the Rules). The primary judge refused to make the order and the Court of Appeal of New South Wales dismissed Jeffery & Katauskas’ appeal. The High Court granted special leave to appeal.   Section 98(1)(a) of the Civil Procedure Act 2005 (NSW) provides that costs of civil proceedings are “in the discretion of the court”. The power to award costs is however expressed to be “subject to the rules of court”. Under rule 42.3(1) the court may not make an order for costs against a non-party. That prohibition is qualified by rule 42.3(2) which provides in paragraph (c) that rule 42.3(1) does not limit the power of the court to make an order for payment, by a person, of some or all of the costs of a party to a proceedings, where the costs arose out of the person’s commission of contempt of court or abuse of process. Jeffery & Katauskas argued it was an abuse of process for SST Consulting to agree to fund proceedings by Rickard Constructions, an insolvent plaintiff, without also indemnifying Rickard Constructions for any costs which it might be ordered to pay if its action were unsuccessful, and therefore that SST Consulting should be ordered to pay the legal costs of the successful defendants under rule 42.3(2).   By majority the High Court rejected this argument. The Rules themselves provided that costs should not be ordered against a third party other than in the exceptional circumstance that the third party had committed contempt of court or had abused the processes of the court, and a third party’s agreement to fund another party’s litigation was not, of itself, an abuse of process. In this case, Jeffery & Katauskas’ ability to recoup its legal costs from Rickard Constructions would not have improved if there had been no funding arrangement in place and, in any event, a plaintiff’s inability to pay the costs of litigation is an issue which may be addressed by an order that the plaintiff pay security for costs before the litigation proceeds. The High Court found that SST Consulting had not been shown to have committed an abuse of process of the court and dismissed the appeals.

Bofinger v Kingsway Group Limited [2009] HCA 44 (13 October 2009)

The High Court of Australia has held that where guarantors of a secured loan have contributed to the repayment of that loan they may recoup that contribution from the borrower out of the remaining surplus securities before the surplus is used to repay a second loan that is secured over the same property, even though the guarantors have also guaranteed the second loan.

The appellants, Mr and Mrs Bofinger, were guarantors of three separate and sequential loans to a developer.  Those loans were secured by first, second and third mortgages over the developer’s properties.  The guarantees were also secured by first, second and third mortgages over the guarantors’ properties.  The guarantors then sold their properties, the proceeds from which were used to repay some of the first loan.  The three mortgages over the guarantors’ properties were discharged at this time.  The first lender then sold some of the developer’s properties in order to repay the remainder of the first loan.  The surplus funds and remaining properties were then made available to the second lender.   The guarantors claimed to be subrogated to the rights of the first lender over the surplus proceeds and unsold properties in priority over the second lender.  They claimed that they should have been able to recoup what they had paid to the first lender out of the surplus funds and remaining properties before the surplus and properties could be used by the second lender to repay the second loan.  The Supreme Court of New South Wales held that the guarantors could not recoup what they had repaid of the first loan from the securities ahead of the second lender.  On 3 December 2008, the appellants’ appeal to the Court of Appeal of the Supreme Court of New South Wales was dismissed.  The High Court granted the guarantors special leave to appeal.   In a unanimous decision the High Court held that the guarantors were entitled to recoupment from the surplus funds and remaining properties before the second lender, notwithstanding that they had guaranteed the second loan.  The Court held that once the first loan had been repaid, the first lender was obliged in good conscience to provide the surplus funds and remaining properties to the guarantors.  By transferring the surplus funds and remaining properties to the second mortgagee the first mortgagee had breached this obligation. The High Court allowed the guarantors’ appeal.

John Holland Pty Ltd v Victorian Workcover Authority [2009] HCA 45 (13 October 2009) John Holland Pty Ltd v Inspector Nathan Hamilton [2009] HCA 46 (13 October 2009)

The High Court of Australia unanimously has held that a company subject to a Commonwealth occupational health and safety law was liable to be prosecuted under State occupational health and safety laws for offences allegedly committed before the company became subject to the relevant Commonwealth law.   In October 2006, John Holland Pty Ltd carried on the business of road construction and associated activities. At around this time John Holland was declared by the federal Minister to be eligible to be granted a licence under Part VIII of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act). John Holland was granted a licence under the SRC Act which commenced on 1 January 2007.   In March 2007, on the commencement of amendments to the Occupational Health and Safety Act 1991 (Cth) (the OHS Act) and by reason of John Holland’s licence under the SRC Act being in force, John Holland became a “non-Commonwealth licensee” and an “employer” as defined in the OHS Act. This had the effect that John Holland became subject to the occupational health and safety regime created by that Act.   In September 2008 the Victorian Workcover Authority (the VWA) authorised Mr Andrew Gildea, an inspector appointed under the Occupational Health and Safety Act 2004 (Vic) (the Victorian Act), to prosecute John Holland for offences allegedly committed under the Victorian Act in October 2006. Mr Gildea arranged for a charge and summons to be issued against John Holland in the Magistrates Court in Victoria.   In separate proceedings in the Industrial Court of New South Wales, John Holland was also charged with breaches of the Occupational Health and Safety Act 2000 (NSW) (the NSW Act), arising out of an incident occurring in New South Wales in October 2005.   On 19 February 2009 John Holland commenced proceedings in the High Court of Australia seeking a declaration that the Victorian Act was invalid insofar as it purported to empower the VWA to authorise the prosecution. A case was stated for the consideration of the Full Court asking whether John Holland, once it became a “non-Commonwealth licensee” under the OHS Act, was liable for conviction under the Victorian Act for offences committed before John Holland became a “non-Commonwealth licensee”. John Holland argued that by virtue of section 109 of the Constitution, it could not be charged with offences under the Victorian Act in those circumstances. John Holland later applied to remove part of the proceedings in the Industrial Court of New South Wales to the High Court, insofar as they raised a similar issue to that raised in the Victorian-based litigation.   In the matter concerning the Victorian Act the Court held that John Holland, whilst a “non-Commonwealth licensee” for the purposes of the OHS Act, was liable to be prosecuted under the Victorian Act. The Court held that there was no inconsistency between the Victorian Act and the Commonwealth law to the extent that the Victorian Act purported to empower VWA to authorise the bringing of proceedings against John Holland for offences committed before John Holland became a “non-Commonwealth licensee” under the OHS Act. In the second matter (John Holland v Inspector Nathan Hamilton) John Holland’s application for removal was granted but the Court declared that the charges against John Holland were valid and that the Industrial Court of New South Wales had jurisdiction to hear those charges.