Datasets:

CJWeiss

/

lcr

like 0

The approval is sought under ss 33V and 33ZF of the Federal Court of Australia Act 1976 (Cth) (the "Act"). The orders sought in the notice of motion include orders pursuant to s 33ZF of the Act dispensing with the requirements for opt-out notices and notices of settlement of the proceedings referred to in ss 33J , 33X (1)(a) and 33X (4) of the Act. Each of the proceedings was commenced on 15 October 2007 as a representative proceeding under Part IVA of the Act. The applicants brought claims for damages on behalf of themselves and group members in each of the proceedings against the respondents, Village Life Ltd (now known as Fig Tree Developments Ltd) ("the company") and a number of former or current officers of the company. Those officers are Mr David Jeffries, who was the chairman of the company, and Mr John Krimmer and Mr Anthony Roberts, who were joint managing directors. The applicants and group members claimed to have acquired an interest in shares in the company in two separate periods specified in the Statement of Claim. There was a substantial overlap in the facts relevant to each proceeding. Two proceedings were commenced so that an entity which purchased in the first period could represent other entities which purchased shares in that period and the same course was adopted in relation to the second period. The first period was from 8 December 2003 to 1 February 2005 and the second period was from 2 February 2005 to 23 May 2005. The essence of the allegations in the amended Statement of Claim is that the company and the personal respondents breached their obligations of continuous disclosure pursuant to s 674 of the Corporations Act 2001 (Cth) by providing misleading forecasts for the profit of the company for the period ending 30 June 2005. The applicants also relied upon claims for misleading or deceptive conduct under s 1041H of the Corporations Act and similar provisions in the Australian Securities and Investments Commission Act 2001 (Cth), as well as alleging contraventions of s 52 of the Trade Practices Act 1974 (Cth) and corresponding State and Territory fair trading legislation. Other than sharing common claims for damages, an essential feature of the class in each matter was that all group members, as at the date of the commencement of the proceeding, were required to enter into a litigation funding agreement with IMF (Australia) Limited. Also, each group member entered retainers with Slater & Gordon Lawyers. No doubt because of the complexity of the proceeding, its progress was not particularly fast. On 22 May 2008, I ordered that the Statements of Claim which had been filed at the commencement of the proceedings be struck out: see Peter Hanne & Associates Pty Ltd v Village Life Limited [2008] FCA 719. An amended Statement of Claim was filed in each proceeding. The amended Statement of Claim in the Hanne matter was filed on 30 June 2008 and in the Vernon matter on 9 July 2008. Defences were filed and the parties had proceeded to the stage of discovery, although it appears that that stage was not particularly advanced. Then, on 27 November 2008 the parties agreed to refer both proceedings to mediation. Dr Fabre's opinion was sought in order to prepare an analysis of the losses to be claimed by the applicants. Dr Fabre used two methods. The first method was an event studies method, by which Dr Fabre identified the inflation in the price for each share said to be caused by the alleged contraventions. The second method was a price earnings multiple method, which estimated the amount by which the price earnings multiple of the company had been affected by the contraventions. The event studies method produced an estimated total loss of nearly $30 million. The price earnings method produced losses estimated at approximately $23 million. IMF prepared a third methodology which is known as the "left in the hand" method. Under that method, a "proxy sale price" of $0.01 was used so as to calculate the difference between the purchase price and the notional sale price of shares in the company. This yielded total losses of approximately $39.5 million. Dr Fabre's opinion and the IMF analysis were available to the parties at the mediation. None of the respondents took any issue with the methodologies or the quantum of losses resulting from the application of those methodologies. The mediation took place on 27 March 2009 and was conducted before the Hon Mr Trevor Morling QC. The mediation was attended by the legal representatives of the parties, including Senior Counsel for the applicants, as well as by representatives from IMF and a representative of the company's insurer. The individual respondents were also present, as was the current CEO of the company. Before the mediation, Messrs Slater & Gordon were provided with an insurance policy issued by Liberty Insurance. The applicants were informed that there was no other policy which responded to the claims made in the proceedings. This is of particular importance in the application before me because, as will appear below, the company seems to be in parlous financial condition and the personal respondents are unlikely to have any substantial assets to contribute to a judgement, assuming the applicants were to be successful at a final hearing. The main features of the insurance policy are that there is a cap of $5 million from which the individual respondents' legal costs incurred in defending the proceedings were to be deducted. The indemnity provided under the insurance policy extended only to the individual respondents and did not provide cover for the company. During the mediation, the individual respondents waived confidentiality over a letter from their solicitors which described their financial position. I do not need to refer to the letter in any detail but it is sufficient to indicate that the letter shows that those respondents have a limited capacity to pay any judgment sum. Also, at the time of the mediation, the company appeared to have limited financial capacity. As I have said, it was uninsured. Its last trading price was $0.01, which is the lowest price that can be quoted on the ASX. This is a matter of considerable importance in determining whether to exercise the power. I will refer later to the similar circumstances that arose in Lopez v Star World Enterprises Pty Ltd [1999] FCA 104. Clause 2 of the agreement provides the essential terms of the settlement, which are that there is to be a verdict for the respondents, and the respondents are to pay to the applicants the sum of $3 million in full and final settlement of both sets of proceedings. There is to be no order as to costs. Previous costs orders are to be vacated and the settlement sum is to be paid within 28 days. The parties agree to approach the Court to seek those orders. Clauses 6 and 7 provide for effective finality of the proceedings and are in accordance with the terms of the litigation funding agreement. Although the agreement provides that its terms are to be and remain confidential as between the parties and are not to be disclosed save for the purposes referred to in clause 13, no order under section 50 of the Act is sought. Clause 14 provides that in the event that the Court does not approve the terms of the settlement agreement and make the orders to which I have referred, the agreement "will no longer be binding" on the parties and thereafter is to be of no effect. He has the day to day carriage of both proceedings. He swore an affidavit of 5 May 2009 in each proceeding and provided updated information in an affidavit in each matter sworn on 12 May 2009. The affidavit of 5 May 2009 discloses that the mechanism for distribution of the settlement proceedings consists of three principal steps. The first is the reimbursement to IMF of its legal costs and disbursements, the second is for IMF to take from the settlement sum its commission and the third is for distribution to individual group members of the net proceeds of the settlement. The first two steps, that is to say reimbursement of legal costs and payment of IMF's commission, are in accordance with the relevant provisions of the litigation funding agreement. The third step, namely the distributions to individual group members, required an exercise of judgment. Mr Moulis explains in his affidavit the reasons for not adopting the price earnings multiple method. This was largely because to adopt that method, certain difficult adjustments would have been required. Accordingly, what is proposed is that a weighted figure be determined based upon the event study method and the "left in the hand" method. 80 percent will be allocated to the events studies method, and the remaining 20 percent to the "left in the hand" methodology. The first notification was contained in a letter from Slater & Gordon dated 14 April 2009. It informs group members that "as you will be aware", a mediation was conducted on 27 March 2009. The group members were informed of all of the terms of the settlement; they were also informed of the consequences of a decision by any of them not to accept the settlement. Group members were informed in the letter of 14 April that the Court would be likely to hear an application for approval of the settlement on 28 April 2009. The letter of 14 April 2009 refers to the provisions of ss 33J and 33X of the Act (without specifically naming those sections), under which opt out notices are to be given. The letter explains the consequences of a group member exercising the right to opt out. The consequences of course include exclusion from the settlement; they also include consequences which flow from the terms of litigation funding agreement, under which IMF would not be able to continue to fund any proceedings which a group member might wish to pursue and Slater & Gordon would not be able to act. The letter observed in [26] that the solicitors for the respondents have expressed a view that the settlement agreement reached on 27 March 2009 prevents group members from opting out. Slater & Gordon stated that they did not share the view of the respondents' solicitors, but the group members were informed that the possible consequence of any decision to opt out would be further litigation with the respondents. The second letter which was sent to group members was dated 30 April 2009. The letter informed the group members inter alia that the date on which the Court would consider an application to approve the settlement had been adjourned from the date originally notified, namely 28 April 2009, to 12 May 2009. Group members were informed that this was done to allow Mr Moulis and IMF to work out the appropriate distribution methodology so that the settlement sum could be distributed to group members in accordance with that methodology. The letter explains the methodology and the weighting. It refers to the apportionment, taking account of the reimbursement of legal costs, and commission payable to IMF. The letter also refers to the legal costs that had been incurred to date, and makes further reference to what was set out in the earlier letter about the opportunity of group members to opt out and to object to the proposed settlement. Thus, this letter provided group members with a further opportunity to opt out or to object to the settlement. Group members were requested by the letter to advise Mr Moulis by Friday 8 May 2009 whether the group member would wish to opt out, and/or whether the group member would wish to object to the settlement. No group member has expressed any wish to opt out or any objection to the settlement. The letter of 30 April 2009 set out a schedule which indicates the individual amounts payable to group members. The schedule indicates that some group members will receive nothing from the settlement. This is explained by the simple fact that those group members sold their shares at a profit and therefore, on any view, can hardly be said to have suffered any real loss. The schedule discloses that investors fall into two categories, that is to say retail investors and institutional investors. Some investors will receive very small amounts from the settlement but a number of the institutions will receive sums measured in the hundreds of thousands of dollars. As well as bearing upon the question of whether I ought to exercise my discretion in relation to the giving of opt out notices, it is plain that the letters from Slater & Gordon are also relevant to the provisions of s 33X(4) of the Act. That section provides that unless the Court is satisfied that it is just to do so, an application for approval of a settlement under s 33V must not be determined unless notice has been given to group members. Clearly enough, the letters of 14 April and 30 April were directed to that requirement. As I have said, no group member has come forward to express any objection. This includes group members who have been advised that they will not receive any funds from the settlement sum. Nor has any group member come forward seeking to opt out of the proceedings or to be given an opportunity to do so. The principles to which I referred were applied by Stone J in Dorajay Pty Ltd v Aristocrat Leisure Limited [2009] FCA 19 at [10] . I will apply those principles in considering the present application. It seems that the authorities to which I referred in Taylor v Telstra suggest that there might be some slight difference of emphasis between the approach taken by Goldberg J in Williams v FAI Home Security Pty Ltd (No 4) [2000] FCA 1925 ; (2001) 180 ALR 459 and Darwalla Milling Co Pty Ltd v F Hoffmann-La Roche Limited (No 2) (2007) 236 ALR 322. However, both of these approaches indicate that the essential question is whether the settlement is fair and reasonable having regard to the claims made by group members who will be bound by the settlement. In Lopez , Finkelstein J referred at [16] to the onerous task involved in the consideration of an application. As I mentioned earlier, the application in Lopez has some striking similarities to the situation which arises in the present matter. That is because, in Lopez , there was a very real likelihood that if the case went to a final hearing, the group members would not receive anything like the amount they will receive upon the approval of the compromise. The reason for this was that the company was hopelessly insolvent and success in the proceeding would have left group members in a position where their claim would be reduced to the ability to prove in a winding up. As his Honour remarked at [19], "that is hardly an enticing position". A further similarity in Lopez was that there was an insurance fund which was available. His Honour referred at [23] to the effect of s 562 of the then Corporations Law which had the effect that the approval of the settlement and the application of the insurance funds would not, in any way, adversely affect the interests of unsecured creditors of the company. Whilst Village Life is conceded to have limited assets, what I have said about Lopez is not to suggest in any way that the company is insolvent. The estimate of those costs provided in Mr Moulis's affidavit, is in an amount of approximately $4.8 million. Mr Moulis is an experienced practitioner in this field, and I accept his estimate as being within the range in this type of matter. It seems to me to be likely that the individual respondents, who would be entitled to indemnity from the insurer, would incur costs of that order in defending the proceedings. Accordingly, if the matter were to proceed to a final hearing, the entire amount of the insurance fund would be eaten up by legal fees. That is, of course, an unfortunate consequence of the complexity of this type of proceeding. Nevertheless, it is a fact which informs the fairness and reasonableness of the settlement which has been reached. Although the letter from the individual respondents' solicitors suggests that two of the respondents may have some funds at present, it is, in my view, reasonable to infer that were the matter to proceed to final judgment, all of the personal respondents would have to eat into their own assets to such an extent that there would be nothing left for the applicant and group members. That is to say there would be no financial return from success in the proceeding. I have been provided with a copy of the advice of Senior and Junior Counsel retained by the applicants in the proceedings. The advice of Counsel remains confidential and I will make an order under s 50 of the Act to that effect. Nevertheless, it is important to record that Senior and Junior Counsel have given consideration to all relevant matters, including what I have said about the commercial practicalities of the proceeding in coming to the view that the settlement sum is fair and reasonable to group members. It is also to be borne in mind that Mr Cheshire has informed me that were the matter to proceed to a final hearing, his clients would vigorously defend the actions. He points out that ASIC conducted what appears to be a full investigation of the complaints and that the investigation extended to a consideration of 40 Lever arch files of documents. ASIC came to the view that no action should be brought against the directors. Another matter which perhaps bears on the attitude of the respondents is that the settlement agreement in clause 2(i) provides for there to be a verdict for the respondents, notwithstanding that they have agreed, in clause 2(ii), to pay the sum of $3 million in full and final settlement. The relevant provisions are contained in ss 33J and 33X(1). The opt-out requirements of Part IVA are an important element of the scheme laid down by that part of the Act. In King v GIO Australia Holdings Ltd [2001] FCA 270 at [15] , a Full Court observed that these requirements ensure that group members can make an informed decision about their rights. The Full Court said at [15] and [16] that the opt-out notice must not mislead group members and must be expressed with clarity and simplicity. Section 33Y provides for the Court to approve the form and content of an opt-out notice. Section 33Y(2) would ordinarily also require the Court to approve the form and content of the notice to group members advising them of the settlement. Section 33ZB(b) provides that persons who exercise the right to opt out of a proceeding under s 33J are not bound by a judgment given in a representative proceeding. In Multiplex Funds Management Ltd v P Dawson Nominees Pty Ltd [2007] FCAFC 200 ; (2007) 164 FCR 275 , a Full Court considered the question of whether a compulsory funding agreement in similar terms to the funding agreement of the present matter contravened the opt-out nature of representative proceedings. Although not stated explicitly in Multiplex , it is clear enough from the analysis of the relevant provisions of Part IVA that s 33J and the right to opt out is an essential ingredient of the scheme. In spite of that, the Court came to the view that the conditions of the funding agreement which effectively imposed an opt-in requirement did not contravene the provisions of Part IVA. I observed at [149] that the execution of the funding agreement as a condition of inclusion in the represented group operates as a substantial practical disincentive to a group member to exercise the right to opt out of the proceeding. Although the appellants in that case submitted that this subverts a fundamental principle of Part IVA , I said at [150] that group members are nevertheless entitled to opt out, and I came to the view that the funding agreement did not contravene the provisions of Part IVA. French J (as his Honour then was) and Lindgren J agreed with the views that I expressed. I do not consider that Multiplex is authority for the proposition that the Court lacks power to dispense with the requirements of s 33J. I do not consider that the general dispensing power contained in s 33X(2) is applicable. However, in my view, there is power in s 33ZF to dispense with the requirements of opt-out notices. He said that for that reason, it was desirable to empower the Court to make orders necessary to resolve unforeseen difficulties. As his Honour observed, the only limitation is that the Court must consider the order to be appropriate or necessary to ensure that justice is done in the proceeding. In Courtney v Medtel Pty Ltd [2002] FCA 957 ; (2002) 122 FCR 168 at [48] , Sackville J observed that there are good reasons to give s 33ZF a generous interpretation. His Honour did not refer expressly to the remarks of Wilcox J in McMullen , however the passage to which I have referred from McMullen was approved by Tamberlin J in Johnstone v HIH Limited [2004] FCA 190 at [103] - [104] . It seems to me that there are a number of reasons why I ought to exercise the discretion to dispense with compliance with the opt-out requirements stated in ss 33J and 33X(1)(a). In essence, this is because group members have been notified on at least two occasions of their right to opt out, and they have been invited on both of those occasions in the letters from Slater & Gordon to indicate whether, if given the opportunity to do so, they would wish to exercise their entitlement to opt out. As I have said on several occasions, no group member has indicated any wish to do so. I would also take into account the cost of providing a further notice to group members which would have to be borne by the applicants. Not only would there be the cost of any mail-out, there would be further costs involved because I would need to adjourn the hearing of this application pending the dispatch of opt-out notices and the receipt of any responses from group members. In light of what has already taken place, this would seem to be a futile exercise. I have been taken to the terms of a draft opt-out notice which I would be asked to send in the event that I should decide not to exercise my discretion under s 33ZF. The information contained in the draft opt-out notice, with the exception of three paragraphs, has already been provided to the group members by Slater & Gordon. The only additional information is to refer the group members to the allegations made in the Statement of Claim and to point out the nature of the cause of action, as well as to observe that the respondents deny any of the contraventions of the law alleged in the Statement of Claim. It seems to me to be clear enough that all group members, whilst they would not have read the pleadings, would at very least understand the general nature of the matters alleged against the respondents, and the fact that the respondents deny contraventions of the law would seem to be fairly obvious. Mr Cheshire concedes that I have power to dispense with the provisions of ss 33J and 33Z(1)(a). He also submitted that I ought to exercise the power, although he said I ought to do so for reasons other than those put by Mr Abadee. In particular, Mr Cheshire submitted that the effect of the settlement agreement is that the group members are contractually bound not to opt out. I do not think that I need to consider the correctness of that submission because, as I have already said, sufficient information has been supplied to group members. Nor do I need to consider whether a further submission put by Mr Abadee is correct. He submitted that the policy considerations informing the opt-out requirements of the Act do not readily apply where the class is effectively closed from the outset by the requirement of a compulsory litigation funding agreement. It seems therefore to me that I ought to exercise my power under s 33ZF to order that the requirements of ss 33J and 33X(1)(a) of the Act be dispensed with. What I have said about the correspondence from Slater & Gordon to group members satisfies me that notice has been given to group members in order to satisfy the requirements of s 33X(4). Whilst it is true that the form and content of the letters was not sent with the prior approval of the Court, to the extent necessary, I would make an order dispensing with that requirement. I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.

application for approval of settlement of representative proceedings applicant sought leave under s 33zf of the federal court of australia act 1976 (cth) to dispense with requirements for opt-out notices and notice of settlement pursuant to ss 33j , 33x (1)(a) and 33x (4) group members notified of terms of settlement and of application for court approval group members given opportunity to opt out or object to settlement application granted. practice and procedure

He enlisted in the Royal Australian Air Force and served with the Defence Forces between 9 October 1942 and 11 April 1945. He subsequently qualified as a medical practitioner. He died at The Hills Private Hospital, Baulkham Hills, on 21 June 2003. The veteran was survived by his widow, the respondent. The respondent's application was refused on 20 January 2005 by the Repatriation Commission delegate who determined that the death of the veteran was not related to his war service. The respondent then applied to the Veterans' Review Board for a review of the delegate's decision. On 13 April 2006 the Veterans' Review Board affirmed the decision under review. By Application for Review of Decision dated 7 May 2006 the respondent applied to the Tribunal for a review of the decision of the Veterans' Review Board. Before the Tribunal, the respondent claimed that the veteran developed a heavy cigarette smoking habit during and as a result of his war service which caused Ischaemic Heart Disease ('IHD') (inadequate supply of blood to the heart muscle) which in turn contributed to his death. The Tribunal upheld the respondent's application, finding that the veteran's death was ' war-caused '. Section 8(1) of the VE Act describes the circumstances in which a veteran's death is to be taken as ' war-caused ' and includes the circumstances where the ' death of the veteran arose out of, or was attributable to, any eligible war service ': see s 8(1)(b). By the use of that statutory direction the legislation fastens upon an opinion that no reasonable hypothesis is available and directs that it satisfy the onus of proof beyond reasonable doubt. In these circumstances the claim will be rejected. Sub-section (3) is concerned with whether "the material" raises a reasonable hypothesis that the relevant injury, disease or death was connected with the service of the veteran. It is not concerned with conflicts in the material, whether they be of opinion or fact. The purpose of sub-s. (3), as demonstrated by its terms and its history, is to ensure that a claim to which s. 120 applies is not met unless there is some material which raises the relevant causal hypothesis. That is to say, the commission must determine that the injury, disease or death was war caused "unless it is satisfied, beyond reasonable doubt, that there is no sufficient ground for making that determination. Section 120A applies in respect of claims made under the VE Act on or after 1 June 1994. Section 120A and ss 196A to 196ZP were introduced in order to establish a more certain basis for the finding of a medical hypothesis and to ensure that ' medical opinions supported by little or no medical-scientific evidence do not prevail over the carefully developed mass of medical-scientific opinion ' (see Explanatory Memorandum to the Veterans' Affairs (1994-95 Budget Measures) Legislation Amendment Bill 1994 ). Such changes allow for the creation of a Statement of Principles ('SoP') to be determined by the Repatriation Medical Authority ('the Authority') which establish the relevant relationship between service and the death claimed by applicants for pensions. Section 120A(3) of the VE Act relevantly provides that a hypothesis connecting, inter alia, the death of the person with the circumstances of any particular service rendered by the person is reasonable only if there is a SoP that upholds the hypothesis. Section 196B(1) authorises the Authority to formulate SoPs for the purpose of the VE Act. So stated, the hypothesis has to point to a connection which starts with the disease in respect of which the application is made and ends with the service. That connection will comprise a number of links or factors each of which must be upheld by a Statement of Principles and, if need be, by more than one Statement of Principles. An instrument entitled ' Revocation and Determination of Statement of Principles concerning Ischaemic Heart Disease ' (No. 53 of 2003 as amended by No. 9 of 2004) ('the IHD SoP'), now replaced by No. 89 of 2007, was operative at the date of the Commission's decision. The replacement is not relevant, since the Commission was required to consider the IHD SoP in accordance with the SoP prevailing at the date of its decision: see Repatriation Commission v Gorton [2001] FCA 1194 ; (2001) 110 FCR 321. In all relevant respects, the 2004 and 2007 IHD SoPs are identical. Paragraph 8 of the IHD SoP provided that ' " death from ischaemic heart disease " in relation to a person includes death from a terminal event or condition that was contributed to by the person's ischaemic heart disease '. The respondent contended before the Tribunal that paragraph 5(f) of the IHD SoP applied. Subparagraph (f) thereof relevantly relates to the smoking of cigarettes prior to the onset of IHD. At the date of the Tribunal's decision the Authority had also determined a SoP entitled ' Determination of Statement of Principles Concerning Mesangial IgA Glomerulonephritis ' being Instrument No. 63 of 2001 as amended by No. 75 of 2002 ('the GN SoP'). Glomerulonephritis is a renal disease characterised by inflammation of the glomeruli, or small blood vessels in the kidneys. The Tribunal considered the ' particular kind of...death ' (see s 196B(2)) suffered by the veteran as referred to in s 120A(2) of the VE Act. It referred to the medical evidence, which was not in dispute, that the veteran developed acute focal necrotising glomerulonephritis, a kidney disease, in 1993 and almost simultaneously developed hypertension in consequence of such condition. In February 1996 the veteran's renal function was mildly impaired and in November 2000 there was moderate renal dysfunction which deteriorated markedly in 2002. The veteran also suffered a myocardial infarct in 1999. An angiogram revealed triple vessel disease necessitating coronary artery bypass surgery. The veteran suffered cardiac failure in June 2002 associated with a chest infection and deterioration of renal function. The veteran encountered difficulties with his memory from approximately 2000 and by August 2002 he was diagnosed as suffering from a type of Alzheimer's dementia. Professor O'Rourke, a cardiologist, attributed the veteran's heart failure at the time of death to glomerulonephritis which caused the veteran's hypertension and renal failure and maintained that there was no evidence of IHD being a factor in his death. Professor O'Rourke believed that following the veteran's successful by-pass surgery in 1999 the veteran had made a complete recovery from IHD. Dr Butler, a consultant physician, opined that the effects of the previous myocardial infarct had contributed to heart failure and that there was a likelihood of approximately twenty per cent that the veteran had IHD at the time of his death. We do not consider that either dementia or IHD was a "kind of death". There is no SoP for either of the kinds of death we have found. That hypothesis was that the veteran developed a heavy smoking habit during and in consequence of his service which caused IHD and that IHD was one cause of his death. The Tribunal found that such hypothesis was reasonable and that it was not satisfied beyond a reasonable doubt that any element of the hypothesis had been disproved beyond reasonable doubt. The first step is to identify the hypothesis said to establish the causal link between the veteran's eligible war service and the death, injury or disease. Identifying the hypothesis is a question of fact. (2) The second step under subs (3) is to determine whether the hypothesis is reasonable. The material will raise a reasonable hypothesis if it points to some fact or facts which support the hypothesis (the 'raised facts') and if the hypothesis can be regarded as reasonable assuming the raised facts to be true. In determining whether the hypothesis is reasonable the decision-maker must identify the facts said to point to it. (3) Whether a hypothesis is reasonable is a question of fact. The decision-maker must be satisfied that the hypothesis is reasonable after considering the whole of the material. Proof of facts and onus of proof are not in issue at this point. (4) If the decision-maker concludes that the material raises a reasonable hypothesis, the third step is reached. Subsection (1) must be applied, and the claim will succeed unless one or more of the facts necessary to support the hypothesis are disproved beyond reasonable doubt, or the truth of another fact in the material, which is inconsistent with the hypothesis, is proved beyond reasonable doubt, thus disproving, beyond reasonable doubt, the hypothesis. Deledio also determined (at 97) that if no SoP were in force, the hypothesis will not be taken to be reasonable and in consequence the application must fail. Such observation has subsequently been disapproved: see Bull v Repatriation Commission (2001) 188 ALR 756 at [14]; Woodwood v Repatriation Commission [2003] FCAFC 160 ; (2003) 131 FCR 473 at [55] ; and Repatriation Commission v Hancock [2003] FCA 711 ; (2003) 37 AAR 383 at [10] . In Repatriation Commission v Codd [2007] FCA 877 ; (2007) 95 ALD 619 Gordon J observed (at [20]) that the Deledio methodology is subject to three qualifications. Firstly, the methodology is not to be applied mechanistically; secondly, if no SoP is in force reference must be had to s 120A(4) of the VE Act which provides that s 120A(3) does not apply in certain circumstances; and thirdly there are two preliminary steps to the Deledio analysis as expounded by Selway J in Hancock . This involved the identification, on balance of probabilities, of any and all [SoP] and/or determinations under s 180A(2) of the Act and any other "kinds of death" which were applicable to that death. In order to satisfy ss 120(3) and 120A(3), a hypothesis relied on by a veteran to support a pension claim must be supported by material pointing to each element that the SoP makes essential for the hypothesis to be reasonable. The veteran must have met a death with which that SoP is concerned in order to link such death with his war service: see Lees v Repatriation Commission [2002] FCAFC 398 ; (2002) 125 FCR 331 at [16] . The Commission submits that the Tribunal erred in its finding that the 'kind of death' sustained by the veteran was heart failure and kidney failure, and that such finding conflates the medical cause of death with the actual death of the veteran. The Commission referred to paragraph 8 of SoP No. 89 of 2007 which defines ' death from [IHD]' to include ' death from a terminal event or condition that was contributed to by the person's [IHD]'. As mentioned earlier, this was not the applicable SoP, however, the relevant wording is identical to the SoP that was in force. ' Terminal event ' is defined in the IHD SoP and includes cardiac arrest. The Commission contends that the Tribunal's finding did not consider the cause of heart failure or kidney failure. Instead the Tribunal wrongly made its finding on the 'kind of death' based upon the proximate cause or terminal event. The Commission also submits that given that the Tribunal found that IHD was not a 'kind of death', it follows that the Tribunal must, as a consequence of that decision, have not been satisfied, on the balance of probabilities, that IHD had contributed to the veteran's death. That is, the Tribunal's hypothesis connecting the veteran's death to his service was erroneous because it was premised on IHD contributing to the veteran's death. Further, by the finding that IHD was not a cause of death of the veteran, but that glomerulonephritis was such cause, the Commission submits that the Tribunal should have concluded that the GN SoP was applicable. However, the application of the GN SoP would not have assisted the respondent because the GN SoP did not include cigarette smoking as a cause of glomerulonephritis. The respondent submits that the determination of the 'kind of death' was a question of medical causation and as such comprised a factual finding which could not be the subject of an appeal pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 ('the AAT Act'); that the factual finding was open to the Tribunal since there was evidence that heart failure occurred; and that heart failure was a cause of the veteran's death. The respondent also submits that there is no SoP applicable where heart failure ' constituted a kind of death '. The respondent submits that the correct interpretation of a ' terminal event or condition ' as contained in the IHD SoP comprises the ' terminal event or terminal condition . ' Any finding that the veteran's heart failure was the ' proximate ' or ' ultimate ' cause of death or that the IHD was the ' underlying ' or ' contributing ' ' medical cause of death ' was a factual consideration made on the medical evidence before the Tribunal. The respondent submits that if the Tribunal made a factual finding to the effect that the heart failure sustained by the veteran was the proximate or ultimate cause of death, and was therefore a terminal event or terminal condition as defined in the IHD SoP, the SoP would have been applicable to the 'kind of death' sustained by the veteran. The respondent submits that no party made any submission to the Tribunal that a 'kind of death' of the veteran was mesangial IgA glomerulonephritis and that no party referred to the GN SoP. At 287 the Full Court distilled five propositions which emerged from previous authority relating to such question. Accordingly, this question of construction raises a question of law. As such, questions of law are pivotal to the appeal. Accordingly, the Court rejects the contention that the Tribunal's finding concerning the cause of death of the veteran was a finding only of fact. The first step was to determine what the 'kind of death' was. As was observed by Selway J in Hancock at [9], such identification is a critical step in the analysis. Next, the Tribunal was required to determine whether s 120A applied, that is whether a SoP existed which addressed the question of the reasonableness of the hypothesis concerning the connection between the 'kind of death' and service of the veteran. If a relevant SoP existed, the Tribunal was, pursuant to s 120A of the VE Act, required to determine the claim in respect of the death in accordance with the template contained in the SoP. By satisfying the template, a reasonable hypothesis linking the veteran's service with the death would thereby be established. If no relevant SoP existed, s 120A(3) had no application by virtue of s 120A(4). In this event, the Tribunal was required to assess the claim having regard only to s 120(3) of the VE Act. It is not a question about whether the death was slow, fast or the like. It asks "questions of medical causation" about the cause of death and does so in a particular context --- the VE Act and, in particular, Pt VIII of the VE Act: see also explanatory memorandum to the Veterans' Affairs (1994-95 Budget Measures) Legislation Amendment Bill 1994 (Cth) pp i-ii. In particular, it requires examination of the relevant hypothesis that is said to provide the causal link between death and service. It follows from such evidence that the Tribunal's conclusion that the veteran's death resulted from 'heart failure and kidney failure' ignored the causes of such failures and conflates the 'terminal event or condition' with the medical cause of the veteran's death. By failing to appreciate the underlying nature of the disease but directing its attention to the consequence of the disease, namely heart failure, the Tribunal failed to direct its attention to the circumstances leading to the 'kind of death'. Instead, the Tribunal had regard to the proximate or ultimate cause of death and committed an error of law of a similar kind referred to in Codd where the Tribunal found that the 'kind of death' met by the veteran was by road accident. The IHD SoP had been made, and it was directly relevant to the respondent's claim which contended that the veteran's 'kind of death' (heart failure) was caused by IHD. Accordingly, the Tribunal was required to consider the IHD SoP in accordance with the SoP prevailing at the date of its decision: see Gorton . Applying the IHD SoP, the critical issue for the Tribunal's determination was the identification of the cause of the IHD, as itemised in the IHD SoP. Having observed that there was evidence that the veteran's tobacco consumption had been between 30 and 50 pack years as estimated by Dr Butler, the Tribunal found that the hypothesis raised by the respondent linked the veteran's service with his death from heart failure. In such deliberation the Tribunal noted the evidence of Dr Butler that the requirements of the IHD SoP in respect of the veteran's tobacco consumption would be met. Further, Dr Butler said that there was 10 or 20 per cent likelihood of systolic failure on the basis of IHD. Professor O'Rourke also said that there was a less than 10 per cent probability that IHD played a role in Dr Walker's death. That is evidence from both doctors of a likelihood of a contribution from IHD to Dr Walker's death. We find that hypothesis is reasonable. Dr Butler rated such possibility as a ten or twenty per cent chance and Professor O'Rourke assessed such possibility as probably less than ten per cent. In my opinion, this could only have been intended to introduce the standard of proof required in civil litigation. However, failure to satisfy a balance of probabilities test does not lead to the conclusion that IHD cannot have had any contribution whatsoever to the veteran's death. That is, it does not follow that such conclusion has the consequence that IHD could not have contributed to the veteran's death, as the Commission has submitted. The Tribunal's finding only establishes that the contribution has not been sufficient to satisfy the high standard found in s 120(4) of the VE Act. In finding that the veteran's 'kind of death' was heart failure (erroneously, as has been discussed) the Tribunal found that the possibility of IHD contributing to the veteran's death was sufficient to find that it was a cause of the veteran's 'kind of death' and thus ground a reasonable hypothesis under ss 120(1) and 120(3) of the VE Act. While based on a misapplication of the VE Act regarding the 'kind of death', from the Tribunal's perspective it was logical (though again, erroneous) for it to consider the IHD SoP as providing a grounding for a reasonable hypothesis, namely that cigarette smoking caused the veteran's IHD which in turn was a cause of heart failure. The Tribunal has not 'subverted the standard of proof prescribed by s 120 of the VE Act '. It is understandable that the Commission wishes to prevent the Tribunal using the methodology it adopted in the proceedings before it to subvert the purpose of the SoP scheme. However, the mischief in this instance arose not because the Tribunal subverted the correct standard of proof, but rather because the Tribunal reached an incorrect answer to the 'kind of death' involved. Provided that the Tribunal correctly interprets the phrase 'kind of death', such that it accords with the meaning of that phrase as judicially determined, the risk of the misapplication of the SoP scheme will be minimised. As referred to earlier, the Tribunal found that the veteran suffered two 'kinds of death', namely heart failure and kidney failure. He maintained that there was no evidence of IHD being a factor in his death. Professor O'Rourke acknowledged that Dr Walker had IHD, with clinical onset in September 1999, but said that he had no symptoms attributable to coronary artery disease following his successful coronary artery by-pass graft in 1999. That is, following the successful surgery in 1999, Dr Walker had made a complete recovery from IHD, and did not suffer from that condition at the time of his death. The difference of opinion was the extent to which IHD contributed to the heart failure. Following such conclusion, the Tribunal should have asked itself whether glomerulonephritis was a 'kind of death' in respect of which a SoP existed. Having established that the GN SoP had been made, it would have been necessary for the respondent to satisfy the Tribunal that any claim in respect of death by glomerulonephritis was caused by a disease referred to in the SoP, which resulted in renal failure. That is, the Tribunal should have then asked itself whether the hypothesis of a connection between the veteran's death and his operational service was upheld by the GN SoP. The Tribunal overlooked inquiring whether a SoP for glomerulonephritis existed, resulting in the Tribunal's failure to apply the GN SoP template, as was required by s 120A(3) of the VE Act. Further, the finding of the Tribunal that the veteran died of kidney failure erroneously conflated a ' terminal event or condition ' with the underlying cause of the veteran's death. Such misinterpretation caused the Tribunal to make an error of law by treating the veteran's kidney failure (the proximate or ultimate cause of death) as a 'kind of death' instead of having regard to the cause of that failure. As such, the provisions of the GN SoP were circumvented in the same manner as the IHD SoP was circumvented. The Commission submits that no new hypothesis can be formulated to connect the veteran's death to his operational service through his glomerulonephritis and claimed ' war-caused ' smoking habit since smoking is not a cause of glomerulonephritis recognised by the GN SoP. The Commission refers to the fact that the veteran's nephrologist, Dr Johnson, rejected smoking as a cause of the veteran's glomerulonephritis and renal failure. The Commission therefore submits that it would be futile to remit the matter to the Tribunal. The GN SoP identifies several causes of such disease, but cigarette smoking is not included as a cause of glomerulonephritis for the purpose of the SoP hypothesis. Accordingly, it is arguable that the respondent's claim could not have succeeded because there was no reasonable hypothesis prescribed by the SoP, and therefore as a matter of law, linking the veteran's smoking to his renal condition. Such question however was not the subject of any submissions to the Tribunal and the Court will decline to exercise its power under s 44(7) of the AAT Act to determine that the veteran's death was not ' war-caused '. It has erred in misapplying the IHD SoP to support a reasonable hypothesis under s 120(1) and (3). It has erred in failing to find that the GN SoP is relevant to the 'kind of death' suffered by the veteran, and it may be that any claim under the GN SoP could not succeed. However, since no submission before the Tribunal dealt with the GN SoP, and since the Tribunal did not consider such issue, the Court will remit the matter to the Tribunal, differently constituted, to enable the respondent's application to be heard and determined in accordance with the law. By way of example, the respondent relies upon the fact that no reference was made to the GN SoP during the Tribunal hearing. It was also submitted that the cause of death put to the Tribunal by the Commission was 'renal insufficiency' which the respondent contends was not clearly articulated as being different from the finding of renal failure made by the Tribunal. The application for a costs certificate is opposed by the Commission. The Commission submits that such certificate should not issue and relies upon Repatriation Commission v Cornelius (2002) 35 AAR 345. In Cornelius , Branson J found that an application to the Court from a decision by the Tribunal constituted an ' appeal ' from a decision of the Tribunal. It followed that the proceeding constituted a ' Federal appeal ' within the meaning of the Costs Act. This Court, adopting such finding, determines that it has a discretion to award the relevant certificate. In Cornelius Branson J observed at [11] that costs certificates are ' intended to advance a more specific public interest '. Accordingly, the respondent was made aware that her claim was weak. In the present proceedings, no such consideration arises. The issue determined before this Court concerns the interpretation by the Tribunal of both statutory provisions and of SoPs. The Tribunal was not referred by the Commission to the GN SoP in respect of which numerous submissions have now been made by the Commission and which were not raised before the Tribunal. The arguments of the Commission involved a degree of complexity, and the errors of the Tribunal have arisen from a misapplication of the law. The position is not dissimilar to that in Repatriation Commission v Codd [2005] FCA 910. The Court has an unfettered discretion with regard to the award of a certificate, provided that the discretion is exercised judicially: see Bullock and Others v Federated Furnishing Trades Society of Australasia and Others (No. 2) (1985) 5 FCR 476 at 478. I would emphasise that in granting a certificate I do take account of Mr Milenz' status as a war veteran though I do not consider it to be of decisive significance. The correction of the Tribunal's reasoning provides sufficient justification of the issue of a certificate. In these circumstances, and taking into consideration the fact that the Commission's submissions have been upheld, the Court considers it appropriate that a costs certificate should issue in respect of the unsuccessful respondent's costs, and the costs of the Commission that the respondent must pay. I certify that the preceding eighty-four (84) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy.

veteran's entitlements widow's pension appeal from administrative appeals tribunal whether tribunal correctly determined the 'kind of death' whether there was an applicable statement of principles to the 'kind of death' whether the court should remit the matter to the tribunal or make a finding of fact itself costs certificate costs of unsuccessful respondent circumstances in which certificate should be given administrative law practice and procedure

The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs of 28 July 2004 to cancel the appellant's visa for breaches of s 101 and s 104 of the Migration Act 1958 (Cth) ('the Act'). He first entered Australia on 7 November 1995 as the holder of a Student (Temporary) visa class (Class TU) visa, sub-class 560 (student). He was subsequently granted further sub-class 560 visas through to 1998. On 17 June 2001, the appellant married an Australian citizen, Sara Masotti, and on 5 July 2001, the appellant applied for a Partner (Temporary) visa class (Class UK) visa, sub-class 820 (Spouse) ('temporary visa') which was subsequently granted on 13 September 2001. On 20 August 2003, the appellant was granted a Partner (Residence) visa class (Class BS) visa, sub-class 801 (Spouse) ('permanent visa'). 3 In the appellant's visa application dated 4 July 2001 there was a line ruled through the part of question 37 which asked him to give the names and other details of all of his children. At the time the application was completed, the appellant did not have any children. In addition, he filed with his visa application a curriculum vitae in which he claimed that he had graduated from Swinburne University of Technology ('Swinburne') with a Bachelor of Business. The appellant reiterated his claim to have graduated with a degree from Swinburne in the documents lodged in support of his permanent visa in August 2003, shortly before the permanent visa was granted. 4 However, there was a change in the appellant's circumstances in that he later had a child by a woman, Thi Thanh Huong Hoang, who was not the nominating spouse in the visa application. Ms Hoang, the mother of the appellant's daughter, had been a friend of the appellant before his marriage to Ms Masotti. Ms Hoang moved into the house with the appellant and Ms Masotti after their wedding. Ms Masotti worked nightshift and the appellant states that as he was lonely, he and Ms Hoang were intimate on a couple of occasions but did not enter into a serious committed relationship. As a consequence Ms Hoang became pregnant with the child. The child was born on 7 January 2003 but the appellant did not advise the Department of the change in circumstances at this time, despite being made aware of the child shortly before the child was born. 5 On 18 August 2003, some seven months after the birth of the child, but before the grant of the appellant's permanent visa, and for the purposes of the grant of that visa, the appellant lodged with the Department various supporting documents. Those documents included a statutory declaration sworn by the appellant on 11 August 2003 together with a document headed 'Documentation Guide'. In neither of these documents did the appellant disclose the birth of his daughter on 7 January 2003. The appellant claims that he told his wife in October 2003 that he was the father of the child. The appellant and his wife separated permanently in December 2003. 6 A notice of intention to consider cancellation of the visa was sent by the Department to the appellant on 27 May 2004 primarily concerning the incorrect statements about the appellant's daughter. The appellant, by his migration agent, responded to the notice of intention to cancel the visa on 16 June 2004. 7 On 29 June 2004, the Department sent another notice of intention to consider cancellation of the visa to the appellant concerning the incorrect statements about Swinburne. This notice explained that further information had come to the Department's attention indicating the appellant had not in fact obtained a Bachelor of Business from Swinburne. Instead he had applied for leave of absence but was subsequently excluded from the course on 16 July 1999 for two academic years, which was extended by Swinburne on 20 December 2000 for another two academic years. In the letter dated 16 June 2004 from the appellant's migration agent in response to the first notice of intention to cancel the visa, the appellant maintained that he had 'pursued various academic courses from which he has graduated'. 8 On 28 July 2004 the delegate proceeded to cancel the appellant's visa and on 30 July 2004, the appellant applied to the Tribunal for review of the delegate's decision. In its decision, the Tribunal recounted all the relevant facts and circumstances and noted that there was no factual dispute about the significant events. 10 The Tribunal found that the appellant failed to declare to the Department that he had not been in an exclusive relationship with his wife and his affair with Ms Hoang had resulted in the birth of his daughter. Additionally, it found that in support of his visa application he submitted a Documentation Guide on which he failed to disclose the birth of his daughter. The Tribunal having found that the appellant had not complied with s 101 and s 104 of the Act in the manner specified, identified that cancellation in this case was not mandatory but discretionary. It then proceeded to consider the exercise of the discretion to cancel the appellant's visa in accordance with reg 2.41 of the Migration Regulations 1994 (Cth) ('the Regulations'). 11 In considering the circumstances prescribed under reg 2.41, the Tribunal found that the appellant's extra-marital relationship was likely to have impacted on the outcome of his visa application. The Tribunal also found that there was evidence of previous non-compliance by the appellant in his failure to report to the Department when he deferred his studies at Swinburne and his subsequent exclusion from the course. 12 The Tribunal noted that in its consideration of whether to cancel the appellant's visa, it had regard to the appellant's false claims that he had a degree from Swinburne and his deception in hiding his extramarital child from his wife and from the Department. It also considered significant that the appellant and his wife had separated. The Tribunal concluded that the grounds for cancellation of the review were made out and affirmed the decision of the delegate. The appellant's case before Riethmuller FM was that the Tribunal did not have jurisdiction to make the decision because it involved jurisdictional errors. 14 The appellant alleged error in the Tribunal's hearing process by not conducting a de novo review and instead conducting the process as if an appeal or judicial review. However Riethmuller FM found that due to the appellant not disputing that he had separated from his spouse, that he had fathered a child, and that he did not have a degree from Swinburne, there was no call upon the Tribunal to make detailed findings about these issues and instead the Tribunal correctly reviewed the facts and circumstances and exercised afresh the relevant discretion. 15 In relation to the appellant's contention that the Tribunal had erred in finding that the appellant and his wife were not in a spousal relationship for the purposes of reg 1.15A(1A), Riethmuller FM held that the Tribunal had only to consider the likely effect of the non-compliance on the outcome of the visa application. The Tribunal had done this and concluded it was likely to have impacted upon the visa application and the appellant had now separated from his wife. 16 The appellant also alleged that the Tribunal had not considered each false statement made by the appellant separately and instead addressed the matter as a whole. Federal Magistrate Riethmuller found that once the Tribunal identified more than one ground of cancellation, it was not appropriate that each statement be considered separately when exercising its discretion in accordance with reg 2.41. His Honour held that 'it would create a wholly artificial assessment and exercise of the discretion if these matters were to be balanced against the individual non-disclosures without the Tribunal being able to consider the matter as a whole'. 17 The appellant also claimed that the Tribunal should only consider the nature of the relationship up until the time of the grant of the permanent visa. The marriage did not break down until after the visa was granted due to the appellant's spouse gaining knowledge of the affair and the child after the visa was granted. His Honour found that the Tribunal was not obliged to ignore the undisclosed information in exercising the discretion under reg 2.41, by limiting its inquiry to the time of grant of the visa. His Honour found that the whole purpose of the provisions would be defeated if the Tribunal were obliged to ignore the undisclosed information in exercising the discretion. The very purpose of reg 2.41(c) is to consider the likely effect of the information on the decision. The Learned Federal Magistrate erred in law in failing to find [26] that the Appellant was at all material times and in particular on 20 August 2003 a spouse as that term is defined for the purposes of the Migration (1994) Regulations in reg 1.15A(1) and 1.15A(1A). The Learned Federal Magistrate erred in holding at [37] that question 37 in the Form 47SP completed by the Appellant on 4 July 2001 constituted a "question" for the purposes of s 101(a) of the Migration Act 1958 (Cth). That the learned Federal Magistrate erred in law in failing to hold the [Tribunal] had made a jurisdictional error by failing to find what acts or omissions of the appellant was the non-compliance relied on for either or both of ss 101 or 104 of the Migration Act . The decision to cancel was therefore discretionary: s 109(1). Regulation 2.41 of the Regulations prescribes the circumstances to which a decision-maker must have regard in deciding whether to cancel a visa: s 109(1)(c). The Minister is to have regard to the prescribed circumstances in considering whether to cancel the visa. 24 In my view neither the Tribunal nor the Federal Magistrate were required to make a finding in the terms suggested. The questions for the Tribunal in the present case were whether the appellant had given correct information to the Department, whether he had failed to notify the Department of changes of circumstances and whether any failures in that regard warranted the appellant's visa being cancelled. 25 The appellant submitted that the Tribunal concluded that the reference in the definition of spouse in sub-reg 1.15A(1A)(b)(i) to the Minister being satisfied that the parties to a marriage had a commitment to a shared life as husband and wife 'to the exclusion of all others' had the consequence that the Minister 'could never be so satisfied when infidelity was established'. 26 The Tribunal did not make that specific conclusion. It said that the correct information was likely to have impacted on the outcome of his permanent visa application. The significance of the statement by the Tribunal is that the appellant's failure to give correct information to the Department may have enabled him to obtain a permanent spouse visa, to which he was not entitled. 27 The Tribunal had to consider, in deciding whether or not to cancel the appellant's visa, 'the likely effect on a decision to grant a visa...of the correct information: sub-reg 2.41(c) of the Regulations. In the present case, once the correct information became known, that is, once the appellant's wife discovered that the appellant had had an extra-marital child, the marriage ended. However, this may not be directly to the point. If the correct information had been given to the Department about the birth of the appellant's extra-marital child, even if the appellant and his wife had not separated, it is likely that the delegate would have investigated whether the appellant's infidelity, and the circumstances surrounding it, meant that he did not have a genuine commitment to the marriage. At the time of the cancellation, the Department had some evidence suggesting that the relationship may not have been genuine. Upon proper investigation, the delegate may have concluded that the appellant did not have a genuine commitment to a shared life as husband and wife to the exclusion of all others with his wife and the appellant's permanent visa may have been refused. Accordingly, I would not uphold this ground of appeal. 29 I agree with the finding of Riethmuller FM that the word 'question' has a broad meaning and includes not only a simple interrogative statement but also a sentence worded or expressed in a form such as to elicit information from a person. In so finding, reliance was placed on the New Shorter Oxford English Dictionary (Clarendon Press, Oxford: 1993). His Honour, in my view correctly, concluded that question 37 was a question within the meaning of ss 101 and 104 . 30 Further, the real matter in contention is whether an incorrect answer was given for the purposes of para 101(b) of the Act. So, whether there was a 'question' for this purpose, the matter is placed beyond doubt by the effect of s 99. Section 99 of the Act operates so that information given by an applicant is taken to be an answer to a question. Whatever may be the normal meaning of the word 'question', s 99 operates in this case to mean that item 37 is a question, provided that item 37 relevantly enquires as to the situation of the appellant's daughter. In other words, if the appellant's daughter was alive at the time of completing item 37, would the answer have been incorrect? Item 37 is addressed to the appellant, not to the appellant and his spouse. Therefore, the reference to 'your' family or children is a reference to the appellant's family or children. I do not see the request as limited to dependent children, as there is nothing in the relevant Regulations, the terms of the application as a whole, or item 37 in particular, to so limit its operation. When the appellant was asked to complete the column 'All your children (including from previous marriages/relationships)' this would have included his daughter (if born prior to completing the form). I do not regard the reference to 'including from previous marriages/relationships' as doing anything other than directing the mind of any applicant to complete the answer by reference to marriages/relationships other than the one the applicant may currently be enjoying. The information sought after was the appellant's children --- the answer given was correct at the time, but incorrect in the new circumstances. Therefore I would not uphold this ground of the appeal. One is that the Appellant had breached s 101 by not filling in his application in such a way that "all questions on it are answered and no incorrect answers are given" . The first notice specifies a question that has not been answered (AB 47 para 1). The second notice does not. Another is that the Appellant breached s 104 because circumstances had changed such that "...an answer to a question on a non-citizen's application form or an answer under this section [i.e. s 104] is incorrect in the circumstances. " The first notice refers to the birth of a child as a new circumstance. The second sets out facts the [sic] occurred before the first from [sic] was completed on 4 July 2001. This is not a new circumstance for a [sic] 104(1). 34 The Tribunal regarded the incorrect statements in relation to the appellant not graduating from Swinburne and not disclosing that he had been excluded from Swinburne for two years simply as other instances of non-compliance. Those instances of non-compliance were matters that were required to be considered under reg 2.41(g) in the exercise of the discretion to cancel the appellant's visa pursuant to s 109. Whether or not those instances of non-compliance were in fact instances of non-compliance was a factual matter for the determination of the Tribunal and one which the appellant did not dispute. 35 Accordingly, the Tribunal's approach in cancelling the visa under s 109 was entirely proper and reasonable. The Tribunal under the heading 'Grounds for cancellation', set out s 101 and s 104. It then found that the appellant had failed to declare to his wife or the Department that he had not been in an exclusive relationship with his wife and that his affair with Ms Hoang had resulted in the birth of his daughter. It further found that he had failed to disclose the birth of his daughter in the 'Documentation Guide' which was submitted to the Department in support of his application for permanent visa. These were the matters the subject of the particulars of the possible non-compliance given in the notice of intention to cancel the visa dated 27 May 2004 and given under s 107(1). That is, it determined that there had been a failure to comply as described in the notice. That clearly satisfies the requirements of s 108 and s 109. 36 The Tribunal then proceeded under the heading 'Discretionary cancellation' to set out reg 2.41 prescribing the circumstances to which the Tribunal was required to have regard, pursuant to s 109(1)(c) , before determining whether the visa should be cancelled. It proceeded to have regard to each of those matters (a)-(k). 37 In having regard to the prescribed circumstances, the Tribunal noted that there was evidence of previous non-compliance in that as the holder of a student visa the appellant had failed to report to the Department when he had deferred his studies and when he was excluded by his education provider, Swinburne, for two years: reg 2.41(g). This had been the subject of the second notice of intention to cancel the visa. As is evident from the Tribunal's reasoning however, these instances of non-compliance were not relied upon as a ground for cancellation, but were matters taken into account in the exercise of the discretion to cancel the visa pursuant to par 109(1). It was also a matter referred to in the 12 November 2004 notice under s 359A given to the appellant. However, those instances of non-compliance did not need to be separately considered by the Tribunal pursuant to s 109 as the basis for cancelling the appellant's visa. 38 I am mindful that one must read the Tribunal's decision fairly, bearing in mind that they are the reasons of an administrative decision-maker: see Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 271-272 and the authorities referred to. 39 When one reads the Tribunal's decision fairly and in light of the above structure of reasoning, no error is apparent. In light of my view on this, leave to amend the notice of appeal to allow for the proposed third ground of appeal should not be granted as there are no reasonable prospects of success. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton.

judicial review cancellation of visa pursuant to s 109 of the migration act 1958 (cth) whether information given by the appellant was an 'answer to a question' relevance of other acts of non-compliance migration

The Tribunal affirmed a decision of a delegate of the Minister not to grant the appellant a protection visa. 2 The claim for protection which was the subject of the application before Federal Magistrate Nicholls was the second claim for protection made by the appellant. The initial claim for protection was made in 2001 and was rejected by a delegate of the Minister. That decision was affirmed by a differently constituted Tribunal in 2002. 3 The only issue which arises on the appeal is whether the second Tribunal constructively failed to exercise jurisdiction either by failing to consider the appellant's claim cumulatively or by failing to consider the whole of the material put before it. In this respect the appellant relies in particular upon submissions which were put to the Tribunal in writing by the appellant's then legal adviser after the conclusion of an oral hearing before the Tribunal. She first arrived in Australia on 5 August 2001 on a false Korean passport. It appears that an agent prepared and lodged an application for a protection visa on her behalf. On 6 November 2001 a delegate of the Minister decided not to grant a visa and on 29 November 2002 the Tribunal affirmed the delegate's decision. The appellant remained in Australia until she was removed to China on 15 February 2005. 5 On 24 August 2005 the appellant re-entered Australia on a second Korean passport. This passport, like the first one, was also a false passport. The appellant was detained on 22 December 2005 at the Villawood Detention Centre. She remains in detention at the time of this hearing. 6 On 13 January 2006 the appellant made her application for the protection visa which is the subject of the present proceedings. On 1 February 2006 a delegate of the Minister decided not to grant the visa. The appellant's application to the Tribunal for a review of the decision was made on 7 February 2006. As I have already said the Tribunal affirmed the delegate's decision refusing the grant of a visa on 9 May 2006. It did so in considerable detail. 8 The Tribunal also recorded in its decision some parts of the post hearing submissions made by the appellant's legal adviser. In particular, the Tribunal noted that the adviser stated in those submissions that as a former practitioner of Falun Gong the appellant was at risk of serious harm, and that she was also at risk of harm as a relative of practitioners of Falun Gong. The Tribunal stated that the appellant had given a number of reasons why she considered that she had a well-founded fear of persecution from the Chinese authorities upon the ground of her imputed involvement in Falun Gong. These reasons were then summarised in five bullet points. 12 The Tribunal went on to say that it did not accept that the appellant was subject to ongoing harassment or detention by the Chinese authorities after she was deported back to China in February 2005 upon the basis of being a suspected associate of Falun Gong. This was a rejection of a significant factual plank in the appellant's present argument that the Tribunal failed to consider her claims cumulatively. The Tribunal observed that it did not accept the Appellant's suggestion that the payment of a bribe had ensured the re-issuing of a Chinese passport at a time when the appellant was allegedly under investigation and subject to detention by the authorities. This was apparently a significant part of its reasons for this finding. 13 Nor did the Tribunal accept that when the appellant returned to Australia in August 2005 she did so for the purpose of seeking protection against harm feared from the Chinese authorities. The Tribunal pointed to what it called the appellant's modus operandi which was that she obtained and used false documents for the purpose of working and remaining in the country until she was detected. The Tribunal considered that this was inconsistent with a genuine fear of harm from the Chinese authorities. 14 The Tribunal then made a broad finding that it did not accept that the appellant had been imputed to be an associate of Falun Gong by the Chinese authorities because it did not accept as "plausible or credible" the basis upon which the claim of imputed involvement with the Falun Gong was said to have occurred. 15 The Tribunal expressed reservations about the appellant's claim that her sister committed suicide by reason of the crackdown on members of Falun Gong but, in any event, the Tribunal did not accept that, even if there was a causal nexus, that it resulted in any ongoing adverse attention to the appellant. The Tribunal gave a number of reasons for this. The Tribunal pointed to the fact that nothing flowed from the questioning of family members following the death of the appellant's sister in March 2000. The Tribunal said that it followed that when the appellant came to Australia for the first time in August 2001 she came on her own account in order to work in Australia and that when she sought a protection visa in 2001 she regarded it as merely a convenient vehicle to enable her to stay in Australia to earn money. 16 I should pause here to add that there was material in the transcript of the hearing before the Tribunal which was put before me at the hearing of this appeal that supported that finding. I will not set out the relevant parts of the transcript but they appear at pages 3 and 4 of the transcript of the hearing of 9 March 2006. Thus the Tribunal did not accept that the events of 2000 gave rise to a well-founded fear of harm at the present time. 17 Broadly, the Tribunal did not accept that the appellant had told the Chinese authorities when she returned to China in February 2005 that she applied for a protection visa in Australia on the basis of an association with Falun Gong. The Tribunal gave reasons for this which are not necessary to repeat in my reasons for judgment. 18 The Tribunal also rejected the claim that the appellant was contacted by Falun Gong practitioners by text messages and by leaflets after she returned to China in February 2005. The Tribunal did not accept as plausible that Falun Gong practitioners would seek to contact the appellant in this way. The Tribunal accepted that the appellant had no personal involvement in Falun Gong while she was in Australia but it did not accept that any involvement she may have had prior to the crackdown in 1999 would result in her facing harm on her return to China in 2006. 19 The Tribunal went on to say that "for all the reasons outlined above" it did not accept that the appellant had a well-founded fear of persecution upon the ground of an imputed Falun Gong profile. It said that in "light of the foregoing and in the absence of any political activity on the part of the [appellant]" the Tribunal did not accept that on her return to China she faced harm for reason of any imputed political opinion. It also said, accordingly, that it was not satisfied the appellant had a well-founded fear of persecution. 20 In its conclusion the Tribunal said that "having considered the evidence as a whole" it was not satisfied that the appellant was a person to whom Australia owed protection obligations. It therefore found that the appellant did not satisfy the criteria set out in s 36(2) of the Migration Act 1958 (Cth) for the issue of a protection visa. They were that the Tribunal failed to apply the correct test, that it unreasonably rejected the claims and that it did not consider whether the appellant had a well-founded fear of persecution if she returned to China. The learned Federal Magistrate said at [24], when dealing with the unreasonableness ground, that there was "nothing in the material to show that the Tribunal misunderstood the claim made by the [appellant] nor that it dealt with a claim different to that which she had put forward". 22 The learned Federal Magistrate also considered the question of whether there was a breach of s 424A of the Act. Counsel for the Minister fairly raised that matter before the Federal Magistrate because the appellant was then unrepresented. The learned Federal Magistrate found that there was no breach of that section. He came to the view at [33] that no jurisdictional error could be discerned on the part of the Tribunal. However, I think it is arguable that they fell within the unreasonableness ground and, in any event, counsel for the Minister disclaimed any prejudice to the Minister by the raising of these grounds on appeal. Accordingly, applying the principles stated by a Full Court in VUAX v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 158 at [46] to [48], I would be prepared to grant leave to the appellant to raise the grounds on the appeal. That, of course, is not to say that amended grounds could be raised on appeal if the principles referred to by the High Court in Coulton v Holcombe [1986] HCA 33 ; (1986) 162 CLR 1 at 7-8 are infringed. 24 The appellant's argument in support of the appeal was put by counsel on two bases; he said, firstly, that an explicit claim made by the appellant's solicitor was not addressed. This is the claim that the grounds upon which the profile was to be imputed were to be considered cumulatively. The second basis upon which the appellant's counsel argued the case was that there was an obligation to consider all of the evidence as a whole. 26 The principle is that there will be jurisdictional error if the Tribunal fails to make a finding on "a substantial, clearly articulated argument relying on established facts". This may amount to a constructive failure to exercise jurisdiction. This principle was referred to by a Full Court in NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) [2004] FCAFC 263 ; (2004) 144 FCR 1 at [55] . The court also referred at [57] to the nature of the review function as described by Allsop J in Htun v Minister for Immigration and Multicultural Affairs (2001) 194 ALR 244 at [42]; this is that the tribunal is to consider all of the component integers of the appellant's claim. 27 The essence of the appellant's argument was that there was nothing in the Tribunal's reasons to show that it had dealt with the question of how the Chinese authorities would deal with a person of the appellant's profile upon her return to China. Counsel for the appellant submitted that the Tribunal had not dealt with objective facts that formed part of the appellant's claimed Falun Gong profile. 28 The starting point for consideration of the appellant's arguments seem to me to be conveniently addressed in a decision of a Full Court in Applicant WAEE v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 75 ALD 630 at [46] to [47]. Their Honours observed at [47] that the "inference that the tribunal has failed to consider an issue may be drawn from its failure to expressly deal with that issue in its reasons". However, that is an inference which will not too readily be drawn where the reasons are otherwise comprehensive and the issue has at least been identified at some point. 30 It is therefore important to note, as I have already pointed out, that the Tribunal expressly recorded the appellant's adviser's post hearing submissions which stated that the factors relied upon by the appellant may not of themselves amount to a claim for asylum but that cumulatively they created a profile of an imputed association with Falun Gong. It seems to me to follow from this and also from the lengthy statement of the appellant's claims in the Tribunal that the reasons given by the Tribunal must be read in light of those two factors; that is to say the issue which the appellant now seeks to agitate was expressly referred to by the Tribunal before it gave its findings and reasons, and the findings are therefore to be informed by that fact. 31 The appellant relied upon the decision of Moore J in Kaur v Minister for Immigration and Multicultural Affairs [2001] FCA 1401. That case was referred to with apparent approval by Finkelstein J in Jegatheeswaran v Minister for Immigration and Multicultural Affairs (2001) 194 ALR 263 at [48]. Kaur was a case in which it was argued that the tribunal considered each of the facts put forward by the applicant in isolation but failed to consider their cumulative weight. His Honour accepted that this may amount to constructive failure to exercise jurisdiction. His Honour cited a number of authorities in support of that proposition. 32 I should mention that in the present case the Minister's counsel concedes that if there was a failure to consider the facts cumulatively then there would be demonstrated jurisdictional error. 33 However, it seems to me that in the present case upon a fair reading of the Tribunal's reasons it did not compartmentalise the appellant's claims in the manner submitted by the appellant's counsel. Rather, in my view, the Tribunal did consider the claims cumulatively and did consider all of the integers of the appellant's claims. In particular, I would point to three factors to support that view; firstly, the Tribunal identified the issue as submitted by the appellant's legal adviser, secondly, there seems to be a comprehensive treatment of the claims which were identified in some detail, thirdly, the Tribunal appears to me to have dealt with all of the factual bases of the claim, that is to say the critical bases upon which the claim is put. 34 Mr Potts for the Minister relied in particular upon the statements in the Tribunal's reasons including the reference to "all the reasons" and the conclusion which stated that the Tribunal had considered the "evidence as a whole". The use of these expressions should not be considered to be a verbal formula or a substitute for a fair reading of the whole of the Tribunal's reasons. 35 However, in the present case, for the three reasons that I have mentioned above, I consider that the Tribunal dealt with all of the integers of the claim and that the facts put forward to support the profile were considered cumulatively. Indeed, that was the view which was eventually reached by Moore J in Kaur at [13] to [15]. It seems to me that the reasons given by the tribunal in Kaur pointed more strongly in the direction of a compartmentalised consideration of the claims than appears in the present case. 36 In my view the present case falls within the approach taken by Finkelstein J in Jegatheeswaran at [49]. His Honour observed that the separate treatment of the incident relied on in that case did not indicate that the tribunal failed to look at the case in its entirety. His Honour remarked that the tribunal stated that it reached its conclusion "[h]aving considered the evidence as a whole" and that there was no reason to doubt the statement. In my view that is apt in the present case. Sundberg J agreed with the reasons given by Finkelstein J. The reasons of Emmett J at [23] are also consistent with this approach. 37 I reject the submission put by counsel for the appellant that the Tribunal failed to address a contention. I do not think the appellant's argument is supported by what was said in Applicant WAEE at [44]. The present case falls for consideration upon a fair reading of all of the reasons of the Tribunal. I have already given my views on that question.

whether rrt constructively failed to exercise jurisdiction whether rrt addressed explicit claim to consider evidence cumulatively whether rrt failed to consider whole of material no jurisdictional error appeal dismissed migration

2 I proceed to consider the merits of each of these separately. Part B of Sch B detailed the categories of documents for discovery by Termicide. A spreadsheet showing the number of installations of Termiglass by the Respondent on a quarterly basis. 2. All correspondence, reports or site inspection records relating to any property in which Termiglass has been installed and which allegations of penetration by termites has occurred. 3. All protocols relied upon by Dr French in carrying out tests on crushed glass as a physical termite barrier. 4. All documents in relation to any contract or arrangement made between the Respondent and Dr French or the Respondent and CSIRO in relation to the testing of crushed glass and/or the assessment of the Termiglass system as a physical termite barrier. 5. All documents recording all testing of crushed glass carried out by Dr French as a physical termite barrier. 6. All correspondence, file notes, memoranda and any other documents recording communications between the Respondent (or any person on its behalf) and Dr French and/or the CSIRO in relation to the testing of crushed glass and/or the assessment of the Termiglass system as a physical termite barrier. 7. All documents recording all testing of crushed glass or the Termiglass system as a physical termite barrier carried out by or on behalf of the Respondent or otherwise supplied to the Respondent or on its behalf. 8. All correspondence, file notes, memoranda and any other documents recording communications between the Respondent (or any person on its behalf) any other person in relation to the testing of crushed glass and/or the assessment of the Termiglass system as a physical termite barrier. A response to that letter was made on behalf of Termicide by its solicitors on 16 May 2008. Dr French referred to "the materials you kindly delivered". The materials delivered were samples of sintered glass and are no longer in the possession, custody or power of the Respondent and do not comprise a document. 4 All correspondence and documents provided to BLS Consulting and Barry Schafer in relation to termiglass for the purpose of obtaining the appraisal or draft appraisal as referred to in the facsimile from BLS dated 18 November 2003 (document 7) No further documentation to be discovered. Any documentation that was in the possession of the Respondent has been lost over time due to both changes in administration staff and the Respondent moving premises. 5 The termiglass installation manual and the Granitgarrd specifications as referred to in the letter from BLS to CSIRO dated 26 November 2003 (document 8) and also referred to in the affidavit of Dr Ewart dated 23 April 2008 The termiglass installation manual has already been put into evidence by the Applicant (annexed to the affidavits of Dr Don Ewart sworn 17 December 2007 and 23 April 2008). The Respondent has reasonable belief that the Granitgard specifications are already in the possession of the Applicant and is not required to discover that document under Order 15 Rule 2(4) 6 The documents attached to the email dated 1 December 2002 from Barry Schafer to Paul Jeynes relating to the sieve analysis (document 9) No further documentation to be discovered. Any documentation that was in the possession of the Respondent has been lost over time due to both changes in administration staff and the Respondent moving premises. 8 The appraisal certificate enclosed with the letter from CSIRO to Barry Schafer dated 11 December 2003 (document 10) This has already been discovered as part of document 11 9 The information provided by Termicide as referred to in the CSIRO Technical Assessment (document 11) together with the Techcon Management Pty Ltd report dated March 2003 referred to in the same document The information provided by Termicide is set out in 'Relevant Documents' and 'Basis of Appraisal' of the Technical Assessment (document 12) and comprised: • Termicide Installation Manual Nov 2003 (already in the possession of the Applicant as it is annexed to the affidavits of Dr Ewart) • Report from Techcon Management March 2003 (already discovered as part of document 17) 10 Any correspondence with NRA as referred to in the letter from Dr French to David Jeynes dated 5 November 2003 (part of document 11) No documentation to be discovered 11 Any correspondence from Dr French or documents regarding communications with Dr French in respect of Mr Jeynes' letter dated 19 December 2003 (document 12) No further documentation to be discovered. Any documentation that was in the possession of the Respondent has been lost over time due to both changes in administration staff and the Respondent moving premises. We note that you have now issued a subpoena to Dr French. 12 The specification requirements referred to in Mr Jeynes' letter dated 19 December 2003 (document 12) No documentation to be discovered 13 All documents provided to LTD (Consultant) Services for the purpose of provided its opinion as expressed in its letter dated 26 May 2005 (document 18) No further documentation to be discovered. Any documentation that was in the possession of the Respondent has been lost over time due to both changes in administration staff and the Respondent moving premises. We note that you have now issued a subpoena to Mr Langley. 14 All documents or notes of conversations relied up on by Termicide for the purposes of advising CSIRO that the testing quality assurance systems used in the manufacturing system of termiglass were of the highest standards and confronted to the original product specifications as per the letter dated 25 January 2006 (document 19) No further documentation to be discovered. Any documentation that was in the possession of the Respondent has been lost over time due to both changes in administration staff and the Respondent moving premises. 15 The original product specifications referred to in document 19 This has already been discovered as part of document 11 and document 15 16 The document containing the description of the manufacturing process and steps undertaken to ensure consistency as referred to in document 19 The description and steps are set out in document 19 17 All samples of Termicide and testing results taken from them as referred to in document 19 Samples of the termiglass product are not discoverable. Samples do not comprise a document. 18 Photos referred to in document 19 No further documentation to be discovered. Any documentation that was in the possession of the Respondent has been lost over time due to both changes in administration staff and the Respondent moving premises. 19 The documents incorporating the quality management system and rules referred to in Termicide's declaration of design life dated 2 May 2006 (document 20) This has already been discovered as part of document 11 and document 15. 20 All correspondence and documents recording communications with Ehab Melek and SAI Global in respect of termiglass, including all samples of termiglass provided, as referred to in the email dated 13 December 2006 from Mr Melek to Dr French (document 21) No further documentation to be discovered. Any documentation that was in the possession of the Respondent has been lost over time due to both changes in administration staff and the Respondent moving premises. Samples of the termiglass product are not discoverable. Samples do not comprise documents. We note that you have now issued a subpoena to Mr Melek and SAI Global 21 The installation manual and the termiglass specifications as referred to in the LTD (Consultant) Services report (document 25) The termiglass installation manual has already been put into evidence by the applicant (annexed to the affidavit of Dr Ewart) 22 Letter dated 26 Jun 2007 from CSIRO referred to in the Termicide letter to CSIRO dated 23 November 2007 (document 25) No further documentation to be discovered. Any documentation that was in the possession of the Respondent has been lost over time due to both changes in administration staff and the Respondent moving premises. 23 The Extrusion Technologies International Pty Ltd report referred to in the Termicide application for revalidation of CSIRO technical assessment 313 (document 25) This is not within the scope of Schedule B of the 15 February 2008 Orders. It refers to a component which is not the subject of this litigation. 24 Reports recording validation of Termicide sealant as referred to in the Termicide application for revalidation of CSIRO technical assessment 313 (document 25) This is not within the scope of Schedule B of the 15 February 2008 Orders. It refers to a component which is not the subject of this litigation. 25 Correspondence between CSIRO and Mr Chris Langley of LTD (Consultant) Services sent for the purpose of obtaining the opinions expressed by Mr Langley in the email dated 30 January 2008 to Mr Simon Hanson of CSIRO (document 26) The Respondent was not party to this correspondence and the correspondence is not in the possession, custody or power of the Respondent. We note that you have now issued a subpoena to both Mr Langley (LTD) and to the CSIRO. 26 Correspondence from Dr French concerning the opinions of Mr Langley expressed in the email to Mr Hanson dated 20 January 2008 (document 26) No further documentation to be discovered. 27 All correspondence and documents provided to Dr French in respect of his report dated 6 February 2008 (document 27) No further documentation to be discovered. 28 Report of Ecospan referred to in the CSIRO facsimile dated 19 February 2008 to Dell Shaw (document 29) This has already been discovered as document 27 29 All documents or notes of conversations relied upon by Termicide for the purpose of advising CSIRO that the product specifications of termiglass are the same as those tested in the laboratory and field as per the letter dated 18 February 2008 (document 30)) Report from Ecospan dated 6 February 2008 has already been discovered as document 27. No further documentation to be discovered. A party dissatisfied with the completeness of discovery by another party might seek to identify either a document or class of document as the focus for an application. That document or class of document must relate to a matter in question in the proceeding. The grounds for a belief that some document or class of documents relating to a matter in question exists can be demonstrated to the court either from the evidence adduced by the applicant for an order or from the nature or circumstances of the case (reflected in the pleadings) or from any document filed in the proceedings. The applicant must then demonstrate that such a document or class of document either may be, or may have been, in the possession, custody or power of a party. Once those matters are demonstrated, the court may order such a party to file an affidavit stating whether that document or any document of that class is or has been in the possession, custody or power of the party. 7 On behalf of Granitgard, it is submitted that a good litmus test of Termicide's failure to address its duties as to discovery appears from a letter from its solicitors dated 27 August 2008. In that letter Termicide's solicitors identified and attached an email which, it was conceded, had been the subject of a claim for privilege, and which, it was conceded, ought not to have been subject to such a claim. The email concerned had two enclosures. 8 Whilst that particular response might, with all due respect, be regarded as churlish, it does not at all follow that the further disclosure of the email, which, upon reflection, was regarded as not attracting a claim on behalf of Termicide for legal professional privilege, is in any way indicative a failure to observe discovery obligations. To the contrary, it shows an attention to the ongoing responsibilities that attend such an obligation. 9 To use the litmus test analogy favoured by Granitgard, it seems to me, on the material, that Granitgard's application is motivated by an unfortunate acidity in relations not just between the parties but between those who represent them, whereas, on a more objective analysis, the fact of voluntary further disclosure is alkaline in its character. By that I mean there is a quite benign view that one can take of that, which is that of a party, by its solicitors, taking care to observe a discovery obligation notwithstanding a position earlier taken and as soon as it is realised that that earlier position was taken in error. The discovery that was ordered by me on 15 February 2008 was by categories, not general. It is quite apparent from the letter sent in response to Granitgard's letter of 30 April 2008 that there has been reflective consideration by Termicide and those advising it of the adequacy of discovery in respect of the categories of discovery ordered. Having regard to the responses which were made and usefully summarised in the table, it seems to me that there ought not to be any order for further discovery. That is so even if, perchance, strictly, some of the documents identified in the 29 types or categories of document might have at one stage or another existed. 10 Further, I do not see any particular utility in requiring Termicide to verify on oath that which its solicitors have made on its behalf by way of response in that table. The response seems to me to be a complete answer to the request that was made. The application for further discovery, in any event, would enliven a discretion and, as I have indicated, even if, strictly, some documents may or may not at one stage have existed within those 29 classes of document, I am not disposed at this stage of the proceedings to order further discovery by Termicide of those on the basis of the material with which I have been provided for the purposes of hearing the application. And that is an alternative position; the primary one being it seemed to me that the responses made were a complete answer. The application for further and better discovery will therefore be dismissed. The foundation for that claim is said by Termicide to be found in s 118 and s 119 of the Evidence Act 1995 . This limitation in the language of the statutory provisions was noted and was essential to the decision of this Court in Northern Territory v GPAO. The explanation of the wording of the Act is set out above. The statutory language is clear. It deals with the adducing of evidence. That would cover adducing evidence in interlocutory proceedings as well as at a final hearing or on an appeal but it does not cover all the circumstances in which a claim for privilege might arise. To take the most obvious example, it would not cover the circumstances considered in Baker v Campbell. 13 Neither, for the reasons given in para 59, does it cover the situation in respect of documents which are produced on subpoena, save in that circumstance when such a document is sought to be adduced in evidence. That is not this case at the present. That is not to say that documents produced on subpoena may not be the subject of a claim by a party entitled to claim legal professional privilege, but the foundation for such a claim must be that privilege as it is known at common law, not as provided for in s 118 and s 119 of the Evidence Act 1995 . 14 Granitgard has challenged the claim made by Termicide insofar as the claim relates to communications between third parties, in other words, where the documents did not emanate either from the Respondents or its lawyers. 15 It is convenient to consider the fate of the application, given its focus, by reference to the question as to whether at common law legal professional privilege can attend communications passing between experts or documents produced to experts for the purposes of providing an expert opinion. Authoritative guidance to the resolution of such a question is provided in the judgments delivered by Pincus JA and Thomas J, with each of whose judgments de Jersey J (as the Chief Justice then was) agreed, in Interchase Corporation Limited (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1) (1999) 1 Qd R 141. Suffice it to say, that case was decided in respect of a similar controversy in respect of legal professional privilege. 17 There were five categories of document which were controversial and the subject of privilege claim in the Interchase case. They are set out in a table which appears at page 150 of the reasons for judgment of Pincus JA. 19 His Honour further observed that the documents in category A raised different considerations. The only question to which acceptance of the English position would give rise, as to category A, is whether it includes documents not in origin privileged, but used by the expert in forming an opinion; on the basis of the English cases, such documents would not be privileged, although supplied by the solicitor to assist in the expert's work. There is concealed in this issue a problem about the way in which a judge should proceed in considering the validity of a claim of privilege. Even if each document is precisely identified, it may not be possible to reach, merely from their description, a definitive conclusion on the validity of the claim with respect to each document; sometimes it may be that a sampling process may usefully be engaged in by the judge, to determine the credibility of a privilege claim designed to protect a large quantity of material; I do not accept that the judge must examine either all of the documents in question, or none of them. For practical reasons, it appears to me that the judge will ordinarily deal with challenged claims of privilege in accordance with categories, rather than individual documents. 20 That presents a difficulty in this case, if only in the sense that the privilege claim advanced on behalf of Termicide is, to put it charitably, of the most general in its description of the documents covered by the asserted claim. Later in his judgment in Interchase , Pincus JA considered whether the position which he thought obtained in light of English authority ought to be in any way altered or varied in light of authority in this country. Suffice it to say, his Honour did not consider that Australian authority compelled any different conclusion. 21 The view to which his Honour came, ultimately, was that documents in category A, being those passing between the plaintiff's solicitors and the valuer they engaged, relating to the valuation, are privileged, but the documents in categories B, C, D and E, being those which were brought into existence or were obtained by the valuer to assist in the preparation of the valuation report, were not privileged. His Honour's conclusion was that "witness document privilege" did not exist. The question is whether they are properly protected from disclosure. The rationale of the protection of legal professional privilege is a perceived need to protect the confidences between clients and their legal advisers (Grant v. Downs [1976] HCA 63 ; (1976) 135 C.L.R. 674 , 685; Australian Federal Police v. Propend Finance [1997] HCA 3 ; (1997) 188 C.L.R. 501 , 551-552). Although marginal cases constantly arise, the courts have succeeded in identifying appropriate limits to the confidentiality of communications in dealings between client and solicitor. However more complex factors arise when the solicitor finds it expedient to enlist the assistance of other persons. In this context an expert is a third person from whom the client, represented by a solicitor, hopes to obtain an advantage. The extent of protection applying to communications between the solicitor and the expert concerning alleged facts or hypotheses which the expert is asked to assume is, I think, a grey area. The solicitor is deliberately converting the expert into a witness. The community has some interest in ultimately being able to ensure (through the courts) that this process is not abused. It is desirable that the rules be such that the courts, or the adversary, be able to explore fairly fully the circumstances of the formation of the opinion. It is also necessary in some cases to explore the circumstances and nature of the retainer. However, to the extent that communications of this kind (commonly called "instructions") are made solely for the purpose of use in litigation and are intended to be confidential, such instructions are generally thought to enjoy protection. The important principle that there is no property in a witness means that an adversary party may subpoena an expert retained by the original party and require that expert to give all relevant information in his possession, including an expression of his opinion, to the court. It is perhaps curious that statements made by a plaintiff to, say, a doctor or engineer are not privileged, while similar or dissimilar statements made to such persons on the plaintiff's behalf by the plaintiff's agent, the solicitor, are. It is difficult to draw a tidy dividing line between the opinion and "the instruction" because the opinion of the expert is commonly premised on facts supplied by that means. 23 I interpolate that his Honour's observation in respect of the subpoena process is particularly germane in this case. It would seriously jeopardise the proper testing of such witnesses if privilege were extended to documents of the kind which are described in categories B, C, D and E in the present case. Privilege may however be claimed in relation to communications between the expert and the solicitor (both ways) when such communication is made for the purpose of confidential use in the litigation. Beyond this there is no sufficient reason why any material relevant to the formation of the expert's opinion should be subject to a claim of legal professional privilege. It is as well to add that an expert or solicitor may not artificially manufacture privilege by, for example, the expert sending in his or her file to the solicitor. Documents of this kind simply are not confidential. 25 Though reported in the authorised reports in 1999, the Interchase case was decided in 1997, that is prior to the decision of the High Court in Esso Australia Resources Limited v Commissioner of Taxation . Thus, that explains the reference by their Honours to a sole purpose test. The later decided Esso Australia Resources case holds that for Australia the test at common law for legal professional privilege in relation to documents is whether a communication was made or a document was prepared for the dominant purpose of a lawyer providing legal advice or legal services. Subject to that necessary qualification, the discussion of principle in the Interchase case is compelling. 26 For completeness reference might also be made to a decision given in this Court's original jurisdiction by R.D. As I have said, however, there are possibly some communications from the second applicants and the third applicants and I've already stated that in the event of these being identified, if a privilege is found to exist, those parties should be given the opportunity to decide whether to make a claim and support it with argument. If there are communications to Mr Robinson by persons other than any of the applicants, that is persons other than any client, there is no basis for a client based privilege. 27 Though brief, it is evident from his Honour's observation that, at least in respect of the communications to Mr Robinson in that case, he was of a similar view to that which is evident in the reasons for judgment of Pincus JA and Thomas J in the Interchase case. Thus, a pervasive claim or a blanket claim for privilege in respect of the documents produced on subpoena does not seem to be warranted. Indeed, there is every likelihood that it greatly overstates the basis upon which privilege might validly be claimed. The question becomes how best to deal with the question of privilege if any attaching to documents which have been produced on subpoena? 28 In the first instance, it would be a misuse of judicial resources for me to examine each and every document produced on subpoena to the end of determining whether privilege ought to be claimed. This task was nonetheless one which I was urged to undertake by Granitgard. I do not propose to undertake that task in the first instance. Instead, it seems to me that Termicide ought to do what a counsel of perfection might suggest it should have done before asserting a privilege claim to start with. In other words, it ought to identify with precision, seriatim, each and every document in respect of the subpoenaed documents, in respect of which a claim for privilege is pressed. 29 In so doing it will now have the benefit of the Court's reasons for judgment as to categories, in respect of which privilege is and is not available. It is unfortunate that Granitgard has had to bring such an application, but it having been brought, there ought to be relief granted to enable it to access documents in respect of which there is no basis for the making of a privilege claim. Further, the party which has asserted privilege, Termicide, needs to approach the task of identifying, with precision, documents in respect of which the claim is maintained with considerable expedition, given that the case is presently fixed for trial on 20 October 2008. 30 With that in mind, I propose to order that the list concerned be filed and served not later than Friday next and to reserve liberty to apply in respect of that list. Further, I propose that in respect of documents not identified on that list that Granitgard have leave to inspect and copy the documents produced on subpoena. That will mean that on and from Monday week at the latest Granitgard will be able, in respect of documents which do not appear on the list, to inspect and copy those documents. 32 I must say that my experience of the practice of this Court over the last quarter century or so is that it is unusual indeed for the Court to order the administration of interrogatories. Nonetheless, a discretion exists and I have approached the matter on the basis of whether, in the circumstances of this case, the discretion ought to be exercised in favour of the granting of leave to administer an interrogatory. There is but one interrogatory proposed, but it is a sweeping one. 33 It is sought that Mr Paul Jeynes, a director of Termicide answer this interrogatory on behalf of Termicide. There can be no doubt that there is an issue on the pleadings concerning whether the Termicide pest control barrier has been breached or, for that matter, whether it is misleading or deceptive to describe it as a barrier to the ingress of termites. The affidavit material read in support of the application gives rise to a suspicion that on one occasion in respect of a property apparently the subject of a "treatment certificate" number 3057, seemingly issued by Termicide, there was a breach. The affidavit, though on information and belief, does support a view that a property treated with the Termicide barrier system became the subject of a breach by termites. 34 There are photos exhibited to the supporting affidavits which contain apparent termite activity on above ground parts of what seems to be a domestic house. For all that, an interrogatory in the sweeping terms proposed by Granitgard has the flavour to me of a fishing expedition. From what may be one example of a breach of a termite barrier, a large extrapolation is made. That such an extrapolation came to be made seems to me, on present materials, to be indicative of the degree of acidity in relations that I have earlier described. The interrogatory also seems to, at least in part, go to question the integrity of the affidavit verifying the list of documents provided by Termicide. Generally, of course, such an affidavit is conclusive on the question of whether or not a party has or has had in its possession, custody or control relevant documents. 35 Whilst I am not prepared to countenance an interrogatory of the breadth proposed by the Applicant, Granitgard, it does seem to me that a basis is established for ordering particular discovery and to do so irrespective of whether that discovery does or does not fall within a category established by the order which I made on 15 February 2008. Order 15 r 8 does enable the making of an order for particular discovery in such circumstances and it seems inherently likely that there may, or at least may at one stage, have been documents relating to the particular job number which is evident in the supporting affidavit material. In other words, the job number in respect of treatment certificate number 3057. 36 I therefore propose to order not that there be an interrogatory of the kind which appears in annexure A, but, rather, that the Respondent, Termicide, file and serve a supplementary list of documents verified on oath in respect of each and every document in its possession, power or control relating to the job in respect of which treatment certificate number 3057 was issued. 37 I will direct the parties to bring in short minutes to give effect to the orders that I propose in the reasons for judgment. 38 In respect of the application for further discovery, it seems to me that costs should follow the event. I therefore order that Granitgard pay Termicide's costs of and incidental to that application, to be taxed. 39 In respect of the application filed on 29 August, two issues were raised: one was the delivery of an interrogatory; the other was in respect of privilege. There has been mixed success and, indeed, the relief sought was modified on the hearing of the application to embrace an order of the kind ultimately made, which was for particular discovery. The submission has been made that there was very late service of the material that came to provide a basis for the order for particular discovery, and that does excite a recollection on my behalf which supports that particular submission. 40 There may or may not have been, in a more leisurely way, an answer there, but that would nonetheless have itself raised questions which are probably questions for an ultimate trial. It is true that the very relief sought was not granted so far as an interrogatory is concerned, and that is the basis upon which, in that regard, at least, Termicide came to court. So what does one do, then, with an application which was supported by material served late, in circumstances when there has been some success nonetheless on a point which was always live, namely, the privilege point? It seems to me that there ought to be some allowance for the way in which the case came to evolve and the way in which it was prosecuted by Granitgard, which is not a way one would wish to encourage in this Court. 41 I order that the costs of that application be as follows; Termicide is to pay half of Granitgard's costs of and incidental to the application, to be taxed. 42 Now, Granitgard being the moving party in respect of each of the applications, it is for Granitgard to bring in minutes of orders to give effect to the judgment. I have already indicated in the judgment the orders that I propose, and I will direct that those minutes be brought in forthwith. It is obviously, as a matter of professional courtesy, to say the least desirable that those orders be presented to the solicitors for Termicide before they are lodged in the court. 43 I grant liberty to apply. 44 I grant leave to Termicide to inspect and copy the documents which are the subject of subpoena. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

application for further and better discovery challenge to claim for legal professional privilege application for leave to administer an interrogatory where application further and better discovery dismissed where party ordered to identify with precision documents for which privilege is claimed where interrogatory not allowed but order for particular discovery made practice and procedure

The primary judge found in Television's favour and ordered that the registration of the Trade Mark be refused. Channel was also ordered to pay Television's costs. Leave is required under s 195(2) of the Trade Marks Act 1995 (Cth) ("the Act") where the proposed appeal is against a judgment of a single judge of this Court. Section 25(2)(a) of the Federal Court of Australia Act 1976 (Cth) provides that applications for leave to appeal may be heard and determined by a single judge, or by a Full Court. However, O 52 r 2AA provides that an application under s 25(2) must be heard and determined by a single judge unless a judge directs it be heard by a Full Court, or a Full Court is already seized of the matter and considers it appropriate to hear and determine the application. WHAT IS THE APPROPRIATE APPROACH IN DETERMINING WHETHER LEAVE SHOULD BE GRANTED UNDER S 195(2) OF THE ACT? In support of this submission, both counsel referred to the Full Court decision of Woolworths Ltd v BP Plc (2006) 150 FCR 134 ; [2006] FCAFC 52 (" Woolworths ") at [53] --- [56]. Then, both counsel appeared to submit differing alternative approaches. Mr Stephens submitted, in the alternative, that leave should be granted if there is an important question of law involved, relying upon the Full Court decision in Kenman Kandy Australia Pty Ltd v Registrar of Trade Mark [2002] FCAFC 273. For his part, Mr Franklin SC submitted that " at the very least " an applicant for leave needed to show that the appeal was reasonably arguable, or that there was sufficient doubt to warrant consideration of the matter by a Full Court. Having considered these submissions and the relevant authorities on the issue, I have concluded that, in the circumstances of this matter, I should not adopt the "prima facie error of law " approach, but instead I should take the approach outlined in the Full Court decision of Decor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655 ; (1991) 33 FCR 397 (" Decor Corp ") particularly at 398 --- 399. That approach is similar, in part, to the alternative approach outlined by Mr Franklin SC immediately above. My reasons for reaching this conclusion are as follows. I begin by noting that about eight months after Woolworths was delivered, a differently constituted Full Court in Pfizer Corporation v Commissioner of Patents (2006) 155 FCR 578 ; [2006] FCAFC 190 (" Pfizer ") rejected a submission from counsel that the majority in Woolworths had held that the general rule or principle governing leave was that the applicant had to show " clear prima facie error in the reasons of the primary judge ": see Pfizer at [7]. Instead, after reviewing various decisions on the point, the Court held that the discretion to grant leave to appeal must not be constrained by rigid rules, or rules of general application, but each application was to be considered on its own special circumstances: see Pfizer at [10]. However, the Court did, then, appear to approve the " clear prima facie error " approach where the applicant for leave had been unsuccessful after two hearings and questions of fact, impression and judgment were involved: see Pfizer at [12]. Then, in The Scotch Whiskey Association v De Witt [2008] FCA 73 (" Scotch Whiskey "), Jessup J observed that the Full Court decisions in Woolworths and Pfizer appeared to have been argued prior to the insertion of r 2AA in O 52 of the Federal Court Rules at [17]. As noted above, r 2AA (which came into operation on 9 August 2005) provides that, with some exceptions that are not relevant for present purposes, an application for leave to appeal under s 25(2)(a) of the Federal Court of Australia Act 1976 (Cth) must be heard and determined by a single judge. Thus both those decisions appeared to involve a situation where the applications for leave to appeal were dealt with by a Full Court, rather than a single judge: see Scotch Whiskey at [17]. Flowing from this observation, Jessup J gave a compelling reason why the appropriate approach on an application for leave to appeal may be otherwise after r 2AA was introduced. He observed that while it may be easy, in an appropriate case, for a Full Court to conclude that a judgment of a single judge of the Court was attended by " clear prima facie error ", it would be inappropriate for one single judge of the Court to express the same conclusion about the judgment of another single judge of the Court: see Scotch Whiskey at [16]. Ultimately, in the exercise of his discretion, Jessup J decided not to take the " clear prima facie error " approach, but instead his Honour applied the approach laid down by the Full Court in Decor Corp : see Scotch Whiskey at [19]. It is clear from these decisions that I have a broad discretion as to which approach I decide to take in this matter. I should say at once that I am uncomfortable, as a single judge of this Court, adopting the " clear prima facie error " approach in deciding whether leave should be given to appeal the decision of another single judge of this Court. Moreover, identifying a clear prima facie error seems to me to invite a more searching consideration of the merits of the appeal than should occur at this stage of the proceedings: compare with the " rough and ready " approach suggested by Brennan CJ and McHugh J in Jackamarra v Krakouer [1998] HCA 27 ; (1998) 195 CLR 516 at [9] , albeit directed to an extension of time to appeal. Instead, the Decor Corp approach adopted by Jessup J has the advantage that it does not require me to identify clear error on the part of the primary judge, but rather to assess whether there is the necessary combination of sufficient doubt about the decision and the existence of substantial injustice (if leave were not granted), to justify the matter being considered by a Full Court. Furthermore, the Decor Corp approach requires that the sufficiency of the doubt and the extent of the potential injustice involved be balanced against each other and not be " isolated in separate compartments " so that " the degree of doubt which is sufficient in one case may be different from that required in another ": see Decor Corp at 399. Thus a more stringent approach is taken to a decision involving a point of practice, than one determining a substantive right, such that in the latter case, leave is more readily granted: see Decor Corp at 400. Jessup J made some similar observations in relation to applications for leave to appeal under s 195 of the Act in the Scotch Whiskey case. There, his Honour noted a submission of counsel that contrasted the situation where the applicant for leave had had two previous unsuccessful hearings in relation to the trade mark, with that where an applicant had had one prior success and one prior failure. While his Honour did not specifically adopt counsel's submission, Jessup J provided two reasons why clear prima facie error (ie significant doubt) may be appropriate in the former situation , observing that: " The basis for this approach, it seems, is twofold: first, the opponent has had two full hearings on the merits, and has achieved the same result each time; and secondly, a disappointed opponent may in any event apply for cancellation of the registration of the mark under s 88 of the Act ": see Scotch Whiskey at [13]. By contrast, in relation to the latter situation, Jessup J appeared to agree with counsel's submission that leave should only be refused if: "... the court is satisfied that it is clear beyond doubt that there is no error on the part of the trial Judge ", observing that: " No doubt the basis for that proposition is that, once having been rejected in the Court, the owner's application for registration would be permanently at an end ": see Scotch Whiskey at [13]. I respectfully agree with those observations and I consider they are directly referable to this case, which involves the latter situation. If leave is not granted to Channel, that will mean its application for registration of the Trade Mark will be at an end, or, in other words, its substantive rights will have been finally determined. On this point, I reject the submission made by Mr Franklin SC that Channel could simply file a new application. While this may be correct in theory, because of the findings made by the primary judge, I consider that a new application in substantially the same form would face very significant, if not insurmountable, difficulties. It follows from all this that I consider a small amount of doubt about the trial judge's decision should suffice in this case given the substantial injustice that Channel will suffer if leave were refused and its substantive rights were thereby finally determined on the basis of the primary judge's decision. Food Channel Pty Ltd ("Food Channel"), a related entity to Channel, filed the application for the Trade Mark on 28 August 2003. The application described Food Channel as the owner of the Trade Mark. It also described the goods and class to which the Trade Mark related in the following terms: " Goods specification: Class 16: printed matter, periodical publications, books and newspapers; paper and cardboard articles; posters, calendars; writing instruments, pencils, pens, stationery, writing pads, greeting cards; photographs ". On 20 January 2004, Food Channel assigned its application to register the Trade Mark, to Channel. Following the application being advertised for opposition, Television lodged a notice of opposition. Before the delegate of the Registrar, Television pursued three grounds of opposition: Channel did not intend to use the Trade Mark (s 59) ; the Trade Mark was likely to deceive or cause confusion (s 43) ; and the Trade Mark was deceptively similar to Television's trade marks (s 44). On 29 November 2006, the delegate rejected all of Television's grounds of opposition and decided to proceed to register the Trade Mark. As is already noted above, Television then appealed to the Federal Court on the same three grounds, and it added three additional grounds. The additional grounds were: Channel was not the owner of the Trade Mark (s 58) ; the Trade Mark was scandalous or its use was contrary to law (s 42) ; and the Trade Mark was similar to Television's trade mark that had acquired a reputation in Australia (s 60). Television subsequently abandoned its reliance upon s 43. In the lead-up to the trial of the matter, the primary judge conducted a number of directions hearings at which orders were made about the filing of affidavit evidence, the discovery of documents and the filing and service of written submissions. Among other things, both parties therefore subsequently filed and served a number of affidavits upon which they intended to rely. Throughout these pre-trial processes, Mr Paul Lloyd Lawrence (the sole director of Channel and Food Channel) acted for Channel. He did so by leave of the primary judge. However, the primary judge made it clear to Mr Lawrence from the outset that his leave to appear for Channel did not extend to the pre-trial mediation, or to the trial itself. For those stages of the proceedings, he was required to acquire legal representation for Channel. Shortly before the trial, Mr Lawrence retained counsel and solicitors to act for Channel. At the commencement of the trial on 17 March 2008, Channel's counsel sought to file and rely upon a fourth affidavit of Mr Lawrence sworn on 16 March 2008. The primary judge allowed Channel to file this affidavit and then heard submissions as to whether it should be permitted to rely on it. It should, perhaps, be noted that Channel also sought to file and rely upon a fifth affidavit, however that affidavit is not relevant in this application. The primary judge refused to give Channel leave to rely upon the fourth (or the fifth) affidavit and published reasons for that ruling (see [2008] FCA 378). The trial was then completed with Channel having to rely upon the three affidavits that had been prepared and filed by Mr Lawrence. However, Television was unsuccessful in relation to its grounds under ss 42 and 60 of the Act: see [2009] FCA 271 at [178] and [167] respectively. In summary, Channel alleges that the primary judge was in error in ruling that: The fourth affidavit of Mr Lawrence could not be relied upon; Neither Food Channel nor Channel was the owner of the Trade Mark; Neither Food Channel nor Channel used, or intended to use, the Trade Mark; The Trade Mark was deceptively similar to Television's trade marks. This is so because, as I understand its position, Channel claims it was denied a fair trial on the issues of the ownership of the Trade Mark (s 58) and the use, or intention to use, the Trade Mark (s 59) , by reason of the primary judge's refusal to allow it to rely upon the fourth affidavit. Channel, therefore, appears to be raising the principle expressed in cases like Balenzuela v De Gail [1959] HCA 1 ; (1959) 101 CLR 226 (" Balenzuela ") and Stead v State Government Insurance Commission [1986] HCA 54 ; (1986) 161 CLR 141 (" Stead "). In Balenzuela , the High Court held that, where material evidence had been erroneously rejected at the instance of a party who succeeded in the case, the unsuccessful party was entitled to a new trial unless it was shown that the evidence would not have affected the outcome: see at 232, per Dixon CJ; 239, per Menzies J; and 242 --- 243, per Windeyer J. Furthermore, the evidence rejected need only be material; it does not need to be conclusive: see 241, per Windeyer J. I interpolate that, for this reason, the submissions made by Mr Franklin SC that the fourth affidavit contradicts the third affidavit, or parts of it were vague, are not apposite because those matters go to the weight of the evidence, rather than its relevance or materiality. In Stead , the High Court held that, where material evidence was erroneously rejected (or in Stead , where counsel was not heard on a critical issue) an appellant need only show that he or she was deprived of the possibility of a successful outcome and that, in order to negate that possibility, a Court would have to find that a properly conducted trial could not possibly have produced a different result: see Stead at 147. It follows that the following questions arise in relation to the rejection of the fourth affidavit and the effect that had on Channel's case at trial under ss 58 and 59 of the Act: The fourth alleged error identified in the summary above, raises a separate and discrete issue and question. It is: Did the primary judge make a proper assessment of the deceptive similarity of the trade marks under s 44 of the Act? Before turning to consider these issues and questions, I should reiterate what I have said above about the nature of my task. It is limited to a consideration of whether the answers to these questions raises sufficient doubt in my mind about the primary judge's decision to justify granting Channel leave to appeal it. In making that determination, I should be careful to avoid converting this into a preliminary hearing of the appeal. I should therefore avoid making any detailed analysis of the issues raised by Channel's notice of appeal, or expressing any concluded views thereon. It follows that nothing I say in these reasons should be taken as expressing any concluded views on those issues. Furthermore, in relation to the first issue (above at [38]), I should also bear in mind that, since the primary judge's decision involved the exercise of a discretion, the sufficient doubt must relate to the judge having: acted upon a wrong principle; or allowed extraneous or irrelevant matters to affect her; or mistaken the facts; or not taken into account some material consideration: see House v The King [1936] HCA 40 ; (1936) 55 CLR 499 at 505. I consider those two applications are misconceived. The interlocutory order of 18 March 2008, by itself, is of little importance. What is of importance is the effect (if any) that order had on the subsequent trial. Channel has already raised this issue in its proposed notice of appeal. If Channel is able to obtain leave under s 195 of the Act and if it is ultimately able to persuade a Full Court that it was denied a fair trial because of the rejection of the fourth affidavit, the final decision will most probably be set aside. Channel will then obtain appropriate relief. It follows that Channel does not need to separately attack the interlocutory order of 18 March 2008 to achieve its ultimate goal. IS THERE SUFFICIENT DOUBT ABOUT THE FAIRNESS OF THE TRIAL ON THE SS 58 AND 59 ISSUES GIVEN THE REJECTION OF THE FOURTH AFFIDAVIT? The first question that arises for consideration on this issue is whether the fourth affidavit contained evidence that was material to Channel's case. It is appropriate to begin my consideration of this question by examining why it was that Channel's legal advisers thought the fourth affidavit was necessary. As I have noted above, during the pre-trial period, Mr Lawrence was acting for Channel. In accordance with the pre-trial directions made by the primary judge, Mr Lawrence prepared and deposed to three affidavits which he then proceeded to file on behalf of Channel. Not surprisingly, those affidavits demonstrate Mr Lawrence's lack of legal qualifications. For example, he failed to distinguish his personal position from that of the various corporate entities with which he was involved as a director, including Channel. Furthermore, he failed to show any appreciation of the critical issues involved in the case, including the importance of identifying who created the Trade Mark and who owned, and used it, at various times. As a result, those three affidavits presented, what could only be described as, an unclear and confused position on these issues. As I have also noted above, in the days immediately before the trial, Mr Lawrence retained counsel and solicitors to act for Channel at the trial. Indeed, it emerges from the final decision, that this did not occur until less than four days before the trial was due to commence on Monday, 17 March 2008: see [2009] FCA 271 at [19] . Soon after the trial commenced, Channel's counsel sought to file and rely on the fourth affidavit. In his oral submissions in support of the reception of the fourth affidavit, Mr Stephens frankly conceded to the primary judge that when he read Mr Lawrence's three earlier affidavits and Television's outline of submissions on the eve of the trial, he realised that the three affidavits were expressed in layperson's terms and did not properly address the issues in the case. They also did not contain the relevant history of the Trade Mark. Consequently, he told the primary judge the fourth affidavit was prepared in an attempt to explain in legal terms, rather than in Mr Lawrence's layperson's terms, the history of the creation and assignment of the Trade Mark, how Channel came to be the current owner of it, and how Food Channel and Channel had used it. The ownership and the use of the Trade Mark were obviously critical issues in the primary judge's final decision. This can be seen from the summary of the final decision set out above (at [33]) and also from the summary of the principles extracted from the relevant authorities set out in the final decision: see [2009] FCA 271 at [39] . In the case of a mark that has never been used, the proprietor is the person who is the "author" of the mark and who has applied for its registration with the intention of using the mark: ... Authorship in this context is not confined to the person who originated the mark. A person may be the author even if he has copied a foreign mark; he or she need only be the first person to have applied the mark in Australia: ... A person is also the proprietor of a mark if, at the time of application for registration, he or she is entitled to the exclusive use of that mark under the common law: ... At common law that is the person who first used the mark. [NB: This is not the Trade Mark, but a related one. ] After the registration of the company and prior to the application for the trade mark 733265 ( about early April 1997) I assigned all my trading assets and goodwill including intellectual property to the newly formed company The Food Channel Pty Ltd. Mallesons Stephen Jacques solicitors arranged for the assignment agreement which was duly signed and stamped. I no longer have the originals of these documents as they were lost or destroyed in moving office and residence on a number of occasions over the last 11 years. Trade Mark 733265 was assigned from The Food Channel Pty Ltd to Food Channel Network Pty Ltd on the 15 th January 2004 and filed with the Trade Mark Office on the 4 th February 2004.Annexed hereto and marked annexure "C" is a true copy of the assignment together with an extract from IP Australia of the registration of the assignment. The Food Channel Pty Ltd made the application for the trade mark as depicted in 967804 on the 28 th August 2003. It was always the intention that The Food Channel Pty Ltd would use the trade mark. At a later time it was decided to transfer the ownership of the trade mark to Food Channel Network Pty Ltd but licence back the right to use the trade mark to The Food Channel Pty Ltd. In this way both companies had the right to use the mark but the ownership would be with the company which was intended to exploit a world wide network of operations. Trade Mark 967804 pending was assigned from The Food Channel Pty Ltd to Food Channel Network Pty Ltd on the 15 th January 2004 and filed with the Trade Mark Office on the 20 th January 2004.Attached hereto and marked annexure "D" is a true copy of that assignment together with an extract from IP Australia of the registration of the assignment. From the time of the assignment of the trade marks to Food Channel Network Pty Ltd, it authorised the use of the trade marks by The Food Channel Pty Ltd. A formal Licence Agreement was drawn up between the parties on or about that time however the original documents have been lost or destroyed although a copy of the document is on my computer. Attached hereto and marked annexure "E" is a true copy of that licence agreement. While it could have been expressed more clearly and directly in relation to the Trade Mark, I consider these parts of the fourth affidavit contain, at the very least, prima facie evidence bearing upon all, or some, of the critical issues arising under ss 58 and 59 of the Act (set out above) as follows: Taking into account these matters, I therefore consider the fourth affidavit contained evidence that was material to Channel's case under ss 58 and 59 of the Act. Was the fourth affidavit erroneously rejected? It is convenient to begin my consideration of this question by examining why Television opposed the reception of the fourth affidavit. In short, Mr Franklin SC opposed it being received because of what he described as: " severe ... prejudice ". He submitted that, while the issues in the case had been clear throughout, the fourth affidavit sought to: " contradict the earlier evidence and present a new and different case ". This meant, so he submitted, that: " We can't test any of this evidence, and we should and would have been entitled to test that evidence ". He submitted that the proceeding should not be adjourned to allow Television to investigate the matters raised in the affidavit because the issues under ss 58 and 59 of the Act had always been alive and this evidence should have been raised at a much earlier time. In essence, Mr Franklin SC submitted that the reception of the evidence in the fourth affidavit would take him by surprise. The next step is to consider the reasons the primary judge gave for rejecting the fourth affidavit. First, in the "findings" section of her Honour's reasons for that decision, the primary judge began by stating " In my view the fourth and fifth affidavits are not admissible ": see [2008] FCA 378 at [11] . Secondly, the primary judge referred to s 135 of the Evidence Act 1995 (Cth) which she said: "... p rovides the Court with a general discretion to exclude evidence if its probative value is substantially outweighed by the danger that the evidence might be, inter alia , unfairly prejudicial to a party ": see [2008] FCA 378 at [13] . Then, her Honour appears to have made an assessment of the probative value of the fourth affidavit. In the process, she observed that it contained: " vague references (for example, with respect to use of the trademarks in paras 10 and 11 ...), possible inaccuracies (for example, in para 16 ...), opinion evidence (for example, para 17 ...) ... ": see at [13]. Finally, on this aspect, her Honour stated that she accepted that Television would suffer " unfair prejudice " if Channel were to be allowed to rely on the fourth affidavit: see [2008] FCA 378 at [13] . Thirdly and finally, her Honour noted the obligation a court has to allow a party " the opportunity to raise an arguable case in accordance with the principles in Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146 " (" JL Holdings "), and, by comparison, noted that it would be unfair to Television to require it to deal, on the run, with new evidence produced at the last minute: see [2008] FCA 378 at [15] . I would interpolate that, given her Honour's ultimate conclusion, it is to be inferred she considered the unfairness caused to Television outweighed the prejudice caused to Channel. I will deal with each of these conclusions in the order they appear above. First, since the question her Honour had to decide was whether Channel could rely on the fourth affidavit, not, at least at that stage, whether it was admissible, the statement that the affidavits are "not admissible" (see at [55] above) raises a doubt in my mind as to whether her Honour may have committed an error of principle by considering the wrong issue. This doubt is compounded by the reference, in the next paragraph (see at [56] above), to s 135 of the Evidence Act 1995 (Cth). That section deals with the admissibility of evidence, not whether or not a party should be permitted to rely upon evidence that has not been disclosed earlier in the pre-trial case management process. In any event, even if the issue were one of admissibility of the evidence under s 135 of the Evidence Act 1995 (Cth), the primary judge did not specify why the evidence in the fourth affidavit was unfairly prejudicial. The only express mention of the paragraphs in the fourth affidavit (set out above at [51]), was that paragraphs 10 and 11 were affected by vagueness. However, vagueness goes to the weight to be given to the evidence rather than its admissibility. I might add that the similar objections raised by Mr Franklin SC before her Honour about the fourth affidavit contradicting evidence given by Mr Lawrence in his earlier affidavits, is also a matter that goes to the weight of the evidence, rather than its admissibility. Finally, on this aspect, it should be noted that her Honour did not provide any reason why the evidence in paragraphs 6 to 9 inclusive of the fourth affidavit, was unfairly prejudicial. I have similar doubts as to whether her Honour may have made errors of principle in assessing the competing prejudice the parties may suffer, when she gave, what appears to be, her alternative reason for rejecting the fourth affidavit. Without making too detailed an analysis, my reasons for having that doubt are as follows. First, at its highest, Television was alleging that it was prejudiced because it was taken by surprise and therefore could not properly prepare its case. In my view, it is difficult to see how evidence that is, at least prima facie , material evidence, could be outweighed by prejudice in the form of surprise, when there was nothing before the primary judge to suggest that Television's surprise could not have been remedied by an adjournment with costs. While Mr Franklin SC advised the primary judge that Television did not wish to have an adjournment of the trial, he did not provide any reason why an adjournment with costs would not overcome Television's prejudice in all the circumstances. For example, he did not suggest that there was any particular reason why the proceedings had to be determined urgently, or that there had been such significant delays in the proceedings to that time such that it was in the interests of justice they should be promptly brought to an end. Secondly, in this context, the surprise rule is generally directed to a party raising a new claim or defence not, as was the case here, to a party seeking to rely on new evidence going to an existing claim or defence albeit in breach of case management directions. Indeed, Mr Franklin SC emphasised throughout his submissions in opposition to the reception of the fourth affidavit, that the issues in this case remained the same throughout. Finally, I have doubts whether a sufficient (or any) allowance was made to accommodate the fact that, until the last minute before the trial, Channel was, in effect, a self-represented litigant. If Channel had continued as a self-represented litigant, the Court would usually have attempted to diminish the disadvantages it would have suffered as a consequence: see Rajski v Scitec Corporation Pty Ltd (Court of Appeal (NSW), unreported, 16 June 1986); Morton v Vouris (1996) 21 ACSR 497 at 513 to 514, per Sackville J; and Woodward v Loadman (No 1) (2007) 22 NTLR 1 at [76] to [81], per Olsson AJ and Wills v Australian Broadcasting Commission [2009] FCAFC 6 at [45] . While Television cannot be held responsible for Mr Lawrence's decision to wait until the last minute before appointing legal advisers for Channel, I doubt whether sufficient allowance was made for the fact that Channel's newly appointed legal advisers were placed in the predicament they were, essentially as a result of Channel's earlier self-representation via Mr Lawrence. The most obvious allowance in all the circumstances would have been an adjournment, with a costs order against Channel. For these reasons, I have doubts as to whether the primary judge may have made errors of principle in dealing with the competing prejudices in contention. Was Channel deprived of the possibility of a successful outcome? Finally, in determining this issue, it is necessary to consider the question whether Channel was deprived of the possibility of a successful outcome by the rejection of the fourth affidavit. As the High Court remarked in Stead , an appeal court should approach this conclusion with caution and it would ordinarily require some evidence that a properly conducted trial could not possibly have produced a different result: see Stead at 145 and 147. Of course, both of these observations were directed to the court that hears the appeal. It would necessarily follow that, if the Full Court should be so careful about answering this question in the negative, I should be all the more so, particularly where there is no such evidence before me and I am considering the matter at the leave to appeal stage, where I consider only a small amount of doubt should be sufficient to justify my granting leave. It follows that I consider there is sufficient doubt to justify granting leave to Channel to appeal this aspect of the primary judge's decision to the Full Court. IS THERE SUFFICIENT DOUBT ABOUT THE CONCLUSION THE TRADE MARKS WERE DECEPTIVELY SIMILAR UNDER S 44? This is so because, even if there is sufficient doubt about that aspect of the primary judge's decision, if there is no such doubt about the primary judge's decision to reject the appellant's case under s 44 of the Act, Television will succeed in any event on that ground alone and it would, therefore, be futile to grant leave to appeal the decision. It follows that I should proceed to consider whether there is also sufficient doubt about the primary judge's decision about deceptive similarity under s 44 of the Act. In doing so, I bear in mind the matters I have set out above (at [40]) about the scope and nature of my task. Furthermore, since the primary judge's decision under s 44 was an evaluative decision, or one involving matters of impression upon which different minds could differ, I should bear in mind that the sufficient doubt must relate to an error of principle allegedly committed by the primary judge: see Registrar of Trade Marks v Woolworths Ltd [1999] FCAFC 1020 ; (1999) 93 FCR 365 (" Registrar of Trademarks ") at [58], per French J and [69], per Branson J. The principles that bear upon a judge's task when considering deceptive similarity under s 44 of the Act are well-established. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks. If, considering all those circumstances, you come to the conclusion that there will be a confusion - that is to say, not necessarily that one man will be injured and the other will gain illicit benefit, but that there will be a confusion in the mind of the public which will lead to confusion in the goods ... you must refuse the registration, or rather you must refuse the registration in that case. Furthermore, in Cooper Engineering , the High Court held that this process involves a two stage test. The first stage is whether the marks really look alike, or sound alike. The second stage is, if they do, whether the resemblance is likely to deceive: see Cooper Engineering at 538 to 539 and Registrar of Trademarks at [84], per Branson J. In making these findings, the primary judge also rejected the relevance of the appellant's submissions that the words "Channel" and "Network" did not sound the same and that the Trade Mark and the respondent's trade mark were substantially different in appearance (at [147]). Based on these findings and conclusions, the trial judge concluded (at [148]) that the two trade marks were deceptively similar. The primary judge therefore appears to have focused on the words used in the trade marks and, to a limited extent, the circumstances of their use in a television entertainment context. If that is so, the primary judge does not appear to have considered all the surrounding circumstances related to the use of the trade marks, including the circumstances in which the related goods or services would be bought and sold and the character of the probable customers for them. In other words, her Honour does not appear to have moved beyond the first step in the two step process identified in Cooper Engineering . For these reasons, bearing in mind the circumstances of this case outlined above (at [17]), I consider there is sufficient doubt as to whether the primary judge has made an error of principle in her assessment of the deceptive similarity of the trade marks under s 44 to justify granting leave to Channel to appeal this aspect of the primary judge's decision to the Full Court. Before I conclude, I should record that there were numerous other issues debated in the written and oral submissions before me, however, because of the conclusions I have reached above, I do not consider it is necessary to address any of them. I will therefore order that: Channel be granted leave to appeal the judgment delivered 27 March 2009. The application and the notice of motion filed on 11 August 2009 be dismissed. I certify that the preceding eighty (80) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves .

trade marks trade marks act 1995 (cth) test for leave to appeal under s 195(2) whether there is sufficient doubt to warrant reconsideration of the matter and whether denial of an opportunity to appeal would involve a substantial injustice supposing the decision of the primary judge to have been wrong whether there is sufficient doubt that the refusal of primary judge to allow an affidavit resulted in the denial of a fair trial on the issues of ownership and intention to use test to be applied whether the affidavit contained material evidence and whether it was erroneously rejected thereby depriving the possibility of a successful outcome trade marks s 44 whether the primary judge made a proper assessment of deceptive similarity test to be applied two step process intellectual property evidence intellectual property

On 13 October 2008 the liquidator obtained an order under s 596B of the Corporations Act 2001 (Cth) for the issue of a summons requiring Mr Mason to attend and be examined about the affairs of Australvic. Mr Mason's response was to bring an application to have the examination summons set aside. The principal basis for that application was as follows. At the time of the application, there was in existence a proceeding in the Supreme Court of Victoria that related directly to the activities of Australvic. Mr Mason was concerned that the liquidator had obtained the examination summons in order to conduct enquiries that might assist him in prosecuting the Supreme Court proceeding: an advantage which was not available to the liquidator by use of the ordinary processes of the Supreme Court. I declined to make the order to set aside the examination summons. I did, however, impose two restrictions on the liquidator. First, I directed that the examination be limited to eliciting information in relation to whether or not there had been a breach of duty, whether under the common law or statute, by Michael Kyriackou (a former director of Australvic) in relation to the affairs of any company in the Australvic group. Second, I directed that without leave of the court, any evidence given by Mr Mason could not be used, directly or indirectly, in connection with the Supreme Court proceeding. On 12 March 2009 the examination commenced. It has not yet concluded. It was adjourned to a date to be fixed. Following the adjournment of the examination, the Supreme Court proceeding settled. The orders show that, as a result of agreement between the parties as regards how money then held in Supreme Court should be distributed, the action and a counterclaim in the action were dismissed. The dismissal of the Supreme Court proceeding led to the liquidator making a request to recall the direction limiting the scope of the examination. The liquidator does not seek the removal of the restriction on the use of Mr Mason's evidence because there is now no proceeding in which the evidence could be used. I have looked at my reasons for dismissing Mr Mason's application to set aside the examination summons. In those reasons I said it was clear that the liquidator was not seeking to conduct a dress rehearsal of a possible cross-examination of Mr Mason, who at that time was a potential witness in the Supreme Court proceeding. I went on to say that if during the course of the examination of Mr Mason the liquidator uncovered evidence that might assist his prosecution of the Supreme Court action, that was not untoward. Nevertheless, I imposed the two restrictions to which I have just referred so as to guard against any improper use of the examination procedure. The liquidator asks for the first restriction to be recalled so he can continue the examination of Mr Mason. I am in no doubt that I should make the order sought. There are two reasons. First, it was the existence of the Supreme Court action that led to the imposition of the two restrictions. Second, it is clear that there are still unanswered questions about the affairs of Australvic which the liquidator is entitled to pursue. In reaching this conclusion, I have had regard to the liquidator's affidavit filed in support of the original application in which he explains the topics about which he wishes to examine Mr Mason. I see no reason why the liquidator should be restricted in carrying out any investigation which the statute permits him to carry out now that the Supreme Court proceeding is at an end. I will make orders accordingly. The liquidator shall have his costs. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.

liquidator's examination summons direction made limiting the scope of the examination summons to prevent the liquidator from obtaining an advantage in a related proceeding related proceeding discontinued direction recalled corporations

For many years he lived in Darwin, but in early 2006 he moved to Jakarta, Indonesia. He returned to Australia to oppose a creditor's petition for his bankruptcy, which was heard on 28 and 29 June 2006. Judgment is reserved on the sequestration order application. He was, and presently remains, unable to return to his home in Jakarta because a warrant for his arrest was issued under the Absconding Debtors Act (NT), and to avoid imprisonment he has surrendered his passport. 2 This application is to discharge the warrant for his arrest. Presently, through the company Television News Agency (NT) Pty Ltd he provides services to Network Ten Pty Ltd and Seven Network (Operations) Ltd for an annual fee, due to expire on 31 August 2006 but renewable. Under that agreement, he is required to provide television camera shooting, television news production, news gathering and editing of news stories in Indonesia. He has a 12 month work visa issued by the Republic of Indonesia which is renewable every 12 months. 4 Mr Sim also has an Indonesian fiancé who he proposes shortly to marry. His fiancé came to Australia with him, but has returned to Indonesia as her visa was about to expire. 5 For the purposes of the company, Mr Sim procured through CBFC Limited (CBFC) in his own name certain camera and television production equipment under three hire purchase agreements in 2000 and 2001. He defaulted in payments under those agreements, and there is now outstanding the sum of about $90,000. Mr Sim and his former partner, who still resides in Darwin, also obtained funds under a Better Business Loan from the Commonwealth Bank of Australia (CBA), secured by an equitable mortgage on a unit which he and his former partner, Ms Lestari Sim owned. That property has since been sold by the CBA as mortgagee, but there is still money owed to the CBA under the Better Business Loan. Judgment was entered in favour of CBA against Mr Sim on 6 July 2006 for $41,269. 6 On 10 November 2005 the CBA filed a creditor's petition in the Federal Magistrates Court (FMC) in respect of a debt of some $25,000 owing to it from Mr Sim. He paid that out. On 3 April 2006, CBFC was substituted as the petitioning creditor in respect of the debt under the hire purchase agreements. It is unclear the extent to which the property the subject of the hire purchase agreements remains in Australia, and for how much it might be realised. 7 On 29 June 2006, CBFC applied in the Supreme Court of the Northern Territory (NTSC) for a warrant for the arrest of Mr Sim under the Absconding Debtors Act . He had pre-booked a return flight to Jakarta for 29 June 2006, to follow the hearing of the sequestration order application. To avoid a warrant being issued for his arrest before the Supreme Court application had been fully heard, Mr Sim surrendered his passport. That application was then heard over a period of part days. During the hearing, the CBA also became a party. On 10 July 2006 a judge of the NTSC ordered under ss 6 and 16 of the Absconding Debtors Act that a warrant issue for the arrest of Mr Sim for the purpose of preventing him from leaving the Northern Territory. Execution of the warrant was stayed upon Mr Sim surrendering his passport (which he had already surrendered on an interim basis) and undertaking in writing not to leave the Northern Territory for 28 days from that date. That order was varied on 4 August 2006 to require Mr Sim to surrender his passport until 21 August 2006 and to undertake not to leave the Northern Territory until 21 August 2006. I understand the extension of that order was to await judgment in the sequestration order application. If Mr Sim is declared bankrupt, he will be obliged to surrender his passport to the trustee of his estate under s 77(1)(a)(ii) of the Bankruptcy Act 1966 (Cth). 8 On 3 August 2006, reasons for the orders made on 10 July 2006 were published: CBFC Ltd v Sim [2006] NTSC 57. 9 This application under s 60(1) of the Bankruptcy Act was made immediately following the learned Supreme Court judge delivering reasons for the orders made on 10 July 2006. It seeks a stay of the proceedings in the NTSC, and a discharge of the orders made on 10 July 2006 including the warrant for Mr Sim's arrest. Counsel for CBFC and CBA contends that the Absconding Debtors Act does not have that character. 13 In my view the Absconding Debtors Act is a law to which s 60(1)(a) of the Bankruptcy Act refers. 14 Section 60 was amended following the decision of the High Court in Commissioner for Motor Transport v Train [1972] HCA 62 ; (1972) 127 CLR 396. The amendment made the circumstances addressed in subs (1)(a) and (b) clear alternatives, and extended its operation to criminal as well as civil legal process. Hence, the foundation for the decision in Train was statutorily altered: see per Barwick CJ at 401-402; per Walsh J at 414-415; and per Stephen J at 416. Nevertheless, that decision may inform the meaning of the expression 'law relating to the imprisonment of fraudulent debtors'. In the legislative context of the time of that decision, the Road Maintenance (Contribution) Act 1958-1969 (NSW) (the Road Act) was found not to come within that description. 15 Neither Barwick CJ nor Stephen J explored the boundaries of the expression: see per Barwick CJ at 402 and per Stephen J at 416. Walsh J at 405-412 addressed at some length the question whether s 60 of the Bankruptcy Act as then in force could apply to the Road Act as a law falling within that description. His Honour rejected that proposition (at 412), and in doing so appears to have taken a different view to that of the other judges on that particular point. 16 His Honour reviewed the 'background of State laws' to which the expression may have been directed, both at the time and in the light of the legislative history of the expression (first in Australia as s 63 of the Bankruptcy Act 1924 (Cth)). The excepted cases were those where the debtor was being punished for some form of delictual conduct, including those whose conduct was 'no different from fraudulent debtors'. That decision concerned the Road Act. That it was overruled is not immediately significant. What is significant in that decision, in my view, are comments of Gibbs J about the operation of the then form of s 60(1) of the Bankruptcy Act. His Honour at 388-389 regarded s 60(1) as being directed to legislation which, by imprisonment and other orders, was a means of enforcing the payment of the debt. See also per Gibbs J in Re Caddies; Ex parte Stapleton (1962) 19 ABC 155 at 158. I do not think that either Barwick CJ or Stephen J in Train necessarily disagreed with those comments. They provide a different focus for determining whether the Absconding Debtors Act is a law relating to the imprisonment of fraudulent debtors. 18 The Absconding Debtors Act has the long title 'An Act to make Provision for and in respect of the Apprehension of Certain Debtors'. In my view, that is a factor to which regard may be had in determining whether it is legislation which has the character attracted by s 60(1)(a) of the Bankruptcy Act: see Pitt, Son & Badgery Ltd v Municipal Council of Sydney (1907) 24 WN (NSW) 203 at 204 per Street J; Clunies-Ross v Commonwealth [1984] HCA 65 ; (1984) 155 CLR 193 at 199; Northern Suburbs General Cemetery Reserve Trust v Commonwealth [1993] HCA 12 ; (1993) 176 CLR 555 at 563. 19 Part 2 of the Absconding Debtors Act empowers the issue of a warrant by the NTSC for the purpose of preventing the debtor from leaving the Territory. A warrant may not issue unless the Court is satisfied after reasonable inquiry 'as to all material matters'. Section 16 empowers the Court to make an order releasing a debtor, after the execution of a warrant, upon terms in the case of a debtor brought before the Court under s 11(2)(b) or s 14(2). Section 11(2) concerns a person who has been taken into custody by the execution of a warrant, and who is then brought before the Court by the officer in charge of the relevant police station. Section 14 concerns an application to restrain the transfer or removal of property. It appears the learned judge treated the issue of the warrant, and the process of Mr Sim being arrested and being brought before the Court under s 11(2)(b), as occurring simultaneously so as to enliven his powers under s 16. It is section 16 which would enable the release of Mr Sim upon the conditions on which he has been released. No point was taken about that approach. 21 In the NTSC, Southwood J determined that s 4(3)(b) does not require CBFC or CBA to prove that Mr Sim intended to abscond or to avoid his creditors by leaving the Territory. All it required was proof of the objective (and uncontested) fact that he was about to do so. I do not need to revisit that issue, although senior counsel for Mr Sim contended that his Honour's decision was erroneous. It is not necessary for me to revisit that issue because the question at issue at present is simply to determine whether the Absconding Debtors Act is, for the purposes of s 60 of the Bankruptcy Act, a law relating to the imprisonment of fraudulent debtors. Section 4(3)(c) of the Absconding Debtors Act indicates that the Absconding Debtors Act falls within that description. Those consequences may be the result of deliberate wrongful conduct by the debtor, or (as here) by innocent conduct of the debtor. The purpose of the law under which imprisonment may be imposed is the important feature, because s 60 is intended to provide relief in certain circumstances against the means of enforcement of a debt which is not consistent with the Bankruptcy Act: see Storey v Lane . 24 The Absconding Debtors Act is clearly directed to the enforcement, or the better enforcement, of the payment of a debt. It is perhaps surprising that legislation permits the issue of a warrant to arrest a debtor, to better secure the enforcement of a debt in the light of the trend evident even in the nineteenth century to abolish the practice of enforcement of payment of debt by imprisonment. The review of Australian legislation by Walsh J in Train indicates that trend. See also per Barwick CJ in Train at 402. The general approach of Gibbs J in Re Hollis to the scope of operation of s 60(1) of the Bankruptcy Act seems more consonant with its purposes, and with the role of the Bankruptcy Act as regulating the relations between a creditor and a debtor once the processes for which it provides are invoked. 25 That view is consistent with the context of s 60 of the Bankruptcy Act. Section 78 of the Bankruptcy Act provides, inter alia, that a debtor against whom bankruptcy proceedings are issued may be arrested if the debtor has absconded, or is about to abscond, with a view to avoiding payment of his or her debts or with a view to preventing or delaying proceedings against him or her. It is unlikely that s 60 would have been intended to have effect only in respect of legislation which is fully parallel with s 78. One might rhetorically ask why the reach of s 60 should extend to circumstances where a person against whom bankruptcy proceedings are extant proposes to abscond with a view to avoiding payment of his or her debts, and so is vulnerable to arrest, but should not apply if that person proposes to leave a particular jurisdiction for legitimate purposes, but with the same adverse consequences that departure may cause, namely that payment of his or her debts will be more difficult or the course of proceedings more difficult and prolonged. I do not see any reason why s 60 would be intended to be limited in its operation to the first type of circumstances only. It is intended to be a vehicle for relief, where bankruptcy proceedings are extant, against the imprisonment of debtors and there is no apparent policy reason why it should provide the vehicle for relief only if the debtor is (in a conventional sense) fraudulent but not where the debtor is (in a conventional sense) innocent. 27 In my view, this is a matter in which I should exercise the discretion in favour of discharging the orders made in the NTSC on 10 July 2006 and 4 August 2006, although I do so upon certain conditions. 28 In the first place, Mr Sim was found in that proceeding to have intended to return to Indonesia to go back to work until the end of his current contract and until he has married his current partner in September 2006. The learned judge so found at [74]. That finding recognised Mr Sim's personal circumstances. Mr Sim has no employment or source of income in Australia. He has no residence in Darwin, and is staying at the home of a friend. There is no evidence that he has any means of support in Darwin, or that either CBFC or the CBA have taken any steps since 29 June 2006 to provide him with any such support. 29 More importantly, I consider his initial imprisonment in Australia, and then his forced residence in the Territory, are not consistent with the policy of the Bankruptcy Act. Its policy in relation to such matters is indicated by s 78 (referred to above), and the learned judge found that Mr Sim's desire to return to Indonesia was not with a view to avoiding payment of his debts but for legitimate purposes. See also s 272 of the Bankruptcy Act. I note that, if a sequestration order is made, a bankrupt must then surrender his or her passport to the trustee: s 77. Permission to travel overseas from the trustee then becomes necessary. A decision of the trustee on such a matter is reviewable. In Malouf v Prentice [1998] FCA 1427 Sackville J said the withholding of permission to travel for apparently legitimate purposes should not be lightly exercised. In Re Tyndall (1977) 17 ALR 182, Deane J at 187 and 190 referred to the 'fundamental importance' of such applications for permission to travel overseas to pursue legitimate commercial or personal desires; and also in some cases to the financial rewards to be derived by the bankrupt's estate. 30 Section 78 provides for circumstances in which, as a matter of policy, the Bankruptcy Act considers that orders to ensure the effectiveness of a sequestration order, if made, may be secured before the making of such an order. Clearly, the Absconding Debtors Act operates beyond those circumstances, but once bankruptcy proceedings are initiated (by bankruptcy notice or petition) those extended circumstances may impose burdens on the debtor beyond the policy of the Bankruptcy Act. This case provides an example. 31 The debts of both CBFC and of the CBA are clearly provable debts in Mr Sim's bankruptcy, if a sequestration order is made. Those creditors will be able to rank equally with other creditors. The trustee will be able to exercise the powers available, including procuring information under s 77 and conducting an examination under s 81. Those matters clearly would require Mr Sim to be within Australia to be fully effective, but it does not follow that the policy of the Bankruptcy Act is that he should not be permitted to return to his home and his occupation in the present circumstances in anticipation of a sequestration order being made. Moreover, his trustee may communicate with Mr Sim in Indonesia. 32 I note also, as counsel for CBFC and the CBA indicated, there are other inquiries a trustee of Mr Sim's bankrupt estate would be likely to pursue and which could be undertaken in any event. Those inquiries may include examining Mr Sim's former partner who still resides in Darwin, and procuring the production of records of entities with which Mr Sim is said to be associated and if necessary examining the officers of those entities, and locating and realising the property within Australia which was the subject of the hire purchase agreements. 33 It must be recognised, as the learned judge in the NTSC found, that there are reasonable grounds to believe that Mr Sim's departure to his home would 'materially prejudice' the prospects of the creditors recovering their debts. His Honour's focus was on the capacity of his trustee to administer Mr Sim's estate while Mr Sim is in Indonesia. I agree with those views, although it is a matter of judgment as to how difficult that process would be in the circumstances. I also have regard to the detriment, or likely detriment, to the creditors by Mr Sim being permitted to return to Indonesia in terms of outcome --- that is, how much greater or less the recovery of debts will be --- compared to his presence in Australia either in prison or under a regime such as that now imposed under s 16 of the Absconding Debtors Act . Whilst the process of recovery may be impaired, it is by no means so clear that the ultimate recovery of the debts will be lesser by him now returning to his home. It is there that, at present, he has his capacity to earn. Moreover, the impairment of the recovery process is on the assumption that he will not be prepared to assist his trustee in the administration of his bankrupt estate. I think that steps may be taken, as set out below, to better secure his cooperation and I do not assume that his desire to return to his home means that he will not in the future cooperate with his trustee in any event. Similar considerations apply to the enforcement and recovery process available in the event that the petition is dismissed. 34 I have also taken into account that Mr Sim is entitled to seek review of the orders of 10 July 2006 and 4 August 2006 under the Absconding Debtors Act . I do not, however, think that matter is of great significance where it is apparent (as I have found) that the basis upon which the orders are presently made does not equate to those specified in s 78 of the Bankruptcy Act. 35 Counsel for CBFC and the CBA referred to several other matters relevant to the exercise of my discretion. I do not accept that this proceeding is a collateral attack upon the orders of the NTSC. It is the exercise of an entitlement under s 60 of the Bankruptcy Act to have those orders discharged. Nor do I accept that, by resisting the orders sought under the Absconding Debtors Act , Mr Sim is prevented by some form of estoppel from maintaining this application. There is no relevant res judicata or issue estoppel. He was brought into those proceedings as a defendant, and was entitled to resist them. He may have brought this application at an earlier point, but that does not lead to the conclusion that his failure to do so now precludes him from making the present application. He was faced with an immediate problem by those proceedings, and responded by defending them over the next several days after having been obliged to surrender his passport to avoid his immediate arrest. As I have noted, this application was made immediately the reasons for judgment became available on 3 August 2006. 36 The exercise of the discretion under s 60(1)(a) of the Bankruptcy Act does not involve any challenge to the factual conclusions made by the learned judge, but proceeds from the foundation which they provide. 37 I have not overlooked the expense which CBFC and the CBA have clearly incurred in the proceedings under the Absconding Debtors Act . It was their choice to bring those proceedings. They did so to take advantage of the different, and lower, threshold for a warrant for arrest under the Absconding Debtors Act . They did so in the light of the risk of Mr Sim applying for an order under s 60 of the Bankruptcy Act. That he did not bring this application earlier no doubt has increased the costs they have incurred, and that is a factor I have put into the balance. But I do not consider his defence of the proceedings in the NTSC involved him acting in a manner consistent only with Mr Sim having chosen not to exercise his right to apply under s 60 of the Bankruptcy Act, either generally or in the light of the reasons for judgment: cf Commonwealth v Verwayen [1990] HCA 39 ; (1990) 170 CLR 394. There is also no evidence from CBFC or from the CBA that they continued to conduct the proceedings under the Absconding Debtors act relying upon any assumption of fact induced by Mr Sim's continued defence of those proceedings. 38 One matter which counsel for CBFC and the CBA raised, which I reject, is that there was insufficient opportunity to make an application to this Court or to the FMC for an order under s 78 of the Bankruptcy Act at or immediately after the hearing of the petition, and so the application was made under the Absconding Debtors Act . The Registry of this court is open during normal hours and has an after-hours number. It is well known that a judge of the Court can be available at very short notice, if necessary, to hear any urgent application. That is not to say that it was inappropriate to have instituted the proceedings in the NTSC under the Absconding Debtors Act --- that was a matter for CBFC and the CBA --- but simply to reject one explanation for having done so. The reason for having done so, as appears from the transcript of the hearing in the SCNT and in his Honour's reasons at [63], is the judicial advantage under the Absconding Debtors Act compared to s 78 of the Bankruptcy Act that, as his Honour accepted, the Absconding Debtors Act does not require proof that Mr Sim was about to abscond with a view to avoiding payment of his debts. However, as I have sought to point out, that judicial advantage also illustrates a difference from the policy of the Bankruptcy Act in circumstances such as the present. 39 Another matter raised by counsel for CBFC and the CBA which I reject is that Mr Sim has improperly delayed in making this application. In fact, he did so within a day of the reasons for judgment of the SCNT being published. As the factual issues before his Honour included whether Mr Sim did intend to abscond so as to avoid paying his debts, it was sensible for Mr Sim to await the reasons to see what factual finding was made on the issue. 40 I have also had regard to Mr Sim's preparedness to undertake to the Court to return to Australia (by inference within a reasonable time) to assist his trustee in the event that he is made bankrupt. He is prepared to offer a surety for his return, Thomas Winter, in the sum of $15,000 and Mr Winter too has deposed to his preparedness to offer that surety and to his having assets sufficient to meet it. I propose to accept that undertaking, but to impose upon Mr Sim the time limit of three calendar months from this date, or such later date as may be agreed in writing by his trustee. He will, upon his return to Australia, have to surrender his passport to his trustee. His trustee, assuming Mr Sim is made bankrupt, will then have sufficient time to investigate Mr Sim's affairs in such manner as the trustee may consider appropriate, and to arrange for Mr Sim to be examined under s 81 of the Bankruptcy Act. The trustee will control Mr Sim's capacity to travel overseas so as to allow an adequate time to complete with Mr Sim such inquiries as he wishes. I am more disposed to accept that undertaking, supported by the surety, as Mr Sim has extensive family in Australia: an elderly parent, three children and seven grandchildren. It is virtually imprisonment for contempt of the court's orders, not imprisonment for debt. 44 I do not propose to make the separate order sought under s 60(1)(b) at present. I understand that judgment on the petition is imminent. Apart from the orders I have made, I see no need to stay other legal processes to recover debts by CBFC or the CBA over the next several days. If there is some other legal process which immediately affects Mr Sim in a way which does not reflect the policy of the Bankruptcy Act, he may apply on short notice for a further order. 45 I indicate however that, if all else remains the same, and Mr Sim now refused to continue to comply with the directions for the provision of an undertaking and for the surrender of his passport so that the order that he be imprisoned were about to be enlivened, I would stay that process of imprisonment under s 60(1)(b) of the Bankruptcy Act. 46 Apart from the orders I have now made, I will adjourn the application to a date to be fixed with liberty to any party to apply on short notice, including as to costs. It may be that the issue of costs can be dealt with on written submissions.

bankruptcy act 1966 (cth) s 60(1) discharge of orders made under laws relating to the imprisonment of fraudulent debtors absconding debtors act (nt) whether power to discharge orders discretionary considerations bankruptcy

2 The applicants in the proceedings are a company engaged in the supply of glass for automobiles, such as windscreens, and two persons who are involved in that business, who were formerly directors of it. The respondents are another company engaged in the supply of glass for automobiles, such as windscreens, and two persons who either are or have been involved in that company, directly or indirectly. 3 The case is essentially a defamation case brought in this Court, federal jurisdiction relevantly being attracted by the making of certain claims for relief under the Trade Practices Act 1974 (Cth). 4 The alleged defamation is said to arise from the publication of three documents, being a facsimile, a letter to the Australian Taxation Office ('the ATO') and an email. 5 The extent of publication of the facsimile would appear to have been, on the evidence thus far, within a narrow compass. My recollection is that the applicants contend that it was transmitted to approximately 30 other parties. The evidence would tend to suggest or prove a lesser degree of transmission than that. The letter to the ATO was hand delivered and would appear to have had no wider publication than directly to the ATO. The email was transmitted to a party in Hong Kong with a copy to an associate in China. I hope I do not do an injustice to the applicants' claims by defining the nature of the defamatory publications in those terms. 6 The respondents were originally represented by solicitors and at one stage by competent counsel including senior counsel. When the matter was called on for hearing on 4 December 2006 the first respondent, the corporate respondent, was unrepresented and each of the second and third respondents appeared in person. An application was made by the respondents who appeared in person that they or one of them be allowed to represent and speak for the company. That application was refused. The hearing of the matter proceeded in December on the basis that nobody was there to speak for the company but each of the second and third respondents was present before the Court to conduct the litigation. 7 Following the reading of an affidavit, subject to rulings on objections, by the second respondent, Mr Jack J Moller, he entered the witness box at about 12:07 pm on 11 December 2006. After giving evidence-in-chief which occupied about two pages of the transcript, the cross-examination of Mr Jack Moller by junior counsel for the applicants commenced. I should interpose that at that stage, senior counsel for the applicants was detained elsewhere. The cross-examination of Mr Jack Moller proceeded until the close of business on 11 December 2006 and resumed on 12 December 2006 until the luncheon adjournment at about 12:49 pm. 8 At the adjournment I indicated that the Court would resume at 2:15 pm and requested that Mr Jack Moller be back at the Court by that time, inferentially so as to continue with his evidence. 9 I should indicate that Mr Jack Moller, the second respondent, and Mr Carl Moller, the third respondent, are father and son. My observation of Mr Jack Moller would suggest to me that he is in his mid to late 70s. I do not have the evidence presently before me but my recollection is that he may have indicated his precise age in his evidence at some stage which I think accords with my personal assessment. 10 When the Court resumed at 2:22 pm on 12 December 2006 I asked Mr Jack Moller whether he wanted to say something. I have a heart condition called atrial flutter. It is not life-threatening but when it happens I go dizzy and I lose my balance. I felt it coming on in the last half hour in the witness box here and I fear that I may not have understood questions. I am on drugs for it and a specialist and they said when it comes on I have go [sic] to lay down for four to six hours. I just want to go home. I don't want her notified of the situation. I note that that acquiescence was at a time when senior counsel for the applicants had been able to return to the Court. 13 The hearing resumed on the following day, 13 December 2006. I made the observation to Mr Carl Moller who was present in Court that I could not see his father. I have just heard on the mobile phone from my mother that he is not very well at all and he will be attending a doctor today and possibility of a nervous breakdown. Therefore, I ask that he be excused at this point of time until I can get some more information for the court. I referred to a remark which I had previously made to the effect that the litigation may have an adverse effect on Mr Jack Moller's health. At about 10:40 am the matter was adjourned until the following day, namely 14 December 2006. 17 The hearing on 14 December 2006 commenced with an acknowledgement by counsel for the applicants that a medical certificate had been provided. He's not very well at all. The medical certificate, being a certificate of a Dr K Callan dated 13 December 2006 became exhibit AR-1 on the adjournment application. Senior counsel for the applicants applied to cross-examine the medical practitioner. That did not occur because the application made by the applicants for an order under Order 33 rule 13 of the Federal Court Rules requiring Dr Kerry Callan to attend Court and be examined on her certificate dated 13 December 2006 was not pressed. Senior counsel for the applicants proceeded to make an open offer in Court to settle the applicants' case against the second respondent, Mr Jack Moller, who, needless to say, was not present at the time. 19 On 14 December 2006 a revised form of that open offer was sent by letter to the second respondent inviting him to submit to the proposed settlement contained in that letter. It was indicated that the offer would remain open until close of business on 25 January 2007. As it transpires, that offer was rejected by Mr Jack Moller. 20 Yesterday, when the hearing of the matter resumed, senior counsel and junior counsel for the applicants appeared along with the third respondent but Mr Jack Moller, the second respondent, did not appear. During the course of the morning the open offer to Mr Jack Moller to settle the matter was revived but earlier today Mr Jack Moller informed the Court that he was not disposed to accept it. 21 Mr Jack Moller failed to communicate with the Court to advise it of his wishes, prior to his non-attendance at the continuation of the hearing yesterday, that is to say Thursday 12 April 2007. Furthermore, he failed to communicate with the solicitors for the applicants. A copy of it was made available to counsel for the applicants. 23 Leave was granted to the applicants yesterday to file and serve a Notice of Motion returnable before the Court at 10:15 am today seeking certain relief referrable to the non-attendance of Mr Jack Moller on 12 April and the declared attitude of Mr Jack Moller towards the further conduct of the litigation as against him, which attitude was reported to the Court by his son Mr Carl Moller yesterday. It goes without saying that Mr Carl Moller had no authority to make any admissions against the interests of his father. However, it was indicated by Mr Carl Moller that his father intended not to return to Court for the further hearing of the matter and also intended not to return to the witness box to conclude his evidence and allow the further cross-examination of himself by junior counsel for the applicants to proceed. 24 After being served with the Notice of Motion returnable for 10:15 am today and apparently hearing a report from Mr Carl Moller as to what transpired in Court yesterday, Mr Jack Moller attended Court this morning along with his son Mr Carl Moller. When he addressed the Court, Mr Jack Moller was seated and he asked if he could be permitted to remain seated as he felt that he would be unable to properly address the Court were he to be standing. Needless to say that application was acceded to. 25 Mr Jack Moller has personally informed the Court that he does not intend to return to the witness box to allow himself to be further cross-examined and that he intends to absent himself from the balance of the hearing of the matter against him. He has indicated that he does not wish to accept the revived settlement offer of 14 December 2006, nor does he wish to submit to a judgment against him; rather, he wishes to rely upon his Defence and he is content to have the matter dealt with by the Court in his absence. In an endeavour to ascertain what if any application Mr Jack Moller wished to make, it became clear that he wished to be excused from giving further evidence in the case. 26 It seemed to me that logically his application to be so excused should be addressed first and then I would allow the applicants to seek such relief as they may be advised under their Notice of Motion filed 12 April 2007. Senior counsel for the applicants agreed that it was appropriate to first address the desire of Mr Jack Moller to be excused from giving further evidence in the case. It is appropriate to note that in addition to the possibility of contempt proceedings being instituted, provision is made in s 58 of the Federal Court of Australia Act 1976 (Cth) ('the Federal Court Act') in relation to offences by witnesses who refuse or fail to be sworn or to make an affirmation or who refuse or fail to answer a question that they are required by the Court to answer. He further sought to rely upon the medical certificate of the same doctor which had become exhibit AR-1 on the application for adjournment made on 14 December 2006. The tender of each medical certificate was objected to by senior counsel for the applicants in the absence of Dr Callan to give evidence. 30 Mr Jack Moller informed the Court that at the time when he solicited and obtained the medical certificate from Dr Callan of 10 April 2007, that is to say last Tuesday, he informed the doctor that she may well be required to attend court to give evidence in respect of the matters the subject of the medical certificate. It's clear that no arrangement was put in place by Mr Jack Moller to have Dr Callan attend Court today or, for that matter, yesterday, to provide evidence as to his current medical condition. 31 When invited to consider the possibility of a 10 minute adjournment to allow Mr Jack Moller to contact Dr Callan to see whether she would be available to come to Court at some time later in the day today to give evidence, Mr Jack Moller declined the opportunity, informing the Court that doctors were busy people and they could not drop things at a moment's notice to come to Court to give evidence, or words to that effect. 32 Mr Jack Moller informed the Court that if someone wanted Dr Callan to be in Court, that party would have to subpoena Dr Callan. He declared that he did not intend to subpoena her and that if the applicants wanted her to be a witness before the Court they would have to subpoena her. In this regard it is clear that Mr Jack Moller had a complete misunderstanding as a litigant in person of the obligation of a person who wishes to establish a fact to prove it by their own evidence rather than relying upon some other party to prove it for them. In the circumstances there is no medical evidence at all before the Court in relation to Mr Jack Moller's medical condition. 33 Having said that, I am reminded of my observation on 13 December 2006 that I was satisfied that the condition in which the Court observed Mr Jack Moller on the afternoon of 12 December 2006 was not that of a person who was 'putting it on', rather he appeared to be in some distress of a medical nature. I note that, as stated above, senior counsel for the applicants agreed with that observation. When invited to address the Court on his application to be excused from giving further evidence in the case, Mr Jack Moller indicated that he was unable to address the Court orally about the matter but wished to rely upon a bundle of material which he had gathered together, in which he recorded a written submission. 34 None of the material which he relied upon by way of submission included any reports from any medical specialists whom he may have consulted. I notice that he has extracted, presumably from the internet, a number of articles addressing atrial fibrillation or flutter and the dates on which those articles were printed vary from 12 January 2007 to 17 January 2007. 37 Senior counsel for the applicants has helpfully put submissions to me on the possible application of s 41 of the Evidence Act and s 58 of the Federal Court Act. In relation to s 41 of the Evidence Act , the primary submission of counsel for the applicants is that the power conferred on the Court to disallow a question or to inform a witness that it need not be answered is to be addressed by the Court seriatim, so that there is no power to provide for a blanket disallowance or relief from answering all further questions. I am not sure in relation to the observation that one has to address the matter question-by-question, but am disposed to agree that, until one gets to the first question that should appropriately be disallowed or the subject of information to the witness that the question need not be answered, there is no power conferred on the Court by s 41 to simply order that a person be excused from giving further evidence in a case. 38 In relation to s 58(2) of the Federal Court Act, the submission of the applicants is that it is a section constituting an offence. It is not one directed at conferring on the Court a power to excuse a witness from giving further evidence in a case. This is true; however, it seems to me that the underlying philosophy behind s 41 of the Evidence Act and s 58 of the Federal Court Act is that there may be circumstances in which a refusal to answer questions will be permissible. It is significant that s 58(2A) of the Federal Court Act indicates that there will be no offence if the person refusing or failing to answer a question has 'a reasonable excuse'. It is also significant in addressing whether or not the Court should exercise its discretion to relieve a witness from the obligation of answering a question in cross-examination under s 41(1) of the Evidence Act that the court is entitled to have regard to any mental, intellectual or physical disability to which the witness appears to be subject . 39 It is also appropriate of course to have regard to a person's age. Fortunately, in these times there are many people who are 76 years of age who have long life expectancies. However, at 76 a person has enjoyed three score and ten years and may well be afflicted by medical disabilities which one would not expect to suffer from, if of a younger age. In my opinion, having regard to the apparent medical condition which affected Mr Jack Moller in December last year, it would be reasonable to excuse him from what would otherwise constitute an offence by refusing or failing to answer further questions in cross-examination. 40 I find the application to be excused from giving further evidence to be novel and challenging; however, in my opinion the application is one which should succeed. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.

application by a witness under cross-examination to be excused from giving further evidence in the case evidence

2 The application is urgent because the proceedings have been adjourned part heard and are due to resume in February 2007. I heard the motion for a full day on 28 November 2006 but final written submissions were not provided to me by the applicants until 5 December 2006. 3 The discovery process in these proceedings has been a difficult one. Mr Hetherington's description of it in his affidavit sworn 24 November 2006 as 'somewhat tortuous' is apt. Discovery was initially ordered in February 2004 with discovery to be given by categories of documents. The categories have been expanded principally to meet amendments to the pleadings. 4 This application does not seek to enlarge the categories of documents that have been ordered. The applicants are at pains to stress that the application is based on what are said to be deficiencies in the discovery that has been given. However, for reasons set out below, even if I am satisfied that the respondents have failed to give full discovery, it does not follow that the orders which are sought should be made as a matter of course. 5 Rather, the exercise of the power is discretionary and involves weighing the value of the additional discovery sought against the burden to be imposed upon the respondents. The delay in bringing the application and the applicants' explanation for this delay are factors to be weighed in the balance. So too is the stage of the proceedings at which the application is made. The power conferred by O 15 r 8 is discretionary; see Australian Broadcasting Commission v Parish (1981) 48 FLR 292 at 295. 7 The orders which are sought go beyond the power conferred by O 15 r 8. However, it seems to me that I have power to make the orders under s 23 of the Federal Court of Australia Act 1976 (Cth) if I consider it to be appropriate. 8 In my view, the exercise of the power is informed by similar considerations to those which underlie the power conferred by O 15 r 8. Thus, the Court may refuse to make an order if it would be unduly oppressive to the other party. His Honour also directed Telstra to file a report setting out the steps taken to comply with that order. 11 In deciding to make orders for additional discovery, his Honour was satisfied that Telstra had failed to fully comply with its discovery obligations. His Honour was also satisfied that the tapes contained much material that was relevant to the issues in the proceedings. 12 In NT Power Generation Pty Limited v Power & Water Authority [1999] FCA 1669 , Mansfield J declined to limit discovery to email communications which existed in hard copy form at the time of the order. His Honour indicated at [2] that it would impose a very substantial burden on the respondents to restore and examine the back up tapes. 13 However, he was not satisfied that the material which might be recoverable electronically was sufficiently insubstantial to warrant the order sought by the Respondents limiting discovery to hard copy documents. I have used the word "material" to indicate communications beyond those that are merely formal or insignificant. The applicant is entitled to discovery of them. I am not persuaded, in the interests of justice, that I should excuse the Respondents from giving discovery of that material notwithstanding the time, expense, and effort involved in doing so. Nevertheless, very few emails have been discovered and those which have been discovered fall outside the critical time periods in the proceedings. 15 Most importantly, Quadrant has not discovered any emails from Mr Hadley or Mr Penklis for the whole of the year 2000 which is the most important year in the case. Nor has Quadrant discovered any emails from Mr Hadley or Mr Penklis for the first half of 2001 which is also an important time period in the proceedings. Moreover, Quadrant was able in February 2004 to generate electronic diaries for Mr Hadley and Mr Penklis from its computer systems. 16 Those diaries contain references to a number of important meetings but there are some significant gaps. Both diaries contain references to the meeting of 16 August 2000 between Mr Hadley, Mr Blom and Mr Seward. There is no reference to a meeting apparently planned on 17 or 18 September 2000 between Quadrant and Ms Addison nor is there any reference to the meeting which took place in Dallas on 25 September 2000. 17 Moreover, the diary printouts for the week of 24 September to 30 September are compressed in a way that is not explained. There is a reference to a scheduled telephone call with Mr Quinton on 11 October 2000 in Mr Hadley's diary. There is no reference to a meeting with Ms Addison on or around 13 October 2000 in Mr Penklis' diary but there is a note in Mr Hadley's diary for 9 October 2000 which refers to the Slicks; this may be a reference to the meeting of 13 October 2000. Mr Gilman is the Financial Controller and Company Secretary of Quadrant. He has been responsible for Quadrant's IT infrastructure since July 1996. 19 Electronic material which was on Quadrant's system when it was upgraded was migrated across to the new system. This evidence did not appear in Mr Gilman's affidavit but it was elicited in his evidence in chief after the applicants' forensic expert, Mr Daniel, pointed to this gap in Mr Gilman's evidence. 20 Thus, as Mr Gilman conceded in cross-examination, emails which related to the Barrington transaction which were migrated to the new system in October 2003, and which were not deleted or written over between that time and January 2006, would be on the current Quadrant system. 21 The effect of [4] of Mr Gilman's affidavit is that Quadrant's back-up tapes are rotated weekly and overwritten. Therefore, on Mr Gilman's evidence, there are no back-up tapes which contain information that is more than seven days old. This procedure has been in place since 1996. 22 Mr Gilman affirmed in [5] of his affidavit that the only emails relating to the Barrington transaction that are available prior to the October 2003 and January 2006 upgrades are those that were printed out and placed on the hard copy file. 23 He said in cross-examination that he had not personally conducted a search to confirm this conclusion but he believes that one of his colleagues would have done so at the time. He conceded it was possible that there are other emails on the system but the effect of his concession is that it is unlikely that those emails exist. 24 Mr Backley, the Chief Information Officer, Enterprise Services, of Westpac, gave evidence that Westpac's IT infrastructure is outsourced to IBM. He gave evidence on information and belief from officers of IBM. 25 His evidence dealt with Westpac's email system and its document servers. 26 The email system in use as at 2002 was known as the legacy mail application. That system was decommissioned and replaced in about 2002-2003. At the time when the legacy system was decommissioned, a "snapshot" back-up was taken for the sole purpose of disaster recovery. 27 According to Mr Backley's evidence, obtained from IBM, in order to access the back-up tapes, it would be necessary to rebuild the legacy mail environment. A number of risks and hurdles are said to exist. The rebuilding process is said to be time consuming and expensive. The time estimate is at least three months and the costs may be upwards of $600,000. 28 Westpac's document servers were replaced in 2003-2004 when a new operating system was introduced. Mr Backley's evidence is that many of the same difficulties as with the email back-up tapes would be encountered because the legacy server environment would have to be rebuilt. The time estimate is two to three months and the cost would be at least $500,000. 29 Evidence in answer to Mr Gilman and Mr Backley's affidavits was filed by the applicants in an affidavit sworn on 28 November 2006 by Mr Daniel, a senior technical consultant employed by Forensic Data Services Pty Ltd. I will refer to this below. The effect of Mr Daniel's evidence is that it may not be necessary to rebuild the legacy environment. Mr Backley conceded in cross-examination that if this is so it would follow that the risks and hurdles to which he pointed would fall away. 30 Mr Backley also conceded that emails migrated to the new system would be accessible so long as they had not been deleted or written over. This was similar to the concession made by Mr Gilman. 31 As to the question of whether the respondents have made full discovery, this depends in part upon the explanations given by Mr Gilman and the affidavit of Mr Garey, sworn 27 November 2006, who is the solicitor for the respondents with the day to day conduct of the matter. Mr Garey's affidavit annexed a letter, dated 24 November 2006, written to the applicants' solicitors from Mr James Beaton, Mr Garey's supervising partner, in opposition to the orders sought in the motion. 32 Mr Beaton stated in the letter that the "discovery already provided has involved reviewing electronic records used by a number of individuals at the relevant time". The letter also stated that, in relation to Quadrant, while some material was transferred from the old file server to the new file server, "that new file server has been searched and relevant material on it has been discovered". The letter stated that, to the extent that discoverable documents for Quadrant fall within the categories in the notice of motion, "anything that can be discovered has been discovered". 33 As to Westpac, the letter explained the system and the upgrades. Mr Beaton refers to the need to rebuild the IT infrastructure to carry out the process demanded by the applicants. The letter stated that the solicitors could not see any utility in the proposal sought by the applicants in relation to Westpac. His evidence is that Forensic Data Services has the necessary skills and resources to restore the environment without the need to rebuild it. He says he has yet to experience any instance in dealing with the legacy media in which he has been unable to access the system in some way. 35 Mr Daniel does not believe that many of the difficulties referred to by Mr Backley are likely to confront Forensic Data Services. He is of course prepared to sign an appropriate confidentiality undertaking. Mr Daniel was not cross-examined. 38 It is true that the evidence discloses that Westpac used emails in the relevant period and that few have been discovered. I think it is likely that Mr Daniel would be able to access any emails that have not been deleted or written over but the evidence as to whether that could be done more quickly and at less expense than the method proposed by IBM is equivocal. 39 I accept that if the exercise is carried out by Mr Daniel the cost would be borne, at least in the first instance, by the applicants. But it is plain that there would need to be substantial involvement of Westpac executive time and that the lawyers would be heavily involved in vetting the process, including considering any claims for privilege. 40 I accept Mr Gilman's evidence that there is no link between the Quadrant computer system and Westpac's computer system. I also accept his evidence that there is no ability to access documents between Quadrant's system and Westpac's system. 41 The balancing exercise in relation to Westpac is therefore quite straightforward. What I have to weigh is the theoretical possibility that documents might exist against the cost and burden of either rebuilding the former electronic environment (and the risks and burdens apparently associated with this) or alternatively the cost and burden to Westpac of involvement with any forensic examination undertaken by Mr Daniel/Forensic Data Services. 42 It is unnecessary to consider questions of delay on the applicants' part in relation to the Westpac material because, in my opinion, the answer to the balancing exercise is straightforward. 43 Whether or not Westpac, through IBM, were to undertake the task, or whether the forensic exercise is undertaken by Mr Daniel, the theoretical possibility that something might turn up is well and truly outweighed by the cost and burden to Westpac. 44 In short, I am not satisfied that the exercise sought by the applicants is necessary in the interests of justice. 45 I make this finding notwithstanding that the applicants seek to limit their relief to an order that Westpac merely hand over the back-up tapes to Forensic Data Services with a view to that company retrieving any relevant data from them. Mr Hadley swore the affidavit of documents. However, he made no enquiries of Mr Gilman at any time since 2002, other than to retrieve hard copy records from archives. 47 Moreover, Mr Gilman stated in cross-examination that Mr Hadley has not asked him to do a search of Quadrant's computer system relating to the Barrington transaction. And he said that Mr Hadley has not asked him to conduct an electronic search of the computer system of Quadrant for the purpose of discovery in the proceedings. 48 Moreover, Mr Gilman has not personally undertaken a search of Quadrant's system to confirm that the only email records are those that were printed out and placed on hard copy files. 49 It is true that Mr Gilman believes that one of his colleagues would have conducted a search at that time. But Mr Gilman does not actually know whether that occurred. 50 It is also true that Mr Beaton's letter states that the new Quadrant server has been searched and relevant materials on it have been discovered. But this statement was based on instructions received from his client. 51 I have no doubt that both Mr Beaton and Mr Garey are competent and diligent solicitors and I do not doubt that they have made full and careful enquiries. I reject the submission put by the applicants that the letter is 'intemperate'. 52 Nevertheless, I am concerned that, on the evidence given by Mr Gilman, the necessary enquiries within Quadrant have not been made. 53 Furthermore, the gaps in Mr Gilman's personal knowledge of searches made and Mr Hadley's failure to make enquiries of Mr Gilman support a finding that the necessary searches have not been made. Of course, others may have done so but the evidence is not sufficiently clear for me to make that finding. I should say, however, that I reject any suggestion that the statements made in Mr Beaton's letter are in any way other than a full and frank explanation of his instructions and enquiries. 54 Moreover, the absence of any emails in the critical period of the year 2000 and the first half of 2001 must be considered in light of the fact that the computer diaries of Mr Hadley and Mr Penklis were printed out on 18 February 2004, two days after my first order for discovery in the proceedings. 55 Those diaries fail to refer to a number of important meetings which I have referred to above. 56 The compression of the diaries for the week of 24 September 2004 is unexplained. 57 In light of these matters, I am prepared to infer, for the purposes only of the present application, that there may be data on Quadrant's current system which would be discoverable under the primary categories sought by the applicants. 58 If there are, those documents may well have real utility to the applicants which would outweigh the burden imposed on Quadrant of providing further discovery. 59 I do not consider that there has been such delay as to warrant the exercise of my discretion against the grant of relief. 60 In my opinion, the letter from the respondents' solicitors of 28 September 2004, annexed to Mr Hetherington's affidavit of 10 November 2006, did not sufficiently put the applicants upon notice of the possible gaps in discovery first appreciated by Mr Hetherington in October 2006. 61 Nevertheless, in my view, having regard to the fact that the proceedings are due to recommence in February 2007, the ambit of the orders should be strictly limited to those which I consider to be plainly necessary for fairly disposing of the issues in the proceedings. For clarity, I should state that the "primary categories" are those set forth in paragraphs 3, 4, 5, 6, 14 and 15 of Schedule A to the notice of motion, with the limitation to paragraph 3 as set out in [14] of the applicants' written submissions. 63 As to the question of whether the searches should be made by Quadrant or by Mr Daniel, I have come to the view, on balance, that the most expeditious and efficient way to deal with the issue that has arisen at this stage of the proceedings is to make an order for Forensic Data Services to carry out a search of Quadrant's current system in the primary categories set forth in Schedule A. 64 Some of the persons referred to in the list seem to have only marginal relevance to the proceedings but I do not propose to delete any of the names stipulated in the primary categories. If the search reveals the existence of any retrievable data within these categories Forensic Data Services should be permitted to take reasonable steps to retrieve it. 65 The parties are to bring in short minutes of order to reflect my reasons. Costs will be reserved. The motion was supported with voluminous evidence which must have taken considerable time to put together. This approach is not consistent with the ordinary professional courtesies and co-operation that should exist between legal practitioners. If notice had been given, the matter may have been able to be disposed of in a manner more consistent with the usual way in which complex proceedings are managed by the docket, or trial, judge. I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.

discovery motion seeking further discovery relevant principles whether party failed to take appropriate steps to locate electronic documents factors relevant to exercise of discretion appropriate form of orders practice and procedure

The Court then ordered that the application be dismissed. It further ordered that costs be reserved. The latter order was made for the purpose of enabling the parties to make submissions in relation to costs. Those submissions have now been received and these reasons address the issue of costs in the proceedings. The Court in its judgment at Part D , identified 12 Claims and Issues; subdivided into 37 sub-issues. The Court dealt with the evidence and arguments and made findings in relation to each of those. In respect of the 5 th of those issues, the Court identified three sub-issues and made a finding in favour of the applicants in respect of two out of three of those sub-issues, at [443]. 2. The Court in Part E, identified 5 Specific Factual Issues. In relation to the first of those issues, the Court identified two sub-issues. In relation to one of those sub-issues, the Court found in favour of the applicants, at [221]. 3. It is within the capacity of a taxing officer to apportion a costs order to take into account the issues upon which each party was successful. 4. The matters identified by the applicant (par 4(1)) are not issues on which a costs order should be made against the respondents, or issues on which the applicant should be relieved of paying the respondents' costs. 2. The matters concerning the prima facie determination of equal treatment before tribunals administering justice (par 4(1)(a) and (b)) were not distinct or severable from the matter of justification as being reasonably appropriate and adapted and in the public interest, and on the basis of a special measure. The factual and legal questions raised by these matters all go to the question of whether there was unlawful discrimination, and it is artificial to regard a prima facie determination on one aspect of that overall question as a separate issue from the ultimate finding of no unlawful racial discrimination. 3. The matter of Robert Bropho's residence was not an 'issue' on which the applicant would have enjoyed a right to relief despite other conclusions made. It is a minor question in the sub-stratum of the totality of the determined facts. 4. In any case, the matters specified by the applicant did not occupy a considerable or discrete portion of the course of the trial. Further, the respondents did not improperly or unreasonably add to the cost of the litigation by contesting those matters. Section 43(2) provides that except as provided by any other Act (which is not of relevance here) the award of costs is in the discretion of the Court or Judge. It therefore includes the power to look at issues run in a case differentially and to make an order otherwise than that the loser pays all costs: Evans Deakin Pty Ltd v Sebel Furniture Ltd [2003] FCA 282 at [5] per Allsop J. It is therefore important that the parties should pay careful attention to the merits, not only of the whole case but to the issues which arise in the course of a case. In complex litigation, where issues are raised on which a party is unsuccessful, the court should, when appropriate, make orders for costs which reflect the fact that, whereas a party may generally be successful, in regard to some of those issues that party has been unsuccessful. Furthermore, if the way in which an issue is conducted or argued has the result of increasing the costs of the litigation, and the court finds that it was unnecessary for the party to develop the issue in that way, that again can be reflected in a special order for costs. 5 An 'issue' for these purposes means 'that which, if decided in favour of the plaintiff, will in itself give a right to relief, or would, but for some other consideration, in itself give a right to relief': Howell v Dering [1915] 1 KB 54 at 62-63 per Buckley LJ. 6 Further, an order concerning the costs of a particular issue should be made only where the issue is distinct and severable from the other issues in contest between the parties and the issue occupied a considerable and identifiable part of the trial: Inn Leisure Industries Pty Ltd (prov liq appointed) v D F McCloy Pty Ltd (No 2) (1991) 28 FCR 172 at 174 per French J; or the respondent, in contesting the issue, has conducted the litigation improperly or unreasonably, in a manner that has increased the cost of the litigation: Evans Deakin [2003] FCA 282 at [5] . 7 In my view the respondents' submissions correctly state the circumstances in which the issues identified by the applicant in her above submissions do not qualify within these tests. 8 This is not an instance where it is said that the litigation was conducted improperly or unreasonably in a manner that has increased the cost of the litigation. 9 It is a case where the matters concerning prima facie determination of equal treatment before tribunals administering justice were not distinct and severable because they were linked to the question of whether they were reasonably appropriate and adapted in the public interest and the question of whether there was a special measure, which applied across the board in relation to such issues. I agree that the matter of Robert Bropho's residence was not an issue in the required sense and was a relatively minor question in the sub-stratum. 10 In my view it follows that the discretion of the Court in relation to costs must inevitably be exercised in favour of an order that costs follow the event, namely, that the applicant pay the respondents' costs of the application. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson.

racial discrimination tort applicant unsuccessful in claims whether applicant entitled to costs in respect of issues on which respondents unsuccessful whether issues ones on which costs order should be made against respondents whether costs should follow the event costs

ICE 2000 was the applicant below and is the respondent to this appeal. His Honour ordered Computer World (Victoria) Pty Ltd ("Computer World"), the appellant, to pay an amount of just over $62,000 by way of damages, together with costs fixed in the sum of $28,000. He dismissed a cross-claim filed on behalf of Computer World. 2 The trial occupied several days. It was conducted without pleadings. The facts were essentially quite simple. ICE 2000 conducted a retail computer sales outlet on behalf of the Computer World until approximately April 2002. Computer World permitted ICE 2000 to use its signage, and supplied it with stock. ICE 2000 would account to Computer World in relation to sales of stock, and receive commissions from it. 3 As part of the arrangement between the parties, ICE 2000 deposited an amount of $50,000 with Computer World pursuant to what was described as "a credit facility", dated 6 December 2001. It is unnecessary to set out the terms of that document in their entirety. That you deposit an amount of $50,000 ("security amount") (the receipt of which is acknowledged) into a separate interest bearing account to be opened in the name of Computer World (Vic) Pty Ltd and titled Internet Centre of Excellence 2000 Pty Ltd Trust Account. The security amount can only be drawn upon by Computer World (Vic) Pty Ltd in the event the Internet Centre of Excellence 2000 Pty Ltd fails to pay for goods purchased within the trading terms. Mr Hasturk was, at that time, an employee of ICE 2000. It was common ground that a cheque for $50,000, described as "the security amount", was provided by ICE 2000 to Computer World, and banked. However, the proceeds of that cheque were not put into a separate interest bearing account in the name of Computer World and "titled an Internet Centre of Excellence 2000 Pty Ltd Trust account", as specified in the credit facility, but rather into Computer World's general account. The money was used by Computer World in the course of its ordinary business dealings. 5 Ultimately the relationship between the parties broke down, and ICE 2000 sued to recover the $50,000 (less a minor adjustment of several hundred dollars), together with interest on that sum. Computer World's cross-claim related to non-payment for goods supplied by it to ICE 2000. As previously indicated, his Honour dismissed the cross-claim. There is no appeal from that part of his Honour's orders. Nothing further need therefore be said about the cross-claim. 6 The primary issue at trial was whether the $50,000, which was paid into Computer World's general account, and used for ordinary business purposes, was trust money. The credit facility, in its terms, suggested that the parties regarded it as such. Insofar as it represented a written agreement between them, the security amount was impressed with the character of a trust. 7 Before his Honour Mr Yuvarajah gave evidence that, although he had signed the credit facility, it had been "a mistake". He claimed that there was an oral agreement between Mr Hasturk and himself to the effect that, notwithstanding the terms of the credit facility, the $50,000 need not in fact be deposited in a separate interest bearing account, as specified, but could instead be used by Computer World as ordinary working capital. 8 McInnis FM found that the credit facility created either an express or implied trust of the security amount in favour of ICE 2000. He rejected the evidence of Mr Yuvarajah that a separate oral agreement had been reached with Mr Hasturk which relieved Computer World of its obligations under the credit facility to establish a separate interest bearing account as a trust account in favour of ICE 2000. He regarded the terms of the credit facility as clear and unambiguous. He also found Mr Yuvarajah not to be a credible witness. He said that it was implausible that Mr Yuvarajah would have signed the credit facility, as he claimed, "by mistake". 9 His Honour regarded the evidence presented by both parties as unsatisfactory. He noted that ICE 2000 had not called Mr Hasturk as a witness. There was some hearsay evidence from Ms Anne Gardner, on behalf of ICE 2000, to the effect that Mr Hasturk had "since returned to his homeland of Turkey", and that his whereabouts at the time of the trial were unknown. In these circumstances, his Honour declined to draw a Jones v Dunkel inference against ICE 2000. 10 After judgment in this matter was delivered, Computer World discovered that Mr Hasturk had not in fact gone to Turkey, but had at all material times been in Melbourne and available to give evidence. Moreover, he was easily capable of being contacted by ICE 2000 because he retained the same mobile telephone number that he had used when employed by that company. 11 By notice of motion dated 11 April 2005, Computer World sought leave to lead further evidence on the appeal to this Court. Essentially, that further evidence is contained in an affidavit sworn by Mr Hasturk in which he deposed to his understanding of the arrangement he had entered into with Mr Yuvarajah at the time that the credit facility was signed. 12 Mr Hasturk's affidavit discloses that he first learned of the proceedings between Computer World and ICE 2000 on 23 November 2004, several weeks after McInnis FM delivered judgment. He deposes that he was responsible, on behalf of ICE 2000, for all negotiations with Computer World in November and December 2001. He says that he can recall discussions regarding "a security deposit of $50,000". He says that the deposit was paid so that ICE 2000 could obtain stock from Computer World, and that it was regarded essentially as a line of credit. The only agreement in writing between the two parties that I am aware of is the contract concerning the $50,000 security deposit. I remember a verbal agreement, the exact terms which I cannot recall, with Murugesu Yuvarajah regarding a $50,000 security deposit. This money was to be held by Computer World until the termination of trading between the parties. If either party terminated the contract then the basic understanding was that the security deposit less any outstanding stock unpaid for by Ice2000. [sic. The contract which I presented to Murugesu Yuvarajah was a formality which I had drafted using a solicitor as per my instructions from Ice2000 management. I can not recall anything about establishing a separate trust account for the $50,000. To the best of my knowledge I do not believe that Mr. Yuvarajah had any understanding of creating a separate trust account. There had never been any discussions about creating a separate trust account for the security deposit. I have remained in Melbourne, Australia at all times since 1990. I have always been available to be contacted since then. I have not returned to Turkey to live nor have I ever considered doing so. Any such suggestion is entirely refuted and completely false. My contact details have remained the same since my departure from Ice2000. they [sic. ] have not changed since December 2001. My mobile phone number has remained 0419 200 040 and I could easily been [sic. ] contacted by management at Ice2000 should they have attempted to do so. Nobody from Ice2000 has attempted to make contact with me since my departure. Pursuant to that section, the power of the Court to receive further evidence on appeal is discretionary. The discretion is a wide one, but must be exercised judicially: CDJ v VAJ [1998] HCA 76 ; (1998) 197 CLR 172 at 185. Factors such as finality, discoverability of the evidence and its likely effect on the orders made are usually relevant to the exercise of the discretion. 16 Computer World submits that had the evidence of Mr Hasturk been led before his Honour, it may well have caused him to accept the evidence of Mr Yuvarajah, rather than rejecting that evidence. That in turn might have led his Honour to find that there was a collateral agreement of the type alleged by Computer World, rather than a trust, as his Honour ultimately found. Computer World also submits that, had his Honour been aware that Mr Hasturk was available to give evidence, but had not been called by ICE 2000, he may well have been prepared to draw a Jones v Dunkel inference against ICE 2000, rather than refusing to do so. 17 This submission, despite its apparent force, nonetheless faces several difficulties. Even if it be assumed that Mr Hasturk's evidence may have led his Honour to accept Mr Yuvarajah's account of what had occurred, the legal consequences of accepting that evidence would still be problematic. On one view of Mr Hasturk's evidence, the $50,000 was paid to be held for a special purpose. It would therefore fall within the principles developed by the House of Lords in Barclays Bank Ltd v Quistclose Investments Ltd [1968] UKHL 4 ; [1970] AC 567 at 580-82 per Lord Wilberforce, and in Twinsectra Ltd v Yardley [2002] UKHL 12 ; [2002] 2 AC 164. Under those principles, the $50,000 would be trust money, as his Honour in fact found. 18 More importantly, Mr Hasturk's evidence would have to overcome the difficult legal hurdle created by the High Court's judgment in Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 ; (2004) 218 CLR 471 at [32] - [36] . In that case, the respondents alleged that the "operative agreement" was not contained in a written loan agreement, but was reached earlier, and was wholly oral. Yet it was not said that the written agreement should be rectified. Nor was it said that a defence of non est factum was available, or that the agreement was executed by mistake, or that its execution was procured by misrepresentation. 19 The High Court explained why the law does not permit reliance upon a collateral agreement of the type alleged in circumstances where a written agreement has been executed. First, this ensures that the legal rights and obligations of the parties turn upon what their words and conduct would reasonably be understood to convey, and not upon actual beliefs or intentions. Secondly, in the nature of things, oral agreements will often be disputable. Resolving such disputes can be difficult, time consuming, expensive and problematic. As a consequence, where parties enter into a written agreement, courts will generally hold them to the obligations which they have assumed by that agreement. The obligations of written agreements between parties cannot simply be ignored or brushed aside. 20 The High Court went on to state some general principles. It noted that some contracts are alleged to have been partly oral, and partly written. In such cases, evidence as to the oral terms can be given, but not if those terms contradict the terms of the written agreement. 21 Turning back to the present case, it is far from clear just how Computer World put its case at first instance. On one view, it submitted that the credit facility was nothing more than an acknowledgement of a loan, akin to a receipt. Unfortunately for Computer World, the credit facility simply does not read that way. Indeed, Mr Hasturk regarded it as a contract, albeit "a formality". Nor does the credit facility read as though it contains the terms of a contract that is intended to be partly written and partly oral. Even if it did, the supposed oral agreement between Mr Yuvarajah and Mr Hasturk would directly contradict the written term in paragraph one of the document that the security amount be deposited on trust for ICE 2000. I am unable to accept Computer World's submission that, in some way, it impliedly sought rectification of the written agreement before McInnis FM. Mr Yuvarajah's reference to a "mistake" does not, in context, suggest that any such application was being made. In accordance with the principles so clearly enunciated in Equuscorp (and also stated in earlier cases such as Hoyts v Spencer [1919] HCA 64 ; (1919) 27 CLR 133 and BP Refinery v Hastings [1977] HCA 40 ; (1977) 180 CLR 266), contradiction of a written term, absent rectification, cannot be permitted. 22 It follows that Computer World would not have been assisted had Mr Hasturk's evidence regarding the collateral agreement been led before his Honour. Mr Yuvarajah's credibility might have been enhanced, but the legal consequences of accepting his evidence would not have altered. It therefore follows that the application to rely upon further evidence in this appeal should be rejected. 23 Computer World also relies on several substantive grounds of appeal which do not involve the reception of further evidence. Its notice of appeal contains ten grounds, but a number of them were abandoned during the course of argument. 24 Ground three contends that his Honour erred in failing to draw a Jones v Dunkel inference in relation to the non-appearance of Mr Hasturk, and also of Ms Serif Memis, who was another employee of ICE 2000 at the relevant time. For the reasons set out above in relation to the further evidence ground, a Jones v Dunkel inference in relation to Mr Hasturk could not have assisted Computer World. Such an inference would not overcome the legal impediment to its claim created by the High Court's decision in Equuscorp . 25 In relation to Ms Memis, it would appear that she played some role in the preparation of the accounts by which the various exhibits to ICE 2000's affidavits were created. However, Ms Gardner had the central role in relation to the various accounting issues that were raised, and there is nothing to suggest that Ms Memis' part in what took place was of such significance as to warrant a finding of appealable error. 26 As part of ground three, Computer World claims that his Honour erred in drawing a Jones v Dunkel inference against it in relation to a particular witness who prepared the spreadsheets exhibited to Mr Yuvarajah's affidavits, but was not called ("Pinky"). However, "Pinky" seems to have played a more central role in preparing the accounting documents that were tendered on Computer World's behalf. It was open to his Honour to distinguish between "Pinky" and Ms Memis in that regard. 27 Ground six complains that his Honour misconstrued the nature of the evidence by equating "stock transfers" with "invoices" when these are in fact different concepts. His Honour dealt with this issue at [24] of his reasons for judgment. Regardless of whether stock was transferred from Computer World to ICE 2000 for on-sale to customers, or for display purposes, the transaction and transfer of stock was evidenced by Computer World's "stock transfer" documents. These stock transfers were at times referred to as "invoices", which is effectively what they were, but the debate is somewhat sterile, and merely involves semantics. There is nothing to suggest any error of the kind alleged in his Honour's reasons. 28 Ground seven complains that his Honour misunderstood the nature of the evidence in that ICE 2000 was the only party in a position to generate invoices and associated documentation, and not Computer World. Once again, there is nothing in this point. His Honour was plainly aware of the distinction between Computer World's "stock transfer" documents, and the tax invoices generated by ICE 2000 for sales to customers. 29 Ground eight asserts that his Honour erred in finding for ICE 2000 on its claim pursuant to s 52 of the Trade Practices Act 1974 (Cth). In particular, it alleges that even assuming that Computer World engaged in misleading or deceptive conduct by representing that the security amount would be kept in a separate trust account in favour of ICE 2000, there was no evidence that ICE 2000 relied upon any such representation when Mr Hasturk handed over the cheque for $50,000. 30 There is some substance in this ground. Without Mr Hasturk's evidence, his Honour must have inferred reliance. There was little, if any, evidence upon which such an inference could be based. Mr Hasturk's evidence, if it were to be received, would tend to negate reliance because as he put it, he regarded the credit facility as nothing more than a formality. 31 The difficulty confronting Computer World in relation to ground eight is that it leads nowhere. His Honour found in favour of ICE 2000 primarily on the basis of breach of trust. No issue of reliance arises in relation to that cause of action. Any findings that he made in relation to the alternative claim under s 52 of the Trade Practices Act were dicta, as his Honour specifically noted at [88] of his reasons for judgment. The relief to which ICE 2000 was entitled in relation to its claim for breach of trust was exactly the same as the damages that might have been awarded under s 52. It follows that, irrespective of whether his Honour fell into error on this point, no appealable error is demonstrated. 32 Ground nine complains that his Honour erred in finding contrary to the evidence that Ms Gardner was at all material times the managing director of ICE 2000. Ms Gardner was the managing director from at least 1 April 2002, and possibly earlier, through to February 2003. By the time of the trial, she was a consultant. If his Honour erred in the manner alleged in this ground, it was an error of a minor kind. It did not infect his overall reasons for judgment with appealable error, and did not lead to an incorrect result. 33 Finally, ground ten complains that his Honour acted upon hearsay, particularly hearsay derived from the various affidavits of Ms Gardner. No objection was taken to those affidavits at the time that they were read. Subsequently, during cross-examination of Ms Gardner, counsel for Computer World purported to object to her affidavit evidence except for her analysis of business records which was conceded to be appropriate and unobjectionable. The hearsay objection was never properly particularised, and the matter was never thereafter pursued. This ground cannot succeed. 34 It follows that the application for leave to rely upon further evidence will be refused, and the appeal itself dismissed. The appellant must pay the respondent's costs.

whether leave to rely on further evidence on appeal should be granted trusts breach of trust written agreement creating express or implied trust parol evidence rule whether oral agreement in contradiction of written agreement can be established practice and procedure equity

The agreement was called a Consolidated Water Supply Agreement (CWSA). The CWSA related to the supply by AOHL of water to AOL in its capacity as responsible entity (RE) of a number of managed investment schemes (MISs or Projects) in respect of olive groves at Yallamundi in Queensland (Groves). COGL was the owner of the land on which the Groves were located. AOHL owned a neighbouring allotment on which there was a lagoon called Yallamundi Lagoon. In the CWSA that allotment was called the "Water Land" and the lagoon on it was called the "Water Resource". I will call the Water Resource, that is to say, Yallamundi Lagoon, "the Lagoon". The defendant, Huntley Management Limited (Huntley), replaced AOL as the RE in respect of some or all of the Projects. There are six Projects, called Australian Olive Project 1, 2 etc. Huntley claims that it has validly replaced AOL as RE for all six. AOL concedes that Huntley has done so for Projects 1, 2, 4, 5 and 6. There is a dispute as to Project 3. This proceeding relates only to Projects 4, 5 and 6. Huntley replaced AOL as RE for Projects 5 and 6 on or about 28 March 2008 and for Project 4 on or about 29 April 2008 (30 April 2008 according to the plaintiff's submissions, but 29 April 2009 [sic] according to the defendant's submissions). The removal and replacement for Projects 1 and 2 and the alleged removal and replacement for Project 3 occurred in or around November 2008. That was after AOHL purportedly terminated the CWSA on 9 October 2008 for wrongful repudiation by Huntley (the solicitor for the plaintiff wrote to the solicitor for the defendant on 2 October 2008 stating that the termination was "effective immediately". The plaintiff's chronology states 9 October 2008, as do the plaintiff's submissions (see para 106(a)) and the further amended statement of claim, but the defendant's submissions (para 31) state 2 October 2008. ) In this proceeding AOHL seeks to enforce the CWSA against Huntley as the successor RE of AOL in respect of Projects 4, 5 and 6. AOHL contends that Huntley has succeeded to the obligations of AOL under the CWSA by the operation of ss 601FS and 601FT of the Corporations Act 2001 (Cth) (the Act). Huntley denies that it has done so. The major issue for decision is who is right on the proper construction of the CWSA and of ss 601FS and 601FT of the Act. There is no question of AOHL's attempting to enforce the CWSA against Huntley in respect of Project 1, 2 or 3 because, on any reckoning, AOL was still the RE of those MISs until 9 October 2008. From the times of the change in RE from AOL to Huntley in respect of Projects 4, 5 and 6, AOHL sent invoices to Huntley pursuant to the CWSA. Huntley did not pay them, contending that it was not liable to do so. Accordingly, on 2 October 2009 AOHL gave Huntley a notice accepting what it says was Huntley's repudiation of the CWSA, and terminating the CWSA. AOHL sues Huntley for debt based on the invoices covering the period until 9 October 2008 and for general damages in respect of the loss of the contract in relation to the period thereafter (in effect the loss of the benefit of the future stream of income). In the alternative to the claim for debt, AOHL sues Huntley on the ground of unjust enrichment, alleging that it in fact supplied water or a reliable source of water to Huntley. As can be seen, generally speaking the Groves within Projects 1, 2 and 3 are within the upper half of the plan and those within Projects 4, 5 and 6 are in the lower half. The Lagoon is wholly within Lot 11, SP113870 (the Water Land). I will call the Water Land "Lot 11". The "Water Owner" in the CWSA was defined to be the registered proprietor of Lot 11. That was AOHL. Part of Speers Creek constitutes the eastern boundary of Lot 11. (Speers Creek is elsewhere referred to as 'Spiers Creek' but I shall refer to it as 'Speers Creek' in conformity with the annexed plan). Two dams appear on the map: the North West Dam which is in the top left corner, and the Project 5 Dam which straddles the boundary between Lots 79 and 310. Those two dams are on land owned by COGL. Indeed, all of the land shown on the map with the exception of Lot 11 and Lot 394 (see below) is owned by COGL. As at the date of the CWSA, Projects 1-4 had already been established by AOL. The CWSA recorded that AOL intended to establish further Projects. AOL established Project 5 about a year after the making of the CWSA and Project 6 at some time after that. AOL as RE had entered into "Grove Agreements" with the members of the Projects (investors in the MISs) under which it agreed to manage their Groves, including to irrigate them. If they so elected, Members could hold stapled interest, in the form of shares in COGL coupled with their units in the MISs. Under the CWSA, AOHL undertook to supply water, and AOL to take water, to enable AOL to comply with its duty to irrigate the Groves under the Grove Agreements. AOHL alleges (para 16) that until 9 October 2008 it continued to supply and/or make available water to the Projects in accordance with the CWSA. AOHL claims (para 17) to have invoiced Huntley pursuant to the CWSA for water supplied and/or made available on a pro rata basis reflecting the number of hectares of Groves in Projects 4, 5 and 6 as a proportion of the total number of hectares the subject of all six Projects, and to have rendered invoices in the amounts and at the times stated in a table in para 17 of the FASC, totalling $486,504.77. AOHL claims (paras 18, 19) that each of the invoices was due and payable on the first day of the calendar month to which it related yet Huntley refused or neglected to pay and is indebted to AOHL in the amounts of the invoices, yet has asserted that it is not obliged to pay and has refused to perform the CWSA. AOHL alleges that by this conduct Huntley repudiated the CWSA, and that AOHL accepted that repudiation on 2 October 2008, when it elected to terminate the CWSA on and from 9 October 2008 (paras 20, 21). In para 22 of the FASC, AOHL makes a claim for damages for breach of contract. In paras 28ff, AOHL pleads that if the CWSA does not bind Huntley, nonetheless AOHL has conferred a benefit on Huntley by reason of AOHL's supply of a reliable source of water or of water itself, and that AOHL conferred that benefit on Huntley at its request, at AOHL's expense, and in the belief that Huntley was obliged to pay for it. AOHL claims by way of unjust enrichment the "base fee" set out in cl 5.2 of the CWSA on a pro rata basis according to number of hectares utilised by the Projects, alternatively $500 per Grove (along with GST and indexed for inflation), as a reasonable sum for water and/or for the supply of water (paras 29-31). The claim made in para 32 is that Huntley was unjustly enriched at AOHL's expense and is liable to pay AOHL for the benefit conferred. There is an obvious difficulty in accommodating the definition of "Projects" to Projects 5 and 6 which were not established as at 22 October 2002. As noted at [13] above, only Projects 1, 2, 3 and 4 were established as at that date. There was evidence too that in fact Project 6 and most of Project 5 were not irrigated from the Lagoon. The parties treated the CWSA as applying to all six projects and so will I. Recital B was that AOL had entered into Grove Agreements with the Members of the Projects under which AOL had agreed to manage their Groves. Of Projects 4, 5 and 6, this recital could have been true as at 22 October 2002 only in respect of Project 4. Recitals C and D were that AOL was obliged under the Grove Agreements to irrigate the Members' Groves (C) and that AOHL owned Lot 11 on which the Lagoon was located (D). Recital E was that AOHL had agreed to supply water, and that AOL had agreed to take water, to enable AOL to comply with its duty to irrigate the Members' Groves under the Grove Agreements. By the CWSA, AOHL agreed to supply water to AOL and AOL agreed to take water from AOHL in the manner and on terms in accordance with the CWSA: cl 2(a). According to cl 2(b) the supply of water was to continue for the term of the CWSA. Although cl 3(b) provided that the CWSA would continue until the expiry of 80 years from its commencement, AOHL accepts that the CWSA could operate only for the term of the respective MISs, namely, 21 years. The first obligation was to pay AOHL the fees provided for in the CWSA. The other obligations were to maintain AOL's Pumping Equipment and the Reticulation Equipment at AOL's cost and to operate and maintain the Lagoon in a good and workmanlike manner in order to maintain the Lagoon and its water capacity and to improve reticulation. The fee will be payable in the manner provided for in this clause 5. The annual base fee will be payable in the manner and at the times provided in this clause 5.2. Clause 5.4 provided that on and from 1 July 2002, AOL would pay the annual base fee to AOHL, free of any deductions, by equal monthly instalments in advance on the first day of each month with, if applicable, a proportional payment for any broken portion of a month at the termination of the CWSA. The procedure set out in Clause 7 must be followed by the Manager if the Manager retires or is removed under the Act. Paragraph (d) of cl 7.1 provided for the resolution of any dispute between AOL and COGL about the replacement cost. The "Pumping Equipment" was defined to mean the water pumping plant and equipment, existing and future, owned by AOL which was or would be used to pump water into the Lagoon within Lot 11. The "Reticulation Equipment" was defined to mean that part of the reticulation and irrigation plant and equipment located on Lot 11 and owned by AOL, that was or would be used to pump water from that Lagoon to irrigate Groves or land planted to olive trees. Paragraph (c) of cl 7.1 also provided that the equipment mentioned was to remain in situ "in accordance with the provisions of the Lease [see below]". Clause 7.2 provided that in order the better to protect the interests of members of the Projects both during and after the subsistence of the Projects by ensuring that there could be a continual supply of water to any land on which the Groves were located or which were planted to olive trees, and as an inducement to AOL to enter into the CWSA, AOHL agreed to grant to COGL an easement for the supply of water over Lot 11. The easement was to be in the form of Schedule 3 to the CWSA. AOHL agreed to grant a similar easement in favour of COGL for the benefit of each lot owned by COGL to be used for the Projects as soon as reasonably practicable. Also by cl 7.2, AOHL agreed to grant to AOL an easement for the supply of water in the form of Schedule 4 to the CWSA over Lot 11. Clause 7.2 provided that the easement was "[d]uring the period [AOL was] entitled to water supply under the [CWSA]". The form in Schedule 4 provided for the grantee to be AOL "or such other permitted assignee or successor ... of AOL under the [CWSA]". I was told that instead of granting an easement, AOHL leased to AOL Lot 11 (and Lot 394 CPML 1751 --- an "administration block" (Lot 394)) from 1 October 2002 to 30 June 2023 with six options of renewal, which, if exercised, would take the period of the lease up to 30 June 2078. Oddly, although (a) the form of this lease is found in Schedule 5 to the CWSA, and (b) the expression "Lease" is defined in Schedule 1 (Dictionary) to the CWSA as the lease to be entered into between AOHL and AOL "if clause 7.1(b) applies" on terms substantially the same as those appearing in Schedule 5, and there are references to the Lease in cll 6.1, 7.1(a)(ii) and 7.1(c), there is not any actual undertaking to grant or take the Lease in the CWSA. Lease No 706189421 of Lot 11 and Lot 394 was executed by AOHL as lessor and AOL as lessee on 21 October 2002 and by a guarantor on 23 October 2002. The permissible use was "[a]gricultural plantation maintenance, management, promotion, and any ancillary or related purposes". Part IV of the Lease provided that AOL was permitted to pump and reticulate water on and from the demised premises at AOL's expense. AOL undertook to maintain and repair the Pumping Equipment and the Reticulation Equipment. AOHL was given a right to inspect the equipment and, if necessary, to service, maintain and repair it at AOL's expense. Clause 16.04 of the Lease provided that if the CWSA should be terminated or AOL be relieved of its obligation to pay the annual base fee thereunder, the Lease was automatically terminated. The picture that emerges from the documents is that AOL was able, by reason of being the lessee of Lot 11 and having its Reticulation Equipment and Pumping Equipment on Lot 11 (see cl 4.1(h) of the CWSA), itself to take the water from the Lagoon that AOHL had undertaken to supply to it, and that upon the removal or replacement of AOL as RE, a new régime as between AOHL and COGL was to come into operation, without any reference to a new RE or its role. Clause 10 of the CWSA made the law of Queensland the proper law of the contract. Clause 12 of the CWSA provided for severance in case any provision of the CWSA should be found to be prohibited by law. My attention was directed to that for Project 4 dated 26 April 2001. The Project 4 prospectus could be relevant to the construction of the CWSA because it formed part of the background known to the parties to the CWSA when they entered into it. However, the prospectuses for Projects 5 and 6 post-dated the CWSA and could not be relevant to its construction. I will refer to the prospectus for Project 4 as "the Prospectus". The Prospectus stated (p 2) that by entering into a Grove Licence Agreement with COGL, each Member would have the right during the term of the Project to use and occupy a separate and independently identifiable area of the Project land (known as a Grove) on which olive trees would be grown. Each Member would enter into a management agreement (called "Grove Agreement") with AOL. A Member had the opportunity for the Member or the Member's nominated associate to acquire a certain number of ordinary shares in COGL (p 2). This was in addition to the interests offered by AOL in the Project. According to p 7 of the Prospectus, the opportunity offered was to carry on the business of the commercial growing of olives. On offer were interests in 4,800 Groves, each Grove having an area of 0.2 ha (2,000 m 2 ), to be planted with 71 olive trees. The application price for each Grove was said to be $8,605.00 plus GST. Members were each to enter into a "Grove Licence Agreement" (with COGL) which would give the Member a licence to use and occupy a 0.2 ha Grove. They were also to enter into a "Grove Agreement" (with AOL) under which AOL was to establish and maintain the Grove until 30 June 2023. In addition, AOL undertook to harvest and market the olives as agent for the Member at the maximum obtainable price. However, a Member was to have the right to elect to have olives harvested and/or marketed independently of AOL. For an additional $200.00, holders of Grove Licences or their nominated associates would be entitled to acquire one parcel of 187 ordinary shares in COGL for each 0.2 ha Grove held. When GST was added on to the $8,605.00 mentioned above, the total application price per Grove was $9,465.50, to which $200.00 was to be added if a parcel of 187 ordinary shares in COGL was also to be acquired. Each Member was to pay AOL an annual fee of $1,470.00 per Grove (plus GST and subject to CPI increases) for ongoing maintenance. In addition, an annual base fee of $25.00 (plus GST and subject to CPI increases) per Grove was to be paid to COGL for the Member's right to use and occupy the Grove. These fees were payable under the terms of the Grove Agreement and the Grove Licence Agreement. AOL was to install necessary irrigation works to ensure proper reticulation of water, to carry out drainage works to prevent soil erosion, and generally to maintain the Groves in accordance with sound agricultural and environmental practices (p 8). The Prospectus recorded that the Lagoon was a permanent freshwater lake, recently enlarged to approximately 400 acres to hold an average depth of 6 metres making the capacity 7,300 megalitres (p 10). The Prospectus stated (p 10) that COGL had held an option, since expired, to acquire Lot 11 from AOHL, and that AOHL would negotiate with COGL for the sale of Lot 11 to COGL on commercial terms. No sale eventuated. The Prospectus referred (p 10) to the CWSA (or more accurately to an earlier water supply agreement entered into in 1997) and to the potential grant of an easement by COGL to AOHL to ensure that various water works on COGL's land were available to AOHL. The Prospectus stated (p 10) that COGL had leased the "Project Land" to AOL under a lease to expire on 1 July 2023, which was one day after the end of the term of the Project. The Prospectus noted (p 23) that for maximum high quality production, the total water requirement was 9-10 megalitres per hectare. It stated (p 12) that a reduction or interruption of water supply may lead to the expected yield not being achieved. It also noted (p 24) that the North West Dam had been completed and had the capacity to collect natural rainfall and pump it into the Lagoon. The Prospectus stated (p 44) that the Constitution of the Project was the primary document governing the relationship between investors and AOL. The Prospectus stated (p 45) that under the Constitution AOL had a right of indemnity out of the Project Property in respect of liabilities incurred in performance of its duties and for all fees and costs recoverable by it under the Constitution (see below). Clause 3.1 provided in substance that all Project Property would be held by the RE on trust for the Members for the term of the Project. Clause 6.1 provided that AOL must wind up the Project or cause it to be wound up if, inter alia, the Project should be without an RE (para (b) of cl 6.1) or if the Members held a validly called meeting and voted by extraordinary resolution to remove the RE, but did not, at the same meeting, pass an extraordinary resolution choosing a new RE that consented to becoming the Project's RE (para (d) of cl 6.1). Clause 7.1 provided that the RE was entitled to be paid fees of the amount and in the manner set out in Item 3 in Schedule 3. Those fees were $8,580.00 for management of a Member's Grove from the date the person became a Member to the next 30 June; for the next financial year $11,470.00; for each subsequent financial year of the Project an amount equal to the previous year's fee increased in accordance with movements in the CPI; and for harvesting, a fee equal to the amount that the RE actually expended in harvesting. The RE's "legal recourse for its fees and payments is through the Grove Agreements" according to Item 3. Consistently with that position, Item 3 stated that the fees and payments were noted in that Item "as a matter of record". Clause 7.2 provided that the RE was entitled to recover from the "Proceeds Fund" "costs" of the kind and in the manner set out in Item 3 in Schedule 3 to the Constitution . However, Item 3 does not set out any "costs". Clause 8.1 assumed importance. That clause required the RE to open, or cause to be opened, two bank accounts for the Project. One was called an "Application Fund" into which was to be deposited all money received from persons applying to become Members (Applicants) including accrued interest and any money incidental to the making of the applications. The other was called a "Proceeds Fund" into which was to be deposited all money generated from the Project and Members of the Project, excluding the money paid into the Application Fund by Applicants. Clause 11, which deals with the term (duration) of the Project, refers to the Grove Licence Agreements and Grove Agreements. It states that the Project is established, inter alia , to allow successful Applicants to enter into Grove Licence Agreement for the use of the Grove as a farm, and to enter into a Grove Agreement appointing the RE to manage the person's business. The expressions "Grove Licence Agreement" and "Grove Agreement" are defined as agreements in the forms of the agreements contained in Schedules 6 and 5 to the Constitution respectively, or as substituted or amended under certain conditions. Under the Grove Licence Agreement COGL grants to the Member a licence to use and occupy the relevant Grove for the planting, growing, harvesting and marketing of olives. The right of occupation is non-exclusive. The term is until the earlier of the termination of the Member's Interest and 30 June 2023. Under cl 6, the Member must pay to COGL a licence fee of $25 (indexed) per Grove. The obligations of the Member, COGL and AOL are set out. As RE, AOL must, at its expense, construct an external boundary fence and access roads and pathways. By cl 16 the rights and obligations of the three parties under the Grove Licence Agreement are made subject to the Constitution . Under the Grove Agreement AOL's duties are far more extensive. They are classified as "Planting and initial maintenance" (cl 4.1) and "Ongoing management and harvesting duties" (cl 4.3). AOL's remuneration is provided for (cll 6 and 7). Clause 6 provides that the RE is entitled to be paid, for carrying out its initial (cl 4.1) duties, a sum of $8,580, and for carrying out its subsequent (cl 4.3) duties a sum of $1,470 for the first year and a CPI adjusted amount for each subsequent year. Clause 6 provides that in each case the Member must pay the fee to the RE on application (the clause erroneously says "on Application"), meaning upon demand by the RE. Clause 7 provides for the Member to pay the RE a harvesting fee but the Member may elect to harvest and market the olives on the Member's Grove (cl 5.3), in which case, of course, the harvesting fee is not payable to the RE. Clause 19 makes the rights and obligations of the Member and AOL under the Grove Agreement subject to the Constitution . These amounts must be paid by the Members. Sections 601FS and 601FT were considered in Re Investa Properties Ltd [2001] NSWSC 1089 ; (2001) 187 ALR 462 and Syncap Management (Rural) Australia Ltd (ACN 095 807 837) v Lyford (2004) 51 ACSR 223. In the former case, Barrett J said (at [11]) that ss 601FS(1) and 601FT(1) appeared to be intended to cause an incoming RE to "step into the shoes of its predecessor". It is convenient to deal with the issues of construction that divide the parties by reference to Huntley's submissions. Clause 7.1(b)(i) distinguishes between obligations that accrued before and those that accrued after the event or situation referred to in cl 7.1(a) occurred or commenced to exist. Like cl 6.3, cl 7.1(b), says nothing about the responsibility of a newly appointed RE that replaces an incumbent RE. The CWSA could not impose obligations on a newly appointed RE because it was not a party to the CWSA. It is interesting that the CWSA purported to impose obligations on a successor in the case of the "Land Owner" and the "Water Owner" by reason of the definitions of those expressions to include, respectively, the permitted successors or assigns which owned the land on which the Projects were established excluding Lot 11, and the registered proprietor of Lot 11 for the time being. In contrast, the "Manager" is defined neither in the dictionary in Schedule 1 to the CWSA, nor in the dictionary to the Constitution that is imported into the CSWA by cl 1.1. The "Manager" is simply denoted as AOL, without any reference to a successor RE, although the definition of RE in the Constitution makes reference to the RE for the time being and the possibility of a replacement RE. Huntley relies on cl 7.1(b)(ii) and (iii) which establish a régime that is to come into effect when, relevantly, AOL is removed or retires as RE. That régime must be entered into immediately by AOHL and COGL. Paragraph (c) is, according to Huntley's submission, consistent with that régime: it provides for AOL to sell the Pumping Equipment and the Reticulation Equipment to COGL. AOHL submits that cll 7.1(a)(iii), (b), (c) and (d) apply only where there is no replacement of the RE who is removed or retires, whereas Huntley points out that the CWSA expresses no such limitation. In any event, so Huntley submits, that situation could not, as a practical matter, ever arise because of the provisions of ss 601FL(3) and 601FN of the Act. I have come to the view that Huntley's submissions should be accepted. Clause 6.3 (set out at [38] above) shows that the parties to the CWSA had in mind the provisions of the Act relating to the retirement and removal of REs when they entered into the CWSA. Yet they stipulated that the procedure set out in cl 7 "must be followed" if AOL should retire or be removed under the Act. This provision and cl 7.1(a)(iii) do not lend themselves to a reading down so as to apply only to situations in which no new RE is appointed. Both parties accept that the Act reflects a policy that a registered MIS should always have an RE. Clause 7.1(a)(iii) would unacceptably limit the scope of the operation of cl 7.1(b) if it referred only to those situations in which there was an effective removal or retirement without a replacement. The question that then arises is whether ss 601FS and 601FT alter this result. In my opinion they do not. The construction supported by AOHL would involve re-writing the CWSA by omitting its various provisions as to what is to happen upon the removal or retirement of AOL as RE. I do not think that s 601FS(1) of the Act requires or permits this to be done. The "rights, obligations and liabilities of the former responsible entity" to which s 601FS(1) refers are impliedly limited to those that are capable of having an ongoing operation after the change in RE. Paragraph (b) of s 601FT(1) reflects this idea expressly in the words "that is capable of having effect after the change". If the CWSA did not provide for the effect on it of a removal or retirement of AOL, it would make sense to conceive of the new RE as stepping into the shoes of the outgoing one. That would be a situation in which the rights, obligations and liabilities of the former RE had an ongoing operation. It is a matter for the members of an MIS when considering whether to remove and replace an RE, and for a company (of a kind described in s 601FA) when considering whether to accept appointment as a new RE, to take into account the contractual arrangements that the current RE has made and their effect on whether the new RE will be able to perform its statutory and other obligations. The conclusion which I have just reached makes it unnecessary for me to consider Huntley's other two arguments in relation to AOHL's contractual claim but I will do so briefly. Huntley argues that s 601FT(1) does not apply because: Huntley's argument is that cll 4.1 and 4.3 of the Grove Agreements (referred to at [73] above), which are to be read subject to the Constitution , provide that the RE is under an obligation to irrigate the Member's Grove, and that cl 24.2 of the Constitution (set out at [75] above) provides that the RE must pay "from its own assets", inter alia , "[a]ll costs, expenses, commissions, fees ... payable in accordance with this Constitution in respect of the Interests". An Interest includes a Member's participation in a Grove Licence Agreement and a Grove Agreement. A single Interest is held in respect of a single Grove, two Interests are held in respect of two Groves and so on. There is a threshold question as to the meaning of s 601FS(2)(d). Does the expression "could not have been indemnified out of the scheme property" mean "could not as a matter of legal entitlement" or "could not as a matter of fact"? Clause 8.1(b) described a disentitlement ("negligence, deceit, breach of duty, fraud or breach of trust..."). It may be, however, that although that exclusion does not apply, there is as a matter of fact no "scheme property" within the meaning of the Act out of which a former RE could have been indemnified. Senior counsel for Huntley submits that the Projects did not involve the holding and management of "scheme property" over any significant period of time. This submission is based on the separateness of the business conducted by each Member. Huntley did not pursue some of the questions it raised to a conclusion, contenting itself with a more specific submission. This was that under each Grove Agreement, the Member undertook to pay AOL for managing the Member's Grove, including supplying it with water, and even if some scheme property could be identified, it would be unthinkable that AOL would be entitled to be indemnified out of it in respect of its liability to pay AOHL because this would be to allow double payment: payment by the Member under the Grove Agreement and payment out of the scheme property under cl 8.1 of the Constitution . I will deal only with this submission advanced by Huntley. It would be possible to discuss at great length the various inter-relationships between the Grove Agreements, cll 8.1 and 24.2 of the Constitution and the CWSA, and also the relationship between them and ss 601FS(2)(d) and 601FT(2) of the Act. I referred earlier (at [73]) to cll 4.1, 4.3, 6 and 7 of the Grove Agreement. There can be no doubt that AOL undertook in comprehensive terms to supply the Member with adequate water up to a maximum of 0.8 megalitres to irrigate the Member's Grove and in fact to irrigate that Grove: see cll 4.1(g) and (h) and 4.3(a) and (b) . The Member's undertaking to pay the fees to the RE is a personal one and there is no provision in the Grove Agreement for an indemnity out of any property. It suffices to state my conclusion in summary form. According to cl 8.1 of the Constitution the indemnity is out of "the Funds" and the "Project Property". The Constitution 's definition of "Project Property" distinguishes between funds, investments and other property that are held in common and those that are vested in individual Members. The definition treats "Project Property" as being the same as "Scheme Property. Under the Grove Licence Agreement, however, it is the individual Member who has the licence and who will own the olives harvested (the trees belong to COGL). The olives and the trees are not part of the Project Property referred to in cl 8.1(a) of the Constitution . I noted the definitions of the Funds at [69] above. The indemnity is given over money and other property held by the RE unless and until there has been an appropriation to individual Members. The point is made by the repeated use of the word "pending" in the definition of "Project Property" set out above. I do not see any basis on which the words "any liability incurred by the Responsible Entity in the performance of its duties in respect of the Project" in cl 8.1(a)(i) can be read down to exclude the liabilities that AOL assumed under the CWSA. The word "Project" is defined broadly in the Constitution 's dictionary to mean "the managed investment scheme established by this Constitution ". AOL bought AOHL's undertaking to supply water for the benefit of all Members of all grove Projects. Huntley did not dispute that there were funds and property that were, if only temporarily, common funds and property to which the indemnity could attach. The right of indemnity would cease to apply to funds once they were duly allocated to a particular Member. No doubt complex questions would arise but at least the right of indemnity would have some scope for operation so long as there were some common funds or some property within the expression "the Funds" or the "Project Property". In my view cl 24.2 of the Constitution does not stand in the way of the RE's right of indemnity. That clause is concerned to distinguish between amounts payable by the RE and amounts payable by the individual Members. The words "from its own assets" signify that the RE is not to pay the amounts described from money or property that had been allocated to an individual Member and which the RE therefore held upon trust for that Member, as distinct from on behalf of the Members generally. For the above reasons, I do not accept Huntley's submission that s 601FT(2) (with reference to s 601FS(2)(d)) of the Act defeats AOHL's contractual claim. For present purposes s 601FS directs attention to each of Projects 4, 5 and 6. Huntley argues that s 601FS does not apply to the obligation to pay the base fee under the CWSA because that base fee is an indivisible lump sum that is payable for the supply of water for use in a range of Projects and there is no provision of the CWSA that authorises the charging of a "pro rata" share of the base fee. Accordingly, so it submits, the CWSA cannot operate where the RE is not the RE of all of the Projects, and there is no mechanism in the CWSA for a new RE for one Project to become liable on a pro rata basis for water supplied for that Project. I set out cl 4.1(a)-(d), (f) and (h) of the CWSA at [33] above. It will be recalled that the CWSA was dated 22 October 2002. At that time Project 4 had been established (in 2001) but Projects 5 and 6 were yet to be established. Clause 4 of the CWSA contemplated that further Projects might be established after 22 October 2002, and that the CWSA might have to apply to them. The primary obligation of AOHL is provided for in cl 4.1(a), (b) and (c). Paragraph (a) provides for a maximum annual allocation of 5 megalitres per hectare. Paragraph (b) provides for a "per Grove" maximum in respect of Projects that were in existence as at 1 July 2002 --- Project 4 in this proceeding. Paragraph (c) provides for a "per Grove" maximum in respect of Projects that had commenced between 1 July 2002 and 22 October 2002 (none had) and that might yet commence after 22 October 2002 (as Projects 5 and 6 were to do). AOL did not undertake in the CWSA to request that the maxima be supplied but AOHL undertook to supply up to the maxima as required by AOL. According to cl 5.2 of the CWSA, on and from 1 July 2002 the previous base fee per Grove was replaced by an annual base fee in respect of all Groves, present and future. The annual base fee for the year commencing on 1 July 2002 was $1,490,000 per annum, and for subsequent annual periods there was to be an adjustment in accordance with CPI figures. It will be recalled that by reason of the Lease from AOHL to AOL and the presence of AOL's Pumping Equipment and Reticulation Equipment on Lot 11, AOL in fact had a free hand in taking water from Lot 11, but contractually this was subject to the maximum volumes provided for in cll 4.1(a) and (b) (modified by paras (c) to (e)). In my opinion the CWSA is an "entire" agreement and does not accommodate an apportionment. There are several indications of this. First, there is the point made by Huntley that AOL could not, consistently with its contractual obligations, have reduced the amount of its liability by irrigating only certain Groves or Projects. Second, there is the impracticability of different REs having access to Lot 11 and the Pumping Equipment and Reticulation Equipment on it (owned by AOL) to irrigate the different Projects for which they were hypothetically responsible. Third, there are the references to "the Projects" (in the plural) in, for example, cl 7.1(a)(i) and the definition of "Land" in the Dictionary (Schedule 1) as "the land from time to time on which Projects are established, excluding the Water Land. " The references suggest all of the Projects and all of the Land as a whole. Fourth, I construe the CWSA as providing for supply from the Lagoon, yet the evidence shows that it is not physically possible for all of the Projects in the Groves to be supplied from the Lagoon in equal measure. Projects 5 and 6 could not be irrigated from the Lagoon because there was no pipe work across Speers Creek to convey the water to those Projects. More precisely, the evidence was that of the land the subject of Projects 5 and 6, the Lagoon could irrigate only 18% of Project 5, because it is only that 18% that is on the north-western side (the Lagoon side) of Spiers Creek. The CWSA is to be construed in the light of the physical environment to which it was directed, and in the light of the evidence just mentioned it would not have made sense for the parties to have agreed that the water from the Lagoon was to be treated as supplied on a per Project or per Grove basis when, generally speaking, water from the Lagoon could not irrigate certain Groves at all. It will be noted that while this fourth point is relevant to the construction of the CWSA, even if severance was possible it would also militate against the per hectare formula adopted by AOHL. For the above reasons it was not open to AOHL to sue Huntley on the basis of a liability to pay a pro rata part of a CPI-adjusted base fee of $1,490,000. AOHL claims to have conferred a benefit on Huntley in the form of a "supply of a reliable source of water or the supply of water" or the ability of Huntley to meet its obligations to investors under cl 4.1(g) of the Grove Agreements (para 28(a) of the FASC). The FASC asserts that the benefit was conferred on Huntley at its request. The request alleged was that: The FASC asserts (para 28(c)) that the benefit was conferred at AOHL's expense because AOHL lost the opportunity of entering into a contract with Huntley to supply the service of providing a reliable supply of water or to supply water for valuable consideration; AOHL incurred the expense of providing a reliable supply of water or access to water; alternatively AOHL lost the water actually supplied which was a valuable commodity. First, I do not accept that the "supply of a reliable source of water" from Lot 11 was a benefit conferred on Huntley for present purposes. Absent contract and the supply of water itself, the meaning of a "supply of a reliable source of water" is elusive. It seems to mean nothing more than that as the owner of Lot 11 on which the Lagoon was located, AOHL was the owner of a water source of such a nature and location as to be capable of enabling Huntley to irrigate the Groves. This is not a benefit conferred on Huntley. Second, the evidence suggests that the only water supplied was 5 megalitres on 6 April 2008 from the Project 5 Dam and 3 megalitres on 7 April 2008 also from the Project 5 Dam. That water was not supplied by AOHL. Third, it is not shown that AOHL suffered detriment. However, benefit is not the only element in such a claim. The benefit must be at the appellant's expense and there must be an element of injustice: see, for example, Mason and Carter, Restitution Law in Australia , Butterworths, Sydney, 1995, paras [221], [327] and [226]. In my opinion this is not an expense or detriment. In the first place, it is not shown that there would have been a fruitful negotiation between Huntley and AOHL for AOHL to supply Huntley with water. The evidence tends to suggest the contrary. Moreover, AOHL did not lose the opportunity by reason of providing a reliable supply of water. In the absence of contract, the most that can be said is that AOHL had a reliable source of water in proximity to the land the subject of the Projects. As Huntley submits, the water was not supplied because no consensus was reached between AOHL and Huntley as to the terms upon which it would be supplied. Liabilities are not to be forced upon people behind their backs any more than you can confer a benefit upon a man against his will. Bowen LJ identified salvage in maritime law as one qualification. Other cases, including other cases of necessitous intervention, may now be seen as further qualifications to the principle but it is not necessary to examine in this case how extensive are those further qualifications or what is their content. The "reliable source of water" in the present case existed by reason of geography. It was not created at AOHL's expense or at Huntley's request. It was always there. AOHL parted with or produced nothing and Huntley did not benefit, by reason of its existence. AOHL's restitutionary claim fails. I certify that the preceding one hundred and thirty-four (134) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

managed investment schemes olive grove projects former responsible entity (re) (aol) entered into a consolidated water supply agreement (cwsa) with owner of land containing a lagoon (aohl) to supply water to enable aol to perform its obligations of irrigating individual groves of which members of the projects were licensees aol removed as re and replaced by huntley in respect of some of the projects whether, by reason of ss 601fs and 601ft of corporations act 2001 (cth) (the act), huntley became liable to aohl in respect of the particular projects for which it had been appointed as re in place of aol construction of cwsa construction of ss 601fs and 601ft of the act whether aol had enjoyed a right of indemnity in respect of the liability to aohl for purposes of s 601fs(2)(d) of the act whether liability of huntley as successor re to aohl was excluded by s 601ft(2) of the act whether cwsa was an "entire" agreement that did not permit a pro rata liability in respect of some projects or some groves of olive trees. corporations

The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs to refuse to grant a protection visa to the appellant. At the hearing of this appeal I granted leave to join the Tribunal as the second respondent and to amend the name of the first respondent to read "Minister for Immigration and Citizenship". 2 The appellant is a citizen of the People's Republic of China ('the PRC') who arrived in Australia on 2 April 2005. On 28 April 2005 the appellant lodged an application for a protection visa with the Department of Immigration and Multicultural Affairs. In his application for a protection visa the appellant claimed to have a well founded fear of persecution as a result of his Falun Gong practice in the PRC. The appellant asserted that he was appointed as head of Falun Gong in Hong Qiao Qu Tian Jin on the arrest of the previous leader and acted to promote Falun Gong. The appellant claims his house was searched twice by police after which he applied for his passport. The appellant claims that he continued to act as the head of Falun Gong in his area, organising meetings and activities in his area and communicated with members all over the country. The appellant claims police came to search his home again in 2004, taking away his computer and holding him for questioning. The appellant asserted that he suffered mental and physical torture at the hands of the PRC authorities. 3 On 24 June 2005 a delegate of the first respondent refused the application for a protection visa and on 21 July 2005 the appellant applied to the Tribunal for a review of that decision. On 2 September 2005 the Tribunal advised the appellant that it had considered the material before it but was unable to make a decision in his favour on this information alone and invited him to attend a hearing. The appellant failed to respond the Hearing Invitation and did not attend the hearing at the allocated day and time. The Tribunal invited the appellant to give oral evidence at a hearing on 7 October 2005. The appellant was advised that if he did not attend the hearing and a postponement was not granted, the Tribunal may make a decision on his case without further notice. 5 The procedures for the sending of the hearing invitation letter were complied with. The address to which the letter was sent was the last address given to the Tribunal as his address for service in connection with the review, and the letter complied with the requirements of s 425A and s 441A(4) and reg 4.35D of the Migration Regulations 1994 (Cth). Receipt of the letter was therefore deemed to have occurred pursuant to s 441C(4). In any event, there is no suggestion anywhere in the application or amended application that the appellant did not receive the letter. Nor is there any suggestion that the Tribunal was aware of any circumstances, which rendered improper or unfair its decision to proceed under s 426A(1). The Tribunal found that as the appellant did not attend the oral hearing his claims could not be tested by the Tribunal. There was nothing to support the claims of the appellant besides unsubstantiated assertions; insufficient particulars were provided by the appellant; the credibility of the appellant could not be tested. Accordingly the Tribunal was unable to be satisfied that the appellant is or was a Falun Gong practitioner and that he faces a real chance of persecution should he return to the PRC now or in the foreseeable future. The appellant further asserted the Tribunal had failed to carry out its statutory duty by breaching s 424A of the Act . Each of these was described as a 'particular' of jurisdictional error. The Federal Magistrate treated each as a distinct substantive ground. As to the first 'particular' his Honour held that no independent country information was relied upon by the Tribunal and in any event the provision of such information would have been excluded by the exception contained in s 424A(3)(b) of the Act . As to the second 'particular' his Honour held that the statement of bias in the first ground was mere assertion as a bland statement without particulars of the nature or circumstances of the alleged bias. The appellant had made no attempt to file the Tribunal transcript or recording tape in support of the claim. The Federal Magistrate found that no inference of bias could be drawn from the mere fact of a Tribunal decision which is adverse to the appellant. As to the third 'particular' his Honour held that the decision of the Tribunal was not made on 'assumptions' but it was made by reference to the fact that the appellant had failed to make out his claim. 9 The Federal Magistrate considered the second ground outlined by the appellant and held that it was not information but rather the inability of the Tribunal to be satisfied that the applicant fulfilled the criteria for grant of a protection visa which was the basis of the decision of the Tribunal. The Tribunal did not rely on "information" for the purposes of s 424A: SZECI v Minister for Immigration and Multicultural Affairs [2005] FCA 1201 at [24] . Accordingly, both grounds for review were rejected by the Federal Magistrate. I was not given an opportunity to explain my case. The Tribunal failed to consider my claims. The Tribunal had bias against me and did not consider my application according the s. 91R of the Migration Act 1958 . The Tribunal's satisfaction that I am not a refugee was not based on a rational and logical foundation for this belief. Federal Magistrates court did not fully consider the information provided and refused my application. I will adopt the paragraph numbering in the Notice of Appeal. This is not a ground that was raised before the Federal Magistrate. 13 I take this to mean that he submits that he was not given an opportunity to explain his case before the Tribunal. The appellant requires leave to raise this issue for the first time on this appeal. 14 The Tribunal, in my opinion, complied with its statutory obligations under the Act to invite the appellant to a hearing. When the appellant failed to appear at the hearing the Tribunal decided to exercise the power under s 426A(1) of the Act and proceeded to make a decision without taking any further action to allow the appellant to appear before it. No error resulted in the Tribunal proceeding in this manner: VNAA v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 134 ; (2004) 136 FCR 407 at [14] - [15] ; Minister for Immigration and Multicultural Affairs v SZFDE [2006] FCAFC 142 ; (2006) 154 FCR 365 at [135] per Allsop J. No particulars are provided. 16 The first and last of these require leave to be raised as they are not raised below. Again they are not particularised and the appellant did not advance any before me. I am satisfied that the Tribunal fully considered the appellant's claims and the material before it. I find that they are without merit. As to bias the applicant has not met the requirement that such an allegation be firmly and distinctly made and clearly proved: Minister for Immigration and Multicultural Affairs v Jia Le Geng (2001 [2001] HCA 17 ; 205 CLR 507. No jurisdictional error has been made out. The Federal Magistrate correctly found that the Tribunal's decision was based on the paucity of detail and information, such that the Tribunal was unable to be satisfied that the appellant has a well-founded fear of persecution within the meaning of the Convention. This ground is not made out. Again no particulars are provided. A reading of his Honour's reasons dispels such a ground. The appellant appeared before the Court assisted by an interpreter in the Mandarin language. He was invited to make oral submissions and did so speaking from a prepared document. These submissions were but a repetition, without particulars, of the grounds of appeal. There is nothing in the material before me to support such a ground. 19 I would refuse to grant leave in respect of those grounds which require leave. The test for whether leave to appeal is granted or refused is well established: Décor Corp v Dart Industries Inc (1991) 3 FCR 397 at [9]. I am of the opinion that none of them has any reasonable prospects of success. The Federal Magistrate's decision is not attended by sufficient doubt to warrant it being reconsidered by the Federal Court. No substantial injustice would result from my refusal to grant leave. It is not "expedient in the interests of justice" to allow these new grounds: H v Minister for Immigration and Multicultural Affairs [2000] FCA 1348 at [6] . 20 Otherwise I would dismiss the appeal as the grounds are without merit. No jurisdictional error has been made out. Further on my reading of the reasons of both the Refugee Review Tribunal and the Federal Magistrate, no such error is discernable. The appellant should pay the costs of the first respondent, fixed at $2,700. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.

appeal from decision of federal magistrate application for protection visa whether jurisdictional error whether appellant had opportunity to put his case whether bias. migration

2 During that year the union wished to have the bank make such certifiable agreements in respect of bank employees. Among other things, such an agreement must be about 'matters pertaining to the relationship between a [corporate employer] ... and ... all persons who ... are employed in a ... business, [or a part of it] ...of the employer': ss 170LH, 170LI(1). Further, such an agreement must only be about such matters: Electrolux Home Products Pty Ltd v Australian Workers' Union [2004] HCA 40 ; (2004) 221 CLR 309 . Within a fortnight the union followed that with a notice to the employer pursuant to s 170MI(2), with the intention of initiating a bargaining period during which industrial action to support claims made in respect of the proposed agreement would have certain legal immunity, as provided for by Div 8 of Part VIB (ss 170MI - 170NB ) --- particularly ss 170ML and 170MT. The notice was accompanied by what purported to be particulars of, among other things, 'the matters that the initiating party propose[d] should be dealt with by the agreement', as required by s 170MJ(c). 4 Negotiations between the parties ensued up to June 2004. By 17 June 2004, actual disagreement between the parties had narrowed to three issues, designated by the union as 'Staffing and Relief', 'Performance Management' and 'Pay'. 5 Between 28 June 2004 and 11 August 2004 the union gave the bank various notices of intention to take industrial action in support of those claims, and instigated various forms of industrial action involving strikes. 6 In August 2004 Mr Murray, the bank's chief executive officer (CEO) said that there was poor attendance of union members at stopwork meetings. 7 The High Court decided Electrolux on 2 September 2004. The effect of that decision was that industrial action in support of a claim for an agreement that contained any provision for a matter not relating to employer-employee relation was not protected. The decision surprised those concerned with industrial relations and the Commonwealth Parliament enacted 'savings clauses' in Div 10A of the Act. Section 170NHBA provided that if industrial action occurring before 2 September 2004 (the date of judgment in Electrolux ) would have been protected action under the Act but for the fact that it included a purpose of supporting a claim about a matter that did not pertain to the employer-employee relationship, the action would nevertheless be protected. 8 On 1 October 2004, the CEO indicated that the bank, having earlier conceded and implemented some pay increases, was withdrawing from negotiations. 9 In the light of Electrolux , in a letter of 20 October 2004 the union clearly signalled that it no longer proposed that agreements as to matters not pertaining to the employer-employee relationship ('non-pertaining matters') should be implemented in otherwise certifiable agreements. The union's indication in June 2004 that there were only three matters standing in the way of agreement had been confirmed. 11 The union conceived it as necessary to try to demonstrate to bank management that those of the union's demands it was continuing to press reflected real dissatisfaction on the part of bank employees, contrary to the bank management's stated perception of the matter. 13 On 1 November 2004 the union gave notice of a full day's stoppage of work to be undertaken on 5 November 2004, the day of the bank's annual general meeting ('the AGM'). 14 The bank first notified the union of its assertions that any past or intended industrial action was unprotected on 3 November 2004. 15 Up to and on 5 November 2004 the union aided and induced a number, but not more than about 150, of the bank' s 36 ,000 odd employees to breach their contracts by attending the AGM as shareholders or proxies for shareholders when their contracts of employment obliged them to be at work. However the purported particulars were so vague and general as not to amount to particulars. The supposed failure to adequately particularise the matters meant that there was never a valid initiation of a bargaining period. The post- Electrolux savings provisions did not assist the union in this respect. In consequence, the action was not taken 'for the purpose of ... supporting or advancing claims made in respect of [a] proposed [certifiable] agreement' (cf s 170ML(2)(e)) and, after the cut-off date, was not 'protected' action. (3) Moreover, on account of the non-pertaining matters initially sought by the union to be incorporated in the proposed agreement, there was no bargaining period validly initiated. (4) The union took the several instances of the thus unprotected industrial action 'with intent to coerce' the bank 'to agree ... to making' a certifiable agreement, contrary to s 170NC. (5) The 'shareholder campaign' was 'other action' taken with the same intent, also contrary to s 170NC (see especially para 170NC(1)(a)). A reasonable degree of informative specification is required: the recipient is to be able to understand what areas of employer-employee relations are sought to be dealt with by the agreement. However there is a context. The 'claim' document was sent to the bank a fortnight earlier. The union said in its accompanying letter: 'This claim identifies the key issues staff want addressed ...'. Further, there was the entire context of management initiatives as to staff administration, staff reactions and the continuing union-employer relations. 20 Allowing that such context, on the evidence, would enable the bank to make some educated guess at the meaning of the matters that the union wanted the agreement to deal with, an unacceptable level of guesswork would still be necessary as to what 'targets' and 'democracy at work' might mean. Contrary to the bank's submissions, however, the same is not true of the phrase 'conditions of employment'. In the context, which included the Australian industrial relations scene generally, it sufficiently conveyed that the union wanted the agreement to deal with the range of non-salary terms and conditions of employment conventionally dealt with in individual instruments regulating the bank's obligations to its employees and so dealt with in Australian industrial instruments generally. Those reasons are to my mind persuasive and nothing in Electrolux mandates that they be discarded. Section 170MI(2) says the bargaining period "is initiated" by the giving of a notice stating the initiating party intends to try to make an agreement under Division 2 or 3 and have that agreement certified under Division 4. These are the essentials of a valid notice. Although the command of s 170MJ is important, and non-compliance may have the consequences mentioned by the Full Bench in the Victorian case, the section imposes a subsidiary obligation that does not affect the validity of the notice. ... s 170MI(2) makes it clear that it is the giving of the written notice which initiates the bargaining period. Nevertheless s 170MJ should be complied with. A party which fails to provide particulars is at risk if the Commission is required to exercise its discretion at a later point in the process eg under s 170MW(2)(a) or s 170MX(5)(e). The party may request the notice-giver to provide proper particulars and not to act on the notice until an appropriate period after such further particulars are given. If the notice-giver fails to give proper particulars, the notice-recipient may, if acting promptly, obtain injunctive relief: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 ; (1998) 194 CLR 355 at [100] per McHugh, Gummow, Kirby and Hayne JJ . However, here, the bank sat on its hands and made no demur about the particulars for several months. No doubt the relevant bank officers anticipated that, in discussions, the union would explain, as it did, what it wanted if there were any matter different from or additional to what was set out in the preceding 'claim' document. Had the bank promptly complained of the inadequacy of the particulars, the union could readily have enlarged and explained them. No injunction was sought before me. There must be a direct connection with the employment relationship and the relevant relationship is that between the employer as employer and the employee(s) as employees : see for example, Electrolux per Gleeson CJ at [9]-[10]; Wesfarmers Premier Coal Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (No 2) (2004) 138 IR 362 at [74]. 24 The union's claim that the employer pay for employees who were union representatives to work in their union capacity and to be educated for that capacity may, for present purposes, be assumed not to 'pertain' to the employer-employee, as distinct from the employer-union, or employer and union representative, relationship. The apparent claim that, in effect, the bank require its contractors to remunerate their casual employees no less favourably than the bank's own employees may also be assumed to be a 'non-pertaining' matter. Likewise, it may be assumed that by seeking to have repeated certain provisions of earlier agreements, the union's claim may have been for non-pertaining matters to be included in the sought agreement(s). 25 As such, if the union were pressing that one or more such claims be included in the intended agreement(s), and were taking industrial action in support of such an agreement, Electrolux dictates that the action would not be protected. However the post- Electrolux savings clauses of the Act override that result in relation to industrial action taken before 2 September 2004. 26 There was, however, industrial action taken 'for the purpose of ... supporting or advancing claims made in respect of the proposed agreement' after that date, on 5 November 2004, the day of the AGM as part of the 'shareholder campaign'. The immediate purpose of that industrial action was to make effective the presence of union representatives and members at the AGM. Nevertheless, in a broad way, the point of that presence was, to support claims made in respect of the proposed agreement. Such industrial action would not have the protection of s 170 ML if the claims still included did not pertain to the employment relationship as such. 27 However in my opinion it is clear enough that the union was, by that time, no longer pressing any such non-pertaining claim and that this had been made plain, in the context, to the bank. There are technical issues such as specific BSU agreements and scope that also need to be resolved but these issues can only be addressed in the context of agreement being reached on the substantive issues above. However your ongoing refusal to negotiate these issues leads us to conclude we have no option but to advise members that industrial action is necessary to demonstrate how unacceptable your current position is to your staff. 29 On 9 July 2004 the union told the bank's board members 'There are only three matters in contention' and explained that they were the three just mentioned. 30 It was not until 3 November 2004, when the bank's solicitors sent a 'letter before action', that any suggestion surfaced that the bank believed that the union was continuing action to press any broader or non-pertaining claims additionally to these three matters. The suggestion, at least as to non-pertaining matters, is unconvincing. The union was well aware of the Electrolux decision. It was not, in reality, seeking an agreement that would be bound to fail registration by the Australian Industrial Relations Commission, even if the bank could be induced to agree to such. Although in a formal sense, the union was still pressing some non-pertaining matters, it was not wanting them included in a certifiable agreement --- see [9] above. 31 Further, the industrial action after 2 September 2004 was, as a factual matter, not in support of any such non-pertaining claim. As to non-pertaining issues, there was either no controversy about them between the parties or any such controversy lacked heat. The union's attitude was that once agreement could be reached as to the three matters it regarded as important, everything else was a matter of detail and would be readily enough negotiated. There was no thought at relevant times of industrial action in support of any claim other than those three. 32 Thus the industrial action of 5 November 2004 was, in my opinion, protected. 33 The prohibition in s 170NC(1) on coercive action does not apply to protected action. Thus s 170NC(1) does not apply to the industrial action of 5 November 2004 nor to the organising of it: s 170ML permits organisations of employees and their officers, employees and members to organise as well as engage in industrial action in support of a claim in respect of a certifiable agreement. 35 Section 170MI requires for the initiation of a bargaining period only that the initiator give written notices 'stating' the initiator's intention to try to make an agreement. The statement of the intention is enough. It is not an additional requirement that the statement should accurately characterise the legal effect of an agreement concerning what might be the initiator's actual claims. Indeed, there might, at the early stage of initiation of the bargaining period, be no actual claims, far less finally formulated ones in respect of which industrial action might be taken. 36 Electrolux holds that it was not the legislative intention of Parliament to accord protection to industrial action in support of claims as to any matter not pertaining to employer-employee relations, because the statutory protection only arises where a certifiable agreement is being sought and such an agreement must only contain provisions about matters which do so pertain. Electrolux does not say nor, in my opinion, imply anything as to the formalities preceding the industrial action in question and before it can be identified what claims the industrial action is supporting. 37 Neither s 170MI nor s 170MJ require that the proposed agreement accompany the initiating notice, let alone that the notice should include or be regarded as incorporating what might then be the proposed agreement. The bank's submission would nevertheless have it that if a non-pertaining clause is then in prospect, well before any actual industrial action or notice of it is given, there cannot be initiated a bargaining period. Such a conclusion is one to be avoided unless statutorily necessary. In other words, in law it was as if no notice at all had been given. In Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 ; (1998) 194 CLR 355 at [93] McHugh, Gummow, Kirby and Hayne JJ pointed out that the correct test for determining the issue of validity where some statutory provision has been infringed is to ask whether it was a purpose of the legislation that an act done in breach of that provision should be invalid. In determining the question of purpose, regard must be had to "the language of the relevant provision and the scope and object of the whole statute". And that notwithstanding the fact that the impermissible matter has not in fact formed the subject of any live claim. What is or is not a matter pertaining to the relationship between employer and employee is not always easy to ascertain, as witness the fact that three judges in the Full Court of the Federal Court and one judge in the High Court in Electrolux took a different view from that of the High Court majority. The requirement that the particulars accompanying the initiating notice specify the matters that the initiating party proposes should be dealt with does not demand a specification of terms and conditions but rather of topics. Nor does it require that the matters be exhaustive of all matters that could find their way into a final agreement. These provisions govern the beginning of a process of negotiation. It would be antithetical to their objects to require that the initiating party have defined an agreement capable of certification from the outset. I agree with Gyles J's analysis. 'Coerce' is a strange word; • in considering whether there was actually an intent to coerce, the likelihood that the action or threatened action could or would effect the alleged coercion is a relevant matter: Finance Sector Union at [38]. Likewise, it is unlikely that the legislature would have wished to stifle a wide range of ways of vigorous activity and of exerting power or influence, otherwise lawfully permitted and engaged in without general disapprobation, intended to force another party's compliance in commercial and related contexts. 41 In my opinion, the immediate purpose of the entire shareholder campaign was to bring a degree of embarrassment to the bank's management in the eyes of people influential in financial markets. The union was seeking to show that the bank's management, and its CEO in particular, had misread the mood of their employees when, it was sought to demonstrate, they were seriously dissatisfied with their pay and some aspects of their conditions of employment. It was sought to show that what the market might have considered promising initiatives by the CEO, called by him the 'Which New Bank' programme, was thereby in peril of coming to nothing. The union's officers could not reasonably have thought, and it has not been shown that they did think, that the 'shareholder campaign' would itself force the bank to agree to move on any of the three main issues outstanding between the parties. At best the union officers hoped and intended that the bank might agree to talk further to the union. More widespread industrial action targeted to have real bite against the bank's principal operations had, apparently, only forced what the union regarded as an inadequate response from the bank, if anything at all. There was likely so little real hope that the bank would, as it were, crumble and agree to put more palatable provisions into the intended agreement that it cannot be concluded that there was an intention on the part of the relevant union officers that the shareholder campaign would produce that result. 42 It is true that the notice of the intended industrial action when taken on 5 November 2004 literally threatened industrial action on a much wider scale than occurred. It was, on its face, capable of being understood by the bank as a threat of a broad campaign in support of the proposed agreement. However, even assuming that the entire context (including what the union would assume the bank to know --- a great deal --- would not deny such an understanding), the question remained one of the union's intention, that is the intention of its relevant officers. Their intention as to the broad terms of the notice was to prevent the bank knowing the employees who were intending to miss their work and attend the AGM, and to prevent the bank from pressuring them not to do so. The union did not thereby intend that the action would support the actual claims it wanted to go in the agreement. 43 A further aspect is that it must be shown that what is intended (in the present context) to be coerced is that the putative victim of the coercion should 'agree ... to ... making an agreement', that is, a certifiable agreement. While the union wanted such an agreement, it is by no means clear that, unlike the position in some other industrial disputes, the embodiment in such an agreement of the substance of what was wanted was a matter of high priority. The union, indeed, suggested in argument that s 170NC is not concerned with coercion as to particular issues at all but solely with whether any certifiable agreement is to be made or not, cf Finance Sector Union at [43]-[47]. I do not accept that. Such a view would, without adequate warrant, rob the section of the scope for much practical work. 44 However it does appear to be necessary from the terms of the section that the intended coercion should involve the inclusion in such an agreement of terms to deal with a desired outcome. There was no sufficient focus on the form by which an agreed outcome might be implemented to warrant the conclusion that, by the shareholder campaign, the union intended to coerce the relevant kind of agreement by the bank. For example, had the bank agreed to the substance of the union's demands on the three sticking points but decided to implement such agreement otherwise than in a certifiable agreement, the sensible inference is that union members would likely have given short shrift to any proposal to expend further union resources on purely formal aspects, even if the union would prefer that a certifiable agreement should hold sway. It is not, of course, always so in industrial disputes. Sometimes the mode of embodiment of a concession of a demand can be of great practical or even symbolic significance, such as to warrant the conclusion that it is the inclusion in such an instrument of a term that really is sought to be coerced, along with the concession sought. 45 That question is a different one from whether the industrial action might be said to be 'supporting' (cf s 170ML(2)(e)) an intended certifiable agreement. The union wanted such an agreement and, in a broad way, the shareholder campaign was supporting such. But if it were intended to force the bank to buckle, it was not at the altar of an agreement of that kind. Illegality or illegitimacy of the shareholder campaign? 47 It cannot have been tainted by any tort (such as inducing breaches of contract) involved in the industrial action concerning 150 of the bank' s 36 000 employees because, as I have indicated, such industrial action was 'protected' under the Act. 48 There is a further reason for such a conclusion. The industrial action is one thing. The 'other action', the shareholder campaign, is another. In the circumstances of this case, the shareholder campaign was not in aid of the very limited industrial action, so as possibly to pick up or acquire any illegitimacy attending any illegality of such industrial action. On the contrary, the industrial action was in aid of the shareholder campaign. The latter was entirely lawful activity, nothing more than a species of advocacy using lawful processes. Unlawful industrial action in support of lawful and legitimate 'other action' does not rob the latter of either its lawfulness or legitimacy, at least in a case such as the present. 49 It is, to a degree, a matter of judicial policy whether an interpretative restriction is placed on the width of the phrase 'other action', or whether emphasis is placed on the concepts of illegality or other illegitimacy inherent in the statutory penalisation of an 'intent to coerce'. I prefer the latter approach. The phrase 'other action' need not be limited if proper weight is given to the illegality/illegitimacy element. The latter more naturally occurs to the reader of the section, having regard to its legislative and social context and the focus of s 170NC is on proscribing conduct that amounts to coercion, not on limiting the kinds of action that may constitute it. 50 The concept of illegitimacy, as distinct from illegality, though respectably enough supported in authority and doctrine, is also difficult. In my view, where there is no illegality in actions intended to force a party to make etc a certifiable agreement, illegitimacy of such action sufficient to warrant the penalisation of intended coercion will not often be found. The action would need to have a quality that would strike the reasonable observer as seriously contrary to generally held notions of morality as to the kind of conduct in question. It must amount to unconscionable conduct: Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 at 46. Notoriously, community opinion is divided on many issues concerning industrial relations and attendant power struggles between participants, and others indirectly involved or affected, in industrial disputes. Some people may see some questionable conduct by unions, or by employers, as illegitimate. Others may not. The matter is not to rest on a judge's mere prejudices. I discern no illegitimacy of that kind, nor indeed of any other kind. There will be no costs order: s 347. I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick.

the commonwealth penalties in relation to industrial action by organisations the commonwealth certified agreements negotiations for certified agreements initiation of bargaining period notice requirements adequacy of particulars reference to matters not pertaining to requisite employment relationship the commonwealth certified agreements negotiations for certified agreements protected action notice of intention to take action immunity provisions industrial action that is not protected the commonwealth certified agreements negotiations for certified agreements prohibition of coercion in relation to agreements. industrial law industrial law industrial law industrial law

The Delegate did not take an active part in the proceedings. Instead, and properly in the circumstances, she adopted the stance of abiding the order of the court and not wishing to be heard on any issue save as to costs. Upon the dismissal of the judicial review proceedings, the Delegate, through her solicitors, informed the Court that she sought no order as to costs against the Applicants. 2 The Second Respondent, Queensland Water Infrastructure Pty Ltd (QWI), did seek an order that the Applicants pay its costs of and incidental to the judicial review application. The Applicants had correctly identified QWI as a necessary respondent party in the proceedings. QWI took an active role as contradictor. 3 In deference to the helpful and comprehensive submissions in respect of costs made on behalf of QWI by Ms Bowskill of Counsel and by Mr Balzamo of Counsel on behalf of the Applicants, I did not make orders in respect of costs on 1 October 2008, but rather reserved my decision until today. It was common ground as between QWI and the Applicants that, strictly, the judicial review application was a proceeding under the AD(JR) Act not under the Native Title Act . There was though considerable debate as to the relevance, if any, in relation to the awarding of costs, of s 85A of the Native Title Act . 5 The starting point then should be the identification of the source of the Court's power to award costs in a proceeding under the AD(JR) Act and general principles which attend the awarding of costs in the exercise of that power in civil proceedings. 6 It was common ground that the source of the Court's power to make an order in respect of costs was s 43 of the Federal Court of Australia Act 1976 (Cth) (Federal Court of Australia Act). 8 As to that discretion "it is a general rule that a wholly successful Defendant should receive his costs unless good reason is shown to the contrary": Milne v Attorney-General For the State of Tasmania [1956] HCA 48 ; (1956) 95 CLR 460 , at 477. The discretion to award costs is nonetheless broad and unfettered, but it must be exercised judicially, not whimsically or capriciously, and that usually means that the proper exercise of the discretion will be that costs should follow the event. 9 A comprehensive discussion of the principle in respect of the awarding of costs in this Court pursuant to the power conferred by s 43 of the Federal Court of Australia Act is to be found in the joint judgment of Black CJ and French J (as the Chief Justice then was), in Ruddock v Vadarlis (No2) (2001) 115 FCR 229 at 234, para 9 at et seq. • Where a litigant has succeeded only upon a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which he or she has failed. • A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other parties' costs of them. In this sense "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or law. See Hughes v Western Australian Cricket Association (Inc) & Ors (1986) ATPR 40-748 (at 48,136); approved by the Full Court in Queensland Wire Industries Pty Ltd v Broken Hill Co Ltd (1987) 17 FCR 211 (at 222). 10 QWI, unsurprisingly, adopted the position that costs should follow the event with the "event" being the dismissal of the application. 11 That usual, civil jurisdiction position normally governs the costs sequel to an unsuccessful judicial review application in federal jurisdiction. A like position prevails in respect of costs in judicial review proceedings in England and Wales: The White Book, 2006 Edn Vol 1 para 54.16.17. In neither jurisdiction is there a statutory intrusion into the general costs discretion such as is found in s 49 of the Judicial Review Act 1991 (Qld) . 12 What then of s 85A the Native Title Act ? 13 The Applicants drew my attention to an unreported decision of Marshall J in Murray v Registrar of the National Native Title Tribunal [2003] FCA 45 and to the appellate sequel to that decision, Murray v Registrar of the National Native Title Tribunal [2003] FCAFC 220 ; (2003) 132 FCR 402. Murray's case had a similar background to the present in the sense that it was an unsuccessful application pursuant to the AD(JR) Act for the Court to set aside a decision of a delegate of the Registrar of the National Native Title Tribunal to register an ILUA. I therefore consider it appropriate to take into account the legislative intention that matters which raise for consideration the correct interpretation of the Native Title Act may be considered in a different context from what would otherwise ordinarily apply. In my view, this case is one where it is appropriate "to follow the spirit of subs [85A(1)] of the Act"; see The Ngalakan People v Northern Territory of Australia [2003] FCA 23 at [16] , per O'Loughlin J. 10 Having regard to the public interest in determining the correct construction of the provisions of the Native Title Act which deal with ILUAs, I consider it to be in the interests of justice that no costs orders be made against Ms Murray, other than in one respect; in my opinion, Blairgowrie should have its costs in respect of its application to be joined as a party to the proceeding. That application was opposed by counsel for Ms Murray. In my view, that opposition was unreasonable, having regard to the fact that Blairgowrie had an obvious interest in the outcome of the proceeding and also having regard to the absence, at that stage, of a "contradictor" in the matter to press for a different outcome to that contended for by Ms Murray. On appeal, the Full Court (Spender, Branson and North JJ) observed (at [28]) of the passage just quoted, "In our respectful view, the approach adopted by his Honour, as reflected by the above paragraphs, was entirely appropriate in the circumstances of a first instance proceeding". Their Honours took a different view as to the way in which the costs discretion ought to be exercised on the appeal, awarding costs against the unsuccessful appellant. Section 85A of the Act does not directly apply. Each case must be considered on its own merits and in its particular circumstances. I accept that the Court should have regard to the 'spirit' of s 85A in a matter such as the present. It concerned the validity of a function undertaken by the Registrar under the Acct, and involved consideration of the particular sections directly how that function was to be conducted. I have therefore included some consideration in the exercise of my discretion. 16 In the circumstances of that case, Mansfield J considered that costs should nonetheless follow the event. 17 QWI drew my attention to another decision of the Full Court, The Lardil Peoples v State of Queensland [2001] FCA 414 ; (2001) 108 FCR 453. Materially in that case, Dowsett J, with whom in this regard French J agreed, had occasion to consider the meaning of the word "proceeding" for the purposes of the s 85A of the Native Title Act . The possible exception to this arises when a determination of native title is necessary as part of proceedings pursuant to the latter subsection. The Federal Court is then obliged to follow the procedure prescribed in the Act. See s 213(1. However that exception has no application for present purposes because the appellants have not sought to establish native title. Submissions were made but did not result in any change to that conclusion: see The Lardil Peoples v State of Queensland [2001] FCA 464. 19 It is not apparent that the Full Court's judgment in the Lardil Peoples' case was drawn to the attention of either Marshall J or the Full Court in Murray's case. That does not mean, in my opinion, that the two Full Court decisions are irreconcilable. A proceeding under the AD(JR) Act is not a "proceeding" for the purposes of s 85A of the Native Title Act . In Brownley v Western Australia (No 2) [1999] FCA 1431 ; (1999) 95 FCR 172 , Lee J had reached just such a conclusion (at para 21). More recently, in O'Mara v Minister for Lands (2008) 167 FCR 145 , Reeves J reached a like conclusion. That does not mean that it is impermissible, in relation to the exercise of the discretion conferred by s 43 of the Federal Court of Australia Act , to take into account the "spirit" of s 85A. That is what I propose to do and it seems to me that, sitting in the original jurisdiction, I am in any event bound by Murray's case so to do. Taking that consideration into account is influential but certainly not determinative in this particular case. That is not a subject in respect of which the Delegate made or was obliged to make an affirmative finding of fact. I accept that the Applicants genuinely believe that there may be such issues. It is important to recall that their status as persons aggrieved is that they are persons who "claim" to hold native title. There has been no determination that either they or they as part of a wider group hold native title in respect of some or all of the project area. There is evidence that Dr Fesl is an "Aboriginal party" for the area in terms of the Aboriginal Cultural Heritage Act 2003 (Qld) (ACHA). That status certainly gave her an interest in the interface between that Act and the Native Title Act in the circumstances of this case, quite apart from her status as an identified member of the "native title group". Item (c) reflects what I accept is a genuine belief on the part of the Applicants, but the conclusion of the Delegate, which I have held to be reasonably open on the evidence before her, was that the Applicants are members of a wider group with Gubbi Gubbi being but one alternative spelling. 22 I accept that the judicial review proceeding, although not under the Native Title Act , did involve a construction of important provisions of that Act relating to ILUAs. As in Doepel (No 2) , there is a public importance in some of the issues which arose in this case and those issues were novel. Further, it was, with respect, properly conceded by QWI that the judicial review application could not be described as frivolous or vexatious. There was an apparent disparity of resources available as between QWI and the Applicants. QWI (which is wholly owned by the State of Queensland) appeared by senior and junior counsel. The Applicants appeared by their solicitor, save for 1 October 2008 when junior counsel appeared to make submissions in respect of costs. My impression is that, within the limits of available resources, the Applicants prosecuted this application with due diligence. It is true, as QWI submitted, that the ground in respect of which the Applicants enjoyed a degree of forensic success, ground 2, was added relatively late in the course of proceedings and at a time when the bulk of QWI's preparatory costs must necessarily be regarded as having been incurred. Nonetheless, the addition of the ground did not extend the hearing of the application beyond one day. 23 The Applicants found themselves in a position whereby, because of what I have held to be an overly narrow conception on the part of the Delegate of what she could take into account in making a registration decision, they did not have the benefit of a considered decision, albeit from an administrative official, in respect of the worth of their submission that the "CHIMA" provisions found in Sch 3 to the Agreement had the effect, having regard to s 24CE(1) of the Native Title Act and the ACHA, of making that agreement unlawful either in whole or in part and hence incapable in that form of registration under s 24CJ of the Native Title Act . The issue was a novel one. It is also important to remember that a consequence of the registration of an ILUA is that future acts under such an agreement which affect native title are valid. A judicial review proceeding either under the AD(JR) Act or otherwise, challenging a registration decision on this basis was the only alternative left to the Applicants. The native title which they claimed to have would otherwise would subject to such effects as the dam building project may visit upon it. In making the observation, I do not ignore that none of the Applicants is a registered claimant much less that none has the benefit of a determination of native title in respect of any part of the project area. 24 The proceedings are nonetheless not wholly in the public interest. In a sense, the Applicants were seeking to preserve a private, albeit group, claim in respect of native title. Further, I do not ignore a remark by the Delegate in her reasons that one factor at least in the Applicants' opposition to the agreement was environmentally based, rather than based on a claim to native title alone. 25 Even in federal judicial review proceedings unconcerned with the Native Title Act , costs do not invariably follow the event. Duncan v Chief Executive Officer, Centrelink (No 2) [2008] FCA 667 (Finn J) offers a recent example. These are the reasonableness of the applicant in bringing the application and where the respondent, as in this case, is a public authority, the general importance both of the clarification of the law for such an authority and of securing proper compliance with it: see eg Perrett v Commissioner for Superannuation (1991) 29 FCR 581 at 594; see also Wilderness Society Inc v Hon Malcolm Turnbull, Minister for Environment and Water Resources [2008] FCAFC 19 at [7] . 26 In this case, the Applicants did reasonably bring the judicial review proceeding. QWI was not a party charged with the administration of the registration of ILUAs under the Native Title Act . Its interests though could hardly be described as private. It is an emanation of the State of Queensland specifically charged with the construction of a project considered necessary for the supplementation of the water supply in South East Queensland. It had a very particular public interest in the due administration and construction of the provisions governing the registration of an area agreement in the Native Title Act . In that regard, and in the face of a submission by QWI to the contrary, the Applicants have at least secured this Court's guidance as to matters which the Registrar and delegates can and should take into account when deciding a registration application. 27 The factors for and against the making of an order for costs as sought by QWI are certainly not all one way. On the balance, in my opinion, in the particular circumstances of this case, there should not be an award of costs in favour of QWI against the Applicants. In voicing that opinion, I have taken into account whether, if not appropriate to award QWI all its costs, some percentage order might alternatively be made. 28 The further order that I make in the proceedings is therefore that there be no order as to costs, either in respect of the costs of the First Respondent or in respect of the costs of the Second Respondent. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

application under administrative decisions (judicial review) act 1997 (cth) for review of decision by a delegate of the native title registrar to register an indigenous land use agreement application to review decision unsuccessful whether circumstances of the case warrant departure from ordinary rule as to costs where reasonableness of review application and public importance of issues raised warrant departure from ordinary rule as to costs relevance of s 85a of the native title act no order as to costs costs

The shares are presently registered in the name of the first defendant, Green Frog Nominees Pty Ltd. The plaintiff asserts that it has a beneficial interest in those shares in the nature of an equity of redemption. The second defendant, Opes Prime Stockbroking Pty Ltd (rec and mgr apptd) (admin apptd), also claims an interest in the shares. It contends (through its receivers) that it is the sole beneficial owner of them. The issue presently to be resolved is whether the plaintiff should be permitted to proceed with the action. There are two impediments. First, since the commencement of the action Green Frog was placed into liquidation. Second, at an earlier point in the proceeding the plaintiff gave an undertaking it would not proceed with the action without leave of court or consent of the administrators of OPS. 2 The background may be described briefly. The plaintiff, which is in the restaurant business, engaged Opes Prime Paradigm Pty Ltd, a company that is related to OPS, to act on its behalf in relation to the acquisition of the shares in RBNZ. The plaintiff's intention was to purchase the shares partly with its own funds and partly with borrowed money. It claims that OPS agreed to lend it the money it needed on the security of the shares. The plaintiff contends the agreement was in the nature of a margin loan. OPS, on the other hand, says that the principal terms of the agreement with the plaintiff are to be found in a Global Master Securities Lending Agreement (GMSLA). If the GMSLA contains the relevant terms of the bargain then the plaintiff would have no proprietary interest in the shares. 3 When it became apparent to the plaintiff that its claim to an interest in the shares was not accepted by OPS, it commenced this action. At the time Green Frog was not in liquidation, but OPS had been placed into administration. On the application of the plaintiff I made orders restraining Green Frog from disposing of the shares pending the trial of the action. Section 440D of the Corporations Act 2001 (Cth) provides for a stay of proceedings against the property of a company in administration in the absence of the administrator's consent or leave of the court. The cases say the section applies to property claimed by a company in administration even if its title is in dispute and even if the property is held by a third party: see Cope v Home [2002] NSWSC 777. Accordingly I granted the plaintiff leave to bring the action to obtain the injunction. However, so as to not interfere too much with the administration, as a condition of the grant of leave I required the plaintiff to undertake not to proceed any further with the action without leave. I had in mind the possibility that following an investigation of the plaintiff's claim the action might be compromised. 4 There has been no settlement and the plaintiff wishes to continue with its action to recover what it alleges is its property. It now faces two hurdles. Not only is there the undertaking, there is, as well, s 500 of the Corporations Act 2001 (Cth) which effects a stay of the action against Green Frog except with leave of the court. 5 OPS says that it will consent to proceedings being continued in respect of property over which it claims title. It gives this consent through the receivers who as the company's managers have control of the action. If the consent was required for purposes of overcoming the stay imposed by s 440D it could not be given by OPS or the receivers. Section 440D permits an administrator to consent to a proceeding being brought in relation to the property of a company in administration. But there is no reason why OPS through its receivers could not consent to the plaintiff being released from its undertaking. That does not fall under s 440D. This notwithstanding, if I were of the view that the administration would be prejudiced to the release, I would not accede to the plaintiff's application without notice to the administrators. That is not the case. 6 So far as Green Frog is concerned, the liquidator does not oppose leave being granted under s 500. The liquidator has indicated that he intends to take no part in the action and will leave it to OPS to oppose the plaintiff's claim. In any event, it is appropriate to grant the leave sought. Green Frog is a necessary party to the action as it is the legal owner of the shares. It is usual in that circumstance to grant leave: Rio Grande do Sul Steamship Co, Re (1887) LR 5 Ch D 282; Marshall v Glamorgan Iron & Coal Co (1868-69) LR 7 Eq 129. I will, however, impose a condition that no judgment for a money sum be executed without leave. There is no money claim against Green Frog but I wish to guard against the possibility that the plaintiff might execute any costs order it might recover against Green Frog. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.

company in liquidation action by plaintiff to recover property company a necessary party to action leave to proceed granted corporations

Ultimately the proposal to have such hearings was abandoned. The State argued that it was entitled to an order for the costs of that exercise under s 85A(2) of the Native Title Act 1993 (Cth), or alternatively under the general power of the Court to order costs under s 43 of the Federal Court of Australia Act 1976 (Cth). It argued that it had incurred those costs as a result of unreasonable acts or omissions of the Birri-Gubba People in connection with the conduct of the proceedings for the preservation of evidence. 2 At a number of directions hearings between September 2006 and up to October 2007 the Birri-Gubba People had indicated that there were persons whose evidence ought be preserved prior to any trial of these proceedings occurring. The matter then was, and now is still, a long way from being ready for trial. The Birri-Gubba People have not yet served any connection material. They now propose to amend their application to join it with another application and to reformulate the relevant claim groups. 3 Initially the State resisted the taking of any preservation evidence because no connection material had been served or otherwise identified by the Birri-Gubba People, despite a number of orders that they do so. However, ultimately, as will appear, the State co-operated in framing an interlocutory regime for the taking of preservation evidence on an urgent basis. In part, this was because when there was a directions hearing in Mackay on 18 May 2007, it was obvious that there were several elderly or frail people among the claim group who attended on that occasion and indicated that they wished to give evidence. I will now turn to the procedural history. The solicitor for the Birri-Gubba People said that some of the applicant group were then present in court including two elders, whom she identified. She said the two elders would be among those whose evidence would have to be preserved. Consequently, I made orders that each party was to file and serve, by 1 December 2006, a document which both would identify the names of the persons whose evidence may need to be preserved and indicate the urgency of any necessary hearing. I also ordered the Birri-Gubba People to provide the respondents with a history report and connection material researched by a named person by 1 December 2006. I directed that the parties file, a week beforehand, their proposed draft orders and submissions as to how the matter ought to be dealt with at the next directions hearing scheduled for 12 March 2007. 5 On 1 December 2006, the Central Queensland Land Council, which has acted on behalf of the Birri-Gubba People, filed a list identifying eight persons whose evidence may need to be preserved. That list did not indicate the urgency of any necessary hearing, in breach of the order which I had made. The affidavit and other submissions filed on behalf of the Birri-Gubba People prior to the 12 March 2007 hearing did not indicate anything about urgency either. Queensland filed submissions dealing with its position in accordance with my orders. This identified eleven persons whose evidence may need to be preserved and added three persons to those on the first list. It identified three people of comparatively advanced age, two of whom were well over 70, whose evidence should be preserved as a precaution. The second list also identified another person as suffering some memory loss whose evidence needed to be preserved from further loss, and, finally a person suffering from breathing problems. The second list noted that six persons were in 'reasonably good health' and that there was no urgent or special reason which would require an immediate hearing to preserve their evidence. The last statement, of course, suggested that those six persons ought not to have been included on either list, though it may be that this insight was only gained shortly before the filing of the second list without any lapse of due diligence. On 11 May 2007, the land council filed a work plan and draft orders which did not deal with the issue of preservation of evidence. 8 At the directions hearing in Mackay on 18 May 2007 the solicitor for the Birri-Gubba People said she had prepared a new list which she had circulated to those of her clients who were present in court that day. On that occasion a number of the applicant group addressed me. These included an elder who had been named in all lists. He told me that he was 87 years old and, very articulately, spoke about his connection to the land at Cape Upstart. Unfortunately, I was later informed, he had passed away without his evidence being preserved. I made orders on 18 May 2007 requiring the parties to circulate among themselves draft orders concerning an appropriate regime for the preservation of evidence and stood the matter over to 24 May 2007 for directions. 10 On 21 May 2007 the land council filed a third list identifying twenty-two persons whose evidence may need to be preserved. It added eleven persons to those identified on the list previously filed. This list did not include any detail regarding the age of four of the persons. It repeated the information concerning the five persons whose state of health or age was specifically referred to in the second list. It advised that seventeen persons were in reasonably good health and that there were no urgent or special reasons which would require an immediate hearing for the preservation of their evidence. Draft orders were circulated by both the applicant group and Queensland. 11 Senior counsel appeared for Queensland and counsel appeared for the Birri-Gubba People at the directions hearing on 24 May 2007. Despite this, the Birri-Gubba People did not consult the State prior to 10 July 2007. At about 2:00pm on 10 July, the land council faxed a draft preservation of evidence report to the State for comment. The State responded promptly within 2 hours on the same day. Subsequently on 10 July the land council filed a list in the same terms as the draft preservation of evidence report. That fourth list stated that '... the Applicant after considering the health and ages of the Applicant group, decided that the evidence of [four named persons] are required to be preserved'. Two of those four persons had not been identified previously on the earlier three lists. The ages and health status of those two persons was not identified. There was little information in the list about locations, venue, travel and accommodation which the orders of 24 May 2007 had specified so as to enable the orderly preparation of the evidence and hearings. 13 On 11 July 2007 I made orders in chambers re-listing the matter for directions on 24 July 2007 and directing that any party file any notice of motion by 19 July 2007 regarding the witnesses whose evidence should be taken and the location of any hearing. This was necessary because the Birri-Gubba People had failed to provide any meaningful information in conformity with the orders of 24 May 2007 set out above. That material was necessary to enable the parties and the Court to take steps to prepare for the hearing at which the evidence was to be preserved. 14 On 19 July 2007 the State filed a notice of motion, supporting affidavit and submissions in accordance with the orders I had made for that purpose. On 23 July 2007 the Birri-Gubba People filed an affidavit of Gertrude Stotz, and submissions regarding conclusions about the composition of a claim group which would involve, so it was said, the need to revise the earlier timetable envisaged by the Court. The person filing that --- it just went to Dr Stotz --- didn't look at the earlier list , and Dr Stotz had four names of quite elderly people. So that's why there is a lack of congruence between that and the earlier list ... the list, as you probably were aware, given to you on that day after 18 May was compiled by the applicants, and I do apologise for any confusion. Ultimately, on 24 July 2007, I vacated the dates set aside in November 2007 for the preservation of evidence hearing. I ordered the applicant to file and serve on or before 17 August 2007 a list of all persons known by them to be potential witnesses whose evidence ought to be preserved in relation to the present proceedings and related ones brought by the Gia People against the State of Queensland, together with the proposed further proceedings which had been foreshadowed in Dr Stotz' s 23 July affidavit. I required that each person be identified by name, age, state of health, present address and the reason for taking their evidence as soon as practicable. I ordered that each party file and serve submissions one week later regarding the conduct of any proceedings for the purpose of taking preservation evidence. The matter was stood over for further directions on 31 August 2007. 17 On 17 August 2007 the land council filed a fifth list. That identified four persons whose evidence was sought to be preserved. No age was given for one of those witnesses. Each witness was simply stated to be 'not in good health'. No reason was given for taking evidence from any of those witnesses as soon as practicable. On 24 August 2007 the State filed submissions regarding the fifth list and the conduct of any proceedings for preservation of evidence, but the Birri-Gubba People did not file any submissions. 18 On 31 August 2007 the solicitor for the Birri-Gubba People referred to there being 'a balance' between the elderly and a number of other people who were not quite well or whose health had deteriorated. She said that in particular, one elder's health had deteriorated markedly in the preceding couple of months. She said that the names had been given to her by the group. She identified one, whose health was deteriorating, as having very bad diabetes. On that day I made further orders that the Birri-Gubba People file and serve, by 17 October 2007, an affidavit deposing to the state of health of each person whose evidence was proposed to be preserved based on evidence from a medical practitioner (which could be on information and belief) and a progress report setting out, among other things, the proposed orders for the conduct of the proceedings. 19 On 17 October 2007 the land council filed an affidavit by its solicitor in which she deposed that she had not received instructions from the applicant group regarding the need to preserve the evidence of any person. No explanation was provided about why that change of course had taken place. Nonetheless, s 85A acknowledges that the Court has an overriding discretion as to costs and does not expressly impose a limit on the scope of the discretion. They said that there was no requirement that a threshold condition be met before the Court is empowered to make a costs order. Thus, the exercise of the discretion under s 85A(1) does not require a finding of a fact or the formation of an opinion that there has been unreasonable conduct or that special circumstances exist. 23 However, they held that s 85A(2) of the Act puts beyond doubt the extent of the Court's discretion in cases where a party has acted unreasonably. That provision does not control or limit the discretion available to the Court under s 85A(1). Their Honours held that the matters to be taken into account in making a costs order were left to the Court's discretion, which had to be exercised judicially. They said that the starting point was that each party would bear its own costs unless the Court determined that it was appropriate in the circumstances to make an order for costs. They emphasised that the starting point was not that costs ordinarily followed the event. Their Honours followed what Lee J had said at first instance in Ward v Western Australia [1999] FCA 580 ; (1999) 93 FCR 305 at 311-312 [31] - [37] . A similar approach has been taken in McKenzie v South Australia [2006] FCA 891 at [8] per Finn J and Reid v South Australia [2007] FCA 1479 at [53] - [54] per Finn J. In Reid [2007] FCA 1479 at [54] Finn J said that it is not proper to use the power to award costs to punish either a successful or unsuccessful party or to use it to operate as a deterrent to other would-be applicants. 24 It is inappropriate to read a provision, such as s 43(2) of the Federal Court of Australia Act , which confers jurisdiction on, or grants powers to, a court, by making conditions or imposing limitations which are not to be found in the words used: Oshlack v Richmond River Council [1998] HCA 11 ; (1998) 193 CLR 72 at 81 [21] per Gaudron and Gummow JJ; see also Owners of "Shin Kobe Maru" v Empire Shipping Co Inc [1994] HCA 5 ; (1994) 181 CLR 404 at 421. The section contains no positive indication of the considerations upon which the Court is to determine by whom or to what extent costs to be paid. The power must be exercised judicially, not arbitrarily or capriciously or so as to frustrate the legislative intent. In the absence of some positive indication of the considerations on which a grant or refusal of consent is to depend, the discretion is 'unconfined except in so far as the subject matter and the scope and purpose of the statutory enactments may enable the Court to pronounce given reasons to be definitely extraneous to any objects the legislature could have had in view' as Dixon J said in Water Conservation and Irrigation Commission (NSW) v Browning [1947] HCA 21 ; (1947) 74 CLR 492 at 505; see also The Queen v Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd [1979] HCA 62 ; (1979) 144 CLR 45 at 49 per Stephen, Mason, Murphy, Aicken and Wilson JJ; Oshlack 193 CLR at 81 [22]; Probiotic Limited v The University of Melbourne [2008] FCAFC 5 at [47] in my judgment, with which Finn J at [1] and Besanko J at [82] agreed. 25 There is no absolute rule that the sole purpose of a costs order made under a provision such as s 43 of the Federal Court of Australia Act is to compensate one party at the expense of another under the Judicature Act system: Oshlack 193 CLR at 89 [43]. The general power conferred by s 43 is not to be narrowly construed. However, where there has been some delinquency on the part of an unsuccessful party, the Court has power to order costs against that party, and sometimes on a scale greater than party/party costs: Oshlack 193 CLR at 89 [44]; Probiotic [2008] FCAFC 5 at [48] . 26 During the course of argument I raised the question whether other authorities may bear on the meaning of 'any unreasonable act or omission' in s 85A(2) of the Native Title Act . The parties filed submissions after I had reserved judgment. 27 The power to order costs under s 85A(2) is expressed in similar, but not identical terms, in the provisions of s 824(2) of the Workplace Relations Act 1996 (Cth) which were considered by Young J in Paras v Public Service Body Head of the Department of Infrastructure (No 3) [2006] FCA 745 ; (2006) 152 FCR 534. He gave that section a wide construction on its plain and natural meaning: Paras 152 FCR at 538 [16]. But Young J held that the applicant for the order had to satisfy the Court that, relevantly, the other party's conduct 'involved unreasonable acts or omissions that caused the [party applying for the order] to incur costs': Paras 152 FCR at 539 [19]. He pointed to the fact that it could be expected in ordinary litigation that some issues which were hotly contested at an interlocutory stage might fall away by the time of the trial as minds became focused on the real issues. And, he pointed out that since at least March 2007 all parties had been on notice that the description of the claim group would have to change in light of the latest anthropological research obtained by Birri-Gubba People as to the correct identity of the persons who could claim native title over the relevant lands and waters in the vicinity of Cape Upstart. Counsel for the Birri-Gubba People also argued that there were practical problems with the funding available to the land council. 29 The land council is presently the representative body under the Native Title Act . It was entitled to prioritise and make determinations as to the funding, staff, resources and complexity of this matter as one of a number for which it was responsible. Counsel argued that there was no basis on which the Court's discretion under s 85A of the Native Title Act was enlivened to warrant the making of a costs order against the Birri-Gubba People. He argued that the jurisdiction to award costs under s 85A should be only be exercised in circumstances where there were special or unusual features of the case, or where there had been conduct in the nature of an abuse of process, improper purpose, contempt or unreasonableness. In essence, that argument sought to confine the Court's power to award costs to circumstances which would warrant an order for costs on an indemnity basis in ordinary civil litigation (that is, in litigation where the Court's power to award costs does not have the constraint of s 85A(1) of the Act). That arose in the context that this application for the determination of native title was filed on 18 December 1998. Queensland pointed out that one might have expected that the elders and others in the society claiming the determination would have been identified and their ability to give evidence to support the claim ascertained, at least in general terms, by those representing the Birri-Gubba People long before 2006. On the other hand, the Birri-Gubba People argued in a general way, not limited to their own claims, that there had been substantial dispersal of the persons who had held native title at white settlement, including in the areas of Queensland, the subject of this claim. 31 Thus, persons who may still be able to speak of their connection to country, the customs and other factors connecting the claim group to the land the subject of the claim, may be scattered far and wide. Those persons may not necessarily be in ready or convenient locations to be interviewed by the legal representatives of the Birri-Gubba People. This was in part due to funding constraints upon the land council and the need for it to decide, among the various persons whose interests it was obliged to represent, which claims would be pursued and in what priority. 32 Because of the age and apparent state of health of a number of the members of the claim group, it was obvious that some steps ought to have been taken to preserve evidence, whether for the present application or the foreshadowed amendment to the claim group. Evidence taken from old, frail or sick members of the present claim group or the amended claim group would be available in any amended proceedings: see s 86 of the Native Title Act . 33 Nonetheless, it seems to me that until the decision not to put forward any person whose evidence was sought to be preserved, there had been no proper investigation by the Birri Gubba People of the nature of the evidence which could be given by any witnesses identified on the various lists filed with the Court and served on the State. As the sequential variations in the lists showed, some of the persons, on later investigation, were not in a fit condition to give evidence, and hence, should never have been included on a list in the first place. Others, for whatever unknown reason, were removed from the list. In adversarial proceedings, including matters such as this brought under s 61 of the Native Title Act , it is for the parties to determine which witnesses they call, if at all, and in what order. However, I am of opinion that it is likely that there are several persons who are likely to be able to give relevant evidence at the moment, but who may be too sick or no longer alive when these proceedings, as they are amended or evolve into other proceedings, are likely to go to trial. 34 On the evidence before me, the State has incurred substantial costs in complying with the orders and directions relating to the preservation of evidence and preparing for and attending the various directions hearings for that purpose. Here, a total of five lists emerged before the Birri Gubba People determined, without any explanation, that no witnesses were to be called whose evidence might be preserved. 35 I am of opinion that having regard to the history that I have set out above, the State has incurred substantial costs in seeking to comply with the regimes ordered for the purposes of progressing with hearings for the preservation of evidence. That expenditure has not had any value at all in the litigation because of the abandonment of that course by the Birri Gubba People. 36 The object of the Court is to decide the rights of the parties in and to resolve controversies. It is not to punish parties for mistakes they make in the conduct of their cases. Thus, the courts have developed principles as to when amendments may be made to pleadings to raise or change the form of the litigation, even at very late stages, provided that the other party can be compensated by an appropriate order for costs: Queensland v JL Holdings Pty Limited [1997] HCA 1 ; (1997) 189 CLR 146 at 152-155 per Dawson, Gaudron and McHugh JJ. 37 I consider that it was unreasonable of the Birri Gubba People to present a total of five lists, none of which, on final consideration, produced even one person whom they wished to call. The Birri Gubba People were represented by lawyers and the land council at all times. They were not in the position of litigants in person unable to make informed forensic judgments or to properly present their case to the Court. On the evidence before me, no proper, considered attention was given to the inclusion of any of the persons in the five lists that were provided by the Birri Gubba People for the purposes of identifying whose evidence ought be preserved. This is evident from the fact that the end result is that no such witness has been identified, although one person who was clearly an appropriate witness, has unfortunately passed away in the meantime. 38 On a number of occasions in open court the state of preparation of the land council was disclosed as being in disarray. I have no doubt that there was a sincere attempt to identify persons whose evidence might need to be taken on a number of occasions. But the attempt does not appear to have been undertaken by a lawyer familiar with litigation or with a view to determining whether or not any of those persons ought to be called to give evidence and what evidence he or she could give until, ultimately, the forensic decision was taken not to call any of them. 39 In those circumstances, I consider that it would be unjust to require the State to bear all of its legal costs for an exercise which, in effect, has been a waste of time and resources. While the internal attention of the Birri Gubba People to the preparation of their case is one thing, the bringing of the State to court on a number of occasions for, what ultimately turned out to be no good purpose, has caused the incurring of costs which were unnecessary. In the ordinary course wholly successful parties will incur substantial cost in native title proceedings which they will not recover because of the prima facie rule in s 85A(1) of the Native Title Act that each party bear their own costs. In my opinion the present application for costs warrants recognition that expense over and above that which would ordinarily be incurred in these proceedings has been visited upon the State by the unreasonable way in which the Birri Gubba People have conducted the issue of preservation of evidence. I am satisfied that it would be unjust to the State to require it to bear the whole of the costs associated with preparing for and appearing at the directions hearings involving the issue of preservation of evidence. 40 It is impossible to be precise in these matters or to fix a sum with any scientific accuracy. In my view a fair allocation of the costs burden would be that the Birri-Gubba People pay 50% of the costs of the State relating to its preparation for and appearance at directions hearings between 1 December 2006 and 17 October 2007 in relation to the issue of what evidence ought be preserved. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

native title costs application by state government for costs order against applicant in respect of steps taken for purposes of preparing for interlocutory hearings to preserve evidence of witnesses state incurred substantial costs in seeking to comply with court's orders course ultimately abandoned by applicants whether applicant group had caused state to incur costs by any 'unreasonable act or omission' whether costs could be ordered pursuant to s 85a(2), native title act 1993 (cth) or s 43 , federal court of australia act 1976 (cth) meaning of 'any unreasonable act or omission' in s 85a(2), native title act whether court's power under s 85a(2) confined to circumstances which would warrant order for costs on indemnity basis in ordinary civil litigation aboriginals

By September 2005, Toy Shed had failed to pay Playspace the various invoices it had submitted for the supply of this equipment. As a result, Playspace obtained a default judgment against Toy Shed in the County Court of Victoria in the total sum of $116,525.81, including costs and interest. On 19 October 2005, Toy Shed was placed in voluntary administration. Soon after that, its creditors voted to appoint a liquidator and have the company wound up. Mr Trevor Angus was appointed as the liquidator. Ms Christine May Osborn, the defendant in these proceedings, was the sole director of Toy Shed throughout this period. With the consent of the liquidator, Playspace has commenced these proceedings against Ms Osborn claiming that, when Toy Shed incurred the debt with Playspace, there were reasonable grounds for suspecting that Toy Shed was insolvent, or would become so as a consequence of incurring the debt. Section 588M(3) allows Playspace, as a creditor of Toy Shed, to recover from Ms Osborn an amount equal to the loss or damage it has sustained if, as the director of Toy Shed, Ms Osborn contravened s 588G(2) or (3) of the Act. As to the matters that are in dispute, it was agreed between counsel at the hearing of this matter that the following issues arise for determination: When did Toy Shed incur the debt to Playspace? When did Toy Shed first become insolvent? Were there reasonable grounds to suspect that Toy Shed was insolvent at the time the debt was incurred to Playspace, or it would become so by incurring the debt? Did Ms Osborn have reasonable grounds to expect, and did she expect, that Toy Shed was solvent at the time the debt was incurred and would remain so notwithstanding the incurring of the debt? I will turn to consider these issues in the order set out above. As will become apparent below, it will not be necessary for me to consider all these issues. WHEN WAS THE DEBT INCURRED? From about June 2003, Toy Shed decided to expand its business activities to include installing playgrounds in public parks and at other locations around Darwin. Playspace designed and manufactured for sale, playground and park equipment. Its principal place of business was at Dandenong in Victoria. On 30 September 2003, Toy Shed entered into a Distributor Agreement with Playspace. Under that Distributor Agreement, Toy Shed became an authorised distributor in the Northern Territory for Playspace's products. In or about May 2004, Toy Shed submitted a tender to the Darwin City Council for the installation of 15 playgrounds at various locations in Darwin. In or about June 2004, Toy Shed was awarded the contract for those works in the total sum of $210,000 plus GST. On 21 June 2004, Toy Shed placed an order with Playspace for the supply of the equipment for the 15 playgrounds. The order form set out the general location of each of the 15 playgrounds and stated a base price for each playground. The total amount of the order, after allowing for discounts and adding GST, was $92,136.59. The order form also specified the dispatch date for the equipment as 26 July 2004. The equipment for each of the playgrounds was delivered to Darwin from on or about 6 August 2004, until on or about 20 December 2004. After the various packages of equipment were delivered, Playspace issued invoices to Toy Shed. It issued 13 invoices in all. The first of them was dated 6 August 2004; and the last was dated 20 December 2004. The total amount shown on the invoices was $99,191.55. The difference between the amount shown on the order form and the total amount of the invoices, was due to various additional pieces of equipment that were required by Toy Shed during the course of the contract. For her part, Ms Osborn contended that the debt was incurred when she, on behalf of Toy Shed, placed the order for the equipment with Playspace on 21 June 2004. Her counsel contended that this followed from the fact that the order was for "manufacture to order" goods; and it also followed from the provisions of Clause 7.1.3 of the Distributor Agreement. is one that has been considered in a number of decisions in the recent past, some related to s 588G of the Act and others related to the various predecessors to that section, which were to similar form and effect. In Hawkins v Bank of China (1992) 26 NSWLR 562 , Gleeson CJ said (at 572) the word "incurs" was " apt to describe, in an appropriate case, the undertaking of an engagement to pay a sum of money at a future time ". Kirby P said (at 576): "... The act of 'incurring' happens when the corporation so acts as to expose itself contractually to an obligation to make a future payment of a sum of money as a debt ". See also Woodgate v Davis (2002) 55 NSWLR 222 at [13] --- [15] per Barrett J. In Standard Chartered Bank of Australia Ltd v Antico [1995] NSWSC 31 ; (1995) 38 NSWLR 290 (" Standard Chartered Bank "), Hodgson J was required to consider this question in relation to a $30 million loan facility the terms of which had been varied, supplemented, or displaced on three occasions during a six to eight months period, without any further funds being advanced. His Honour identified (at 314) the appropriate approach as being: " ... to construe the language of the section, according to the natural meaning of its words, but with due appreciation of the practical implications ". He then stated his opinion (also at 314) as to what the section required, in the following terms: " ... a company incurs a debt when, by its choice, it does or omits something which, as a matter of substance and commercial reality, renders it liable for a debt for which it otherwise would not have been liable ". While Hodgson J did not, in that decision, consider this question in relation to the specific situation that arises in this case, ie the sale of goods, he did, in a subsequent decision, about a week later, of Leigh-Mardon Pty Ltd v Wawn (1995) 17 ACSR 741 (" Leigh-Mardon "). In that case, his Honour was required to consider when a debt was incurred in connection with the sale of some items of packaging. The packaging in question was ordered on 15 September 1989, but delivered at various dates in November and December 1989. The defendant, Wawn, contended that the debts were incurred when the various consignments of the packaging were delivered, relying upon three decision: Hussein v Good (1990) 1 ACSR 710 ; Rema Industries and Services Pty Ltd v Coad [1992] FCA 114 ; (1992) 107 ALR 374 (" Rema Industries ") at 381; and Taylor v Powell [1993] FCA 85 ; (1993) 113 ALR 374 at 379. In rejecting that contention, Hodgson J said (at 749): " ... there is no hard and fast rule that a company incurs the debt for goods sold and delivered at the time when the goods are delivered to the company, and not at any earlier time . " After reiterating what he had said in Standard Chartered Bank (above) about the question being " a matter of substance and commercial reality ", his Honour turned to consider the specific situation in relation to the sale of goods. In relation to sale of goods, it seems to me that, in some cases, it will be the order which in substance and commercial reality renders the company liable for the price of the goods, even if that price is not actually payable until delivery; while in other cases, it will be the acceptance of delivery which, as a matter of substance and commercial reality, so renders the company liable. And intermediate positions are possible. It will often be necessary to identify the time when the conduct and choice of the company caused the debt to be incurred, or brought about the circumstances in which the debt was incurred, because it is at that time that it must be shown that the director failed to prevent the company from incurring the debt in the relevant sense, and it is also at that time that it must be shown that the director had or ought to have had the requisite awareness that there were reasonable grounds for suspecting insolvency . I think that it will often be the case, for the purposes of the section, that under a contract for the sale of goods where delivery times are left for future orders or instructions that, as a matter of substance and commercial reality, a debt will be incurred on each occasion when a delivery is ordered ... ". In this respect, it is also appropriate to mention the observation of Lockhart J in Rema Industries (at 381) that: " The time when a debt is 'incurred' will vary from case to case, depending principally upon the terms of the agreement between the parties, express or implied ... ". Surprisingly, that Agreement does not expressly state when it was that Toy Shed became obligated to pay for any goods it ordered from Playspace. However, Ms Osborn's counsel submitted that the obligation can be inferred from the terms of Clause 7.1.3. That clause provides that: " The Distributor shall not be relieved of any obligation to accept or pay for goods by reason of any delay in delivery or supply or dispatch ". But, as I have already observed above, the "obligation" referred to in this clause is not described anywhere in the Agreement. Without the obligation being so described, that clause does not, in my view, provide any support for the contention that it can be inferred that Toy Shed was under an obligation to pay for the goods once they were ordered. The Distributor Agreement does state that: " All orders will be subject to the provisions of this Agreement and the general terms and conditions of sale of the Company " (Clause 7.2) and that payment is due: " 60 days from the date of invoice rendered in respect of the supply of the Products unless otherwise stated in writing by the Company " (Clause 8.1). However, the general terms and conditions of sale of Playspace were not tendered in evidence before me and, as a consequence, I do not know whether they placed any obligation on Toy Shed to pay for the goods from the time they were ordered or from some other time. Similarly, there was no evidence before me to suggest that Playspace had stated in writing a different period of payment in relation to Toy Shed's order as provided in Clause 8.1. In any event, the timing of the payment is not the critical issue. It is: when did the obligation for the debt arise? It follows that the Distributor Agreement does not assist in answering this question. In addition to Clause 7.1.3 of the Distributor Agreement, Ms Osborn's counsel relied upon the observations made by Hodgson J in Leigh-Mardon to submit that Toy Shed incurred the debt when the goods were ordered because they were goods that were "specially manufactured". Then it was my responsibility to organise the installation in the ground and putting the bits together. She said: " I designed the playgrounds to the Darwin City Council requirements. For instance, they would give me an instruction ... it had to be for three to five year olds, it needed to include balance activities or a swing ... they gave me specific instructions in the tender as to the age group . " This is borne out by various aspects of the order form submitted by Toy Shed on 21 June 2004. In it, the goods are described as " non-standard products " which have to be " pack[ed] separately ". The installation addresses are stated to be " various around Darwin (15) ". Moreover, with two exceptions --- Kapalga and Strele, which both had a base price of $8,000 --- the base prices stated for each playground are different and range from $7,250 to $13,937. This suggests that almost twice as much product (at least by value) was installed at some playgrounds than others. All this points to the conclusion that, while the goods were not specially manufactured to fill Toy Shed's order, they were specially collected together and packed into 15 separate packages, where the contents of each package were determined by criteria that were specific and unique to each playground. That being so, once these packages were dispatched from Melbourne to Toy Shed in Darwin, it is unlikely that they would be of any real commercial value to anyone else, should Toy Shed fail to take delivery of them. It follows from this that the substance and commercial reality of the situation meant that, once these packages of playground equipment were dispatched to Toy Shed, it became obligated to pay for them. Conversely, I do not consider that occurred, as a matter of substance and commercial reality, at delivery, as Playspace contends, because the delivery did not alter the inherent commercial value of the equipment. That was set once the playground equipment was assembled into 15 separate unique packages and dispatched. Thus, while I do not consider Toy Shed was obligated to pay for the goods as at the date of its order on 21 June 2004, I consider it became so obligated on 26 July 2004 once the dispatch date shown on the order form passed without Toy Shed cancelling the order. In other words, in the terms of the authorities set out above, the omission to cancel the order before this dispatch date was the critical choice Toy Shed made giving rise to the obligation for the debt. WAS TOY SHED INSOLVENT AT THAT TIME? It is common ground that Toy Shed was insolvent in 2005, so the question is: was that insolvency present as early as 26 July 2004? It based this contention on the expert evidence of Mr Angus, Toy Shed's liquidator. In his report, Mr Angus set out a monthly insolvency calculation (Schedule 5) that showed that Toy Shed had a net deficiency of assets, or available funds, compared to liabilities, at the end of each month between April 2004 and December 2004. It followed, so Playspace contended, that Toy Shed was insolvent at all relevant times, including when it ordered the goods, when it took delivery of them and when it received the invoices for them. On the other hand, Ms Osborn contended that Toy Shed was not insolvent until early 2005, and possibly until as late as April 2005. Ms Osborn relied upon the expert evidence of Ms Kylie Wright, a chartered accountant. Ms Osborn's counsel also criticised Mr Angus' report, claiming that it contained at least five "fundamental flaws" as follows: The answer to this question therefore requires a consideration of the evidence of the two expert witnesses. Before doing that, I should set out a summary of the relevant legal principles. It also provides that a person who is not solvent, is insolvent. As Mandie J observed in Plymin (at [370]), this is the " cash flow test " of insolvency. His Honour described that test in the following terms: " The cash flow test provides that a company is insolvent when it is unable to pay its debts as they fall due. It is of no consequence, under this test, that assets exceed liabilities. The important point is: can the company pay its way in carrying on its business? The court, in examining whether a company is suffering cash flow insolvency, will consider whether the company is actually paying its debtors" . The question of Toy Shed's solvency, or insolvency, has to be determined objectively upon the whole of the admissible evidence: see Lewis (as liq of Doran Constructions Pty Ltd (in liq) v Doran [2005] NSWCA 243 ; (2005) 54 ACSR 410 (" Lewis ") at [103] and Re Damilock Pty Ltd (In Liq); Lewis and Carter as Liquidators of Damilock Pty Ltd (In Liq) v VI SA Australia Pty Ltd [2008] FCA 1801 ; (2009) 252 ALR 533 (" Damilock "); [2008] FCA 1801 at [15] . What has to be established is that the company has an endemic inability to pay its debts as and when they fall due: see Sandell v Porter [1966] HCA 28 ; (1966) 115 CLR 666 (" Sandell "); Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation [2001] NSWSC 621 ; (2001) 53 NSWLR 213 at [54] and Damilock at [18]. This determination is not to be limited to a simple analysis of Toy Shed's current assets and liabilities, or a consideration of its liquidity (or lack thereof) at a particular point in time. Instead, it must involve a consideration of Toy Shed's financial position in its entirety and include matters such as expected profits and other sources of income and funding that Toy Shed may be able to avail itself of: see Sandell at 670; Quick v Stoland Pty Ltd (1998) 29 ACSR 130 at 139; Emanuel Management Pty Ltd (in liq) v Foster's Brewing Group Ltd [2003] QSC 205 ; (2003) 178 FLR 1 at [73] and following; and the comprehensive review of the authorities in Plymin at [369] --- [380] per Mandie J. In Plymin , Mandie J adopted a checklist of indicators of insolvency which were put forward by one of the expert witnesses in that case. See also Damilock at [16]. Continuing losses. 2. Liquidity ratios below 1. 3. Overdue Commonwealth and State taxes. No access to alternative finance. 6. Inability to raise further equity capital. Creditors unpaid outside trading terms. 9. Issuing of post-dated cheques. 10. Dishonoured cheques. 11. Special arrangements with selected creditors. Payments to creditors of rounded sums which are not reconcilable to specific invoices. Inability to produce timely and accurate financial information to display the company's trading performance and financial position, and make reliable forecasts. The absence of one or more of those factors does not, of itself, establish solvency. This is not to be done with the benefit of hindsight: see Lewis at [103]. Furthermore, because Playspace has to establish that Ms Osborn contravened s 588G of the Act, while the civil standard of proof applies, Playspace is required to meet the Briginshaw ( Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336)) approach to the proof of its case: see Plymin at [367]. It is clear that, on the authorities I have referred to above, this is not the relevant consideration. Instead, what is required is an assessment of Toy Shed's financial position as a whole, taking into account the commercial realities of the situation. Even if the apposite consideration were a comparison of assets and liabilities, or " liquid funds and current debt " as he also described the process earlier in his evidence, I have serious doubts about the reliability of the calculations made by Mr Angus. I say this for three reasons. First, Mr Angus accepted in cross-examination that he made an assumption that the Playspace invoices were payable by Toy Shed within 30 days of the invoices being rendered. However, it is clear from Clause 8.1 of the Distributor Agreement that Toy Shed was allowed 60 days in which to pay those invoices, unless some contrary indication in writing was given by Playspace and, as I have noted above, there is no evidence of such before me. Secondly, Mr Angus could not explain why the trade debtors' figure as at 31 August 2004 was only $113,000 when he said earlier in his evidence that Toy Shed's payment claim dated 20 August 2004 to the Darwin City Council for $129,349 would have been included in that figure. Finally, Mr Angus said in cross-examination that he did not take into account any future income that Toy Shed might derive from the Darwin City Council and others for work in progress. I took this to include the balance of the contract price over and above the claim already submitted for the sum of $129,349. Since the contract sum was for $231,000 inclusive of GST, there was approximately $100,000 of future income to be received from the Darwin City Council upon the completion of this contract alone. Moreover, it is apparent from Mr Angus' report and his evidence that he did not attempt to make the required assessment of Toy Shed's financial position as a whole. With the possible exception of Toy Shed's liquidity ratio, Mr Angus did not turn his mind to any of the 14 matters set out on the Plymin checklist of insolvency indicators. If he had, Ms Wright's report shows that the only indicator that suggested Toy Shed may have been insolvent was that it had an outstanding taxation liability to the Australian Taxation Office of $23,611 as at 26 February 2004. However, whilst Toy Shed did not reduce its liability to nil until May 2005, Ms Wright noted that it did make regular payments in reduction of this liability throughout the intervening period. On the other hand, the other indicators for which Ms Wright was able to locate relevant documentation, allowed her to express the opinion Toy Shed was solvent, at least until early 2005. In summary, Ms Wright's comments about those indicators were (I have used Ms Wright's descriptors rather than those in Plymin ): It should also be noted that Ms Wright was unable to obtain the relevant documentation to allow her to reach any conclusion about the following indicators: Finally, there are two other indicators in the Plymin checklist that merit separate treatment. They are: (5) No access to alternative finance; and (6) inability to raise further equity capital. Mr Angus was specifically asked about these matters in cross-examination. He said that he only enquired into Ms Osborn's ability to finance further loans to Toy Shed " in a general sense " and concluded that there was " no practical opportunity ". However, the evidence contained in Ms Wright's report indicates that this conclusion is doubtful. Ms Wright noted that the financial statements of Toy Shed demonstrated that Ms Osborn had been providing loans to Toy Shed over a period of years and had also arranged to pay various company expenses by way of her personal credit card. Ms Wright also expressed the view that Toy Shed appeared to have access to funding from an associate of Ms Osborn --- a Mr Milhinos. It is also of some significance, in my view, that earlier in her report, Ms Wright notes that the freehold property from which Toy Shed operated, was owned personally by Ms Osborn and had been used by her in the past to secure funds to support Toy Shed. Mr Angus' failure to consider these indicators of insolvency (or solvency) and any of the other indicators mentioned above, leads me to conclude that his opinion that Toy Shed was insolvent from at least April 2004 should not be accepted. This is so because it is not based upon a proper consideration of Toy Shed's financial position as a whole, including the factors mentioned above. Moreover, in my view, his evidence, which is the only evidence put forward by Playspace to prove that Toy Shed was insolvent at the relevant time, does not meet the level of satisfaction required under the Briginshaw approach. In summary, for the reasons set out above, I have concluded that: I therefore order that the plaintiff's application filed on 28 May 2009 be dismissed. I will hear the parties on the question of costs. I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves.

insolvency insolvent trading consideration of what is meant by incurring a debt for the purposes of s 588g of the corporations act 2001 (cth) to be determined according to commercial reality whether goods are manufactured to order or whether goods are readily resalable if delivery is refused or order cancelled insolvency insolvent trading consideration of what is meant by insolvency " cash flow test " consideration of the financial position of the company in its entirety checklist of indicators of insolvency insolvency insolvent trading onus of proof of insolvency contravention of s 588g requirement to meet briginshaw approach corporations law corporations law corporations law

3 The applicant in these three linked proceedings complains that the identical second appeal statements filed by the Commissioner in each matter on 4 July 2007 do not meet the standard required by the definition in O 52B r 5(3). By notices of motion filed on 28 August 2007, the applicant seeks orders that these statements be removed from the Court files; that the respondent file and serve amended appeal statements that comply with the Federal Court Rules ; that within 14 days of receiving the amended appeal statements, the applicant serve any request for further and better particulars; and that the respondent provide such particulars within 21 days of receiving the applicant's request. In the alternative the applicant seeks an order that the appeal statements be struck out or that the respondent be ordered to amend the statements so that they comply with the Federal Court Rules . The applicant taxpayer appeals from the Commissioner's disallowance of objections made by the applicant in respect of amended income tax assessments issued by the Commissioner for the years of income ending on 31 March of 1993, 1994 and 1996. Order 52B of the Federal Court Rules applies to appeals brought under Part IVC. Rule 5(2)(b)(i) requires the Commissioner to serve on the applicant for relief under Part IVC a copy of the appeal statement or the appeal affidavit filed in accordance with r 5(2)(a)(iv). 5 For reasons that follow I am of the opinion that there is no basis for an order that the appeal statements be removed from the file nor for striking them out. In my view such deficiencies as may be found in the appeal statements may be remedied by the provision of further particulars pursuant to a proper request by the applicant. The deductions claimed are for expenditure incurred in each of the relevant years of income in carrying on research and development activities ('R&D') in respect of the Jindalee Operational Radar Network Project ('Jindalee Project'). 7 Section 73B(9) provides that a deduction is not allowable if the R&D is carried out "on behalf of any other person". Section 73CA(2) and (3) provide that certain deductions otherwise allowable under s 73B will not be allowable if the Commissioner is satisfied that the expenditure on R&D was not at the risk of the taxpayer either in whole or in part. 8 The design and construction of the Jindalee Project was the subject of a number of agreements. According to the respondent's appeal statements, the Commonwealth of Australia entered into a contract (the 'Prime Contract') with the corporation now known as Telstra Limited, for the "design, development and supply of a fully tested and operational over the horizon radar network". Some of the work under the Prime Contract was subcontracted by Telstra to Marconi Overseas Ltd which in turn subcontracted some of that work to the applicant. Telstra also directly subcontracted the applicant to do some of the work under the Prime Contract. In considering what the Commissioner must disclose in the appeal statements it is necessary to take account of the fact that the taxpayer has the burden of proof under s 14ZZO. This factor was also an issue in George v Federal Commissioner of Taxation [1952] HCA 21 ; (1952) 86 CLR 183 which was the earliest case involving the Commissioner's obligation to provide particulars with respect to assessments, albeit that the question arose in the context of earlier legislation. 11 In George, the taxpayer claimed that his taxable income was less than the amount assessed by the Commissioner. He sought orders that the Commissioner furnish particulars of the source from which it was alleged that he had derived that income. Kitto J declined to make the orders sought on the basis that it was the taxpayer and not the Commissioner who had the burden of proving that the assessment was excessive. His case must be that he did not derive from any source taxable income to the amount of the assessment. The need supposed of showing that he formed such a judgment could be no ground for requiring particulars of the sources of the taxable income ascribed by the assessment to the appellant. In Bailey v The Commissioner of Taxation of the Commonwealth of Australia [1977] HCA 11 ; (1977) 136 CLR 214, the High Court discussed the Commissioner's obligation to provide particulars in the context of s 260 of the ITAA. This inevitably, in my opinion, requires the Commissioner to inform the taxpayer of the operation of s 260 which has warranted the adoption of his view of the taxable facts. This involves the identification and disclosure of the contract, agreement or arrangement which has been treated as avoided by s 260 .... [T]he Commissioner must, in my opinion, be specific in his identification of the contract, agreement or arrangement ... which justifies the amount of the assessment. Rather their view was to the contrary. These facts are not within the knowledge of the taxpayer; they are within the knowledge of the Commissioner. Jacobs J acknowledged in Bailey that particulars are essentially factual rather than legal, however his Honour recognised that for a request for particulars to be appropriately directed to the matter in dispute the issues must be sufficiently defined. In the present case it is therefore necessary for the taxpayer and the Court to know the basis of the assessments. In that case the Commissioner's statement listed the issues and contentions in a table against which the Commissioner indicated his position by a simple "yes" or "no". Sundberg J held that the deficiencies in the statement could not be cured by further particulars. His Honour noted, at 331, that the ultimate decision in the appeal before him would "turn on the facts established by the applicant, and not on those perceived and stated by the [Commissioner]" and rejected the claim that the applicant was seeking to invert the onus of proof. 17 In outlining his conclusions on the application before him Sundberg J referred to Gummow J's comments in Jackson v Federal Commissioner of Taxation (1989) 20 ATR 611 at 618 that the taxpayer was entitled to know both the Commission's view and the facts on which that view was based. A statement that leaves the taxpayer uncertain as to how the case is put against it is embarrassing and oppressive. A statement that does not disclose the facts on which the respondent has based his assessment and the manner in which he has arrived at it, suffers from these twin vices. The difference between pleadings and a statement of facts, issues and contentions or an appeal statement was recognised by Lindgren J in WR Carpenter Holdings Pty Ltd v Commissioner of Taxation (2006) 234 ALR 451 where his Honour stated unequivocally, at 459, that a statement of facts, issues and contentions is not a pleading even within the extended definition of "pleading" in O 1 r 4 of the Federal Court Rules . 19 Ultimately, however, what is clear from all of the authorities is that the issue is one of substance; the taxpayer, and the court, must be given a clear and succinct statement of the Commissioner's position without imposing any element of a burden of proof on the Commissioner. In substituting such a statement for pleadings the legislature has provided for a very practical approach to the unusual situation where the taxpayer bears the burden of proving that the Commissioner's assessment is excessive. In my view, such a statement should not be overly scrutinised in an attempt to find errors or inadequacies. The question is: does the statement give the taxpayer a practical understanding of the Commissioner's position? While expressly not conceding that those deficiencies could be cured by further particulars, a request for further and better particulars was enclosed with the letter. In its response dated 17 August 2007, the respondent's solicitor declined to amend the statements but said that its client was prepared to give further particulars. Despite this, no further particulars had been given by the time of the hearing of the applicant's motions. This involves consideration of the concept of being "at risk" in respect of R&D expenditure. This is a question of fact. Ruling 2442 states that the subsection prevents "double deductions" and "restricts entitlement to section 73B deductions to the company that bears the financial risk ... and effectively owns the project results". It gives as an example a company asked by a client to develop a project for the client's business. 25 According to the Ruling if the development was done at the risk of the company so that the client was required to pay only for the final product, the company would qualify under s 73B, "since it would in fact be performing the R&D activities on its own behalf". In contrast where the company carrying out the development is reimbursed by another for its expenditure then it would not be entitled to s 73B deductions unless it retained ownership of the results. Without that, it would be carrying on the R&D on behalf of another. 26 Ruling 2451, under the heading "General Principles" says that for research and development activities to be carried out by or on behalf of a company "there must be a close and direct link between the company and the work undertaken". It says that the company must "effectively own" the result and "have proper control over the conduct of those activities". Arrangements that "in substance" do not allow the company ownership and control "could compel the conclusion" that the development was not for or on behalf of that company. The Ruling also says that if a company incurs expenditure in carrying on research and development on behalf of another, it does not necessarily follow that the other owns the results, adding that, "The concept is broader and extends to a more indirect effective benefit to the other person". There is further discussion of the implications of formal ownership. 27 As can be seen neither Ruling gives a succinct account of the application of s 79B(9). Reference to these Rulings cannot, by itself, meet the requirement of a succinct outline of the respondent's contentions however the appeal statements also contain the summary quoted above at [23]. The respondent asserts that this summary "propounds all the necessary ingredients of the test. The test is a simple one, which is clearly multifactorial. It neither requires, nor permits, greater elaboration". The applicant conceded that the summary would be sufficient taken by itself however it submitted that the reference to the test being "detailed" in the Income Tax Rulings deprives the summary of the succinctness it might otherwise have. I do not accept this submission. In my opinion it is apparent, on a sensible reading of paragraph 54 of the appeal statements, a reading that takes account of the practical purpose of an appeal statement, that the succinct statement of the test is to be found in the summary. The Rulings, as the respondent submits, "provide elaboration of potential application of the test". 29 According to the appeal statements, the facts on which the respondent has based his view that the applicant's R&D was carried out on behalf of another, are to be found in paragraphs 15, 16, 19 and 20 to 39 of the statements. The statements allege that these facts show that the applicant's R&D was carried out "for the benefit of and in the ultimate interests" of Telstra. Specifically, it is alleged that (a) the facts in paragraph 16 show that Telstra had "ultimate control" of the R&D carried out by Marconi and the applicant; (b) the facts in paragraphs 26 to 29 show that Telstra had "effective ownership of the results" of the applicant's R&D; and (c) the facts in paragraphs 15, 19, and 20 to 25 show that the applicant did not bear any financial risk. 30 Paragraph 16 of each of the statements contends that the terms of three of the contracts, namely those between the Commonwealth and Telstra (the "Prime Contract"), between Telstra and Marconi, and between Marconi and the applicant, show that Telstra was responsible for the Jindalee Project and had ultimate control in relation to the applicant's R&D. The particulars given in respect of paragraph 16 refer to specific clauses of the latter two contracts but not to any provision of the Prime Contract. The applicant points out that despite its location in the part of the respondent's statements dealing with facts, paragraph 16 contains some of the respondent's contentions in relation to the issue of control. It submits that each of the statements "neither identifies all the facts on which the Respondent makes his contentions (for example, no provisions of the Prime Contract are identified) nor outlines how the Respondent says those facts have the stated effect". The failure to identify relevant terms of the Prime Contact could be remedied by provision of further particulars as can any deficiency in identifying the facts on which the respondent has based his contentions. The construction of the terms of the various contracts is a matter for another day. 31 So long as the relevant terms and facts have been identified it is not incumbent on the Commissioner to make submissions on the construction of the contracts at this stage. It is necessary for the Commissioner to indicate what has led him to the conclusion that the relevant contracts provide for the R&D to be carried out on behalf of someone other than the taxpayer, but it is not necessary for him to identify the persons on whose behalf the R&D was allegedly carried out. 32 Paragraphs 26 to 39 deal with the ownership and licensing of the intellectual property produced by the R&D. The appeal statements detail the provisions of the various contracts that they allege deal with these issues and which ultimately give Telstra control of the intellectual property. The respondent's contentions on this question may be right or wrong but that is not the issue here. The appeal statements provide a coherent account of the Commissioner's contentions on this issue and the facts on which they are based. Again, it may be that further particulars would provide greater illumination. 33 According to the appeal statements, the factors relevant to the Commissioner's contentions on the financial risk of the R&D are identified in paragraphs 15, 19, and 20 to 25. That issue is considered below in the context of the discussion of s 73CA. Accordingly ss 73CA(3) operates to disallow the concessional component of the deductions claimed by the applicant. As described in the appeal statements, by these contracts part or all of the obligations accepted by Telstra under the Prime Contract are subcontracted either directly to the applicant or to Marconi and thence from Marconi to the applicant. The respondent alleges in paragraphs 15 and 19 respectively, that the applicant was remunerated by Marconi for its work under the contract with Marconi and by Telstra for its work under the contract with Telstra. Paragraph 21 describes the flow of funds by way of progress payments from the Commonwealth to Telstra and thence to the applicant either directly or through Marconi. The respondent submits that the applicant could discharge the onus of proof in relation to this issue by "adducing evidence or advancing submissions to show that, by proper alternative construction of the agreements, the Applicant was at risk in relation to the expenditure". It may be, as the respondent concedes, that further particulars would assist the applicant in challenging the Commissioner's conclusion however, in my view, there is no basis here for declaring that the respondent has failed to discharge his obligation to provide appeal statements within the meaning of the Federal Court Rules . It seems to me that had the Commissioner responded appropriately to the applicant's request for further particulars much, if not all, of the present dispute could have been avoided. The efficient preparation of an appeal from the Commissioner's rejection of the taxpayer's objection to an amended assessment of income tax requires that the parties co-operate on procedural matters. The requirement of an appeal statement is directed to this end as is the obligation to provide particulars in response to a proper request for particulars, that is particulars of fact not of argument. An appropriate response would have been for the Commissioner either to provide the particulars requested or, if he regarded the request as seeking information that does not fall within a proper request for particulars, to take issue with the details of the request. For the reasons I have given the applicant's motions must be dismissed however in all the circumstances it seems to me that the costs of the motions should be costs in the cause. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone.

notice of motion adequacy of commissioner's appeal statement any deficiency in appeal statement remedied by provision of further particulars taxation

Between December 1997 and April 2001, Athena was employed in pleasure and sightseeing voyages for the public, including tourists and the corporate market. 2 In addition, three of the proceedings are concerned with the question of whether certain expenses incurred by Mr Ell in connection with the operation of a Riviera power boat known as ' Medusa ' are, for tax purposes, allowable deductions from his assessable incomes for the years ended 30 June 1999, 30 June 2000 and 30 June 2001. 3 Each of the proceedings is an appeal under Division 5 of Part IVC of the Taxation Administration Act 1953 (Cth) ('the Administration Act') against appealable objection decisions made by the respondent, the Commissioner of Taxation ('the Commissioner'). By those decisions, the Commissioner disallowed objections lodged by the Taxpayers in relation to income tax assessments issued by the Commissioner to the Taxpayers for the relevant years of income, after the Commissioner had conducted an audit in respect of the Taxpayers. Following graduation, he was employed in the Commonwealth Public Service for approximately 16 years. Between 1972 and 1988 he was an Australian Trade Commissioner, based in Singapore, New Delhi, Manila and Jakarta. During that period Mr Bowman was also seconded to AWA Limited ('AWA') for two years. In 1988, Mr Bowman left the public service and commenced work as an executive with AWA. From 1988 to 1999, he was the group marketing manager for AWA. 5 Mr Ell was born in 1954. He graduated from Mitchell College, Bathurst in 1979 with a Bachelors Degree in Business Studies. He also graduated from the Australian Graduate School of Management in 1987 with a Masters Degree in Business Administration. From April 1988 to January 1993, Mr Ell was employed as senior business analyst in the Corporate Services Division of AWA. Mr Ell met Mr Bowman when they were both executives working at AWA in 1988. 6 In 1989, AWA and Serco Limited, a UK company, formed a joint venture company to pursue the ' outsourcing market ' of the Commonwealth government, particularly the Department of Defence. The joint venture company subsequently came to be known as Serco Australia Pty Limited ('Serco'). Mr Bowman was appointed as the manager of Serco and, in 1991, Mr Ell joined him at Serco. 7 The business of Serco consisted of tendering for the management of particular government and commercial enterprises and reorganising those enterprises by instituting more efficient management practices and computer systems. Quite often enterprises that were operating at a loss were turned into profit centres by Serco. The talents of Messrs Ell and Bowman were complementary. Mr Ell's expertise was in the financial and operational management area. Mr Bowman's expertise was in marketing and planning growth. Their professional relationship at Serco was a highly successful one. During their employment by Serco, Messrs Bowman and Ell developed a close personal relationship. He sought information from, and spoke to, various people in that industry, operating in both the Whitsunday Islands and in Sydney Harbour. For example, he obtained packages containing information as to the possible financial return from ownership of a vessel used in the industry. 9 In early 1997, Messrs Bowman and Ell began discussing with each other the possibility of acquiring a yacht. They said that the acquisition was to be for the purpose of conducting a charter business. Mr Ell approached Mr Bowman believing that his own financial and operational management skills would complement Mr Bowman's marketing skills and that the combination of their talents would assist in minimising risks from such a venture. Mr Ell said that, at the time, he believed that he would need to develop new opportunities for himself, in order to deal with the time when his employment with Serco would cease. 10 In February or March 1997, Messrs Ell and Bowman met Mr Trevor Joyce of EastSail, a business carried on at d'Albora Marinas, Rushcutters Bay, NSW ('EastSail'). They had a discussion concerning the possibility of a venture involving a large, fully crewed, charter yacht operating on Sydney Harbour. Mr Joyce provided them with spreadsheets containing 3 year and 5 year budgeted profit and loss statements and cash flow statements from such operations ('the February/March Spreadsheets'). 11 In February 1997, Mr Ell was in communication with Beneteau --- VicSail, another business carried on at d'Albora Marinas, Rushcutters Bay, NSW ('VicSail'). By facsimile communication of 25 February 1997 from Mr Brendan Hunt of VicSail to Mr Ell, VicSail provided a quotation for the supply of a Beneteau 50 yacht. Mr Ell said that he developed the spreadsheet independently from the spreadsheets provided by Mr Joyce as he considered himself as having far more experience than Mr Joyce in testing business models and the viability of such models. Mr Ell was unable to specify precisely when the Athena Business Plan was brought into existence. He said that he first prepared it in March but that it was a ' work in progress ', which changed from time to time as the project developed. At some stage, although he could not recall precisely when, Mr Ell prepared another document entitled ' Calculations of "Real" Profit Based on Business Plan '. I shall return to the spreadsheet and the calculations of real profit later. 13 At some stage Mr Bowman also prepared a document entitled ' Athena Business Plan ', which consisted of a narrative and a spreadsheet. He said that he prepared his business plan for himself, to get right in his mind the assumptions as to ' the way the thing would work '. Based on that a "global" figure is then quoted for supply and delivery. Inspection. I will arrange to have the boat available on Sunday if you can confirm with me Tomorrow, 29/4/97. Sales Tax. Find following the relevant sections of the sales tax act. You will need to reference this with your accountant to ensure it will be to your advantage to comply. The facsimile was, in effect, an invitation to inspect the boat at Hamilton Island. Mr Ell subsequently visited Hamilton Island with Mr Hunt to inspect the boat. 17 On 5 May 1997, Mr Hunt sent Mr Ell a further facsimile communication concerning a Beneteau 50. I now feel in a position to be much more specific in relation to a boat. And also elaborate on some issues relating to "modus operandi". Extras. Extra description. When we next meet I suggest we go over the options in detail. We have full description for each option. Ownership. I do perceive perhaps a more than causal [sic scilicet, casual] interest in personal use for the boat. In talking with Trevor and Eastsail, I believe there are some interesting ways in which this can be considered, whilst ensuring a balance between private and commercial use. Mr Ell denied, however, that he told Mr Hunt that he had ' more than a casual interest in personal use ' for the boat. In cross-examination, Mr Ell characterised that reference as Mr Hunt's ' normal sales patter '. 19 Sometime in May 1997, Mr Bowman read a memorandum entitled ' SALES TAX ON CHARTER VESSELS '. The memorandum was signed ' RSD ' and is dated 20 May 1997. He has been approached by Stephen Ell but has not advised on the matter yet. He does not see a conflict as we are both on the same side. Any boat that can carry more than 12 passengers can qualify for exemption. They must be used for "regular and scheduled" sightseeing tours. The rate of sales tax is 22% but note that it does not apply to the full purchase price but only to the manufactured value. The owner is required to make a declaration based on his intention. The declaration cannot be false. The intention should be supported by adequate documentation including a business plan. Mr Bowman denied that the reference in item 9 was the reason for his preparing the Athena Business Plan. The total price, with additional fittings, after ' Extra ordinary discount ' of 8 per cent, was $750,056. The quote indicated that the sales tax component was $115,737. Many extras are based on discussions following test sail at Ham island. Following those discussion, Mr Joyce prepared a letter to Messrs Ell and Bowman dated 5 June 1997. I believe it was a very constructive meeting and we look forward to the prospect of working with you on the operation and management of your yacht. The bulk of this revenue will be generated during the summer months, and more particularly November, December and January. As you know we are planning to have the larger Houssman 68 join our fleet later in the year and tow [sic] yachts will together form the basis for the development of this business activity. Personal Use. In particular we would have to be able to charter the yacht on weekends and public holidays during the peak summer season. All charter revenue would be credited to your account. A booking fee of 10% on average will be debited against the revenue to cover commissions paid to third party booking agencies, and the cost of transacting the booking we do ourselves. A fixed management fee will be charged as an operating expense, with the fee payable monthly in 12 instalments of $1875 each year. This management fee will be invested in the marketing of the luxury yacht programme, which in turn will reflect in the commercial success of the investment for you as the owner. After payment of all operating and management expenses surplus revenue will be shared, 70% to you as the owner and 30% to Eastsail as the operator. This amount will be calculated monthly and will appear in your monthly statement of income and expenses. In the event that there is a shortfall of revenue versus expenses we would require that such a shortfall is made good at the end of each twelve-month period. The second version differed in some significant respects from the earlier version. Following our earlier meetings and telephone discussions we have developed our proposal for the marketing, operation and management of your Beneteau 50, which we understand you are ready to purchase from Beneteau yachts. We firmly believe that the venture holds great promise and we look forward to working on it with you. For example, I have assumed that the purchase would be 100% financed with an interest only loan secured by assets other than the yacht itself, with the cash surplus at the end of each year applied to reduction of the principal. For the monthly case flow exercise for year 1 I have assumed that you would make a 221D application so that you could recover the projected loss by way of reduction of PAYE tax instalments. They were identical as to revenue but contained different figures in relation to depreciation and interest. A third spreadsheet was also attached, dealing with ' PROJECTED MONTHLY CASH FLOW ' for 12 months. I shall say something more about those three spreadsheets ('the June Spreadsheets') later. 24 On 16 June 1997, Mr Hunt sent Mr Ell a further facsimile quotation for supply of a Beneteau 50 yacht, showing a total price, after inclusions and ' extra ordinary discount ', of $694,956. The facsimile indicated that ' Changes reflect our discussions of last Friday '. Another quotation, also dated 16 June 1997, shows a total price of $693,656. The difference is attributable to differences in the inclusions. 25 On 19 June 1997, an agreement for the sale and purchase of a Beneteau 50 yacht was entered into between VicSail, as vendor, and Messrs Ell and Bowman, as purchaser. Assuming there are no delays or complications with commissioning, the yacht should be operational by early December, which means that we should be in a position to catch at least some of the peak Christmas and summer season. One of these differences, i.e. Your yacht will be offered as a key vessel in a luxury yacht programme to be promoted to the domestic corporate and in-bound tourism markets. EastSail will implement a professionally planned marketing programme to ensure the future financial success of the investment from your point of view. This will be an expensive exercise and we do not see operation of the yacht being profitable for us in the short term. We will be breaking new ground with a an operation on Pittwater. As you know we have not operated there before, although we are enthusiastic about the potential. We will to some extent be constrained by the regular and scheduled departure component of the programme, and the fact that we will be limited in terms of the number of passengers we can take on the yacht. The share of net charter revenue after retail discounts and agent commissions if applicable shall be 50:50, with a minimum payment of $20,000 to EastSail during the fifteen month period from the date of commencement of operation of the yacht on Sydney Harbour, projected for early December 1997. Reconciliation of this amount with actual income will be completed at the end of this fifteen month period. Any deficiency in income relative to expenses will be met during the 30 day period following the date of each statement. This usage shall not conflict with any revenue generating charter of the yacht. All berthing, maintenance and insurance costs will be met by the owners. The yacht shall have a dedicated pen at d'Albora Marina for the time that it operates on Sydney Harbour. The management contract will be for a period of three years with an option to renew for a further two years, if required. EastSail as the operator will have unlimited access to the yacht for charter, during the period that the yacht is based in Sydney. On Pittwater we see less activity initially but we would also want the freedom to market the yacht without restriction on availability. The copy was signed by Messrs Ell and Bowman. $AUS411,506 on presentation of Shipping Documents. $AUS248,019 on presentation of acknowledgement of Handover Signed by Applicant. A letter of 23 July 1997 from Finlease to Mr Ell indicated that WA Bank had given finance approval for the sum of $680,000 over 36 months with a balloon payment of $544,000. There is no dispute as to the financing or the interest payments that were made by Messrs Bowman and Ell pursuant to the arrangements. 31 Athena was delivered to Sydney in November 1997. She was commissioned and put in survey, a process that took about six weeks. 32 There is some dispute as to the precise arrangements that appear to have been entered into between Messrs Ell and Bowman on the one hand and EastSail on the other concerning the operation of Athena. Nothing further was done to formalise the arrangement after the exchange of 20 June 1997 and 25 June 1997 ('the June Exchange'). The Draft Lease was dated 1 January 1998 and was expressed to be between Mr Ell as ' the Owner ' and EastSail as ' the Hirer '. The Draft Lease recited that Mr Ell was the owner of the yacht listed in the schedule and had agreed to lease the same by way of demise to EastSail on the terms and conditions contained therein. The schedule described Athena, together with details of her equipment. However, there is no evidence that it was ever signed by either Mr Ell or Mr Bowman. Mr Bowman said that he did not consider that the Draft Lease fully reflected the arrangement evidenced by the June Exchange. Mr Ell said that he did not pursue the matter with EastSail as he considered that the Draft Lease was more of a standard contract for EastSail boat owners as compared with the June Exchange. 34 Mr Ell said that he did not think it was of critical importance to tie down with EastSail the matters dealt with by the Draft Lease. Although he conceded that they had some level of importance, Mr Ell could not recall raising with EastSail any of the matters referred to in the Draft Lease. There was no further written communication between Messrs Ell and Bowman on the one hand and EastSail on the other concerning the terms of their arrangement in relation to the operation of Athena. In March 2001, an offer to buy Athena for $640,000 was made in writing by a Mr Barry Scott. The offer was made through Vicsail. That offer was accepted by Mr Bowman on 12 April 2001. However, for reasons that neither Mr Bowman nor Mr Ell explained, the sale did not proceed. Athena remained on the market. Although the arrangements with EastSail had been terminated, Athena was moored near EastSail and continued to be chartered until April 2001. 37 In November 2001, Messrs Ell and Bowman placed Athena with Sydney By Sail Pty Limited, another charter operator ('Sydney By Sail'). Mr Ell said that a formal agreement with Sydney By Sail may have been signed, but he was unable to locate the signed version. An unsigned version of the agreement that he believed may have been signed was in evidence ('the Sydney By Sail Agreement'). It may be significant that the general thrust of the arrangement with Sydney By Sail is not significantly different from the general thrust of the Draft Lease submitted by EastSail in November 1997. 38 Messrs Ell and Bowman received offers to buy Athena for $550,000 in March 2002 and $525,000 in mid-2002. Neither proposed sale proceeded. The Taxpayers finally sold Athena in late 2002 for $475,000. Mr Ell placed Medusa in charter with EastSail. Mr Ell said that at that time he was considering methods of building a viable business after he retired from Serco, and the purchase of Medusa was a means of further exploring opportunities in the charter market for luxury vessels. He decided that Medusa was only to be used in conjunction with a skipper, in order to ensure that the vessel was kept in pristine condition. Medusa had a large cockpit, which was protected from the weather. Mr Ell said that he considered that Medusa would fill a void during the winter months when yachts were not generally hired, because of their exposure to the weather. 40 Mr Ell sold Medusa through Lee Dillon Marina for $300,000 in May 2000. In the intervening period, he received management reports and other documents from EastSail relating to Medusa. It is instructive and informative to consider the business plans in conjunction with the spreadsheets provided by Mr Joyce in February 1997 ('the February/March Spreadsheets) and the June Spreadsheets. One shows a projection over five years. The other shows a projection over three years. Each has a schedule of ' program assumptions ' attached. 43 Each assumes a cost price of $600,000 and a value for depreciation of $585,000. Each assumes that 100 per cent of the purchase price will be financed, in one case for a term of 60 months and in the other case for a term of 36 months. An interest rate of 8.15 per cent is assumed for each. A depreciation rate of 20 per cent of prime cost is also assumed for each projection. 44 Each spreadsheet has an item for ' weekly rental '. The assumption for the five year spreadsheet is $15,000 while the assumption for the three year spreadsheet is $7,000. Each also has an item for ' weekly fee for personal use '. For the five year spreadsheet, the amount shown is $75,000 per year and for the three year spreadsheet the amount shown is $42,000. Insurance as a percentage of purchase price is shown in the five year spreadsheet as 0.93 per cent and in the three year spreadsheet as 1.00 per cent. Finally, there is an item for ' interest for net present value calculation ', of 6 per cent for the five year spreadsheet and 10 per cent for the three year spreadsheet. The yacht will be purchased and resident in Australia. Charter fees based on a net return to the owner. Operating costs are subject to a signed and written agreement setting out fixed berthing costs and survey fees, with maintenance costs to be clearly defined as to "running costs" and replacement costs". Insurance could be arranged through a group policy or by the owner. Interest is a variable cost depending on the owner's total funding requirements, available security and rate of interest. Interest is expensed using "Rule 78". Depreciation of yachts in Australia is 20% diminishing value method, or 13% prime cost method. We have selected the 20% DVM for this example. The DMV [sic] allows a higher initial depreciation claim, reducing over each successive year. The PCM allows a lower p.a. claim in the initial years, but remains constant over each year and is consequently higher than the DMV in the later years. A tax saving may be available to owners who can substantiate that the yacht is a bona fide business operation. Such owners may claim the loss after taking into account depreciation and personal use against other taxable income. The tax saving will be based on the owner's personal marginal rate of tax. The given example assumes deductibility of the "loss" factor against other taxable income, which may or may not apply to the owner. An investment allowance of 10% is applicable to charter boats "purchased" before 1 July 1994. "Purchased" includes signing a contract to purchase, providing the boat is first used before 1 July 1995. Accordingly, Mr Ell said, he was not prepared to make any decision based on the spreadsheets. He said that, for that reason, he intended to prepare his own business plan based on his own experience and methodology. Mr Bowman also referred to the spreadsheets provided by Mr Joyce but said that, as they gained information during their investigations, Mr Ell developed their own spreadsheet model of the returns they could expect from the business of operating a yacht. In one spreadsheet the investment is assumed to be $750,000 and in the other the investment is assumed to be $650,000. For the investment of $750,000, the accumulative cash surplus is shown to be $140,900 and for the investment of $650,000, the cumulative cash surplus is shown to be $121,865. 53 The projected monthly cash flow that was enclosed with the letter of 5 June 1997 does not appear to reconcile with either of the profit and loss spreadsheets. It shows total revenue for 12 months of $55,000 and net charter income of $49,500. The number of passengers is 10 in the peak months of February, March, October, November and December and from 5 to 7 in the other months. Mr Ell explained that his calculation was based on a charge of $45 per passenger for day trips and a fee of $1,000 per day and $700 per half day for charter. On the assumption that the purchase price was $660,000, the sale price would be $600,000, giving a capital loss of $60,000. After deducting the profit over the four years, the ultimate result would be a loss of $7,300. 58 On the other hand, the owners of Athena would be entitled to claim depreciation at the much greater rate shown in the figures. That is to say, there would be a further deferral of tax that would otherwise be payable. 60 Mr Bowman's business plan was a narrative, coupled with a spreadsheet. It is to be placed in survey and berthed at d'Albora Marina in Ruscutters Bay. Eastsail is to manage the maintenance. Charter fees are to reflect the quality of the yacht. While the bulk of the revenue will be generated during summer months there may also be an opportunity for the yacht to generate income in Pittwater during winter when the Sydney market is quiet. Moving to Pittwater in winter would also defray mooring charges. The possibility in Pittwater is to combine with the sea plane operators to fly clients to and from the yacht. The success of daily schedule business will preclude significant private use. Vicsail have estimated the resail value of the yacht at the end of 3 years charter to be $600,000 provided it is maintained to a high standard. This resale is high compared to the purchase price because the yacht is to be purchased sales tax free. The fee for the daily schedule business will be $100 per passenger. The yacht is to be operated in Sydney Harbour for 7 months of the year. Mr Bowman accepted, in the course of his oral evidence, that there were significant errors in the spreadsheet. Thus, in Year 4, the Total Costs should be $34,800, not $24,800, the Operating Profit/Loss should be ---$800 and the total Loss for the 4 years should be $54,950 and not $44,950. Mr Bowman also accepted that the ultimate figure for overall profit of $291,050 was ' completely inaccurat e'. 63 It is disconcerting that neither of the business plans tendered on behalf of the Taxpayers had a date or any other indication corroborating the time of its preparation. For two such astute and able businessmen, it is curious that their forecasts were so awry, particularly in circumstances where Mr Joyce provided them with his own projections. Mr Ell's said that he rejected Mr Joyce's projections because Mr Joyce was a salesman. If that were so, one might have expected that Mr Ell's projections would show a lower, more conservative, estimate of income than Mr Joyce's projections. That was not so. 64 Mr Bowman said that he prepared his narrative for his own assessment, to get his thoughts clear in his mind. Mr Ell said that he had seen Mr Bowman's documents but could not recall when. Again, it is curious that two such astute businessmen, who were working together at Serco, prepared projections independently that appear to bear no relationship to each other. 65 Mr Ell prepared an ex post facto explanation for his thinking in preparing his Business Plan. He calculated what he says was his expectation of ' real profit ', after taking advantage of the tax deductions for depreciation of Athena. They say, however, that, if the Court concludes that Athena was not acquired for private use, the only other possible explanation is that the Taxpayers' dominant intention was not to obtain tax deductions but to conduct a profitable business. They said that their time with Serco was coming to an end and they would no longer have income from Serco against which to set-off losses. 67 However, the Taxpayers remained at Serco during all of the years of income in question. There was no suggestion that they contemplated departure from Serco during that time or that their departure was imminent. They placed Athena on the market in November 2000, long before either of them left Serco. The Commissioner contends, therefore, that Taxpayers had a private purpose in acquiring Athena, namely, of owning a luxury yacht, to which they would have at least standby access, for a cost discounted by the large deductions flowing from depreciation in relation to the yacht. 68 Mr Ell's so-called ' real ' profit is completely illusory. It is difficult to see how Mr Ell or Mr Bowman ever imagined that the enterprise of buying Athena, operating it for three or four years and then selling it could ever have produced a ' real ' profit. It certainly had the advantage of deferring for some years the tax that would have been assessed in respect of their income from Serco. However, none of the figures show a profit in any real sense. All other spreadsheets assume income only from charters. Mr Bowman's first period is one of six months. His first full twelve months period showed charter income of $42,500. It might be possible to speculate that the twelve month period he had in mind was the twelve months ended 30 June 1999, since Athena was not acquired until the end of 1997 and the first six month period would take the calculation to 30 June 1998. On the other hand, in Mr Ell's spreadsheet, the first full calendar year, 1998, had charter income of $30,000 and the second full year, 1999, had charter income of $45,000. • The five year budget produced by Mr Joyce in February 1997 showed charter fees of $22,500 for each of five years. The three year budget showed charter fees of $21,000 for each of 3 years. • The spreadsheet attached to Mr Joyce's letter of 5 June 1997 showed gross charter fees of $50,000 for year 1 and net charter revenue, after booking commission, of $45,000. The June spreadsheet assumed a management fee to be paid to EastSail of $25,000. The owner was to receive 80% of the net surplus or deficiency. Yet there is no real evidence as to the source of the differing estimates said to have been relied on by Messrs Bowman and Ell. It is difficult to see why two astute businessmen such as Messrs Bowman and Ell would have embarked on the enterprise if that was the best result that they could have expected. It rather suggests that, at no stage, did they expect to generate a cash surplus or a profit in any real sense. 72 There is no substantial evidence to suggest that it was ever realistic for the Taxpayers to expect that there would be significant income generated from the use of Athena on scheduled tours. • Mr Joyce, who ' was perceived as the main driver ', did not continue with EastSail; however, Mr Joyce was perceived as a salesman and Mr Franki, the principal of EastSail, continued to have regular discussions with one or other of the Taxpayers. • EastSail did not establish an office in Pittwater as suggested in the letter of 20 June 1997. Again , no complaint appears to have been made about that failure. • Eastsail did not undertake ' the regular and scheduled departure component of the program ' as referred to in the letter of 20 June 1997. Once again, no complaint ever appears to have been made about any such failure. • In 2000, prior to the Olympics Games in Sydney, EastSail purchased a large catamaran to take customers on sightseeing tours; however, there was no evidence as whether those tours were scheduled regular tours. However, where two experienced and astute businessmen decide to spend well in excess of $600,000 in the acquisition of a luxury yacht, with which they plan to derive a profit in carrying on a business, it would not be unusual to prepare a plan or projections, based on information gleaned from reliable sources as to the likely income they could expect to generate and the expenses they would be likely to incur in generating that income. • The methodology that the Taxpayers used for putting together their business plans was, they say, the same as the methodology they used at Serco for new business ventures. Mr Bowman gave an example of one of the projects on which they were engaged at Serco. He said that they assembled a team of people who had appropriate experience and the team worked together to collect and review the information needed for a business plan. They conducted a number of reviews of the draft plan and tested innovative ideas and business inputs and outputs ' through a peer review process ' until they got to a point where they were confident that the plan was ' break even '. They depended on the peer review process and collective responsibility for the outcomes to ensure accuracy. Mr Bowman claimed that the Taxpayers adopted the same methodology for the proposed new yacht charter business. He characterised EastSail as ' one member of the team ', which was ' to stay and manage the service delivery and would share in risks and rewards '. However, they ignored the information from one of their so-called experts, EastSail. There was no evidence that the Taxpayers ever discussed either of their business plans with their expert, EastSail. Assuming the business plans were first generated in the first half of 1997, as the Taxpayers claimed, there appears to have been no cooperation between Messrs Ell and Bowman in relation to the production of their respective business plans. Overall, both business plans create the impression of being ex post facto justifications. It beggars belief that Messrs Bowman and Ell genuinely believed that they were going to generate a profit from the yacht's operations. • The business plans were ' works in progress ' and the documents that were in evidence were never intended to be exhaustive. They were the only documents that had been retained. However, that suggests that they were the most recent or most finalised. No evidence was given that the figures in the documents in evidence were later updated. • The Taxpayers had only limited time to devote to the yacht operations, since they were still employed as senior executives with Serco and, because they were still employed at Serco in higher paying positions, their concerns to ensure that the yacht operations were profitable would be less than for someone who intended to rely on such operations for their living. However, it seems unlikely that, if the Taxpayers were intending to generate a positive cash flow and profit, they would not take considerable care to ensure that their calculations were based on sound assumptions. • The yacht operations should be viewed in the context of being the first of a number of businesses that the Taxpayers commenced together when they left Serco. There was no suggestion that those ventures had any element of private pleasure. 74 There was no evidence that Mr Ell made any projection or estimate of revenue or expenditure in relation to Medusa. For the years ended 30 June 1999 and 30 June 2000, Mr Ell appears to have incurred a very substantial loss from the operation of Medusa, having brought it for $400,404 and sold it for $300,000. They had an overdraft facility in connection with that account, which they used for meeting maintenance expenses and other costs associated with operating Athena. 76 From the end of 1997 until termination of their arrangements with EastSail, Messrs Ell and Bowman received monthly reports from EastSail indicating the usage of the Athena and the net fees to be paid to them in relation to that usage. They also received monthly expense reports for the Athena indicating labour and other costs incurred in the maintenance of the Athena. Subsequently, they received similar reports from Sydney By Sail. 77 Whenever Mr Bowman received a report from EastSail, or later from Sydney By Sail, he entered the relevant data from the report by use of a Quicken accounts management software program. That enabled him to produce annual financial statements for Athena. Mr Bowman also provided a printout of the Quicken reports to Ms Eva Angelis, an accountant, to enable her to prepare tax returns for himself and Mr Ell. Mr Bowman also provided the St George Bank statement to Ms Angelis each year in connection with the preparation of tax returns. During the course of each financial year, Mr Bowman from time to time printed and updated profit and loss statements in relation to Athena from journal entries. He discussed the results with Mr Ell. At the end of each financial year, an annual report was produced and a copy was provided to Mr Ell. 78 The EastSail reports show that the first usage of Athena was for a charter on New Year's eve 31 December 1997. The reports up to the end of March 1998 regularly show that Mr Bowman or Mr Ell was the charterer. However, there is no mention of either Mr Bowman or Mr Ell as charterer after 9 March 1998. On the other hand, there are numerous references to periods when, for unspecified reasons, Athena was unavailable for charter. None of the reports from Sydney By Sail showed details of private use of Athena by either of the Taxpayers. 79 In calculating the expenses said to have been incurred in operating Athena, each of the Taxpayers made an allowance for private usage of Athena. However, for each of the years in question, the allowance for private usage was quite minimal. For the year ended 30 June 1998, the private usage of Athena was shown as 14 out of 181 days. For the years ended 30 June 1999, 2000 and 2001, the private usage was 14, 10 and 14 out of 365, 366 and 365 days respectively. In relation to Medusa, the private usage was shown as 5 out of 82 days for the year ended 30 June 1999 and 10 out of 366 days for the year ended 30 June 2000. Each of the taxpayers said that he gave particulars of private usage to Ms Angelis at the time when she was instructed to prepare tax returns. 80 Except as just indicated, no independent record was maintained of the days on which Athena was used by either of the Taxpayers privately and the particulars given to Ms Angelis by each of the Taxpayers were his own personal recollection of use during the year. Under cross-examination, each of the Taxpayers was adamant in rejecting the suggestion that the level of private usage exceeded that disclosed in their respective tax returns. 81 Mr Bowman informed Ms Angelis each year of the number of days Athena was used privately by him. Mr Ell also spoke to Ms Angelis each year and informed her of the number of days when Athena was used by him privately. Mr Ell said that it was not difficult to recall the number of days that Athena was used privately by him because it was only on rare occasions that he used her for private purposes. Mr Ell did not keep any record of private use of Medusa. He said, however, that ' because it was so rare I was able to recall fairly closely the number of days I had used it privately ' and that he provided those details to Ms Angelis for the purpose of preparing his tax returns. Mr Ell also claimed deductions for various outgoings and depreciation allegedly incurred in relation to Medusa. After audit, the Commissioner disallowed the deductions in their entirety and issued amended assessments dated 13 January 2003 to Mr Bowman and 16 December 2002 to Mr Ell. Notices of Objection were lodged by Mr Bowman on 26 June 2003 and by Mr Ell on 8 July 2003. 87 The Taxpayers filed relevantly identical notices of objection in so far as the amended assessments were based on deductions claimed in respect of Athena. The Taxpayers relied on the ground that the amounts in question were allowable deductions because the Taxpayers were conducting a business in the relevant years of income. That ground was expounded in an attachment to the Notices of Objection. The attachment states that it was the intention of the Taxpayers to use Athena for the generation of income by way of a yacht charter business. 88 The attachment then states that, prior to December 1997, when Athena was first available for charter to the public, the Taxpayers ' entered into a formal management agreement with EastSail '. They then assert that the agreement ' was terminated with EastSail because [the Taxpayers] were of the view that EastSail were not producing the expected results from the venture in terms of income growth, and rather than immediately entering into an agreement with an alternative Charter Operator they attempted to sell the yacht as they were of the perception that Charter Operators would not manage aging yachts... '. This intention is supported by both the research conducted during the business start up phase and the conduct of the [Taxpayers] during the life of the business. This was because one [of] the charter licensing requirements was that the yacht was sailed by a professional crew. As a result of the professional crew sailing the yacht, it was anticipated the wear and tear of the yacht would be reduced, and consequently the value of the yacht on resale would be higher than the value of a yacht crewed by amateurs. This was a key driver in the decision making. Secondly, EastSail did not have a 50 ft yacht in its fleet, and it was anticipated there would be a demand for a boat of this size. [The Taxpayers] entered into an arrangement with EastSail whereby the yacht would be used for regular and scheduled cruisers for sightseeing in addition to the standard charters. It was acknowledged that the sightseeing cruises may not be profitable in the short term, however [the Taxpayers] entered into the arrangement in the light of medium to long-term profitability potential. The fact that the yacht was available for private use while it was not being chartered should not bear on the determination of the yacht being used predominantly for business purposes... Both [the Taxpayers] had access to another yacht used solely for private use. They were more than "Concerned and interested absentee" boat owners... They were conscious of the potential for personal financial loss and were intent on contributing to the management of the business to preserve and grow the equity in the business. They regularly reviewed the performance of a yacht by examining the reports provided by EastSail and Sydney By Sail, and utilising an accounting package to produce their own reports for further analysis. EastSail and Sydney By Sail were effectively acting as agent for [the Taxpayers] . As outlined above, [the Taxpayers] were regularly involved in the business from an administrative and planning perspective and they were organised and systematic in doing so. the day-to-day chartering of the yacht and associated practical activities) of conducting the yacht charter business does not mean they are not in business. Such services include custom enquiry and booking services, pre-charter briefings and catering. This demonstrates [the Taxpayers] were able to exercise appropriate control over the yacht. When the yacht was not sold promptly, [the Taxpayers] entered into an arrangement with [Sydney By Sail] to prevent the asset sitting idle. While in form [the arrangements between the Taxpayers and East Sail and subsequently Sydney By Sail] may be viewed to be a lease agreement, the practicalities of the arrangement was such that in substance the agreement extended beyond a mere lease as [the Taxpayers] were actively involved in the business on a regular basis and were able to exercise control over the yacht. As discussed above, the charter operators acted as an agent for [the Taxpayers] in return for a management fee. Due to the agency arrangement, [the Taxpayers] were able to maintain a level of control over the boat and its income producing operations --- this control was demonstrated when [the Taxpayers] withdrew the yacht from EastSail fleet prior to the expiration of the Agreement. [The Taxpayers] monitored the business activities of the boat and where necessary provided input and direction to the respective Charter Operators. The eight proceedings were commenced on 28 November 2003. The Commissioner asserted that, by reason that the Taxpayers were not using Athena in the prescribed manner, the deductions claimed were not allowable. Otherwise, the Commissioner put the Taxpayers to proof of all facts on which they sought to rely. The Commissioner made similar assertions in relation to Medusa and Mr Ell. 92 In their Statements of Facts, Issues and Contentions, the Taxpayers joined issue with the Commissioner in relation to the assertion that Athena was not being used in the manner prescribed by s 26-50(5)(b) of the Assessment Act. (2) Whether the deductions claimed by the Taxpayers were allowable pursuant to s 26-50(5) of the Assessment Act. (3) Whether the deductions claimed for amounts equal to the decline in value of depreciating assets were allowable to the Taxpayers pursuant to s 40-25 of the Assessment Act. (4) Whether the Taxpayers are liable to additional tax. I shall return to that question later. 94 Section 8-1(1) of the Assessment Act provides that a taxpayer can deduct from his assessable income any loss or outgoing to the extent that it is incurred in gaining or producing assessable income , or is necessarily incurred in carrying on a business for the purposes of gaining or producing assessable income . However, under s 8-1(2), a taxpayer cannot deduct a loss or outgoing to the extent that it is a loss or outgoing of a private or domestic nature or to the extent that a provision of the Act prevents that taxpayer from deducting it . 95 Section 42-15 of the Assessment Act provided an artificial deduction for depreciation. Under s 42-15, as it applied at December 1997, a taxpayer was entitled to deduct an amount for depreciation of a unit of plant for an income year if, in that year, the taxpayer was its owner or quasi owner and the taxpayer used it for the purpose of producing assessable income. Plant included a boat. However, under s 42-45(3) an amount could not be deducted for depreciation of a boat unless, at some time in the income year, the taxpayer used the boat, or held it for use, as mentioned in s 26-50(5)(b), (c) or (d) . 96 Section 26-50(1) of the Assessment Act provides that a taxpayer cannot deduct a loss or outgoing in an income year to the extent that the taxpayer incurs it to acquire or retain ownership of a boat or to use, operate, maintain or repair a boat. However, s 26-50(5) provides that s 26-50(1) does not stop a taxpayer from deducting a loss or outgoing if certain prerequisites are satisfied. 97 The first is that the boat is held for trading stock for sale in the ordinary course of a business carried on by the taxpayer. There could be no suggestion that that provision has application in the present circumstances. The second is that at all times in the income year, the taxpayer uses the boat, or holds it, mainly for transporting, for payment in the ordinary course of a business carried on by the taxpayer, the public or goods. It could not seriously be suggested that the Taxpayers used Athena (or Medusa in the case of Mr Ell) for transporting the public or goods, as referred to in s 26-50(5)(c). The charters began and ended at EastSail's premises at Rushcutters Bay. There was no suggestion that Athena stopped anywhere in the course of its cruises. 98 Under s 26-50(5)(b), s 26-50(1) does not stop a taxpayer from deducting a loss or outgoing for a boat in an income year if, at all times in the income year, the taxpayer uses the boat, or holds it, mainly for letting it on hire in the ordinary course of a business that the taxpayer carries on . Further, under s 26-50(5)(d), a taxpayer will not be stopped from deducting a loss or outgoing for a boat if, at all times in the income year, the taxpayer uses the boat for a purpose that is essential to the efficient conduct of a business carried on by the taxpayer . Those two provisions are relied upon by the Taxpayers. 99 Under s 26-50(6), if a taxpayer uses a boat, or holds it, as described in those provisions, at all times during part of a year of income, then s 26-50(1) does not stop the taxpayer from deducting so much of the loss or outgoing as is reasonable in the circumstances. 100 Under s 226G of the Income Tax Assessment Act 1936 ('the 1936 Assessment Act'), which is also in Part VII, if a taxpayer has a tax shortfall for a year and the shortfall was caused by the failure of that taxpayer to take reasonable care to comply with the Assessment Act, the taxpayer is liable to pay, by way of penalty, additional tax equal to twenty five per cent of the amount of the shortfall. Sections 226H and 226J provide for a greater penalty where the shortfall is caused by recklessness on the part of the taxpayer or intentional disregard of the Assessment Act. 101 Penalty tax is dealt with in Part VII of the 1936 Assessment Act. By s 222A, which is in Part VII, the term ' tax shortfall ' in relation to a taxpayer and a year is defined as meaning the amount, if any, by which that taxpayer's statement tax for that year is less than the taxpayer's proper tax for that year. The term ' statement tax ' is defined as meaning the tax that would have been payable by the taxpayer in respect of that year if it were assessed at that time on the basis of taxation statements by the taxpayer after allowing credits claimed by the taxpayer. The term ' taxation statement ' relevantly means a statement made in a return or a notice of objection. The term ' proper tax ' is defined as meaning the tax properly payable by the taxpayer in respect of that year and the taxpayer's taxable income after allowing credits properly allowable to the taxpayer. 102 While the two boats were used to gain or produce assessable income, it is by no means clear that all of the expenses and outgoings in question were incurred in gaining or producing that assessable income. That is to say, while the Taxpayers have established that the expenses and outgoings claimed as deductions have in fact been incurred, no attempt has been made to attribute particular expenses or outgoings to the production of any particular part of the assessable income brought to account in their respective returns. 103 In the light of the Taxpayers' formulation of the issues and the grounds stated in their Notices of Objection, the Taxpayers must establish that their activities amounted to carrying on a business. The first question, therefore, is whether the Taxpayers were carrying on a business for the purpose of gaining or producing assessable income . If either question is answered unfavourably to the Taxpayers, the question of the penalties imposed by the Commissioner must be considered. Even if assessable income was derived by the Taxpayers from the use of Athena, or from the use of Medusa in the case of Mr Ell, unless the expenses and outgoings in question were necessarily incurred in carrying on a business for the purpose of gaining or producing that assessable income, they will not be allowable deductions. If the expenses and outgoings in question were incurred in order to obtain the benefit of tax deductions in the context of owning a luxury boat, rather than in carrying on a business, there will be no allowable deduction in respect of the outgoings and expenses. 106 The Taxpayers contend that the objective evidence supports their contention that their purpose in acquiring Athena was for the purpose of carrying on a business and not for private use. • Athena had a capacity of 25 passengers and was therefore too large for regular private use. • Athena required a captain and crew and could not be managed by individuals alone: those crewing requirements made Athena unsuitable for private use. • Considerable expense, in the order of $38,000, was incurred to have Athena certified to carry 25 passengers in commercial use: that would not have been necessary if Athena were intended for private use only. • From 18 March 2000 to February 2001, Messrs Ell and Bowman owned another yacht, a Beneteau 33.7, which they kept at Cottage Point, on Pittwater, for their own use (L paragraph 144 and 145): if they were using Athena for private purposes, there would not have been a need to acquire another yacht for their own private purposes. Even if Athena were acquired for private use, that private use ceased after 18 March 2000, when the second yacht was acquired. • Income earning activities were undertaken with Athena immediately upon its acquisition and in each year of income; expenditure was incurred in connection with those activities. • From December 1997 to August 1998 and from October 1998 to August 1999, Athena was kept at Rushcutters Bay, where it was not convenient for private use by the Taxpayers. 107 However, none of the matters relied on by the Taxpayers is inconsistent with an intention to own a luxury boat for private purposes but to defray some of the expenses of acquiring, owning and operating the boat by using it to generate income. 108 The Taxpayers say that they assumed that, if Athena was maintained in good order and condition, it was likely that, upon resale after three to five years, it would realise 90 per cent of the initial purchase price. They intended that the excess of any sale proceeds over the depreciated value for tax purposes was to be applied to reduce the entry price of a replacement boat. That is to say, the balancing adjustment required was to be applied in reduction of the entry price of a new boat: that indicates that the nature of their overall plan was to pursue a continuous business. One might have expected that the intention to acquire a second boat on the disposal of the first one to have appeared in one of the business plans said to have been prepared by the Taxpayers in 1997. However, there was no contemporaneous evidence that such an intention was in the minds of the Taxpayers. 109 The Taxpayers also rely on dealings with the Australian Taxation Office ('the ATO'), in relation to sales tax. When a dispute arose with the ATO concerning entitlement to an exemption from sales tax, the Taxpayers asserted that Athena had been acquired with the expectation that it would be used for scheduled sightseeing tours. EastSail supported that assertion in a letter to the ATO of 17 August 1999. The Taxpayers lodged an objection to the sales tax assessment on that basis. 110 Mr Bowman said that it was always his intention that Athena would be used for scheduled sight seeing tours. Despite the asserted intention of the Taxpayers, they abandoned their claim to exemption because Athena was not in fact used for scheduled sightseeing tours. The Taxpayers seek to obtain some credibility from the fact that they decided not to pursue the dispute with the ATO in relation to sales tax. They say that, once the sales tax was paid and the sales tax dispute was resolved, it did not really matter whether Athena was used for scheduled sightseeing tours or not. However, that attitude is, at best, equivocal. Mr Ell's business plan was dependent upon generating income from scheduled sightseeing tours as well as having the sales tax exemption. If the sales tax exemption was not available, one might expect that the Taxpayers would have redoubled any effort to generate income from scheduled sightseeing tours, rather than abandon that object. 111 Although not determinative, intention is relevant where, for example, a particular activity produces no income (see John v FCT [1989] HCA 5 ; (1989) 166 CLR 417) or where the first step in a business is undertaken (see Fairwell States Pty Ltd v FCT [1970] HCA 29 ; (1970) 123 CLR 153). It is necessary to examine the activities engaged in, including their nature and extent (see Martin v FCT [1952] HCA 36 ; (1953) 90 CLR 470 at 474). Activities may constitute the carrying on of a business even though the activities are carried on in a small way and it is not for the Commissioner to dictate to a taxpayer in which business the taxpayer engages or how to run a business profitably or economically (see Tweedle v FCT (1952) 180 CLR 1). Provided that an activity said to constitute carrying on business is engaged in for the purpose of profit on a continuous and repetitive basis, that activity may constitute the carrying on of business (see Hope v Bathurst City Council [1980] HCA 16 ; (1980) 144 CLR 1). 112 If there were no real expectation of a profit from engaging in a particular activity, there will be real doubt as to whether engaging in that activity can be said to be the carrying on of a business. Where the expenses and outgoings of an activity are disproportionate to any income that might reasonably have been expected from engaging in the activity that involved incurring those expenses and outgoings, it may be legitimate to draw an inference that the expenses and outgoings were not incurred in gaining or producing the relevant assessable income but were incurred for some other purpose. 113 Where expenses and outgoings claimed as deductions are disproportionate to the assessable income produced, subjective factors, including the direct and indirect objects of a taxpayer, may become determinative (see Fletcher v FCT [1991] HCA 42 ; (1991) 173 CLR 1 at 17-19). Where an expense or outgoing claimed as an expense or outgoing of a business is disproportionate to any assessable income that may be gained, it will not be as easy to conclude that the expense or outgoing was incurred in gaining or producing that income (see Spassked Pty Ltd v Commissioner of Taxation [2003] FCAFC 282 ; (2003) 136 FCR 441 at [64] ). 114 The state of mind or intention of a taxpayer may be relevant to the question of whether or not that taxpayer is carrying on a business. Even where a transaction produces no income, if the intention of the relevant taxpayer is that the transaction is the first step in a business, that subjective state of mind may be relevant. The acquisition of Athena was, the Taxpayers say, the first step in the carrying on of a business (see Fairway Estate Pty Ltd v FCT [1970] HCA 29 ; (1970) 123 CLR 153 at 166.8). Further, it is not for the Commissioner to dictate to a taxpayer in what way a business should be run. A business may be carried on even though it is not profitable or economical (see Tweedle v FCT (1952) 180 CLR 1), provided it is carried on with the purpose of making a profit (see FCT v Stone (2005) ATC 4234 at 4243). The Taxpayers say that they had a profit making purpose or intention in relation to the use of Athena. 115 The fact that taxation laws affected the shape of the transaction and even influenced the Taxpayers into entering into the transaction is not fatal to the conclusion that the Taxpayers were embarking upon a business venture. Tax deductions resulted in an early positive cash flow and the fact that there were tax advantages from the transaction does not adversely impact upon a conclusion that the Taxpayers were carrying on a business (see FCT v Spotless Services Ltd [1996] HCA 34 ; (1996) 186 CLR 404 at 415-416). If the Taxpayers entered into the arrangements with a view to profit, or that was their principal motivation, it would be open to conclude that they were engaged in carrying on a business. 116 Examination of the various business plans and projections, which are described above, is instructive as to whether the Taxpayers' intention was to incur the relevant expenses and outgoings in carrying on a business for the purpose of gaining or producing assessable income. Mr Ell's business plan projected a shortfall of $7,300, on the assumption that Athena would be acquired for $660,000 and would be sold for a net price of $600,000, giving rise to a capital loss of $60,000. Another assumption of his business plan was that income would be derived both from charters and from scheduled sightseeing tours. However, the projections for scheduled sightseeing tours appear to have no foundation at all. Although Mr Ell attributed to the suggestion for such tours to Mr Joyce and Mr Franki, no evidence was given by either of them to that effect. If the scheduled service sightseeing income is excluded, the shortfall was projected as being $332,400. It is difficult to see how that indicates an intention of carrying on a business, the object of a business is to generate a profit eventually. 117 Mr Ell projected income figures from charters that were significantly more optimistic than any provided to him by Mr Joyce. Mr Ell's rationale for rejecting Mr Joyce's projections, as being the optimistic views of a salesman, is quite irrational in circumstances where his own projections are significantly more optimistic. Mr Ell acknowledged that assumptions as to revenue depend upon industry or market knowledge and not mere modelling skills. However, none of the sources upon which Mr Ell says he relied would justify the use of the more optimistic figures that he adopted. The figures that he adopted do not reflect any process of analysis by persons of the ability and experience of the Taxpayers. Nor does Mr Bowman's narrative business plan exhibit the character of a commercial analysis that one might expect from individuals as astute and experienced as the Taxpayers. 118 The absence of any contemporaneous material relating to the business plans must cast some doubt on the circumstances in which the documents in evidence were brought into existence. It was not suggested to either Mr Ell or Mr Bowman that their documents were fabrications. However, even assuming that the business plans were brought into existence in the course of 1997, the complete absence of analysis projections or demonstrating a commercial rationale for the venture, namely a profit, suggests the alternative purpose postulated on behalf of the Commissioner, namely, obtaining tax deductions in the context of having a luxury yacht available for private use. 119 The assumption made about the resale value of Athena was based on Mr Hunt's statements. Mr Hunt, of course, was a salesman. Mr Ell said that he was not prepared to place reliance upon projections given by Mr Joyce because he was a salesman. It is difficult to see, therefore, why, as a prudent businessman, he could place reliance upon the statements made by Mr Hunt. 120 The actual results from the operation of Athena and Medusa during the years of income in question confirm the outcome predicted by the business plans and the projections, namely, that the expenses and outgoings would be significantly in excess of any income likely to be generated. Indeed, the Taxpayers accept that the venture could only be characterised as profitable in any sense because of tax advantages. The result, so far as Mr Ell was concerned, was a total loss of $304,060. Mr Bowman's total loss was $203,233. Mr Ell's was greater because of the losses and outgoings in relation to Medusa. Adopting Mr Bowman's loss in relation to Athena as the measure, the loss of the venture involving the Athena was $406,466. 121 Several specific matters, in addition to the absence of a credible commercial rationale for the acquisition of Athena, point to a conclusion that the purpose of the Taxpayers was not the gaining or producing of assessable income or the carrying on of a business. Those matters are as follows. 122 First , the Taxpayers took no independent professional advice in relation to the likely revenue from the operation of Athena, the expenses likely to be incurred in operating Athena or the likely resale value of Athena. Rather, to the extent that they relied on any advice, they relied on advice from persons interested in persuading them to acquire a yacht. The only independent advice appears to have been oral advice in relation to sales tax. Even then, they had no independent advice as to the feasibility of using Athena in the way that would be necessary to obtain exemption from sales tax. The Taxpayers accepted the proposal from EastSail that there be a minimum payment of $20,000 during the first 15 month period, notwithstanding that the Taxpayers had seen no such requirement in any standard documents that they had seen. 123 Second , notwithstanding scepticism on the part of EastSail, the proposed operator, the Taxpayers nevertheless entered into the venture. Thus, in his letter of 5 June 1997, Mr Joyce expressed the belief that operating in the tourism driven scheduled sightseeing market, on Sydney Harbour, would not achieve the Taxpayers', or EastSail's, commercial objectives with Athena. In the same letter, Mr Joyce adverted to the possibility of a shortfall of revenue as against expenses. In his letter of 20 June 1997, Mr Joyce said that EastSail would be constrained to some extent by the scheduled departure (or sightseeing) component of the proposed program. Mr Joyce did not see operation of Athena as being profitable for EastSail in the short term. 124 Third , the Taxpayers contended that the June Exchange covered all of the essential terms, including the undertaking of scheduled sightseeing tours, the dividing of the net charter revenue and the proposed transfer to Pittwater in winter. The June Exchange, however, was, on its face, not intended to be the final arrangement between the Taxpayers and EastSail. It was only intended to be the basis of working until the arrangements could be formalised. The effect of that declaration was that the Taxpayers stated that they intended to use Athena mainly in providing regular and scheduled sightseeing tours to the public for reward in the course of the business carried on by the Taxpayers. According to Mr Joyce's letter of 20 June 1997, that proposed use required revision of EastSail's standard management contract to reflect ' the important differences in the operational scenario for your yacht '. Further, the letter observed that EastSail would be breaking new ground with an operation on Pittwater, where less activity would be expected initially. Nothing was done to formalise that proposed use. 126 As Mr Joyce said, the proposed differences in operation would require special provisions in the marketing and operation of Athena by EastSail. Mr Joyce proposed advertising Athena in Gryphon magazine and production of a high quality brochure which was expected to cost in excess of $20,000 in the first year. Notwithstanding that Mr Bowman asserted that throughout the time they owned Athena, they never really ceased to have the declared intention, no attempt was made to hold EastSail to the promotional promises contained in the letter of 20 June 1997. No attempt whatsoever appears to have been made by the Taxpayers to give effect to their declared intention. The Taxpayers accept that, notwithstanding the terms of the exchange of 20 and 25 June 1997, which they claimed constituted the contractual arrangement with EastSail. EastSail did not promote Athena for either regular scheduled tours or charters. They say, however, that Mr Ell pursued those issues with Mr Hunt. Neither Mr Ell nor Mr Bowman gave evidence of doing so. Then there was no evidence of any promotion of Athena by EastSail at all. On the other hand, EastSail published advertisements for sightseeing voyages for a 10 metre yacht and for a yacht with a maximum capacity of 12 people. Athena could carry 25 passengers and was well in excess of 10 metres, yet no complaint was ever made to EastSail. 127 Fifth , notwithstanding the total failure to embark on any attempt to employ Athena in scheduled sightseeing tours, neither of the Taxpayers thought it appropriate to revisit their business plans in the light of the absence of income from that source. Further, even when it was clear that the sales tax exemption would not be available, neither of the Taxpayers considered it appropriate to revisit their business plans. It may be that nothing much would be achieved by reviewing and revising the business plans. Nevertheless, if the business plans represented a serious attempt to project the results of a business, it is surprising that they were ignored when a significant assumption made in them was shown to be false. 128 Sixth , the proposal for Athena to winter at Pittwater received no real consideration. As the letter of 20 June 1997 made clear, EastSail would be breaking new ground with an operation on Pittwater. They had not previously operated there and, while Mr Joyce expressed enthusiasm about the potential, there were in fact no facilities available. Mr Joyce's letter stated that Athena would have a ' dedicated pen ' at Rushcutters Bay for the time it operated on Sydney Harbour. Mr Ell endorsed a note that that would be from October to March inclusive and that from April to September, Athena would be at Pittwater. Even though EastSail had no operation at Pittwater and no imminent proposal for establishing one, Athena was taken to Pittwater for two winters. Whether or not it would have been possible for Athena to be brought to Sydney for charter and how and at what cost that would be done was simply not investigated at the time. Mr Ell said in evidence that he thought that a single crew member could bring Athena back to Sydney if required. However, he later said that moving Athena from the mooring at Pittwater was a difficult operation that required several people to execute. He said that it was certainly not something that one could do on one's own. 129 Seventh , the informality of the discussions between the Taxpayers and EastSail concerning the operation of Athena does not suggest a business on the part of the Taxpayers. The extent to which the Taxpayers met with EastSail to discuss the operation of Athena is not entirely clear. Mr Franki said that they met two or three times a year, while Mr Ell said that they met regularly. Mr Franki also said that he spoke to one or other of the Taxpayers once a month. The only written agenda for any meeting in evidence was for a meeting scheduled for 2 February 1999. It is not clear whether any other written agenda had been brought into existence. There are other written communications between the Taxpayers on the one hand and EastSail on the other, but none relates to commercial aspects of the arrangement. Rather, the other communications in evidence relate to maintenance or cleanliness of Athena. Mr Franki, who was the principal of EastSail, said that he met with either Mr Ell or Mr Bowman or both at Rushcutters Bay about two to three times a year. He also had telephone conversations with one or other of them about once a month, usually with Mr Ell. He described Messrs Ell and Bowman as ' The most proactive owners of vessels in the EastSail fleet '. In their discussions, they talked about charter fees, expenses, maintenance, insurance and promotion of Athena as well as new business prospects for her. He responded that EastSail showed off Athena at the Sydney on Sail Convention by putting it in the most prominent position in front of the Casino at Darling Harbour. On another occasion, Mr Franki told Mr Ell that EastSail had just established a website and that it had spent more than $40,000 on advertising in the Yellow Pages. However, there is no evidence that either Mr Ell or Mr Bowman ever complained about the failure by EastSail to comply with the undertakings contained in the June Exchange. While the lack of formality in the arrangements and communications between the Taxpayers on the one hand, and EastSail on the other is not fatal to a conclusion that the Taxpayers were engaged in carrying on a business, that lack of formality militates against such a conclusion. 132 Finally , while use by the Taxpayers was recorded by EastSail for the first few months of the arrangement, it was not maintained after March 1998. Private usage was estimated after the end of a tax year in connection with the preparation of tax returns. No record was ever kept. Even then, the Taxpayers treated private use as a proportion of the total day in the years of income on which Athena was owned by them for the purposes of proportional expenses and outgoings. While the matter is certainly not critical, the treatment of private use was anything but businesslike. 133 There is no doubt that the Taxpayers were intending to derive income from the use of Athena. They entered into businesslike arrangements with both EastSail and Sydney By Sea in order to produce income from the use of Athena. However, in the light of the considerations set out above, I do not consider that they were carrying on a business in relation to Athena. The venture of acquiring, operating and selling Athena is really only explicable by reference to the pursuit of tax deductions in the context of owning a luxury boat. Similar conclusions follow in relation to Medusa. 134 I am not persuaded, on the balance of probabilities, that the Taxpayers incurred expenditure and outgoings in relation to Athena in carrying on any business for the purpose of gaining or producing assessable income. Nor am I persuaded, on the balance of probabilities that Mr Ell incurred expenditure and outgoings in relation to Medusa in carrying on any business for the purpose of gaining or producing assessable income. That question calls for the identification of a business carried on by the Taxpayers. That in turn depends upon the nature of the relationship between the Taxpayers, on the one hand, and EastSail and Sydney By Sail, on the other hand, concerning the operation of Athena. 136 In relation to EastSail, the Taxpayers say that the June Exchange constituted the arrangements between them, notwithstanding the submission by EastSail to the Taxpayers of the Draft Lease on 20 November 1997. The Taxpayers say that the Draft Lease was never accepted by them and that, accordingly, the arrangements constituted by the June Exchange continued in force at all relevant times. 137 Nevertheless, when the Taxpayers wanted to end the arrangements with EastSail, Mr Ell resorted to the terms of the Draft Lease. Mr Ell said that he did so only because he had no other formal or informal way of cancelling their contract with EastSail. He thought that EastSail would be annoyed by reason of the cancellation and he referred to the terms of the Draft Lease in the hope that EastSail would think that he was ' within his rights '. He said that it was a tool he used to avoid a confrontation with EastSail. Notwithstanding the terms of the letter of 30 September 2000, Mr Ell said in cross-examination that he and Mr Bowman were dissatisfied with EastSail's performance and did not want to get into a fight with EastSail. 138 In the June Exchange, Mr Joyce spoke of the ' operation ' of Athena by EastSail. Thus, Athena was to be offered ' as a key vessel in a luxury yacht program to be promoted to the domestic corporate and inbound tourism markets '. Further, EastSail, ' as the operator ', was to have unlimited access to Athena for charter during the period when it was based in Sydney. The ' net charter revenue after retail discounts and agents commissions ' was to be shared equally between the Taxpayers and EastSail, with a minimum payment to EastSail during the first 15 months. EastSail was to implement a marketing program and was to have ' reasonable access ' to the Athena for the purpose of ' market development activities '. The Owner shall let and the Hirer shall hire the yacht by way of demise for a period of Three (3) years. The term may be extended by a further period of two years on the same terms and conditions as otherwise herein contained except for this clause, if both parties are agreeable to such further term. The yacht shall be employed in the yacht charter and sailing school trade between good and safe ports or places which it can lie always afloat within the geographical limits agreed upon from time to time by the parties. The Owner warrants that they agree to the current limits that the Hirer customarily sets. The sub-charterer will be informed of these geographical limits and safe ports. By informing the sub-charterer of those limits and ports, the Hirer is taken to have discharged their obligations under this clause. Rental payments in respect of each month shall be paid to the owner by the 30 th of the month immediately following. (a) The Lease shall take effect as a demise of the yacht and nothing herein contained shall be construed as imposing upon the owner any right or obligations in relation to the operation, maintenance, equipment, supply or manning of the yacht. Subject to compliance by the Hirer with the terms and conditions of this Lease the Hirer shall peaceably hold, enjoy and utilise the yacht for yacht charter and sailing school purposes without the hindrance or interruption of the Owner or by any other person claiming authority from him during the term of this Lease. The yacht shall be regarded as delivered to the Hirer pursuant to this agreement only after an inspection has been carried out by the Hirer to determine that the yacht is seaworthy and is fit for a charter and sailing school service as reasonable skill and care can make her. The Owner shall be under no liability whatsoever for any loss, damage or delay of whatsoever kind howsoever occurring or for any injury to or death of any person however such injury or death may occur, arising in connection with the yacht. The Owner shall have the right to terminate this Lease agreement with the Hirer after giving 6 months notice in writing. There will be a minimum payment of $20,000 to EastSail during the fifteen month period from the date of commencement of operation of the yacht on Sydney Harbour, projected for early January 1998. Reconciliation of this amount with actual income will be completed at the end of this fifteen month period. By Clause 4, EastSail was to pay rent to the Taxpayers and clause 6(a) made clear that the arrangement was to take effect as a demise of Athena. A demise would operate as a letting or hiring of Athena to EastSail. That is to say, for the payment of an agreed consideration, EastSail would have the right to use Athena for the purposes specified in the Draft Lease, namely, in the yacht charter and sailing school trade, as provided in clause 3 of the Draft Lease. 141 The Taxpayers point to the reference to ' sailing school trade ' and the reference in clause 4(a) to ' sailing school income ' as indicating the inappropriateness of the Draft Lease for the proposed arrangements between the Taxpayers and EastSail. Clause 17 also refers to sailing school service. The Taxpayers say that, at no stage, was there any proposed use of Athena in connection with the sailing school operations conducted by EastSail and that the references demonstrate that the Draft Lease was simply an EastSail standard form. Significantly, no reference is made in the Draft Lease to the possibility of use of Athena for the purpose of scheduled tours. 142 The Commissioner points to evidence concerning a voyage of Athena involving sailing school staff. However, it is clear enough that that is not a reference to any sailing school operation that was apparently conducted by EastSail at Rushcutters Bay. Any type of recreation, sailing or sight seeing that might be organised by the Manager. The Taxpayers accept that their arrangements with Sydney By Sail were governed by that agreement. However, Mr Bowman gave evidence of using Athena for sailing with business associates, including, for example, visiting representatives of a Japanese company and employees of Macquarie Bank. Macquarie Bank later chartered Athena. The Taxpayers also made Athena available for various charitable causes with which they were connected. 145 The Taxpayers contend that, while EastSail may have managed the day to day chartering activities in relation to Athena, the Taxpayers exercised management control over its use. Mr Franki said that, if there was any major decision to be made in relation to Athena, such as major maintenance, he consulted the Taxpayers for approval prior to instituting the work. The Taxpayers also pointed to their ability to move Athena to Pittwater at a time of their choosing during 1998, regardless of the terms of the Draft Lease, which provided that Athena was to be at Rushcutters Bay from October to March inclusive. In about March 1998, the Taxpayers discussed with Mr Franki the options for utilisation of Athena in the winter months. Mr Ell suggested to Mr Franki that Athena be used as a training vessel with an experienced skipper and a crew who wanted to train for offshore racing. He suggested that Athena could be taken up to Hamilton Island to participate in the races held there in August. Mr Franki prepared a budget for rigging Athena as a sail training vessel, but the expenses were too high. 146 On 2 May 1999, EastSail sent to the Taxpayers an estimate ' to put Athena into Australian Yachting Federation Category 2 Survey '. That class of survey would allow Athena to carry fare paying sailing school crew offshore on a trip to Hamilton Island. The total estimate of cost was $27,464. Estimated income, on ' best case scenario ' was $11,601. The letter ended by suggesting that ' The best option is to have the vessel delivered to Hamilton by a professional skipper. EastSail may be able to help find some non farepaying crew to assist in the delivery '. 147 The Taxpayers organised for Athena to be sponsored by Serco and PL Lease Management Pty Ltd in the Hamilton Island Races 1999. Those arrangements were made independently of EastSail. The Taxpayers arranged for Athena to be sailed to Hamilton Island by an experienced crew and it was chartered by Serco and PL Lease Management Pty Ltd. The Taxpayers derived about $10,000 in fees from the arrangement, which were not shared with EastSail. Serco paid the delivery cost to Hamilton Island, which was about $8,000. Athena was damaged on the return trip from Hamilton Island. Mr Ell dealt with the insurance company in respect of the claim. 148 Neither the June Exchange nor the Draft Lease explains, in their entirety, the arrangements that operated as between the Taxpayers and EastSail. When the Taxpayers decided to terminate the arrangement with EastSail in relation to the Athena, they invoked a clause of the Draft Lease. Mr Ell endeavoured to explain that circumstance by saying that there was no provision in the June Exchange for termination and that he considered it was appropriate to refer to the provision of the Draft Lease relating to termination when the Taxpayers decided to bring their arrangements with EastSail to an end. 149 The Taxpayers had nothing to do with the day to day commercial activities engaged in by EastSail in chartering vessels. EastSail in fact conducted regular scheduled sightseeing tours but did not employ Athena. During the period of the arrangements with EastSail, both of the Taxpayers were busy senior executives with Serco. Clearly, neither of them had anything to do with the day to day operation of Athena in deriving charter income. 150 Athena was in fact under the day to day control of EastSail. Athena was used, together with other yachts, in the business conducted by East Sail. Whether or not the arrangement could be characterised as a demise by the Taxpayers to EastSail may not matter. Clearly, however, it was EastSail who was conducting the charter business at Rushcutters Bay. Neither of the Taxpayers had any presence or involvement in any of the charter activities. The Taxpayers were not engaged in carrying on the business of letting the Athena on hire. That is the prerequisite for s 26 - 50 . If the Taxpayers were engaged in carrying on any business, the business consisted of the provision of Athena to EastSail for use in EastSail's business, in return for a share of the net income from that use, whether or not the provision to EastSail was by way of demise. 151 The Taxpayers contend that the role of EastSail was more akin to that of a manager, since it was the prospective charterer of vessels who chose the particular boat to be chartered. They characterise the role of EastSail as providing logistical support for Athena in the form of maintenance, catering and crewing and that the remuneration received by EastSail was the reward for organising that support. 152 The contentions of the Taxpayers in their Notices of Objection appear to accept unequivocally that the Draft Lease constituted the arrangements between the Taxpayers and EastSail, but that the arrangements were properly to be construed as an agency. It is difficult to avoid the conclusion that, whether or not there was a formal demise of Athena to EastSail, the essence of the arrangement was a letting or hiring of Athena to EastSail to enable EastSail to use Athena in connection with its charter operations, in consideration for which EastSail agreed to share earnings on the basis agreed. 153 For the reasons indicated above, I do not consider that the evidence supports a conclusion that EastSail engaged in chartering activities in relation to Athena as agent for, or in any way on behalf of, the Taxpayers. The Taxpayers were provided with regular records of the chartering of Athena and the income from that chartering. Clearly enough, the arrangement between the Taxpayers and EastSail was that EastSail would be entitled to use Athena in connection with its chartering business and that, in consideration for that use, EastSail would pay to the Taxpayers one-half of the charter income after deduction of relevant expenses consisting of crew, catering and the like. A similar conclusion follows in relation to Medusa and Mr Ell. 154 The Taxpayers' contentions in relation to s 26 - 50 (5)(b) assume that the Taxpayers were carrying on some business. However, they say that, whether their business was the business of letting Athena on hire is irrelevant, so long as Athena was being let on hire by someone, namely EastSail, and that occurred in the ordinary course of a business that the Taxpayers carry on: they say that their business was that of making Athena available to EastSail for use by EastSail for the purpose of generating assessable income from chartering. 155 I do not consider that that construction of s 26 - 50 (5)(b) is open. The ordinary meaning of the language of s 26 - 50 (5)(b) is that the boat is used by the taxpayer for letting on hire in the ordinary course of a business of hiring out boats that is carried on by the taxpayer. I have concluded that the Taxpayers were not engaged in any business of letting Athena on hire. Athena was let on hire in the ordinary course of a business carried on by EastSail. 156 Alternatively, the Taxpayers rely on s 26 - 50 (5)(d). Section 26 - 50 (5)(d) does not impose any restriction on the nature of the business being carried on by the taxpayer, except that the use of the boat must be for a purpose that is essential to the efficient conduct of the business. The Taxpayers say that, when Athena is being used to produce income from chartering, it is being used in a business and Athena is essential to the conduct of that business because, but for Athena, such a business could not be carried on. Thus, they say, whether or not Athena was the subject of an arrangement between the Taxpayers on the one hand and the charterer on the other, Athena was being used in a business carried on by the Taxpayers, namely, of letting out the use of Athena to EastSail and, subsequently, to Sydney By Sail. 157 The Commissioner responds to the Taxpayers' alternative contentions concerning s 26 - 50 (5)(b) and (d) by saying that they did not raise those contentions fully and in detail as grounds in their Notices of Objection, as required by s 14ZU of the Administration Act. The Commissioner says that their Notices of Objection, fairly read, raises only the ground that EastSail conducted the relevant chartering business as agent for the Taxpayers. The Commissioner says that the Taxpayers did not raise the matter adequately prior to submissions and should not now be permitted to rely on the contentions. 158 Under s 14ZU(c) of the Administration Act, a person making a taxation objection must state fully and in detail the grounds on which the person relies. Under s 14ZZ of the Administration Act, if a person is dissatisfied with the Commissioner's objection decision, the person may appeal to the Federal Court against the decision. Under s 14ZZO(a), in proceedings on appeal under s 14ZZ to the Federal Court against an appealable objection decision, the appellant is, unless the Court orders otherwise, limited to the grounds stated in the taxation objection to which the decision relates. 159 In their Notices of Objection, the Taxpayers said that, while the form of the arrangements with EastSail might be viewed as a lease agreement, in substance the arrangement was more akin to a management agreement under which EastSail acted as an agent for the Taxpayers. It is inconsistent with that contention to suggest that the Taxpayers were carrying on a business of letting Athena to EastSail and subsequently to Sydney By Sail. In the absence of any application for leave to rely on additional grounds, the Taxpayers are not entitled to raise as a ground the assertion that they were engaged in the business of letting Athena to the operators. 160 The Commissioner says, in any event, that the Taxpayers contentions in relation to s 26-50(5)(b) overlook the fact that it is a taxpayer who must use or hold a boat mainly for letting on hire and that the terms of that provision are not apt to describe the use now relied upon by the Taxpayers. That is to say, the use that the Taxpayers now contend for is the entirety of the business that the Taxpayers say they conducted and not merely a purpose that was essential to the efficient conduct of such a business. The Commissioner says that, since the Taxpayers have declined to describe the business that they now say they conducted, the Commissioner is not in a position to deal with the fresh contention. I have concluded that the Taxpayers did not incur the relevant expenditure and outgoings in carrying on any business. The alternative arguments, therefore, do not arise. 161 The Taxpayers claim, in the alternative, that, if they are not entitled to a deduction for all of the expenses and outgoings in question, because they do not satisfy s 26-50(5)(b) of the Assessment Act, they are entitled to a deduction at least to the extent of the income generated from the use of Athena. The Taxpayers contend that s 26-50(5)(b) and 26-50(5)(d) should be construed so as to permit the deduction of expenses and outgoings incurred at least to the extent that they resulted in the derivation of assessable income. There can be no doubt that the Taxpayers derived assessable income from the use of Athena and that Mr Ell derived assessable income from the use of Medusa. 162 Assuming that there is no legitimate objection to reliance upon the ground raised by the Taxpayers, the question is whether there is an appropriate basis for apportioning expenses and outgoings incurred in relation to Athena, and Medusa for that matter, to the income produced by the use of Athena and Medusa. It would certainly be a curious result that the Taxpayers should be required to bring to account the whole of the income produced by the use of the boats but are not entitled to any deduction for any of the outgoings or expenses that must of necessity have been incurred in order to produce that income. 163 On the other hand, that may be a question of fact, which has not been explored in the course of the hearing. That is to say, while the Taxpayers have established that the expenses and outgoings claimed as deductions have in fact been incurred, no attempt has been made to attribute particular expenses or outgoings to the production of any particular part of the assessable income brought to account in their respective returns. In that regard, it would be necessary to consider each item of each head of expense or outgoing separately. 164 The ' lease expenses ', as they are described, consist of payments made to a financier in relation to the acquisition of Athena. The precise nature of the arrangement is not clear. However, it is possible to draw the inference that the financing arrangement involved acquisition of ownership by the financier and the letting or hiring of the boat to the Taxpayers for a rent that would return to the financier the principal paid, together with interest at an agreed rate. Once the obligation to the financier was incurred by the Taxpayers, otherwise than for the purpose of a business, the obligation continued, whether or not Athena was subsequently used for producing assessable income. Of course, if the arrangement with the financier were entered into in order to put the Taxpayers in a position where they could produce assessable income, the position may be different. 165 The interest expense relates to the account opened by the Taxpayers with St George Bank. Expenses and outgoings were paid from that account, which went into debit under an overdraft arrangement, and a liability for interest was thereby incurred. However, no attempt has been made to demonstrate that any particular expense or outgoing paid from the account was attributable to the production of any particular part of the assessable income in question. 166 By far the greatest expense is depreciation. A basic prerequisite for depreciation being allowed as a deduction is that the unit of plant be used for the purpose of producing assessable income. There can be no doubt that Athena was, in the relevant years, used for the purpose of producing assessable income. Section 42-45(3), however, adds the further prerequisite that s 26-50(5) also be satisfied. Nevertheless, even if a unit of plant is used for the purpose of producing assessable income for a small part of the relevant year and is otherwise used for other purposes, depreciation will not be allowed at the full rate for the whole of the year (however there must be a qualification). 167 Where a deduction is claimed for depreciation and the unit of plant is subsequently sold for a price greater than its depreciated value, the excess must be brought to account as income. According to the business plans prepared by the Taxpayers, their expectation was that such a balancing charge would be imposed. Even so, there was a tax advantage in deferring the payment of tax for several years. The rollover provisions of the depreciation scheme would permit that deferral to be extended if, upon sale of a thing, the Taxpayers acquired another boat. Mr Ell gave some evidence of an understanding that the depreciation provision would operate in such a way that a significant tax advantage, albeit only a deferral, would be obtained. 168 Repairs and maintenance and other expenses may possibly be shown to be attributable to the producing of particular parts of the assessable income. However, no attempt has been made to do so. Whatever the purpose of the Taxpayers in acquiring and using Athena in that way may have been, it is fair to characterise the arrangements that they had with EastSail and, subsequently, Sydney By Sail, as business arrangements. 169 Repairs and maintenance and other expenses may well be attributable to particular charters or the use of Athena for the purpose of charters. However, as with other expenses and outgoings, no attempt has been made to link any particular expense or outgoing with any particular item of income. Whether or not it would be necessary for the Taxpayers to demonstrate that they were engaged in carrying on a business, they have made no attempt to demonstrate that any particular expense or outgoing was actually incurred in gaining or producing the assessable income returned in the relevant income years. Significant parts of the expenditure and outgoings would, in their nature, not be capable of attribution to particular income. On the other hand, there may be expenses or expenditure that could be so attributed. For example, an expense incurred in order to ready Athena for a particular charter, being an expense that would not be incurred but for that charter, may well fall within the first limb of s 8-1. Even so, of course, the expense would be excluded by the operation of s 26-50(1), if s 26-50(5) were not satisfied. I am not persuaded that the assessments were excessive in so far as they relate to the disallowance of the deductions claimed. That is to say, Taxpayers have not discharged the burden imposed on them by s 14ZZO(b)(i) of the Administration Act of proving that the assessments are excessive. The Commissioner concluded that the Taxpayers had not demonstrated that reasonable care had been taken in the performance of their obligations under the Assessment Act. In particular, the Commissioner relied on evidence suggesting that the Taxpayers acted in a manner contrary to professional advice, which could be viewed as constituting intentional disregard for taxation obligations, particularly in the matter of the sales tax exemption. The Commissioner concluded that the Taxpayers had not demonstrated that the tax shortfall was not the result of carelessness in making claims for deductions and had provided no ground relevant to the remission of the penalty imposed for the years ended 30 June 1998, 1999 and 2000. 172 Having regard to the conclusions that I have reached concerning the deductibility of the expenses and outgoings claimed by the Taxpayers, I am not persuaded that the Commissioner erred in concluding that the Taxpayers' tax shortfalls were the result of carelessness on their part. It follows that I am not persuaded that the assessments in question were excessive by reason of the inclusion of penalty tax at the rates imposed by the Commissioner. The Taxpayers should pay the Commissioner's costs of the appeals. The eight appeals have been heard as one. If any adjustment of the costs order is required by reason of the additional issues relating to Medusa and Mr Ell, the parties should raise that matter within seven days.

objections and appeal whether certain expenses incurred by taxpayers in connection with the operation of a yacht are allowable deductions whether the taxpayers were carrying on a business for the purpose of gaining or producing assessable income whether at all times in the relevant years the taxpayers used the yacht mainly for letting on hire in the ordinary course of a business carried on by the taxpayers, mainly for transporting, for payment in the ordinary course of a business carried on by the taxpayers, the public or goods or for a purpose that was essential to the efficient conduct of a business carried on by them. taxation

In my opinion none of the summons should be discharged. Division 1 of Part 5.9 of the Act made provision for the examination of persons about corporations. Section 596A dealt with 'mandatory' examinations and s 596B dealt with 'discretionary' examinations. Mr Crouch's application for the issue of the examination summons in question was made in accordance with rule 11.3 of the Federal Court (Corporations) Rules 2000 (Cth) ('the Rules') which required the application to be supported by an affidavit stating the facts in support of the process. In accordance with rule 11.3(7) an affidavit in support of an application for an examination summons is not to be made available for inspection by any person unless the Court otherwise orders. As it transpires, Mr Crouch has made copies of his affidavits sworn 25 November 2008, 4 December 2008 and 28 October 2009 available for inspection by counsel for Messrs. McDonald, Myers and Chapman on the undertaking of such counsel not to disclose the contents of the affidavits or make inspection of them available to any other person without the leave of the Court to do so. The Deputy Registrar in the New South Wales Supreme Court declined to so restrict the examination. Review of the Deputy Registrar's decision was sought whereupon McLelland J, as his Honour then was, dismissed the examinee's application for an order restricting the examination. That decision was reversed on appeal to the Court of Appeal but restored following an appeal to the High Court. In light of the purpose of the section, great weight must be given to the views of the liquidator when the court considers whether to order an examination ... The same approach must be taken by the court when it makes orders or gives directions in relation to an examination in progress. The very purpose of the section is to create a system of discovery, which may cause defences to be disclosed, for the purpose of bringing charges. The section gives to the liquidator rights not possessed by an ordinary litigant ... . In these circumstances it must be accepted that the section applies equally to proceedings which the liquidator "might be able to bring, proceedings he contemplates bringing, proceedings he has decided to bring, and proceedings he has already brought" ... To adopt the language of Kitto J in Mortimer v Brown [(1970) [1970] HCA 4 ; 122 CLR 493 at 496] , to hold otherwise "would render the provision relatively valueless in the very cases which call most loudly for investigation". There is no presently relevant distinction in substance between gathering information referable to commencing proceedings and gathering information referable to continuing proceedings. There may be more risk of or opportunity for the examination being vexatious or oppressive after proceedings have been commenced .... Also an abuse of process may be more readily exposed once proceedings are already on foot. But this is surely not to the point, as vexation or oppression will not be tolerated no matter when the examination is held. But he must not abuse this process. For instance an attempt, where litigation is either contemplated or commenced, to summon the prospective or existing defendant's probable witnesses and examine them simply for the purpose of destroying their credit would exceed the legitimate use of the process. Beyond stating this extreme instance, I consider it unsafe to generalize --- very often the gathering of information quite properly involves testing the reliability or credit of the examinee from whom the information is being obtained. The type of examination which could be vexatious, oppressive or harassing will not be difficult to recognize. If counsel is appearing for the party being examined, he will no doubt take objection where necessary. And if the examinee is unrepresented, one can be confident that the Master himself would intervene were a situation to develop where the examination departed into a field which is abusive of the process of the court. I reiterate that the mere fact that the subject matter of the examination is directly concerned with issues currently being litigated or matters incidental to such issues will not of itself render the proceedings abusive. Provisions such as s 596B have a long history. In practice, in many cases the applicant for an examination order is the liquidator of a company which is being wound up. Liquidators often experience difficulty in obtaining necessary information concerning the affairs of the company, and they may not be able to depend upon former officers of the company to assist them in that regard. Indeed, they may wish to assert rights of the company against such former officers (see per Gleeson CJ, then of the Supreme Court of New South Wales, in Hong Kong Bank of Australia Ltd v Murphy (1992) 28 NSWLR 512 at 517). The scope and operation of s 596B of the Act is such that it will inevitably intrude on private and commercial interests of third parties and require the disclosure of information which would, absent such a provision, be confidential. Despite those consequences, the provision must be given full effect, in accordance with its terms, reflecting a choice made by the Parliament as to the necessary balance between such private and commercial interests and the public interest in the orderly administration of companies under the control of external managers (per Basten JA, Beazley JA agreeing, in Meteyard v Love [2005] NSWCA 444 ; (2005) 65 NSWLR 36 ('Meteyard') at [136]). The statutory definition of 'examinable affairs' is so wide that it would be unwise to assume that matters of future intention are necessarily beyond its scope (per Santow JA in Meteyard at [10]). It would be equally unwise to assume that information already known to a liquidator should be excluded from questioning in respect of examinable affairs (per Santow JA in Meteyard at [11] and Basten JA at [139], Beazley JA agreeing). An examination directed at testing a liquidator's preliminary view that claims in current litigation have good prospects of success in not an objectionable purpose (per Barrett J in O'Brien v Wily (2009) 74 ACSR 145 ('Wily') at [37]-[38]). Where the predominant purpose of a liquidator in conducting examinations is to put himself into a position from which he can make a final decision whether or not to pursue litigation is permissible (see per Barrett J in Wily at [45]). The approach taken by Courts to prevent abuses of process in inter-partes litigation may not necessarily apply in all circumstances to summons issued pursuant to the investigative powers conferred upon, amongst others, a liquidator, as an eligible applicant in relation to a corporation's examinable affairs. However, what has been said in relation to abuse of process in the context of inter-partes litigation will, of necessity, be relevant to determining questions of abuse of process in respect of the issue and use of examination summons. It has been said repeatedly in the judgments of this court that the categories of abuse of process are not closed. In Walton the majority adopted the observation in Hunter that courts have an inherent power to prevent misuse of their procedures in a way which, although not inconsistent with the literal application of procedural rules of court, would nevertheless be "manifestly unfair to a party to litigation ... or would otherwise bring the administration of justice into disrepute among right-thinking people". This does not mean that abuse of process is a term at large or without meaning. Nor does it mean that any conduct of a party or non-party in relation to judicial proceedings is an abuse of process if it can be characterised as in some sense unfair to a party. It is clear, however, that abuse of process extends to proceedings that are "seriously and unfairly burdensome, prejudicial or damaging" or "productive of serious and unjustified trouble and harassment". Nor would they accept that there should be a rule which would bar the prosecution of some actions according to whether the agreement met some standards relating to the degree of control or the amount of the reward the funder might receive under the agreement. It was not shown that apprehensions that the funder might improperly interfere with the conduct of the proceedings could not sufficiently be addressed by "existing doctrines of abuse of process and other procedural and substantive elements of the court's processes". No such impermissible purpose is apparent in the circumstances of this case. Furthermore, one must not overlook Street J's observation in Re Hugh J Roberts Pty Ltd that testing the reliability of an examinee from who information is being obtained can be a legitimate use of the examination power. It would appear that Tumut set up a number of tax avoidance schemes between about 1991 and 1997. The various schemes were horticultural schemes of which Tumut was the promoter. To participate in the schemes taxpayers, referred to as 'investors' needed access to funds which they could use in conjunction with their own initial capital contributions to enable them to acquire allotments and then become 'growers' in respect of the fruit produced from orchards established on their several 'allotments'. Tumut made advances of funds to 'investors' as part of the various schemes. HP Mercantile Pty Limited, the first applicant named in the Further Amended Interlocutory Process, claims that the resultant debts owed by the several taxpayers to Tumut in respect of the various schemes were duly assigned to three companies, namely Core Finance Pty Limited, Symsung Pty Limited and Treetop Projects Limited, that those companies in turn assigned the debts to Merilbah Investments Pty Limited (formerly known as Bejemi Pty Limited and Arnott-Smith Holdings Pty Limited) ('Merilbah') which, in turn, assigned them to HP Mercantile Pty Limited. Mr Crouch's interest in examining Messrs McDonald, Myers and Chapman is to ascertain the nature and extent of the indebtedness of the several taxpayer/investor/growers to Tumut and to investigate the validity of the assignments of the debts so owed to Core Finance Pty Limited, Symsung Pty Limited and Treetop Projects Limited. Tumut was wound up under a creditors' voluntary winding up with Maxwell William Prentice and Vince Christopher Barilla being appointed as joint liquidators on 28 April 1999. On 7 January 2006 it was deregistered. However, on 7 July 2008 the registration of Tumut was reinstated by an order of the Supreme Court of New South Wales whereupon Nicholas James David Crouch, the plaintiff/respondent in these proceedings, was appointed as Tumut's official liquidator. On 25 November 2008 Mr Crouch in his capacity as liquidator of Tumut made an ex-parte application under s 596A of the Act and Rule 11.3 of the Rules, as the plaintiff, for orders with respect to the issuing of summons for the examination of two persons who had previously served as, in one case, a director and, in the other, a secretary, of Tumut. That originating process was superseded by an Amended Originating Process dated 5 December 2008 in which the orders were sought under s 596A ' and or section 596B ' of the Act and Rule 11.3 of the Rules. These loans were assigned up to 4 times to a number of companies during 1996-2004. The terms of the arrangement will be negotiated once I have expressions of interest from those prepared to fund the liquidation. Therefore the funder should be relieved of the obligation to pay anything to [HP Mercantile Pty Ltd] or me as liquidator. I confirm that orders of the Court of this kind are discretionary. If the level of support is adequate, I will invite funding at a rate of $300.00 per allotment or $750.00 for Tumut River Orchard Projects of 1991 & 1992. If adequate funding is not pledged I will finalise my investigations. On 7 February 2008 Mr Crouch and Shabnam Amirbeaggi were appointed as joint liquidators of Merilbah. On 11 September 2009 Mr Crouch as official liquidator of both Tumut and Merilbah sent a circular to 'INVESTORS & CREDITORS'. Therefore the funder should be relieved of the obligation to pay anything to [HP Mercantile Pty Ltd] or me as liquidator. I confirm that orders of the Court of this kind are discretionary but are consistent with the public policy of s 564 of the Corporations Act . An Australian Securities & Investments Commission Historical Organisation Extract of 18 March 2009 suggested that Mr McDonald had been a director of Merilbah from 5 August 2001 to 29 January 2006 and that Mr Myers (referred to as 'Myres') had been appointed as a director and secretary of Merilbah on 29 January 2006. In an affidavit sworn 9 November 2009 Mr Chapman deposed to the fact that neither Mr McDonald nor Mr Myers had ever been a director, officer or employee of HP Mercantile Pty Limited. Mr Chapman deposed to being a director of Stratford Capital Corporation Pty Ltd ACN 003 391 946 which serves as the manager of a portfolio of loan debts for HP Mercantile Pty Limited. He further deposed to being authorised to swear his affidavit on behalf of, amongst others, HP Mercantile Pty Limited, Mr McDonald and Mr Myers. However his assertion that the first relevant assignment from Tumut to Treetop Projects Limited took place on 29 May 1998 demonstrates that he is clearly able to give information about that aspect of Tumut's examinable affairs. The summons served on Mr McDonald required him to attend before the Court for examination on oath or affirmation about the examinable affairs of Tumut and to produce at his examination certain books. The summons included definitions of 'books', 'financial records' and 'document' but it is unnecessary for present purposes to go to the extended definitions of those words. In the early afternoon on 3 December 2009 Mr Crouch through his counsel submitted to the Court three documents entitled ' SCHEDULE TO McDONALD SUMMONS ', ' SCHEDULE TO MYERS SUMMONS ' and ' SCHEDULE TO CHAPMAN SUMMONS '. These Schedules proposed the further variation of the summons directed to Messrs McDonald, Myers and Chapman by deleting all material appearing after the words '(b) to produce at the examination the following books:' and preceding the date of the summons and substituting the relevant Schedule. 003 501 611 ( TROM ) to Core Finance Pty Limited A.C.N. 097 362 877 ( HPM ) in or about August 2001. It required his attendance before the Court to be examined on oath or affirmation about the examinable affairs of Tumut and to produce at his examination certain books. Once again the summons included extended definitions of the words 'books', 'financial records' and 'document'. The ' SCHEDULE TO MYERS SUMMONS ' which was provided by counsel for Mr Crouch in the early afternoon of 3 December 2009 sought a variation of the summons directed to Mr Myers by the deletion of all words appearing in the summons after '(b) to produce at the examination the following books:' and preceding the date thereof with the same words as were proposed in the 'Schedule to McDonald Summons' for inclusion in the McDonald summons, including the same typographical error where the word 'of' was plainly omitted from paragraph 4. In the case of Mr Chapman the summons directed to him was also issued on 30 October 2009. It required him to attend before the court to be examined on oath or affirmation about the examinable affairs of Tumut and to produce certain books at his examination. Once again, the summons included extended definitions of the words 'books', 'financial records' and 'document'. 003 501 611, Treetop Projects Limited A.C.N. 081 209 298, Core Finance Pty Limited A.C.N. 073 869 897 (sic) , Symsung Pty Limited and or Merilbah Pty Limited (In Liquidation) A.C.N. 003 501 611 ( TROM ) to Core Finance Pty Limited A.C.N. 097 362 877 ( HPM ) on or around 31 August 2001. 002 979 893 ( Merilbah ). That Schedule incorporated definitions of ' Document ' and ' Documents ' which had been deleted from the earlier iteration and then repeated the words used in the 'Schedule to McDonald Summons' down to and including the proposed new paragraph 4, incorporating the same typographical error as had been included in the McDonald and Myers schedules. Any valuation of the Loan Books or any of them for the period 1 July 2001 to date. Having said that, I must say that I have some remaining concern with the reformulation of paragraph 6 in the proposed Schedules to the summons directed to Mr McDonald and to Mr Myers. I have difficulty in seeing how any consideration paid by Merilbah to Core Finance Pty Limited, Symsung Pty Limited and/or Treetop Projects Limited for the assignment to it of choses in action acquired by Core Finance Pty Limited and/or Symsung Pty Limited and/or Treetop Projects Limited from Tumut could bear upon the business, trading, transactions and dealings, property, liabilities, profits and other income, receipts, losses, outgoings or expenditure of Tumut (see s 53 of the Act). There are other difficulties with paragraphs 1(a)(ii) and (iii), 1(b)(ii) and (iii), 1(c)(i) and (ii) and 1(d)(ii) and (iii) for the same reason. It is submitted that he cannot properly act in the interests of the creditors and contributories of Tumut whilst he is serving as a joint liquidator with Ms Amirbeaggi in respect of Merilbah. As liquidator of Tumut his inquiries relate to the debts owed by the taxpayers/investors/growers to Tumut and the possible assignment thereof to Core Finance Pty Limited and/or Symsung Pty Limited and/or Treetop Projects Limited. He wishes to ascertain whether the assignments may have been ineffective or otherwise invalid. Wearing his hat as a joint liquidator of Merilbah it is said that Mr Crouch's interest is in establishing the effectiveness and validity of the assignments of the several debts to Core Finance Pty Limited and/or Symsung Pty Limited and/or Treetop Projects Limited such that Merilbah validly acquired and thereby became the owner of the relevant choses in action, which it was then able to validly assign to HP Mercantile Pty Limited. Secondly, they submit that the proposed means of funding Mr Crouch's costs and expenses in undertaking the proposed examinations of them is an improper exercise of the powers of the liquidator of Tumut. Thirdly, they submit that each of the summons is too wide in terms of the books the production of which is sought in that they travel beyond books that relate to Tumut or to any of its examinable affairs. In this regard they submit that the summons are so expressed as to indicate that Mr Crouch is seeking to use the summons for a collateral and impermissible purpose. They assert that two of the three examinees are presently persons who have provided affidavits for use in proceedings in the District Court of New South Wales in which HP Mercantile Pty Limited is plaintiff and Tumut is a defendant. Fourthly, they submit that the summons call for the production of books that do not relate to Tumut or to any of its examinable affairs and are simply personal documents of the individuals. Fifthly, they submit that the summons have not been issued in the interests of the creditors or contributories of Tumut and that there is no relevant public interest in having the individuals named therein examined. What is revealed may provide the foundation for a decision to commence, or to proceed with existing, litigation or to refrain from so doing. The facts as revealed may provide a basis for claims to be made which will be met without the necessity for any litigation. Liquidators are well-attuned to the need for discernment when reviewing factual matrices of which they become aware. Whether they be liquidators of other companies that may be related to the company whose affairs are under examination or that may have had dealings with such company is, generally speaking, irrelevant. They will have as much interest in learning that an item of property is an asset of company A as in learning that it is not such an asset, if there is reason to doubt what may be perceived or alleged to be the true position. Questions of conflict of interest will only arise if there are disputed claims to the same assets by companies of which the same person is liquidator. The allegation that Mr Crouch is 'hopelessly conflicted' is premature and may never be warranted. Were there to be disputed claims to the same assets one might reasonably expect that Mr Crouch would seek the appointment of special liquidators to Merilbah to deal with the conflict. In any event, the role of Ms Amirbeaggi as a joint liquidator of Merilbah cannot be overlooked. It would be trite to say that a liquidator's primary focus will be upon serving the interests of the creditors and contributories of the company that is in liquidation. Such a liquidator certainly has no obligation to find ways and means whereby debtors of the company can avoid their obligations to the company. Arguably, it would be improper for Mr Crouch to use funds of Merilbah to conduct investigations into the examinable affairs of Tumut, but that does not mean that monies which may have been subscribed to provide funding for further public examinations, that may have been banked into an account in the name of Merilbah, are necessarily to be taken to be funds of Merilbah in the circumstances of this case. As the authorities cited above make clear, the fact that two of the intended examinees may have provided affidavits for use in proceedings in the District Court of New South Wales in which HP Mercantile Pty Limited is a plaintiff and Tumut is a defendant, is irrelevant, so long as the liquidator does not abuse the process for which s 596B of the Act makes provision. In normal circumstances, the mere engagement of the investigation process will not of itself constitute an abuse of process. The fact that a liquidator may already have copies of relevant documents provides no justification whatsoever for such a liquidator being deprived of the opportunity to obtain or to seek to obtain further copies of those documents, if they exist, from persons who are able to give information about the examinable affairs of the company in liquidation. Other copies of documents may reveal textual differences between copies, alterations, handwritten notes subscribed thereto, the use of different typefaces in the creation of the different copies, different document codes endorsed thereon, and so on. The mere fact that a particular examinee has or lacks a copy of a particular document may well bear upon the efficacy of transactions affecting the company's property which are under consideration. It seems to me that the liquidator has a very real interest in exploring the true position in respect of the so-called assignments of the choses in action which were said to have arisen upon the borrowing of funds from Tumut by the various taxpayers/investors/growers, to enable them to participate in the various schemes. The examination process provides a just mechanism whereby the liquidator may elicit the facts relevant to the making by him of a decision as to the existence of unpaid debts that may be owing by such taxpayers/investors/growers to Tumut, and the recoverability thereof. The ability of HP Mercantile Pty Limited to collect debts owed by taxpayers/investors/growers to Tumut is plainly dependent upon the existence of enforceable debts owed by such persons to Tumut and the validity of the respective assignments to the various intermediate 'owners' of those debts and the assignments thereof from Merilbah to HP Mercantile Pty Limited. A liquidator of Tumut might reasonably expect that anyone seeking to enforce the payment of the relevant debts would be able to provide information as to the existence of the debts, the validity of the assignments thereof to Core Finance Pty Limited, Symsung Pty Limited or Treetop Projects Limited as the case may be, the cost of recovering debts said to have been lawfully assigned and the perceived value of such debts. Similarly, a liquidator of Tumut might reasonably expect that officers of Merilbah, as one of the alleged intermediate owners of the relevant choses in action, would be able to provide like information with the exception of recovery costs that may have been incurred in securing the payment of debts. Whilst Mr Chapman may have been a director of Stratford Capital Corporation Pty Limited which served as the manager of a portfolio of loan debts for HP Mercantile Limited, the fact that Mr Chapman was authorised by HP Mercantile Pty Limited, Mr McDonald and Mr Myers to swear his affidavit of 9 November 2009, further demonstrates that each of Messrs McDonald, Myers and Chapman are persons likely to be able to give information about examinable affairs of Tumut. In my opinion the second, third and fourth applicants have failed to make out a case for the discharge of the examination summons directed to them. No direction should be given at this stage about the matters to be inquired into at the several examinations, under s 596F(1)(a) of the Act. This brings me to a consideration of the requirements sought to be imposed upon each of the second, third and fourth applicants for the production of specified books that may be in their respective possession and which relate to Tumut or to any of its examinable affairs. They did not demonstrate an interest in ascertaining information about the examinable affairs of Tumut except in the most oblique way. For instance, there may have been within minutes of meetings of directors of Merilbah or other documents concerning or relating to the management of Merilbah, information revealing a lack of authenticity or validity in respect of assignments of choses in action by Tumut to Core Finance Pty Limited, Symsung Pty Limited and/or Treetop Projects Limited, but this was not readily apparent from the formulation of the document production requirements in the summons. The problem with the summons filed 30 October 2009 was not cured by the omission of paragraph (b)(ii) as occurred on 2 December 2009. If one were to construe the ' SCHEDULE TO McDONALD SUMMONS ' which was provided to the Court in the early afternoon of 3 December 2009 as an application for amendment of the examination summons directed to Mr McDonald, I would not allow the amendment in the terms proposed. In my opinion the requirements of the ' SCHEDULE TO McDONALD SUMMONS ' which are to be found in paragraphs 1(a)(ii) and (iii), 1(b)(ii) and (iii), 1(c)(i) and (ii), 1(d)(ii) and (iii) and 6 should not be allowed. However, subject to the deletion of the definition of 'document' and 'documents', it would be appropriate to allow amendment to the examination summons to require the production of documents answering the description of the remaining paragraphs in the ' SCHEDULE TO McDONALD SUMMONS '. It would also be appropriate to correct the typographical error in paragraph 4 by inserting the word 'of' after 'in respect'. In his case, the deletion of paragraph (b)(iv) did not overcome the fundamental deficiencies in those requirements. The observations made by me in respect of the proposed further amendment of the summons directed to Mr McDonald also apply to the proposed further amendment of the summons directed to Mr Myers as set out in the ' SCHEDULE TO MYERS SUMMONS '. The summons directed to Mr Myers should be dealt with in the same way as the summons directed to Mr McDonald. Whilst some parts of the document production requirements of the summons may have withstood scrutiny, many of the requirements, on the face of it, were inappropriate. The second iteration of the requirement for the production of documents as recorded in the first ' SCHEDULE TO CHAPMAN SUMMONS ' constituted a significant improvement on the first iteration, but it also contained deficiencies. The ultimate version upon which Mr Crouch now seeks to rely shares a number of problems in common with the schedules referable to the McDonald and Myers summons. In my opinion, an amendment to the examination summons directed to Mr Chapman should be allowed subject to the deletion of the definitions of 'document' and 'documents' and the deletion of paragraphs 1(a)(ii) and (iii), 1(b)(ii) and (iii), 1(c)(i) and (ii) and 1(d)(ii) and (iii). The second, third and fourth applicants propounded that each of the examination summons should be discharged and in this regard they have failed to make good their case as recorded in the Further Amended Interlocutory Process filed 30 November 2009. However, in relation to their alternative prayers for relief seeking the striking out of requirements for the production of documents, they have been substantially successful both in respect of the original formulation of the relevant requirement and the later formulations as well. In my opinion the appropriate order as to costs would be one under which the plaintiff/respondent, Mr Crouch, was required to pay one quarter of the second, third and fourth applicants' costs. Whilst it could be said that each party has enjoyed a measure of success and accordingly there should be no order as to costs, the fact is that the plaintiff/respondent did not propound an appropriate requirement for the production of documents, notwithstanding two opportunities to address the significant deficiencies in the original formulation of the document production requirements. To avoid the necessity of further costs being incurred what I propose to do is to make an order in the terms which I have proposed, but I will direct that such order not be entered for a period of seven days to allow either party to make an application seeking a different order in relation to costs. I certify that the preceding eighty-one (81) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.

application to discharge examination summons whether abuse of process whether requirements for the production of documents should be set aside corporations

First there are the costs thrown away by reason of the trial having to be adjourned on the second day of the hearing. Second are the costs of the resumed trial in which both the claim for infringement and the cross-claim for revocation were dismissed. 2 The costs of the adjournment present no difficulty. Both sides were dilatory in filing their evidence --- there was an order that the trial be on affidavit and a timetable for filing affidavits was set and ignored. In particular, the parties were late in filing the evidence of their experts. Part only of the blame lies with the respondents who took some time to get their house in order. Nevertheless the trial was adjourned because the respondents filed the third affidavit of their expert, Mr Hunter, on 13 November 2006, being the first day of the trial. Upon reading the affidavit it was apparent the applicants would require time to investigate what Mr Hunter said and, most likely, prepare answering material. That is how events turned out. The applicants did apply for the adjournment and the order was made. The respondents must pay the costs thrown away. 3 The more interesting question is what should be done with the costs of the trial. In my reasons I suggested that each side should bear its own costs. Mr Hess SC who with Ms Marks appeared for the respondents said in a detailed written submission that the claim and cross-claim should be treated as one case and, since the applicants failed in their infringement action, they should be treated as having failed in the entire case and thus ought pay the respondents' costs. 4 This rather bold submission was not made under cover of a fall back position, for example, that there should be an apportionment of costs on an issue by issue basis. As that was not pressed I will leave it out of account. I note in passing, however, that I see no difficulty in holding that the incidence of costs should be decided on an issue by issue basis. Most often an apportionment of that kind will produce a better result than will the blunt application of the "costs follow the event" rule. In this case, however, I will confine my attention to whether the respondents should get all the costs. 5 This action exhibits an undesirable feature that has become standard fare in patent litigation. Most patent cases begin with an infringement action. The common practice is for the defendant to deny infringement and cross-claim for the revocation of the patent. Often there is no merit in the cross-claim. It is brought for tactical reasons, for instance to put pressure on the applicant in the hope of achieving a satisfactory settlement. The idea is that an applicant might not be willing to run the risk, however slight, of having his patent, which is often a very valuable right, struck down. 6 It is difficult to know how to deal with this problem, the seriousness of which should not be understated. First of all, patent litigation is expensive. Judges share part of the blame for very often they do not impose adequate restraints on the manner in which the parties conduct their case. But judges are usually not in a position early on to work out which claims are hopeless and make appropriate orders. That only becomes apparent at trial, by which time it is too late to do much about it. 7 Second, patent litigation is not just expensive, it also takes up a great deal of judicial time. If courts are required to expend scarce resources dealing with hopeless cases, other litigants will suffer as their cases are necessarily put off in the meantime. 8 I do not know what motivated the respondents to bring their cross-claim for revocation. I do know it wholly lacked merit. Mr Hess said that the grounds for invalidity were limited and based on reasonable grounds. The pleaded grounds for invalidity were hardly limited. The grounds were want of novelty, lack of inventiveness step, not a manner of manufacture and not a patentable invention being a mere collocation of previously known integers. In written submissions filed shortly before the trial all these grounds of invalidity were pressed. In the end no evidence was called to support them. This simply will not do. Were I to award the respondents any costs in these circumstances it would be to condone their action, if not encourage others to follow it. 9 I propose to allow the costs to lie where they fall, as I had indicated I was minded to do. In other cases it may be necessary to go further. The usual order for bringing a hopeless case is to require the losing party to pay indemnity costs. Sometimes even that might not be enough. In patent litigation the parties are often large organisations that will not sufficiently feel the pain of an indemnity costs order. In those cases (I do not suggest this one) the proper order might be to require the legal practitioner to himself bear the costs, coupled with an order that the practitioner shall not be entitled to recover those costs from his client, notwithstanding any agreement to the contrary. I fear that only orders of that kind will deter parties from bringing hopeless cases. But, these are issues for another day. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.

trial adjourned adjournment caused by late filing of affidavit respondents to pay costs of adjournment on indemnity basis resumed trial each party partially successful no order as to costs cross-claim for revocation cross-claim hopeless discussion of appropriate costs order costs patents

I stated that I would deliver reasons at a later date. What follows are my reasons for making the orders that day. Ms Fegan brings this proceeding as President of Victoria No. 1 Branch of the Health Services Union, and a member of the Union. The respondent, Ms Kathy Jackson, is the National Secretary of the Union. Ms Fegan sought interim orders pursuant to s 164(4) of Schedule 1 to the Workplace Relations Act 1996 (Cth) requiring Ms Jackson to apply forthwith to the Industrial Registrar for certification of changes to the rules of the Union (in so far as they related to the internal management of Victoria No. 1 Branch). These changes were purportedly made by the Branch Committee on 24 February 2009. In essence, Ms Fegan contended that, under the Union's rules, Ms Jackson, as National Secretary, was required to apply to the Industrial Registrar for certification of the rule changes. Counsel for Ms Jackson opposed the making of interim orders sought by Ms Fegan. The applicant relied on her own affidavit affirmed on 26 March 2009. The respondent filed no answering affidavits. The Union has rules registered under that Act. The Branch Committee passed the relevant resolution "with a vote of twelve members in favour and one against". The letter asked Ms Jackson to "confirm by 4.00pm, Thursday 12 March 2009 that you have taken the appropriate steps". The letter enclosed a copy of the declaration referred to in (5) below. The declaration was entitled "Notice Under Regulation 126 of the Workplace Relations (Registration and Accountability of Organisations) Regulations 2003 " and set out the particulars of the rule alterations. Ms Fegan purported to provide the requested information by letter dated 18 March 2009. Ms Fegan received this letter on 16 March 2009. The terms of the grant to the Court of authority 'to make such orders as it thinks fit in relation to the matters to which the proceedings relate' indicate that the Court has a wide discretion as to the form of order to be made. The exercise of this discretion cannot be restricted to the making of orders for the performance or observance of the rules, or for that matter to directions as to matters which will conduce to performance or observance of the rules. The history ... suggests that in its present form it is designed to enable the Court to make any interlocutory order which will safeguard the position and interests of parties pending a final determination, provided that it bears a relationship 'to the matters to which the proceedings relate'. Yet they are not susceptible of the construction which the prosecutors seek to place upon them. It is impossible to read 'the matters to which the proceedings relate' as signifying no more than the relief claimed by the applicant in the proceedings, or, for that matter, than the issues which are raised for decision in the proceedings. The words, we think, signify the controversy between the parties to which the proceedings relate, whether or not it be crystallized as an issue in these proceedings or in the form of the relief sought. I am by no means convinced that these tests, which have been applied by courts in dealing with applications for interlocutory injunctions, are appropriate to the specific statutory power under s 209(4) of the Act. It should be noted that the power to make interim orders is given in broad terms. The court may make "such interim orders as it considers appropriate". Parliament has not chosen to use the word "injunction". The practice in granting or refusing interim orders differs from the practice in relation to interlocutory injunctions in at least one important respect. It is rare for an applicant for interim orders to be called upon to give an undertaking that he or she will pay damages in the event of failure. In my view, it is the duty of the court to do justice as best it can when confronted by an application for interim orders. Sometimes, the evidence proffered by an applicant will be uncontested and will demonstrate a strong case. In such circumstances, a court will naturally be more ready to make orders on an interim basis. Whilst bearing in mind the test for a conventional interlocutory injunction, in such a case as this, it is and was "the duty of the court to do justice as best it can". Under the rules, the Union is made up of various Branches, including Victoria No 1 Branch: see rule 48. Rule 44(a) provides that all branches "shall be completely and absolutely autonomous within the ambit of these Rules, and shall be responsible for their own Government and administration". The control of the Branch resides exclusively in the members of the Branch, who shall be bound by these Rules. This Rule can never be altered except by a ballot of all financial members of the Union. Such alteration to be carried must receive a majority vote of two-thirds of the financial members of the Union. (e) Any rule or rules made by a branch pursuant to clause (d) of this rule shall be forwarded to the National Secretary who, upon receipt of any information and documentation necessary for the purpose, shall forthwith apply to the Industrial Registrar for certification of the same and upon certification such rule or rules shall form part of the rules of the Union for all purposes other than Rule 71 but shall apply only to the Branch initiating the same. [Emphasis added. (2) Under Regulation 126 of the Regulations (see [18] above) an organisation had 35 days after an alteration to the rules is made to lodge the notice required by Regulation 126(1)(a) with the Industrial Registrar. The function of the Industrial Registrar was to register the rules, as altered, but, in doing so, the Registrar was required to satisfy himself or herself that the rules had been properly passed. (3) By virtue of rule 49(e), the National Secretary was the officer of the Union obliged to take the steps that ensured compliance with Regulation 126. The form of rule 49(e) was mandatory. (4) Rule 49(e) made no provision for the National Secretary to be satisfied as to any matter, but required the National Secretary to forward certain documents to the Industrial Registrar. This duty arose once the National Secretary had been given the rules made by the branch pursuant to rule 49(d) and the information and documentation necessary for making application to the Industrial Registrar. (5) In the present case, the National Secretary had this information and documentation at the latest when Mr Jackson wrote to the National Secretary, as explained in his letter to Ms Fegan of 17 March 2009. (6) The 35 th day after the making of the alteration to the rules by the Branch Committee was to expire on the day the application for interim orders was heard. The National Secretary had not taken the action she was obliged to take under rule 49(e) and she had given no explanation for her inaction. (7) The applicant had a strong case, being very likely to succeed at trial. The prejudice was that the time in which the Union was required to lodge the notice required by Regulation 126(1)(a) was to expire that day. Although the Registrar might allow additional time, it was not known whether or not the Registrar would consider that there existed grounds to justify an extension. In any event, there was no reason to believe that the National Secretary would lodge the requisite notice in the future. The fact that the grant of the interim orders sought would be tantamount to a grant of final relief should not deter the Court from granting interim relief. (2) The obligation under rule 49(e) was to "apply" whilst the requirement in s 159 of Schedule 1 and Regulation 126 was to "lodge". According to counsel for Ms Jackson, the rule presupposed something that was not found in the legislation. (3) There was nothing to show that the applicant or the National Secretary was authorised to sign the declaration referred to in Regulation 126(2), in accordance with Regulation 12. (4) The rules as altered were not made by a branch within the meaning of rule 49(e) of the Union's rules because the rules as altered by the Branch Committee went beyond rules relating to the internal management of the Branch. (5) The Court should refuse to deal with the application because it should not be satisfied that the applicant has taken all reasonable steps to try to have the matter the subject of the application resolved. Towards the end of his submissions, counsel for Ms Jackson gave an undertaking to do all things practicable to apply to the Industrial Registrar on the afternoon of the hearing to seek an extension of time until 14 April 2009. An attempt on the afternoon of the hearing to apply for an extension was later said to be to no avail. Each branch may make rules regarding its internal management, and add to, amend, rescind or alter these rules "insofar as they relate to the internal management of a branch": see rule 49(d). Under rule 49(a), the Branch Committee has the government, management and control of the affairs of the branch; and, under rule 49(d), either the Branch Committee or the members in special meeting may make or alter the rules as to internal branch management. However, under s 159(1) of Schedule 1 of the Workplace Relations Act , an alteration of the rules of a Union does not take effect unless particulars of the alteration have been lodged in the Industrial Registry and a Registrar has certified in accordance with s 159(1), including that, in the Registrar's opinion, the alteration has been made under the Union's rules and is not contrary to law. A Registrar may refuse to certify an alteration of the rules under s 159(1) of Schedule 1 unless there is compliance with Regulation 126: see Regulation 126(3). The notice required by Regulation 126 must contain a declaration "signed by an officer of the organisation authorised to sign" the declaration, stating that the alteration was made in accordance with the rules, the action taken to effect the alteration, and that the particulars in the notice are "true and correct to the best of the knowledge and belief" of the person signing. The Rules contemplate that the National Secretary is the officer of the Union who is required to take the steps for compliance with Regulation 126. This much appears from rule 49(e). Rule 49(e) casts a duty on the National Secretary to apply to the Industrial Registrar for certification of an alteration to the rules made under rule 49(d), when the National Secretary receives the rules as altered and any other information and documentation required to apply to the Registrar. Rule 49(e) makes it clear that any alterations to the rules made under rule 49(d) must be forwarded to the National Secretary and that, "upon receipt of any information and documentation necessary for the purpose", the National Secretary is obliged "forthwith" to "apply" to the Industrial Registrar for their certification. Rule 49(e) thus creates a duty, which the National Secretary must perform. The information and documentation necessary for the National Secretary to apply to the Industrial Registrar for certification is that which is required by Regulation 126. That is, the National Secretary cannot comply with Regulation 126 unless the Secretary has a notice setting out the particulars of the alteration as required by Regulation 126(1)(a) and containing a declaration as required by Regulation 126(2). Counsel for Ms Jackson made much of the difference between the need to "lodge" in s 159 of the Schedule and Regulation 126, before the Registrar could proceed to certify the rules as altered, and the requirement to "apply" to the Registrar for certification spoken of in rule 49(e). Plainly enough, the rules of the Union should be construed in a practical way. Whilst in some contexts the differences in meaning between the words "lodge" and "apply" may be important, in the present context, it would seem that the words are used more or less interchangeably. It is clear that rule 49(e) contemplates that the National Secretary "apply" for certification, in the sense that the National Secretary takes such steps as are necessary to secure certification --- which, by virtue of s 159 of Schedule 1 (see [11] above) and under Regulation 126, requires the lodgement of a notice in conformity with Regulation 126. It is possible too that rule 32(f) may be called in aid to answer Ms Jackson's submission on this point. Further, for present purposes, it is reasonably arguable that the effect of rule 54(ii) is to authorise the applicant, in her capacity as President, to sign the declaration required by Regulation 126(2). The "Notice Under Regulation 126 of the Workplace Relations (Registration and Accountability of Organisations) Regulations 2003 " given by the applicant to the National Secretary on 5 March 2009 assumed as much, containing as it did a declaration in the terms required by Regulation 126 signed by the applicant. There was nothing to indicate that Ms Jackson as the National Secretary disputed this assumption prior to the hearing of the application for interim orders. If, as Ms Jackson at one stage suggested, the Notice was deficient because it did not set out the steps taken under the rules to alter the rules, it is reasonably arguable that any such deficiency was corrected (as far as concerned Ms Jackson) when Mr Jackson as Branch Secretary supplied the information and documentation to Ms Jackson as National Secretary, as indicated in his letter of 17 March 2009. Further, at this stage at least, I am unconvinced by Ms Jackson's argument that the rules as altered were not rules relating to the internal management of the Branch. Be this as it may, the Industrial Registrar is obliged to form an opinion on whether or not the alterations have been lawfully made in accordance with the Union's rules. Before the Industrial Registrar certifies changes to the rules, the Registrar must form an opinion on the matters set out in s 159(1) of Schedule 1 (see [11] above), including that the change has been made under the rules of the organisation and is not contrary to law. The making of the interim orders sought by the applicant merely ensures that the rules as altered are placed before the Industrial Registrar for consideration. It is not a step towards approving the certification of invalid rules, as contended by counsel for Ms Jackson. Before turning to "balance of convenience" type considerations, I note that, in the circumstances, I was satisfied that the applicant had taken all reasonable steps, within the meaning of s 164(3) , to try to have the matter the subject of the application resolved. He drew attention to Rule 21(l) which confers power on the National Council 'to interpret these Rules'. I would not refuse to deal with the present application merely because the applicant has not sought to have the validity of the resolutions resolved by an interpretation of the Rules by the National Council. Section 164(3) speaks of "all reasonable steps". An applicant is not required by s 209(3) to engage in conduct the result of which is purely speculative. Mr Langmead, who appeared for the national body, intervened with leave in support of the respondent. It would not in my view be reasonable for the applicant to expect the National Council to interpret the rules in a way that would defeat the side with which it is aligned. In any event, whatever the Council's ruling on the meaning of the rules, the matter would return to the Court. An interpretation of the rules made by the Council cannot exclude the jurisdiction of the Court. To require the applicant to approach the Council would, in my view, simply consume time to no avail. In the circumstances, to require the applicant to have communicated with Ms Jackson again before making this application would have been a somewhat pointless exercise. I appreciate that the grant of the interim orders sought was tantamount to the grant of final relief. In Conquo v Jackson [2009] FCA 45 , Sundberg J considered whether or not it was necessary to establish a stronger than usual case in such circumstances and held that it was not. In Bradto Pty Ltd v State of Victoria [2006] VSCA 89 ; (2006) 15 VR 65 the Court of Appeal rejected a submission that because part of an interlocutory injunction required positive action, it was mandatory and not prohibitory, so that it should not have been granted unless there was a high degree of assurance that at trial it would appear that the injunction was rightly granted. There is nothing in the body of authority to which we have referred, nor any consideration of principle, which requires a special test to be applied to one subcategory of such injunction applications, namely, those where mandatory relief is sought. On the contrary, as pointed out convincingly by Hoffman J in Films Rover , the grant of a mandatory injunction may be justified in a particular case notwithstanding that the court does not feel the requisite 'high degree of assurance'. On the contrary, we think that it must be relevant on every application for an interlocutory injunction to consider the likelihood of the plaintiff succeeding at trial. Not only is such consideration a necessary part of deciding whether there is a serious question to be tried, but the plaintiff's prospects of success will almost certainly be a factor in the evaluation of the balance of convenience. It is to be remembered that an order under s 164 is defined so as to include 'directions for the performance' of any rules of an organisation by a person who is under an obligation to perform them. This will often be a mandatory order that results in the giving of final relief. An interim order under s 164(4) can plainly be an order of the same type as that granted at trial under subs (1). The applicant made a strong showing that there was a serious question to be tried as to whether, in failing to apply to the Industrial Registrar for certification of the alteration of the rules as passed by the Branch Committee on 24 February 2009, the National Secretary was failing to perform the duty laid on the National Secretary by rule 49(e). The National Secretary did not point to any prejudice to her or anyone else if the National Secretary was required to lodge the notice with the Industrial Registrar as required by Regulation 126. There was prejudice to the applicant and the Branch Committee if the National Secretary was not required to take this step. It will ultimately be for the Registrar to form the opinion as required by s 159(1) of Schedule 1.

organisations union rules amended by branch committee pursuant to rules of the union whether interim orders should be granted requiring national secretary of the union to apply forthwith to the industrial registrar for certification of rule changes role of the industrial registrar before certification of changes to the rules test for interim orders whether interim orders should be granted application granted industrial law

The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs (the first respondent) to refuse to grant a Protection (Class XA) visa to the appellant. 2 The appellant is a citizen of the People's Republic of China. She legally departed from China on 1 August 2006 and arrived in Australia on 2 August 2006 as the holder of a sponsored visitor visa (Class UL, subclass 679). On 17 August 2006 she lodged an application for a Protection (Class XA) visa with the Department of Immigration and Multicultural Affairs which was rejected by the Minister's delegate on 23 October 2006 and the appellant was notified accordingly. 3 On 26 October 2006 the appellant applied to the Tribunal for a review of that decision. She is of Uigher ethnicity. She was married in September 1962. She worked as a teacher whilst in China however her teaching career was interrupted for a time during the middle 1960's when she and her husband, who was also a teacher, were dispersed to work on a farm in difficult circumstances. They lived there for 13 years before returning to teach at their original schools in 1977. In 1990 her husband was detained by Chinese authorities and died in 1993 in detention. The appellant ceased working in 1991. She said she was made to retire. She said that she was given a pension because she had no other income and children to support. 5 The appellant claimed to have six children, three boys all older than their three sisters. Two of her children currently reside in Australia; her daughter emigrated to Australia in 1995 as the spouse of an Australian citizen; and her son arrived in Australia in 2006 claiming to be a refugee. He was initially refused a protection visa by the delegate of the Minister. He sought a review of that decision in the Tribunal which found him to be a person to whom Australia has protection under the Refugee's Convention. The circumstances and consequences of her son's entitlement to a protection visa form a part of the argument advanced before me on the appellant's behalf which I will address later in these reasons. 6 The appellant claimed that she feared persecution for reason of her ethnicity, religion and imputed political opinion. She is a Muslim and of Uigher ethnicity, who originates from Xinjiang province, formerly called East Turkestan. She claimed specifically that family members, particularly her husband, grandfather, son and son-in-law have all suffered at the hands of authorities because of their ethnicity and involvement in the Uigher community; that she was sent with her husband to work on a farm and that she was separated from him when he was imprisoned in 1990; that she was forced out of her job because she was the wife of a suspected "separatist"; and that she was not permitted to practise her religion or any religious rituals. She also asserted that she was suffering from unspecified "health problems" which could not be treated in China. She tendered a letter from a Dr Nareen Wilson dated 13 September 2006 stating, amongst other things, that the appellant was "a refugee" who suffered from Post Traumatic Stress Disorder and was "an epileptic" and had "not been able to get any medications in China due to persecutions. It determined that her claim that she was the mother of the sixth child was untrue. The Tribunal found that child could not possibly be the appellant's natural child, but be her granddaughter or her brother's child and later adopted by the appellant. 8 The Tribunal addressed the country information which it had received. The country information put before it was to the effect that the Uigher population in Xinjiang province continues to be at a disadvantage due to China's Develop the West Program. The Uighers are being deliberately persecuted for practising and preserving their culture and religion. The Chinese government initially introduced a two track education system but has since replaced it with a variation that requires all schools to teach in Chinese, although they may also teach in the local language as well. The dominant position of standard Chinese in government, commerce and education puts users of minority languages at a disadvantage. Amnesty International notes that the Uighur population in China's Xinjiang province continues to be at an economic and social disadvantage largely due to China's Develop the West Program and her (sic) subsequent influx of Han Chinese to the region. However, the repression of the Uighers stems deeper than mere disadvantage, as they are being deliberately persecuted for practising and preserving their culture and religion. The applicant's account of her grandfather and husband's experiences appear to be consistent with the country information cited above. However, the question to be addressed is whether the applicant herself is a victim of persecution. 9 The reference by the Tribunal to the Uighers being at more than a disadvantage but being "deliberately persecuted for practising and preserving their culture and religion" was extracted from a report of Amnesty International of 11 October 2006. The Tribunal made no comment on this aspect of the country information in that part of its decision under the heading of "Findings and Reasons". 10 As can be seen, the Tribunal stated that the question to be addressed was whether the applicant herself was a victim of persecution. The question the Tribunal posed itself is important. 11 It accepted the appellant's claim regarding her working life but noted that the practice of dispersing segments of urban populations to rural areas was widespread in China during the period the appellant and her family were forced to work as farmers, and it was not limited only to Uighers. The Tribunal accepted the appellant's claim of separation from her husband on the basis of his involvement and activism within the Uigher community, and also the evidence of the appellant's son-in-law, who was detained in China while visiting in 2002/2003. However, it did not find that this amounted to persecution of the appellant on a Convention ground, as it did not necessarily follow that she suffered discrimination by association. The Tribunal found that the fact that the appellant's son was granted a protection visa "does not support that the applicant is herself a person to whom Australia has protection obligations under the Refugees Convention". It was not satisfied that the appellant had suffered discrimination on the basis of her ethnicity. The Tribunal rejected the appellant's claim that she was discriminated against in her employment as a teacher, instead determining that her retirement in 1991 was on the grounds of ill-health and that she was granted a government pension. 12 The Tribunal accepted country information that the Chinese government had a policy of controlling and regulating religious groups and of crackdowns against Muslim Uighers. However, it held that there was no claim that the appellant suffered persecution or came to the attention of authorities on the basis of her religion. It held there was no evidence that she lost her teaching position because of her religion, or that she was effectively prevented from practising her religion in private, or that she was treated any differently from the population at large regarding her religion. In making this finding the Tribunal said the applicant had not made a claim that "she suffered persecution or came to the attention of the authorities on the basis of her religion". 13 The Tribunal also held that while the appellant had recently become a member of the East Turkestan Association in Australia and regularly attended mosque, she had not been engaged in activities in Australia that were likely to bring her to the attention of the authorities upon her return to China. The Tribunal does not accept that the applicant faces a real chance of serious harm amounting to persecution in the reasonably foreseeable future. The Tribunal is not satisfied that the incidents that the appellant describes, taken individually or cumulatively, amount to persecution or discrimination within the meaning of the Convention. The Tribunal asked the wrong question in relation to whether the Applicant had a well-founded fear of persecution, in that it failed to consider whether there was a real chance of future persecution, even in the absence of past persecution. The appellant argued, citing Wang v The Minister for Immigration and Multicultural Affairs [2000] FCA 1599 ; (2000) 105 FCR 548 , that two elements of the concept of religion as expressed in the Convention must be considered; the manifestation of personal faith and the practice of faith in a congregation or like-minded community. She contended that the failure to consider her claim that she was restricted in her public expression of faith constituted a jurisdictional error. 17 His Honour held that it was literally incorrect for the Tribunal to find that "she has made no claim that she suffered persecution ... on the basis of her religion" because evidence provided by the appellant and her agent clearly demonstrated she was making such a claim. However, it also determined that the appellant's evidence and submissions did not amount to an "especially focused reference to the denial of public worship". It did not include a great deal of information about specific instances of persecution relating to the applicant personally. That does not mean that it did not have to be given proper consideration but it does have an impact on our (sic) evaluation of the way the Tribunal went about its task. The one very specific occasion referred to in the statutory declaration is identified in the Tribunal's findings (the visit by an official to her house during prayer). The reference to the fact that her employment has not been lost and as to the applicant not being the focus of specific attention by the authorities are unsurprising observations in a decision of this kind. It is a matter of the Tribunal putting the allegations in some perspective rather than an indication that the Tribunal was suggesting that such allegations were a necessary part of an allegation of religious persecution. 18 His Honour held that the appellant's claims did not identify specific instances of personal persecution and as such the Tribunal was principally engaged in evaluating the meaning of "serious harm" under s 91R of the Migration Act 1958 (Cth) (the Act) rather than trying to apply an "inappropriate test" as to what constitutes religious persecution. 19 His Honour held that while the Tribunal dealt somewhat summarily with matters of the specific and personal circumstances of the appellant, it nonetheless considered them and therefore did not fall into jurisdictional error in dealing with persecution on the basis of the appellant's religion. 20 In relation to the second ground, the Federal Magistrate noted first, that the Tribunal had little difficulty in accepting the appellant's account of her husband's activities and of the difficulties they experienced from the Chinese authorities. Secondly, his Honour noted the activities of the applicant's son, who had been asked to spy for the Chinese in the East Turkestan community in Australia, had been actively involved in the community's activities within Australia, and had recently been successful in his review from the Minister's refusal to grant him a protection visa. His Honour was prepared to draw the inference that the Tribunal had access to the file held by the Tribunal differently constituted in relation to the appellant's son. 21 It was accepted by counsel before the Federal Magistrate that the only relevance this information had was with respect to the appellant's claims of how a well-founded fear of persecution on account of political opinion could be imputed to her on account of her association with her husband and her son, and inferences that might be drawn from that by the Chinese authorities. I think that a fair reading of the Tribunal's decision indicates that such a consideration was properly evaluated. The Tribunal knew of, and noted, the experiences of both the applicant's husband and son (and son-in-law, less significantly). The husband had, after all, died in detention. What was significant for the Tribunal, and, I may say, understandably significant, was that, notwithstanding these issues, the applicant had not suffered convention-related harm herself. The Tribunal found (and it was not disputed) that she was not a political activist herself (CB 332). Her claim for refugee status on account of political activity (bound up with Uigher ethnicity) was always to be evaluated on family association criteria. Apart from the fact of her ethnicity, it did not otherwise arise on the facts of this case. I am satisfied the Tribunal did give proper consideration to the political opinion that might be imputed from her son's East-Turkistan activities, just as it did to that which might have been imputed from her deceased husband's activities. 23 The Federal Magistrate turned his mind to the third ground of appeal: that the Tribunal had applied an incorrect test in asking whether the appellant had suffered significant past persecution, and had not properly assessed the risk of future persecution. 24 Counsel relied on Appellant S395/2002 v Minister for Immigration and Multicultural Affairs [2003] HCA 71 ; (2003) 216 CLR 473 and argued that although the Tribunal might have been entitled to examine the appellant's living circumstances in China and reach the conclusion that no past persecution had in fact occurred, the absence of past persecution did not mean that there was not a real chance of persecution in the future. He argued that the Tribunal paid little to no attention to the risks of the appellant suffering persecution upon her return to China. 25 The Federal Magistrate agreed that the Tribunal had dismissed the question of future persecution quite summarily. In these circumstances, the Tribunal can only find, as here, that no chance of serious harm on account of such activities will occur in the reasonably foreseeable future. 26 His Honour therefore dismissed the appellant's application for judicial review. 29 Finally, it is asserted in the notice of appeal that the Federal Magistrate erred in concluding that the Tribunal had properly considered the appellant's claim for fear of persecution on the basis of a political opinion imputed to her by reason of her son's political activities in Australia, and had properly taken into account the fact of the grant of a protection visa to the appellant's son in its consideration. 30 During argument the appellant's counsel applied for leave to amend a further ground of appeal directed to the passage in the Tribunal's reasons referred to in [8] of these reasons. Counsel asked for time to consider the precise wording of the amendment. I directed the appellant to formulate the amendment within 7 days and each party to provide me with written submissions in relation to the application for leave to amend and the substance of the amendment. The parties complied. 31 Whilst the first respondent argued that the ground should be dismissed, no separate argument was put that leave should not be given. 34 The appellant contended that whilst the Tribunal addressed the appellant's historical claims, the Tribunal did not address the ultimate question which was whether the appellant had a well-founded fear of persecution if the appellant were to return to China. 35 It was contended that the Tribunal did not apply its mind to what persecution the appellant might suffer by reason of her ethnicity, religion or imputed political opinion if she were to return to China. It merely concentrated on past events. 36 It was put that the appellant had given the Tribunal explicit material which showed that she would be restricted in the manner in which she could practise her religion. She tendered evidence in the form of a statutory declaration and country information which showed that the Chinese State restricted the practice of Islam by Uigher members. In particular, she claimed that the Tribunal failed to address the thrust of her claim, which was that she was restricted from practising her religion in public and required to practise her religion discreetly and privately. 37 The third ground of appeal relied upon by the appellant related to the grant of a protection visa to her son and any political opinions that might be imputed to the appellant by the Chinese authorities because of that fact. It was submitted that the appellant had already provided information to the Tribunal regarding her son's political profile. 38 It was argued that the Tribunal expressed too wide a principle in holding that the fact that the appellant's son had had his protection visa application remitted by the Tribunal "[did] not support that the applicant is herself a person to whom Australia has protection obligations under the Refugees Convention. " The appellant submitted that the Tribunal again fell into jurisdictional error by dismissing the relevance of the appellant's son's claims and by failing to consider whether the appellant might be at risk of persecution because of her son being granted a protection visa in Australia. 39 As to the fourth ground the appellant contended that the passage quoted amounted to a finding of the Tribunal and was not merely a re-stating of Country Information, and that because it is implicit that the persecution was ongoing, the Tribunal should have considered whether the appellant may be persecuted as a person of Uigher ethnicity. 41 It submitted that the Tribunal had given explicit reasons and findings in respect of five aspects arising from the appellant's claims which, coupled with the fact that the appellant had been able to obtain a passport in China; had taken no steps to go anywhere other than Australia; had neither been a victim of persecution nor been seriously harmed in the past; and had stated to the Tribunal that she was attracted to Australia because the situation was good and that she wanted to be with family and was assured by her daughter of better medical care, meant that her claim to the Tribunal was bound to fail. 42 The respondent also addressed each of the appellant's grounds of appeal. 43 In relation to ground 1 of the notice of appeal, the respondent submitted that the Federal Magistrate was correct in holding that the Tribunal acted properly in finding that despite numerous members of her family being imputed with separatist political beliefs and actually being persecuted by Chinese authorities, no harm had befallen the appellant in the past as a consequence. Furthermore, it submitted, the Tribunal was entitled to take this into account in determining if the appellant had a "well-founded fear" of future persecution and that the Federal Magistrate was right to rely upon Minister for Immigration and Ethnic Affairs v Guo [1997] HCA 22 ; (1997) 191 CLR 559. The Minister submitted that the question as to whether the harm (or potential harm) feared by the appellant was capable of constituting "persecution" for Convention purposes was a matter for the Tribunal, and that the Tribunal correctly assessed the question without falling into jurisdictional error. 44 In relation to ground 2 of the appeal, dealing with the appellant's religious beliefs, the respondent submitted that the Federal Magistrate dealt with this issue in detail and properly assessed this aspect of the appellant's claim on the basis that the appellant was an adherent of Islam and if returned to China she may continue to practise her religion. 45 The respondent further submitted that no error of the type referred to in Appellant S395/2002 216 CLR 473 arose because the Tribunal focused on the appellant's particular circumstances. The first respondent argued that the Federal Magistrate correctly held that the Tribunal was properly engaged in the task of identifying whether a well-founded fear of "serious harm" had been established, rather than attempting to apply, it submitted, an inappropriate test as to what constitutes religious persecution. 46 The respondent submitted that the Federal Magistrate was correct in dealing with the Tribunal's decision regarding the appellant's son and that no error was apparent in His Honour's decision and ground 3 should be dismissed. 47 The first respondent contended that the appellant's late-raised fourth ground of appeal should be dismissed. The first respondent submitted that, properly read, the passage of the Tribunal's reasons did not mean that the Tribunal accepted as fact that all Uighers are being deliberately persecuted. Rather, it submitted, the Tribunal was reciting an assertion of information provided by Amnesty International. It therefore submitted that no jurisdictional error arose from this passage of the Tribunal's decision. 49 First, in my opinion, contrary to the finding of the Federal Magistrate, the Tribunal did not address the appropriate question in considering the appellant's claims. The question that the Tribunal needed to consider was whether the appellant had a well-founded fear of persecution. This required the Tribunal to consider whether if the appellant were to return to her country of origin, in this case China, there would be a real chance she would be persecuted for a Convention reason. 50 It is, of course, relevant in determining whether there is a real chance that an event will occur for a particular reason in the future to consider whether similar events have or have not occurred in the past for the same or similar reasons. It was appropriate, therefore, for the Tribunal to determine whether or not the appellant herself had been subject to persecutory conduct for a Convention reason: Guo [1997] HCA 22 ; 191 CLR 559. 51 However, a finding that she has not previously been subject to persecution for a Convention reason does not necessarily answer the question as to whether there is a real chance that she will be subject to persecutory conduct in the future if she were to return to China for a Convention reason: Appellant S395/2002 216 CLR 473 per Gummow and Hayne JJ at 499. 52 In this case, the Tribunal addressed the question of past conduct but did not consider the question of future conduct. That specific question had to be addressed and answered. In that sense, it did not exercise the jurisdiction which is bestowed upon it under the Act. 53 The second reason why, in my opinion, the Tribunal fell into error is that the Tribunal did not address one integer of the appellant's claim. She claimed that, by reason of her husband's conduct, her son-in-law's conduct and, more relevantly, her son's conduct, their political opinions would be imputed to her which would give rise to persecutory conduct on the part of the authorities. The Tribunal did not consider whether her son's conduct and the granting of a protection visa to him as a result of the decision of the Tribunal would be likely to give rise to persecution for their political opinions. The Tribunal misunderstood the relevance of the appellant's son being granted a protection visa. 54 Thirdly, in my opinion, the Tribunal fell into error by failing to deal properly with the appellant's claims of feared persecution because of her religious beliefs. There was significant evidence put before the Tribunal as to the manner in which the appellant was restricted by the Chinese State in the practice of her religion, and also as to the manner in which she wished to practice her religion, namely in public with other members of the Muslim community. Despite this, the Tribunal held that "[t]he applicant has not claimed ... that she was effectively prevented from practising her religion in private. She made no claim that she suffered persecution or came to the attention of the authorities on the basis of her religion. I would add that that interpretation is consistent with the commonly understood meaning of religion as including its practice in or with a like-minded community. 56 For the Tribunal to simply state that the appellant was not prevented from practising her religion in private in my opinion was an error. The Tribunal failed to properly address the appellant's claimed restrictions on her ability to practice her religion openly with others, and whether those restrictions amounted to persecution under the Convention. 57 Fourthly, the Tribunal's conclusion contradicted its own finding. The appellant is a Uigher from the Xinjiang province. At [8] of these reasons I have quoted what, in my opinion, was an unambiguous finding of the Tribunal that the Uigher population is being deliberately persecuted for practising and preserving its culture and religion. As I have said, the first respondent contended that the Tribunal did not make such a finding but was merely recounting the account given by Amnesty International. I reject that contention. 58 Earlier in its reasons, the Tribunal set out three different reports: United States Department of State Country Report on Human Rights Practices for 2005; Amnesty International Report of 11 October 2006; and DFAT Country Information Report China of 26 May 2006. However, the repression of the Uighers stems deeper than mere disadvantage, as they are being deliberately persecuted for practising and preserving their culture and religion. 60 At that part of its reasons the Tribunal made no findings. The next part of its reasons is headed "Findings and Reasons". It is within that part of the Tribunal's decision that the Tribunal said what I have quoted at [8] of these reasons. 61 There would be no point in reciting that information twice unless on the second occasion under the heading of "Findings and Reasons" the Tribunal was thereby accepting the evidence contained in the report. 62 In my opinion, the passage quoted at [8] of these reasons is a finding and conclusion of the Tribunal. My conclusion is reinforced by the last two sentences of the passage quoted. First, the Tribunal observes that the Amnesty International account is consistent with the appellant's account of her grandfather's and husband's experiences. There would be no point in making that observation unless the Tribunal was accepting the Amnesty International report. Secondly, the Tribunal has introduced the last sentence of that passage with the word "[h]owever" which, again, suggests that it has accepted the previous account in the Amnesty International report. 63 In my opinion, the Tribunal made a finding that people of Uigher ethnicity are deliberately persecuted for practising and preserving their culture and religion. 64 The Tribunal then fell into error by confining its examination to whether the appellant herself had been subject to persecutory conduct in the past and thereby overlooked the finding that she would be deliberately persecuted for practising and preserving her culture and religion. 65 In my opinion, for all three reasons, the appeal should be allowed and the orders made by the Federal Magistrate dismissing the application for judicial review and ordering the appellant to pay the first respondent's costs fixed in the sum of $5,000 set aside.

appellant claimed asylum for reasons of ethnicity, religion and imputed political opinion whether tribunal fell into error by failing to address whether appellant had a well-founded fear of future persecution whether tribunal fell into error by failing to address whether appellant's association with her son who was granted a protection visa might give rise to an imputed political opinion of the appellant whether tribunal fell into error by failing to address whether appellant's claims of restriction of public practice of her religion amounted to persecution whether tribunal accepted evidence of deliberate persecution of people of uigher ethnicity whether tribunal fell into error by not considering whether appellant would therefore be subject to future persecution appeal allowed. migration

An order that, pending the trial of these proceedings or further earlier order, the respondents and each of them and their directors, officers, servants and agents be restrained from manufacturing, importing, distributing, promoting, offering for sale or selling anywhere within Australia any article to which the Registered Design or any fraudulent or obvious imitation of it has been applied. 2. 3. The first and second respondents pay the applicants' costs of the Interlocutory Application and of that attendance described in par (2) above. 4. Time for service of this Application be abridged. 5. Such further or other orders as the Court deems appropriate. It was set down as an urgent hearing before me this morning at 10.15 am. 3 There was however no appearance by the respondents in court this morning. 4 Mr Philp for the applicants filed in court a number of affidavits relevant to the issue of service on the respondents: • First, an affidavit of service by Nadia Braad, an articled clerk employed by Bennett & Philp Solicitors, sworn 27 July 2006, wherein Ms Braad swore that on 24 July 2006 she contacted the first respondent's Beenleigh store and asked for its head office fax number. She deposed that she then faxed a copy of each of the applicants' application and statement of claim filed with the Court on 21 July 2006, to the "administration office's" fax number, together with a copy of a letter from the District Registrar to Bennett & Philp. • An affidavit of service by Ross Williams, a Licensed Commercial Agent, sworn 25 July 2006, wherein Mr Williams swore that he had at 8.30 am on 25 July 2006 served on the first respondent sealed copies of a number of documents, namely: o the application o the affidavit of Graham Alexander McColm sworn on 20 July 2006 o the affidavit of Kenneth Philp sworn on 20 July 2006 o the affidavit of Samantha McColm sworn on 20 July 2006 o the affidavit of Penny Mole sworn on 20 July 2006 o letter from the Federal Court of Australia dated 24 July 2006 o and the statement of claim. At the time of the service he had asked if the premises were the registered office of the first respondent, and the receptionist had replied in the affirmative. ' to which the respondent had replied in the affirmative. 5 I requested the Court Officer to call the names of the respondents outside the Court, however there was no response. I then requested Mr Philp to contact the respondents by telephone, and stood the matter down for 15 minutes to permit this to occur. After the adjournment, Mr Philp informed the Court that he had spoken with a person at the Underwood store of the first respondent, and understood that the second respondent had shortly before left the premises. However Mr Philp had been unable to contact the second respondent on his mobile phone. On the basis that it was possible that the second respondent was en route to attend court, I stood the matter down until 11.30 am. When Court resumed, Mr Philp informed the Court that he had spoken to the second respondent and informed the second respondent that the matter was before the Court. Mr Philp also said that a meeting has been arranged between the parties this afternoon to discuss the issues in contention between the parties. 6 Mr Philp submitted nonetheless that the hearing proceed. 7 If any party is absent when a proceeding is called on for trial, the court may, inter alia , adjourn the trial or proceed with the trial generally or so far as concerns any claim for relief in the proceeding. Although notice of the hearing has been shorter than usual, I am satisfied that, possibly as early as Monday, but certainly by no later than Tuesday this week, the respondents were duly served with the application and the statement of claim noting that the hearing date of this matter was today. I am also satisfied that the second respondent, and, through the second respondent, the first respondent, had been notified of the hearing by telephone. No applications have been made to me by the respondents in respect of today's hearing, or their non-appearance. In view of the nature of the matters alleged by the applicants, including the history of this matter and the evidence before the Court, I order that the hearing proceed in accordance with O 32 r 2(1)(d) of the Federal Court Rules . The design was registered on 19 February 2003, and is described in the main details as 'A football kicking tee'. The design is registered in the names of the applicants. The records of the Registrar indicate that monopoly by the applicants is claimed in the shape and configuration of the football kicking tee as shown in the representations contained in the records. According to the printout found in the affidavit of Mr Philp sworn 20 July 2006, the registration is currently renewed to 10 October 2008. 9 Evidence of Mr McColm, one of the applicants, is that the infringing design was imported/made/sold without the license or authority of the applicants, and therefore in breach of s 30(1) Designs Act 1906 (Cth). The 1906 Act applies for the purposes of determining whether a person's conduct infringed the monopoly in this design, because the design was registered prior to the enactment of the Designs Act 2003 (Cth) (s 156(3) Designs Act 2003 (Cth)). 10 The applicants exhibited an example of their kicking tee, and a kicking tee which they submit was purchased from one of the stores owned by the first respondent. 11 The kicking tees were exhibited to the affidavit of Mr McColm to which I will refer later in this judgment. The applicants submit that they first became aware that the first respondent was selling a kicking tee that infringed the Registered Design in March 2005. I will herein refer to those kicking tees as 'the infringing kicking tees'. The first respondent is a corporation which carries on business, inter alia , selling sporting equipment and accessories, including kicking tees. The second respondent is a director of the first respondent, whom the applicant also submitted today is the directing mind and will of the first respondent. 12 The applicants submit that, on 18 March 2005, Bennett & Philp on behalf of the applicants wrote to the first respondent requesting, inter alia , no further infringement of the Registered Design and requesting details of the number of infringing football tees or infringing kicking tees retained by the first respondent then unsold. The applicants submit that, as a result of communications between Bennett & Philp and the respondents, a settlement was reached. My attention has been drawn in particular to two items of correspondence from the second respondent. 13 The first item is a copy of an email from the second respondent to Joanne Swift dated 22 March 2005 at 2.45 pm, containing a letter to Mr Philp, exhibited to Mr Philp's affidavit sworn 20 July 2006. We have recalled all "Struddys Shooter" kicking tees from our stores. Together with the tees we have recalled all packaging. Our email copied to you evidenced we have complied with your request. We hereby give written undertaking we will not at any time in the future infringe any of your clients intellectual property rights whatsoever and in particular (but without limitation) your clients intellectual property rights in the registered design 150767 and the copyright in the features and goal kicking tips sections of the packaging for your clients tees as manufactured by Playcorp. The total number of Struddy's Shooter kicking tees acquired by our company was 200. All Struddy's Shooter kicking tees have now been returned from our stores. The total number of Struddy's Shooter kicking tees remaining in stock is 156. These remaining kicking tees and the packaging for same has been destroyed. The net number of Struddy's Shooter kicking tees sold was 44. The Struddy's Shooter kicking tees sold were only sold through our stores. Not all our stores stocked the Struddy's Shooter kicking tees. The Struddy's Shooter kicking tees were only sold to customers in the instances when the Michael De Vere kicking tee was not available. 16 The applicants have filed affidavits to the effect that purchases have been made of infringing kicking tees at a number of stores of the first respondent. In particular: • the first named applicant, Mr McColm, deposes in his affidavit sworn 20 July 2006 that on 29 June 2006 he received information regarding a possible ongoing infringement of the Registered Design by the first respondent. He further deposes that: o on 29 June 2006 he purchased an infringing kicking tee at the first respondent's Browns Plains store, and was sold an unpackaged and unlabelled black rubber kicking tee by a male salesperson, who told Mr McColm, inter alia , that this kicking tee was 'ours and we call it a no name tee... We sell hundreds of these' o on 30 June 2006 he purchased an infringing kicking tee at the first respondent's Ipswich store, and was sold an unpackaged and unmarked football kicking tee which was black in colour by a female salesperson, who told Mr McColm, inter alia , that 'Everyone buys these. We sell heaps... We have heaps of them out the back'. • Ms Samantha McColm, the daughter of Mr McColm, deposes in her affidavit sworn 20 July 2006 that she attended the first respondent's Beenleigh store on 5 July 2006 and purchased an infringing kicking tee • Ms Penny Moll, a law clerk employed by Bennet & Philp, deposes in her affidavit sworn 20 July 2006 that she attended the first respondent's Browns Plains store on 1 July 2006, where she observed two stacks of black plastic or rubber football tees stacked up against a wall in the store, and purchased an infringing kicking tee at the store. The top of the tee is angled so that the lower part is faced towards the kicker and the upper part is faced in the direction to which the ball is to be kicked • generally football kicking tees are made of soft plastic or rubber • the football kicking tee which is the Registered Design was developed by Mr McColm and Mr Michael De Vere, who was a well-known former Brisbane Broncos and Australian representative rugby league player and is currently playing rugby league professionally in England • the applicants are also the registered owners of Australian Registered Trade Mark 930105 which was registered in class 28 on 18 August 2003. The Trade Mark Registration is for a combination trade mark of the words 'Sharp Shooter" with a particular background • the applicants licence the manufacture and distribution of the kicking tees to a third party • the applicants' kicking tee is used extensively in National Rugby League, New South Wales Rugby League and the Queensland Rugby League competitions both at senior and junior grades. 18 The infringing kicking tee which I understand Mr McColm purchased at the first respondent's Ipswich store was exhibited to his affidavit and produced today in court. Further, an example of one of the applicants' kicking tees was exhibited to Mr McColm's affidavit, and was produced today in court. 19 Without forming any conclusive views, it is clear that, with the exception of the trademark on the applicant's kicking tee which does not appear on the infringing kicking tee exhibited to Mr McColm's affidavit, the kicking tees are otherwise superficially very similar in appearance in that, for example: o they are similar in circumference around the base and similar in height o they are both black o they both appear to be made of plastic material, although the applicants' kicking tee appears to be made of a softer material. The principles which govern the exercise of that power were set out recently by Stone J in Hexal Australia Pty Limited v Roche Therapeutics Inc [2005] FCA 1218 at [17] , namely: 1. That there is a serious question to be tried or a prima facie case such that if the evidence remains the same there is a probability that at a final hearing it will be entitled to relief. 2. That it will suffer irreparable harm for which damages will not be an adequate compensation, unless an injunction is granted. 3. That the balance of convenience favours the granting of an injunction. The applicants submit that it is an obvious imitation of their kicking tee o the applicants submit that the ongoing sales of infringing kicking tees will substantially damage the market for the applicants' kicking tees. The applicants further submit that the first respondent appears to both have and be selling large amounts of the infringing kicking tees, as (they claim) evidenced from comments of salespersons in the stores of the first respondent o the applicants submit that the respondents have deliberately and dishonestly continued to act in infringement of the applicants' Registered Design despite previous undertakings of the respondents. 22 Unfortunately the Court has not had the benefit of submissions from the respondents on these points. However, the visual similarity in the tees is clear. Gummow J in Wanem Pty Ltd v John Tekiela (1990) 19 IPR 435 at 15 said 'the design applies to the appearance of the article as a whole and issues of infringement are to be approached with that in mind'. Prima facie , there is a case that the tees sold by the first respondent infringe the Registered Design of the applicants under the Designs Act 1906 (Cth). 23 Further, there is affidavit evidence from the applicants that at least some infringing kicking tees are being sold in stores operated by the first respondents. Finally, there is evidence before the Court, including correspondence from the respondents, which supports the third contention of the applicants in relation to the conduct of the respondents. In my view, these issues indicate that there is a serious question to be tried. 25 Consequently the applicants submitted that the market for future potential sales for the applicants' kicking tees will be damaged if the respondents continue to sell the infringing kicking tees. Further, the loss of market share could not be adequately compensated by damages in a case where the applicants have a monopoly over the Registered Design until 2008 and should be entitled to retain such monopoly. 26 In Mr McColm's affidavit of 20 July 2006, Mr McColm disposes as to the identity of his co-designer and co-applicant in this matter, Mr Michael De Vere. 27 It is clear from the packaging on the 'Sharp Shooter' product over which the applicants have a Registered Design that the De Vere name as a former professional Rugby League player and goal kicker is used to market the 'Sharp Shooter', and that the association between Mr De Vere and the design of the particular football kicking tee would appear to be well established. 28 It is arguable that the infringing kicking tee product being sold by the respondents is seeking to take advantage of the reputation that the applicant has in respect to the football kicking tee product. 29 A similar case concerning backpack style containers used for spot-spraying pests and weeds was heard before Finkelstein J in Outdoor Power Products Pty Ltd v Silvan Australia Pty Ltd [2005] FCA 1696. In that case, Finkelstein J considered an application for an interlocutory injunction to restrain an infringement of a trade mark over the 'Solo Sprayer'. His injunction considered the elements of the claimed passing off action and found it to be made out sufficiently for the purposes of an interlocutory application. His Honour held that in a case where it was clear that the offending product was interfering with the applicant's goodwill, damages would not be an adequate remedy. 30 As I indicated earlier, I have been provided in Court this morning with the football kicking tee as sold by the first respondent which I have referred to as the infringing kicking tee, and a 'Sharp Shooter' football kicking tee. I am in no doubt that the general appearance of each is extremely similar. I agree with Finkelstein J that in circumstances where it is clear that an infringement of the Registered Design by the respondents is being used to interfere with the goodwill of the applicants and being used to erode the applicants' market share in breach of the applicants' monopoly rights pursuant to the Registered Design, damages would not be an adequate remedy. 32 Again, it is unfortunate that the respondents did not appear today. However, the factors I have listed above, in particular the history of this matter as presented to me by the applicants, persuade me that it would be appropriate to grant the applicants interlocutory relief as they seek. Further, as evidenced by the email and letter exhibited to the affidavit of Mr Philp, the respondents had already indicated that they would not be selling kicking tees which infringe the applicants' Registered Design. An order restraining them from selling the infringing kicking tees appears to be compatible with undertakings it seems they made in 2005. 34 Accordingly, I am prepared to make the first order sought by the applicants, namely an order that pending the trial of these proceedings or further earlier order, the respondents and each of them, and the directors of its servants and agents be restrained from manufacturing, importing, distributing, promoting, offering for sale or selling anywhere within Australia any article to which the registered design or any fraudulent or obvious imitation of it has been applied. 35 Since returning to court this afternoon the applicants have informed me that while they continue to seek interlocutory injunctive relief, they have reached an agreement with the respondents in relation to inspecting the premises of the respondents at Underwood tomorrow. Accordingly, the applicants no longer press the second order they sought this morning. 36 Thirdly, the applicants asked the respondents pay the applicants' costs of the interlocutory application and that attendance. In my view at this stage the appropriate order is that the costs be reserved. 37 I order however that time for service of the application be abridged as sought by the applicants, given the seriousness of the claims they have made. Until the determination of these proceedings or further Order of the Court, the respondents and each of them and their respective servants and agents be restrained from manufacturing, importing, distributing, promoting, offering for sale or selling anywhere within Australia any article to which Registered Design 150767 or any fraudulent or obvious imitation of it has been applied. 3. Time for service and hearing of the applicants' Interlocutory Application be abridged to 10.15 am on 27 July 2006. 4. Costs be reserved. The action be reviewed for further directions by the Court at 9.30 am on 4 August 2006.

australian registered design no appearance by the respondent whether satisfied that the respondents were aware of the hearing whether serious question to be tried whether damages are an adequate remedy whether balance of convenience favours granting the injunction interlocutory injunction

On 8 December 2006 the applicants closed their case. The first witness for the respondents was the second respondent, Mr Jack Moller. His evidence-in-chief was given on 11 December 2006. His cross-examination commenced shortly thereafter and continued until lunchtime on 12 December 2006. Upon the resumption of the hearing on the afternoon of 12 December 2006 the second respondent complained of a sense of dizziness and loss of balance which occurred shortly before lunch on 12 December 2006. 2 The net result of what then followed was that the cross-examination was not finished on 12 December. No cross-examination was undertaken on 13 December and the proceedings were adjourned to 12 April 2007 on 14 December. On 13 December the Court was informed that it was likely that the second respondent's cross-examination would occupy a further two hours. 3 In the course of the second respondent's case his affidavit of 24 November 2006 was read, subject to rulings on objections that had been taken to parts thereof. Indeed, most of the affidavit was rejected. 4 The applicants have by Notice of Motion filed on 12 April 2007 moved the Court today for an order that the oral and affidavit evidence given in the proceedings by the second respondent be excluded from the evidence received in the proceedings. This application has been made following the making of an order earlier today on the second respondent's application to be excused from giving further evidence in the case, which was successful (see National Auto Glass Supplies (Australia) Pty Limited v Nielsen & Moller Autoglass (NSW) Pty Limited (No 5) [2007] FCA 569). From these authorities the applicants draw the principle that the discretion conferred by s 136 to limit the use to be made of evidence is not foreclosed by the admission of the evidence. They further rely upon the authorities mentioned to support the proposition that whether it is appropriate to exercise the discretion after the admission of evidence depends entirely on the circumstances of the trial as they have developed and that evidence will be unfairly prejudicial where a party is denied the opportunity to cross-examine the source of the evidence. 6 As expressed by Mansfield J in The Larrakia People , one aspect of unfair prejudice may be the lack of a proper opportunity to cross-examine the person whose evidence is sought to be admitted. In this case the relevant evidence in relation to which relief is sought has been admitted. 7 Prayer for relief 1 seeks an order limiting the use of the entirety of the second respondent's evidence in the applicants' case against not only the second respondent, but also the first respondent, which is not presently represented, and the third respondent, who is before the Court in person as, indeed, Mr Jack Moller was prior to the luncheon adjournment today. 8 Counsel for the applicants accept that if an order is made limiting the use to be made of Mr Jack Moller's evidence which precludes the use of any of that evidence, then what is sauce for the goose is sauce for the gander. The applicants accept that they may not have the advantage of any parts of Mr Jack Moller's evidence that are favourable to them and that that is part of the price which has to be paid for the order which they seek, which deprives both Mr Jack Moller and the other respondents from having the benefit of any of the evidence given by Mr Jack Moller. Mr Jack Moller has chosen not to be present in Court to resist the relief sought by the applicants in relation to the case against him. 9 Mr Carl Moller has been heard on the application to limit the use to be made of Mr Jack Moller's evidence in the case against Mr Carl Moller. Mr Carl Moller was invited to direct the Court's attention to the irremediable harm that would be done to Mr Carl Moller's case were the evidence of Mr Jack Moller to be excised. My understanding from Mr Carl Moller's response was that the evidence of his father was particularly important but that there was nothing relevantly in Mr Jack Moller's evidence that could not be covered by Mr Carl Moller's own evidence. He indicated to me that the evidence of Mr Jack Moller was corroborative rather than irreplaceable. 10 Were this matter to go further, an appellate court may well be under a greater handicap than the Court as presently constituted were the evidence of Mr Jack Moller to stand, an appellate court being deprived of the opportunity to form any assessment of the weight of the evidence given thus far, either in chief or in cross-examination. It seems to me that without the opportunity being afforded to the applicants to complete their cross-examination of Mr Jack Moller, there is a danger that the use of his evidence might be unfairly prejudicial to the applicants or be misleading or confusing. 11 The submission is put by counsel for the applicants that the prejudice suffered by their clients is effectively shared by the other respondents, and in particular Mr Carl Moller, who have not had an opportunity to cross-examine Mr Jack Moller either. If the boot were on the other foot and the applicants wanted the evidence of Mr Jack Moller in but Mr Carl Moller wanted the evidence out, counsel for the applicants concede that they could not be heard to argue that the evidence should remain available for use by them. 12 In my opinion it would be appropriate to exercise the Court's discretion and limit the use to be made of Mr Jack Moller's evidence by excluding it from any further use in the proceedings. 13 The only other substantive relief sought by the applicants on the hearing of the Notice of Motion filed 12 April 2007 was prayer for relief 6A which, in the light of events that have occurred during the course of the day, is no longer pressed. 14 This leaves for consideration prayers for relief 5 and 4 which deal with the costs thrown away yesterday and the costs of the motion filed 12 April 2007 which have occupied time this afternoon. In relation to the costs thrown away yesterday, I have in earlier judgments delivered today made it clear that a whole hearing day was lost yesterday which in large measure can be attributed to the failure by Mr Jack Moller to appear before the Court yesterday: (a) as a party; and (b) as a witness then currently under cross-examination. 15 I note that, notwithstanding Mr Jack Moller's medical condition, he found himself in a condition that he was able to attend Court today, inform the Court of his intentions and wishes and then to withdraw. Had he done so yesterday, some of the time wasted could have been usefully employed. More importantly, Mr Jack Moller did not pay either the applicants or the Court the courtesy of informing them in advance of his intentions and wishes in relation to the future conduct of the proceedings against him. He has done so today for the first time. 16 Notwithstanding the fact that Mr Jack Moller claims to be a pensioner without means, he has at times demonstrated a degree of belligerence towards the applicants which is perhaps natural for a litigant in person but is, in my view, unwarranted. 17 His parting words to the Court today were indicative of the belligerence which from time to time he has demonstrated. Such costs should be taxable and payable forthwith and I will order accordingly. 19 In relation to the costs of and incidental to the motion this afternoon which has resulted in the order being made limiting the use of Mr Jack Moller's evidence, it seems to me that the appropriate order is that the applicants' costs of the motion this afternoon, which has occupied approximately an hour and a half, should be the applicants' costs in the proceedings. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.

discretion to limit the use to be made of evidence following its admission where an order has been made excusing a witness under cross-examination from giving further evidence in the case evidence

(See Order 4 rule 14(2) ; and Order 9 rule 1. ) The applicant has previously had solicitors and counsel appearing for it. 2 The respondent opposed the application, but did not oppose Mr Maiocchi appearing on the application on behalf of the applicant. I gave that limited leave. 3 The principles by reference to which the discretion should be approached have been discussed in a number of cases. See in particular Molnar at 74-75 per Smithers J and 80 per Keely J. In Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241 , French J set out the guiding approach, which has been followed and applied by other judges of the Court: see Australian Communications Authority v Viper Communications Pty Ltd [2000] FCA 982 ; Oakley Inc v Franchise China Pty Ltd [2002] FCA 404. . . . (3) Notwithstanding sub-rule (1) and subject to any Act, a corporation may not without the leave of the Court or a Judge enter an appearance or defend any proceeding except by a solicitor. Equivalent rules in other jurisdictions and particularly England and other Australian States set up an "exceptional circumstances" or like test before leave can be granted --- Arbuthnot Leasing International Ltd v Havelet Leasing Ltd [1991] 1 All ER 591; Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd (1986) 8 NSWLR 104. In the latter case, Samuels JA in the New South Wales Court of Appeal, saw the court's discretion to dispense with its rules about representation as one to be exercised "only with the most meticulous care" and in exceptional circumstances. In this respect I refer to what I said in Simto Resources Limited v Normandy Capital Limited (1993) 11 ACLC 856. Although the rationale for the restriction is basically the same in all jurisdictions, the power of the Federal Court to grant leave to a corporation to carry on a proceeding, otherwise than by a solicitor, is conferred as an integral part of the Rules in O 4 r 14 and O 9 r 1. There is no threshold requirement of special or exceptional circumstances. Relevant factors for dispensing with that requirement include the financial capacity or lack of capacity of the corporation and those standing behind it, the effect of diverting company resources to paying legal expenses, the nature of the company's undertaking, its financial structure, its ability to retain and pay its staff and the identity and spread of its shareholders. The factual complexities of the case and the capacity of the proposed representative to conduct it effectively are also relevant --- VN International Video Pty Ltd v West End HK TVB Video & Others (1996) 14 ACLC 1308. They also acquire disabilities and obligations. One of the disabilities is that which is imposed by the Rules of Court under consideration in this case. A distinction may be drawn between the case in which the company in question is applicant and that in which it is respondent. In the latter case it may be a more liberal approach to the grant of leave is warranted. 6 It is necessary to outline the issues in the case and how the case has been conducted to date. 7 The application was supported by a 14 page statement of claim together with a 5 page schedule. The dispute concerns SilkEarl's claim that Ainsworth has failed to pay all royalties payable to it under the Royalty Agreement they made on 27 July 1999 (which was amended on 18 October 2001) and the determination of this question will require the Court to construe that Agreement and in particular the critical clauses 3, 4(a)(i) to (iii), 4(c), (d), (e)(i) to (iii), (h), 5 and 6(b), and from the evidence to consider which, if any of the terms of the Royalty Agreement was breached and then to determine what damages ought to be awarded to SilkEarl. Although Ainsworth paid to SilkEarl some monthly payments, SilkEarl shall contend that the payments it received do not accurately represent the amount of royalties which it ought to have been paid and which Ainsworth was and is liable to pay under the terms of the Royalty Agreement. Whether SilkEarl created and developed architecture under and in accordance with the Royalty Agreement and did it provide and make that architecture available to Ainsworth, and if so was that architecture original or unique. If the Architecture was not original or unique (which is not admitted), what effect, if any, did that have in relation to the obligation of Ainsworth to pay royalties to SilkEarl pursuant to the Royalty Agreement? In respect of the issues in 5 above, does clause 4(h) have the effect of imposing on Ainsworth an obligation to establish in these proceedings that it did not use either or both of those key elements. Does clause 5(c) constitute a penalty? If the key elements were not used in the Celebrity models or the Ambassador models or some of them, was Ainsworth liable under clause 5 to pay SilkEarl royalties under clause 4(a)(i)-(iii)? Was and is Ainsworth liable for royalties calculated under clause 4(a)(i)-(iii) independently of the implementation of the architecture under clause 5. Did Ainsworth provide to SilkEarl the information required under clause 4(c)? Whether Ainsworth paid SilkEarl all royalties it was liable to pay under the Royalty Agreement, and if not what quantum of royalties ought it have paid. Assuming the evidence does not support SilkEarl's entitlement to royalties in respect of the Celebrity models or some of the Ambassador models, did clause 6(b) impose on Ainsworth an obligation to use, apply and thereby obtain the benefit of the architecture in all poker machines it manufactured and if so, was the introduction by it of Celebrity and Ambassador excel models a contravention of that provision which had the effect of depriving SilkEarl of royalties which would ought to have been payable had those models incorporated the architecture. These technical issues concern software development and the development and use of computer-based gaming machines, involving electrical engineering considerations. 10 The relative complexity of the case is also shown by the statement of preliminary issues handed up at an early directions hearing by counsel for the respondent which is to be found at pp 17 and 18 of Exhibit 1 on the motion. One can see from this document and that referred to at [8] above that both counsel saw similar issues raised. 11 The respondent has cross-claimed against the applicant claiming that it was received and acted upon representations about information, specifications and data for a proposed architecture. These representations were said to be for manufacture or development of gaming machines. The respondent now says that the architecture was generic, not novel or unique. It claims damages in the nature of the royalties paid and loss of profit. 12 Interlocutory procedures were undertaken in 2005. There was some delay which it is presently unnecessary to relate. 13 In November 2005, a subpoena was issued on behalf of the applicant to the Liquor Administration Board for documents held relating to 4 poker machines known as Ambassador 64, Ambassador Excel, Celebrity, Celebrity Excel. These documents have been produced to the Court. The respondent claims that these documents should be kept confidential from Mr Maiocchi, though it has no difficulty with independent legal advisers or experts inspecting them on appropriate undertakings. 14 On 15 February 2006, the respondent filed a notice of motion for security for costs. This was supported by an affidavit of Julie Kathryn Ward, the solicitor for the respondent, filed 15 February 2006. She estimated legal fees ex GST of over $600,000. This affidavit was tendered on the motion by Mr Maiocchi. 15 On 24 February 2006, the respondent filed a notice of motion seeking orders that access to documents listed in a 20 page schedule to be restricted to counsel and solicitors only, and subject to an undertaking. This was supported by an affidavit of Mr Perry, a solicitor assisting Ms Ward. This affidavit was tendered on the motion by Mr Maiocchi. 16 On 28 February 2006, in purported answer to the motion of 15 February 2006 for security for costs, Mr Maiocchi swore an affidavit taking issue with the cross-claim and various other issues. It reflected a lack of coherent organisation and a lack of attention to relevance. The affidavit was read on the motion on behalf of the applicant. 17 On 13 March 2006, Mr Maiocchi swore two affidavits one said to be No. 603091 and the other No. 603121. They were read on the motion on behalf of the applicant. The first (603091) (of 27 pages and 2 large folders of annexures) was said to be in support of the applicant's position in respect of the intellectual property of the poker machine architecture of which Annexure A to the Respondent's Affidavit is indicative. The affidavit is dense and difficult to follow. It seeks to give detailed factual basis to the claims and to deny the allegations in the cross-claim. The second (603121) (of 5 pages with 91 pages of annexures) is in support of his motion. This affidavit contains a general history of the dispute from Mr Maiocchi's personal perspective. He expressed dissatisfaction with his legal advisers. He makes complaints about the conduct of the proceedings by the respondent. There are some references by assertion of not being able to afford an independent expert and of not being subject to security for costs. There is assertion that when Mr Maiocchi decided to commence these proceedings he thought that the expense would be within a budget. Among the assertions is one that he cannot pay an independent expert to have access to the confidential subpoenaed material from the Liquor Administration Board. He also asserts that he does not have money for security for costs, and that he has not the funds to engage an independent expert. A similar submission was made by Mr Van Aalst when retained by the applicant in court on a previous occasion. 18 On 13 March 2006, the respondent filed an affidavit of Ms Ward of 3 pages and 160 pages of annexures dealing with the communications that have taken place between Mr Maiocchi and Mallesons Stephen Jaques. This was read by the respondent on the motion. 19 Also on 13 March 2006, the respondent filed an affidavit of Mr Perry sworn 13 March 2006, deposing to the royalty payments to the applicant for 2001-2006 being in excess of $750,000. 20 On the same day, another affidavit (of 6 February 2006) of Mr Perry outlining correspondence between Mallesons Stephen Jaques and the applicant was filed. 21 Mr Maiocchi filed two further affidavits with many annexures on 21 March 2006 including one dealing with the technology. These affidavits were read on the motion on behalf of the applicant. They reveal the likely complexity of the case. 22 On 7 April 2006, Mr Maiocchi filed an affidavit dealing with the motion and other aspects of the conduct of the case, annexing his written submissions and correspondence with Mallesons Stephen Jaques. This was read on behalf of the applicant on the motion. 23 For the purposes of the application the respondent conceded that the applicant had an arguable case. 24 At the hearing of the motion, the respondent tendered a bundle of documents including correspondence between Mr Maiocchi and the solicitors for the respondent. 25 Mr Maiocchi has asserted an inability to pay for legal advisers. There is, however, no reliable evidence concerning the financial state of affairs of the applicant or of Mr Maiocchi and anyone else with an interest in the applicant to demonstrate a lack of financial capacity to engage a solicitor or the effect upon the company of diverting its resources towards legal expenses. The affidavit of Ms Ward on the security for costs application, annexing evidence that the applicant owns no real property in New South Wales, was tendered on the motion. It is known from records of the Australian Securities and Investments Commission, also annexed to the same affidavit, that Mr Maiocchi and Mrs Maiocchi are the only two directors of the applicant, with Mr Maiocchi also being the company secretary. The applicant has two issued shares, held one each by Mr and Mrs Maiocchi, with a total issued share capital of $2. Among the bundle of documents tendered by the respondent is a facsimile Mr Maiocchi sent to Ms Ward on 11 March 2006 referring to the foreshadowed motion for security for costs, saying that he and his wife were middle class Australians and not eccentric millionaires with an excess of money. 26 There is no evidence about what cash reserves, if any, the applicant has or what funds Mr and Mrs Maiocchi have or do not have. There is, however, evidence at least of royalty payments exceeding $750,000 to the applicant by the respondent which does not support an inference of lack of financial capacity. There are some documents in the annexures to the first affidavit of Mr Maiocchi of 13 March 2006 indicating the cost of two employees of the applicant, in the years 2000 and 2001 reflecting salaries of $98,000 and $75,000 respectively. The following exchange took place. Do you wish to leave the evidence in its current form about those matters? I am not running your case for you. I want you to tell me whether you wish to have an adjournment to place further evidence on. Because at the moment all I have, and I am going to deal with this motion on the basis of the evidence that you have led. Now, you are aware from those affidavits, and from the material that has been put on, that the financial position of the company is a relevant consideration. And, given the nature of the company, a relevant consideration is the financial position of you and your wife. Are you content for me to continue with this application today on the basis of the evidence that you have put forward? I learned this morning, when I looked at the email, the contents of the email sent by the respondent, that it is an important issue to demonstrate that actually I don't lack the fundings to pay for the presentation. So I - as I say I had to provide the proof and the case going to be stronger if I can provide the proof. You have had your application on for some time. Now, if you want an adjournment I will hear you as to why you shouldn't pay the costs of today, that is, the company shouldn't pay the costs of today. If you don't want the adjournment we will go on with the motion on the material that you have identified. Some of the information that the respondent has asked me is still my accountant has not requested. They want the very latest. There is an email dealing with that from me to the respondent. They want the very latest tax return that is still - the Taxation Office doesn't require. 30 Shortly after this exchange I made a ruling refusing to reject [6] of the above affidavit under s 135 of the Evidence Act . However, it will be received only subject to the weight that in the end I give to those assertions. It is in a sense no more than unproven assertion without any foundation which the reader of the affidavit or the cross-examiner can grapple with. It does not tell me by what standard of analysis the notion of afford legal representation is brought to bear for the statement. I am not told, and the reader is not told anything about the asset and liability position of the company and its shareholders and directors. It [the reader] is not told anything of the competing considerations and calls upon the commercial or financial position of the company, all of which considerations are embedded within the statement, "I can no longer afford legal representation. " I will allow the evidence but it will stand with the balance of the evidence with such weight as I decide appropriately to give it. Is that the only objection to the affidavit? 32 The claim for confidentiality made by the respondent over certain material produced by the Liquor Administration Board under subpoena further complicates the position. In the affidavit of Mr Perry tendered on behalf of the applicant as evidence on the motion, but not read, there is a confidentiality undertaking labelled Annexure C, given by the former solicitor of the applicant over the subpoenaed material. 33 The factual and legal issues in the case are of some significant complexity. In this context, the capacity of Mr Maiocchi to conduct proceedings on behalf of the applicant is relevant, as is his involvement in the issues central to the trial and the likelihood that he will be a witness. It is clear enough in the conduct of the motion to date that it would be highly desirable if the court were assisted by the expertise of a solicitor acting for the applicant. Apart from the need for a degree of skill and assistance in a commercial case involving not straightforward issues of intellectual property, the claims for confidence will require at least one person on the applicant's side of the record who can deal with the applicant's interests without risking the loss of any confidentiality that the respondent may have. (One of the persons to whom the respondent claims the records in question should not be disclosed is Mr Maiocchi himself. Not all litigation can be conducted in peaceful harmony, but one of the fundamental obligations of any practitioner in the discharge of his or her obligations to the client and to the court is the civil and dispassionate communication with other parties to that litigation: see generally Ex parte Bellanto; Re Prior [1963] SR (NSW) 190 and Garrard v Email Furniture (1993) 32 NSWLR 662 at 667. There is an absence of meaningful financial information as to the applicant, Mr Maiocchi and others who may be interested in the applicant on its success. The various and repeated assertions are general and based on unstated implicit assumptions and value judgments which cannot be illuminated without primary financial material. 2. The case will be complex both as to factual and legal issues. The difficulty of Mr Maiocchi in dealing with this complexity is revealed by the documents before me. They reveal an unwillingness or inability in Mr Maiocchi to deal in a dispassionate way with relevant issues. Much of the correspondence is argumentative and emotive, and in some circumstances abusive. Such behaviour will likely lead to prolonged delays and unnecessary expense. 36 It is impossible to disentangle the claim by the applicant and the cross-claim. Difficult questions may hereafter arise about what should happen to the applicant's claim and the cross-claim. However, taking the present evidence into account and applying the legal principles to which I have referred I do not think that the applicant has demonstrated sufficient cause to vary the usual rule as to representation of a corporate applicant. 37 In all the circumstances, on the present material, I would dismiss the applicant's motion with costs. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.

application by company for a non-practitioner to appear on its behalf application refused practice and procedure

Since leaving his ship he has become baptized as a Christian whilst living in Australia. He contends that his Christian journey commenced before that and that his interest in Christianity which preceded his conversion from the Islamic faith provided a basis for his claim, since his arrival here, of refugee status. 2 His application for a Protection (Class XA) Visa was rejected by the Minister's Delegate. His subsequent application for review of that decision was rejected by the Refugee Review Tribunal ("the Tribunal") and his application for review of the Tribunal's decision was dismissed in the Federal Magistrates Court of Australia on 23 February 2005. 3 The current appeal from the decision of the Federal Magistrate raises the question of whether the Tribunal committed reviewable error. The Respondent Minister submits that the Appellant is in truth seeking no more than a merits review and that no ground has been made out warranting the issue of constitutional writs. 4 The Appellant does not seek to rely on his conversion and baptism to justify his claimed refugee status, nor does he rely upon the reasons for his departure from Iran to justify that status. The Appellant simply relies on his reasons for jumping ship at Port Kembla. 5 He contends that his interest in Christianity, which predated his departure from Iran, had become known to some fellow seamen on his ship, that the Captain had become aware of that interest and that the Captain had threatened to turn him in to the authorities upon the ship's return to Iran, it being suggested that he would then be interrogated and dealt with for committing apostasy. 6 The Tribunal had before it, and referred in its reasons for its decision, to country information concerning Iran. This information suggested that if Iranians of Islamic faith abandoned that faith in favour of Christianity they would be put to death. They are concentrated mainly in urban areas, and are legally permitted to practice their religion and instruct their children, but may not proselytise Muslims. ... The authorities have become particularly vigilant in recent years in curbing what is perceived as increasing proselytising activities by evangelical Christians, whose services are conducted in Persian. Conversion of a Muslim to a non-Muslim religion can be considered apostasy. Members of evangelical congregations are required to carry membership cards, photocopies of which must be provided to the authorities. Worshippers are subject to identity checks by authorities posted outside congregation centres. Instances of harassment cited included conspicuous monitoring outside Christian premises by Revolutionary Guards to discourage Muslims or converts from entering church premises and demands for presentation of identity papers. ... Apostasy, or conversion from Islam to another religion, is not acceptable in Islamic law. ... An innate-apostate (one whose parents were Muslims and who embraced Islam but later left Islam), if a man, is to be executed. ... The most prominent cases of apostasy appear to occur from Islam to Christianity. Proselytising apostates (converts who have begun preaching Christianity) are likely to face execution. However, there are only one or two cases (high profile Christian clergy) where this sentence has ever been imposed. Moreover, some senior and influential clerics have recently publicly questioned such an interpretation of Koranic law. But, if a seaman were to manage to establish himself on shipboard such an adverse political profile, through persistent statements, declarations, and subversive activities, as would be considered a potential political or security threat, he would inevitably be arrested and confined on board pending return to Iran. It would be very difficult for anyone to jump ship while in detention. An individual not so detained would by definition be deemed not to be a serious political or security threat and on return to Iran, at most would suffer a bout of questioning, possibly a short period in detention or a fine, and more than likely, nothing beyond dismissal or confinement to shore duties. A person taken into detention on board would face, on return to Iran, more intense interrogation, a longer period of detention and almost certain dismissal. While there is no Soviet-style cadre system in operation on board, there are informal networks and cooperation among security personnel and active supporters of the government, who would take a lead in public prayers and various activities associated with good Islamic revolutionary practice. The Appellant submits that such a view was not available to the Tribunal in the face of the country information to which reference has been made. 10 This of course would depend upon whether the country information concerning the likely behaviour of Iranian ship captains comprehensively recorded how they would be expected to behave in every circumstance and whether it was open to the Tribunal to find that a seaman who was flirting with Christianity could be said to be engaged in subversive activity and to be a political or security threat. 11 The ultimate question for the Tribunal under s 36(2) of the Migration Act 1958 (Cth) ("the Act ") was whether the Appellant, owing to a well-founded fear of being persecuted for reasons of religion, was outside Iran and was unwilling to avail himself of the protection of Iran. He says that in the circumstances of this case the critical time was when he chose to jump ship in Port Kembla. 12 The Tribunal was not prepared to decide the question in the Appellant's favour. 13 At the hearing before the Tribunal on 25 February 2003 the Tribunal made it abundantly clear to the Appellant that a criterion for the grant of a protection visa was that the Tribunal had to be satisfied that he was outside Iran because he had a well-founded fear of being persecuted and was unwilling to avail himself of the protection of Iran. Such things as minor discrimination or minor harassment don't qualify as persecution. The tribunal needs to be satisfied that you have a well-founded fear, it's persecution you fear and it's for a convention reason. The convention reason is ... for reasons of either your race, your religion, your nationality, your membership of a particular social group or your political opinion. In addition to being satisfied that [you] have this well-founded fear, this persecution to fear and it's for a convention reason, the tribunal also needs to be satisfied that you can't avail yourself of protection in your own country. In 1989, he secured employment with a shipping company based in Bandar Anzali (the port of Anzali), Iran. From that date, the Appellant's employment was with various shipping lines. Relevantly, his ship in 2001 was one flying the Iranian flag. 15 According to the Appellant, he was introduced to Christianity in Dubai in 1996 by a friend from the Philippines with whom he worked. The friend took him to a Christian church service, which he says began his interest in the Christian faith. 16 The Appellant claims that over the next four years his interest in Christianity grew, although he still considered himself to be a Muslim. He says that he was aware that if he converted to Christianity he could be tried by the Iranian authorities as an apostate, but this did not stop him from attending Christian churches in the countries where the ship on which he was serving docked. He says that he endeavoured to keep his interest to himself. 17 In December 2000, whilst the Appellant's ship was docked in Argentina he says that he attended a local Christian church service. Upon leaving this church, the Appellant claims that he was seen by three Iranian crew members off the ship on which he was working. Those crew members confronted him and demanded to know why he had been at the church. They did not accept his explanation and demanded that he walk back to the ship with them, whereupon he says that he was ordered to go to the senior Iranian officer's cabin. According to the Appellant, three officers were present and the senior officer was very angry with him but nevertheless allowed him off with a warning. 18 When the Appellant returned to Iran in February 2001 he was given time off work for medical reasons, after which he went back to his home town for a brief period of time. During this visit, he met four of his Muslim friends, who were neither devout nor fanatical, and told them what he had learned about the Christian faith. They indicated that they were disturbed by what the Appellant had to say. Shortly after that meeting, the Appellant claims that he received a threatening phone call where the caller accused him of being "... a dirty Christian. " and said "You're not worth it to live in this country-city. You make this city dirty, unclean. You are an apostate" . Other like phone calls are said to have followed. 19 The Appellant returned to his ship and was "keen to leave Iran" because he did not feel safe, but hoped that matters would settle down in the ensuing months. 20 A couple of weeks after the departure of his ship from Bandar Abbas (the port of Abbas) on about 11 March 2001 the Appellant claims that the Captain was informed of the ostracism he experienced in his home town whereupon the Captain demanded to know whether rumours about the Appellant were true and whether the Appellant was a Christian. Although the Appellant denied that he was a Christian, the Appellant says that the Captain did not believe him and apparently told him that as soon as the ship returned to Iran he would be " dealt with accordingly" . The Appellant says that this made him very scared and caused him to fear that he would face persecution upon his return to Iran and that he would be turned over to the Kharoset (Iranian Security Officers). He was also greatly concerned by the attitude towards him of the other crew members and feared that he would "be dead" by the time the ship returned to Iran. In these circumstances the Appellant says that he decided to "jump ship" as soon as possible. 21 When his ship was in port at Port Kembla the Appellant says that he made his escape at about 2 --- 3 a.m. on 7 April 2001. He says that he did so with the help of a friend who distracted the patrolling officer while he escaped. 22 The Appellant proceeded to apply for a Protection (Class XA) Visa on 17 April 2001. This application for a protection visa was refused by a delegate of the Minister on 29 May 2001. 23 The Appellant then applied for review of the Minister's delegate's decision in an application to the Tribunal, which was filed on 5 June 2001. When invited to do so, the Appellant indicated that he would like to attend the hearing before the Tribunal and also that he would be providing witnesses to give evidence on his behalf, as he later did. On 24 February 2003, the day before the Tribunal hearing, the Appellant's representatives, Farnam Immigration and Language Services, caused to be faxed to the Tribunal various documents to support the Appellant's case, including a further (unsworn) statutory declaration of the Appellant and a certificate of Baptism dated 21 October 2001. On 24 July 2003, the Tribunal handed down its reasons affirming the decision of the Minister's delegate not to grant the Appellant a protection visa. The Appellant then applied, unsuccessfully, for a review of the Tribunal's decision to the Federal Magistrates Court of Australia and on 14 March 2005 appealed to this Court from that decision. Therefore the Applicant does not satisfy the criterion set out in s 36(2) of the Act for a protection visa. The Applicant makes no claims as to having been accused of any Christian activities while on board ship such as reading the Bible but states ... that 'I had kept to myself, and hadn't said a word about Christianity'. Rather the Applicant claims that while visiting his home town he meet up (sic) with some friends and spoke to them with enthusiasm about Christianity. The Applicant claims that on the strength of this personal conversation among his friends when at home for ten days his interest in Christianity became public knowledge such that a fellow crew member on the ship knew of the Applicant's Christian leanings and informed the Captain. The Tribunal considers that if the Captain was intending to hand the Applicant over to the authorities in Iran and had informed the Applicant of his intention then more stringent measures would have been set in place in respect to the Applicant's movement when the ship was in dock. 28 Furthermore, the Tribunal was not satisfied that the Appellant faced a real chance of persecution for a Convention reason on his return to Iran. 29 The Appellant's Notice of Appeal sets out four grounds of appeal. Ground one contends that the Federal Magistrate erred when he failed to hold that the Tribunal had committed jurisdictional error in making findings based on implausibility considerations which it was said were not open on the material before it. Ground two is expressed in the alternative, that the Tribunal made findings for which there was no evidence. The third ground contends that the Tribunal committed jurisdictional error by failing to have regard to certain evidence relevant to the Appellant's credit. The fourth ground relied upon is that the Tribunal denied the Appellant natural justice by failing to put to him critical factors on which its decision was likely to turn. 30 The Respondents submitted that regardless of the manner in which the Appellant dressed up his argument, he was in effect seeking a merits review of the Tribunal's decision, which of course was not open on an application for judicial review. 31 The duty and jurisdiction of the Court to review administrative action do not go beyond the declaration and enforcing of the law which determines the limits and governs the exercise of the repository's power. If, in so doing, the Court avoids administrative injustice or error, so be it; but the Court has no jurisdiction simply to cure administrative injustice or error. The merits of administrative action, to the extent that they can be distinguished from legality, are for the repository of the relevant power, and, subject to political control, for the repository alone. The consequence is that the scope of judicial review must be defined not in terms of the protection of individual interests but in terms of the extent of power and the legality of its exercise. (per Brennan J, as he then was, in Attorney-General for the State of New South Wales v Quin [1990] HCA 21 ; (1990) 170 CLR 1 at 35-6. Counsel for the Appellant submitted that the country information set out above, provided clear evidence that ship captains act in exactly the manner in which the Captain of the Appellant's vessel did when faced with someone who behaved as the Captain believed the Appellant had. In the light of this evidence, it was submitted that the implausibility reasoning was perverse. 33 The Appellant does not cavil with the notion that the Tribunal is perfectly entitled to say that it thinks someone is lying or is not worthy of credit. Rather, issue is taken with the conclusion that certain aspects of the Appellant's claims were implausible when it was said that there was independent evidence to support his story. 34 Findings on credibility are the function of the primary decision-maker par excellence. If the primary decision-maker has stated that he or she does not believe a particular witness, no detailed reasons need be given as to why that particular witness was not believed. The Tribunal must give the reasons for its decision, not the sub-set of reasons why it accepted or rejected individual pieces of evidence (per McHugh J in Re Minister for Immigration & Multicultural Affairs; Ex parte Durairajasingham [2000] HCA 1 ; (2000) 168 ALR 407 at 423). 35 As in Durairajasingham the reason for the Tribunal's disbelief of the Appellant in this case was apparent from the Tribunal's use of the word "implausible" . The disbelief arose from the Tribunal's view that it was inherently unlikely that the Captain had expressed a concern which might have led to the Appellant having a well-founded fear of persecution for reasons of religion if he were to stay on the ship. 36 This begs the question, as indicated earlier, as to whether the country information concerning the likely behaviour of Iranian ship captains comprehensively recorded how they would be expected to behave in every circumstance and whether it was open to the Tribunal to construe the possibility that a seaman flirting with Christianity might be considered to be a political or security threat by engaging in subversive activities. 37 It seems to me that it was open to the Tribunal to construe a captain's perceived concern over a crew member's apparent interest in Christianity as providing a justification for the crew member being placed in custody when the ship was in a foreign port; either on the basis that pursuit of that interest constituted participation in a subversive activity which rendered him a political or security threat, or that his conduct was so offensive to the State as to warrant his delivery up to the authorities in Iran upon the ship's return to Iran to be "dealt with accordingly" , even if he was not considered to be a political or security threat. 38 The country information did not, in my opinion, preclude the Tribunal from rejecting the Appellant's case that his Captain had such a concern and, accordingly, that he had a well founded fear of persecution, in circumstances where his movements were not relevantly restricted whilst in port in Port Kembla. 39 It was open to the Tribunal to find that the freedom of movement afforded to the Appellant when his ship was in Port Kembla was inconsistent with a well-founded fear of being persecuted for reasons of religion. The evidence was said to be constituted by the DFAT Country Profile and the evidence of three independent witnesses who gave evidence on the Appellant's behalf at the Tribunal hearing. 41 It is plain from a reading of the Tribunal's reasons that it had regard to both the DFAT Country Profile and also the evidence of the witnesses who spoke of the Appellant's conversion to Christianity in Australia and of his awareness of Christianity when they first had contact with him in Australia. 42 The Tribunal did not find that the Appellant had no interest and involvement in Christianity prior to his arrival in Australia. What it did not accept was that the Appellant was considered by the Iranian authorities to be an apostate or actively involved in Christianity prior to his arrival in Australia. This finding was not challenged by the Appellant. 43 The Tribunal did not accept that the Appellant jumped ship because he faced harm from the authorities of Iran because of his claimed interest and involvement in Christianity at that time. This view was open to the Tribunal. It is suggested that the Tribunal was obliged to put the assumptions on which it was to make its decision to the Appellant in order for him to be able to comment on those assumptions and perhaps provide additional evidence in light of those assumptions. Counsel for the Appellant submitted that he was entitled to respond to any adverse conclusion drawn by the decision-maker which was not a natural and obvious evaluation of the evidence and that failure to do so would result in a lack of procedural fairness. 45 The proceeding before the Tribunal was inquisitorial, not adversarial. A decision-maker such as the Tribunal was obliged to advise a person such as the Appellant of any adverse conclusion which would not obviously be open on the known material. However, such a decision-maker would not be otherwise obliged to expose his or her mental processes or provisional views to comment before making the decision in question (per Northrop, Miles and French JJ in Commissioner for Australian Capital Territory Revenue v Alphaone Pty Limited (1994) 49 FCR 576 at 592). 46 The Tribunal did not have to articulate the reasoning processes by which it came to the conclusion that it reached about the Appellant's claimed reasons for jumping ship in this case. Its rejection of the Appellant's claim was obviously open on the known material. Accordingly, the appeal should be dismissed with costs.

whether implausibility reasoning perverse whether procedural fairness requires disclosure by tribunal of provisional views on matters of assumption migration

The design related to a ladies' dress. The applicant alleges that the respondents made and sold a dress in infringement of the applicant's design, and seeks declarations, damages and injunctions. 2 Until 28 February 2007, the applicant was a designer and retailer of women's clothing, particularly clothing said to be of interest to fashion-conscious women in their 20s and 30s. Under its name "Review", the applicant retailed its clothing in its own stores, of which there were some 15 throughout Australia, and through concession sites within Myer stores, of which there were some 19 throughout Australia. Those stores, and sites, sold the applicant's branded garments and accessories only. The applicant's branded clothing was not available elsewhere. 3 The respondents too were engaged in the design, distribution and sale of women's clothing. In the evidence and submissions before the court, no distinction was made between the first respondent (Innovative Lifestyle Investments Pty Ltd) and the second respondent (Clothing Outlets Pty Ltd): the case was conducted, by both sides, on the basis that the conduct of which the applicant complains was done by the respondents, without differentiation. In much of the evidence, the respondents were referred to as "The Discovery Group". Save for these very general observations, it is not possible to describe the respondents' business, as they did not give evidence on the subject. 4 In the period leading to May 2005, Ms Jayne Ellis, a director of, and designer employed by, the applicant, designed a new original dress for retail distribution by the applicant. The design for that dress was included within a number of representations which were the subject of a design application made by the applicant, pursuant to s 21 of the Designs Act , on 24 June 2005. In late June 2005, the applicant dispatched commercial quantities of dresses made in accordance with the design to its stores and outlets, and these were shortly thereafter placed on display for retail sale. 5 On 14 November 2005, the applicant requested registration of the design pursuant to s 35 of the Designs Act . On 9 December 2005, the Registrar notified the applicant that its application met the minimum filing requirements, and had been given a filing date of 24 June 2005. The product to which the design related was described, in the particulars recorded by the Registrar, as a "ladies' garment". 6 By at least the second week of September 2005, the respondents had commenced the process of causing a new dress to be manufactured. In evidence was a "costing sheet" dated 12 September 2005 upon a document headed "The Discovery Group". It related to the respondents' new dress, and set out, in considerable detail, the design of the dress, the structure of the make-up of the dress, the materials and accessories of which the dress was to be made and the proposed time line for bringing the dress into production. That time line (the details of which were, I infer, inserted on the various later dates upon which relevant events occurred) suggested that the respondents' dress was "passed to production" in late January 2006. 7 Also in evidence was a "Specification Sheet", a document of "The Discovery Group" dated 30 January 2006. As its name suggested, the document contained a detailed specification for the manufacture of the respondents' new dress. It was to be branded "Lili". The specifications for various different sizes were set out. 8 Also in evidence was a purchase order of the respondents dated 22 January 2006, addressed to a company called Jedda Pleating Pty Ltd. It related to a sample pleating job (one unit) for the respondents' new dress. It may be that this order was raised after the event, since the Jedda invoice for this sample pleating was dated 18 January 2006. However these anomalies may be, it seems fairly clear, and I would infer, that, at some time in January 2006 or thereabouts, the respondents caused Jedda Pleating Pty Ltd to perform work upon a sample of what was intended to be their new dress. 9 In February or March 2006, the respondents placed orders with a business called "Thuan Loi Fashion" for the manufacture of what appear to have been commercial quantities of their new dress. Documents in evidence suggest that, by 17 March 2006, Thuan Loi Fashion had manufactured some 157 dresses, and delivered them to the respondents. 10 There were in evidence two sales history reports, discovered by the respondents, for the "Lili" dress. One report was headed "Discovery Clothing", from which heading, and from the content of the report generally, I infer that it related to the respondents' wholesale sales of that dress over the period 1 July 2005 to 23 February 2007. Curiously, the report shows some sales activity prior to what I have considered to be the manufacture of commercial quantities of the dress. The numbers were very small, and seem to have included a "staff" transaction. The respondents led no evidence about these minor anomalies. The date upon which reasonable wholesale quantities of the dress were, according to the report, first sold by the respondents was 14 March 2006. A total of 150 units (net of returns) was sold in March and April 2006. A further eight sales were made in May. There was one sale (and there appear to have been two returns) in June, and there was a further sale in December 2006. The other report was headed "Discovery Retail" and I infer that it related to the respondents' retail sales of the "Lili" dress over the period 1 July 2005 to 31 March 2007. It shows eight sales in April, five sales in May, three sales in June (all subsequent to 2 June), 10 sales in July and one sale in September 2006. 11 On 5 May 2006, an employee of the applicant attended at a "Charlie Brown" store located at Direct Factory Outlets in Moorabbin and purchased one unit of the respondents' dress. 12 On 2 June 2006, the Registrar of Designs issued a Certificate of Registration in respect of the applicant's design. 13 On 7 June 2006, solicitors for the applicant wrote to the respondents, drawing attention to the then recent registration of the applicant's design and warning that, should a certificate of examination be issued under Part 3 of Ch 5 of the Designs Act in relation to that design, continued sale by the respondents of the "Lili" dress would entitle the applicants to damages. The letter suggested that the respondents should cease selling their dress. By letter dated 21 June 2006 to the applicant's solicitors, the respondents said that they were "a designer, manufacturer, distributor of ladies wear fashion clothing in the Australian market". In various ways, they said that the design of the "Lili" dress was the result of the respondents having derived inspiration from current fashion trends in Australia and overseas. They denied that the respondents had copied the design of the applicant's dress. 14 On 13 July 2006, the Registrar certified, pursuant to s 67 of the Designs Act , that examination had been completed in relation to the applicant's registered design. 15 On 19 September 2006, the applicant commenced the present proceeding against the respondents. It sought a declaration that the respondents had infringed the registered design, and injunctions to restrain the respondents from infringing the design, from manufacturing, importing, exhibiting in public, marketing, promoting, offering for sale and selling the "Lili" dress and from disposing of possession of that dress, save in accordance with orders for delivery up which the applicant also sought. The applicant sought damages or, at its election, an account of profits. 16 For reasons which were seemingly unconnected with the present litigation, in October 2006 there was what was described as a "private equity buy-out" of the applicant. What actually happened, according to the evidence of Mr Peter Strain, a director of the applicant, was that, in that month, a majority interest in the shareholding of the applicant was sold. On 28 February 2007, the business of the applicant was transferred to a company then called Review Holdings Pty Ltd (ACN 122 295 836). On the same day, the design registration with which this proceeding is concerned was transferred from the applicant to Review Holdings. On 13 March 2007, the applicant changed its name to Review 2 Pty Ltd, and Review Holdings changed its name to Review Australia Pty Ltd. The latter change in name was recorded on the design register. To avoid confusion, I shall refer to the company previously called Review Holdings Pty Ltd, and now called Review Australia Pty Ltd, as "Review Holdings". 17 On 13 June 2007, the applicant appointed liquidators for the purposes of a members' voluntary winding up pursuant to Division 2 of Part 5.5 of the Corporations Act 2001 (Cth). Mr Strain accepted that the purpose of the appointment of the liquidator had been that of "closing out the applicant's affairs". In their Amended Defence filed on 10 December 2007, the respondents denied that their dress was identical to the applicant's design, but otherwise admitted the allegations in subpars (c), (d) and (e) of the applicant's pleading. They denied every allegation in subpars (a) and (b). There was no evidence of importation as alleged in subpar (b) of the applicant's pleading and, at trial, it was not submitted on behalf of the applicant that that allegation had been made good. 19 In the result, the position before the court is that the respondents have admitted that they sold, offered to sell or disposed of a product (the "Lili" dress) which was substantially similar in overall impression to the applicant's design. They admitted also that they used such a product for the purposes of their trade or business, and that they kept such a product for the purposes of sale etc. A remaining issue is whether, in addition to being substantially similar in overall impression to the Review design, the respondents' dress was identical to that design. The other issue, relevantly to s 71 of the Designs Act , relates to subpar (a) of the applicant's pleading. Although, strictly speaking, all of the relevant allegations were denied by the respondents, they conducted the trial on the basis that, consistently with their admissions in relation to subpars (c), (d) and (e), their dress was substantially similar in overall impression to the applicant's design. The point which they made in relation to subpar (a) was that they themselves neither made nor offered to make the "Lili" dress. It was said that the dress was made by independent contractors, not by the respondents. 20 The respondents' dress that was purchased by an employee of the applicant at Charlie Brown was tendered in evidence. Although I can well appreciate why the respondents have admitted that that dress was substantially similar in overall impression to the applicant's design, I would not go to the extent of finding that it was identical thereto. There were points of difference, at the level of detail, between the respondents' dress and the applicant's design which were pointed out to the court during the course of the evidence. Those points of difference preclude me from finding that the dress was identical to the design. 21 With respect to subpar (a) of the applicant's pleading, I do not accept the distinction, sought to be made by the respondents, between a product made by those directly employed by a company, on the one hand, and a product made by an independent contractor at the behest of a company, on the other hand. In the policy context of the Designs Act , I consider that the reference, in s 71(1)(a) thereof, to a person who "makes" a product includes a reference to a person who directs, causes or procures the product to be made by another, whether or not an employee of the person. To accept, as the respondents did, the application of the provision to a situation in which the product is made by an employee of the person necessarily excludes the construction that the word "makes" refers only to the manual task of making by the person himself or herself. That being so, there is no intelligible point, consistent with the scope and purpose of Part 2 of Ch 6 of the Designs Act itself, at which a line should be drawn so as to exclude the making of a product by a contractor to, but at the direction of, the person. 23 I consider next the question of compensatory damages, for which the applicant has opted pursuant to s 75(1)(b) of the Designs Act . Here the respondents have made no admissions. At one level, it might be thought difficult to sustain the proposition that, by doing no more than making their dress, the respondents caused the applicant to suffer loss or damage. It might be thought that the infringement referred to in item (a) in the previous paragraph, as such, could not produce any loss or damage. This would, however, be to take too narrow a view of the realities apropos an infringement of the kind to which s 71(1) of the Designs Act refers. The sale of a product cannot be harmful to another trader unless the product has been made; or, to put it the other way around, the damage which a trader suffers as a result of the sale of a product necessarily results from the circumstance that the product has first been made before being sold. And I would express the same conclusion with respect to item (d) above: if damage has been suffered by the sale of the product, the person who previously kept the product for the purposes of it being sold might, in an appropriate case, be regarded as having contributed to that damage. In the circumstances of the findings set out in the previous paragraph, I think it proper to find that the respondents engaged in an integrated course of conduct which involved each of the infringements to which I have referred, the end result of which was that they placed on to the market, and sold, an infringing product which had the potential to cause loss or damage to the applicant. That potential arose, of course, because both parties were sellers of similar products in much the same market. 24 The most obvious way in which the applicant might have made good its claim for damages would have been to demonstrate that the respondents' distribution and sale of the "Lili" dress had a detrimental impact upon sales of its own dress, made in accordance with the registered design. It is here that, for reasons which were never made clear to the court, the applicant's evidentiary case was curiously deficient. As I have said, the applicant placed its own dress on to the market at about the end of June 2005. The respondents did not commence to make any significant retail sales of their dress until March 2006. The applicant did not give any evidence of the sales volumes achieved by its own dress, save with respect to a very short initial period terminating on 4 July 2005. In that period, it seems that the applicant sold five units of its dress, and held a further 170 units in stock. This evidence was set out in a detailed table, obviously printed from computer records, of sales, costs, stocks and profits relating to a range of the applicant's products, including the dress in question. There was neither evidence nor explanation as to why similar data might not have been produced with respect to the whole of the period down to the point at which the respondents' "Lili" dress was placed on to the market, and with respect to the period thereafter, when both dresses were on the market together. Intuitively, it would seem that an examination of the sales achieved by the applicant's dress by reference to the presence, or absence, of the respondents' dress in the same market would have had at least the potential to provide an intelligible starting point for the calculation of damages suffered by the applicant as a result of the respondents' infringements. However, save for the very short period to which I have referred, the applicant placed no sales history before the court. 25 I have referred above to the respondents' sales of their "Lili" dress. It seems that they sold something in the region of 185-190 units over the period in question. However, without corresponding details of the applicant's own sales, I am in no position to make an informed assessment as to the extent, if any, to which those sales suffered as a result of the respondents' sales to which I have referred. 26 Counsel for the applicant did not invite me to infer that, had the respondents' dress not been on the market, the applicant itself would have achieved sales of about another 185 units of its own dress. Neither would the evidence sustain any such conclusion. There was no evidence as to the proximity of the applicant's outlets to those outlets which offered the respondents' dress for retail sale. Because the applicant's products were sold only in its own outlets, and because those outlets sold nothing but the applicant's products, the situation would never have arisen, I infer, where the applicant's dress and the respondents' dress were offered for sale side-by-side. In the circumstances, I could not conclude that it was probable that a consumer who bought the respondents' dress would, if that dress had been unavailable, have bought the applicant's dress instead. There are too many other rational possibilities which, in the absence of any evidence on the subject, would have to be regarded as at least equally probable: for example, the consumer may have bought some other dress, or some other garment, of the respondents, or of some other manufacturer; or she may have bought nothing at all. The product with which this proceeding is concerned was, I consider, highly discretionary and not such as the court should infer would necessarily have been purchased from the applicant, if it were not purchased from the respondents. It is sufficient, however, for me to conclude, as I do, that the incomplete state of the evidence of itself precludes the drawing of any such inference. 27 Counsel for the applicant submitted that I should award his client general damages upon the same footing as was done by Wilcox J in Autodesk Australia Pty Ltd v Cheung (1990) 94 ALR 472. Cheung was a retailer of computer hardware. If a customer bought particular hardware from him, Cheung was prepared to give the customer, free of charge, certain software as required by the customer. The software was "pirated", in the sense that it had been produced, and copied on to disk, without the authority of the relevant copyright owners. In the facts of the case itself, Autodesk made a trap purchase of hardware from Cheung, and received, free of charge, a pirated version of software of which it was the copyright owner. Autodesk then commenced proceedings in this court, and obtained an Anton Pillar order from Burchett J, pursuant to which a search of Cheung's premises was carried out. It is probable that his activities cost them some sales, because some customers he supplied with AutoCAD programs would otherwise have purchased programs from the applicants. But that loss relates to the supply of programs before the date of the search. It has nothing to do with the number of programs which happened to be in Mr Cheung's premises at the time of the search. Under the circumstances, it is not logical to apply the "licence fee" approach. However unsatisfactory that course may seem, the court must treat the damages as being "at large", in the words of Horridge J in Fenning Film Service Ltd v Wolverhampton, Walsall and District Cinemas Ltd [1914] 3 KB 1171 at 1174, giving "what amount I think right as if I were a jury". 28 The present case is of course quite different factually from Autodesk . There, the pirated software was the means by which the computer bought from Cheung could be caused to perform certain functions. It is safe to assume that potential purchasers of the software would see commercial benefit in the performance of those functions. Because it owned the copyright, Autodesk was the only entity which could lawfully satisfy that need. Thus it was reasonable for Wilcox J to infer, as his Honour appears to have done, that the probable consequence of Cheung distributing pirated copies of the software in question would be that customers who were, ex-hypothesi , concerned to have their new computer working in these ways would not obtain legitimate software from Autodesk. As Wilcox J pointed out, Cheung's activities cost Autodesk some sales, because at least some of the customers would otherwise have purchased programs from Autodesk. In the present case, however, I am not prepared, in the absence of evidence, to equate a ladies' fashion dress with copyrighted software intended to cause a computer to perform a commercially valuable function. I could not follow Wilcox J and find that it was probable that the respondents' infringement cost the applicant some sales of its own dress. 29 However, counsel for the applicant did not base his case for damages wholly --- or even mainly --- upon the proposition that I should find that his client had probably lost some sales as a result of the market presence of the respondents' dress, but that the value thereof was required to be the subject of estimation, if not guesswork (as to which see Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10 ; (2003) 196 ALR 257, 266 [38]). Rather, counsel submitted that the market presence of the respondents' dress had damaged the applicant's reputation. He relied upon a passage in Mr Strain's affidavit (which I allowed to be read over the objection of the respondents) as follows: "When Review's designs are copied by other traders who sell their garments to a similar market to Review, the claim to originality in the Review's design is lost. " I take it that when Mr Strain said "are copied" he intended a reference also to the production of a substantially similar garment, whether or not by a process of copying. 30 I think there is sense in the applicant's position in this regard, particularly with respect to so much of the respondents' infringement as concerns offering to sell, and selling, their own dress. I accept the applicant's evidence that it put considerable value by the perceived originality of its garments. It was an important aspect of the applicant's image in the market. I can well understand that, if the applicant had a reputation, however diffuse, for originality of design, a consumer might well show a particular interest in the applicant's range of products, and be alert to the appearance of new designs from time to time. And if she took that approach, she would have to enter one of the applicant's stores or outlets to satisfy her curiosity. If garments bearing a substantial similarity to those of the applicant started to appear in other outlets and under other brands, the consumer's perception of the originality of the applicant's designs would necessarily be weakened. In an extreme case, the consumer's perception may be that the applicant's garments were nothing very special at all, and that she might as well spend her discretionary dollar at any outlet where she noticed something to her taste. I could not, of course, find that the present was anything like an extreme case, but I am prepared to find, on the probabilities, that the market presence of the respondents' dress did bring about some minor dilution of the applicant's reputation for originality. 31 Although different from Autodesk with respect to the matter of actual lost sales, I consider that the present case is one in which the approach of Wilcox J may be taken with respect to the reputational damage which the applicant alleges. Because of the uncertainties involved, and because the applicant has made an apparently conscious choice not to put satisfactory sales figures before the court, I must be very cautious in my assessment. By conducting its case in the way that it has, the applicant has made the task of assessment entirely a matter of impression. Doing the best I can, I am prepared to place a capital value of $7,500 upon the probable diminution of the applicant's reputation for originality brought about by the respondents' infringement. 32 Counsel for the respondents made certain submissions the thrust of which was that the compensatory damages which I would otherwise be minded to award either should not be awarded at all or should be reduced. They submitted that, the applicant now being in liquidation, it could suffer no further damage which was to any extent related to its trading position (such as damage to its reputation). Indeed, they submitted that 28 February 2007 was necessarily the cut-off point for the estimation of such damages as the applicant had suffered, since that was the date when it transferred its business to Review Holdings. Counsel pointed to the absence from the evidence (and from the applicant's discovery) of any reckoning of the value of the applicant's reputation for the purposes of that transfer. I am not persuaded that I should qualify the conclusions which I would otherwise reach by reason of the considerations to which counsel referred. I think that the damage to the applicant's reputation upon which I have based my assessment above was almost wholly complete by the time of the institution of the present proceeding in September 2006, although the financial impact of that damage may have taken some time thereafter to be fully felt. My assessment was of the probable damage to the applicant's reputation, as at the commencement of the proceeding. It should not be qualified as proposed by counsel for the respondents. 33 Counsel for the respondents next submitted that the court had a discretion whether to award compensatory damages under s 75(1) of the Designs Act , and that, in the circumstances of the present case, I should exercise that discretion in their clients' favour. As to the existence of the discretion, counsel pointed to the words of the section "the relief may include". They were unable, however, to point to any decided case in which these words, or similar words in analogous legislation, had been held to be sufficient to give rise to a discretionary basis for the denial of damages, where otherwise a proper case had been made out. For my own part, I consider that the words "the relief may include" do no more than introduce an identification of the range of remedies that would be available to a court in accordance with well-established principles. In the case of par (b) of s 75(1) , the remedies identified are damages or an account of profits. Each is a description of a remedy with which the general law is familiar. Putting to one side the special case of damages in equity, the remedy of an award of damages has traditionally been treated as non-discretionary in the sense that, if the wrongful act of the plaintiff causes damage to the defendant, damages should be awarded. I do not accept that the way in which s 75(1) of the Designs Act is expressed is intended to make an award of damages discretionary, as though it were analogous to an equitable remedy. 34 Counsel for the respondents next submitted that the applicant should fail in its claim for damages because of its own misleading, and possibly unlawful, conduct in relation to its own sale of garments made in accordance with the registered design. Counsel relied upon a short but authoritative line of cases commencing with The Leather Cloth Company Ltd v The American Leather Cloth Company Ltd (1865) 11 HLC 523. Before turning to those cases, I should mention the facts of the present case which are relevant to this submission by counsel. 35 Ms Ellis gave evidence that, since about March 2005, the applicant had made a practice of endorsing the "swing tag" on each of its garments with the following statement: "Review styles are registered designs". The applicant's own dress, made in accordance with the registered design the subject of this proceeding, was, when offered for sale, accompanied by a swing tag containing such a statement. Indeed, the applicant relied upon the presence of that statement as being sufficient to put the respondents on notice that the dress which it was alleged they copied was the subject of a registered design; that, however, is a matter to which I shall return. 36 In point of fact, it was not until 2 June 2006 that the design in question was registered --- about 11 months after the corresponding dress was first put on to the market by the applicant. For the whole of that time, the statement on the swing tag that the applicant's styles were registered designs was incorrect in its application to the dress in question. Additionally, counsel for the respondents extracted evidence from Mr Strain, under cross-examination, the general purport of which was that no more than about 2-3% of all the new garment styles placed on to the market by the applicant ever became the subject of registered designs and, therefore, that the broad statement that the applicant's styles were registered designs was incorrect. According to the submission of counsel for the respondents, the conduct of the applicant in making the statement was effectively fraudulent in the sense identified in Leather Cloth and similar cases, and was an offence under s 132(3) of the Designs Act . 37 The authorities upon which the respondents rely all had two presently relevant features. First, they concerned causes of action which relied upon the plaintiffs in question having established a reputation for the use of a particular mark or word in connection with their products. Leather Cloth and Ford v Foster (1872) LR 7 Ch App 611 were what might be called common law trade mark cases. Angelides v James Stedman Henderson's Sweets Ltd [1927] HCA 34 ; (1927) 40 CLR 43 and Kettles & Gas Appliances Ltd v Anthony Hordern & Sons Ltd (1934) 35 SR (NSW) 108 were passing-off cases. In each of these cases the plaintiff's title to relief depended on the establishment of a trading reputation with respect to the use of the mark or word upon which the proceeding was based. None of these cases involved a claim that a registered mark had been infringed; much less was any of them concerned with a registered design. 38 It is clear from a reading of the judgments upon which the respondents relied that in each case the argument (which succeeded in Kettles and which was taken to be correct in the other authorities) was to the effect that a plaintiff could not rely, as a basic ingredient of his or her cause of action, upon a reputation which had been built up with the assistance of fraudulent or misleading conduct. In the present case, by contrast, the applicant's cause of action is to no extent reliant upon its trading reputation. Its cause of action is complete upon proof of its registered design and the respondents' admissions of infringement. So far as the issues raised in this proceeding are concerned, it was not necessary that the applicant ever have made a dress in accordance with its registered design, much less that it have acquired a reputation in relation to that dress, or to the design upon which it was based. 39 The second feature of difference between the authorities upon which the respondents relied and the present case is that each of those authorities was concerned with the equitable jurisdiction of the court. None of them involved an award of damages. As was made clear in Leather Cloth , Angelides and Kettles , a plaintiff who sought the protection of his or her intellectual property in relevant respects would not be regarded as coming to equity with clean hands if the right which he or she sought to protect was to continue to mislead the public by the use of a trade mark or the like which contained a misrepresentation. Although also a case in equity, only in Ford v Foster was the position which would obtain at law discussed. The declaration at law always begins by setting out that the Plaintiff had used for a length of time a certain particular trade mark, and that his goods were known by that trade mark, and it substantially sets up that by the user of that mark, and his goods being known in the market by it, he has practically got a right to the use of that mark. It appears to me that it would come within the rule Ex turpi causâ non oritur actio ; that if the trade mark contains a false representation calculated to deceive the public, a man cannot by using that, which is in itself a fraud, obtain - I do not say an exclusive right - but any right at all. However, it is clear that his Lordship's observations would have no application to circumstances in which the plaintiff obtained his or her right not by a pattern of trading leading to the establishment of a reputation, but by registration under statute. 40 I would hold that, apart from the operation of s 75(2) of the Designs Act , an award of compensatory damages in favour of a successful applicant should not be regarded as discretionary. In the present case, upon proof of infringement, the applicant's entitlement to have its damages assessed is, subject only to the specific provisions of s 75 , complete. No question as to the honesty or integrity of the applicant's own trade arises; nor does any question of clean or unclean hands. The subsection takes no account of the period between the filing of the design application and the registration of the design in question. That period is within term --- s 46(1)(a) --- and is, therefore, a period during which the making, sale etc of a product embodying the design would amount to an infringement of the design --- s 71(1). However, at least on a natural reading of its terms, s 75(2) operates only with respect to a period in which the design is in fact registered. If that is the position, a defendant is, during so much of the term as precedes registration, denied the protection of the subsection and is, accordingly, in a worse situation than he or she would occupy post-registration. 43 Counsel for the respondents submitted that s 75(2) could not possibly have been intended to operate in this way. They pointed to the fact that, in the present case, had their clients made every possible inquiry in the first half of 2006, they would have been able to discover only that the applicant had many pending applications for registration, each of which was unrevealingly described as a "ladies garment". The design itself was not publicly available before registration. Counsel asked rhetorically: why should a potential defendant be in a worse position in the circumstances of the present proceeding than would be the case if the design were actually registered? 44 Although the facts of the case have illuminated the problem of the operation of s 75(2) in rather sharp focus, a construction of the subsection must, in my view, proceed according to conventional, objective, considerations, rather than by reference to those facts. Inconvenient as it may be, it is simply impossible to distort the words of the provision to make them apply in a circumstance where the design was not registered, but merely in term. Had the legislature desired to cover that circumstance, it could have done so by a deeming provision. However, it is not at all obvious what the legislature might have said about the subject, given that the design itself is not publicly available before registration. In other words, this is not, in my view, simply a case in which it is obvious what the legislature intended but in which that intention has not been effectuated in the words used. This is a case in which there is no reason to believe that the legislature ever turned its mind to a situation such as that disclosed by the facts before the court. I do not believe that I am in any position to do otherwise than give effect to s 75(2) according to the terms actually used by the legislature. 45 I take the view that s 75(2) operates only in relation to a design which is in fact registered "at the time of the infringement", the temporal point of reference used in the subsection. On the facts of the present case, the primary infringement occurred in February 2006 or thereabouts, in which circumstances the defence under par (a) was not available. To the extent that the respondents' secondary infringements were constituted by sales of their dress, most of those infringements occurred before the design was registered on 2 June 2006 and did not, therefore, attract the defence under s 75(2). As I have found above, there were some further infringements after the date of registration, but, in the light of the letter from the solicitors for the applicant dated 7 June 2006 to which I have referred, it could not seriously be suggested that the respondents were not then aware that the design was registered. 46 For the sake of completeness, I shall say something about the facts which might, in other circumstances, have borne upon the prospects of a defence under s 75(2) of the Designs Act . With respect to the respondents' primary infringement, they led no evidence of any steps which they had taken to ascertain whether the design was registered. Even if the subsection had applied in the period when an application for registration was pending, a defence under s 75(2)(a) would necessarily have failed, because the respondents had not taken the steps referred to in subpar (ii) thereof. 47 As to the matter of secondary infringement, I shall assume that the question is whether the respondents could reasonably have been expected to be aware that a design application was pending. Here I am required to refer to the circumstances which led to the design of the respondents' dress. The respondents led no evidence on that subject. As I have set out above, documents discovered by the respondents disclose that the design of the respondents' dress was at least substantially completed by the second week of September 2005. That was a little more than two months after the applicant's dress, made in accordance with the design which was later registered, was placed on to the retail market. A version of each dress was tendered in evidence. The general impression I got was that the respondents' dress is strikingly similar to the applicant's dress, particularly with respect to the more eye-catching features of each. If it were the fact that the respondents' dress was designed independently of the applicant's dress, or even designed as a result of the relevant designer's general impressions of market trends, including, possibly, those represented by the applicant's dress, it would have been an easy matter for the respondents to have led evidence from the designer himself or herself. No such evidence was led. Neither was there any explanation for the respondents' failure to lead such evidence. I am bound to conclude that evidence as to the circumstances leading to the design of the respondents' dress would not have assisted their case. I consider that the striking visual similarity between the two dresses, together with the timing of the commencement of the production of the respondents' dress apropos the first appearance of the applicant's dress on the retail market, justify the inference that the respondents' dress was a copy of the applicant's dress. In the absence of evidence to exclude that inference, I am confident that it should be drawn in the circumstances. 48 Returning to s 75(2)(b) of the Designs Act , therefore, my starting point is that, in about August 2005, the respondents embarked upon a process of design which involved copying the design of the applicant's dress. It is common ground that the applicant's dress was sold with a swing tag stating (whether or not accurately) that the applicant's styles were registered designs. I must assume that, acting reasonably, the respondents would have noticed the words on this swing tag at the time when they examined the applicant's dress for the purposes of copying. This ought to have put them on notice of the prospect that the dress might well have been made in accordance with a registered design. It is true that the only information which the respondents could have obtained from the Designs Office was that a number of "ladies' garments" were the subject of pending applications, but, as counsel for the applicant pointed out, the respondents at least knew that they were dealing with the applicant, and a phone call might have put the matter beyond doubt. This was not done. Aware that they were copying one of the applicant's dresses, and aware that the design of that dress might well have been registered, the respondents proceeded nonetheless to cause their dress to be manufactured and to be placed upon the retail market. 49 For the above reasons, I would not find that the respondents could not, at any time before 2 June 2006, reasonably have been expected to be aware that the applicant's design was the subject of an application under the Designs Act . Indeed, I would make the positive finding that the respondents did not take all reasonable steps to ascertain whether such an application was pending, acting conscientiously with a concern for the observance of the law as I must assume they should have been. In other words, on the facts of the present case, it is not merely that the respondents have been deprived of what might appear to be a good defence on the merits by the unhappy drafting of s 75(2): it is also that, had the subsection been drafted in a way which dealt also with so much of the term of a design as precedes registration, the respondents would have been unlikely to have been able to bring themselves within it. 50 These findings are relevant also with respect to the next point which I must consider, namely, the submission of the applicant that additional damages should be awarded under s 75(3) of the Designs Act . It was submitted that the conduct of the respondents, in copying the applicant's design and in marketing and selling a dress made from that copy, in circumstances where the respondents must be assumed to have been aware of the wording on the applicant's swing tag, was flagrant. Counsel for the respondents submitted that, because of the misrepresentation involved, I should take no notice of the swing tag. They submitted that at all (or at least nearly all) stages of the infringements which their clients had admitted, the suggestion made on the swing tag that this design was registered was wrong, and that the suggestion itself was made in contravention of s 132 of the Designs Act . They submitted also that, absent rights under that Act, there was nothing wrongful about their clients' copying (if that is what happened) the design of a competing product. This was not a case of copyright, and the respondents were, it was submitted, prima facie entitled to adopt the design of any competing product. 51 I propose to consider first the matter of the applicant's swing tag. Although I have taken the existence of the swing tag into account in the findings of fact which have led me to the conclusion that the respondents could reasonably have been aware of the applicant's pending design registration application, different considerations apply when the applicant seeks to invoke the court's discretionary power under s 75(3) for an award of additional damages. At this level, reliance upon the swing tag would place the applicant in a position of special advantage by reason of its own misrepresentation. Not only was the swing tag wrong to imply that the dress in question was the subject of a registered design, it was wrong to suggest, as it did, that the applicant's styles generally were the subject of registered designs. I am not prepared to hold that the applicant should be permitted to use these misrepresentations to its particular advantage for the purpose of securing an award of additional damages under s 75(3). 52 I approach the question under s 75(3) therefore, as though the swing tag did not exist. The facts then would be, as I have otherwise found them, that the respondents noticed the applicant's dress on the market, copied the design of that dress, and caused dresses corresponding generally with the design to be manufactured and sold. They so proceeded without any inquiry as to whether the dress which they copied was the subject of a registered design. However, there is nothing in the evidence from which it would be proper to conclude that the respondents ought to have presumed that the dress was the subject of a registered design. Save for the practices of the applicant itself, the court knows nothing about the prevalence of registered designs with respect to garments of the kind presently in issue. The applicant's own practices, of course, appear to be such that a small minority of its garments in fact become the subject of registered designs. The most I could conclude was that the respondents might well, and perhaps ought reasonably, have taken the view that the dress which they copied might have been the subject of a registered design. In copying that dress, of course, the respondents took the risk that it was. Using an adjective different from that implied by s 75(3) , I might conclude that the respondents were somewhat cavalier in their decision to produce and sell their dress without making appropriate inquiries. However, the authorities make clear that something more is required if flagrancy is to be found: see Raben Footwear Pty Ltd v Polygram Records Inc (1997) 75 FCR 88, 92-93; Polygram Pty Ltd v Golden Editions Pty Ltd (1997) 76 FCR 565, 575-576; MJA Scientifics International Pty Ltd v SC Johnson & Son Pty Ltd (1998) 43 IPR 275, 281-282. In the circumstances, I am not prepared to find that the respondents' infringement was accompanied by flagrancy within the meaning of s 75(3) of the Designs Act . 53 That, of course, is not the end of the matter under s 75(3). The court's power to award additional damages requires me to take into account also "all other relevant matters". I have been referred to some of the cases in which the jurisprudence arising under s 115(4) of the Copyright Act 1968 (Cth) has been developed. Two things, however, need to be said about this analogy. First, the specific headings of matters to be taken into account set out in par (b) of that subsection do not appear in s 75(3) of the Designs Act . There is, for example, no reference to deterrence in the latter. Secondly, of its nature, an infringement of a registered design is quite different from an infringement of copyright. In the case of copyright, it is the copying itself which constitutes the delict. Under the Designs Act , an infringement occurs by the making, sale, etc, of a product which is identical or substantially similar, whether or not copying has taken place. That is to say, subject perhaps to such policy considerations as are embodied in s 75(2) of the Designs Act , an infringement might be constituted by an act which, in general terms, is quite innocent. This has the result, in my view, that considerations such as deterrence play out quite differently under the Designs Act from the way they do under the Copyright Act , and that this circumstance might explain the absence from s 75(3) of the former of the particular matters required to be taken into account under s 115(4) of the latter. 54 This does not mean that the existence of copying, in a case in which it has occurred such as the present, will always be irrelevant to the matter of additional damages under s 75(3). However, I must recognise that it is no part of the policy of the Designs Act to prevent copying per se . I accept the submissions made on behalf of the respondents that, unless they were appropriately put on notice that the dress which they copied was the subject either of an existing registered design or of an application that was pending, I should not view as especially culpable their conduct in copying that dress. I reach that conclusion only on the facts of this particular case, in which it has not been established that the existence of registered designs should, by a reasonable participant in the relevant industry, be viewed as the norm. This was not, therefore, a case in which the respondents proceeded to manufacture and sell their own dress notwithstanding that they ought reasonably to have supposed that the design of the dress which they copied was most probably registered, or in the process of becoming so. 55 The conduct of the respondents subsequent to their receipt of the letter from the applicant's solicitors dated 7 June 2006 raises further considerations. According to the respondents' discovered documents (which were not the subject of any evidence on behalf of the respondents themselves), there was a single sale by wholesale on each of 19 June and 7 December 2006, and there was a single sale by retail on each of 25 June, 1, 4, 6, 7, 12, 13, 17, 23, 27 and 30 July, and on 27 September 2006. The continued making of sales, even on this fairly modest scale, is not the conduct of traders which, having been specifically informed of the applicant's registered design, were conscientious to observe their legal obligations. Indeed, the respondents' letter of 21 June 2006 contained a denial of the respondents' copying of the applicant's dress; a denial with which the respondents did not persevere in their evidentiary case before the court. 56 I consider that the respondents' continued trade in their "Lili" dress, once having been directly informed of the applicant's registered design, was such as should attract an award of additional damages pursuant to s 75(3) of the Designs Act . I would fix those additional damages at $10,000. 57 The applicant also sought a declaration that the respondents had infringed its registered design, and injunctions restraining the respondents from continuing to do the things which have been found to constitute infringements. I can see no point in making a declaration. The applicant has been successful in its action for damages, and the basis of that success appears sufficiently from these reasons. In my view, a declaration would not add further to the appropriate judicial resolution of the dispute which has brought the parties to court. 58 Neither do I consider that the present circumstances warrant the grant of injunctive relief. The respondents' admissions make it tolerably clear that they recognise that the further manufacture and sale of the "Lili" dress would be unlawful. They do not come to court to assert an entitlement to continue to do the things which I have held to constitute infringements of the applicant's registered design. Additionally, it is Review Holdings, not the applicant, which now owns the registered design, and which, I infer, engages in such exploitation of that design as is done by any member of the group of which the applicant is (or was) a member. I consider that it is Review Holdings, rather than the applicant, which would be the proper applicant for an injunction. Review Holdings is not a party to this proceeding. For each of the reasons referred to in this paragraph, therefore, I decline to enjoin the respondents in the terms sought by the applicant. 59 In the result, and for the reasons expressed above, there will be judgment for the applicant on its damages claim in the sum of $17,500. I shall hear the parties on the matter of costs. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.

infringement of design rival trader making and selling product in same market as product of registered owner whether owner suffered diminution of sales of own product whether owner's reputation for sale of original products affected quantum of damages to reflect dilution of reputation whether compensatory damages discretionary whether damages should be reduced by reason of owner's misleading representations in connection with sale of own product additional damages whether warranted by proof of copying whether warranted when rival trader on notice of registration of design. infringement of registered design quantum of damages to reflect dilution of reputation of registered owner whether compensatory damages discretionary whether damages should be reduced by reason of owner's misleading representations in connection with sale of own product additional damages whether warranted by proof of copying whether warranted when rival trader on notice of registration of design. registered design damages

It did not prove possible that day for the reference to be heard by the duty judge. Today is the first available day upon which the reference can be heard. On 30 March 2009, a Deputy Commissioner of Taxation made application for the winding up of WPS Motorsport Pty Limited (Administrator Appointed) (hereafter WPS Motorsport). The addition of the description "administrator appointed" is but a recent one. The company was not in administration at the time when the application for winding up was made. Rather, on 30 April 2009, ie the day before the case was due to be heard in the Court, the directors of WPS Motorsport resolved that the company appoint an administrator under s 436A of the Corporations Act 2001 (Cth) (the Act). On that day, a Mr Robert Boyce Moodie, a chartered accountant and an official liquidator, consented to appointment as administrator. He became the administrator of WPS Motorsport that day. The application for winding up is made on the basis of a failure on the part of WPS Motorsport to comply with the terms of a statutory demand and its consequential deemed insolvency. The underlying debt to the Commonwealth is, in total, very large, in excess of $1 million. The question for immediate determination is whether or not, having regard to s 440A(2) of the Act, I am satisfied that it is in the interests of the company's creditors for the company to continue under administration rather than be wound up. If I am so satisfied, then the effect of that subsection is that I am obliged to adjourn the hearing of the application for the winding up order. The onus of engendering that state of satisfaction lies on the company. It is necessary, in that regard, to make some observations concerning the present position of the company so far as it is revealed from the very general material before the Court, and also in respect of the proposal for a Deed of Company Arrangement (DOCA), advanced or sought to be advanced by the company's directors. The only evidence as to the assets of WPS Motorsport is found in the report as to its affairs made on behalf of the company by a director, a Mr John Atkinson, on 30 April 2009. That document records assets being plant and equipment, having a total estimated value of $100,000. Though the document makes reference to "as detailed in inventory", there is no inventory in the document before me. There are no other assets of the company shown. The company's creditors, each of whom, it seems, is unsecured, have, in total, debts owed to them of at least $6,195,117. It is necessary to say "at least", because in the annexure to the report as to affairs, there is, in respect of a company, Goreco Proprietary Limited, an unknown liability noted and, further, in respect of what are described as "intercompany loans", there is likewise an unknown liability specified. Further, the debt recorded in respect of the Australian Taxation Office is $783,629, whereas, apparently, the total indebtedness to the Commonwealth payable to the Commissioner of Taxation exceeds $1 million. I note in passing, in respect of the list of unsecured creditors, that there is a debt of $377,794 of some unspecified nature to the Office of State Revenue, ie, the State of Queensland. Directors' loans also comprise a large proportion of the indebtedness to unsecured creditors. These total $924,000. I infer that the initials "JEA" and "CG", annotated against "directors' loans" in the list of unsecured creditors, are references to Mr Atkinson, whom I have already mentioned, and the other director of WPS Motorsport, Mr Craig Gore. I note further that, individually, as opposed to, it seems, jointly, Messrs Gore and Atkinson are also creditors in the sums of, respectively, $20,313 and $235,514. Mr Atkinson has deposed that, broadly speaking, the principal activity of WPS Motorsport was motor racing. The amount of this final payment would be determined by the amount of claims accepted to participate in the DCA and actual costs of managing the DCA (total estimated: $200,000). It must be said, with all due respect to Mr Atkinson, that whatever information may presently be available to him, that which is available to the Court is sparse indeed. It does emerge from his affidavit that, over the past few months, he (inferentially, on behalf of the company WPS Motorsports) has had discussions with one Steve Di Petta. These discussions have concerned Mr Di Petta's interest in V8 Supercar Racing and the acquisition of WPS Motorsport by Mr Di Petta. Mr Atkinson deposes that he and Mr Di Petta have had discussions to the extent that there is value in the brand, WPS Motorsports. I observe that if there is any value in the brand, WPS Motorsports, it is not a value which commended itself to Mr Atkinson in setting out the assets of that company in the report as to its affairs. The form makes provision for other assets to be valued, if only by estimation, and detailed. There is but a blank space on the form where this might have been done. Mr Atkinson deposes that it is "no secret" that Mr Di Petta has an interest in motorsport and, more precisely, that category of motor racing described as "V8 Supercars". He further deposes that, according to inquiries which he has conducted, Mr Di Petta has the financial resources to be able to fund a team to compete in the motorsport category described as "V8 Supercar Racing". Apparently, Mr Di Petta features on the "BRW Young Rich List". I presume, given the notoriety of the letters "BRW", that this is a reference to "Business Review Weekly". Whatever one might make of the evidentiary value of someone featuring on the "BRW Young Rich List", I do have the benefit of an affidavit from Mr Di Petta. He confirms in that that he has had, for many years, a keen interest in motorsport racing and a desire to own his own motor racing team, particularly in the V8 category. He further confirms that it has come to his attention that WPS Motorsport was "looking for a buyer" and that he has had discussions with representatives of that company over the past few months. Mr Di Petta believes that the company is "correctly positioned on which to build a racing team". He states that he has made an initial offer to WPS Motorsport and that he is prepared to commit the sum of $200,000 for its purchase by either him or a company controlled by him. That purchase, he deposes, would be subject to, and conditional upon, WPS Motorsport entering into a sale agreement in terms satisfactory to him and to his solicitor. He sets out in his affidavit certain special conditions that he would require to be incorporated in any sale agreement. I note that these special conditions make reference to a consent being received by the purchaser from third parties under each "key contract" to the assignment of the relevant key contract to the purchaser to an assignment of leases of premises used for the benefit of the business and to the purchaser having received "from TEGA and AVESCO" consent to the sale and assignment of all estate and interest in a "Level 1 teams' licence agreement". These references to a "key contract", to leases and to a Level 1 teams' licence, as well as to TEGA and AVESCO, are intriguing to say the least. Exactly what they mean is a complete mystery on the evidence. Again, if they have any value one might expect them to be the subject of express reference and at least estimation as to value in the report as to the company's affairs. There is no such reference. If I am satisfied that it is in the interests of the company's creditors for the company to continue under administration then I am obliged, as I have said, by s 440A(2) to adjourn the winding up application. The converse does not automatically follow. By that I mean even if I were not satisfied as to it being in the interests of the company's creditors for the company to continue under administration I would, nonetheless, possess a discretion to adjourn the winding up application. It was, at one stage, submitted on behalf of WPS Motorsports that I should take into account the public interest in deciding the question posed by s 440A(2). I do not consider that the public interest is a relevant consideration under that subsection. The relevant consideration under that subsection is, as the subsection states, is it in the interests of the company's creditors for the company to continue under administration rather than be wound up? Nonetheless, the public interest is a relevant consideration in the event that I were not satisfied that it was in the interests of the company's creditors for the company to continue under administration rather than be wound up. To that extent, and to that extent only, I consider I shall have regard to public interest considerations. The Judge in the present case was not satisfied that it was in the creditor's interests for the administration to continue and it is his decision to that effect that is challenged here. Justice Philip McMurdo made just such a point, in my opinion, in Re Octaviar Limited (formerly MFS Limited) [2008] QSC 216 at [55] . The first is that read in context, it is referring to the absence of evidence of any assets whatsoever. Secondly, it is not possible to read this passage as a statement of some principle that in every case, for a court to be satisfied in terms of s 440A(2) , there must be some detailed comparison of the dividends from one regime or the other. It will often be the case where not enough is known about what is likely to come from one or both regimes for that comparison to be made at this stage. The amount of proof which can result in persuasion differs with the circumstances in which litigation comes before the court. It is common enough, in applications under s 440A , for an administrator to need to seek an adjournment very soon after his or her appointment, at a time when he or she knows very little about the affairs of the company. In that sort of situation, comparatively little material might be needed to justify a short adjournment. As time goes on, however, and the occasion that there has been for the collecting of evidence increases, so the amount of material which might need to be put before the court before it is persuaded, will increase. He, too, referred to Creevey's case, noting that it was the only intermediate appellant authority. His Honour's judgment contains a valuable critical analysis of later authorities in various original jurisdictions concerning the subsection. At para 18, in following this analysis, his Honour reached this conclusion: What I derive from a consideration of the foregoing authorities, as perhaps appears from my reflections during their recitation, is that it is dangerous, as in so many cases, to place any gloss upon the statute. The sole consideration posited as the criterion for the Court's decision in s 440A(2) is the interests of the company's creditors. It is clear that the onus is on the person seeking the adjournment to establish to the satisfaction of the Court that the adjournment is in the interests of those creditors. In general terms, that will be difficult to do unless there is a good case that there will be a greater or more accelerated return from the course contended for. But considerations beyond mere quantum may be relevant to take into account in determining what is in the interests of the creditors and whether it is established that an adjournment may be said to be in the creditors' interests. Where there are advantages in either course, in general terms it may well be the proper course to give such adjournment as will allow the creditors themselves to vote upon the proposal and determine which course they prefer. In a judgment which I recently delivered in Australian Securities and Investments Commission, in the matter of Storm Financial Limited (Receivers and Managers Appointed) (Administrators Appointed) v Storm Financial Limited (Receivers and Managers Appointed) (Administrators Appointed) [2009] FCA 269 , I observed of such a survey of authority that the long and the short of it was that s 440A(2) means what it says. It is for the person seeking the adjournment to satisfy the court that in the circumstances of the particular case, it is in the interests of the company's creditors for it to continue under administration rather than be wound up. I approach the question of whether to adjourn having regard to the authorities just mentioned and what I have described as the long and the short of it. Another matter which was the subject of submissions was the effect of the granting of an adjournment in relation to the relation-back period. The s 513C day, in relation to the administration of the company, would, in this instance, be the day on which the administration began: see s 513C(b). The effect of the company being in administration then is to affect the day which is the relation-back day. That effect has already occurred. It was not put to me that there should be some alteration of that effect. Another matter which was adverted to in submissions on behalf of the Commissioner was that there may be matters warranting investigation by a liquidator, having regard to the reference in the list of unsecured creditors to intercompany loans of an unspecified amount. Such a consideration I note was regarded as relevant by Gyles J in Deputy Commissioner of Taxation, in the matter of KJ Consulting Pty Limited (Administrators Appointed) (ACN 081 729 768) v KJ Consulting Pty Limited (Administrators Appointed) (ACN 081 729 768) [2005] FCA 1827. I do take that factor into account in this instance. This is a case where the factors for and against being satisfied as to where the interests of creditors lie are not all one way. Having regard to the estimated worth of the only disclosed asset and to the costs of liquidation there is, at least at present, very little prospect indeed of a return to creditors. There is something, though, of a prospect in relation to the proposed deed of company administration. It is said to be six cents in the dollar. That is certainly a lot more than nothing, derisory though six cents in the dollar may be. It is an unfortunate feature of this case that indebtedness to the Commonwealth and, it seems, the State of Queensland has been allowed to accumulate to the extent that it has. Nonetheless, to recover something is to recover more than nothing so far as the consolidated revenue of the Commonwealth and the State and other unsecured creditors is concerned. The difficulty is in finding substance even at this preliminary stage in what WPS Motorsport has to offer. I am very conscious, as the authorities highlight, that substance may be revealed in the course of an administrator's investigating the affairs of the company and reporting to creditors. Nonetheless, it seems to me that there should at least be raised the existence of an asset which is the subject of the proposed transaction and there is just no evidence at all. All that there is some vague reference in terms to which I have referred. In those circumstances, it seems to me that there is not a persuasive case for an adjournment or at least, better put, I am not persuaded that it is in the interests of creditors for the company to continue under administration. I then have to consider, as I have indicated, whether, in any event, there ought to be an adjournment of the winding up application. The company is, on present materials, not just insolvent but spectacularly so. It has large debts to the consolidated revenues of the Commonwealth and the State as well as to, it seems, arm's length creditors. I can see no public interest that would warrant the continuance of the company. It seems to me that the company is one which ought to be wound up. I therefore propose to make orders for the winding up of the company and the appointment of a liquidator. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

application to wind-up corporation in insolvency and appoint official liquidator failure to comply with a statutory demand company not in administration at time of application administrator appointed on day prior to hearing of winding up application whether court satisfied that it was in the interests of creditors to continue in administration rather than to wind-up the corporation where winding up application should be adjourned court not satisfied adjournment of winding up application in the interests of creditors or otherwise warranted order that company be wound up in insolvency corporations act 2001 (cth) ss 9 , 436a , 440a , 513a , 513c corporations statutes

The provision of the undertaking in substance binds Toll Holdings and other related corporations ("the Toll companies") not to "share" management or employees with Asciano Limited ("Asciano") or to "second" management or employees to or from Asciano, or to allow Asciano to "share" management or employees with the Toll companies or to "second" management or employees to or from the Toll companies. The second applicant ("Toll Personnel") is a wholly owned subsidiary of Toll Holdings. Toll Personnel entered into a labour hire contract with Asciano that involved the provision of casual employees of Toll Personnel (and some other people who had contracted to supply labour to Toll Personnel) being instructed by Toll Personnel to perform work in the business conducted by Asciano. The question is whether this labour hire contract amounted to one of the Toll companies sharing employees with, or seconding employees to, Asciano. In their written submissions, filed prior to the hearing of the proceeding, the applicants stated that the case raised two issues. The first is the proper construction of the relevant provisions of the undertaking and the second the validity of the ACCC's decision not to consent to a variation of the undertaking. In the course of the hearing of the proceeding, counsel for the applicants abandoned the application for relief in relation to the ACCC's refusal to consent to a variation of the undertaking. That relief was sought pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth) and in the exercise of the jurisdiction conferred on the Court by s 39B of the Judiciary Act 1903 (Cth). There is little doubt that a decision by the ACCC to refuse consent to the withdrawal or variation of an undertaking, pursuant to s 87B(2) of the Trade Practices Act , is amenable to judicial review. There were difficulties with the grounds on which the applicants sought such review in the present case, which were phrased in terms of allegations that the ACCC had taken into account irrelevant considerations and had failed to take into account relevant considerations. Under the guise of those grounds, the applicants really sought to agitate issues of fact that had been determined by the ACCC. In any event, an order quashing the decision of the ACCC would only have the effect of requiring the ACCC to determine the matter again. It is always open to the applicants to seek again the consent of the ACCC to a variation of the undertaking, and to place before the ACCC whatever material they seek to rely on in support of an application for consent, without setting aside the previous decision. There is no res judicata or issue estoppel arising from the making of an administrative decision. Because of the withdrawal of what was characterised as the second issue, the case concerns the first issue only, namely the proper construction of the relevant provisions of the undertaking. If the relevant conduct did constitute a contravention of the undertaking, there can be little objection to a decision of the ACCC that such a contravention occurred. Documentary exhibits were tendered in the course of the hearing. Toll Holdings is a corporation which provides transport, freight forwarding and logistics services. Toll Personnel has operated a labour hire company since September 2004. Prior to 15 June 2007, Toll Holdings and Patrick Corporation Limited ("Patrick") each held a 50% interest in a corporation called Pacific National Limited ("Pacific National"). Pacific National predominantly provided railway haulage services for the movement of containerised freight between Sydney, Melbourne and Perth. Patrick provided container stevedoring services in Melbourne, Sydney and Brisbane, auto-logistics services nationally, and freight shipping services between Victoria and Tasmania. On 22 August 2005, Toll announced that it would make a takeover bid for all of the shares in Patrick which it did not already own. This proposed acquisition was conditional on the ACCC not seeking to prevent it. On 9 February 2006, the ACCC commenced a proceeding in this Court against Toll Holdings, seeking orders restraining it from acquiring the shares in Patrick on the ground that the acquisition would contravene s 50 of the Trade Practices Act . Following negotiations between the ACCC and Toll, the ACCC accepted an undertaking from Toll, pursuant to s 87B of the Trade Practices Act , on 11 March 2006. That undertaking required Toll Holdings to divest various interests and businesses, make available certain assets and rights to market participants, and implement a non-discrimination regime at ports and on railway lines. The proceeding of 9 February 2006 was thereupon discontinued and Toll Holdings proceeded to acquire all of the shares in Patrick, which became a wholly-owned subsidiary of Toll Holdings on 5 May 2006. On 13 December 2006, Toll Holdings proposed a scheme of arrangement for the restructure of its group of businesses, the purpose of which was to create a new listed entity, Asciano, and a trust called the Asciano Trust. The restructure involved the transfer by Toll Holdings of infrastructure assets to Asciano, including the Pacific National business and the container stevedoring and auto-logistics businesses of Patrick. The ACCC had concerns about the proposed restructure. The restructure could not comply with the undertaking of 11 March 2006, without the ACCC's consent to a variation of that undertaking. On 18 April 2007, the ACCC consented to a variation and accepted an undertaking by Asciano. The variation relieved Toll Holdings of a number of its obligations under the original undertaking, some of which were assumed by Asciano. It also involved Toll Holdings accepting a number of new obligations, among them those found in cl 2.9 of the undertaking as varied. The restructure took effect on 15 June 2007. Between 15 June 2007 and 24 June 2008, Toll Personnel provided labour hire services to Asciano and its related bodies corporate. The personnel hired out by Toll Personnel were hired out to Asciano, Toll Holdings and other clients. They were registered with Toll Personnel and employed as casual employees, although a small number of people were described as "contractors". The personnel included: crane drivers and crane operators; labourers; terminal operators; dock hands; drivers; forklift operators; pick and packers; customer service clerks; receptionists; financial accountants; and a small number of white collar or professional personnel, who performed clerical functions, administrative functions and data entry. Toll Personnel had a pool of registered candidates from which it obtained its labour force to hire out to its clients. It maintained a database of persons available for hire to all of its clients. Under its standard terms and conditions, Toll Personnel was responsible for the payment of salaries, taxation, superannuation and workers' compensation insurance for those employed by it as casual employees for the purpose of providing labour hire services to its clients. The services were provided at contracted rates of hire. The terms and conditions for the provision of labour hire services by Toll Personnel to Asciano were approved by the board of directors of Toll Holdings at various board meetings on 25 July 2007, 19 September 2007, 23 October 2007 and 28 November 2007. There were numerous hire agreements between Toll Personnel and Asciano, which were consolidated into one agreement on 20 February 2008 by resolution of the board of Toll Holdings. This consolidated agreement included terms that: there was no contractual or employment relationship between Asciano and any employee whose services were hired to it, but personnel were hired out to clients at contracted rates; a placement fee was payable to Toll Personnel if Asciano employed or otherwise directly engaged a Toll Personnel employee at any time during or after an assignment; and Asciano and Toll Personnel would keep confidential information regarding their respective businesses and the details of each assignment. Between 15 June 2007 and 21 November 2007, Asciano accounted for about 60% of hours billed by Toll Personnel to its external clients. Of the persons hired to Asciano, 63% were hired for less than a month, 14% for more than one month but less than three months and 23% for more than three months. On a typical day, Toll Holdings and its related companies hired between 2,500 and 3,000 casual employees from Toll Personnel. Approximately 550 Toll Personnel employees worked as labour hired to Toll Holdings and its related companies and as labour hired to Asciano in the 12 months preceding 5 February 2008. In addition to labour from Toll Personnel, Asciano sourced its casual labour from 35 other external labour hire providers. Prior to 24 June 2008, Toll Personnel also provided labour hire services to Pacific National since around March 2005, Toll Stevedoring (now part of Asciano) since around January 2006 and various subsidiaries of Patrick since around April 2006. At no time prior to the making or variation of the Toll Holdings undertaking to the ACCC did Toll Holdings or Toll Personnel inform the ACCC that it provided these services. The undertaking of Asciano to the ACCC, pursuant to s 87B of the Trade Practices Act , was originally given on 18 April 2007 and was varied on 6 February 2008. The relevant provisions of that undertaking, including the terms of cl 2.9, are substantially the same as the relevant provision of Toll Holdings's undertaking. The possibility of breaches of the undertaking was first raised as a result of an independent audit of Toll Holdings's compliance with its undertaking, carried out for the period between 16 June 2007 and 31 October 2007. On 12 November 2007, a meeting was held between Toll Holdings and the ACCC, at which time the issue of labour hire services was discussed. The ACCC sought further information over the period between November 2007 and May 2008, after which it advised the solicitors for Toll Holdings by letter dated 21 May 2008 that it reserved its rights to institute proceedings against Toll Holdings if it became aware of any further or continued breach of the undertaking. On 22 April 2008, the ACCC also notified Asciano that it considered Asciano to be in breach of its undertaking to the ACCC by receiving personnel for hire through Toll Personnel. Asciano replied on 29 April 2008, undertaking to cease using Toll Personnel for the hire of labour. On 1 May 2008, Asciano informed Toll Holdings that it had been notified by the ACCC that the ACCC considered Asciano to be in breach of its undertaking. With effect from 24 June 2008, Asciano terminated the service agreement with Toll Personnel. The restructure is proposed by Toll to involve transferring the assets, entities and/or businesses listed in Annexure F that comprise Toll's infrastructure assets to Asciano (the "Proposed Restructure" ). Toll is of the view that divestiture of the PN Interest, the Vehicle Transport Business and the PrixCar Interest is no longer required to address competition concerns. However, the Commission remains very concerned that the competition issues that arose by reason of Toll's acquisition of Patrick and which were addressed by the original undertakings continue to be addressed notwithstanding the Proposed Restructure. Additionally, the Commission is mindful that its competition concerns in the context of mergers are typically addressed by means of a transparent divestiture process. In the circumstances of the Proposed Restructure, the variation proposed by Toll has the effect of replacing a transparent divestiture process with a complex transaction that is intended to result in the creation of a wholly independent company from Toll; which company will own and control the assets that gave rise to the Commission's competition concerns. Consequently, the Commission has consented to a further variation of these Undertakings. Additionally, the Commission consents to the variation on the basis that Mr Mark Rowsthorn, Asciano, the Asciano directors and the Toll directors offer undertakings to ensure that Asciano and Toll are in effect wholly separate entities. The ACCC accepted that the ordinary principles in relation to the construction of contracts, particularly agreements to settle legal proceedings, should apply by analogy to the interpretation of the undertaking. These would include evidence of surrounding facts or circumstances known to both parties. These propositions are difficult to accept. Undertakings given pursuant to s 87B of the Trade Practices Act are given statutory force and effect by that section. They are properly to be regarded as statutory instruments, made under the Trade Practices Act . See Australian Petroleum Pty Limited v Australian Competition and Consumer Commission (1997) 73 FCR 75 at 88-89. Such an instrument has a public purpose. Members of the public, including competitors of the person giving the undertaking, are entitled to rely on the fact that undertakings have been given, and upon their terms. So is the Court, if proceedings to enforce an undertaking are ever instituted. The meaning of the words used in an undertaking cannot therefore be modified by reference to facts known only to the party giving the undertaking and the ACCC. The words of an undertaking are to be construed by reference to the principles of construction of a legislative document, and not by reference to the principles of construction of a private contract, whether entered into in settlement of a legal proceeding or not. This means that the first step in construing an undertaking is to ascertain the ordinary meaning of the words used. The ordinary meaning will normally be ascertained by reference to dictionary definitions, although evidence may be led of the common acceptance of specific meanings in a particular trade or industry, or of the use of words as terms of art. The meaning of the words used must be considered by reference to the purpose or object of the undertaking concerned. This requirement is derived from the combination of s 15AA and s 46(1)(a) of the Acts Interpretation Act 1901 (Cth) ("the Acts Interpretation Act "), requiring that a construction promoting the purpose or object of an instrument made under an Act (other than one required to be laid before Parliament) is to be preferred to a construction that would not promote that purpose or object. In the present case, the same requirement of a purposive construction of the undertaking has been adopted expressly in cl 19.2(b) of the undertaking. Ordinarily, the purpose or object of an instrument will be ascertainable from the instrument as a whole, whether it is express or to be gathered from the terms of the instrument as a whole. By s 15AB(1) of the Acts Interpretation Act , it is permissible to have regard to material not forming part of the instrument, either to confirm that the meaning of the relevant terms is the ordinary meaning, or to resolve ambiguity. By s 15AB(3) of the Acts Interpretation Act , in considering whether to make use of such extrinsic material, or what weight is to be given to it, it is necessary to have regard to the desirability of persons being able to rely on the ordinary meaning of the terms, taking into account their context and the purpose or object underlying the instrument. The relevant meaning of "share", found in the Oxford English Dictionary, is "To receive, possess, or occupy together with others. " The Macquarie Dictionary defines "share" relevantly as "to divide and distribute in shares; apportion", or "to use, participate in, enjoy, etc., jointly. " The relevant meaning of "second" in the Oxford English Dictionary is, "To remove (an officer) temporarily from his regiment or corps, for employment on the staff, or in some other extra-regimental appointment. Also transf. of employees in other occupations and employments. " Similarly, the Macquarie Dictionary defines "second" as "to transfer (a military officer or other) temporarily to another post, organisation, or responsibility. Throughout the process of varying the original undertaking from Toll Holdings on the transfer of aspects of the business to Asciano as a company independent of Toll Holdings, the ACCC's concern was to ensure that Toll Holdings did not obtain a competitive advantage in dealing with Asciano, as against any other person or corporation conducting a business similar to that of Toll Holdings and also using the services of Asciano. To this end, the undertaking was directed towards securing complete separation of Toll Holdings and other companies in the Toll Holdings group, on the one hand, and Asciano on the other hand. These matters are apparent from the recitals to the undertaking as varied, particularly recitals N, O, P and Q. It is unnecessary to have resort to any further material to ascertain the purpose of the undertaking. This was the result of the application of the definition of "Toll" in cl 19.1 of the undertaking, by which the term "Toll" includes related bodies corporate of Toll Holdings and other entities that Toll Holdings is required to consolidate for the purposes of preparing annual financial reports. There is no doubt that Toll Personnel falls within this definition. Therefore either Toll Personnel is taken to have given the undertaking to the ACCC, or Toll Holdings is in breach of the undertaking (if Toll Personnel shared employees with, or seconded employees to or from, Asciano), because those employees are to be regarded as employees of Toll Holdings, by reason of the definition of "Toll". Although the parties resorted to dictionary definitions, to ascertain the ordinary meaning of "share" and "second", they disagreed as to the ordinary meaning of those words in the context of the undertaking. Counsel for Toll Holdings and Toll Personnel argued that it was only possible to "share" an employee if that employee had two employers simultaneously. All of the employees whose services Toll Personnel made available to Asciano were employees of Toll Personnel. No employment relationship ever came into existence between any of those persons and Asciano. As a consequence, it was argued that those employees were not shared. They were not used or possessed jointly or in common by Toll Personnel and Asciano. Nor were they divided between Toll Personnel and Asciano. They were supplied for Asciano's purposes alone and did not perform functions or activities jointly for Asciano and Toll Personnel, nor for Asciano and Toll Holdings. This argument takes too narrow a view of the ordinary meaning of "share". Something that is shared between two people can be divided between them. A cake is shared if each of the two persons has a piece of it exclusively of the other. Time is shared if each of the two persons occupies part of it exclusively. A person who has sole ownership of a cake may share it with another by giving the other part of the cake, to deal with as the other sees fit. In the same way, an employee is shared if he or she works for part of his or her time for one person and part of his or her time for another. The fact that no employment relationship arises between the employee and one of those persons is of no significance. Indeed, in the ordinary use of the term "share", for an employer to make available the services of an employee to another party, whilst continuing to employ that employee, certainly falls within the ordinary understanding of the word "share". The sharing of an employee therefore does not depend upon the existence of an employment relationship simultaneously between both Asciano and Toll Personnel. It may be true, as counsel for the applicants argued, that Toll Holdings could be in contravention of the undertaking unwittingly, if it happened that a person was a part-time employee of one of the Toll companies and also a part-time employee of Asciano, working regularly for each of them in defined periods of the same week. If it were to occur, this unfortunate consequence would be the result of the breadth of the terms of the undertaking. The possibility that it could occur cannot be used to control the construction of the undertaking, so as to confine it to joint employment. Similarly, counsel for the applicants argued the word "second" in the undertaking is confined to the situation in which the employment relationship is transferred from one employer to another, for a defined period, or on a temporary basis. Again, this is too narrow a view of the ordinary meaning of the word "second". Nothing in the dictionary definitions of "second" requires that there be any transfer of the employment contract, only that there be a transfer of the employee. The continued employment by one employer of a person who, during part of his or her working time is located physically at the premises of another person, and performs services for that other person in relation to the business of that other person, falls well within the ordinary meaning of the secondment of the employee. It follows that, on the ordinary meaning of the words "share" and "second", the provision of labour services of its employees by Toll Personnel to Asciano amounted both to sharing employees between Toll Personnel and to seconding employees from Toll Personnel to Asciano. The context of the undertaking does not dictate that this meaning should be abandoned. Counsel for the applicants argued that the provision of labour hire services by Toll Personnel to Asciano was on an arm's length basis, within the meaning of cl 2.9(j)(i) of the undertaking, and was therefore not caught by the terms of cl 2.9(h) or 2.9(i). This argument mistakes the effect of cl 2.9(j). Clause 2.9(j) gives rise to separate obligations from those established by cll 2.9(h) and 2.9(i). Those separate obligations are of a different quality. They relate to all dealings between the Toll companies and Asciano, not merely to those concerning management or employees. In relation to management and employees, the obligations created by cl 2.9(j) are additional to those created by cll 2.9(h) and 2.9(i). Any contract, arrangement or understanding between any of the Toll companies and Asciano concerning management or employees that does not involve sharing or seconding must comply with cl 2.9(j), in order to avoid contravention of the undertaking. Clause 2.9(j) is not intended to be an overriding provision, restricting the meaning to be given to cll 2.9(h) and 2.9(i). The separate and different operation and application of cl 2.9(j) from cll 2.9(h) and 2.9(i) is confirmed by the way in which the obligations expressed in those clauses are summarised in recital P in the undertaking. Clauses 2.9(h) and (i) of the undertaking are expressed in broad terms. They proscribe contracts, arrangements or understandings that "in effect" allow sharing or seconding. The clauses are not to be construed narrowly by reference to the precise terms of the contracts between Toll Personnel and its employees, or the precise terms of the labour hire agreements between Toll Personnel and Asciano, but to the effect of the performance of services in the business of Asciano by employees of Toll Personnel. A purposive construction of the undertaking leads to the same conclusion as the application of the ordinary meaning. There is a serious risk that the labour hire arrangements between Toll Personnel and Asciano could provide to the Toll companies a competitive advantage, as against others using the same services of Asciano. Employees of Toll Personnel providing services to Asciano might give preference to the Toll companies in the provision of those services. For instance, they might move containers of the Toll companies in priority to those of competitors or process transactions of Toll companies in priority to those of others. They might do so in the hope that they would thereby earn the favour of Toll Personnel and enhance their chances of being offered further work by Toll Personnel in the future. They might do so out of a sense of loyalty to the Toll companies, seeing themselves as somehow belonging to the Toll companies. They might even do so subconsciously, because of the prominence of the name "Toll" in their minds. If these consequences were to occur, they would obviously undermine the competition concerns and the requirements of complete separateness, expressed in the recitals to the undertaking, which I have quoted in [14] above. The consequences would be anticompetitive and would contain vestiges of the historical relationship that existed between the businesses of the Toll companies and Pacific National. In relation to purpose, the argument of counsel for the applicants focussed on the issue of the acquisition and misuse of confidential information by those whose services were provided by Toll Personnel to Asciano. It was said that the employees whose services were provided were not employees of the types likely to acquire confidential information. In any event, they were bound by their individual contracts of employment not to divulge any confidential information acquired. In reality, it cannot be assumed that any person working in a business will never acquire any confidential information relating to the operation of that business. Such matters as the terms on which Asciano does business with competitors of the Toll companies, which might be different from those on which it does business with Toll companies, would be likely to become known by those working at all levels in many facets of Asciano's business. Nor can it be assumed that the existence of contractual obligations to refrain from divulging confidential information will be effective to prevent its disclosure. There is always the practical possibility of breach. The kinds of motivations and loyalties to which I have referred in [28] might also increase the likelihood of breach. Disclosure is all the more a possibility as the contractual obligations of confidentiality will be owed by the employees to Toll Personnel. The management of Toll Personnel would have an interest in acquiring the information, and therefore an incentive not to enforce the contractual obligations by sanctions such as dismissal of the employee concerned, if confidential information were disclosed. There is also the possibility of inadvertent disclosure. In addition, there may be a failure of an employee, or a Toll Personnel supervisor, to appreciate the content or the significance of contractual obligations of secrecy, leading to voluntary, or even involuntary, disclosure. The risk that confidential information about Asciano's business would leak to the Toll companies, as a result of Toll Personnel's provision of labour hire to Asciano, is too great to be ignored. In any event, the purpose of cll 2.9(h) and 2.9(i) of the undertaking is not limited to preventing the communication of confidential information, and those clauses cannot be construed solely by reference to that consideration. The applicants' application for declaratory relief to the contrary must be dismissed. It is unnecessary to consider whether declaratory relief in the terms sought would have been appropriate, even if the applicants' construction of the undertaking had been accepted. As the applicants have abandoned their claim for relief in relation to the ACCC's refusal to vary the undertaking, the whole of the application must be dismissed. No reason appears, and none was advanced, why the usual principle, that costs follow the event, should not be applied. The applicants will therefore be ordered to pay the ACCC's costs of the proceeding. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray.

undertaking to australian competition and consumer commission undertaking in connection with restructure of business undertaking not to "share" employees with or "second" employees to a specified company whether labour hire agreement, whereby employees of subsidiary of company giving undertaking worked for specified company, gave rise to sharing or secondment of employees principles of construction of undertaking " share " " second " trade practices words and phrases

2 Part IV of the Assessment Act made provision for the lodgement of income tax returns and the making of assessments of taxable income and the tax payable thereon. 3 Under s 170(1) of the Assessment Act the Commissioner was empowered to amend any assessment. 5 Part VII of the Assessment Act dealt with the imposition of 'penalty tax'. Relevantly for present purposes reference needs to be made to s 226K of the Assessment Act. That section rendered a taxpayer liable to pay, by way of penalty, additional tax equal to 25% of the amount of the relevant tax shortfall for a year. The expression 'tax shortfall' was defined in s 222A(1) of the Assessment Act to mean 'the amount ... by which the taxpayer's statement tax for [the given] year at the time at which it was lowest is less than the taxpayer's proper tax for that year'. Furthermore, s 227(2) empowered the respondent to incorporate in a notice of amended assessment under s 170(1) of the Assessment Act, notice of an assessment of additional tax payable under s 226K. 8 The power of remission, which is central to the issues presently before the Court, was contained in s 227(3) of the Assessment Act which permitted the Commissioner, in his discretion, to 'remit the whole or any part of the additional tax payable by a person under a provision of this Part'. 11 In short compass the facts of the present case are that in respect of the year of income ended 30 June 1999, the taxpayer claimed as an allowable deduction an amount of $5 million. The Commissioner's original assessment of the taxpayer's taxable income and the tax payable thereon proceeded on the basis that the deduction of $5 million was properly allowed. 12 By a Notice of Amended Assessment issued on 29 July 2004 the Commissioner disallowed the claimed deduction of $5 million with the consequence that tax of approximately $2.4 million became payable in respect of the applicant's taxable income. There being no present issue in relation to the satisfaction of the preconditions (a) --- (d) to the imposition of additional tax in accordance with s 226K of the Assessment Act, the additional tax for which the applicant became liable, by way of penalty, equalled 25% of the amount of the shortfall, i.e. approximately $600,000. The precise amount of additional tax was $606,250.00, none of which has been remitted by the Commissioner in accordance with s 227(3) of the Assessment Act. 13 The Commissioner contends that he addressed the discretion conferred upon him by s 227(3) of the Assessment Act and made a decision not to remit any part of the additional tax payable by the applicant, prior to the issue of the Notice of Amended Assessment on 29 July 2004. The Notice of Amended Assessment document also comprised notice to the Applicant of an assessment by the Commissioner of additional tax under s 227(1) of the ITAA 1936 (the Penalty Assessment ). The amount of additional tax assessed was $660,250.00 (sic) ... . The Commissioner did not remit any of the additional tax under s 227(3) of the ITAA 1936 (the Remission Decision ). Schedule 1 to the ADJR Act relevantly identified in paragraph (e) one of the classes of decisions that were not decisions to which the ADJR Act applied. In advancing these submissions the applicant relied upon two of the three provisos referred to in the judgment of Dixon J, as his Honour then was, in R v Hickman; Ex parte Fox and Clinton [1945] HCA 53 ; (1945) 70 CLR 598 ('Hickman') at 615. 16 Hickman was a case concerning so-called orders made by a Local Reference Board established under the National Security (Coal Mining Industry Employment) Regulations on 1 May 1945 and 10 May 1945. The Reference Board had power, amongst other things, to settle disputes as to any local matters likely to affect the amicable relations of employers and employees in the coal mining industry. The prosecutors were carrying contractors whose vehicles and employees were engaged in carrying coal from mine heads to various points, including railway stations and sidings. The question which arose in Hickman was whether awards governing certain employees, including lorry drivers, in the coalmining industry applied to the employees of the prosecutors who were engaged in carrying coal from mine heads to various points as indicated. The question depended upon a proper understanding and application of the indefinite description 'coal mining industry'. The Local Reference Board was of the opinion that the operations of the prosecutors fell within the natural meaning of the expression 'coal mining industry'. The Court took a different view and made orders absolute for prohibition against the Local Reference Board and the New South Wales branch of the Federated Mining Mechanics Association of Australasia prohibiting them and each of them from proceeding further upon the relevant orders. The proceedings required consideration to be given to regulation 17 of the National Security (Coal Mining Industry Employment) Regulations which provided that a decision of a Local Reference Board should not be challenged, appealed against, quashed or called into question, or be subject to prohibition, mandamus or injunction, in any Court on any account whatever. In his reasons for judgment Dixon J, as his Honour then was, addressed whether and to what extent regulation 17 was ineffectual to protect the decisions of the Board from invalidation. Dixon J observed that a provision such as regulation 17 could not, under the Constitution , affect the jurisdiction of the High Court to grant a writ of prohibition against officers of the Commonwealth 'when the legal situation requires that remedy' (at 614). But a writ of prohibition is a remedy that lies only to restrain persons acting judicially from exceeding their power or authority. It is therefore necessary to ascertain before issuing a writ whether the persons or body against which it is sought are acting in excess of their powers; and that means whether their determination, when made, would be void. The Board derives its power from Regulations of which reg. 17 forms a part, and that regulation must be taken into account in ascertaining what are the true limits of the authority of the Board, and whether its decision is void. But under Commonwealth law, and in jurisdictions where there is a unitary constitution, the interpretation of provisions of the general nature of reg. 17 is well established. ... Such a clause is interpreted as meaning that no decision which is in fact given by the body concerned shall be invalidated on the ground that it has not conformed to the requirements governing its proceedings or the exercise of its authority or has not confined its acts within the limits laid down by the instrument giving it authority, provided always that its decision is a bona fide attempt to exercise its power, that it relates to the subject matter of the legislation, and that it is reasonably capable of reference to the power given to the body . It is not appropriate to attempt a comprehensive definition of the phrase "bona fide". Dixon J in R v Murray; Ex parte Proctor [(1949) [1949] HCA 10 ; 77 CLR 387] , at 400, made it clear that the phrase involves an "honest" attempt to deal with the subject matter conferred to the executive. Bad faith is not just a matter of poor execution or poor decision-making involving error. It is a lack of an honest or genuine attempt to undertake the task in a way meriting personal criticism of the tribunal or officer in question. The second and third conditions are related. Both involve objective tests. The requirement that the award relate "to the subject matter of the legislation" will ordinarily be satisfied if the purported award deals with industrial matters. Putting to one side breach of the rules of procedural fairness, the requirement that the award be "reasonably capable of being referred to the power" will be satisfied if, on the face of the record, it appears that the award was made by the Commission in purported exercise of the power of conciliation or arbitration conferred by the Act: see Amalgamated Engineering Union [(1967) [1967] HCA 47 ; 118 CLR 219 at 252-253] where it was said that the requirement is satisfied if "the purported exercise [of power] ... is reasonably capable of being referred to the power (i.e. does not on its face go beyond the power)". The Notice of Amended Assessment showed the balance of assessment at $4,899,790.31 after allowance of a 'Credit for 1999 Provisional Tax' of $76,756 and 'Tax Offsets and Other Credits' of $225. The balance of the applicant's previous 1999 Assessment was noted at $367,874.91, which produced a 'Difference between this and previous Assessment' of $4,531,915.40. The 'Net amount payable' was accordingly shown as $4,531,915.40 which was payable under the Notice of Amended Assessment issued on 29 July 2004, by 2 September 2004. By way of 'Additional Information' the Notice of Assessment recorded that '[t]he amount at Label D [$2,106,915.40] consists of $606,250.00 penalty and $1,500,665.40 interest'. 23 On or about 15 July 2005 proceedings were commenced in the Supreme Court of New South Wales by the Deputy Commissioner of Taxation against the applicant, therein referred to as 'David Bonnell' in respect of the applicant's failure to pay income tax for the year ended 30 June 1999 on or before the due date. A total of $5,021,494.54 was claimed together with a further general interest charge and costs. The amount of $5,021.494.54 was derived from the amount payable under the Notice of Amended Assessment of $4,531,915.40 and a general interest charge up to and including 14 July 2005 of $492,326.41 against which a credit of $2,747.27 was allowed. 24 On 2 March 2006 a default judgment was entered for the Deputy Commissioner of Taxation against the applicant in the Supreme Court proceedings requiring the applicant to pay the Deputy Commissioner of Taxation the sum of $5,411,557.65 together with costs in the sum of $684.00. 25 Section 175A of the Assessment Act provided for taxpayers who were dissatisfied with assessments made in relation to them to object against the relevant assessment 'in the manner set out in Part IVC of the [ Taxation Administration Act 1953 (Cth)]' ('the Administration Act'). 26 As at 29 July 2004 Part IVC of the Administration Act commenced with s 14ZL and concluded with s 14ZZS. 28 Haritopoulos Pty Ltd v Deputy Commissioner of Taxation [2007] FCA 394 ('Haritopoulos') was a decision of Besanko J on an application for summary dismissal of an application filed by Haritopoulos Pty limited on 30 March 2006 seeking relief under s 39B of the Judiciary Act in relation to an assessment and penalty assessment made by the Deputy Commissioner of Taxation. His Honour ordered that the proceeding be dismissed. Relevantly, the case concerned the consequences of the Deputy Commissioner failing to consider a package of information said to be relevant to the assessment in question which was said to have been provided to the Deputy Commissioner before the assessment was made. No undertaking was given by the respondent prior to the making of the assessment that the package of information would be considered; in fact, it was made clear that it would not be considered, but held by the respondent pending an objection to the assessment. ... The applicant claims that the respondent's failure to consider the package of information constitutes an arguable case of bad faith or an arguable case of a breach of s 166 of the [Assessment] Act or an arguable case of a breach of the rules of procedural fairness and, in particular, the hearing rule. I do not think the fact that the respondent did not consider the package of information before making the assessment constitutes an arguable case of bad faith. More would be required to give the respondent's conduct even the flavour of bad faith. His Honour also referred to the privative provisions of ss 175 and 177 of the Assessment Act. He then concluded that to successfully challenge an assessment in s 39B proceedings under the Judiciary Act one of the Hickman provisos must be established (at [47]). There is no arguable case of bad faith. There is no arguable case of a breach of s 166 and, even if there was, there is no arguable case that such a breach affects the validity of the assessment. Even if at common law there was an obligation to observe the hearing rule in connection with the making of an assessment the decision in Richard Walter means that there is no arguable case that a breach of such an obligation can form the basis of a successful challenge under s 39B of the Judiciary Act . The central element of the legislative regime is the making of an assessment by the Commissioner which ascertains the taxpayer's liability to tax and the reference to the Tribunal or the appeal to the Federal Court, in which the taxpayer is entitled to dispute his or her substantial liability to tax. The effect of s 177(1) ... is to condition the exercise of jurisdiction upon production of the notice of assessment or a copy of it so that it is treated as valid, otherwise than in Pt IVC proceedings. The reference to "due making" of the assessment in s 177(1) reflects the content of s 175. In such an appeal, it is for the taxpayer to show that the assessment is excessive. 33 It will be appreciated that Part IVC of the Administration Act gives the taxpayer the option to seek review of reviewable objection decisions, as defined in s 14ZQ, in the Administrative Appeals Tribunal, or to appeal to the Federal Court against an appealable objection decision, as defined in that section (see s 14ZZ of the Administration Act). Section 177 gives effect to the substantive provisions of the Act, in particular s 175, the effect of which is to ensure that the validity of an assessment does not depend upon compliance with any of the particular provisions of the [Assessment] Act or considerations of purpose. On this view, s 177(1) is consistent with the Hickman principle. If any of these issues be resolved in favour of the taxpayer, an amendment of the assessment so as to reduce the taxable income or the tax liability of the taxpayer must follow. The width of that jurisdiction and the evident purpose of the Act to channel all issues as to the true tax liability of the taxpayer into the objection, review and appeal procedures found the clearest implication that exceptions to the broadest literal application of s 175 must be narrowly confined and a corresponding operation must be attributed to s 177(1). The privative clause is given effect despite non-compliance with the provisions governing the exercise of the power, but only if the purported exercise is a bona fide attempt to exercise the power, it relates to the subject matter of the legislation and it is reasonably capable of reference to the power given to the body purporting to exercise it. The validating provision cannot be so construed if the impugned act by the repository of the power is not referable to the power given to the repository or exceeds the power which can constitutionally be given to the repository. There are two features of the legislative scheme which, in my opinion, indicate that the Hickman principle should be applied in the construction of s 175. These features are consistent with two objectives which the principle is designed to achieve: according legal effect to an act or instrument which is not done or made in compliance with conditions expressed to govern the power to do or make it, and attributing effect to the governing conditions except to the extent necessary to accord legal effect to the impugned act or instrument. The first feature is the legislative intention to protect the validity of the notice of assessment as a central and critical link in the chain of imposing liability for income tax on and the recovery of tax from the taxpayer. The second feature is the full opportunity afforded by the taxpayer to object to the assessment and, in the event that the objection is dismissed, to challenge the assessment. The challenge may be made before either an administrative or a judicial tribunal (at the taxpayer's election) on any ground which affects the taxpayer's liability to tax or the quantum thereof including the Commissioner's power to make the assessment to which the taxpayer has objected. At 211 their Honours considered that if a purported 'assessment' did not satisfy the three Hickman provisos the protection of s 175 would be unavailable and the purported 'assessment' would be invalid. 39 Dawson J acknowledged the existence of the Hickman principle (at 222) but did not consider that anything in Richard Walter warranted the application of the principle either directly or by way of analogy. Certainly, s 177(1) constrains the jurisdiction of any court to inquire into the making of an assessment but it does so only in the context that a system of objections, determinations, reviews and appeals is provided for. That system is now to be found in Pt IVC of the Taxation Administration Act . His Honour proceeded to point out that in his opinion s 177(1) did not purport to immunise an assessment from challenge. Equally, his Honour said that s 175 was only concerned to protect an assessment from challenge by reason of some defect or irregularity in the making of the assessment. He observed that it did not operate where the power of the Commissioner to make an assessment was at issue. He regarded the statement of principle enunciated by Dixon J in Hickman to be authoritative in the High Court. But, under the second or exception limb of s 177, matters affecting the substantive liability of the taxpayer are open to challenge in Pt IVC proceedings. The applicant's original Notice of Motion was filed on 5 March 2007. It was superseded by an Amended Notice of Motion filed on 11 April 2007 at the conclusion of the hearing. Granting leave to the applicant to file and serve an amended statement of claim in the form of exhibit NM1 on the hearing of the notice of motion filed 5 March 2007. 48 The respondent's Notice of Motion was filed 9 March 2007. The proceedings be dismissed pursuant to section 31A of the Federal Court Act 1976 and Order 20 rule 2 of the Federal Court Rules . Alternatively, the proceedings be stayed pursuant to Order 20 rule 2 of the Federal Court Rules . Further and in the alternative, the statement of claim be struck out pursuant to Order 11 rule 16 of the Federal Court Rules , and the application be dismissed. On or about 29 July 2004, the Respondent made a decision to amend the Applicant's income tax assessment for the year of income ended 30 June 1999, disallowing the deduction claimed for the Applicant's contributions made to the Fund during that year of income, imposing penalties or not remitting penalties and imposing interest on a purported tax shortfall amount ("Amendment Decision"). In that notice of objection the applicant claimed that the amended assessment was invalid by reason that it was issued for an improper purpose and/or that the amended assessment was invalid in that it was issued in bad faith. The amended assessment was therefore made for an improper purpose and was not made for the purposes of the Act. That act was in bad faith and the bad faith vitiates the amended assessment. The Commissioner's obligation was to 'make an assessment of the additional tax payable by a person under a provision of this Part' (see s 227(1) of the Assessment Act). The Commissioner's discretion was confined to the remittal of the whole or any part of the additional tax under s 227(3) of the Assessment Act. 55 By letter dated 3 December 2004 the applicant was advised that his objection had been disallowed. The amended assessment was authorised by section 170 of the Income Tax Assessment Act 1936 ('ITAA 1936') and was not issued for an improper purpose or in bad faith. The amended assessment was not issued for the purpose of merely fulfilling any announcement made by the Commissioner and was not issued for the purpose of fulfilling the Commissioner's "PASTO" strategy. The assessment of penalty tax was authorised by Part VII of the ITAA 1936. These proceedings NSD 117 of 2005 came before this Court constituted by Justice Stone on a number of occasions. On 31 March 2005 the respondent Commissioner filed a Statement of Facts, Issues and Contentions and on 9 May 2005 the applicant filed a Statement of Facts, Issues and Contentions. Whether the Respondent was permitted by law to assess the Applicant for additional tax by way of penalty. Whether the additional tax by way of penalty levied by the Applicant (sic) was levied for an improper purpose and vitiates the amended assessment. The Respondent levied additional tax for an improper purpose and this improper purpose causes the entire assessment to be an improper exercise of power. On 19 July 2005 the applicant filed an Amended Statement of Facts, Issues and Contentions which, inter alia, excised issues 2 and 3 as quoted above and excised the applicant's contention that the respondent had levied additional tax for an improper purpose. This allegation was made in my objection and original SFIC in the current proceedings. If the allegation is correct then the amended assessment is vitiated as ultra vires. After considerable discussion of this matter with Messrs Robertson SC and Lloyd it was concluded that these allegations were inappropriate to be the subject of the current appeal. If they are to be pressed then they can only be pressed in an action under section 39B. This was the reason for the amendment of the SFIC. In the circumstances, it seems to us that it would be appropriate for the directions hearing to proceed rather than for the matter to be removed from the list. We would certainly be seeking costs of the day. The date for this directions hearing had been set at the last directions hearing on 6 December 2005. The Court did not receive any communication from you or from the applicant indicating that there would be no appearance. Her Honour has asked me to convey her concern about this discourtesy to the Court and to the respondent. The applicant file all of the evidence on which he intends to rely on or before Wednesday 15 March 2006, in default of which the respondent has leave to apply to strike out the application. The matter be listed for further mention on 16 March 2006 at 9:30am. Any such application would be considered at the directions hearing on 16 March 2006 at 9:30am. I will file a Notice of Discontinuance tomorrow. As it transpires the applicant did not file any Notice of Discontinuance of his appeal on 16 March 2006, nor did he appear when his appeal was called for directions on 16 March 2006. I received no notice of discontinuance and a check of the website last night suggested one had not been filed but in the absence of the applicant's appearance today and in light of the email which I might hand up a copy, I ask that the matter be dismissed with costs. I'm satisfied from our records that the applicant was notified of the hearing today, of this directions hearing, and it was made abundantly clear last time and in the letters that were sent from the Court that this is likely to happen and therefore I'll order that the application be dismissed with costs. The application be dismissed. The applicant pay the respondent's costs of the proceeding. 68 On 15 June 2006 the Official Receiver for the Bankruptcy District of New South Wales proceeded to issue a bankruptcy notice directed to the applicant requiring the applicant to pay to the respondent $5,543,008.60. The Schedule to the bankruptcy notice recorded the amount of the judgment at $5,412,241.65 (the total of the judgment in the Supreme Court together with costs) and an amount of $130,766.95 being interest accrued since the date of the judgment, a total of $5,543,008.60. 69 On 23 June 2006 a copy of the bankruptcy notice was served on the applicant. 70 On 10 October 2006 the applicant was served with a creditor's petition. We have been instructed to commence proceedings in the Federal Court under section 39B of the Judiciary Act 1903 , to contest the validity of the assessment issued to our client on 29 July 2004. We enclose by way of service the application and Statement of Claim that were filed today. In these proceedings, the applicant seeks to challenge the validity of that part of an amended assessment made by the respondent ... which was a decision not to remit penalty tax .... Relief is sought under s39B of the Judiciary Act 1903 (Cth). 74 The 'NOTICE OF OBJECTION AGAINST AMENDED ASSESSMENT' lodged on or about 29 September 2004 objected against 'the amended assessment of the amount of the taxable income and of the tax payable thereon in respect of the year of income ended 30 June 1999'. The applicant claimed in relation to the amended assessment that it was 'issued for an improper purpose', that it was issued 'in bad faith' (see [53] above), that it was issued 'out of time', that it was inconsistent with a ruling issued on 29 September 1998, that it wrongly disallowed claimed deductions of $5 million by way of superannuation contributions, that it overstated the applicant's Medicare levy liability and that the 'amended assessment should be reduced by the excision of an amount of $2,106,915.40 described as understatement penalty and interest'. 76 Without retracing the history of the applicant's case in relation to the amended assessment, it is apparent from the applicant's 'OUTLINE OF SUBMISSIONS IN REPLY' of 2 April 2007 that the applicant now seeks to challenge nothing other than 'the validity of that part of [the] amended assessment ... which was a decision not to remit penalty tax', and, to do so in proceedings under s 39B of the Judiciary Act in reliance upon two of the Hickman provisos. In the reasons for disallowing in full the applicant's objection the Commissioner simply stated under the heading ' Excision of the penalty and interest imposed is not warranted ' that the preconditions for liability to pay additional tax under s 226K of the Assessment Act had been satisfied. In the circumstances, the objection decision recorded that 'penalty tax under section 226K should apply at a rate of 25% of the primary tax applicable to the adjustment'. Then, in relation to interest, the objection decision recorded '[i]n the course of determining Mr Bonnell's objection we have reviewed the interest payable and concluded that no further remission is warranted. 79 The facts of this case are not on all fours with those which applied in Commissioner of Taxation v Queensland Trading & Holding Company Ltd [2006] FCAFC 112 ; (2006) 152 FCR 456. In that case the bench comprised Ryan, Heerey and Edmonds JJ. Queensland Trading & Holding Company Ltd and its parent, Industrial Equity Ltd, had each been a transferee of losses from Spassked Pty Ltd, another member of the Industrial Equity Limited Group. By Notices of Amended Assessment issued on 11 and 14 April 2003, the Commissioner had disallowed losses transferred to each of Queensland Trading & Holding Company Ltd and Industrial Equity Ltd. The Notices of Amended Assessment also notified the companies in question of an assessment of additional tax under Part VII of the Assessment Act. Each of Industrial Equity Ltd and Queensland Trading & Holding Company Ltd objected against the amended assessments and each objection included a ground that additional tax assessed to each taxpayer should have been remitted pursuant to s 227 of the Assessment Act. The Commissioner disallowed each objection. However, the premise is false; the Commissioner's refusal to further or fully remit the additional tax is subsumed in the objection decision and, as a result, the objection decision is no less a decision under s 14ZY of the TAA disallowing an objection to an assessment of tax than it would be if the objection on which the decision is made had been grounded solely in matters going to primary tax. 82 It may be observed that whilst s 175A of the Assessment Act makes provision for taxpayers, who are dissatisfied with assessments, to be able to object against them in the manner set out in Part IVC of the Administration Act, there does not appear to be any provision for taxpayers who are dissatisfied with remission decisions of the Commissioner under s 227(3) of the Assessment Act enabling them to object against them. The Commissioner is not constrained to exercise it, if at all, before the Commissioner discharges his obligation under s 227(1) to make an assessment of the additional tax payable by a taxpayer such as the applicant under s 226K of the Assessment Act, nor is he constrained to exercise it before he makes a decision in relation to any taxation objection. 85 It seems to me that a remission decision under s 227(3) of the Assessment Act will not necessarily be caught by the privative provisions of ss 175 and 177 of the Assessment Act. In my opinion those provisions do not apply to the present case where, as events have transpired, the applicant's present challenge is not, in reality, to any assessment of the amount of his taxable income or of the tax payable thereon. Rather, his challenge relates to a failure on the part of the Commissioner to remit the amount of the additional tax or some part thereof for which he is liable under s 226K of the Assessment Act, whether before or after the issue of the Notice of Amended Assessment in respect thereof. 86 In my opinion, a remission decision would be amenable to review in this Court under s 39B of the Judiciary Act 1903 (Cth) if one or other of the Hickman provisos was satisfied. 88 Plainly an attempt to re-litigate an issue which is res judicata or one which is affected by issue estoppel or by 'Anshun' estoppel would constitute an abuse of process of the Court. However, in my opinion, no relevant estoppel arises from the making of the order of dismissal in proceedings NSD 117 of 2005 on 16 March 2006 in the circumstances in which that order was made. 89 It seems clear that the relevant order was made under Order 35A rule 3(1) of the Federal Court Rules . It would be an abuse of process to allow parties to litigate repeatedly matters that have been finally determined by the Court. Also, quite apart from any psychological detriment that might flow from an individual having to undertake litigation of the same issue a second time, the State has an interest in ensuring that, once an issue has been determined according to law and all rights of appeal have been exhausted, that should be an end of the matter. The resources of the community ought not to be expended in the litigation, more than once, of the same issue. Anshun estoppel arises where the issue, now raised for the first time, properly belonged to the subject of the earlier proceeding but, by negligence, omission or accident, was not raised in earlier proceeding. As foreshadowed in Anshun, there will be instances where, even though there is every reason why the matter should have been raised earlier but was not, there are special circumstances that prevail to permit a party to raise the issue in a subsequent proceeding. The Court therefore has a discretion, if it determines that special circumstances exist, to allow an issue to be raised, even where it is found that the point was unreasonably omitted from the earlier proceeding: see Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543 at 558. However, the circumstances in which that would be permitted must, because of the principles referred to above, be exceptional, constituting "special circumstances" : see BC v Minister for Immigration and Multicultural Affairs [2002] FCAFC 221 at [30] . What will be sufficient to constitute special circumstances is by no means fixed and may involve consideration of a wide range of factors, all of which bear upon the general discretion of the Court where justice requires the non-application of the general principle: see BC v Minister for Immigration and Multicultural Affairs (2001) 67 ALD 60 (Sackville J) at [50] referring to Port of Melbourne v Anshun (No 2) [1981] VR 81; see also Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287 at 296, 298-299, citing Yat Tung Investments Co Ltd v Dao Heng Bank Ltd [1975] AC 581. However, where the beneficiary of such a principle is a Minister of State, who has no personal interest in the outcome of a proceeding, such a principle may be of only secondary significance. If it were the case that a failure by a Minister to comply with a positive duty constitutes "special circumstances" then it would seem every such failure would be sufficient to invoke the special circumstances exception, requiring the full ventilation of argument on the issue that would otherwise be estopped. Those circumstances alone, do not constitute the requisite special circumstances, such that it would not be an abuse of process for Mr Wong to ventilate issues that it was unreasonable for him not to have raised in either the First Proceeding or the Second Proceeding. There may be sound reasons of policy for arguing that Anshun estoppel not apply for the benefit of the executive government and its representatives, but only to individuals. This is because the executive is a respondent by force of statute or of the Constitution and is not subject to the same psychological burden that may weigh on individual litigants; they cannot be "vexed" in the same way by instigation of subsequent proceedings. That may be a more appropriate basis, namely that of accepted public policy, to ensure that representatives of the executive government cannot rely on the principle of Anshun estoppel to frustrate, in effect, the intended legislative mandate. However that proposition does not sit well with the authorities that apply the principle of Anshun estoppel equally to judicial review of administrative action (at [39]). 94 What may come within the 'special circumstances' exception to a finding of 'Anshun' estoppel was dealt with by the Full Court in Wong. Those circumstances need to be 'exceptional' (see also BC v Minister for Immigration & Multicultural Affairs [2002] FCAFC 221 ('BC') at [31] --- [33] and [38] and Thayananthan v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1054 ; (2003) 132 FCR 222 at 237, [52] --- [53]. Clarke JA considered that the case should be judged solely upon the basis that the counter-claim was dismissed for want of appearance of the counter-claimant at the trial. Under s 73 of the County Court Act 1958 (Vic) (' County Court Act ') '[e]very judgment and order made in any action or matter by the court or a Judge, except as in this Act provided, shall be final and conclusive between the parties'. There being no contrary provision in the County Court Act , Clarke JA found that the order dismissing the counter-claim was, by virtue of s 73 'final'. The position is no different than that which arises under a default judgment: Spencer-Bower (at 158). It may be understood that if a judgment, on its face, is contingent or provisional, it will not have that element of finality which it is the purpose of the law of res judicata to defend. But where the judgment is on its face final, the mere fact that a party has a privilege to apply to have that judgment set aside cannot convert it to a contingent or provisional judgment forever flawed and incapable of giving rise to res judicata. 100 The relevant principles in relation to 'Anshun' estoppel were considered in some detail by Lander J in Applicant A184 of 2003 v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 210 ALR 543 ('A184'). An application for review of a decision of the Refugee Review Tribunal came before Hely J in this Court. The applicant did not appear on the first return of the application but was represented by a solicitor. The matter was adjourned because the solicitor's instructions were withdrawn. The applicant was advised in writing of the adjourned hearing. However, when the matter came on again before Hely J his Honour was not sure that the applicant was aware of the hearing date. Nevertheless, on that day Hely J dismissed the application and ordered the applicant to pay the respondent's costs. In doing so his Honour adopted the procedure in Order 32 rule 2(1)(c) of the Federal Court Rules . His Honour did not deal with the matter under Order 32 rule 2(1)(d). 102 It is clear from the circumstances of the present case that the docket judge did not at any stage embark upon a consideration of the merits of the applicant's case. She dismissed the application as a result of the applicant's non-attendance at a directions hearing. The matter had not even reached the stage where a date for trial had been fixed. 103 In A184 Lander J did not finally determine the status of Hely J's order of dismissal. All it established was that the applicant, for unascertained reasons, did not attend before the court. It might be that he did not receive notice of the hearing. He was not present when the matter was set down. That might indicate a consent or acquiescence. This was simply an order entered for an undisclosed failure to attend a hearing of which the applicant might or might not have had notice. The procedure adopted by his Honour meant that no findings of fact were made or issues decided. 105 Before reaching his conclusions in A184 Lander J gave consideration to a number of cases including Rogers v Legal Services Commission of South Australia (1995) 64 SASR 572 ('Rogers') where the Full Court of the Supreme Court of South Australia held that summary dismissal of a claim for damages did not bar the appellant from bringing further proceedings for breach of statutory duty, negligence and misfeasance in public office (at [100]). As to whether or not the dismissal of an action gives rise to a matter capable of being pleaded as res judicata, that may depend upon whether the dismissal of the action is seen to have necessarily involved a determination of any particular issue or question of fact or law. If it does not, then the dismissal decides nothing, except the dismissal of the action itself. 108 Furthermore, in my opinion no question of 'Anshun' estoppel arises by reference to the default judgment obtained by the Deputy Commissioner of Taxation against the applicant in the recovery proceedings in the Supreme Court of New South Wales on 2 March 2006. 109 The present case bears some similarity to the facts in Jewiss v Deputy Commissioner of Taxation (2006) 65 ATR 222 ('Jewiss'). In that case Mansfield J had before him a motion seeking relief under s 31A(2) of the Federal Court of Australia Act 1976 (Cth) and Order 20 rule 2 and Order 16 rule 11 of the Federal Court Rules in a taxation appeal against certain appealable objection decisions. His Honour held that it would be an abuse of the Court's process to permit Mr Jewiss to re-litigate in the proceedings before him the same matters as had previously been determined against him in the South Australian District Court. His Honour considered that, because the issues which Mr Jewiss sought to raise before him were 'the same issues as those he sought to raise in the District Court proceedings and upon which an adjudication adverse to those claims' had been made, there was no scope for the principle of 'Anshun' estoppel to be applied. 111 Jewiss was an unusual case in that the recovery proceedings brought against the taxpayer in the District Court of South Australia had been defended and Hickman issues had been raised, on the voir dire, upon a tender of Notices of Assessment or copies thereof which met the requirements of s 177(1) of the Assessment Act. The District Court judge had ruled that the allegations of bad faith which had been advanced had not made out, so that the Notices of Assessment were admissible. In his defence the taxpayer had alleged that he was not liable to pay the outstanding taxation debts, inter alia, because the Commissioner had made the assessments without proper investigation and had fraudulently relied upon certain documentation obtained in his absence; that the Commissioner by issuing the assessments had abused the processes prescribed under the Assessment Act; and that the notices were knowingly false, fraudulent and erroneous. In his final judgment, the District Court judge confirmed that he rejected the defence of impropriety in the making of the assessments. An appeal to the Full Court of the Supreme Court of South Australia was dismissed and an application for special leave to the High Court to appeal from the Full Court was also dismissed. Mansfield J pointed out at [47] that on the hearing of the appeal the Commissioner was 'content to allow the appeal to proceed on the assumption that there was a limited right to challenge the admission of the notices of assessment on the ground that the assessments were an abuse of power and were made for improper purposes'. None of the issues which the applicant in the present proceedings wishes to raise in his proceedings under s 39B of the Judiciary Act were the subject of determination in the Supreme Court recovery proceedings. At least insofar as the applicant seeks prohibition against the respondent in relation to the Commissioner's exercise of, or his failure to exercise, his discretion under s 227(3) of the Assessment Act, it seems clear to me that the Supreme Court of New South Wales did not, in the recovery proceedings, have jurisdiction to grant relief in the form of a writ of prohibition against the Commissioner had the applicant filed a cross-claim asserting that the Commissioner's exercise or failure to exercise his discretion under s 227(3) of the Assessment Act was open to challenge because one or other of the Hickman provisos had not been satisfied. Then, in his 'Outline of Submissions in Reply' the applicant says that he seeks to challenge 'the Remission Decision' which itself is differently defined from 'Remission Decision' in paragraph 35 of the proposed Amended Statement of Claim. 113 The Commissioner did not have power to make a decision to impose penalties. The applicant became liable to pay additional tax by way of penalty by dint of s 226K of the Assessment Act and the Commissioner was obliged by s 227(1) of the Assessment Act to make an assessment of that additional tax. This amendment resulted from a disallowance of the applicant's claimed deduction from his assessable income of $5 million by way of contribution to, I assume, the 'Bonnell No. It is clear that the Commissioner had the power, under s 227(3) of the Assessment Act, to remit the additional tax or part thereof before the Commissioner made the assessment of the additional tax as required by s 227(1). As previously indicated, the exercise of that power was not confined to any particular time period, which has since elapsed. 116 There is no evidence to suggest that the applicant has called on the Commissioner to exercise the discretion conferred on him by s 227(3) in the applicant's favour. What is clear is that if the Commissioner addressed his discretion before 29 July 2004, he did not exercise it in the applicant's favour. As previously indicated (at [13]) the Commissioner contends that he did address the discretion before the issue of the Notice of Amended Assessment on 29 July 2004 and that he made a decision not to remit any part of the additional tax payable by the applicant. However there is no evidence to support that contention and no evidence to indicate that the applicant was ever informed of that fact, if it was the case. 117 In the foregoing circumstances, it remains open to the applicant to challenge any decision of the Commissioner under s 227(3) in proceedings under s 39B of the Judiciary Act in reliance on one or other of the Hickman provisos, as the applicant has indicated he wishes to do. No 'Anshun' estoppel precludes the applicant from making those claims in the present proceedings. 118 Whether any wider basis for a challenge to a s 227(3) decision by the Commissioner is available to the applicant need not be determined in the applications presently before the Court. 119 One thing that is clear is that the present proceedings cannot be used to revive the appeals to this Court against the Commissioner's objection decisions which were the subject of proceedings NSD 117 of 2005. Furthermore, the applicant does not seek to do so. 120 In my opinion it would be premature to address whether or not any relief claimed by the applicant under s 39B of the Judiciary Act , to which he might otherwise be entitled, should be refused on discretionary grounds. 121 On the material presently available and in the absence of any evidence as to the Commissioner's exercise of his discretion under s 227(3) of the Assessment Act, I am not satisfied that the applicant has no reasonable prospect of successfully prosecuting the proceeding insofar as it may claim relief in relation to the exercise of that discretion under s 39B of the Judiciary Act , reliance being placed on one or other of the Hickman provisos. As the applicant said in his email of 5 December 2005 'one of the allegations I have made consistently is that the levying of penalties against me was done for an improper purpose'. Such an allegation in respect of the 'levying of penalties' cannot be sustained in these proceedings. However, an allegation that a decision taken by the Commissioner in exercise of his discretion under s 227(3) of the Assessment Act not to remit the whole or any part of the additional tax payable by the applicant by way of penalty under s 226K of the Assessment Act was taken for 'an improper purpose' may be sustained. On my understanding it is this second allegation which underpins the case the applicant now wishes to bring. 122 I am not satisfied on the evidence presently available that the claims which the applicant now wishes to make are frivolous or vexatious or an abuse of the process of the Court. 123 In the foregoing circumstances, the respondent's Notice of Motion filed 9 March 2007 should be dismissed. However, the conclusions which I have reached in relation to that motion have been largely influenced by the as yet unpleaded case which the applicant has indicated that he wishes to take to trial. In my opinion there should be no order as to costs in respect of the determination of that Notice of Motion. 124 Turning to the applicant's Amended Notice of Motion filed 11 April 2007 it seems clear to me that an order for preliminary discovery under Order 15A rule 6 at this stage would be quite inappropriate especially in the absence of a detailed affidavit from the applicant deposing to matters which would satisfy the prerequisites for such an order. Apart from other considerations, it is difficult to see how the applicant could argue that he does not have sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain relief from the respondent in circumstances where he has already commenced such a proceeding (see generally Imperial Chemical Industries plc v Echo Tasmania Pty Limited [2007] FCA 1731 at [14] - [20] ). 125 Notwithstanding the fact that an order for preliminary discovery under Order 15A rule 6 would be inappropriate, it seems to me that leave should be granted to the applicant, at an early stage, to file and serve a notice for discovery on the respondent requiring the respondent to give discovery of documents relating to any exercise of the discretion conferred on the Commissioner by s 227(3) of the Act to remit the whole or any part of the additional tax payable by the applicant under the Notice of Amended Assessment issued on 29 July 2004 or any possible exercise by the Commissioner of that discretion. 126 I would not be disposed to grant leave to the applicant to file and serve an Amended Application in the form of the draft Amended Application attached to the affidavit of Bruce Elliott Rowntree sworn and affirmed (sic) 5 March 2006. However an opportunity should be afforded to the applicant to file and serve an Amended Application. The claims for relief in such an application would have to be confined to the applicant's challenge to the Commissioner's exercise or failure to exercise his discretion under s 227(3) of the Assessment Act. It could not 'contest the validity of' the assessment in accordance with s 170(1) of the Assessment Act of the amount of the applicant's taxable income and of the tax payable thereon or the validity of the assessment under s 227(1) of the Assessment Act of the additional tax payable by the applicant under s 226K of the Assessment Act. 127 Were the Application and the Statement of Claim to remain in the form of the documents filed on 10 October 2006, it would plainly be appropriate to order that the proceedings be summarily dismissed. Nothing in the present proceedings can affect the amended assessment by the Commissioner of the amount of the applicant's taxable income and of the tax payable thereon resulting from the disallowance of the claimed deduction of $5 million under s 170(1) of the Assessment Act. However, the applicant should not, in my opinion, be denied an opportunity to put his house in order and bring his application into line with the case which he has indicated he wishes to bring in relation to the Commissioner's exercise or failure to exercise his s 227(3) discretion favourably to the applicant. 128 Turning to the proposed Amended Statement of Claim which is Exhibit NM-1, I am of the opinion that paragraph 36 should be struck out and further that paragraphs 33A, 34A, 35, 35A and 35B should be struck out but with an opportunity afforded to the applicant to replead his case in a manner consistent with these reasons for judgment and his declared limitation of his case to one brought within the Hickman provisos in relation to the s 227(3) exercise of discretion issues, under s 39B of the Judiciary Act . 129 In the foregoing circumstances, leave ought not to be granted to the applicant to file and serve an Amended Statement of Claim in the form of Exhibit NM-1. However, leave should be granted to the applicant to file and serve a Statement of Claim consistent with these reasons following the giving of discovery by the respondent as contemplated above. 130 Subject to a grant of leave to file an Amended Statement of Claim and an Amended Application pursuant to Order 13 rule 2(1) of the Federal Court Rules , orders should be made providing for the Statement of Claim filed 10 October 2006 to be struck out under Order 11 rule 16 in the event that an Amended Statement of Claim is not filed within the time allowed for that purpose and for the Application filed 10 October 2006 to be dismissed generally under Order 20 rule 5 in the event that an Amended Application is not filed within the time allowed for that purpose. 131 Given that the applicant has failed in its endeavour to secure a grant of leave to file the proposed Amended Application and the proposed Amended Statement of Claim, I consider that an order for costs should be made in the respondent's favour in respect of the applicant's Amended Notice of Motion filed 11 April 2007. Given the measure of success on some issues which the applicant has enjoyed, I am of the opinion that the appropriate order as to costs is that the applicant pay one half of the respondent's costs of the applicant's Amended Notice of Motion filed 11 April 2007. In the circumstances of this case it seems to me that it would be appropriate for such costs to be taxed and payable forthwith. I certify that the preceding one hundred and thirty-one (131) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.

scope of privative provisions in the income tax assessment act 1936 (cth) review proceedings under s 39b of the judiciary act 1903 (cth) relying on the hickman provisos review of the commissioner's exercise or failure to exercise his discretion under s 227(3) of the income tax assessment act 1936 (cth) to remit the whole or part of the additional tax payable by a taxpayer under s 226k availability of anshun estoppel following the dismissal, under order 35a rule 3(1)(a) of the federal court rules , of an appeal against an appealable objection decision under the taxation administration act 1953 (cth), as a result of an applicant's default by failing to attend a directions hearing availability of anshun estoppel following recovery proceedings in the supreme court of new south wales taxation estoppel

2 In order to deal with the contended inadequacy of the particulars, it is necessary to set out the material facts (and pleaded particulars) said to properly frame the claims for relief and adequately put the respondents on notice of the case they must answer and, in consequence, the issues in relation to which the respondents must give discovery once pleadings have closed. On 9 September 1999 the creditors of Waters rejected a proposed composition. On 22 September 1999 the estate of Richard Waters was sequestrated (with the appointment of the first applicant as trustee of the estate) consequent upon a Bankruptcy Notice issued to Mr Waters on 4 March 1999 by the Official Receiver and the presentation of a Creditors Petition against him by the liquidator of Delvine Pty Ltd ("Delvine") on 20 April 1999. On 28 September 1999 the Insolvency Trustee Service of Australia ("ITSA") accepted a Debtors Petition filed by Mrs Waters and appointed the second applicant as trustee of her estate. 5 On 23 November 1984, Mr and Mrs Waters had become registered proprietors as joint tenants of a property at 46 Victoria Terrace, Caloundra, in Queensland. 6 In December 1996, a number of events and transactions occurred. 7 On 2 December 1996, Dalvella Pty Ltd ("Dalvella") was incorporated as was Donemate Pty Ltd ("Donemate"). The directors from 2 December 1996 of each company were John Alexander Guest and Brian James Osborne. On 2 December 1996, the Cliffside Trust was established with Dalvella as trustee and Mr and Mrs Waters as Principals. On the same date, the Kings Beach Trust was established with Donemate as the trustee and Mr and Mrs Waters as Principals of the trust. On 9 December 1996, by deed, Mr and Mrs Waters retired as Principals of each trust, and appointed their children, Jane Waters, Louise Waters, and Adrian Waters, as the "New Principals". (paras 8 to 16 of the SoC). 8 Between 3 December 1996 and 24 December 1996, Mr and Mrs Waters entered into ten transactions with Dalvella in its capacity as trustee of the Cliffside Trust (called, in the pleading, "the 1996 transactions") implemented by effecting transfers between the account of Mr and Mrs Waters at the Caloundra branch of the National Australia Bank ("NAB") and Dalvella's account at the same branch of the NAB. Those ten transactions had one of two characteristics. Some were loans by Dalvella to Mr and Mrs Waters. The others were gifts of money to Dalvella by Mr and Mrs Waters. In the result, Dalvella made unsecured loans in the aggregate of $2,199,960.00 to Mr and Mrs Waters; and Mr and Mrs Waters gave a gift of $2,200,000.00 to Dalvella, the final gift of $230,000 taking place on Christmas Eve. By the end of those transactions on 24 December 1996, Dalvella had money receipts of $2,200,000.00 and a debt due to it (payable according to its terms) from Mr and Mrs Waters of $2,199,960.00. 13 The applicants then plead a number of transactions that occurred in February 1997 between Mr and Mrs Waters, Dalvella (in its capacity as trustee of the Cliffside Trust ) and Donemate (in its capacity as trustee of the Kings Beach Trust ). On 1 February 1997, Mr and Mrs Waters by letter to Donemate requested an interest-free loan for 25 years of $2,199,960.00 from Donemate in order to repay the loan from Dalvella to Mr and Mrs Waters from December 1996 and thus extinguish that debt. 14 On 3 February 1997, Donemate borrowed that sum from Dalvella interest free for 25 years. Dalvella made the loan to Donemate on the security of a third party mortgage by Mr and Mrs Waters over the Caloundra property. 15 On 3 February 1997, Donemate made the 25 year interest-free loan to Waters; Waters repaid their debt to Dalvella; and Waters granted a mortgage to Dalvella over 17 lots of land including the Caloundra property. 16 The transfers on 3 February 1997 are said to have occurred this way: Dalvella made one transfer of $99,960.00 and seven transfers of $300,000.000 to Donemate totalling $2,199,960 in all. Donemate made transfers of the same number and amounts to Waters and they made transfers of the same number and amounts to Dalvella. Accordingly, Dalvella, supported by the third party mortgage given by Waters, had become a secured lender to Donemate; Donemate a lender to Waters; and Waters had discharged the December 1996 debt to Dalvella. 17 The applicants plead another transaction in May 1999 between Dalvella and Waters. On that date, by REIQ contract subject to special Annexure A conditions, Mr and Mrs Waters sold the Caloundra property to Dalvella at "market price" and Dalvella agreed to the release of the third party mortgage given by Waters. 18 By para 29 of the SoC, the applicants plead that but for the 1997 transactions and the 1999 transaction, the estate of each bankrupt would have included a one-half legal and beneficial interest in the Caloundra property. First, the facts and circumstances relied upon to support the inferences pleaded at para 23 of the SoC, which in turn relies upon the facts and circumstances pleaded at para 22 of the SoC, and the particulars at 22.2.1 to 22.2.13. Secondly, three letters of demand sent to Mr and Mrs Waters by BSA on 20 February 1997, 3 April 1997, and 6 June 1997 claiming $14,368.44 (and a further foreshadowed claim of $57,465.00), $33,372.94 and $60,765.94 respectively, and threatening suit if payment should not occur. Thirdly, on 3 February 1997, the liquidator of Delvine commenced proceedings against Mr Waters to recover a contended preference payment of $17,000.00. On 12 February 1997, the liquidators of Freedom Homes commenced proceedings against the DCT seeking to recover a contended preference payment of $200,000.00 and on 17 March 1997, the DCT joined Waters and sought indemnity from them pursuant to s 558FGA (2) of the Corporations Law. Fourthly, between 24 April 1996 and 28 January 1998, Waters paid creditors of Freedom Homes holding personal guarantees from Waters, amounts totalling $823,811.00. Fifthly, on 17 February 1999, the liquidators of Freedom Homes commenced proceedings against Waters to recover damages for contended insolvent trading in an amount of $1,656,127.87. Sixthly, on 24 February 1999, the liquidator of Delvine obtained a judgment against Mr Waters in an amount of $30,536.25. Seventhly, on 26 February 1999, the liquidators of Freedom Homes commenced proceedings against Waters claiming $2,738.184.75 pursuant to s 588M(2) of the Corporations Law, $1,772,324.80 for contended breaches of duties by Waters as directors of Freedom Homes and $1,504,213.20 pursuant to s 588FF of the Corporations Law. Eighthly, on 4 March 1999, the liquidator of Delvine issued a Bankruptcy Notice against Mr Waters; and the liquidators of Freedom Homes, the DCT and the BSA each lodged proofs of debt in the bankruptcy of Mr and Mrs Waters. 21 By para 31 of the SoC, the applicants plead an inference drawn from the circumstances pleaded and particularised at pars 22 and 30 of the SoC that the liquidators of Freedom Homes, the DCT, the BSA, and the liquidator of Delvine were either creditors, contingent creditors, or anticipated creditors of Waters and "inevitably there would come a time when these creditors would press Mr and Mrs Waters for payment of moneys or obtain judgment that Mr and Mrs Waters would not be able to pay"; and, the 1997 transactions and the 1999 transaction amount to a "voluntary disposition" of the Caloundra property thereby contributing to Waters not having "sufficient assets to meet their debts". 22 By para 32 of the SoC, the applicants contend that the 1996 transactions, the 1977 transactions, and the 1999 transaction purported to result in Donemate in its trustee capacity being indebted to Dalvella in its trust capacity; Waters being indebted to Donemate as trustee in that sum; Dalvella taking a third party mortgage over the Caloundra property to secure Donemate's debt to Dalvella; and Dalvella being entitled to take a transfer of the legal and beneficial interest in the Caloundra property in terms of the contract. 23 By para 33 of the SoC, the applicants contend that the 1996 transactions, the 1997 transactions, and the 1999 transaction were circular transfers of funds between Waters, Dalvella and Donemate which resulted in no consideration or consideration of less than market value being given in that Dalvella, in its trustee capacity, did not advance $2,199,960.00 to Waters; Waters did not gift back to Dalvella $2,200,000.00; Dalvella did not advance $2,199.960.00 to Donemate; Donemate did not advance that sum to Waters; Waters did not repay that sum to Dalvella; the mortgage granted by Waters to Dalvella was granted for no consideration because no moneys were actually advanced by Dalvella to Donemate; and the contract of sale of the Caloundra property by Waters to Dalvella was not a genuine arm's-length contract. The applicants say that the 1996 transactions, the 1997 transactions, and the 1999 transaction gave rise to dispositions within the scope of s 121 of the Bankruptcy Act and those dispositions are void against the applicants. 24 The transactions under challenge by the applicants occurred in December 1996, February 1997, and concern a contract made on 25 May 1999. The order sequestrating the estate of Mr Waters was made on 22 September 1999 and ITSA accepted the debtor's petition of Mrs Waters on 28 September 1999. The Bankruptcy Act was amended by the Bankruptcy Legislation Amendment Act 1996 (Cth) (No 44, 1996) which, by Item 208 of Schedule 1 repealed s 121 of the Bankruptcy Act and inserted a new s 121 entitled "Transfers to defeat creditors" and by Item 457 of Schedule 1, the new s 121 applies to bankruptcies for which the date of the bankruptcy is on or after the commencement of Schedule 1. Schedule 1 commenced on 16 December 1996. The term "the date of the bankruptcy" is, by s 5 of the Bankruptcy Act , the date on which a sequestration order is made of the individual's estate or the date on which an individual becomes bankrupt by virtue of the presentation of a debtor's petition having regard to ss 55 , 56E , or 57 , as the case requires. The relevant event in that case is "acceptance" of the debtor's petition. Although these dates determine the date of the bankruptcy, "the commencement of the bankruptcy" is determined by s 115 of the Bankruptcy Act . The respondents say that they are entitled to know the whole of the contended scheme and since the pleading alleges a statement of mind, O 12 r 3 of the Federal Court Rules requires the applicants to give particulars of the facts relied upon to establish the contended state of mind; and O 11 r 10 of the Federal Court Rules requires the pleading of any matter of fact or particular of fact that might take a party by surprise, if not pleaded. 26 The applicants say they have been responsive to each separate paragraph of the request and as to para 1(a) of the Request , which seeks particulars of the "scheme" asserted, the particulars of the scheme are those facts and particulars pleaded at paras 8 to 21 of the SoC. Those paragraphs plead incorporation of Dalvella and Donemate; formation of the trusts; retirement of Waters as Principals; the substitution of their children as new Principals; the loans and gifts; and the method of transfer as between Dalvella and Waters. The '1996 transactions' (defined as the money transfers) are pleaded as part of the scheme elements at paras 8 to 21 of the SoC. 27 The particulars of the scheme contended for by the applicants are sufficiently identified. 28 As to para 1(b) of the Request which seeks particulars of the allegations that Waters "orchestrated" the scheme, the applicants say that the facts, matters and circumstances relied upon are those pleaded and particularised in paras 11 to 16 and paras 20 to 21 of the SoC. Paras 11 and 12 of the SoC plead the establishment of the Cliffside Trust on 2 December 1996, the appointment of Dalvella as trustee, and the position of Waters as Principals of the trust. Paras 13 and 16 of the SoC plead the establishment of the Kings Beach Trust , the appointment of Donemate and the position of Waters as Principals of that trust. Paras 15 and 16 of the SoC plead the retirement seven days later of Waters as Principals of each trust and the appointment by them by deed of their children as the new Principals on 9 December 1996. Paras 17, 18, and 19 of the SoC plead the details of the bank accounts operated by Waters, Dalvella, and Donemate at the Caloundra branch of the NAB, and paras 20 and 21 of the SoC plead precise details of the ten transactional transfers between 3 December 1996 and 24 December 1996 between the account operated by Waters and the account of Dalvella at the Caloundra branch, effecting the loans and gifts. The facts and particulars pleaded at paras 11 to 16, and 20 to 21 of the SoC identify the contended participation by Waters in the elements of the scheme pleaded and relied upon. Waters would understand from the pleaded facts and particulars that the applicants, plainly enough, contend that Waters caused the trusts to be established with Waters as Principals of those trusts under the trust deed, shortly after formation, they retired as Principals and substituted their own children as the new Principals, and participated in effecting the transfers between their own account and that of Dalvella at the Caloundra branch in order to borrow money from Dalvella and make gifts of $2.2 million to Dalvella. The pleaded contention is clear. Discovery of documents going to the instructions to form the trusts, incorporate the trustees, retire as Principals, substitute their children as new Principals, and instructions to effect the money transfers is likely to enable the identification of each specific step taken by Waters in relation to the elements of the contended scheme. 29 As to para 1(c) of the Request which seeks particulars of each and every one of the creditors the applicants contend Waters intended to defraud, the applicants say the reference to 'creditors' in para 22.1 is a reference to 'all of [Waters] then present creditors and all future creditors ... including Jefferson and Stevenson and BSA'. The applicants say these particulars are sufficient and adequate as the response identifies all the then present creditors and, by class, all of the future creditors with a specific reference to two identified future creditors. The respondents say the particulars are inadequate and too broad as they capture all future creditors and adopt the 'inclusive' reference that does nothing to limit the field of inquiry the subject of the alleged intention. Paragraph 22.1 asserts money transfers as part of a scheme put in place by Waters with an intent to defraud creditors. There must be a relation between the steps taken in the scheme and an intention to defraud identified creditors. Those creditors might be existing creditors with provable debts or future creditors ( Barton v Deputy Federal Commissioner of Taxation [1974] HCA 43 ; (1974) 131 CLR 370 at 374; PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 at 525-526; DM Cannane & Anor v J Cannane Pty Ltd [1998] HCA 26 ; (1998) 192 CLR 557 at 566 and 593; Ebner v Official Trustee in Bankruptcy [1999] FCA 110 ; (1999) 91 FCR 353 at 370-371) or any present or future creditor. In this case, the applicants contend Waters held the relevant intent at the time of orchestrating the scheme, in relation to present creditors and those who, like Jefferson and Stevenson and BSA, might become creditors. A trustee at pleading stage, seeking to recover assets on behalf of the beneficiaries of a bankrupt estate is not likely to know whether a scheme has been implemented with an intent to defraud each present creditor or a group of present creditors (perhaps those agitating the most); or future creditors or a group of future or anticipated creditors perceived by the former bankrupt to be those who might pursue claims or causes of action arising out of the conduct of the bankrupt; or both classes of claimant. What is important is the identification of the contention within the limits of what might reasonably be put having regard to all the circumstances pleaded. In this case, the applicants plead a sequence of steps including a set of inherently odd transactions by which Waters borrowed money from a trust established by them in which they were formerly principals and substituted almost immediately after formation, their own children as principals, and immediately made gifts of the borrowing back to the trust. The applicants say all the scheme steps were made with an intent to defraud all creditors (that is, to remove the assets from the reach of those who ultimately might call upon them should payment not occur) whether present creditors or future creditors. The function of particulars is to put Waters on notice of what is contended against them, enable them to plead and to isolate those documents relevant to the issues. Waters would understand from this pleading as particularised that the trustees say Waters took scheme steps with an intention of removing assets from anyone who was at the time a creditor or anyone who might be a creditor, emblematic of which are the nominated future creditors. The pleading as particularised enables each of Waters to ask, 'Did I take the contended steps (if any) with the intention of defrauding my present creditors or future creditors? '; and although the answer might be 'no', 'Am I aware, after reasonable enquiry, of any document relevant to a contention that I put in place the contended steps with an intention to defraud present creditors or future creditors? ' being a document falling within Order 15, r 2(3). 30 By para 1(d), the respondents sought full particulars relied upon by the applicants to support the allegation that Waters held an intent to defraud their creditors. In answer, the applicants relied upon the facts, matters and things contained in the particulars of para 22 of the SoC ([11] of these reasons). The respondents contend that the applicants have failed to provide proper particulars of the facts relied upon to support an alleged condition of mind including an allegation that a party has engaged in conduct with malice or fraudulent intent. Order 12, r 3 provides that a party pleading any condition of mind shall give particulars of the facts relied upon (Order 12, r 3(1)) and 'for that purpose, a condition of mind includes any disorder or disability of mind, any malice and any fraudulent intention ...' (Order12, r 3(2)). 31 In addition, the respondents contend that the applicants have not pleaded any nexus between Waters undertaking the 1996 transactions and any of the matters alleged in the particulars to para 22 of the SoC. However, by para 22 of the SoC, the assertion is made that Waters engaged in the 1996 transactions as part of a scheme they put in place with an intent to defraud their creditors. The particulars then set out a sequence of factual matters and particularly events occurring between 29 February 1996 and December 1996 which concern the financial circumstances of entities with which either Mr Waters or Mr and Mrs Waters were engaged or with which one or other of them or both had a relationship in a particular capacity; and events which relate to the potential liability of Mr and Mrs Waters pursuant to claims foreshadowed or threatened against them or the subject of a report and discussion as to a liability by them or claims to be made against them. These facts in conjunction with the facts pleaded at paras 8 to 21 provide a foundation upon which an inference might reasonably be drawn that Waters acted with an intent to defraud creditors. The allegation is that the events at paras 8 to 21 were engaged in by Waters with a fraudulent intent. That factual contention is sought to be made out as an inference drawn from all of the circumstances which, having regard to the pleaded conduct, explain, in the absence of any other evidence, the motivation for the conduct. As a matter of pleading, the sequence of matters identified in the particulars to para 22 in conjunction with the inherently odd 1996 transactions, gives rise to an inference to support the condition of mind alleged as a fact. This approach is entirely consistent with PT Garuda Indonesia Ltd v Grellman (supra) at [526] per Wilcox, Gummow and Von Doussa JJ. In proving a contended intention to defraud creditors it may not be necessary to establish that the transferor of the property in question actually had in mind an intention to defraud creditors if the effect of what that person did would reasonably be expected to have such a consequence ( Re Trautwein ; Richardson v Trautwein (1994) 14 ABC 61 at 75; PT Garuda Indonesia Ltd v Grellman at 523-524). Courts will therefore 'infer the intention in issue, in deciding it as a question of fact. This does not mean that the intention so derived is one imputed by law. It is not a fiction. It is the real intention of the transferor decided objectively rather than upon protestations of innocence on the part of the debtor or outraged accusations on the part of suspicious creditors' ( Cannane , per Kirby J at p 592). In deciding that objective question, the Court looks to all the circumstances to support the inference. 32 By para 1(f), the respondents seek full particulars of the facts, matters and things relied upon by the applicants to support the allegation that Dalvella did not act 'in good faith'. The applicants rely upon paras 20 and 21 of the SoC and the particulars of those paragraphs and the particulars contained in para 22. The respondents say that the applicants bear the onus of proving that in accepting the transfers by Waters, Dalvella was not acting in good faith. The respondents say that paras 20 and 21 of the pleading simply set out a schedule of the loan and gift transactions; and the particulars to para 22 do not provide any particulars of facts relating to the conduct of Dalvella. Further, the respondents say that the applicants must plead facts which support a conclusion that Dalvella knew of the fraudulent intent of Waters. The respondents concede that knowledge of the fraudulent intent of Waters can be inferred from foundation facts known by Dalvella but no particulars of such facts have been pleaded from which an inference could be drawn that Dalvella knew that Waters made dispositions of property with an intent to defraud anyone. 33 By paras 20 and 21 of the SoC, the applicants plead the loan and gift transactions between Waters and Dalvella having pleaded the role of Dalvella, its incorporation, the formation of the trust, the role of Waters in retiring as principals and appointing their children as principals and the method of drawdown and transfers of money between accounts by flexi-phone transfers at the Caloundra branch of the NAB. I have described transactions by which a borrower borrows money from a lender and at the same time or as part of a sequence of transactions immediately 'gifts' the money back to the lender as inherently odd or to use the language of Garuda at 528 and 529 either 'strange' or 'all was not being regularly and properly done'. It seems to me that paras 20 and 21 together with the sequence of events all of which necessarily have an impact to a greater or lesser degree upon Waters, support an inference that the 1996 transactions were part of a scheme as previously described in which Dalvella received transfers other than in good faith. An inference is open that by reason of the examination of the conduct of Mr Waters in connection with particular entities; the investigation of the personal liability of Waters by Waters and their advisers consequent upon particular events; the content of the report prepared by the administrators of Freedom Homes foreshadowing a potential substantial liability on the part of Waters and the discussion of that report at a meeting of creditors; and, the particulars of steps foreshadowed by claimants against Waters, Waters took particular steps to remove assets from the reach of existing and future creditors which, as implemented, directly involved Dalvella, a company having had the particular association with Waters and then their children. Paragraphs 20, 21 and 22 of the SoC as particularised, support an inference that Dalvella was not acting in good faith. 34 By para 1(h), the respondents seek particulars of the group of companies of which Freedom Homes formed part. At para 22.2.2, the applicants allege that Freedom Homes formed part of a group of companies that included Delvine. The applicants in response identified four companies, Delvine Pty Ltd, Freedom Homes (Qld) Pty Ltd, Haljaquin Pty Ltd as trustee of the Waters Family Trust and Clontart Credit Co. Pty Ltd. The respondents say that that response simply specifies some of the companies in the group but not the whole of the group and the respondents do not wish to be taken by surprise at trial. The applicants say that only two companies are relevant in any event namely Freedom Homes and Delvine and to make the position clear the applicants confine the contention at para 22.2.2 to one that the only two relevant entities are Freedom Homes and Delvine. 35 By para 1(j), the respondents called upon the applicants to identify the method by which a s 439A report was provided to Waters ([11], para 22.2.8). In response, the applicants contended that the request was not a proper request as the request is a request for evidence. 36 Paragraph 22.2.8 identifies the report and the content of the report. Paragraph 22.2.9 identifies the meeting of creditors at which the content of the report was 'ventilated at length' and the resolution of the creditors to place Freedom Homes in liquidation to enable the foreshadowed claims to be pursued against Waters. The assertion at para 22.2.8 is that Mr and Mrs Waters were provided with the second report to creditors issued by Jefferson and Stevenson in the voluntary administration. I accept that the critical matter is whether Waters were provided with the report. The assertion is clear. Waters would not be taken by surprise because they would be in a position to know whether and if so by whom the report was provided to them. If they say that they did not receive the report, they are in a position to plead to that fact from their own knowledge. 37 By para 1(k), the respondents sought particulars of matters contained in para 22.2.10 of the SoC which involves a contention that between 13 June 1996 and 16 August 1996 Waters obtained personal insolvency advice from Mr John Ebbage of BDO Kendalls, Chartered Accountants and Mr Philip Pan of Minter Ellison Lawyers concerning seven matters (a) to (g) (see [11], p 5, of these reasons). The respondents seek particulars of whether the advice was oral or written; if written, the identification of the documents; and, if oral, the place where the advice was given and who gave it. In response, the applicants say that Mr Waters sought advice from Mr Pan on 13 June 1996 by facsimile and the advice sought was given by Mr Pan and Mr Ebbage to Mr Waters acting on his own behalf and that of Mrs Waters at a meeting that took place at Brisbane on 15 August 1996. The respondents say that the response does not particularise whether the advice received from Mr Ebbage and Mr Pan was written or oral or partly written and partly oral and no particulars have been given as to that part of the advice said to have been given to Waters by Mr Ebbage and that given by Mr Pan. The respondents say these particulars are a basic element of the pleading and the respondents are entitled to know the case made against them. 38 Plainly enough, neither trustee was present at the meeting or a participant in Waters seeking advice about their affairs. The particulars identify a document by which Mr Waters sought advice from Mr Pan and the date of that document. The particulars also identify a meeting, the date of the meeting, the participants at the meeting and the provision of advice responsive to the request of 13 June 1996. In the absence of any other identified document, the particulars of the meeting suggest that advice must have been given orally. Mr Waters would not be 'taken by surprise' about these matters as he sought the advice and received it as he was at the meeting with Mr Pan and Mr Ebbage and in that sense, unlike the trustees, was a direct participant. 39 By para 3 of the request, the respondents seek particulars of the 'large sums of money' referred to in para 23 of the SoC. Paragraph 23 asserts the inference previously discussed that the liquidators of Freedom Homes and the BSA were either creditors, contingent creditors or anticipated creditors for large sums of money and inevitably these creditors would press Waters for payment and they would not be able to pay. In response, the applicants gave particulars that the large sums of money are said to 'include debts claimed in the proofs of debt lodged in the bankruptcies of Mr and Mrs Waters by Jefferson and Stevenson and the BSA. The applicants say that the proofs of debt have been identified and copies of the proofs of debt lodged in the bankruptcies of Waters have been provided to the respondents and those proofs identify the precise amount claimed. Nevertheless, the applicants ought to provide the respondents with a statement based on the proofs of the amount of the debt and to whom it is owed. 40 By para 4 of the request, the respondents seek particulars of the monies Waters would not be able to pay as contended in para 23 of the SoC. The applicants say the monies unable to be paid include the debts claimed in the proofs of debt previously mentioned. The provision of the particulars extracted from proofs of debt will provide particulars for the purposes of para 4 of the request. 41 By para 9 of the request, the respondents seek particulars of the monies the applicants allege by para 31 of the SoC that Waters would not be able to pay. By para 31 the applicants say that in the circumstances of the particulars pleaded in paras 22 and 30 of the SoC an inference arises that Jefferson and Stevenson, the Deputy Commissioner of Taxation, the BSA and the liquidator of Delvine were creditors for large sums of money; a time would come for payment of those monies by Waters; and Waters would not be able to pay. The applicants provided particulars of para 9 that the monies include 'the debts claimed in the proofs of debt lodged in the bankruptcies of Mr and Mrs Waters by Jefferson and Stevenson, the DCT and the BSA and the judgment debt owed by Mr Waters to the liquidator of Delvine'. The respondents say that those particulars do not identify the monies. The applicants say the respondents have been provided with copies of the proofs of debt. However, a statement extracted from the proofs of debt of the amounts claimed and by whom ought to be provided to the respondents. 42 By para 10 of the request, the respondents request the applicants to specify the property referred to in para 33 of the SoC for which market value was not given. By para 33, the applicants contend that the 1996 transactions, the 1997 transactions and the 1999 transaction were circular transfers of funds between the accounts of Waters, Dalvella and Donemate and no consideration was given for the relevant transactions or, alternatively, consideration less than market value was given having regard to the matters contended at 33.1 to 33.7 of the SoC. The applicants contend that para 10 is not a proper request for particulars as para 33 does not refer to 'property' for which market value was not given. The respondents say that para 33 can only be read as referring to a disposition of property from Waters to Dalvella and the 'property' the subject of the contention is not identified. However, para 33 pleads that the 1996 transactions, the 1997 transactions and the 1999 transaction were expressions of a circular transfer of funds unrelated to any true underlying transaction as a result of which there is no consideration or consideration of less than a true market value referable to a true market transaction. Mr and Mrs Waters would understand that the fundament of the contention made against them is that the transactions are simply a sham put in place to try and insulate from the creditors' assets that would otherwise have been available. 43 By para 11 of the request, the respondents request the applicants to specify the 'market value' referred to in para 33. The applicants say that the request is not a proper request and constitutes a request for evidence. The respondents say that they are entitled to know the relevant market value referable to the relevant property. The request by para 11 is not a proper request having regard to the observations made at [42]. In terms of the future directions for the matter, the parties ought to try and agree consent orders and submit proposed consent orders to my Associate during the course of next week. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.

consideration of an application for further and better particulars of a statement of claim consideration of contentions relating to s 121 of the bankruptcy act 1966 (cth) practice and procedure

I shall refer to them as 'the claim group' and to Mr Newman as 'the applicant' . The motion is brought pursuant to s 84C(1) of the Native Title Act 1993 (Cth) ( ' the NTA'), which relevantly provides that if an application does not comply with ss 61 or 62 , a party to the proceedings may apply to the Court to strike out the application. An order under O 35A r 2 staying or dismissing the application is sought in the alternative, on the basis of the claim group's non-compliance with orders and directions made by the Court. The application is supported by the State of Queensland, by the local government respondents and, to an extent, by native title claim groups with which this application overlaps. The area the subject of the application overlaps with seven other claim areas. They include areas the subject of applications by the Wakka Wakka and Barunggam Peoples. It would appear that the Registrar of the National Native Title Tribunal considered that this application did not meet the requirements for identification of the claim area (s 62(2)(a) and (b)); identification of internal areas (s 62(a)(ii)) ; and for the provision of a map showing the external boundaries of the area claimed (s 62(2)(b)). Another, amended, claim was filed on 26 February 1999, but no leave was sought with respect to that amendment. For a reason which is not apparent regard was had to both the original and purported amended application in determining that the former could be registered. 6 The original application was made in the names of eight persons as applicants ' on behalf of the descendants of Jack Darlow, daughter Jane Darlow and her descendants and that these families recognise that they are direct descendants of the Western Wakka Wakka People'. The application also shows that Jack Darlow had at least three children in addition to Jane Darlow and that she had eight children: Roy, Maude, Phyllis, Elliott, Billy, Isobel, Emily and Jean. The applicant stated that there were no relatives claiming in the Western Wakka Wakka claim area ' other than those named in this claim' . 7 The native title claimed is said to be subject to, and in accordance with, ' traditional Western Wakka Wakka laws and customs' . The application contained statements that the authority to lodge the claim on behalf of the descendants of Jack Darlow and his daughter Jane is ' through practised family customs and practices' and at another point ' according to Western Wakka Wakka laws and recent practices of Aboriginal decision-making on behalf of the Jane Darlow family and descendants group' . 8 The application does not claim exclusive native title rights and expressly states that it is not asserted that the claim group is the only traditional owner of the area. It is said that, in the event that the claim is not successful, the claim group would automatically be a party to the Barunggam native title claim. If that latter claim was unsuccessful, those claimants could join this claim. 9 An affidavit filed by a member of, and a spokesman for, the claim group, Margaret McLeod, deposes that there are seven family groups or lines from Jane Darlow which comprise the claim group. However a comparison of her list with the persons identified as the children of Jane Darlow in the application shows that two are not included by her (Elliott and Emily) and one person is included, but is not identified in the application as a child (Jack Tobane. ) Two members of the claim group say that they are of the Wakka Wakka bloodline. Mrs McLeod also says that the 'name of the native title claim was used as a compromise to distinguish the claim from the other Wakka Wakka claims on the other side of the Bunya Mountains' . 10 The applicant submits that the application for native title determination itself shows that the requirements for authorisation have not been met, in a number of respects. It may be observed that it speaks of the Western Wakka Wakka People and their laws and customs on the one hand, but identifies the claimants as the descendants of only one member of a family. Moreover it also refers to customs and practices of a family. 11 It was submitted for the claim group that it should not be assumed that there were other members of the Western Wakka Wakka People and that these descendants may be all that remains of them. The submission is itself problematic. In Members of the Yorta Yorta Aboriginal Community v State of Victoria [2002] HCA 58 ; [2002] 214 CLR 422 at 445, [49] - [50] it was pointed out that laws and customs necessary to support native title do not exist in a vacuum; they arise out of and define a particular society. A society is to be understood as a body of persons united in and by its acknowledgement and observance of a body of law and customs. If the society ceases to exist as a group, which acknowledges the laws and customs, the latter cease to have continued existence. 12 In the present case there is nothing to suggest the continued existence of a wider group, a society of Western Wakka Wakka persons who observe that society's laws. If such a group did once exist, all that remains are the descendants of one person and they are said to follow family customs and practices. 13 The State of Queensland also pointed to the difficulty associated with a native title claim brought on behalf of the families and not a larger group. Assuming however that to be possible, it submitted that it would appear that two persons have been excluded from participation in the authorisation process and one person, who is not a descendant, has been included. 14 The submissions for the applicant to the motion point to another feature of the application, one which suggests that the families may be part of a larger group. The statements in the application show clearly that the Barunggam people are said to have the same native title claim rights as this group, for otherwise it could not be foreshadowed that they could elect to join in the claim. That would appear to be correct. The assertion that this claim group might also join in the Barunggam people's claim is also one of a shared right. There is nothing to suggest that any rights in common with those people differ from those claimed in this application. There is evidence to suggest that the Barunggam claim group may not agree with these assertions, but that is not relevant to the question as to the composition of the claim group as identified by this application. It may be inferred that this claim group identifies themselves with the Barunggam claim group but have chosen to make a discrete claim on behalf of the families over a specific area. The prospect that the families are but a sub-group of a larger group is strengthened by the statement made by Ms McLeod about the Wakka Wakka Peoples' claim, taken in conjunction with the statements by two members of the claim group that they belong to those peoples. 15 The claim group submits that s 61(1) of the NTA does not prevent there being more than one claim group of traditional owners in an area, provided there is a claim to different native title. There may be other traditional owners within the area who claim a different native title and form a different claim group. In relation to the Wakka Wakka group it should not be assumed that this claim group is part of that group because of their name. The submissions find some support in the reasons for judgment in Harrington-Smith on behalf of the Wongatha People v State of Western Australia (No 9) [2007] FCA 31 , where Lindgren J acknowledged the possibility of co-existing, but different, native title rights in the same area. In such a situation it would not be necessary for one group to authorise the application of another. 16 It may be accepted that the reference to the Wakka Wakka People and Western Wakka Wakka People does not necessarily mean that the latter are a subgroup of the former, with both groups having the same native title rights to a common area, at least comprising the overlapping part of the Western Wakka Wakka claim. Whilst the statements by two of the witnesses show them to identify themselves with the other claim group, this should not be taken as conclusive of the question of whether they are in fact part of a wider group having the same rights. Although the evidence strongly suggests to the contrary, I accept this for present purposes. It does not however appear to me that the reference in the application to the Barunggam people can be said to lack certainty in what it conveys. The only inference which may be drawn is that those persons are accepted as having the same native title interests as the Western Wakka Wakka. No other explanation is possible. It follows that they were necessary to the authorisation process. Further, the evidence of the claim group shows that the persons who have been treated as the claim group with respect to the application are not the same in every respect as those identified as descendants in the application itself. 17 The requirements of s 62 have not been met in a number of respects. The persons said to be authorised have not each sworn an affidavit. Apart from Mr Beattie they have merely signed statements which have been witnessed. The content of the documents do not address each of the matters required by s 62(1)(a). There is no evidence of authorisation as required by s 62(1)(a)(iv) , read with s 251B. The affidavit of Mr Beattie simply asserts that he was authorised by resolution of a meeting. The minutes of the meeting, of eleven persons, on 25 January 1999 show only that a motion authorising the native title claim by the persons listed was carried. How that process came to be undertaken is not gone into. Two conclusions appear to be open with respect to what was undertaken at the meeting. Neither amounts to compliance with s 251B. If there are in existence Western Wakka Wakka laws and customs they have not been followed. The application does however also refer to more recent and family practices, as earlier mentioned. It is unclear what is meant by this but it may reasonably be inferred that they are not traditional laws and customs. In the absence of those customs it has not been shown how the persons in the claim group have agreed to, and adopted, the resolution procedure utilised so that s 251B(b) could apply. 18 The requirements of s 62(2) , that an area and its boundaries be identified, is not met, as evidence tendered by the State of Queensland establishes. A map prepared from the geographical co-ordinates provided in the application shows that the boundary lines do not meet. A defined area is not thereby disclosed. 19 The claim group do not deny these deficiencies. Indeed for some time they have been proposing an amendment of their claim, both with respect to the composition of the claim group and the area the subject of their claim. As recently as a few weeks prior to this hearing some of them met and agreed that new claims should be lodged and the current claim withdrawn. There should be a new claim with respect to an area which had been recommended at a Summit meeting held in 2006 for the claim groups in this region; and joint native title claims with other groups where there are overlaps. In the event that joint claims were not possible, this group would become respondents to the overlapping claims. 20 The claim group's submissions do not meet the arguments with respect to non-compliance with s 61 and do not deny those concerning s 62. Submissions on the application make plain that amendments will not be sufficient to overcome the extent of the non-compliance with the requirements of ss 61 and 62 of the NTA. It may be that the claim group could file affidavits deposing to the requisite matters and that a fresh map could be prepared showing a bounded area, assuming for present purposes that this does not produce the result that a larger area is claimed, as the State of Queensland submits. The problem of authorisation cannot however be resolved by amendment of the claim and the question of the proper constitution of the claim group must be addressed. 21 It was submitted for the claim group that further time be permitted to allow them to rectify the position. The position sought to be achieved is to allow the claim to remain on foot whilst a new claim is prepared, at which time the current application could be withdrawn or struck out. It is sought to maintain the benefits currently enjoyed as a result of registration. It was put that it would be unfair to strike out their application and let the Barunggam group remain registered because they were meant to stand together. This motion does not however concern that group's claim. It cannot presently be concluded with respect to this application that this claim group is entitled to the rights flowing from its registration. 22 Assuming for present purposes that it was appropriate for the Court to consider delaying the striking out of the application, I would not be inclined to do so. The application has been characterised by inaction, non-compliance with orders of the Court and an inability of the persons who make up the applicant to act together. This matter has been the subject of mediation with overlapping claims since December 1999. Whilst the claim group were not initially represented they have been represented by a lawyer for some years. In August 2006, in the absence of any meaningful action on their part to progress the matter, the claim group was ordered to file and serve a work plan identifying how the matter was to be advanced and the steps which were to be taken to resolve the overlaps. At this time it appeared that the group was dysfunctional and a direction was made requiring each person named as an applicant to file an affidavit stating their position. Two such persons gave evidence that they were unable to co-operate with the others and that they did not believe the claimed area represented the traditional lands of the descendants of Jane Darlow. The claim group's solicitor did not file a work plan and provided only a vague proposal for a combined claim to be made with other overlapping claim groups. This was not taken up by those groups. This claim group did not attend the Summit earlier referred to, which other groups attended in an endeavour to resolve overlaps, with some success. On 15 September 2006 the claim group was ordered to hold a meeting and identify the proper claim group and area and file a motion to amend accordingly. This was not undertaken. At that time a motion to strike out the claim had been foreshadowed. It was filed on 13 December 2006. The only response to it was a meeting held by some of the persons making up the applicant shortly prior to this hearing and an attempt to seek to resile from some of the statements which showed that they could not agree about the claim. There is still no concrete proposal before the Court which in any event would require authorisation. It was submitted for the claim group that they have been active with respect to their claimed rights. This appears to be a reference to the pursuit of economic advantages, which is understandable. It should not however be confused with the vindication of the rights claimed in the application, which is the Court's concern. There has been ample opportunity for the claim group to resolve the problems with their claim, if they are able to do so. 23 I add that I would in any event have been inclined to use the powers given by O 35A to dismiss the application. There has been a complete lack of response to the Court's orders, nothing to show that the claimants are motivated to progress these proceedings and nothing to suggest that there is any purpose to be served by their continuation. 24 There will be an order striking out the application. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel.

whether native title application be struck out whether application complies with s 61 of the native title act whether authorisation requirements met composition of claim group claim brought on behalf of families not larger group where claim group different from to those identified as descendants whether group a "society" observing society laws where more than one claim group in area whether application complies with s 62 of the native title act competence of affidavit whether evidence of authorisation whether area and boundaries identified whether amendments sufficient to overcome non-compliance whether delay to strike out alternatively whether application be stayed or dismissed under o 35 r 2 where non-compliance with orders and directions native title

The principal claim involves both the first applicant, Mr Christopher Rose, as well as the second applicant, Riva Properties Pty Limited ( Riva ). The second claim involves only Riva. Riva is controlled by Mr Rose. The principal claim concerns four agreements entered into on 18 December 2006 (together the Impugned Agreements ). The parties to the Impugned Agreements were Mr Rose and Riva, on the one hand, and the respondents, Sakkara Properties Pty Limited ( Sakkara Properties ), RMB Australia Holdings Limited ( RMB ) and Sakkara Capital Investments Pty Limited ( Sakkara Capital ), on the other. It is convenient to refer to the three respondents together as the Lenders . Mr Rose and Riva claim that they have rescinded the Impugned Agreements. Alternatively, they claim declarations that the Impugned Agreements are void, orders that the Impugned Agreements be set aside and cancelled or orders refusing to enforce the Impugned Agreements. Mr Rose and Riva claim that the Impugned Agreements were entered into as a consequence of duress and improper pressure alleged to have been brought to bear on Mr Rose by the Lenders. Alternatively, they claim that the Impugned Agreements were entered into as a result of unconscionable conduct on the part of the Lenders. Mr Rose also asserts that two of the Impugned Agreements, being guarantees executed by him, were unjust in the circumstances relating to their execution, within the Contracts Review Act 1980 (NSW) ( Contracts Review Act ). The conduct complained of by Mr Rose and Riva is that the Lenders wrongfully refused to permit redemption of mortgages given to the Lenders by Moruben Properties Pty Limited ( Moruben ). Moruben is also controlled by Mr Rose. In addition, Mr Rose and Riva claim that the Lenders wrongfully threatened to appoint administrators to Riva, Moruben and other companies controlled by Mr Rose. The two Impugned Agreements that are guarantees by Mr Rose relate to obligations owed by Riva to Sakkara Properties and to RMB and Sakkara Capital respectively. Riva has failed to meet those obligations. Accordingly, by cross-claim, the Lenders claim judgment against Mr Rose under the guarantees. Mr Rose accepts that, if he and Riva fail to obtain the relief claimed in the proceeding, he has no answer to the cross-claim by the Lenders in respect of his obligations under the guarantees. Under the guarantees, Mr Rose covenanted that he would not further encumber any property of his until the obligations guaranteed by him are satisfied. I shall refer below to the precise terms of the covenants. The Lenders say that Mr Rose has, notwithstanding that covenant, further encumbered property owned by him. Accordingly, as I understand the position, Mr Rose also accepts that, if he and Riva fail to obtain the relief claimed in the proceeding, injunctions should be granted restraining Mr Rose from further encumbering his property. Mr Rose accepts that, unless restrained, he does not regard himself as bound by the covenants. In the second claim, Riva asserts that it suffered loss by misleading and deceptive conduct that it alleges was engaged in by the Lenders in connection with the sale by Riva to Chevron Lifestyle Properties Pty Ltd ( Chevron Lifestyle ) of apartments in a property at Chevron Island, Queensland ( the Chevron Island Property ). The apartments were constructed by Riva with the assistance of finance provided by the Lenders on the security of mortgages of the Chevron Island Property. Riva says that the Lenders represented to it that they were agreeable, or would be agreeable, to Riva's selling unsold apartments in the Chevron Island Property in one line to Chevron Lifestyle. Riva says that, because the Lenders were not agreeable to such a sale, the alleged representations were misleading or deceptive in contravention of the Trade Practices Act 1974 (Cth) ( Trade Practices Act ) and that Riva suffered loss by reason of having to pay the sum of $102,500 to Chevron Lifestyle as consideration for the rescission of the contract for sale that Riva entered into with Chevron Lifestyle in reliance upon the alleged representations. I shall first say something about the parties and various financing arrangements entered into by the Lenders with companies controlled by Mr Rose. I shall then say something about the witnesses. After that, I shall deal with the circumstances of Riva's contract with Chevron Lifestyle. Finally, I shall deal with the circumstances that led up to the execution of the Impugned Agreements. One of the issues turns on that distinction, having regard to the provisions of the Contracts Review Act . Under s 6(2) of the Contracts Review Act , a person may not be granted relief in relation to a contract so far as the contract was entered into in the course of, or for the purpose of, a trade, business or profession carried on by the person. The Lenders say that the Impugned Agreements were entered into by Mr Rose in the course of the business carried on by him as a property developer. In addition to Riva and Moruben, Mr Rose also controlled the following companies: Quadwest Developments Pty Ltd ( Quadwest ); Quadrant Properties Pty Ltd ( Quadrant Properties ); Quadrant Property Services Pty Ltd ( Quadrant Services ); Quadrant Projects Pty Ltd ( Quadrant Projects ). Each of the Lenders is a financier. Sakkara Properties and Sakkara Capital are related to each other and are part of the Sakkara Group . RMB is an Australian subsidiary of an international financier. Various finance facilities were entered into between the members of the Quadrant Group on the one hand, and one or more of the Lenders, on the other. Sakkara Capital managed RMB's involvement in the various facilities. Different facilities were entered into in relation to each development of the Quadrant Group. In some instances, the facilities were cross-collateralised , in that one development was sometimes provided as security for facilities granted in connection with a different development. It is desirable to say something about the facilities relating to each development. On 16 February 2004, Riva entered into a facility agreement with Sakkara Properties ( the Riva Equity Agreement ) for the provision of finance up to a total of $2 million. The obligations of Riva under the Riva Equity Agreement were secured by a registered mortgage of the Chevron Island Property and a fixed and floating charge over the whole of the assets of Riva. Advances were made to Riva by Sakkara Properties pursuant to the Riva Equity Agreement. On 23 December 2004, Riva entered into a loan agreement with Sakkara Capital and RMB for the provision of a further facility of $2 million for the purposes of refinancing ( the Riva Mezzanine Agreement ). An advance was made pursuant to the Riva Mezzanine Agreement, part of which was applied in repayment of advances made under the Riva Equity Agreement. The obligations of Riva under the Riva Mezzanine Agreement were also secured by a registered mortgage of the Chevron Island Property and a fixed and floating charge over the whole of Riva's assets. On 23 December 2004 Quadrant Properties executed a Guarantee and Indemnity in favour of Sakkara Capital and RMB. The Guarantee and Indemnity is curious in so far as it fails to identify Sakkara Capital and RMB by name. However, it is common ground that the Guarantee and Indemnity executed by Quadrant Properties on 23 December 2004 was given in favour of Sakkara Capital and RMB in respect of the obligations of Riva under the Riva Mezzanine Agreement. On 8 June 2006, Mr Rose executed a mortgage ( the Milsons Point Mortgage ) over his home in Milsons Point (the Milsons Point Property ) in favour of Sakkara Capital and RMB to secure the payment of all amounts payable by Mr Rose or by Quadrant Properties to Sakkara Capital and RMB. In the Milsons Point Mortgage, Mr Rose also personally covenanted to pay the amount secured by the Milsons Point Mortgage. Thus, Mr Rose was personally liable, without limit, for the obligations of Riva under the Riva Mezzanine Agreement. On 16 June 2004, in connection with the proposed development and resale of the Moruben Road Property, Moruben entered into a development facility agreement with Sakkara Properties ( the Moruben Equity Agreement ). The limit of the Moruben Equity Agreement was $300,000. By clause 6.1 of the Moruben Equity Agreement, Moruben acknowledged and agreed that, in addition to the payment of all other money payable to Sakkara Properties, Moruben must pay to Sakkara Properties an amount calculated as 10% of the Net Project Profit of the Project. Project was defined as the acquisition of the Moruben Road Property, obtaining all approvals necessary to carry out the design and construction of six luxury apartments, managing and carrying out all work necessary to construct the development, marketing and selling the apartments and any other incidental works and matters required for completion of the development. Net Project Profit was defined as the amount agreed by Sakkara Properties and Moruben in good faith to be the profit derived in relation to the Moruben Road Property calculated by reference to the difference between Revenue for the Project less Project Costs, as detailed in the Feasibility. Revenue was defined as the proceeds of sales of the Moruben Road Property, plus any other revenue received by Moruben for the Project. The term Project Costs was defined as the cost to Moruben and the Project of acquisition costs, construction costs, financing costs, selling costs and such other costs incurred on the Project as the parties may agree. Feasibility was defined as the detailed Project feasibility annexed to the Moruben Equity Agreement, as varied with the written consent of Sakkara Properties. Net Project Profit was to be determined only after there had been paid from sale of the Project all amounts owing to any senior lender, any mezzanine debt provider and all amounts owing to Sakkara Properties. Under clause 6.6(a) of the Moruben Equity Agreement, Moruben was required to make available to Sakkara Properties all records, vouchers, receipts, accounts and plans relating to the Project, its purchase and sale, to enable Sakkara Properties to assess the Net Project Profit. Further, under clause 6.6(b) Moruben agreed that it would not sell, assign or otherwise dispose of the Project unless it ensured that any sale, assignment or disposal was for a fair and proper consideration and otherwise on terms appropriate to an arms length commercial transaction and was on terms acceptable to Sakkara Properties. Such terms could include arrangements to ensure that Sakkara Properties will achieve an economic return on its debt as contemplated by the Moruben Equity Agreement. Finally, by clause 6.6(c), Moruben acknowledged that the 10% of Net Project Profit to be paid to Sakkara Properties represented additional interest payable to Sakkara Properties in consideration of the facilities granted to Moruben and that a proper financial return to Sakkara Properties was calculated by adding the 10% of Net Project Profit to all other money payable to Sakkara Properties. However, under clause 6.4 of the Moruben Equity Agreement, Sakkara Properties was to receive a minimum Internal Rate of Return of 40% prior to any distribution to Moruben of Net Project Profit. Internal Rate of Return was defined as the rate of interest determined by Sakkara Properties (expressed as a percentage) at which all future payments under the facility made available under the Moruben Equity Agreement must be discounted in order that the net present value of those cash flows should be equal to zero. By clause 8 of the Moruben Equity Agreement, Mr Rose guaranteed to Sakkara Properties that Moruben would promptly and diligently comply with all of its obligations under the Moruben Equity Agreement relating to the physical delivery and management of the Project. However, nothing in clause 8 was to impose upon Mr Rose any liability to Sakkara Properties for the repayment of any debt of Moruben. Thus, the parties expressly excluded any liability on the part of Mr Rose for money obligations of Moruben. The effect of clause 3(d) of the Moruben Equity Agreement was that Moruben could only make a drawing under the Moruben Equity Agreement if Sakkara Properties held the Security. There was some doubt about whether such a second mortgage was ever granted. No second mortgage was in evidence and, at one stage during the hearing, Mr Rose and Riva suggested that no mortgage had in fact been given, notwithstanding an allegation in the Third Further Amended Statement of Claim that Moruben had granted an equitable mortgage over the Moruben Road Property. Ultimately, that suggestion was abandoned and the proceeding was conducted on the basis that it was common ground that at least an equitable mortgage of the Moruben Road Property was given to Sakkara Properties to secure Moruben's obligations under the Moruben Equity Agreement ( the Moruben Equity Mortgage ). The existence of the Moruben Equity Mortgage is of critical importance as will appear below. On 28 March 2006, Sakkara Properties wrote to Moruben in relation to the Moruben Equity Agreement, the term of which had expired on 15 December 2005. Sakkara Properties notified Moruben that the term had been extended until 31 December 2006. Mr Rose accepted the extension on behalf of Moruben. On 15 April 2005, Moruben entered into a loan agreement with Sakkara Capital and RMB ( the Moruben Mezzanine Agreement ) for the provision of advances up to $1,700,000. Moruben's obligations under the Moruben Mezzanine Agreement were to be secured by a registered mortgage over the Moruben Road Property, as well as fixed and floating charges over all of the assets of Moruben. By mortgage dated 15 April 2005 ( the Moruben Mezzanine Mortgage ), which was registered in due course, Moruben mortgaged the Moruben Road Property to Sakkara Capital and RMB to secure the punctual payment of the Secured Money. Secured Money was defined as all amounts that are payable, owing but not payable or that otherwise remain unpaid, by Moruben to RMB and Sakkara Capital on any account at any time. By fixed and floating charge given by Moruben on 15 April 2005, Moruben charged all its assets to Sakkara Capital and RMB. That charge contains an express power for Sakkara Capital and RMB to appoint a receiver or receivers of any of the charged property. Under s 436C of the Corporations Act 2001 (Cth) (the Corporations Act ), a chargee, such as RMB and Sakkara Capital were in relation to Moruben, has power to appoint an administrator of a company granting such a charge. The significance of that will become apparent. Also on 15 April 2005, a deed of priority was executed by Sakkara Capital and RMB, Moruben and BOS International (Australia) Limited ( BOS ), in connection with the Moruben Mezzanine Agreement ( the BOS Priority Deed ). By the BOS Priority Deed, the mortgage and charges given to BOS as security for advances made by it to Moruben were given priority over the mortgage and charges given to Sakkara Capital and RMB. (b) RMB and Sakkara Capital may not exercise any power under or in respect of their second ranking registered mortgage over the Moruben Road Property or their second ranking fixed and floating charge over the assets of Moruben without the consent of BOS unless BOS has been fully and finally paid all amounts advanced by BOS to Moruben in connection with the development of the Moruben Road Property and BOS is satisfied that any such payment is not able to be avoided for any reason. (c) BOS will give to RMB and Sakkara Capital fourteen days notice before realising any property that is subject to a security interest under those securities. (d) RMB and Sakkara Capital may exercise a power under or in respect of their second ranking registered mortgage and their second ranking fixed and floating charge without the prior written consent of BOS if, and to the extent that, BOS's first ranking registered mortgage and the second ranking securities in favour of RMB and Sakkara Capital do not create or evidence a security interest over the same property of Moruben. A similar deed of priority had been entered into with Bank of Western Australia Limited in relation to the Riva Mezzanine Agreement. The term "power" was defined, both in the BOS Priority Deed and in the priority deed with Bank of Western Australia Limited, as including any power, right, discretion and remedy of a chargee or receiver, as applicable, whether under the Priority Deed, under the security or under any law. Thus, the term power, when used in clause 4.1 would include the right to appoint a receiver or administrator to Moruben or Riva. That is of significance in relation to the alleged threat by the Lenders about which Riva and Mr Rose complain. The funds used for the purchase of the Adelaide Terrace Property were provided by Sakkara Properties pursuant to a loan agreement dated 15 March 2005 ( the Quadwest Loan Agreement ). Riva and Moruben were also parties to the Quadwest Loan Agreement. The obligations of Quadwest under the Quadwest Loan Agreement were secured by a mortgage over the Adelaide Terrace Property and charges by Quadwest in favour of Sakkara Properties and RMB. In addition, Quadwest's obligations were secured by a registered mortgage over the Moruben Road Property and a registered mortgage over the Chevron Island Property. There was thus cross-collateralisation of the Chevron Island Property and the Moruben Road Property in relation to the Adelaide Terrace Property. The Riva Equity Agreement had expired on 16 February 2006, although it had been extended to 31 December 2006. The Riva Mezzanine Agreement had expired on 30 September 2006. The Moruben Equity Agreement had expired on 15 December 2005, although it had been extended to 31 December 2006. The Moruben Mezzanine Agreement expired on 15 October 2006. The Quadwest Loan Agreement had expired on 30 September 2006. Thus, the Riva Mezzanine Agreement, the Moruben Mezzanine Agreement and the Quadwest Loan Agreement were in default according to their terms. In addition, notwithstanding the extension of the Riva Equity Agreement and the Moruben Equity Agreement to 31 December 2006, they were in default by reason of cross default provisions linking them to the Riva Mezzanine Agreement and the Moruben Mezzanine Agreement respectively. In addition, oral evidence was given by Mr Neil Wilson, the managing director of the Sakkara Group and Mr Gordon Bevan, the former chief operating officer of the Sakkara Group. Both were extensively cross-examined. Mr Stephen Camilleri was an officer of the Sakkara Group at relevant times. Mr Camilleri played an important role on behalf of the Sakkara Group in relation to the Quadwest Group, but was not called to give evidence. However, his evidence was shown to be quite unreliable on several occasions, such that I would not be prepared to accept his oral evidence where in conflict with the evidence of the other witnesses. I shall recount several such instances of Mr Rose's unreliability. One of the complaints by Riva and Mr Rose in the proceeding is that, in an alleged conversation with Mr Bevan on 8 December 2006, Mr Bevan threatened that Sakkara Capital and RMB would move to appoint an administrator to all companies in the Quadrant Group to which they had exposure, including Moruben. A file note purporting to record that threat was tendered on behalf of Mr Rose and Riva. The file note, which bears the date 8 December 2006, purports to record a telephone call between Mr Rose and Mr Bevan " at approximately 11 am " on 8 December 2006. In his evidence in chief, Mr Rose said that he had a practice in relation to meetings that he attended, which entailed his sitting down and typing a file note on a computer, within one to two days after the meeting. He said that it was sometimes shorter than one to two days and sometimes it was immediately after the meeting, but certainly no later than a couple of days. When giving his evidence in chief, Mr Rose was asked about the file note bearing the date 8 December 2006. He said that it was prepared in accordance with that usual practice. When asked about the file note in cross-examination, Mr Rose said that it was typed a few days later than 8 December 2006 but that he could not recall the exact date. When it was put to him that it was a lot more than a few days, Mr Rose persisted in saying that he could not recall the exact date. When it was specifically put to him that it was not prepared until some time in late 2007, his response again was that he could not recall when it was done. Ultimately, however, Mr Rose accepted that the file note was created in October 2007 and modified in November 2007. Specifically, he accepted that he did not create the file note until well after this proceeding had been commenced. He accepted that, until challenged with those facts, he had been prepared to put the file note forward as a contemporaneous record of what Mr Bevan had said to him on 8 December 2006. He also accepted that he intended that the Court should believe that it had been brought into existence shortly after the discussion to which it referred. It is also significant that, when giving oral evidence concerning the alleged threat to appoint an administrator, purportedly recorded in the spurious file note, Mr Rose, on three occasions, referred to a threat to appoint a receiver . He has never complained about a threat to appoint a receiver, although it is possible that Mr Bevan may have adverted to that possibility, something to which I shall return later. The reference to the threat to appoint an administrator was an integral part of the initial complaint made by Mr Rose and Riva in the proceeding. The inconsistency in referring to appointment of a receiver and appointment of an administrator, when coupled with the spurious file note, is highly damaging to Mr Rose's credibility. Another matter relevant to the assessment of Mr Rose's credibility arises out of evidence he gave concerning the Milsons Point Mortgage. In the course of his evidence in chief, Mr Rose was asked about his state of mind when he accepted a proposal from the Lenders contained in a letter of 8 December 2006, pursuant to which the Impugned Agreements were executed. He answered that there were a number of concerns and pressures that he had. One was that the facilities granted to Riva and Moruben by senior lenders (BOS and Bank of Western Australia Limited), which he had personally guaranteed, were to expire at the end of 2006. He said that he was also acutely aware of the financial position in which he would find himself, if he were unable to access any funds from the Moruben Road Project. He ended by saying that he was also concerned about losing his own home, given that Sakkara Capital [and RMB] also had a mortgage over that. Clearly, he was then referring to the Milson's Point Mortgage. In cross-examination, Mr Rose accepted that he understood that he had given a mortgage over his home to secure the obligations of Quadrant Properties and that he understood that Quadrant Properties had given a guarantee of the obligations owed by Riva to Sakkara Capital and RMB. However, when it was put to him that the reason he was concerned about losing his home was that he knew that he was personally " on the line for all of Riva's liabilities ", he said that that was not the reason. It was put to him that he had said, in his evidence in chief, that he was concerned about losing his home because he understood the way in which the securities were interlocked. Mr Rose's response was that he was concerned about " the threat that Gordon Bevan gave saying that they would appoint receivers [sic]". In later cross-examination, Mr Rose would not agree that, prior to 8 December 2006, he was personally liable, by reason of the covenants in the Milson's Point Mortgage, for the obligations owed by Riva. He would not accept that that was why he said he was concerned about losing his own home. Later still in cross-examination, Mr Rose said that he was concerned that, if an administrator were appointed to all the companies in the Quadrant Group, then one of the assets that would be seized would be his own home. He said that he believed that, if Gordon Bevan's threat to appoint a receiver [sic] to all the companies were carried out, then his home would be captured by that. In re-examination, when asked what his understanding was as to how, if a receiver or administrator were appointed to all of his companies, that would capture his home, Mr Rose said that he had personally guaranteed senior debt facilities and he knew that an event of default was the appointment of an administrator. However, that response appears to be a complete non sequiter . It was not suggested that there was a mortgage over the Milson's Point Property in favour of the senior lenders. There is no basis for concluding that the appointment of receivers or administrators would result in the Milson's Point Mortgage being enforced. Mr Rose's evidence in relation to the matter was wholly unconvincing. Where there is any conflict between Mr Rose, on the one hand, and Mr Bevan or Mr Wilson on the other, I prefer the evidence of the latter two over that of Mr Rose. That conclusion underlies the factual findings that I make below concerning the alleged misleading and deceptive conduct in relation to the sale of the Chevron Island Property to Chevron Lifestyle and also the communications that led to the execution of the Impugned Agreements. Mr Wilson and Mr Rose worked together for a developer for a number of years from the late 1980s or early 1990s, through to the mid 1990s. They were close working colleagues and were friends as well. They each left the employment of that developer, at different times, and went their separate ways. Mr Wilson and Mr Rose subsequently met by chance, as a result of which Mr Rose commenced dealing with the Sakkara Group. I consider that Mr Wilson made an honest and fair attempt to give accurate evidence. He presented in the witness box as a credible and honest witness and I consider that his evidence is on the whole reliable. He commenced practice as a solicitor in 1974. His practice, until the middle of 2005, was concerned with banking, finance and property. Mr Bevan had a practice of maintaining a day book in which he made notes of conferences and attendances. He did not maintain a separate book for separate matters, but made a separate note in the day book as each attendance or conference occurred. The notes do not purport to record everything that occurred, or even everything that might have been regarded as important. Rather, Mr Bevan regarded his notes as a prompt for himself. In the middle of 2005, Mr Bevan became a director of the Sakkara Group. Mr Bevan continued the practice of maintaining a day book while working with Sakkara Group during 2006. My assessment of Mr Bevan is that he is an honest and credible witness, who was making a genuine effort to recall relevant circumstances as best he could. That is not to say that his recollection was perfect but, on the whole, I regard his evidence as reliable. However, the Lenders say that, even if representations were made, Riva has failed to establish that it has suffered any loss as a consequence of having entered into the contract with Chevron Lifestyle. In particular, they rely on the fact that Riva has made no attempt to show whether, after the contract with Chevron Lifestyle was rescinded, it subsequently sold the units in the Chevron Island Property that were the subject of that contract and, if so, the amount of the proceeds of sale. More specifically, there is no evidence to indicate whether the amount of any such proceeds was greater or less than the price at which Riva had agreed to sell the units to Chevron Lifestyle. Further, the only evidence of the value of the units suggests that their combined value was significantly greater than the prices payable by Chevron Lifestyle, such that an inference can be drawn that Riva was better off as a consequence of the rescission of the contract with Chevron Lifestyle. In the circumstances, I would not be persuaded, on the balance of probabilities, that, even if there had been misleading and deceptive conduct on the part of the Lenders that induced Riva to enter into the contract with Chevron Lifestyle, Riva suffered any loss or damage as a consequence. In any event, for the reasons I shall now explain, I am not persuaded that there was any conduct on the part of the Lenders that was misleading or deceptive in relation to the sale of the units to Chevron Lifestyle. Where one party alleges that the conduct of another was misleading or deceptive, it is incumbent upon the first party to establish, on the balance of probabilities, precisely what the conduct was that is alleged to be misleading. In addition, the precise circumstances that rendered the conduct misleading must be established. Where the conduct is the making of oral representations, the words spoken must be proved with a degree of precision that enables the Court to be satisfied, on the balance of probabilities, that the words spoken were misleading in the circumstances established. The question of whether spoken words were misleading may, although not necessarily, depend upon what may have been relatively subtle nuances flowing from the use of a particular word, phrase or grammatical construction or the presence or absence of some qualifying word or phrase or condition (see, for example, Watson v Foxman (1995) 49 NSWLR 315 at 318-319). There is no contemporaneous documentary evidence of the representations alleged by Mr Rose to have been made by Mr Wilson. The sole evidence of the alleged representations is oral evidence given by Mr Rose. To the extent that that evidence is inconsistent with Mr Bevan's evidence, I reject it. I consider that the evidence of the conversation given by Mr Wilson indicates what happened. Accordingly, I shall recount only that version. Mr Wilson accepted that he had a conversation with Mr Rose in March 2006 concerning the sale of the unsold units in the Chevron Island Property. Mr Rose broached the subject by saying that, in his opinion, the Gold Coast market was deteriorating and that he felt an inline sale would be beneficial to the Chevron Island Project. He said that he had a potential inline buyer that would see the " mezzanine deck " portion of the project receive a full return of principal and interest; however, the equity portion of the loan would only receive the principal plus an 8% return, which would leave a 2% shortfall, and there would be no profit share. Mr Wilson responded by saying that Mr Rose had not managed the Chevron Island Project as well as he had managed previous projects. Mr Wilson told Mr Rose that he had " dropped the ball on this one ", that he had been focussed on the Adelaide Terrace Project, as well as other things, and that, as a consequence, the Chevron Island Project had suffered. Mr Wilson also told Mr Rose that, nevertheless, he agreed that the Gold Coast market looked like it was going to deteriorate and that he would generally be supportive of a transaction that realised full principal and interest under the Riva Mezzanine Agreement and an 8% return under the Riva Equity Agreement with no profit share. However, Mr Wilson told Mr Rose that that was a discussion he would need to have with his colleagues and with the Investment Committee of RMB, because he could not make decisions on his own. Mr Rose nodded and said " OK ". In cross-examination, Mr Rose acknowledged that he knew, from his previous dealings with Mr Wilson, that there would always be a formal process in relation to anything that they agreed, although he said that he was accustomed to accept Mr Wilson's word and that if something was agreed between them, it would be done in the way that they had agreed. He gave no specific examples. Riva relies on a subsequent communication that it says corroborates Mr Rose's evidence that representations were made as alleged. On 10 October 2006, Mr John Batiste, head of lending for the Sakkara Group, wrote to Mr Rose. The Lenders have reservations that the Lenders will be repaid the indebtedness by [Riva] should the contract be completed. In the circumstances, the Lenders reiterate that the Lenders do not agree to the completion of the contract without [Riva] demonstrating to the Lender's [sic] satisfaction the capacity of [Riva] to repay the indebtedness of [Riva] to the Lenders. In the absence of such evidence, the Lenders reserve their rights under the terms of their security documentation. During this discussion I explained to Neil that the price was the best "arms length sale" we could negotiate without third party assistance and that the sale would be insufficient to generate a development profit and could result in a reduction in the rate of return that Riva could pay to RMB/Sakkara. Neil acknowledged this and encouraged me to get the best price possible from [Chevron Lifestyle] rather than to get to completion and have almost 50% of the building unsold. We advised you of this on the 5 th June 2006. However, Mr Wilson told Mr Batiste that the assertion in the facsimile was incorrect. Even so, the facsimile does not refer to a representation by Mr Wilson that the Lenders were agreeable to a sale, the terms of which had not even been settled at that stage. If anything, the facsimile is inconsistent with a representation such as is alleged. To encourage Mr Rose to get the best price possible is not a representation that the Lenders would be agreeable to a sale at an unspecified price. It is inherently unlikely that Mr Wilson would make a statement intended to bind, not only Sakkara Properties and Sakkara Capital, but also RMB, without obtaining express authority to do so. The discussion in March 2006 took place in a coffee shop. That is to say, it was attended with a degree of informality. I accept the version of the conversation given by Mr Wilson. I do not consider that that discussion involved the making of any representation by Mr Wilson that the Lenders were agreeable to, or would be agreeable to, a sale of units in the Chevron Island Project in one line, such as is alleged by Riva. I do not consider that the statements that Mr Wilson made to Mr Rose on that occasion were, in the circumstances, misleading or deceptive. It may be that Mr Rose was encouraged by the response that he received from Mr Wilson to pursue negotiations for the sale of the unsold units in one line. Be that as it may, that is a different matter altogether from a representation that the Lenders were agreeable or would be agreeable to a sale of the remaining units on terms that were not specified. As I have said, the language of the facsimile of 17 October 2006 is inconsistent with such a representation. I do not consider that Riva has established that any of the Lenders engaged in any misleading or deceptive conduct in connection with the sale of units in the Chevron Island Property to Chevron Lifestyle. This claim must be rejected. All depend upon the same factual matrix. They assert that there were two aspects of duress or unfair pressure brought to bear on them by the Lenders, which, they say, give rise to the three causes of action on which they rely. The first is that the Lenders threatened to appoint administrators to the companies of the Quadrant Group, in circumstances where it was unlawful for them to do so, because of the provisions of the BOS Priority Deed and the priority deed with the Bank of Western Australia Limited. The second is that the Lenders refused, or at least threatened to refuse, to permit Moruben to redeem the Moruben Equity Mortgage and the Moruben Mezzanine Mortgage, in circumstances where Moruben had evinced its willingness and ability to redeem by payment of all money secured by those two mortgages. It is convenient to deal with each of those aspects separately. He relied upon his spurious file note of that date as corroborating his evidence. For the reasons given above, I do not accept Mr Rose's evidence when it is inconsistent with that of Mr Bevan or Mr Wilson. For the reasons given above, I reject the spurious file note as having no weight whatsoever. Indeed, the circumstances surrounding the creation of the file note firmly suggest that no threat such as is alleged was made. However, Mr Rose and Riva also pointed to internal memoranda of the Lenders that, they say, tend to support the allegation of a threat by Mr Bevan to appoint administrators. I consider that the documents, if anything, confirm that no threat was made on 8 December 2006 as alleged. On 13 November 2006, Mr Camilleri sent an email to Mr Bevan in connection with the Quadrant Group. In the email, Mr Camilleri pointed out to Mr Bevan the prohibition on RMB and Sakkara Capital from exercising any power under its securities without the prior written consent of BOS. In the course of cross-examination, Mr Bevan agreed that it was unlikely that such consent would be given and that he did not ask for it. Mr Bevan accepted that, while it was not highly unusual for a senior lender to consent to a subordinate lender appointing a receiver, it was rare. In an email of 4 December 2006, from Mr Bevan to Messrs Camilleri and Wilson, Mr Bevan referred to Mr Camilleri's confirmation that they could not " move on the Riva security without the consent of the senior lender ". In response, Mr Wilson said that they needed to have an investment committee meeting on the question of the Quadrant Group. At some time on 4 December 2006, Mr Bevan made a note in his day book concerning strategy in relation to Riva. It is significant that the note refers to the appointment of a receiver/manager and not to the appointment of an administrator . That extends to the appointment of a receiver . In this regard, I believe that you have identified that Ross Harding at BOSI is the contact person. Given the possible consequences to Quadrant/Riva I suggest we await the result and direction of the IC meeting before contact is made with him. We need to formally request consent to act on our security and you and I will need to draft that request. It may be that the threat of the appointment of the receivers will be enough to bring Chris Rose back to the table. No mention was made of an administrator. The proposed meeting of the Investment Committee was in fact held on 4 December 2006. · Chris Rose will be granted until midday today (5/12/06) to advise his position regarding the stance taken by RMB/Sakkara in this matter. · Should Chris refuse to grant cross collateralisation and personal guarantee, contact is to be made with [the relevant officer] at BOSI to advise of RMB/Sakkara intention to appoint a Receiver and seek BOSI consent as required under the terms of the priority deed. No mention was made of an administrator. More significantly, the need for the consent of BOS was specifically noted. He was also aware that there is a provision in the Corporations Act that entitles a chargee to appoint an administrator to the assets charged by a company. He also knew that, while Sakkara Capital and RMB had an entitlement to appoint a receiver, he could not act on that entitlement. He said that his strategy involved approaching the senior lenders to obtain consent to act. In his evidence in chief, Mr Bevan said that, on 5 December 2006, he had at least two conversations with Mr Rose. In one of those conversations, Mr Rose asked him what would be proposed if agreement could not be reached on the provision of further securities. Mr Bevan responded that RMB and Sakkara Capital would look to their securities. Mr Rose asked what that would mean and Mr Bevan said that they would take steps to appoint a receiver . There was no discussion about the identity of the companies to which the receiver would be appointed. I accept that evidence. It is significant that Mr Bevan referred to appointment of a receiver and not an administrator. Further, the conversation was three days before the threat alleged by Mr Rose. Mr Rose and Riva make no complaint about any such conversation on 5 December 2006. In cross-examination, Mr Bevan agreed that Mr Camilleri's email of 5 December 2006 accurately recorded what was decided at the meeting of the Investment Committee held on 4 December 2006. While he acknowledged that his role was to advise Mr Rose that, unless cross-collateralisation of securities and a personal guarantee was forthcoming, Sakkara and RMB would move to appoint a receiver to Riva and other companies in the Quadrant Group, he denied that he in fact carried out that instruction. Mr Rose's evidence was that a threat to appoint administrators was made in a conversation on 8 December 2006. Mr Rose said that, in response to the alleged threat, he told Mr Bevan that he did not think Sakkara Capital and RMB had the right to appoint administrators, because the priority deeds would limit or restrict them in doing that. His evidence was that Mr Bevan told him that, in his view, Sakkara Capital and RMB had the right to appoint administrators. It may be that there was a conversation between Mr Rose and Mr Bevan before 8 December 2006, in which Mr Bevan told Mr Rose of the possibility that, if some accord could not be reached concerning the Riva facilities, RMB and Sakkara Capital would consider taking steps to enforce their securities. I do not consider that that carried with it an implicit, and certainly not an explicit, threat to do so without obtaining the consent of the senior lenders. The email exchanges to which I have referred make it clear that Mr Bevan was very conscious of the need to obtain consent of the senior lenders before taking steps to enforce the securities given by Moruben and Riva. It is inherently unlikely that he would have made a threat to Mr Rose to act in contravention of the arrangements with the senior lenders, of which he was expressly aware. No complaint, in any event, is made in respect of any threat to appoint a receiver. The only threat is that alleged to have been made on 8 December 2006 to appoint an administrator that was the subject of the spurious file note. I have already indicated my conclusion concerning Mr Rose's credibility in relation to this factual issue. I find that there was no conversation between Mr Bevan and Mr Rose on 8 December 2006 that constituted a threat to appoint administrators to any members of the Quadrant Group. This aspect of the claim by Mr Rose and Riva must be rejected. The Lenders were aware that the Quadrant Group was under pressure from the Australian Taxation Office to pay overdue instalments of tax and that all of the facilities with the Lenders were either overdue or in default. In that context, Mr Rose was anxious to obtain a discharge of the securities over the Moruben Road Property and other assets of Moruben so that Moruben could borrow sufficient funds from another lender to discharge the indebtedness secured on the Moruben Road Property, as well as provide additional funds for the ongoing purposes of the Quadrant Group. The allegations in the Third Further Amended Statement of Claim may be summarised as follows: On 15 April 2005, Moruben acquired the Moruben Road Property and, by registered mortgage of that date, Moruben mortgaged the Moruben Road Property to RMB and Sakkara Capital. By equitable mortgage, Moruben mortgaged the Moruben Road Property to Sakkara Properties. Moruben was entitled to have both of those mortgages redeemed upon payment of the whole of any principal sum, accrued interest and costs owing under the mortgages. On 30 November 2006, Moruben requested the Lenders to account for the amount required to redeem the two mortgages. On 5 December 2006, Moruben again requested the Lenders to account for the amount required to redeem the two mortgages. The Lenders refused to account in answer to the requests and wrongfully refused and neglected to permit the redemption of the two mortgages. Between 1991 and 2005 Mr Rose, on the one hand, and the Lenders, on the other hand, dealt with each other upon the basis of a common assumption that, where a company in the Sakkara Group provided mezzanine finance to a company associated with Mr Rose, the company in the Sakkara Group would not obtain from Mr Rose a personal guarantee in respect of financial accommodation provided to the company associated with him. In reliance upon that assumption, Mr Rose continued to obtain, for companies associated with him, mezzanine finance from companies within the Sakkara Group, which provided mezzanine finance on the basis of the common assumption. On 7 December 2006, Mr Bevan, acting on behalf of the Lenders, " made a demand " on Mr Rose and Riva that the two mortgages of the Moruben Road Property would not be redeemed unless they agreed to enter into the Impugned Agreements. On 8 December 2006, the same demand was made again by letter of that day from Mr Camilleri to Mr Rose. - The obligations under the Moruben Equity Agreement and the Moruben Mezzanine Agreement were separate and independent of the obligations of Riva under the Riva Equity Agreement and the Riva Mezzanine Agreement. - Moruben was entitled to redeem the two mortgages of the Moruben Road Property upon payment of the payout figure without entering into the Impugned Agreements. - The demands referred to above were inconsistent with and repugnant to the contractual and equitable right of Moruben to redeem the two mortgages of the Moruben Road Property. - The demands constituted a penalty clogging Moruben's equity of redemption. - The Lenders knew that Riva and Mr Rose occupied a position of special disadvantage in relation to the Impugned Agreements and took advantage of their superior bargaining power by entering into the Impugned Agreements. One aspect of the claim is that Mr Rose and the Lenders, through Mr Wilson, dealt with each other upon the basis of a common assumption that, where a company in the Sakkara Group provided mezzanine finance to a company associated with Mr Rose, a personal guarantee would not be obtained from Mr Rose. Mr Wilson accepted that he had had a number of conversations with Mr Rose concerning guarantees in which Mr Rose asked if the Sakkara Group required personal guarantees. Mr Wilson said that his answer was that the Sakkara Group do not normally look for guarantees when going into a deal because they want to make the deal work with only registered mortgage security. In cross-examination, Mr Wilson accepted that his practice on behalf of the Lenders was not to seek personal guarantees " going into a deal ". It is difficult to see where the allegation of a common assumption leads. There was no evidence that, going into a deal, the Lenders ever required personal guarantees from the Quadrant Group. Mr Wilson's evidence was, in effect, that, if the value of the property and the development proposed was not satisfactory, the Lenders would not go into a deal, even with personal guarantees. In the present case, however, the question of a personal guarantee from Mr Rose arose only because of the substantial default on the part of the members of the Quadrant Group and the prospect of a loss in relation to the Riva facilities in connection with the Chevron Island Property. I do not consider that Riva and Mr Rose have established that any arrangement was entered into between Riva and the Lenders on the basis of any common assumption that personal guarantees would never be called for, even in the event of substantial default, such that it would be unconscionable, in any way, for the Lenders to depart from such an assumption. Mr Rose and Riva complain about a wrongful refusal to permit Moruben to redeem the mortgages. The allegation is that the Lenders wrongfully refused to permit redemption, not that they merely threatened to refuse redemption. The manner in which the claim is otherwise formulated is slightly unusual, in so far as it alleges a demand that the mortgages of the Moruben Road Property would not be redeemed. There is no allegation of tender by Moruben of any amount secured by the mortgages: merely an allegation of a refusal to account for the amount required to discharge the mortgages, coupled with a refusal to permit redemption. Further, in so far as Riva and Mr Rose seek rescission of the Impugned Agreements, restitutio in integrum would, of necessity, involve Moruben, since the mortgages over the Moruben Road Property were in fact discharged and a compromise was reached with Moruben over the amount of the Net Project Profit. Curiously, however, Moruben is not a party to the proceeding. The essence of the complaint, as finally formulated, is to be found in a letter of 8 December 2008 from Mr Camilleri to Mr Rose. In order to put that letter in context, it is necessary to recount a series of communications between the parties that led up to the signature of that letter by Mr Rose, whereby he effectively agreed that the Impugned Agreements would be executed. During September 2006, an internal memorandum concerning the Quadrant Group was produced by one or other of the Lenders. The memorandum recorded a review of the financing arrangements between the Lenders and the Quadrant Group. Two forthcoming events prompted the review, being: The forthcoming expiry of the term of the Quadwest Loan Agreement on 30 September 2006. The potential for loss in connection with the facilities granted to Riva in relation to the Chevron Island Property. The Action Plan also referred to the possibility of the overarching agreement providing for a personal guarantee from Mr Rose. An updated version of the Action Plan of 20 October 2006 repeated the same workout strategy. That workout strategy was confirmed in successive iterations of the Action Plan on 27 October 2006, 3 November 2006, 10 November 2006 and 17 November 2006. I have referred above to the letter of 10 October 2006 from Mr Batiste to Mr Rose, which referred to the contract with Chevron Lifestyle and asserted that the Lenders had at no time agreed to Riva entering into the contract with Chevron Lifestyle. On 17 October 2006, Mr Batiste wrote to Mr Rose concerning the various financing arrangements with the Quadrant Group. After referring to the loan balances and expiry dates of all of the facilities and to the profit share in relation to the equity facilities, the letter observed that three of the facilities had by then expired and suggested that it was in the best interests of all parties to agree upon and formalise arrangements for repayment of all of the facilities (other than a separate loan agreement between Quadrant Properties and Sakkara Capital and RMB which was to expire on 8 June 2007). Mr Batiste's letter of 17 October 2006 suggested that the " imminent sell down " of the Moruben Road Property offered the most sensible avenue by which to resolve the issues " in a timely fashion ". The letter proposed that the sale proceeds from the Moruben Road Property be utilised, after repayment of the senior debt facilities: first to repay the Moruben and Quadwest facilities in full; and secondly, in reduction of the Riva facilities. The letter invited Mr Rose's response in relation to the proposal concerning the application of sale proceeds from the Moruben Road Property and any alternative proposal that he may have for repayment of the various facilities. Mr Batiste's letter crossed with the communication from Mr Rose to Mr Batiste, also of 17 October 2006, to which I have referred above. In that communication, Mr Rose also said that Riva still did not have sufficient funds to undertake the marketing activities for the Chevron Island Property that had been suggested by Mr Batiste. Mr Rose said that, as a director of Riva, he was not in a position to allow Riva to incur additional debts and financial obligations without the means to repay them. On 23 October 2006, Mr Rose responded to Mr Batiste's letter of 17 October 2006. In his response, Mr Rose confirmed agreement to repay the outstanding loan facilities owed by Quadwest and Moruben from the proceeds of the sale of the Moruben Road Property, which he said he expected to be able to achieve within the next 14 days. However, he said that he would like a response to his communication of 17 October 2006 concerning the marketing of the Chevron Island Property before commenting on Mr Batiste's proposals in the letter of 17 October 2006. Notwithstanding Mr Rose's stated expectation that the Moruben Road Property would be sold within 14 days of 23 October 2006, sale was not achieved within that time. Mr Camilleri then took up the question of the Chevron Island Property again. On 10 November 2006, Mr Camilleri sent to Mr Rose a letter from Mr Batiste dated 9 November 2006 concerning the Chevron Island Property. The letter said that the Lenders' main concern in relation to the contract with Chevron Lifestyle was that: the sale does not appear to be at or near market value; the Lenders at no time agreed to Riva entering into the contract; and there would be a material adverse impact on Riva's capacity to repay the monies owed to the Lenders should the contract with Chevron Lifestyle be completed. The letter of 9 October 2006 sought Mr Rose's urgent advice as to how he proposed to deal with the contract with Chevron Lifestyle, given the Lenders' stated position on the matter. The letter also required prompt finalisation and execution of an overarching agreement dealing with: Mr Rose responded to the letter of 9 November 2006 by facsimile of 15 November 2006. Mr Rose's facsimile asserted that each project was funded independently from the other and that it was the intention of Riva to maintain that position. That assertion was inaccurate, since, as I have pointed out above, there was already a degree of cross-collateralisation in relation to the Adelaide Terrace Property. Mr Rose said that a new finance facility was being negotiated that would address the repayment of the Quadwest and Moruben facilities before the end of November. That last observation is a reference to a letter of 13 November 2006 received by Moruben from Ashe Morgan Winthrop, thanking Moruben for the opportunity to assist with funding requirements for the Moruben Road Property. The letter enclosed a terms sheet for a proposed commercial facility for $5 million, inclusive of an interest provision of $410,000. By the letter, Ashe Morgan Winthrop offered " to use all reasonable endeavours " to obtain finance for Moruben on the basis of the terms sheet. Thus, it was not a firm offer of financial assistance but only an invitation to treat. On 20 November 2006, Mr Rose requested the provision of " the current payout figures " for the Moruben facilities as at the end of that week, namely, 24 November 2006. On the same day, he received a response by email to his personal assistant saying that the Moruben " payout figure " as at 24 November was $2,367,669.24 and that interest would accrue at the daily rate of $1,153.96 until the end of November. Significantly, there was no complaint from Mr Rose that the response did not specify the legal costs for the discharge of the mortgages and other securities given by Moruben. On 23 November 2006, Mr Bevan sent an email to Mr Wilson and Mr Camilleri concerning a conversation that he had had with Mr Rose. In the email, Mr Bevan recorded that Mr Rose had said that he was endeavouring to secure as much as he could from Ashe Morgan Winthrop on the security of the Moruben Road Property. To that end, Mr Rose had asked Mr Bevan that Sakkara Properties give consideration to setting " a realistic profit share figure " under the Moruben Equity Agreement. Mr Rose said he would pay out such a figure at the time of refinancing. There is no reason to doubt that the email fairly reflects a conversation between Mr Rose and Mr Bevan. It is significant that, at that stage, Mr Rose accepted the need for agreement between Sakkara Properties and Moruben as to the profit share, before finalisation of the Moruben Road Project. Mr Bevan's email of 23 November 2006 went on to note that the profit share was not ascertainable at that point in time and that it was necessary to make an estimate. Mr Bevan suggested that they " wait and see " what Mr Rose's " wish list " of payments that he would make from the proceeds of refinancing would be, before giving any consideration to the request for agreement on a " realistic profit share ". Mr Wilson responded to Mr Bevan's email by asking if they were still preparing an overarching deed. He said that they could not afford to wait for Mr Rose, since time was running out. Later on 23 November 2006, Mr Rose sent an email requesting " end of November payout figures " in respect of the Quadwest and Moruben facilities. His email said that his " numbers " were currently based upon 30 September 2006 loan balances. That supports a conclusion that, for Mr Rose, the term " payout figure " referred to the amount owing under the facility and did not include legal costs that might be payable in connection with the discharges of securities. The allegation in the Third Further Amended Statement of Claim refers to the " payout figure " as the amount required to discharge the mortgages. Mr Camilleri noted in his email that Mr Rose had obtained " a payout figure " under the Moruben Mezzanine Agreement direct from RMB. The use of the term " payout figure " is significant in that it indicates that that term was being used as referring to the amount owing under a relevant facility. Once again, there was no complaint by Mr Rose that he was not given particulars of the legal costs that would be incurred in connection with the discharges of the securities. On 28 November 2006, Ashe Morgan Winthrop wrote to Moruben offering a loan facility in the amount of $5,500,000, inclusive of $440,000 of capitalised interest. The purpose of the loan was stated to be the refinance of existing debt primarily secured on the Moruben Road Property. The letter from Ashe Morgan Winthrop provided that Mr Rose was to give a guarantee in respect of the facility. On 28 November 2006, Mr Bevan and Mr Wilson had a meeting with Mr Rose. During the meeting, Mr Rose said that he could not pay out the profit share in respect of the Moruben Road Project (and the Adelaide Terrace project) and asked that payment of the profit share be deferred. Mr Rose said that the offer he had received from Ashe Morgan Winthrop would preclude him from being able to offer cross-collateralisation in respect of the profit share. He asked whether Sakkara Properties would be prepared to accept a personal guarantee instead. Mr Rose said that he was " good for it ". Mr Wilson told Mr Rose that he, Mr Rose, knew how he, Mr Wilson, felt about personal guarantees but, since they had been working together for a long time and had done a number of successful projects, it was something they would consider in that instance. On 29 November 2006, Mr Camilleri sent to Messrs Bevan and Wilson a draft of a letter to Mr Rose outlining proposed variations to the various Quadrant Group facilities. Mr Camilleri said that Mr Rose was meeting with Ashe Morgan Winthrop that morning to finalise the terms of refinance for the Moruben Road Project and that Mr Rose wanted to have the letter by 10 am that day. In the afternoon of 29 November 2006, Mr Camilleri sent the draft letter to Mr Rose by email, in which Mr Camilleri referred to recent discussions with Messrs Bevan and Wilson. The draft letter set out " the proposed variations in key terms of the existing [loan] facilities ". The proposals involved repayment of the indebtedness under the Moruben Mezzanine Agreement in full, and repayment of the principal and interest under the Moruben Equity Agreement in full. The existing security was to be retained and cross-collateralised with the indebtedness of Riva. The profit share under the Moruben Equity Agreement was to be paid no later than 1 July 2007. A priority deed was to be entered into with Ashe Morgan Winthrop. The draft letter also proposed that, in relation to Riva, the facility term be extended to 1 July 2007 and that an overarching deed be entered into to deal, relevantly, with the following: Mr Rose responded to Mr Camilleri's proposal by email sent later on 29 November 2006. Mr Rose said that the main two issues with which he did not agree were the cross-collateralisation and personal guarantee from him. He said that, once agreement on the terms sheet had been agreed, he would need to meet with BOS, the senior lender, to get their agreement to the rescission of the contract with Chevron Lifestyle. Mr Bevan sent an email to Mr Wilson and Mr Camilleri early on the morning of 30 November 2006, in which he recorded that the draft letter accurately reflected the discussions with Mr Rose, notwithstanding that, the previous evening, Mr Rose had indicated that he was not happy with respect to the cross-collateralisation and the provision of a personal guarantee. Mr Bevan said that it was his understanding that the cross-collateralisation proposal had been in the discussions from the outset and that he found it difficult that Mr Rose was " back peddling " on that issue. Mr Bevan also said that Mr Rose had indicated that any reference made by him to the provision of a personal guarantee was only if the outstanding profit share was not to be secured by mortgage, as it now was to be. Mr Bevan said that, in that context, he believed that they could drop the personal guarantee requirement, provided they took the security. It is significant that the proposal for a personal guarantee by Mr Rose appears, therefore, to have come from Mr Rose himself. On the other hand, Mr Bevan accepted in the email that the guarantee was proffered by Mr Rose in relation to the outstanding profit share under the Moruben Equity Agreement, against the possibility that payment of the profit share would not be secured. Mr Bevan's email of 30 November 2006 went on to say that, without the cross-collateralisation, he believed the return from the Riva Mezzanine Agreement would be marginal. Mr Bevan also observed that another " pressure point " that was available was the profit share under the Quadwest Facility, which was then due and which Mr Rose had asked to be postponed and secured on the Moruben Road Property. The email ended by saying that, if they were looking at a shortfall in respect of the Riva facilities, they must put the cross-collateralisation in place. Mr Camilleri responded to Mr Bevan, indicating that a loss of $931,033 was projected in respect of the Riva Mezzanine Agreement on the basis of valuations that had been obtained. As I have indicated above, Mr Camilleri also pointed out that Sakkara Capital and RMB were prohibited from exercising any power under its securities without the prior written consent of the senior lender, unless the senior lender had been fully and finally paid all moneys secured. On Friday, 1 December 2006, Mr Rose sent to Mr Camilleri a calculation of the Net Project Profit for the Moruben Road Development. The calculation showed a profit of $3,140,803, with Sakkara Properties' 10% share being $314,803 [sic]. Mr Rose clearly did not put that figure forward as having been fixed. It was put forward as a proposal for acceptance by Sakkara Properties. Mid morning on 1 December 2006, Mr Matthew Barry of Deacons, who were acting for Moruben, emailed Ms Emma Young and Ms Mary Breen, of Blake Dawson Waldron, who were acting for the Lenders, saying that on 5 December 2006 Moruben intended to pay out the mortgages to BOS and the Lenders which was secured on the Moruben Road Property. The email said that the original documents relating to the Moruben Road Property, including the certificates of title, would be expected on settlement and asked for confirmation of " the payout figure for the loans ". No reference was made to legal costs. Ms Breen forwarded the email to Mr Camilleri, who replied shortly afterwards, saying that the Lenders intended to retain their security over the Moruben Road Property and that " the payout figure " should be obtained from RMB. At some time on 1 December 2006, Mr Bevan spoke to Mr Rose by telephone. Mr Rose said that he wished to pay out all mezzanine and profit share owing by Quadwest and Moruben but to leave Riva to stand alone. He said that he was looking to refinance the liabilities secured on the Moruben Road Property on the following Tuesday and that a " payout " was needed. Again, no specific mention was made of legal costs connected with the discharge. Late on 1 December 2006, Mr Rose sent to Mr Camilleri a calculation of the Internal Rate of Return under the Moruben Equity Agreement, showing that Sakkara Properties' minimum share of the Net Project Profit, was $355,818. Mr Rose's calculation also stated that the principal sum outstanding under the Moruben Equity Agreement as at December 2006 was $285,000. Thus, Mr Rose considered that he had the material necessary to calculate the latter sum and to calculate the former. Early on the morning of Monday, 4 December 2006, Mr Bevan reported by email to Messrs Camilleri and Wilson that Mr Rose had advised him at 5 pm on the previous Friday that: Mr Bevan's email of 4 December 2006 also said that there was to be no release of security until they had received all project accounting from the Quadrant Group to determine the share of the Net Project Profit under the Moruben Equity Agreement. Mr Bevan asked Mr Camilleri to inform Mr Rose of that requirement. The Moruben Equity Agreement provided for that information to be provided to Sakkara Properties if it required it. Mr Bevan went on to say that the proposal by Mr Rose was another shift from his stated position. He said that, without the cross security to the Moruben Road Property, the Lenders looked vulnerable to loss. He expressed the view that the Lenders needed to be satisfied with the arrangements on Riva before the Moruben and Quadwest securities were released. Significantly, he said such release would " be difficult to resist from a legal view given present security position ", a comment to which Mr Rose and Riva attach considerable significance. In his email of 4 December 2006, Mr Bevan also referred to Mr Camilleri's confirmation that they could not enforce the Riva security without the consent of the senior lender. He asked Mr Camilleri to look at the Moruben security to see if the Lenders could make a claim for the exposure to Riva, " based upon definition items in the security documents ". Mr Bevan then observed that Mr Rose was maintaining that he would not permit cross-collateralisation to the Moruben Road Property for the possible shortfall from Riva and would not provide a personal guarantee. He said that the only other security available was the Milson's Point Property, Mr Rose's home, which, Mr Bevan said, was " tied to the Rose Bay project ". The reference to the Rose Bay project is unclear. Mr Bevan said that the Moruben Road Property remained the best option for security and that, with the repayment of the mezzanine and profit share, they would have no present claim against that security. Thus, it is clear enough that Mr Bevan was looking for a basis on which the Lenders could decline to discharge the mortgages over the Moruben Road Property at that stage. In an email later on 4 December 2006, from Mr Bevan to Messrs Camilleri and Wilson, to which reference has been made above in connection with the alleged threat to appoint administrators, Mr Bevan asked Mr Camilleri to ask Mr Rose to provide " the project details " for the Moruben Road Property. Mr Bevan said " that should slow him down on his settlement proposals ". The email went on to say that " we have security and leverage now that will be lost if we allow the repayment of the moneys due on Moruben Road and Quadwest. Our weakness is the contracted link across the securities ". Riva and Mr Rose attach some significance to the contents of those emails, as suggesting that Mr Bevan was conscious of the imposition of pressure on Mr Rose and Riva. The emails indicate that Mr Bevan was mindful of the fact that the discharge of the securities given by Moruben would result in loss of bargaining power that might otherwise be available to compel some further security in relation to the indebtedness of Riva, which was at risk. Mr Camilleri acted as he was instructed, by sending an email to Mr Rose on 4 December 2006. In the email, Mr Camilleri acknowledged receipt of the calculation of 1 December 2006 of the profit share and told Mr Rose that Sakkara Properties would need to review the books and records relating to the Moruben Road Project before reaching agreement on the profit share amount payable to it from the Moruben Road Project. Sakkara was entitled to that material under clause 6.6(a) of the Moruben Equity Agreement. Mr Rose responded by email shortly afterwards, saying that he was planning to pay out the Moruben facilities on Wednesday 6 December 2006 and would need to agree on " the payout figure " forthwith. He said that, by his calculations, the minimum Internal Rate of Return was going to be greater than the 10% share of the Net Project Profit in any event and that he was happy " to personally guarantee any difference that you may find between the IRR and the books and records ". He ended by saying that he would require " the mortgage " to be discharged upon refinance. That must be taken to be a reference to the Moruben Equity Mortgage as well as to the Moruben Mezzanine Mortgage. It is significant that Mr Rose was still prepared to give a personal guarantee, albeit for a much smaller sum than the likely shortfall on the Riva facilities. According to an email sent by Mr Camilleri to Messrs Bevan and Wilson shortly after 4 pm on 5 December 2006, Mr Rose then put forward a proposal along the following lines: The Lenders can retain a mortgage over the Moruben Road Property, which would be subordinated to the proposed $5 million facility from Ashe Morgan Winthrop. The Lenders' priority with respect to the Moruben Road Property would be limited to an aggregate sum of $350,000 and it could not be called upon for 12 months. Mr Rose would meet costs associated with securing rescission of the contract with Chevron Lifestyle, the marketing costs associated with the Chevron Island Property and interest on the Riva senior debt. Mr Rose would agree that any marketing program for Riva must be acceptable to Sakkara. Later on 5 December 2006, Deacons wrote to Blake Dawson Waldron attaching a copy of company searches for Moruben and for Quadrant Property Services. Deacons said that they had been instructed as follows: Moruben is ready, willing and able to pay out the loan relating to the Moruben Road Property, subject to " the appropriate discharge amount " being provided. Moruben has had discussions with the Lenders as to " the quantum of discharge amount " in relation to the Moruben Road Property but does not agree with the proposal for the discharge presented by the Lenders. Moruben has incurred significant costs as a result of not settling the transaction that day and will continue to incur further costs until the transaction is settled. The letter ended by saying that Deacons looked forward to prompt confirmation of " the payout figures ". Blake Dawson Waldron forwarded the Deacons letter to Mr Camilleri by email early on 6 December 2006. Shortly after noon on 6 December 2006, Mr Camilleri sent an email to Blake Dawson Waldron setting out details of the amounts " required to payout [sic]" the various loans as at that date. It is not clear whether that information was forwarded to Deacons. However, shortly after that email was sent, Mr Barry sent an email to Ms Breen asking for a response to the letter of 5 December 2006. Ms Breen responded later in the day that she had been instructed that the clients were meeting at 10 am the following day and she would let him know as soon as she received instructions. A meeting took place on 7 December 2006 involving Mr Bevan, Mr Camilleri and Mr Rose. Mr Rose said that a personal guarantee would be provided because a mortgage over the remaining lots of the Moruben Road Property was no longer available. Mr Rose accepted in cross-examination that, at the meeting, he put forward a proposal that involved his providing a personal guarantee for amounts equal to the principal amounts then owing by Riva, if he failed to perform certain functions . That may be a reference to the proposal that he would give a personal guarantee if security could not be provided for outstanding profit share. It is not entirely clear. He accepted that the bottom line was that he could be liable for $2 million in respect of the Riva Mezzanine Agreement and $450,000 on the Riva Equity Agreement if he failed to perform the functions that were discussed. He subsequently said that he could not recall who put forward the proposal and that his recollection was that the proposal came from either Mr Bevan or Mr Camilleri. I consider that it is more probable that Mr Rose put forward the proposal, as he first accepted. That is significant in so far as it indicates his preparedness to accept a personal liability, at least in some circumstances. On 8 December 2008, Deacons wrote to Blake Dawson Waldron again. They said that they were instructed as follows: Despite the meeting of the clients on 7 December 2006 to discuss " the quantum of the discharge amount ", their client did not reach agreement on the proposal for the discharge presented by Blake Dawson Waldron's client. Since 6 December 2006, Moruben has been ready, willing and able to pay out the loan, subject to the Lenders providing " the appropriate discharge amount ". Moruben has incurred significant costs and expenses as a result of not settling this transaction on 6 December 2006. The letter went on to say that, if a discharge amount was not provided by 5 pm on 8 December 2006, their instructions were that the matter would " be elevated and further legal action would be instigated ". The letter finished by requesting prompt confirmation of " the payout figures ". Neither Deacons' letter of 5 December 2006 nor their letter of 8 December 2006 made any specific mention of legal costs. They spoke only in terms of " the discharge amount " and " the payout figures ". At 1.53 pm on 8 December 2006, Mr Camilleri sent to Mr Rose a letter setting out the terms of " RMB/Sakkara's counter proposal " to the offer put forward by Mr Rose at the meeting of 7 December 2006. Although the letter enclosed with the email was signed by Mr Camilleri, it was clearly endorsed " DRAFT ". Mr Camilleri's email said that he and Mr Bevan would be happy to discuss the matter further with Mr Rose. At 2.22 pm, Mr Rose sent an email to Mr Camilleri asking that Mr Camilleri " issue " the letter as an " execution version for me ". A copy of Mr Camilleri's earlier email was sent to Mr Bevan. Mr Bevan made a handwritten note on his copy of a telephone conversation with Mr Rose at 2.25 pm on 8 December 2006. I accept that Mr Bevan's note fairly recorded the substance of the conversation. It is also significant that a distinction was drawn between the payout figure and costs. Mr Bevan sent an email to Mr Camilleri at 2.34 pm on 8 December 2006 saying that Mr Rose had phoned and confirmed that he was agreeable to the terms and wanted to sign a clean copy without " DRAFT " on it. Mr Bevan asked Mr Camilleri to work out the costs that needed to be paid to the solicitors. He said that Mr Rose said that he did not know the amount but wanted to settle as soon as possible. Thus, as soon as a figure for costs was requested, steps were taken to provide it. At 2.51 pm, Mr Bevan sent to Mr Rose the form of the letter without " DRAFT " endorsed on it. At some time later on 8 December 2006, Mr Rose signed the foot of the letter, acknowledging and agreeing to the proposed variations in terms of the existing facilities provided to the companies mentioned in the letter. The terms of the letter are critical to the allegation that, by the letter, the Lenders made a demand and refused to permit Moruben to redeem its securities. Loan to be repaid in full (including risk fee). The Deed and Guarantee and Indemnity will need to be executed prior to settlement of the Moruben Developments Pty Ltd refinance. Both parties agree that time is of the essence in this regard, and must be consummated on or before the 13 th of December 2006. The deed and guarantee and indemnity will need to be executed prior to settlement of the Moruben Developments Pty Ltd refinance. On 12 December 2006, drafts of the Impugned Agreements were sent by Blake Dawson Waldron to Deacons. In their email of 12 December 2008, under cover of which they sent the drafts, Blake Dawson Waldron said that Sakkara Properties did not propose to hand over any discharge of its security in relation to the loans to Quadwest and Moruben at settlement, on the basis that the security was not registered. The email also asked for a certificate confirming that Mr Rose did not consider it necessary to obtain independent legal advice prior to execution of the forms of Guarantee and Indemnity. Later on 12 December 2006, Mr Rose proceeded to obtain legal advice in relation to the Impugned Agreements from Mr Robert Schneider, solicitor, as to whether there were provisions that would be inconsistent with any subsequent action by Mr Rose to impugn the guarantees, for example, by asserting that the Lenders had engaged in unconscionable conduct. Mr Schneider expressed the view that the guarantees contained such provisions but very much doubted whether the Lenders would agree to any variation, let alone the deletion, of such provisions, given that they were fundamental to the efficacy of the guarantees. Mr Schneider expressed the view that it would be extremely difficult for Mr Rose to impugn the guarantees successfully in the future, should the Lenders seek to enforce them, in circumstances where he had not, either prior to or at the time of executing the guarantees and the proposed variation agreements, reserved his right to do so. Mr Rose then instructed Deacons to request further concessions. Importantly, he instructed Deacons to request that the guarantee provided by Quadrant Properties be released. That they did. Deacons informed Blake Dawson Waldron that Quadrant Properties had no assets and that it was proposed, in due course, that it be " wound down ". After obtaining instructions from Mr Camilleri and Mr Bevan, Blake Dawson Waldron responded to Deacons that the Lenders required that the guarantee remain in place at that stage and that, if Deacons' client wished to commence any winding down of Quadrant Properties at a later date, it should request the consent to the release of the guarantee at that time. Deacons responded late on Thursday, 14 December 2006 that it was intended that Quadrant Properties be liquidated the following week and accordingly requested Blake Dawson Waldron to obtain consent to the release of the guarantee. On 15 December 2006, Blake Dawson Waldron responded to Deacons that the Lenders agreed that the guarantee by Quadrant Properties would no longer be required, provided Mr Rose provided a statutory declaration confirming that Quadrant Properties had no assets and that Mr Rose agreed to wind up the company by a specified time. They said that the obligation to wind up Quadrant Properties by that date would be incorporated into the guarantees to be provided by Mr Rose. Deacons were asked for the time by which Mr Rose agreed to wind up Quadrant Properties. There was no evidence as to why it was pressing for Quadrant Properties to be wound up and for it to be released from the guarantee at that time, other than the fact that its guarantee linked Mr Rose personally to the indebtedness of Riva through the Milson's Point Mortgage. That is of great significance in relation to Mr Rose's motivation in accepting the proposal of 8 December 2006 and executing the Impugned Agreements. On the afternoon of 15 December 2006, Deacons provided to Blake Dawson Waldron, with a copy to Mr Camilleri and Mr Bevan and others, a form of statutory declaration by Mr Rose in relation to Quadrant Properties. A statutory declaration was given by Mr Rose in that form at the time of execution of the Impugned Agreements. By that statutory declaration, Mr Rose declared that there was a deficiency in the net asset position in Quadrant Properties and that a meeting of creditors had been set for 3 January 2007, to appoint a liquidator. Mr Rose executed the Impugned Agreements on 18 December 2006, without any further complaint to the Lenders. On the same day, the sum of $5,060,000 was advanced by Ashe Morgan Winthrop on the security of the Moruben Road Property and all securities given by Moruben to the Lenders were discharged. At that stage, the amount owing was $690,000. In addition, all of the indebtedness of Moruben to the Lenders under the Moruben Equity Agreement and the Moruben Mezzanine Agreement, was repaid. Specifically, the sum of $300,000 was paid to Sakkara Properties as its share of the Net Project Profit. The guarantee by Quadrant Properties was subsequently released when Quadrant Properties was wound up. Subsequently, the Milsons Point Mortgage was also discharged, since it no longer secured any indebtedness. The Impugned Agreements consist of two forms of Loan Agreement Variation Deed and two forms of Guarantee and Indemnity. The parties to the first Loan Agreement Variation Deed are Riva, RMB and Sakkara Properties and Mr Rose. The parties to the second Loan Agreement Variation Deed are Riva, RMB and Sakkara Capital and Mr Rose. The first Loan Agreement Variation Deed recites the Riva Equity Agreement and recites that RMB had, on 23 December 2004, agreed to participate in the funding to Riva under the Riva Equity Agreement. The deed also recites the Guarantee and Indemnity of 18 December 2006 by Mr Rose of the obligations of Riva under the Riva Equity Agreement. The operative provisions of the first Loan Agreement Variation Deed varied the Riva Equity Agreement in three respects. First, by new Clause 17, Riva undertook that it would fund and diligently and prudently coordinate all sale and marketing activities in connection with the sale of the Chevron Island Property and would rescind or terminate or procure the rescission or termination of the agreement of 18 May 2006 with Chevron Lifestyle. Riva also undertook that it would enter into contracts for sale of all residential units comprising the Chevron Island Property and ensure that completion occurred under those contracts by 30 June 2007. The prices at which the units were to be sold were specified. Secondly, by a new clause 18, the order of distribution of the proceeds of sale of the Chevron Island Property was specified. Finally, the term of the facility under the Riva Equity Agreement was extended to 1 July 2007. By the first Guarantee and Indemnity, Mr Rose guaranteed to RMB and Sakkara Properties the due and punctual payment by Riva of the whole or any part of any moneys that remain unpaid at any time under or in connection with the Riva Equity Agreement, up to a maximum of $450,000. Clause 2.3(a) provided that, if Riva defaults in the due and punctual payment of any guaranteed money, Mr Rose must pay that money on demand to, or as directed by, RMB and Sakkara Properties. However, by clause 12, clause 2.3 was made conditional, inter alia , upon Riva failing to comply with the new clause 17 of the Riva Equity Agreement or upon any guaranteed money remaining following the sale of all residential units comprising the Chevron Island Property. In addition, by clause 7.3 of the first Guarantee and Indemnity, Mr Rose covenanted that he would: The second Loan Agreement Variation Deed made the same amendments to the Riva Mezzanine Agreement of 23 December 2004 as had been made to the Riva Equity Agreement by the first Loan Agreement Variation Deed. Specifically, it extended the time for repayment to 1 July 2007. In addition, by clause 6.1, Mr Rose, in his capacity as sole director and sole secretary of Quadrant Properties, covenanted that, on or before 3 January 2007, he would either appoint an administrator or convene a meeting of creditors for the purpose of appointing a liquidator to Quadrant Properties. Riva and Mr Rose acknowledged that RMB and Sakkara Capital had executed the second Loan Agreement Variation Deed on the basis of that covenant. By the Second Guarantee and Indemnity, Mr Rose gave a guarantee of the obligations of Riva under the Riva Mezzanine Agreement in terms similar to the first Guarantee and Indemnity. As a result of the transactions that were settled on 18 December 2006, the default in respect of the facilities of the Lenders relating to the Moruben Road Projects was rectified and it was no longer open to the Lenders to enforce their securities in respect of the Moruben Road Property. In addition, the effect of the variation of the facilities with Riva was to remove any default, by extending the time for repayment of both facilities. Further Sakkara Properties accepted $300,000 in respect of its share of the Net Project Profit for the Moruben Road Project. The undertaking by Riva to rescind its contract with Chevron Lifestyle and to undertake a fixed regime for the realisation of the Chevron Island Property was a quid pro quo for Sakkara Properties accepting the sum of $300,000. The guarantees by Mr Rose were no doubt an inducement for the Lenders to enter into the Loan Agreement Variation Deeds with Riva. Further, he secured an advantageous compromise of the amount of the share of Sakkara Properties in the Net Project Profit for the Moruben Road Project. I do not consider that Mr Rose was induced by any undue or unfair pressure on the part of the Lenders or by any unconscionable conduct on the part of the Lenders to accept the letter of 8 December 2006 or to execute the Impugned Agreements. Further, I do not consider that either of the two deeds of Guarantee and Indemnity executed by Mr Rose was unjust in the circumstances relating to their execution by Mr Rose. More specifically, I do not consider that the agreement of 8 December 2006, which was constituted by Mr Rose's acceptance of the letter of that date, was unjust in the circumstances relating to its execution by Mr Rose. I do not consider that the Lenders used unfair pressure or unfair tactics against Mr Rose in relation to the execution of the forms of Guarantee and Indemnity. It is true that the Quadrant Group, as a whole, was under some financial pressure, as the Lenders knew. Various companies in the Quadrant Group were in default of their financing arrangements and they needed funds to discharge obligations to the Australian Taxation Office. Nevertheless, the Quadrant Group as a whole derived benefits as a consequence of the Impugned Agreements. Moruben had no entitlement to a discharge of the Moruben Equity Mortgage prior to the final determination of the Net Project Profit. Nevertheless, Moruben was able to secure discharge of the securities, notwithstanding that the Moruben Road Development was not complete because not all of the apartments had been sold. Thus, the Quadrant Group was able to use the unsold part of the Moruben Road Property to raise funds for the benefit of the Quadrant Group as a whole. That was a benefit to Mr Rose. Further, the default by Riva was remedied, in that an extension of more than six months for the time for discharge of the facilities granted to Riva was secured. That was also a benefit for Mr Rose. Finally, and very significantly, while Mr Rose undertook personal obligations by means of the Deeds of Indemnity and Guarantee, with a limitation on his liability of $2,450,000, he also secured the release of an unlimited guarantee related to the obligations of Quadrant Properties, which as at 18 December 2006, were well in excess of $2,450,000. I consider that Mr Rose was conscious of his personal position and the exposure of the Milsons Point Property to liabilities of Riva, through Quadrant Properties. Mr Rose was personally better off as a consequence of the consummation of the agreement constituted by acceptance of the letter of 8 December 2006. Mr Rose had information available to him that would have enabled him to calculate the payout figures for all of the indebtedness of Moruben to the Lenders, other than the amount of the Net Project Profit. That could not be determined until the sale of all of the apartments in the Moruben Road Property, although it would have been open to the parties to agree on an estimate of value for the purposes of an earlier discharge. At no stage was any attempt made to tender any amount in order to secure discharge of the mortgages over the Moruben Road Property. Had there been a formal tender, the Lenders may have taken a different course. However, they were never put in the position of having to respond to a formal tender. Certainly, the legal costs of the discharge would be secured by the mortgages and would have to be paid in order to compel a discharge. It may be that Mr Rose did not know what the legal costs of the discharge of the securities would be. However, at no stage did Mr Rose, or those acting for him, specifically ask for an estimate of legal costs involved in the discharge. No demand had been made for costs at the time when Mr Rose signed the letter of 8 December 2006. Indeed, on 13 December 2006, Blake Dawson Waldron wrote to Deacons specifying the amounts " required to discharge the mortgages as at 14 December 2006 ". At the end of the letter, Blake Dawson Waldron stated that they required payment of attached invoices and that their costs and disbursements in acting for the Lenders in respect of the discharge of the securities over the Moruben Road Property were $1,492.38. The letter ended by saying that, once the Impugned Agreements had been finalised, Blake Dawson Waldron would advise Deacons of their fees for acting for the Lenders in that regard, which they also required to be paid on settlement. There is no substance in the contention advanced on behalf of Mr Rose and Riva that they could not determine a payout figure for the redemption of the mortgages of the Moruben Road Property without first being given details of legal costs. The definition of Net Project Profit in the Moruben Equity Agreement refers to an amount agreed by the parties, in good faith, to be the profit derived in relation to the Moruben Road Project. However, it is clear, from the language of the relevant provision of the Moruben Equity Agreement, that a calculation was to be made by reference to the difference between two amounts, each of which is defined by reference to the actual result of the Moruben Road Project. Specifically, Revenue was defined as the proceeds of sales of the Moruben Road Property, or parts of it, plus any other revenue received by Moruben from the Project. That must be understood as referring only to the actual proceeds received, not to some estimate of what might be received in the future. The bargain between Moruben and Sakkara Properties was that Sakkara Properties would be entitled to 10% of the Net Project Profit from the Moruben Road Project and that its entitlement to that share was to be secured by a mortgage of the Moruben Road Property. Until the Project was completed and Net Project Profit could be determined, Sakkara Properties was entitled to maintain its security for its share of Net Project Profit. While Sakkara Properties could, of course, agree to accept an estimate, it was not bound to do so. The crux of the complaint made by Mr Rose and Riva, that the Lenders threatened to refuse, wrongfully, to allow Moruben to redeem the mortgages of the Moruben Road Property, depends upon the construction of the letter of 8 December 2006. It is not a threat. The sentence is but one sentence in a letter of over a page and a half, in which a detailed proposal was being put forward to Mr Rose and Riva for their consideration. The proposal provided benefits to Riva and it was in no way expressed as an ultimatum. Mr Rose had put forward a proposal and the letter of 8 December 2006 is expressed to be a " counter proposal ". Even then, it is expressed to be subject to " formal approval " by RMB. One of the terms of the proposal being put forward involved a guarantee and indemnity by Mr Rose. The requirement that the guarantee and indemnity be executed prior to settlement of the refinancing is understandable: that was the quid pro quo for the Lenders' agreeing to the discharge of their security on the basis of a compromise concerning the Net Profit Share and the extension of the Riva facilities. Sakkara Properties agreed to limit its share of the Net Project Profit to $300,000 and to release its security, notwithstanding that the Project had not yet been completed and notwithstanding that Mr Rose had earlier estimated Sakkara Properties' share to be $314,803 and had calculated the minimum Internal Rate of Return to be $355,818. Mr Rose accepted the counter proposal. Indeed, he added a further requirement that time was to be of the essence and that the arrangements were to be consummated by 13 December 2006. He subsequently secured the release of his personal obligations in respect of the Riva Mezzanine Agreement, through the Quadrant Properties guarantee, as a consequence of the release of that guarantee. I do not consider that, in all of the circumstances, there was any wrongful threat on the part of the Lenders to refuse to discharge the securities given by Moruben. Moruben had no entitlement to a discharge of the Moruben Equity Mortgage. It had no entitlement to a discharge of the Moruben Mezzanine Mortgage without tender of the amount secured, which it did not do until 18 December 2006. Mr Rose and Riva may have been under some pressure because of the financial pressure on the Quadrant Group. However, I do not consider that the circumstances that I have described amount to the bringing to bear of any undue or unfair pressure on either of them. It cannot fairly be said that the conduct of the Lenders should be characterised as unconscionable. Mr Rose and Riva were, by reason of financial pressure, relevantly in a position of disadvantage to the Lenders. However, inequality of bargaining power is not of itself sufficient to render the conduct of a stronger party unconscionable. Mr Rose and Riva must establish that they suffered a special disability or were placed in some special situation of disadvantage, which rendered them unable to make a worthwhile judgment as to what was in their own best interests and that the Lenders knowingly took advantage of that disability or disadvantage. No special disability or special disadvantage has been established in the present instance. A person will not be in a position of special disadvantage or disability as a result of inequality of bargaining power. Many, if not most, contracts are made between parties of unequal bargaining power and good conscience does not require parties to contractual negotiations to forfeit their advantages, or neglect their own interests ( ACCC v C.G. Berbatis Holdings Pty Ltd (2003) 214 CLR 51 at [11]). Unconscientious exploitation of another's inability or diminished ability to conserve his or her own interests is not to be confused with taking advantage of a superior bargaining position ( ACCC v C.G. Berbatis Holdings Pty Ltd at [14]). Notwithstanding that Riva, Moruben and Quadwest were all in default, that Moruben had no contractual entitlement to the discharge of the mortgages over the Moruben Road property in the absence of tender of all monies owing under the Moruben Mezzanine Agreement and had no contractual entitlement to redemption of the Moruben Equity Mortgage because the amount of the Net Project Profit could not be calculated, Mr Rose was seeking indulgences from the Lenders that would permit him to obtain an extension of the facilities granted to Riva. He had no contractual entitlement to such an extension and therefore had to make concessions to the Lenders to obtain such a concession. One of the terms that the Lenders dictated was the provision of personal guarantees by him. While the situation may have been difficult for Mr Rose, and the Quadrant Group generally, it is not a situation that justifies a conclusion that the Lenders brought undue pressure or duress to bear on Mr Rose or Riva or that their conduct was in any way unconscionable. As I have said, the Lenders contend that relief under the Contracts Review Act is precluded by the operation of s 6(2). Clearly enough, the Loan Agreement Variation Deeds entered into by Riva were entered into in the course of the business carried on by Riva, namely, the development of the Chevron Island Property. However, Mr Rose was not personally engaged in the development of the Moruben Road Property, the Chevron Island Property or the Adelaide Terrace Property. To the extent that those developments involved carrying on businesses, those businesses were carried on by Moruben, Riva and Quadwest respectively. However, that is not an end of the matter. It is clear that Mr Rose was engaged in an enterprise involving property development. He described himself in his evidence in chief as a property developer. He engaged in that activity through the instrumentality of the various limited liability companies that formed the Quadrant Group. As part of that activity, Mr Rose regularly gave personal guarantees in respect of the obligations of one or more of the companies in the Quadrant Group. The Quadrant Group was an enterprise conducted by Mr Rose. It is an enterprise that can fairly be characterised as a business. I would be disposed to conclude that all of the Impugned Agreements were entered into in the course of that business. However, it is not necessary for me to reach a conclusion on that question. The Lenders say that neither of those events constituted an effective rescission. They also say that it is not possible for the Court to order rescission, or the setting aside, of the Impugned Agreements. The Lenders say that there has been no rescission and there can be no rescission because of the impossibility of providing substantial restitutio in integrum to the Lenders. Because of the benefits that accrued to Moruben and Riva on the one hand, and the corresponding detriment to one or other of the Lenders on the other hand, there may well be a real question as to whether restitutio in integrum could have been, or could be, provided by Riva and Mr Rose, even if duress or undue pressure, unconscionable conduct or unfairness were established. In particular, a significant aspect of both the question of undue or unfair pressure or unconscionable conduct and the question of restitutio in integrum concerns the release of the guarantee given by Quadrant Properties of the obligations of Riva. Those obligations were secured by the Milson's Point Mortgage and by personal covenants given by Mr Rose in the Milsons Point Mortgage to pay moneys owing by Quadrant Properties. The significance of the guarantee by Quadrant Properties and the Milson's Point Mortgage is that, quite apart from the Impugned Agreements, Mr Rose was personally liable for the indebtedness of Riva prior to his accepting the terms of the letter of 8 December 2006. His liability under the Milson's Point Mortgage exceeded the amount now owing under the Impugned Agreements. At this stage I do not propose to deal with the question of whether restitutio in integrum was or is possible. The question does not arise if there was no undue pressure brought to bear on Mr Rose and Riva, if there was no unconscionable conduct on the part of the Lenders that induced the execution of the Impugned Agreements and if no order ought to be made under Contracts Review Act . I have already referred to the absence from the proceeding of Moruben as a party. Moruben secured an advantage, not only in relation to the discharge of the securities over its properties, including the Moruben Road Property, but also in having the net profit share capped at $300,000. Thus, the question of restitutio in integrum may require an investigation of the final outcome of the development of the Moruben Road Property to determine whether the Net Project Profit exceeded the Internal Rate of Return as defined in the Moruben Equity Agreement. In their written submissions, the Lenders asserted that rescission of the Impugned Agreements was not available to Mr Rose and Riva because it was not possible or practicable to put the Lenders substantially in the position they were in prior to entering into the Impugned Agreements. Following some discourse between the parties on the question of who bore the onus of establishing that restitutio in integrum was either possible or not possible, Mr Rose and Riva sought leave to amend the Application in the proceeding, to seek additional relief by way of the taking of accounts and the conduct of an enquiry for the purpose of determining what order should be made to ensure restitutio in integrum , assuming the Court were disposed to make declarations that the Impugned Agreements had been rescinded or to make an order that they be rescinded, set aside or cancelled. The leave was opposed by the Lenders. Accordingly, at the completion of all submissions by both parties, I directed that Mr Rose and Riva serve on the Lenders a detailed outline of their contentions that, as at the respective dates at which they claimed to have effected rescission, they were in a position to provide restitio in integrum to the Lenders and that, as at the day on which any relevant Court order may be made, they will be in a position to provide restitio in integrum to the Lenders. The parties subsequently jointly asked the Court to vacate that direction on the following basis: I have not yet expressed a view as to whether the former course is appropriate. It may be that Mr Rose and Riva should be put to an election as to whether they wish to proceed with their application for leave to amend, even if they fail to make out any of the causes of action, against the possibility that, on appeal, a different result might ensure. That is to say, if there are contentious matters that would need to be resolved, if the leave to amend were granted, the question of amendment should be dealt with before the final disposition of the proceeding at first instance. Accordingly, if the application for leave to amend is to the dismissed, it will be dismissed on the basis that Mr Rose and Riva no longer wish to pursue it and it will not be open to them to pursue it in the event of a different result being obtained on appeal. It also follows that there should be judgment for the Lenders against Mr Rose on their cross-claims. In addition, injunctions should be granted restraining Mr Rose from breaching his covenants that he will not further encumber his property. I shall direct the parties to bring in short minutes of the orders that would follow from my conclusions, including the precise calculation of the amount for which judgment should be entered, and the terms of relevant injunctions. At the conclusion of the hearing, senior counsel for the Lenders indicated that, if the respondents were successful, an application for a special order for costs would be made. The parties agreed that, in the circumstances, it was preferable to defer the question of costs until after the Court's conclusions have been published. Accordingly, I propose to fix a time for further argument on the questions of costs, in the light of the conclusions I have reached. I certify that the preceding one hundred and seventy-eight (178) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

unconscionable conduct inequality of bargaining power position of special disadvantage or disability whether deeds entered into as a result of duress and improper pressure whether any failure to permit redemption of mortgages whether any conduct amounted to unconscionable conduct or duress and improper pressure whether contracts unjust in the circumstances relating to their execution contracts review act 1980 (nsw) misleading and deceptive conduct whether false representation trade practices act 1974 (cth) part v trade practices contracts trade practices

He was a fulltime employee of UWA and remained as such until March 1997 when he changed to a fractional 30% appointment focussing on clinical work at the Royal Perth Hospital (RPH). In his time as a fulltime employee, Dr Gray was required by his terms of appointment to teach and to conduct and stimulate research. The terms incorporated the Statutes and regulations of UWA including its Patents Regulations. At the time of his appointment Dr Gray had been engaged for some years in researching the treatment of liver cancer by using microspheres, in the general size range of 10 to 50 microns, injected into the blood vessels of the liver to deliver anti-cancer therapies to the sites of tumours. Microspheres were directed to those sites with the aid of a vasoactive agent which temporarily promoted blood flow into the tumour blood vessels at the expense of blood flow into normal liver tissue. It was this line of research that Dr Gray pursued at UWA along with other researchers, including Dr Mark Burton, who had worked with him previously at Melbourne University. In the years that followed Dr Gray's appointment work was done on three microsphere technologies. One was known as SIR-Spheres, the acronym SIR standing for Selective Internal Radiation. It was designed to transport a short lived radioisotope to irradiate cancerous tissue. A second class, DOX-Spheres, was designed to transport and release, in a controlled way, anti-cancer drugs and particularly doxorubicin. A third technology, Thermo-Spheres, involved the delivery of microspheres of magnetic material into the cancerous tissue and heating them by the external application of an alternating or rotating magnetic field. It relied upon a phenomenon known as "magnetic hysteresis". Provisional applications for various patents and international applications under the Patent Cooperation Treaty were made in respect of inventions said to have been developed in relation to the various technologies. Various applications were made over a period of years. The history of Dr Gray's employment at UWA, the people with whom he worked and the work they carried out, the conflicts he had with other academics and administrators at UWA, his attempts to secure funding from external sources and ultimately to commercialise the technologies are set out in this judgment in an extensive history which covers a period of over 20 years. By 2000 Dr Gray was a director of Sirtex Medical Limited (Sirtex), a publicly listed company which was floated in that year to commercialise and market the technologies. In 1997 the company had acquired from Dr Gray and the Cancer Research Institute (CRI), a body set up to provide support for his research work, intellectual property rights arising out of the inventions said to be associated with the technologies. In the late 1990s Dr Gray's employer, UWA, was aware of his involvement with an external company and the prospect of commercialisation of the technologies. Its officers formed the view, certainly by 1999, that UWA might have some claim on the intellectual property rights being used by the company. A letter from the Vice-Chancellor of UWA, Professor Schreuder, to Dr Gray in 1999 made that clear. It was a letter which Dr Gray did not disclose to Sirtex. UWA was also aware in 2000 of the float of the company, its prospectus and that it acquired intellectual property rights in respect of the targeted microsphere technologies which it proposed to commercialise. The Pro Vice-Chancellor (Research) took a decision that any investigation into whether UWA had an interest in the intellectual property would be difficult because of its "messy lineage". He said at the time that he hoped that if Dr Gray made a lot of money out of the float he might donate a Chair of Surgery to UWA. He concluded that the risks of legal action were not outweighed by the likely benefits. Ultimately, for reasons which appear in the judgment, UWA decided to initiate proceedings to vindicate its asserted rights to the intellectual property associated with the microsphere technologies late in October 2004. In the meantime many people had invested and traded in Sirtex shares and it had expended money on the development of the technology. In October 2004, UWA sent letters of demand to Dr Gray and to Sirtex alleging that the inventions the subject of the intellectual property rights which Sirtex had acquired were developed or made in the course of Dr Gray's employment at UWA and that of other academic researchers working with him. UWA commenced proceedings against Dr Gray, Sirtex and CRI on 21 December 2004. It sought a declaration that Dr Gray had held his shares and options in Sirtex on trust for UWA. It also sought orders that he transfer them and that he account to UWA in respect of any benefits obtained by him by reason of those shares and options. It sought a declaration against Sirtex that all the rights, title and interest in the relevant patent applications, patents and inventions were held on trust by Sirtex for UWA. It sought an order that Sirtex transfer that right, title and interest to UWA. Other ancillary orders were also sought. Before the trial the Court appointed a receiver to CRI whose board of management was purportedly reconstituted to consist of Dr Gray, his sister and his solicitor. The receiver was given power to conduct the litigation on behalf of CRI or to settle with UWA subject to the approval of the settlement by the Court. UWA and CRI settled and the settlement was approved by Graham J. Sirtex and Dr Gray appealed against the approval to the Full Court. That appeal was dismissed. The trial of the action lasted some 50 days with the Court sitting extended hours most days to ensure that the trial was finished within the available time. There were some 4,586 pages of transcript and more than 1,000 documentary exhibits. Much of the case was based on the documentary evidence. So much time had passed since many of the events relevant to these proceedings that it was not unusual for witness testimony to be based on inference derived from contemporary documents rather than actual recollection. The witness inference being mere opinion was not evidence. UWA alleged that Dr Gray had breached his contract of employment with it by failing to comply with disclosure and associated obligations imposed by its Patents Regulations which had been made in 1971 and their successors, the Intellectual Property Regulations (the IP Regulations) which were passed by the Senate of UWA on 22 July 1996. I have found that the latter Regulations were not shown to have been promulgated, as required by the University of Western Australia Act 1911 (WA) (UWA Act) before 30 November 1997. I have proceeded on the basis that they did not come into effect before that date. UWA also alleged that Dr Gray had breached his fiduciary obligations to it. It claimed that Sirtex had been knowingly concerned in those breaches by Dr Gray and had provided knowing assistance to him in those breaches by the issue of shares to him. Dr Gray and Sirtex each cross-claimed against UWA. Dr Gray's cross-claim included a claim for defamation based on the letter of demand to Sirtex and asserted that malice informed the content and timing of the letter. The malice claim attracted a good deal of evidence about conflicts which arose between Dr Gray and various individuals in the University, particularly the current Vice-Chancellor, Professor Allan Robson. I was not satisfied that the letter of demand was actuated by malice so as to defeat a defence of qualified privilege to the defamation claim. I have rejected claims by Dr Gray and Sirtex that UWA's letter of demand and the institution of the proceedings constituted unjustified threats of infringement action within the meaning of s 128 of the Patents Act 1990 (Cth) (1990 Act). Similarly, I have rejected claims brought by them against UWA alleging misleading or deceptive conduct. UWA had a problem in seeking to rely upon its Patents Regulations. I have found that from 1988 it had effectively abandoned the Patents Committee mechanism for which the Regulations provided. After that time the possibility that a committee could be appointed on an ad hoc basis to respond to reports of particular inventions was never considered. Instead UWA moved down an alternative pathway using a company called Uniscan and a centre which it established called "The Centre for Applied Business Research" (CABR). It also appointed a Deputy Vice-Chancellor (Research) and later a Pro Vice-Chancellor (Research) to provide a framework within which inventions could be commercialised. In contractual terms UWA failed to maintain the mechanism necessary for the performance of the notification obligations said to have been imposed upon its staff by the importation into their contracts of the terms of the Patents Regulations. This conclusion adversely affected UWA's contract claims against Dr Gray for alleged non-compliance with the Patents Regulations. However that was the least of its difficulties in this case. UWA's case against Dr Gray and Sirtex was critically dependent upon the proposition that it was an implied term of Dr Gray's contract of employment that intellectual property developed in the course of his employment belonged to UWA. Although there seems to have been an assumption among some at UWA that such an implied term operates generally in the case of academic staff who research and use university facilities, I have concluded that the assumption is not well founded. Absent express agreement to the contrary, rights in relation to inventions made by academic staff in the course of research and whether or not they are using university resources, will ordinarily belong to the academic staff as the inventors under the 1990 Act. The position is different if staff have a contractual duty to try to produce inventions. But a duty to research does not carry with it a duty to invent. Moreover, in my opinion, such provisions of the Regulations made by UWA as purport to vest intellectual property rights in it or interfere with the intellectual property generated by its academic staff, are not valid. UWA did not rely upon the earlier Patents Regulations as a source of its property rights. But the IP Regulations assert ownership by UWA of all intellectual property developed by its staff (apart from most copyright). UWA was authorised, by the UWA Act, to make regulations relating to the control and management of its own property. It was not authorised by the Act to make regulations acquiring property from others or interfering with their rights. It would seem that the only secure way for UWA to acquire property rights from its academic staff in respect of intellectual property developed by them in the course of research at UWA is by express provision in their contracts of employment. Even then, as this case demonstrates, the transaction costs of administering and enforcing such provisions and the uncertainty surrounding their scope and application, raises a real question as to their utility. The length and complexity of this litigation has been exceptional. However any claim by a university to intellectual property rights whose creation has involved a team of research workers, external funding, collaborative arrangements and extended periods of conceptual and practical development is likely to pose similar difficulties. UWA and other universities might well consider the alternative of deriving benefits from inventions produced by their staff by offering highly competent and experienced commercialisation services in exchange for a negotiated interest in the relevant intellectual property. That alternative offers many benefits in terms of incentives, harmony and certainty that are not available through the enforcement of legal rights unlikely to be capable of precise definition. The legal foundation of the UWA case did not exist and for that reason its claims against Dr Gray and Sirtex will be dismissed. In addition, I was not satisfied that the inventions, other than the so-called DOX-Spheres were made by academic staff of UWA in the course of their employment there. That conclusion depended upon a consideration of the times at which the inventive concepts constituting the inventions were created. The cross-claims by Dr Gray and Sirtex against UWA will be dismissed. The cross-claim by Sirtex against Dr Gray succeeds in so far as it alleged that he breached his duty as a director of the company and engaged in misleading or deceptive conduct by failing, in 2000, to disclose to Sirtex correspondence between himself and Professor Schreuder, the Vice-Chancellor of UWA, in 1999. The correspondence would have alerted Sirtex to the risk of a claim against its intellectual property rights by UWA. The damages flowing from that cross-claim will have to be assessed at a separate hearing if they are not able to be agreed between Sirtex and Dr Gray. They are likely to relate to the costs of these proceedings incurred by Sirtex and not recovered from UWA. There were two remaining cross-claims. One was Sirtex's cross-claim against CRI for breach of warranty and misleading or deceptive conduct. It is dismissed. There will be no order as to costs as CRI took no part in the proceedings following its settlement with UWA. The other was Dr Gray's claim for a declaration that one of his research team involved in the work on DOX-Spheres, Dr Chen, had no interest in a provisional application for that invention filed in November 1993. Although I have made findings adverse to Dr Chen's claim of inventorship, in my opinion the case is not one in which I should make a declaration in favour of Dr Gray who has no obvious interest in seeking it. In the reasons for judgment I have attempted to give a reasonably comprehensive history of the events of over 20 years which had led to these proceedings. Some of the facts which have been found were not directly related to the conclusions reached on the various claims and cross-claims. Some of them would be relevant to issues in defences raised under the Limitation Act 1935 (Cth) and by way of laches or undue delay by UWA in bringing the proceedings against Dr Gray and Sirtex. Some may also be relevant to other defences. The positive defences were the subject of extensive argument. However given my conclusions on UWA's case, it is not necessary to deal with them here. It would add more length to an already long judgment and provide hypothetical answers to questions which have not arisen. For the reasons that follow, UWA's claims against Sirtex and Dr Gray fail. All cross-claims in the proceedings are dismissed save for Sirtex's cross-claim against Dr Gray for breach of his duty as a director and misleading or deceptive conduct which will stand over for a hearing (if it be necessary) for assessment of damages. I will make orders but the parties will have the opportunity to file written submissions seeking variation of those orders. It is a body corporate with all the attendant capacities to sue and be sued and to take, purchase, hold and alienate real and personal property (s 6). The definition of UWA, including staff and students, no doubt traces its ancestry back at least as far as s 1 of the statute of 1571 relating to Oxford University which provided that "The Chancellor, Masters and Scholars of Oxford" shall be incorporated and have perpetual succession in fact, deed and names. Similar formulae appear in a number of University Acts throughout Australia, including those in New South Wales, Victoria, South Australia and the Northern Territory. The definition is not used in University Acts in Queensland. Those statutes that use the traditional formula recognise staff and students as members of the university and not merely as employees and clients respectively. It has been suggested that this has implications for the interpretation of university statutes, bylaws and regulations which affect them: Corcoran S, First Principles in the Interpretation of University Statutes (2000) 4 Flinders Journal of Law Reform, 143 at 149. It may also have implications for the nature of the employment relationship between UWA and its academic members although none was argued. Subject to the UWA Act and Statutes made under its authority, the entire control and management of the affairs and concerns of the university is vested in the Senate which "... may from time to time appoint deans, professors, lecturers, examiners, and other officers and servants of the University, ..." (s 13). Control and management of real and personal property vested in or acquired by UWA is also conferred upon the Senate (s 14). The Senate has power under sections 16A and 16B to make bylaws regulating the use of UWA lands. The power to make such bylaws is conferred by section 16A(2). It is constrained by the requirement that the bylaws be approved by the Governor. The purposes for which they may be made are "managing, preserving, and protecting the lands of the University ... and ... regulating the terms and conditions on which such lands may be visited or used by any persons ... and the conduct of such persons when on or upon such lands". They "take effect and have the force of law as from the date of such publication, or from a later date specified in the publication". The Senate may also make regulations. Section 31 empowers the "governing authority" to make, alter, and repeal "Statutes" with respect to a variety of matters set out in that section. Under section 31(3) the Convocation may consider and draft amendments to the proposed statute and return the draft to the Senate. If the Senate agrees, it may forthwith make the Statute. If it does not, there is a process for a conference between the Senate and the Convocation. Where agreement cannot be reached, the Senate can nevertheless make the statute. By section 33 Statutes require approval of the Governor and must be published in the Gazette and "shall thereupon have the force of law". They are subject to annulment by resolution of either House of Parliament. As it turns out, consideration of the legislative history by the parties would have avoided some wasted debate. UWA has a rather confusing and overlapping mix of delegated legislative powers. The UWA Act as originally enacted conferred upon the Senate the "control and management of the affairs and concerns of the University" and of real and personal property vested in UWA (sections 13 and 14). There was no express power to make bylaws or regulations. Section 31, in much the same form as it is now, conferred power upon the Senate to make, alter and repeal Statutes. That power was subject to the constraints imposed by section 33 requiring the approval of the Governor, publication in the Gazette and laying before Parliament. When the UWA Act was introduced into the Legislative Assembly in 1911 the then Premier who delivered the Second Reading Speech made reference to the statute making power. An example of that usage from 1538 given in the dictionary referred to the "Masters of the Collegis in Cambryge and Oxforde with there Statuytts: Latimer in Ellis Orig Lett (Ssr III III.204)". As appears from the dictionary definition the term "Statute", which designates delegated legislation made by UWA under section 31, dates back in usage to domestic rules made by universities in England as chartered corporations under the Royal prerogative such as the Colleges of Oxford and Cambridge. Such statutes did not enjoy legislative status and were subject to judicial review for unreasonableness and inconsistency with the general law. However, where a university was established by an Act of Parliament with power to make statutes as a species of delegated legislation, statutes so made had the force of law. An early example was the Oxford University Act 1854 (UK) which authorised the Hebdomadal Council and ultimately Convocation to make statutes: University of Oxford --- Statutes and Regulations: Preface: Constitution and Statute-making Powers of the University www.admin.ox.ac.uk/sttutes; Whittaker S, " Public and Private Law-making: Subordinate Legislation, Contract and the Status of Student Rules" (2001) 21 Oxford Journal of Legal Studies pp 103-128. Against that background it is helpful to turn to the history of the by-law and regulation making powers of UWA which were first conferred upon it some 18 years after its establishment. Sections 2 and 3 of the University of Western Australia Act Amendment Act 1929 (WA) (the 1929 Amendment Act) conferred on the Senate power to make bylaws in the terms and subject to the constraints now reflected in sections 16A and 16B of the UWA Act. Section 6 introduced the regulation making power now found in section 16E(1). The 1929 Amendment Act was to be read with the UWA Act. There was no provision requiring promulgation of regulations in order for them to take effect. Sections 2 to 7 of the 1929 Amendment Act were renumbered as sections 16A to 16F of the UWA Act by the University of Western Australia Act Amendment Act 1970 (WA). The University of Western Australia Act Amendment Act 1975 (WA) amended section 16E of the principal Act by redesignating it as subsection (1) and enacting the present subsection (2). At the time that the Patents Regulations were made by the UWA Senate in 1971 there was no requirement in the UWA Act for their promulgation. This issue is further considered below. A point was made, in closing argument, about distinctions between the powers to make Statutes, bylaws and regulations and the implications of those distinctions for the extent, if any, to which regulations could affect property rights derived from the general law and, in particular, intellectual property rights. That is discussed later in these reasons, but it is useful to note what was said about the regulation making power when it was enacted in 1929. The Second Reading Speech in the Legislative Assembly for the 1929 Amendment Act dealt principally with the bylaw making power which was concerned with UWA lands. They occupy the greater part of the University calendar for example from page 30 to 103 of the 1929 Calendar. Small alterations are made in these regulations at almost every meeting of the Senate in order to meet the changing conditions of University work. The University Act and the statutes set out the main principles on which degrees are given, and the regulations concern themselves only with minor details. At present however, these regulations have not the force of law, and the Bill proposes to give the Senate power to make such regulations. The Patents Regulations commenced with a Preamble reciting that "Although it is not the policy of University research to seek patentable inventions, there can arise in the course of research, inventions which, in the interests of the public, the University and the inventor, should be patented. The inventor shall be entitled to 33 1/3 per cent of the net financial return from any invention exploited under Regulation 8 after any expenses incurred by the University in patenting and exploiting it have been met: provided that, if the net annual return to the University from the invention exceeds $50,000 the proportion to be received by the inventor shall be progressively reduced until at a net annual return to the University of $500,000 it shall be 10 per cent; and provided also that, even before the University's expenses have been met, the inventor shall at no time receive less than 10 per cent of the gross returns to the University from his invention. This provision was the subject of considerable debate advanced by Dr Gray and Sirtex about whether and when the Patents Regulations had been promulgated and thereby came into effect. UWA joined issue on that debate. Much reference was made to the publication of University Calendars, inter-faculty handbooks and the like. This was unnecessary because section 16E(2) had not been enacted when the Patents Regulations were made by the Senate. It was not enacted until 1975. A question arose after the passage of the Murdoch University Act 1973 whether regulations made by UWA attracted the requirements of s 36 of the Interpretation Act 1918 (WA). Section 36(4) of that Act applied to Acts which provided for regulations to be made by any authority other than the Governor. Regulations so made were subject to paragraphs (b), (c) and (d) of s 36(1) and to ss 36(2) and (3). Such regulations were to be published in the Gazette . They would "take effect" and have the force of law from the date of such publication, or from a later date fixed by the order making such regulations. Section 36(1)(d) required such regulations to be laid before both Houses of Parliament. By s 36(2) they were subject to disallowance by either House. The term "regulation" was defined in s 36(5) to include "rule" or "by-law". There was no evidence that the Patents Regulations had ever met these requirements. It is highly likely that they did not. The problem which existed in respect of those and other UWA regulations was resolved in 1975 by the first limb of section 16E(2) of the UWA Act. That deemed the provisions of s 36 of the Interpretation Act never to have applied to a regulation made by the Senate under section 16E(1). The deemed non-application of s 36 of the Interpretation Act was retrospective in its application. It was, in effect, deemed never to have applied to any regulation made by the Senate prior to the date from which section 16E(2) came into force. The second limb of section 16E(2) is prospective only as appears from the use of the word "shall". The amendment now sought makes it clear that a regulation of the university senate is not, and never has been, such a regulation and emphasises the time at which it is to take effect. This may have been the case with the Patents Regulations until 1975. But whatever the true position may have been between 1972 and 1975, the Patents Regulations were in effect at all material times after the coming into effect of the 1975 amendment to section 16E of the UWA Act. confidential information which means information of any kind which, because of its confidential character, is capable of protection by contractual or equitable means, and includes information of a valuable commercial or technical character. . copyright work which means any work or thing in which copyright may subsist including, without limitation, 'artistic work', 'literary work', 'dramatic work', 'musical work', 'sound recording', 'cinematograph film', 'television broadcast', 'sound broadcast', 'published edition of work' or 'photograph', as those terms are defined by the Copyright Act 1968 (Commonwealth) as amended or replaced from time to time. invention which means an invention (including both products and processes) which may be patentable under the Patents Act 1990 (Commonwealth) as amended or replaced from time to time. . patent which means a patent within the meaning of the Patents Act 1990 (Commonwealth) as amended or replaced from time to time, and includes a standard patent, provisional patent application, patent application, or a petty patent. 'patent' refers to intellectual property. Originators are to own the copyright in all copyright works created by them subject to the other provisions in the IP Regulations (regulation 4(1)). Students are to own intellectual property which they create (regulation 4(2)). A decision on action arising out of the consultation is normally to be made within 90 days of the consultation taking place (regulation 7(2)). (b) If this option is exercised, the University, where appropriate, shall assign to the originator within ninety (90) days, rights to the intellectual property on fair terms. The committee was empowered to establish guidelines, procedures and criteria for reporting to the Pro Vice-Chancellor (Research) the creation, commercialisation, unauthorised use or infringement of intellectual property to which the IP Regulations apply. The Pro Vice-Chancellor (Research) is empowered by regulation 9 to do a variety of things for the purposes of the IP Regulations. These include consultation with the originator and the relevant executive deans of faculties, application for protection or registration of intellectual property, commercialisation of intellectual property owned by or licensed to UWA and assignment or licence to the originator of intellectual property owned or licensed to UWA under the IP Regulations. Regulation 10 provides for the apportionment of net revenue from the commercialisation of UWA's intellectual property. Moreover, they contended there was no satisfactory evidence that they had been promulgated as required by section 16E(2). UWA submitted that the date at which the IP Regulations came into effect did not depend upon their promulgation as it was stated in the IP Regulations themselves that they were "effective from 22 July 1996". In so contending UWA relied upon section 16E(2) of the UWA Act. It is important to point out that promulgation for the purpose of section 16E(2) requires publication at a particular date which may then be identified as the date from which the relevant regulation comes into effect. The insufficiency of a particular claimed publication cannot be cured by its repetition over a number of years. There is a constructional difficulty with UWA's submission that the IP Regulations took effect upon the date they were made by the Senate, ie 22 July 1996. A regulation made under section 16E(2) will take effect "from the date of its promulgation in the University or from such later date as may be therein specified". The subsection makes promulgation a necessary condition of a regulation coming into effect even if the date upon which the regulation comes into effect is later than its promulgation. Moreover, the subsection, properly construed, contemplates that if a regulation is to come into effect at a date later than its promulgation, that later date will be specified in the promulgation itself. The word "therein" in section 16E(2) refers to the promulgation, not to the regulation. This is consistent with the model for bylaws which come into effect upon the date of publication in the Gazette or "from a later date specified in such publication" (section 16B). A less likely alternative construction would allow the later date to be specified in the regulation itself. But the regulation and the later date would still have to be promulgated. In any event, the inclusion in the IP Regulations of the provision that they would be effective from 22 July 1996 was not valid as it purported to bring them into operation before they had been promulgated. On any view of what constituted their promulgation it occurred at a date after their approval by the Senate. The Senate cannot bypass the promulgation requirement. Its importance is apparent. It was imposed in 1975 by section 16E(2) in lieu of the more rigorous requirements of s 36 of the Interpretation Act. It is the mechanism by which the existence of regulations is to be brought to the attention of those to be bound by them. Those to be bound are identified in section 16E(1) namely "... all deans, professors, lecturers, examiners, and all other officers and servants of the University and also ... all students attending the University". There is no definition of "promulgation" in the UWA Act. The Court was not directed to any statute, regulation, instrument or written administrative policy or practice which existed in 1996 and which specified how regulations made under the UWA Act were to be promulgated. To set forth or teach publicly (a creed, doctrine etc). Evidence relating to the circulation of draft Senate minutes was given by Ms Lynette Hill who was the Personal Assistant to the University Registrar between April 1992 and December 1999. One of her duties was to compile draft minutes of Senate meetings and to circulate them within about a week of the meeting to people identified on a mailout list. The current list, which Ms Hill exhibited to her affidavit, reflected the classes or groups of persons, defined by office, to whom she had been sending draft Senate minutes since 1992. The draft minutes of the Senate meeting of 22 July 1996 would therefore have been sent to members of Senate, senior officers in the Chancellery, Deans of Faculties, Heads of Schools and various UWA administrative officers. The draft minutes of the Senate meeting held on 22 July 1996, as exhibited to Ms Hill's affidavit, included the resolution on the recommendation of the Academic Council rescinding the Patents Regulations and adopting the IP Regulations. They did not include the text of the regulations nor any guide to where they could be viewed. I accept the evidence given by Ms Hill as to the distribution of the draft minutes and infer that it is likely that they were distributed as she suggested. However, in my opinion, that distribution did not constitute promulgation of the IP Regulations. It was a limited publication of unconfirmed minutes setting out a resolution but not the regulations or how they might be accessed. It did not purport to be a promulgation. In my opinion it does not answer the definitions of promulgation referred to above. The UWA newsletter, Campus News, published in August 1996 contained a notice that the Senate had passed the IP Regulations 1996. An extract of the newsletter was exhibited to the affidavit of the University's Secretary, Ms Massey. The President of the Post Graduate Students Association commended the new arrangements saying that students perceived them to be very favourable. This publication in my view was not a promulgation of the Regulations. This may be inferred by reference, inter alia, to the contents page. It contained a more fulsome statement about the IP Regulations. It said that they provided for the ownership of intellectual property created by students and staff of UWA. It said nothing about the obligations of UWA staff under the terms of the regulations. I am prepared to infer from the contents page that it would have been published close to the beginning of the academic year. It set out, amongst other things, Principal Dates and Semester Dates. It gave details of the Orientation Program. I am not prepared to accept that publications to students or a statement about the IP Regulations constituted the promulgation of the Regulations. I accept that there was reference in the Interfaculty Handbook to the publication of the Regulations on a UWA website, but this was not relied upon by UWA as promulgation. The first formal publication of the IP Regulations relied upon and of which there was evidence, was in the 1997 University Calendar. There they were reproduced in full. However the date of the publication was attended with uncertainty. The Calendars for the years 1972 to 1975 and 1985 to 1999 included statements that they were current at a particular month, generally March or April, in the year of publication. In some cases the Calendar was updated throughout the year so that it bore a number of dates at which the information in it was said to be current. Information in the 1997 Calendar was said to be current as at April 1997. The only direct evidence about UWA's practice in relation to the date of publication of its Calendars before they began to be produced in an electronic form, was that of Professor Robson, the current Vice-Chancellor who was first employed by UWA as an academic in the field of agriculture in 1974. He said of the Calendar generally that "Prior to it becoming electronic it was generally produced towards the end of the year". It was put to him that it was in October or November. He said "of that order of time, yes". He said however, he was not certain when that occurred. Professor Gale, who was the Vice-Chancellor from 1 February 1990 to 31 December 1997, agreed in cross-examination that the "normal process" was for regulations to be published in the UWA Calendar after they had been through the Senate. It was put to her that the 1997 Calendar was published in October or November of that year but she could not remember when it was published. UWA submitted in its responsive submissions in closing that the Court should infer that the 1997 Calendar was published in April of that year. This inference was said to be supported by the statement in the Calendar that the information it contained was current as at that month. No such inference can be drawn. Moreover, it is at odds with the only evidence there was about publication dates which came from Professor Robson. It was submitted that Dr Gray's counsel did not put a date to Professor Robson. But that was not his obligation. It was for UWA, which invoked the Regulations against Dr Gray, to establish the date at which they came into effect. I cannot find, given the evidence of Professor Robson, that the IP Regulations were published in the University Calendar 1997 at any particular date . I can infer, based on his evidence, that they had been published by 30 November 1997. The evidence does not allow me to infer on the balance of probabilities that they were promulgated at any particular date before then. It was acknowledged on behalf of Sirtex that Dr Gray appeared to know about the existence of the IP Regulations as early as 26 July 1996. That knowledge, as was pointed out by Sirtex, did not constitute evidence of promulgation. Dr Gray had recently spoken with Mr James Lennon, the lawyer in charge of intellectual property in the UWA Legal Office and may have learned about the new regulations informally in that way. I conclude, for the purposes of these proceedings, that the IP Regulations did not come into effect until 30 November 1997 and that the Patents Regulations were not rescinded until that time. There would be utility in a procedure for promulgation to the whole of the UWA community, formally adopted by UWA, publicised and uniformly applied to its regulations when made or repealed. The content of any promulgation would give notice of the existence of the regulations and their contents or a convenient means of accessing their text. The procedure should also provide for promulgation of regulations at a particular date so that there can be no debate about when they come into effect. Sirtex pointed to the procedural safeguards associated with Statutes which require their approval by the Governor, publication in the Gazette and that they be placed before Parliament and be subject to annulment. It also pointed to the safeguards attaching to bylaws under s 16A which regulate the use of UWA land. They too must be approved by the Governor and published in the Gazette. The absence of such procedural requirements for regulations made under section 16E was said to indicate that they were intended to be ancillary procedural and facilitative. It was submitted that section 16E does not authorise the making of regulations which abrogate substantive rights accorded to private persons as a matter of general law. The submission was consistent with the representation made to the Legislative Council in the Second Reading Speech for the Amendment Act 1929 that regulations made under the power conferred by that Amendment would be concerned with "minor details". It is apparent from the language of section 16E that regulations are a lesser form of delegated legislation than Statutes. Their first stated purpose is "carrying out the Act ... or any Statute made by the governing body of the University". These words indicate that regulations made pursuant to that purpose are ancillary to the Statutes. The second stated purpose of the regulation making power however overlaps with the first subject matter of the Statute making power which is "the management, good government and discipline of the University". The words "securing and enforcing management, good government and discipline of the University" which define the cognate purpose for which regulations might be made, suggest that they are a lesser species of instrument than the Statutes. They do not attract the procedural protections attending the making of those higher instruments under section 31. Nevertheless, the securing and protection of property belonging to UWA under the general law, would lie within the scope of the regulation making power as well as within the power to make Statutes. It is a very different matter to propose that the law-making power of the university authorises regulations which alienate or interfere with property rights not vested in UWA. The words of section 16E are not apposite to such a wide construction. Moreover, there is a well established presumption against construing legislation as interfering with vested proprietary interests. It applies to the scope of the powers conferred by section 16E. The presumption was applied by Kitto and Owen JJ in CJ Burland Pty Ltd v Metropolitan Meat Industry Board [1968] HCA 77 ; (1968) 120 CLR 400. The High Court there held that a bylaw under which the Metropolitan Meat Industry Board could keep parts of animals killed at its abattoir was invalid. The bylaw making power in s 30 of the Meat Industry Act 1915 (NSW) provided for by-laws for "the management and control" of public abattoirs and for regulating and controlling their use. As was held in Newcastle Breweries Ltd v The King [1920] 1 KB 854 this rule applies a fortiori to the construction of a statute delegating legislative powers. Windeyer J agreed with Owen J inter alia (at 410). See also: LH Hoare Pty Ltd's Application [1976] Tas SR 1156 and generally: Pearce and Geddes Statutory Interpretation in Australia (6 th ed, 2006 Lexis Nexis Butterworths) at 5.17-5.18. When property said to be affected by a statute is itself a statutory right, then a question of the construction of the two statutes may arise. The presumption has been applied in some such cases: eg Greville v Williams [1906] HCA 97 ; (1906) 4 CLR 694 and Yang v Owners-Strata Plan No 3529 [2001] NSWSC 1135 ; (2001) 54 NSWLR 60. In those two cases, widely separated in time, public service superannuation rights and rights under the Strata Scheme Management Act 1996 (NSW) were respectively treated as property rights which could not be taken away without an express provision: Pearce and Geddes at 5.19. In my opinion an inventor's rights derived from the 1990 Act or its predecessor fall into the category of property rights which attract the presumption. No question can arise of UWA's regulations modifying in any way the operation of the Patents Act . No such suggestion was made. The 1952 and 1990 Acts both provide that the rights given to a patentee by a patent are personal property and "capable of assignment and of devolution by law" (s 152(1) , 1952 Act and s 13(2), 1990 Act). A person may alienate or encumber rights created by the Acts, or associated rights, expressly or by operation of law including by application of equitable principles. Assuming, without deciding, that UWA could be empowered by its Act to make a regulation appropriating rights derived from the Patent Act it has not been so empowered in this case. That conclusion flows from the language of section 16E and, if it be necessary, the effect upon its construction of the presumption against interference with property rights. There is, of course, nothing to prevent UWA, which has all the capacities of a body corporate, from engaging a person as a member of its academic staff, subject to an express covenant to assign to UWA all or any subset of defined intellectual property rights which may arise out of the person's work as an employee. Property rights vested by contract in the university or otherwise devolving on the university can be protected, managed and controlled by statute or regulation as can any of its property. However UWA cannot, by regulation, acquire property from its staff members. The position is no different where the staff member's contract embodies a regulation which purports to declare that intellectual property generated by him or her belonged to UWA. If the regulation is not valid for the reasons I have outlined then it could not be said that it was intended by either party that compliance with an invalid regulation could become a contractual obligation. The incorporation of the Statutes and the Regulations of the university into staff contracts is, in my opinion, posited on their validity. Where the regulations "from time to time" are imported into the conditions of appointment and UWA enacts, during a person's term of appointment, a new regulation purporting to appropriate intellectual property rights, a similar issue arises. A regulation beyond power could not change contractual arrangements so as to affect a staff member's proprietary rights. Regulation 6(3) of UWA's Patents Regulations mandated assignment of a staff inventor's rights in his or her invention to UWA. Regulation 4(4) of the IP Regulations asserts the ownership of UWA to all intellectual property created by an "originator" in the course of the originator's employment with UWA. That is other than copyright (save for copyright in computer programs). On the analysis already outlined these Regulations are either redundant or invalid. If UWA (contrary to my conclusion later in these reasons) already owned the property by implied term or as an incident of the employment contract, then the Regulations would add nothing. If UWA does not have the property, then the Regulations could not validly appropriate it. They did not create the University's interests in patentable inventions nor do they extinguish any such interest. As a matter of proper construction the Patents Regulations were expressly machinery provisions, as the terms of the preamble and the Regulations themselves make clear. As Sirtex pointed out they did not state circumstances in which UWA would have an interest in patentable inventions developed by UWA academic staff. That was a question left to the general law. Rather, they provided a procedure by which UWA was to vindicate its rights (or decide to abandon them) in relation to inventions in which the general law gave it an interest. The assignment obligation under regulation 6 was posited upon UWA having rights in relation to an invention. It was not relied upon as the source of UWA's rights. UWA's position was not always clear in respect of the IP Regulations. However at one point it characterised the purpose of both sets of regulations as implementing a procedure to enable the orderly identification of property "to which the University was entitled". The relevant property comprised patentable inventions made by, among others, an employee in the course of his or her duty and in respect of which UWA was entitled to be recorded on the Patents Register as the owner. The statutory rights granted under a patent to a patentee pursuant to the 1952 Act derived from that Act as do the statutory rights associated with a patent granted under the 1990 Act. Although the 1952 Act was repealed by s 230 of the 1990 Act, transitional provisions in the latter Act apply it in relation to a standard or petty patent granted under the 1952 Act as if it had been granted under the 1990 Act (s 232(1)). Where, before the commencement of the 1990 Act, a patent application and provisional specification had been lodged under the 1952 Act, but a complete specification had not been lodged under that Act then, subject to Ch 23 of the 1990 Act and the Regulations, the 1990 Act applied as if the application were a provisional application under the 1990 Act. Where the complete specification had been lodged then the 1990 Act would apply on and after the commencement day as if it were a complete application under that Act (s 234(2)). Subsections (2) and (3) are not material for present purposes. Subsection (4) was inserted, with effect from 14 June 1969, by ss (2) and (6) of the Patents Act 1969 (Cth). Persons entitled to a patent by "assignment, transmission or other operation of law" could apply to the Commissioner of Patents to register their titles (s 21). Notice of trusts, expressed, implied or constructive, relating to a patent or licence, were not to be entered on the Register or be receivable by the Commissioner (s 25). (2) The exclusive rights are personal property and are capable of assignment and of devolution by law. (3) A patent has effect throughout the patent area. As appears from the preceding provisions of both the 1952 and 1990 Acts, and as submitted by Sirtex, there was at all material times after the making of the Regulations in 1971 a mechanism by which UWA could apply to the Commissioner for a patent to which it claimed entitlement by operation of law. ... While ss 34(2), (3), (4), 63 and 64 deal with assignments and joint applications and ownership, all these provisions do is to permit assignments of patents from employee to employer or joint applications or both. The common law and equitable principles still govern who, in the first place, is entitled to apply for a patent for such an invention or is entitled to the patent when granted. The amendment was the result of a recommendation by a committee set up in 1950 by the Commonwealth Attorney-General under the chairmanship of Dean J of the Supreme Court of Victoria. Its establishment followed the 1947 Report of the Swan Committee which led to the enactment of the Patents Act 1949 (UK). The Bill recommended by the Dean Committee became, in effect, the 1952 Act. The Committee was reconvened in January 1957 to consider suggested amendments to the Act. One of those related to s 34. The Committee recommended that "any person who is entitled to the benefit of a patent when granted may make an application for a patent" --- Report of the Committee appointed by the Attorney-General of the Commonwealth to consider what further alterations are desirable in the Patent Law of the Commonwealth (the Dean Report) p 2. However, there are certain persons who are entitled to the benefit of a patent once it has been granted but, as the Act stands at present, they are not entitled to make an application. One example of such a class of person is an employer who is unable, at present, to apply in his own name for a patent in respect of an invention made by his employee in the course of his employment. The committee recommended that these persons should themselves be entitled to make an application. These provisions did not, however, affect the general law governing ownership of intellectual property rights as between employers and employee inventors. Section 56(2) of the Patents Act 1949 (UK) was enacted to provide a procedure for determining disputes between employers and employees about the ownership of patent rights and for the apportionment of interests. In the event that the Court or Comptroller was not satisfied that either employer or employee was entitled, to the exclusion of the other, to the benefit of an invention made by the employee, an application could be made for apportionment between them of the interest or benefit derivable in or from the invention or patent in such manner as the court or comptroller deemed just. The provision was recommended by the Swan Committee: 1947 Cmnd 7207 [27]. Its object, according to the recommendation, was to allow an apportionment of interests where the moral rather than the legal benefits were shared. It was, however, narrowly construed by the House of Lords in Sterling Engineering Co Ltd v Patchett [1955] AC 534. See the comment by the author of the Swan Report in K Swan, Patent Rights in an Employee's Invention (1959) 75 LQR 77. The provision was replaced by ss 39 to 43 of the Patents Act 1977 (UK) --- see generally Phillips and Hoolahan, Employees' Inventions in the United Kingdom - Law and Practice (ESC Publishing, Oxford, 1982) Ch 2. Section 40 provides for the compensation of employees where an employee invention is of outstanding benefit to the employer and "it is just that the employee should be awarded compensation to be paid by the employer". Section 41 provides for the way in which such compensation is to be assessed. Cornish and Llewellyn in their text on Intellectual Property describe s 39 as "in effect" codifying the common law principles which determine whether an employer or an employee is initially entitled to an invention although as they note, Falconer J in Harris' Patent [1985] RPC 19 did not accept that s 39 necessarily embodied the common law: Cornish W and Llewellyn DM, Intellectual Property --- Patents, Copyright, Trade Marks and Allied Rights, (6 th ed, Sweet and Maxwell, 2007) p 275. It is convenient now to consider the common law in relation to employee's inventions as developed in the United Kingdom. Whether it will be implied will depend upon the circumstances, as will the scope of the implication. The cases illustrate a degree of judicial caution about generalisations in the area although, as appears below, there was thought to be a strengthening of the position in favour of the employer in the House of Lords in 1955 notwithstanding the provisions of s 56(2) of the Patents Act 1949 (UK). The perceived effects of that decision were mitigated in the United Kingdom by ss 39 to 43 of the 1977 Act (UK). At the end of the 19 th century the fact of employment and payment could be enough to support a prima facie inference, at common law, that copyright generated by an employee in the course of employment belongs to the employer: Lamb v Evans [1893] 1 Ch 218 at 225 (Lindley LJ). Where confidential information was involved a good faith requirement preventing its use by an employee for his own benefit would usually be implied: Robb v Green [1895] 2 QB 215. On the other hand there was no general presumption that an employer had property in an employee's inventions. He might do so even though the invention might relate to subject-matter germane to and useful for his employers in their business and even though the servant may have made use of the employer's time and servants and materials in bringing the invention to completion, and may have allowed the employers to use the invention while in their employment (at 48). The employee had been engaged to use his skill, knowledge and inventive powers to improve the manufacture of moulding cylinders for phonograph records. He made the inventions in the execution of that duty and took out the patents in issue through the patent agent of the company and at the company's expense. So too, in British Reinforced Concrete Engineering Co Ltd v Lind (1917) 34 RPC 101 , the employee, obliged by the terms of his employment to produce the best design he could for linings of headings in a colliery, was a trustee of a patent of an invention produced pursuant to that obligation. Eve J identified the relevant question by reference to the passage in Frost cited in Edisonia Ltd v Forse 25 RPC 546. He held that the mere fact that the employee had been engaged as an assistant engineer or draughtsman would not have entitled his employer to claim for its benefit the advantages of any invention which he might have made albeit the invention had been the result of knowledge and experience gained in the employer's office and might even have been suggested by difficulties which had arisen there. A declaration was made that he was a trustee for the patent for the successful design. He was under a duty to his employer to design to the best of his ability a brake that worked. The invention which he developed was the solution of a problem which his employers had instructed him to solve. A statement of the circumstances in which ownership of an employee invention by the employer will be implied appeared in Triplex Safety Glass Co v Scorah (1937) 1 Ch 211 at 217. Farwell J held in that case that an implied term existed which gave rise to an equity on the part of the employer. On the other side of the line was Charles Selz Ltd's Application (1954) 71 RPC 158 in which the manager of a factory making lamp shades discovered a method of applying plastic coatings to frameworks for display articles and signs and also for making lamp shades. Lloyd-Jacob J rejected the employer's claim on the basis that the employee had at no time been engaged by his employer to apply himself to discovering an invention or anything in the nature of an invention. An apparently distinct category was recognised where the status or seniority of the inventor employee was such that he or she could be said to owe a fiduciary obligation to the employer in respect of the benefit of any invention developed in the employer's time and/or using the employer's resources. In Fine Industrial Commodities Ltd v Powling (1954) 71 RPC 253 the managing director of a company who had participated, as managing director, in experiments which led to a patented invention was found to hold his share of the patent as trustee for the company. Danckwerts J referred to the relevant law as "well settled" and cited Worthington Pumping Engine Co 20 RPC 41 , British Reinforced Concrete Co 34 RPC 101 and Triplex Safety Glass Co (1937) 1 Ch 211. It is very material to see what is the nature of the inventor's position in regard to the business, and it may be a term of his employment, apart altogether from any express covenant, that any invention or discovery made in the course of the employment of the employee in doing that which he was engaged and instructed to do during the time of his employment, and during working hours, and using the materials of his employers, should be the property of the employers and not of the employee, and that, having made a discovery or invention in the course of such work, the employee becomes a trustee for the employer of that invention or discovery, so that as a trustee he is bound to give the benefit of any such discovery or invention to his employer. The case concerned proceedings under s 56(2) of the Patents Act 1949 (UK) involving an inventor and the company which employed him at the time he made the relevant invention. There was discussion of the nature of the "implied term" in a contract of service that inventions made by an employee belonged to the employer. Viscount Simonds, with whom the other Law Lords agreed, described such a term as implied in the sense that it was implied in the contract of service of any worker that what is produced "by the strength of his arm or his skill or the exercise of his inventive faculty belongs to the employer" (at 544). If it is patentable it is for the employer to say whether it shall be patented, and he can require the employee to do what is necessary to that end. Lord Reid saw it as a term "inherent in the very nature of the contract which the law will imply in every case unless the parties agree to vary or exclude it" (at 547). But at the time when he made these inventions he was employed by the Appellants as their Chief Designer and it is, in my judgment, inherent in the legal relationship of master and servant that any product of the work which the servant is paid to do belongs to the master: I can find neither principle nor authority for holding that this rule ceases to apply if a product of that work happens to be a patentable invention. Of course, as the relationship of master and servant is constituted by contract, the parties can, if they choose, alter or vary the normal incidents of the relationship, but they can only do that by express agreement or by an agreement which can be implied from the facts of the case. Indeed it was said that the invention might be the employee's even though made in the employer's time and with his materials. The tendency to increase the presumption in favour of his employer probably grew as cases arose in which employees were trying to stop their employer from using the invention in his own business. Cornish W and Llewellyn D, op cit at 7-03. He was found to have been employed "... to give the Plaintiffs technical advice in relation to the design or development of anything connected with any part of the Plaintiffs' business. " He made an invention on his own initiative which related to the business of the company. He had been employed by the company on other work and on terms which permitted him to retain for himself the benefit of anything which he subsequently invented. Shortly after applying for a patent for his invention he left the company's employment and entered that of a trade rival. Roxburgh J held that it was not consistent with the relationship of good faith between a master and a technical advisor that the advisor make some invention in relation to a matter concerning a part of the plaintiff's business and either keep it from his employer if and when asked about the problem, or sell it to a rival. Of course, what I am saying only relates to matters concerning the business of his employer. That, of course, is quite clear; but, in matters of that type it seems to me that he has a duty to be free from any personal reason for not giving his employer the best possible advice. In a note on the case in the Law Quarterly Review, RE Megarry observed that the earlier authorities contained not even an oblique discussion of the question whether the company was entitled to the benefit of the invention which had been made voluntarily and without any request even for advice on the problem. Roxburgh J's conclusion rested on the basis of good faith between master and servant. The invention was substantially complete when the technician was still obliged to give technical advice to the company. Let the spark of genius be struck before the vital date and the tedious process of converting it into a workable invention be carried out subsequently: what claim would the original employers have then? The latter decision was applied by Whitford J in Electrolux Ltd v Hudson [1977] FSR 312. The relevant employee was a senior storekeeper for Electrolux Ltd. He and his wife devised an adaptor for use in vacuum cleaners whereby any open mouthed bag could be made to fit into a vacuum cleaner to collect the dust sucked up by it. Electrolux claimed that the invention was made while he was in their employment and that they were entitled to its benefit under their "Standard Conditions of Employment for Staff". The relevant clause was held unenforceable as an unreasonable restraint of trade. It covered the discovery of any process, invention or improvement relating not only to articles manufactured by the employer but also by any of its associated companies in the United Kingdom or elsewhere. Despite the absence of an enforceable express condition relating to inventions by employees, the Court held that there could be implied into a contract of employment a covenant that inventions made in the course of employment should be held upon trust for the employer. But such a principle had no application where the employee was not employed to invent and had made the invention outside working hours and without using the materials of the employer. In so holding Whitford J accepted the principle in Robb v Green (1895) 2 QB 1 that there would be engrafted on any contract between master and servant a condition that the servant undertook to serve the master with good faith and fidelity (at 329). There was no breach of that obligation to Electrolux. Whitford J held that when an employee is not required to produce inventions in a particular field, he or she may well be able to enjoy the fruits of inventive activity. In Harris' Patent (1985) 102 RPC 19 , Mr Harris had managerial responsibility for a department of his employing company which sold a class of valve manufactured by a Swiss company. Neither he nor his employer had a research function. They were to sell and provide after sales service for the product. Mr Harris designed an improved version of the valve in his own time and, after leaving his employment, applied for a patent for it. The company claimed, under s 39(1) of the Patents Act 1977 (UK), that the invention belonged to it. Falconer J upheld the Hearing Officer's decision in favour of Mr Harris. He referred to Adamson v Kenworthy for the proposition that "... the duty of fidelity is to carry out faithfully the work the employee is employed to do to the best of his ability" (29). The existence of that duty did not "assist in the formulation of the actual duties which the employee is employed to do" (30). The business of Mr Harris' employer was to sell valves made by a Swiss manufacturer, all made strictly according to the manufacturer's drawings. As manager of that part of the business, Mr Harris had no special obligation, beyond that of sales and after sales service, to further the interests of his employer. The invention therefore did not fall within s 39(1)(b) of the Patents Act 1977. As has been pointed out in academic commentary Mr Harris' job description required him to use his specialist knowledge to deal with problems experienced by customers of his employer. However, the Patents Court did not base its decision on his job description but on the actual duties he performed. He had no research laboratory or other facilities. He did not undertake any creative activity and major design problems were referred to the Swiss manufacturer of the valves: Chandler PA " Employees' Inventions: Inventorship and Ownership " [1997] 5 EIPR, 262 at 263. Harris' Patent 102 RPC 19 was distinguished in Staeng Ltd's Patents (1996) RPC 183 where the relevant employee was held by the Comptroller-General to be a senior executive with a special obligation to advance the interests of his employer's undertaking. The existence of a "special obligation" is a statutory condition for employer ownership prescribed in s 39(1)(b) of the Patents Act 1977 . It may, to some extent, reflect the common law where the status or seniority of the inventor/employee is such that he or she could be said to owe a fiduciary obligation to the employer. Such an obligation may arise "... where the employee represents the alter ego of his employer or occupies a position very high in the management structure": Chandler PA op cit at 265. In Staeng Ltd's Patents [1996] RPC 183 a point of distinction was that while Mr Harris passed on problems, the employee of Staeng Ltd was expected to solve them by identifying the need for new products or modification of existing ones: Chandler PA op cit at 266. In a case a little closer to the present, a junior registrar employed at the Department of Ophthalmology in a hospital in Glasgow, and paid by the Greater Glasgow Health Board made an invention. It related to an optical spacing device for use with an indirect ophthalmoscope. The inventor was found by Jacob J, in proceedings under s 39 of the Patents Act 1990 (UK), to have been doing some teaching and taking an interest in research to the extent it was consistent with his primary and essential function of treating patients. He made the invention in his own time. He was held not to have been acting in the normal course of his duties as a Registrar: Greater Glasgow Health Board's Application (1996) RPC 207 at 222. Jacob J rejected the proposition that because it was a doctor's duty to think about the diagnosis and treatment of patients, it was also his or her duty to devise a better method of diagnosis if he or she were able to find one. Some of those will involve patentable inventions. Most doctors are employed. If, just because they are employed and because the invention could be used for the purpose of their employment the invention belongs to the employer then many doctors would be placed in a very difficult position ... "Can they publish what they had discovered? ", "Do they have to get their employer's permission to publish? " At present they do not. I do not see why they should in the future. When that case was decided the issue of ownership of copyright in a work as between employer and employee was based upon whether the work was made in the course of employment. A person engaged to give lectures who decided to reduce them to writing would, absent clear terms, have been entitled to the copyright. Jacob J thought the same applied to an inventor. While a "useful accessory to his contractual work" it was not "really part of it". It may also require the assignment of rights associated with such an invention. A provision conferring an employee inventor's rights on the employer, if too widely expressed, may be unenforceable as an unreasonable restraint of trade. Absent express provision, a term may be implied in a contract of employment whereby the benefit of an invention developed by an employee belongs to the employer such that the employee is a trustee of the invention for the employer. There may be an associated implied contractual obligation or an incidental equitable obligation to assign the benefit of any invention to the employer. The character of a contract as a contract of employment does not of itself require the implication of a term that would prevent the employee from taking the benefit of an invention made by the employee during the term of service even if made in part in the employer's time and using some of the employer's human and material resources. Where an employee has been employed for the purpose of solving a technical problem or improving the employer's technology or to make inventions, then there will be an implied term in the contract that the inventions made by the employee in the discharge of such contractual duties belong to the employer. The preceding implication may be supported by an implied term that the employee will act in good faith in the interests of the employer in discharging his or her duties under the contract of employment. Where the employee has a position with the employer of such seniority that it carries with it an associated duty to advance the interests of the employer generally, then there may be an implied duty of good faith and an implied term that an invention made by the employee relevant to the employer's business will belong to the employer even if made outside working hours. Where an employer is entitled to the benefit of an employee's invention by express provision or by implication, the employee will hold the invention in trust for the employer. For reasons discussed below their application to such a case is to be approached with caution. In the United States it has long been the rule that, when an employee is employed to invent, an invention produced pursuant to that contractual obligation is the property of the employer. Where an employee is not specifically employed to invent but makes an invention on the employer's time and using the employer's facilities then the employee may retain the invention: Hapgood v Hewitt [1886] USSC 224 ; 119 US 226 ; Solomons v United States [1890] USSC 255 ; (1890) 137 US 342 ; Dalzell v Duaber Manufacturing Co [1893] USSC 168 ; 149 US 315. In such a case the employer may have an implied non-exclusive right to use the invention. This is known as a "shop right": United States v Dubilier Condenser Corporation [1933] USSC 85 ; (1933) 289 US 178. In Dubilier Condenser Corporation [1933] USSC 85 ; (1933) 289 US 178 the inventors were employed by the US Bureau of Standards. They were given particular projects on which they were to work. With their employer's permission they became interested in another project to which they had not been assigned. This involved remote control devices for use in bombs and torpedoes. They invented a device relevant to that project, obtained a patent on it and assigned it to Dubilier Condenser Corporation. The Supreme Court held that even though they had used workplace facilities to develop the idea, their employers had given them permission to do so which was not conditional upon their undertaking to assign the patent that resulted. That observation reflected what the Court called "[t]he reluctance of courts to imply or infer an agreement by the employee to assign his patent". That reluctance was said to be based upon the particular nature of the act of invention and the distinction between that act and that of the discovery of the laws of nature. The reason is that he has only produced that which he was employed to invent. His invention is the precise subject of the contract of employment ... On the other hand if the employment be general, albeit it cover a field of labour and effort in the performance of which the employee conceives the inventions for which he obtained the patent, a contract is not so broadly construed as to require an assignment of the patent. But the employer in such a case has no equity to demand a conveyance of the invention, which is the original conception of the employee alone, in which the employer had no part. This remains the property of him who conceived it, together with the right conferred by the patent to exclude all others than the employer from the accruing benefits. These principles are settled as respects private employment. There is no difference between the government and any other employer in this respect. That which he has been employed and paid to accomplish becomes, when accomplished, the property of his employer. Whatever rights as an individual he may have had in and to his inventive powers and that which they are able to accomplish, he has sold in advance to his employer. Factors relevant to that conclusion included the purpose of the federal government fund, the provision and use of university facilities, the university's willingness to pay all expenses related to the patent application out of the federal fund, the nature of the instructions given to the academic and the circumstances in which the initial application was made: State of Florida v Neal (1943) 152 Fla 582. This may be contrasted with Florida State Board of Education v Bourne (1942) 150 Fla 323 where the employee was held to retain full rights in his invention. The employee, who was a plant pathologist, was assigned to a project focussed on cane breeding experiments. It was not directed to any specific varieties of cane. He was employed to develop cane varieties by research and experimentation that might or might not lead to invention. The three varieties of sugar cane were in fact produced using the land and facilities of a private company separately employing the employee for that purpose. The Board of Education was aware of that employment and of the payment being received. The court held that the evidence was insufficient to establish that the employee had been specifically employed to invent. The decision of the Supreme Court of North Carolina in Speck v North Carolina Dairy Foundation, Inc (1984) 319 SE 2d 139 represented something of a departure from established jurisprudence. A single judge of the Supreme Court of that State held that a secret process, developed through the research of a university professor and his assistant in relation to acidophilus milk, belonged to the university absent a written contract by the university to assign. The Court found that the researchers were permitted and encouraged by their employer to conduct the precise research which led to the discovery and perfection of the secret process. The decision in Speck (1984) 319 SE 2d 139 has been criticised as contrary to the principles enunciated in Dubilier [1933] USSC 85 ; (1933) 289 US 178. With one exception it has not been followed by US Courts in later cases. The exception was Madey v Duke University (1999) US Dist Lexis 21379. The decision suffered appellate reversal in certain respects and appears to have been principally concerned with the effect of federal grants for research and an experimental use defence to an infringement allegation: Madey v Duke University [2002] USCAFED 222 ; (2002) 307 F 3d 1351. The US cases to 1992 were discussed in a helpful article in the Wisconsin Law Review in 1992: Chew PK, "Faculty-generated inventions: Who owns the Golden Egg? " (1992) Wis L Rev 259. The author observed that at that time many cases had applied the Dubillier principle but few had specifically addressed ownership disputes between faculty inventors and university employers. One first instance decision cited was Kaplan v Johnson (1976A) 409 F Supp 190 which held that a doctor working at a Veterans Administration Hospital owned the rights to an invention he conceived for a camera for whole body imaging. The invention was made in part during working hours, using hospital facilities and the assistance of other employees. The court rejected the proposition that the doctor was hired to invent because research was part of his job. A distinction was drawn between "employment calling for general research work and employment with a specific job of inventing". There were other issues in the case relating to the governmental character of the employer and the effect of an Executive Order for rights to the invention which led to reversal on other grounds: Kaplan v Corcoran [1976] USCA7 673 ; (1976) 545 F 2d 1073. The case does not carry great persuasive weight save for its application of the Dubillier principle to a situation, in some respects, analogous to the present. Professor Chew in the article made the point that many of the decided cases focussed on researchers, scientists and engineers in a variety of institutional settings. In such cases the question for decision had always been whether the employees were "hired to invent" (266). In Canada an invention by an employee is the property of the employee except where the employee is engaged to invent and creates an invention in the course of his or her duties. That is to say, where the invention is the product of the very work the employee is paid to do, it belongs to the employer: Spiroll Corp Ltd v Putti (1975) 64 DLR (3d) 280 , aff'd (1976) 77 DLR (3d) 761 ; Seanix Technology Inc v Ircha 53 BCLR (3d) 257. The position that the employee, not employed to invent, retains the rights to an invention developed during employment applies even though the employer's time and materials have been used to develop the invention: Comstock Canada v Electec Ltd (1991) 45 FTR 241. The court also held that the fact that an employee owes a fiduciary duty to act in the best interests their employer does not of itself prevent the employee from asserting rights in relation to an invention to which he or she is entitled: Comstock Canada (1991) 45 FTR 241 at [79]. Nevertheless there are situations in which a fiduciary employee's conduct in relation to the development and exploitation of the invention will be held to have breached a fiduciary duty. In CI Covington Fund Inc v White (2000) 10 BLR (3d) 173 , the principal shareholder and director of a company used the company to solicit funding to develop water treatment technology and having used that funding to develop that technology lodged patent applications in his own name. In the Ontario Superior Court of Justice, Swinton J held that since the employee's principal employment obligation was research and development with respect to water treatment technology the employer company should properly be regarded as owner of the patents and the patent applications. The employee's failure to lodge the applications in the company's name constituted a breach of fiduciary duty as director. It does not appear that the American concept of the "shop right" has been developed in Canada. There is a helpful discussion of the US and Canadian cases in the context of university employees in La Roche, Collard and Chernys, " Appropriating Invention: The Enforceability of University Intellectual Property Policies " (2007) 20 IPJ 135. Generally speaking the cases cited supported the proposition that, absent an assignment or like provision in a contract, an employee who has not been employed to invent retains the property right in relation to any invention developed in the course of his employment. In New Zealand, the question of entitlement to employee inventions was considered by the Court of Appeal in Empress Abalone Ltd v Langdon (2000) 2 ERNZ 53. There was no dispute in that case between the parties as to the law concerning the ownership of employee inventions. Keith J held that where an employee is employed to invent in one area of the employer's business and creates an invention outside that area the invention will belong to the employee even if it is valuable to another part of the employer's business: Empress Abalone Ltd (2000) 2 ERNZ 53 at [8]. Two other reported decisions are mentioned briefly for completeness. Kwan v Queensland Corrective Services Commission [1994] APO 53 ; (1994) 31 IPR 25 was a decision of a delegate of the Commissioner of Patents which turned on the conclusion by the delegate that the relevant inventors were not employees of the Commission at the relevant time. Even if they had been employees they would have been entitled to the grant of the patent as the making of the invention was not done in the course of their ordinary duties. The other decision which touched incidentally upon the issue, was that of the Western Australian Court of Appeal in Eastland Technology Australia Pty Ltd v Whisson (2005) 223 ALR 123 ; [2005] WASCA 144. That case is of marginal relevance because it was concerned with the position of a company director who invented something that would have advanced the commercial interests of his company. McLure JA who wrote the judgment of the Court referred to Fine Industrial Commodities Ltd v Powling (1954) 71 RPC 253. She cited it as authority for the proposition that "the mere fact that a person is a director or employee of a company does not disqualify a person from taking out a patent for an invention made by him during his period of service even though the invention may relate to or be useful in the company's business". Beyond that observation, the case has little direct relevance to the present proceedings. The first of the decisions dealing more substantively with the issue of employee inventors was Spencer Industries Pty Ltd [2003] FCA 542 ; 58 IPR 425 , a judgment on appeal from a delegate of the Commissioner of Patents reported in Spencer Industries Pty Ltd v Collins (2002) 54 IPR 434. The delegate had refused to extend the term of a petty patent on the basis that an employee of the patentee made the invention outside the course of his normal duties as an employee. The petty patent system was abolished from 24 May 2001 upon the coming into operation of the Patents Amendment (Innovation Patents) Act 2000 (Cth) but transitional provisions in that Act applied in relation to the petty patent before the Court. The business of the employer, Spencer Industries, was the manufacture of equipment used in the tyre retreading business, particularly rasp blades, hubs and spaces and pins for hubs. Mr Collins was employed as sales manager of the company with "... total responsibility for sales and contracts and the authority to negotiate new agencies both in Australia and overseas". He was a qualified first class machinist and also had considerable experience as a sales representative. He was responsible for selling the products manufactured by his employer. However he did not have complete autonomy. He was not involved in decisions concerning the management of the employer's business. He was not employed to improve the products of the employer or to invent new ones. He did, however, make suggestions which were acted upon about the expansion of his employer's product range and accepted that this was part of the performance of his duty to increase sales. An overseas customer of the employer raised with Mr Collins the issue of the employer designing its own tyre rasp hub. A principal of the company instructed or authorised Mr Collins and a machinist to work together towards the design of a new hub. Subsequently he worked on the design of a tyre rasp spacer with another employee. He then designed a more efficient and effective tooth for a rasp blade, but when he sought to interest his employer in the invention he was effectively rebuffed. Later however, at his employer's request and in his own time, he prepared enlarged drawings of the invention using his own equipment. Branson J held that Mr Collins did not make the invention within the course and scope of his employment as sales manager of Spencer Industries. The position he held was principally a sales position. He occasionally undertook tasks outside his area of principal responsibility. He could be given reasonable direction to perform duties outside of the area of sales that were within his technical skills and that were not incompatible with his principal responsibility for sales. Her Honour rejected the submission that because he had a duty as sales manager to advance the sales of his employer any invention made by him which was capable of advancing those sales was made within the course and scope of his employment. It was no part of his ongoing duties to invent products for the employer. Her Honour therefore upheld the decision of the delegate that the invention was made by Mr Collins outside the course of his duties and that Spencer Industries would not have been entitled to have the patent of the invention assigned to it. In that case the parties were in agreement that the relevant law was that articulated by Lord Reid in the passage cited earlier from Sterling Engineering Co Ltd [1955] AC 534. A helpful commentary on the decision appears in Raper E, " Employee Ownership of Inventions --- A Re-examination" (2004) 17 AJLL 81. The second case on employee inventions is also the only reported Australian decision about the rights of universities and academic staff in relation to inventions created by staff is Victoria University of Technology [2004] VSC 33 ; 60 IPR 392 , a decision of Nettle J. The defendants, Wilson and Feaver, were respectively a professor and senior lecturer at the Victoria University of Technology. In March 2000 Professor Wilson, Dr Feaver and one Astill lodged an Australian provisional patent application in respect of an invention which they had developed involving an electronic international trade exchange. It was intended to enable international traders and brokers to undertake trading transactions electronically through a controlled electronic trading environment. It was otherwise described as a product and commodity internet and extra-net based electronic trading exchange. The facts of the case were, like the facts of this case, complex and convoluted. Although there was a university intellectual property policy in existence, there was no evidence it had ever been approved by the university council or published in its human resources manual, staff manual or equivalent publication. It is an implied term of employment that any invention or discovery made in the course of the employment of the employee in doing that which he is engaged and instructed to do during the time of his employment, and during working hours, and using the materials of his employers, is the property of the employer and not of the employee. Having made a discovery or invention in course of such work, the employee becomes a trustee for the employer of that invention or discovery, and he is therefore as a trustee bound to give the benefit of any such discovery or invention to his employer. But the mere existence of the employer/employee relationship will not give the employer ownership of inventions made by the employee during the term of the relationship. And that is so even if the invention is germane to and useful for the employer's business, and even though the employee may have made use of the employer's time and resources in bringing the invention to completion. Certainly, all the circumstances must be considered in each case, but unless the contract of employment expressly so provides, or an invention is the product of work which the employee was paid to perform, it is unlikely that any invention made by the employee will be held to belong to the employer. In discussing the existence of fiduciary duties owed by employees to employers, Nettle J observed that, in the law of contract, the extent of an employee's duty of fidelity and loyalty to the employer is dependent upon the facts of the case. So the law will not impose on a manual worker restrictions, the real effect of which would be to interfere with the worker's freedom to use spare time as he or she chooses. A chief executive officer of a listed public company is in a different position. Some employees, particularly senior employees, do owe fiduciary duties to their employers. But others do not. The scope of an employee's fiduciary duties to the employer depends as much as anything upon the nature and terms of the employment. "The fiduciary relationship, if it is to exist at all, must accommodate itself to the terms of the contract so that it is consistent with and conforms to them. The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction". Nettle J found that the research which the academic defendants undertook in developing the patented system was not research which they had been retained to perform (at [115]). It had never been conceived before the advent of their proposal that they were retained to conduct the sort of research that could result in a patentable invention. They were expected to undertake the kind of intellectual analysis which typifies social science academic inquiry even in applied disciplines. Nevertheless, his Honour found that they undertook the project as work on behalf of the university and continued with it on that basis until they resolved to take the intellectual property for themselves. It could therefore be concluded that they were retained to perform the work which they undertook on the invention. Other times, an employee may be retained at the outset of the employment relationship on a general basis providing no more specific guidance as to the work which he is to perform than that he is to do the work assigned him by his foreman or supervisor. In such a case the nature of the work which the employee is retained to perform is capable of changing daily if not more frequently. Consequently, the law in this country is that the nature of the work which an employee is retained to perform at any point of time must be assessed by reference to the work performed at that point of time. In relation to the allegation that the academics had breached their fiduciary duties to the university, his Honour referred to the degree to which, over the last 30 years or so, public service in general and academia in particular, has changed. He observed that conditions of service which once informed academic service structures have been replaced with business practices. Permanent and tenured employees have, in many cases, been replaced with contractors. It no longer goes without saying that public servants in general or academics in particular are bound to refrain from extraneous paid activities. His Honour did not accept that it was enough to make an academic liable to account for information or opportunity acquired while working, that the academic may spend most of his or her time working. Indeed, in the case of the Victoria University, its outside work policy provided they were free to work outside university hours without consent provided their work did not interfere with their duties to the university. On the other hand, even if an employee were free to work for somebody else, he or she must avoid work which could conflict with the interests of the employer that the employee is paid to serve. So in the absence of full and frank disclosure and consent, a professional employee remains bound to account to the employer for gains derived as a result of the employee's fiduciary position and for opportunities of which the employee may learn in the course of employment. His Honour found that there was a breach of fiduciary duty in the case before him because: The opportunity to design the system was presented to the academics in their capacities as such. The opportunity was available to the university in the sense that the proponent would have been pleased to have had the system designed in the name of the university. The academics began work upon the system design in their capacities as employees for the university and for the benefit of the university. Their decision to take the intellectual property rights for themselves had the effect that they were taking away from the university and transferring to themselves the opportunity of continuing with the design of the system, to exploit the opportunity for their own benefit to the exclusion of the university. It was irrelevant whether the change was made in knowing disregard of the university's interest or an honest ignorance of their obligations. So too, to a large extent, was the question whether the university would have chosen for them to continue with the work on its behalf if apprised of all the facts. It was plain in that case that the university did have the capacity to do the work of designing the system. His Honour dealt specifically with an argument that the university was not in the business of providing venture capital for the sort of enterprise in which they were involved in developing the software the subject of the patent. He identified, as one answer to that contention, the proposition that it is not ordinarily a defence to a breach of fiduciary duty that the fiduciary's principal may have been unwilling, unlikely or unable to take the opportunity taken by the employee and exploit it. That was not altogether an adequate answer as a fiduciary's position only inhibits him or her in respect of business opportunities that the principal is actively pursuing or in which the principal might reasonably expect to be interested. The evidence did not go far enough to positively satisfy him that it would have wished to be involved. Nevertheless there was a real and sensible possibility that it would have so wished if given the chance to do so. There was therefore a real and sensible possibility of conflict of interest and duty on the part of the academics in arranging for their software to be developed by an external entity rather than by the university. They therefore acted in breach of fiduciary duty by excluding the university from the opportunity to be involved (at [213]). The decision was not directly concerned with the question whether a member of the academic staff of a university, employed to do research which could give rise to inventions, can be said to have a duty to invent. Nor did it have to deal with the question whether, irrespective of any duty to invent, an academic researcher whose work was in an area likely to give rise to an invention held the rights in relation to any inventions or whether they effectively belonged to the university. The academic staff in the University of Victoria case had not been engaged to do the kind of research that could result in patentable inventions. The case was decided on grounds relating to the conduct of the academics and choices they made in breach of a fiduciary duty to the university. It left open the question whether academic staff of the university engaged to carry out research which could result in patentable inventions as a general proposition hold the rights to such inventions or whether the university would be entitled to those rights. It seems reasonable to state that, while there is a clear principle that a UK university employer will own inventions that its academics create in the course of their employment, its practical application can be very difficult. Uncertainties remain in determining when the academic is employed to invent. The position is the same in Australia. Hence, it will be unwise for a university to rely upon general principles if its intention is to claim title to inventions that are made by its academic employees during their working hours and using university facilities and funding. A contractual term that limits university claims to inventions made in the performance of duties of employment will be inadequate protection if the duty to invent is not a duty of employment. Hence, it would be necessary to include an express term under which the researcher agrees to assign any inventions that he makes not only in the performance of employment duties, but also in the course of using university funding and other resources. However they acknowledged that, in that case, the comments to that effect were obiter because the invention was made out of working hours and not within the scope of the doctor's employment (at [6.65]). Monotti and Ricketson confessed to a "lingering discomfort with equating an academic's general duty to research with a duty to invent, even though the research is that from which an invention might reasonably be expected to result". In asking why this discomfort should exist they referred to the general obligation of secrecy imposed on the employee who has a duty to invent. Although contracts of employment may include express conditions to that effect, with safeguards on the duration of secrecy, an automatic implied obligation sits uncomfortably with the notion of "academic freedom", shared ownership and free exchange of research results (at [6.66]). In my opinion, however, those differences in relation to persons engaged to undertake research at universities are of critical importance. A person engaged to carry out research only is in a different category even when the possibility or probability exists that the research will lead to the development of an invention. Such a person has a duty to research, but no duty to invent. Where, as is often the case, the pathways that may be taken in research are a matter of choice, the question whether or not to invent will be a matter of choice. Given the nature of universities and the public purposes served by such as UWA, there is no basis for implying into the contracts of employment of its academic staff a duty not to disclose the results of research even if such disclosure could destroy the patentability of an invention. Absent such a duty and given a choice to invent or not invent, it is difficult to see upon what basis there can be a presumption that a term will be implied as a matter of law that the university has an entitlement to take the inventor's property rights in relation to the invention. In the present case UWA does not assert any limited right to the inventions but all the rights. No question of an implied "shop right" has been raised. The existence of such an implied term is even more problematical in circumstances such as the present where the researcher was expected to secure funding to a substantial degree from sources external to UWA. This was even though UWA, under standard arrangements, administered funding, from sources such as the NH & MRC and CSIRO, when it was received. A striking feature of this case was the significant amount of time and effort devoted by Dr Gray and those researching with him in applying for research grant grants to a myriad of funding and grant bodies and agencies. In relation to UWA, the principal officers of the university responsible for administering its intellectual property policies took somewhat differing views of its role in relation to inventions produced by academic staff. Professor Parfitt, who was Deputy Vice-Chancellor (Research) from 1 April 1987 to 31 December 1991 commented in a draft document which he produced in October 1988 that the whole of the professional time of an academic staff member was to be devoted to the performance of the duties of office of that staff member. Any intellectual property developed by staff members in the performance of the duties of their office belonged to UWA. This could not have been a statement about the operation of the Patents Regulations because they made no such provision. Professor Parfitt saw UWA, in practical terms, as having an option to seek intellectual property protection for inventions at its own cost or, if it decided not to do so, to assign the relevant rights to the staff member within a reasonable time. Professor Barber who was Pro Vice-Chancellor (Research) from February 1994 to late 2002 regarded commercialisation of intellectual property as a by-product of UWA's activities. He characterised UWA's approach as reactive rather than proactive. Absent express contractual provisions, if a person were employed by a university specifically to produce an invention, then there would be at least a presumption of a term implied by law that the rights in relation to the invention will belong to the university. For example, if a post-graduate student is engaged by the university to design a particular device or an improvement to an existing device, any right to apply for a patent in relation to such device or improvement will belong to the university. That would accord with the established authorities relating to employees who have a duty to invent. However, nobody from UWA suggested that the academic staff in this case, who were engaged to carry out research, had a duty to produce inventions. Indeed that proposition was disclaimed by counsel for UWA in oral closing submissions. While each case involving a university and its academic staff must be assessed by reference to its particular circumstances and the terms and conditions of employment of its staff, I do not consider as a general proposition that there is a presumption at law that the university will be entitled to the rights to inventions developed by such staff in the course of their research. This issue will be revisited later in these reasons by reference to the particular circumstances of Dr Gray's appointment. The power of the Vice-Chancellor in relation to inventions said to be subject to the Patents Regulations, was circumscribed by the requirement to act with the advice or the subsequent endorsement of the Patents Committee. The only direct documentary evidence of the existence and composition of the Patents Committee covered the years from 1985 to 1988 inclusive. It was listed in the University Calendars for those years. In 1985 its chairman was Professor Boyle. The other members were Mr Ford of the Faculty of Law, Associate Professor Wager of the Faculty of Engineering, and Associate Professor Bottomley who filled the role of a member appointed from the School of Chemistry or Department of Physics. The membership was the same for 1986, but in 1987 Professor Robert Parfitt, the appointee to the newly created position of Deputy Vice-Chancellor (Research), became its chairman. He was also the chairman in 1988. The only minutes of the Patents Committee before the Court recorded a meeting held on 25 October 1985. Professor Clyde acted as chairman at that meeting. Mr Ford and Associate Professor Bottomley were present. Minutes of a meeting held on 18 August 1983 were confirmed. There is no other evidence that the Patents Committee met at any time relevant to these proceedings. Professor Robson, the current Vice-Chancellor, accepted in cross-examination that if there were minutes of the Patents Committee in existence they would have been produced. Mr Fritz Steenhauer, who was the secretary to the Committee could have been called as a witness but was not. I infer from the absence of documentary evidence of any meetings after 1985 and the history of institutional arrangements for dealing with intellectual property, discussed below, that the Patents Committee did not meet after 25 October 1985. It had become a dead letter. Although formally constituted until 1988 it ceased to exist thereafter. In its responsive closing submissions, UWA argued that the Senate was empowered to convene the Patents Committee at any time. Until such time as disclosure of an invention was made that committee had no duties to perform under the Patents Regulations. Accordingly, so it was submitted, the maintenance of a standing Patents Committee could not be a condition precedent to the enforcement of the Patents Regulations. I will deal with that submission later in these reasons. On or about 30 November 1976 a company called Uniscan Ltd (Uniscan) was incorporated by UWA as a company limited by guarantee. According to a Position Paper written years later by Mr David Hilditch, who in the 1980s was to work as a consultant for that company, it came into existence as the result of a recommendation by the Patents Committee. The particular project for which it was formed was the Beta-Graph, an invention developed by Professor John Ross at the Department of Psychology. On 28 September 1982 the Senate of UWA agreed in principle to a recommendation from its General Purposes Committee that it establish a Centre for Applied Business Research (CABR). According to an internal UWA memorandum dated 1 June 1983, CABR was established as a limited liability company wholly owned and controlled by UWA. The statement that CABR had corporate status was mistaken. Professor Robson said in cross-examination that he did not think that CABR was a company. Mr Hilditch's Position Paper treated it as a trading name used by Uniscan. According to the memorandum of 1 June 1983, it was controlled by a board of management, not a board of directors. I find that CABR was a "centre", established by UWA but lacking a distinct corporate identity. It was an administrative unit of the university. Although it had its own board of management, it was effectively operated in conjunction with Uniscan. According to the memorandum of 1 June 1983, CABR's objective was "to facilitate the expansion of applied research within the School of Commerce and the expansion of non-award professional and management development activities ... and to coordinate and administer research projects, seminars or short non-award programs resulting from these research activities". It commenced its operations on 1 April 1983. Mr Hilditch described it as having been established to provide consulting services to the Western Australian business community utilising academic resources available to it through its association with UWA. An internal UWA document dated 29 June 1984 and entitled "Centre for Applied Business Research Project Proposal" suggested the establishment of what was variously referred to as an "Industrial Liaison Unit", a "Intellectual Property Service Unit" and a "Technology Transfer Intellectual Property Liaison Unit". I infer from its text that it was a document from within CABR. Following the June 1984 paper, UWA approved the establishment of a Technology Transfer/Intellectual Property Liaison Unit (the IP Unit) within CABR on a "retainer" of $30,000 per year for a three year trial period. In his position paper Mr Hilditch described the terms of reference of the unit as very broad and extending well beyond the charter of the Patents Committee. He saw the IP Unit as set up "to exclusively manage and commercialise intellectual property arising from research originating from within the University". Its role was to analyse the commercial potential of an intellectual property project, obtain advice on the best method of protecting the property, liaise with prospective commercial and industry partners and make recommendations to the Uniscan board. I accept that as an accurate description of its purpose and function. David Hilditch was engaged by Uniscan between early 1984 and May 1985 to provide part time consultancy services. He had a science degree from Nottingham Trent University and a Master of Business Administration from UWA. He was engaged through David Hilditch & Associates Pty Ltd as trustee for the Hilditch Family Trust. In May 1987 Uniscan offered him a position as a senior consultant on a project-by-project basis. At that time Uniscan's office was located at Love House in Nedlands. From May 1987 to November 1987 he was primarily engaged in Uniscan and CABR consulting projects preparing business plans and market reports for external industry clients. He reported on his work to the Director of CABR, Dr Ian Nicholas who, as appears below, was appointed to that position in December 1984. In his cross-examination Mr Hilditch said the role of managing the University's intellectual property had been conferred on Uniscan and CABR in 1984 although there was still "notionally a Patents Committee". But from 1984 onwards the Patents Committee was dormant, albeit it could be convened at any time to discuss whether or not there was going to be any financial commitment made or any discussion about the lodging of patents. An internal UWA draft document dated 6 June 1985 was put in evidence. It was entitled "Intellectual Property --- Administrative and Financial Issues". It proposed that UWA's rights to all intellectual property should be assigned continuously to Univention as a holding company. That company would in turn empower CABR to manage intellectual property on its behalf. It was proposed that Univention "be reconstituted and merged with the current Patents Committee but widened to incorporate one or more members of Uniscan and/or CABR and where the CABR representative takes on a commercial advisory/secretarial role". The document also proposed merging the board of directors of Uniscan with the board of management of CABR. It was indicative of the degree of uncertainty and confusion about policies and practices with respect to intellectual property at UWA at the time. This was reflected the following year in a paper submitted to the Senate by the Vice-Chancellor, Professor Robert Smith, which led to the creation of the position of Deputy Vice-Chancellor (Research). On 20 December 1985, Professor Boyle, signing over the title "Chairman, Patents Committee" wrote to the Secretary of the Australian Vice-Chancellors' Committee (AVCC) explaining UWA's general policy with respect to patents. The letter was written in response to an inquiry from the AVCC. Professor Boyle said that UWA's general policy was determined by the Patents Regulations and enclosed a copy. He noted that in the past the Regulations had been "... broadly interpreted with inventors usually being given the rights to their inventions". He attributed this to lack of return from inventions and dissatisfaction shown by many inventors. The word "given" puts the level of UWA activity in relation to inventions too high. There was no evidence of purported assignments of intellectual property rights to inventors having occurred at this time. Professor Boyle wrote that, with the introduction of CABR, intellectual property policy was under review and it was anticipated that CABR would take a more active role in evaluating and developing intellectual property and seeking partners to develop or market it. Against that background he found it difficult to be specific in answering the questions posed by the AVCC and the answers he gave were to be regarded as a "guide to policy only". It is understood that the Common Law position is not as clear cut and it may well be that in the case of a legal challenge the Patents Regulations may be overridden. It had patented some significant discoveries, but for a number of reasons had not benefited greatly from those inventions. He was not called as a witness, but Professor Robson in his cross-examination said he accepted the letter at face value. He had not been personally involved at the time. He was then Professor of Agriculture at UWA. UWA's intellectual property policies and practices were in a state of disarray in 1986. The role of the Patents Committee and its ability to operate within the time-frame of a commercial environment needs to be re-assessed in these circumstances. The Patents Regulations need revision to bring them into line with current practices (the Regulations are in conflict with the grant conditions of some funding bodies). There is very little coordination or consultation between the Patents Committee and other bodies within the University. The Senate resolved accordingly on 26 May 1986. In the event, the new position was not filled until 10 months later. On 1 April 1987 Professor Robert Parfitt took up his appointment to the newly created office of Deputy Vice-Chancellor (Research) at UWA. He reported directly to the Vice-Chancellor. Upon his commencement the Vice-Chancellor was Professor Robert Smith. He was succeeded by Professor Fay Gale in about January 1990. Professor Roy Lourens acted as Vice-Chancellor between Professor Smith's retirement and the commencement of Professor Gale's term. In his capacity as Deputy Vice-Chancellor (Research), Professor Parfitt was a member of the Patents Committee, a director of the board of Uniscan and a director of two other companies associated with a commercialisation project known as the QPSX Project. Professor Parfitt said in cross-examination that Professor Smith's characterisation of UWA's legislation policies and practices in relation to intellectual property and the role of the Patents Committee accorded with his own understanding when he took up his appointment as Deputy Vice-Chancellor (Research). After taking up his position Professor Parfitt made it his business, over a period of some months, to go to all UWA departments meeting researchers so that he could get a broad understanding of the research being undertaken in UWA generally. During this time, as appears below, he met Dr Bruce Gray. A report, dated 1 October 1987, on the activities of Uniscan and CABR was delivered to the Finance Committee of UWA by the executive chairman of Uniscan, Mr Hyland. It was exhibited to Professor Parfitt's affidavit who used it to refresh his memory with respect to appointments. Although he was not the author of the report, he did provide some comments and suggestions to Mr Hyland in its preparation. It reflected his understanding, at the time, of the approach to be adopted when dealing with UWA's intellectual property rights for the purpose of commercial dealings involving third parties. Mr Hyland reported that CABR had achieved a small profit of nearly $10,000 in 1986/1987 on an increased turnover of $764,000. There had been an increase in its work on UWA's intellectual property including the QPSX project, an outstanding invention in the field of telecommunications. Two projects from the Department of Surgery offer great hope in the treatment of cancer tumours. CABR's staff establishment has been trimmed down to only 10 persons --- excluding myself. It appeared from Mr Hyland's report that in the previous year he had recommended the re-establishment of CABR with the more marketable name of "Uniscan" and with greater involvement in UWA's intellectual property. Mr Hyland anticipated that eventually the term "CABR" would disappear. He identified six major objectives to be achieved by Uniscan and CABR in the current year. Such arrangements were not unique. He said that while Uniscan and CABR undertook that work he did not consider it necessary to convene meetings of the Patents Committee. Professor Lourens had informed him at the time of his appointment that the Patents Committee had not met for some time. Professor Parfitt also said that to the extent that the Patents Regulations required advice to be given to the Vice-Chancellor about the exercise of UWA's rights in an invention, he believed the advice would have been provided by himself as Deputy Vice-Chancellor (Research). He did not recall giving any advice of that kind during his term. His understanding of the operation of the Patents Regulations when he joined the University was that they had "more or less lapsed". [sic] That's as I understood it and I was asked by Professor Smith to try to resolve the issue. In the course of that appointment he became aware of CABR. Its work and proposed areas of work were of interest to him. When he returned to England in late 1984 he was invited to apply for the position of Director of CABR. He flew back to Western Australia in December 1984. He was interviewed and, on 11 December 1984, he was offered the position which he formally accepted on 14 December 1984. He attended his first meeting of the board of management of CABR on 12 December 1984. As Dr Nicholas described it, when he became the Director of CABR, its main function was the provision of consulting services to third parties for a fee. He considered that if CABR were to succeed in developing an intellectual property enterprise, it was appropriate that UWA should as far as possible retain ownership of patents and intellectual property with UWA, but that there should be a corresponding arrangement to share costs and benefits of the exploitation of such property with the people who developed it. He recognised that his vision was not consistent with the Patents Regulations. He considered that UWA needed to amend its policy if CABR was to flourish. He considered the Patents Regulations to be too restrictive. When he commenced the position of Director, it was part of his job, as he saw it, "... essentially to create a role for CABR in relation to intellectual property projects". In June 1985 he prepared a position paper for the board of CABR setting out his vision of how it could develop. He understood at the time that the Patents Committee had fallen into disuse. During the period that Dr Nicholas was the director of CABR, it held monthly meetings. Minutes were prepared and circulated. Whenever he was introduced to an intellectual property project that might be of interest to CABR he placed it as a "work in progress" item on the minutes. It remained as such until a formal decision was taken by CABR to abandon the particular project or it was otherwise exploited. In March 1986 Dr Nicholas prepared another position paper about CABR's role at UWA in the area of intellectual property and technology transfers. He sent a copy to Professor Lourens. The basic proposition outlined at paragraph 2.1 of the paper was that UWA should retain, as far as possible, total ownership of patents and other intellectual property developed within it and that existing regulations to that effect should be observed and, should it prove necessary, be enforced. Those who had developed innovations and those, whether within UWA or third parties who assisted in their development should be obliged to come to some mutually acceptable and equitable arrangement about the costs and benefits accruing. It followed that UWA had the responsibility " ... to be actively involved in the protection, management and commercial development of the intellectual property it possesses ...". This philosophy, he said, was embodied within the current Patents Regulations. While Uniscan/CABR's role in the general area of intellectual property had been "inferred by relevant correspondence on a number of occasions" it had never been unequivocally stated. That situation should be rectified. He also proposed flexibility in negotiation so that UWA could relinquish part of intellectual property ownership in consideration of a cash payment, higher royalties or an equity in a promoter's company. Dr Nicholas observed in his paper that a number of the considerations which he had discussed were inconsistent with the Patents Regulations and that contracts containing clauses of the kind he proposed needed to be specifically approved by the Senate before they could be ratified. He recommended that the Patents Regulations be reviewed with the object of redrafting those clauses that might be seen to conflict with best practice and standard commercial usage. He proposed that UWA's rights to intellectual property as provided for by the Patents Regulations, should be assigned to Univention Ltd which would constitute a "holding" company for such property and would undertake much of the activity "... currently the responsibility of the Patents Committee". Dr Nicholas was not the only person who thought that a revision of the Patents Regulations was desirable. Professor Parfitt also reviewed them during his term. That revision was driven by a need to broaden the basis upon which staff and students could participate in the proceeds of commercialisation for other categories of intellectual property. It was Professor Parfitt's understanding at all times that other categories of intellectual property owned by UWA could be commercialised with or without the assistance of Uniscan. Professor Parfitt did not recall any occasion during his term as Deputy Vice-Chancellor (Research) when UWA or Uniscan was authorised by the Vice-Chancellor to assign or abandon any interest in any intellectual property owned or created in the course of employment by a member of staff. However, on 1 September 1988 he sent a letter to Dr Roy of the Department of Computer Science referring to the drawing back of Uniscan "within the University structure". He expressed a hope that within a few months "... we should be able to recommence activities, offering advice and support in the areas of intellectual property and contract research". He referred to the possible exploitation by Uniscan of a computer program developed by Dr Roy with the aid of an external grant. On behalf of the University, therefore, I transfer all its rights in that property to you. It treated computer software as copyright. Professor Parfitt said he could not give back patents. He described his letter as a "letter of comfort" and asserted that "all copyright belonged to the academic at this particular time". Professor Parfitt wrote a memorandum dated 23 November 1988 entitled "THE FUTURE OF UNISCAN". In it he observed that Uniscan had been contracted into the University under the supervision of the Deputy Vice-Chancellor (Research). He observed that the recent winding back of the company and the appointment of a new board of directors by the UWA Senate afforded it the opportunity for a new start. The time was opportune in Western Australia to rethink how intellectual property was handled in publicly funded institutions and to decide which elements of commercial enterprise were appropriate for universities. He canvassed the alternative of a state-wide intellectual property handling organisation. Uniscan would still be maintained by UWA as a company with a remit to handle commercial activities including the negotiation of appropriate contracts on behalf of UWA staff, departments and UWA. It would also act as a conduit for contract research and consultancy activities into UWA and be the employment vehicle for staff for some of UWA's centres. His memorandum was written in the context of what was then thought to be the imminent merger of UWA and Murdoch University. In that context he proposed that the amalgamated university have only one contract and consulting company. In the course of his employment as Deputy Vice-Chancellor (Research), Professor Parfitt drafted a number of memoranda, policy and other documents setting out UWA's approach to the development, ownership and commercialisation of intellectual property created by its employees and students. One of those documents, dated 2 July 1987, was a memorandum to Deans of Faculties and Heads of Department. He told them that if they needed advice on matters relating to intellectual property they should contact himself or Dr Nicholas. Uniscan sustained substantial losses in its initial years. A financial report prepared by Dr Nicholas dated 1 September 1987 set out expenditure in relation to various projects being handled by Uniscan/CABR. These were dominated by the QPSX projects. Two of the projects that were relevant to Dr Gray's research were designated CDS 9014 and TUM 9015. The first related to controlled delivery systems and the use of microspheres to deliver drugs to cancer tumours. Some $420 was expended on it. Provisional patent application to be lodged. Initial discussions with interested company taking place. It attracted the same comment as the controlled delivery system project. In his affidavit evidence, Dr Nicholas said that in 1986 and 1987 he attempted to promote the intellectual property and technology transfer activities of CABR. CABR however did not flourish. On 18 November 1987 the Uniscan board resolved to extend his contract of employment on a temporary basis pending re-advertisement of the position. He found that unacceptable and on 3 December 1987 wrote to Mr Hyland, the executive chairman of Uniscan advising that he would not seek to extend his contract beyond 31 January 1988. The position was advertised and the successful applicant was Mr Peter Macintosh, although his time as director lasted only from April 1988 to 31 July 1988. One of the unsuccessful applicants was David Hilditch. A meeting of the Uniscan board on 22 June 1988 considered a letter from the Vice-Chancellor to the Executive Chairman, Mr Hyland, stating that it was no longer possible to operate Uniscan as a company at arms length from UWA. The Chairman had been asked by the Vice-Chancellor to advise the board that it would need to "wind down the company prior to reducing its functions and placing it within the traditional function of the University". Professor Parfitt was present at the meeting. Mr Hyland wrote to the Vice-Chancellor on 24 June 1988 advising that the board had decided that Uniscan would cease to handle all business consultancy work save for outstanding projects which it was legally obliged to complete. Five replacement directors were to be appointed. Professor Parfitt, the Acting Vice-Principal and Ms BE Robbins, all of whom were existing members of the board were reappointed. In addition there were to be two external members appointed by the board. From 1 July 1988 Professor Parfitt managed the former Uniscan/CABR projects. In this he was assisted by Mr Hilditch who already had a consultancy relationship with Uniscan. A meeting of the new board of directors of Uniscan was held in Professor Parfitt's office on 11 July 1988. He suggested immediate action to produce a list of projects which the company wished to continue and those which it wished to eliminate as no longer viable. On 1 August 1988 the outgoing executive director, Peter Macintosh, wrote to Professor Parfitt advising that a number of prospects and genuine opportunities in intellectual property had been raised and were within days of transfer. Detailed files had been prepared on each project. They had been updated in the previous week with a current contact list, immediate history and actions for conclusion. From mid-June 1988 to mid-July 1988 Mr Hilditch was overseas on a Uniscan assignment. When he returned he learned that the Love House office was to close down and that Uniscan was to discharge its staff and consultants including himself. On 12 August 1988 Professor Parfitt who wrote to him confirming that he would be retained by Uniscan as a consultant at $35 per hour to "carry out a holding function with respect to Intellectual Property activities" and "advise the board on matters concerning Contract Research Projects that are currently in progress or that may be contemplated in the near future". Mr Hilditch already had a consultancy arrangement for some existing projects which were continuing. On 10 October 1988 Professor Parfitt produced a revised version of a document entitled a "Draft Policy and Guidelines on Intellectual Property". In it he stated that the University had appointed Uniscan as its agent for the management of most classes of intellectual property. It was responsible for all business and related legal negotiations concerning the assignment or licensing of rights and development through other mechanisms or forms of agreement. Thus, any intellectual property developed by staff members in the performance of the duties of their office belongs to the University. The cost would be borne by UWA. A decision to file a complete specification would be made by the Vice-Chancellor or Deputy Vice-Chancellor (Research) after considering advice from the inventors and Uniscan and any other appropriate sources. Some, but not all, of the references to Uniscan in the document had been struck out so that the relevant action was taken by UWA. This seems to have been an incomplete attempt to make the policy and guidelines consistent with the winding down of Uniscan's activities. If this option is exercised the University will assign to the inventor(s) within a reasonable time rights to the intellectual property on fair terms taking into account all costs to the University and its agents to the date of assignment. It set out arrangements that would normally apply to the distribution of earnings from intellectual property. Under those arrangements inventors or originators would receive 60% of the net annual earnings up to $50,000, 40% of the next $100,000 and 20% thereafter. The corresponding percentages to UWA would be 20%, 40% and 60% with 10% in each case to the department or centre and 10% in each case to Uniscan. A notation on the document indicated that it had been revised as at 10 October 1988. Towards the end of 1989 Professor Parfitt appointed Technology and Innovation Management Pty Ltd (TIM) on a subscription basis to provide intellectual property services to UWA in place of those previously provided by Uniscan/CABR. This was done in conjunction with Murdoch University, Curtin University and the Western Australian College of Advanced Education (now Edith Cowan University). All agreed to subscribe to TIM. The subscription covered: Seeking intellectual property from within institutions. Handling intellectual property queries. Offering advice to academic staff on market potential and protection of intellectual property. TIM would also, for additional cost, arrange to provide patent protection and seek additional parties for the exploitation of inventions. In 1989 Mr Peter Johnson was appointed Assistant Registrar, Research Liaison. In or about February 1990 Mr Hilditch's family company was engaged by the University directly to provide his consultancy services on a part time basis (two days per week). He ceased providing services to Uniscan but otherwise his role did not change significantly. He was required to liaise with TIM on projects assigned to it. He continued to report to Professor Parfitt and, from time to time, to Messrs Steenhauer and Martin Griffith and Professor John Ross. After Professor Parfitt left UWA, Professor Ross was Acting Deputy Vice-Chancellor (Research). Mr Hilditch's consultancy contract with UWA was renewed on three occasions so that he continued in that role until the end of 1993. Mr Hilditch said that, as a consultant to Uniscan and later UWA, his authority was very limited. He did not have authority to sign agreements on behalf of UWA nor to abandon or assign its interests in any intellectual property. In some cases Uniscan/CABR would refer an intellectual property project back to the inventor because there was no commercial interest in it or there was difficulty in developing a business case for capital raising purposes. Alternatively, the project might be immature and need more development before being referred for commercialisation. The referral of a project back to the inventor meant that Uniscan/CABR would no longer investigate its commercial application. The relevant head of department would be notified so that he or she could monitor the project on behalf of UWA. By way of example, an inventor in the Department of Electrical Engineering independently found an external partner to commercialise an invention and an agreement was subsequently reached between the researcher, UWA and the external partner. The process of referral back to an inventor was done by recommendation from Mr Hilditch to Professor Parfitt or Mr Steenhauer. During the whole of the time that Mr Hilditch was engaged by Uniscan and UWA he did not encounter any situation in which UWA assigned any intellectual property rights to a UWA employee personally. Professor Parfitt said that while Mr Hilditch had assisted him with ongoing and prospective projects, he had no authority to make decisions about the ownership or abandonment of the UWA's property. Professor Parfitt retired from UWA on 31 December 1991. Professor John Ross was appointed as Acting Deputy Vice-Chancellor (Research) at some time following Professor Parfitt's retirement and pending a substantive appointment to the position. He began a process of reviewing intellectual property policy. Professor Fay Gale, who was Vice-Chancellor of UWA from 1990 to 1997 did not remember questioning the role of the Patents Committee. She accepted in cross-examination that if something came to the attention of Professor Parfitt relevant to intellectual property issues, it would be his decision whether to notify her or to convene a meeting of the Patents Committee. Professor Gale did not have much systematic interaction with her Deputy Vice-Chancellors, including Professor Parfitt, for at least the first two years of her term as Vice-Chancellor. She found it difficult to get them together as a team. She did not remember whether Professor Parfitt briefed her on how he was administering research within UWA. She did not think that the Patents Regulations were ever brought to her attention. She did not remember inquiring about the role of the Patents Committee. On 23 April 1993 the Senate resolved to advertise the new position of Pro Vice-Chancellor (Research). The duties attaching to that position covered the development and implementation of a comprehensive research policy for UWA, advice to the Vice- Chancellor on all matters relating to research and the chairing of the Research Committee with oversight of the work of its sub-committees. They included monitoring and ensuring adherence to policies on intellectual property, integrity in the conduct of research, fraud and plagiarism. Professor Michael Barber was appointed to the position which he described in his affidavit evidence as Pro Vice-Chancellor (Research and Innovation). Immediately prior to his appointment he was Professor of Mathematics and Dean of the Faculty of Science at the Australian National University. As Pro Vice-Chancellor (Research and Innovation) he was the Chair of the UWA Research Committee. He was also a member of the Academic Board and of the Executive Committee of that Board which was known as the Academic Council. He did not recall the existence of a Patents Committee at the time of his appointment and was not appointed to any such committee. Professor Barber said that the implementation and administration of UWA's research policies was the responsibility of Research Administration and at the time of his appointment, was headed up by Peter Johnson the Assistant Registrar, Research Liaison. He provided direction to Mr Johnson about the interpretation of policies and took advice from him about implementation and administration. Mr Johnson formally reported on implementation and administration to the UWA Registrar, Malcolm Orr. Between the time that the Senate decided to advertise the new position of Pro Vice-Chancellor (Research) and the commencement of Professor Barber's appointment, Uniscan was deregistered. The public notice dated 21 July 1993 over the name of Martin Griffith was placed in the West Australian Newspaper pursuant to s 573(5) of the Corporations Law. Professor Barber commenced at UWA in February 1994. One of the matters that he attended to very soon after his appointment was a review of the Regulations and the development of new intellectual property regulations. He did this in conjunction with Peter Johnson and Professor John Ross who was the Acting Deputy Vice-Chancellor (Research) prior to his appointment. Professor Ross had prepared a discussion paper for a proposed new intellectual property policy which was circulated around UWA in early 1994. According to Professor Gale, the review of intellectual property policy was "a specialty" of Professor Barber's "as at the time of his appointment". He had spoken very strongly about it. Professor Barber convened a group to discuss intellectual property issues and to develop a new policy based on Professor Ross' discussion paper. Draft documents relating to a new policy were considered by the Research Committee on 1 June 1995 and 14 September 1995. They were prepared by Professor Ross and Mr Johnson with input from Mr James Lennon who was then UWA Intellectual Property and Contracts Officer. An outline of Mr Lennon's employment history and role with UWA appears later in this section. They were considered by the Academic Council at its meeting on 4 October 1995. The Council resolved to endorse the proposed policy and the Constitution of the Intellectual Property Committee and to recommend to the Senate that the Patents Regulations be rescinded and the IP Regulations be introduced with immediate effect. At a meeting of the Senate on 23 October 1995 the item was withdrawn from the agenda to allow further discussion with the academic staff union. The IP Regulations were considered again by the Academic Board on 19 June 1996. The Academic Board then resolved to endorse the proposed Intellectual Property Policy and the Constitution of the Intellectual Property Committee and to recommend that the Patents Regulations be rescinded and the proposed IP Regulations be introduced with immediate effect, subject to final drafting by the Senate Legislative Committee. Professor Barber attended the meeting of the Senate on 22 July 1996 at which it was resolved that the Patents Regulations be rescinded and the IP Regulations be introduced with immediate effect. The Intellectual Property Policy approved by the Academic Council was entitled "A Guide to the Intellectual Property Policy'. In its Introduction it stated that UWA's policy on intellectual property centred around the IP Regulations, General Regulation 32A and the Constitution of the Intellectual Property Committee. The Introduction was followed by a Background Statement about UWA's primary mission which was said to be "to advance, transmit and sustain knowledge and understanding through the conduct of teaching, research and scholarship at the highest international standards, for the benefit of the international and national communities and the State of Western Australia". The benefits should provide equitable returns to the originators of intellectual property, both as an incentive and reward, as well as to the University. In section 3 of the Policy, its Key Elements were set out. Paragraph 3.2 was entitled "Ownership of Intellectual Property". It contained a reference to regulation 4. The Policy set out the obligation upon originators to consult with the Pro Vice-Chancellor (Research) about what would be necessary to be done to protect intellectual property likely to be commercially significant and how best to facilitate the commercialisation process. This did not preclude established researchers from filing a provisional patent prior to consulting the Pro Vice-Chancellor (Research) as long as the outcome was not inconsistent with UWA's rights. It was acknowledged that the Pro Vice-Chancellor (Research) had the option of deciding that UWA had no further interest in the intellectual property. UWA would assign rights to the originators within 90 days if that option were exercised. Under the heading "Management of Intellectual Property" the policy stated that the Pro Vice-Chancellor (Research) was empowered under the IP Regulations to act on behalf of UWA on a wide range of intellectual property matters. On a day-to-day basis he obtained advice from the Intellectual Property and Contracts Officer. Reference was also made to the Intellectual Property Committee as an advisory committee to the Vice-Chancellor which met three times each year and otherwise as needed. Under the heading "Sources of Advice" reference was made to Technology and Innovation Management Limited (TIM) as an organisation which existed to commercialise intellectual property developed in the four public universities in Western Australia. The Constitution of the Intellectual Property Committee referred to its function under the IP Regulations. It comprised the Pro Vice-Chancellor (Research) as Chair, the Chair of the Academic Board, members of academic and general staff, the President of the Post Graduate Students' Association, the Vice-Principal and up to two coopted members. It was normally to meet three times each year and to report to the Vice-Chancellor "only in general terms for reasons of confidentiality" (clause 4). As part of its function it was "to review all relevant matters determined by the Pro Vice-Chancellor (Research) to ensure that proper policy advice on intellectual property is developed" (clause 5). It had a dispute resolution role under the Regulations requiring it to appoint a mediator where a dispute arose as to the operation of the policy. It could appoint an arbitrator if the dispute could not be resolved (clause 6). It could also exercise the power of the Pro Vice-Chancellor (Research) set out in regulation 9 of the IP Regulations in respect of any reference to it by the Vice-Chancellor. Professor Barber saw himself as having primary responsibility for the administration and operation of the IP Regulations. He described what he called "the philosophy" underpinning UWA's approach to intellectual property and commercialisation from 1994 to at least 1999 under both the Patents Regulations and the IP Regulations as "not commercially focussed". It was directed to such matters as gaining research funding, the support of PhD students and "... above all, kudos and reputation from academic publication in the peer reviewed literature". Commercialisation of intellectual property was a "by-product" and there were only a few examples of it during that period. I take Professor Barber's account of "the philosophy" to reflect his own approach to the administration of intellectual property policy within UWA from the time of his appointment up until 1999. On that basis it may properly be attributed to UWA. He did not see his role as that of a "police officer" enforcing intellectual property rights. Professor Barber regarded the principal researcher as the key person in terms of UWA's involvement with any commercialisation of intellectual property. He assumed that the originator of the intellectual property was both the expert on the research itself and its potential areas of application or commercialisation. So if a researcher were to inform him under the IP Regulations that he or she thought some intellectual property was commercially valuable and wished to pursue discussions with a third party about patenting or some other form of commercialisation, UWA would generally work with the researcher to follow this through. By way of example he pointed to the commercialisation of the production of nanopowders through the establishment of Advanced Powder Technology Pty Ltd between 1999 and 2000. On the other hand, if a researcher said that intellectual property was of little value this was accepted at face value. This, in a number of cases, reflected a decision by the researcher and/or UWA that publication was the primary goal in terms of utilising the intellectual property. Professor Barber characterised UWA's approach to intellectual property as reactive rather than proactive. Implementation of the IP Regulations and the Intellectual Property Policy up to the time of the establishment of the Office of Industry and Innovation, which occurred in 2001 and is referred to below, was based upon a level of trust in the persons likely to be involved particularly at the professorial level. There was a tension between Professor Barber's approach as explained in evidence and the provisions of the IP Regulations. His approach tried to accommodate the practical reality that the existence of the reporting obligation depended upon at least two important evaluative judgments. The first was a judgment that intellectual property had been created. In the case of a patentable invention this is no trivial requirement as the Law Reports, text books on the subject and these proceedings testify. The second was a judgment that the intellectual property created "was likely to be commercially significant". The obligation created by the regulations was imposed upon one or more persons who answered the definition of "originator". The effect of Professor Barber's approach, as he described it, was that if a researcher wanted to commercialise an invention or other intellectual property he or she would approach UWA about it before dealing directly with any outside party. No doubt in most cases such an approach from a researcher would imply that the researcher had made the judgment that intellectual property had been created and that it was commercially significant. Of course the researcher might be wrong. Although requiring evaluative judgments, the criteria in the IP Regulations are expressed objectively and not subjectively. Professor Robson, who was Acting Vice-Chancellor on a number of occasions during Professor Barber's time as Pro Vice-Chancellor (Research), described his understanding of Professor Barber's role. It was that, under the IP Regulations, Professor Barber had the power to deal with inventions on behalf of UWA, including any assignment or waiver of UWA's rights in relation to them. Four other individuals who played a role in UWA's implementation of its intellectual property policies were Linda Key, James Lennon, Andrew Sierakowski and Kim Heitman. An outline of their roles and employment history with UWA follows. Linda Key was UWA's Senior Legal Officer from 1995 and subsequently its Director of Legal Services until her death in 2002. James Lennon was employed as a solicitor by the University from 19 April 1993 until about February 1998. From 19 April 1993 he worked in the Registrar's office as a Contracts Officer and from 19 April 1994 that position was extended for a two year fixed term contract, which was again extended. From the time of his appointment in 1993 he took over Mr Hilditch's role in relation to intellectual property projects. Mr Hilditch's consultancy finished at the end of 1993 following an overlap and handover period with Mr Lennon. When the UWA Legal Office was established in about 1995 Mr Lennon was assigned to that office and worked under the supervision and direction of Linda Key. In February 1998 he left to take up a position in Sydney. Mr Lennon's duties including the preparation of confidentiality agreements, research contracts and intellectual property agreements in which UWA was involved, including drafts of agreements between UWA and external parties. He was otherwise required to assist Professor Barber. This involved being a contact point for UWA staff and Professor Barber in relation to intellectual property issues, although staff could deal with Professor Barber directly and often did so. He was responsible for preparing the agenda and papers for meetings of the Intellectual Property Sub-committee and participating in those meetings from time to time. He also assisted in the preparation of documents associated with the review and amendment of UWA's Patents Regulations prior to the enactment of the IP Regulations by the Senate in July 1996. In January 2001 the University established an Office of Industry and Innovation (OII). Dr Andrew Sierakowski was appointed as its director. The OII liaised with UWA's Legal Services Office in relation to legal aspects of their functions. The two offices were physically located within 20 metres of each other. When he commenced as OII's director, Dr Sierakowski reported directly to Professor Barber. In November 2001, Mr Kim Heitman was appointed to the Legal Services Office of UWA on a three day per week appointment as an intellectual property lawyer. His predecessor, a solicitor named Julia Frodsham, was commencing maternity leave. Mr Heitman's responsibility as UWA's intellectual property lawyer, included managing intellectual property contracts, dealing with copyright issues, software licensing and student intellectual property rights. He reported to the Director of Legal Services who at that time was Linda Key. Ms Key was unwell and her health continued to deteriorate. In early 2002, Mr Heitman was appointed Deputy Director of Legal Services on a four day a week basis. Ms Key died in about May 2002 and thereafter Mr Heitman was appointed Acting Director of Legal Services. Following a selection process, he was appointed University Lawyer and Director of Legal Services in about November 2002. He continued to occupy the office of Director of Legal Services at the time of the trial of this action. Professor Barber left UWA late in 2002 and took up an appointment as Executive Director Science Planning with the CSIRO. The records, put in evidence, relating to meetings of the sub-committee were limited to a notice of a meeting to be held on 22 June 1993 and minutes of a meeting held on 14 February 1994. The June 1993 notice showed Professor Ross as the convenor. The members included Mr Martin Griffith, David Hilditch, Peter Johnson, Professor Robson, Mr Steenhauer who, during the time of the existence of the Patents Committee had been its secretary, and Mr James Lennon. The agenda made no reference to any matters concerning Dr Gray. One of the items listed, however, was a Strategy for the development of UWA's intellectual property policy. Mr Lennon signed the notice as secretary to the Intellectual Property sub-committee. The minutes of the sub-committee meeting held on 14 February 1994 showed that the meeting was chaired by Professor Robson. Also present were Messrs Griffith, Johnson Steenhauer and Lennon. The meeting resolved that Professor Barber would be invited to become chair of the sub-committee. Interestingly, the meeting also discussed the place of the sub-committee within UWA's structure. It was proposed that the sub-committee become an advisory committee to the Vice-Chancellor which would necessitate redrafting the regulations. The matter was flagged for discussion when Professor Barber took up his appointment. There was comment critical of TIM which somebody at the meeting suggested was "barely worth the financial contribution being made to support it". Professor Barber was to be asked to be UWA's appointment to TIM's board. A series of "clinics" with TIM were to begin at UWA designed to "increase awareness and use by staff of both TIM and the Research Contracts Officer". The Intellectual Property Committee constituted under the IP Regulations had its first meeting on 9 December 1996. A copy of the minutes of that meeting were in evidence. It was chaired by Professor Barber. Its members included Mr Steenhauer and Mr Lennon. It was resolved that proceedings of the committee would be confidential unless specifically noted otherwise in order to protect patentability of inventions and to honour obligations of commercial confidentiality. At the time, as I have found, the IP Regulations were not in effect as they had not been promulgated. The existence of the Committee was not at that time supported by the Regulations. Nothing however turns on that fact for present purposes. There was discussion, led by Professor Barber, of two issues in connection with the Intellectual Property Policy. The first was the application of the Policy to Co-operative Research Centres (CRCs). The second related to centres at UWA. The minutes noted that in ordinary circumstances the Intellectual Property Policy did not apply to CRCs because they were governed by external agreements. It was thought desirable to find out whether the spirit of the Intellectual Property Policy was being followed in UWA's own staff and student activities within the centres. Professor Barber thought it appropriate that UWA write to the Directors of the CRCs to enquire about their intellectual property policies. In relation to UWA centres, the minutes recorded what was presumably a statement by Professor Barber that the Intellectual Property Policy was based on a particular model of UWA not being viewed as an entity whose primary aim was commerce. The essential model was that commercial intellectual property was a by-product of UWA activity and that it was directed to incentives and protection. There were a number of centres which had a commercial focus and in which research was to be done with a commercial emphasis supporting the research. An example was the Centre for Water Research. In that Centre income was ploughed back into research. This meant that where the policy stated that a share of the revenue went back to staff, the commercial emphasis of such centres was compromised. The committee also discussed an educational program. It was told of efforts taken at that time to inform members of the university community of the intellectual property policy. There had been a "well attended lecture" through the Centre for Staff Development and presentations made to particular groups of researchers. A copy of the agenda was in evidence including an item which referred to "New disputed IP --- Heartlink monitor, Paragon Liver Cancer SIR Technology". There was no evidence of the outcome of that meeting. Professor Barber made no reference to it in his evidence and neither Mr Steenhauer nor Ms Frodsham were called as witnesses. The reference to SIR technology as "new disputed IP" is relevant to UWA's state of knowledge at that time of facts which might have given rise to a claim against Sirtex. The Patents Regulations came into effect no later than 1975. The Patents Committee established by the Patents Regulations did not meet after 1985. No one was appointed to the Patents Committee after 1988. UWA effectively treated it as a dead letter after 1985. None of the practical arrangements in place for the exploitation of intellectual property policy between 1985 and 1997 provided for any function to be undertaken by the Patents Committee. (See regulations 4, 5 and 5 of the Patents Regulations). The Patents Regulations ceased to be in effect no earlier than 30 November 1997. UWA took no steps between 1985 and 1997 to establish administrative processes or guidelines for notification of inventions to the Vice-Chancellor under regulation 6(1) of the Patents Regulations, referral of matters to the Patents Committee or advice from the Patents Committee to the Vice-Chancellor. In 1976 UWA established Uniscan to "define procedures for determining which inventions resulting from research should be patented in accordance with the Patents Regulations". Uniscan did not define or publish to academic staff of UWA any procedures to give effect to its stated objectives. In 1983 UWA established CABR to provide, inter alia, external consultancy services. In 1984 an IP Unit was created within CABR to manage and commercialise intellectual property arising from research within UWA and to provide advice to Uniscan. No arrangements were put in place to link the functions of the Patents Committee to those of the IP Unit of CABR or Uniscan. Dr Ian Nicholas was appointed as Director of CABR from December 1984 to December 1987. He regarded the Patents Regulations as too restrictive. In 1985 UWA had no procedures in place for the administration or enforcement of the Patents Regulations. In 1986 UWA's intellectual property policies and practices were, and were described by its Vice-Chancellor as being, "in a state of disarray". The position of Deputy Vice-Chancellor (Research) was created in 1986 and Professor Robert Parfitt appointed in April 1987. Professor Parfitt, a member of the Patents Committee, never convened it or attended a meeting of it. He regarded the Patents Regulations as "more or less lapsed". Professor Parfitt informed Deans of Faculties and Heads of Departments in July 1987 that if they needed advice on intellectual property matters they should contact himself or Dr Nicholas. Uniscan's independent function was removed when the board was replaced in June 1988. Its function at that time was limited to assessing existing intellectual property projects which had already been referred to it. In October 1988 in a draft policy paper Professor Parfitt asserted ownership by UWA of intellectual property developed by its academic staff in the performance of their duties as staff. In the draft document Professor Parfitt asserted that staff had to deal through UWA in the commercialisation of intellectual property unless they had the prior agreement of the Vice-Chancellor or himself. In 1989 TIM was appointed to provide intellectual property services to UWA in lieu of those provided by Uniscan/CABR. From the 1980s through to the 1990s Mr David Hilditch provided consultancy services to UWA initially through Uniscan and then in liaison with TIM on the commercialisation of intellectual property projects. Some projects were referred back to inventors from time to time as not commercially viable or requiring more development. Referrals were made by Professor Parfitt on Mr Hilditch's recommendation. Professor Parfitt retired on 31 December 1991. An intellectual property sub-committee of the Research Committee was established and met once in 1993 and again in 1994. The committee may have met on other occasions. In February 1994 Professor Michael Barber was appointed to the new position of Pro Vice-Chancellor (Research). His duties included maintaining and ensuring adherence to intellectual property policies. Professor Barber was never appointed to a Patents Committee and knew nothing of the existence of such a committee. UWA adopted an Intellectual Property Policy together with IP Regulations and established an Intellectual Property Committee in 1996. The Intellectual Property Committee first met in December 1996. The IP Regulations came into effect no earlier than 30 November 1997. Neither Professor Barber nor UWA put in place any procedures for the enforcement of notification obligations under the Patents Regulations or the IP Regulations. Professor Barber had power under the IP Regulations to deal with inventions on behalf of UWA including any assignment or waiver of UWA's rights in relation to them. UWA legal officers were involved in issues relating to commercialisation of intellectual property projects. In January 2001 UWA established an Office of Industry and Innovation. One of its functions was to train researchers in relation to intellectual property processes and its regulations in relation to intellectual property. Dr Andrew Sierakowski was appointed as its director. He reported to Professor Barber. In November 2001 Mr Kim Heitman was appointed as an intellectual property lawyer in the Legal Services Office of UWA. In November 2002 he became Director of Legal Services. Professor Barber resigned from UWA late in 2002. Sirtex argued in substance that, absent a Patents Committee, the procedure prescribed in the Patents Regulations was not binding upon the staff of UWA. Academic staff were unable to follow the procedure set out in the Patents Regulations in relation to any invention conceived before those regulations were rescinded. That submission did not require a finding that UWA lost, as a consequence, whatever rights it might have at common law to intellectual property developed by its employees during that period. Rather its failure to maintain the mandated procedure went to the question whether Dr Gray had breached his contractual obligations by the way in which he dealt with the technology in issue in these proceedings. Sirtex submitted that regulations 4 to 6 of the Patents Regulations were premised on the existence of the Patents Committee. When acting in relation to inventions made or developed by persons subject to the Patents Regulations, the Vice-Chancellor was obliged to act on the advice of the Committee. Upon receiving notice of a patentable invention the Vice-Chancellor was obliged to refer it to the Patents Committee and to act on its advice in deciding whether UWA would exercise any rights it had in relation to the invention. Regulations 7 to 11 were also said to be premised on UWA having decided to exercise its rights in relation to a patentable invention and so premised on the Vice-Chancellor having obtained advice from the Patents Committee. To the extent that no, or no adequate, Patents Committee was maintained the prescribed procedure was not binding. UWA argued that the Senate was empowered to convene a Patents Committee at any time. Until such time as a disclosure of an invention was made, the Patents Committee had no duties to perform under the Regulations. Accordingly, the maintenance of a standing committee could not be a condition precedent to their enforcement. In any event, it was always open to Dr Gray under regulation 6(2) to require UWA to inform him as to whether or not it would exercise its rights in any invention made by him. UWA pointed to Professor Barber's evidence that although he was not a member of the Patents Committee, intellectual property was regulated during his time by the Intellectual Property Sub-committee of the Research Committee. It also pointed to Mr Hilditch's evidence that although the Patents Committee was dormant it could be convened at any time. Mr Hilditch had attended meetings of the Intellectual Property Sub-committee which he regarded as "essentially the old Patents Committee". This evidence, it was said, did not support an inference of any lack of readiness or ability to convene a Patents Committee should the need arise. Professor Barber's view of the role of the Intellectual Property Sub-committee and Mr Hilditch's opinion of the capacity of UWA to convene the Patents Committee do not answer the Sirtex submissions. The issue raised by those submissions must be analysed with more precision than they were able to offer in essentially argumentative opinions. A case can be imagined in which the members of the Patents Committee, appointed by the Senate, all ceased to be members at the expiry of their terms and before their reappointment or the appointment of new members. In the event that one of the conditions for the exercise by the Patents Committee of its functions under the Regulations was met during a period when the terms of its members had lapsed, then fresh appointments could be made. If the condition was the reporting of an invention to the Vice-Chancellor, it would be necessary to make the fresh appointments in time to enable the Vice-Chancellor to refer the report to the committee, receive advice from it and inform the inventor of UWA's position within the 60 days prescribed by regulation 6. Alternatively, the Vice-Chancellor could proceed under regulation 5(2), acting without the advice of the Patents Committee and upon its reappointment could seek endorsement of the action taken. Absent such endorsement the matter would have to be reported to the Senate for directions. To hold that the Regulations ceased to operate during any period that the Patents Committee was not constituted, however brief that period might be, would be to attach to their operation an absurd implied condition. It would be a condition that would not be necessary for the proper functioning of the Regulations and, indeed, would have impeded it. Nothing in the text or in ordinary principles of construction would warrant such an implication. The position is not the same where UWA can be taken to have effectively abandoned the Patents Committee structure. Regulation 4(1) mandates the appointment of a Patents Committee by the Senate. Absent appointment by the Senate, the Committee did not exist as some sort of continuing corporate entity. The Senate was not advised by officers of UWA after 1988 to make any appointments. On the basis of the facts already found, UWA may be taken, by attribution, to have decided that the Patents Committee had no useful continuing function. It was not merely "dormant". It did not exist and there was no prospect of its revival although theoretically this would have been open to the Senate for the appointment of members to it. In my opinion UWA should be taken to have decided, after 1988, not to appoint a Patents Committee at all. The possibility that a committee could be appointed on an ad hoc basis to respond to reports of particular inventions was never considered. Indeed, UWA moved down an alternative pathway using Uniscan and CABR, the Deputy Vice-Chancellor (Research) and later the Pro Vice-Chancellor (Research) to provide a framework within which inventions could be commercialised. UWA depended upon approaches by staff interested in commercialisation. The activities of these entities were not posited on a legal obligation on staff members to bring matters to them. The question remains whether the obligation imposed by regulation 6(1) upon staff members to inform the Vice-Chancellor of any patentable invention was dependent upon the existence of the Patents Committee. If the Patents Committee were merely an advisor to the Vice-Chancellor, then its existence or non-existence would not be seen as critical to the existence of the obligation under regulation 6(1). Its function, however, was more than that. Referral of a report to the Patents Committee was an essential element in the process leading to the Vice-Chancellor's response to the reporting inventor. The Vice-Chancellor had an obligation "acting upon the advice of the Committee" to inform the inventor "as soon as possible" and in any event not more than 60 days after receiving a written request on whether UWA would exercise "its rights" in the invention. The permanent absence of the Patents Committee and the adoption by UWA of other mechanisms for assessing inventions for commercial development meant that the procedure, of which the inventor's obligation to notify the Vice-Chancellor of patentable inventions was part, could not operate. UWA can be regarded as having had a reciprocal obligation to establish the mechanism under the regulations for providing a prompt response to an inventor's notification. That reciprocal obligation having been abandoned, a necessary condition of the existence of the inventor's obligation was removed. UWA failed to maintain the mechanism necessary for the performance of the obligations said to have been imposed upon its staff by importation into their contracts of the terms of the Regulations. This conclusion affects UWA's claims against Dr Gray for breach of contract up to 30 November 1997. After graduation he spent two years in teaching hospitals in Perth, initially as a junior resident medical officer and then as a senior resident medical officer. In 1968 he worked at the Department of Health in the north-west of the State for a year. He then decided that he wanted to become a specialist surgeon. In 1969 he sat for and passed the first-part examination of the Royal College of Surgeons in Ireland. He applied for and was awarded a training post in surgery in Auckland. He became interested in the treatment of liver cancer. In 1971 Dr Gray passed the examination for the Final Fellowship of the Australasian College of Surgeons. He was offered a Fellowship in Transplantation and Oncology at the Lahey Clinic in Boston. Because there was a delay between the offer and the commencement of the Fellowship, he spent 1972 back in the north-west of Western Australia as a regional surgeon before taking up the Fellowship. He enjoyed success at the Lahey Clinic. He was offered a position as an Associate and had two major research projects there, one in pancreas transplantation for diabetes and the other in oncology. As a result of his diabetes research, he was awarded a Master of Science in Surgery from Tufts University. A letter of reference from Dr Elton Watkins of the Lahey Clinic to a professorial selection committee at UWA on 25 January 1984 testified to the significance of Dr Gray's research contributions during his time at the Clinic. Dr Watkins described Dr Gray as "outstanding in his capacity for independent research in fields relating to the advance of surgical science" and said he would have been delighted to have him continue as a member of the permanent senior staff at the Clinic. Dr Gray spent three years in the United States after which he returned to Australia and took up an academic position in the University of Melbourne, located at St Vincent's Hospital. He had responsibility for the surgical care of some patients within the hospital but also continued research he had started in Boston relating to cancer immunology. Ultimately the immunotherapy which he investigated turned out to have no useful effect. The results of his research were not published until 1988. While writing a clinical trial program for the immunotherapy research, Dr Gray commenced a number of other oncology-related research programs. He established a group known as the "Australian and New Zealand Bowel Cancer Trials Group" with surgeons, medical oncologists and radiotherapists from Australia and New Zealand. The Group initiated two major trials. One of those involved chemotherapy by injection directly into the blood supply of the liver as a preventative measure against secondary liver cancer in patients who had undergone removal of a primary cancer in the bowel. The trial had been suggested by a Professor Taylor in Bristol. It was directly related to Dr Gray's interest and expertise in liver cancer. In 1980 Dr Gray was elected as a Fellow of the American College of Surgeons and in 1982 was awarded a PhD from the University of Melbourne for his work on cancer immunology. In 1982 he was awarded the John Mitchell Crouch Fellowship by the Royal Australasian College of Surgeons for the "most outstanding contribution to surgery". He used money from that Fellowship to employ another research assistant at the University of Melbourne to help with his cancer research. He studied the natural history of cancer so he could better understand its basic physiology. He wanted to develop an understanding of how bowel cancer metastasises to the liver. Understanding the process might open opportunities for prevention. He undertook an exhaustive review of the literature and published his findings in 1980: Gray, " Colorectal cancer: The Natural history of disseminated disease " (1980) Australia & New Zealand Journal of Surgery 50; 643-646. He also published a review of methods used to treat disseminated bowel cancer. The idea of using microspheres to treat cancers dated back to the late 1960's. Dr Gray linked it to the delivery of high doses of anti-cancer drugs directly into the liver to treat liver cancer. He referred to an article co-authored by Dr Watkins entitled " Surgical Basis for arterial infusion chemotherapy of disseminated carcinoma of the liver " (1970) Surgery, Gynaecology and Obstetrics 30:581-605. Dr Watkins had developed a technique for infusing cancer chemotherapy drugs into the hepatic artery in order to deliver the drugs to cancers within the liver. The technique had met with some success but had not progressed to a clinical application. The paper documented the management, in 1961, of 195 patients with carcinoma of the liver. It demonstrated the feasibility of delivering, over protracted periods, high concentrations of a cancerostatic drug directly into the liver which has the unique ability to detoxify excess quantities of the drug. The blood supply of the liver could be used to deliver the drugs. Dr Gray thought that the technique could be modified by manipulating the way in which blood flows between the liver and cancers within the liver and by packaging anti-cancer agents into microspheres rather than simply infusing them into the blood stream. This was to be the basis for his subsequent targeted microsphere work. In treatments which he trialled, infusing anti-cancer drugs directly into the blood stream of the livers of patients with liver cancer, Dr Gray observed how blood flow could be manipulated between liver and cancer tissue compartments. He injected a dye into the blood stream and watched its differential flow between normal and cancerous tissue. He thought that this could be the Achilles heel of liver cancer as it would allow the use of a range of agents to target the cancers selectively while sparing normal liver tissue. The agents included radioactive isotopes. He thought that the most positive results would arise from the use of microspheres to deliver local radioactive materials. Dr Gray referred to 11 papers published between 1948 and 1982, of which he was aware at that time. They dealt, inter alia, with the treatment of patients with advanced liver cancer using anti-cancer agents and microspheres injected into the hepatic arterial circulation. They covered ideal microsphere characteristics and the targeting of microspheres by utilising preferential arterial supply to tumours as well as the use of resin microspheres to carry radionuclides and in particular Yttrium 90 . It is helpful to refer to those papers to get a sense of the ideas underlying the development of targeted microsphere technology which were already in the public domain. The first of the papers was Prinzmetal, Ornitz, Simkin and Bergman, " Arterio-Venous Anastomoses in Liver, Spleen and Lungs " (1948) American Journal of Physiology 152:48-52. Glass spheres with diameters ranging from 10 to 440 microns, 20 to 40 times the average diameter of the lumina of capillaries, were injected into veins and arteries servicing the liver, spleen and lungs of experimental animals. The spheres were recovered from other organs after the animals had been killed. Their recovery from those organs demonstrated the existence of arterio-venous shunts through which they must have travelled to bypass the capillaries. The existence of such shunts, which was discussed in evidence at the hearing, later became a concern in the use of microspheres for the treatment of cancer patients. In the case of radioactive microspheres "breakout" through shunts could result in their lodgment in the lungs. The second paper referred to by Dr Gray described an experiment involving delivery, by intravenous injection, of a short-lived artificial radioactive isotope to the lungs of cancer patients using a precipitate of radioactive colloidal gold: Muller and Rossier " A New Method for the Treatment of Cancer of the Lungs by means of Artificial Radioactivity " (1951) Acta Radiologica 35:449-468. The third paper by Kim and Others, was published in 1962. Distribution of the spheres within normal and tumour-containing organs. The volume flow through arteriovenous shunts of spheres of 60 microns or greater in size "spill over". Altered function of specific organs after large doses of internal irradiation. 4. Effect on growth of experimental tumours in mice and rabbits. 5. Effect on tumours, both primary and metastatic in 17 patients. The authors observed that ceramic microspheres had unique advantages unavailable in the past. They were of uniform size and too large to pass through any capillary bed. They were capable of carrying a wide variety of cationic isotopes and had great stability in the sphere itself and in the isotope within the sphere: Kim, LaFave and Maclean, " The use of radiating microspheres in the treatment of experimental and human malignancy " (1952) Surgery 220-231. The fourth paper was a further publication on the same topic by the same researchers and others in 1965. It summarised their clinical experience in the treatment of tumours with radioactive microspheres. Localised beta irradiation using radioactive microspheres caused regression in 30% of people treated. Several patients were clinically and subjectively improved and one may have been cured. The procedure was simple and relatively safe. However a tumour had to have proven excellent vascularity before intravascular microsphere infusion: Blanchard, LaFave, Kim, Frye, Ritchie and Perry, " Treatment of Patients with Advanced Cancer Utilizing Y 90 Microspheres " (1965) Cancer, 18:375-380. In the fifth paper cited by Dr Gray, Blanchard and others reported further on their work: Blanchard, Grotenhuis, LaFave and Perry " Blood Supply to Hepatic V2 Carcinoma Implants as Measured by Radioactive Microspheres " (1965) Proceedings of Society of Experimental Biology and Medical Science, 118:465-468. They concluded that radioactive microspheres reached a concentration in hepatic metastases averaging four times the concentration in surrounding liver parenchyma when infused via the hepatic artery. The spillover of radioactive microspheres 15 microns in diameter from liver to lungs and kidneys was negligible. Arteriovenous shunts in the liver and V2 carcinoma were either few in number or less than 15 microns in diameter. The sixth paper, which was cited but not exhibited to Dr Gray's affidavit, was by Piovelei and Badellino entitled " The behaviour of rigid microscopic resin in the terminal circulation of tumors ", (1967) Bibl Anat 9: 446:449. In the work reported in the seventh paper, Yttrium 90 , tagged to microspheres, was used to study the distribution of vascular systems to normal and tumour tissue. The paper was cited as Ackerman, Lien, Kondi and Silverman, " The blood supply of experimental liver metastases. I. The distribution of hepatic artery and portal vein blood to "small" and "large" tumors ", (1969) Surgery 66:1062-1072. An eighth paper reported another such study using ceramic microspheres labelled with radioactive Chromium 51 : Rogers, Edlich and Bradley, " II. Distribution of Blood Flow in Experimental Tumors ", (1969) Angiography, 20:374-387. The ninth paper, by Edgar Grady, was entitled " Internal Radiation Therapy of Hepatic Cancer" (1979) Diseases of the Colon and Rectum, 22:321-375. It reported that established cancer in the liver could, in selected patients with good arterial circulation in the tumours, be effectively treated by intrahepatic artery radioactive Yttrium 90 resin microspheres. The tenth paper was by Matramadai and Spigos, " Intra-arterial Yttrium-90 in the treatment of hepatic malignancy ", (1982) Radiology 142:783-6. The eleventh paper was Ariel and Padul, " Treatment of Asymptomatic Metastatic Cancer to the Liver from Primary Colon and Rectal Cancer by the Intraarterial Administration of Chemotherapy and Radioactive Isotopes " (1982) Journal of Surgical Oncology, 20:151-156. The latter study found that intrahepatic artery installation of cancer chemotherapeutic drugs plus internal irradiation in the form of Yttrium 90 microspheres in 40 patients with asymptomatic hepatic metastases tripled their life span to an average of 28 months. It is not necessary to resort to Dr Gray's opinion on the point which was objected to, to conclude from the preceding papers that the concept of using microspheres as a means of delivering anti-cancer agents to liver cancers had been well ventilated in scientific literature before he commenced his development of it. However, at the time that Dr Gray reviewed the papers, and so far as appears from them and from his evidence, no microsphere technique had been developed to the point where it was acceptable as a viable treatment alternative for cancer patients. A major obstacle lay in developing a suitable microsphere material to carry radioactive isotopes. Dr Gray believed that he understood why the use of microspheres had failed and how he could make it work. He intended to develop a range of microspheres able to carry different anti-cancer agents. They would be designed so that they could flow freely in the blood stream and be of such a size that they would get caught in the tiny blood vessels of the cancer. This could be accomplished by injecting millions of the right size, shape and density into the liver blood supply. Selective targeting of the cancers would occur by manipulating the arterial blood flow so that, for a few minutes, it preferentially flowed to the cancer and away from the normal healthy liver. Those few minutes would be sufficient to enable injection of the microspheres. Once they were lodged in the cancer the targeting process would have been accomplished and the anti-cancer payload within the microspheres could take effect. Dr Gray called the application of the idea "targeted microsphere technology". Anti-cancer agents which could be carried by the microspheres included radiotherapy, chemotherapy, hyperthermia and targeted anti-bodies. Dr Gray commenced experiments into targeted microsphere technology at St Vincent's Hospital in Melbourne in 1980. The hospital's research centre provided the necessary facilities and some limited research staff to assist in the experiment. However he needed assistance to develop the project further. He applied for a competitive research grant. He secured funding to employ Dr Kelvin Stribley to investigate tumour blood flow and test ways of using microspheres to carry anti-cancer agents. That study he described as "... generic to all the future iterations of microspheres that would be, or could be, developed either by scientists associated with me or with other groups". Dr Gray and Dr Stribley performed a series of experiments generic for all applications of targeted microsphere technology, in which they tried to develop spheres to deliver selective internal radiation therapy as the first "product" to be used. These Dr Gray later called "SIR-Spheres". That term is used throughout these reasons to refer to microspheres used to deliver localised radiotherapy. Two different types of microspheres were employed in initial experiments. The first was used to study microsphere distribution in the bloodstream of animals and the manipulation of arterial blood flow to assist in their targeting. Dr Gray called them "tracer" microspheres. They could be purchased commercially from a company specialising in that technology. They were made from an ion-exchange co-polymer and could be labelled with a tracer such as radioactive tin or cobalt. The second type was to be used to treat humans. Drs Gray and Stribley published two articles describing the results of their experiments to evaluate the distribution of varying numbers of the microspheres in three animal models. They were: Stribley, Gray, Chmiel, Heggie and Bennett " Internal Radiotherapy for Hepatic Metastases I; The Homogeneity of Hepatic Arterial Blood Flow " (1983) Journal of Surgical Research 34; 17-24 and Stribley, Gray, Chmiel, Heggie, and Bennett " Internal Radiotherapy for Hepatic Metastases II; The Blood Supply to Hepatic Metastases " (1983) Journal of Surgical Research 34;25-32. The purpose of the study reported in the first paper was to establish the homogeneity of isotope distribution in liver substance when 15 micron microspheres using Cobalt 57 as a tracer isotope were arterially injected. This was done in three mammalian species. The results showed a mean percentage coefficient of variation of 28% + 5%. The study also demonstrated that 15 micron particles while not penetrating to the venous circulation, achieved a more homogeneous spread throughout the liver than larger particles. To maximise homogeneity in distribution, 4,000 beads per gram of liver tissue were required. The results indicated criteria for maximum homogeneity of therapeutic agents within liver substance when administered by this method and allowed confidence limits to be attached to direct in vivo measurement of hepatic irradiation. Curiously, Dr Gray's affidavit evidence describing this study gave the impression that Yttrium 90 was used and made no reference to the use of Cobalt 57 . This rather suggests that in preparing his evidence he scanned the abstract rather than looking to the body of the paper. The second paper reported that 30 rats had adenocarcinomas implanted directly into their livers. Between 10 and 20 days after implantation, 15 micron diameter Cobalt 57 microspheres were infused. The animals were sacrificed and the distribution of the microspheres studied. A second experiment reported in the same paper involved the injection, via the hepatic artery, of three humans with "macroaggregated ferrous hydroxide technetium-99m". The technetium isotope is a gamma ray emitter used for blood perfusion studies. The experiments demonstrated increased arterial blood supply to the hepatic metastases. The results from the three human studies indicated that extrapolation from the animal model to the human situation was valid. Dr Gray presented these results to the annual scientific meeting of the Surgical Research Society of Australia: Gray, Stribley, Heggie, Chmiel and Bennett " Distribution of radioactive microspheres in liver parenchyma and tumour tissue " (1983) Aust NZ J Surg, 53;366. In 1981 Dr Gray considered he was ready to develop a microsphere to carry radiation to treat patients. He chose a radioisotope, Yttrium 90 , as his preferred radiation source because it had what he regarded as ideal nuclear radiation characteristics. He then had to select a matrix to form the carrier microsphere. His first approach was to develop microsphere made of Yttrium Oxide and to activate the stable Yttrium isotope to Yttrium 90 by bombardment in a neutron flux at the Lucas Heights Reactor in New South Wales. This was potentially a much simpler process than trying to incorporate radioactive Yttrium 90 into an inert microsphere made of some other material. Ways of making small Yttrium Oxide particles were explored. One way was to use plasma spraying. The Department of Materials Engineering at Monash University in Victoria had particular expertise in this technique. Dr Reginald McPherson undertook a series of experiments in 1982 to manufacture pure Yttrium Oxide microspheres using plasma spraying technology. Some of the microspheres produced as a by-product of the process were hollow: McPherson J, " Formation of metastable monoclinic rare earth sesquioxides from the melt " (1983) Material Science 1341-1345. A photograph of plasma spheroidised Yttrium Oxide (Y 2 O 3 ) was Figure 3 in the paper. It depicted the hollow Yttrium microspheres that Dr McPherson made in 1982. Dr McPherson has died since Dr Gray prepared his affidavit. The solid Yttrium microspheres were found by Dr Gray to be too heavy and to distribute poorly in the blood stream. They were not suitable for clinical use. He asked Dr McPherson to try to manufacture the hollow variety. A few further experiments were undertaken to that end but did not lead to either understanding or control of their formation. That would have been a major research project in itself and Dr Gray did not have access to the necessary funding. This all occurred in 1981-1982 at the end of which time he put the project on hold until large scale funding became available. As appears later in these reasons, subsequent attempts by his research group and by Sirtex to develop hollow microspheres extended over more than a decade and were ultimately unsuccessful. Even when hollow microspheres of Yttrium Oxide were produced, they were found to fracture in the neutron flux necessary to convert them to radioactive Y 90 . Dr Gray then considered the use of polymer microspheres. He selected a co-polymer (polystyrene divinyl benzene) matrix commonly used as a cation-exchange resin and available in microsphere form off the shelf from a commercial company --- Biorad. Biorad is an American company which supplies ion exchange resins. Yttrium 90 was easily incorporated into the new microspheres and they behaved well when injected into the blood stream of animals. Dr Stribley returned to medical practice and was replaced by Dr Michael Chamberlain who took over his research into the targeted microsphere technology project. Dr Gray and Dr Chamberlain undertook further experiments and in 1983 published an article: Chamberlain, Gray, Heggie, Chmiel, Bennett " Hepatic Metastases --- a physiological approach to treatment " (1983) British Journal of Surgery 70; 596-598. The intrahepatic distribution has been studied in the dog, rabbit and rat models. The activated Yttrium 90 was incorporated into styrene-divinyl benzene copolymer ion exchange microspheres of 17.5 + 2 micron diameter. The microspheres contained 10% Yttrium (w/v). They were exhaustively washed in an acid solution to free non-absorbed or lightly absorbed Yttrium 90 . The spheres were injected into the hepatic artery of anaesthetised mongrel dogs, the thoracic artery of white rabbits and the thoracic aorta of rats. The animals were sacrificed and the distribution of the spheres studied. The article described the application of the animal studies to humans. It was suggested that, as was the case with the animals, there would be considerable variation in the therapeutic ratio of tumour to normal liver blood supply of human patients. Therapeutic application would depend upon calculation of individualised therapeutic ratios for each patient. The 1983 paper described how to make what Dr Gray called SIR-Spheres, including their size, composition and specific density, their Yttrium 90 content and the radiation activity of the isotope. It described the removal of Yttrium 90 from the spheres by acid washing, their suspension in saline solution for administration, their distribution after administration to animals and their selective targeting of tumours within the liver. There was a problem with the new SIR-Spheres that rendered them potentially unsafe. That was the risk that Yttrium 90 would leach off because of poor chemical bonding to the microsphere matrix. This could occur through a process of exchange with counter-ions in the blood. If large amounts of Yttrium 90 were leached off it could circulate in the blood, concentrate in the bone, and irradiate bone marrow with catastrophic consequences. On Dr Gray's understanding of the literature similar events had been experienced by Dr Grady and others with fatal outcomes. As appears below, the problem was largely resolved by Dr Gray's research team on advice from a CSIRO researcher, Dr Jonathan Hodgkin and work done by Cameron Jones, a member of Dr Gray's team, in 1988. When Dr Chamberlain returned to medical practice he was replaced by Dr Gregory Self. In 1983 Dr Mark Burton was also recruited to Dr Gray's research team and took over day to day responsibilities of all the research projects. Dr Burton, who is now Dean of Science at Charles Sturt University, graduated with an Honours degree in science majoring in physiology from the University of New England in 1980. Although he commenced his PhD in 1981 he had to take up concurrent employment for financial reasons and completed it in 1989. He was appointed as a Research Fellow with Melbourne University at St Vincent's Hospital when he joined Dr Gray's team in 1983. He was offered a position initially as a vascular physiologist, a research area which fitted well with his prior experience and interest in the relationship between structure and function at organ and tissue levels. Dr Burton was directed by Dr Gray to international research literature relevant to liver cancer and the process of its spread. He also made himself familiar with papers already published by Dr Gray in conjunction with Dr Stribley and Dr Michael Chamberlain and others. Through this reading he became aware of the possibility of injecting suitably sized microspheres carrying radioactive isotopes into the vascular bed of tumours in the liver. It soon became apparent to Dr Burton that the vascular architecture associated with hepatic metastases was reasonably well known and provided clues for a different approach to treatment. He gave a helpful explanation of relevant features of that architecture in his affidavit. The liver receives blood from the portal vein and oxygenated blood from the hepatic artery. The majority of the blood permeating the tissue mass of the liver is derived from the portal vein. The overall contribution of the hepatic artery is relatively small. So normal liver tissue is fed more by venous than arterial blood. Prior research had already established that as tumour tissue develops it creates its own blood vessels which are supplied principally from well oxygenated arterial blood. It was a considered view, referred to in the literature, that introduction of an anti-cancer agent into the hepatic artery would deliver a higher concentration of that agent into the tumour than into normal tissue. This had led to investigations by international research groups, which commenced in 1975, into internal hepatic radiotherapy. Dr Burton referred to the move by Dr Gray's group from using Yttrium microspheres to polystyrene particles because of the low density of the plastic compared to whole blood. Using that approach, small quantities of Yttrium Oxide could be activated to its radioactive isotope, ionically dissociated and then adsorbed onto polystyrene microspheres by ion exchange before they were injected into the hepatic artery. Dr Burton's first project at St Vincent's Hospital was to examine vasoactive agents which could influence blood supply within the liver and within a liver tumour. In particular he was to identify drugs that would constrict vascular flow in normal liver tissue. He determined that very immature vessels of newly established tumour vasculature did not contain the normal functional units of a standard blood vessel. So the tumour vasculature could not respond to standard vasoconstrictive agents. Normal vasculature retained that function. Using animal studies he showed that the normal distribution of blood flow to a tumour in the liver varied from species to species but was generally around three times normal tissue blood flow. Using the vasoconstrictor angiotensin-2 he demonstrated that an injection of the drug before the entry of microspheres could increase the normal ratio from 3 to 1 to more than 10 (or hundreds) to 1. This would have obvious positive effects on the distribution of radiation during a treatment session. The majority of his experimental work in the vasoconstriction project was based on the measurement of blood flow in particular vascular beds. That was done using radioactive microspheres. These "blood flow microspheres" had physical characteristics very similar to those to be used for clinical work and so acted as a clear model. The spheres he used were made of the same polystyrene matrix as the polymer resin which was subsequently to be used in Perth for internal radiation therapy in humans. They were available for purchase from a radioactive product distributor. They could float in the blood stream in the same way as a red blood cell. Dr Burton's first major publication in relation to this work appeared in 1985: Burton, Gray, Self, Heggie and Townsend, " Manipulation of Experimental Rat and Rabbit Liver Tumor Blood Flow with Angiotensin II " (1985) Cancer Res, 45: 5390-5393. The experimental work described in the article measured the ratio of arterially introduced microspheres lodging in tumour tissue to those in surrounding normal hepatic tissue, referred to as parenchyma, both before and after the intra-infusion of angiotensin-2 inducing incremental systemic responses. A significant elevation in the ratio was observed for both rats and rabbits following the drug infusion. Ratio elevation occurred in 37 of 40 tumours examined despite the lack of a clear dose-response relationship. Angiotensin-2 was found to increase significantly the number of microspheres gaining arterial access to the central portions of the tumours. The results indicated "... a substantially enhanced radiation dose reaching tumour tissue after angiotensin-2 infusion, while relatively sparing the surrounding normal tissue". Dr Burton and his colleagues noticed during preliminary experimentation that a small proportion of the radioactive isotope dissociated from or leached off the microspheres in salt solutions. This leaching was a matter of concern. It was undesirable that radioactive Yttrium 90 be released from injected microspheres to the general circulation from which it could spread to the lungs and bone marrow. That problem had to be solved if the microsphere technology were to be suitable for use in human clinical trials. Dr Burton, Dr Self and Dr Townsend looked at a variety of ways of more firmly combining Yttrium 90 to the microspheres. They had mixed success. In order to understand the solution which was eventually adopted, it is helpful to set out the steps involved in the creation of the irradiated microspheres to that point. As described by Dr Burton they were as follows: A non-radioactive powder form of Yttrium Oxide (Y 2 O 3 ) (also known as Yttria) was irradiated by neutron bombardment at the Lucas Heights Reactor in Sydney. The resultant isotopic form of Yttrium Oxide was dissolved in a solution of sulphuric acid and the ion exchange resin (the microspheres) added to the solution. The solution contained free Yttrium ions which were then attracted to the oppositely charged ion exchange microspheres resulting in the Yttrium becoming attached to them. The microspheres would sink to the bottom of the container. The rest of the solution would be decanted and replaced with non-radioactive water, mixed again, and again allowed to sink and have the remainder solution replaced. The procedure was repeated until the solution contained no free Yttrium and all the radioactive Yttrium ions were attached to the microspheres. The preceding process was known as "washing". The end product was to be used for injection into the liver. The procedure was simplified by washing the solution through a sieve-like filtration unit which strained out the microspheres several times. Dr Gray referred to this procedure in his affidavit evidence. It involved modifying a ready made device used for sterilising liquids by passing them through a small membrane filled container. By modification of this device they were able to construct a small scale "hot-cell" that could be used in the production of radioactive SIR-Spheres. Dr Gray arranged for Dr Burton and Dr Self to visit Dr Jonathan Hodgkin, a research scientist employed at the CSIRO in Melbourne to explore ways of chemically fixing Yttrium 90 so that it would be permanently embedded in the microsphere matrix and not leach out into the blood stream. Dr Hodgkin gave evidence about this approach, which he said occurred in 1982 or 1983. He initially considered coating the beads then suggested that the Yttrium be precipitated onto the beads as an insoluble salt. He looked up the most insoluble Yttrium salt he could find. It was the phosphate. Dr Hodgkin explained in his evidence that the microsphere material was a highly cross-linked polymer. Its molecule had a "chelating structure" which enabled it to attract and bind the Yttrium. However, because the material was very porous the Yttrium could be displaced into the body by other ions from the blood stream. Precipitating the Yttrium as an insoluble phosphate salt enabled it to bind more strongly with the sphere. Ultimately, of course, the sphere would break down but the radioactive Yttrium 90 with a half life of three days or less, would have decayed within that time and not pose a threat to other organs. Dr Hodgkin recalled the approach from Dr Burton and Dr Self and the advice he gave because he talked about it in the course of a newspaper interview which he was giving on another project related to water purification. The Age newspaper published an article about it. Dr Burton and his colleagues tried out Dr Hodgkin's suggestion. It had the merit that it only required one extra step in their production sequence after the Yttrium Oxide had been combined with the ion exchange resin. That step was the addition of a phosphate salt to the Yttrium when it was on the microspheres. The salt would turn the Yttrium from a soluble ionic form into an insoluble phosphate form less likely to dissociate and to be exchanged for other ions in the blood. As Dr Burton explained in his evidence, the production of the microspheres using this technique remained relatively easy. It resulted in a much more stable microsphere with significantly reduced leaching when injected into the blood stream but with the same irradiating qualities. He described the use of phosphate solution as a "break through" and as a "critical achievement" which was essential in opening the way to human experiments. I accept his characterisation of the application of phosphate solutions to the better binding of Yttrium to ion exchange resin microspheres. The majority of Dr Burton's research to that point was conducted in the latter half of 1983 and throughout 1984 at the University of Melbourne while he was part of Dr Gray's team. Typically he and the other researchers would meet with Dr Gray on a weekly basis. Dr Gray had a number of research projects on foot and was not involved full time in the laboratory work. Their weekly meetings were in depth and they used them to ensure that Dr Gray was informed of the direction and progress of the research and to obtain his feedback and suggestions. Manufacture of the SIR-Spheres was initially undertaken by Dr Gray and then by Dr Burton at St Vincent's Hospital. On 31 January 1984, Dr Self prepared a set of notes detailing what he described as "... major aspects of techniques which [he] had used during 1983-84". The techniques related to the preparation of Yttrium 90 microspheres. They had the character of detailed instructions for production of such spheres. The notes were entitled "YTTRIUM-90 MICROSPHERES PROJECT - Experimental Procedures and Equipment". In 1984 Dr Gray undertook a review of possible adverse effects of injecting SIR-Spheres into human patients. He collected the data together with experimental data generated over the previous four years and submitted it to gain approval to commence the first use of the SIR-Spheres in patients with liver cancer. This was to be at St Vincent's Hospital. He submitted an application to the Therapeutic Goods Administration (TGA) in Canberra and to the Human Ethics Committee of St Vincent's Hospital. He was given approval to start human experiments. The optimal dimensions of microspheres for use as SIR-Spheres was an ongoing question. Dr Burton recruited a higher degree student from the University of Melbourne, Veronica Meade, to help in this respect. She was given the task of evaluating different sized microspheres. Dr Burton described her work as an extension of ideas being considered within the research group relating to the use of different ion exchange resins to transport anti-cancer agents. They had been trying different ion exchange resins to attach different ionically charged agents. Because these spheres tended to be of different sizes the group wanted to see if size affected distribution in the liver. Ms Meade wrote her thesis and subsequently published the results of her evaluation as Meade, Burton, Gray and Self, " Distribution of Different Sized Microspheres in Experimental Hepatic Tumours ", (1987) European Journal of Cancer and Clinical Oncology, 23; 37-41. She and her co-authors concluded that arterially embolised 15 and 32.5 micron diameter microspheres shared equal tumour perfusion properties in that the numbers lodged in tumour tissue were about three times more than the numbers which lodged in ambient normal liver tissue. Fifty micron microspheres concentrated less in tumour than in normal tissue. Homogeneity of distribution improved as microspheres increased in diameter from 15 to 50 microns. They recommended that in view of the good distribution of 32.5 micron spheres and their ability to preferentially lodge in tumour tissue, they should be regarded as the optimal microsphere size for the animal model in order to study tumour blood flow. Initially the radioactive isotopes required for the research group to undertake animal studies were provided by the Australian Radioisotopes Division of the Australian Nuclear Science Organisation (ANSTO). They were supplied at no cost on the understanding that if any of the research was ever commercialised, ANSTO would be the manufacturer of the radioactive products. They also talked about the possibilities of immunotherapy and hyperthermia. Dr Gray said it was always his intention to develop microspheres to carry drugs for targeted chemotherapy and magnetic material for targeted hyperthermia. One of the projects in Melbourne involved using the microspheres to bind the widely available anti-cancer drug, doxorubicin. The development of what he called the "DOX-Spheres project" was limited at the University of Melbourne because it required a chemist to progress it further and funding was limited. Microspheres used in that application are referred to in these reasons as "DOX-Spheres" to avoid a multiplicity of designations. Despite the limited funding the group decided to commence studies examining the use of doxorubicin. Dr Burton described their proposed activities thus: To evaluate the use of the standard ion exchange resins as microspheres to transport doxorubicin and to release it at the site of embolisation. To examine the potential of work being done elsewhere using protein microspheres to carry doxorubicin, the suggested advantage being that this methodology would alleviate immunological interaction with the particles by using the patient's own albumin. Some of those elements emerge from literature which Dr Gray had reviewed covering the period between 1948 and 1982. The elements were: The use of microspheres to transport an irradiated isotope of Yttrium into the vasculature of liver cancers in order to deliver lethal radiation to the tumour without significant harm to normal liver tissue. The use of microspheres for that purpose comprising styrene-divinyl benzene copolymer ion exchange matrix to incorporate the Yttrium 90 . The use of vasoactive agents including angiotensin-2 to create enhanced vascular flow into cancerous tissue and effect preferential distribution of injected microspheres into that vasculature. Precipitation of Yttrium 90 as a phosphate salt to bind it sufficiently strongly to the microsphere matrix that the risk or incidence of leaching of the Yttrium 90 into the general circulation while it remained radioactive was reduced to acceptable levels. The possible use of microspheres in the size range of 30 microns to optimise preferential lodgment in tumour tissue. As appears later in these reasons further work done by Dr Cameron Jones, as part of Dr Gray's research team at UWA, led to improvements in the phosphating process to improve the binding of Yttrium 90 to microspheres. In 1988 he determined that leaching of Yttrium from microspheres during storage could be reduced by storing them in a solution kept at the physiological pH of 7, that is the pH level of blood. They received some assistance from the Department of Medical Physics at St Vincent's Hospital. Dr Gray described the concept in evidence. It was well known that raising the temperature of internal tissues by as little as 3 degrees Celsius could be very effective in causing cell death. Even very small increases in the temperature of tumours would greatly increase their susceptibility to ionising radiation and chemotherapy. If tumours could be heated selectively by as little as one or two degrees, a greatly enhanced cellular kill rate from the SIR-Spheres or DOX-Spheres could be expected. Targeted hyperthermia involved the use of microspheres loaded with ferromagnetic materials and directed to tumours in the same way as the SIR-Spheres. Heat could be generated from the spheres by subjecting them to an externally applied alternating electro-magnetic field. The heat would arise from the hysteretic behaviour characteristic of all magnetic material subject to such a field. Microspheres used in this application are referred to in these reasons as Thermo-Spheres, the term used by Dr Gray and his associates. I accept the evidence of Drs Gray, Burton and Hodgkin concerning conception, commencement and development of the targeted microsphere technology research program at the University of Melbourne as outlined in the preceding sections of these reasons. He retained copies because it was usual practice to cut and paste from one to another to bring in their common background. He set out in his affidavit a list of some 17 applications for which he had found records for the period 1981-1984 relating to the targeted microsphere technology project. The list set out the title of each application, the amount sought, the year in which the application was made and the body to which it was made. The applications were exhibited to his affidavit. As he put it they "... describe in some detail what had already been achieved in the area of the targeted microsphere technology research relating to the application itself". The University in its closing submissions handed up a "Schedule A" offering an analysis of the applications showing those which, on the evidence, had resulted in a grant and those for which there was no evidence of a grant being made. The earliest application was made in 1981. It was directed to the Anti-Cancer Council of Victoria (ACCV) and sought funding for a project described in its short title as "Intrahepatic administration of radioactive Yttrium 90 microspheres for the treatment of hepatic metastases". In the application Dr Gray stated that techniques used to that date were intrinsically inadequate as there had been no attempt to maximise the dose of radiation delivered to metastatic tumour tissue. Limited attempts at therapeutic application in humans had been based on grossly inadequate estimations of the likely dose to be delivered to normal liver parenchyma. (3) To further develop suitable microspheres containing Yttrium with the desired physical properties for embolisation into the hepatic artery of cancer bearing subjects. (4) To apply this new technique on an individual basis to patients for the treatment of metastatic hepatic cancer. The second application was made to the RACS in 1981 for substantially the same purposes and yielded a grant of $4,500. A third application was made to the Felton Bequest Committee in 1982 for an investigation into the value of vasoactive agents to enhance the internal radiation of metastatic liver cancer. The aims of that project were as follows: To investigate the ability of vasoactive agents to differentially act on the vascular bed of normal hepatic parenchyma, whilst having either the reverse of no effect on the vascular bed of the hepatic metastases. To quantify the extent of the "therapeutically enhanced" blood flow to metastatic tumour nodules within the liver of two experimental animal models, using the technique of embolization of radioactive microspheres into the vascular tree. Using the two available animal models, to assess the potential therapeutic value of using intra-hepatically delivered vasoactive agents prior to the delivery of radioactive microspheres, for treatment of metastatic liver cancer. To apply these techniques to the treatment of patients with metastatic liver cancer. The date of the application was 20 December 1982. Similar applications at about the same time were made to the Buckland Foundation, the Rowden White Fund, the Utah Foundation, The Ian Potter Foundation, The H & L Hecht Foundation, The Brockhoff Foundation and The Helen Schutt Trust. The application to the Buckland Foundation had the same title as that to the Felton Bequest. The applications to the other Funds, Foundations and Trust in 1982 all related to the use of vasoactive agents to enhance the anti-cancer effect of radioactive microspheres. The application to the H & L Hecht Foundation yielded a grant of $4,000. An application to the ACCV in 1982 entitled "Intrahepatic administration of radioactive Yttrium-90 microspheres for the treatment of hepatic metastases" yielded a grant. Its quantum is the subject of some conflicting evidence ranging from $23,000 to $33,300. The quantum is not material for present purposes. In 1983 an application was made to the ACCV entitled "Enhanced radiation of liver cancer by vasoactive agents" and in 1984 another application to the same body entitled "Drug Enhanced Arterial Perfusion of Experimental Liver Tumours". Enhanced Internal Radiation of Metastatic Liver Cancer by Vasoactive Agents. There is no record that any of those applications were successful. In late 1984 an opportunity arose for Dr Gray to take up the UWA's Chair in Surgery at Royal Perth Hospital (RPH). In light of that opportunity he considered it would have been inappropriate to start a major clinical project at St Vincent's only to have it aborted by relocating several months later. He delayed treating patients with the SIR-Spheres until after he had relocated to Perth. It is convenient now to refer to his appointment to the Chair of Surgery and its terms and conditions. The letter informed Dr Gray that if he accepted the offer he would be granted clinical status and admission to practice by the Board of Management of the RPH. The offer came with a set of "Conditions of Appointment". If Dr Gray were to decide to accept the offer, he was to sign and return a copy of the Conditions of Appointment. Dr Gray replied on 15 August 1984 setting out what he regarded as minimum basic infrastructure requirements for the University Department at RPH to be viable. He wanted four full-time clinical surgical positions, recognition by the hospital that full-time surgical staff must have sufficient access to public hospital patients to provide an adequate clinical caseload and ongoing salaried research staff to help support a commitment to research from all members of the department. He would need adequate secretarial support and an establishment grant of approximately $120,000 for the purchase of laboratory equipment to re-establish his ongoing research projects in Perth. The Deputy Vice-Chancellor (Staffing), Professor Boyle, replied to Dr Gray on 2 October 1984. Some, but not all, of his requirements could be met. These included provision of an associate professor and one full-time position. An assurance had been given by the hospital that his unit would have increased access to public hospital patients. A de facto arrangement could be made for the provision of research support. There was an existing support group consisting of a director and deputy, with three research officers, six staff assisting in the animal house and two in the theatres. The comment about secretarial support had been passed on. The hospital had agreed to provide up to $50,000. UWA had been able to secure reasonably definite commitments to the extent of $30,000 and Professor Boyle was hopeful that an extra $20,000 could be made available. Dr Gray responded to Professor Boyle on 9 October 1984. His inquiries had indicated that it would not be possible to locate a new research staff member within the RPH staffing structure. It was imperative that Mark Burton be relocated to Perth. He described Dr Burton as "... the key scientist in our main research program at St Vincents". He proposed that a position be found for him with UWA, similar to that which he had at Melbourne. Dr Gray would not accept the Chair in Surgery unless Dr Burton could be accommodated. A meeting of the Raine Research Committee of UWA held on 16 October 1984 resolved to provide support to an upper limit of $30,000 per year for a limited term tenured appointment for Dr Burton. This was on the condition that the Vice-Chancellor were unable to find any other source of support. The Committee required that support be limited for a period of no more than five years, Dr Burton be known as a Raine Research Fellow, and that a report on his work be submitted to the Committee annually. A letter of offer went to him on 5 November 1984. He was offered an appointment as Raine Research Fellow initially placed in the Department of Surgery at a commencing salary of $23,905 per annum for a term of five years. He accepted the offer on 16 November 1984. On 26 October 1984 Dr Gray signed an acceptance of UWA's offer. The acceptance clause was appended to a set of the "Conditions Governing Permanent Appointments to Chairs". The Scheme provides for a pension to be paid on retirement after age 55 and cover in the case of invalidity or death. Contributions are at the rate of 7 per cent of salary whilst the University contributes 14 per cent. (2) Consulting and outside work must not interfere with the carrying out of all necessary University duties and shall normally be relevant to a professor's teaching and research. Fees in excess of this amount shall be paid to the University and credited to a departmental fund to be used for such purposes as may be recommended by the head of department and approved by the Vice-Chancellor. Dr Gray did not admit the first condition as pleaded. As to the second, he pleaded that, under clause 3(i), a professor would be subject to the Act, Statutes and Regulations of UWA. Dr Gray pleaded his right under clause 11 to conduct a private consultative practice. He alleged that the necessary conditions under clause 11(3) to permit him to engage in private consultative practice were satisfied, namely: It was desirable that his experience and special knowledge be made available to the community through the profession of which he is a member. His knowledge as a University teacher would be enlarged. In addition, he relied upon the applicable academic industrial awards and, as and from 1993, the Minimum Conditions of Employment Act 1993 (WA). UWA alleged that by reason of his employment by it between 11 February 1985 and 21 November 1999, as pleaded in paragraph 2 of the Statement of Claim, Dr Gray owed certain fiduciary duties to the University. Each of these duties was said to have survived the termination of his employment relationship with the University. Dr Gray did not admit that he owed the fiduciary duties alleged during the course of his employment by UWA. He positively denied that he owed those duties after March 1997 and denied that they survived the termination of his employment. Dr Gray further asserted in his defence that any fiduciary duties he owed to UWA were cognate to the circumstances in which their relationship of employment was formed, and that he did not breach those duties by: pursuing research consistent with, or related to, those areas of research in which he had been engaged prior to his employment with the University; and seeking to commercialise, for his own benefit or for the benefit of others, intellectual property the product of that research. There was some controversy in closing argument about whether it was properly part of the UWA case that compliance with the Regulations was a contractual obligation imposed upon Dr Gray. In my opinion it was. There would otherwise have been little point in the clearly implied reference in the statement of claim to clause 3(i) of the Conditions. It was asserted on behalf of Dr Gray that there was no case pleaded against him that he had any contractual or other obligation to supervise compliance with the Regulations by any other employee of UWA. This point was made because, in its written opening statement, the University said that Dr Gray had an obligation to report discoveries made by other persons bound by the Regulations who were operating under his supervision, whether or not he personally made those discoveries. But an obligation to report is not an obligation to supervise. As appears from its responsive submissions, UWA did not assert a general duty of supervision, but rather a duty to report the making of inventions by others. It was said to arise out of the Patent and IP Regulations. UWA did not plead in its statement of claim any implied term in Dr Gray's contract of employment that the benefit of any invention developed by him in the course of his employment belonged to UWA. The pleading seems rather to have proceeded upon the assumption of some unspecified mechanism whereby such inventions developed by him belonged to UWA. That mechanism was plainly not the Patents Regulations. They left open the question of UWA's rights in respect of inventions. The IP Regulations took a different approach. UWA attempted, on day 44 of the trial, by an amendment to its reply to Dr Gray's defence, to plead an implied term in his contract of employment with it. The implied term was that he owed to UWA a duty of good faith and fidelity. That term had not been previously pleaded. It was raised in answer to defence pleaded by Dr Gray under the Limitation Act 1935 (WA). The amendment was disallowed on 19 June 2007: University of Western Australia v Gray (No 17) [2007] FCA 924 at [42] , ruling A7. He was provided with an office and a secretary. Seventy per cent of his salary was paid by the University and 30% by RPH. His secretary was paid for by the hospital to provide support for him and the other three academics in the department. The conditions of his appointment made it "permanent subject to review" for an initial period of three years. That initial period ended on 11 February 1988. On 12 October 1987 the Vice-Chancellor, Professor Smith, wrote to Dr Gray advising him that, in accordance with standard procedures, he was required to put a recommendation to the Senate in respect of the conversion of Dr Gray's appointment to "permanent not subject to review". He requested that Dr Gray submit a report on his teaching, research and other activities since taking up his appointment in February 1985. It is convenient to refer to that report which provides an overview of the kind of activities undertaken by Dr Gray in his first three years at the University. In his report to the Vice-Chancellor Dr Gray referred to his initial negative perceptions of the University Department of Surgery and the work he had undertaken in the first three years with academic members of the Department to develop it. He had received cooperative support from most but unfortunately not all of them. He set out a number of principles which he had sought to apply and which amounted to what he called "the philosophy that I have attempted to develop". According to these "principles" all members of the University Department of Surgery should undertake research to justify their continuation within it. Teaching students and the provision of ongoing education for the practising medical profession were emphasised. Clinical excellence was an essential requirement for all members. He reported, inter alia, that in 1986 he had initiated a clinical service for complicated liver surgery and was receiving personal referrals from practitioners and surgeons throughout the State. He described the service as "... one of the major liver surgery centres in Australia. " The report to the Vice-Chancellor did not make specific reference to Dr Gray's ongoing involvement in targeted microsphere technology research beyond what might be discerned by reference to the titles of a number of his published and submitted research papers which were set out in appendices. This was not surprising as it was primarily directed to an account of what he considered he had achieved in relation to the development and improvement of the University Department of Surgery during his first three years as Professor of Surgery. There was a considerable emphasis on that topic in his affidavit evidence. It was accompanied by commentary and was plainly designed to indicate the major contribution to change which Dr Gray considered that he had made. Some of that commentary included observations that: At the time of his appointment surgeons in the University Department of Surgery had little influence on academic affairs in Australia, were not noted for any significant research outcomes and had a low profile in the affairs of the Royal Australasian College of Surgeons. There was a generally dismissive attitude towards academic surgery in Western Australia and he had a mandate for change. With the exception of orthopaedics and ophthalmology there was an extremely poor history of success in obtaining national peer reviewed competitive research grants. The quality of teaching by some visiting consulting surgeons was often poor. There was no coordinated theme for clinical activities within the Department of Surgery and over the four teaching hospitals. Undergraduate teaching had been dysfunctional and largely ad hoc and required a complete revision of the teaching syllabus. Poorly coordinated post-graduate training was responsible for a long history of a high failure rate by surgical trainees in Western Australia undertaking surgical examinations for the Royal Australasian College of Surgeons. The financial affairs of the University Department of Surgery in 1985 were in disarray. The Department of Surgery had an almost invisible presence in obtaining competitive national scholarships for undergraduate or post-graduate students prior to 1985. He perceived antipathy towards him by some academic surgical staff who had been replaced. However on 14 October 1988 he was informed by the Deputy Vice-Chancellor (Academic) Professor Clyde, that the Senate had converted his appointment to a permanent one, not subject to review, effective from 26 September 1988. Dr Gray said that during the period 1985 to 1990 he enjoyed a high level of support from the central University administration including Professor Robert Street, who was the Vice-Chancellor when he was appointed, Professor Robert Smith who succeeded Professor Street in 1986 and the Deputy Vice-Chancellors, Professors Alan Boyle and Roy Lourens during that period. He regarded all of them as "supportive of my attempts to elevate the academic standing of the University Department of Surgery". Between 1985 and 1990 Dr Gray took an active role at a national level in oncology related organisations. He was a member of the Executive of the Clinical Oncology Society of Australia and the Surgical Research Society of Australia. He was a member of the Australian National Cancer Advisory Committee and the Australian Cancer Network. He was chairman of the Gastrointestinal Group of the Clinical Oncology Society of Australia. He founded and chaired the Australia and New Zealand Bowel Cancer Trials group as a national cooperative group for the coordination of the conduct of cancer trials in Australia. In 1991 he convened, with funding support from a Melbourne-based company, a meeting which led to the formation of the Australian Gastrointestinal Trials Group, which he described in his evidence as "... now the pre-eminent national organisation for coordinating larger scale clinical trials in cancer". He chaired that group from 1991 until 1996. The setting out of this global history at much greater length in Dr Gray's affidavit indicates that he saw himself, no doubt with considerable justification, as an agent of great change and improvement within the University Department of Surgery. The emotional significance of that perception, in my opinion, is not to be under-estimated and is reflected by the space which his account of his years in the Department occupied in his affidavit even though it was not, on any view, a necessary part of his case. Importantly, what came to dominate his relationship with UWA in later years was his research program on the use of the microspheres to treat liver cancer and attempts to commercialise the intellectual property deriving from it. It is appropriate now to focus upon that program and dealings between Dr Gray and UWA and other participants in the research group. Others, relevant to the targeted microsphere technology, included: Burton, Gray " Redistribution of blood flow in experimental hepatic tumours with Nor-Adrenaline and Propanalol " (1987) Brit J Cancer, 56; 585-588. Burton, Gray " Intra-operative dosimetry of Yttrium-90 in liver tissue" (1988) Nuclear Med (In press). Burton, Gray, Colletti " Effect of Angiotensin-2 on blood flow in the transplanted sheep squamous cell carcinoma" Europ J Cancer Clin Oncol (In press). Jones, Burton, Gray " Albumin microspheres as vehicles for the sustained and controlled release of Adriamycin " (1987) J Pharm Pharmacol (Submitted). Jones, Burton and Gray " Enhanced in-vivo activity of Adriamycin incorporated into slow release microspheres " J Cont Release (Submitted). Jones, Burton, Gray " In-Vitro release of cytotoxic agents from ion exchange resins" J Cont Release (Submitted). Jones, Burton, Gray " Albumin microspheres as vehicles for sustained and controlled release of cytotoxic compounds" (1987) Proc Aust Physiol Pharmacol Soc, 17: 60. Jones, Burton, Gray " Sustained and controlled release of cytotoxic agents from microspheres" (Abstract) Presented at Australian Society for Medical Research, Sydney, December, 1986. A lot of the setting up was done by Dr Burton. He was the only member of the Melbourne research group to transfer to Perth with Dr Gray. When he arrived at the hospital it became clear to him that significant resources and infrastructure were needed before they could start on the research program which had already been developed and planned. For him, 1985 was also a year of consolidation of the research results emanating from the Melbourne work in which he had been involved, publication of those results, applications for grants income to support the extension of the work and progress to new research subsequently derived. The period from 1985 to 1988 was marked, for Dr Burton, by the completion of his PhD, the building of the research team with a reasonable number of research assistants and researchers, its establishment within the UWA Department of Surgery and the development of a profile in the Perth research community. One of those appointed to the group early in the piece was Cameron Jones, a 1984 UWA graduate with an Honours Degree in Science, majoring in organic chemistry. He is now a Professor at the School of Chemistry at Cardiff University in Wales. He also has an Australian Research Council Professorship which he took up at Monash University at the beginning of November 2006 to be held concurrently with his other professorship until October 2007. (Although he did not obtain his doctorate until some time later, he is referred to by the title "Dr" in these reasons). On 1 July 1985 Dr Jones commenced a 12 month appointment as a research grant funded graduate research assistant. He continued with successive appointments as a research assistant until 31 December 1987 when he left to travel around the United States. In late 1988 he came back on a casual basis as a research assistant with the group. Another research assistant working with him was Angela Colletti. She assisted with animal experiments and in vitro and in vivo studies. Cameron Jones was appointed as a member of the UWA staff, albeit funded out of a research grant. His initial appointment expired on 30 June 1986. It was extended upon Dr Gray's application dated 11 June 1986. The nature of his appointments was indicated by the offer of an extension of his term made by the UWA Staffing Officer on 27 June 1986 following Dr Gray's application for its extension. The University Staffing Officer, "on behalf of the Vice-Chancellor", offered him an appointment as a research assistant "on the research grant funded staff of this University". The appointment was offered subject to the provisions of the UWA Act, the Statutes and Regulations of UWA. It was funded from a grant made for research purposes. UWA was unable to contribute its own funds. If a salary variation were to occur and the grant funds were insufficient to support the appointment to its original termination date, then the termination date would be brought forward accordingly. I am satisfied, having regard to the circumstances of Dr Burton's appointment and those of the researchers in Dr Gray's group when it was established in 1985 at RPH, that they were all employed as staff members of UWA. A considerable part of Dr Burton's time was used in developing and training existing and new staff within the hospital laboratories and animal research facilities so that they were conversant with the kind of research he had been carrying out in Melbourne. The protocols for the handling and management of the very high levels of radiation to be used in the clinical work had to be established within the medical radiation facilities of the hospitals. On 12 March 1985 he wrote to Dr Richard Fox of the Department of Medical Physics at RPH describing the technique which he used to make microspheres and seeking necessary approval for the use of Yttrium 90 . He received a memorandum of 21 March 1985 from Dr Fox setting out details to be covered by the relevant protocol. Dr Burton brought with him to UWA the equipment he used in the University of Melbourne and, in particular, a hand held probe used to measure and calibrate radiation in liver tissue. Initially he performed a number of experiments using new animal models such as sheep to calibrate the intra-operative radiation probe to be used in human studies. He also undertook a significant amount of work in developing safe handling techniques for the radioactive materials to be used, quality control procedures for the labelling of the microspheres and the production of radiation protection measures for staff. As part of the establishment grant which he had requested upon appointment, Dr Gray sought $50,000 for the purchase of radiation detectors, they being a Packard Liquid Scintillation Counter and a Packard Gamma Counter and associated equipment and accessories. The request was referred to the Equipment Advisory Committee of UWA which was prepared to approve $25,000 and indicated that other moneys were available from the Medical School Endowment Fund. The Head of Department of Surgery, Professor Catchpole was so advised by a memorandum dated 19 March 1985. On 25 March 1985 Dr Gray wrote to the secretary of the Research Committee to justify the request. Dr Gray explained in his letter to the Research Committee that the main thrust of his group's investigations was a continuation of earlier research investigating the blood supply and treatment of hepatic metastases. It required the use of a number of multiple labelled radioactive microspheres. The multiple labelling techniques were used to assess alterations in blood flow induced by the use of vasoactive agents. A sophisticated gamma counting device was needed as the technique required the removal of organs from experimental animals and the counting of microspheres in tissue samples. The Liquid Scintillation Counter was required in connection with investigation into the treatment of disseminated malignancy by the intra-arterial embolisation of radioactive microspheres. The work involved the counting of tissue samples containing the microspheres into which Yttrium 90 had been incorporated. He wrote that two full time members of the department were working on the project. The need for large scale counting of Gamma and Beta emitting isotopes was imminent. A copy of the letter was sent to Professor Catchpole. Funding for the radiation detectors was eventually provided. The participants in the work were identified as Drs Gray, Burton, Hodgkin and Mau, the latter two being employed by CSIRO. Dr Jonathan Hodgkin, it will be recalled, was the CSIRO research scientist based in Melbourne who had been consulted by Dr Burton in 1982 or 1983 about the use of phosphate salts to chemically fix Yttrium 90 to SIR-Spheres. The "Project Detail" section of the application set out at some length in the application referred to prior research in the use of microspheres as vehicles for anti-tumour agents which had been undertaken by the group. After these drugcarrying particles have become preferentially embolised within the tumour tissue, they will allow a continuous slow release of chemotherapeutic drugs directly within the surrounds of the tumour with relative sparing of normal tissues from the toxic effects of drug exposure. The proposal requires the development of a process for producing maximal uptake of drugs into the microspheres and the measurement of drug capacities of microspheres of varying size and type. In addition, a means of regulating the sustained release of drugs into the tumour must be developed. Over the past two years we have developed a proven technique for the preferential delivery of microspheres into tumour tissues in larger numbers for therapeutic means. He would require a part time technical assistant for the duration of the project. Testing and quality control would require the services of a graduate research assistant under the direction of Dr Burton. It would include assessment of microsphere drug carrying capacity, release rates and the therapeutic value of the microspheres as vehicles for chemotherapy pharmaceuticals. The application was successful. Dr Hodgkin wrote to Dr Burton on or about 15 April 1985. He could start work almost immediately. He asked for any samples of ion exchange microspheres to be sent over otherwise he would start with a sample of Aminex A-6 which had already been sent or with material of his own group's making. On 18 June 1985 Dr DH Solomon the Chief of the Division of Applied Organic Chemistry of CSIRO, wrote to Dr Gray advising that CSIRO had received notification of the award of the joint grant and had arranged for the appointment of a technical assistant in its division, Ms JR Colman, to carry out the work. She was to be appointed from 15 July. The assignment of benefits between the two Institutions would depend on their degree of involvement and would be negotiable separately. I find, and it is not contentious, that Dr Hodgkin and Ms Colman were and remained employees of CSIRO in the work that they carried out under the collaborative funding arrangement. There was a tendency for drugs initially to come off microbeads quickly. This was well known in the scientific literature and referred to as the "burst release" effect. His investigations involved looking for a chemical means to prevent this and control the rate of release of the anti-cancer drugs from the beads. As will appear later in the evidence, another actor in these proceedings, Dr Yan Chen who joined the Gray group in September 1989, claimed that in 1991 she developed the idea of using a ferric ion to complex with doxorubicin and prevent burst release. Dr Hodgkin said that he had come up with the concept and provided it to Dr Chen. He had found in the literature that doxorubicin complexes with ferric ions to produce a fairly insoluble compound. In the application lodged on 1 April 1985 for the collaborative research grant he had provided a number of references to his previous publications and patents which he had taken out on the same or similar chemical processes. He referred in particular to a patent application he had lodged in 1980 entitled " Ferric Ion Selective Resins" (Australian Patent Application 64585/80). He also referred to an exchange of correspondence he had had in September and October 1985 with Cameron Jones. Dr Jones wrote to Dr Hodgkin on 20 September 1985 advising that he was considering coating his spheres with some biodegradable or non-biodegradable polymer to control drug diffusion from sphere matrix. He sought advice about how to proceed. On 8 October 1985 Dr Hodgkin replied that he and his associates had carried out some tests using both Adriamycin and Methotrexate in .9% NaCl. They also were looking at ways of coating the spheres to slow down the release. One method used the more insoluble salts of the drugs, by soaking the spheres in sulphate or phosphate or perchlorate solutions after the drug was put into them. Dr Hodgkin accepted that his letter did not mention metals. There is a slight difference in the chemical terms as the use of iron involves formation of a chelate rather than an ion exchange. However it operates on exactly the same chemical principle and any organic chemist would understand that. In 1982/1983 he had written a chapter for the Encyclopaedia of Polymer Science entitled "Metal Chelating Polymers". Dr Hodgkin also referred to a collaborative research fund application for 1986/1987 which he signed on 17 March 1986 on behalf of himself, Mr Mau, Dr Burton and Dr Gray. In 1986 when his wife was working at the Alfred Hospital he was able to access a lot of out of date anti-cancer drugs from her oncologist co-workers to experiment with chelating resins. The experiments included using drugs such as doxorubicin in combination with metal ions. He described his work as a research assistant in the Department of Surgery. The group was quite small. It consisted of Dr Gray, Dr Burton, Angela Colletti and himself. He worked on both DOX-Spheres and SIR-Spheres. He was supervised by Dr Burton whom he described as his "line manager". He and Dr Burton would meet about once a week with Dr Gray to discuss their research. Dr Gray was an active participant in the meetings. They would talk about their findings, apparatus designs, difficulties they were having, proposed studies and related topics. One of the things he discussed with Dr Burton was the use of angiotensin-2 to manipulate blood flow. One matter Dr Gray regularly emphasised was the need to ensure that the SIR-Spheres' work complied with regulations relating to radiation safety. Occasionally he would visit the laboratory but his visits tended to be fleeting. Dr Jones did not recall ever seeing him doing experiments in the laboratory. In cross-examination Dr Jones agreed that Dr Gray's research group worked in a collegiate manner. Each member had his or her own expertise although because it was a small group they had to diversify. They all got on "fairly well". He thought there was a lot of pressure on Dr Burton. It was put to him in cross-examination that although Dr Gray did not carry out the laboratory work he contributed to the analysis of the results. He said Dr Gray was not involved in the statistical analysis. However he had an input into the analysis of results at the group meetings. Cameron Jones' work with the DOX-Spheres involved biodegradable and non-biodegradable versions. The former were made of a protein which in his time was bovine serum albumin (BSA). It could be purchased commercially as a dried powder. The DOX-Spheres were produced by dissolving albumin in an aqueous medium and adding doxorubicin to that solution. The albumin-doxorubicin solution would then be mixed with oil to form an emulsion. Droplets of albumin-doxorubicin would disperse throughout the oil. They would then be stabilised by heat or chemical means causing the albumin to be denatured as chemical bonds formed between individual albumin molecules. These alterations in structure and the formation of the bonds created solid 3 dimensional albumin matrices. The biodegradable DOX-Spheres were composed of albumin in the size and shape of the aqueous droplets in the emulsion. The doxorubicin was dispersed throughout the albumin matrix. Non-biodegradable DOX-Spheres were made from cation exchange resin. This would be purchased from a commercial supplier in the form of tiny spheres of approximately the same size. They would be mixed with a solution of doxorubicin which would become bound to them. Dr Jones remembered in cross-examination that his study on DOX-Spheres had reached the conclusion that resin spheres did not display the "burst release" phenomenon and were superior in that respect to albumin DOX ---Spheres. This conclusion was reflected in a paper entitled Jones, Burton, Gray, " Enhanced in vivo activity of Adriamycin incorporated into controlled released microspheres" (1989) British Journal of Cancer 59:743-745. Cameron Jones' name appeared as the first named author in four of the papers mentioned by Professor Gray in his 1987 report to the Vice-Chancellor, mentioned earlier. One article, although submitted in 1987, was not published until 1989. Burton, Jones Trotter, Gray and Codde, " Efficacy of ion-exchange resins for anti-tumour drug delivery " (1990) Reg Cancer Treat 3, at 36-39. Dr Jones was also involved with SIR-Spheres. He assisted in the design of an apparatus for their safe manufacture so that they complied with regulations governing the use of radioactive materials. He saw a document very similar, if not identical to, that which Dr Self had prepared in January 1984 as a guide to the preparation of Yttrium 90 microspheres. While he was not sure whether the equipment he used in their preparation was the same, the chemistry was the same. That was the chemistry developed in Melbourne. The use of phosphate salts to ensure binding of Yttrium 90 to the microspheres had already been adopted by the group in Melbourne. He also assisted Dr Burton in animal trials using the SIR-Spheres. Experiments were done on sheep which were injected with spheres comprising a cation exchange resin and Yttrium 90 . Samples of liver taken from the treated sheep were analysed. Dr Jones recalled concern about the leaching of Yttrium 90 from the resin SIR-Spheres. He set out the steps that he took in manufacturing them. washing the spheres several times after treatment with a phosphate solution to remove unbounded Yttrium 90. One problem he encountered was aggregation of the microspheres after their sterilisation by autoclaving. The problem was mitigated by storing the spheres frozen. A similar solution was adopted to prevent clumping of DOX-Spheres carrying adriamycin. In January 1987 an application was made in Cameron Jones' name to the RPH Research Foundation for a grant of $3,915 to investigate the incorporation of Floxuridine, Mitomycin C and Novantrone into biodegradable and non-biodegradable microspheres. In that application he defined the aim of the project as the development of a technique "for the concentration and preferential delivery of chemotherapeutic drugs into tumour tissue". The means for pursuing that aim which he identified in the application were : Incorporation of chemotherapeutic drugs into slow release microspheres suitable for embolization into the arterial circulation of tumour bearing organs. Optimisation of the capacity and drug release profiles of 3 cytotoxic compounds (Novantrone, Floxuridine and Mitomycin-C) in both biodegradable and non-degradable microspheres. Vasoactive manipulation of the blood supply to tumours to enhance preferential delivery of drug containing microspheres into the tumour tissue. Analysis of the therapeutic benefit of this form of controlled release drug delivery in comparison with present chemotherapy techniques. Towards the end of 1986, animal trials of the SIR-Spheres had progressed to the point where Dr Gray was ready for clinical trials. Dr Jones was not directly involved in the administration of the SIR-Spheres to human patients in those trials, the first of which occurred in November 1986. However he prepared the spheres that were used and watched them administered to at least one patient. During that operation he measured the level of radiation emitted from the patient's liver using a portable beta-counter. A more detailed account of the clinical trials of SIR-Spheres at RPH appears later in these reasons. Upon his return from the USA, Cameron Jones accepted a casual appointment with UWA from about 22 November 1988 until about mid-December 1988 to look at why leaching and aggregation were still occurring with Yttrium 90 microspheres. His appointment was on flexible hours and he did most of his work in the afternoons. He researched chemical literature and, in particular, literature concerning the solubility of Yttrium phosphate. He found that the leaching of Yttrium 90 from the radiation spheres was pH related. Yttrium phosphate was more soluble at a lower pH. Storage of the radiation spheres at a low pH would allow leaching to occur. The problem therefore was really only an artefact of storage of the SIR-Spheres in the laboratory. Dr Jones knew that blood is maintained at a relatively constant pH of about 7. He also knew from his research at the UWA library that Yttrium phosphate is insoluble at physiological pH so that in the blood it would remain insoluble and attach to the radiation spheres. He told Dr Burton that he didn't think there was a problem. The Yttrium 90 phosphate would remain insoluble at physiological pH and the leaching from the SIR-Spheres in storage could be reduced by using a buffer at about the level of physiological pH. In fact in cross-examination he said it was his conclusion that at physiological pH there would be "next to no leaching". Cameron Jones referred in his affidavit to a provisional specification for a patent lodged in the Australian Patent Office on 18 November 1993 by Dr Yan Chen and Dr Gray and entitled "Controlled Release Matrix for Drugs and Chemicals " . The number allocated to the provisional specification was PM2493. Dr Jones had not seen the document before he prepared his affidavit although three or four years before he had obtained a copy of the United States patent that appeared to him to describe the same invention. Dr Jones called the provisional specification a "provisional patent" which, as he put it, referred to the use of biodegradable and non-biodegradable matrices to transport and control the delivery of therapeutic and chemical agents. He identified two distinct differences between the experiments described in the provisional specification and his own experiments at UWA on biodegradable and non-biodegradable DOX-Spheres. Those described in the provisional specifications were formulated to be more ionic and specific reference was made to drugs spheres made of a mixture of albumin and dextran sulphate. Dr Jones had no recollection of ever making drugs spheres composed of a mixture of albumin and dextran sulphate. (b) He did not treat either the biodegradable DOX-Spheres or the non-biodegradable DOX-Spheres with metal ions as a means of controlling the rate of drug release from them. He pointed out that the provisional specification described the way that the microspheres are produced. That technique he said was very similar to the technique that he used to make biodegradable microspheres between 1985 and 1987. He referred in particular to the way that the authors of the provisional specification controlled the size of their microspheres by passing them through sieves. This was the same as the method that he used while he was working at UWA. He did some work on the use of microwaves to attempt to heat tissue. He also thought, wrongly as he acknowledged, that it might be possible to load microspheres with metal ions which could be heated with microwaves. Hyperthermia, as Dr Gray pointed out in his evidence in chief, covers a wide range of technologies for the treatment of cancer. In the 1980s they included, but were not limited to, the microwave and radio frequency wave induction of hyperthermia, in which Dr Burton was interested. One technique involved the direct infusion of heated fluids containing chemotherapy drugs into the abdominal cavity of patients with advanced abdominal cancer. Another involved connecting the patient to a cardiac bypass machine, heating the patient's blood and adding anti-cancer drugs to it. The heated blood was perfused through the patient's limbs. This was used for patients with recurrent melanoma of the limbs. Dr Gray was not involved in the development of these technologies but said he did introduce them into Western Australia. There was already in existence in 1985 a significant amount of literature in relation to the uses of hyperthermia in the treatment of cancer. Some of that literature was set out in a schedule of publications ranging from 1957 to 1996 on the basis that it was prior art for the purposes of the Thermo-Spheres patent application made in 1997 which is the subject of these proceedings. At the time, in 1985 and 1986, that Drs Gray and Burton were pursuing their interests in hyperthermia the published literature included: Gilchrist and Others, " Selective Inductive Heating of Lymph Nodes" , (1957) 147 Annals of Surgery 596-606. Fine magnetic particles were injected into lymph nodes and subjected to induction heating by the use of radio frequencies. Heating occurred through three mechanisms --- dielectric loss, eddy currents and hysteresis. Hysteresis loss, described as "a form of magnetic friction" was said to offer "the best approach to the problem as the heat per unit volume is independent of particle size. " Mosso and Others, " Ferromagnetic Silicone Vascular Occlusion" (1973) 178 Annals of Surgery, 663. This paper reported selective vascular occlusion of tumour blood vessels by direct injection of a ferrosilicon preparation under magnetic control. It did not involve heating of the magnetic particles but their movement under the direction of an externally applied magnetic field. Rand RW and Others, " Selective Radiofrequency Heating of Ferrosilicon Occluded Tissue: A Preliminary Report " (1976) 41 Bulletin of Los Angeles Neurological Society, 154. The paper referred to previous work on hyperthermic therapy including heated perfused blood and heated anaesthetic gases. Liquid silicone impregnated with finely powdered iron particles was used to occlude vascular beds of tumours. The work evaluated the ability to heat the material, both alone and within various organs, by the use of selective radio frequency heating. " Cancer treatment method" , US Patent 4,106,488 RT Gordon inventor. The patent was for a treatment of cancer by the application of external electromagnetic energy to generate heat in intracellular particles to induce selective thermal death of cancer cells in living tissue. It proposed the use of particles of 1 micron or less in diameter with magnetic properties so that they would be inductively heated when subjected to a high frequency alternating electromagnetic field. The particles could also be used as a method of delivering a chemotherapeutic agent primarily to the interior of the cancer cells, the agent being encapsulated in the particles and released by application of the electromagnetic field or by solubilising the particulars within the cells. Gordon RT and Others, " Intracellular Hyperthermia: A biophysical approach to cancer treatment via intracellular temperature and biophysical alterations " (1979) Med Hypotheses 5, 83-102. The concept described in the paper involved locally induced heat energy after tumour phagocytosis of submicron particles whose composition permits magnetic excitation. The process used the cancer cell membrane to contain the energy generated within the cancer cell. " Cancer treatment ", US Patent 4,303,636, 1 December 1981. RT Gordon inventor. The patent abstract described a treatment of cancer by the application of external electromagnetic energy capable of the generation of heat in intracellular particles to induce selective thermal death of cancer cells in living tissue. Borrelli NF and Others, " Radio frequency induced hyperthermia for tumour therapy ", US Patent 4,323, 056. The invention involved the use of localised Magnetically- coupled, RF-induced hyperthermia mediated by a non-toxic and preferably inert material compatible with animal tissue and incorporating iron-containing crystals of size, composition and magnetic properties sufficient to impart at least 200 oersteds to the material in an RF magnetic field with a frequency not in excess of 10 kilohertz. The magnetic properties of the crystals were "such as to maximise the hysteresis loss". Luderer AA and Others, " Glass-Ceramic Mediated Magnetic-Field-Induced Localized Hyperthermia: Response of a Murine Mammary Carcinoma " (1983) Rad Res 94, 190-198. The article reported the use of a biocompatible ferromagnetic glass-ceramic capable of inducing localised hyperthermia by hysteresis heating upon exposure to an alternating magnetic field. The ceramic was used on a subcutaneously transplanted weakly antigenic breast carcinoma. The data demonstrated such heating may be a useful therapeutic approach to the treatment of cancer. Borrelli AA and Others, " Hysteresis heating for the treatment of tumours" (1984) Phys Med. Biol. 29(5), 487-494. The paper reported a method whereby effective hysteresis heating in living tissue was achieved utilising a biocompatible magnetic glass-ceramic material. The method involved the use of an external magnetic field developing heat through magnetic hysteresis. " Inductive heating method for use in causing necrosis of neoplasm" , US Patent 4,983,159, 8 January 1991. RW Rand and Others inventor. The abstract of the patent described a process involving the injection of particles having hysteresis heating characteristics into tissue either within or in close proximity to the neoplasm and then subjecting those particles to an alternating magnetic field sufficient to cause hysteresis heating. Matsuki H and Another, " High quality soft heating method utilizing temperature dependence of permeability and core loss of low Curie temperature ferrite " (1985) IEEE MAG 21(5), 1927-1929. A high quality soft heating method utilising low temperature ferrite was developed. The heater generated sufficient heat at room temperature and stopped abruptly at the Curie temperature. The heat characteristics of the heater and the suitable exciting conditions were clarified. The term "soft heating" was a reference to induction heating utilising temperature-sensitive magnetic materials whose hysteresis loss and permeability largely depend on temperature. It is a superficial but uncontentious account sufficient for the requirements of these proceedings. Magnetic fields are associated with electric currents. So an electric current moving through a conductor will produce a magnetic field around the conductor. At the atomic level tiny magnetic fields are associated with orbital electrons. The response of particular materials to externally applied magnetic fields classifies them as one or other of diamagnetic, paramagnetic or ferromagnetic materials. The classifications reflect ascending levels of response. Diamagnetism derives from current loops associated with orbital electrons at the atomic level. Application of an external field aligns the loops to oppose the applied field. If this is the only magnetic response of a material it is designated as a diamagnetic material. All materials are inherently diamagnetic. The phenomenon is even seen in those commonly regarded as non-magnetic. It is a very weak form of magnetism. Some materials display magnetisation proportional to the externally applied magnetic field. This phenomenon is designated "paramagnetism". The spin of electrons at the atomic level defines the direction of the magnetic field associated with the atom. The fields in neighbouring atoms may or may not point in the same direction. Where the material is non-magnetic these randomly oriented fields cancel each other out. However where the cancelling out is incomplete the net magnetic field will be in a particular direction. A material which exhibits a magnetic field of this kind is referred to as paramagnetic. Paramagnetism is stronger than diamagnetism but is a lot weaker than ferromagnetism. Ferromagnetic materials are characterised by the alignment of unpaired electron spins in regions known as domains. Within each domain the magnetic field is strong and focussed in a particular direction. There will be many domains for a microscopic sized piece of material. Absent an externally applied magnetic field the magnetic fields within the domains being randomly oriented will cancel out. However when a modest magnetic field is applied to a piece of unmagnetised ferromagnetic material, it can induce individual domains to align with its direction. This means there is less cancelling out by localised opposing magnetic fields and consequential multiplication of the internal magnetic field. When a piece of ferromagnetic material is removed from an external magnetic field it remains to some degree magnetised. The term "hysteresis" refers to the tendency of the ferromagnetic material not to return to its original pre-magnetisation state. The word is derived from the ancient Greek word, phonetically rendered as "hustreresis" meaning "short coming" or the related word, "hysterein", meaning to be late or to fall short. That is defined as a graph showing how the value of some property of a hysteretic system varies as the agent causing it is varied from one value to another and back again, having the form of a closed curve whose area is a measure of the loss of energy in the cycle. Thus hysteresis loss is the energy dissipated as heat in a system as a result of hysteresis. A typical hysteresis curve showing the degree of magnetisation of ferromagnetic material varying according to the strength of the external magnetic field appears below in Annexure 1 to these reasons. Where the external magnetic field not only changes its strength but changes its direction the reversed external field will begin to reverse the direction of the magnetic field within the domains of the ferromagnetic material. When the external magnetic field alternates between one direction and another 180º in the opposite direction, the directions of the domains alternate. The associated hysteresis phenomenon is referred to as alternating hysteresis. Hysteresis may also occur where instead of simply reversing the polarity of the magnetic field the field is rotated. Where a magnetic field is rotated around a piece of ferromagnetic material, the direction of the field inside the piece of material also rotates. The external energy applied to the material via the rotating magnetic field is manifested in part as heat generated in the material. With alternating hysteresis there are times when the field is stable and not in a state of flux. The more flux that can be caused, the greater the heat generation. On this basis rotational hysteresis is a much more efficient way of converting changes in externally applied magnetic fields to heat. There is a temperature called the Curie temperature which is referred to in some of the evidence. That is a temperature at which a ferromagnetic material either becomes paramagnetic or loses magnetism altogether. Another term, related to hysteresis, which was mentioned in some evidence is "remanence". It refers to the fraction of the saturation magnetisation that remains in a ferromagnetic material when an externally applied magnetic field is removed. He asked Dr Burton to have a look at the attachment which contained a general discussion of the potential application of hyperthermia to the treatment of cancer. He identified what he called "the greatest potential clinical application for hyperthermia" being its use as a "potentiating and adjuvant treatment for conventional radiotherapy". He referred to studies which confirmed that hyperthermia and radiotherapy were synergistic. This reduction is the Oxygen Enhancement Ratio (OER) and for radiotherapy is particularly relevant for hypovascular areas of tumour. Dr Gray's interest was in the use of fluctuating magnetic fields to induce heating in microspheres bearing magnetic materials. He called this "targeted hysteresis hyperthermia". He coined the term "Thermospheres" for microspheres containing magnetic material. The development of this technology, however, was going to be expensive and beyond normal funding mechanisms then available to him. Soon after arriving in Perth he approached UWA seeking research funds to develop targeted hysteresis hyperthermia to the point where it could be tested in patients with cancer. He did not need funding for the SIR-Spheres project as he regarded this as having already matured. He needed only limited funding for the drug microspheres project. He exhibited to his affidavit a list of research grants for the period July 1985 to 1988. Two were UWA grants, six were from RPH, two from the RPH Research Foundation, one from the CSIRO/UWA Collaborative Research Fund, three from the National Health and Medical Research Council, one from the Cancer Foundation of Western Australia and one from the Medical Research Fund of Western Australia. All related to topics forming part of the targeted microsphere project being undertaken by the group. An analysis of the successful research grant applications for the period 1985 to 1986, taken from Dr Gray's closing submissions and incorporating amendments and comments from UWA, appeared in a Schedule B lodged by UWA in its closing submissions. There were some disputed entries but the points of difference are not of great materiality in the outcome of these proceedings. An extract of some of the elements of Schedule B is Annexure 2 to these reasons. He said there was a formal mechanism for review and up to three post-graduate scholarships would be provided for in any year. He described the initiative as highly successful and instrumental in promoting the research activities within the Department. He had some limited success in obtaining scholarships from within UWA itself. The Faculty of Medicine offered scholarships on a competitive basis to various academic departments. Two of these internal scholarships were awarded during 1987-1988. The number of higher degree students within the Department of Surgery increased significantly in the first five years after his appointment as Head of Department. Three students annually had been enrolled for higher degrees between 1982 and 1985 but by 1988 the number had increased to seven. However it appears reasonably clear that he telephoned the director of CABR, Dr Ian Nicholas, in May 1986 and arranged to meet him at the CABR offices. There were at Love House. Dr Nicholas remembered the meeting because Dr Gray parked his old Rolls Royce next to Dr Nicholas' green Morgan. He told Dr Nicholas about his three projects relating to cancer research. Dr Nicholas thought they were very exciting. Although Dr Nicholas did not recollect the detail of the meeting, he remembered that it lasted for about one and a half hours. Dr Gray told him he had been working on cancer research using microspheres for some time, that the CSIRO had been involved, that a Japanese company manufactured the spheres and that he had a team of people located at RPH. He outlined the three projects which he thought might be of interest to CABR. As Dr Nicholas recalled them they were: A project relating to iron filings and plastic spheres which would be used for cancer treatment. The iron filings would be introduced via the spheres into the patient and a magnetic field applied to generate hysteresis heating to treat the cancer. Dr Gray told Dr Nicholas that the technique enabled the targeting of the cancerous cells and that it could be difficult to control. A project involving the use of permeable spheres which contained drugs as another treatment for patients. A project involving the use of spheres containing radioactive Yttrium which could be introduced into a patient and provide radiation treatment. Dr Nicholas told Dr Gray that UWA would want ownership of the intellectual property but would look to agree on appropriate terms to exploit it commercially. This, he said, was a standard discussion he had with those whom he thought might be able to bring intellectual property to CABR. In cross-examination, he agreed that it was his understanding at the time, that UWA would own the intellectual property in any event if the relevant discovery were at UWA. Although he thought the project sounded exciting, his impression was that there was still a considerable amount of work to be done to perfect it. He thought it was a matter worth following up in a year's time to see if there would be scope for CABR involvement. Professor Parfitt accepted in cross-examination that it was appropriate for Dr Gray to approach CABR as he did. That was the procedure to be followed by UWA staff who thought that they had invented something. UWA did not insist that academic inventors make disclosure of their inventions directly to the Vice-Chancellor under the Patents Regulations. Given that there was no process in place to facilitate or deal with such disclosures, this is not surprising. Dr Nicholas opened a file for the projects which Dr Gray had discussed with him. It was designated IP 4. That meant that it was the fourth major intellectual property project which had been introduced to CABR. He dictated a file note of the meeting but it was not in evidence. He made approaches to them for funding in December 1986. He kept handwritten notes of an initial contact with Mr Tony Bates and Dr Bill Kettleby of Lederle. He wrote to Dr Kettleby on 29 December 1986. The letter followed a submission which his group had made to MERA for funding. He attached a copy of the submission, a report on the use of albumin microspheres for the controlled release of Adriamycin and graphs relating to the experimental work which his group had already done in that connection. By provision of a research assistant's salary for about two years at the rate of about $25,000 per annum. . Maintenance expenses of the order of about $10,000 per year and a supply of the drugs that they wished to test. He suggested that they enter into an arrangement whereby specific cytotoxic drugs could be targeted for their evaluation. He was only interested in using drugs with relatively high activity where a clinical use could be found if they were shown to be of benefit in in vivo experiments. He proposed that the ownership of information generated from the "conjoint research project" be negotiated. Ultimately, however, in a telephone conversation held on 13 April 1987, Dr Kettleby told Dr Gray that Lederle was not interested in proceeding. He met Dr Gray shortly after he arrived. The meeting did not arise out of his general visitations. Dr Gray approached him and told him about his research projects. Professor Parfitt had some previous awareness of them because he had written an article for the Canberra Times on drug delivery systems for the treatment of cancer. He suggested to Dr Gray that there was some prior art and that the research needed development. The technology would have to be improved to get a patent. The date of their meeting did not appear from Professor Parfitt's oral evidence in cross-examination. Indeed, his first diary record of a meeting with Dr Gray was dated 2 May 1988 and he no longer had a direct recollection of that meeting. At some time in 1987 Dr Gray prepared a document for CABR entitled "A proposal to determine interest in production and marketing of Yttrium 90 loaded microspheres for use as an agent for delivering therapeutic radiation for the treatment of cancer". In the document he described the project as having been developed over the previous six years and refined to a stage where clinical trials had started in patients with metastatic liver cancer. He referred to phase 2 clinical trials which began in November 1986 and were continuing at RPH. While acknowledging that it was too early to determine the efficacy of the treatment in prolonging life, the initial tumour response rates in patients treated to that date were so encouraging that the prospects for commercialisation should be explored. The procedure was potentially applicable to other organs but his discussion focussed upon the treatment of secondary liver metastases as the area in which most of the basic and clinical investigations had concentrated. Under the heading "Product Description and Quality Control" Dr Gray described the SIR-Spheres as manufactured from commercially available cationic exchange resin microspheres. He indicated that although various dimensions were available those used to that date were either 17 + 2 microns in diameter or 30 + 2.5 microns. The final SIR-Spheres contained on average 5.6% dry weight of Yttrium 90 . The specific activity of the isotope purchased from ANSTO was usually within the range of 3,000 to 3,150 Mbq per 100mg of Yttrium Oxide. The hydrated SIR-Spheres had a specific gravity of about 1.6. This was adequate for embolisation into the arterial circulation of cancer-bearing organs. Microspheres with higher specific gravities would not mix adequately in blood when embolised into the arterial circulation resulting in uneven distribution within target organs. Dr Gray referred to the risk of leaching and the procedure for leach testing before use of the spheres in patients. He described the SIR-Sphere manufacture process, toxicity studies, precautions to be taken and preliminary investigations in patients considered for SIR. He gave details of the technique for the delivery of SIR-Spheres in the treatment of metastatic liver cancer. He explained the procedure for intra-operative measurement of liver and tumour radiation doses. Selective targeting using a vasoconstrictor was also described. He set out the calculation of tissue radiation doses and previous experience with Yttrium 90 microsphere internal radiotherapy. Points of difference between the technique described in the proposal and previous attempts at similar procedures were listed. In summary they were: The use of a new type of Yttrium 90 microsphere with desired physical qualities for embolisation into the vascular tree of body organs. Firm binding of the Yttrium 90 to the sphere matrix to avoid leaching. Absence of toxicity. No significant effect on overall liver blood flow from therapeutic doses to the hepatic arterial circulation. A sufficient payload capacity in the microspheres to allow radiation doses well in excess of the therapeutic range without disturbance to liver blood flow. A manufacturing process refined to avoid significant risk to laboratory staff. Ease of sterilisation of the microspheres. The SIR-Spheres were significantly different in basic composition and "... hence would be patentable as a different product". The alternative product known as "Therasphere" developed by Nuclear Medicine Inc consisted of Yttrium 90 incorporated into a solid glass matrix. He then referred to the clinical experience in treating liver metastases with SIR-Spheres. He showed the results for seven patients. The technique for delivering SIR has now been established and initial clinical trials indicate a high objective response rate. Many questions regarded radiation tolerance, augmentation of effect with chemotherapeutic drugs, hyperthermia and radio-potentiating agents remain to be answered. However if the early experience is maintained SIR should find widespread clinical applications within the near future. It is appropriate to now consider commercialisation of the SIR-Spheres with a view to their marketing for future use as a commercial radiopharmaceutical project. Dr Gray also prepared a proposal for CABR with respect to the development of DOX-Spheres. It was entitled "A proposal to determine interest in a co-operative venture for the development of controlled-release delivery systems for Cytotoxic drugs " . Its aim was described in its text as continuing the further development of techniques for the concentration and preferential delivery of chemotherapeutic drugs into tumour tissue. Although several controlled release mechanisms had been developed for the selective delivery of Adriamycin into tumours there were many other opportunities to expand the initial work with the prospect of commercial exploitation within a few years. The proposal was for continued development of the project by investigation of the following areas: Incorporation of Cytotoxic drugs into slow release microspheres suitable for embolisation into the arterial circulation of tumour bearing organs. Optimisation of the capacity and drug release profiles of selected Cytotoxic drugs in both biodegradable and non-degradable microspheres. Analysis of the therapeutic benefits of this form of controlled-release drug delivery in comparison with present chemotherapy techniques. Physiological manipulation of the blood supply to tumours to enhance preferential delivery of drug containing microspheres into the tumour tissue. Clinical trials in patients. Marketing of controlled-release drugs that would meet appropriate standards for clinical use. The group was currently conducting animal experiments to define the pharmacokinetic movement of controlled-release Adriamycin in animal tissues prior to clinical trials in patients. More limited studies had been undertaken with several other drugs. He described the present status of chemotherapy and the use of microspheres to transport Cytotoxic agents to tumours. He described the influence of vasoactive drugs in microsphere distribution and the therapeutic exposure advantage of regional chemotherapy. Evidence from both the literature and our studies also point to the potential of these drug carriers for the sustained and controlled delivery of other Cytotoxic drugs. The microspheres could be narrowly sized to any required size with the aid of microsieves. Drug levels of up to 25% by sphere weight could be achieved without affecting the structural integrity of the spheres. Dr Gray attached to his DOX-Spheres proposal appendices giving broad details of some of the studies that had been conducted. They were titled thus: Albumin microspheres as vehicles for the sustained and controlled release of Adriamycin. In vitro release of cytotoxic agents from ion exchange microspheres. Enhanced in vivo activity of Adriamycin incorporated into controlled release microspheres. This work had centred on the use of furfuryl alcohol to coat ion exchange microspheres in order to control drug release characteristics. (b) Microsphere manufacture materials . (c) Therapeutic studies . Dr Gray expected that the majority of the experimental program could be completed within three years. It would be structured so that only the most favourable potential drug microspheres would reach the therapeutic testing stage. The experimental work was to be carried out in the laboratories of the University Department of Surgery at RPH and the Queen Elizabeth II Medical Centre. He attached a list of some 24 references to the proposal. He prepared the DOX-Spheres proposal in or prior to May 1987. In May he met with Dr Nicholas again. Dr Nicholas understood from their conversation at that time that he was not making great progress in relation to the so-called Thermo-spheres and was concentrating on the potentially more exploitable project involving the delivery of the SIR-Spheres with Yttrium 90 . Dr Nicholas and Dr Gray agreed that CABR would enquire about the patentability of the technologies that he was developing. Dr Nicholas wrote a letter dated 22 May 1987 to Davies & Collison Patent Attorneys seeking their advice about whether Dr Gray's projects might be amenable to patent protection. On 9 July 1987 Dr Nicholas sent a facsimile to Davies & Collison about Thermo-Spheres which does not appear to be in evidence, but which elicited a letter dated 13 July 1987 from Dr Stearne of that firm. Dr Nicholas had instructed Davies & Collison to prepare a provisional patent specification relating to the selective heating of tumour cells. The specification was to be directed to the incorporation of ferromagnetic particles into microspheres. In his reply Dr Stearne sought information about a number of aspects of the proposed invention. These included the mechanism of hysteresis heating, the type, sizes and configurations of the ferromagnetic particles, ranges of field strength and frequency for operating the magnetic coil and preferred sizes for the magnetic coil. Dr Stearne gave his advice about DOX-Spheres on 15 July 1987. On the basis of what had been published by Dr Gray's group and other groups he advised that any patentable aspects of Dr Gray's work would be confined to the delivery method utilising microspheres having particular characteristics or new developments in vasoactive targeting not previously published. Their novelty, and therefore patentability over known methods would reside in the use of novel microspheres. Processes for the production of albumin microspheres utilising a phase emulsion polymerisation technique and ion-exchange microspheres using sulphonic acid cation exchange resin particles and cationic forms of cytotoxic drugs or other permutations of resins and drugs would seem capable of patent protection as long as they were new in the sense that the processes had not been published and were not obvious in the light of previously published work. Dr Stearne required full details of processes used in producing the albumin microspheres and ion-exchange microspheres if the patent attorneys were to proceed in obtaining patent protection for that aspect of the work. As to the use and techniques of polymer coatings on microspheres to further control drug release characteristics, it seemed to Dr Stearne that that aspect had not been fully developed and further work would need to be done before they could reach the stage of having sufficient information to file any patent applications. He observed, however, that it would seem at least arguable that using a biodegradable polymer coating to enhance sustained drug delivery might be obvious to the skilled person and so not amenable to patent protection. Further information about that aspect of the invention was required before a more complete opinion on patentability could be given. That was not enough to cause him to dismiss them as of no interest to CABR as a potential business opportunity. He asked Dr Gray to write summaries of the DOX-Spheres research with a view to attracting a commercial partner. He considered there was little novelty inherent in that technique. It was possible to introduce novelty by developing degradable or non-degradable coatings for drug-laden microspheres which would control drug release rates by moderating the diffusion of the drug out and counterions into the microsphere. Another way to "increase" novelty would be to develop biodegradable ion-exchange microspheres from various materials with a range of release profiles. He claimed there was novelty in the means of microsphere administration. He referred to the introduction of drug-laden microspheres into the arterial blood supply of a tumour bearing organ with a view to embolising them within the tumour micro vasculature. This method of delivery was especially suited to the treatment of hepatic metastases. He also pointed out that the use of vasoactive drugs for preferential shunting of arterially introduced drug-laden microspheres to tumour tissue was unreported. However given that they had been using the technique for the selective targeting of radioactive microspheres to tumour tissue and had published the technique, it could not be regarded as novel. Dr Gray's summary went on to discuss the use of albumin microspheres. He accepted that little novelty existed in the method then being used for the manufacture of those microspheres containing cytotoxic drugs. However, the drugs Novantrone and Floxuridine had been incorporated into the microspheres. This had not previously been reported. Again, novelty could be added as with cation exchange microspheres by use of a coating to retard drug release. Vasoactive drugs could also be incorporated within the microsphere or its suspending medium to enhance tumour targeting. In the second summary, Dr Gray noted that much of the literature concerning albumin microspheres centred on their use to carry Adriamycin. Invariably a phase emulsion polymerisation technique had been used to manufacture them with final microsphere size controlled by energy input into the emulsification. I interpolate that this was the method of manufacture described by Cameron Jones. Dr Gray proposed that a novel variation of Adriamycin loaded albumin microspheres was the biodegradable cation exchange microsphere manufactured by incorporating a weakly acidic cation exchange polymer (Polyglutamic acid) into the albumin matrix. Adriamycin had been loaded onto the microspheres post-manufacture by a simple cation exchange process. Drug loads of up to 50% had been obtained. He observed that the incorporation of Adriamycin into polymeric microspheres had not been widely investigated. Polysacharide (Dextran) ion exchange microspheres had been produced by carboxylating or sulphonating commercially available sephadex microspheres. He referred in this connection to a 1984 paper by Goldberg and Others in a book entitled " Microspheres and Drug Therapy ". Another approach was to use an irreversible covalent attachment of Adriamycin to polymeric microparticles which would attach themselves to the surface of cancerous cells. He also discussed emulsion systems for the carriage of Adriamycin. Dr Gray himself made approaches to potential commercial partners. The approach to Lederle in December 1986 has already been mentioned. On 8 June 1987, on University Department of Surgery letterhead, he wrote to Dr Ian Pitman, the Research Director at Fauldings attaching his proposal in relation to the incorporation of cytotoxic drugs into microspheres. He enquired about the possibility of joint collaboration in developing the microspheres to a point where they could be applied in clinical settings. He and Dr Nicholas met with Dr Pitman sometime in June 1987. Their meeting was referred to in a letter dated 4 August 1987 from Dr Pitman. In his letter Dr Pitman said that Fauldings would be most interested in receiving an update on the patentability of the delivery system. His major concern at that time centred around the need to administer a non-biodegradable polymer systemically. He foresaw major regulatory problems, even though the danger to the long term health of a patient might not be great. He expressed interest in the alternative of lipid microspheres as drug delivery systems. He mentioned Dr Goldberg whose work "had great parallels" with that being undertaken by Dr Gray. She was located at the Royal Infirmary in Glasglow. Dr Gray responded to Dr Pitman on 12 August 1987. He spoke of a patent application making some progress but described it as a "rather time consuming exercise". In a further letter dated 2 November 1987 he attached the two summaries which he had prepared at the suggestion of Dr Nicholas. On 27 November 1987, Dr Pitman replied advising that there would be no funds available to support his research. He left open the possibility of collaborative work in the future on a delivery problem. He attached an overview of the Thermo-Spheres project in specific areas that he thought needed development and particular answers to the questions raised by Davies & Collison. He described specific areas to be developed which included the assessment of various ferromagnetic materials with the necessary properties. suitable and optimal size and shape. In addition it would be necessary to develop suitable microspheres to carry the particles, identify techniques for incorporation of ferromagnetic particles into the microspheres in a suitable and optimal configuration for hysteresis heating and to develop techniques for their delivery into cancerous tissues. He referred also to the need to develop techniques for selective delivery by the use of radioactive agents and the development of an electrical/mechanical device capable of inducing suitable and optimal magnetic fields to cause hysteresis heating of the particles once lodged within cancerous tissues. A copy of Dr Gray's replies was forwarded to Davies & Collison. Materials with large hysteresis loop areas will require high fields at low frequencies, whereas the utilization of materials with small loop areas will require small fields and high frequencies of operation. The frequency range is from a few tens to a few hundreds Hz. eg NdFeB. A working volume of about 0.3m diameter and 0.3m would be required. Dr Nicholas received a letter, dated 30 October 1987, from Davies & Collison and a draft provisional patent specification for the Thermo-Spheres. The specification was prepared on the basis of the detail supplied by Dr Gray. Dr Stearne noted in his covering letter that the draft lacked supporting experimental data and might be considered somewhat speculative. It would not provide an adequate basis for obtaining Convention priority in the USA. He strongly recommended that one or more further provisional specifications be filed within the following 12 months in order to provide experimental support for the invention. The applications could be "cognated" to form a single complete specification. Dr Gray said in cross-examination that the need for more experimental work to establish the efficacy of the idea reflected in the draft provisional specification was self-evident. However future directions in the work were not driven by Dr Stearne's suggestions. Asked whether some of the further work that he did on the Thermo-Spheres was done at UWA, Dr Gray said that a lot of people worked on it and that the further work done at the University was done "via students". He himself, as a Professor of Surgery at the University, did none of it. In it he described research undertaken "to investigate the potential of vasoactive agents to cause a redirection of blood flow within tissue containing metastatic cancer". He reported that: Three animal models of metastatic cancer had been developed and established encompassing the requirements of the study where species differences could be minimised and technical problems involved in the size of the animals addressed. A variety of vasoactive agents had been and were continuing to be assessed with angiotensin-2 the most promising. The sensitivity of the tumours in each of the models had been assessed for a number of the available chemotherapeutic drugs. Adriamycin was being planned as a potentially beneficial drug for experiments combined with the vasoactive agents. He attached a copy of the proposed provisional patent specification relating to "hysteresis heating of tumours". He and Dr Gray would be very pleased to discuss the possibility of a research grant and looked forward to hearing form Mr Stapleton shortly. He sent a copy of the letter to Dr Gray. As appears from the history of events at CABR, previously outlined in these reasons, Dr Nicholas gave notice to Mr Hyland on 3 December 1987 of his intention not to seek to extend his contract beyond 31 January 1988. Early in 1988 Professor Parfitt received a telephone inquiry from the general manager of a Queensland-based company called Technology Transfer Australia Commercial Research and Development Ltd (TTACRD). This inquiry followed some newspaper coverage of Dr Gray's research work in relation to cancer treatment. Professor Parfitt referred him to Dr Gray who wrote to him on 31 March 1988 inviting contact. A telephone conversation followed and Dr Gray wrote to the general manager, Mr Paulson, setting out the nature of the projects in which his group was involved under the headings "Targeted Radiation Therapy", "Targeted Chemotherapy", and "Selective Hyperthermia". We are in the process of channelling several of the projects through Uniscan as they do have real commercial potential. Dr Gray was also approached by Mr Heery, Medical Director for Wellcome Australia who had read in the University's newsletter in May 1988 about the targeted microsphere technology. He suggested some further discussions as Wellcome might be interested in the technology. Dr Gray briefly discussed the targeted microsphere technology with Mr Heery and asked for further information from Wellcome but had no record of any further correspondence. This was done with the approval of the Human Ethics Committee and under the supervision of the Department of Medical Physics at RPH. The technique used involved surgical exposure of the patient's liver and insertion of a catheter into the hepatic artery. Angiotensin-2 was injected to divert blood flow to the tumour. A small initial dose of SIR-Spheres followed. The resulting radiation dose to the liver was measured using a radiation detector. The additional quantities of SIR-Spheres necessary were then calculated and inserted through the catheter until the radiation dose in the liver reached a pre-determined level. The procedure took some hours and patients took weeks to recover. Moreover medical staff involved in the procedure were exposed to radiation over a period of time. This was monitored by the use of personal radiation detectors and reduced by staff wearing shielding. In the SIR-Spheres proposal which Dr Gray wrote for CABR in 1987 and which is referred to later in these reasons, he gave details of the clinical trials. The first patient was treated in November 1986. The radiation dose was kept at low levels in that case to evaluate its potential side effects. The treatment was then offered to patients as an experimental procedure from February 1987. At the time he wrote the proposal for CABR, two patients per month were being treated. Dr Gray said that all patients were extensively evaluated pre-operatively with nuclear and CT scans of the liver, an angiography and a battery of liver function tests. All were evaluated for "breakthrough" of microspheres. This was done by injecting Tc 99 labelled tracer microspheres into the hepatic arterial circulation via the catheter used for hepatic angiography and placing the patient under a gamma camera and calculating the percentage of microspheres entering the general circulation and reaching the lung. At the time he wrote the proposal no patient had been denied treatment because of excessive microsphere breakthrough. In a table set out in the proposal he gave details for the first seven patients treated with regard to isotopes given and liver and tumour radiation dose as determined by intra-operative probe measurements. As more patients entered into the program, the technique was refined and the radiation dose to patients was increased. Dr Gray said in his evidence, and I accept, that positive results were shown by way of tumour regression. He treated some 16 patients in this way. In order to mitigate adverse effects on patients and reduce irradiation to staff, Dr Gray modified the technique. The change involved implanting a port under the skin of the abdomen connected to a catheter surgically inserted into the hepatic artery. The SIR-Spheres were then able to be injected into the patient under a local anaesthetic through the port. The process was better tolerated than the lengthy surgical procedure. It also reduced staff exposure to radiation. The port devices were available commercially as they were used in chemotherapy for the administration of anticancer drugs directly into the liver. Dr Gray had experience in their implantation. He began combining the SIR-Spheres and chemotherapy using the port for both. The two treatments had a synergistic effect. Dr Guy van Hazel, a medical oncologist practising at the QE II and Mount Hospitals supervised the administration of the chemotherapy. Drs Gray and van Hazel were to collaborate in the publication of a number of papers. During the initial stages of the clinical trials the SIR-Spheres were manufactured by Dr Burton. However that process did involve some radiation exposure. The demand for SIR-Spheres was increasing with the number of patients Dr Gray treated. Following an incident in which Dr Burton received an excessive radiation dose to his hands, arrangements were made for the SIR-Spheres to be manufactured by the Australian Nuclear Science and Technology Organisation (ANSTO). SIR-Spheres manufactured by ANSTO were shipped directly to RPH. Patient outcomes continued to improve. The number of patients coming to RPH from around Australia and overseas increased. By 1988 Dr Gray had accumulated sufficient meaningful results to begin publishing data in international scientific literature. Four papers were published in 1989 in conjunction with staff from RPH who were involved in the SIR-Spheres project. They were: Burton, Gray, C Jones and Colletti, " Intraoperative Dosimetry of 90 Y in Liver Tissue" (1989) Nuclear Medicine Biology, 16:495-498. The paper described the use of a radiation detection probe to measure radiation dose to sheep in an animal study. The result of the clinical trial on a human patient at RPH was also reported. Burton, Kelleher, Klemp, " Selective Internal Radiation (SIR) Therapy for Treatment of Liver Metastasis; Measurement of Response Rate" (1989) Surgical Oncology, 42:192-196. Ten patients with liver metastasis from primary tumours were treated with SIR therapy. The SIR-Spheres used were described in the paper as "... closely sized resin-based microspheres of either 18 or 30 micron diameter and containing Yttrium 90 at an activity of approximately 5Bq-microsphere". Bq refers to the Becquerel, a unit of measurement of radioactivity. They had a specific gravity of 1.6, did not leach, and distributed evenly throughout the liver when infused into the hepatic artery. Approximately 5 x 10 4 to 15 x 10 4 SIR-Spheres per gram of total liver tissue were infused for each patient depending on the final radiation dose required. Dr Gray characterised this paper in his evidence as a description of the technique and results for measuring regression of tumours in patients treated with SIR-Spheres. Tumour response was quantified by measurement of carcinoembryonic antigen (CEA) in each patient and responses were observed. Burton, Gray, Klemp, Kelleher, Hardy, " Selective Internal Radiation Therapy; Distribution of Radiation in the Liver" (1989) European Journal of Cancer and Clinical Oncology, 25:1487-1491. This article reported on evidence of radiation distribution patterns within the liver following injection of SIR-Spheres. The SIR-Spheres used were described in the paper as being of either 17.5 + 2.5 or 32.5 + 2.5 microns in diameter. Klemp, Perry, Fox, Gray, Burton, " Aspects of Radiation Protection During the Treatment of Liver Cancer Using Yttrium 90 Labelled Microspheres" ( 1989) Radiation Protection Australia, 7:70-73. The title of the article speaks for itself. Dr Gray was cross-examined on patient records in relation to the trial. In the case of one patient who died there was evidence, post-mortem, of shunting and a breakthrough of microspheres into the general circulation ending up in the lungs. He said that some spheres would always get through. The point was to keep the breakthrough or shunting below a certain limit. In cancers originating from the gut and particularly from the large bowel, he estimated that 85% to 90% of patients would have less than 3% breakthrough. In cross-examination Dr Gray said that by 1988 he regarded the optimum size of microsphere as 32 micron diameter. It was safer than the 17 micron alternative. He agreed that he moved from 15 or 17 micron microspheres to 32 micron microspheres at some time between 1987 and 1988. The smaller size did not offer any advantage of deeper penetration into the tumour mass. In this connection it was pointed out to Dr Gray that the SIRT-1 PCT application filed on 25 October 2001 designated, in claim 14, a microsphere diameter in the range of 30 to 35 microns. (T2613) He said that the work that led to the stipulation of that size range had been done by Veronica Meade in 1984. Although her studies had found 35 micron microspheres were desirable in rats and rabbits, her conclusions about size were applicable to human beings. Asked why he began using 17 micro microspheres to treat patients in 1986 and 1987, he said there was not a lot of difference between 17, 18, 20, 25 and 30. Only around 50 microns was preferential distribution lost. Meade had shown that. The size of the capillaries in the animals she studied was the same as the size of the capillaries in humans. I accept his evidence in that respect. I accept that the micron size stipulated in the SIRT-1 PCT application derived ultimately from the Meade paper. One was Professor Arthur Li, Head of Surgery at the Chinese University of Hong Kong. Two of his staff came to Perth for training and started using SIR-Spheres to treat patients at Prince of Wales Hospital in Hong Kong. Dr Richard Stubbs in Wellington, New Zealand visited RPH, sent a scientist to Perth to learn about SIRT and introduced the use of SIR-Spheres to his hospital. By the early 1990s there was an increasing interest internationally in what Dr Gray and his colleagues were publishing and many research groups started experimenting with SIR-Spheres. He said that there are literally dozens of possible ways to make SIR-Spheres. Two research groups in Perth developed their own versions of the spheres. Dr Gray and his colleagues continued to undertake treatment of patients with SIR-Spheres through the 1990s and to publish results as they became available. In 1991 they started their first randomised clinical trial using SIR-Spheres in patients with secondary liver cancer that had spread from a primary cancer in the bowel. The principal investigators were himself and Dr van Hazel with patients being treated at RPH and the QE II Medical Centre and followed up by Dr van Hazel. The evidence sometimes refers to the Sir Charles Gairdner Hospital which is on the QEII Medical Centre site. For ease of reference it will be referred to hereafter as QEII. Approvals for the trial were obtained from the Human Ethics Committees of both hospitals and from UWA. The trial was approved by the Therapeutic Goods Administration Section of the Department of Community Services and Health under the Clinical Trial Notification Scheme. It was designed to compare the outcomes of treating patients with secondary liver cancer with anticancer drugs infused directly into the blood supply of the liver and the same drugs so infused together with a single administration of SIR-Spheres. He and Dr van Hazel were awarded a three year grant by the NH & MRC to conduct the trial. The funds were administered by UWA. The trial was also financially supported by the RPH Medical Research Foundation (the Foundation). The NH & MRC grant allowed the recruitment of staff to assist in the conduct of the trial but the cost of treating patients with SIR-Spheres was met from RPH and the cost of further treatment, tests and care of patients was borne by the public health system through Medicare, the private health insurance industry, RPH and QE II. Annual reports of the clinical trials were submitted to the Ethics Committees of the participating hospitals. Dr Gray and his group continued to conduct SIR-Spheres experiments in the 1990s. A number of papers were published relating to the use of SIR-Spheres in humans. These papers included: Gray, Matz, Burton, Kelleher and Klemp, " Tolerance of the liver to Yttrium-90 irradiation " (1990) International Journal of Radiology, Oncology, Biology and Physics, 18:619-623. Burton, Gray, Kelleher, Klemp and Hardy, " Selective internal radiation therapy; Validation of intra-operative dosimetry " (1990) Radiology, 175:253-255. Fox, Klemp, Egan, Mina, Burton and Gray, " Dose distribution following selective internal radiation therapy" (1991) International Journal of Radiation, Oncology, Biology, Physics, 21:463-467. Gray, Anderson, Burton, Codde, Morgan and Klemp. " Regression of liver metastases following treatment with Yttrium 90 microspheres" (1992) Aust NZ J Surg 62:105-110. Dr Burton resigned from UWA in 1993 in circumstances referred to later in these reasons. I accept Dr Gray's evidence that his departure hampered the laboratory and animal based studies at RPH as Dr Burton chaired the Medical Advisory Committee of the project funders, Lions Cancer Institute (LCI) and Cancer Research Institute (CRI) (discussed later in these reasons) and supervised research activities. As a result, the flow of publications into the public domain declined. Dr Gray continued to collaborate on some studies with Dr Burton after he went to Charles Sturt University. However, because of the break-up of the research team in Perth at the time, laboratory based and animal based experiments on SIRT were stopped although Dr Gray continued to treat his patients in conjunction with Dr van Hazel and to collect clinical data for publication. Dr Gray and Dr Burton published a further article in 1995 showing that in animals it was possible to prevent the development of liver cancer by treating them with SIR-Spheres before the cancers had actually appeared: Burton, Gray " Adjuvant internal radiation therapy in a model of colorectal cancer-derived hepatic metastases " (1995) British Journal of Cancer, 71:322-325. They collaborated on further publications on SIR-Spheres including their book chapter entitled Gray, Burton "Hepatic Metastases. Diagnosis and Management, Ch 11, Radiotherapy" in Morris, McArdle and Onik (ed), Management of Liver Metastatses (Butterworth Heinemann, 1996) p 108-113. They also collaborated in the publication in the British Journal of Cancer of a study undertaken by one of Dr Burton's research students at Charles Sturt University, entitled: Halley, Walker, Gray and Burton, "Microsphere Distribution within a Metastatic Liver Tumour Following Selective Internal Radiation Therapy" . Dr Gray and Dr van Hazel continued to report on the clinical results of patients they were treating. Among the papers which they published were the following: Gray, van Hazel, " Regression of Non-Resectable Liver Metastases following Treatment with SIR-Spheres . " (1998) Hepato-Gastroenterology Suppl 2 Vol 45 at 133. Yorke, Jackson, Fox, Wessels, Gray, " Can Current Models Explain the Lack of Liver Complications in Y-90 Microsphere Therapy? " (1999) Clinical Cancer Res (Suppl) 5:3024-3030. Gray, van Hazel, Buck, Paton, Burton, Anderson, " Treatment of Colorectal Liver Metastases with SIR-Spheres plus Chemotherapy" (2000) GI Cancer 3(4):249-257. Gray, van Hazel, Anderson, Hope, Moroz, Paton, " Randomised Trial of SIR-Spheres plus Chemotherapy versus Chemotherapy Alone for Treating Patients with Liver Metastases from Primary Large Bowel Cancer" (2001) Annals Oncology 12:1711-1720. Gray, van Hazel, Blackwell, Anderson, Price, Daunt, Moroz, Bower, Cardaci, " Randomised Trial of SIR-Spheres + FU/LV versus FU/LV alone in Advanced Colorectal Hepatic Metastases " (2002) ASCO: abst 599. van Hazel, Blackwell, Anderson, Price, Moroz Bower, Cardaci, Gray, " Randomised Phase 2 Trial of SIR-Spheres plus fluorouracil/leucovorin chemotherapy versus fluorouracil/leucovorin chemotherapy alone in advanced colorectal cancer" (2004) J Surg Oncol, 88: 78-85. Over a period of 11 years from 1989 until 2000 there were a number of attempts to make what Dr Gray called SIRT-2 hollow microspheres. He referred to the copolymer product as SIRT-1. He perceived it as a disadvantage of the use of the copolymer product that it involved handling large amounts of radiation. That problem could be obviated if hollow Yttrium microspheres could be produced. In the event, the effort to produce a hollow Yttrium microsphere was unsuccessful. Dr Gray estimated that the project ended up costing Sirtex something of the order of half a million dollars. The SIRT-2 product was never used by Sirtex. Early in 1989 at Dr Gray's instruction, Dr Burton contacted Dr Christopher Berndt at the Department of Materials Engineering at Monash University to see if he could suggest why some of the microspheres that Dr McPherson had made in 1982 were hollow. Dr Burton sent Dr Berndt some Yttrium Oxide powder in March 1989. Dr Berndt applied a plasma spraying system to the powder. On 18 May 1989 he sent Dr Burton some Scanning Electron Microscope photographs of the powder which had been plasma processed. The photographs indicated that the powder could be spheroidized and that the spheroids so derived showed some porosity. Dr Berndt indicated he was continuing the study and designing some apparatus to improve processing techniques, including an efficient particle collection system and a technique for separating required particle sizes. The photographs showed that the as-received Yttrium Oxide had very irregular shapes, whereas following plasma processing spherical particles were produced. In November 1989 Dr Gray agreed that Dr Berndt could employ a student nearing the completion of a PhD thesis to work on the plasma spheroidization and classification of the powders. The stipend of $1,500 per month was evidently authorised by Professor Parfitt as appears from a letter sent by Dr Gray to the Business Manager's Office at UWA on 6 December 1989. The student was to be employed on the Monash University payroll. The work was to commence in mid January and continue for two to three months. Dr Berndt sent a technical report to Dr Burton on 18 April 1990 and expressed the opinion that they should proceed. The work that had been performed to that point had been successful. Dr Burton sent more powder to Dr Berndt in May 1990 and said he was seeking particles within size range 20 microns (absolute minimum) to 60 microns with a preference for approximately 35 + 5 microns. Other exchanges and work ensued. Electron micrographs which were sent in May 1990 looked "very promising" according to Dr Burton in a letter dated 31 July. Thereafter the program bogged down. In a handwritten note dated 12 October 1990 Dr Burton said he rang Dr Berndt who had done nothing. He had been waiting for powder which was lost in transit. In the event, Dr Berndt treated more powder and sent about 9 grams to Dr Burton under cover of a letter dated 15 November 1990. The powder had been sieved to a size range of 20 to 45 microns. Dr Berndt and his PhD student, Phillip Cheang, provided Dr Burton with a report entitled " Spheroidisation of Ceramic Powders by Flame and Plasma Spraying" . The report was 23 pages long and referred to preliminary trials on a variety of materials other than Yttrium which were said to show that particle spheroidization could be achieved in a number of ways. They recommended that 500 grams of Yttrium powder be purchased, consolidated by pressing and grinding and that spheroidization be carried out via plasma processing. The report did not contain any reference to experiments involving plasma spraying of Yttrium. Dr Gray regarded it as of no value. At that point the spheroidization project lapsed. Late in 1991, there was an attempt to revive the hollow Yttrium microspheres project. Dr Burton or Dr Gray suggested that CRI fund a student scholarship at Monash University to identify the spheroidisation mechanisms using plasma spraying. Dr Gray opened negotiations on behalf of CRI with Professor Mary Gani in the Department of Materials Engineering at Monash University. Dr Berndt had left that university. There were a number of conversations and written exchanges between Dr Gray and Professor Gani. In March 1992, CRI guaranteed funds for the first year of work of a post-graduate student who was identified as Ms Gordana Pravdic. She was engaged on an annual remuneration of $24,128. Ms Pravdic commenced her work in July 1992. Payment was to be made to Monash University at six monthly intervals. The first such payment was sent by Dr Gray on 17 September 1992. The covering letter was sent over his name. It used UWA letterhead, and the cheque was from CRI. The receipt was issued to RPH. A second instalment was forwarded on 15 February 1993. On that occasion Monash University issued the receipt to Friends of the Cancer Institute --- (Royal Perth Hospital). Ms Pravdic continued to be funded into 1994. She encountered difficulties with her work. Spheroidized Yttrium powder received in October 1993 was found to be too heavy with a specific gravity of over 4. In October 1993 Dr Gray wrote to Dr Gani saying that time was running out. They needed to run some clinical trials. In the meantime, Ms Pravdic explored better separation techniques to try to separate out 20-38 micron and 38-45 micron particles. On 11 May 1994, Dr Gray wrote to Dr Gani suggesting that he might try using a Perth-based density centrifugation to separate spheres by size. He suggested that Ms Pravdic be employed by CRI to assist with the work after she had submitted her thesis for her Masters degree at Monash University. Ms Pravdic submitted her thesis in December 1994. It was entitled "Modification of Ceramic Powders by Plasma Techniques". In the meantime she continued to work on the problem of the Yttrium microspheres. For three years from 1991 to the end of 1994 CRI funded a scholarship for Ms Pravdic at Monash University and then employed her and met other costs associated with the development of the hollow Yttrium microspheres. By the end of 1994 there were still problems associated with hollow microspheres. It was Dr Gray's opinion that the project had met with very limited success. The yield of hollow Yttrium microspheres was extremely small and they were often contaminated. Moreover, experiments at ANSTO showed that the microspheres fractured when placed in a neutron flux which was necessary in order to produce the radioactive isotope Y 90 . The fracturing made them unsuitable for use. Its cause was not determined despite many experiments at ANSTO. Dr Gray and his associates then decided to shelve the project on the basis that it might be resurrected at some stage in the future if sufficient scientists became available. Late in 1996 with the formation of the company, Paragon Medical Ltd (Paragon Medical) which is discussed later in these reasons, Dr Gray was in negotiation with a Japanese company, Nomura/JAFCO, about a possible venture capital investment in targeted microsphere technology. Dr Michael Panaccio was the Investment Manager for Nomura/JAFCO. He had a PhD in medical science and had worked for many years in medical research. In the course of a due diligence exercise which he undertook on behalf of Nomura/JAFCO, he visited Dr Gani with Dr Gray. At a meeting in November 1996 Dr Gani and Dr Gray decided to resurrect the project. There was some toing and froing about whether Monash University would maintain any claim to intellectual property associated with the use of hollow Yttrium microspheres for the treatment of cancer. I wish to confirm that Monash University recognises that the intellectual property associated with the application of these microspheres was brought by you to the project. The University will not in future have any claim on the technology for using yttria microspheres in cancer treatment. The whole exercise proved frustrating. In his affidavit, Dr Gray said that by the end of 1998 neither he nor Dr Gani nor Ms Pravdic understood the factors that controlled the production of Yttrium microspheres. In late 1997 Dr Cammarano joined the research team on a different project and was seconded to the hollow Yttrium microsphere project in 1998. He apparently worked on it for several years. At the end of that time Sirtex was still unable to manufacture hollow Yttrium microspheres and in 2001-02 decided to permanently abandon the project. At the time that Sirtex abandoned the hollow Yttrium microspheres, Dr Andrew Ruys had joined the company. He developed two further iterations of ceramic SIR-Spheres containing radioactive Yttrium which, according to Dr Gray, were far superior to the hollow Yttrium microspheres. The subsequent iterations were patented by Sirtex in patents entitled "Radionuclide Coating Particulate Material" and "Low Density Radionuclide containing Particles". She was initially funded by a UWA fellowship and, from January 1989, and NH & MRC grant. She worked with Dr Burton on a range of matters including the use of microwave hyperthermia, the use of vasoactive drugs to enhance microsphere targeting and the drug microsphere project. Dr Burton described her as having good animal physiology skills and contributing significantly to the animal research program aligned with both the radioactive microspheres and some of the hyperthermia work that was underway. At the end of her time she returned to Europe. Dr James Codde was recruited in 1988. He was a science graduate from UWA with a PhD undertaken through the Department of Medicine at RPH where he worked for 12 years. He worked with the group from 1988 until mid 1992 when he left the Department of Surgery intending to pursue a post-doctoral position in the USA. However, for family reasons his plans changed and he remained in Perth and took up a position with the Western Australian Department of Health. Dr Codde initially engaged with the DOX-Spheres project but diversified into studying the use of liposomes as an alternative drug delivery carrier. He was involved in immunotherapy research. He also supervised the research of Angela Lumsden, a higher degree student from UWA. He described his research projects as falling under the same "umbrella" of attempting to target cancer with specific treatments that reduced the side effects of conventional cancer treatment. Like Cameron Jones, he regarded the atmosphere of the group as collegiate and collaborative. The researchers would talk about their different projects at the tearoom or in more formal discussions. When he was at the department he wrote a variety of software programs designed to assist other researchers measure various parameters they wanted to monitor. During his time with the group he never heard any talk from Drs Gray or Burton or anyone else about any commercial aspects of the research they were doing. The focus of the group was, from his perspective, based entirely on getting better outcomes to treat cancer patients. I accept that characterisation of the focus of the group at the time. Dr Codde described controlled drug release in vivo as a common theme that many of the researchers were trying to address, whether with DOX-Spheres, liposome or other drug delivery systems. A lot of experimental work was carried out in the laboratory measuring the release characteristics of different polymer microspheres. Initially it was conducted by Dr Cameron Jones but was carried on by subsequent researchers, including Dr Yan Chen and Ross McCulloch. If somebody had solved the burst release problem in relation to albumin while he was working in the RPH laboratories he would have heard about it. He did not recall any major break through in the controlled release of doxorubicin in relation to albumin microspheres while he worked in the department. He was appointed an Emeritus Professor upon his retirement. That is an honorary title but as an Emeritus Professor he was entitled to access UWA resources such as libraries, the computer system and laboratories and was entitled to apply for grant funding as a member of UWA. Since 1989 he has been an Honorary Research Fellow in the Physics Department and since 1992 a "Senior" Honorary Research Fellow. One of Professor Street's research interests as a physicist included magnetism. He published widely on the topic and supervised Honours and PhD students studying magnetism. In 1988 or 1989 he established, with the assistance of Australian Research Council Funding, a Magnetics Research Group, as an informal subgroup within the School of Physics. The objective of the group was to investigate magnetic materials. It worked in a laboratory established in the basement of the Physics Department and was sometimes referred to as the "HiPerm Lab", which is a reference to High Energy Permanent Magnets. Dr Gray approached Professor Street to find an appropriate body to provide a report to satisfy potential commercial partners about the feasibility of the Thermo-Sphere project. It seems that the approach was made in late 1987. Professor Street suggested that he contact the Department of Applied Physics at CSIRO in New South Wales. Dr Gray followed up by contacting Mr John Collins and Dr John Dunlop from CSIRO in Sydney. It was, in effect, a research outline for the development of targeted hysteresis hyperthermia outlining the work that would be entailed in a feasibility study. It would require information and assessment of: Heat capacity of brain and liver tissue when under the effect of different drugs used in distribution of the microspheres and with microspheres in place. Consideration of the effect of rotating magnetic fields on the microspheres and whether the spheres themselves would rotate or be prevented by friction. Consideration of the shape of the microspheres. Determination of the quantity of microspheres to provide necessary heating power. Materials, preparation and properties. Field generation including nine questions such as an electro magnetic versus a permanent magnetic field and rotating versus switching fields. On 25 February 1988 Mr Collins sent Dr Gray a draft research agreement for a three month collaboration in a feasibility assessment. CSIRO would provide a feasibility report to UWA by 15 May 1988. At the end of the feasibility stage either party could terminate the agreement. Clause 10.01 of the draft provided that intellectual property resulting from the collaborative activity would be the joint property of UWA and CSIRO. The proposal from CSIRO was too expensive as far as Dr Gray was concerned. Mr Collins then had a telephone conversation with Professor Street and followed up with a letter to Dr Gray on 29 February 1988. He proposed an arrangement whereby CSIRO would charge UWA only the actual salary component of its most junior research scientist with no overheads and no profit margin. CSIRO would have to have an equitable stake in any intellectual or commercial gains that might result from materials researched in the project. The essence of his proposal seems to have been that if CSIRO were not able to recover more than the costs of the relevant research officer's salary, then it would get all, or the lion's share, of the intellectual property in relation to the specification of the composition, geometry and preparation of the magnetic particles and the magnetic parameters for hysteretic heating. Dr Gray had some further discussion with Mr Collins after that correspondence and on 2 March 1988 Mr Collins wrote to him again. He summarised what he called the "essence" of Dr Gray's problem. He attributed Dr Gray's concerns to advice from Uniscan that the proposed arrangement was unacceptable. Mr Collins understood Dr Gray's position to be that UWA would get the work done elsewhere on terms more favourable to UWA or possibly have CSIRO do the work on a three times salary contract basis (presumably with little or no intellectual property benefits). He considered that Uniscan did not appreciate the difficulties inherent in the magnetic research. Evidence from Mr Hilditch contradicted the suggestion attributed by Mr Collins to Dr Gray that Uniscan had advised on the proposed CSIRO arrangement. After Dr Nicholas left Uniscan in November 1987 he had familiarised himself with Uniscan's IP projects and arranged an appointment with each inventor so that he could learn more about them. He contacted Dr Gray to arrange a meeting with him to discuss the two projects designated on the Uniscan files as CDS9014 and TUM9015. I'll call you when I need to. I don't need Uniscan at this moment. He discussed the matter with Professor Parfitt who advised him to refer all matters relating to Dr Gray's IP projects to him. Although he met Dr Gray only once, he estimated that he spoke to him by telephone about three times in the period of his engagement as a consultant to Uniscan and subsequently UWA. Mr Hilditch said he was not involved in any assessment of a proposal from CSIRO and was in no position to determine the extent (if any) of Uniscan's involvement with CSIRO or the feasibility study, financial or otherwise. There was, however, correspondence to Mr Hilditch which does suggest some degree of involvement on his part in 1988. On 13 April 1988, Dr Gray received a proposal from the CSIRO signed by Mr Collins entitled "Research Proposal for Hyperthermic Treatment of Cancer by Hysteresis Heating". CSIRO offered to undertake a feasibility study to end on 30 June 1988 at which time a Joint Management Committee set up between it and UWA would assess the information obtained and the prospects for success in Part 2 of the proposal. In the event, it was finally agreed that CSIRO would undertake a three month feasibility study only and that Uniscan would then seek its own commercial funding that might or might not involve CSIRO in the future. Before final agreement was reached, Dr Catherine Foley at CSIRO actually undertook the feasibility work. In a memorandum dated 6 May 1988 to Dr Gray and copied to Mr Hilditch, Mr Collins reported on encouraging results obtained by Dr Foley and another researcher. On 9 May 1988 Mr Collins sent a fax to Mr Hilditch stating that CSIRO wanted Heads of Agreement finalised as soon as possible. Certain clauses proposed by UWA were unacceptable to CSIRO. Information obtained from CSIRO's measurement would only become the sole property of Uniscan if payment to the CSIRO were agreed at the rate of three times salary. CSIRO would not grant sole rights to the information for a payment of salary only. On 16 May 1988 Peter Macintosh who was by then the Executive Director of Uniscan, replacing Dr Nicholas, wrote to Professor Parfitt concerning discussions he had had with Mr Collins and Dr Gray about the Thermo-Sphere project. They were now coming closer to finalising the necessary agreement. It was going to involve an equal three way allocation of intellectual property rights deriving from the feasibility study between Uniscan, CSIRO and the inventor. Dr Gray received a draft agreement, evidently sent by fax from the Department of Electrical Engineering on 12 May 1988 relating to the disposition of intellectual property arising out of the UWA, CSIRO collaboration. That agreement would have been between UWA, Uniscan and himself. Dr Gray said it was his handwriting. Mr MacIntosh also raised with Professor Parfitt the question of ownership of any patent associated with the Thermo-Spheres project pointing out that Dr Gray had already prepared "letters of patent ready for submission in the form of a provisional patent". He said he had made it clear to Dr Gray that "all rights must be assigned to Uniscan for the purpose of commercial exploitation". Professor Parfitt endorsed a note on the memorandum "ownership must be the University". There were in the meantime faxed exchanges between Dr Foley and Dr Gray about the substance of the project. She sought information from him about the microsphere technology and aspects of the physiology of liver cancer and blood flow in patients so she could calculate heat exchange that would be generated from targeted hysteresis hyperthermia microspheres. She also wrote Dr Gray a letter on 27 May 1988 asking for information on liver blood flow and other aspects of the physiology that would be needed for her calculations. Dr Gray responded that he was subsequently unable to locate a copy of his response for these proceedings. The feasibility study was completed and a copy sent to Dr Gray on 30 July 1988. The study recited that it was prepared under a collaborative research agreement with UWA's Department of Surgery, "through its agent Uniscan". It concluded that hyperthermic treatment of liver cancer was possible by hysteresis heating of embolised magnetic microspheres. It referred to the power and power outputs necessary for therapeutic heating and the strength of the relevant magnetic field. Recommendations for further work were included. Dr Gray, in his evidence, was dismissive of the study. He said it was a review of the relevant literature and theoretical calculations rather than an actual experimental result. There was little of substance in the report other than verification that the concept he had espoused was potentially workable. He said it was of no value in assisting the direction of experiments undertaken many years later. I do not attach great weight to that opinion. The fact is that later that year in September, he appended the study to his provisional specification for a patent as confirmatory of the "scientific credibility of the invention". He also used it in a letter written to the Office of the Registrar of UWA on 16 July 1990 in support of Fellowship Funding for Dr Stephen Jones, a researcher working on the hyperthermia project. The Heads of Agreement were concluded after the event between Uniscan and CSIRO and reflected in a document dated 10 August 1988. They provided for the conduct of the feasibility study. They also provided that if the feasibility study gave rise to any invention or discovery by CSIRO, then the intellectual property was to remain the joint property of Uniscan and CSIRO. Mr Hilditch did not recall the original of the CSIRO agreement, nor the identity of the person who drafted it. He did not recall when he first saw it. He received a copy of the feasibility study under cover of a letter addressed to him dated 16 August 1988 and forwarded it to Dr Gray. Dr Gray sent a fax to John Dunlop at CSIRO on 1 September 1988 about a meeting to discuss ongoing collaboration on the Thermo-Spheres project. He observed that ownership of intellectual property would depend on many factors including financial and research contributions. They agreed to meet on 14 September 1988. Mr Dunlop wrote back on 12 September about the financial pressures on CSIRO to recover, as a minimum, 2.8 x salary plus a percentage of intellectual property for collaborative research. On the same day Dr Gray sent him an overview of the work done by his group up to the beginning of 1988. A number of further exchanges occurred between Dr Gray and CSIRO in October 1988. In a fax dated 27 October 1988 Dr Gray told Dr Barry Inglis at CSIRO that "the bottom line of the CSIRO is so unattractive to us that we would not want to be bound into any contract with which we were not reasonably happy". He said he would continue to try and find private funds for the project. Dr Inglis faxed back on 28 October 1988 that, in light of Dr Gray's comments, CSIRO would not proceed with an NH & MRC application which they had discussed. He attached two appendices which were lodged with the specification. The first was entitled "Patent Application for Tumour Hyperthermia by Hysteresis Heating". It comprised 12 pages. The second was the CSIRO feasibility study of 30 July 1988. The number given to the specification by the Australian Patent Office was PJ0371. Dr Gray said he lodged the provisional specification "acting on instructions from Uniscan". Mr Hilditch denied making any such request of Dr Gray. His understanding was that a patent application in respect of an invention developed by a UWA employee in the course of his or her duties as such would be filed in the name of UWA. He was not even aware that the provisional specification had been lodged. I find that Dr Gray did not act on instructions or on a request from Uniscan in filing the provisional specification. In so finding, I have regard to the form of the provisional specification, the fact it was signed by Dr Gray in his own name, the fact that it was not lodged through the Uniscan patent attorneys and Mr Hilditch's evidence, that Dr Gray filed the patent specification without notice to UWA. Nevertheless, in his earlier discussions with Dr Nicholas, both had contemplated the possibility that a provisional specification would be lodged. The provisional specification identified a new method "for delivering hyperthermia as a treatment for patients with cancer". Heat is generated from the particles by release of hysteresis heat when the micro-particles are placed in an alternating magnetic field. Dr Gray said in cross-examination that the provisional specification would have covered the use of a rotating magnetic field. The CSIRO Feasibility Study appended to the specification listed four possible methods of generating the necessary magnetic fields. He was cross-examined on both. He maintained that the provisional specification covered a broad range of fluctuating magnetic fields which could be "rotating or simply oscillating". When it was put to him again that the subject matter of the 1988 and 1996 provisional specification did not include a rotating field he replied "yes absolutely" which in context was an assertion that it did cover rotating fields. Professor Street, in cross-examination by counsel for Dr Gray, said he thought all four field source options identified by the CSIRO referred to alternating fields. He explained that a plot against time of the magnetic field strength of an alternating field would yield a graph in the shape of a sine wave. In the case of a rotating magnetic field, the field is of constant strength but has a direction which varies in time. A plot of the angle of its direction over time would also yield a sine wave. The provisional specification referred to alternating magnetic fields only. It also relied upon two appendices. Appendix 1 was Dr Gray's paper entitled "Patent Application for Tumour Hyperthermia by Hysteresis Heating". It was characterised in the specification as a description of "the concept of the invention in greater detail". It referred to particles subjected to "an alternating field of limited magnitude" and "alternating field hysteresis" (at 6/2078). Appendix 2 which was the CSIRO Feasibility Study was characterised in the provisional specification as a paper which "describes preliminary investigations that confirm the scientific credibility of the invention". It did not form part of the description of the invention in the specification. In my opinion the Thermo-spheres provisional specification lodged in 1988 and again on 10 May 1996 described an invention in which alternating magnetic fields were used to induce hysteresis heating in microspheres. It did not extend to rotating magnetic fields. It is perhaps worth noting that funding applications prepared in 1990 and 1991 by Dr Stephen Jones, who was working on the hyperthermia project as part of Dr Gray's group, referred to "alternating" and not to rotating magnetic fields. On the other hand Dr Jones did say in his affidavit evidence, and I accept, that the reference to "rotating permanent magnets" in the CSIRO paper planted in his mind the seed of the idea of using rotating magnetic fields. Professor Bruce Gray now has copies of this report. Further studies are anticipated. Professor Gray will discuss his requirements with Prof Parfitt. The project is being reviewed by Professor Gray and Bob Parfitt. I will take no further action unless instructions are received from Bob Parfitt. A copy was sent to Mr Baker of Accounting Services and Mr Martin Griffith, the UWA Business Manager. In the letter Mr Hilditch referred to the scaling down of Uniscan's activities and his review of all projects on its books as at 31 July 1988 "to determine whether or not UNISCAN will continue to support them". OF SURGERY CONTROLLED DELIVERY SYSTEMS PROFESSOR GRAY Delivery system for transferring drugs to cancer tumours Project has not been developed to a sufficiently commercial stage. Mr Hilditch explained in his affidavit the process of referring a project back to the relevant department. His evidence about that has been canvassed earlier in these reasons in the history of University arrangements for the commercialisation of intellectual property generally from 1985. It was dated 3 October 1988 and entitled "A Proposal to Develop Interest in Development and Commercialisation of a New Technique for Selective Induction of Hyperthermia as a Method for Treating Cancer". He said he had also been asked to provide a business plan to accompany the proposal. Mr Hilditch had no recollection of seeing this document. The proposal described the generation of heat in tumours including by hysteresis from microparticles introduced into the arterial circulation of tumour bearing organs and selectively targeted towards tumour tissue by the use of vaso-active drugs. Heat would be generated in the tumour by placing the patient in a high intensity oscillating magnetic field resulting in hysteresis heating of the microparticles. The proposal stated that further development was required before a prototype suitable for clinical application was manufactured. The experiments would refine the materials required for microsphere production and for generation of the magnetic field as well as demonstrating the in vivo heating effect in animal models of cancer. Dr Gray anticipated in his paper that the experiment could be accomplished over one year using the equivalent of two research scientists per year. Dr Gray sent a copy of the proposal and of the business plan to Professor Street on 7 October 1988. He sent it to Professor Street because he was an influential academic, had recently been Vice-Chancellor at the University and had indicated that he might be able to help Dr Gray find a commercial partner. He also had an association with a group called "Integrated Health Care" that might be interested. Dr Gray was introduced by Uniscan to "many potential commercial parties". These included Hambro Grantham Ltd; ICI Australia Ltd and Stinoc. Professor Street introduced him to Integrated Health Care Ltd. He had also earlier introduced Dr Gray to Professor Rossiter, Head of the Department of Materials Engineering at Monash University. None of these contacts was successful. In communicating with them, Dr Gray used UWA letterhead. I have no reason to believe that at the time he made these contacts he did so other than on behalf of the University. Professor Robson, in cross-examination, accepted that in 1987 and 1988 Dr Gray reported to the University all of the work his research group was undertaking and that his reports to Uniscan and to Professor Parfitt as a director of the company, met his obligations under reg 6 of the Patents Regulations. It was put to Professor Robson that the obligation was then on the Vice-Chancellor to refer any report to the Patents Committee and to act upon its advice. Professor Robson disagreed saying that the University had maintained a Patents Committee. He did not know what had happened about Professor Parfitt reporting to the then Vice-Chancellor, Professor Smith. He speculated that Professor Parfitt was dealing with intellectual property through Uniscan. It is no disrespect to Professor Robson to say he was asked an argumentative question and understandably gave an argumentative answer. However it was not evidence of the facts about the maintenance and operation of the Patents Committee. In that regard findings have already been made earlier in these reasons. There was in the Melbourne group a strong commitment to the publication and dissemination of research results for the sake of developing new treatments and new approaches to cancer management. All of the research and the results of the work undertaken in Melbourne were presented in general and public forums within the Department, the university, at research meetings and conferences without any concern about the disclosure of the new methodologies. I accept his evidence in that respect. According to Dr Burton that approach continued after the move to Perth. Again, I accept his description of the general approach to disclosure during his time with Dr Gray's team in Perth. He and Dr Gray had given conference presentations to the Australian and New Zealand Surgical Research Society on the SIR-Spheres work before and during 1985. In 1986/87 Dr Burton presented work to the Australian Physiological and Pharmacological Society on the use of microspheres in liver cancer. Dr Cameron Jones presented on the manufacture of drug microspheres and releases of the drug from the particles. Dr Burton and Dr Gray also made representations in 1988 to the Cancer Research Foundation of Western Australia in the hope of attracting its funding support. They presented papers to the Cancer Research Association of Western Australia. These related, inter alia, to dosimetry used for selective internal radiation therapy and the methodology and therapeutic responses associated with Adriamycin exchange resins. Presentations they made in 1989 covered the extension work which they had been performing using the same microsphere techniques but using heat to increase the release and therapeutic effects of the agents concerned. In that year the Cancer Foundation of Western Australia provided the group with project funding. They also received support from the RPH Research Foundation. Dr Burton's affidavit exhibited a list of his publications which included refereed journal articles, abstracts and conference papers. Some of his papers, which were co-authored with Dr Gray and others, were listed in Dr Gray's report to the Vice-Chancellor of his activities for 1985 to 1987. Some in that report were listed as submitted for publication, but not published at that time. Between 1985 and 1995 there were some 34 papers which he published in major refereed journals in areas relevant to the targeted microsphere technology. In addition there was a significant number of papers in minor publications in the form of abstracts and conference papers. Jointly with Dr Gray and Dr Yan Chen, Dr Burton contributed a chapter entitled "Methodology and Pharmaceutical Aspects of Microparticles" in 1994 to the CRC Handbook: "Clinical Application of microspheres" edited by Willmott and Daly. Dr Burton was of the view that the only robust technology they had developed for the DOX-Spheres, that could clinically be used, was the original concept developed in Melbourne of simply adding doxorubicin to the microspheres and clearing away loose drug to avoid leaching. That was the process that was used for the DOX-Spheres tested in clinical work. In his opinion it held no potential at all for producing a patentable product because the process had been previously disclosed. She obtained that degree in July 1983. She also has a PhD in Pharmaceutical Science conferred upon her in November 1989 from the University of Strathclyde in Scotland. Her thesis title was "In vitro Characterisation and in vivo Evaluation of Microspheres as Carriers for the Anticancer Drug Adriamycin". At the time she gave evidence, she was a senior lecturer at the School of Pharmacy at Curtin University. Dr Burton said Dr Chen had been recommended by a collaborative group who were also working on drug microspheres. Her work was of interest to him and other members of Dr Gray's group and he thought she might be able to contribute to their research ideas and research plans. He said he made two grant applications and received funding to cover her salary for the first year or two. The idea was that she would be able to attract funding in her own right after that time to support her own position. On 14 February 1989 Dr Chen accepted an offer of appointment for two years as a research associate with the University, initially placed in the Department of Surgery. Upon evidence of her successful completion of her PhD she would be appointed as a Research Fellow on the staff of the University. She signed standard Conditions of Appointment which imported the University Act, Statutes and Regulations in the same way as the Conditions of Appointment for Dr Gray. Dr Chen's employment history with UWA and with RPH can be summarised briefly. She commenced her appointment on 1 September 1989. Between June and August 1991 she took unpaid maternity leave from which she returned to work in September 1991. In February 1992 she was offered further employment by UWA from 1 January 1991 to 31 December 1992. The offer, which was signed by Professor Lourens, was for the position of Research Officer (NH & MRC) at the Department of Surgery at RPH. It was retrospective. It included a reference to Dr Chen having made arrangements to pay arrears to the Superannuation Scheme for Australian Universities (SSAU), backdated to 1 January 1991. She accepted the offer on 19 February 1992. UWA paid her until 12 January 1993 when her appointment was treated as expired. Subsequently Dr Chen was offered a limited tenure contract as a Research Assistant by RPH. The duration of the appointment was 13 January 1993 to 31 December 1993. From 13 January 1993 she clearly became an employee of RPH. In February 1993 she received an amended fixed term contract of service for RPH amending her job title to "Research Officer". She accepted the terms of the amended contract. On or about 10 January 1994 Dr Chen was appointed by RPH to the position of Senior Research Officer --- Level 1 for a term from 1 January 1994 to 31 December 1994. She accepted the offer. In or about October 1994 she advised RPH of her intention to resign as a Senior Research Officer. In hindsight Dr Burton did not regard Dr Chen's appointment as particularly positive from the perspective of funding grants. He formed the opinion that she did not seem to be able to easily develop new ideas. He used her primarily to service research that had already been devised in relation to the DOX-Spheres. The only independent research she performed, according to his recollection, was premised on earlier work using ion-exchange resins and chemical modification of the drug to combine it with the polymer matrix of the spheres. Dr Chen disputed Dr Burton's assessment of her capabilities. She said that between 1989 and 1994 she was listed as the Chief Investigator on grant applications that yielded over $200,000 in funding, some of which was to support her salary. She also denied that the only independent research that she did was predicated on earlier work on resin microspheres and chemical modification of drugs. She claimed that the research that she was doing was novel. He holds a Bachelor of Science with Honours from UWA which he completed in 1983. He also undertook his PhD in physics at UWA. It was conferred in 1989. The title of his thesis was "Frequency Stabilisation with a Sapphire Loaded Super Conducting Cavity". Between 1983 and 1986 Dr Jones was a part-time laboratory demonstrator in the Department of Physics at UWA and from 1984 to 1986 a part-time tutor. On 11 January 1989 he was offered, by Professor Parfitt, the position of Research Associate in the Physics Department for a 12 month term commencing 1 January 1989. He accepted that offer on 25 January 1989. On 14 July 1989 he applied, in response to an advertisement, for the position of Raine Research Fellow with the Department of Surgery. His father had been a medical physicist and he had an interest in conducting research in that area. Dr Jones was interviewed for the position by Dr Gray and Dr Burton. Dr Richard Fox, who was the head of Medical Physics at RPH, may also have been on the panel. On 22 September 1989 Professor Parfitt wrote offering him a "temporary appointment as a Raine Research Fellow on the staff of this University, initially placed in the Department of Surgery ...". The appointment was for a term of two years. Conditions of Appointment attached to the offer incorporated by reference, the University Act, Statutes and Regulations of the University. Dr Jones accepted the appointment and took up the position in January 1990. He worked in the Department of Surgery located at RPH in Wellington Street, Perth. During his time at RPH, he maintained his contact with the UWA Department of Physics. He co-supervised several students in Honours projects and students undertaking doctorates, some of which related to hyperthermia. He had ongoing contact with Professor Street who was also supervising most of those students. All of them except one, Paul Moroz, were studying in the Physics Department, not in the Department of Surgery. From time to time he delivered presentations about his research to members of the Physics Department, particularly through the Research Centre for Advanced Minerals and Materials Processing. Professor Street held the position of a half-time Senior Research Fellow at the Centre from March 1992 to about the end of 1999. Upon accepting the Fellowship, Dr Jones was given documents to read before starting work. He became familiar with some of the relevant literature including articles by Borelli, Luderer and Panzorino which are among articles on selective hyperthermia previously referred to in these reasons. That literature discussed processes along the lines he was seeking to develop involving the injection of ferromagnetic microparticles which could be heated by an externally applied alternating magnetic field. Dr Jones described his first task as setting up a laboratory with suitable equipment and developing an understanding of the physics behind the magnetic hysteresis heating effect he sought. He described "hysteresis" as the physical mechanism that generates heat, essentially as a result of magnetisation changes in a sample induced by exposing the sample to a variable magnetic field. Dr Burton took an interest in Dr Jones' work. He provided guidance from time to time. He helped him to understand the project in its proper context in terms of treatments and cancers. Dr Chen was working at the same laboratory as Dr Stephen Jones at RPH on other aspects of research and she helped out with some aspects of his work. He was broadly aware that she was working on DOX-Spheres and looking at ways to modify their release characteristics. From 8 January 1991 to 7 January 1992, Dr Jones' appointment as a Raine Research Fellow was superseded by his appointment as a Research Fellow of the University. Funding for that appointment in 1991 came from the University rather than from the Raine bequest. In any event, he continued as a member of the academic staff of the University. From 6 January 1992 to 31 December 1992 his status changed again to Research Officer (NH & MRC) reflecting another change in the source of his funding. He continued in the Department of Surgery at RPH as a member of the academic staff at the University. His appointment was renewed successively through to 19 August 1994. The last reappointment came in the form of a letter dated 18 July 1996 from Professor Robson, the Deputy Vice-Chancellor, confirming his appointment as "Research Officer (NH & MRC) from 1 July 1994 to 19 August 1994". He accepted the offer. In August 1994, shortly prior to the expiry of his NH & MRC grant, Dr Jones applied for the position of Elizabeth Stalker McEwan Fellow in hyperthermia research at RPH. He did not succeed in that application which was made to Mr Doug King, Manager of the Medical Research Foundation at RPH. During the seventeen month period from 19 August 1994 to 29 January 1996 he continued his research at RPH in particular in hyperthermia. He had no appointment with UWA during that time. I accept his evidence that from 20 August 1994 to 28 January 1996 he was employed by CRI and funded by money provided by LCI and CRI. I accept also that he became a staff representative on the Board of Management of CRI in November 1994. The minutes of 15 November 1994 show him in attendance. That meeting also accepted a proposal from Dr Gray that funding support for Dr Jones be provided for 1995. LCI and CRI were affiliated with UWA in 1995. In 1996 they became part of the Centre of Applied Cancer Studies (CACS) at RPH. Reference to the creation of these bodies and their relationship to RPH and UWA is made later in these reasons. Dr Jones worked out of the same laboratory although it had been moved into the Medical Research Foundation building at RPH. When the move occurred, Dr Gray acquired an office on the same floor as the laboratory. On 4 March 1996 Professor Robson, then a Deputy Vice-Chancellor at UWA, wrote to Dr Jones offering him appointment as "Research Fellow (Level B) initially placed in the Lions Cancer Research Institute, University Department of Surgery, (Royal Perth Hospital) within the Faculty of Medicine and Dentistry" for the period 29 January 1996 to 28 February 1997. Dr Jones accepted that offer on 25 March 1996. The conditions of appointment contained the standard provision, incorporating by reference, the University Act, the Statutes and Regulations of the University. On 22 January 1997 Dr Jones sent a letter at Dr Gray's request submitting his resignation from CACS, effective from 31 January 1997. Dr Gray accepted his resignation on the same day. The Department of Human Resources at the University subsequently sent him a letter dated 29 January 1997 stating that the Vice-Chancellor had accepted his resignation from the staff of the University effective 31 January 1997. In February 1997 Dr Jones was appointed as Chief Research Scientist by CRI. The terms of his employment were set out in an agreement entitled "Employment Agreement Stephen Jones The Cancer Research Inc". He served as Chief Research Scientist at CRI until 18 November 1998. On 19 November 1998 he commenced employment at Paragon Medical (now Sirtex). His employment agreement was due to expire on 1 July 1999. On 29 June 1999 he was offered an extension which he accepted. From 2000 to July 2006 Dr Jones was employed as the Senior Research Scientist and Hyperthermia Project Manager at Sirtex. He recalled reading, in 1990, a version of the provisional specification for Thermo-Spheres lodged by Dr Gray in September 1988. The nature of some of Dr Jones' work on hyperthermia in these early stages of his UWA employment in Dr Gray's group can be tracked through funding applications that he made. In one of his first applications to the Foundation on 16 February 1990, he sought and obtained funding for a project entitled "Development of Ferromagnetic Microspheres for Treatment of Cancer by Induced Hyperthermia Resulting from Hysteresis Heating". He proposed to develop "microspheres loaded with ferromagnetic material that will, when subjected to a suitable alternating magnetic field, be heated as a result of hysteresis losses". He and Drs Gray and Burton were named as "Principal Investigators". The funding they requested was for the purchase of a Magnetic Field Generation System and a Gauss-Tesla Meter and Probe and Ferromagnetic Powders and Electronic Components. A grant of $5,700 was approved. In setting out the research and methods to be used, Dr Jones referred to the difficulties associated with the use of ferrite (Fe 2 O 3 ) based materials. The inefficiencies associated with the magnetic heating of such materials required higher frequency in the applied alternating magnetic field in order to achieve the necessary heating. However there was a field frequency threshold at which eddy currents could be induced in normal human tissue which would cause unwanted heating and decrease the effective selectivity between normal and tumour tissue. The application referred to the availability of "several new magnetic materials" from commercial sources. The proposal was to design and construct a benchtop alternating magnetic system that would enable a range of magnetic powders to be tested. It would be necessary to measure the heat generated from hysteresis effects as a function of field strength and frequency for particles of different composition, shape and size. The prototype magnet system was to be a laminated steel cored electromagnet with water cooled energising coils. Dr Jones said that the group had already developed the technology for the production of microspheres of any desired size and was able to incorporate either soluble or particulate materials into the microspheres during the manufacture process. The size of the unincorporated ferromagnetic particles is an important factor determining their magnetic properties while the size distribution of the biocompatible microspheres determines how they will embolize in the vasculature of the tumour, hence, their effectiveness. It was proposed that in addition to its use in the hyperthermia research the instrument would find application in the chemotherapy research with microspheres and the immunotherapy research being undertaken by others in the department. He attached to his application a document which he drafted describing the hyperthermia project. After explaining the general concept he said that the initial stages of his research would involve a considerable amount of physical testing and analysis to develop and evaluate suitable ferromagnetic particles for incorporation into microspheres to be used to induce selective heating. That would involve measuring the magnetic characteristics of the various ferromagnetic materials and quantifying the effects of changes to particle size, shape and proximity to other particles. The information gained would be used to select the best ferromagnetic material and to maximise the heat generation capabilities of the particles. He claimed that significant progress had already been made in the area. Accurate measurements of the heat generation characteristics of microspheres ranging in size from 20 to 50 microns in a controlled benchtop situation will enable proper interpretation of in vivo heating data. The system will be tested in an animal model to fully characterize its heating capabilities. He referred in the letter to the CSIRO Feasibility Study which Dr Jones had read. A three-month scientific evaluation of the feasibility of the project was undertaken with the CSIRO before the project started. This feasibility study strongly supported the physical rationale for the project. The project is quite unique, and we are not aware of any similar project being undertaken anywhere. The project has the potential to develop truly selective tumour heating as a therapeutic modality. Stephen Jones is about to undertake in vivo studies in animals using the composite materials and magnetic induction equipment that he has developed. There are several other areas of selective tumour heating that Dr Jones wishes to investigate in the future. These also have potential in an area of research that is expanding worldwide. They sought an amount of $8,994 for a programmable current source, a signal generator and the use of external facilities as well as electronic components and magnetic materials. In the application Dr Jones said that a benchtop system had been built and used to make measurements of the hysteresis heating potential of several ferromagnetic materials when exposed to a moderate strength 50Hz magnetic field. Results achieved to that date were superior to other magnetic heating techniques being investigated elsewhere. The research forming the basis of the application aimed to characterise the physical properties of the best ferromagnetic materials over the useable range of magnetic field configurations. That information would be used to optimise particle characteristics which had to be matched with the applied magnetic field frequency and strength to maximise the hysteresis heating effect. The next logical step would be to begin testing in vivo which was beyond the scope of the application then being made. In describing progress to the date of the application, Dr Jones said that since the beginning of 1990 a benchtop alternating electromagnet system had been designed. It consisted of a laminated iron cored electromagnet powered through a variable transformer connected to mains electricity. It could be configured so that a magnetic field alternating at 50Hz, which was the mains frequency, was produced across a small air gap in which the powder samples were located. The smaller gap size was best suited to the material studies. A larger gap size, which was available, allowed for the possibility of in vivo studies at a later date. The four best ferromagnetic powders tested to that point were hexaferrite (barium ferrite), alnico, Magnequench A and Magnequench B. Magnequench A and Magnequench B were two types of neodymium-iron-boron based materials. Progress had also been made in the development of a technique to incorporate the hexaferrite particles into biocompatible microspheres. Dr Jones described the microsphere matrix as crosslinked albumin. He said that microspheres in the size range 20-60 micron could be manufactured with approximately 60% by mass being magnetic material. In July 1991 Dr Jones submitted a manuscript which was published in 1992 under the title: Jones, Gray, Burton, Codde and Street, " Evaluation of ferromagnetic materials for low- frequency hysteresis heating of tumours", (1992) 37 Physics in Medicine and Biology 293-299. The paper described the experiments in which heating properties of several ferromagnetic powders were tested at varying field amplitudes oscillating at 50Hz. This is the same as the mains frequency. A diagram showed the instrumentation used in the experiments. A table similar to that referred to earlier showed the results for the four powders, alnico, barium ferrite, Magnequench A and Magnequench B. His conclusion was that a therapeutically significant amount of heat could be generated by magnetic hysteresis in small ferromagnetic particles using high field strengths and low frequencies. Because the heating power was proportional to frequency the use of a low frequency magnetic field resulted in reduced heat output. In general, however, the hysteresis area increased non-linearly with the amplitude of the applied field. If the correct choice of ferromagnetic material were made such an increase could be sufficient to compensate for the frequency related reduction in heating power. Operation at mains frequencies allows the possibility of using carefully designed electromagnets with pole pieces to restrict the influence of stray flux and to increase the efficiency of the system. Investigations to find the optimum combination of ferromagnetic material and magnetic field properties to maximise the rate of heat production by magnetic hysteresis are continuing. The project with which that application was associated concerned microwave hyperthermia utilising ferromagnetic resonance. Its aim was to develop a method to enhance the selectivity of heat deposition of microwave radiation by utilising ferromagnetic resonance in ferrite particles. The application, which was for the sum of $5,247 was successful. The funding was processed through RPH not through UWA. On 21 February 1992 Dr Jones made an unsuccessful application to the DEET Australia Research Council for funding for a project entitled "Magnetoregulated Release of Active Agents from Polymer Matrices". The application was made jointly with Drs Chen and Burton. All were designated as "Chief Investigator". This application was connected with the DOX-Spheres project. The aim of the project was to characterise and control the effects of magnetically induced changes to polymer carriers impregnated with magnetic particles on the release profiles of active agents. It was sought to establish how these effects were influenced by the properties of active agents in polymers and the forms of entrapment of the active agent in polymer systems. On 25 February 1992 a funding application was made to the NH & MRC signed by Drs Jones and Gray and Professor Street. Dr Jones put the application together. He drafted information about magnetism and hyperthermia used in the application in consultation with Professor Street. Other information in the application was obtained from Dr Gray. On 30 November 1992 the NR & MRC wrote advising that the application had not been successful. The title of the project was "Induced hyperthermia of tumours by ferromagnetic hysteresis heating". In answer to a question on the application form, "Does this project include techniques and processed which could be developed commercially? ", he answered in the affirmative. In a section of the application entitled "Background and Research Plan" an outline of currently available techniques for heat delivery was given. Reference was made to whole body hyperthermia, microwave heating, ultrasound heating and the use of metal rods or seeds surgically implanted into the tumour and heated using eddy currents generated through a magnetic field. The concept of tumour targeted hysteresis hyperthermia was said to depend upon selective targeting of tumours with microspheres and the generation of localised hysteretic heat from those microspheres. Under the heading "Progress to Date" the application stated that the research group had commissioned CSIRO to undertake a feasibility study to assess whether it would be possible to generate sufficient quantities of heat from ferromagnetic particles within living tissues and to provide recommendations on how that might be achieved. The study had concluded that the hypothesis was sound and that currently available engineering technology would be sufficient to allow the project to develop to a stage of clinical application. The application then stated that Dr Jones had been employed in 1990 "to develop the project in depth". He had developed "a working relationship with the University Dept of Physics". Progress achieved in the previous two years was then summarised. It included the commissioning of two electromagnetically shielded laboratories and the assembly of basic equipment for preliminary testing and the commencement of evaluation of physical parameters controlling the production of heat by hysteresis in ferromagnetic particles. A cooperative arrangement with UWA Department of Physics enabled access to highly expensive equipment items in that department. Different types of electromagnet systems had been developed and used to evaluate the heating potential of a range of ferromagnetic particles. Three types were described. In the first the coils were energised through a variable transformer connected to the mains, producing a magnetic field alternating at 50Hz in the air gap. The second type was designed for operation at frequencies up to 1kHz. The coils were energised from an audio frequency amplifier. The third and improved electromagnetic type had recently been designed and built to enable operation at 20kHz. This replaced the iron core with a solenoid to produce the magnetic field with the test region being the space inside the solenoid. Small scale experiments had been performed to confirm that the technique of magnetic hysteresis heating could be used to achieve therapeutic temperatures in vivo and to establish a temperature differential between tumour tissue containing ferromagnetic particles and surrounding normal tissue. Figures demonstrating representative temperature rises within tissue in an anaesthetised mouse were shown. The research plan outlined in the application involved the generation of oscillating magnetic fields, the selection and optimisation of ferromagnetic particles, the optimisation of microsphere design and in vivo experiments. Future developments which were foreshadowed included combination therapy using hyperthermia to potentiate the cytotoxic effects of both chemotherapy and radiotherapy. Reference was made to clinical trials then being undertaken using SIR-Spheres and DOX-Spheres for treating patients with cancer. Both those treatment methods could be enhanced by the addition of targeted hyperthermia. The possibility of automatic temperature regulation to avoid overheating of tissues was also flagged in the application. One way of achieving that result would be to use particles with a Curie Temperature in the desired range above which they would lose their hysteretic characteristic. The second was to select particles of the correct size so that the Blocking Temperature above which they would become super paramagnetic lay within the desired range. The second option seemed to offer the sharpest transition. Another application which was successful was made by Dr Jones and Dr Chen on 19 May 1992 for funding by the Cancer Foundation of Western Australia (CFWA) for a research project entitled "Magnetoregulated Release of Doxorubicin from Albumin-Heparin Microspheres". On 15 December 1992 the CFWA approved a grant of $37,000 for research in the project. The funding was processed through RPH, not through UWA. This of course related not to the hyperthermia project but to the DOX-Spheres project. Another application in the area of magneto regulated release of doxorubicin was made by Dr Jones and Dr Chen on 22 June 1992 to the Clive and Vera Ramaciotti Foundations. It was unsuccessful. On 11 August 1992 Dr Jones signed an unsuccessful application for funding by the UWA Faculty of Medicine for research into a project entitled "In vivo Investigation of Hyperthermia by Ferromagnetic Hysteresis Heating". A successful application dated 15 September 1992 was made by the UWA Department of Surgery and LCI for a grant of $50,000 from the Channel 7 Telethon Trust for a project entitled "Development of a Hyperthermia Research Program" Dr Jones said he was broadly aware of the application at the time, but did not recall if he was involved in putting it together. On 12 February 1993 Dr Jones and Dr Gray signed an ultimately successful funding application to the Foundation for a research project entitled "In vivo investigation of induced hyperthermia by ferromagnetic hysteresis technique". Funding of $10,010 was approved for the project. It was processed by RPH and not by UWA. In the application Dr Jones stated that early research had focussed on evaluation of a range of magnetic materials to test for their suitability and also investigations of various designs of electromagnet. He referred to the publication of results of that work. He referred also to a recent pilot study to determine the heating power necessary to raise tumour temperatures into the therapeutic range. This had been performed using five mixed sex WAG rats. Paramagnetic Alnico had been surgically implanted into tumours grown in each of the hind limbs of the rats. In each case one hind limb tumour acted as a control while the other was exposed to an alternating magnetic field. Fluoroptic probes were used to measure temperatures within the tumour and animal core temperatures. He demonstrated a typical curve showing tumour temperature as a function of time. Since the pilot study a new microsphere had been formulated using Biopol, a non-biodegradable bio-compatible polymer material impregnated with CrO 2 , a medium strength ferromagnetic material. The density and size of the microspheres was easily controlled during the manufacture process. CrO 2 had been shown to be a superior heating material by a factor of 2 to 3. A prototype design electromagnet was also being tested. The proposed research plan involved testing the system in vivo . Experiments would evaluate optimum microsphere parameters and would include a short therapeutic study. The funds requested were to cover the purchase of a 10kHz electromagnet and associated equipment and experimental animals. A further unsuccessful application to the NH & MRC was made on 5 March 1993, signed by Dr Jones, Dr Gray and Professor Street. This class includes materials such as acicular iron oxides, chromium dioxide and cobalt modified iron oxides. Some preliminary data from experiments with chromium oxide shows that under conditions of low strength, high frequency magnetic fields (Type III magnets), this class of materials can yield the required improvement in heating efficiency. That specification referred to a particular member of that class, designated "S11". That was a manufacturer's designation given to it by Bayer. The grant application did not specifically refer to it. Another unsuccessful application was made to the NH & MRC by Dr Jones on 23 April 1993 in connection with the hyperthermia project. He was also involved in further applications for funding in connection with the DOX-Spheres project on 20 May 1993 (to CFWA) and the UWA Faculty of Medicine on 10 September 1993. In September 1993 Dr Jones prepared a progress report for the Foundation and the Ethics Centre on the Microwave Hyperthermia Project for which funding of $5,284 had been provided. Progress had been delayed by delays in the delivery of the electromagnet power supply. Despite his involvement in the magnetoregulated release of drugs from DOX-Spheres, Dr Jones played no part in the preparation of the DOX-Spheres provisional patent application nor in the subsequent complete and PCT applications. Nor did he have any involvement in the SIRT-2 provisional patent application AU54724/94. On 11 February 1994 Dr Jones and Dr Gray applied to the Foundation for $9,650 for a project entitled "Use of a Rabbit Tumour Model to Investigate Dose/Temperature Effects in Magnetic Microsphere Induced Hyperthermia". The application was successful. The project involved the use of rabbits randomly assigned in three treatment groups to measure temperature distributions corresponding to three different dosages of 32 micron microspheres. The animals would have their kidneys exposed to enable specified doses to be administered by injection through a catheter to each renal artery. Normal blood flow would be re-established. Fluoroptic probes would be used to measure the temperature after exposure to an alternating magnetic field. A second experiment would test the effects of hyperthermia on the growth of induced tumours placed in the rabbit's kidneys. The application referred to the most favourable ferromagnetic material for its purpose as gamma-Fe 2 0 3. Dr Jones said, however, that this did not specifically refer to the Bayer manufactured material called "S11" which he obtained and used with some success in his later experiments. Dr Jones gave evidence of what he called the "discovery" of "S11". He had mentioned the material, which was obtained from Bayer, in his progress report of 8 September 1994 to the Foundation. He said in his evidence-in-chief that he made that report 19 days after the expiry of his appointment with UWA on 20 August 1994. He could not recall when he came across S11 but it may have been before 20 August 1994. It emerged from cross-examination that in fact Dr Jones had come across S11 in 1993. In November 1993 he wrote to a Dr Eldridge at CSIRO reminding him that he had given Dr Chen a few grams of S11 a year earlier to assist with her research into magnetic regulation of drug release from polymer matrices. He had been in touch with Bayer which had reclassified the material and did not know which of its products was equivalent to S11 or indeed if there were any equivalent. He asked Dr Eldridge if the CSIRO had any stocks of old material that it could send. Some more S11 material was obtained this way. However it was his evidence-in-chief, which I accept, that he was not able to obtain any further supplies thereafter. Subsequently with Dr Raffaele Cammarano and others he developed a substitute for S11 which became the subject of the Thermo-Sphere-3 patent applications. In 1994 and subsequent years Dr Jones explored the possibility of using rotating magnetic fields to generate hysteresis heating more efficiently than could be done using alternating fields. Closely involved in some of this work was Simon Harrison who joined the Gray group as an Honours student in 1994 to work on the measurement of rotational hysteresis effects. He returned in late 1995 and took up the work again as part of his PhD thesis program. Simon Harrison's involvement in 1994 is outlined in the next section of these reasons. His thesis work involved supervised research in the measurement of rotational hysteresis in ferromagnetic materials. He was jointly supervised by Dr Stephen Jones and Professor Street. His project lasted from February to November 1994. When he first discussed the project with Dr Jones, Dr Harrison (as he now is) was told that Dr Jones and Dr Gray were interested in rotational hysteresis because it appeared from the literature that even though it took twice as much power to generate a rotational field as was needed to generate an alternating field, rotational hysteresis could generate more than twice the amount of heat in exposed materials. Dr Harrison prepared a research proposal which set out the way in which his project would correlate with the research undertaken by Drs Gray and Jones. His precise aim was to develop a device to generate and measure rotational hysteresis in hard permanent magnetic materials. He called it a "Rotating Sample Magnetometer or RSM". Seventy per cent of Dr Harrison's supervision during his work on the device was provided by Dr Jones and about 30% by Professor Street. They would meet regularly in the Hi PERM (High Energy Permanent Magnets) laboratory in the basement of the Physics Department. He also met Dr Jones on about three occasions at the Medical Research Foundation Building. He completed the construction of the RSM in August 1994. It comprised an electromagnet and four sensing coils. These also measured the amount of hysteresis generated by the field. The RSM operated by placement of a small block of ferromagnetic material in the field generated by the electromagnet. The sample could be physically rotated with the sensing coils in the applied magnetic field. All of Dr Harrison's work with the RSM was done in the Hi PERM laboratory. He spent an average of about 20 hours per week working with the RSM and measuring rotational hysteresis in many sample materials. At some time in 1994 he investigated whether "S11" could be used in hysteresis heating. He applied the RSM to measure hysteresis in the material but could not take accurate measurements. Dr Harrison wrote up his Honour's thesis in October or November 1994. His thesis was entitled "An investigation of low frequency hysteresis heating --- with specific application to induced hyperthermia treatment of cancer tumours". He concluded, inter alia, that rotational hysteresis could be generated by physically rotating a sample with the external rotating magnetic field. He also concluded that hard magnetic materials were not preferable to soft magnetic materials for use in cancer treatment despite the fact that hard materials could generate more heat. After submitting his Honours thesis Dr Harrison travelled overseas. The RSM remained in the HiPERM laboratory in the Physics Department. He handed it over to Paul Gouteff, another Honours student. He was to return in 1995 and commence work for his PhD thesis in the same area of rotational hysteresis. She also performed experiments in the Pharmacy Department at RPH and in the RPH animal house. In about 1992 Dr Gray's laboratory moved to Level 2 of the Medical Research Foundation Building and he relocated his office to that building also. She had an internal office across the corridor from a room which housed computers on the same floor. She also had a cytotoxic suite being a laboratory specifically designed for research using cytotoxic drugs. Dr Chen carried out research using both biodegradable and non-biodegradable microspheres. Most of the non-biodegradable microspheres she used were made of a cation exchange resin being a material with an overall negative charge. They were preformed to a uniform diameter. She said that in most of her studies the non-biodegradable microspheres she used had a diameter of about 32 microns. She made biodegradable microspheres when working in Dr Gray's laboratory. She used the same technique that she had applied during her PhD studies. It involved the emulsifying of an aqueous solution of base materials in oil, creating chemical bonds between strands of base material and thereby creating a three dimensional matrix about the same size and shape as the droplets in the emulsion. She mainly used an absorption method to load microspheres while working in Dr Gray's laboratory. The drugs she loaded included doxorubicin, floxuridine and cisplatin. She used several methods to measure drug loading and release from microspheres including spectrophotometry using light in the ultra-violet and visible light wave lengths. She also used high performance liquid chromatography (HPLC). Dr Chen said that while working at UWA and at RPH it was her practice to record details of experiments she was doing in a laboratory book. When one book was filled she would begin using a new one. They were hard covered books with each page lined, but not numbered. Although it is possible that she used other types of books as her laboratory books, she did not remember doing so. The entries she made in her books in relation to her experiments were generally made at the same time as she performed the experiments. They set out the methods used, the results she obtained and, on occasion, her observations or comments. She obtained laboratory books from a stationery supply in the UWA, Department of Surgery. Each book issued to her had an identifier number which would be recorded in a register maintained by Dr Stephen Jones. Dr Chen used other books in which she wrote down details of experiments and other matters. These included log books recording usage of equipment and a diary which she started in about 1990 and continued until 1994. She said that whenever she left an employer it was her practice to leave the original laboratory books that recorded the experiments undertaken during her employment. From time to time, however, she kept records of experiments that had not been published as she needed them to prepare publications. When she left her job at RPH most of the records of the experiments she had conducted while employed there and by UWA were packaged in a box and left in Dr Gray's laboratory. She no longer has access to those documents. When she commenced her employment at UWA in 1989 Dr Chen initially worked very closely with Dr Burton. She was experienced in the production of biodegradable microspheres from albumin but not the production of microspheres made from cation exchange resin. One of Dr Burton's research assistants showed her how to make resin microspheres. Dr Chen started studying the mechanism by which high doxorubicin loading could be achieved with resin microspheres. She wanted to know how it was bound to them. She did this work in 1989 and/or 1990. It was important for her to know whether the products released from doxorubicin loaded resin microspheres were doxorubicin or some degradation product. She used HPLC to measure the amount of doxorubicin and degradation products following release. Her investigations showed certain forms of resin microspheres were unsuitable for use as drug carriers because of the extent to which the doxorubicin broke down after it was loaded on to them. This research was published under the following titles: Chen, Martins, Burton and Gray, " Characterization of Polymer Carriers for the Anticancer Drug Doxorubicin" in IUPAC International Symposium, Polymer Materials, Preparation, Characterization and Properties: Polymer 91, (1991) Melbourne, Australia 10-14 February 1991, 1:273-274. Chen, Burton, Codde, Napoli, Martins and Gray, " Evaluation of ion-exchange microspheres as carriers for the anticancer drug Doxorubicin: In-vitro studies" (1992) Journal of Pharmacy and Pharmacology, 44:211-215. Dr Chen said that she noticed that resin microspheres initially released doxorubicin at a high rate, a phenomenon which looked similar to the burst release phenomenon. The focus of her research then changed to finding ways to reduce burst release. She could not say when that happened, but she was thinking of ways to reduce the burst release in late January 1991. On 31 January 1991, with Steven Blackbourn a pharmacist at RPH, she submitted a grant application entitled "Formulation of Sustained Release Carriers for Cisplatin" to the RPH Research Foundation. One of the methods under consideration for the reduction of burst release was to coat microspheres with something that would break down in time. She referred to this in the application under the heading "Formulation of Delivery Systems". Dr Chen's affidavit evidence discussed at some length her account of her interaction with Dr Hodgkin. She met Dr Hodgkin at the Polymer 91 Conference at which she presented a paper, already mentioned. She had been corresponding with him since late 1989. On 12 April 1991 she sent him a fax proposing that the two of them jointly apply for funding from the CSIRO/UWA Collaborative Research Fund to undertake experiments to control the release of drugs from microspheres and so reduce burst release. Soon after that they had a telephone conversation. She made some handwritten notes of it on a draft copy of the fax which she had sent. One of the handwritten notes reads: "Metal Chelat ..., ion exchange resin + DOX". She said that she did not recall that Dr Hodgkin or anyone else suggested those words. He said words to the effect that he or his colleagues had worked with ion exchange resins for metal ion chelate/binding. She said that metal ion chelation refers to the ability of substances to reversibly bind metal ions and in the process form a metal complex. She said that at the time of their discussion she recalled two papers that she had read in Scotland and brought with her to Perth. They were: Beraldo, Garnier-Suillerot, Tosi and Lavelle, " Iron (III) --- Adriamycin and Iron (III)" - Daunorubicin Complexes: Physiochemical Characteristics, Interaction with DNA, and Anti-Tumour Activity " (1985) Biochemistry 24:284-289. Both complexes were described as six membered chelates. Their "stability constant" was one of the highest shown by Fe(III) complexes. Due to that high stability constant, Fe(III) was not dissociated from the complexes by plasma components. The complexes displayed anti-tumour activity against P388 leukaemia which compared with that of the free drug. Gelvan and Samuni, " Reappraisal of the Association between Adriamyicin and Iron " (1989) Cancer Research 48:5645-5649. They did not necessarily form a colloidal aggregate but rather a true chelate. The effect of their binding constant was strongly pH dependent. Dr Hodgkin's comments about using ion-exchange resins to chelate metal irons made her think that perhaps there might be an interaction between resin microspheres, doxorubicin and soluble iron (Fe 3+ ) ions. In addition the DOX-iron complex formed as the colloidal aggregate meant that the complex would not be soluble. This insoluble form of the complex would act as a coating. She formed the theory that if this occurred it might suppress the burst release of doxorubicin and slow down the DOX release that she had seen with the microspheres. She said in her affidavit evidence that she did not know exactly when she initially thought it was worth trying to add iron (Fe 3+ ) ions to resin microspheres which were loaded with doxorubicin. She said it was after her telephone discussion with Dr Hodgkin on 12 April 1991 because she re-read the two papers before she undertook her experiments to test her hypothesis. Dr Chen said she undertook an experiment to determine the effect of Fe 3+ ions on the binding of doxorubicin to resin microspheres and found that the addition of Fe 2+ ions, which were quickly oxidised into Fe 3+ upon neutralisation, to doxorubicin and resin microspheres resulted in a striking colour change. When the doxorubicin and the resin microspheres are mixed the solution is a red colour. When she added the iron ions the solution changed to a brown/black colour. In subsequent experiments she found that the burst release of doxorubicin from these microspheres was reduced and the release was more sustained. Dr Chen sent a further fax to Dr Hodgkin on 23 April 1991 attaching a draft of her proposed CSIRO/UWA Collaborative Research Fund application. In the fax she asked whether he had tried doxorubicin on Nafion resins. She said she would appreciate it if he could give her some more information regarding the characterisation of complexes and microspheres. The draft referred to previous studies on DOX-iron complexes and that it was well established from in vitro studies that DOX binds Fe 3+ with considerable affinity. DOX-iron complexes can be formulated in an insoluble form which can be used to delay or sustain the release of DOX or soluble DOX-iron from microspheres. Furthermore, by varying the concentration of Fe 3+ in the system we will be able to control the degree of formation of soluble and insoluble forms of DOX-iron complexes and iron-hydroxyl polymers in microspheres. This will allow us to study the role of the DOX-iron complexes in sustained release of DOX microspheres. Since DOX-iron complexes are biologically active it is expected that their incorporation into microspheres may produce enhanced biological response. The principal investigators from CSIRO were Dr Hodgkin and Dr Mau. The principal investigator from UWA was shown as Dr Chen with Dr Burton designated as "Associate Investigator". It appears that the application was successful and that an amount of $31,917 was granted for the project. Dr Chen said she had actually conducted a relevant experiment involving Fe 3+ and DOX complexes in April 1991. She did not have a direct recollection of it herself but "estimated" that she had conducted the experiment after speaking to Dr Hodgkin on or about 12 April 1991 and reviewing the two papers mentioned earlier. She thought that she had conducted it before 23 April 1991 when she sent her fax to Dr Hodgkin about the proposed grant application. Dr Chen referred to entries in a diary on a page dated December 1990 which she claimed referred to studies conducted in April and October 1991. She did not recall the date of that experiment or the composition of the biodegradable microspheres. She said that the reference on her diary page to DOX-FE-Chitosan Ms Study (10.10.91) suggested that she had added iron (Fe 3+ ) ions to biodegradable microspheres made from Chitosan which is a polysaccharide. The actual date entry in the diary was (18.4.9). She said in cross-examination that she had made the entry some time after October 1991. This followed from the entry date "10.10.91". Asked why she had written the diary entry after October 1991 she said that the loading and treatment of the relevant microspheres was done in April 1991. They were then preserved by freezing and the release study using High Performance Liquid Chromatography (HPLC) was done in October 1991. The reference to HPLC was not consistent with the content of a CSIRO/UWA collaborative research fund application signed by Dr Chen on 28 April 1991. That application was for funding for "Development of complexed Doxorubicin --- Metal Ion Microspheres". The stated aim of the research covered by the application was the development of "complexed DOX-Metal Ion Microspheres for the sustained release of DOX/DOX-metal ion". There was no reference in the application to the use of HPLC. Evidence of the formation and stability of DOX-Iron complexes was to be determined by the use of potentiometric titration and UV diode array spectrophotomery. Dr Chen pointed to a reference in the application to a process used to measure the percentage of DOX-iron complexes within the microspheres. She said that HPLC could be used for that purpose. I am not satisfied that Dr Chen's testimony about the entry in her diary was reliable or that the entry was completely accurate. In particular, I am not satisfied that I can rely upon her evidence or that of the entry as evidence that she carried out the study or the analysis recorded at the dates shown in her diary. In February 1992 Dr Chen applied to Foundation for a research grant. It was entitled "Development of Biodegradable Magnetoresponsive Microspheres". It yielded a grant of $3,680. The principal investigators were shown as Dr Gray, Dr Chen and Steve Blackbourn. The aim of the proposed project was described in the application as the development of biodegradable magnetoresponsive microspheres for DOX delivery. The release rate of drugs such as insulin from polymer systems can be significantly increased by magnetic stimulation. The process is mediated by small magnetic particles dispersed throughout the polymer matrix of the carrier. They have no effect on the release rate under normal conditions. However, upon exposure of the matrix to an externally applied oscillating magnetic field designed to stimulate movement of the particles, the release rate of drug from the matrix can be significantly enhanced. The underlying theory was that the movement of magnetic particles in response to an applied magnetic field results in physical stress of the polymer and induces local heating. This facilitates the release of entrapped drugs. To that point its use had been limited to macromolecules such as albumin and insulin. The application described "Current Progress with Microspheres". It referred to the development of techniques and expertise for incorporating a variety of chemotherapeutic agents into albumin and ion exchange microspheres (15-40 microns in diameter). Reference was also made to the use of vasoconstrictor agents such as angiotensin-2 with the blood borne microspheres. The application described Dr Chen's work and designated her as "Chief Investigator". Her work has identified and elucidated the factors determining the quality of DOX incorporated within microspheres. Furthermore, utilising the concept of complexation of DOX with metal ions as addressed above, she developed DOX-loaded ion-exchange microspheres with versatile release characteristics by varying the concentration and type of metal ions. This significantly improved the degree of control of DOX release from ion-exchange microspheres. In addition, the high drug loading (60-80%) is still maintained. This breaks the conventional perception that higher drug loading leads to faster drug release. Furthermore, it is expected that through inclusion of magnetic particles the magnetoresponsive microspheres will eventually provide enhanced DOX release at the target site which will have significant biological benefits. Formulation of biodegradable microspheres containing DOX-metal ion complexes. 2. The characterisation of DOX-metal ion microspheres. 3. Inclusion of magnetic particles into microspheres. 4. Evaluation of the magnetoresponse of the microspheres on DOX release regulation. A figure incorporated in the application showed what was described as a "Release profile of DOX-loaded ion exchange microspheres with and without metal ion complexation". On 14 February 1992, Dr Hodgkin wrote to Dr Chen following some discussions that they had had in the previous week. He referred to a follow-up discussion he had with a Mr Eldridge of CSIRO, who was knowledgeable about magnetic beads. Dr Hodgkin said that in the course of discussion about biodegradable ion-exchange microspheres made from linear styrene sulphuric acid polymer, Mr Eldridge suggested that sulphonated dextran could be crosslinked with metal ions to give biodegradable microbeads which might be more useful to Dr Chen. Dr Hodgkin also enclosed the first pages of two Japanese papers concerned with drug release involving 5-Fluorouracil (5-FU) and the possibility of making a 5-FU derivative which would bind to ion-exchange microspheres better than 5-FU itself. Dr Chen responded to Dr Hodgkin on 11 March 1992 and said she was also looking into the possibility of using sulphonated dextran beads as biodegradable carriers. On 5 May 1992 she sent him a fax thanking him for his fax of 30 April and an email regarding the washing and storage of resins. She had tried sulphonated dextran as a biodegradable matrix for DOX. It could load DOX but the size of the beads was far too large at more than 200 microns. She asked if he knew any way to make the beads smaller. She had tried grinding them but they were no longer spherical. Dr Chen referred to her laboratory notebook and experiments recorded on 8 and 9 June 1992 when she made microspheres out of albumin and dextran sulphate (Alb/Dex microspheres). She used the abbreviation BSA/DEX-SO 4 Ms to refer to Alb/Dex microspheres. The Alb/Dex microspheres were prepared without doxorubicin which was loaded on by an absorption method. The microspheres were then treated with Fe 3+ ions. There was contention in closing submissions about Dr Chen's claim to have developed the cross-linked albumin/dextran sulphate microspheres to carry the anti-cancer drugs. I accept that she did develop the combination of the two in one microsphere. Dr Gray, in closing submissions, argued that if she did it was not an inventive step because the use of albumin and dextran as carriers was already well known in literature to which she referred in her PhD thesis in 1989. He noted in particular her citation of work by Goldberg et al, published in 1984 in which reference was made to the use of albumin microspheres and dextran microspheres to carry Adriamycin (doxorubicin). On the other hand, as UWA submitted in reply, the Goldberg paper did not refer to a combined microsphere. In her cross-examination Dr Chen accepted that the combination was not a new invention. Dr Chen wrote to Dr Hodgkin on 25 June 1992 referring to experiments that she had conducted creating Fe 3+ ion treated doxorubicin loaded Alb/Dex microspheres and animal experiments using Fe 3+ treated doxorubicin loaded resin microspheres. In her letter to Dr Hodgkin, she said that she had nominated him as a referee for a research project entitled "Magnetoregulated Release of the Doxorubicin from Albumin-heparin Microspheres". This was an application to the Clive and Vera Ramaciotti Foundation. She reported in the letter that she had managed to get smaller microspheres made of dextran sulphate and albumin in the size range 10 microns to 45 microns. She said they gave a very high yield (99%) of DOX and that their loading doubled the loading of Aminex ion-exchange microspheres. However the release characteristics of the Alb/Dex microspheres compared to Aminex resins was fast. After treating them with Fe 3+ the initial burst release of DOX had been significantly reduced. However it was still faster than aminex. She referred to tests on an animal model using the albium/dextran-sulphate microspheres. He thinks that at this stage we had better not publish any results about DOX-metal ion complex microspheres in case it has commercial applications. Dr Chen's next evidence-in-chief relating to DOX-Spheres concerned human treatment with Alb/Dex microspheres. On or about 10 November 1993 Dr Gray, Dr Anderson (a radiologist at RPH), Mr Blackbourn and herself applied to the RPH Ethics Committee for ethics approval for a project entitled "Evaluation of Doxorubicin Controlled-Release Microspheres for the Treatment of Hepatoma". She wrote the first draft of the application which comprised a cover sheet, a description of the proposed treatment and supporting results and research publications. It was proposed to administer doxorubicin loaded iron treated Alb/Dex microspheres to human patients. The principal difference between the microspheres that were to be used in these trials and those she had made on 9 June 1992 was that the human trial microspheres were to be made from human serum albumin rather than BSA and would be produced under sterile conditions in the Pharmacy Department at RPH. The application set out laboratory and animal studies that she had undertaken analysing the release of doxorubicin from Fe 3+ treated Alb/Dex microspheres. They were set out in appendices to the application. Appendix A was entitled "Release Profiles of DOX-loaded Microspheres" and showed plots of the release of doxorubicin against time from Aminex microspheres, Alb/Dex microspheres and Fe treated Alb/Dex microspheres. In addition these microspheres are biodegradable as they were totally degraded within 24 hrs in a trypsin solution. It was entitled "Effect of Different DOX Delivery Systems on Liver Tumour Growth". According to the application it showed that Alb/Dex/Fe-DOX microspheres have superior therapeutic activity when compared to treatment with all other forms of doxorubicin therapy and in particular when compared to both free DOX and Alb/Dex microspheres. The animals that received the Alb/Dex/Fe-DOX microspheres had significantly diminished tumour growth when compared with control group animals. Should this study show clear evidence of tumour regression in two or more of the five treated patients, then a more extensive evaluation would be designed. The trials were carried out in January, July and August 1994. In the case of the first patient with the initials FP she had written "18/1/93" in her book but suggested that this was an error for 18/1/94. Having regard to the other dates and the projected date of the trials in the ethics application, I accept that the first patient was treated on 18 January 1994. He graduated from UWA with a BSc (Hons) in 1969 and undertook a PhD between 1972 and 1976. After completing his PhD he commenced work with RPH. He has worked in research there ever since. Dr McCulloch became involved in the early 1990s with Dr Gray's group in a project to carry out research on the use of ion exchange particles as vehicles for the slow release of doxorubicin in the treatment of cancer. He had previously been involved with Dr Gray in a paper which they co-authored with SG Archer published in 1989 and entitled " A Comparative Study of the Pharmacokinetics of Continuous Portal Vein Infusion versus Intraperitoneal Infusion of 5-Fluorouracil" (1989) Reg Cancer Treat, 2: 105-111. Dr McCulloch was engaged on a half time basis in 1991 to work on a project to develop the optimum conditions to achieve a controlled and sustained release of drug from a doxorubicin microsphere. The release rate was said to be connected with the treatment of the loaded microspheres with different concentrations of ion. He conducted experiments using different ratios of ion to doxorubicin to observe optimal conditions for slow release of the drug. He was directed by Dr Gray and Dr Chen in relation to what his research was to involve. Dr Chen thought that he had commenced working on the project in 1992. It appears that he was funded by the Medical Research Foundation at RPH. Funding was apparently arranged by Dr Gray. Dr McCulloch was at all material times an employee of RPH. According to Dr McCulloch the project experiments in which he was involved were carried out in the Foundation Building of RPH because they had to use the toxic suite to weigh out the Adriamycin. Dr Chen said that studies using doxorubicin were actually undertaken in several buildings, including the MRF Building and in the RPH Pharmacy and the original RPH "North block" laboratory next to the animal house. Initially Dr McCulloch did not know how to make the microspheres. Dr Chen made them and although he eventually learnt the process he used hers for consistency. She agreed with this and added that the microspheres she provided to him were made of albumin and dextran sulphate. Dr McCulloch said in his affidavit that the albumin-based microsphere technology was known as dextran sulphate microsphere technology. Dr Chen disagreed with this. She said that albumin and dextran sulphate are completely different substances, the former being a protein and the latter a polysaccharide which is a chain of carbohydrates. However the statement in Dr McCulloch's affidavit did not mean that he regarded albumin and dextran sulphate as interchangeable terms. Indeed, that would be surprising for someone with a PhD in organic chemistry. Dr Chen's attempt to attribute such an error to him did not reflect particularly well on her as a witness. Dr McCulloch said that he would take albumin microspheres load them with doxorubicin and then work on their iron treatment to control the release of the drug. The recipe for coating or "complexing" the microspheres was set out in a journal article which he wrote at the end of the project. He said the overall objective of his project was to optimise conditions to produce a controlled release of the drug. The only metal he ever used was iron. He did not use any other metal substance in the preparation of the microsphere. Dr McCulloch said he was never involved in working out the optimum size of the microspheres and Dr Chen agreed with that. He also said that he was not involved in their clinical trials. Again she agreed. Those trials commenced after he ceased working on the 1993 MRF project. Dr McCulloch said that over a period of two years, presumably 1992 and 1993, he refined the experiments to create conditions to control the release of doxorubicin. This was what he described as his intellectual contribution to the project. He did this work alone. He said that Dr Chen worked in the same laboratory as he did. She was undertaking a study of the effects of his microspheres on rats. He could not recall what else she did at the time. She was not supervising him. He ran the project himself and she had no input on the chemistry side of it. Dr Chen took issue with Dr McCulloch in her affidavit evidence. She said it was her idea to treat doxorubicin loaded microspheres with metal ions and even before Dr McCulloch joined the 1992 MRF project she had done studies that proved the treatment resulted in desirable sustained drug release characteristics. She said that Dr McCulloch extended her work by investigating optimum conditions for the preparation of metal ion treated doxorubicin microspheres. At the same time, she said she had moved on to undertake other studies that were still part of the projects. She denied that Dr McCulloch worked independently and without supervision during his time with the group. Dr McCulloch worked on them under my direction with my consent and he reported his findings to me. She said, however, that when he commenced working on the 1992 MRF project she had already completed the first part of it and this involved applying her knowledge of chemistry to come up with the concept of metal ion treatments. Dr McCulloch said that at the end of the project he wrote a paper entitled " Synthesis of albumin-dextran sulfate microspheres possessing favourable loading and release characteristics for the anticancer drug doxorubicin ". He said that the article summarised precisely what he did in relation to the project. He said he wrote the entire paper and did all the work described in it apart from making the albumin-dextran sulphate microspheres. He submitted the paper to a journal for review. He identified himself as the first named author because it was his work and he wrote the article. He named Dr Chen as a co-author on the basis of her contribution to making the albumin microspheres and named Dr Gray because he was head of the project. In a continuation of this research, we report the synthesis of an albumin-dextran sulphate microsphere with very favourable loading (pay loads up to 84%) and release characteristics for the drug DOX. A variety of release profiles for these microspheres can be obtained by loading the particles to different extents. These profiles can be further modified by treating the loaded microspheres with Fe 3 which retards the release of DOX. This versatility in the release profiles of these particles offers promise for their use in the clinical treatment of tumours. Dr McCulloch's graphs had shown results at a particular time. He added in two cumulative release graphs and resubmitted the article which was accepted for publication. Dr McCulloch said that before resubmitting the article Dr Chen approached him and said that as she was applying for grants she wanted her name to appear as first author on the article. At the time Dr McCulloch considered he was in full time employment, while she had children and she needed the opportunity. She was applying for grants and needed publications to her name. Dr McCulloch said he agreed and the change was made before resubmitting the paper. He did not recall whether he physically did it himself or somebody else made the change. He did not recall whether he resubmitted the article or whether Dr Chen did so. Dr Chen agreed that Dr McCulloch wrote the first draft of the paper and submitted it for publication. She said he had submitted it without discussing with her who should be an author or the order of authorship. She was annoyed by this as she claimed the manuscript reported a large amount of her work and she was the joint or sole Chief Investigator of the projects. The manuscript was returned in late 1993 at which time Dr McCulloch was finishing work on the 1993 MRF project. Drs Chen and Gray had a discussion about the paper. She raised the issue of authorship. Dr Gray asked what Dr McCulloch's contribution to the work had been. She said he did some of the studies and he had written the paper. She also told Dr Gray that she was the Chief Investigator, she designed and made the biodegradable albumin-dextran sulfate microspheres and came up with the concept of combining them with the metal ion treatment. She also did the continuous release and HPLC studies. In relation to Dr McCulloch's account of how she became first author, she said she could no longer recall whether she put to him that she was applying for grants and had children. In my opinion Dr McCulloch's account of Dr Chen's request for special consideration has the ring of truth. She did not deny it. I am satisfied that it is likely to have occurred as recounted by Dr McCulloch. I am satisfied also that Dr McCulloch's account of the respective parts played by him and Dr Chen in the development of the DOX-Spheres leading up to the paper which he prepared is more likely to be accurate than the account given by Dr Chen. Given Dr Chen's focus on her own interests in her dealings with others and aspects of her evidence already referred to, and to be referred to, I did consider that her recollection was likely to be self-serving on important and contentious points relating to her own role in the research undertaken by Dr Gray's group. Dr John Chleboun was recruited to the Department and assisted in the project to evaluate how women with breast cancer were treated in Western Australia. The result of that investigation was published in the Australia and New Zealand Journal of Surgery in 1987: Chleboun J, Gray BN, " Survey of the Management of Primary Breast Cancer in Western Australia " (1987) Australian and New Zealand Journal of Surgery, 57: 609-613. Dr Chleboun also assembled evidence supporting the use of mammography screening for breast cancer which involved a study of the profile of breast cancer in Western Australia to establish a data base from which recommendations for a screening program could be mounted. Approaches were made to the Health Department of Western Australia to establish a pilot screening program for the State. According to Dr Gray there was initial opposition from the Cancer Foundation of Western Australia (CFWA). In the event, according to his evidence, the CFWA agreed that there was sound evidence that mammography screening would save lives. On 7 January 1986 Dr Gray was approached by Mr Gary Irvine, a senior figure in Lions Clubs International and Past District Governor of Lions in Western Australia. Dr Gray had frequently addressed Lions Clubs as a guest speaker and had used that forum to promote the idea of a breast cancer screening program for Australia. Mr Irvine indicated his support for the proposal. Dr Gray and Mr Irvine started lobbying government and speaking at Lions Clubs to gather support. In the event, Prime Minister Hawke announced that the Federal Government would fund a breast cancer screening program in Australia beginning with pilot programs, one of which was in Western Australia. By the time the Federal Government pledged support for the screening program, Mr Irvine had become familiar with members of Dr Gray's research team and other cancer research projects that he was promoting. He was keen to promote Lions involvement in other aspects of cancer research. Dr Gray met with many of the senior executives and past Governors of Lions. With Mr Irvine and his co-governors he developed a proposal that a formal research institute be established and located in the RPH precinct with himself as the inaugural medical director. On 26 January 1989 Mr Irvine and Dr Gray put the proposal to Dr Joyner the Chief Executive Officer of RPH. Dr Joyner supported the proposal and agreed to provide the hospital facilities and space so that Lions could establish an independent institute located in the hospital grounds. It would be owned and governed by Lions but would affiliate with RPH. There was no suggestion at that stage that the LCI would in any way be associated with the University. Dr Gray said in evidence that he conferred with Professor Roy Lourens, the Vice-Chancellor (Staffing) regarding the initiative and received a supportive response. His diary entry for Wednesday, 27 September 1989 indicated that he met Professor Lourens at that time apparently with Mr Martin Griffith. I accept that he did confer with Professor Lourens. Dr Gray took the concept of a Lions Cancer Institute to both Professor Parfitt and the Vice-Chancellor, Professor Fay Gale. His diary entry indicates he met with Professor Gale on 16 May 1990 to discuss the Institute. She had a diary entry for a meeting with him and Professor Clyde on the same day. Professor Gale and Professor Parfitt expressed support for the initiative and said that there was no question that he could and in fact should devote time and energy to its development. There was no discussion about any formal affiliation with UWA. The guiding principle was that it was a highly desirable initiative that would add to the corpus of research being undertaken into cancer. Professor Parfitt had diary entries for 7 February 1990 and 25 October 1990 each of which also recorded meetings with Dr Gray concerning the LCI. He recalled meetings on the topic. His involvement was for information only as the proposal concerned Lions Clubs raising funds for Dr Gray's research. There was no discussion touching upon dealings in University intellectual property in favour of the Lions Clubs or any institute established by Lions or the ownership of intellectual property created by employees of the University using funds raised by Lions. Dr Burton gave evidence concerning the formation of the LCI which generally accorded with that of Dr Gray. There was initial opposition to the LCI from the CFWA. The basis of that opposition was that there was only enough public funding for one such organisation and that the LCI would confuse the public and dilute access to funds. The board of the proposed LCI met with the board of the Cancer Foundation. On Dr Gray's account of it the meeting was acrimonious. Another source of opposition in 1989, from within the Lions Organisation, derived from concerns that the LCI would deflect funds from the Lions Eye Institute which had a close association with Dr Ian Constable, the Professor of Ophthalmology at UWA. One Lions District decided not to support the LCI on that basis. There was correspondence put in evidence connected with the formation of the LCI which it is not necessary to review in detail but which may be outlined briefly. The District Governor for the International Association of Lions Club, Mr RJ Thomson, wrote to Club Presidents on 28 February 1990 promoting the formation of the LCI. He referred to Dr Gray and his research group which was, at that time, using a suite of research laboratories at RPH. He said they would be relocating to a new purpose built research building at 50 Murray Street, Perth. The LCI would not be involved with funding the building. The institute would be involved in funding a variety of items of equipment and running expenses. In March 1990 there was an exchange of correspondence between Dr Gray and the UWA Registrar, Mr Orr, about the use of the UWA logo on letterheads to be used to raise funds for the LCI. Mr Orr told Dr Gray, on 9 March 1990, that since the enterprise would involve fundraising final authority had to come from the Vice-Chancellor. Dr Gray accepted Mr Orr's suggestion that the words "associated with UWA" be used on any letterhead rather than any reference to "affiliation" which required Senate approval. On 21 March 1990 Professor Anthony House, Head of the Department of Surgery, wrote to Professor Lourens expressing concern about a conflict of interest within the Lions Group which was currently supporting the Lions Eye Institute, the Lions Save Hearing and the Australian Kidney Foundation. He said there was likely to be conflict with the CFWA as they would be competing for the same donors. He saw the entire situation as "really too nebulous to react to" because Dr Gray was playing his cards very close to his chest. To try and clarify the situation he and Professor House would approach Lions themselves. On the same day Dr Gray wrote to Dr Joyner bringing him up to date with developments regarding the formation of the LCI. In substance he sought advice from Dr Joyner about the things that might be put in a letter from Lions to Dr Joyner for consideration by the RPH board. Professor Gale, the Vice-Chancellor, wrote to Dr Gray on 5 April 1990 indicating that she was awaiting advice from Professors German and House on the proposed LCI but was unclear whether it was intended that UWA or RPH be involved in the matter. If UWA were to be involved, then any formal proposal and offer would have to be made to her on behalf of the Senate. On 23 April 1990, Professor German wrote to Mr Thomson referring to a lunch which he had had with Lions colleagues of Mr Thomson's recently. He said in his letter that they had been somewhat in the dark about the precise details of the proposal from the Lions Clubs and that there were certain points in Mr Thomson's letter of 28 February 1990 which raised some confusion in university and hospital circles. He believed these had largely been resolved as a result of the lunch itself and further discussions between Mr Thomson's colleagues and RPH. He also said that it appeared that with the planning and development of the new Clinical Sciences block and the eventual move of Dr Gray's research team into part of that block, there would be significant needs for support of various kinds to ongoing research. If the proposed research support were vested in RPH and its research foundation , then UWA would have no further direct involvement. There might, however be issues arising out of any affiliation of that research endeavour with UWA as a defined research centre. Dr Joyner wrote to Dr Gray on 9 April 1990, replying to his letter of 28 March 1990. His letter spelt out some of the complexities of the new clinical block development at RPH and the various parties with whom RPH had to deal in relation to funding for research. He wrote again to Dr Gray on 24 July 1990 to make clear the basis upon which donations to the LCI, for which tax deductibility was claimed, should be dealt with. Money donated for research under the aegis of either RPH or the Foundation had to be specified as a donation to one of those bodies. Because donations to them were tax deductible, they insisted on having the ultimate responsibility for the donated moneys although Dr Joyner said that was "a requirement seldom if ever invoked ...". If Dr Gray maintained a tax deductibility based on the association with UWA, then both RPH and the Medical Research Foundation might want to consider "very deeply" their official association with LCI. Dr Gray responded on 30 July 1990 advising that he had referred Dr Joyner's letter to Mr Gary Irvine, the chairman of the steering committee of the LCI. The research carried out in the Institute is not confined to members of the University of WA but will, as now happens, involve RPH clinical and scientific staff. I know that the LCI Steering Committee and the subsequent Board of Directors, will continue to foster this relationship. The LCI was formally incorporated on 25 January 1991. The aims of the LCI included providing a platform for research into the causes of cancer, different forms of treatment for cancer and new methods of management for cancer patients. They included assisting in the provision of adequate facilities for undertaking those forms of cancer research and the provision of sufficient funding to consistently carry out those forms of cancer research in both basic and clinical study settings. Mr Irvine became the Chairman of the LCI, Dr Gray its Medical Director and Dr Burton its Scientific Director. There was considerable evidence given by Dr Gray of conflict between himself and senior members of the Faculty of Medicine in connection with the establishment of the LCI. He alleged that some of the senior academics, including Professor Allen German and Professor Anthony House, met with four Governors of Lions Clubs International in 1991 and attempted to persuade them that support directed to Dr Gray by the LCI should be redirected to work at the QE II Medical Centre which they controlled. This approach was allegedly rejected. It is not necessary for present purposes to explore all the details of this conflict nor, for the most part, to make findings about it other than that it existed. It spread out over a number of years. It involved repeated complaints to Professor Gale including a letter of complaint to her from the Chairman of the Board of Directors of LCI, Mr Irvine, on 1 April 1992. Solicitors acting for Dr Gray, Grant Milner & Co, also became involved and corresponded with the Chancellor of UWA, Justice Kennedy, in 1993 and 1994 concerning the matter. The conflict about the establishment of the LCI had resonances in the initial opposition from within the Faculty of Medicine to the affiliation of the LCI with UWA. The prolonged history of the affiliation process is dealt with later in these reasons. Some aspects of the conflict incidental to that history are dealt with later in these reasons. Its purpose was to raise funds for projects recommended by the LCI. A group of community supporters led by Mrs Leonie Mirmikidis were involved in establishing the organisation. Dr Burton described them as people who wanted to be able to donate their time and energy to attracting funds for research being performed by the research group. They wanted to manage the "process" in tandem with the activities of the LCI. He was happy to be involved with both groups. On 28 October 1993, the name of the Friends of the Cancer Institute Inc was changed to "Cancer Research Institute Incorporated". Broadly the division of their roles was that the LCI provided funding for equipment and staffing of the research program. Funds from the CRI supplemented funds from conventional external funding bodies. The LCI adopted as its primary focus for research support the targeted microsphere technology which was the subject of the work being done by Dr Gray and his group. He described this as a continuation of the role he was already performing at RPH with the addition of management responsibility for research facilities at the Sir Charles Gardiner Hospital section of the University department. This new role brought him into contact with some of the senior professorial staff at Sir Charles Gardiner Hospital including the next head of the Department of Surgery, Professor Tony House, who became his Line Manager. Dr Burton said during that time he came under considerable pressure from Professor House to discontinue his involvement with Professor Gray and fall in line with the new management of the University Department of Surgery and the Faculty of Medicine. It was against this background that he became involved with the formation of the LCI. He was involved himself in discussion with the Lions Clubs organisation about the potential for applying in the area of cancer research the precedents set by the Lions Eye Institute in the area of vision research. He became Scientific Director for the LCI in 1989 and served on its board. He described the formation of the LCI as creating significant problems because of perceived competition for funds from the Lions Clubs organisation. In 1990 Dr Burton secured funding for study leave to go to the USA and became a Visiting Professor in the Department of Radiation Oncology at the Arizona Cancer Centre with the University of Arizona in Tucson. The Arizona group with which he worked in that year was well known for its hyperthermia research. He brought to the group his own expertise in relation to measurement of blood flow using blood flow microspheres. He was involved there in a number of studies and treatment programs using a variety of modalities and hyperthermia techniques. He presented his own research in relation to the production of radioactive microspheres and their use in selective internal radiation therapy. He also gave presentations on the work that had been done using doxorubicin on ion exchange resins and the potential interaction of that treatment modality with hyperthermia. The study leave also allowed him to travel to approximately five leading institutions across the USA where he discussed the research program methods and results of the work which had been done in Perth and in Melbourne. In 1991 and 1992 the research activities of Dr Gray's group continued strongly and attracted reasonable funding. During that period they published a significant number of papers. From Dr Burton's perspective however, he was still encountering what he described as significant antagonism from elements within the UWA hierarchy and particularly the management of the Department of Surgery. He said it was obvious to him that there were limited future opportunities for him as an academic within UWA. He and his wife decided that it was probably the right time for them to look for alternative employment. In 1992 he was offered a lecturing position at Charles Sturt University in New South Wales. He reluctantly accepted that offer which would detach him from the research that had been carried out in Melbourne and in Perth. He found it a difficult decision to take because essentially it left Dr Gray to manage the research group. It was also a significant step down in status and income from his current position. After he left UWA, Dr Burton continued to have the occasional interaction with Dr Gray and the research group and offered support wherever possible. In 1996 he assisted in compiling some of the clinical research results of the selective internal radiation therapy clinical trial and other work with Dr Gray. However that was only a short research spell from his activity at Charles Sturt University. Dr Burton continued some extensions of the research conducted in Melbourne and Perth after joining Charles Sturt University. This took the form of using microsphere technology to transport genetic material as an anti-cancer agent instead of radiation drugs or heat. He continued on that path with no impediment from Dr Gray's research group. He said he has had very little contact with either Dr Gray or Sirtex until recently when he received a letter from the University's solicitors. The letter rather bluntly demanded the return by him of research notes and other items from his time with Dr Gray's group in Perth. It is part of the history of his relationship with UWA . It is the history which feeds into the history of funding and organisational arrangements which were seen as relevant to his contractual and fiduciary relationships with UWA. Some of them also go to allegations of the history of animosity between himself and Professor Robson, the current Vice-Chancellor. That history is invoked by Dr Gray in support of an allegation of malice on the part of UWA in connection with his cross-claim for defamation arising out of the letter of demand which UWA sent to Sirtex on 26 October 2004. It is neither necessary nor possible nor fair to those against whom allegations were made, some of whom were neither parties nor witnesses, to make findings about the substance of most of them. Dr Gray's testimony, in a very lengthy affidavit, indicated that the emotions generated by disputes which arose between him and other members of UWA may have affected his perceptions and recollections of events. That is not to say that his testimony on these matters was, for that reason, to be regarded as dishonest. But recollections from a perspective of ongoing resentment and anger must be treated with considerable reserve particularly where there is no supporting documentary or independent corroborative evidence. I have no doubt from his testimony and his ready offering of adverse reflections on other people that he could be a very difficult person to deal with. This does not mean he was at odds with everybody. He clearly inspired a degree of loyalty and support from those who worked closely with him. There were also a number of senior administrators with whom it appears he had good working relationships. One of Dr Gray's complaints was that Professor German, the Dean of the Faculty of Medicine and Dentistry and Professor House, the Head of the Department of Surgery, deliberately removed departmental funds from his control. Before 1990 he had run the Department of Surgery in all four teaching hospitals. If it were possible to save funds in one area they could be allocated to another project in the same hospital section of the department. During Professor Gale's term as Vice-Chancellor, UWA devolved administrative and managerial functions to the faculties and the departments. That fact is not in dispute. According to Dr Gray, the devolution had the result that, by the beginning of 1990, Professor German, as Head of the Division of Medicine and Dentistry, controlled all staff positions and all funds. Dr Gray no longer had any discretion to utilise UWA funds in order to promote the Department of Surgery at RPH. Dr Gray alleged that in 1991 Professor German removed funding for initiatives which had already been agreed to by UWA prior to his appointment as Head of the Division. An example cited arose out of the appointment of Dr Yan Chen for a two year period from September 1989. Dr Gray said he had negotiated for UWA to employ Dr Chen for that period and to fund her from salary savings. He alleged that Professor German told him that he was "reversing the arrangement that had been entered into with central University administration and intended allocating the salary savings to his own budget". According to Dr Gray, this meant that UWA reneged on Dr Chen's two year contract. He said that he reminded the UWA administration of the obligations under the contract but was constantly referred back to Professor German who advised him that he needed to find the funds himself if he wanted to continue her employment. In the end Dr Burton was forced to use funds that he had been granted for another project. He agreed to employ her through one of his successful NH & MRC grants which had been intended to employ another research scientist. It is instructive to compare with contemporary documents the breadth and tone of Dr Gray's complaint against Professor German. That complaint was linked to his allegation that Professor German had foreshadowed removal of resources from him "during his infamous meeting with the Board of the Lions Cancer Institute many years earlier". That meeting was in 1991. Professor German's perspective appears from a letter he wrote to Ms Julia Emmerson in Personnel Services on 25 October 1990. He wrote that there had been no commitment to pay Dr Chen against future salary savings. He referred to a letter from the Office of the Director of Personnel Services to Professor House dated 2 February 1990 which set out the situation with regard to payments from 1 January 1991. Professor Gray himself had underwritten those costs in discussion with him, having been told there would be no further salary savings available from January 1991 as all salary savings would revert to the Division which would have to hold on to them in case of budget shortfalls. She referred to a letter from Dr Gray to Professor House dated 2 February 1990 in which it was stated that funds would be made available from "departmental sources" as underwritten by Dr Gray. Dr Gray replied on 12 November 1990 and referred to a letter dated 13 October 1989 from a Ms Nancy Fitzpatrick, apparently an officer of the University, in which she said that continuation of Dr Chen's employment beyond 31 December 1990 was to be a first call against future salary savings generated in the RPH section of the Department of Surgery. I personally regard this as unacceptable but the matter is not under my control. He had negotiated the salary savings as Head of Department and on the understanding that there would be further salary savings to be identified in 1990 and 1991. He claimed they were in abundance from the very section of the department that was under his jurisdiction and yet were being denied. The matter of Dr Chen's salary was the subject of further correspondence within the Division. The Director, Personnel Services, Ms Wallace, wrote to Dr German pointing out that if the terms of Dr Chen's appointment were to be honoured funds were required to meet the salary and on-costs of her position. Professor German responded to Ms Wallis on 10 December 1990 making the point that Dr Gray's offer of an appointment to Dr Chen for a period of two years and his intention to base it on salary savings and other funds had never been cleared with the Division and never agreed to. The Division did not have the money to support Dr Chen. I believe that he should, in view of his research funding, be in a position to fulfil his commitment as pointed out by Mr Smith in his letter. The Division has made no commitment. I would very much appreciate Personnel Services dealing with this matter in terms of the realities of the present situation. This was "no longer a divisional matter". Dr Gray then wrote to Professor German on 14 February 1991 saying, inter alia, that as a result of Professor House's actions he was unable to access departmental funds which he had generated himself and even contributed to from personal income. He described the situation as "ludicrous" and sought Professor German's assistance to resolve the problem which he considered to be UWA's. Professor German replied on 22 February 1991. His letter was conciliatory and referred in some detail to funding constraints affecting UWA and the Division. He pointed out that, since the setting up of the Divisions salary savings accrued to them and not to the departments. Part of the arrangement was that Divisions had to repay 2.5% of their annual budget to UWA before they could utilise salary savings. In 1990 the Division of Medicine and Dentistry did not have salary savings available until after July when that debt had been paid off. The situation for 1991 was that the Division would have no salary savings until approximately July or August. Moreover it had been forewarned that those savings might be required to meet part of the cost of an academic staff pay rise. The Commonwealth Department of Employment, Education and Training had informed UWA that it would not fully fund such a pay rise. There were therefore no salary savings available within the Division of Dentistry and Medicine or any other of the UWA divisions. There had never been salary savings available within departments since the beginning of 1990. These matters had been set out in a letter of 27 October 1988 which was sent to Dr Gray by Dr Keith Smith of Personnel Services. Professor German told Dr Gray that research funds would have to be used to meet the balance of Dr Chen's salary. He had sought advice from Mr Peter Johnson, the Assistant Registrar (Research) about the propriety of using them for that purpose. Professor German also wrote to Professor House about the matter proposing the use of NH & MRC research funds awarded to Dr Burton in which Dr Chen had been named as a co-investigator. Professor House then contacted Dr Burton who obtained NH & MRC agreement to use the money to pay Dr Chen's salary. Indeed, Dr Chen had been nominated as the recipient of the salary alluded to in the grant. In the event, Dr Gray authorised the payment of her salary from the grant. This was confirmed by Dr Burton. The evidence of the exchanges relating to Dr Chen's salary has been set out in some detail because it is at odds with Dr Gray's rather negative characterisation of Professor German's conduct. The probability, as appears from the correspondence, is that Professor German was acting in good faith in dealing with a difficult budgetary situation affecting not just his Division and the Department of Surgery, but UWA. While Dr Gray may have had a sense of grievance about the way in which Professor German proceeded, he had no basis to suggest, as seems to have been implied in his affidavit, that he was being personally targeted. This particular example and the nature of the allegations he has made against other members of the academic and administrative staff lead me to treat his evidence on these matters of personal conflict with considerable caution. Dr Gray said that by 1992 it was clear to everyone in his research team that the removal of core funding was going to continue. The only way their research could continue was for Dr Burton and himself to write applications for competitive grant money from outside UWA. By this stage, according to Dr Gray, he had no academic staff members working under him and no UWA research staff with the exception of Dr Burton. He also claimed that Dr Burton found himself the subject of intimidation from Professor House which forced his resignation in late 1992. The allocation for his position was also removed and put under Professor House's control. Dr Gray said that he made many requests to Professor Gale from 1990 to 1992 to intervene in what he regarded as "a concerted attack on our research activities". He saw it as difficulty in getting past Professor German as Professor Gale consistently referred Dr Gray back to him on departmental issues. Professor Gale denied in her evidence that she had been briefed by anyone at UWA with respect to any history of dispute between Dr Gray and Professor German prior to her appointment in 1990. She said she took Dr Gray's complaints about his difficulties with his colleagues in the UWA Department of Surgery seriously. It is fair to say, however, that correspondence over the following year, 1993, indicates that Professor Gale had had enough of Dr Gray's many complaints. In April 1993 Professor Gale had written to Dr Gray reminding him of a meeting they had had in April 1992 and undertakings which he gave to accept the authority of the Head of Department (in that case Professor House) in all aspects of administration and management. She also said in her letter of April 1993 that Dr Gray had undertaken to refrain from writing to or about members of staff in terms which were discourteous and disparaging. She expressed her disappointment about the terms of a letter which he had written to Professor House in March 1993 and directed that he comply with the undertakings which he had given in April 1992. Dr Gray lodged what he called "a further complaint" about the behaviour of Professor House in a letter to Professor Gale dated 21 September 1993. This concerned the placement of a postgraduate student by Professor House in the laboratories which Dr Gray normally supervised. He complained to her that she had refused to grant him an appointment and that her refusal to do so was making his position in UWA untenable. Professor Gale responded to Dr Gray on 1 October 1993 pointing out that the Head of Department had responsibility for the allocation of resources including the use of facilities for postgraduate students. She also reminded him that in her letter of 13 April 1993 she had asked him to apologise to Professor House and withdraw his remarks in writing. She did not consider it appropriate to meet personally with him until such time as he had complied with those requirements. Professor Gale said in her oral evidence that she did meet subsequently with Dr Gray and that there was "eventually an apology, of a kind". Whatever criticisms may be made of UWA administration at this time, none of the evidence supports any inference of malice on the part of senior administrators or malice otherwise attributable to UWA in relation to Dr Gray. That is not to say that some individuals may not have been profoundly irritated by him. Mr Irvine alleged that the harassment was related to a meeting Professor German had organised in April 1990 with four past District Governors of the Lions Organisation and which had been attended by himself, Professor House, Professor Walters and another person. Dr Gray had not been told of the meeting. Mr Irvine alleged that the Lions Governors were informed by Professor German that UWA knew nothing of what the LCI was about and that Dr Gray had not discussed his arrangements with UWA. When the Lions' representatives indicated that they were not interested in becoming involved in domestic matters of UWA, the meeting became hostile. He alleged that Professor German had asked that the Lions Clubs International consider diverting funds from Dr Gray to the QE II Medical Centre and that Dr Gray and his research team might not continue to enjoy research success and support in the future. This letter, which was exhibited to Dr Gray's affidavit, recounts what occurred at a meeting at which nobody who was present was called to give evidence. I do not therefore regard it as evidence of what occurred at the meeting but rather as evidence of the fact that a complaint was made to Professor Gale drawing her attention to the allegations. There can also be little doubt that Dr Gray was involved in the sending of the letter. It indicates another reason why he had adopted the negative view that he had of Professor German. Assuming that the meeting took place as alleged by Mr Irvine, it could be argued that it was imprudent and tactless of Professor German and his colleagues to arrange such a meeting and to put the propositions which were put to the Lions' Governors. It does not, however, support findings of bad faith or improper conduct on their part. If, as alleged, they did not support Dr Gray's activities or the priorities that might be established in terms of public funding of those activities, that is a view they were entitled to have though others might disagree with them. It was a view they were entitled to put to prospective funders. It is not indicative of malice or impropriety. Professor Michael was to report back to Professor German who would then report on to the Vice-Chancellor. Dr Gray submitted a list of 19 matters that he wanted to be the subject of inquiry including alleged misconduct by Professor German. He complained in his evidence that Professor German closed down the inquiry and gave his own account of events regarding resourcing within the Department of Surgery and that Professor Michael wrote a report based only on Professor German's evidence. Following representations to Professor Gale she asked Professor Michael to undertake a second inquiry. In the end, according to Dr Gray, the written report from Professor Michael addressed space allocation for research and not "the many other issues of bias and removal of resources". Dr Gray said there was a marginal improvement in the core funding situation for a short time after Dr Michael produced his second report. But by the time affiliation occurred in 1995 the original intention of the Institutes to work cooperatively with UWA "had been soured". The second Michael Report, which was dated 28 October 1992, was exhibited to Dr Gray's affidavit. Professor Michael and Mr Bandt of Personnel Services, conducted interviews of staff members from the UWA Department of Surgery on 14 September 1992. They interviewed some 11 people including Dr Burton, Dr Stephen Jones, Dr Yan Chen, and Dr Codde. Professor Michael reported that all members of laboratory staff referred to a deteriorating and stressed atmosphere existing in the research laboratories at the RPH site. The atmosphere was not conducive to research work being undertaken. Laboratory staff working for Professor Hall wanted to cooperate with Dr Gray's laboratory staff but this was not permitted because of the impossible conflict between those two members of the academic staff. The result was fragmentation within the laboratory and intellectual isolation for some of the staff. Whereas equipment allocation had been made jointly to all members of laboratory staff for mutual use, more recently Dr Gray's staff had been denied access to the equipment. The report characterised that situation as "inappropriate" because it did not permit sharing equipment. Professor Michael reported a perception of considerable conflict between the Department of Surgery sited at the QE II Medical Centre and the Department at RPH. The staff believed that there was a hidden agenda to undermine Dr Gray's authority and research credibility. He identified the major current issue as the allocation of laboratory space in the proposed new research building at RPH. There appeared to be inequity of allocation, the greater numbers of staff attached to Dr Gray being allocated a smaller area of the Department. If a perception arose that Dr Gray was not considered as the senior academic in the Department at RPH, then current plans for distribution of space in the laboratory would lead to further isolation and the potential of a department being set up within a department. Professor Michael described the situation as insoluble. He observed that the obvious personality difficulties should not be allowed to influence the quality of work. He also reported that members of the Lions Organisation who were interviewed told the inquiry that they believed that they were discouraged by the Faculty of Medicine from supporting the proposal for a cancer institute. They were disappointed with that reaction. There had been little progress in two years of negotiations for the proposed Lions Cancer Institute. They wanted to have it sited at RPH in Dr Gray's unit. The initiative was supported by RPH. They could not understand the reasons for the active discouragement by the Faculty of their initiative. The report identified issues of conflict between the two Departments of Surgery and the personality conflict between Dr Gray and Associate Professor Hall. He found mutual denigration had occurred between Dr Gray and Associate Professor Hall. It characterised LCI as a legitimate approach by Dr Gray to establish an organisation funded by Lions. The report recommended geographic separation of Dr Gray and Associate Professor Hall. A degree of autonomy should be considered for the Department of Surgery similar to that accorded to the Department of Medicine. A recommendation was also made for an independent review of space allocation in the proposed new Department of Surgery at RPH. Professor Etherington, the Chairman of the Accommodation Committee of UWA, had agreed to investigate the issue of space allocation and to assist in achieving a possible solution. The report also indicated that there appeared to be no good reason for the Faculty of Medicine or any UWA subcommittees not giving consideration to an application made by the LCI. It is notable that in his affidavit evidence, Dr Gray was quite dismissive of Professor Michael's second report. Dr Gray said that after Professor Michael completed his second inquiry, Professor Robson, whom he characterised as the Senior Administrative Officer in charge of staffing at UWA, "failed to implement any changes that were highlighted by the Michael inquiry and which would assist in the recovery" of his research team. This was an allegation of some generality involving elements of opinion informed by a very personal perspective. It has nothing much to do with the issues in the case. I disregard it. It was not related to any of the particulars of the history of animosity between Dr Gray and Professor Robson relied upon in support of Dr Gray's cross-claim for defamation against UWA. It provided, inter alia, that the Foundation and the LCI would use their best efforts for mutual support and promotion. Particular provisions regulating the financial relationship between the two bodies were as follows: The Lions Cancer Institute recognises the Medical Research Foundation as an appropriate body to administer research funds generated by the Lions Cancer Institute for cancer research within the University Department of Surgery and Royal Perth Hospital. The Medical Research Foundation recognises and endorses the Lions Cancer Institute as an organisation that will contribute to research into cancer at Royal Perth Hospital. The Lions Cancer Institute will invest funds in the Medical Research Foundation on the understanding that such funds will be used solely for cancer research projects. Such research projects may involve patients and participation from organisations outside of Royal Perth Hospital. The Memorandum also provided that the Medical and Scientific Advisory Committee of LCI would advise the Institute board of projects for which support was recommended. The LCI would then nominate to the Foundation those projects which it wished to support (clause 5). Funds provided by LCI could be invested according to the usual procedures of the Foundation on the basis that interest earned would be returned to the LCI (clause 7). The funds provided by the LCI would be subject to the auditing and accounting procedures of RPH. The terms of the Memorandum of Agreement suggest that the perception of LCI held by those controlling it and those involved with the Foundation was of a body providing funding for research. Sirtex submitted, however, that whatever LCI's role in the early 1990s it evolved into a substantive entity conducting its own research in subsequent years. As Sirtex submitted in closing, it is clear enough from the evidence that at this stage in its existence, LCI was not institutionally connected with UWA. It was associated with Dr Gray's work at RPH. The Memorandum of Understanding was a memorandum entered into with an RPH entity not a UWA entity. He said that the LCI had selected the cancer research team headed by Dr Gray as the principal beneficiary of its support. He referred to informal conversations between the Governors of both Lions Districts in Western Australia and Professor Parfitt about the work being done by Dr Gray and his team. It was timely that the board now sought the view of UWA regarding some more formal association. Our Board is confident that we will develop into a major research centre and seeks the opportunity of discussing the possible implications for the University of WA in this initiative. On 20 March 1991 Professor Lourens wrote to him setting out what the main points of the discussion. The summary was broadly supportive of LCI but said nothing about association beyond a statement that UWA would wish to cooperate in maximising the search for new knowledge of treating cancer and was grateful for the added support by the Lions Clubs. The letter did not suggest any form of affiliation between LCI and UWA. It stated what LCI proposed to do, suggested internal quality control and cooperation with a potential competitor and little else. Mr Irvine wrote to Professor Gale on 3 April 1991. He again sought her guidance on an association "formal or informal" with UWA given the relationship between LCI and Dr Gray's team. He wrote on 24 June 1991 yet again asking whether UWA wished to have an association with LCI or its board. He suggested that LCI might offer an invitation to a representative from UWA to attend a board meeting to keep lines of communication open and ensure that everyone was satisfied with developments at LCI. A handwritten footnote on the letter dated 15 July 1991, apparently from Professor Lourens to Professor German, indicated that the Vice-Chancellor's meeting (with her Deputy Vice-Chancellors) had decided that UWA should not "get in close" but maintain contact and advice. Professor Lourens asked Professor German to suggest a suitable contact. Professor Thomas Norman Palmer, known as Norman Palmer, was Professor of Bio-chemistry at UWA from 1990 to July 1997. For later reference it may also be noted that he was Acting Executive Dean of the Faculty of Medicine and Dentistry between 1 December 1995 and June 1996. In July 1997 he left UWA to take up the position of Pro Vice-Chancellor (Research and Innovation) at James Cooke University, a position he still holds. Following Professor Lourens' request to Professor German to suggest a UWA contact with LCI, Professor Palmer was approached and agreed to join the board. The Vice-Chancellor's personal assistant, Barbara Goldflam, wrote to Mr Irvine on 12 September 1991 advising him of Professor Palmer's consent to being the UWA representative. Professor Palmer attended his first meeting of the board on 12 November 1991. The meetings were held at the University Department of Surgery office in the Medical Research Foundation building at RPH. He recalled that Dr Gray was Medical Director but did not know what the position entailed. Dr Gray prepared reports and he saw some of them. Dr Gray said in his affidavit evidence that Professor Palmer would have kept the Vice-Chancellor informed of the activities of both LCI and CRI. Professor Palmer did not recall any activities of LCI which would have required any report from him to the Vice-Chancellor. As to CRI, he was never a member of its board. He had been invited to join it but had declined. Professor Palmer did not recall any matter of substance relating to CRI being reported at LCI meetings that required him to make any report to the Vice-Chancellor. Professor Palmer had then and said he still has, a very strong view of the benefits of affiliation between medical research institutes and universities. He regarded such arrangements as delivering significant financial and intellectual benefits. It was on that basis that he gave his support to the proposed affiliation. At a meeting of the LCI board held on 11 February 1992 Dr Wal Neal, a member of the Bullcreek Lions Club, was appointed as Administrative Officer in an honorary capacity. The board met again on 14 April 1992 at which time Dr Gray was requested to prepare a plan for a program for the next three years. It met on 12 May 1992 and established an Executive Committee comprising the Chairman, the Medical Director and the Administrative Officer. The question of a closer relationship with RPH was raised. On the matter of affiliation the Chairman reported that it seemed appropriate to seek a formal affiliation with UWA. The advantages would be "recognition, status and support". The board resolved to seek affiliation and to prepare an application for that purpose. In June or July 1992, Dr Neal sent a draft application for affiliation with UWA to Professor Palmer for his comment. Professor Palmer wrote back to him on 31 July 1992 suggesting that the application would be considerably strengthened if the membership of the board were extended to include greater representation from UWA and RPH. On 17 August 1992 Mr Irvine submitted an application for affiliation to Professor German. The members of the board as shown in the application included Dr Burton, Dr Codde, Dr Gray, Professor Palmer and Dr Neal. The application stated that the LCI did not employ staff at the time. Board members, the Medical Director, the Medical and Scientific Consultants, the Administrative Officer and most of the other clerical and support staff offered their services without charge. The application foreshadowed that the situation would change as the LCI was committing itself to supporting a major research project which would involve staff salaries and supporting services. In relation to Dr Gray's research projects, the application stated that while providing general support and publicity to the group the LCI's main financial contribution had been in the purchase of equipment. However it had committed itself to supporting a major extension of the research effort for the next three years. The application listed UWA staff directly involved. It showed Dr Gray as Professor of Surgery and Medical Director of the LCI. Dr Burton was described as "Senior Scientific Administration Officer". Dr James Codde, Dr Stephen Jones, Dr Yan Chen and Dr Ross McCulloch were all described as "Research Officers". Ms Angela Lumsden was described as a "Research Student". The application noted that a number of staff of RPH provided supporting services as consultants and committee members. The board met on 8 September 1992 and 10 November 1992. At the latter meeting Mr Irvine retired as chairman of the board and Mr J Roberts, a Lions District Governor, was appointed in his place. Dr Neal was reappointed as Administrative Officer to undertake the duties of Secretary and Treasurer. He reported that the affiliation application had been referred by the Executive Committee of Dentistry and Medicine at UWA to the University Department of Surgery for examination. He was trying to follow the matter up. The minutes of that meeting also reported the appointment of Dr Elizabeth Williams as an LCI Research Fellow to commence duty on 7 January 1993. Her appointment and subsequent history including dealings with Dr Gray are outlined later in these reasons. It was put on the Executive Committee's meeting agenda for 19 January 1993. Dr Gray attended the meeting which was chaired by Professor James Patterson who was evidently then Dean of the Faculty. According to Dr Gray the application was opposed from the outset by Professor Constable of the Lions Eye Institute. He made a prepared statement of opposition. Professor Patterson himself referred to representations about LCI to the Faculty in a letter written by Mr Clive Deverall the Director of the Cancer Foundation. He told the meeting it would be inappropriate to consider the affiliation proposal while there appeared to be a major dispute between the LCI and the Cancer Foundation. He advised the Committee that the Faculty could reconsider the matter when differences between the two organisations had been resolved. This was Dr Gray's account of the meeting. To the extent outlined I accept it. It is inherently probable that the relevant decision-makers within the Faculty would not wish to have become embroiled, through the affiliation process, in some kind of turf war between the LCI and the Cancer Foundation. Dr Gray, in his affidavit evidence, said he accused Professor Patterson of colluding with the Cancer Foundation to elicit its letter of protest. He offered the opinion in his evidence that opposition to affiliation had been "set up" by Professors Patterson and Constable. He thought Professors Patterson and Constable wanted to prevent any diversion of Lions' funding support from the Lions Eye Institute to the LCI. It is not necessary to reach any final conclusions about this incident beyond observing that it exemplified and explained to some extent the tension between Dr Gray and other senior members of UWA academic staff and had a part to play in ongoing acrimony between him and elements of the Faculty. The next step in the process towards affiliation with UWA was a letter dated 3 February 1993 from Professor Palmer to Dr Gray at LCI advising that the Medical Executive Committee of the Faculty of Medicine had chosen not to discuss the proposed affiliation at its most recent meeting. Professor Palmer opined that members of the Executive Committee would have approved affiliation of the LCI on academic grounds. Their concern was conflict with the Cancer Foundation. He suggested that the conflict could be resolved by discussions with individuals associated with the Cancer Foundation. He looked forward to discussion of affiliation at the LCI's next board meeting. Affiliation was again discussed at the LCI board meeting held on 9 February 1993. The Chairman circulated the letter from Mr Deverall of the Cancer Foundation which had been referred to at the faculty meeting and which outlined objections to the existence of LCI. He also circulated a letter sent by District Governors of Lions expressing concern at some of the things said in Mr Deverall's letter. It was reported that a meeting had been arranged between members of the LCI Board and the CFWA to try to solve the disagreement. Professor Palmer stressed the importance of settling the disagreement. If it were resolved he felt that the affiliation would proceed smoothly. A meeting was held between representatives of LCI and the CFWA on 12 February 1993. A reference to that meeting appeared in a letter dated 1 April 1993 to Dr Gray from Mr Roberts the Chairman of LCI. In the letter Mr Roberts reported that Professor Liveris, the Chairman of the CFWA, agreed to write to the Vice-Chancellor at UWA advising her that the CFWA did not wish to stand in the way of LCI affiliation with UWA. Mr Roberts said in the letter that when he had asked at the meeting why the CFWA had written its letter of opposition to Professor Patterson in the first place, the Chairman of the CFWA replied that Professor Patterson had solicited the letter from the CFWA. Mr Roberts said that Mr Irvine and Dr Neal both attested to the correctness of his report of the comments made at the meeting with the CFWA. Whether the claim about Professor Patterson is correct or not, it is not material here. But the fact it was made goes to the very difficult relationship that existed between Dr Gray and other senior members of the Faculty. His complaint about Professor Patterson's conduct found its way into an exchange of correspondence with the Chancellor of UWA over the period 1990 through to 1995. Professor Patterson was a member of the Medical Board of Western Australia in 1993. According to Dr Gray's affidavit he regarded it as inappropriate for Professor Patterson to sit in judgment on his peers. He therefore contacted the Secretary of the Medical Board and put before it his allegations about Professor Patterson's behaviour. The Secretary advised him subsequently that the Medical Board had discussed the matter and that Professor Patterson would remain as a member of the board. Dr Gray's solicitors wrote to the board in July 1994 saying that it ought to convene a formal inquiry into Professor Patterson's conduct. After further exchange of correspondence the board informed Dr Gray, on 15 September 1994, that it would take no further action in relation to Professor Patterson. She was employed by CRI on 14 June 1993 as Laboratory Assistant for research projects involving UWA, LCI and CRI. Her duties, as set out in her CV, were to assist Dr Stephen Jones with the in vivo studies for the hyperthermia project and the continued development and manufacture of human protein, plasmid and magnetic microspheres. She was also involved in testing the integrity of the SIR-Spheres used on patients in trials. She participated in the targeted chemotherapy project and associated clinical trials. Following the Affiliation Agreement referred to later in these reasons, which was made on 30 October 1995, she was on UWA's records as one of its employees although the funding for her position was provided by CRI. A letter was sent to her by UWA on 26 February 1996 on behalf of the Vice-Chancellor offering her a fixed term appointment on the staff of UWA as "Assistant (Laboratory)". The term of her appointment was 29 January 1996 to 28 February 1997. According to Dr Gray, Ms Winter took part in many research experiments including the manufacture of DOX-Spheres used in their clinical trials. I accept that evidence. He said that the following were considered: The original resin SIR-Spheres developed in 1981-1982. However the details of SIR-Spheres had been disclosed into the public domain in 1983. The ceramic SIR-Spheres (SIRT-2) that had been "invented" in 1982 and further developed by Monash University. This he described as a definite candidate for a provisional patent application. Dr Stephen Jones could not provide anything on targeted hysteresis hyperthermia as nothing had been developed. Dr Chen, he said, volunteered that she had experimented with a new way of controlling the release of drugs from microspheres. This was the use of the metal-ion concept to slow the release of the drug. About this time Dr Chen drafted a provisional specification. It was for an invention to be called "Controlled Release Matrix for Drugs and Chemicals". One particular application of this formulation is to transport cytotoxic drugs that are designed to be used in patients and animals for the treatment of cancer. The concept of using metal ion-drug complexes in combination with ionic polymers can also be used for the transport and controlled release of other drugs and chemicals for a variety of other applications. Dr Chen said that she initially named Dr McCulloch as an inventor on the draft application. Dr McCulloch recalled that Dr Chen informed him that he was on the application to accompany the provisional specification. He did not have any input into it and never saw the application. Dr Chen said that she and Dr Gray met on or about 15 November 1993 in his office on the second floor of the MRF building. They discussed, inter alia, the provisional specification application. It was her evidence that Dr Gray told her that he did not think that Drs McCulloch, Burton or Hodgkin should be on the provisional application. He wanted himself and Dr Chen to be named. According to Dr Chen's evidence Dr Gray made notes on his whiteboard as they talked. Dr Gray disputed aspects of her account of their conversation. He said he did not have a whiteboard. He believed that he had proposed Dr McCulloch as an inventor on the provisional application. His recollection was that Dr Chen told him that she alone had been involved in the development of the invention. On that basis Dr McCulloch's name was removed. The omission of Dr Hodgkin's name was based upon Dr Chen's advice to Dr Gray. Dr Gray said that he put his own name in as co-inventor because he had initiated the DOX-spheres project. He had not, however, done any of the experiments testing the use of metal ions to control drug release from the microspheres. He did not check Dr Chen's claims with Dr McCulloch. He also relied upon her advice in omitting Dr Hodgkin's name. He had not had personal contact with Dr Hodgkin for several years. He said that he "could only presume that he had faded from my memory the reason why he was not included as an inventor". Dr Burton had left the team early in the year and relocated to New South Wales. Dr Gray did not contact him to check on Dr Chen's affidavit. It is difficult to place any particular reliance upon the recollections offered by witnesses of oral conversations conducted 14 years previously. I think it probable, having regard to Dr McCulloch's evidence, that Dr Chen had initially proposed that his name be included on the provisional specification but that it took little, if any, persuasion for her, in discussion with Dr Gray, to omit Dr McCulloch's name. Dr Chen presented as a person focussed upon the advancement of her own interests. That of itself is not a matter for criticism in the context of these proceedings. It does however affect the extent to which I can rely upon her uncorroborated testimony to give an objective account of contentious matters affecting her interests. My confidence in the reliability of her testimony was generally affected by the secret tape-recording she made of a conversation with Dr Gray in November 1994 and the way in which she misled him about it. The tape-recording incident is described later in these reasons. Dr Gray returned the draft provisional application at or soon after his meeting with Dr Chen. When she received the draft back from Dr Gray he had written his name first and hers second as inventors. When she discovered this, Dr Chen said to Dr Gray that she should be the first inventor and he acceded. She then typed her name and then Dr Gray's on the patent request form. After meeting with Dr Gray, Dr Chen spoke to Dr McCulloch and told him that Dr Gray had decided he would not be included on the provisional specification application. He did not take any part in those discussions. He remembered Dr Chen telling him that his name had been taken off the patent. He recalled that he was annoyed. However he did not have the resources to do anything about it. He considered the modification of the DOX microspheres to be his project, their evaluation in an animal model to be Dr Chen's project, with Dr Gray ultimately using them in a human model if the animal studies were successful. Dr Chen lodged the provisional specification and accompanying request on 18 November 1993 at the Australian Industrial Property Organisation office (AIPO) in Adelaide Terrace, Perth. She paid the application fee of $80 out of her own pocket. She listed herself and Dr Gray as the actual inventors. This followed a conversation in which Dr Gray, having seen the draft specifications, wrote his name and hers as the inventors. He also told her that the application should use CRI as the address for correspondence as CRI would fund the project and her in the future and were going to fund the patent application. The provisional specification was assigned the number PM2492. The receipt from the AIPO was sent to the post office box of CRI. In the meantime Dr Chen was reimbursed the sum of $80 by Dr Gray's secretary. He was named as the inventor, the applicant and the nominated person to whom the patent was to be granted. The patent attorneys filing on his behalf were Davies Collison Cave. The invention was said, in the complete specification, to relate to the treatment of cancer in mammals by the use of small hollow particles (collectively called microspheres) containing a radioactive substance. They were designed to be administered into the arterial blood supply of the organ to be treated whereby they would become entrapped in small blood vessels of the target organ and irradiate it. The claims defining the inventions focussed upon methods for the production of hollow microspheres. Essential steps comprising the grinding of the base material to a fine powder, combining the base material with a suitable binder, spray drying the slurry and thermal spraying of the spray dried particles were referred to. The production of microspheres having a diameter from 10 to 200 microns was claimed in one claim. The use of Yttrium or any compound of salt of Yttrium as the basic element of the microspheres was also claimed. The matter was again discussed at the board's meeting held on 12 October 1993. An outline for a new proposal was to be presented at the next meeting of the board. The next meeting was on 14 December 1993. An outline of a new submission to UWA had been circulated and it was approved as a basis for the submission to be presented to the February board meeting. At the meeting held on 8 February 1994 Professor Palmer suggested that the application emphasise opportunities for UWA through the availability of training for postgraduate students and the possibilities for collaborative research. The board agreed that the draft was a sound basis from which to work and the aim should be to submit it to the Executive Committee of the Faculty of Medicine at its April meeting. Final approval would be left to the Executive Committee of the LCI. The Executive Dean of the Faculty of Medicine was to be invited to nominate a member to the Medical and Scientific Advisory Committee of the LCI. On 30 March 1994 Dr Neal sent the revised affiliation application to Professor German. The application, which described the "Present Activities" of the LCI indicated that it had established an association with Dr Gray and scientific staff of UWA's Department of Surgery at RPH. It stated that financial support was given to a number of research projects but the LCI also had initiated and completely supported several projects. Among projects to which it was giving support were what it described as the hyperthermia research project, "an ongoing project of the Department". The application also reported that a group of people who were not Lions had formed a Cancer Research Institute with the aim of raising funds to support research activities. The application stated that they had had considerable success and were supporting projects of the LCI. Grants obtained by research staff of the LCI were set out in an appendix to the application. They were said to total $1,062,823, listing as their sources the NH & MRC, the Foundation, the Channel 7 Telethon Trust, other research grants and fellowships and scholarships. Professor German responded on 6 April 1994 advising that he would place the application before the Faculty Board after it had been vetted by the Deputy Vice-Chancellor, Professor Robson. He could see no further reason for it being delayed. On the same day Professor German sent a copy of the application to Professor Robson. In his memorandum to Professor Robson he characterised the application as "satisfactory". I look forward to hearing from you. It was examined in the Registrar's office and found to supply information required by the guidelines. As the matter was a potentially sensitive issue the Registrar's office recommended that the proposal go to the Faculty Board before being considered by the Academic Board/Council. At a meeting of the LCI board on 16 April 1994 it was noted that Professor German had written to LCI nominating Dr P Le Souëf to represent the Faculty of Medicine on the Medical and Scientific Advisory Committee of the LCI. On 26 July 1994 the Senate of UWA resolved to approve the affiliation of UWA with LCI "subject to the drawing up and signing of an appropriate agreement between the Institute and the University". It was allocated a number PCT/AU94/00708. The invention was entitled "Controlled Release Preparation". Subsequent claims defined the active compound as pharmaceutically active (claim 4). A cytotoxic or cytostatic drug (claim 4), doxorubicin, daunorubicin or cisplatin (claim 6). The claim was made for an ionic polymer matrix comprising a biodegradable cross linked albumin/dextran sulphate matrix (claim 7) and a preparation wherein the complexing agent was a metal ion (claim 8) and in which the metal ion was Fe (claim 9). The loading of the ionic polymer matrix with Fe-complex doxorubicin was claimed (claim 10) and also with chitosan-complex cisplatin (claim 11). Methods of treatment and use were also claimed. The minutes of the board of management of CRI held on 15 November 1994 recorded that Dr Gray advised the board "that an application for an International Patent on Microsphere Control Release had been submitted under the name of the Cancer Research Institute (Inc)". He advised that legal costs might be substantial. A motion was passed unanimously that CRI would assume responsibility for all costs. The application covered what was referred to in the statement of claim as the Thermo-Spheres-1 Invention being that claimed in patent application PN9782 entitled "Targeted Hysteresis Hyperthermia as a Method for Treating Cancer". The application filed on 23 December 1994 was however allowed to lapse. The specification was in similar terms to that lodged in September 1988. He had the confidence and support of Professor Gale and dealt with many issues that Dr Gray would have expected Professor Gale to deal with. Complaints of misconduct on the part of Professors German and House were diverted to Professor Robson. Dr Gray tried to get Professor Robson to intervene to stop what he called the "relentless intimidation of our research group". He claimed that Professor Robson was not only not prepared to help but became actively hostile to his appeals. He alleged that on one occasion Professor Robson became extremely aggravated by his requests for assistance and started "yelling loudly at me" and insisted that he take his complaints to Professor German. This was denied by Professor Robson. Dr Gray said he met with Professor Robson several times after that incident but because of his hostility it became common practice for him to ask his legal representative, Mr Grant Milner, to attend their conversations. Despite his repeated requests for assistance nothing was done and the intimidation continued until he left UWA several years later. He said it soon became apparent to him that Professor Robson was not going to provide support and that his attitude had progressed from disinterest to open hostility. By about 1994 he regarded Professor Robson as entirely hostile to him. I recall on one occasion he came to Royal Perth Hospital to intervene into a dispute regarding research facilities that was clearly an issue to be dealt with by the Dean of Faculty. He ensured that I was disadvantaged at every opportunity. According to Dr Gray, Professor Robson's antipathy towards him grew during the 1990s. By 1996 there was so much bad blood that it was difficult to make the affiliation agreement work. Dr Gray's own conduct in relation to Professor Robson, as it appears from the history of events set out in these reasons, evidenced the level of hostility which he felt towards him. I cannot rely upon his characterisations of Professor Robson's attitude towards him. His opinions are not evidence of Professor Robson's feelings. Moreover I cannot rely upon his account of Professor Robson's mode of speech towards him. As I observed in connection with his evidence about the dispute with Professor German concerning Dr Chen's salary, his recollections, offered from a perspective of ongoing anger and resentment, were unreliable. One of those particulars, said to be an element of that history, was that Dr Gray had given evidence to the Parliamentary Inquiry relating to Dr Rindos where his evidence was opposed to evidence given by Professor Robson and was critical of the administration of UWA. Professor Gale, who was Vice-Chancellor at the time, said that until she read Dr Gray's affidavit she was not aware of his support for Dr Rindos or that he had given evidence at a Parliamentary Inquiry into the affair. She did have a diary entry for a meeting with Dr Rindos and Dr Gray on 19 November 1993 at 4.30pm. However, based on her personal diary, she did not believe that the meeting actually took place as she was involved with the Festival of Perth launch that afternoon. I accept that it is unlikely that Professor Gale was particularly conscious of Dr Gray as a Rindos supporter or held any animosity towards him for that reason. Professor Robson in his affidavit of 2 March 2007, referred to this particular. He said in the course of preparing his affidavit in January 2007 he reviewed, on the relevant parliamentary website, the report of the Western Australian Parliamentary Standing Committee on Public Administration on its inquiry into the events surrounding the denial of tenure to the late Dr Rindos by UWA. Appendix 2 to that report listed Dr Gray as having given oral evidence to the inquiry. To the best of his recollection, until he reviewed that report in January of that year, he was unaware that Dr Gray had given evidence. At the time of swearing his affidavit he still did not know what evidence Dr Gray had given. He had never seen any transcript or report of what he had said. The only transcript of evidence to the Rindos inquiry that he had ever seen was his own. I accept Professor Robson's evidence. I am not satisfied that the support given by Dr Gray to Dr Rindos played any part in the content or timing of the letter of demand sent by UWA to Sirtex in 2004. These have already been outlined. In 1987, after taking advice from patent attorneys, the director of CABR, Dr Nicholas, did not think that either the DOX-Spheres or the Thermo-Spheres were patentable. Various approaches were made to potential commercial partners. None of them yielded any positive results. In September 1988, as noted earlier, Mr Hilditch "handed back" the DOX-Spheres project to "the department", presumably a reference to the UWA Department of Surgery. The Thermo-Spheres project was left to Professor Parfitt to deal with but nothing resulted from that. An attempt to establish a collaborative arrangement with CSIRO in relation to Thermo-Spheres did not proceed beyond the conduct of a feasibility study. At some time, which was probably about mid 1994, Dr Gray approached Mr Kevin Karlson, on the recommendation of JB Were, Stockbrokers. They also suggested he approach Mr Peter Jones, a former State Government Minister. Dr Gray said it was late 1994, but the sequence of the documentary evidence suggests if is more likely to have been May or June 1994. Dr Gray told Mr Karlson that he was looking for capital to commercialise three products which he had developed for the treatment of cancer. Mr Karlson was a chartered accountant who had been managing partner of the Perth office of Ernst & Whinney (the predecessor to Ernst & Young) from about 1980 to 1989. He had retired from Ernst & Young on 30 June 1993 but remained active as a consultant because of ongoing insolvency engagements. In 1993 up to the time of his affidavit in 2006, he had held a number of part time appointments including that of consultant for Tolhurst Corporate Limited, a broking/underwriting business based in Perth. Dr Gray told Mr Karlson that JB Were had also recommended that he seek assistance from Mr Peter Jones, a former minister in the Western Australian Government whom he had met from time to time in the course of his business activities. Mr Karlson said that Dr Gray told him he was a Professor in the Department of Surgery at UWA and involved in research for the development of the products to be commercialised. He told Mr Karlson that in substance the research was being carried out by CRI and LCI. Nothing that Dr Gray said then indicated that there was any obstacle in the way of himself or CRI commercialising the products. He said that products had been protected by patents taken out either by himself or by CRI. Dr Gray agreed in cross-examination by counsel for Sirtex that, when he first invited Mr Karlson to become involved with the raising of venture capital, he did not suggest to him that there was any legal constraint on his ability to develop or commercialise the products. On the advice of either Mr Karlson or Mr Peter Jones, Dr Gray contacted a corporate solicitor, Jeremy Shervington. He asked Mr Shervington for advice and assistance on how to seek venture capital funding. Mr Shervington told him what had to be done to set up a company and to seek such funding. Mr Shervington recalled that Dr Gray consulted him about incorporating a company for that purpose in order to develop intellectual property which involved the use of microspheres that were irradiated then injected into people with liver cancer. He did not have a clear recollection of the work that he did for Dr Gray apart from the fact that it involved a proposed capital raising. As an early step Mr Shervington acquired a shelf company for Dr Gray on or about 29 June 1994. It was called Fairburn Investments Pty Ltd (Fairburn). According to Dr Gray, he discussed with Mr Shervington the need to appraise UWA of his involvement and the nature of the business to be carried on by the company. Dr Gray said he wanted UWA to be aware of his interest to set up a company to develop the technology and to accept his involvement in that process. At the time he thought the company could even be a party to the Affiliation Agreement between LCI/CRI and UWA, which was still then in its long gestation period. This is corroborated by Mr Orr's handwritten note of a discussion which he had with Dr Gray in August 1994. That note referred to "... a third party to join with the agreement --- a commercial company (yet to be launched) to head up the technology transfer". Dr Gray regarded him as "a highly capable administrator with a thorough knowledge of research methodology". Initially they did not have much interaction as Dr Gray was located at RPH and Professor Barber at the Crawley campus of UWA. Most of their communication was by telephone. Dr Gray's diary entries indicated that he had a number of meetings with Professor Barber between 11 May 1994 and 16 January 1997. He said that he discussed with Professor Barber "in detail" the progress of the targeted microsphere technology towards commercialisation as it occurred. He said that in 1994 when he began to explore the possibility of attracting venture capital funding through a corporate vehicle for the technology he kept Professor Barber informed about what was going on. Professor Barber did not remember meeting Dr Gray in May 1994. Dr Gray himself kept no file notes of their discussions. I am satisfied however, by reference to his diary notes that they did meet. This was a critical time in the progress of the Affiliation Agreement between LCI/CRI and UWA. Professor German had promised to place the affiliation application before the Faculty board at its meeting which was to be held in June 1994. It may well be the case that Dr Gray wanted to enlist Professor Barber's support for affiliation. It was, however, also close to the time at which he began seeking professional advice on how to raise venture capital. It is probable that this topic was raised with Professor Barber. Having regard to the history of Dr Gray's dealings with UWA in relation to commercialisation before 1994 which had led nowhere, it is difficult to see any reason why he could have expected to keep plans for commercialisation of the technology secret from UWA. Professor Barber's lack of recollection of a meeting in May 1994 is explained by the passage of the years. It does not undercut the inference that such a meeting occurred. Mr Shervington made a one page file note of the meeting. His note indicated that reference was made to Mr James Lennon who was, at that time, a Contracts Officer in the Registrar's office. There was reference to an intellectual property committee which had been set up by the Vice-Chancellor and a statement that "Monash's position is much the same". These notes are likely, in my opinion, to have referred to discussions about UWA's approach to the exploitation of intellectual property rights developed by academic staff. The only intellectual property committee in existence at that stage was the Intellectual Property Sub-Committee of the Research Committee. Mr Shervington's note recorded a query about what would happen in the future if the company developed, from its own resources, further intellectual property. The answer he recorded was that it was discretionary and depended on how clearly the result evolved from using UWA's facilities. He added "... but it would be okay to set it up in advance". I take this to refer to a statement either made or acceded to by Professor Barber. It was also noted that the company would come to the Institute and that the Institute could be used by the company as a vehicle. However the company would remain outside to some extent. There was a note that the affiliation agreement would have implications for government funding between UWA and the Institute. Dr Gray recalled the meeting very clearly. He "vividly" recalled that a major consideration for him in arranging the meeting was to ensure that UWA, through Professor Barber as its head of research, was fully acquainted with all the developments that had occurred and were going to occur. He said he wanted not only to protect UWA's interests but to seek protection from any further attacks against himself and CRI. He said he knew this to be a real possibility in view of the previous four year history of attempts to undermine him, the LCI and CRI and his targeted microsphere technology research. Dr Gray said in his evidence that he told Professor Barber that they had sought the meeting in order to advise him of developments in the technology and to seek approval from UWA to proceed with what they were proposing so that UWA knew of those developments and could give guidance to himself and Mr Shervington. He said that he gave Professor Barber a very comprehensive overview of all the major events that had brought the technology to the point where he and the CRI were seeking commercial funding by a company in which he would play a "pivotal role". He and Professor Barber discussed the fact that he was wearing many hats and that there might be potential for conflicts of interest. By the end of the meeting Professor Barber agreed with the steps that Dr Gray had taken and was proposing to take to deal with those conflicts. They discussed, he said, the provenance and development of the ceramic SIR-Spheres (SIRT-2) that Monash University had developed through funding provided by the CRI. According to Dr Gray, he also told Professor Barber that the proposed commercial entity might have a formal association with UWA and perhaps form part of the affiliation process between the LRI/CRI and UWA. Professor Barber told him that proposal was not workable and advised that the commercial entity should stand outside UWA. According to Dr Gray they discussed how UWA might be involved in further development of the technology. He said they agreed that some form of contractual relationship could easily be developed for access by the commercial entity and/or the CRI. At that time he thought that the UWA Department of Physics had expertise that could be used to develop the hyperthermia technology. Dr Gray did not recall any detailed discussion of the DOX-Spheres or the fact that the CRI had taken out a provisional patent application in relation to it. He said they discussed the Patents Regulations in effect at UWA and how they might impact on him and the development of the commercial entity. Professor Barber apparently expressed some concern about the impact of these developments on research students. That issue was not resolved at the meeting other than being flagged as a matter for ongoing oversight. Professor Barber did not agree in his affidavit evidence-in-chief that the meeting of which Dr Gray gave evidence, took place in August 1994 or at any time. The matters that Dr Gray referred to in his evidence, such as the provenance of specific inventions and UWA's claim to them, confidentiality agreements between the commercial entity and students and the supervision of students within some sort of commercialisation venture were not matters with which he was familiar in August 1994. In cross-examination, however he had no reason to doubt that he met with Dr Gray and Mr Shervington in August 1994. He usually kept file notes of significant meetings but did not know what had happened to the notes of the meeting alleged. In my opinion the probability is that Dr Gray did raise and discuss with Professor Barber his intention of establishing a commercial vehicle to raise venture capital for the exploitation of the technology. I so find. They met at the Foundation's building at 50 Murray Street, Perth. They discussed whether the company which Dr Gray proposed to set up could rent space in the RPH research facility to continue research into the technology. Mr Shervington recalled that the meeting concerned the use of laboratory space at the Foundation premises. His handwritten file note of the meeting supports that recollection. In the event no arrangement was made for use by the company of RPH research facilities. Mr Shervington did not do a lot more work for Dr Gray after that because initially they were unsuccessful in attracting venture capital funds and when they did attract a partner, Nomura/JAFCO, it instructed Freehills to look after its interests. In the course of these meetings Dr Gray explained the microsphere technology "products" to him and to Mr Jones and showed them the laboratory where the relevant research was being undertaken. He understood that in assisting him he would be bringing to the table commercial experience that Dr Gray lacked. Dr Gray had told him that he had come to the view that he had to set up a company and try and raise funds that way. He had no recollection of Dr Gray telling him that he had discussed the matter of commercialisation with senior administrators at UWA. He did remember Dr Gray saying that he had engaged Mr Jeremy Shervington to assist him on the legal side. The potential directors of the company that Dr Gray wanted to set up, namely himself, Mr Karlson and Mr Peter Jones, had a number of meetings which were minuted as meetings of a board of directors. The potential company was later referred to in some of the minutes as "Newco". Prior to the first minuted meeting of the potential directors, which is referred to below, there had evidently been meetings the records of which were not in evidence. While he was proceeding to establish a commercial vehicle to raise capital, Dr Gray was also in discussion with the Australian Nuclear Science and Technology Organisation (ANSTO) about the manufacture of Yttrium microspheres. On 13 September 1994 he wrote on LCI letterhead, to ANSTO. The letter referred to prior discussions about arrangements between Australian Radioisotopes (ARI), which I take to be an arm of ANSTO, for the manufacture and distribution of Yttrium microspheres. He confirmed in the letter that he would be at ARI on Tuesday 20 September 1994. Production by him of raw microspheres. Establishment of a price for the product in the immediate future and discussion of division of profits between ARI and "our Company". The arrangement between the company and ARI would work best under a licensing arrangement whereby ARI paid royalties on a per unit sold basis. Both the company and ARI to have performance criteria in relation to promotion. The arrangement to be in place for a fixed term such as three years. Any arrangements that we come to can then be taken back to our Board for ratification. These included: The lodgement of international patents by mid November --- it was noted that Dr Gray agreed to cover the costs of obtaining an international cover note for SIR-Spheres and DOX-Spheres. The finalisation of financial arrangements regarding the purchase of intellectual property by mid November. The finalisation of financial arrangements with CRI, LCI and UWA. Mr Jones and Mr Karlson agreed that, prior to the next meeting, they would investigate the possibility of purchasing an existing company. All three men agreed that an attempt should be made to go to a public float in either January or early February. The second minuted meeting was held on 16 November 1994. Mr Karlson outlined five streams of activities that needed to be undertaken in order to activate the company. These involved the raising of seed capital and registration, determining the company type, obtaining an intellectual property valuation, patent protection and industry assistance, the conduct of medical trials and submission of the relevant products to the TGA and "FDA", presumably a reference to the Federal Drugs Administration of the United States. The first priority was to raise seed capital and to produce documentation for that purpose and decide the company's structure. They agreed that purchase of a shelf company would obviate many of the problems associated with a public float in the first instance. Mr Karlson was to meet with Ernst & Young to decide the appropriateness of purchasing a shelf company and determine the documentation required for raising seed capital. The amount of seed capital contemplated at that time was $1 million. Various other contacts were to be made, which it is not necessary to outline here. The third minuted meeting was held on 23 November 1994. A possible source of seed capital had been identified. Mr Grant Boyce had agreed to become company secretary. Dr Gray prepared a document dated 28 November 1994 entitled "Proposal to Delta West/The Upjohn Company for Raising Seed Capital in Preparation for the Floatation of a Public Company". The document referred to the formation of a company for the purpose of commercial development of several novel technologies designed to be used for the treatment of cancer and other diseases. It referred wrongly to the formation of the company as though it had already occurred. It stated that the company either had been, or was in the process of, acquiring assets relating to new and promising technology that was considered to have the potential to generate income for the company. In addition, the company was acquiring contracts and strategic alliances to develop and commercialise its technology. It was said that the assets of the company would consist of: Two international patents for cancer treatment products. Contracts of ownership of other unprotected new technology. Binding contracts with key scientists to undertake further research and development. Strategic alliances with existing pharmaceutical companies for commercial exploitation of products generated from intellectual property owned by the Company. Strategic alliances with an existing research institute in the University of Western Australia to undertake further research and development of key products of the Company. The "existing research institutes" at UWA were not identified. The letter was misleading in this respect. The fourth minuted meeting, and the first in which the proposed company was referred to as "Newco", was held on 1 December 1994. Dr Gray tabled a submission to the Upjohn company proposing either a strategic alliance or a suggested investment in Newco as seed capital. Mr Unsworth of Delta West had agreed to transmit the proposal to Upjohn. The State Department of Commerce and Trade had invited Newco to submit a proposal to the government for seed capital. Dr Gray informed the meeting of his discussions with ARI. He had discussed a commercial arrangement with the new chief executive of that company, Mr D Sterling. He was due to meet with Mr Sterling in Sydney on 12 December 1994. A strategic alliance would be entered into between Fairburn and ARI. This would allow the public company to take over the strategic alliance from Fairburn at a future date. He could not recall the precise words but he said his call was to tell her about the CRI, about the establishment of a commercial vehicle and commercial funding and his role in it. She did not raise any issues as being a problem. He said that he took this as her agreement with what he was proposing. Professor Gale in her affidavit evidence said she believed, that between 1990 and 1997, Dr Gray had not informed her that he and others with him had developed patentable inventions using UWA resources at UWA's Department of Surgery as part of their work for UWA. She was therefore not in a position to approve or authorise patent applications or any commercial dealings in relation to them and did not do so. She could not recall having any conversations with him or receiving any written communications from him with respect to the discovery of any patentable inventions or commercially significant knowledge deriving from the work in which he participated or which he supervised and directed at the Department of Surgery at RPH. Nor was she informed by him of the lodgement of patent applications or the obtaining of any valuation analysis or financial forecast with respect to the sale of products using the patents while she was Vice-Chancellor. Given the passage of time, I am unable to place much reliance upon Dr Gray's recollection of his telephone conversation with Professor Gale concerning the establishment of a commercial vehicle and his intention to raise venture capital to commercialise the microsphere technology. However he was making no secret of his intentions so far as they related to the establishment of a corporate vehicle. He and Mr Shervington had raised the matter with Professor Barber at their meeting with him in August 1994 and Dr Gray had raised it with Mr Orr in the context of the Affiliation Agreement. There was much that Professor Gale could not recollect. That is no criticism of her. In my opinion however it is at least likely, given the other disclosures of his general intention to UWA officials, that he communicated them to Professor Gale. His evidence does not go so far as to support a finding that he disclosed to her his intention to use any particular intellectual property in the company that he was intending to establish. She thought that she started on the board in about 1992 and is sure that she was a member in 1994. She did not recall the names of all the members of the board but did remember that Dr Gray and Mrs Leonie Mirmikidis were members. More specifically this would include aspects of my research projects. The fax referred to a letter from Dr Gray of 4 November 1994 and his instructions to file an international patent application based on Australian Provisional Application No PM2492. He had evidently instructed them to file the international application in the name of CRI, naming himself and Dr Chen as inventors. The patent attorneys identified, as the unique aspect of the invention, the use of a complexing agent such as a metal ion to control the use of drugs from the ionic polymer matrix. They understood that the ionic polymer matrix could be either a biodegradable matrix such as the crosslinked albumin/dextran sulphate matrix specifically exemplified, or a non-biodegradable matrix such as polystyrene-divinylbenzene based ion exchange resin. Dr Gray sent Dr Chen a draft letter on the letterhead of the CRI. It was to be co-signed by herself and Dr Gray addressed to Mrs Mirmikidis as Acting Chairperson of CRI. The Provisional Patent was taken out in the names of Y Chen and B Gray. The matter of the intellectual property is to be negotiated. At or about that time, and presumably shortly after that letter was sent, Dr Chen was contacted by Dr Gray who told her that they needed to authorise CRI to file an international patent application for the controlled release doxorubicin microspheres and that she should sign the letter that he had sent to her. Dr Chen said in evidence that she was concerned that by signing the letter she would give up rights she might have to share in the proceeds of commercialisation of the invention. She could not understand why she was being asked to give those rights to CRI when she had never been an employee of CRI and believed that the invention was made in or about 1991 while she was still in the employ of the University. At about this time she had a discussion with Dr Gray relating to her concerns about the letter. She raised with him the possibility that UWA might also have a claim to the invention. Dr Gray said he would look into that. At the time of this conversation in November 1994, Dr Chen was not an employee of the University. She wanted, however, to ensure that if the invention were commercialised she would share in the proceeds of its commercialisation. There was evidence of a telephone conversation between Dr Gray and Dr Chen on the evening of 14 November 1994. Dr Chen tape recorded the conversation using her answering machine. She did not tell Dr Gray she was doing so. He asked her about a background noise generated by the recording device. She lied about that noise. Have you got a mobile phone or something? Something --- is just the line or something. Yeah. She had retained the tape until providing it to the court under subpoena in these proceedings. The content of the conversation was directed in part to her concerns that her interests should be protected in the event of signing the CRI letter. She was concerned that the mere fact that her name appeared on the application as an inventor would not give her any beneficial interest if in fact the interests were acquired by CRI. On 15 November 1994, Dr Chen wrote a letter to Mrs Mirmikidis at CRI stating that she fully supported the proposed action by CRI provided that she had a written agreement with it including the following: She would accept that the application be in the name of CRI and would assume that the names of herself and Dr Gray would still be included as inventors in the application. The names of beneficiaries and applied percentages would be indicated. On 16 November 1994, Dr Chen went to see a patent attorney at Wray & Associates and discussed the proposed letter. Handwritten notes at the bottom of her copy of the letter record that the patent attorney told her that the letter could be signed and would not affect any of her rights. An assignment of ownership had to be done by filling in a formal document, signed by both parties concerned. The assignment would not need to be filed at the same time as the international application. There was a grace period. The United States was a country designated in the application in which letters patent were sought. On 30 November 1994, Davies Collison Cave wrote to Dr Gray at CRI confirming, after an earlier letter and telephone conversation with him, that they had named CRI as applicant for "all designated states except the United States of America" while the inventors were named as applicants for the purposes of the United States of America only. This was because US patent law required that a US patent application be initially filed in the name of the inventors. This necessitated a formal assignment of the US letters patent from Drs Chen and Gray to CRI and a proposed assignment document was attached. Dr Chen received a copy of the proposed assignment already signed by Dr Gray on 30 November 1994. Davies Collison Cave sent another letter to CRI on 9 December 1994 in relation to a formal PCT request form which had been forwarded under cover of their earlier letter of 22 November 1994 for execution on behalf of CRI and by each of the inventors. A deadline of 1 February 1995 had been set for the lodgment of that document. They asked Dr Gray to arrange for appropriate execution and return as soon as possible. Dr Chen received written advice from John King of Wray & Associates on or about 21 December 1994. Mr King set out his understanding that the bulk of the experimental work carried out in respect of the controlled release preparation invention had been conducted while Dr Chen was an employee of the University, either directly or indirectly through RPH. He stated his understanding that throughout that time she was paid by the University through funds obtained under an NH & MRC grant. He referred to the fact that funds provided for the project by CRI were used in respect of toxicity studies and clinical trials but that the money was forthcoming after conception of the invention and the filing of the provisional specification. The reason being that Professor Gray and yourself arrived at the invention whilst under the employ of the University. In these circumstances, and unless there is a separate agreement to the contrary, the intellectual property of an invention which arises in the course of an employees usual duties automatically belongs to the employer. As such we suggest that you undertake discussions with the university to confirm the ownership of the present invention and any rights that you may have as an inventor. She observed that the assignment was the "formal document assigning the ownership of intellectual property rights as well as the matter related to the share of the profit/value of the intellectual property". She requested once again a written agreement from CRI before signing the assignment to guarantee that she would always be one of the beneficiaries and would receive the same percentage as applied to other staff currently working at CRI. She characterised her request as "modest" and said she was the major contributor to the invention. As to the involvement of UWA she expressed the opinion that they should be included in the "party" if they wished to participate or a release should be obtained from them. She added that a company called Delta West was quite serious about getting involved in the application of the invention. The invention was designated "Particulate Material". It was said to relate to a particulate material comprising small hollow or cup shaped ceramic particles called microspheres, a process for their production and methods for its use. The claims in this specification included radioactive particulate material comprising hollow or cup shaped ceramic microspheres comprising a beta or gamma radiation emitting radionuclide and having a diameter in the range of from 5 to 200 microns (claim 5). Narrower claims defined the material as Yttrium and diameters in the range from 20 to 80 microns. A process for the production of the material by forming aggregates of powdered base material with a suitable binder and thermal spraying to melt the base material and vaporise the binder to form hollow or cup shaped microspheres was also claimed. Related method and use claims were made. From 1987 to 1992 she was employed in the John Curtin School of Medical Research as a Research Assistant, Post Doctoral Fellow and Visiting Fellow. Her PhD thesis was concerned with the processes underlying resin losses in hops following mechanical damage to hop tissues during harvesting. At their meeting held on 14 April 1992 the directors of the LCI observed that with the Institute's funds standing at over $170,000 it was time to consider, inter alia, providing a focus for the Institute which, together with the Screenings, might reinforce fundraising efforts. Dr Gray was asked to prepare a plan for a program for the next three years. On 12 May 1992 Dr Gray presented for consideration a proposal for the appointment of a Senior Research Officer and a Research Assistant to open up a new area of research in the discipline of cancer biology. He proposed that the project be sponsored by LCI for a period of three years initially. The financial commitment would be $100,000 per year for salaries and associated costs plus maintenance and equipment. The board approved the project in principle. Advertisements for the proposed position of Senior Research Fellow were placed with a closing date of 31 August 1992. Dr Williams applied for the position. She was the successful candidate. Dr Gray reported her selection to the board of the LCI at its meeting on 10 November 1992. Dr Neal wrote to Dr Williams on LCI letterhead on 30 November 1992 congratulating her upon her selection. He noted that it was a new venture for LCI to assume the role of employer and so they were a little slow at working out the details. The appointment was for three years with a commencing date of 7 January 1993. The commencing salary was $45,613 in accordance with NH & MRC salary levels. LCI had an agreement with RPH for handling the administration of salary conditions. However we would like to treat each case on its merits depending on the background and circumstances. From that time on the LCI provided Dr Williams with technical support and funded virtually all of her research needs for the next ten years. It also supported student scholarships and provided research assistants to work with her. Dr Williams said between January 1993 and March 1996 she received her salary through the RPH payroll system. The Foundation supplied her group certificates during that period. She had an office in the premises of the UWA Department of Surgery from 1993 and also worked in laboratories on Level 2. She supervised students including PhD students of UWA. She said that she worked in close proximity with Dr Gray and other UWA staff including, as at 1993, Drs Burton, Stephen Jones, and Yan Chen, Mrs Kathleen Brown and Ms Sylvia Napoli among others. Dr Williams described her field of expertise as a biochemist with a focus on protein structure and function including mechanisms of protein-mediated catalysis. Her work in Dr Gray's unit involved scientific research into cell division regulation with a view to developing an understanding of particular enzymes from a biochemical point of view. She was researching whether a particular protein sometimes found in enzymes known to be critically important in cell division could play a roll in the treatment of cancer. One of the objectives of her project was to design new anti-cancer drugs. Another was aimed at the development of a novel anti-cancer gene therapy. She did not have any specialist expertise in the microsphere research conducted by Dr Gray's group, although she had some understanding of what was involved as a result of working day to day with other members of the group. Dr Williams said that although she understood that LCI and CRI were separate institutes, there seemed to her to be little to differentiate between them. When she was working with Dr Gray on Level 2 of the Medical Research Foundation Building she was aware that he was the Medical Director of both LCI and CRI as well as a professor of UWA. Reports of both Institutes that she read at the time covered the same projects and researchers for SIR-Spheres, DOX-Spheres and magnetic hysteresis. Dr Williams exhibited an annual report from LCI for the year 1996-1997. In that report Dr Gray referred to the establishment of CACS. He noted the recruitment of a Mrs Sally Wright as the Executive Officer of the CRI. She was spending most of her time working with members of the CRI but was "also providing valuable assistance to the LCI". Dr Gray's report referred to the formation of Paragon Medical and securing of venture capital funding for the hyperthermia project and the Yttrium and controlled release projects on which he had been working for the past 15 years. He described this as providing an opportunity of not only promoting the research but also feeding back valuable funds into the research effort. He also referred to clinical trials, including a major international study involving adjuvant chemotherapy in patients undergoing resection of liver cancer. The report included a paper by Dr Stephen Jones, Simon Harrison and Jillean Winter, a laboratory assistant, entitled " The Targeted Hyperthermia Project ". Dr Gray's annual report for CRI for 1996/1997 was considerably briefer. He referred to the establishment of CACS and the continuation of Dr Williams as the Lions Research Fellow on her project involving the biochemistry and molecular biology of cancer. Dr Stephen Jones continued to "drive the hyperthermia project forward". Dr Gray said he himself had been "principally involved with Clinical Trials". He referred to the recruitment of two new doctoral students to CRI undertaking studies together with Dr Williams towards their respective PhDs. He also referred to the formation of Paragon Medical in terms similar to those in the LCI report. Dr Williams said that from time to time Dr Gray referred to research work within their unit as taking a rice bowl approach to funding. That is to say all researchers in the unit were fed funds from the same bowl, albeit the funds came from a variety of sources. She said that when she started work in 1993 she was employed as an LCI Research Fellow, funded by LCI. There is no more money for your salary so your salary is now coming from UWA. Until she was told by Dr Gray she was not aware that the LCI funding for her position had run out. In any event she went on UWA's payroll in about March 1996. She continued to work in the same space and use the same resources in the same premises as previously but her salary was paid by UWA. It supplied her group certificates from March 1996 until her employment ceased at the end of 2003. In practical terms nothing changed for her upon the establishment of CACS. She continued her supervision of UWA students including PhD students. Dr Gray was listed as co-supervisor for some of them. Dr Gray made some generally disparaging reflections upon Dr Williams and her research output at LCI in his affidavit. They did not appear to be relevant to anything and I disregard them. From about 1998 Dr Williams was appointed Deputy Director of CACS. She became its Executive Director several months before November 1999. After becoming Executive Director Dr Williams did not have access to the records that related to Dr Gray's work at UWA between 1986 and 1999, the lab books that were brought into existence during that period and animal or human trial records including patient files or any other data collected in trials conducted by Dr Gray or his team between 1986 and 1999. For the bulk of her time in the Medical Research Foundation building the trial and patient records were kept in a Clinical Trials Room which was locked for the preservation of patient privacy and confidentiality. Correspondence files, personal files, grant applications, records and communications with others within the UWA hierarchy which Dr Gray had maintained prior to Dr Williams' appointment as Executive Director were located in a file room adjacent to the secretary's office. Dr Gray, Mr Kevin Karlson and Mr Peter Jones became its first substantive directors. Professor Arthur Li also became a director. The company secretary was Grant Boyce. The shareholders were the three initial directors, together with Fairburn and Pine Ridge Holdings Pty Ltd. Mr Boyce was a partner in Mullers, Chartered Accountants. Dr Gray was Managing Director of the new company. Dr Gray said that Mr Karlson had asked Mr Boyce to become involved in the company. They had been colleagues at Ernst & Young. Dr Gray agreed in cross-examination by counsel for Sirtex that he never suggested to Mr Boyce that there was any legal constraint on Paragon Medical developing the new technologies. Not long after the formation of the company, Dr Gray had some discussions with Mr Rod Unsworth of Delta West. Delta West wrote to Paragon Medical on 20 May and Dr Gray replied on 5 June. In his reply he said that Paragon Medical had acquired from CRI an Option to Purchase Intellectual Property relating to "controlled release matrix formulation for cytotoxic drugs" (described in Patent Application PCT/AU94/00708). He enclosed with his letter a copy of a report to the Ethics Committee of RPH on the treatment of five patients with DOX-Spheres. He indicated that he would shortly be producing a protocol for a larger phase 2 trial in Asia. On 2 May 1995 Ernst & Young provided a valuation of the SIR-Spheres and DOX-Spheres technology. The valuation was not received as evidence of the value of the technologies but rather as evidence of the fact that it had been made and of the figures of which Dr Gray was aware. According to Ernst & Young the valuation range for the SIR-Spheres was between $13,526,000 and $9,834,000. That for the DOX-Spheres was between $4,883,000 and $3,726,000. Reference was made to the targeted hyperthermia technology which was valued at nil because of the high discount rates applied, the costs to commercialisation and a number of years to commercialisation. It was not otherwise referred to in the report. It appears that a meeting of the directors of Paragon Medical was held on 3 May 1995. Draft minutes for a meeting on that date were circulated by Mr Boyce on 8 May 1995. At the meeting on 3 May 1995 it was resolved to ask Deloitte Touche Tohmatsu (Deloittes) to become company auditors. Dr Gray declared his associations with LCI, RPH and the CRI. Mr Karlson was to introduce Dr Gray to Kevin Edwards and Andrew Thompson with a view to appointing them as company solicitors. Challenge Bank was to be used as the company bankers. Dr Gray and Mr Boyce were authorised to sign on behalf of the company. A meeting of the board of directors of Paragon Medical took place on 17 May 1995. Messrs Karlson, Gray and Jones were present. Dr Gray reported a positive response from Delta West and that a meeting would be held in two days time to set up an alliance with Upjohn. Mr Karlson indicated that before anybody could approach investors a discount factor needed to be finalised by the board members. This would require finalising details for the absorption of intellectual property into the company structure. A meeting was arranged for Monday, 22 May 1995 with Edwards and Thompson, Solicitors for advice regarding the structure of the company in preparation for a public float. Dr Gray went on to reiterate the history of the previous ten years in relation to the Yttrium project. He referred to the treatment of patients which had commenced in 1987. He said that since that time "we have treated over 100 patients in Perth and about the same number in Hong Kong". Other isotopes as well as Yttrium had initially been evaluated. Yttrium proved superior and they concentrated on that. ANSTO was not aware of much of that evaluation as some of it was done through another entity, Amersham. Our board has a detailed business plan for penetrating key markets in the near future and we are well advanced in structuring the financial aspects of this development from both governmental and private sources. We would like to see ARI playing a key role in this development, and this has been the subject of numerous discussions over the past two years with ARI. As previously discussed with you, our Company does not require any funding from ARI, as all costs associated with the project would be borne either by or through, our Company structure. The letter gave the impression that treatment and other work which had been done in relation to the development of Yttrium had been done by the company. This was plainly untrue. It was put to him that he would not include UWA staff in that description. I would not, you're quite right. I wouldn't. He agreed that the letter referred to SIRT-1 technology in relation to patients treated in phase 2 trials. SIRT-2 had never been used on a patient. As to the use of LCI letterhead, Dr Gray said that he used that because at the time there was no company letterhead. Dr Gray signed the letter over the designation "Professor of Surgery" and the designation "Medical Director". He said that he was not speaking on behalf of the LCI when he wrote the letter but rather on behalf of himself and Messrs Karlson and Jones and the notional company. Mr Sinclair replied to Dr Gray on 27 March 1995 referring to his letter dated September 13, 1994. Mr Sinclair said that ANSTO was prepared to negotiate in good faith for a licence to irradiate and sell Yttrium 90 microspheres in Australasia and Asia. However it had to be satisfied on a number of important issues including an examination of the intellectual property owned by the LCI to determine whether it was novel, unpatented and did not infringe patents owned by third parties. I assume that future negotiations will be between ANSTO and that incorporated entity. Nor did it have any intellectual property in relation to the DOX-Spheres or the Thermo-Spheres. At one point in his cross-examination Dr Gray said he would take the reference to LCI in the letter and replace it with a reference to CRI. He said that he had confused the position by writing on LCI letterhead. He believed that he had conveyed to Mr Sinclair that CRI not LCI was going to set up an incorporated body to conduct the future development of the project. It was put to him that he meant he himself was going to set up an incorporated entity. He denied that. On 31 March 1995, again writing on LCI letterhead, Dr Gray sent Mr Sinclair copies of a proposed Confidentiality Agreement which he asked him to sign and return. The terms of that agreement proposed that it be made between ANSTO and Dr Gray. On 8 May 1995 Mr David Sinclair, the Director of ARI wrote to Dr Gray at LCI advising that ANSTO's solicitor had reviewed a proposed Confidentiality Agreement provided by Dr Gray. He expressed some puzzlement as to why the Confidentiality Agreement which had been sent was with Dr Gray as an individual. It was his understanding that LCI was to be the other party. The draft Confidentiality Agreement which accompanied the letter of 8 May 1995 showed the parties as LCI and ANSTO. Dr Gray made handwritten alterations with the apparent intention that the parties should be Paragon Medical and ANSTO. On 9 June 1995 Dr Gray wrote to Mr Sinclair, this time on Paragon Medical letterhead. He said that LCI was not the proprietor of the technology. The technology for the new microspheres, including techniques currently being used to manufacture Yttrium microspheres, had been "consumed by Paragon Medical Ltd, a public company set up to promote a range of targeted anticancer technologies". Dr Gray said he was happy with the draft that ANSTO's solicitor had prepared, but the party had to be altered to Paragon Medical (in lieu of LCI). He was asked in cross-examination what technology he was referring to in the letter and said he thought it was SIRT-2. However he agreed that ANSTO was manufacturing SIRT-1 microspheres. Asked to explain how Paragon Medical had "consumed the technology", Dr Gray said that there was an agreement between Newco and CRI that all of the targeted technology being patented and owned by CRI would be vested in Paragon Medical. He said that this had been done by agreement. He did not believe there had been a formal written assignment from CRI to Paragon Medical at the time of the letter to ANSTO. He said by June 1995 there had not been a formal assignment but "... there was a clear contract by dint of a handshake contract that that's what would occur at some subsequent stage". On 28 June 1995 Mr Sinclair sent Dr Gray two copies of the Confidentiality Agreement to be signed and one returned to ARI. The Confidentiality Agreement was signed on behalf of Paragon Medical by Dr Gray and dated 20 June 1995. It recited, inter alia, that Paragon Medical was in possession of technical and business information of a confidential nature concerning the manufacture of Yttrium microspheres. It was interested in discussing with ANSTO technical and business information to determine whether the parties wished to establish a business relationship and wanted to ensure that the confidentiality of its technical and business information relating to the topics to be discussed was preserved. This was to be spent over a period of two years in order to prepare the company for a public float. Part of the preparation for that capital raising was the valuation by Ernst & Young which was provided on 2 May 1995. Dr Gray was actively involved in its preparation. Mr Karlson did not recall having any active involvement. At this time Mr Karlson was employed as a consultant to Tolhurst. He introduced Dr Gray to Messrs Richards, Whitely and Tilley at Tolhurst. He sent a fax to Dr Gray on 1 June 1995 enclosing his thoughts on what to do following a meeting that they had with Tolhurst personnel the previous day. Necessary steps included the preparation of an information memorandum, an underwriting agreement to raise $2 million and a number of legal agreements. The agreements would involve the transfer of intellectual property from Dr Gray, CRI and LCI. They would also involve arrangements with RPH, UWA, ARI, Upjohn and Seed Capitalists. On 15 June 1995 Dr Gray, as Managing Director of Paragon Medical, sent a memorandum to the other directors referring to the meeting which had been attended by Mr Karlson, Mr Jones and himself with Messrs Whitely and Tilley from Tolhurst. Tolhurst had indicated it could raise capital in the order of $2 million but would require upfront funding to generate a document which they would use to raise the capital. Dr Gray recommended that all activity from Tolhurst should be done on a success fee basis only. One of the items of business was the raising of venture capital. Dr Gray and Mr Karlson spoke of a meeting earlier that day with Bain & Co who proposed a syndication package for intellectual property to be purchased by Paragon as it probably qualified for pre-1985 capital gains taxation exemption. Some discussion ensued about the mechanism for transferring intellectual property into Paragon Medical. This was subject to further clarification from Bain & Co., Tolhurst and Deloittes. It appears that at that stage a draft Information Memorandum had been prepared by Tolhurst. It was discussed and broadly accepted in principle. Mr Karlson was cross-examined about the last entry in the minutes. It was his understanding at the time that Dr Gray and CRI effectively owned and controlled the intellectual property. The next meeting of the directors of Paragon Medical took place on 25 September 1995. The minutes recorded that several meetings had been held with Tolhurst over the previous weeks. A target list for potential venture capitalists had been identified and Tolhurst would be approaching them on the east coast and in Western Australia. The memorandum stated in the "Executive Summary" that Paragon Medical proposed to raise $3 million of equity funding to assist in the commercialisation of its range of new products for the treatment of liver cancer and for further research and development of associated technologies. The Company and the owners of the technology have reached agreement for the Company to acquire the exclusive rights to develop products and intellectual property designed and patented by Professor Bruce Gray, a director of Paragon, and others after 10 years of research and development. Clinical results to that date were said to be "very positive" and to support the likelihood of establishing a market for the product. The three primary products were identified as SIR-Spheres, DOX-Spheres and hyperthermia. These products have been developed by Professor Bruce Gray, a director of Paragon, and others over a number of years. Paragon has reached agreement with Professor Gray to acquire the exclusive rights to develop the products and their associated technologies. The directors of Paragon Medical at the time were Dr Gray, Mr Karlson, Mr Peter Jones and Professor Arthur Li. The memorandum referred to CRI as "a non-profit organisation focussed on cancer research" and as a tenant of the MRF facility. Dr Gray was described as Medical Director of CRI. It had "undertaken research development and manufacture in the same core areas of technology that Paragon has now purchased and intends commercialising". Financial forecasts of returns from each of the technologies over a 15 year period were set out in the memorandum. They projected a total cashflow after tax in years 13 to 15 of $190, 692,000 made up of $152,658,000 for SIR-Spheres, $9,258,000 for DOX-Spheres and $38,312,0000 for targeted hyperthermia, all less $144,039,000 in costs and $9,536,000 in corporate costs. Paragon Medical would enter into a research contract with CRI on commercial terms for a period of at least eight years and would guarantee a minimum level of work of $250,000 per year for the contract period. The directors of Paragon Medical would consider public listing of the company to fund further research and the commercial production, marketing and distribution of its products. The memorandum anticipated a further capital injection of $8 million to $10 million required within the next 18 to 24 months. In the event the Tolhurst Information Memorandum did not yield any immediate response. The draft was said to be close to that made with Professor Constable's Ophthalmology and Visual Science Centre. The letter referred to a request from Dr Gray to have all LCI staff paid through the UWA payroll. That request was said to be "... more complex" and to require further consultation before the Registrar could give Dr Gray an answer. There was a handwritten note on the memorandum, presumably prepared by Mr Orr, of a discussion with Dr Gray which I infer followed the sending of the memorandum. The agreement is with their lawyer Jeremy Shervington, who will prepare amendments to the draft agreement to accommodate the third party. There is also a new party emerged (the Cancer Institute) who want to be included in any affiliation deal. They are a sub-group of LCI. Bruce Gray will send their constitution. Another copy of the same memorandum bore a handwritten note from Mr Orr to Professor Barber designated "P.V.C.(R)". It focuses on the new rule for "counting" research grants which themselves raise questions for us. I think Bruce will try and exploit maximum benefit from the agreement so we must get it right. At present he wants all Institute staff to be paid by the University to save payroll tax. In fact, as appears later in these reasons, he had met with Dr Gray in May 1994. Mr Orr also asked, in his handwritten note, whether the matter could be discussed at a Vice-Chancellors' Friday morning meeting. In those days the meetings comprised the Vice-Chancellor who was Professor Gale, Professor Barber, Professor Robson, Mr Orr and Mr Martin Griffith who was then the Executive Director of Finance and Property. On 10 August 1994 Mr Orr wrote to Dr Stephen Jones referring to a letter from him of 25 July 1994 concerning access to UWA facilities. He pointed out that the draft form of agreement which he had sent to Dr Gray required UWA to provide access for LCI staff to UWA facilities. This would be likely to include access to library and computing facilities. The question of eligibility to apply for research fellowships and small grants was unresolved. On 25 August 1994 Dr Gray wrote to Mr Orr on CRI letterhead. He indicated the desire of CRI to be included in the affiliation agreement between UWA and LCI. He attached a copy of its Constitution . He said that formal recognition of its affiliation with UWA would allow CRI to use the UWA name in fundraising and promotional activities. CRI was, at that time, raising a considerable amount of money and was about to embark on a major fundraising drive. Once affiliation was effected, the funds would be channelled through UWA. He said he would write further when the CRI's solicitor had had a chance to put in writing the requirements that would outline contractual arrangements regarding commercial money for research. In his reply dated 31 August 1994 Mr Orr saw a real problem in getting the CRI affiliated as a principal partner in a formal association with UWA as it was clear from its Constitution that in spite of its title, it was an agency for raising funds and not an organisation actively engaged in research. One alternative he suggested was that in the Affiliation Agreement the LCI might be referred to as "the Lions Cancer Institute incorporating the Cancer Research Institute" to indicate a very close operational relationship between the two organisations. The draft of the agreement sent by Mr Orr to Dr Gray on 9 August 1994 recited in cl 2.2 the general objectives of the LCI which have already been referred to. It provided, inter alia, that UWA would process applications for research funding to granting bodies from staff of the LCI who were also UWA staff. It would act as employer and paymaster for such staff as the LCI recruited as a consequence of grants processed through UWA. The LCI would direct current and future applications for grants from UWA staff through UWA in accordance with established UWA procedures. The LCI board met on 16 August 1994. Dr Gray reported that affiliation with UWA had been granted for a five year period in the first instance subject to written confirmation. He also reported that considerable work was needed to settle the fine detail of affiliation. This included potential administration charges flowing to UWA and the possibility of funds flowing from UWA to LCI. He noted it was also necessary to look at the situation relating to "Intellectual Property" and that some decisions or policy formation might be urgently required in that area. A small subcommittee comprising himself, the Chairman of LCI Mr Roberts and Dr Stephen Jones was established to discuss areas of concern. On 7 September 1994 Professor Palmer wrote to Dr Gray indicating that he had a copy of the draft affiliation agreement between the LCI and UWA for comment. He said that overall the document looked excellent but he had a number of comments. He thought it essential to emphasise that LCI would approach its objectives on a cooperative basis with other cancer researchers in Western Australia. He also added comments on the respective obligations of the University and the LCI in relation to the enrolment of students and the need to distinguish between research appointments in the LCI and academic appointments in departments of UWA. Dr Gray replied on 20 September 1994 indicating that the board had a number of reservations about the document including the ones which Professor Palmer had raised. The draft agreement was discussed at the LCI board meeting on 11 October 1994. The subcommittee had reviewed it. It was understood that Dr Gray would take up a number of issues with UWA. The meeting also discussed the position of CRI. A copy of a recently issued CRI brochure was tabled which apparently used the LCI logo. The board agreed that the matter required discussions between CRI and Dr Gray. The general view of the board was that there was a danger that LCI would lose its identity and that confusion would develop between the objectives of the two organisations. It was proposed that a meeting be set up with CRI to discuss the matter. On 1 November 1994 Dr Gray wrote to Professor Gale seeking to discuss with her the implications of himself obtaining commercial funding for cancer research. He said that he was proposing to generate commercial funds that would be used for cancer research through the LCI and CRI. With the affiliation of the LCI with UWA there would be major benefits to UWA and he sought her approval for that initiative. Martin Griffith wrote a note to the Vice-Chancellor's personal assistant on the letter indicating that Dr Gray had called on the Registrar and himself to discuss his centre/company/fundraising conflicts. Mr Griffith said they did not have any major problems with the concept and had left it to him to talk to his lawyer and work out legal relationships and come back to them. They had heard no more at that time. On 14 November 1994 Dr Gray sent a letter to the Registrar, Mr Orr, setting out his comments on the Affiliation Agreement. He said that both LCI and CRI were actively sponsoring research, albeit in relation to different projects. LCI was primarily involved in sponsoring skin cancer screening and a molecular oncology laboratory which, as appears later, was headed up by Dr Elizabeth Williams. CRI had sponsored controlled release cytotoxic studies and was establishing a program of research into breast cancer. If successful the CRI would be the conduit whereby commercial funds from the corporate sector are channelled into research. In the future, activities undertaken by the LCI may also attract commercial sponsorship and it would be necessary for both to be able to have those funds used through the University, via the affiliation document, in order to promote the Institute's research effort. However the board of CRI had indicated its intention to alter its constitution at the next annual general meeting. He said that CRI had its own letterhead, its own constituted board and its own fundraising committee and program of research. However she had been informed by the Registrar and the Vice-Principal (Mr Griffith) that the proposed legal relationship between the LCI/CRI and UWA had not been sorted out. She suggested they reschedule their meeting until the essential background work was done. A meeting was scheduled for 16 December 1994 with Professor Barber, Professor Schwartz, who had become the Executive Dean of the Faculty of Medicine and Dentistry and Mr P Johnson, the Assistant Registrar (Research). It seems that there was discussion of the affiliation arrangement at this meeting although there was no record of the meeting in evidence. There was evidence given by Dr Gray of a telephone conversation he had with Professor Gale in December 1994 and of which she had no recollection. That conversation concerned his proposal to establish a commercial vehicle and to seek commercial funding for the technology. It is dealt with later in these reasons in the context of his steps to commercialise the technology outside of the UWA framework. On 13 January 1995 Mr Orr sent Dr Gray a revised Affiliation Agreement which he hoped reflected the points raised during their pre-Christmas meeting. Under the revised draft the parties to the agreement were "the University, the Lion's Cancer Institute in association with The Cancer Research Institute (the Institutes)". Clauses 4.7 and 4.8 dealing with intellectual property were unchanged. Mr Orr again met with Dr Gray to discuss the contract in January or February 1995 and on 16 February 1995 sent a copy of a revised draft of the agreement to the Vice-Chancellor and Professors Schwartz, Robson and Barber, as well as Mr Griffith and Mr Johnson. He referred to the extended definition of "Institute" to refer to "the Institutes". They want us to differentiate between intellectual property arising from the work of commercial contract staff (should be exclusively to the benefit of the Institutes) and from the work of research grant staff (negotiable with the University). The carriage of the matter was with Mr Orr. He recalled some discussions about it. Questions about intellectual property had been raised with him "fairly generically". He had no detailed recollection of any specific input he made into the affiliation agreement. He did not regard affiliation with a new cancer institute as a hot potato or a contentious issue, albeit there were concerns associated with the removal of potential funding from the Department of Surgery. The proposition that a sub-group of a department could be a beneficiary was a matter of concern to the Faculty. Professor Barber had no recollection of discussing Mr Orr's memorandum of 16 February at the Vice-Chancellors' meeting on the following day. However, he said that the concept of UWA centres had emerged as a way of regularising the interface between UWA and external institutes. On 7 April 1995 Mr Orr again wrote to Dr Gray. He said that the coupling of LCI and CRI was achievable but more detail was required about the composition of CRI. UWA could not take on payroll responsibility for groups of staff outside award conditions. All grants generated by the LCI/CRI had to be processed through UWA and association with UWA was to be acknowledged in everything. He observed that negotiations had reached a stalemate. The position was further confused by a proposal from Mr Deverall of the Cancer Foundation for a global cancer research fund to which all charities would contribute and which UWA would administer by distributing resources in response to grant applications. He suggested another meeting. He sent a further version of the contract to Dr Gray on 19 April 1995. This incorporated the four points referred to in his letter of 7 April 1994. Clause 4.7 was in the same form as offered on 16 February 1995. On 8 May 1995 the Acting Deputy Registrar, Ms Wendy Edgeley, sent a memorandum to Professors Robson and Barber, inter alia indicating that the Registrar had sent a copy of the Affiliation Agreement to the Vice-Chancellor recommending that she sign it subject to "cosmetic" changes. A further version of the agreement was produced on 29 May 1995. When Mr Orr returned from leave on 29 August 1995 the agreement had still not been resolved. He wrote to Dr Gray saying that UWA could not retreat from the 29 May document but should attempt to accommodate his concerns within it. As such it contends that it should have the right under the agreement to negotiate for a share in the intellectual property proceeds. It may not exercise this right, and if it does it is most unlikely that it would be seeking much more than a nominal recognition of its involvement in the partnership through some financial return. I cannot think that the University will wish to back down on this one and abandon its interests. However this is not something I can rule on and you may wish to contact Michael Barber to negotiate a compromise wording. " Both parties recognise that in normal circumstances the majority share of the proceeds will go to the staff of the Institutes. Professor Barber did not recall the words being referred to him for a final verdict and did not recall the details of his discussions in relation to the agreement. He suspected that he agreed with the proposed wording. Mr Orr wrote to Dr Gray again on 20 September 1995 enclosing a copy of what he hoped would be the final version of the agreement. He wrote that Professor House had raised with him the question of Dr Gray's status in the Department of Surgery once the agreement was signed and his position in relation to the Institutes was thus formalised by UWA. Whether the new arrangement with the Institutes will have any affect on such funding as you may receive through the Department is a secondary question. In so far as you are continuing to do work for Surgery which is not a function of the Institutes' responsibilities as specified under the agreement it seems to me that you must retain the right at least to bid for an allocation appropriate to your needs. On 27 September 1995 Mr Orr sent a memorandum to Dr Joyner at Professor Robson's suggestion enclosing a copy of the proposed Affiliation Agreement. He asked Dr Joyner to confirm that the proposed agreement did not raise any particular problems for RPH. Dr Joyner passed that letter on to Mr Douglas King, the Manager of the Foundation. He wrote to Mr Orr on 18 October 1995 referring to the memorandum of agreement of November 1992 between LCI and the Foundation. He said there were clearly points of conflict in the areas of administration of funds, ethics approval and the role of direction. The Medical Research Foundation has no objection to the Lions Cancer Institute entering into an Agreement with the University and relinquishing its Agreement with the Foundation. He understood that this was acceptable to Dr Gray. On 30 October 1995 UWA, LCI and CRI entered into the affiliation agreement. Its purpose was stated in clause 1, namely, to "facilitate the establishment of the Lions Cancer Institute and the Cancer Research Institute ("the Institutes") by defining their role and their relationships to the University of Western Australia as affiliated research institutes under Statute No 13". The Medical Director will normally be a professor or associate professor employed by the University and as such will be a member of an appropriate department in the Faculty of Medicine. As a University employee the Medical Director will also be responsible to the Vice-Chancellor through the Executive Dean of Medicine and Dentistry. The Medical Director of the Institutes will be responsible to the University for all employment related matters. Both parties recognise that in normal circumstances the majority share of the proceeds will go to the staff of the Institutes. He said that the salaries of Dr Stephen Jones and Ms Jillean Winter were "financial only to 31 December 1995". He asked for a calculation of their salaries to 26 January 1996 and said that CRI would provide RPH with the money to cover that additional amount. Dr Gray wrote to Professor Palmer, the Acting Executive Dean of the Faculty of Medicine and Dentistry, on 14 December 1995 advising that LCI and CRI were in the process of transferring their staff from other payrolls into UWA. Following discussions with Ms Ann Johnson in Human Resources they had decided to move people across to UWA with effect from 29 January 1996. All appointments were to be made on a one yearly basis only. He enclosed "Recommendation to Offer Appointment" forms for the staff members under transfer. Mr Karlson reported further approaches to potential investors. Deloittes had prepared a document for an Australian Taxation Office ruling on the pre-capital gains status of the technology. The Board met again on 1 November 1995. Capital raising dominated the minutes. Reference was made to reports from Dr Gray about the DOX-Spheres Project, the SIR-Therapy trial and the Hyperthermia Project. Of the latter he said it was progressing well and "a further employee who will be undertaking a Doctorate Degree has been employed through the Institute to work on one aspect of this project". Dr Gray said in cross-examination that he thought this was a reference to Simon Harrison. The Board met on 23 November 1995. Approaches to politicians to lobby for changes to rules governing syndication proposals to go to the Industry Research and Development Board, for the purpose of attracting tax concessions, were discussed. Dr Gray was asked to produce "a flow chart of future costs of patents of the three products". On 13 December 1995 the Board met again. Dr Gray tabled a submission to the Department of Commerce and Trade for a $50,000 grant under the Western Australian Innovation Support Scheme for Research and Development. The application related only to the Hyperthermia Project. At a meeting of the board of directors of Paragon Medical on 1 February 1996 Mr Karlson reported that Tolhurst had not been successful in raising venture capital and that other options were being canvassed. Dr Gray said he would get in touch with JB Were & Co to discuss its potential involvement in venture capital raising and in a public float. The next meeting took place on 14 February 1996. At that meeting Dr Gray "outlined the time and costs for the three patents currently covering the intellectual property of Paragon". The first substantial next cost would be in June when an amount of $50,000-$60,000 would be required to file the patent for the SIR Spheres. Nevertheless as at February 1996 Paragon Medical was meeting the patent costs. He accepted also that Dr Gray personally paid an amount of $8,500 to Deloittes for its submission to the Australian Taxation Office and had done so on behalf of the company. He said he was writing to advise of further developments in the research effort in LCI and CRI. The purpose of that company is to undertake research and development on medical products. The company has no assets and no fees or income is provided to any Directors. However, it is our intention to use the company to attempt raise [sic] investment capital which would be used for medical research, which hopefully will eventually provide a profit for the company. Hopefully this would provide substantial financial benefits to the Institute and therefore to the University. Should that happen I will inform the University through your office accordingly and make appropriate arrangements so that the University's interests are protected. The letter was sent to Professor Schwarz at about the time he left UWA. Professor Palmer was appointed Acting Executive Dean of the Faculty on 1 December 1995. It appears that Professor Palmer dealt with the letter. His initials appear at the bottom under the handwritten word "endorsed". It was Professor Palmer's practice to write "endorsed" on proposals that he supported in principle. This did not mean he had authority at the time to approve any proposal that a person become a director of a company. I accept however that he gave his support to what Dr Gray was undertaking according to his letter. The letter was referred to the Vice-Chancellor, Professor Gale, and by her office to UWA's solicitor, Linda Key. Linda Key caused a company search to be undertaken on 14 December 1995. The search disclosed Dr Gray's directorship of Paragon Medical with effect from 19 April 1995. Ms Key then sent a memorandum to Professor Gale on 21 December 1995. She noted that Professors Paterson and House had both approved Dr Gray's proposal. Ms Key pointed out that Dr Gray's letter was not so much a proposal as for information. If Paragon Medical were to make a profit out of medical research and CRI and UWA were to receive financial benefits as the bodies undertaking the research, then Dr Gray could not negotiate on their behalf with Paragon Medical. She distinguished Dr Gray's position from that of Professor Constable in the Lions Eye Institute. Professor Constable held no directorship in any commercial venture which might enter into research arrangements with UWA. Professor Gale wrote to Professor Palmer on 23 January 1996 and referred to the potential for a conflict of interest. She mentioned recently revised UWA policy guidelines requiring her permission before a staff member could become a director of a company. Professor Gray indicates his company is intended to be profitable in the future. It may thus be necessary to suggest to Professor Gray that his directorship of Paragon Medical Ltd may potentially be in conflict with his position at the University. Could I ask you to look into this and let me know if these two cases are the same. There is no evidence that he followed up on the request by Professor Gale. He did write to Dr Gray six days later on 29 January 1996 concerning Dr Gray's relocation into the proposed Centre for Applied Cancer Studies which is discussed later in these reasons. He made no mention of the Paragon Medical directorship. Professor Barber's recollection was that he had been aware of Dr Gray's directorship of Paragon Medical when Linda Key brought it to his attention in or about December 1995. He agreed that he was aware from that time that Dr Gray was a director of Paragon Medical and that the company would be working in conjunction with the Institute. He was aware that Paragon Medical was interested in the commercialisation of research. He said he would have discussed the matter with Professor Gale. They tended to discuss such things at the executive team meetings on Friday mornings. Professor Gale had no recollection of a response from Professor Palmer to her letter of 23 January 1996. She did not take any action by way of letter or other communication with Dr Gray. It was put to her in cross-examination that she did not follow up with him. I mean I certainly believe that I would hear when there was likely to be any conflict from him as he had promised me and Professor Palmer. She did not raise any objection or concern with Dr Gray. Professor Gale's answer in cross-examination indicated that she was prepared to accept the continuance of the directorship on the assurance that Dr Gray would raise potential conflict concerns with UWA. It is not a reflection upon Dr Gray to say that such an assurance from the person likely to be directly affected by the conflict might be thought less than reliable. This does not affect the characterisation of Professor Gale's conduct which, in my opinion, amounted either to a permission within the terms of the UWA policy or a waiver of its strict application. This technology has been developed as a result of a major research program undertaken over the past six years. Paragon Medical Ltd now requires to undertake a final research and development program in order to commercialise the technology and bring the products of the research to the market place. He said he would have been involved in its preparation but did not write it. He maintained that Paragon Medical had acquired intellectual property in the hyperthermia technology. He had earlier accepted that there had been no transfer of intellectual property to CRI. It didn't require a formal written assignment. The facilities were said to consist of "eleven dedicated research laboratories". Dr Gray was asked whether he was claiming that CRI had eleven dedicated research laboratories at the Foundation. He said it was just a statement that they had access to them. He accepted that some of the laboratories were being used by UWA. The application also stated that Dr Stephen Jones had been employed for six years as a research scientist on the hyperthermia project. Dr Gray accepted that that was an inaccurate statement because Dr Jones was doing other things as well. As was pointed out in cross-examination Dr Jones was employed by UWA for part of that six year period. Under the heading "COLLABORATORS" the document said that CRI had "... a full complement of research facilities that are at the disposal of Paragon Medical Ltd". It added that the facilities included "several laboratories that have been purpose built and are dedicated to this hyperthermia research project". Dr Gray said in cross-examination that the laboratories were in the animal house at RPH. There was a special facility in the RPH Research Centre. A Faraday Cage had been built there specifically for the project and for use on all sorts of animals. There was also a magnetism laboratory in the Physics Department at UWA to which CRI students had access and which Dr Stephen Jones used on occasions. On any view, the statements about laboratory facilities available to Paragon and CRI were exaggerated and gave an incorrect impression of the scale of the CRI operation at that time. The application to WAISS was successful as appears from a letter dated 10 April 1996 from the Western Australian Department of Trade and Commerce to Paragon Medical. The total amount of the grant was $50,000. An arrangement had been made to meet with a Mr Kiyoshi Arai that day. That meeting was to lead to the involvement of the Japanese technology investment company Nomura/JAFCO in raising capital for Paragon Medical. The conflict had created problems in attracting and retaining academic surgical staff at the hospital and had been detrimental to the development of a surgical academic presence there and therefore of surgical services. This request has been addressed by the Head of the University Department of Surgery, Professor Tony House, and related to quite unsatisfactory work conditions. There was other evidence going to the disputation between Dr Gray and Dr Hall. It is not necessary for present purposes to canvass that evidence. The dispute is significant primarily as the background to the formation of the CACS, which was designed to resolve it. Dr Joyner said the request was naturally of great concern to RPH as Associate Professor Hall was not only a valued member of the clinical and academic staff of the hospital but had also played a significant role in the changed management process which it was currently undergoing. The hospital was especially concerned about the likely ramifications of such a move by Professor Hall and his group, the implications of which they were led to believe would result in the withdrawal of surgical undergraduate teaching at the hospital by UWA's Department of Surgery because of lack of adequate supervision. He felt that while hard decisions might have to be made, they were essential if the continued viability of an academic surgical presence on the site was to be maintained. There was an urgent need for UWA to take appropriate action. A copy of the letter was sent to Professor Palmer, then the Acting Executive Dean of the Faculty of Medicine and Dentistry. The letter, which was exhibited to Professor Palmer's affidavit of 28 February 2007, was admitted as evidence of the fact of the communication and not as to the truth of its contents. Professor Palmer did not recall having received a copy of the letter but was familiar with the matters raised in it. Those accorded with his recollection of the issues that the Department of Surgery was confronting at the time and that these related in large part to personality conflicts within the department between Dr Gray and others. Professor Palmer attended a meeting at the Vice-Chancellery soon after his appointment as Acting Executive Dean of the Faculty. Professor Robson and Dr Gray were there along with other academic surgeons in the Department of Surgery. The meeting concerned Dr Gray's work within the department. About the time of that meeting, Professor Robson asked Professor Palmer to sort out the problems within the department. He recalled meeting with Dr Gray in late 1995 and/or early 1996. The matters they discussed were of an administrative nature and involved him exploring ways to solve the problems within the department. Professor Palmer recalled an agreement reached to settle the problem which involved the "relocation of Professor Gray". This was not a physical relocation, but rather an administrative adjustment so that Dr Gray was no longer required to report to the Head of the Department of Surgery, notwithstanding that he remained a part of the Faculty of Medicine and Dentistry. Between December 1995 and February 1995 Professor Palmer was involved in negotiations with Dr Gray, the Department of Surgery and RPH to establish Dr Gray in what became known as CACS. Professor Palmer wrote to Dr Gray about CACS proposal on 29 January 1996. He summarised their discussions to that date which he hoped would provide a basis for a settlement. The essential elements of his summary were as follows: The establishment of a centre within the Faculty of Medicine and Dentistry based upon the existing structure of the CRI. The centre would have the status of a department within the Faculty and its director would report to the Executive Dean. The budgetary allocation would be determined on an annual basis in accordance with the Faculty's budget model. The Department of Surgery would provide the equivalent of 0.7 of Dr Gray's salary for a period of up to five years. If he chose to convert his appointment to a part time one, salary savings could be used to support a research division in the Centre. RPH would continue to provide 0.3 of his salary providing he maintained his current level of clinical responsibilities at the hospital. RPH would continue to provide 0.75 of the salary of Ms K Brown, his secretary, for five years or until she vacated the post. The Faculty of Medicine and Dentistry would calculate the EFTSU load for students taught by Dr Gray in his capacity as a consultant surgeon at RPH as part of the surgery component of the MBBS course. The Faculty, the Department of Surgery and RPH agreed not to create a position of Professor of Surgery at RPH for a period of two years following Dr Gray's relocation to the proposed Centre. Professor Palmer was prepared to open negotiations with concerned parties to see if it were possible to provide $20,000 pa for five years towards such an appointment. A copy of the letter was sent to Professor Robson and to Dr Beresford, the Director of Clinical Services at RPH. The minutes of a meeting of the board of CRI held on 15 February 1996 record Dr Gray, as Medical Director, speaking at length about the Institute becoming a Centre at UWA to be known as CACS. A diagram of the relationship between LCI and CRI and UWA was attached to the minutes. It showed both LCI and CRI comprising the proposed Centre with a reporting line to the Executive Dean of the Faculty of Medicine and Dentistry. The UWA Department of Surgery was shown as a separate entity having its own reporting line to the Faculty. At this meeting, Mr Dane Gorn was appointed to chair the Board of Management of CRI and Mrs Mirmikidis who was the Acting Chair vacated in his favour. The Board of the Faculty of Medicine and Dentistry met on 20 February 1996. The minutes of the meeting recorded that members noted a proposed agreement for the establishment of a Centre to replace the Faculty's former affiliation agreement with LCI and CRI. Professor Palmer told the meeting that the proposal was strongly supported by the Department of Surgery and RPH and suggested that the Centre be called "The Centre for Applied Cancer Studies". Professor House reported that an agreement had been reached with CACS which would see post graduate students enrolled through it. As a Category B Centre, the proposed Centre would require an external partner and would only survive if successful in gaining funding through its research strength. This differentiated it from Category A Centres which were formed within departments. Members noted that CACS was required to report annually to the Executive Dean and was to be reviewed at the end of five years of operation. The Board resolved to recommend to the Vice-Chancellor the formation of a Category B Centre to be named "The Centre for Applied Cancer Studies" in partnership with LCI and CRI under and agreement which was attached. He was offered a scholarship by CRI on a weekly stipend of $261.80 from 2 October 1995 to 22 December 1995. He accepted the offer. During that time be began working on what was to become his PhD thesis. However he did not enrol in the PhD program at UWA until early in 1996. He recovered custody of the RSM from Paul Gouteff who had improved its measurement by incorporating a "lock in amplifier" which excluded unwanted noise. When he started working on his PhD research Dr Jones took him to meet Dr Gray. Dr Harrison submitted his PhD thesis proposal to UWA on 1 March 1996. He identified Dr Jones and Professor Street as his supervisors. His proposed project was entitled "Rotational Hysteresis Measurements and their Applications". The aims of the project, as set out in the research proposal which he submitted to UWA, included the following: To develop instrumentation capable of making magnetic rotational hysteresis measurements for materials in magnetic fields rotating in the frequency range of 0-20kHz. To produce magnetic microspheres suitable for targeted delivery to hepatic tumours. The technology to produce such microspheres and to deliver them to tumour sites in the liver is already well developed. To conduct in vivo tests to assess the effectiveness of induced hyperthermia treatment of liver cancer via rotational hysteresis heating of magnetic microspheres embedded in and around the tumours. These experiments will require animal ethics approvals. The estimated annual costs "borne by private sector financial support, averaged over three years" was $350,000. As such it may be necessary for the thesis arising from this project to contain information that may be considered to be confidential and/or subject to confidentiality agreements. He also had a desk in the HiPERM laboratory. He renamed the RSM as the RSCM standing for "Rotating Sampling Coil Magnetometer". He began work on improving the accuracy of hysteresis measurements using the RSCM. This improvement work continued intermittently as and when he received materials for the RSCM until he left for the United Kingdom in 2000. Dr Harrison was aware of the establishment of CACS in 1996. He knew nothing of the reasons for the change from the Department of Surgery to CACS. He and Drs Gray and Jones worked in the same premises on Level 2 of the Medical Research Foundation building. Payment of his Australian Postgraduate Award Fund was unaffected. Dr Harrison wrote a project status report on 9 May 1996. In it he referred to modelling which he undertook as a result of observing electromagnets within the Department of Physics generating fields in excess of what the core material was capable of generating. At the time Dr Jones was investigating the use of electromagnets with core material to generate rotating fields suitable for human application. Dr Harrison hypothesised that fields could be generated suitable for use in a clinical human hyperthermia treatment without using core material. He said that he told Dr Jones at some point prior to May 1996 that a human size hyperthermia apparatus could be built with only coils and no core material. He said that Dr Jones encouraged him to undertake some computer modelling of his hypothesis. He undertook computer modelling of the distribution of magnetic fields generated by a coil configuration comprising two interlinked coil magnets orientated at right angles to each other and excited by alternating currents with a phase shift of 90° between them. This had the effect of generating a rotating magnetic field in the centre of the coils within the sample or treatment space. Dr Harrison presented these modelling results at a CACS seminar. Dr Harrison also said in his evidence-in-chief that on 6 August 1996 Dr Jones emailed him seeking assistance in sourcing core material for the "BIG ONE" which he understood to refer to a human scale apparatus for hyperthermia treatment. Dr Jones told him he was going to do a training course interstate to learn how to use the modelling program. Subsequently, he saw Dr Jones working on an Indy computer for the design work. Dr Jones told him that he was working on a design for a human scale hyperthermia device. It would be a four pole device with core material. Dr Harrison frequently saw Dr Jones' designs for a human scale device. They featured exclusively cored magnets. Dr Harrison did not maintain in cross-examination that he had come up with the idea of using air-cored coils as a new concept. He was merely representing in his evidence-in-chief the conversation he had had with Dr Jones in May 1996. The use of air-cored coils had been referred to as an option some 19 years earlier when Dr Gray had sent to Dr Nichols, for transmission to Davies & Collison, answers to questions they had raised about the Thermo-Spheres technology. Throughout 1996 Dr Harrison worked on his design for a device called a HiFroM which was an acronym for High Frequency Rotational Magnetometer to measure rotational hysteresis in soft materials at high frequencies. The construction of the device was completed in about mid 1996. When it had been constructed he and Dr Jones moved the HiFroM to Dr Jones' laboratory at CACS. S11 was the first material he tested in the HiFroM. He also tested other ferromagnetic materials available at CACS. He wrote computer programs to analyse the data he obtained from the RSCM and from the HiFroM and to model the hysteresis properties of various materials. He found that the HiFroM obtained measurements of rotational hysteresis in a variety of materials including S11 within the range he had expected. He concluded that it would, with minor adjustments, be capable of accurately measuring high frequency rotational hysteresis in soft magnetic materials. At the time he selected his research topic for his PhD, Dr Harrison was aware of the involvement of a commercial entity in the development of a hysteresis hyperthermia device or model. He could not be sure he knew it was Paragon Medical at that stage. The choice of his topic for his PhD thesis was a logical extension of his Honours program. He knew the work he was doing was being done in conjunction with work funded by a commercial entity. He accepted in cross-examination that the matter of confidentiality was stressed to him by Drs Gray and Jones with a view to protecting the interests of the commercial funder of their work. Dr Harrison's interaction with Dr Gray in relation to the commercial entity, which was Paragon Medical, and the requests that he sign a confidentiality agreement and the consequence of those requests are dealt with later in these reasons. He retired in 1992 and decided to become involved in community organisations. He was chairman of the Western Australia Youth Jazz Orchestra for about three years in the late 1990s. In 1995 Mr Gorn and his wife attended a CRI fund raising function. After the function he was contacted by a friend of his wife who had been there and who asked if he would be interested in becoming Chairperson of the CRI Board of Management. He agreed to meet the board. As a result of that meeting he understood CRI to be a not for profit organisation set up to raise funds for research into the treatment of cancer and in particular to support Dr Gray's research in developing a procedure for injecting radioactive spheres for the treatment of liver cancer. He was also told that CRI owned some aspects of the technology which Dr Gray was developing. Dr Gray whom he also met with the other members of the board, said he was in the process of conducting clinical trials and further refining the technology at that time. Mr Gorn was elected to the Board of Management on 15 February 1996 and at the same meeting was elected as Chairperson. He succeeded Mrs Mirmikidis who relinquished the office. Mr Gorn served as Chairperson of CRI until October 2000 when he resigned as Chairperson. He said he resigned at the request of Dr Gray who had proposed without notice at a meeting of the board that CRI should elect new directors and that he wanted to be the new chairperson. Mr Gorn continued to serve on the Board of Management of CRI until September 2003 when he resigned from that position also. While Chairperson of CRI, Mr Gorn participated in meetings of the Advisory Board of CACS. Professor Barber and Professor Landau represented UWA on that Advisory Board. Mr Colin Beauchamp represented LCI. In April 1997, Mr Gorn also became a director of Sirtex. He remained a director of that company until 16 December 1999. He resigned because it was then proposed that the company should float publicly and move its offices to Sydney. He considered it in the best interests of the company to have Sydney based directors. Mr Gorn's involvement in particular aspects of the history leading to these proceedings is dealt with in the relevant part of the reasons. The document which they signed was entitled "AGREEMENT RELATING TO THE RELOCATION OF PROFESSOR BRUCE GRAY IN THE CENTRE FOR APPLIED CANCER STUDIES. " In clause 1 CACS was described as "a partnership between the University of Western Australia and the Lions Cancer Institute and the Cancer Research Institute". It was to be accorded the status of a department within the Faculty with its director reporting annually to the Executive Dean. Other elements of the agreement reflected Professor Palmer's letter to Dr Gray following their discussions which led to the settlement of which the establishment of CACS was part. In particular, the Department of Surgery was to provide the equivalent of 0.7 of Dr Gray's salary for up to five years on the understanding that if he converted his appointment to a part time one, salary savings could be used to support a research position in CACS. (clause 2) RPH would continue to provide 0.3 of his salary on the basis that he maintained his current level of clinical responsibilities at the hospital (clause 3). There was a commitment from RPH to continue to provide 0.75 of the salary of Ms K Brown until her secretarial post was vacated or for five years, whichever was earlier. The balance would be provided by the Department of Surgery (clause 4). Clause 7 provided that the sum of $20,000 would be provided annually for a period of five years by RPH on the understanding that the funds were used as a contribution to the cost of a research appointment in CACS. The agreement became affective from 1 March 1996. . The Director will normally be a Professor or Associate Professor employed by the University. As a University employee the Director will also be responsible to the Vice-Chancellor through the Executive Dean of Medicine and Dentistry and to the Boards of the Lions Cancer Institute and the Cancer Research Institute. Both parties recognise that in normal circumstances the majority share of the proceeds will go to the staff of the Centre. Its legal character was not clearly stated. It had not been carefully thought through by those involved in the formation of the agreement. There was a difficulty in that the agreement purported to be made between UWA, the two institutes and CACS. If CACS were merely an emanation of UWA's own activities, it is hard to see how it could be a party to an agreement with UWA. The difficulty was compounded by the application of terms in the Affiliation Agreement to the relationship between UWA and CACS. Clause 4.4.2 required CACS, so long as it remained in RPH building, to "be responsible in its capacity as occupier" for matters connected with health and safety. UWA was to be responsible "in its capacity as employer". Assuming CACS were merely an emanation of UWA, it is difficult to see how this division of obligations would operate. Clause 4.7 contemplated UWA negotiating with CACS for a share of the proceeds from intellectual property developed by staff and students at CACS. The terms of the CACS Agreement are really only comprehensible if the Centre comprised either UWA and the Institutes or the Institutes themselves. In my opinion the former characterisation is to be preferred on the basis that Dr Gray, as Director of CACS, was being treated as an employee of UWA and paid 0.7 of his salary by UWA. However the obligation of UWA to act as employer and paymaster for such staff as CACS recruited as a consequence of grants processed through UWA (cl 3.1.1) did not make UWA the employer of such staff if they were in truth the employees of LCI or CRI. On 29 May 1996 Dr Gray wrote to Associate Professor B Stokes, the Director of Research at the Foundation. He informed Professor Stokes that UWA had formed a specialised "Centre for Applied Cancer Studies". He described it as "a new development within the University" which would allow for specialised cancer research and treatments to be conducted through his unit at RPH. Not much would change other than that the "vast bulk of research activity that was in the old University Department of Surgery at Royal Perth Hospital will now be transferred to the new Centre". Professors Barber and Landau were members. According to Dr Gray the issue of intellectual property and higher degree students was discussed at meetings of that board. Professor Barber said that the CACS Advisory board did not talk about the scientific work being done within CACS or the commercialisation activities of CRI or Paragon Medical. The substance of the research was generally not discussed. The focus of the meeting which he attended was on the management of the relationship between "the various players" rather than any deep consideration of what was happening with the research programs. I accept his evidence in that respect. The application and the provisional specification were exactly the same as had been lodged by him on 12 September 1988. It attached the two appendices referred to earlier in these reasons. As I have already found the specification did not cover the use of rotating magnetic fields. Dr Gray's evidence, which was admitted as relevant to his state of mind, was that his group had taken several years of research to that point and it had yielded nothing that was patentable. They had been trying to demonstrate that they could heat tumours in animals. That data could not be applied to humans. He resubmitted the provisional application of 1998 "in order to get a priority date". This strategy, as he saw it, would allow a further year in which to concentrate on further experiments to come up with information that could form the basis of a full patent application for the use of targeted hysteresis hyperthermia in humans. He said that the concept as described in the Provisional Application was his own and was "... entirely hypothetical information generated before I was employed by University of Western Australia". A filing receipt issued on 14 May 1996 it allocated a number PN9782 to this application. It issued, in the form of a letter, to Dr Gray at his home address in Riley Road, Claremont. A memorandum to the directors attached correspondence from the Department of Trade and Commerce in connection with the WAISS grant. It also referred to correspondence to Mr Gorn on 2 May about commission arrangements if he were able to introduce new equity investors to the company. A similar document relating to the meeting of 29 May 1996 attached a letter from the Department of Trade and Commerce which enclosed the initial payment of $20,000 from the WAISS grant. A letter dated 6 May 1996 from Bain & Co also attached advice from Ausindustry indicating that it would be many months before the syndication application lodged in November 1995 could be considered. The sums being raised did not appear to him to be sufficient to support the research. He made two or three contacts in the Perth business community in an attempt to secure investment capital. He prepared a capital raising presentation document for distribution to potential investors. He based it on other documents prepared by Dr Gray and perhaps other people such as Mr Karlson. He edited the information and took out some of the detail. Mr Gorn's paper began by stating that "the research" which involved a team of twelve doctors and researchers, now operates as the "Centre for Applied Cancer Studies". It stated that the director of CACS reported to the Vice-Chancellor of UWA through the Executive Dean of the Faculty of Medicine and Dentistry. CRI and LCI were administered by duly constituted boards. Paragon is the vehicle for commercial exploitation of the anti cancer products. Each was said to be "... the subject of an international patent". In cross-examination Mr Gorn said that he used the document in discussion with a number of people in Perth in 1996 before the ultimate investor Nomura/JAFCO appeared on the scene. He accepted that his fund raising endeavours were, in effect, on behalf of Paragon Medical. Mr Gorn relied upon information provided by Professor Gray about the research program being carried out in conjunction with RPH and UWA. He had no understanding about Dr Gray's work prior to 1996 when he became Chairperson of CRI. He understood that the doctors and researchers at CACS were somehow associated with UWA although the whole thing was "pretty blurred" as far as he was concerned. He was confident that the association with UWA was an important element in selling the idea. He acknowledged that the small amount of money that CRI had been able to raise at that stage was not sufficient to support the team of twelve doctors and researchers involved in the project. I accept his evidence in this respect. Mr Gorn was also cross-examined on his state of understanding in 1996 about ownership of the inventions. He thought that Dr Gray was the inventor of each of the SIR-Spheres, the DOX-Spheres and the Targeted Hyperthermia and that unless he assigned the rights to those inventions he would in fact own the intellectual property as inventor. He was not aware in 1996 about the interaction of the relationship between an inventor and his or her employer and the inventor's ability to claim intellectual property. In referring, in the paper, to interests held by UWA he was referring to the possibility that UWA might have an interest in the SIR-Spheres and the Targeted Hyperthermia. CIR held the DOX-Spheres patent. He understood that Dr Gray in some way held the major interest in the SIR-Spheres and Targeted Hyperthermia and that in some way UWA and research staff held an interest in those technologies. He acknowledged that potential investors would be interested in who held the relevant patents and what other interests there might be which would have a financial stake in the products. Mr Gorn also understood at the time that Dr Gray was an employee of the University and a Professor at the University and that CRI was not being called upon to pay his salary. At no time in his chairmanship did he think that CRI was funding Dr Gray's salary. I accept his evidence about his state of mind at the time albeit his recollection was necessarily affected by the passage of the years. He was not a person to inquire too closely into the precise details of ownership but rather relied upon the information he had been given and had gleaned from the documents which he used in preparing his paper. Dr Panaccio had a PhD in Medicine from Melbourne University, conferred in 1988. He was a researcher with the Victorian Institute of Animal Science for eight years. He obtained a Masters Degree in Business Administration from the Royal Melbourne Institute of Technology in 1991. In 1994 he was appointed as Head of the Department of Molecular Biology at the Victorian Institute of Animal Science. In May 1996 Dr Panaccio became an Investment Manager with Nomura/JAFCO Investments (Asia) Ltd which was a venture capital investment company based in Singapore. Dr Panaccio was based in Melbourne. Dr Panaccio described Nomura/JAFCO as a joint venture between two Japanese companies, Nomura (an investment bank) and JAFCO (a funds management company). Nomura was formed to undertake venture capital investment in emerging technology companies. Capital was raised from Japanese institutional investment houses. Dr Panaccio's role at Nomura/JAFCO was to identify potential investment opportunities in Australia and to prepare investment proposals for the Investment Committee of Nomura/JAFCO which was based in Singapore. The process followed by Dr Panaccio with respect to proposed investments required him to submit a proposal to the Investment Committee. An evaluation report would be prepared by a member of the Evaluation Department of Nomura/JAFCO and would be sent to the Investment Committee at the same time. Dr Panaccio would have no role in preparing any evaluation report or selecting the personnel allocated to the evaluation process. Typically an investment proposal would take a number of months to prepare from first investigation to submission to the Investment Committee. Dr Panaccio was reviewing a number of business plans in mid 1996 when he came across the Tolhurst Information Memorandum. When he first reviewed it he found the data insufficient to explain why the products would be effective. He also regarded the proposal as fundamentally flawed because the shareholding of investors would be diluted through the issue of further shares to Dr Gray over time regardless of whether real value was being produced. He discussed the memorandum with Mr Richards and advised him that Nomura/JAFCO had no interest in progressing the opportunity further. In late June 1996 Dr Panaccio was telephoned by the Head of Bio-Science Investments, a department of JAFCO. He had received a tip from a friend of his, Mr Ari, that a potential investment opportunity existed in Perth. Mr Ari's wife had travelled to Perth to receive a novel treatment for liver cancer not available elsewhere. Dr Otaki asked Dr Panaccio to investigate. Dr Panaccio was able to work out that the investment opportunity referred to by Dr Otaki was that contained in the Tolhurst Information Memorandum. In July 1996 Dr Panaccio went to Perth and met with a Mr Howard Lange and with Dr Gray at the CRI premises. He was told that Dr Gray was a professor at UWA and a clinician at RPH. Dr Gray told him about the laboratory-based research activities which he conducted and that he was the Medical Director of CRI. Dr Panaccio understood that CRI was affiliated with UWA but did not know the exact relationship. Dr Gray explained that CRI was funding the relevant research and that it was in effect part of UWA. Dr Panaccio regarded CRI as analogous to the Walter and Eliza Hall Institute in Melbourne where staff are affiliated with Melbourne University in order to get PhD students but the Institute retains the benefit of the research done. The science of the technology was explained. It had not been obvious to Dr Panaccio from his initial reading of the Tolhurst Memorandum. From an investment perspective the attraction lay in the concept of the targeted delivery of cancer treatment by way of blood supply. On 14 July 1996 Dr Gray sent Dr Panaccio documents relating to the technology, the patents for the three primary products and Paragon Medical's program for their commercialisation. Dr Panaccio responded on 2 August 1996 saying that he had read and digested the information which he had been sent and wanted to spend a day at CRI to discuss Paragon Medical's technology and possible investment structures and scenarios. He arranged to meet with Dr Gray at CRI's premises in Perth on 2 September 1996. At that time Paragon Medical had little money. It needed additional capital to continue to function. Indeed as Mr Karlson put it, by the time Nomura/JAFCO approached Dr Gray Paragon Medical was desperate for capital and had not been able to attract any other interest. Mr Karlson and Peter Jones each contributed $10,000 to Paragon Medical prior to June 1996. Mr Karlson had been told by Dr Gray that the money was needed to renew or extend patents on the products. On 28 June 2006 Dr Gray wrote to Mr Karlson on the letterhead of Pine Ridge Holdings Pty Ltd advising that he had deposited $78,584 in the Paragon Medical account in addition to having met expenses of $21,416 on behalf of the company. The total sum of $100,000 was to be used "to undertake contract research and development on behalf of Pine Ridge Holdings Pty Ltd". On 26 August 1996 the board met again. The minutes recorded the contributions made by the directors. A sum of $41,785.70 owing to Davies Collison was paid to cover costs relating to the DOX-Spheres patent. A sum of $40,000 was deposited with CRI comprising $20,000 from Paragon Medical and $20,000 being the first increment from WAISS. The money it was said was used to employ Dr Stephen Jones. At the time Dr Jones was working in CACS. He had accepted an offer from Professor Robson on 25 March 1996 to become a Research Fellow (Level B) in LCI at the Department of Surgery in RPH. He ceased working for CRI on 1 February 1997. It was put to Dr Gray by counsel for Sirtex that there was no suggestion in the minutes that he adverted to any issues about the ownership of the intellectual property in which the other two directors thought they were investing. Dr Gray agreed. The research would be undertaken under the umbrella of the Centre for Applied Cancer Studies and with the Cancer Research Institute being the conduit for that research. He identified two occasions from his records on which they spoke about the role of UWA in undertaking contract research. The first was in July 1996 and there were at least four over the following four or five months. The second was in October 1996. Mr Lennon had made records of conversations or meetings with Dr Gray on 26 July 1996, October 1996 and 14 January 1997. Dr Chen had given evidence of a meeting between Mr Lennon and Dr Gray shortly prior to 14 November 1994 which I accept occurred. This may have been a reference to the October meeting . Mr Lennon made notes of the telephone conversation with Dr Gray on 26 July 1996. According to his notes Dr Gray told him that Paragon Medical wished to commercialise the intellectual property of CACS. It was proposed that UWA levy a fee on the project. People employed by UWA working at CACS would have to relinquish their intellectual property. UWA would be reimbursed the cost of wages and the use of UWA's systems. Students working on commercial projects would have to assign their rights to CRI. The substance of the discussion was also set out in a letter which Dr Gray wrote on the same day to Professor Barber. It appears that he met Professor Barber in the same week as the letter referred to such a meeting. CRI controls and has an interest in the ownership of the intellectual property. It would use funds provided by Paragon Medical for further research and development of that project. Paragon Medical to gain access to the intellectual property and attempt to commercialise it. CRI to undertake further research and development. Paragon Medical as funder would gain exclusive access or ownership to all new intellectual property developed during contract research. CRI to derive income from Paragon Medical either by cost loadings or participation in returns from commercialisation. Research will be undertaken within the existing facilities of CRI and CACS. CRI will employ all research staff through CACS as members of UWA. The role of UWA to be defined. It could levy a charge on the project of contract research for its contribution. Funds raised by CRI would be used within CACS for further research activity. UWA would not have rights to the intellectual property. If the previous proposition were acceptable then Mr Peter Johnson could define the University's return from its project. UWA staff employed through CACS using funds provided by Paragon Medical or CRI would not have a claim through UWA on intellectual property generated by the research. CRI had existing agreement whereby staff undertaking research would participate in any commercial returns. Staff employed by UWA funding would have their intellectual property rights defined by the new University policy. Any departure to be the subject of a further written agreement. Students on projects funded by CRI would relinquish all rights to intellectual property generated by that research. CRI and UWA would guarantee that students would have full rights to production of a thesis or scientific reports as required for completion of studentships. Students undertaking research on scholarship funds provided by CRI would have separate arms length arrangements not impacting on the tax free status of their scholarship. Dr Gray was cross-examined on the letter. He was asked what intellectual property he had in mind to exploit. He said it was "any intellectual property associated with the targeted microsphere technology". CRI controlled the release matrix technology known as DOX-Spheres. It had ownership of SIRT-2, particulate material and an interest and ownership in some of the knowledge developed through work done on the hyperthermia project. He denied that he was saying that in July 1996 CRI controlled SIRT-1. It controlled SIRT-2 and DOX-Spheres and the thermo technology in part. He appeared to equate ownership with control. The ultimate expression of CRI's control was its vesting of the rights in Paragon Medical. Dr Gray's testimony on these questions exhibited a degree of conceptual confusion and alternatively a stretching of concepts to accommodate his interests. It was inconsistent with the terms of a discussion paper which he prepared and which was tabled at a meeting of CRI's board of management on 23 January 1997 reference to which appears below. Dr Gray's attention was also drawn to contrasts between the letter and what appeared in the Tolhurst Information Memorandum of September 1995. The Tolhurst Information Memorandum stated that Paragon Medical had reached an agreement with him to acquire "the exclusive rights to develop the products and their associated technology". He said that the "agreement" referred to was made with him "as agent for CRI". He was Medical Director of CRI. They had had a period of poor housekeeping. I was running the project at least in part on behalf of the Cancer Research Institute. I was at the forefront of undertaking these negotiations for the Institute. I was a board member. He said he had made such disclosure "at a later stage and in connection with Mr Lennon". Professor Barber recalled having had a general discussion with Dr Gray about arrangements for contract research with CACS at about that time. However he could not recall the details of their conversation. At the time of the letter he did not know anything about Paragon Medical. The letter came only a few months after the establishment of CACS. He saw nothing unusual about the proposal it contained. It accorded with the purpose and usual operation of Category B Centres such as CACS. His concern in such cases was to ensure no conflict of interest arose in relation to student intellectual property because of funding arrangements. Professor Barber noted that the letter contained no details of the intellectual property to which it referred. He had no discussion with Dr Gray which provided that detail. Based upon his general knowledge of Dr Gray's work and the nature of CACS he assumed that the intellectual property probably had something to do with cancer treatment. He did not consider it necessary to make any further inquiries. Professor Barber did not regard the statement that CRI controlled the intellectual property as unusual. It was consistent with the position in other Category B Centres where parties other than UWA owned the intellectual property used in CACS. He accepted the statement at face value. After receiving the letter, Professor Barber had a company search carried out in relation to Paragon Medical. The search, carried out on 8 August 1996, showed that Dr Gray was one of its directors. Professor Barber became concerned about the potential for a conflict of interest which could affect students detrimentally. This had happened previously in unrelated circumstances. Professor Barber raised his concerns with Mr Lennon over the next few months. They also had some discussion about the structures necessary to give effect to the proposed funding and research arrangements between CACS, CRI and Paragon Medical. Dr Panaccio asked Dr Gray what other parties were involved in the development of the relevant intellectual property or could potentially claim ownership in some or all of it. He asked whether UWA or RPH owned any of the underlying technology or patient data. Dr Gray told him that CRI had funded all the research and the underlying ownership of the intellectual property had been transferred to CRI sometime ago. Clinical trials for patients had taken place at the Prince of Wales Hospital in Hong Kong, but neither the hospital nor the Chinese University of Hong Kong Medical School, with which it was affiliated, claimed any ownership over the relevant intellectual property. Dr Gray also told Dr Panaccio that Monash University had assisted in developing the ceramic microspheres but did not own anything because it was only contract research. Dr Panaccio asked Dr Gray to inform each of the parties of the proposed investment and to obtain written confirmation from them that they would not claim any interest in the technologies. The purpose of his request was to obtain security from Nomura/JAFCO before implementing the proposal. About this time, Ms Goh of the Evaluation Department of Nomura/JAFCO visited CRI and Dr Gray with a view to preparing an evaluation report in relation to the proposed investment by Nomura/JAFCO. Dr Gray wrote to Dr Panaccio on 16 September 1996. He reported that he had met with ARI to discuss securing approval for the SIR-Spheres from the TGA and that meetings with the TGA would follow. He was also finalising an agreement between Paragon Medical and ARI about the production marketing and distribution of the SIR-Spheres. He had had discussions about regulatory requirements to allow the use of the product in Asia. He was proposing to sell it initially in Australia and New Zealand under a TGA Special Access Scheme, get TGA approval and then apply to regulatory authorities in Asia. He anticipated that approval by the Federal Drugs Administration in the United States and by European regulators would be facilitated by TGA approval. The Paragon Medical board met on 25 September 1996. Dr Gray reported on his visit to ARI. Under their proposed arrangement ARI would neutron activate, package, market and distribute Yttrium microspheres on behalf of the company. The majority of the profit on sales would come back to Paragon Medical. The minutes also recorded that Dr Panaccio had recommended to Nomura/JAFCO that it fund Paragon Medical. A business consultant would come from Nomura/JAFCO in the next two weeks. This was a reference to Ms Goh. On 14 October 1996 Dr Panaccio and Dr Gray met with ANSTO and TGA representatives in Canberra. Dr Panaccio remembered being told by Professor Li at about this time, that neither the Prince of Wales Hospital nor the Chinese University of Hong Kong claimed any the ownership in the intellectual property of the technologies. On 15 October 1996 Dr Panaccio met with Professor Mary Gani at Monash University. She told him that Monash University did not make any claim to the intellectual property for the ceramic microspheres. At some time prior to 21 October 1996, according to Dr Panaccio, he had a conversation with Dr Gray about seeking confirmation that the relevant parties had no interest in the intellectual property. Dr Gray later had told him he had obtained verbal assurance but nothing in writing. On 21 October 1996 Ms Goh met with Dr Gray, Mr Karlson, Mr Peter Jones, Dane Gorn the chairman of CRI, Dr Stephen Jones and Jillean Winter of CRI. The meeting lasted all day with presentations about hyperthermia and ceramic microspheres. On 26 November 1996 Professor Peter Darvall, Deputy Vice-Chancellor at Monash University, sent a letter to Dr Gray at Paragon Medical about the project involving plasma processing of microspheres. This was a reference to the ill-fated hollow Yttrium microspheres project. He confirmed that Monash University recognised that the intellectual property associated with microspheres had been brought to the project by Dr Gray. The University would not in future "have any claim on the technology for using Yttrium microspheres in cancer treatment". Dr Panaccio sent a copy of the letter to Nomura/JAFCO's legal department. In November 1996 there was an exchange between Mr Karlson and Dr Gray in relation to the shareholding of Paragon Medical. Dr Gray had set out a proposed shareholding based inter alia on "pre-investment" and "post investment" contributions by himself, CRI, Hong Kong University, Mr Karlson, Mr Peter Jones and Pine Ridge Holdings Pty Ltd. Under the proposal Mr Karlson and Mr Jones would get 15,000 shares each, valued at $30,000, in recognition of their respective contributions of $10,000. Mr Karlson, in a handwritten response, asked who Pine Ridge Holdings was. He also asked "where is Steve Jones? " He did not agree that the $30,000 worth of shares allocated to him and Peter Jones was enough given the directors' hours they had contributed in addition to their cash inputs. On 10 December 1996 Dr Panaccio proposed to Dr Gray an investment structure of a kind usually referred to as a "ratchet". He wanted a structure which would remove the need to value the company at the time of the Nomura/JAFCO's investment. He refined the proposal in a further document dated 12 December 1996. Nomura/JAFCO's practice was not to issue final term sheets to other parties until it was confident that they would be accepted. Dr Panaccio sent Dr Gray a document entitled "Draft Term Sheet" on 24 December 1996. It was further refined on 9 January 1997. He then submitted a report to the Investment Committee of Nomura/JAFCO. In the meantime Dr Gray had told him that if his draft terms were offered to Paragon Medical they would be accepted. The precise date of the meeting was not in evidence. Mr Lennon made notes of the meeting. Dr Gray evidently referred to "three pieces of likely intellectual property" of which he said: One was produced using money provided by Monash University to CRI and was owned by Paragon Medical. One was a product patented by CRI and the relevant person was employed by CRI at the time (around 1993) and not by UWA. One was generated outside UWA by Dr Stephen Jones who had since become an employee of UWA (from March 1996). The funding company wanted Dr Gray to be 100% available to provide his services to it. Dr Gray proposed that he be available on a 30%/40% basis to UWA for the purpose of supervising students and to provide services to RPH. He told Mr Lennon that the concept was alright with the Dean of the Faculty, Professor Landau. Mr Lennon's notes indicated that 80% of CACS's funding came from sources outside UWA. The building in which the research was to be carried out did not belong to UWA. Dr Gray was to get back to Mr Lennon with an actual structure and to clarify the real role of CRI. He also noted that CRI might employ people and contract for the use of UWA facilities. Mr Lennon's understanding from his discussion with Dr Gray at this time was that the only connection between UWA and the research underpinning the three likely pieces of intellectual property was "in the context of the establishment of the CACS Centre about six months earlier". On that basis he saw nothing in which the University could or should be interested. On 1 November 1996 Mr Lennon sent an email to Professor Barber about his meeting with Dr Gray. He said they had briefly discussed an agreement relating to students but mainly the nature of the arrangement between the various parties. His main difficulty is that CRI will be provided funds for a project to be performed which he wants UWA to do through the Centre. That would be done by contract from CRI to UWA. His problem is that he wants CRI to retain some of the money that passes through its hands even though CRI is not currently intending to do the work. They had spoken about the nature of cost recovery and budgets. Dr Gray had expressed some uncertainty about the role to be played by RPH which owns the building in which CACS was situated. They had also discussed the possibility of a conflict of interest. These are the three bodies which are intended to be linked by contract. I do not expect that it will be necessary for UWA to have a direct link with Paragon (as we discussed). He indicated that he was aware of the potential for conflict. I accept Mr Lennon's account of his meeting in October 1996 with Dr Gray as reflected in his notes and in his email to Professor Barber. That letter was sent to her home address which had not changed since she resigned her employment with RPH in late 1994. Dr Gray said that he had been advised by Davies Collison Cave that both he and she had to sign a power of attorney to lodge the DOX-Spheres patent application in the United States. He asked her to sign a document which was enclosed and return it as soon as possible. He added that a small number of patients had been treated using the doxorubicin microspheres, but they were not nearly as effective as they seemed to be in animals. Dr Chen responded on 9 October 1996, again seeking a written agreement from CRI to guarantee that she would always be one of the beneficiaries. She said she would be pleased to complete the form once the agreement had been reached. Dr Gray responded on 25 October 1996 with a copy to Mr Dane Gorn, then Chairman of CRI. He said that as discussed initially CRI had a policy of providing a financial return to the generators of intellectual property. So far as the doxorubicin microspheres were concerned, CRI had to undertake a much wider clinical trial before any consideration would be given to marketing them. He described this as a "hugely expensive exercise" and said the decision would not be made until some time in the future. In the meantime CRI was simply protecting the property by covering it with the appropriate patents. She thanked him for his reply and attached a signed copy of the assignment of the US patent rights in respect of the controlled release invention. The assignment was forwarded by Davies Collison Cave to US patent attorneys on 18 November 1996. There was a little follow up correspondence requesting a further signature from Dr Chen to clarify her citizenship. She signed a further document called a Combined Declaration and Power of Attorney on 12 December 1996. On 23 December 1996 he sent her another letter which attached an assignment of any interest in the Canadian patent to CRI for the consideration of $1. She signed that and returned it to Dr Gray. Dr Chen said that other than seeing Dr Gray on social occasions when their children attended the same kindergarten she had limited, if any, contact with him prior to about 2003. It was an "indicative principal term sheet". It was not intended to be legally binding. It was subject to "satisfactory legal and financial due diligence". As summarised by Dr Panaccio in his affidavit the investment proposal in the term sheet included: A staggered transfer of $3,000,000 by Nomura/JAFCO upon the achievement by Paragon Medical of certain milestones over two years in consideration of three share tranches at each instalment. The execution of a subscription and shareholding agreement. An employee option scheme. Conditions precedent including satisfactory due diligence, satisfactory transfer of all intellectual property and documented representations and warranties. Dr Gray would undertake to remain an employee and director of the company and maintain a minimum shareholding, agree to non-competitive clauses and that the company activities would be his main business focus. These undertakings would apply for three years after the initial public offering. It was proposed in the term sheet that the current shareholders of Paragon Medical and the Fund would use their best endeavours to achieve a listing of the company within five years on the stock market (clause 16). Satisfactory transfer of all intellectual property to Paragon Medical. . Satisfactory documentation of the proposed investment including representations and warranties. The term sheet reflected Dr Panaccio's key objective which was to secure the technology and the ongoing involvement of those who had contributed to its development. He had determined that Dr Gray and certain CRI staff such as Dr Stephen Jones were contributors to the technology and should remain involved. Dr Jones had been introduced to him by Dr Gray as an employee of CRI. Dr Panaccio had been told by Dr Gray that Dr Gray was funding all or part of Dr Jones' salary. He said that prior to the commencement of the present proceedings he was not aware that Dr Jones was employed by UWA. Dr Gray counter-signed the terms sheet on 14 January 1997. Mr Lennon made notes of their meeting and on the following day sent a memorandum to Professor Barber. In the memorandum he said that Dr Gray had come to see him about intellectual property developed "in part in the Centre for Applied Cancer Studies". The intellectual property was said to have been developed by Dr Steve Jones who had been working for some years within CRI and whose salary and work had been funded during that time. He had spent the last year employed by CACS. It was intended that he would return to CRI and resume employment there. Mr Lennon told Professor Barber in his memorandum that there was a possibility that the intellectual property was able to be commercialised. Dr Gray and CRI wanted to clarify the intellectual property ownership situation as well as any claims to a share of the proceeds of the commercialisation. The need for this clarification was also driven by a due diligence exercise being done by "a party considering an investment in the CRI". Mr Lennon stated the relevant facts as related by Professor Gray which included: Dr Jones worked on the project developing the intellectual property for several years before becoming an employee of CACS. When employed by CACS all the funds equipment resources and space for the work was paid for by CRI. UWA's only involvement in his work was to process funds received from CRI and paid them as wages in order to employ Jones. There appeared to be some imminent prospect of commercialising the intellectual property. CRI was negotiating with a company to secure further investment in the device and possibly a licence agreement as well. The invention was a mechanical invention and the first prototype had not been built. Dr Gray estimated it would cost approximately $500,000 to build that prototype. There would be some non-financial spin-off for UWA. It was anticipated by Dr Gray that the project would continue to attract more students. He also referred to Mr Orr's letter to Dr Gray written on 29 August 1995. Mr Lennon made recommendations in the following terms: As the bulk of the research leading to the current invention had been done at CRI, the University should agree that any claims to intellectual property in the invention be assigned to the CRI. It was much easier to commercialise intellectual property with only one owner. The matter of proceeds (money) was different. With regard to proceeds the level of involvement by UWA in the invention had been extremely low. There had been no financial contribution and only a limited administrative contribution. Conversely this would be one of the few opportunities (long term) to extract value from CACS. He suggested UWA should either accept a nominal share of proceeds (if any) or choose to express goodwill by accepting nothing. The assignment agreement (if desired) would extremely short and simple and he would be pleased to draw it up on behalf of both the parties if Professor Barber so instructed. Mr Lennon said in his affidavit that he did not recall Dr Gray advising him during their meetings with him in person or in any discussions by telephone that the University had any interest in the three technologies which he had described to him. He stated his beliefs and understanding about the nature of Dr Gray's assurances. This evidence was received as evidence going only to his state of mind and subject to relevance. I am not however satisfied that its relevance was established. I will disregard it. Dr Gray was cross-examined on the meeting by reference to Mr Lennon's memorandum to Professor Barber. He was asked about the 'relevant facts' set out in the memorandum and attributed to him. He did not agree with the exact words. CRI did not pay for the space in which the work was carried out and did not provide all of the equipment which was used by the research group. He accepted what was attributed to him about imminent commercialisation. The invention referred to in item 5 of the memorandum was "the hyperthermia mechanical invention which is the device for generating an electromagnetic field". The statement in item 6 that there could be some financial spin off for UWA was constructed by Mr Lennon. It was not a misrepresentation of what he, Dr Gray, had said. He could not recall making any reference to clause 4.7 of the CACS agreement. I accept Mr Lennon's memorandum as an accurate account of what Dr Gray said to him. Dr Gray believed that Mr Lennon discussed with Professor Barber the matters which he had raised. That would have been untrue. He agreed he was "an inventor" of each of them according to his understanding of that word. Although he did not necessarily say as much to Mr Lennon on 14 January 1997 he had conveyed it to him "with crystal clarity" on previous occasions. He elaborated on this claim by saying that he had told Mr Lennon that "the concepts underlying these three technologies were concepts that I had been involved in developing long before I came to the University of Western Australia". On 14 January he had referred specifically to the DOX-Spheres invention and discussed with Mr Lennon whether the University should be an applicant on that patent. He had conveyed to Mr Lennon his 'involvement in the SIRT-2 program'. I don't recall using those words. As to the Thermo-1 technology that did not exist at the time. The application for the Thermo-1 patent was made after January 1997. He did convey to Mr Lennon his involvement in that whole program and as "the conceiver of the concept since ... fifteen years before". I accept his evidence about what he told or did not tell Mr Lennon in relation to inventors. Professor Barber referred in his affidavit evidence to the memorandum from Mr Lennon. He could not recall any prior contact with, nor specific knowledge about, Dr Jones. From information supplied by Mr Lennon he understood Dr Jones had been working for several years for CRI during which time he had developed some intellectual property. He had then been employed by CRI for about a year during which his funding, equipment, resources and space had been provided by that organisation. UWA had acted as paymaster for Dr Jones who, it was now proposed, would go back to being employed by CRI. I accept his evidence in this respect. Professor Barber said that Mr Lennon did not provide him with any further detail of the intellectual property referred to in his memorandum. He relied upon Mr Lennon in the sense that, if there were a need to know, Mr Lennon would have included the information in the memorandum or told Professor Barber about it. I accept that Mr Lennon did not go into detail about the intellectual property. Professor Barber also understood that a yet to be constructed prototype of the invention would cost about $500,000. As far as he was concerned, this meant that all there was at the time was an idea or concept. He did not consider it necessary to make any further inquiries about the matters referred to in the memorandum. As to Mr Lennon's recommendation for an assignment of the UWA interest in the invention, that was not implemented. It was, according to Professor Barber, overtaken by the event of a letter from Mr Gorn of CRI seeking a statement from UWA that it had no interest in the relevant technologies. An outline of that event follows. Dr Gray ultimately asked him to put the request in writing. PCT/AU94/00708 International and Provisional PN0213 Australian Phase) currently reside with the Cancer Research Institute, it would be prudent to obtain confirmation that other parties do not claim part ownership. He visited Dr Gray's office and was given a draft letter to be sent to UWA which included a proposed draft of a letter that UWA would be asked to send in return. He did not draft either of these letters. He read and discussed them briefly with Dr Gray but could not recall what they said to each other. It seemed to him at the time a fairly routine matter. Mr Gorn said, and I accept, that he relied on Dr Gray as to the accuracy and contents of the letter to the University. The statements made in it generally accorded with his understanding. That had largely been derived from discussions with Dr Gray and meetings with the board of management of CRI. The letter referred to statements already having been obtained from Monash University and the Chinese University of Hong Kong. He could not recall having seen statements from either of those entities. He believed that he received that information from Dr Gray. The letter which Mr Gorn signed was addressed to Professor Barber. It is desirable to set out its text in full. As you will be aware, the CRI has been affiliated with the University of WA and is a co-sponsor of the recently formed Centre for Applied Cancer Studies. The first is the relationship between the CRI and the University of WA, and the second concerns further development of the Institute's intellectual property. This has meant employing our own research scientists, affiliating with the Royal Perth Hospital Medical Research Foundation and participating in conjoint research ventures with other entities, including Universities and collaborative research groups. Our Institute has for several years been attempting to obtain funding from the corporate sector to advance this property into the commercial world. It seems likely that our current negotiations with a potential venture partner will result in infrastructure funding in the near future. It is important that the University of WA understand that the CRI remains committed to the long term future of the Centre for Applied Cancer Studies. However, as was stressed when the Cancer Centre document was being drafted, the CRI will remain free to develop it's own future as well. I am advised by Professor Gray, our current Medical Director, that the University has benefited from the CRI's research by way of our scientific staff supervising students within the University. I am pleased to say that the CRI will be supporting three students this year who are studying for higher degrees. The first involves intellectual property involving the use of small ceramic particles to treat patients. This was funded through the CRI and developed in association with Monash University and the Chinese University of Hong Kong. The second area involves a new matrix for transport of an anti cancer drug and was developed by a scientist working at the CRI in Perth. The University of WA has no interest in these areas of intellectual property. In the past, and as a result of a Memorandum of Understanding with the Royal Perth Hospital Medical Research Foundation, the Hospital undertook the payroll administrative functions for all staff employed through the CRI and the Lions Cancer Institute Inc. When the Centre for Applied Cancer Studies was established last year, the administration duties were transferred across to the University. CRI have continued to provide all the funds for this and other research projects that are particular to our Institute. Therefore, although this particular scientist has nominally been within the University for the past eleven months, the project, facilities and all costs have been borne by the CRI. The venture partner has requested that everyone we have associated with provide written statements declaring they have no claim on the technology before any contract with the CRI could be undertaken. My request is that the University state that they will not in the future make any claim against the ceramic particle, matrix and hyperthermia technology. The use of targeted hyperthermia in the treatment of patients. He knew he was the chairman of CRI and he knew of CRI because of its role in CACS. As an organisation affiliated with UWA he regarded CRI as a "trusted" organisation. He accepted the statements in the letter at face value. There was nothing in them to cause him any concern. He was aware of a relationship between CRI and the Foundation. He was also aware that institutes associated with other Category B centres employed their own research scientists such as the Lions Eye Institute which was associated with the Centre of Ophthalmology and Vision Science. As to the statement that CRI had developed intellectual property and had been attempting to obtain funding from the corporate sector to advance that property he again said that there was nothing unusual in a body such as CRI doing that. He saw a connection between those references in Mr Gorn's letter and similar references in Dr Gray's letter to him of 26 July 1996. For some reason which he could not recall Professor Barber believed that Dr Gray had been at Monash University before coming to UWA and that there might be some connection between that and the reference to the first item of intellectual property having been developed in association with Monash University. He accepted, based on Mr Gorn's letter, that the first intellectual property was something that CRI had developed in association with Monash University and the Chinese University of Hong Kong as indicated. He found no reason to suspect that the information was not correct. Based on the letter he also accepted that the second element of intellectual property had been developed by one of CRI's scientists working in Perth and that UWA had no interest in it. As to the third element the letter said that this had "involved a scientist employed by CRI since 1993". It did not identify the scientist concerned but Professor Barber saw a clear connection between the circumstances referred to in the letter and those set out in Mr Lennon's memorandum of 15 January 1997. He understood that the scientist referred to was likely to be Stephen Jones. The third element of the intellectual property was therefore likely to be that referred to in Mr Lennon's memorandum. Based on the letter which, according to Professor Barber, reflected the information and recommendations in Mr Lennon's memorandum he accepted that any involvement by UWA in the third element of intellectual property was extremely low. Professor Barber did not arrange for an independent investigation or assessment of the statements made by Mr Gorn in respect of the three areas of intellectual property involved. On the face of the letter, as he saw it, there was no need for any such investigation or assessment. It was a straightforward request from CRI for a statement that UWA would not make any claim on intellectual property developed and funded by CRI and persons funded by it. There was no suggestion of any technical work conducted by UWA staff to develop any of the intellectual property. Professor Barber was aware that Dr Gray had roles in CRI and Paragon Medical as well as his role at CACS and his status as an employee of UWA. He felt however that because of Dr Gray's various roles any assessment of his involvement would be complicated. He saw no reason to obstruct CRI in proceeding to move forward with capital funding. There was no information in the letter in respect of the three areas of intellectual property which could have allowed an investigation of the provenance of that property. No inventors were named no dates were given and no proper names of intellectual property were provided. His letter to Dr Gray concerned the reference to CRI on the letterhead used by Mr Gorn. He observed that the letterhead used by CRI was also used by CACS. Both titles were prominent and there was only one address for them both. When Mr Gorn signed as "Chairman" it was uncertain to the reader whether he was signing as Chairman of CRI or Chairman of CACS. He pointed out that the reference to CACS appeared prominently followed by "Affiliates" of CACS. Professor Barber made the point that the University and the other parties could not be said to be affiliates with the Centre in the ordinary sense. CACS had no real independent existence. It was "... really a joint venture and the members might be better thought of as joint owners of the Centre or members of it". Professor Barber asked Dr Gray to liaise with CRI so its letterhead could be adjusted to better reflect the real situation. CRI could refer to itself as "- a member of the Centre for Applied Cancer Studies together with ...". It is appropriate to make the following observation about Professor Barber's letter in the context in which it was sought and provided. He was aware, from the Gorn letter, as was the case that the letter was sought for the purpose of CRI's negotiations with a third party financier. The technology referred to in the letter was very broadly defined and plainly not limited to a particular inventive concept. The two limitations in the letter were that the release was confirmed "on the basis of the facts in your letter" and that the technology was "CRI funded". There was no suggestion that the truth of the facts was assumed as distinct from known. Nor was there any suggestion that CRI funding was limited to any particular aspect of the technology concerned. I accept the Sirtex contention that an independent third party reading the letter would properly infer that UWA was not making a conditional release but a release based upon its own inquiries or satisfaction. At the same time I accept that Professor Barber was prepared to sign his letter in reliance upon that provided by Mr Gorn. His less than rigorous approach in this respect was consistent with his less than hard line attitude to the enforcement of what he and others thought were UWA's intellectual property rights. I would not go so far as to conclude, as submitted by Sirtex, that Professor Barber's letter reflected an informed consent by UWA to Dr Gray or CRI or anyone else exploiting what it believed to be its intellectual property rights in relation to the three technologies. He also retained James Cherry a patent attorney at Freehills in Melbourne whom Mellos had recommended. Dr Panaccio referred every draft of every document relating to the investment transaction to the legal department of Nomura/JAFCO's Singapore office. The standard practice of Nomura/JAFCO was to obtain the broadest possible warranties and representations in any investment. Dr Panaccio followed the directions of the legal department as to whether particular warranties or representations were sufficient. He said that he did not instruct Freehills to make inquiries into the ownership of the patents which covered the technology. Mr Mellos said that Dr Panaccio's instructions were that the transaction be effected by investment in a new company to which the relevant intellectual property would be assigned and which would, upon the investment, be owned in equal shares between Dr Gray (or associated entities), CRI and the funds managed by Nomura/JAFCO. The costs of the due diligence and documentation were to be shared equally between the new company and Nomura/JAFCO. Mr Mellos received no instructions from Paragon Medical. In a letter which he sent to Mr Mellos on 17 February 1997 Dr Panaccio requested that the lawyers review 'Ownership of all intellectual property'. He did not maintain this as a requirement of the due diligence process and it is not surprising given the difficulties of definitively resolving ownership issues. Indeed Mr Mellos said it was commonplace for clients not to require exhaustive investigation of the ownership of intellectual property the subject of such a transaction. No doubt a prudent cost benefit approach would combine some form of review of intellectual property with appropriate warranties from the party providing it. Dr Panaccio instructed Mr Mellos that all he wanted was a one or two page report on each of the three patents. It was to be a summary of information apparent on the face of each patent. The report was to identify any obvious problems but Freehills and Freehills' patent attorneys were not to undertake any further enquiries. For the purposes of the patent appraisal work he introduced Dr Panaccio to James Cherry. Mr Mellos asked Mr Cherry to provide what Mr Cherry described in his evidence as "limited advice to NJI (on specific questions raised by NJI) in respect of patents on some of the technology the subject of the 1997 transaction". The applicants referred to on the relevant patent documents were Dr Gray and CRI. Mr Cherry's principal instructions in the 1997 transaction came from Mr Mellos. He said that he may also have met Dr Panaccio. They had some telephone conversations. He had no recollection of meeting Dr Gray at that time. Indeed Mr Cherry had very little recollection of any conversations conducted at that time. He did not investigate or review the ownership of the intellectual property. I accept that the instructions were limited as indicated in the evidence of Dr Panaccio, Mr Mellos and Mr Cherry. Mr Mellos said that Dr Gray was represented by a Perth-based firm Blakiston & Crabb. They reviewed and negotiated documentation for the transaction on behalf of Dr Gray. They drafted a deed by which Dr Gray assigned the intellectual property rights to Paragon Medical based upon a document prepared by Freehills. The transaction ultimately involved renaming the existing Paragon Medical Ltd as Australian Surgical Products Ltd and the creation of the new company under the name Paragon Medical Ltd. The new company took an assignment of intellectual property rights of Dr Gray and CRI. It subsequently changed its name to Sirtex Medical Ltd. CRI, which was also advised by Blakiston & Crabb, was to hold shares in Sirtex as consideration for the assignment of its intellectual property assets. Dr Gray, Mr Karlson and Mr Peter Jones were present. Professor Li was an apology. The minutes recorded that Dr Gray outlined the heads of agreement reached with Nomura/JAFCO. The Board unanimously agreed to accept the proposed arrangements subject to a final document to be discussed at the next board meeting. It was expected that the final document would be available within three weeks. At the same meeting it was agreed that there should be a minimum of five directors. The current directors Messrs Karlson, Gray, Jones and Li were reaffirmed. Dr Panaccio and a further nominee of Nomura/JAFCO were accepted as additional directors to be appointed following the first investment from Nomura/JAFCO. Dr Gray was appointed managing director. The minutes of the meeting of the board on 22 January 1997 foreshadowed that the managing director would receive a salary package of $132,000 per year to be reviewed annually. The wording of the minutes suggested that the remuneration awaited the financial input from Nomura/JAFCO. In the area of staff appointments Dr Gray proposed the immediate employment of Dr Stephen Jones along with a data handler and a research assistant. Dr Jones' proposed salary was $72,000 per annum and shareholding incentives. The minutes reported Freehills' recommendation that a new company be established and the name Paragon Medical Ltd be transferred to it. The board agreed that costs would be shared equally between Nomura/JAFCO and Paragon Medical for Freehills to form the new company, to prepare shareholder and investment agreements and to effect transfer of intellectual property into the company for a fee of $26,000. Additional legal requirements including a leasing contract, employment contracts and a review of the Freehills' documents would be undertaken by Blakiston & Crabb. The current liabilities of Paragon Medical would be paid out by the new company. He recommended in the paper that the board support further negotiations on a joint venture. The CRI board met on 23 January 1997. Dr Gray reviewed CRI's input into the hyperthermia project. Mr Gorn tabled his discussion paper and Drs Gray and Stephen Jones left the meeting. The board then agreed that independent legal and financial advice would be necessary to protect CRI's interests. Mr Gorn and another member of the board, Mr Vibert, were given authority to continue negotiations with Paragon Medical and Nomura/JAFCO along lines set out in the discussion paper. Dr Gray informed Mr Gorn that he had retained his own solicitors, Blakiston & Crabb, to advise him with respect to the negotiations with Nomura/JAFCO. He suggested that they could also advise CRI. Dr Panaccio sent a fax to Dr Gray on 24 January attaching costings from Freehills for setting up the new company and completing the investment process. Paragon Medical and Nomura/JAFCO were each to bear half of the costs. Dr Panaccio suggested that Dr Gray negotiate a fixed fee with Blakiston & Crabb to review the Freehills' documents and that they draft management agreements for himself and Stephen Jones and a lease agreement with CRI. Those costs would be the responsibility of Paragon Medical. Dr Gray said he would do this. The current price was $690 per dose which was approximately the actual cost. The increase increased the price to about $2,800 per dose. The price change was implemented. Over the next twelve months or so the Chinese University complained about it and eventually stopped ordering it. A letter was sent on Paragon Medical letterhead to RPH on 30 January 1997 in answer to an enquiry from its Medical Physics Department. The letter advised that each dose of Yttrium 90 SIR-Spheres would consist of 5GBq Yttrium 90 calibrated to a specified delivery date and charged at $2,800 per dose. The letter appeared over the name of Mr Karlson, although it appears to have been initialled by someone else on his behalf. It was clear that the letter was prepared by Dr Gray and sent out in Mr Karlson's name. I do not accept his evidence in cross-examination that Mr Karlson was involved. Mr Karlson knew nothing about the letter. Indeed, Dr Gray in his affidavit evidence-in-chief spoke of himself as having written to the hospital about the new product cost and billing requirements. The little episode of obfuscation in cross-examination may have been an indicator of stress under some pressure, but it did not show Dr Gray in a particularly good light. It was a factor, along with the argumentative style of elements of his evidence, that causes me to treat his uncorroborated testimony on contentious issues with caution. He claimed that Dr Jones said that Dr Panaccio was helping him to write it. Dr Harrison recalled meeting Dr Panaccio at the laboratory. However, as was pointed out to Dr Harrison in cross-examination, Dr Jones had made no reference to Dr Panaccio in his email. I think it unlikely that he would have suggested that Dr Panaccio was involved in the drafting of a Thermo-Sphere patent application or that Dr Panaccio was involved. On 20 February 1997 Dr Jones sent Gary Cox of Wray & Associates what he described as "my version of the patent document for the Targeted Hyperthermia Device". The document was entitled 'Targeted Hysteresis Hyperthermia as a Method for Treating Cancer'. It identified the Inventors as Drs Gray and Jones. The field of the invention was to be taken from the provisional specification. Major limitations due to insufficient penetration depth and poor focussing capabilities of externally applied microwave or ultrasound beams have meant it is impossible to deliver an adequate heat load to deep cancers without an unacceptable level of coincident damage to surrounding healthy tissue. The present invention of targeted hysteresis hyperthermia will overcome all problems concerning penetration depth and inadequate localisation of heat. The production of microscopic ferromagnetic particles that generate heat when exposed to a time varying magnetic field. A method of incorporating these microparticles into some form of carrier that facilitates their optimal delivery to the site of the tumour by the method used in 1). A device which generates a time varying magnetic field capable of heating these microparticles to therapeutic temperatures. This device must also be capable of producing the required magnetic field in a region of space large enough to accommodate a human torso. In the discussion of the ferromagnetic particles to be used, reference was made to a quantity, evidently devised by Dr Jones called the "Magnetic Heating Efficiency (MHE)". "P" is total power loss per unit volume and "f" is the frequency of the applied magnetic field. The units of the quantity so defined were "kg/A.s 2 " (although the later documents suggest that this is a mistake, the proper unit being "J.s/A/g"). Dr Jones described this as a more useful way to compare different materials than simply considering "P" in isolation since it also took into account the magnetic field conditions required to achieve the heat output. The major limitations to the generation of heat by magnetic hysteresis for the purposes of treating cancer arose from the effect a time varying magnetic field has on living tissue. In general those effects increase as the product "f.H" increases. It was therefore essential that "P" be maximised subject to keeping "f.H" within safe limits. He went on to discuss the classes of materials suitable for the application. The materials he described included CrO 2 and gamma-Fe 2 O 3 also ferrites of the general form MO.Fe 2 O 3 where M is a bivalent metal such as magnesium, manganese, iron, cobalt, nickel or copper, zinc, cadmium or lithium. Another class of material suitable to the application were the super paramagnetic single domain particles. That entry had been crossed out on the exhibit in Court but Dr Jones said it was not his crossing out. The device used must be capable of producing the required magnetic field conditions in a region of space large enough to accommodate a human patient and must be such as to maximize the MHE. A number of different designs based on various combinations of induction coils and high permeability cores and pole pieces can be used to generate the appropriately conditioned time varying magnetic field. Circuit designs for devices to produce such fields were shown in figures attached to the paper. He set out distinguishing features of the proposed method. It included the MHE factors in the work of earlier experimenters. Examples followed comparing heat production efficiency of different materials, superior heating derived from a rotational field as against a linear alternating field and a demonstration of the ability to heat living tissue. Experiments had also been performed to demonstrate that the technique could be used to heat liver tumours to therapeutic temperatures while leaving surrounding healthy tissue unaffected. Tumours had been artificially induced to grow in the livers of rabbits. Once they had grown to a size of approximately 1 cubic centimetre, 50 mg of microspheres were infused into the hepatic artery feeding into the liver. Temperatures were measured in the necrotic core of the tumour, the growing edge of the tumour and nearby normal liver tissue. Temperatures were monitored after the living rabbit was placed in the magnetic field apparatus. Under the heading "Embellishments", reference was made to materials for autothermo-regulation. He also provided his summary of why he considered the work of Dr Gray's group was superior. US patent abstracts were included along with some 48 pages of titles from worldwide patent databases which he had searched. Dr Gray had written to Dr Burton in December 1986 about what he called "Adjuvant hyperthermia in the treatment of cancer". At that time there was already in existence a considerable body of literature about selective heating of cancer tissue. Eleven of the relevant papers and patents up to 1986 were referred to earlier in these reasons. The publications reviewed by Dr Jones went up to 1996. In the summary which he provided to Dr Panaccio, Dr Jones set out, after review of the work of others in the field, another statement of what he called "Distinguishing Features of Present Method". He said that the system delivered by the Gray group incorporated "several unique, distinguishing features which ensure its success as a treatment for cancer by targeted hyperthermia". This is reflected in the factor called the Magnetic Heating Efficiency (MHE) factor which must be as high as possible. This factor is calculated from the rate of heat generation (in W/g) divided by the field strength and frequency used to generate that heat. We have the highest MHE. We have . Most authors describe a process of cellular uptake to get the particles into the target cancer cells. This is a highly theoretical approach which has yet to be demonstrated to work. In fact, any experiments that have been done tend to show that this method cannot work. Direct injection of particles into tumours may work in very limited circumstances but is highly undesirable for a number of good reasons. He included a table setting out a summary comparison between work described by the authors of the various articles to which he had referred. The summary referred to the MHE in each case, the technique for targeted delivery and whether there were results from live animals. He had been reflecting upon several conversations which they had had in recent months concerning the commercialisation of intellectual property arising from his research activities. He referred to concerns he had raised with Dr Gray about the potential for conflict of interest arising in his various roles. In the future, I rather doubt if they will be as clear cut. He understood, although he did not believe Dr Gray had ever advised him, that he was a director of Paragon Medical. He said this raised the potential for the conflict of interest in any dealings between himself and Dr Gray on Paragon Medical/CRI/UWA issues. He agreed that there was potential for conflict of interest in the future and a need to "service the University's requirements". He said that in the past he had been Medical Director of LCI and CRI both of which had been and would continue to be unpaid positions. He had not derived any income or other benefit from any institution or company that he had been associated with during his employment with the University. Paragon Medical had been little more than a shell company up until that time. He was acutely aware that there could be conflict of interest in the future. For that reason he had been negotiating with Professor Landau to reduce his commitment to the University and had arranged to reduce from a full time to a 0.3 fraction of full time position to be effective in the immediate future. This would allow him appropriate time to pursue, inter alia, promotional activities associated with the CRI. He told Dr Beresford that he was currently in discussion with the Executive Dean, Professor Landau about the prospect of decreasing his full time position to a 0.3 full time equivalent. He intended to maintain clinical services at RPH by way of operating and caring for patients in the hospital. He would be concerned exclusively with the care of patients with cancer and predominantly with hepatobiliary or GI malignancy. He asked to relinquish on-call duties at the hospital effective from July 1997. On 10 January 1997 Dr Gray wrote to Professor Landau formally requesting that his status within UWA be changed from full time to a 0.3 fractional appointment, effective from 3 March 1997. He observed that the conversion of his full time appointment to a fractional appointment would result in a substantial salary saving which would be used for research appointments within CACS. This accords with Professor Landau's evidence of the reason for the conversion to 0.3 as he understood it at the time. He asked Professor Landau that his office calculate the salary savings to be applied to further research positions so the amount could be agreed before his transition. The relevant approval was given. I have requested that he continue part of the on-call service until July, which he has agreed to do. He will then come off the on-call as of July 1997. Bruce's work will be confined thereafter to elective surgery in the surgical oncology area, predominately hepatic primary and secondary cancer. The particulars of malice include an allegation that the publication was authorised by Professor Robson on behalf of UWA in circumstances of a history of animosity between them. One of those particulars relates to a dispute which arose between them in 1997 when Professor Robson required Dr Gray to pay the cost of repairing damage to certain equipment which he had removed from Professor Hall's laboratory at RPH. The clearest account of the incidents appears from Professor Robson's affidavit of 2 March 2007. The background to the issue arose out of disputes between Professor Hall and Dr Gray following the formation of CACS. The dispute concerned, inter alia, the distribution of equipment between CACS and UWA's Department of Surgery. It appears from contemporary documents that the dispute flared up and involved Professor Robson in November 1996. One Monday morning Professor Robson received a telephone call at his office at UWA from a police officer who said he was at RPH at the request of Dr Hall who wanted to prefer charges against Dr Gray for stealing equipment from Dr Hall's laboratory. The police officer said that it did not appear to him to be a police matter but as they were UWA employees perhaps Professor Robson could sort it out. Professor Robson was greatly concerned that two senior academics were unable to resolve a dispute without having to have recourse to the police. He discussed the matter with Professor Landau. Following his discussion with Professor Landau, Professor Robson had a meeting on 27 November 1996 which was attended by Professors Landau, Hall, Robson, Professor David Fletcher from Fremantle Hospital, Professor House, Dr Gray and his solicitor. The solicitor's note recorded considerable debate about the tension and animosity existing between Dr Gray's laboratory and that of Professor Hall and debate about the interpretation of a letter from UWA to Dr Gray dated 29 February 1996 relating to the establishment of CACS. The debate concerned the identity of the equipment to be transferred to CACS. It was said that this did not include what was referred to as an HPLC machine apparently obtained by Professor Hall as the result of a grant. The solicitor recorded that Professor Robson made the point that Drs Hall and Gray had been at war for ten years and would never see eye to eye in the future. The solicitor recorded that nothing much was resolved, but it appeared clear that the HPLC machine would remain with Professor Hall. At some point, according to Professor Robson, he told Dr Gray that if he did not pay for damage to the machine which was evidently incurred during the removal of it from Professor Hall's laboratory, then it would be deducted by UWA out of his research grants. On 5 February 1997 Professor Fletcher who had been at the meeting, wrote to Dr Gray enclosing an account for the repair of the HPLC machine claiming that at the meeting Dr Gray had committed himself to pay the account. On 17 February 1997 Professor Robson sent a letter to Dr Gray indicating that an account had been received from Scientronic Instrument Services for $533 in relation to "the repair of equipment damaged by your unauthorised removal of the equipment from the laboratory of Professor Hall". He insisted that payment be made by close of business on 21 February 1997. On 15 May 1997 Professor Robson again wrote to Dr Gray saying that he was "amazed" to be told that the account had not been paid. He said that if the account were not paid by close of business on 22 May 1997 he would be obliged to take disciplinary action against Dr Gray. Dr Gray wrote back on 23 May 1997 saying that he would not be intimidated by Professor Robson's threats. You will be contacted further in due course. He sought the assistance of Professor Robson to bring appropriate action against Professor Fletcher. Against that expectation is the realization that previous deliberate, repeated and documented dishonesty by Professors in the Faculty of Medicine have simply been swept under the carpet by your administration. Not surprisingly the Director of Public Prosecutions declined to take any action against Professor Robson. Dr Gray also wrote to the Hon Kim Chance MLC, Chairman of the Standing Committee on Public Administration of the Legislative Council of Western Australia. While the preceding events document overreaction by Dr Gray, they do not support any inference of malice which can be attributed to UWA in any way that is relevant to the letter of demand sent in October 2004. These included the SIRT-2 and DOX patents requested from Dr Gray. The draft reports dealt, inter alia, with the 1996 provisional patent application PN 9782 entitled "Targeted Hysteresis Hyperthermia as a Method for Treating Cancer". Mr Cherry pointed out that the same inventor had filed provisional specifications with similar titles on 12 September 1988 and 23 December 1994. Attention was drawn to similarities between the two provisional specifications. Although there were alterations in the December 1994 specification the reasons for them were not clear. Dr Panaccio said he did not recall whether at the time he received the memorandum he understood that there was a live issue as to whether UWA had a legitimate claim to some or all of the inventions. Some argumentative "concessions" were extracted in cross-examination. Sirtex contended against any conclusion that Dr Panaccio should have been on notice that CRI could not have held an interest in the hysteresis invention. No such suggestion was made by Freehills. The position was consistent with CRI having worked on developing the invention in 1996 and 1997. Hypothetical concessions by Dr Panaccio were of no weight. I accept the submission by Sirtex that the proper inference is that Dr Panaccio did not make the connection to a possible UWA interest. I agree that if he had done so he would have sought some commercial resolution with UWA by the offer of shares or otherwise. As described by Dr Panaccio in his evidence-in-chief, the transaction involved the creation of a new corporate entity which would have the name Paragon Medical Ltd transferred to it. This company later became Sirtex. The old Paragon Medical changed its name to Australian Surgical Products Ltd (ASPL). After the transaction was effected, Dr Panaccio attended meetings of the board of Paragon Medical as an observer on behalf of Nomura/JAFCO. He did not become a director of the company until 11 February 1998. The purpose of his attendance as an observer before that time was to verify the achievement of the investment milestones which had to be met before payments would be made by Nomura/JAFCO under the Subscription and Shareholders' Agreement which form part of the transaction effected on 1 May 1997. Summaries of various of the agreements are set out in the following sections of these reasons. In addition to those, the new Paragon Medical entered into a Memorandum of Understanding with CRI under which CRI undertook to carry out research work for Paragon Medical for reimbursement of salaries and expenses plus a 30% loading. Any intellectual property disclosed to, or generated by, CRI or any of its employees was to belong to Paragon Medical. There was also a confidentiality clause requiring CRI to use its best endeavours to ensure that its employees did not directly or indirectly divulge Confidential Information, a term widely defined in the memorandum. Consideration for the acquisition was as follows: For the Institute Patent - 33,332 B ordinary shares in accordance with the Subscription and Shareholders Agreement. For the Institute Know How and Institute Rights - 400,000 B ordinary shares in accordance with the Subscription and Shareholders Agreement. No separate consideration was provided in relation to the Institute Equipment. The Institute Patent was in effect the DOX-Spheres patents rights. It was extensively defined. It is not necessary to set out that definition in full. The "Institute Know How" was defined to pick up a range of rights and interest of CRI in any of Dr Gray's intellectual property rights associated with a targeted microsphere technology. It is sufficient to say that the obvious purpose of the deed was to effect the transfer from CRI to Paragon Medical of the DOX-Sphere patent held in the name of CRI and any interest that CRI might have in any Patents, Know How, Inventions, Rights, Intellectual Property and the Equipment held by Dr Gray. Part 3 of the CRI/Paragon Medical Assets Purchase Deed contained representations including representations that CRI was the absolute legal and beneficial owner of all the rights entitled to an interest in the Institute Assets. They also represented that no third party (including, without limitation, Yan Chen) had any right or title to, or interest in or in connection with any of the Institute assets. These terms were defined by reference to other defined terms which again picked up the Gray Assets, the Gray Inventions, the Gray Know How, the Gray Patents and the Gray Rights. They also picked up the Institute Know How, the Institute Invention, the Institute Patent and the Institute Rights. The transfer of those rights from ASPL to the new Paragon Medical was made in consideration of $100. The Agreement contemplated the transfer of assets from Dr Gray and CRI and the former Paragon Medical, now ASPL, into the new company. Jones and Karlson had each agreed to subscribe for 15,000 B ordinary shares at a premium of $0.47 for each. The NJI No 2 Investment Fund had agreed to subscribe for up to 499,999 A preference shares at a premium of $1.80 each, 1 C preference share at a premium of $1.80, an additional 500,000 A Preference Shares at a premium of $1.80 each and another additional 500,000 A Preference Shares at a premium of $1.80 each. Schedule 3 contained what were called "Founder and Company Warranties". Schedule 4 contained "Gray Warranties". The Founder and Company Warranties were warranties given by each founder. The founders were defined to mean, CRI, Dr Gray, Mr Peter Jones and Mr Karlson. The Company was a reference to Paragon Medical. The term of the agreement was for an initial period of five years. The salary package was $132,000 per annum and, subject to shareholder approval, participation in an employee option scheme. Under the Employment Agreement, Dr Gray was to serve the Company as Executive Managing Director. He was required to "devote so much of his time and attention to the Business as the Board, in their reasonable and bona fide exercise of its discretion, considers necessary for the proper management of the Company, but in any event shall not be less than 40 hours per week". Under the Agreement, Dr Jones was to provide his services as "Chief Researcher of CRI". The term "intellectual property" appeared as a defined term in the Agreement. The Company agreed that the purchase price would be satisfied by the allotment of 1,028,333 A ordinary class shares and 341,682 B ordinary class shares at an issue price of $2 per share to the Assignor. At the time Professor Robson was a member of the Board of Management of RPH. He was a member from August 1993 to July 1997. Early in 1997 the issue was raised at the hospital concerning circumstances surrounding the price increase. It came to his attention that inquiries made by RPH revealed that the company that supplied the microspheres to the hospital was Paragon Medical in which Dr Gray had an interest. On or about 18 March 1997 Colin Waters, the RPH Director of Administrative Services, sought legal advice from the Crown Solicitor's Office about the matter. A copy of the letter from Mr Waters to the Crown Solicitor was sent to Professor Robson. In the meantime Dr Beresford, the Director of Clinical Services, wrote to Dr Gray, on 24 March 1997, telling him that he understood from the Head of the Department of Medical Physics, Dr Fox, that Dr Gray intended to increase the number of patients receiving radioactive Yttrium 90 treatment. Dr Beresford pointed to the "quite marked financial implications" and the recent increase in costs. He asked for confirmation that the matter had been discussed with the Divisional Director of Cancer Services and asked how the increase could occur as they had just reduced his theatre sessions from three per week to two per week. Mr Tannin of the Crown Solicitor's Office replied to Mr Waters on 17 April 1997. He advised that there was sufficient evidence available to RPH to give rise to a reasonable suspicion about Dr Gray's conduct which warranted a formal criminal investigation and it was appropriate and necessary that the investigation be conducted by the Commissioner of Police, Western Australia Police Service. Dr Gray said in his affidavit that he had first become aware of the matter when he received a phone call from the Western Australian Police who told him they were acting on a complaint from Dr Beresford of RPH. He was interviewed for several hours by the investigating police officer. He provided documents relating to the matter and had another long interview with the investigating police officer. A file note by Linda Key, UWA's solicitor, indicated a telephone attendance on a Detective Samantha Tough of the WA Police Fraud Squad on 30 April 1997. The detective told Ms Key that her preliminary advice was that Dr Gray was a public officer within the definition in the Criminal Code at the time of the alleged conduct. The Fraud Squad would inform the Anti-Corruption Commission (ACC) which could make a determination as to whether there was corrupt conduct or not. If the ACC determined that it was not, then the Fraud Squad would proceed on the secret commission investigation. The Fraud Squad officer had also advised RPH to take advice about a breach of the Trade Practices Act 1974 (Cth) (the TPA). Dr Gray wrote to Dr Beresford on 5 May 1997 stating that he had tried to speak with him and make an appointment to see him on a number of occasions. He described the previous charges raised for Yttrium microspheres as heavily subsidised and exceeded by the cost of production. The cost per patient treated was approximately $4,800. The price had been reduced to $2,800. He said he had discussed the matter with Dr Fox a couple of months earlier. On 5 May 1997 Professor Robson, acting on advice from Linda Key, wrote a letter to the ACC. In that letter he said that UWA suspected on reasonable grounds that "Professor Bruce Gray, a 0.3 fractional tenured academic employee of the University has been involved in conduct which may amount to corruption, a crime or serious improper conduct and which is of concern to the University of Western Australia as employer and to myself as Deputy Vice-Chancellor". He enclosed with the letter a number of documents including Dr Gray's contract of employment with UWA, the advice from Paragon Medical to RPH increasing the charge of SIR-Spheres to $2,800 per dose and extracts from company records of Paragon Medical. In his letter Professor Robson stated that Dr Gray was a director of Paragon Medical who used Yttrium Oxide in his patient treatments. He understood that as a result of a complaint by RPH to the Fraud Squad of the WA Police Department, the Fraud Squad had referred the matter to the ACC having assessed Dr Gray's activity as potentially constituting corruption of a public officer under s 83 of the Criminal Code . The University of Western Australia is paid the clinical salary supplementation payable under the agreement by the teaching hospital and passes the appropriate payment on to its employed clinical academics. The clinical academics such as Professor Gray in addition have a right of private practice under their employment contracts with the University of Western Australia. It is arguable that the definition of "Public Officer" in the Criminal Code includes employees of The University of Western Australia. The University of Western Australia is a statutory authority which is subject to the Financial Administration and Audit Act and is therefore a public authority subject to the Anti-Corruption Commission Act 1988. It sought advice as to whether there was sufficient evidence to determine whether Dr Gray had committed a criminal offence. The advice returned was that the evidence was not capable of establishing a prima facie case of the commission of any offence by Dr Gray. A letter was then sent to Mr Waters of RPH advising him that the police investigation into the matter had been completed and that no action would be taken against Dr Gray. On 6 January 1998 notification of the completion of the inquiry was also given to the ACC by the investigating officer, a Detective Senior Constable, in the Official Corruption Investigation Unit. He said at the time he learned of these events, Dr Gray was angry and said it was because of the decision of the Board to increase the price of SIR-Spheres that RPH made the allegations and instigated the police investigation. However Dr Panaccio told Dr Gray that the central issue was whether or not Dr Gray had informed the patients he was treating at RPH of his interest in the treatment he recommended to them. On 18 June 1997 Dr Beresford wrote to Dr Gray saying that the RPH Ethics Committee were aware that there might have been an irregularity in the administration of his patient trials and that this had been referred to the police who were currently undertaking an investigation. The Ethics Committee had accordingly resolved that recruitment of additional patients for the trial should cease pending the completion of the police investigation. Dr Panaccio said that before the current proceedings he was not aware of the existence of the letter. At the time of the investigation Dr Panaccio told the Sirtex board and Dr Gray that he was opposed to the suggestion made by Dr Gray that Sirtex should fund his defence of the investigation. Dr Gray had retained Robert Richter QC to represent him. Dr Panaccio said that the investigation only related to allegations made against Dr Gray personally for allegedly breaching his duties to patients at RPH. There were no complaints against Sirtex and so it was not a matter to concern the directors of Sirtex. In 1999, upon Dr Gray being cleared by the investigations, the Board decided to meet his legal costs. Although Dr Panaccio was opposed to that course of action and made his position clear, he supported the motion in the interests of the company. On 23 October 1997, Dr Gray executed a Deed of Assignment to Paragon Medical. This began something of a saga. Dr Gray sought to protect, within CACS, for the benefit of Paragon Medical, intellectual property generated by post-graduate students working at CACS on projects supported by funding from the company. Mr Lennon returned a copy of the draft with his comments on 7 August 1996. He wanted to avoid the creation of a sub-class of students who might be disadvantaged by their participation in CACS. Of course, sometimes that doesn't happen, but we need to make sure that the circumstances are appropriate. The proposed agreement had only one party, namely the student. It was in form an assignment by the student to CRI of "all rights in the intellectual property generated from the research in which I participate during my tenure". It included a covenant not to divulge "confidential information generated from this research". It was put to Dr Harrison who took independent advice and sent a memorandum to Dr Gray in September 1996 indicating his concerns. One was that there was no counterparty. Moreover, his research was being done in both CACS and the UWA Department of Physics. He did not think it proper that he assign his rights to all intellectual property generated during his studentship to any one party. He expressed concern about the confidentiality clause and its implications for his right to publish his work and communicate with supervisors and others. Dr Gray saw the question of intellectual property protection for CRI as "quite a major issue during the term of Mr Simon Harrison's PhD studentship". After his exchanges with Mr Lennon and Dr Harrison he sought advice from Blakiston & Crabb. They prepared a draft Deed of Confidentiality and Ownership. They communicated with Mr Lennon in so doing. The draft was sent to him at the UWA Legal Services Office on 30 July 1997. Mr Lennon responded on 26 August 1997 observing, inter alia, that UWA need not be a party to the Deed. On or about 9 September 1997 Dr Gray gave a copy of the Deed to Dr Harrison. He also sent a copy to Associate Professor Cyril Edwards, the Head of the Department of Physics. Associate Professor Edwards discussed it with Dr Harrison. He sent a memorandum on 17 September 1997 to Mr Lennon pointing out that Dr Gray, inter alia, "intends to invite him to sign an agreement which appears to lock up all the IP into a company Paragon Medical Limited" of which he believed Dr Gray was a director. Dr Edwards discussed the issue with Professor Street on 23 September 1997. He sent an email on the same day to Professor Barber. As a result of his discussions with Professor Street, he had found that there were "more things going on than I had thought". He was concerned about the effect of the proposal on the research group based in the Physics Department. He suggested a meeting, convened by Professor Barber, between Dr Gray, Professor Street, himself and one Paul McCormick. Professor Barber did not convene a meeting. Instead he wrote to Dr Gray on 2 October 1997 expressing his considerable concern that CRI and Paragon Medical were "seeking to have PhD students of this University execute a Deed of Confidentiality and Ownership". While he regarded the confidentiality aspect of the agreement as "appropriate" the proposals relating to ownership of intellectual property created by students in the course of student research were "unacceptable". In the meantime Dr Harrison felt under pressure by reason of the ongoing intellectual property issue. In his Report on Progress completed in September 1997 he said that "a ludicrous amount of time" had been spent seeking advice on the intellectual property and confidentiality agreement which he was "being pressured into signing". On 3 October 1997 Professor Street sent an email to Dr Jones. He referred to a "disturbing conversation" with Dr Gray the day before. He reported that Dr Gray was insisting that Dr Harrison sign the Confidentiality Agreement. The reason, as he put it in the email, was "that the financial backing of his company depends on him (Bruce) being able to show that the IP is secure". Professor Street saw two options. Dr Harrison could sign the agreement or Dr Jones could withdraw as his co-supervisor. A meeting followed on 6 October 1997 between Dr Harrison, Professor Street, Dr Jones and Associate Professor Edwards. Professor Street tabled a paper proposing a compromise under which Dr Harrison's direct association with the hyperthermia project would be terminated and Dr Jones would cease to be his co-supervisor. Dr Harrison would continue to have access to the HiFroM. Dr Harrison decided it would not be in his best interests to sign the Confidentiality Agreement. That was his position prior to coming to the meeting on 6 October. He understood that, as a consequence, Dr Gray would, on behalf of Paragon Medical, instruct Dr Jones to cease acting as his co-supervisor. Following the meeting Dr Harrison ceased any association with the hyperthermia project save for some paid contract work which he did in taking measurements for Dr Raffaele Cammarano who was working for Paragon Medical. He changed the focus of his work to materials physics rather than medical physics. He completed the research work for his PhD thesis in mid 2000 before going to the United Kingdom. Ultimately his PhD was conferred in 2004. It was titled "Characterisation of the Mechanisms of Magnetisation Change in Permanent Magnet Materials through the Interpretation of Hysteresis Measurements". The Harrison issue played a part in a letter sent on 19 November 1997 in which Professor Robson demanded that Dr Gray resign as a director of Paragon Medical. That letter is referred to later in these reasons. In 1991 UWA had a policy, published in a Human Resources Manual, generally prohibiting a staff member from becoming a working director of a company without the permission of the Head of Division. Charitable organisations were excluded from the prohibition. The 1991 guidelines were varied in September 1995 to require the permission of appointment to a corporate directorship to come from the Vice-Chancellor. Professor Robson was Acting Vice-Chancellor of UWA from 21 July 1997 to 14 November 1997 when Professor Gale was absent on sick leave. Professor Gale returned from her leave on 19 November 1997. However Professor Robson continued to perform many of her duties on her behalf. As appears from the history of the complaints to the Fraud Squad and the ACC about Dr Gray's involvement with the purchase of Yttrium microspheres from Paragon Medical in 1997, Professor Robson was acutely aware, in the course of that year, of his involvement with the company. He had seen a copy of the Crown Solicitor's advice to the Fraud Squad and knew of Ms Key's discussions with the police. On 19 November 1997 Professor Robson wrote to Dr Gray referring to Professor Barber's letter to him in February of that year about the potential for conflict of interest arising out of Dr Gray's various roles as head of CACS, managing director of Paragon Medical and Professor at UWA. He noted Dr Gray's proposal at the time of Professor Barber's letter to reduce his UWA involvement to a 0.3 fractional position. Professor Barber's response had indicated that the reduction did not eliminate the potential for conflict. Accordingly you are in breach of the University's Consultancy Policy and its Policy in respect of professional relationships in the University of Western Australia Workplace. Professor Robson had previously read the 1995 memorandum from her to Professor Gale and, I would infer, Professor Gale's letter of 23 January 1996. He did not know what had happened after that. Professor Robson was cross-examined at some length about the letter. I do not propose to traverse that cross-examination. I am satisfied that he had a legitimate concern that Dr Gray's directorship of Paragon Medical had the potential to generate an unacceptable conflict between his duties as a director and those as a professor of UWA even on a 0.3 fractional appointment. The events involving Simon Harrison referred to in Professor Robson's letter illustrated the difficulties that could arise. Dr Gray had not sought or obtained prior approval from UWA to become a director of Paragon Medical. He was entitled, quite properly, to complain that Professor Robson's unqualified demand for his immediate resignation was inconsistent with the laisser faire approach adopted by Professor Gale and other officers of UWA on the issue. However I do not accept that Professor Robson acted other than in good faith. He may well have found Dr Gray to be a continuing irritant and source of difficult problems within UWA. His letter did not constitute evidence of, or an element in, "a history of animosity". In particular, it does not either alone or in conjunction with the other matters relied upon by Dr Gray in his cross-claim, support an inference of malice on the part of UWA informing the content and timing of the letter of demand. In any event, as appears later in these reasons, Professor Robson did not see the terms of the letter of demand before it was sent. His first degree was mechanical engineering and his doctoral studies had been in magnetics research at UWA. Other researchers, including Dr Krishnamurthy and Dr Bill Richmond were also involved in the Thermo-Spheres research. Dr Krishnamurthy stayed for about six months. Dr Cammarano's task initially was to identify or develop the right sort of ferromagnetic material for the SIR-Spheres. It was Dr Gray's evidence that sometime in 1998 Dr Cammarano was seconded onto the hollow Yttrium microsphere project. Dr Jones' recollection was that this was about 18 months after his initial employment. Dr Cammarano eventually left employment with Paragon Medical in 2000. Dr Gray did not have records of Dr Cammarano's work as they were held by Sirtex. He worked on the project for several years expending a significant amount of funds in the process. At the end of the process, as previously outlined, Sirtex was still unable to manufacture hollow Yttrium microspheres and in 2001/2002 decided to permanently abandon the project. There were some records to indicate that Dr Cammarano worked with Curtin University and UWA in contract arrangements on the hollow Yttrium microsphere project. According to Dr Gray the arrangements were commercial arms length arrangements and he had invoices from Curtin University to that effect. At a meeting on 30 March 1998 Professor Barber spoke of the need to identify conflicts of interest in relation to intellectual property arising out of the relationship of CACS and Paragon Medical and to establish guidelines to deal with student involvement in projects. The minutes of the meeting note that recommendations would be presented to the next board meeting. Professor Landau was also present at that meeting. On 22 June 1998 Dr Gray sent a brief half page Position Paper to Professor Landau relating to potential conflict of interest. Professor Landau did not remember receiving it. However it appears that a copy was sent to Linda Key. The Position Paper recited that CACS employed staff funded through UWA sources being one fulltime Research Fellow (Level B), a 0.3 Professorial position (a reference to Dr Gray) and a 0.75 Administrative Officer position. There were five UWA PhD students in CACS, one of whom was funded by a CRI scholarship. Dr Gray stated in the paper that the Institutes employed staff and undertook research programs in their own right as well as sponsoring students within UWA. Students undertaking higher degree studies at CACS should be "the subject of normal regulations within the University". They should retain all rights to the results of their research including intellectual property in accordance with UWA regulations. Such an agreement will be agreed to by the Institute, the University and the student. The Legal Office had recommended a standard form of intellectual property agreement be provided where intellectual property owned by the Institute or its contractees were to be used by the student. At a meeting of the CACS Advisory Board on 17 September 1998, the minutes recorded that Dr Gray stated that intellectual property considerations continued to reduce the opportunity for student involvement in the area of magnetic materials development. The current UWA position on student intellectual property was said to have placed too many obstacles in the way of students wishing to be involved in contract research undertaken within CRI. Professor Landau wrote to Dr Gray on 2 October 1998 informing him that Linda Key had written, following the recommendation of Professor Barber, that he provide a standard form of intellectual property agreement as earlier suggested. She was seeking a draft standard form of agreement for review and finalisation for approval. Dr Gray wrote back to Professor Landau on 8 October 1998 with some asperity, referring to the earlier agreement which had been prepared by Blakiston & Crabb and which had been "vetted on a number of occasions by the legal department of the University in order to make sure that it met the University's requirements". He claimed there had been "an obvious delaying tactic on the part of the University". Although Linda Key had assured him and other members of the research staff on an open phone call that there were "no problems", he subsequently found out from the CACS Advisory Board meeting that Professor Barber was not going to agree. This is a very bad outcome from what was a genuine attempt on our part to address a problem on behalf of the university. He did not recall Professor Barber challenging the correctness of Dr Gray's letter. In a Schedule of events which she prepared, Linda Key challenged the correctness of Dr Gray's assertion that the revised draft deed from Blakiston & Crabb had met her concerns. She said in her Schedule, that it had not and she had received instructions from Professor Barber that he did not believe the document was desirable in any form. She said in her Schedule of Events that she had told Dr Gray of that on 30 October 1997. The issue of student intellectual property was again briefly discussed at a meeting of the CACS Advisory Board on 11 February 1999. The discussion appears from the minutes to have been inconclusive but the participants thought it unwise to abandon hopes of future resolution. Professor Landau reported on the meeting to Ms Key and suggested that they write to Dr Gray and see if there were an opportunity for reasonable negotiation. She did so on 13 May 1999. It had a need to protect that intellectual property. The concern was that if students worked through CACS and had access to the science projects and the intellectual property of the various research projects they should not at a later date lay claim against that intellectual property. He wanted to avoid a situation whereby a student would come into an established project, participate, make a marginal contribution and leave and at some later date make a claim against the project. Dr Gray wrote to him on 26 July 1999 requiring that he not disclose in the public domain confidential information provided to him by members of CRI. The relevant confidential information would include non-patented methods and materials used in the generation of targeted hyperthermia. It would be necessary that he not disclose their exact composition unless there were in the public domain or had been patented, unless agreed to by CRI. Mr Moroz agreed to abide by that request for confidentiality. Dr Moroz is a science graduate with first class Honours in chemistry from UWA. He also held a medical degree from UWA conferred in 1997. He did vacation work with Dr Gray between 1995 and 1996 on statistical analysis concerned with health costs associated with melanoma. He regarded Dr Gray as a mentor. In 1998 Dr Gray asked him if he were interested in doing a PhD with his group. He commenced that PhD in 1999 under the supervision of Drs Gray and Jones. His research concerned ferromagnetic embolization of hepatic malignancies. He did his PhD through CACS. He was funded by a Federal scholarship of three years duration. He also received an Athelston and Amy-Saw Research Fellowship through the Faculty of Medicine for the second and third years of the research. This was a top-up grant. Dr Moroz completed his PhD by submission of published articles which comprised the body of his thesis rather than the traditional single thesis format. He published 11 articles. In his Statement of Participation at the commencement of the thesis he said that his experimental work relied upon "the use of existing technology that has been developed and patented by Sirtex Medical Limited, Sydney, Australia". His work was to apply the technology in a biological setting. Two of the papers which he wrote were done in conjunction with Dr Tim St Pierre who was in the UWA Department of Physics doing biophysics. Dr Moroz said there were no restrictions imposed on his publications and that Dr Gray encouraged him to publish as aggressively as possible. He did not recall any intellectual property issues in relation to his work which involved investigating the feasibility of targeted hysteresis to heat tumours in the treatment of liver cancer. Much of his work concerned the use of a small animal tumour model with rabbits, although he did do some work on pigs and dogs. He said, and I accept, that the work had to go further before the technique could be used in humans as the strength and frequency of the magnetic field used could have caused neuromuscular and possible cardiac complications. In order to make the technology work it was necessary to improve the power output, that is the generation of heat in small particles, at safer operating frequencies. This involved working on the composition or saturation of the particles. Dr Moroz gave some evidence of dissatisfaction with Dr Elizabeth Williams who became his supervisor at CACS in 2000. However, nothing turns on that and it is not necessary to explore the details of it. The first related to a new composition for its lead product (SIR-Spheres) and the second was a new formulation of particles being used in the company's hyperthermia technology. The company expected to continue to protect the hyperthermia technology which was said to be the subject of "an intense program of RD". The news release also noted that Paragon Medical had completed the manufacture of the first full sized human hyperthermia coil which would undergo a program of safety evaluation in preparation for human trials, timed to start early in the new year. This was said to be "... the culmination of many years of fundamental research in the area of hyperthermia for the treatment of human cancer and represents an important milestone in the company's development". This was two years after the matter had been referred to it. The Chairman wrote to Professor Schreuder, then Vice-Chancellor of UWA. It informed him that it had decided, under s 21(4) of the Anti- Corruption Commission Act 1988 (WA) (the ACC Act) to refer the allegation to UWA for investigatory or other action for the purposes of the ACC Act in relation to the allegation. The letter also advised that the matter had been investigated by the WA Police Service which did not intend to take any further action. Accordingly the matter is referred to you as warranting your consideration as to whether your University should take any action in respect of the matter, and, if so, what action. I accept that UWA, by Ms Key and Professor Robson, was also aware that Sirtex claimed ownership in relation to intellectual property "probably created at least in part during" Dr Gray's employment. Further, Ms Key had at that time compiled a list of patents to which she referred in the memorandum. Professor Robson was already a very senior figure in the UWA hierarchy. He was the Acting Vice-Chancellor from 11 to 14 June 1999. He had held that office previously on an acting basis. That letter was sent by UWA to him. It was signed by the Vice-Chancellor, Professor Schreuder and sent on 17 June 1999. The microsphere technology is reported to UWA to have been developed by you over a number of years in Melbourne and in Perth. It is UWA's understanding that throughout the time you have been in Perth you have been employed by UWA. Presumably therefore the work in relation to the development of the microsphere technology conducted in Perth was done during the course of your employment by UWA. The Commission states however, that it is not clear how Paragon Medical Limited gained whatever rights it has. If you allege that the intellectual property was created outside your employment by the University please indicate where the work was conducted and at what time. He said he would be taking advice before responding further. He responded further on 16 July 1999. The research program had been "totally undertaken outside of Western Australia over several years under a contract agreement between the Cancer Research Institute Inc and totally independent outside contracting agency in Victoria". CRI had met the full cost of that research program. He did not participate in it. It was neither undertaken by, nor supervised by him. CRI alone had ownership rights to that intellectual property and had transferred that ownership. Dr Gray said in his letter that he was aware that the Chairman of CRI had already written to the Deputy Vice-Chancellor for Research at UWA several years ago. He referred to that correspondence. Intellectual property issues relating to the Institutes and the University have been discussed openly at those meetings on several occasions. There was always a potential for a conflict but he had dealt with this by resigning 70% of his appointment with UWA. That had been clearly articulated in his letter to Professor Barber of 5 March 1997. He presumed that the lack of a reply from UWA and the agreement of the Dean of the Faculty was clear enough evidence that UWA agreed with his proposal. He rejected any inference that he might have a conflict between his duty to his patients and his duty as an employee of Paragon Medical. Her review disclosed that the SIR-Spheres being produced by Paragon Medical were "resin-based irradiated with Yttrium 90 ". Professor Robson accepted that as part of her activities as the UWA solicitor in 1999 Ms Key monitored the Paragon Medical website. Under the heading "University Intellectual Property" he referred to the provisional patent No PP9228 which had been lodged by Paragon Medical in relation to the production of resin-based radionuclide microspheres. He acknowledged that Professor Barber had written to Mr Gorn on 22 January 1997, on the basis of facts set out in Mr Gorn's letter, confirming that UWA had no interest financially in CRI funded technology. However that letter did not affect UWA's ownership of other intellectual property created by Dr Gray in the course of his employment. Professor Schreuder asserted that the resin-based radionuclide microspheres were not the subject of that letter. There is a legal relinquishment of its interest. Your explanation of the inter-relationship of these patents to your work for the University and the University's intellectual property is therefore requested within the next 10 working days. Under the heading "Possible Misconduct" the Vice-Chancellor wrote that it appeared that Dr Gray had not sought UWA's approval to the various directorships held by him. Once I have received your response I will determine the next course of action in accordance with the provisions of the Award. Mr Bonomelli drafted a letter for him to send to Professor Schreuder which he did on 17 November 1999. In the letter Dr Gray asked Professor Schreuder to clarify, inter alia, "the facts upon which it is suggested that the University might be the legal owner of the intellectual property the subject of Provisional Patent 9228 and 8998 and Patent 15279/95 and 81363/94". There was no reply by UWA to the letter from Dr Gray. The letter, received at UWA, bore a "received" stamp from the Office of the Vice-Chancellor and was endorsed "cc Key". It also bore a "received" stamp at UWA's Legal Services Office of 14 December 1999. Professor Robson did not remember why UWA did not respond. Dr Gray had been employed by UWA from the time he came to Perth about 1999. There were grounds for suspecting that some of the work done in the development of the microspheres technology might have been done in the course of Dr Gray's employment. Paragon Medical had lodged applications for certain patents and had been granted the patents. There were grounds for suspecting that the patents applied for by Paragon Medical might not be covered by the Barber letter of January 1997. UWA did not regard itself as having assigned any of its interests in the intellectual property. Paragon Medical was conducting its business on the basis that it owned the microsphere technology being used. Dr Gray regarded UWA as having no interest in the intellectual property being used by Paragon Medical. I infer that he knew of the information contained in his letters to Dr Gray and took no action upon Dr Gray's defiance of his demand for information. Had he been aware of those letters he would have recommended to Nomura/JAFCO not to advance the final amount of $1 million until the issue with UWA had been resolved. He said he would have also recommended to Nomura/JAFCO to instruct solicitors to advise on any possible breaches of warranties or representations by Dr Gray, CRI and Sirtex. Mr Karlson had not seen the correspondence prior to the current proceedings. He would have expected Dr Gray to inform the Board of it and, in particular, each and every time an allegation was being made against him by UWA. He said that had he been shown the correspondence or been made aware of its subject matter he would have been concerned because UWA was asserting an interest in the intellectual property of Sirtex which was contrary to his understanding of the position. This would have raised a number of issues for investigation. He did not see how the company could have proceeded with its planned float, which was intended to take place in 2000, unless the issues raised by UWA were resolved. Dane Gorn gave similar evidence. He added that he had participated in regular meetings of the CACS Advisory Board and that representatives of UWA were members of the Board. He recalled an Advisory Board meeting on 9 September 1999 which was attended by Professor Landau. The discussion did not include, to the best of his recollection, any discussions about UWA's assertions against Dr Gray at that time. He did not recall Professor Landau raising the matter with him at the meeting or at any other time that UWA considered it had an interest in the intellectual property of the technology being developed by Paragon Medical. As far as Mr Gorn was aware, UWA had no interest in the intellectual property of the business of Paragon Medical/Sirtex and there was no issue in that regard. He was very surprised when he first became aware that litigation had been commenced between Sirtex and CRI. Mr Boyce also gave evidence that prior to the litigation he was not aware of the existence of the correspondence between UWA and Dr Gray in 1999. The evidence of Dr Panaccio, Mr Karlson, Mr Gorn and Mr Boyce that Dr Gray did not disclose the correspondence between himself and UWA in 1999 was not challenged. I find that it was not disclosed. Dr Gray was asked in cross-examination whether he thought, with the benefit of hindsight, he ought to have drawn Professor Schreuder's letter to the attention of the board of Paragon Medical. With the benefit of hindsight he said he was sorry he didn't because it would have obviated some of the problems that had arisen as a result. He said however that he believed then and still believed that he was right to take legal advice and to raise the matter with the Due Diligence Committee. The latter was a reference to the Due Diligence Committee set up in connection with the IPO of Sirtex shares in 2000. He said that he raised the correspondence with Mr Cherry of Freehills who was working with the committee. For reasons given below, I find that he did not raise that correspondence with Mr Cherry or the Due Diligence Committee. Had Dr Gray disclosed the 1999 correspondence to the board, particularly the letter of October 1999 from Professor Schreuder, the board would have been put upon inquiry as to the security of the intellectual property upon which it was to rely the following year in proceeding to a public float. I also accept that Nomura/JAFCO would have been put upon inquiry in the way indicated by Dr Panaccio. Dr Panaccio was not the kind of person to gloss over that kind of issue when his principal's money was at stake. This was underwritten by KTM Capital Pty Ltd (KTM). It was a condition of the underwriting that the company's business be relocated to Sydney and that the company have directors known to the Sydney community. As a result of that advice Messrs Karlson and Gorn resigned as directors of Sirtex, Mr Gorn resigning on 16 December 1999 and Mr Karlson on 22 March 2000. Neither of them was involved in the preparation for the float, including the due diligence or the preparation of the prospectus . Mr Karlson has retained his shareholding in Sirtex. Dr Panaccio gave evidence of what he designated "the Initial Public Offering" (IPO) undertaken by Sirtex in 2000. Early in that year Sirtex sought funding, by way of a convertible note issue, to support it upon listing. It raised $1 million at a 30% discount to a future IPO price. The following advisors were engaged to act for Sirtex in relation to the IPO. Freehills as the company's legal advisors. 2. Deloittes as the company's accountant. 3. Davies Collison Cave and Wray & Associates to advise on patents. 4. KPM as underwriters. Dr Panaccio was directly involved in engaging Freehills and KPM. Freehills were retained to conduct the due diligence for the IPO. Gray arranged the retainer of Deloittes and the patent attorneys. Dr Panaccio said that Dr Gray wanted the company to engage Freehills. Dr Gray said he did not engage lawyers to act for him in the 2000 float and due diligence process. He also said that no one from Freehills had suggested that his interests and those of Sirtex might not be the same or that he should consider getting independent legal advice. Just why that should have been Freehills' obligation is not clear. They were engaged by Sirtex to conduct its due diligence process as part of the preparation of the prospectus for the IPO. There was a substantial amount of evidence relating to the meetings of the Committee, the due diligence process generally and Dr Gray's role in verification of prospectus claims with respect to intellectual property. It is not necessary for present purposes to do more than highlight the salient features of the process and particularly Dr Gray's input into it. It is convenient to outline the sequence of those meetings and the matters relevant to these proceedings which were dealt with at them. The Due Diligence Committee met on 3 February 2000. Drs Gray and Panaccio were present along with Mr Kerridge from KTM Capital Pty Ltd, Messrs. Mellos and Davey of Freehills and Mr Messer of Deloittes by telephone. The minutes recorded, under the heading "Background\" that Paragon Medical was proposing to issue a prospectus in relation to an initial public offering of approximately 20 million new ordinary shares in the company to raise approximately $20 million. Mr Mellos tabled a package of draft due diligence documents which had previously been distributed. He provided a brief explanation of the purpose of the due diligence and the process outlined in the package. Mr Messer had not been provided with a package at that time. Each member of the committee including Dr Gray confirmed that he had at least briefly reviewed the documents. The documents included a Planning Memorandum which Mr Mellos asked the members of the committee to review. He asked that they contact Freehills before the next meeting with any questions or comments. It was never the purpose of the due diligence process to inquire into the provenance of Sirtex's intellectual property. Its purpose was to ensure that the statements in the prospectus were true and included all information likely to influence a person's decision to invest in the company's shares and the price that such a person would be prepared to pay. The purpose of the committee as explained by Mr Mellos, was to consider, review and oversee the due diligence process associated with the initial public offering and prospectus. He was appointed chairman. Freehills was to act as role of secretary and coordinator. The committee noted that Freehills had been engaged to conduct a "legal due diligence" and assist with certain parts of the prospectus relating to legal matters. It was to provide an opinion in relation to the due diligence process and to advise generally in relation to legal matters concerning the initial public offering. Davies Collison Cave and Wray & Associates had been engaged to provide reports on the company's patents for inclusion in the prospectus. Their draft report and a final report from Wray & Associates were already available. Dr Gray undertook to circulate those reports to the committee. Due diligence on general matters and all business and technological aspects outside the scope of the expert reports was allocated to Dr Gray. Mr Mellos referred the committee to verification procedures set out in the planning memorandum. They required a line by line verification of the prospectus. Each material statement of fact or opinion would be allocated to a person for verification and confirmation that the statements made in it, where appropriate, was supported by adequate documentation. Bruce Gray may be required to undertake extensive verification of the clinical trial results. This may require referring back to the primary data. Bruce Gray also noted that a statistician in Sydney has interpreted some of the data used in the clinical trial. Kon Mellos suggested that this report be circulated to the Committee. Mr Mellos said that a general meeting of the company would be required to implement the capital restructure and to adopt a new constitution appropriate for a listed company. In order to ensure that existing shareholder rights were not prejudiced if the float were not to proceed the necessary resolutions required for the capital restructure and adoption of the constitution would be passed in advance but specified only to take effect when the company was admitted to the official list for quotation of the company shares on the Australian Stock Exchange. Dr Gray said that shares or options could be issued to other persons including Dr Burton and a new managing director at some time prior to or at the initial public offering. The company had not determined how many options would be issued or their terms. He and Dr Panaccio were to prepare a list of proposed option holders, the numbers of options proposed to be issued and a description of their terms. There was also a discussion about changing the company's name. The name "Oncomed Technology Limited" was discussed. James Cherry, who was by now a partner at Freehills said that in February 2000 he was asked by Mr Mellos to assist him in connection with a limited legal due diligence for the Sirtex IPO in relation to intellectual property issues. Mr Mellos told him that Dr Gray was the officer with knowledge of the intellectual property aspects relevant to the due diligence. According to Dr Gray he had discussions before or early in the due diligence process with Dr Panaccio about attacks upon him by Professor Robson. Dr Panaccio denied knowing that Dr Gray had left UWA on bad terms. He had, of course, been aware in 1997 about the investigation into Dr Gray in relation to the sale of SIR-Spheres to RPH through Paragon Medical. He must have also been aware that no case of criminal or corrupt conduct had been made out against Dr Gray and that in 1999 the board had agreed to reimburse his legal costs. I do not accept that Dr Gray told him that he had left UWA on bad terms. However, Dr Panaccio is likely to have been aware of some conflict between Dr Gray and the UWA administration. That does not take the case very far as I am satisfied that Dr Gray did not disclose to Dr Panaccio or the Sirtex board the important correspondence with Professor Schreuder in 1999 which flagged the possibility of a UWA claim to ownership of the intellectual property. Dr Gray said in cross-examination that he did raise the correspondence with Mr Cherry "or the substantial matters contained in it". This was the first time that he had made the claim in his evidence. It was not in his affidavit nor in his oral evidence-in-chief. Cross-examined, he could not recall providing the correspondence to Mr Cherry "but the substance of the matters were certainly discussed". Asked what he said to Mr Cherry he said he could not remember the exact words. It was seven years earlier and there had been a number of conversations. He could recall the "substantial gist" of what he said. It was put to Dr Gray that he had made up his evidence in an attempt to gloss over his concealment of the correspondence from Sirtex. He denied that and said "as of that time, as far as I was concerned, and my legal advice was concerned, that the issue was dead". His evidence on the issue was unconvincing. It was contradicted by Mr Cherry's evidence. I do not accept that he told Mr Cherry of the correspondence from Professor Schreuder, either in detail or otherwise, so as to alert him to the possibility that UWA might raise a question about the ownership of the intellectual property the subject of the due diligence process. His evidence to the contrary might be what he believed to be true but if so it was a self-serving reconstruction of events. Among the list of the things Mr Cherry was asked to do by Mr Mellos was to look at a draft of a letter dated 28 January 2000 which Dr Gray proposed to send to Dr Burton. The letter asked Dr Burton to agree not to disclose to the public any details of the manufacture of Yttrium microspheres in consideration of an allocation of 20,000 ordinary shares in the company upon its listing on the ASX. In that proposed letter Dr Gray referred to the work which he and Dr Burton had done at Melbourne University involving the treatment of resin microspheres by precipitation of Yttrium 90 into resin as the final step in incorporating it into the resin particles. We do not regard this as a novel or inventive procedure, and it is therefore not patentable or protectable as Intellectual Property. He made some handwritten notes indicating that he was told by Dr Gray that he and Dr Burton had worked together at the University of Melbourne trying to make microspheres safer. It appears from emails that Mr Cherry had some discussion with Dr Gray on 7 or 8 February 2000 about intellectual property issues relating to the resin spheres. He had no recollection of the content of that discussion. Mr Cherry wrote to Dr Gray on 9 February 2000 attaching a proposed draft reply to Dr Burton. He referred to the issue of data arising from clinical trials and said that the best way of handling it would depend on the type of information involved. He was concerned about the confidentiality of such information and its "ownership". He did not believe they could instigate a far-reaching investigation at that stage but asked Dr Gray to send him copies of certain documents so that he could have a better sense of the information in issue. What he sought was a copy of the clinical trial data included with the FDA application, the abstract published in May 1999 relating to the clinical trial data, a copy of the draft publication he was proposing to publish later that year and the dates over which the trials were conducted. Many of these risks are simply best left to lie. However, clearly I need to review this documentation before we can make any judgment of that nature. Resin microspheres incorporating precipitated Yttrium had been sold publicly for sometime and used in the clinical trials necessary for the approval of that method of treatment of liver cancer. Dr Gray sent Mr Mellos, by email on 10 February 2000, his answers to a due diligence questionnaire. Each of them was the word "nil" in answer to questions about whether any material litigation was threatened or existed by or against the company and whether any circumstances existed likely to give rise to such litigation. There was some dispute about the date of the email. While the covering email from Dr Gray to Mr Mellos was dated 10 February 2000, the printed copy bore the date 22 February 2000. I accept that the later date was that on which the document was printed or saved to file. It was sent on the earlier date. The second meeting of the Due Diligence Committee took place on 11 February 2000. Participating were Drs Gray and Panaccio, Mr Kerridge, Messrs Mellos and Davey and Ms Sandeep Mann from Freehills and Mr Peter Messer from Deloittes. Draft patent attorney reports from Davies Collison Cave and Wray & Associates had been received. The report from Davies Collison Cave only covered the status of registration of certain patents and patent applications. Mr Mellos indicated that a reconciliation would be necessary between the patents referred to in the reports and the products and processes used by the company. The committee had to know which aspects of the business of the company were or were not protected by patents. He asked who would be in the best position to reconcile the patents with the products and processes. Dr Gray said that the patent attorneys were not familiar with the business of the company and that he would be in the best position to undertake that task. He asked whether the reconciliation should be done with claims under granted patents or whether it should extend to the subject matter of patent applications. Dr Panaccio observed that it would be difficult to make the reconciliation where products and processes were experimental (eg hyperthermia). He suggested that the reconciliation should only be done in relation to products and processes in respect of which the company had been granted patents, they being SIR-Spheres and DOX-Spheres for which patents had been granted in Australia and the USA. The committee resolved that Dr Gray should reconcile the granted patents with the actual products and processes of the company. He also agreed to contact Davies Collison Cave and request that their report be amended so that it included a summary of the subject matter of the relevant patents. A separate section of the minutes was headed "Intellectual Property Issues". The intellectual property protection was based on know-how and trade secrets rather than registration of claims. He had discussed the matter with Mr James Cherry at Freehills who had expressed an initial view that the absence of patent protection for the original SIR-Spheres was unlikely to be materially adverse to the FDA application although he claimed no expertise in relation to the FDA approval process. It related to the property in the results of clinical trials conducted at UWA while Dr Gray was working there. The trials had been conducted in an academic context. Dr Gray noted that extracts of the results had been published by UWA in May 1999 and were in the public domain. However the company had included more detailed trial results in its FDA application. A review would need to be undertaken of, among other things, the policy of the UWA, the terms of engagement of Bruce Gray and other agreements governing the ownership of intellectual property generated within the UWA. Kon Mellos queried whether a commercial agreement could be reached with the UWA as an alternative to such a review. Dr Gray explained that Dr Burton had been involved at CRI in the development of the resin microspheres during the 1980s and had developed a technique of fixing Yttrium to such microspheres. Patent protection had not been sought because of want of novelty. Dr Gray said he would write to Dr Burton to seek confirmation that he would make no claim in relation to ceramic microspheres used by the company. The company might offer shares or options in exchange for that confirmation. In cross-examination Dr Gray said that Dr Burton had not had much to do with ceramic microspheres but more with the resin microspheres. The reference to ceramic microspheres in the minutes could have been a mistake. I accept that it was intended to be a reference to resin microspheres. The committee resolved that Mr Mellos would discuss the intellectual property issues with Mr Cherry and report to the committee at the following meeting. UWA referred to these matters in its closing submissions. It cited a handwritten note of the meeting by Ms Sandeep Mann quoting Mr Mellos as saying that "claim by UWA sufficiently material to disclose". Just what that meant in context is not clear. It is most likely to have referred to a possible claim to clinical data. Sirtex pointed out in its submissions that all the discussion apart from the comment attributed to Dr Panaccio concerned the clinical trial data. It was in that context that Dr Gray referred to the Barber letter of 22 January 1997. In my opinion, as Sirtex contends, the comments attributed to Dr Panaccio in the minutes should be taken as the most reliable record of his state of mind at the time of the meeting. A significant amount of the evidence in cross-examination in the case was affected by the passage of time. Witnesses, including Dr Panaccio, were repeatedly asked to accept argumentative propositions about what they would have thought, known or said at times long past. Inferences about the past are no substitute for evidence about it. It is for that reason that I am reluctant to place much weight on "concessions" of a hypothetical or inferential character extracted from witnesses. Mr Cherry received a copy of the minutes of the meeting of the Due Diligence Committee of 11 February 2000 on or about 16 February 2000. He reviewed them and sent some comments to Mr Mellos on 17 February 2000 by email. My question is whether UWA is fully informed of what its rights may be, such that it could make a claim. It was put to Mr Cherry in cross-examination that he raised his concern about the UWA rights because Dr Gray had told him something of the hostility in his previous dealings with UWA. He said he had no recollection of Dr Gray expressing any hostility with UWA. He had no independent recollection at that time as to why he had raised the matter. On the face of it, it was a question about verification and did not require resort to conversations with Dr Gray about the hostility of UWA to explain it. He had not seen a copy of the confirmation and thought he should "as such a document would significantly minimise the risk attached to the UWA trials". His focus again was upon the significance of the Barber release for the clinical trial data. Mr Mellos did not pursue the issue raised by Mr Cherry about whether UWA was fully informed of its rights. Sirtex submitted that this was no doubt because Dr Gray provided the Gorn and Barber letters to verify the absence of any issue of ownership in relation to SIRT-2, DOX or Thermo-Spheres. SIRT-1 was considered to be in the public domain and not patentable. Had Mr Mellos thought that there was some real risk that UWA was not "fully informed of what its rights may be" and that there was a real risk that it might raise a claim, then it is difficult to imagine that he would simply have decided to disregard the problem. The proposition that UWA was not fully informed of its rights in the circumstances might have seemed a little improbable. It was after all a large well resourced organisation in terms of the advice available to it. It will be remembered that in making the observation that he did, Mr Cherry had not seen the Barber letter. On 18 February 2000 Mr Cherry telephoned Dr Gray. Dr Gray told him in substance that he would give him a letter providing the confirmation from UWA relating to CRI and information about the clinical trials. The next meeting of the Due Diligence Committee occurred on 18 February 2000. Mr Mellos advised that Mr Cherry's initial view, that the want of patent protection for the original SIR-Spheres was unlikely to be material, was formed in the context of whether or not it would materially prejudice the FDA application. He had asked for more time to consider the matter relating to the use of results from the UWA trials. Dr Gray said he would contact Mr Cherry to discuss the intellectual property issues and to provide information previously requested in connection with the results of the UWA trials. It follows that, to this point, Dr Gray had not provided Mr Cherry with the information he had sought in relation to the intellectual property issues. Dr Gray said he had started on the task of reconciling the patents with the company's products and processes. His preliminary view was that the patents granted to the company provided fairly good coverage for its products and processes. He also said he anticipated receiving the amended report from Davies Collison Cave which he had previously requested. Mr Mellos had discussed with Mr Kerridge the best way to describe the company's technology in the prospectus. He supported the suggestion that the prospectus include an outline of the history of the company's technology in chronological order, namely resin spheres, first-generation ceramic spheres, second-generation ceramic spheres and so on. With respect to each stage of the chronological history it should also indicate the extent to which the company owned any intellectual property in the technology. The outline should appear at the front of the prospectus. Dr Gray agreed to draft the relevant history. Mr Mellos commented that the verification process would commence with the draft of the prospectus incorporating the history of the technology and intellectual property rights that the company owned in it. Under the heading "Intellectual property issues" Mr Mellos said that the item would be deferred to the next meeting as Mr Cherry was not able to attend the current meeting. In the meantime Drs Gray and Panaccio were to discuss intellectual property issues with him and report to the committee at the next meeting. Shortly after 18 February 2000 Mr Cherry received a letter from Dr Gray dated 15 February 2000. It attached the letters of 17 and 22 January 1997 exchanged between Mr Gorn and Professor Barber. It also attached the documentation relating to clinical trial date and associated publications. On that day Mr Davey sent a supplementary due diligence questionnaire to Dr Gray. He said in his covering email that although Freehills had been involved in the establishment of the company at the time of the Nomura/JAFCO investment they did not have an intimate knowledge of the day-to-day operation of its business. He encouraged detailed responses from Dr Gray. Dr Gray agreed in cross-examination that he knew Freehills were relying upon him to provide accurate information. He was waiting for a copy of the prospectus with amended wording before he confirmed his advice in relation to intellectual property issues concerning the three technologies or the SIR-Spheres trial results. The amended wording was to be prepared by Dr Panaccio. Dr Gray said that he had not yet sent a letter to Dr Burton but that Dr Burton would be given shares out of existing shares held by Dr Gray in accordance with a clause in the Subscription and Shareholders Agreement that permitted Dr Gray to allocate shares to persons nominated by him. There was discussion about the most recent drafts of reports from the two firms of patent attorneys. Freehills had circulated comments on the drafts. The committee resolved that Freehills should contact Davies Collison Cave and discuss with them amendments to the report. Its purpose was to make the format of the two reports similar. Dr Gray reported that the chronological history of the technology and intellectual property ownership had been prepared. Mr Kerridge suggested that the description needed to be more specific and more detailed. It appears from the minutes that the only intellectual property issues outstanding were the clinical trial data and the question whether Dr Burton was entitled to a shareholding in Sirtex. On 1 March 2000 Mr Cherry had a discussion with Ms Sandeep Mann of Freehills. She asked him to prepare a brief report on the potential for litigation for the due diligence report and for the prospectus. He received an email from Mr Davey attaching a revised part of the prospectus for his review on 7 March 2000. Further drafts were sent and he made further comments. It was put to him in cross-examination that he did not turn his attention to the material supplied by Dr Gray for some weeks. In reading it, his principal purpose was to assess whether the information in relation to clinical trials which had been used to support an FDA application, could be the subject of a potential breach of confidence claim. He had little recollection, apart from his own documentary record, of what he considered and conversations that he had. He did reach the conclusion that there was a great deal of information and complexity surrounding the ownership of the data in the clinical trials. For the purpose of advising on the associated risk he assumed that the data was owned by UWA. Mr Davey noted in his email that Mr Mellos had mentioned that Mr Cherry thought the prospectus should state that the patents were not necessarily beyond challenge. Cherry said he thought it likely he said something like that. There was further exchange of emails about intellectual property issues surrounding clinical trials. In reference to the statement that your comments on the trial results were based on the assumption that there was no agreement between Bruce and UWA, he has noted that UWA has agreements with all its staff in relation to IP. I would be grateful if you could discuss this with him. Freehills had not yet received the amended report from Davies Collison Cave. A report had been received from Wray & Associates. Both reports were to be amended as a consequence of the change of the company's name from Paragon Medical Limited to Sirtex Medical Limited. In discussion of the proposed capital structure, Dr Gray confirmed that 100,000 new options allocated to CRI were intended for directors of CRI. Five current CRI directors would be offered 20,000 options each. On 21 March 2000 the committee met again. Drs Gray and Panaccio were present along with the proposed chairman, Dr Chris Roberts (by telephone) and Dr Colin Sutton the proposed Chief Executive Officer (also by telephone). Mr Kerridge participated by telephone. Messrs Mellos, Cherry, Davey and Ms Sandeep Mann were present and Deloittes were represented by Ms Leanne Petrou (by telephone). The minutes recorded Mr Cherry's statement that Freehills' views on the intellectual property issues arising out of the use of the trial results in the FDA application for SIR-Spheres were covered in the draft legal due diligence report. However, the remedy for the UWA is, based on the information reviewed by Freehills, most likely to be damages rather than an injunction. James Cherry queried whether the UWA would be able to establish any loss for which it is entitled to damages in any event. Mr Cherry said the risk of litigation became less significant as each day passed. The committee agreed that no specific disclosure was required in the prospectus in relation to that issue. Mr Cherry explained that many people, including Dr Burton, had arguably contributed to the technology and for that reason absolute ownership was almost impossible to establish. This was not unusual for technology of the kind owned by the company. Mr Cherry read a draft of a statement about this issue proposed for inclusion in the "risk factors" section of the prospectus. The committee discussed the proposed wording and suggested some amendments. Under the heading "Other matters" Mr Davey noted a reference in the board minutes of the company to a proposed transfer of shares to Dr Chen. Dr Panaccio explained that that matter related to an issue purely between CRI and Dr Chen concerning the development of the DOX-Spheres and did not in any way affect the company. On 22 March 2000 Mr Cherry telephoned Dr Gray to discuss the issue about clinical trials and in particular the matter raised by Mr Davey in his email of 21 March 2000. In the course of that telephone conversation Dr Gray told him that the current policy of UWA was on its website and there had been other policies in place at the relevant times. Mr Cherry considered that information reinforced the conclusion that the resolution of property issues would be time consuming and might still be equivocal. It informed the drafting of what became Part 3.2 of the due diligence report. On 23 March 2000 Mr Davey sent Dr Gray an email with a further due diligence questionnaire. It requested that he provide a copy of the agreement between himself and UWA in relation to intellectual property. Dr Gray responded the next day saying that there was no specific policy. UWA had developed several intellectual property policies. The latest could be taken from the web. The current document was not really relevant to the results of trials. What was published (based on the clinical data) was under the banner of UWA and other institutions such as CRI and Sir Charles Gairdner Hospital which supported the trials. Freehills produced a due diligence report dated July 2000. It was based in part on a due diligence questionnaire dated 3 February 2000 to the company and supplementary due diligence questionnaires dated 18 February 2000, 9 March 2000, 23 March 2000 and 5 July 2000. The questions had been put to Dr Gray and others. The Freehills lawyers involved were Kon Mellos, Ben Davey, Sandeep Mann and Leanne Edwards an articled clerk. The opinions expressed in the report related to due diligence conducted up until 17 July 2000. Section 3 of the report was entitled "Intellectual property, litigation and conflicts of interest". if a court were to award damages, these are unlikely to be on the basis of ongoing royalty, but rather a lump sum for the cost of carrying out the clinical trials as a service to a third party. In particular, it is assumed that the arrangements between UWA and its staff conducting such trials provide that UWA owns any resulting intellectual property but provide no unusual penalties for use of the intellectual property without the express consent of UWA. This is, in our experience, not an uncommon position. If, of course, the position is more favourable to researchers, then the Company's position is improved. In order to make a more definitive assessment of the position, it would be necessary to review a copy of the actual terms that applied to Bruce Gray's work at the UWA. In another section of the report headed "Litigation" the Freehills' group reviewed facts which might give rise to litigation. They mentioned the letter of 22 January 1997. They also referred to a confidentiality agreement signed between UWA, the company and CRI on or about 4 May 1998 relating to the manufacture and applications of ultra fine powders. Dr Gray had instructed Freehills that the document was irrelevant as the powders were made by another department at UWA and there was no follow-up on the issue. The report, also referred to a one page summary paper published in May 1999, was cited. It described clinical trials. It focussed on the use of SIR-Spheres in addition to chemotherapy with FUDR and disclosed improved results. An FDA application filed in October 1999 containing detailed information about Phase II and Phase III trials was also cited and a nine page paper disclosing much of the information contained in that application which was to be published in the near future. It is further assumed that the arrangements between UWA and its staff conducting such trials provide that UWA owns any resulting intellectual property but provide no unusual penalties for use of the intellectual property without the express consent of UWA. This is, in our experience, not an uncommon position. If, of course, the position is more favourable to researchers, (for example, if the work falls entirely within the letter described ... above) then the Company's position is improved. In order to make a more definitive assessment of the position, it would be necessary to review a copy of the actual terms that applied to Bruce Gray's work at UWA. They then stated the likely legal position which has already been referred to above. The Sirtex prospectus issued on 17 July 2000. In an "Ongoing Due Diligence Questionnaire" dated 18 July 2000, Dr Gray answered "no" to all of the questions put including questions as to his awareness of any intellectual property of the company or any rights under any licence of intellectual property to the company or any member of the group. Save for the reference to clinical trial data, there was nothing in any of his answers to the questionnaire to suggest that there might be a claim by UWA. When the prospectus was published it included statements about intellectual property rights and said that while the directors could not exclude the possibility of claims, they were not aware from their investigations of any such claims having been made. Dr Gray signed a Verification Sign Off document on 17 July 2000 saying that he had reviewed statements in the prospectus which had been allocated to him to verify and confirm. The source material was said to support the statements that they were not misleading or deceptive and that there was no omission of information from the statements which was required to be disclosed in the prospectus. Dr Gray was allocated those paragraphs of the prospectus under the heading "Technology and Intellectual Property Rights" and the first paragraph of Section 5. The relevant text appears later in these reasons. He evidently did not look at the relevant documents before signing off. The due diligence report from Freehills contained no suggestion to Sirtex that there was any issue in relation to the ownership of the patents. UWA's rights in relation to the clinical trial data. 2. The terms of Dr Gray's employment relationship with UWA. Contributions to the development of the technology by Drs Burton and Chen and whether those contributions should be recognised. It was submitted that in these circumstances Dr Panaccio, as a member of the Due Diligence Committee, limited the scope of the Freehills' brief so that it did not investigate the provenance of the intellectual property. I do not accept these submissions. Dr Panaccio was an astute businessman and, in my opinion, not one to take unnecessary risks. It was not unusual to limit the scope of Freehills' enquiries given the uncertain outcome of even the most thoroughgoing investigations as to ownership. He had the benefit of the Barber letter and Dr Gray's assurances. Possibilities can be conjured from constellations of more or less suggestive facts. The constellation of facts in this case was not, in my opinion, sufficient to put Dr Panaccio or an honest and reasonable person in his position on notice that UWA might have or want to pursue, a claim to the intellectual property. To the extent that UWA relies upon Dr Panaccio's involvement to support a case of knowing assistance by Sirtex in a breach of fiduciary duty by Dr Gray and knowing receipt of its proceeds, it cannot succeed. As to Dr Gray, I have already made findings adverse to his contention that he disclosed the possibility of some "spurious" claim being made by UWA in relation to the intellectual property. I accept the Sirtex submission that UWA's claim to be the owner of some or all of Sirtex's patents was not identified as a possibility in 2000 because Dr Gray did not disclose relevant information and, in particular, did not disclose the Schreuder correspondence of 1999. Sirtex accuses him of deliberate non-disclosure. Dr Gray was aware that UWA, through Professor Schreuder, had raised a real possibility that it would assert a claim to an interest in the intellectual property underpinning the Sirtex float. He must have known that the possibility of such a claim was relevant to the due diligence process and the preparation of the prospectus. In my opinion, despite this knowledge, he decided not to disclose the possibility to Sirtex. In all likelihood that was because he took the view that there was not much chance that the University would follow through. He had convinced himself that the Schreuder correspondence was part of a tactic by Professor Robson to bring about his resignation. He had resigned and therefore there would be little or no purpose in UWA pursuing him. He took a calculated risk in not disclosing the correspondence to Sirtex. It was, as Sirtex alleges, a deliberate non-disclosure. Dr Williams saw Dr Gray's secretary, Ms Spicer, assembling boxes of documents in preparation for their removal. Other staff of CACS assisted in packing laboratory records and equipment. Dr Williams was absent from Perth for about two weeks in April 2000 and most of the actual removal of the records and equipment happened while she was away. When she returned to Perth on the weekend of 29 and 30 April 2000 she had to move her own staff records and equipment to new CACS premises at Park Avenue in Nedlands. There were a number of students working in CACS including Paul Moroz, Simon Harrison and Paul Katris. Their research equipment, documents and effects also had to be moved. She did not recall any conversations with Dr Gray about the removal of documents and equipment or the extent of those which he proposed to take with him when he left CACS. After Dr Gray and his team left the only records remaining in CACS related to Dr Williams' work and that of her students, some departmental personnel files and a small amount of correspondence between Dr Gray and others in the Faculty of Medicine and Dentistry. The Laboratory Manager, Jillean Winter, gave Dr Williams a number of schedules described as "Equipment Lists" which she reviewed before and after Dr Gray's team departed. She endeavoured to reconcile equipment and consumables used by various people in CACS. These had been obtained through a variety of funding sources over the years including RPH, Medical Research Foundation research grants, the Cancer Foundation, the NH & MRC, the Clive and Vera Ramaciotti Foundation, Telethon, UWA and possibly others. Some had also been purchased with LCI and CRI derived funds. Dr Williams wanted to make sure to the extent that any equipment and consumables were identified as going to CRI, the University would be reimbursed if it had paid for them. On 9 June 2000 Dr Williams wrote to Mr Gorn the Chairperson of CRI stating that she had identified a number of instances in which purchases of equipment and consumables for CRI scientists undertaking contract research on behalf of Paragon Medical were inappropriately paid from CACS' UWA derived funds rather than the CRI account. She attached details of those transactions. She accepted that, given the complexity of the relationships of CRI with CACS and Paragon Medical and the number of purchase transactions, occasional mistakes in invoice processing were unsurprising. She asked for prompt settlement of the enclosed invoice to correct those mistakes. The total invoice was for $16,573.75. She received a response dated 30 June 2000 from Mr Colin Sutton the CEO of Sirtex attaching a copy of items that he believed should be excluded from costs to be reimbursed by Sirtex. The net amount to be reimbursed was $10,615.62. This was followed on 11 July 2000 by a letter from CRI signed by Mr Gorn attaching CRI's cheque for $10,615.62. Dr Williams wrote back to Mr Gorn on the same day dealing with each of the disputed items and indicating that she would consider the matter settled when CACS received a further $4,211.42 or $2,998.77 together with three books and a dictaphone belonging to CACS. The books and the dictating machine were returned but Dr Williams was referred to the Medical Research Foundation in respect of the outstanding amount. There was a continuing exchange of correspondence into early 2001 concerning some items of laboratory equipment said to be owned by CRI but still at CACS. This led to a complaint to the police and litigation in the Local Court. Dr Williams said that after the departure of Dr Gray and the CRI scientists and support staff from CACS in early 2000 she did not see any of the laboratory books which they had used or copies of them. He described Sirtex as having been formed to commercialise a portfolio of three products relating to the treatment of liver cancer. The third product was based on a new generic technology platform which might develop into a treatment for other forms of cancer as well as having other applications in medicines. The three products were described as SIR-Spheres, DOX-Spheres and Thermo-Spheres. General descriptions of the technologies appeared in Section 2 of the prospectus under the heading "Investment Highlights". In its Prospectus, Sirtex offered for subscription 15 million shares at an issue price of $1 to raise $15 million. Upon listing on the ASX it would have a market capitalisation of $54 million at the "Offer Price". The application list opened on 25 July 2000 and was to close on 11 August 2000. The expected date of quotation of shares on the ASX was 24 August 2000. Section 3 of the prospectus was an "Information Summary". to allow Sirtex Medical easier access to the equity market in order to fund future growth opportunities both through acquisitions and other business opportunities. In each of those years there had been negative earnings. Revenue from the sale of SIR-Spheres was $151,444, $155,554 and $126,246 for 1998, 1999 and the six months to 31 December 1999 respectively. Business and investment risks were referred to. These included the risk that the grant of patent protection might not guarantee complete protection of the company's intellectual property. Section 5 gave an overview of Sirtex. The CRI is an independently incorporated research institute, founded in 1990 that is now affiliated with the Centre for Applied Cancer Studies at the University of Western Australia. The CRI has undertaken many research programs investigating cancer over the past decade. Reference was made to Nomura/JAFCO's subscription for equity in the company to finance development of the technologies. More detailed product descriptions followed. Early data was publicly disclosed and therefore it is not possible to obtain patent protection for the first generation SIR-Spheres ® . The Directors believe that the lack of patent protection on the first generation SIR-Spheres ® will not affect the Company's prospects of commercialising this therapy since the Company now has developed a second- generation of SIR-Spheres ® , with which it plans to replace the current SIR-Spheres ® in the marketplace. Patent protection for the improved SIR-Spheres ® has been granted in Australia and the USA. It distinguished them from the early SIR-Spheres on the basis that they were manufactured from pure Yttrium Oxide and were microscopic hollow ceramic particles. It was said that Sirtex planned to test these second generation SIR-Spheres in patients before the end of the year 2000. Section 5 of the Prospectus also described Product 2 designated "Controlled-Release Therapy with Dox-Spheres". Patent protection for Dox-Spheres has been applied for in a number of countries and patents have already been granted in Australia and the USA (see Section 9). The product concepts were said to have been the subject of a major research program at CRI over many years. Under the heading "Intellectual Property Position" the Prospectus stated that Sirtex had applied for two families of patents to protect its hyperthermia technology. They covered the hyperthermia micro-particles and the device used to generate the electromagnetic fields required. Reference was made to the risks associated with medical research. The three products were described as being "at different stages of development". Sirtex was managing the risk by performing early experiments that would indicate whether the products could be successfully developed. Under the heading "Key Drivers to Revenue" the Prospectus stated that the principal factors determining the revenue generated by the company would be market acceptance of its products, the influence of government regulation of its proposed business and the impact of competitive activities by other market participants. Up to the present time the sale of SIR-Spheres had been in the context of clinical trials and test marketing programs. The overview also referred to the Sirtex website which, it was said, was designed to provide details information to general practitioners to enable them to recommend treatment to their patients. Section 6 of the Prospectus listed the members of the board of directors, they being Dr Chris Roberts, Non-Executive Chairman, Dr Bruce Gray, Medical Director, Dr Michael Panaccio, Non-Executive Director and Dr Colin Sutton, Chief Executive Officer. The key management team comprised Mr Grant Boyce, the Company Secretary, Dr Monica Hope, the Regulatory Affairs Manager and Dr Steven Jones, the Senior Scientist and Project Leader. Risk factors were set out in Section 7 of the Prospectus. It stated that the continued services of Drs Gray and Jones were vital to the ongoing success of the company. The associated risk was addressed in part by the existence of three year service contracts with each of those key staff members. Medical research and development was said to involve long lead times and that the hyperthermia program was at an early stage. The therapies could fail at any of the stages of research and development from laboratory studies through the phase 3 clinical trials. Under the heading "Technology and Intellectual Property Rights", the Prospectus stated that the granting of a patent does not guarantee its validity, that the rights of others are not infringed or that competitors would not develop technology to avoid such patents. The Directors cannot exclude the possibility that a person may claim in future an ownership interest in the technology, but the Directors are not aware from their investigations of any such claims having been made against the Company. It showed accumulated losses from the end of the 1997 financial year to 31 December 1999 at $2,646,420. The total equity at 31 December 1999 was said to be $18,680,348. Non-current assets designated "Intangibles" were valued at $3,125,857. In a note to the accounts, these were said to represent intellectual property at cost less accumulated depreciation. Section 9 was entitled "Reports on Patents". A report from Wray & Associates dated 17 July 2000 was included, together with a report from Davies Collison Cave of the same date. The report from Wray & Associates confirmed that Sirtex was the patent applicant in respect of a number of patent applications in a variety of countries described in Schedule A to the report. Section 10 of the Prospectus set out additional information. It referred, inter alia, to executive service agreements between Drs Gray, Jones, Sutton and Sirtex. It also referred to a Manufacture and Supply Agreement dated 4 February 2000 between Sirtex, Sirtex Medical Products Pty Ltd (a subsidiary) and ANSTO. This was for the supply of first generation SIR-Spheres. A Research and Development Start Grant Agreement dated 17 June 1998 between Sirtex and the Industry Research and Development Board providing for a total grant of $950,000 between 14 January 1998 and 30 June 2001 to assist with the development of SIR-Spheres and hyperthermia technologies was also mentioned. Financial assistance received under that grant up to the date of the Prospectus was $840,839. The latter company was the manager of the investment fund. Professor Barber said he read the prospectus thoroughly at the time. He took his responsibilities very seriously and wanted diligently to consider the document. They had some earlier discussion about the question of intellectual property held by Paragon and Sirtex. He said some such discussion had occurred between October 1999 and August 2000. In the context of Sirtex's initial public offering Ms Key told Professor Barber in July 2000, that, in her opinion, UWA had an interest in the intellectual property. When he saw the prospectus Professor Barber thought that if UWA were to make a claim in respect of the intellectual property it could affect the share offer and expose UWA to a counterclaim for damages. He agreed in cross-examination that he could have asked Linda Key to seek advice from external lawyers which was common UWA practice at the time. However he did not do so. Nor did he conduct any investigation at the time or ask Linda Key to assemble a file of records and information. He accepted that there was nothing to stop him making inquiries of the auditors or independent accountants named in the prospectus about matters contained in. He could have inquired of Mr Lennon who had recently left UWA and he could have contacted other staff members and Dr Gray. He could have written to Sirtex. He did none of these things. Professor Barber was cross-examined on the prospectus. He accepted that it appeared from the prospectus that the continued services of Dr Gray and Dr Stephen Jones were vital to the ongoing welfare of Sirtex. He also recalled reading a statement in the document that the directors could not exclude the possibility that someone might in the future might claim an ownership interest in the technology. He understood when he read that statement that it meant that the directors were not aware of any claim and that potential investors would have understood that the directors did not believe the claims had been made. Professor Barber also said that the prospectus indicated that the investment would be highly speculative and that large sums of money would have to be expended in a short time. The directors of Sirtex were giving no assurance about the prospects of the business. Professor Barber said in his affidavit evidence that any investigations into whether UWA had an interest in the intellectual property would be difficult because of the "messy lineage" of the work carried out in the first eleven months of the operation of CACS. It would have been relevant to a decision to commence action against Sirtex that the company had suffered a loss in every trading period for that year. In light of the negative factors, Professor Barber did not think there was a real prospect of an investigation turning anything up. He told either Linda Key or Professor Landau that he harboured the hope that if Dr Gray made a lot of money out of the float he might donate a "Gray Chair of Surgery" to UWA. He concluded that the risks of legal action were not outweighed by the likely benefits. He did not remember raising the matter with Professor Robson but would probably have mentioned it to him. At this time Ms Key and Ms Frodsham were preparing to prosecute an intellectual property case against Dr Gray. I accept the Sirtex submission that Professor Barber, acting on behalf of UWA, and in consultation with its legal officers, considered making a claim but decided not to do so because of the cost to UWA and the risk of a counterclaim. I also accept, as was the case, that Professor Barber had already shown a reluctance to invest money on behalf of UWA in what would have been an expensive development process including the possible outlay of some $500,000 for equipment for the hyperthermia hysteresis project. Professor Barber's knowledge may be taken to be that of UWA for all material purposes in these proceedings. I also find that it is probable, as he said, that he told Professor Robson of his discussions about the prospectus with Ms Key. She did not recall how she had obtained it. She might have got it from a website. She was watching the affairs of Sirtex in 2000. She had associations with the people who were involved with it and was interested in the progress of their work and its continuance. Dr Williams believed there were no legal issues about the provenance of Sirtex's intellectual property and that suitable arrangements had been made between UWA and those involved. However, it came to her notice in early September that her belief might not be well-founded. A Mr Greg Barrington who was involved in the commercialisation of another piece of intellectual property had told her that UWA had put a hold on the relevant prospectus until there was an acknowledgement that the property had been developed at UWA. This caused Dr Williams to look again at the Sirtex prospectus. There was no such acknowledgement there. She agreed in cross-examination that there had been no secret about the fact that the intellectual property was being commercialised. Dr Williams took the view that if there had been a loss of intellectual property from UWA through the Sirtex float then as the Director of CACS she was the person who was liable to be disciplined by UWA. She wrote to Linda Key on 11 September 2000 on CACS letterhead. She referred to s 6 of the IP Regulations and her understanding that she had a duty as Head of CACS to report any circumstance inconsistent with UWA's rights under the Regulations. She enclosed extracts from the prospectus issued by Sirtex and said that Dr Gray was, until November 1999, employed as a professor within UWA. The CACS records did not include any correspondence to indicate that UWA had assigned any or all of its rights in respect of the intellectual property which formed the bulk of the intangible assets of Sirtex. Similarly can you reassure me that the University has assigned its rights in respect of the patent entitled "Controlled Release Preparation" to Dr Gray, Dr Yan Chen and the Cancer Research Institute? Dr Williams said in cross-examination that the reference to Dr Chen and to Dr Stephen Jones came from a patent search which she carried out before writing the letter. Dr Williams did not get a response to her letter. In the week of 9 November she met with Linda Key on another matter. When they met she asked her whether Ms Key had received her letter. Ms Key told her that Professor Barber had intended to speak to her himself about the matters in the letter. As a result she made an appointment to see Professor Barber on 16 November. Professor Barber had been given a copy of Dr Williams' letter on or about 11 September 2000. He and Ms Key had discussed its contents in the light of their discussions about the prospectus in July 2000. He did not recall why there was such a long delay in replying to Dr Williams. At his meeting with her on 16 November 2000 she expressed her concern that if there were a potential breach of the IP Regulations disclosed by the information in the prospectus she, as Director of CACS, might also be in breach of the Regulations. Dr Barber assured Dr Williams that she was not in breach of the IP Regulations. However, on the evidence available, I do not propose to proceed further with this matter, and can assure you that the University does not consider you in any sense responsible for any potential breach of the Intellectual Property Regulations. In the Executive Summary she described CACS as having been formed in March 1996 as a partnership between UWA, LCI and CRI. She described it as having been a "spectacular success". She said that during its first five years of operation it had, inter alia: Commercialised a new targeted treatment for liver cancer with the creation of Sirtex. Moved further research into controlled release pharmaceuticals and targeted hyperthermia into the commercial arena. Built an intellectual property portfolio consisting of five applications at various stages of the patenting process. In her discussion of what she called "microparticle technologies" she set out a figure detailing the involvement of various participants in the commercialisation process used to make new treatments available to patients. She described Sirtex as the "commercialisation vehicle created to achieve this". The figure set out under three headings the participants, the contributions of each and the benefit derived from each. The participants she listed included UWA, CRI, LCI, Sirtex, Drs Gray, Stephen Jones and Chen, the NH & MRC and the Cancer Foundation of WA. All of those appeared under the sub-heading "Innovators". Sirtex, ANSTO, Nomura/JAFCO appeared under the heading "Manufacturer/Distributor". The paper elicited an acerbic email from Dr Gray to Dr Williams dated 8 December 2000 in which he said it contained many incorrect assumptions which had to be changed because they gave a false impression. The commercialisation of the microparticle technology was performed by CRI and not CACS. CRI had always been an independent institute that undertook its own research and development outside CACS. Patents developed within CRI could not be credited to CACS as they had nothing to do with it. Sirtex had nothing to do with CACS and any reference to Sirtex should be removed other than as providing an opportunity for PhD students such as Paul Moroz. What could be included was the clinical work, that is clinical trials, using radioactive microspheres as they had been undertaken within the framework of UWA and RPH. The scientific articles which came from these could be treated as CACS' activities. Nomura/ JAFCO had never had anything to do with CACS as it only dealt with CRI. Dr Williams said that when she wrote the Discussion Paper she believed the matters contained in it to be true. Her assumptions about ownership of the intellectual property were based on her understanding of the law relating to intellectual property created in the course of employment, her understanding of UWA's intellectual property policy which she obtained and read during her employment and her understanding and belief, when she commenced employment in 1993, that all other personnel then in the Department of Surgery were employed by UWA. She did not see any of the employment contracts for the people whom she assumed to be employees of CRI nor did she know when any of them became employed by CRI. She also accepted that at the time she wrote the Discussion Paper she had not personally undertaken any research in relation to the microsphere technology and had no knowledge of whether or when Dr Gray, LCI or CRI had entered into any contractual arrangements with UWA to assign what she assumed to be UWA's intellectual property in SIR-Spheres, DOX-Spheres and magnetic hysteresis. Dr Gray was not present. Professors Barber and Landau, Dr Williams and Mr Beauchamp were there. The minutes record that they were agreed that the discussion document did not make any inappropriate claims. Professor Barber volunteered to follow up with a discussion with Dr Gray. Sirtex submitted that it may be inferred that Professors Barber and Landau, Dr Williams and Mr Beauchamp understood that it was Dr Gray's position that CRI's work was independent of CACS. They clearly took the view that it was appropriate for CACS (ie UWA) to claim an involvement in the CRI microspheres work. Professor Barber, who had the relevant responsibility at UWA, took no action in light of that knowledge. The major items in question were said to consist of "the thermolyne 8 nitrogen storage, the phat system and the barnstead nanopure water system". Dr Gray said that as Dr Williams would be continuing on until June 2001 they would be happy that she continue to use the equipment, until that time, in order to ensure no disruption to her activities until then. He would make arrangements to have the equipment collected at the end of June. Dr Williams wrote back to Dr Gray on 15 March 2001 stating that CACS would be pleased to return the equipment and that Dr Williams would contact Dr Gray in June about arrangements for its removal from CACS Park Avenue laboratories. On 13 September 2001 Dr Williams wrote to the members of the board of CRI referring to the CRI request for the return of three items of equipment. She acknowledged that CRI had generously allowed her the use of the items until the end of June 2001. She told the board that the relevant research was not ceasing as expected upon the expiration of CACS as her group had been relocated to the Department of Pharmacology at the QEII Medical Centre. She said that it would be very useful if CRI could allow her and her group to continue using its equipment as they extended research into the design and development of new anti-cancer drugs. Dr Gray evidently tried to contact Dr Williams. She wrote to him on 20 September 2001 and referred to the remaining CRI equipment which she had. She said she would like CRI to consider selling the items to UWA provided it was within the terms of the grants from which they were purchased. On or about 24 September 2001, Dr Gray made a complaint about Dr Williams to the police. This was an extraordinary thing for him to do. Not surprisingly no action was taken. There had been no theft. On 27 September 2001 Dr Williams wrote to Colin Sutton at Sirtex confirming that UWA would sell to it certain equipment belonging to UWA. She referred in her letter to the provision to the police of false information by "a person of influence in your company". Her own lawyers had called the complaint a 'criminal defamation' of her. As a result there had been an "erosion of trust" between CACS and Sirtex. She required a cheque made out to UWA to be cleared before handing over the equipment the subject of the agreement. The next step in relation to the CRI equipment still held by CACS was a letter of demand dated 20 December 2001 sent by Dr Gray's solicitor, Grant Milner & Associates on behalf of Dr Gray, "in his capacity as Chairman of the Cancer Research Institute Inc". The solicitors accused Dr Williams of refusing to return the three items to CRI and threatened legal action if they were not returned. In the event a Local Court summons issued on 22 March 2002. It named Dr Williams personally as the defendant. UWA provided her with legal representation through Louisa Case of the Legal Services Office. According to Dr Gray CRI commenced the legal proceedings as a last resort. Ultimately they were settled a short time before trial on the basis that UWA would return the equipment to CRI and would pay its legal costs. Mr Heitman who had been Deputy Director of Legal Services in May 2002 was aware of the case and although he had general oversight of the work of the office, he had no direct involvement of the carriage of the matter. He only became aware of the existence of Dr Gray and CRI when he heard of the CRI proceedings in the Local Court. Dr Williams was called as a witness by UWA. She denied that she bore Dr Gray any animosity by reason of his complaint against her to the police. She said she had seen him behave in other circumstances so as to alienate people. She accepted that that was how he operated and that there was nothing personal in it. This reaction was a little difficult to accept. She had described the incident as giving rise to an "erosion of trust" affecting her attitude to dealings with Sirtex. She had been told that she had been criminally defamed. She is likely to have had a degree of antagonism towards Dr Gray. In the event nothing really turns on that and I otherwise accept her evidence as generally reliable. He was, as already noted, company secretary of the old Paragon Medical from its registration on 19 April 1995 to its deregistration on 21 September 1999. He was company secretary of the new Paragon Medical, which became Sirtex on 4 April 2000. He continued as its secretary until 28 February 2001. He was also company secretary of its subsidiary Paragon Medical Products Pty Ltd, later Sirtex Medical Products Pty Ltd, from 11 November 1997 to 28 February 2001. He held no position at Sirtex between 1 March 2001 and 18 December 2002. In 2002 Mr Boyce was approached by Dr Gray to become a director of Sirtex. Dr Gray told him he wanted someone with financial expertise on the Board. Mr Boyce was appointed a non-executive director on 19 December 2002. He was unaware at the time that UWA asserted that it had an interest in the intellectual property of Sirtex. He did not become aware of that until he was informed of correspondence from UWA to Dr Gray and Sirtex in October 2004. He remembered the letter of demand from UWA's solicitors being tabled at the board meeting. He reacted with surprise and shock. It was completely unexpected. He regarded it as an attack on Sirtex and on Dr Gray. The minutes record that Dr Jones had investigated the matter and recommended implementing a formal research record book system. The record books were to be the property of the Department and to be kept in the Department at all times. All articles bearing authors' names submitted for publication were to be accompanied by written authority of each of the authors. Dr Jones agreed to implement the system for research at RPH immediately. It was Dr Jones' evidence that he subsequently implemented such a system which require each researcher to enter experimental data into bound books rather than on loose pieces of paper. Although the system took some time to implement the Department ordered a number of bound A4 notebooks which he kept in his office area until he issued them to researchers. Each of the books had a sticker on it with a sequential number. In a smaller bound notebook he kept a separate register of the laboratory book numbers. The register recorded four columns of information setting out the sequence number of each book, the title of the project to which it related, the name of the researcher to whom the book had been issued and the date of issue. Dr Jones recorded all of his own experiments in those laboratory books and encouraged other researchers to do the same. However, he did not actively police the system. Researchers kept their laboratory books at their workplaces. Dr Jones endorsed his own laboratory books with the titles "SKJ Bk I", "SKJ Bk II" and so on in sequence. He continued that sequence from his first days at the Department of Surgery at RPH. He did not restart it when be began working for CRI or Sirtex, but continued it. At the time of swearing his affidavit on 19 December 2006 his current laboratory book at Sirtex was "SKJ Bk X". In about June 2002 Dr Jones had a telephone discussion with Dr Elizabeth Williams. He prepared a file note of that conversation on 23 October 2002. He could not recall why he prepared the file note so much later. He recalled receiving a telephone call from Dr Gray about that time in which he told him that he might get a call from UWA and that he should not talk to them. It is probably the case that he prepared the file note after that call. Dr Jones' note indicated that he could not remember the exact text of his exchange with Dr Williams. She informed him of the legal actions between UWA and CRI because of non-return of CRI equipment. UWA would be countersuing. It would require the return of any lab books belonging to it. His response was that he did have some lab books but was not sure if he had those to which she was referring. That was the last conversation he had with her. Following the conversation with Dr Williams, Dr Jones checked the laboratory books held by Sirtex which were stored in its compactus file. He looked to those relevant to his work at UWA and RPH and noted that there were about four laboratory books which were in that category. On 19 November 2002 Dr Jones received a telephone call from Louisa Case, a legal officer employed by UWA. He made a file note of their conversation on the same day. She said that her office had received a letter from Dr Gray's solicitor stating that Dr Jones did not work for CRI. He asked what she wanted. She said they needed the University Department of Surgery lab books that he had. Dr Jones said he did not know what lab books she meant. He had several lab books which he did not believe had anything to do with UWA. She listed those books. She then asked whether he would return them. He said he would have to talk to Dr Gray to find out what was going on. She said she would have to write a letter to Sirtex if he did not return the books. Dr Jones no longer specifically recalls the laboratory books listed by Ms Case but said they appeared to include those relevant to his work at UWA which had been located in the Sirtex compactus following his telephone conversation in June 2002. Following his conversation with Ms Case he telephoned Dr Gray and told him about the conversation. Dr Gray told him that he should not have spoken to her and that he had already advised Dr Jones not to speak to people from UWA. He told Dr Jones he was coming to Sydney soon, either that evening or in a few days time. He asked if Dr Jones had the laboratory books. He said he thought he did. Dr Jones then located and removed the laboratory books relevant to his work at UWA. He met Dr Gray in Sydney where he handed over the books. Dr Gray examined them and asked him to leave them with him. According to Dr Jones he said that in substance the books were all the property of CRI. On the same day as her telephone conversation with Dr Jones, Ms Case sent a letter to Dr Colin Sutton, the CEO of Sirtex. He had told her that Dr Gray had instructed him not to return them and not to communicate with UWA in relation to them. Dr Sutton responded on 25 November 2002 to Ms Case. He advised that neither Dr Jones nor Sirtex were in possession of the items cited and suggested that she direct all future correspondence directly to Dr Gray as Sirtex had no involvement in the dispute that she cited. Before sending the letter Dr Sutton had cleared it with Dr Gray who said, in an email dated 25 November 2002, that the reply was "correct and appropriate". The CRI is suing Williams for recovery of the goods. Please make absolutely sure that any further conversations with her or her minders are passed through myself. After the commencement of the current proceedings in 2004 and while he was still reporting to Dr Gray at Sirtex, Dr Jones had a brief conversation with him in which Dr Jones said to Dr Gray that the issue of the laboratory books would come up in the litigation. Dr Gray responded, "what lab books? " The words stuck in Dr Jones' mind. He cannot recall the precise time and location of the conversation but distinctly recalls Dr Gray saying those words. In cross-examination Dr Gray said it was true that he had instructed Dr Jones not to return the books to UWA. It was also true that he had instructed him not to communicate with UWA in relation to the books. He did not dispute that Dr Jones was holding the books but qualified the statement by saying he did not necessarily have all of the books. Asked upon what basis he directed Dr Jones not to return the books, he said it was as Chairman of CRI. He claimed the books belonged to CRI even though they were held by Dr Jones at Sirtex. He was not sure whether it was under the Sirtex umbrella. Asked about his statement in his email to Dr Sutton that the proposed reply to Ms Case at UWA was "correct and appropriate" he agreed that he meant by it that the books were not in the possession of either Dr Jones or Sirtex. Dr Gray agreed that in conversation with Dr Jones he asked him whether he had the lab books. He agreed that they did meet. He agreed that Dr Jones brought with him a number of lab books, but he had asked him to do so. He wanted to find out what Dr Williams and the UWA solicitor were looking for. He denied that this was an attempt on his part to get possession of lab books relating to the hysteresis project. Dr Gray said he thought Dr Jones gave him two or three books. He did not recall four. Each related to the laboratory work on the hysteresis project. Dr Gray said that he claimed at the time that the books were in fact the property of CRI. He denied that this was not a true statement. Asked about the conversation with Dr Jones following the commencement of the present litigation, he did not remember saying "what lab books? " The lab books in question were not produced in these proceedings. It was put to Dr Gray that the reason they had not been produced was that he had "sent them away in circumstances where the other parties couldn't get access to them". Dr Gray denied that. He said he never had possession of the books. They were repatriated to the CRI together with a number of other documents inadvertently sent to Sirtex. He denied that he had made any deliberate attempt to hide or destroy the books or get rid of them. He accepted the proposition that they would be the best contemporaneous evidence of the process of invention and the development of the technologies. On 2 May 2005 Dr Gray, signing himself as Chairman of CRI, wrote to Dr Jones at Sirtex. Under the heading "Re: discovery of Documents" he pointed out that part of the legal process involved parties revealing documents to other parties. This would only apply to documents between the plaintiff and defendant and not between the defendants. He referred to significant data related to the research activities of CRI generated by Dr Jones while he was employed at the Institute. Copies of this letter were sent to the CRI Board and Mr Tottle, the CRI's solicitor, and Mr Bennett, who was acting for Dr Gray. Dr Jones' evidence in relation to the laboratory books was not challenged in cross-examination on behalf of Dr Gray. Dr Gray did not, in substance, contradict Dr Jones' evidence. I accept Dr Jones' evidence that he was requested by Dr Gray to deliver the laboratory books to him and that he did so. One is that Dr Gray has knowingly refused to produce the books in the discovery process. Another is that he had lost them and forgot about them. Another is that he sent them to a third party (eg CRI or Sirtex) and had forgotten about them. Dr Jones appeared to have placed the worst construction on the "what lab books? " comment at the time, thinking it was a deliberately false denial of possession. On the other hand the words are consistent with forgetfulness. Absent nuance and tone of voice, no judgment can be made from the bare words. Dr Jones' impression, recalled more than three years after the event, is not evidence of Dr Gray's meaning. Dr Jones had given the books to Dr Gray in mid 2002 and Dr Gray's last communication about them, before his January 2004 conversation with Dr Jones, was in November 2002 in his email to Mr Sutton. The circumstance that the laboratory books are missing is suspicious. However, the evidence does not allow me to conclude positively that Dr Gray has deliberately withheld them. It does cause me, however, to doubt the reliability of his recollection where it serves his interests to forget. Those proceedings were begun in March 2002. He became Acting Director of Legal Services in May 2002 after the death of Ms Key. He succeeded her as Director in November 2002. There was no evidence during the period from March to November 2002 that UWA did anything to pursue its claims against Sirtex. Dr Andrew Sierakowski was employed by UWA as Director of the Office of Industry and Innovation (OII) from January 2001. When he commenced that employment he reported directly to the Pro Vice-Chancellor (Research) Professor Barber. In October or November 2002 Dr Sierakowski met Dr Williams in relation to a project she wanted to commercialise. During their conversation she made a comment about Dr Gray and Sirtex. Dr Sierakowski did not recall the comment but it did inspire him to ring Dr Williams after the meeting to further discuss what she had said. Dr Williams told Dr Sierakowski that she did not think Dr Gray had behaved well towards his researchers. He had made Dr Chen, who was working under him, assign her intellectual property to him for a token amount. These comments caused Dr Sierakowski to wonder about the intellectual property said to have been developed by Dr Gray. He could not understand how UWA intellectual property could be assigned to some other party without UWA being involved. He told Dr Williams that he would investigate the matter on behalf of UWA. However he did not do so immediately because the matter did not fall within his core duties at OII. About two weeks after speaking with Dr Williams, Dr Sierakowski asked Professor Barber why UWA did not have any shares in Sirtex. He could not recall Professor Barber's reply but said that he did not receive a clear answer to his question. Dr Sierakowski said in cross-examination that Professor Barber just sort of said "don't worry about that". In February 2003 Dr Sierakowski decided, after discussion with a number of people at UWA, that the ownership of the intellectual property said to have been developed by Dr Gray warranted further inquiry. He reviewed files on Dr Gray, Sirtex and Paragon Medical on the UWA filing system. He inspected Sirtex websites and researched Sirtex on the ASX. Dr Sierakowski sent a memorandum on 28 February 2003 to the then Pro Vice-Chancellor (Research) with a copy to Mr Heitman. In his memorandum he stated his concern that UWA had been compromised. He also provided a copy of the files he had extracted to Mr Heitman. Mr Heitman, after reviewing the memorandum, read the Sirtex prospectus. This gave him a record of the relevant patent applications and grants. He also saw the statement that the directors were not aware of any claims to ownership of the technology. Dr Sierakowski met with Professor Barber on 5 March 2003. By that time Professor Barber was working for the CSIRO. Dr Sierakowski's contemporary file note records Professor Barber informing him that in 2000 Julia Frodsham and Linda Key were getting ready to prosecute an IP case against Dr Gray. Professor Barber told him that he had put a hold on the action at that time believing that there was not a strong enough case and that the costs to UWA to fight such an action would be too high. Dr Sierakowski gave Mr Heitman an account of his meeting with Professor Barber. On 11 March 2003 he obtained a copy of the Sirtex prospectus and sent it to Mr Heitman and the Pro Vice-Chancellor (Research), attached to an email referring to the patents which had been filed. He posed the question, "So who owns background IP going into the future technology (patents listed on pgs # 55/56)?". He referred to the CACS agreements and UWA and said "all looks very fishy". One of the reasons underpinning Mr Heitman's decision that an investigation ought to take place included a proposed bid for Sirtex by Cephalon Inc. He said in evidence that this had given an indication that the intellectual property had a significant commercial value which made it an interesting case for investigation. Sirtex submitted that there was nothing in the evidence to suggest that Mr Heitman or anyone else from UWA had become aware of any facts material to determining whether UWA had an interest in the inventions that were not already known long before. I agree with that submission. In the middle of March 2003, Mr Heitman was given the go ahead to engage external solicitors. He instructed Jackson McDonald on 26 March 2003 to undertake enquiries into the matter for UWA. He did not conduct any further investigations into the matter after that time, although he had the carriage of it within the Legal Services Office and received progress reports from Jackson McDonald. Professor Robson accepted that the UWA Executive did not initiate any formal approach to seek external advice until 2003. The matter only arose after the death of Linda Key and when Dr Sierakowski was working as the Director of Industry and Innovation. That advice was received directly in a meeting of the University Executive. He instructed Mr Heitman, on the basis of that advice to engage external solicitors to advise the University on what, if any, claim it might have in relation to the intellectual property referred to in the Sirtex Medical Ltd prospectus. He said that the instruction was provided to Mr Heitman via Peter Curtis and not directly by himself. In making the decision to engage external solicitors to advise on the matter Professor Robson was conscious of the fact that the decision whether to commence proceedings in relation to intellectual property referred to in the Sirtex Medical Ltd prospectus was a large one. He considered it important that UWA received good, independent, unbiased advice in relation to the matter. On 23 September 2004, Ms Faulkner, a partner at Jackson McDonald, sent an email to Mr Heitman indicating that bound copies of the joint opinion of counsel would be delivered to him by courier that morning. Upon receiving the opinion Mr Heitman sent an email to Mr Curtis informing him of its conclusion that UWA had a number of viable causes of action against Professor Gray and that the action for compensation was recommended. He said that he would be meeting with counsel the following week to settle the letter of demand and the statement of claim. He would report further and seek Executive approval for the action to commence in those terms. Mr Curtis then sent an email to Professor Robson advising that the Sirtex opinion had arrived and that "... it looks like the case is on". Professor Robson said that on or about 18 October 2004 the Administrative Secretary at the Legal Services Office of the University sent an email to Mr Heitman advising him that Professor Robson would like him to "... draft a letter of demand regarding Sirtex which is legally tight to go to Senate". Professor Robson, having refreshed his memory from that email, asked Mr Heitman, on or about 18 October 2004, to prepare a letter of demand "regarding Sirtex Medical Ltd" for the Senate meeting on 25 October 2004. The following day he received a memorandum from Mr Heitman attaching a copy of a letter of demand sent to Dr Gray the previous week. He told Professor Robson that no formal or informal response had been received and that "... Sirtex has not made any announcement to the Stock Exchange". He said he would be happy to prepare a further briefing document for the Senate or give an oral report if required. The content of the letter and the circumstances of its delivery to Sirtex are set out later in these reasons. Although Professor Robson had asked for a letter of demand to be submitted to the Senate meeting on 25 October 2004, he said he was not surprised that it had been sent to Dr Gray without his prior approval. He had taken the decision to proceed with the litigation on or about 27 September 2004 and had advised Peter Curtis accordingly. Once that decision was taken, the day to day running of the litigation was in the hands of the Legal Services Department. Professor Robson did not see a copy of the University's letter of demand to Sirtex dated 26 October 2004, prior to it being sent. Indeed, as appeared from Mr Heitman's evidence in cross-examination, no one from the UWA executive checked the letters before they were sent to see if the factual assertions in them were correct. The minutes of the Senate meeting of 13 December 2004 indicate that the University solicitor, presumably a reference to Mr Heitman, briefed the Senate on the Vice-Chancellor's intention to seek an injunction restraining transfer of shareholdings by a former employee in Sirtex. There was no reference to the general issue of the institution of proceedings. He is a principal with that firm. His duties include the prosecution of Australian patents, overseas patents, patent opposition, the drafting of provisional patent specifications and PCT applications and infringement opinions. He has an Honours degree in science from Murdoch University and a PhD in Molecular Biology from UWA which was conferred in 1994. His qualifications to give the evidence he did were not challenged. It is helpful first to refer to the overview of the process for lodgement of international and foreign patent applications which he outlined. As Dr Boyer pointed out, Australia has signed a number of international agreements associated with intellectual property. Two significant agreements are the Paris Convention and the Patent Cooperation Treaty. Article 4 of the Paris Convention of 20 March 1883, as revised on a number of occasions up to and including 1979, provides a right of priority under which the nationals of one country may be treated in the same manner as the nationals of other countries that are party to the Paris Convention. The term "regular national filing" is defined as "any filing that is adequate to establish the date on which the application was filed in the country concerned, whatever may be the subsequent fate of the application". The period of priority is 12 months for patents which shall start from the date of filing of the first application. As Dr Boyer saw it, the Paris Convention in practical terms allows Australian inventors or applicants to file an Australian provisional or complete patent application in Australia and termed the basic application and within 12 months file corresponding applications in one or more of the Convention countries. Such applications are then treated as if they had been filed on the same day as the basic application filed in Australia, ie on the "priority date" of that application. Dr Boyer also referred to the Patent Cooperation Treaty which came into effect on 31 March 1980. The PCT is set out in Schedule 2 of the Patent Regulations 1991 (Cth). Applications under the PCT are dealt with in the Patents Act 1990 in ss 88 to 93 and regs 8.1 to 8.4 of the Patent Regulations (Cth). Under the PCT process applicants or inventors may file a single patent application in English with IP Australia within 12 months of the filing date of a basic application to satisfy the requirements of the Paris Convention with respect to maintaining the priority date. That is to say, by filing a PCT application by the 12 month anniversary of the basic application filing date (priority date) the applicant or inventor can preserve their rights under the Paris Convention to have patent protection in several countries. As Dr Boyer summarised the position, Australian inventors or applicants can file a provisional or complete patent application and within 12 months file a PCT application designating a number of countries and/or regions thereby allowing them to preserve their rights to patent protection in a number of countries from a single filing in Australia. After the conclusion of the PCT process, which is usually around 30 months after the basic application has been filed, the PCT application must be filed in the specific Convention country or countries otherwise all rights will be lost. This step is referred to as "entering the National/Regional Phase". Dr Boyer said that in practice his clients often give up their rights in the majority of countries covered by the PCT especially, smaller African or Asian countries, as they are considered too expensive or of little commercial worth. Most of his Australian clients generally enter the National Phase in the United States, Australia, Canada, New Zealand, Japan, China and the Regional Phase in Europe. Once the National Phase countries or regions have been entered the patent applications proceed under their respective national laws. Relevant to the progress of the National Phase are quite significant differences in the examination process between countries. These may be procedural. They may relate to the type of claims that are allowed and whether or not particular subject matter is regarded as patentable. The examination process varies. Australia and New Zealand are generally considered to have a rapid examination process which often sees patents granted a long time before corresponding patent applications in other jurisdictions. The examination processes in Canada and Japan are considered to be relatively slow with some patent applications waiting for up to eight years before examination. The stringency of examination varies from country to country. The United States and Europe are often considered by most Australian patent attorneys as difficult jurisdictions within which to prosecute applications. Dr Boyer attached to his affidavit a flowchart which sets out the international patent application procedure. For ease of reference that is attached to these reasons as Annexure 3. Dr Boyer was provided with a number of certified copies of Australian provisional and complete patent applications as well as PCT applications filed at IP Australia as the designated PCT receiving office. He had also been provided with other details taken from the Register. In reliance upon s 189 of the 1990 Act and the documents provided , he concluded that the inventors of the inventions disclosed in them were as shown in the Register and that the patentee, as shown in the Register at the various dates referred to, was prima facie the owner of the patents applications and/or inventions at that time. He set out his conclusions by reference to documents provided to him. The substance of those conclusions ie set out in the order which appears in his report. They were not disputed: On 16 March 1999 Paragon Medical lodged a provisional patent application entitled "Production of resin based radionuclide-containing microspheres", which was given the number PP9228. On 25 October 2000 a provisional patent application was filed in the name of Sirtex entitled "Polymer based radionuclide containing microspheres" and given the number PR0983. On 25 October 2001 a PCT application (PCT/AU01/01370) was filed claiming priority from PR0983. Australian complete patent application No 2002210278 was filed in the name of Sirtex. The application claimed priority from PCT/AU01/01370 and thus from PR0983. Bruce Nathaniel Gray is recorded as the inventor. Dr Boyer assumed that 2002210278 was the National Phase entry case from PCT/AU01/01370. Australian complete patent application No 54724/94 entitled "Radioactive particles for treatment of cancer" was filed in the name of Bruce Nathaniel Gray as inventor and applicant on 21 January 1994. International Patent application No PCT/AU95/00027 was filed on 20 January 1995, claiming priority from 54724/94. Australian complete patent application No 15279/95 entitled "Particulate material" was filed in the name of Bruce Nathaniel Gray as applicant and inventor and claimed priority from PCT/AU95/00027 and thus 54724/94 (also see 7). Australian complete patent application No 15279/95 entitled "Particulate material" was granted as Australian patent No 690630. The priority claim is to AU54724/94 filed on 21 January 1994, the applicant was Paragon Medical Limited and the inventor Bruce Nathaniel Gray. On 18 November 1993 Yan Chen and Bruce N Gray lodged a provisional patent application entitled "Controlled release matrix for drugs and chemicals" which was given the number PM2492. International Patent application No PCT/AU94/00708 was filed on 17 January 1994, claiming priority from PM2492. PCT/AU94/00708 entered the National Phase in Australia as complete patent application No 81363/94 and was sealed on 5 November 1998 as Australian Patent No 693821. Australian Patent No 693821 is entitled "Controlled release preparation" and Paragon Medical Limited is the patentee. Yan Chen and Bruce Nathaniel Gray are shown as inventors and priority is claimed from PM2492. On 12 September 1988 Bruce Nathaniel Gray lodged a provisional patent application entitled "Targeted hysteresis hyperthermia's for the treatment of cancer" which was given the number PJ0371. On 23 December 1994 Bruce Nathaniel Gray lodged a provisional patent application entitled "Targeted hysteresis hyperthermia as a method for treating cancer" which was given the number PN0213. On 10 May 1996 Bruce Nathaniel Gray lodged a provisional patent application entitled "Targeted hysteresis hyperthermias as a method for treating cancer" which was given the number PN9782. International Patent application No PCT/AU97/00287 was filed on 9 May 1997 and that PCT/AU97/00287 did not enter the National Phase in Australia. On 29 October 1997 Paragon Medical Limited lodged a provisional patent application entitled "Improved targeted hysteresis hyperthermia as a method for treating diseased tissue" which was given the number PP0081. On 3 March 1999 Paragon Medical Limited lodged a provisional patent application entitled "Magnetic material" which was given the number PP8998. International Patent application No PCT/AU00/00151 was filed on 3 March 2000, claiming priority from PP8998 and that PCT/AU00/00151 entered the National Phase in Australia as Australian patent application No 28952/00 entitled "Heating of magnetic material by hysteresis effects. " Dr Boyer said that a number of the provisional patent applications and their corresponding PCT applications referred to might have matured into National Phase or corresponding foreign patent applications or patents. He conducted searches of the European Patent Office (EPO), IP Australia and United States Trademark and Patent Office (USTPO) databases in order to determine if patent applications corresponding to the Gray patent applications (PCT/AU01/01370, PCT/AU95/00027, PCT/AU94/00708, PCT/AU97/00287, PCT/AU00/00151) had been filed in other jurisdictions. He prepared a table showing the foreign applications that corresponded to the Gray patent applications: Appendix 4 to these reasons. There were a number of corresponding patent applications or patents in a number of countries and regions including Europe, the United States, Japan and Canada. The European equivalent application to PCT/AU95/00027 has been granted and validated in France, Germany, Great Britain, Ireland, Luxemburg, Spain and Sweden. Under the PCT process European examination takes place before the EPO. When the application has been granted, the claims must be translated into all three official languages of the EPO which are French, German and English, otherwise the application will lapse. The applicant can then validate the application in any one or more member countries of the European Patent Convention (EPC). Once the application is validated in an EPC country then patent protection is in force there. If validation is not done by the due date, no patent protection will be in force. Except for France, Germany, Great Britain, Ireland, Luxemburg, Spain and Sweden, the European patent corresponding to PCT/AU95/00027 was not validated in all European countries. A similar situation exists for PCT/AU01/01370, PCT/AU94/00708 and PCT/AU97/00287. Based on the documents which he reviewed, Dr Boyer was of the opinion that Dr Gray along with other named inventors, Yan Chen, Stephen Jones and Raffaele Cammarano, did on the various dates shown in the documents to which he referred and which are mentioned in the table to his report (now an Appendix to these reasons) filed provisional, complete and PCT applications for the various inventions disclosed therein as inventors. Some of the applications have subsequently lapsed, ceased or been granted in Australia and elsewhere. There remain a number of patent applications pending in various jurisdictions. He also concluded that at various dates Dr Gray filed applications as inventor and patentee. Patent applications were filed in the name of Paragon Medical with Dr Gray appearing as inventor. There was a change of name from Paragon Medical to Sirtex at some point. I accept the conclusions proffered by Dr Boyer in relation to the various documents to which he referred. There was no substantial challenge to them. Attached to it were a number of annexures in the form of Australian Patent Office database searches. The prepared document set out the information publicly available on the Australian Patent Office database from various dates which could be located by searches conducted by reference to inventor or applicant names being specifically Gray, Bruce and Paragon Medical. His disagreements in summary were as follows: Re 6.3.7 he did not believe that as at 1 July 2000 the name of the prosecuting attorneys would have been captured and shown on the databases. Re 7.4.2, the inventor name would not be shown on the databases for Australian provisional patent application No PR0983. Re 7.4.5, he believed that the databases did not disclose that 2 May 2002 was the date that WIPO published PCT/AU01/01370. Re 7.4.6, the number 2002210278 was published on the databases after 1 February 2003; and Re 7.4.8, he did not believe that at 1 February 2003 the name of prosecuting attorneys would have been captured and shown on the database. Dr Boyer added that the databases maintained by the delegates of the Australian Commissioner of Patents are not always accurate or up to date. It is often difficult to confirm that particular data or information was available on the databases on particular dates. Before 2003 the Australian Patent Office accorded an Australian application number to all PCT applications which designated Australia as a possible National Phase entry country. As a result, while databases would sometimes show some information about a PCT application, eg applicant name, address, invention title and the like, the vast majority of such information was not captured and disclosed until after National Phase entry had been effected. He pointed out a further complication, namely that the APO changed databases in July 2002. Any new provisional, complete or PCT application filed after July 2002 was entered on the new database not the old one. In August 2002 all PCT applications that had not entered the National Phase in Australia but had been given an Australian application number were migrated to the new database and no further information was added to the old. From August 2002 it was important to check both databases in order to obtain a more accurate and complete picture of the particulars of any case. In cross-examination Dr Boyer said that subject to the paragraphs with which he had disagreed, he had been able to verify the accuracy of the database. By reference to key-in details and advertisement details he had been able to verify that the database relied upon in the historical analysis was up to date at the relevant times. His comment that the databases maintained by the delegates of the Australian Commissioner of Patents were not always accurate or up to date was "attorney speak". He said it was the caveat that they would put into most of their search reports where they would say they could only go off what the database showed. If somebody had keyed in an incorrect date then obviously they could only report on the date that had been keyed in. I accept the accuracy of the statements made in the historical analysis proffered by Sirtex, as verified by the evidence of Dr Boyer subject to the qualifications contained in his "cross-examination report". She said her purpose in ringing was to find out what the current situation was because she "had a letter from Dr Gray, a so called kind of contract arrangement ...". She wanted to ask Wray & Associates whether they could give her any advice about it, whether she should pursue anything or just leave it. She knew that Sirtex was listed. She made a handwritten note of her conversation on the letter of advice she had received from Wray & Associates on 21 December 1994. She also endorsed on it the figure "241 millions". It appears, although she was not prepared to say so clearly in cross-examination, that this referred to the market capitalisation of Sirtex at about that time. Mr Harwood from Wray & Associates said he couldn't find her file and would have to check the archive and get back to her. He also informed her that he was acting for Dr Gray and could not give her independent advice. At this stage Dr Chen had not engaged solicitors to act for her. It appears, however, that in or about April 2003 she was approached by Mr Heitman at UWA. She sent him an email, which was not in evidence. She engaged Mr Proven and they had a meeting with Mr Heitman. Mr Heitman did not recall the meeting. He said he did not contact her in April but that someone may have done so on behalf of UWA. It would not have been anyone from the Legal Office at UWA but may have been someone from UWA's solicitors, Jackson McDonald. Mr Heitman was asked in cross-examination whether he had authorised UWA's solicitors to negotiate with Dr Chen about her possible participation in benefits derived by UWA were it successful in the litigation. He said he did. He did not instruct the solicitors to communicate the potential benefits to other prospective witnesses in the proceedings. However, he was aware that there was the possibility that others would claim the benefits of the intellectual property the subject of the proceedings. The UWA solicitors had a general instruction from him that in the event that claimants were identified in the course of their investigations they were to be given an opportunity of making any submissions they wished to make in relation to their claim if UWA were successful. There is no evidence of any meetings between Dr Chen and UWA's solicitors between April and September 2003. On 22 September 2003 Dr Chen's solicitor, Mr Provan, wrote to Mr Heitman referring to a telephone discussion they had on 18 September 2003 concerning the anticipated claim by UWA against Sirtex and Dr Gray. Mr Provan said that he and Dr Chen were concerned about the length of time it was taking UWA to formulate its claim and make a decision on whether to proceed or not. Again, while we appreciate that UWA will want to pursue all potential claims and it is more efficient that all are dealt with together, the resulting delay is regrettable. I understand from our discussion that limitation issues have been considered by UWA's legal team and are not considered to be a problem. Nevertheless, we would be grateful if you could confirm that UWA's advice is to the effect that there are no limitation issues which could affect UWA's ability to pursue the claim. The limitation period had been a matter of discussion with UWA lawyers. He was not sure whether he told Mr Provan. However he did confirm with Mr Provan that UWA's advice was that there were no limitation issues. Mr Provan's letter went on to point out that one of the key dates was 28 October 1997, the date on which CRI assigned the DOX-Spheres patent no 693821 to Paragon Medical (subsequently to become Sirtex). Dr Chen had an agreement with CRI and Dr Gray on the basis that ownership of the patent would "be negotiated". Arguably by assigning the patent to Sirtex on 28 October 1997 CRI and Dr Gray breached that agreement. Mr Provan acknowledged that there were issues as to whether CRI, Dr Chen and Dr Gray were able to enter into the agreement on the basis that UWA was entitled to ownership of the patent. Nevertheless if Dr Chen were forced to pursue her own claim against Sirtex, CRI and Dr Gray because UWA had failed to act, Dr Chen might need to issue a writ prior to 28 October 2003 to preserve her rights. We understand that an agreement as to the distribution of any proceeds of the action is to be prepared. Please could you let me know when the draft of such an agreement will be available. He informed Jackson McDonald that he was now instructed to issue a writ naming Dr Chen as plaintiff and each of Dr Gray, CRI and Sirtex as defendants. It was intended to issue the writ but not to serve it. The purpose was to reserve Dr Chen's rights to bring an action for breach of contract, particularly against CRI with whom she alleged she had an agreement about the patent and the proceeds of commercialisation. Dr Chen intends to cooperate fully with UWA in UWA's action and to enter into the proposed agreement with UWA regarding the action by UWA. In that regard, we look forward to receiving the draft agreement between UWA and Dr Chen. To avoid the risk of your client's writ making it onto Sirtex and Gray's 'radar' we would suggest that any writ be filed after the AGM when the risk of a search revealing your client's pending action may be lower. It had been filed after the Sirtex AGM commenced in Sydney and it was not intended to serve it. He again said he looked forward to receiving the draft of the agreement between UWA and Dr Chen relating to the proposed action by UWA. It was put to Dr Chen in cross-examination that in October 2003 she had committed herself to supporting the UWA claim. She said that the letter of 17 October 2003 had been written by her lawyer. Her view was that she would provide all the evidence reflecting the truth and whatever happened at that time to UWA. That is what she meant by supporting. It was put to her that her cooperation was offered in the expectation that she would enter into an agreement with UWA to share in the proceeds of commercialisation of the patent. Mr Provan again contacted UWA's solicitors on 20 September 2004 by email and asked whether there was any progress with getting the action up and running. Dr Chen would have to serve her writ by 24 October 2004 to keep it alive. He sent a follow-up email on 28 September 2004. A meeting ensued between Dr Chen's solicitor and UWA's solicitors. It was reflected in an email dated 12 October 2004 to the UWA solicitors by Dr Chen's solicitor. This provides that the inventors share in 50% of the net revenue (after certain thresholds are met). Further, there are 3 inventions which will each be allocated one third of the total net proceeds from the action. Please could you confirm that this is what is intended. Dr Chen would like to finalise the agreement with UWA so that we all know where we stand. On 18 October 2004 Mr Provan advised the UWA solicitors that Dr Chen had decided to proceed with her action against CRI only and not against Dr Gray or Sirtex. That was on the basis that it was only the contractual cause of action against CRI only and not Sirtex or Dr Gray. She might in the future consider an action for rectification of the Register of Patents seeking an order that she was the sole inventor of the DOX-Spheres invention. On 5 January 2005 Mr Provan advised the solicitors for UWA that Dr Chen had served the writ in her action against CRI only. He reiterated that she would like to finalise the agreement between her and UWA regarding the UWA action. The only outstanding issue was her entitlement to share in the proceeds of the UWA action. He asked the solicitors to let him know the method by which UWA proposed to calculate the amount due to Dr Chen. If the agreement were entered into then she might decide to discontinue her action against CRI. He sought a prompt response from UWA. On 7 January 2005 the UWA solicitors wrote to Mr Provan saying that they were instructed that UWA had no view or comment to make about her action against CRI. It was not a party to those proceedings. It had not been possible for them to obtain instructions in relation to the matters in the remainder of the letter. A further letter was sent to Mr Provan by UWA's solicitors on 23 March 2005. In that letter the solicitors said that if the Court found that UWA was entitled to the intellectual property brought into existence by Dr Chen in her capacity as an employee, she would be regarded as an originator of that intellectual property for the purposes of the IP Regulations and would have an entitlement to participate in a distribution of the cumulative net revenue realised from its commercialisation. The University will not deny Dr Chen an opportunity to participate at the appropriate time, however, it must be understood that any entitlement will be assessed in accordance with the University's policies at that time. It is premature to purport to calculate entitlements now. to attend us and/or Counsel in relation to any appeal by the Respondents or the University (if any) and if required. In the statement of claim which she filed in the Supreme Court, Dr Chen asserted that she was the sole inventor of the invention described in Australian patent application no PM2492 dated 18 November 1993. She pleaded an agreement made on 16 November 1994 between herself and CRI under which she agreed to CRI applying for an international patent in its name in consideration for her receiving a share of the proceeds of any sale, licensing or other commercialisation of the Patent Application or any patent applied for and/or granted pursuant to or claiming priority from the patent application. She alleged that on 28 October 1997 CRI transferred its interest in the patent application and the patents to Sirtex and received the benefit from that transfer. She had not at any time been provided with any proceeds or benefit received by CRI. This, she alleged, was a breach of the agreement. She said she had suffered loss and damage as a result. She claimed, inter alia, a declaration to the effect that she was the sole inventor of the invention which was the subject of the patent application and patents. In the course of her cross-examination Dr Chen said she always held the belief that UWA had the right to claim ownership of the patent and that they should be the owner, but because the provisional patent was taken out in her name and that of Dr Gray they became the owner at that time. She said she had always held the belief that UWA was entitled to own the patent. This was the advice which she had received from Wray & Associates back in 1994. Plainly this was inconsistent with the claim raised in the Supreme Court proceedings. In further cross-examination, Dr Chen said there had been no agreement with UWA as to who would bear the legal costs of her action against CRI. She paid the costs associated with the proceedings herself. The letter bore the endorsement "Private & Confidential". It was headed "Ownership of Technology Developed by Employees of the University of Western Australia". It is convenient to set out the full terms of the letter as it is the subject of the defamation cross-claim. At all relevant times during the Period of Employment Gray and members of the Research Team were involved with both the Department of Surgery within the University (known as the " UDS ") and, upon its establishment in March 1996, the Centre for Applied Cancer Studies (" CACS "). At all times during the Period of Employment, Gray and each of the members of the Research Team were bound by the University of Western Australia Act 1911 (WA) (" University Act ") and the Regulations and Statutes made thereunder. Relevantly Gray and members of the Team were bound by the Patents Regulations from the commencement of their employment with the University until 22 July 1996. Thereafter, they were bound by the University's Intellectual Property Regulations. The research activities in which Gray and members of the Research Team were engaged, inter alia, related to the investigation and formulation of therapeutic devices for treatment of particular kinds of cancer. The University provided Gray and members of the Research Team with significant assistance, including additional research staff and facilities as well as funding their research activities through the administration of NH & MRC grants and other internal and external funding. It is beyond argument that these activities breached Gray's obligations to the University pursuant to Gray's contract of employment, were contrary to the University's policies and procedures, and were in breach of the obligations owed by Gray to the University at law and in equity. In the circumstances, the University is entitled to claim ownership of each of the patents in which Gray and/or members of the Research Team are named as inventor/s and which rely upon the Provisional Applications for priority. On or about 20 January, 1995 Gray relied upon this application to make an application under the PCT. The application made by Gray cites an amount of research all of which was published during the time Gray was employed by the University. Gray was substantially involved with that research, as were other employees of the University. For present purposes, we do not propose to recite the various applications which Gray or Sirtex have made based upon the priority claim made by reason of 54724/94, except to note that applications have been made in a number of countries and patents have been granted to Sirtex by reason of these claims for priority. In relation to 12(b) above, on or about 18 November 1993, Gray and/or one or more members of the Research Team made an application for a provisional specification (PM2492) relating to this technology. In November 1994 CRI made a PCT application relying on PM2492 and listing Gray and a member of the Research Team as inventors. The provisional specification and the PCT application disclose a number of publications and the use of materials and equipment and experimentation with animals. All of these activities appear to have been undertaken using the property and facilities of the University and were apparently undertaken during the time Gray and the member of the Research Team were employees of the University. This PCT application has been relied upon to obtain numerous patents in a number of countries and in which Sirtex is listed as the owner. In relation to 12(c), above, on about May 1996, Gray and/or one or more members of the Research Team made provisional application PM9782. This application names Gray as the owner. On 9 May 1997 what is now known as Sirtex applied for a PCT application relying upon PM9782 for the purposes of claiming priority, and listing Gray and a member of the Research Team as inventors. The PCT application identifies the use of University equipment and facilities and the use of animals. Subsequently Sirtex has relied on the PCT application and the priority of PM9782 to obtain patents in numerous countries. In each of these cases, the University considers that Gray and/or members of the Research Team made application for inventions of which the University is the true owner. After reviewing personnel files and various other files held by the University, we are unable to locate any disclosures by Gray or members of the Research Team to the University concerning these patent applications. This listing occurred on 23 August 2000. Gray took the first steps towards the listing of Sirtex during the Period of Employment. Gray did not disclose to the University that Gray was involved in the listing of Sirtex at any time prior to the publication of the Prospectus. Gray did not disclose to the University that Sirtex (then known as Paragon Medical Limited) had obtained $950,000 in R&D funding from Ausindustry and an additional $3 million in funding from Jafco Nomura. This assistance was obtained during the Period of Employment. To the extent to that [sic] these actions purported to vest rights in Paragon (as Sirtex was then known), they were in breach of obligations owed by Gray to the University. Gray had no authority to make such agreements. In any event, to the extent to which Gray's actions purported to affect the University's entitlements, it is alleged that at all times Paragon had knowledge of the obligations to the University which were inconsistent with these dealings owed by Gray and others. This is, inter alia , because Gray was a director and the Chairman of Paragon and was relevantly the controlling mind of that organisation. To the extent to which these agreements purported to transfer property from CRI to Paragon, including any intellectual property, they were agreements which had no effect. This is because CRI had no intellectual property which it was entitled to transfer. To the extent to which it is necessary, it will be alleged that at all times CRI had knowledge of the University's entitlements and of the obligations owed by Gray to it by reason of Gray's involvement on the Board of CRI and by reason of the position held by Gray as CRI's Medical Director. Quite apart from Gray's participation in each of the organisations known as Paragon and CRI, all of the facts to which we have referred are facts which we are instructed were at least readily available to members of the founding Board of Paragon. The Property was purportedly transferred to Paragon either directly or through CRI. In either case, Gray was integrally involved in the purported transfer and Gray was the controlling mind of both CRI and Paragon. At all relevant times Gray was aware of the University Act and the Regulations and Statutes made thereunder and Gray was aware that he was bound by the same. Gray, and CRI and Paragon through their involvement with Gray, were aware that the University was the owner of the Property and that the purported transfers were not authorised or consented to by the University. Accordingly, Sirtex holds on constructive trust for the University, all Property. Further, Sirtex has held all Property on trust for the University since such Property was purportedly transferred to it. By reason of its recent investigations, the University is aware that Sirtex has allowed patents and/or patent applications in certain countries to lapse. These countries include but are not limited to Australia and Canada. The University is also aware that Sirtex has failed to make applications for patents in some of the countries designated in the PCT applications referred to in paragraphs 13, 14 and 15 above (the "PCT Applications "). By failing to protect the assets of the University through allowing patents and/or patent applications to lapse, and failing to pursue patent protection in countries designated in the PCT Applications, Sirtex has breached its fiduciary duties to the University. The same is true of the shareholdings received by others, which will be the subject of separate correspondence. For the reasons provided in this letter, the University alleges that the entirety of the intellectual property purportedly vested in Paragon (now Sirtex) was intellectual property belonging to the University. In addition, Gray received a salary and other remuneration which is referable to the administrative activities which Gray performed for Sirtex during the Period of Employment and which Gray has apparently to continue to perform for that company since that time. The University obtained details of this valuation in electronic form from University equipment during the course of its investigations. We understand that Sirtex has not paid a dividend to shareholders. You may accept this demand and give the undertaking by signing a duplicate copy of this letter and return it to us. He agreed that he approved the draft before it was sent. He did not regard it as an exaggeration to assert that it was "beyond argument" that Dr Gray's activities had breached his obligations to UWA. He was cross-examined about his awareness of a number of matters said to be inconsistent with the assertions made in the letter. He was generally either unaware of those matters or their detail or disagreed with what was put to him. The letter was prepared as the result of investigations undertaken by the UWA solicitors. He had not had access to the "raw materials" summarised in the letter. He denied the suggestion put to him in cross-examination that the letter contained an exaggerated statement of the UWA position so that Sirtex would be obliged to disclose it to the ASX in terms that would be damaging to it. On 11 November 2004 Jackson McDonald wrote to Freehills referring to advice from Mr Cherry that he acted for Dr Gray and for Sirtex and that he had copies of the letter of demand sent to them. UWA solicitors said they would allow Dr Gray and Sirtex 28 days to respond to the letters of demand. We note that no announcement has been made to the ASX in relation to them, contrary to Chapter 3 of the Listing Rules ... In our opinion, disclosure should be made promptly upon receipt of the allegations and certainly no later than the date on which contact was made with Ms Faulkner by Mr James Cherry. On the documents available to us, there is no record showing that the issues raised in the letter to Sirtex were put to the shareholders at that meeting. In the circumstances, our client is considering its position in relation to the additional options issued to Dr Gray at the recent Annual General Meeting. He denied having instructed the UWA solicitors to tell Freehills that they had been monitoring Sirtex announcements to the ASX. He said he did not direct them to do so. He would have reviewed the letter and approved it before it went out. He denied that he had in mind at the time that the letter of demand was sent out, that it was the day before the annual general meeting of Sirtex. Freehills responded to Jackson McDonald's letter on 12 November 2004 characterising as "contentious, and premature," the assertion that Sirtex had breached listing rule 3.1A. Freehills asserted that having regard to the unascertained merits of the UWA claim an announcement, without an understanding of the merits of the claim, could create a false market in the securities of Sirtex. Jackson McDonald wrote again on 19 November 2004 responding to Freehills' letter of 12 November 2004. They noted that it had been almost seven days since the letter was written and that no disclosure had been made to the ASX. They said that UWA did not accept Freehills' interpretation of the ASX listing rules. They denied that the making of a disclosure would create a "false market". In any event, the listing rules contemplated prompt disclosures by the listed entity. He said he had had a discussion with the solicitor who had the conduct of the matter, Ms Faulkner, about the disclosure issue. Freehills raised the possibility of legal action against both UWA and Jackson McDonald in the event that a "disclosure" were made. They alleged that the making of such a disclosure would be for the sole or dominant purpose of placing pressure on Sirtex to accede to UWA's demand. On 29 November 2004, Jackson McDonald replied to Freehills' letter of 24 November 2004. They again pressed Freehills on the disclosure issue. The failure to do so gives rise to a reasonable basis for supposing that information likely to have a material effect on the price or value of the entity's securities was improperly withheld. A proposed undertaking by Dr Gray was attached relating to non-disposition of his shares in Sirtex and those held by his company, Pine Ridge Holdings. Mr Heitman was asked in cross-examination why it was a matter of concern to UWA that there be disclosure of the allegations made by it. One of the points was that it was considered to be desirable to the extent that this was a claim made against a publicly listed company for Sirtex to make its own declaration. The letter of 29 November 2004 referred, inter alia, to the decision of the annual general meeting to grant 400,000 options to Dr Gray. It also referred to the considerable degree of shareholder dissent in relation to the grant of such options. Counsel for Dr Gray put it to Mr Heitman that the terms of the letter made plain the intention of UWA in serving the letter of demand to force disclosure prior to the annual general meeting that was to consider the grant of the options to Dr Gray. Mr Heitman denied that was its intention. It was put to Mr Heitman that the timing of the letter was a deliberate attempt to damage Dr Gray so that he would be deprived of the options. That was denied. Asked what drove the timing of the letter of demand given that proceedings were not commenced until the end of December 2004, Mr Heitman said it was his desire that the letter should be issued as soon as possible after counsel's opinion had been received and analysed. Counsel's advice had been received on 23 September 2004. Professor Robson had advised that the case should proceed on Monday, 27 September 2004. In my opinion the timing and mode of delivery of the letter was calculated to put pressure on Sirtex and on Dr Gray to accede to the UWA demands and alternatively to open negotiations with UWA. UWA's purposes in pursuing the disclosure issue with Sirtex were not made explicit. Mr Heitman gave a clue when he seemed to suggest in cross-examination that there might be some concern about UWA's position if it stood by knowing that it had sent a letter of demand to a publicly listed company, while the company was trading, and that company failed to make a disclosure. UWA's solicitor was not called to give evidence on the matter and it might well be that evidence she could have given would have been subject to a claim of privilege. In my opinion however it has not been established that it was calculated to inflict damage on Dr Gray in a way that was unnecessary to the pursuit of UWA's demand. CRI was acting by a court-appointed receiver, Mr Mark Conlon, whose powers to enter into a settlement on behalf of CRI were subject to approval of the settlement by the Court . The receiver was initially appointed as receiver of Sirtex shares held by CRI. His powers were extended on 22 December 2006 : University of Western Australia v Gray (No 6) [2006] FCA 1825. The settlement agreement was subsequently approved by Graham J: University of Western Australia v Gray (No 10) [2007] FCA 377. That approval was the subject of an unsuccessful challenge by Dr Gray and Sirtex in an appeal to the Full Court: Gray v Cancer Research Institute Inc [2007] FCAFC 149. An application for special leave to appeal to the High Court is pending. Under the terms of the settlement, CRI and UWA agreed to take such steps as are required to create a trust to be known as "The Cancer Research Trust" (the Trust). The Trust is to be a charitable trust whose objects are to support and promote cancer research and education including, without limitation, funding cancer research and education at a State, national and international level. It is also to establish, maintain and administer a public fund or funds for any charitable purposes it may decide in relation to cancer research and education. The Trust is to be managed by a board of management initially to comprise a chairman, appointed by UWA, CRI and the WA Institute for Medical Research (WAIMR) jointly, two nominees proposed by WAIMR, one appointed by CRI and one appointed by UWA. It is acknowledged by UWA and WAIMR that CRI could propose as its nominee a representative of the Walter and Eliza Hall Institute of Medical Research (WEHI). An external national/international scientific committee is to be appointed by the board of management to advise and assist it. Upon the constitution of the Trust and the appointment of its inaugural board of management, CRI is to transfer all of its assets to the Trust. Subject to being authorised by the Court to do so the receivers of CRI will then take such steps as are necessary to wind up its activities and to have it deregistered as an incorporated association. It was a condition precedent of the agreement that the approval of the Federal Court be obtained in respect of the settlement. He was appointed Company Secretary of Sirtex on 1 March 2005 and Chief Executive Officer on 26 May 2005. He ceased to be secretary on 26 July 2005. He was appointed an executive director on 28 June 2005. Mr Wong set out annual reports of Sirtex for the years ended 30 June 1997 to 2006. He summarised the corporate history of Sirtex. While it repeats some elements of what has appeared earlier in these reasons, it is helpful to have that overview in one place. Sirtex (then new Paragon Medical Ltd) was incorporated on 21 April 1997. On incorporation, the shareholders included Dr Gray, CRI, Mr Jones, Mr Karlson and NJI No 2 Investment Fund. The founding directors were Dr Gray, Mr Karlson, Professor Arthur Li and Dane Gorn. Dr Panaccio and Mr Graham Mitchell became directors on 11 February 1998 as representatives of Nomura/JAFCO. On incorporation, Sirtex was located in Perth. Its name was changed from Paragon Medical to Sirtex on 4 April 2000. On 17 July 2000 Sirtex issued a prospectus for its IPO. In August 2000 Sirtex listed on the ASX. In 2002 Sirtex Medical Inc (Sirtex USA) was incorporated for the purpose of sales and marketing products (principally SIR-Spheres) in the USA. The office of Sirtex USA was located in Illinois and has since been relocated to Massachusetts. Sirtex USA is 100% owned by Sirtex Medical Holdings Inc, which is 100% owned by Sirtex. In February 2003 Sirtex was the subject of a takeover bid from Cephalon Australia Pty Ltd. Cephalon did not obtain the required 90% acceptances from shareholders and the bid failed. In 2003 Sirtex commenced sales and marketing of SIR-Spheres in Europe. On 9 February 2004 Sirtex Medical Europe Gmbh was incorporated. In 2004 a property was purchased in Wilmington, Massachusetts for the purpose of establishing a manufacturing facility for SIR-Spheres. On 3 June 2004 Sirtex Wilmington LLC was incorporated to operate the manufacturing facility. Sirtex Wilmington is 100% owned by Sirtex Holdings. In 2005, Sirtex relocated from its premises in North Ryde in Sydney to its present location in Lane Cove in New South Wales. In 2006, Sirtex conducted a review of its group structure and operations with assistance from PriceWaterhouseCoopers. The review resulted in the formation of five additional subsidiary companies located in Australia and in the United States. Dr Gray has been a substantial shareholder of Sirtex since its incorporation. He holds shares in his name and through his interest in Pine Ridge Holdings Pty Ltd and the B Gray Trust. On 9 September 2003 he sold 3 million ordinary shares for $15,300,000. On 21 December 2006 when Mr Wong swore his affidavit the board of Sirtex was made up of Mr Hill as non-executive director and chairman, and Dr Gray, Mr Boyce, Mr Eady and Mr Wong as non-executive directors. Dr Gray had been appointed a director in 1997. He held the office of Medical Director from 1997 to August 2005 and head of Research and Development Department from about September 2002 to April 2004. He was chairman of Sirtex from 19 December 2002 to 22 August 2006 and Chief Executive Officer from 6 June 2003 until Mr Wong's appointment on 26 May 2005. He was retained by Sirtex as a consultant medical advisor from August 2005 to 24 October 2006. As appears from a supplementary affidavit, which was filed by Mr Wong, Dr Gray was removed from the board by a resolution of shareholders passed at an extraordinary general meeting of Sirtex held on 23 January 2007. His removal was announced to the ASX. Mr Wong swore his first affidavit on 21 December 2006. At that time Sirtex and its subsidiaries employed 38 people. The primary focus of its business while he has been Chief Executive Officer has been the development, enhancement and sale of SIR-Spheres and in particular the product which Sirtex refers to as "SIRT-1". Mr Wong described this as the "core product" of Sirtex. SIRT-1 is the only product sold by Sirtex. The "enhancement and development" of SIR-Spheres includes clinical trials which have taken place and are planned for the future. In the annual report for 2006 Mr Wong referred to dose escalation studies for patients with metastatic colorectal cancer completed in the year ended 30 June 2006. Since 1997 Sirtex has spent significant amounts of money in pursuing its business. Mr Wong set out a table illustrating the expenditure based upon an analysis of the annual report. Sirtex intends to continue to invest money in those areas of its business. Between 1997 and 2006 a total of $6,904,643 had been expended on research and development. $23,685,000 was expended on marketing and sales and $14,038,980 on administration. Total expenditure from 1997 to 2006 was $44,628,623. The SIR-Spheres are presently manufactured in Australia under contract by ANSTO. Sirtex has continued researching the development of other products from the technology which is the subject of the present proceedings. Its major focus has been on targeted hyperthermia. Apart from its own funds it obtained grants from AusIndustry for that project. Apart from funds expended on the renewal of DOX-Spheres patents there had been no other expenditure by Sirtex in relation to DOX-Spheres. Mr Wong also set out a shareholding history of the company up to 21 December 2006. He exhibited a confidential exhibit to his affidavit containing information from Registrys Ltd. Because it contained personal details of current and former members he was concerned to avoid any suggestion that he might have disclosed their details. The history indicated substantial shareholder trading during the time of Sirtex's existence. I accept Mr Wong's evidence. There are some defined terms in the statement of claim which are used in respect of particular inventions, patent applications and assignments of inventions and associated rights. It is convenient to set out those terms before outlining the causes of action as it is the conduct of Dr Gray in relation to the designated inventions, applications and assignments that are said to have constituted the various breaches of his contract of employment with UWA and of his fiduciary duty. The causes of action against Sirtex arise out of its alleged knowing involvement in Dr Gray's breaches of fiduciary duties to UWA. 1.2 The invention disclosed in Patent Application AU 54724/94 entitled "Radioactive Particles for Treatment of Cancer" (SIRT-2) (s/c 12). The DOX-Spheres Invention being that disclosed in Patent Application AU PN2492 entitled "Controlled Release Matrix for Drugs and Chemicals" (s/c 36). The Thermo-Spheres-1 Invention being that disclosed in Patent Application AU PN9782 entitled "Targeted Hysteresis Hyperthermia as a Method for Treating Cancer" s/c 65). The Thermo-Spheres-2 Invention, being that disclosed in Patent Application AU PP0081 entitled "Improved Targeted Hysteresis Hyperthermia as a Method for Treating Diseased Tissue" (s/c 92). The Thermo-Spheres-3 Invention being that disclosed in Patent Application PP8998 entitled "Magnetic Material". The Gray SIRT-2 Applications. These refer to applications made by Dr Gray for patents in countries including Canada, Europe, Japan, the Peoples Republic of China and the United States of America in reliance upon the priority date created by Australian Patent Application AU54724/94 filed on or about 21 January 1994 (the SIRT-2 Australian Application) and the Patent Cooperation Treaty Application PCT/AU95/0027 filed by Dr Gray on or about 20 January 1995 (the SIRT-2 PCT Application). The Gray/Chen DOX-Spheres Applications, being applications for patents made by Dr Gray and Dr Chen in counties including, at least the United States of America in reliance upon the DOX-Spheres PCT Application filed on or about 17 November 1994 by CRI at the request of Dr Gray and Dr Chen and relying upon the DOX-Spheres Provisional Application filed on or about 18 November 1993 by Dr Gray and Dr Chen (s/c 47). The Thermo-Spheres-1 Invention Provisional Application being an application filed by Dr Gray on or about 10 May 1996 (s/c 67). The Gray/Jones Thermo-Spheres-1 Invention Application , being an application by Dr Gray and Dr Jones for patents in countries including, at least, the United States of America relying upon the Thermo-Spheres-1 Invention PCT Application filed by Sirtex on or about 9 May 1997 with the consent of Dr Gray and the Thermo-Spheres-1 Invention Provisional Application. The Gray/Jones Thermo-Spheres-2 Invention Application , being the application by Dr Gray and Dr Jones for patents in countries including, at least, the United States of America, relying upon the Thermo-Spheres-2 Invention Provisional Application filed by Sirtex on or about 29 October 1997 with the consent of Dr Gray and Dr Jones (s/c 99). The Gray/Jones/Cammerano Thermo-Spheres-3 Invention Application , being an application for patents in countries including, at least, the United States of America, by Dr Gray, Dr Jones and Dr Cammerano relying upon the Thermo-Spheres-3 Invention Provisional Application filed by Sirtex on or about 3 March 1999 with the consent of Dr Gray. His duties included the obligation to undertake research or to organise and generally stimulate research among the staff and students of UWA. The UWA Act, Statutes and Regulations were imported into and formed part of his contract. Subject to the validity of particular parts of the regulations affecting personal property, this was not in dispute. The Prompt Notification Condition being the requirement under regulation 6(1) of the Patents Regulations that each person bound by them must immediately inform the Vice-Chancellor of any patentable invention made or developed wholly or in part during the course of that person's duty or whilst using the University's research facilities. . The Assignment Condition being the requirement imposed by regulation 6(3) that, if required by the University, an inventor's rights in any invention made or developed wholly or in part during the course of that person's duty or while using the University's research facilities must be assigned to the University. (This was a misstatement of regulation 6(3) which was depended upon the University first deciding to exercise "its rights in the invention". It was therefore conditioned upon such a decision being made and the University having "rights" in the invention. The Prompt Reporting Condition , being the requirement under regulation 6(1) of the IP Regulations that each person bound by them must promptly report the creation of any intellectual property rights to be commercially significant. . The Restraint Condition , being the requirement imposed by regulation 4(11) of the IP Regulations whereby persons bound by them must not apply for any form of protection for or commercially exploit or otherwise deal with any intellectual property or do any act or thing in a manner inconsistent with the University's rights under the IP Regulations or otherwise. (This condition operated upon the assumption that the University had "rights" under the IP Regulations. The Naming Condition , being the obligation imposed by regulation 4(13) of the IP Regulations on each person bound by the Regulation not to make any application (whether in Australia or overseas) for the registration of intellectual property otherwise than in the name of the University, unless otherwise determined by the Pro Vice-Chancellor (Research and Innovation). . The Cooperation Condition , being the requirement imposed by regulation 4(8) of the IP Regulations that persons bound by them must execute any document or do anything reasonably required by the University in relation to any intellectual property created by such person to demonstrate or prove the University's ownership to third parties or to assist the University to commercialise the intellectual property. The Prompt Notification Condition and, after 22 July 1996, the Prompt Reporting Condition by failing to inform the Vice-Chancellor of the University of the SIRT-Spheres Inventions, DOX-Spheres Inventions or Thermo-Spheres Inventions 1, 2 and 3 either immediately or at all. Each of the inventions was said to be patentable and commercially significant (s/c 12, 13, 36, 37, 65, 66, 92, 93). . . (b) A duty not to make any secret profit or receive any secret payment or obtain any secret benefit from any third party with whom he was dealing. UWA alleged various breaches of Dr Gray's fiduciary duties under (a) and (d) above in respect of the SIR-Spheres, DOX-Spheres and Thermo-Spheres Inventions. Each of the things done by Dr Gray was said to have been done without the knowledge, approval or authority of UWA or without disclosing the interest of UWA. It was also said to have constituted a dealing with personal property to which UWA was entitled. 1.2 PCT/AU95/00027 on or about 20 January 1995 (SIRT-2 PCT Application) (s/c 20). 1.3 PM2492 on or about 18 November 1993 (DOX-Spheres Provisional Application (s/c 36 and 40). 1.4 Application for Overseas Patents with Dr Chen (Gray/Chen DOX-Spheres Applications) (s/c 50). 1.5 Application for Provisional Patent AU PN9782 (Thermo-Spheres-1 Provisional Application) (s/c 70). 1.6 Application for Overseas Patents with Dr Jones (Thermo-Spheres-1 Invention PCT Applications) (s/c 80). 1.7 Application for Overseas Patents with Dr Jones (Gray/Jones Thermo-Spheres-2 Invention Applications (s/c 102). 1.8 Applications for Overseas Patents with Drs Jones and Cammerano (Gray/Jones/Cammerano Theremo-Spheres-3 Invention Applications) (s/c 129). 2.2 On or about 25 October 2000 Australian Provisional Patent Application PR0983 (Second SIRT-1 Australian Application) (s/c 16). 2.3 On or about 25 October 2001 PCT Application PCT/AU/01/0137 (SIRT-1 PCT Application) (s/c 20). 2.4 Applications in overseas countries for patents based upon SIRT-1 PCT Application (Gray SIRT-1 Applications) (s/c 25). 2.5 On or about 9 May 1997 filing PCT Application PCT/AU97/00287 (Thermo-Spheres-1 Invention PCT Application) (s/c 74). 2.6 On or about 29 October 1997 filing Australian Provisional Application AU PP0081 (Thermo-Spheres-2 Provisional Application) (s/c 96). 2.7 On or about 3 March 1999 filing Australian Provisional Application PP8998 (Thermo-Spheres-3 Invention Provisional Application) (s/c 118). 2.8 On or about 3 March 2000 filing PCT Application PCT/AU00/00151 (Thermo-Spheres-3 Invention PCT Application) (s/c 123). 3.2 In or about 1997 of the Thermo-Spheres-1 and Thermo-Spheres-2 Inventions and associated rights and entitlements (s/c 83, 89, 106 and 111). 3.3 In or about 1999 of the Thermo-Spheres-3 Inventions and associated rights and entitlements (s/c 133 and 138). by assigning, with Dr Chen, to CRI in or about 1996 the DOX-Spheres Invention and associated rights and entitlements (s/c 54 and 61). on or about 17 November 1994 by requesting, with Dr Chen, that CRI file the DOX-Spheres PCT Application (s/c 44). failing to answer or comply with a UWA demand made by letter dated 12 October 2004 for the transfer of his shareholding in Sirtex, including Sirtex shares acquired by the exercise of options, otherwise to account to UWA for benefits derived from the inventions and sale of any Sirtex shares. 1.2 preparing and filing the SIRT-1 PCT Applications (s/c 20A). 1.3 preparing and filing the Gray SIRT-1 Applications (s/c 25A). 2. UWA alleged that assignments of right by Gray to Sirtex for consideration were dealing in personal property to which UWA was entitled. Sirtex held the rights on trust for UWA or is liable to account to it for any benefit received. 2.2 The CRI DOX-Spheres assignment (s/c 63). 2.3 The Thermo-Spheres-1 invention assignments (s/c 90 and 91). 2.4 The Thermo-Spheres-2 invention assignments (s/c 113). 2.5 The Thermo-Spheres-3 invention assignments (s/c 140). 3. 3.2 His consent to the Thermo-Spheres-2 Provisional Application (s/c 97). 3.3 His consent to the Sirtex Thermo-Spheres-3 Invention Provisional Application (s/c 119). 3.4 His consent to the Sirtex Thermo-Spheres-3 Invention PCT Application (s/c 124). 4. UWA alleged that the receipt by Dr Gray of shares issued by Sirtex in its public float constituted a breach by him of his fiduciary duty to UWA and that Sirtex was liable for knowingly assisting him in that breach (s/c 146B). Unjustifiable threats of infringement proceedings . The proceedings threatened in the UWA letter of demand were substantially similar to patent infringement proceedings which, by reason of s 128 of the Patents Act and matters raised in the amended defence gave rise to a claim for relief for loss and damages resulting from UWA's conduct. The claim was for loss of salary and loss of value of Dr Gray's shareholding in Sirtex. (C/C 3.4). 2. The statement is said to have constituted a representation about the future which was misleading or deceptive in contravention of s 52 of the TPA . The publication of the letter to Sirtex was said to have been defamatory and to have been made in circumstances attracting aggravated and exemplary damages. 4. The essential elements of each cause of action may be summarised as follows: Misleading or deceptive conduct --- this was based on Professor Barber's letter of 22 January 1997 and the statements in it that UWA had no interest in technology funded by CRI. Gray and CRI are said to have relied upon the letter in making various assignments and in giving warranty. Sirtex's incorporation and entry into various transactions is also pleaded as a consequence of the letter. Sirtex's primary position is that the representations were not misleading or deceptive and that they represented the true position of the University. The cross-claim is based upon the alternative of the representations being false. Unjustifiable threats - The letter of demand from the UWA solicitors dated 26 October 2004 was said to have involved threats of infringement or other similar proceedings under s 128 of the 1990 Act and to have been unjustifiable (c/c 193). If the University were to succeed in its claim for ownership of the acquired inventions Sirtex said it ought to be entitled to an equitable lien against the inventions corresponding to its investment in their development protection and marketing (c/c 194A). These are known as the Gray Sirtex Warranties and the CRI Warranties. Sirtex also pleads that in that event representations made by Gray and CRI were false inaccurate and misleading. (c/c 166) Regardless of whether UWA succeeds in the proceeding or not Sirtex alleges that Dr Gray breached warranties given to it and that they were false inaccurate and misleading. It claimed for breach of warranty and misleading or deceptive conduct. It also invoked an indemnity provided by CRI in similar terms to that provided by Dr Gray. If UWA were not to succeed Sirtex claims against CRI for misleading or deceptive conduct arising out of the CRI representations. The first was an amendment sought by Dr Gray to the further and better particulars of his cross-claim against UWA. This was an additional particular of UWA's alleged malice. It related to UWA's intentions as to the receipt and effect of its letter of demand upon Dr Gray. The letter is said to have been intended by UWA to be received by the Sirtex directors prior to the Annual General Meeting and to be expressed in terms which UWA intended should be forthwith disclosed to the market and shareholders of Sirtex in compliance with its obligations as a listed disclosing entity. It was thereby intended to cause harm to Dr Gray in that the shareholders of Sirtex to UWA's knowledge were to consider at the Annual General Meeting and if they thought fit resolve to approve the issue to him of 400,000 options to acquire shares. The intention that the letter be disclosed was said to be inferred from its hand delivery by a process server on 26 October 2004 and letters from Jackson McDonald to Freehills written in November 2004. UWA's knowledge of the options resolution awaiting consideration at the Annual General Meeting was to be inferred as UWA was monitoring Sirtex's affairs. Reliance was placed upon the emails between Mr Provan and Jackson McDonald in October 2003 and September 2004 which have been referred to earlier in these reasons. I am satisfied that the conduct of the case and, in particular, the cross-examination of Professor Robson was consistent with this particular and that there is no prejudice to UWA in allowing the amendment. The amendment to the particulars of Dr Gray's cross-claim will therefore be allowed in accordance with the minute handed up in Court on 27 July 2007. The second reserved amendment was to the defence and cross-claim of Sirtex. This related to the Sirtex pleading about the terms of Dr Gray's contract of employment with UWA set out in paragraph 10 of the Sirtex defence. The amendment to the Sirtex defence will therefore be allowed in accordance with the minute handed up in Court on 27 July 2007. In the case of the provisional and PCT applications the "personal property" was elaborated as "the right to proceed under the Patents Act 1990 ". No implied term of his contract of employment was pleaded to support the creation of the claimed interests and personal property. It is necessary to consider their nature and sources. In opening, counsel for UWA handed up a written outline in which he said that "by operation of the statutes and regulations each of the patents constituted property belonging to the University". However, in the course of his address, counsel agreed with the proposition that the rights asserted by UWA flowed entirely from its contractual relationship with Dr Gray. This was subject to the additional contention that in making claims for intellectual property protection on his own behalf Dr Gray held the benefit derived from those claims on trust for UWA as a consequence of his fiduciary obligations to UWA. The fiduciary duties were said to derive from his employment. The fiduciary claim was distinct. The case was "not just a contract case". In written closing submissions UWA asserted its property rights variously in "any patentable inventions and other intellectual property", "the inventions that [were] the subject of its claim in these proceedings" and "the inventions (including patentable inventions) and other intellectual property". The rights were said to arise as "an incident" or a "term" of its contracts of employment with Drs Gray, Chen and Jones. The rights were also said to "arise as a matter of law" from the nature of its employment relationships with them. In oral closing submissions counsel for UWA relied upon Sterling Engineering Co [1955] AC 534 for the proposition that there was a term implied or inherent in Dr Gray's contract of employment whereby "property in inventions" vested in UWA. At one point counsel seemed to shift ground by relying upon the assignment obligation under reg 6 of the Patents Regulations as a source of rights. However, he returned to the position reflected in the written submissions that the structure of the Patents Regulations assumed the existence of a right with its source in contract. Counsel for Dr Gray complained that UWA had departed from its opening position which relied upon the Regulations as the source of property rights. In my opinion however the UWA case as ultimately propounded in opening and as set out in its closing submissions depended, during the period that the Patents Regulations were in force, on the general law as the source of the "interests" and "personal property" with which Dr Gray was said to have dealt. The position with respect to the IP Regulations was a little more ambiguous but I accept that UWA relied upon those regulations as conferring a property right. There are some difficulties with the terminology used by UWA in describing the property rights which it claims. Metaphorical references to "ownership" of the inventions should be treated with caution. An invention is not a chattel. Nor is it a chose in action. It is a manner of new manufacture the subject of letters patent and grant of privilege within s 6 of the Statute of Monopolies and includes an alleged invention. It is possible to speak, in a metaphorical sense, of the owner of an invention thereby referring to the person who has the right to apply for or who holds a patent in relation to it. But the metaphor must not misdirect the legal analysis. A fortiori the concept of ownership of an invention which is not patentable is not only metaphorical but elusive. At the time that Dr Gray was employed by UWA the 1952 Act was still in force. The effect of a patent granted under the Act and the nature of the rights conferred by it were specified in s 69. Persons who could apply for a patent under s 34 of the Act included a person who would, if a patent were granted to one of the persons referred to in s 34(1)(a) to (f), be entitled to have the patent assigned to him. There was no reference to ownership of an invention anywhere in the Act. The word "ownership" appeared as part of the heading to s 153 entitled "Co-ownership of patents". This referred to a circumstance in which a patent was granted to two or more persons and created the entitlement in such persons, subject to contrary agreement, to an equal undivided share in the patent. The word "Ownership" appears at the head of Pt 2 of Chapter 2 of the 1990 Act. Section 15, the first section in that Part, like s 34 of the 1952 Act, specifies the persons who may be granted a patent. Section 16 provides for one or more patentees to hold equal undivided shares in the patent absent contrary agreement and s 17 for the Commissioner to give directions where there are two or more patentees. Ownership in this context referred to the patent rights. The exclusive rights to exploit a patent which are conferred upon a patentee by s 13(1) are "personal property and are capable of assignment and devolution by law" (s 13(2)). An application for a patent, whether made under the 1952 Act or the 1990 Act, is an application not a species of property right. Section 34(1)(fa) of the 1952 Act and s 15 of the 1990 Act both recognise that a right to take an assignment of a patent when granted may come into existence while an application is pending or before an application is made. Such a right may find its source in agreement or by operation of the general law. None of this confers on inventions or applications the character of property rights. The nature of the interests and personal property claimed by UWA did not emerge with clarity from its pleading. However it may be inferred that UWA intended to refer at least to a right to take an assignment of the relevant patent when granted. That would attract a right to apply for the patent pursuant to s 34 of the 1952 Act and s 15 of the 1990 Act. To the extent that the pleading was relevant to the regime introduced by the IP Regulations, those Regulations defined intellectual property vested in UWA as including "all rights in relation to any ... invention". The term "invention" was in turn defined as an invention which may be patentable under the 1990 Act. Rights in relation to an invention in that context may be taken to include the right to apply for a patent and a right to take an assignment of a patent. On the UWA case, there would have been an obligation implied by law to assign to it the right to apply for a patent. That obligation might be modified to the extent that it was dependent upon a demand from UWA: see eg regulation 6(3) of the Patents Regulations. Putting aside misleading metaphors about the ownership of inventions, the question is whether or not an implied obligation existed as an incident of Dr Gray's contract of employment which conferred on UWA the right to apply for a patent in respect of any invention developed by him for which a patent could be sought. That requires a consideration of the incidents of his contract of employment. Dr Gray was appointed as a Professor of Surgery. He was a full time officer of UWA, required to devote his whole time to his UWA duties, except in so far as he undertook private and consultative work pursuant to clause 11 of his Conditions of Appointment. Under the terms and conditions of employment he was expressed to be subject to the UWA Act, the Statutes and Regulations of UWA. The obligations imposed upon staff by the Regulations were imported into his terms and conditions. Dr Gray had no duty to invent anything. He had a duty to undertake research and to stimulate research amongst staff and students at UWA. He was working for a university. Prior to the introduction of the IP Regulations there was no prohibition expressed or to be implied which would prevent him from publishing the observations and discoveries he had made and details of the technologies he had developed. He was, at least until 30 November 1997, under no obligation to protect by non-disclosure the patentability of any invention he developed in the course of his employment at UWA. In this important respect his employment obligations differed from those of a person employed by a private commercial entity whose inventions in the course of employment could benefit or affect the business of the employer. It is also not without significance, that Dr Gray was employed by a university, a statutory body established for public purposes. He was not merely an employee. He was, by virtue of the definition of the "university" in the UWA Act a member of it and linked historically by that definition to the idea of the University as a community of teachers and scholars. The statutory definition which incorporated that idea can be traced back at least to the 16 th century statute by which Oxford University was incorporated. The contemporary reality is that most, if not all, universities, including UWA, engage in commercial activities. UWA was held by a Full Court of the Federal Court in Quickenden v O'Connor [2001] FCA 303 ; (2001) 109 FCR 243 to be a trading corporation and thereby a constitutional corporation for the purposes of the Workplace Relations Act 1996 (Cth). But that holding was on the basis of trading activities unconnected to the teaching and research functions for which Dr Gray was employed. Dr Gray was not required to advance a UWA commercial purpose when selecting the research work he would undertake. Research of the kind that Dr Gray was engaged to do carried with it the possibility that he would develop inventions capable of attracting patent protection. The duty to undertake research could be discharged in a variety of ways. These were within the discretion of the researcher. One of the ways in which the duty could be discharged was the development and testing of new technologies. It could be said therefore that an invention made in the course of Dr Gray's research activities as an employee of UWA was an invention made within the scope of his employment and doing what he was employed to do. It does not follow that there was an implied term that the rights to which his invention gave rise belonged to UWA. UWA contended for implication by law of a term in Dr Gray's contract of employment which would vest in UWA rights in relation to inventions developed by him. The implication of the term as a matter of fact was not pleaded and was not part of its case. Where a term is implied by fact the burden of proving the term rests upon its proponent. If a common law rule implies the term into a particular class of contract then the onus is upon the party wishing to deny it to show that the rule is displaced for that particular contract: Carter, Peden and Tolhurst, Contract Law in Australia (5 th ed, Butterworths, 2007) at [11-13]. The common law affecting contracts of employment has been discussed in the context of the English and Australian authorities. The position in the United States, Canada and New Zealand has also been discussed. There is an apparent threshold question whether the legal principles developed at common law apply to all contracts of employment regardless of the nature of the employer's business or activity and, in particular, whether or not they apply to a contract of employment with a university. The question is only apparently a threshold one. It really reduces to a consideration of the nature of the particular contract by reference to the business or activity of its employer and the scope of the employee's employment in relation to that business or activity. To that extent the onus is upon the proponent of the term to show that the contract is of a kind to which the legal implication applies. While each case falls to be decided according to its own circumstances, the approach foreshadowed in the earlier discussion is applicable to Dr Gray's case. The circumstances of his employment lie against the implication necessary to establish UWA's property rights. The absence of any duty to invent anything. The freedom to publish the results of his research and any invention developed during that research notwithstanding that such publication might destroy the patentability of the invention. The extent to which Dr Gray, as a researcher and those working with him, were expected to and did solicit funds for their research, including the development of inventions, from sources outside UWA. The relevance of those considerations is not affected by the arrangements under which UWA would administer funding, eg in the case of CSIRO or NH & MRC grants. The necessity, consistent with research of the kind he was doing, to enter into collaborative arrangements with external organisations such as CSIRO. The circumstances of his employment were a long way removed from the situations which gave rise to the common law implications discussed in the English cases. The Victoria University of Technology [2004] VSC 33 ; (2004) 60 IPR 392 case arose in a different factual context which gave rise to a breach of fiduciary obligations. It did not require consideration of a factual situation and research of the character involved in the present case. In my opinion the circumstances of Dr Gray's employment at UWA and those of the other academics employed as researchers with him negated the implication of any term whereby UWA acquired rights in relation to inventions developed in the course of their research. Provided such work fell under clause 11(3) it was not dependent upon permission from the Senate or any UWA officer. Work done by Dr Gray under clause 11(3) would not be within the scope of his employment by UWA. The work done by Dr Gray at RPH was said to be outside the scope of employment. From the commencement of his appointment in 1985 RPH paid 30% of his salary. The balance was paid by UWA. The evidence did not indicate the arrangements in place between UWA and RPH although it seems likely that RPH would have reimbursed UWA for 30% of Dr Gray's salary. I do not accept that any of Dr Gray's work at RPH was outside the scope of his employment at UWA. The UWA Department of Surgery was located there. He was there to teach and research and to do clinical work. The teaching and research were clearly within the scope of his employment by UWA. The clinical work was done by him as a full time employee of UWA. He was not an employee of RPH. The clinical work which he undertook was not private consultative work for which he was separately paid. The fact that UWA allowed him to provide services to RPH in consideration of RPH paying 30% of his salary does not change his status as a full time employee of UWA. Nor does it take the provision of those services outside the scope of that employment. The LCI/RPH Memorandum of Agreement made on 2 November 1992. 2. The LCI/UWA Affiliation Agreement made 27 October 1995. 3. The CACS Agreement made on 1 March 1996. To them Sirtex added the Relocation Agreement of 29 February 1996. UWA was not a party to the Memorandum of Agreement between LCI and the Foundation. It was an arrangement, not of any legal force, whereby LCI would direct funds for cancer research to the Medical Research Foundation and advise it of the projects which it supported. As was submitted by Dr Gray, it created a source of funding for him external from, and independent of, UWA. This occurred at a time when he was experiencing difficulty in obtaining the funding he wanted from within his department. Moreover, Uniscan had not proven to be a source of any significant funding. Dr Gray submitted that LCI had disclosed its interest in funding cancer research from as early as February 1991. I accept that UWA was aware that LCI was interested in funding cancer research from that time. Dr Gray submitted that from 1992 LCI was an "outside organisation" for the purposes of Patent Regulation 3(1). That regulation prohibited the acceptance, without the prior consent of the Vice-Chancellor, of offers of financial support from outside organisations which might claim rights in any invention made or developed in the course of work undertaken with such support. I am not satisfied that LCI was at that time an organisation which fell into that classification. In any event, there was nothing in the Memorandum of Agreement or in UWA's awareness of LCI's funding intentions which could be taken to have affected Dr Gray's contractual relationship with UWA. Dr Gray next pointed to the UWA/LCI / CRI Affiliation Agreement of 27 October 1995. Under that agreement UWA was to be the "notional employer" of staff funded by the Institutes. It would also process all applications for research funding from granting bodies. The Institutes were to direct funding applications for their staff through UWA. Dr Gray was the Medical Director of the Institutes. It is clear however that he remained a UWA employee responsible to the Executive Dean of Medicine and Dentistry. Shortly prior to the Affiliation Agreement being finalised Mr Orr had written to Dr Gray stating his view that his appointment as a Professor of Surgery in the Department of Surgery continued. It was submitted by Dr Gray that by entering the Agreement UWA consented to him taking on a role which had the capacity to create conflicts of interest. That may be so, but it made no difference to his status or the terms of his employment as an employee of UWA. Both the Affiliation Agreement and the CACS Agreement were in very similar terms. There was an inappropriate transposition from the Affiliation Agreement into the CACS Agreement treating the newly designated centre as a distinct entity in place of the Institutes as though UWA were making an agreement with it. In my opinion, CACS comprised UWA and the Institutes. Dr Gray's responsibilities as Director of CACS were effectively in the same terms as his responsibilities as Medical Director under the Affiliation Agreement. These aspects did not affect his status as an employee of UWA. Clauses 4.7 and 4.8 of the Affiliation Agreement and of the CACS Agreement did appear to constitute an agreement about how UWA would approach the question of intellectual property developed by its staff at the Institutes and at CACS. Counsel for Dr Gray acknowledged that there was an obvious tension between those provisions and the clauses which provided that UWA would be the employer of the staff of the Institutes and CACS. Clauses 4.7 and 4.8 were also at odds with the standard terms of the Patents Regulations. But Dr Gray was not a party to either the Affiliation Agreement or the CACS Agreement. Neither in terms purported to affect his conditions of employment as a member of the UWA academic staff. It was submitted that Dr Gray's contractual obligations were to be read against the effect of the agreements under either the Patents Regulations or the IP Regulations. It was submitted that the incorporation of the Regulations, which made provision for special agreements, had the effect that the incorporated contractual obligations were varied to the extent that any special agreement covered Dr Gray's work. Sirtex submitted that the CACS Agreement indicated an understanding between the parties that some research conducted through CACS would have no connection with UWA. Clause 3.1.1 indicated that UWA's formal status as an employer and paymaster was not intended to carry with it a right to all intellectual property conceived within the scope of the former employment. The legal relationship between UWA, LCI, CRI and the personnel in CACS was said to be similar to the previous position between UWA, LCI and CRI under the Affiliation Agreement, namely: To the extent that CACS developed intellectual property through funds possessed by UWA, UWA would have a right to negotiate for an interest; and To the extent that CACS developed intellectual property through funds unconnected with UWA, UWA would have no interest. Sirtex submitted that the way in which the parties treated CACS, namely as a partnership and the words of clause 4.7 made it clear that CACS was not subject to UWA's internal intellectual property policy. To put it another way, and consistently with the IP Regulations, UWA had expressly agreed for an arrangement "governing ownership of intellectual property" which was intended to prevail over any pre-existing arrangements. In discussing the Affiliation Agreement, UWA submitted that on his own evidence Dr Gray was never a staff member of LCI and never employed by CRI. His position as Medical Director was not that of an employee. I agree with that proposition. UWA submitted that the terms of the Affiliation Agreement and the CACS Agreement had no effect upon the claims it makes against Dr Gray or Sirtex. Relevantly, UWA submitted that the language of the CACS Agreement establishing CACS as a collaborative Category B Centre did not establish or modify any rights to which UWA was otherwise entitled. Neither LCI nor CRI was a tenant of the Medical Research Foundation building. At all times Dr Gray's research group occupied space provided by UWA. Under the Affiliation Agreement UWA was obliged to be the employer of staff funded by the Institutes and in the case of the CACS Agreement, staff funded by grants processed through UWA. Clause 4.1 of each agreement recognised that Dr Gray as a UWA employee remained responsible to the Vice-Chancellor through the Executive Dean of Medicine and Dentistry. UWA's case was that neither Dr Gray nor Sirtex had identified any Institute grants or CACS grants which funded the relevant development of intellectual property for the purposes of clause 4.7. As to clause 4.8 there was no suggestion that UWA had been made a party to any separate agreements relating to projects with commercial application. UWA submitted that there was nothing in the Agreements to modify the obligations owed by Dr Gray or any other employee of UWA to UWA. There was nothing in either agreement which created an assignment of rights or obligations in relation to intellectual property or otherwise. In Victoria University of Technology [2004] VSC 33 ; (2004) 60 IPR 392 , Nettle J observed that the work which an employee is retained to perform can and often does change over the period of employment. The nature of the work that an employee is retained to perform at any point of time must be assessed by reference to the work performed at that point of time. That principle has application to the changed circumstances in UWA's claims to intellectual property rights reflected in clauses 4.7 and 4.8 of the Affiliation Agreement and the CACS Agreement. If there were, contrary to my primary conclusion, an implied term in Dr Gray's contract vesting rights in relation to his patentable inventions in UWA, then the Agreements negatived that implication in the circumstances to which they applied. Clauses 4.7 and 4.8 related to intellectual property rights developed through work funded by Institute grants under the Affiliation Agreement or CACS grants processed by UWA under the CACS Agreement. Sirtex pointed to the Relocation Agreement of 29 February 1996 entered into between UWA, RPH and Dr Gray in his capacity as Director of CACS. In that agreement it was stated that CACS was a "partnership" between UWA, LCI and CRI and on that basis would be accorded the status of a department within the Faculty. Under the agreement UWA was to pay 70% of Dr Gray's salary for up to five years and RPH 30% of his salary. UWA agreed to pay 25% of his secretary's salary and RPH 75%. The arrangements were foreshadowed in a letter from Professor Palmer to Dr Gray on 29 January 1996. Under clause 7 of the Relocation Agreement, RPH was to provide $20,000 annually for five years to be used as a contribution to the costs of a research appointment in CACS. The agreement made no express provision for which entities had an interest in intellectual property developed through CACS. That was a matter covered by clauses 4.7 and 4.8 of the CACS Agreement. Sirtex referred to Dr Gray's work for the old Paragon Medical, ASPL. It pointed out and I accept that there was no suggestion that Dr Gray did any research in his capacity as an officer of ASPL. Any work he did for Paragon Medical was clearly outside the scope of his UWA employment. UWA was aware of his role in ASPL from 1994 onwards. Dr Gray's work for Sirtex was also clearly outside the scope of his work for UWA. He did not conduct any research for Sirtex until, at the earliest, May 1997 when the transactions between Nomura/JAFCO, Sirtex, CRI and Gray were effected. As to the 0.3 fractional appointment which came into effect on 3 March 1997, Sirtex submitted that it significantly reduced the scope of Dr Gray's employment and made it clear to him and UWA that the majority of his time would be spent on work outside the scope of UWA's employment. I accept that proposition. His work at RPH was clinical. If there had been an implied term in relation to the inventions he developed as a fulltime employee of UWA it was negatived by the new arrangements. After March 1997 he was neither employed by UWA to invent, nor to research. In summary I find that from 1985 until the Affiliation Agreement in 1995, Dr Gray was a full time employee of UWA and any research he conducted was within the scope of his UWA employment. Whether or not such work was done with funding support from LCI or CRI did not change his status as a full time employee of UWA nor the character of the work that he did. From the time of the Affiliation Agreement in October 1995 to the CACS Agreement in March 1996 intellectual property derived from work funded by LCI or CRI under the Affiliation Agreement was for the benefit of LCI or CRI subject to UWA having a right to negotiate for a share of the profits. Work for RPH was within the scope of Dr Gray's UWA employment. Following the CACS Agreement, his work for CACS was within the scope of his UWA employment but subject to the terms of the CACS Agreement which meant that intellectual property developed during that time was for the benefit of CACS staff subject to UWA having a right to negotiate for a share of the profits. To the extent that Dr Gray worked for old Paragon Medical or ASPL his work was outside the scope of his UWA employment. From his fractional appointment conversion in March 1997 to his resignation from UWA in November 1997 Dr Gray worked for UWA, RPH, CRI, LCI, CACS, old Paragon Medical and Sirtex. He was only employed as to 30% of his time at UWA. That employment was for clinical work at RPH. On any view of UWA's rights to Dr Gray's invention, I am satisfied that the intellectual property generated by research work funded by LCI and grants processed through CACS during that time did not vest in UWA. At best it had a right to negotiate in respect of it. His work for Sirtex during that time was outside the scope of his UWA employment. On the facts pleaded, this was a reference to the Affiliation Agreement. He pleaded the terms of the Affiliation Agreement and two implied terms. The first implied term was that all cancer research that had been undertaken by Dr Gray or under his supervision would in future be undertaken as part of the activities of "the centre to be established pursuant to the 1995 Cancer Centre Agreement". He also pleaded that ownership of the cancer research, that he had undertaken or that had been done under his supervision or would in future be undertaken as part of the activities of the CACS, "would be determined in accordance with the terms of that agreement". He pleaded the Relocation Agreement (2E) and the CACS Agreement (2H). He alleged identical implied terms in the CACS Agreement. In paragraph 2K of his defence he pleaded that if in March 1996 UWA had any rights in respect of cancer research that had been undertaken by him or under his supervision, it had elected not to maintain or enforce those rights or alternatively had waived them. This was referred to in UWA's submissions as the "Transfer or Abandonment Argument". The point was made that the defence was not responsive to any allegation made in the statement of claim. I accept the UWA submission that there was no basis for the implication of the terms pleaded. The agreement did not require either of them for the purpose of efficacy. It did not speak at all about the transfer of research activities. In responsive submissions, Dr Gray argued that there was evidence that existing cancer research would be undertaken as part of CACS. He referred to a letter from Professor Palmer. It was said to be plain from the terms of the letter that his entire research would be undertaken as part of CACS. That, of course, says nothing about the transfer of existing rights. Dr Gray said there were no existing rights of UWA in respect of intellectual property developed by employees of CRI such as Dr Jones, who were transferring their appointment nominally to UWA pursuant to the CACS Agreement. Then he suggested the issue was not so much a transfer of rights but a modification of rights by the express terms of clause 4.7. The transfer and abandonment pleas set out in paragraphs 2A to 2K inclusive of the defence are not made out. Those negotiations were said to have led to the alteration of his terms of employment so that he was employed on a 30% basis, his employment was restricted to the performance of clinical surgical duties at RPH and RPH paid UWA the whole of his salary. He said that it was agreed in the course of the negotiations leading to that arrangement that when he was not engaged in the employment of UWA he would be seeking to commercialise the results of research undertaken by him or under his direction and with the financial support of CRI in connection with the treatment of cancers and in particular liver cancers. In his affidavit evidence Dr Gray said that in January 1997 he was "in conversation with Professor Landau ... over possible conflicts in my duty of care and negotiating a reduction in my University employment". He referred to negotiating with Professor Landau about the need to reduce his employment with UWA to remove the potential for conflicts of interest. Professor Landau denied that Dr Gray negotiated with him on the basis that his reduction to a 30% appointment would reduce the potential for conflict of interest. Professor Landau recalled, after reviewing the relevant correspondence, that Dr Gray wanted to use the salary savings from his reduction to fund staff at CACS. He did not recall Dr Gray at any time asking him to vary any terms of his employment contract relating to ownership of intellectual property or the application of the intellectual property regulations. I am not satisfied that the agreement pleaded by Dr Gray is made out on the evidence. The defence designated the Affiliation Agreement as the "1995 Cancer Centre Agreement" and the CACS Agreement as the "1996 Cancer Centre Agreement". In [8A.2] of the defence Dr Gray can be taken as alleging that the Patents Regulations did not bind him upon his appointment as Medical Director of LCI and CRI. There was also said to be an implied term of the CACS Agreement that the Patents Regulations would not apply to any employees of UWA who were employed to work within CACS (8A.8). The Regulations were also said to have ceased to apply to Dr Gray when he was appointed Director of CACS. (8A.9) Similar pleas were made with respect to the IP Regulations (13.5 and 23.1.5 and 23.1.6). In my opinion the agreements did not avoid whatever application the Patents Regulations or the IP Regulations had when and to the extent that they were in effect. There is no legal mechanism by which that result could occur. The defence pleas that the Regulations were somehow disapplied by reason of the Affiliation Agreement or the CACS Agreement, cannot succeed. That issue has not been finally settled by the High Court but has been resolved in favour of patentability by the Full Court of the Federal Court. The question of the patentability of methods for treating humans appears to have been discussed in three High Court decisions and mentioned in a fourth. Maeder v Busch [1938] HCA 8 ; (1938) 59 CLR 684 concerned a patent for an improved process for producing permanent waves in human hair. The patent was held invalid because of prior common knowledge and public user. However the court did raise a question about whether a claim for a new method of conducting an operation on a part of the human body, as distinct from a claim relating to an appliance or substance which could be used upon, or in connection with, the human body could be protected under the law relating to patents. Latham CJ was "very doubtful" whether a claim for a new method of conducting an operation upon a part of the human body could be regarded as a "manner of manufacture" (at 699). Dixon J left open the general proposition that a mere process or method for the treatment or manipulation of the human body could not afford patentable subject matter (at 707). McTiernan J recognised the doubt about the question (at 708). The doubts revolved, to some extent, around the question whether a treatment would be a mere process and not patentable. It concerned a patent for an invention entitled "Process for improving strength and elasticity of keratinous material". It was said to claim as an invention a process for the treatment of parts of the human body, namely human hair and nails while attached to or growing upon the human body. Barwick CJ held that a process otherwise appropriate for the grant of a monopoly under the Statute was not incapable of being the subject of the grant only on the ground that it was a process for the treatment of part of the human body. The treatment was cosmetic. The three High Court cases were considered by the Full Court of the Federal Court in Anaesthetic Supplies Pty Ltd v Rescare Ltd [1994] FCA 1065 ; (1994) 50 FCR 1 which was concerned with a patent for a device for treating sleep apnoea. The Court held the patent invalid on the ground of an inadequate description of the invention in the provisional specification and consequent lack of fair basing of the patent claims upon that specification. Lockhart J reviewed decisions in a number of jurisdictions. There was no case in Australia where a process for the treatment of a human ailment or disease had arisen for consideration. I see no reason in principle why a method of treatment of the human body is any less a manner of manufacture than a method for ridding crops of weeds as in NRDC. Australian courts must now take a realistic view of the matter in the light of current scientific development and legal process; the law must move with changing needs and times. Sheppard J dissented. In Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd [1998] HCA 19 ; (1998) 194 CLR 171 , the High Court discussed the scope of s 100(1)(d) of the 1952 Act. That provision provided for revocation of a patent on the ground that the claimed invention "was not an invention within the meaning of the Act". Section 6 of the Statute of Monopolies had excluded any means of new manufacture which was "contrary to law" or "generally inconvenient". The case concerned an invention for a method of administering an anti-cancer drug called Taxol. I accept, on the basis of the decisions of the Full Court of the Federal Court, that to the extent that the inventions in issue in this case involved methods for treatment of disease, they were not thereby deprived of patentability. The SIRT-Spheres inventions - by Dr Gray . The DOX-Spheres invention --- by either or both Dr Gray and Dr Chen. 3. The Thermo-Spheres 1 invention - by either or both Dr Gray and Dr Jones. 4. The Thermo-Spheres 2 invention --- by either or both Dr Gray and Dr Jones. The Thermo-Spheres-3 invention --- by either Dr Gray or Dr Gray and Dr Cammarano. The term "developed and/or discovered" does not appear in the Patents Regulations or the IP Regulations. The notification obligation in reg 6 of the Patents Regulations applies to "any patentable invention made or developed" by the relevant staff member. The IP Regulations apply to "intellectual property" which is "created" and is likely to be "commercially significant". Neither in the statement of claim nor otherwise were particulars given by UWA of what acts, by what persons, gave rise to the development and/or discovery of the inventions. It alleged the employment dates of Drs Gray, Chen and Jones and the filing of various applications which were not in dispute. UWA's explanation of the basis of the pleaded allegations really appeared for the first time in its Inventions Submissions filed on 25 June 2007. The discussion that follows proceeds on the assumption that the primary conclusion that there was no implied term in Dr Gray's contract vesting rights to his inventions in UWA is incorrect. In its Inventions Submissions, UWA characterised the inventions it was pleading as broadly made up of three streams of technology comprising six families of patents. UWA also relied upon the inclusion of "alleged invention" in the definition of "invention" in the 1990 Act (as in its predecessors). That term was explained by Isaacs J in Rogers v Commissioner of Patents [1910] HCA 19 ; (1911) 10 CLR 701 at 713 as "what, if novel, would be an invention". UWA submitted, inaccurately, that any provisional application for a standard patent, any complete application for a standard patent and any applications for patents under the Patent Cooperation Treaty fell within the meaning of the words "alleged invention". It is clear that an application is not an invention. This part of the submissions was confusing. There followed a digression into the area of confidential information, it being said in effect that the subject matter of a provisional specification is confidential information, the confidentiality of which is admitted by the filing of the relevant application. There was no pleading of any cause of action in relation to confidential information. And as I have earlier found, there was no contractual obligation on Dr Gray to keep confidential information derived from his research. UWA said that the word "discovery" used in its statement of claim was intended to comprehend a patentable discovery. The term "developed" was to be given its ordinary and natural meaning. In context it was a reference to "the process of making of an invention and includes incremental advances incorporated in an invention for which protection is claimed". It would not be necessary for the Court to undertake an inquiry into patentability nor to determine whether any application for patent or claim contained within a patent is valid. Rather it should consider the specifications pleaded in relation to each invention and satisfy itself on the balance of probabilities as to whether the inventions described were made during and in the course of the employment of the alleged inventors, Drs Gray, Chen and Jones, at UWA. UWA said it could discharge the onus of specifying the date or dates of the inventions in respect of which it claimed an interest by having regard to the most specific of the claims. Those claims presented the most specific elaboration of the invention. They reflected the outcome of the research process containing the core of the inventions and hence were most useful for determining the time of the inventions. This was the contention most favourable to UWA as the most specific claims were likely to embody developments latest in time. UWA submitted that the patents in issue depended upon the PCT applications which had been made and they in turn depended upon the relevant provisional applications for their priority dates. It was said to be "only necessary for the University to demonstrate that the invention as defined in the PCT claims was developed and/or discovered at the latest by the priority date". Sirtex criticised UWA's approach. It argued that the following steps were appropriate: Identify the "inventive concept" of each relevant invention as defined by the claims in the relevant Patent Cooperation Treaty. Determine inventorship including the person responsible for the inventive concept and the time of conception as distinct from its verification and reduction into practice. Determine how many contractual or fiduciary relationships between UWA and the inventors at the time of the inventorship gave rise to the proprietary rights claimed by UWA. The same question arises if, contrary to my primary conclusions, the Notification Obligation under the Patents Regulations applied. It is also necessary to consider when an inventive concept may constitute an invention to be distinguished from products or processes that may be used to verify its utility or reduce it to practice. A distinction between mere discovery and invention has long been made on the basis that it is only when a discovery is applied to a useful end that it comes within the concept of a manner of new manufacture: Lane-Fox v Kensington and Knightsbridge Electric Lighting Co (1892) 29 RPC 413 at 416 (Lindley LJ) . The dividing line is not clear. There may indeed be a discovery without invention --- either because the discovery is of some piece of abstract information without any suggestion of a practical application of it to a useful end, or because its application lies outside the realm of "manufacture". The claim for a patent would not validly be answered by saying that although the discovery was ingenious no ingenuity was involved in showing how it might be applied. It is the whole process that must be considered; and he need not show more than one inventive step in the advance which he has made beyond the prior limits of the relevant art. It could be done in a thousand ways and by any competent engineer, but the invention was in the idea and when he had once got that idea, the carrying out of it was perfectly easy. To say that the conception may be meritorious and may involve invention and may be new and original, and simply because when you have once got the idea it is easy to carry it out, that that deprives it of the title of being a new invention according to our patent law, is, I think, an extremely dangerous principle and justified neither by reason nor authority. However, it does indicate that the Court recognised a distinction between the inventive idea or concept and its reduction to practice. So an inventive concept may be patentable when steps taken from the inventive concept to the invention as described in a patent specification are not inventive. It may be that in this context there is some overlap between the category of discovery and that of an inventive concept which is not patentable. The Court recognised the long established and "clear distinction ... between the discovery of one of nature's laws and of its application to some new and useful purpose". It should be recognised, in drawing these distinctions, that the term "invention" itself is used in different ways. These were considered by the majority in Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8 ; (2001) 207 CLR 1. The Court observed that the definition of "patentable invention" in s 18(1) of the 1990 Act suggested that "invention" is not used in a uniform sense throughout that Act. There had been debate before the Court about the way in which the complete specification is required by s 40(2) fully to describe the "invention" and end with a claim or claims "defining the invention". McTiernan J had explained the point with reference to s 40 of the 1952 Act in AMP Inc v Utilux Pty Ltd (1971) 45 ALJR 123 where he took the term "invention" as used in s 40 to mean "the embodiment which is described and around which the claims are drawn". In so doing he borrowed from the 3rd (1962) edition of Blanco White Patents for Inventions at 12. The Court pointed out that the term "invention" may give rise to difficulty because it is used in various senses in ordinary parlance and in patent legislation. The 4 th edition of Blanco White which it cited referred to four possible meanings: 1. The embodiment which is described and around which the claims are drawn. This is the sense used in the Act: cf the phrase of s 32, "the invention so far as claimed in any claim". The subject matter of a claim --- especially that of the broadest claim. The inventive step taken by the inventor. The advance in the art made by the inventor which was likely to be broader and more fundamental than would correspond with any claim. In Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2007] HCA 21 ; (2007) 235 ALR 202 , the Court again considered the question of the patentability of ideas. The distinction drawn between "idea" and "invention" seemed to be much the same as that drawn between "discovery" and "invention". The Court observed that distinctions between the idea or concept or principle informing an invention and the means of carrying out or embodying it in a manner of new manufacture have long been made despite expressions of caution from time to time. An idea which is part, even the main part of an inventive step "has got to end in a new method of manufacture". When an idea is incorporated into a means for carrying out an idea, the idea itself can be taken into account when considering validity, and inventiveness may repose largely in the idea. The Court acknowledged that the inventive concept is important for what has come to be regarded in the United Kingdom as a "structured approach to determining obviousness under its current statutory definitions": see eg Windsurfing International Inc v Tabur Marine (Great Britain) Ltd [1985] RPC 59. It characterised the English approach as the problem-and-solution approach mandated by the European Patent Convention. The inventive concept marks a boundary between invention and verification. An example arose in 1994 and 2002 in decisions reported in both the United States and Canada in relation to the use of the drug AZT to treat AIDS. Glaxo/Wellcome had identified a new use for an old compound in conceiving the idea that AZT would work in humans against the HIV retro virus. It used external scientists employed by the National Institutes of Health (NIH) to perform critical blind testing on the AZT and on other compounds (none of which were identified). The NIH scientists found that the AZT did inhibit HIV replication and so advised. The Glaxo/Wellcome patent was considered in the US Court of Appeals in Burroughs Wellcome Co v Barr Laboratories Inc [1994] USCAFED 1225 ; (1994) 40 F 3d 1223. The argument had been raised there that the patent was invalid because of the wrongful exclusion as inventors of the NIH scientists. The argument focussed on when the inventors conceived the invention. Burroughs Wellcome said it was before they learnt the results of the NIH tests. The respondents argued that the NIH confirmation of the inventions operability from the NIH tests was an essential part of the inventive process. The Court of Appeals held that the NIH scientists were not joint inventors. It set out the following principles as established by US appellate courts: Conception is the touchstone of inventorship, the completion of the mental part of inventions. Conception is the "formation in the mind of the inventor of a definite and permanent idea of the complete and operative invention as it is hereafter to be applied in practice". It is complete only when the idea is so clearly defined in the inventor's mind that only ordinary skill would be necessary to reduce the invention to practice without extensive research or experimentation. An inventor need not know that the invention will work for conception to be complete. The inventor need only show that he or she had the idea. The discovery that an invention actually works is part of its reduction to practice. It is not the law that the inventor's definite and permanent idea must include a reasonable expectation that the invention will work for its intended purpose even when it deals with uncertain or experimental disciplines where the inventor cannot reasonably believe that an idea will be operable until some result supports that conclusion. The Glaxo/Wellcome patent was also considered by the Supreme Court of Canada in Apotex Inc v Wellcome Foundation Ltd 2002 SCC 77 ; [2002] 4 SCR 153. Apotex Inc which was a generic drug manufacturer challenged the validity of the Canadian patent on the ground, inter alia, that the disclosure was misleading because it omitted any reference to the NIH co-inventors. It was unsuccessful at first instance, then in the Federal Court of Appeal and finally in the Supreme Court. The Supreme Court held that the NIH scientists were not co-inventors. Despite their contribution they had not participated in the inventive concept as opposed to its verification. Binnie J, delivering the judgment of the Court, referred to s 34(1) of the Patent Act RSC 1985 which required that, at the time the patent application was filed, the specification should "correctly and fully describe the invention ... to enable any persons skilled in the art or science to which it appertains ... to ... use it...". It was not enough to have a good idea. The idea must be reduced to a definite and practical shape. As Jenkins J notes in May and Baker Ltd v Ciba Ltd (1948) 65 RPC 255 (Ch D) at p 281, the requisite "useful qualities" of an invention "must be the inventor's own discovery as opposed to mere verification by him of previous predictions". The closest analogy with the 1990 Act would appear to be proceedings under ss 32 and/or 36. Judicial exegesis in the United Kingdom has considered the question of how an invention is to be identified for the purpose of determining entitlement under s 8. In considering the English authorities on this point it is necessary to do so having regard to their particular statutory setting. However, the problem of identifying an invention for the purpose of determining entitlement raises the same conceptual question that is raised in the present proceedings. Section 125 of the 1977 UK Act was an interpretation provision that provided that an invention is to be taken as that specified in a claim (as purposively interpreted) unless the context otherwise requires. Thorley S, Terrell on the Law of Patents (16 th ed, London, Sweet & Maxwell, 2006) at 3-87, points out that entitlement disputes can arise before any application for a patent has been made or on the basis of an application filed without claims. The problem so identified is therefore similar to the problem in the present proceedings. The application of the implied term and the Regulations does not depend upon the prior existence of claims in a patent or patent application. The distinction between inventive concept and verification of an invention was drawn by Jacob J in Henry Bros (Magherafelt) Ltd v Ministry of Defence and the Northern Ireland Office [1997] RPC 693. In identifying the inventor Jacob J rejected the submission that an invention could be divided into contributed elements and patents awarded accordingly. I think the inquiry is more fundamental than that. One must seek to identify who in substance made the combination. Who was responsible for the inventive concept, namely the combination? Who devised that inventive concept, one or other of the two claimants or the two of them together? He disagreed with it to the extent that it characterised the relevant invention as a "combination" of elements. That disagreement was an artefact of the particular case and not a disagreement with the principle enunciated by Jacob J. The approach is simply stated: the problem is to apply it when there are a number of distinct concepts disclosed by the specification, including an important commercial embodiment. In Stanelco Fibre Optics Ltd's Application (No 2) [2005] RPC 16 , Floyd QC, sitting in the Patents Court, discussed the term "inventor" defined in the 1977 UK Act as "the actual devisor of the invention". Pointing out that the definition of the term "devisor" in the New Shorter Oxford English Dictionary included inventor, Floyd QC observed that the term seems to have been used to distinguish between the person who was actually responsible for making the invention and a mere importer. If that be right then the term "actual devisor" did not add anything to the concept of inventor. While UK authorities applying the 1977 UK Act have to be read in the light of the particular definition the general jurisprudence is still relevant for Australia. Floyd QC pointed out in the light of the Court of Appeal decision in Henry Bros [1977] RPC 693 and the decision of Pumfrey J in Collag Corp [2003] FSR 15 , that the Court in determining inventorship by reference to inventive concept is not concerned with issues of validity or inventiveness merely with the concept as described. He approved the proposition put by counsel in the case that an inventor is not the person who comes up with a vague idea or pipe dream saying "wouldn't it be nice if we could do such and such" --- but without any idea as to whether "such and such" can in fact be done or how it might be done. Such a person will not be the devisor of an invention subsequently made by another even though without the initial prompt the invention might never have been made. It is never going to be enough for an antecedent worker to rely solely on an initial prompt of the vague kind [counsel] refers to: a "but for" approach would lead to all sorts of people being treated as inventors. But where the antecedent worker comes up with and communicates an idea consisting of all the elements in the claim, even though it is just an idea at that stage, it seems to me that he or she will normally, at the very least, be an inventor of the claim. What US patent law calls "reduction to practice" is not, it seems to me, a necessary component of a valid claim to any entitlement. The Court held that s 125 did not apply to the construction of "invention" in s 8. It would be handy if one could go by the claims, but one cannot. S 8 calls for identification of information and their rights in it. Who contributed and what rights if any they had in it lies at the heart of the inquiry, not what monopolies were actually claimed.... As a general rule one will start with the specific disclosure of the patent and ask whether that involves the use of information which is really that of the applicant, wholly or in part or as joint owner. What one is normally looking for is 'the heart' of the invention. There may be one 'heart' but each claim is not to be considered as a separate 'heart on its own'. In a passage referred to with approval by the Full Court of the Federal Court in its recent decision: Polwood Pty Ltd v Foxworth Pty Ltd (2008) IPR 1 at [41] Lord Hoffman said that the first step in a dispute over entitlement is to decide who was the inventor or inventors of the claimed invention. This required a determination of the person who devised or contributed to the inventive concept. It was not sufficient that someone contributed to the claims because they may include non-patentable integers. Another important distinction for present purposes was drawn by Laddie J between devising an invention and formulating an enabling disclosure. Although both may be necessary to secure valid protection ... they relate to different aspects of the law of patents. It is very possible to make a good invention but to lose one's patent for failure to make an enabling disclosure. The requirement to include an enabling disclosure is concerned with teaching the public how the invention works, not with devising the invention in the first place. Laddie J observed that an inventive concept frequently comes from a contribution of more than one mind with each putting the pieces together. Where it was impossible to distinguish the contributions of a number of individuals to a "single inventive concept" they would all be inventors. This did not mean that those whose only contribution was to supply data for enabling disclosure thereby qualified as inventors. Laddie J's decision at first instance, which was on appeal from the Comptroller, was reversed in the Court of Appeal but not so as to cast doubt upon the principles he enunciated. Those who contribute enough information by way of necessary enablement to make the idea patentable would count as "actual devisors", having turned what was "airy-fairy" into that which is practical. That subsection required that the claims in the specification should, inter alia, "relate to one invention or to a group of inventions which are so linked as to form a single inventive concept". A determination of that question was left to the Comptroller because, by s 26 of the Act, no person could in any proceeding object to a patent on the ground that the claims related to more than one invention or to a group of inventions not so linked as to form a single inventive concept. In Sabaf SpA v MFI Furniture Centres Ltd [2005] UKHL 45 ; [2005] RPC 10 , Lord Hoffman said (at [25]) that although s 14(5)(d) imposed a procedural requirement it did suggest that the references in the Act to an "invention" were to the expression of a single inventive concept and not to a collocation of separate inventions. The recent decision of Polwood Pty Ltd [2008] FCAFC 9 ; 75 IPR 1 concerned parties each claiming sole authorship of the method and apparatus for producing potting mix using waste materials. The primary judge held that neither was entitled to the grant of the patent as sole inventor but that they were joint inventors. The Full Court agreed with his Honour's conclusion. It found "two hearts" to the invention, one in the concept of the method and the other in the apparatus which had been devised by the respondent. The appellant had argued that the invention resided "solely in the concept". The Full Court stated that what constitutes the invention can be determined from the particular patent specification including the claims. Sometimes the invention can be identified as "the conception of a solution" to a problem: Stack v Davies Shephard Pty Ltd [2001] FCA 501 ; (2001) 108 FCR 422 at [22] . There may not have been a recognised problem to be addressed and not all inventions or inventive steps can be analysed in terms of problem/solution. That is to say the invention is the formation in the mind of the inventor of a definite and permanent idea of the complete and operative invention as it is thereafter to be applied in practice: see also Burroughs Wellcome [1994] USCAFED 1225 ; (1994) 40 F 3d 1223 cited above. What remains belongs in the department of construction. A concept can be complete although experimentation may continue. It is complete when a person of ordinary skill in the art could construct the apparatus without unduly extensive research of experimentation. Contribution after the invention was fully conceived where that contribution was under the direction of the inventor does not give rise to entitlement to the invention. A person must be able to say that without his or her contribution to the final conception it would have been less. For joint inventorship, each inventor had generally to contribute to the conception of the invention. Plainly there are no bright lines to be drawn between inventorship based on inventive concept and verification or reduction to practice. In the Polwood [2008] FCAFC 9 ; 75 IPR 1 , case the Full Court found that the patent application described the apparatus as an aspect of the invention. It was described and claimed. Polwood did not itself play any part in its design and construction prior to the filing of the patent application. The apparatus was held at first instance to be "an invention" of Foxworth. So there was a finding of inventive contribution by Foxworth. The concept itself was not found sufficient to encompass the machine that made it workable. Those factors argued against Polwood's contention that the concept equated with the invention of the patent application. It yields a workable construction of the implied contractual term (were it to exist) and of the Regulations. It is consistent with authority in this country, Canada and the United States and the approach taken by the Court of Appeal to the determination of entitlement to patents. It must be recognised, in adopting Sirtex's approach, that there may be more than one contributor to the inventive concept and perhaps more than one inventive concept. However, the approach properly eschews a claim by claim analysis and does not accept that selection of the narrowest claim discloses the invention. It does not require a search for who contributed each element of the narrowest claim or claims. In my opinion, the invention in each case in these proceedings is generally to be found described in the relevant specification which will be, for the most part, the applicable PCT specification. The time at which the invention was developed and the person by which it was developed is to be ascertained by reference to the inventive concept of the invention so described. The time of invention, and the identity of the inventor will not be affected by the subsequent process of reduction to practice some elements of which may have found their way into the claims in the application. SIRT-2 was particularised by reference to the claims in the application. Dr Gray said, in relation to SIRT-1, that if there were any patentable invention it was discovered prior to his employment by UWA and, alternatively, after termination of that employment. Part of his defence in relation to SIRT-2 did not seem to make sense. It stated that the microparticle created from particulate ceramic material was not, and had not, been used by him or Sirtex because of the cost of its manufacture. Dr Gray pleaded that at all material times prior to 1980 microparticle preparation incorporating radioactive material to be used in the treatment of cancer was a concept in the public domain. He referred to a number of articles to support that proposition. He also said that before the commencement of his employment by UWA he carried out research into the use of microsphere and microparticle preparations incorporating radioactive material to be used in the treatment of cancer and primarily liver cancer and published his research. Any such research carried out by him in the course of his employment was substantially developed and completed by him before that employment and was not research in respect of a patentable invention. Sirtex denied that the SIR spheres inventions were developed or discovered in the course of Dr Gray's work at UWA or within the scope of his employment by UWA. It admitted that each of the SIRT-1 and SIRT-2 inventions were patentable and commercially significant. It alleged that each of them was invented prior to Dr Gray's employment by UWA. The provisional specification summarised the invention as providing a particulate material comprising resin based microspheres having a diameter in the range of from 20 to 80 microns, preferably from 20 to 40 microns and more particularly in the range of from 30 to 35 microns, said microspheres having a specific gravity of less than 2 and having an Yttrium radionuclide stably incorporated in them. The resin based microspheres were formed from an ion exchange resin particularly a cation exchange resin. A particularly preferred cation exchange resin was the styrene/divinyl/benzene copolymer resin commercially available under the trade name Aminex 50W-X4. The radionuclide incorporated into the microspheres in accordance with the invention was preferably a Yttrium radionuclide and most preferably Yttrium 90 . It did however extend to encompass the incorporation of other radionuclides such as the unstable radionuclides of phosphorous and holmium. The invention extended to the precipitation of the radionuclide as other insoluble salts including carbonate and bicarbonate salts. The reference to stable incorporation was to be understood as meaning incorporation of the radionuclide so that it did not leach out of the microspheres under physiological conditions. A detailed description of the invention followed. Examples were set out. The first focussed on the manufacture of the microspheres and, in particular, the placing of Yttrium oxide in sulphuric acid with gentle heating and stirring to form a clear colourless solution of Yttrium sulphate. The Yttrium sulphate solution was then added to a reaction vessel containing microspheres of approximately 30 to 35 microns which had been added to water to form a slurry. This was stirred at a speed sufficient to ensure homogeneity to absorb the Yttrium solution into the resin based microspheres. Tri-sodium phosphate (10% w/v) was added to the reaction vessel to precipitate the radionuclide as Yttrium phosphate. The microspheres were then washed with water, resuspended and diluted, if necessary, with water. Resin based Yttrium microspheres so produced had 0.01-0.4% unbound Y 90 when tested in a leaching test which was specified. The second example related to the mode of administration and referred to the infusion of angiotensin-2 into the hepatic artery to redirect arterial blood to flow into the metastatic tumour component of the liver and away from the normal parenchyma. This was followed by embolisation of the resin based Yttrium 90 into the arterial circulation so that they would become lodged in the microcirculation of the tumour. Because the radiation from SIRT is delivered as a series of discrete point sources, the does of 80 Gy is an average dose with many normal liver parenchyma cells receiving much less than that dose. This provisional specification was very similar to its 1999 predecessor, however there were some differences. In the summary of the invention the diameter of the microspheres was described as "... in the range of from 15 to 100 microns, preferably from 20 to 50 microns and more particularly in the range of from 30 to 35 microns". A reference was added to them having a "suspending solution pH of less than 9". A graph showing the pH of the wash solution against the wash number was incorporated. That graph had not appeared in the earlier version. The principal change to the first example again related to the pH of the suspension in which the resin based microspheres were to be kept. The particulate material according to claim 1 wherein the radionuclide is incorporated by precipitation. The particulate material according to claim 1 wherein the polymeric matrix is partially cross linked. The particulate material according to claim 3 wherein the polymeric matrix comprises from about 1% to about 20% cross linking. The particulate material according to claim 4 wherein the polymeric matrix comprises about 4% cross linking. The particulate material according to claim 1 wherein the polymeric matrix is an ion exchange resin. The particulate material according to claim 6 wherein the polymeric matrix is a cation exchange resin. The particulate material according to claim 6 wherein the ion exchange resin comprises a partially cross linked aliphatic polymer. The particulate material according to claim 6 wherein the ion exchange resin comprises a partially cross linked polystyrene. The particulate material according to claim 9 wherein the ion exchange resin comprises polystyrene partially cross linked with divinyl benzene. The particulate material according to claim 1, wherein the radionuclide is an isotope of yttrium, holmium, samarium, iodine, phosphorus, iridium or rhenium. The particulate material according to claim 1, wherein the radionuclide is yttrium-90. The particulate material according to claim 1 being a microsphere. A particulate material having a diameter in the range of from 30 to 35 microns comprising a copolymer comprised of styrene and divinyl benzene and precipitated yttrium-90. A process for the production of a particulate material according to claim 1 comprising the step of combining a polymeric matrix and a radionuclide in solution for a time and under conditions sufficient to stably incorporate the radionuclide in the matrix to produce a particulate material having a diameter in the range of from 5 to 200 microns. A process according to claim 15 wherein the radionuclide is stably incorporated by precipitation into the polymeric matrix. A process according to claim 15 wherein the radionuclide is yttrium-90. A method of radiation therapy of a patient, which comprises administration to the patient of a particulate material having a diameter in the range of from 5 to 200 microns comprising a polymeric matrix and a stably incorporated radionuclide. A method according to claim 18 wherein the radionuclide is yttrium-90. A method according to claim 18 wherein the radiation therapy comprises treatment of a primary or secondary liver cancer. Use of particulate material having a diameter in the range of from 5 to 200 microns comprising a polymeric matrix and a stably incorporated radionuclide in radiation therapy of a patient. Use according to claim 21 wherein the radionuclide is yttrium-90. Use according to claim 21 wherein the radiation therapy comprises treatment of a primary or secondary liver cancer. UWA submitted that the evidence showed that the invention disclosed in the SIRT-1 application was made sometime between the commencement of the Phase 1/2 clinical trials of SIRT-Spheres in or about November 1986 and the commencement of the Phase 3 clinical trials in or about May 1991. In that period three problems were solved and the invention was then complete. The three problems which UWA identified were: The selection of microspheres with characteristics suited to use in therapeutic treatments involving the targeted delivery of radioactive isotopes to diseased tissue. A method of incorporating the radioactive isotopes in the microspheres so that they were unable to dislodge or leach from the microspheres following administration to a living organism. The use of the microspheres with immobilized radioactive isotopes in the treatment of diseased tissue. If the microspheres were too small an unacceptable portion of them could leak out of the liver vasculature and lodge in the lungs. The size of microspheres set out in claim 14 of the SIRT-1 PCT application was 30-35 microns. UWA said the adoption of that size to prevent breakout occurred between early 1987 and February 1990 during the time at which Dr Gray was an employee of UWA. (ii) Microsphere density or specific gravity. Density was not specified in the SIRT-1 PCT application claims. The specification indicated the importance of density below 3g/cc with a preference for less than 2g/cc. The desirable density was said to have been indicated by Dr Burton in a letter to Dr Berndt of Monash University on 9 May 1990 and also by Dr Gray in a letter to Dr Gani on 22 March 1991. The required density was said to have been known by May 1990. That did not of course indicate the earliest date by which it was known. (iii) Microsphere composition. The narrowest claims for microsphere composition, SIRT-1 PCT application claim 10, was said to require a partially cross-linked divinyl benzene ion exchange resin matrix. Before Dr Gray began working at UWA it was said that he used commercially available microspheres comprising styrene/divinyl benzene ion exchange resins. It is not clear where this submission was supposed to lead. It did not appear to lead to a proposition that Dr Gray only began using divinyl benzene ion exchange resins after commencing his employment at UWA. (iv) The extent of cross-linking. The narrowest relevant claim required only 4% cross-linking of the polymeric matrix comprising the microspheres (SIRT-1 PCT application claim 5). The evidence was said to point to the cross-linking referred to in claim 5 being chosen at the same time as the move to 32.5 micron microspheres, ie between early 1987 and February 1990. The Stable incorporation problem was described. Leaching was a phenomenon whereby Yttrium 90 could be detached from the microsphere matrix and enter the circulatory system. The SIRT-1 PCT application proposed, in claim 16, precipitation as a method of stable incorporation. UWA accepted that Dr Hodgkin's evidence indicated that his suggestion that the Yttrium 90 be phosphated predated Dr Gray's commencement at UWA. It submitted, nevertheless, that the problem of leaching had not been solved before that commencement. The second SIRT-1 Australian application referred to incorporation of the Yttrium 90 into a polymeric matrix but indicated that there were several instances in which it leached from the microspheres and caused inappropriate irradiation of other tissues. The statement did not identify the clinical work as that of Dr Gray however the absence of any literature citation was said to support that inference and was consistent with his clinical work in November 1986. The evidence was said to suggest that the methods he and his colleagues used to make radioactive microspheres for use in the early clinical trials did not satisfactorily incorporate the radionuclides into them. The method which had been described to deal with the leaching problem involved suspending the microspheres in a precipitation solution, stirring it and then washing them with water until there was "no unbound activity". Absent evidence as to the composition of the precipitating solution, the Court was invited to infer that the solution used in 1987 to manufacture radioactive microspheres was the same as that specified by ANSTO in its specifications dated 29 November 1996 for the microspheres it produced for Sirtex. The Sirtex method involved suspension of the microspheres in precipitation solution for 30 minutes, then their removal and resuspension in a fresh precipitating solution. UWA submitted that the knowledge that the microspheres needed to be exposed to the precipitating solution for more than 30 minutes was critical to allowing them to be used in the clinical treatment. The evidence was said to suggest that the method of precipitating the radioisotope was finally settled on between 1987 and November 1996. The third problem identified by UWA was not defined with any nicety in its submissions. (c) the delivery of sufficient doses of radiation to be therapeutic. UWA submitted that the development of microspheres suitable for treatment did not occur before Dr Gray commenced his employment at UWA. Although he claimed to use SIRT-1 to treat patients at St Vincent's Hospital in Melbourne before 1986, it was clear that he was using traces and not Yttrium 90 microspheres. In relation to the use of angiotensin-2, the SIRT-1 PCT application specification described the contemporaneous or prior administration of a vasoactive substance such as angiotensin-2 to redirect arterial bloodflow into the tumour and prepare it for the receipt of particulate material. This did not, however, appear in the claims. UWA referred to Dr Gray's pre-employment study of the distribution of tracer microspheres in rat and rabbit livers following intra-aorta injection under the influence of angiotension-2. The study indicated that Dr Gray knew that angiotension-2 could successfully target 15 micron diameter tracer microspheres. However, it was asserted, somewhat improbably on the part of UWA, that the study was not predictive as to the effect of angiotension-2 upon the distribution of larger microspheres in the range 30 to 35 microns. There was no evidence, it was said, to suggest that prior to his employment at UWA Dr Gray was aware that large mammal tumour blood vessels under the influence of angiotension-2 would remain sufficiently open enough to allow the larger microspheres to enter the tumour blood supply. It was submitted that the suitability of using angiotension-2 was settled at some time after the commencement of the Phase 1/2 clinical trials in or about 1986 and at about May 1989. As to radiation dosage, UWA noted that claim 18 of the SIRT-1 PCT application claimed a method of administering radiation therapy. It did not describe how the therapy was to work except by reference to the microspheres being administered to the patient. There was no reference to the preferred dosage although in example 3 in the SIRT-1 PCT application a dose of 80Gy to normal liver was reported to be permissible. UWA referred to a paper by Dr Gray accepted for publication in May 1989 in which he reported the results of experiments on ten patients treated with radioactive microspheres. He mentioned that radiation doses had generally been kept below 30Gy. He also reported on a paucity of reliable data on liver tolerance but said that doses in excess of 30Gy given by conventional fractionated techniques were regarded as likely to result in radiation hepatitis. UWA submitted that the state of knowledge prior to the commencement of the Phase 1/2 clinical trial was that radiation dosage should have been close to but below 30-40Gy. Given the likelihood that the larger microspheres could bind significantly larger quantities of "radiation" [sic] it was said to be possible that the increase in dosage to the liver was a consequence of the change in size of microspheres. This was a somewhat speculative submission. In any event, it was submitted, that by about September 1989 Dr Gray was aware that doses of the order of 80Gy could be tolerated by the liver. The content of SIRT-1 as described in the 1999 provisional patent application had first been disclosed in the 1983 Chamberlain article and thereafter repeatedly in various grant applications and articles. Dr Self's paper in 1984. 2. Its use by Veronica Meade in her experiments in 1983/1984 as disclosed in her article. 3. Dr Gray's proposal written for Uniscan in 1987. 4. Various grant applications. He also said it was refined by Dr Richmond in 1998 in an attempt to get a patent. Dr Gray submitted that the invention in relation to SIRT-1 comprised the discovery and incorporation of the "phosphating method" used to chemically fix the Yttrium so that it was permanently embedded in the microsphere matrix. Drs Burton and Self had consulted with Dr Hodgkin in late 1983 who suggested that they precipitate the Yttrium 90 into a soluble salt, phosphate. The method was adopted and solved the leaching problems. Their process was documented in the 1984 Self paper and the Burton protocol document in 1986/1987. Cameron Jones had confirmed that the method resolved leaching issues and that the group was using it when he joined. It was documented in a research grant application made to the Utah Foundation in October 1982. It was also set out in a letter from Dr Burton to Dr Fox dated 12 March 1985 and in a CSIRO application written in 1985 which Dr Hodgkin said was written by him in 1984. Dr Gray submitted there were no issues to resolve in relation to SIRT-1. Nevertheless he made detailed submissions in respect to each of the "problems" identified by UWA. So too did Sirtex. Although the work done was performed on rats, Dr Burton supported its extrapolation to human liver tissue on the basis of their similar vasculature. Dr Gray had relied upon that extrapolation in Appendix 2 to the Thermo-Spheres 1 provisional application lodged on 12 September 1988. There he cited Dr Meade for the proposition that "studies on the distribution of different sized microspheres in hepatic tissues have shown that the optimum therapeutic microsphere size is 32.5 microns". Only claim 14 alleged the particular size and did it in conjunction with the phosphate precipitation of Yttrium 90 . 1.2 Microsphere density. The specific gravity cited in the SIRT-1 PCT (as in the provisional application) was that discussed by Kim et al in the 1962 paper "Radiating Microspheres for treatment of Malignancy" (1962) 52 Surgery. 1.3 Microsphere composition. The UWA argument appeared to be incomplete on this point. The use of styrene/divinyl benzene was an element of the invention well before Dr Gray arrived at UWA. 1.4 Cross-linking. The use of 32 micron Yttrium 90 microspheres which were 4% and 8% cross linked was described in the Self 1984 paper. Dr Burton referred to it in the application he wrote for CSIRO/UWA collaborative funding in late 1984 and which he submitted in 1985. In my opinion the use of phosphate precipitation to bind Yttrium 90 to the microsphere was conceived before Dr Gray was employed at UWA. 3. This has already been dealt with. 3.2 Use of angiotensin-2. The use of angiotensin-2 to achieve preferential distribution of blood flow into tumour tissue was established before 1985. 3.3 Radiation dosage. In my opinion the particular level of dosage was not an element of the inventive concept underlying SIRT-1. It was a result of the use of the irradiated microspheres as point sources delivering discrete radiation dosages to the liver tumour which permitted the use of higher dosages at the level of 80 Gy than would otherwise have been tolerated by human tissue. The inventive concept underlying SIRT-1 was discovered prior to Dr Gray commencing employment at UWA. This invention relates to the formulation of pure Yttria microspheres that are either hollow or cup shaped. These microspheres (to be called SIR-Spheres) are formulated to be of a size, shape and density so that they have improved distribution characteristics when administered into the arterial supply of target organs to be treated. In addition, as SIR-Spheres are composed entirely of Yttria each microsphere can deliver a higher amount of ionising radiation. This in turn means that a lesser number can be administered to the target organ in order to deliver the same radiation dose. In another improvement of SIR-Spheres, the composition of the microspheres is of pure Yttria, thereby removing the unwanted ionising radiation emanating from unwanted radionuclides in the microspheres. In another improvement the SIR-Spheres can be neutron activated after manufacture, thereby improving the manufacture process. In the process of manufacture some microspheres did not form hollow spheres but took on a cup-shaped configuration. The cup-shaped particles were of similar size to the hollow microspheres and also comprised of pure Yttria. They did not significantly alter the characteristics of the batch of microspheres that were produced and could be used for administration to patients. The invention also included the production of cup-shaped particles with a size distribution similar to that of hollow microspheres. The thermal spraying technique resulted in microspheres with a variable size range. Microspheres of the desired size could be sorted by a process of sieving, or using other well described techniques for sorting of small particles based on size. Similarly, the microspheres could be sorted into batches of similar density using conventional techniques separating particles on the basis of density. The process was then described by reference to the grinding of base Yttria to a fine powder and spray-drying of the powder in the form of a slurry. The slurry contained a binding material which would allow it to form into microspheres when fed through a spray-drying apparatus. Spray dried Yttria could be fed into a thermal jet which resulted in solidification of the spray dried particles. The binding material vaporised in the thermal jet during the process of melting of the Yttria which distended the microspheres into the form of hollow particles. The essential steps for the formation of the hollow particles included the grinding of the basic material to a size of up to several microns in diameter, the formation of aggregates of the basic material containing a suitable binder by spray drying, solidification of the spray dried material in a plasma torch and vaporisation of the binder material during the plasma spraying so that hollow spheres were reliably produced during melting and solidification. There were some 17 claims defining the invention. In his defence, Dr Gray pleaded that any research in respect of microsphere preparation incorporating radioactive material carried out by him in the course of his employment by UWA was substantially developed and completed prior to that employment and was not research in respect of a patentable invention. He also pleaded that SIRT-2 was discovered by Dr McPherson in or about 1981 in the performance of work at the Department of Material Science at Monash University commissioned by Dr Gray. It was the subject of public disclosure by Dr McPherson in an article entitled " Formation of Metastable Monoclinical Rare Earth Sesquioxides from the Melt" (1983) Journal of Material Science 18,1341-1345. It was further disclosed by Gordana Pravdic in December 1994 in her thesis for the degree of Masters of Engineering Science entitled " Modification of Ceramic Remedy by Plasma Techniques" (PhD thesis, Monash University, 1994) . The thesis was supervised by the Department of Materials Engineering at Monash University and funded by a scholarship from CRI. It was the subject of an agreement between Monash University, CRI and Dr Gray that the inventions of McPherson and Pravdic so far as they related to the creation of hollow ceramic microspheres for use in the treatment of cancer would be the intellectual property of Dr Gray. Sirtex in its defence took the position that SIRT-2 was at all times patentable and commercially significant and was invented prior to Dr Gray's employment by UWA. It is not entirely clear what the SIRT-2 debate is really about. Despite the expenditure of large amounts of money over many years no workable version of the hollow Yttrium microsphere was ever produced. Those that were produced tended to crack under neutron irradiation. The value of the invention as an asset at present is questionable, although it is not beyond the bounds of possibility that the problems of production, purity and structural integrity under irradiation could be overcome. Sirtex discontinued the hollow microsphere project in 2001/2002. Through Dr Andrew Ruys it developed further iterations of ceramic microspheres for which it obtained separate patents, which are not the subject of these proceedings. UWA undertook a lengthy analysis, in its written closing submissions, of the problems SIRT-2 sought to solve. These were identified as follows: Distribution --- the need to develop particles of a particular size, shape and density to ensure optimal homogeneous distribution within the target organ and ready administration into the arterial blood supply of the target organ. Dosage --- the need to develop microspheres containing sufficiently high doses of ionising radiation so that an excessive number of microspheres was not required to deliver the required radiation dose to the target organ. Contamination --- the need to ensure the microspheres did not contain unwanted radioactive substances which would cause unwanted and deleterious radiation effects in the target tissue. Manufacturing --- the problem of the method of manufacture of non-leaching microspheres requiring the use of specialised facilities and being potentially hazardous to manufacturing personnel. Stable incorporation against leaching --- the risk of irradiation of normal tissue as a result of the unintended separation or leaching of Yttrium 90 particles from microspheres. In my opinion however, the problem oriented approach did not adequately address the inventive concept of SIRT-2 which it was necessary to identify in order to determine the point of invention and the identification of inventorship. In that respect the submissions put by Sirtex were of assistance. The SIRT-2 PCT application, PCT AU95/00027, was filed on 20 January 1995. The PCT application described the field of the Invention by stating that it related to a particulate material comprising small hollow or cup-shaped ceramic particles, referred to as microspheres, to a process for their production and to methods for their use. A particular aspect of the invention related to hollow or cup-shaped ceramic microspheres consisting of or comprising a radioactive material and to their use in the treatment of cancer in humans and other mammals. They were designed to be administered into the arterial blood supply of the organ to be treated whereby they would become entrapped in its small blood vessels and irradiated. An alternative form of radiation was to inject the microspheres directly into the tumour to be treated. The background to the invention, as set out in the PCT application, referred to the desirability of having a size, shape and density that would result in optimal homogeneous distribution within the target organ. It referred to the need for radiation emitted to be of high energy and short range. The microspheres should be of such a composition that they contained only the single desired radionuclide. Yttrium 90 was the preferred radionuclide. The size of the microspheres should be in the range of 20 to 80 microns and be stable so that no material would leach from them. The background statement referred to the earlier clinical use of Yttrium 90 incorporated into a polymeric matrix formulated into microspheres. There were, however, several instances in which the Yttrium 90 leached and caused inappropriate radiation of other tissues. The use of solid glass radioactive microspheres was referred to, as well as the production of light polymeric ion exchange microspheres that did not leach. The invention as summarised in the PCT application was said, in one aspect, to provide a particulate material comprising hollow or cup-shaped ceramic microspheres having a diameter in range of 5 to 200 microns. After the detailed description, there followed examples and then the claims in the PCT application of which there were 18. Sirtex submitted that claims 3, 12 and 16 appropriately identified the inventive concept of SIRT-2 for the purposes of determining inventorship and entitlement. It is helpful in that context to set out claims 1, 3, 11, 12 and 16 thus: A particulate material comprising hollow or cup-shaped ceramic microspheres having a diameter in the range of from 5 to 200 microns. A material according to claim 1, wherein the microspheres consist of or comprise Yttria or another Yttrium-containing compound as base material. A method according to claim 11, wherein the microspheres consist of or comprise Yttria or another Yttrium-containing compound as base material and the radionuclide is Yttrium-90. Use of a radioactive particulate material comprising hollow or cup-shaped ceramic microspheres, said microspheres comprising a beta or gamma-radiation emitting radionuclide and having a diameter in the range of 5 to 200 microns, in radiation therapy of a human or other mammalian patient. The Burton 1988 article relating to the use of angiotensin-II. The Meade 1987 article relating to the use of microspheres of approximately 25-50 microns in diameter. The article by Burton et al " Selective Internal Radiation Therapy: Distribution of Radiation in the Liver " (1989) Europ. J Cancer Clin Oncol 25:1487-1491, which was the Burton 1989 article concerning the use of microspheres with a specific gravity of the order of 2.0. The explicit reference to the prior art on the face of the patent meant that the matters set out in such prior art could not form any part of the inventive concept claimed in the SIRT-2 PCT application. The history of Dr Gray's dealings with Professor McPherson and Professor McPherson's production of particles some of which were spheroidised has already been set out. The funding arrangements entered into between CRI and Monash University for Gordana Pravdic to undertake research into the production of hollow microspheres have also been described. The experimental results indicated that hollow particles were formed from materials which melted over a narrow melting temperature range. It also showed that the type of porosity within the hollow particles as well as the surface morphology was dependent on the material system. It was also found by studies carried out using Yttria that the relative size of the pore is dependent on particle size and it is proposed that the major controlling factor is the thickness of the outer layer through which the gas in the agglomerate could escape during the melting of the agglomerate rather than surface tension or under cooling effects. Surface tension or under cooling effects were shown to produce only minor effects on the relative size of the pore within the particle. The further work that was undertaken was in the nature of verification or reduction to practice. It was not by way of conception giving rise to inventorship and entitlement. If UWA had been entitled, under Dr Gray's contract of employment to rights in relation to inventions developed in the course of that employment, it would have had no rights in relation to SIRT-2. The application was filed on 18 November 1993. In his defence Dr Gray denied the allegations of invention in the course of his employment by UWA ([36]). In further answer he said that any patentable invention was discovered not in the course of Dr Chen's employment with UWA but in her employment with CRI. He also alleged that she did not discover the invention. It was an idea or concept suggested by himself and Dr Burton or either of them and that all research in respect of it up to and including the developing of the patent specification was carried out by Dr McCulloch, who was an employee of RPH. Dr McCulloch's services as a research chemist were said to have been seconded to Dr Gray by RPH. The defence pleaded Dr McCulloch's paper entitled " Synthesis of Albumin-dextran sulphate microspheres possessing favourable loading and release characteristics for the anti-cancer drug Doxorubicin ". It also alleged that while Dr McCulloch's article was in draft, Dr Chen, without Dr Gray's knowledge, obtained Dr McCulloch's agreement to allow her to be named primary researcher and first author to improve her prospects of future employment. Dr Gray also pleaded in his defence that at all material times microsphere preparation incorporating chemotherapeutic cytotoxic drugs to be used in the treatment of cancer was a concept in the public domain. He particularised this allegation with a number of references to articles and scientific journals, including a number of papers in which Dr Chen was named as co-author. He relied upon Dr Chen's pre-appointment research at the University of Strathclyde. The defence also alleged that any DOX-Spheres invention was the product of work preceding the commencement of, or alternatively, outside the scope or course of Dr Gray's employment by UWA, funded by CRI and further or alternatively, by LCI or conducted at CACS. A further alternative plea by Dr Gray alleged that if a patentable invention was made by Dr Chen as claimed by UWA, and if it was in the course of her employment by UWA, then it only extended to the introduction of a metal ion into existing known technology in respect of microsphere preparation incorporating cytotoxic chemotherapeutic drugs. The invention was not commercially significant in that clinical tests carried out by Sirtex and others established that it was a less effective method of delivering doxorubicin treatment to tumours than other existing forms of treatment. Dr Gray also pleaded that, by reason of various prior publications in respect of microsphere preparation incorporating cytotoxic chemotherapeutic drugs for use in the treatment of cancer (other than the introduction of a metal ion) carried out by either or both himself and Dr Chen in the course of employment by UWA, such a process was, as a matter of law, not a patentable invention. In its defence, Sirtex denied that Dr Gray developed and/or discovered the DOX-Spheres invention within the scope of his employment by UWA. It admitted that the DOX-Spheres invention is and was at all material times patentable, but did not admit that it was commercially significant. Sirtex also replicated the defence pleaded by Dr Gray that the DOX-Spheres invention was a product of work which preceded the commencement of his employment by UWA, was funded by CRI or LCI or conducted at CACS subject to the agreements and arrangements referred to earlier. One particular application of this formulation is to transport cytotoxic drugs that are designed to be used in patients and animals for the treatment of cancer. The concept of using metal ion-drug complexes in combination with ionic polymers can also be used for the transport and controlled release of other drugs and chemicals for a variety of other applications. The background statement in the provisional specification set out two basic requirements for targeted microsphere delivery of chemotherapy to be effective. There was a need to localise sufficient quantities of the drug at the target site to have the desired cytotoxic effect. There was also a need to control the rate of delivery into the tumour milieu that would cause maximum cell destruction. It was therefore essential to design or develop a polymer matrix system that could carry a high load of cytotoxic drug as well as provide a controlled or sustained drug release profile. The Background Statement identified the problem posed for the formulation of sustained release matrices. Matrices with a high drug loading would often release the drug rapidly. This was known as a burst release effect. The conventional approach of using a coating technique could sustain the release of the drug but usually decreased the drug loading. The desirability of a bio-degradable drug complex permitting repeat doses was also identified. We have developed the formation of drug-metal ions complexes to suppress the burst release. This has resulted in a carrier matrix with all the required properties for clinical use. These were set out and described the use of albumin and dextran sulphate as polymer matrices for ionic drugs such as DOX and CDDP. The former was used to provide the supporting structure, the latter the anionic sites for cationic drugs of DOX and CDDP to achieve high drug loading. The development of the drug metal ion complexation was said to minimise the burst release without affecting the favourable high drug loading of the system. [Referenced to Lee VA, Musin RI and Tashmukhamedov RI, et al, 1990, " Metal complexes of polymers with amino acid residues, formation, stability and controlled biological activity " J Controlled Release, 14, 61] In some cases, the drug-metal complexes can be biologically active. DOX-iron is an example. [Referenced to Beraldo H, Garnier-Suillerot A, Tosi L and Lavelle F 1985, " Iron (III)-adriamycin and iron (III)-daunorubicin complexes; physicochemical characteristics, interaction with DNA, and antitumour activity". Biochem 24, 284] However, drug-metal ion complexation has never been explored before as a drug release control mechanism. Here we are not interested in the controlled release of DOX-iron but rather using the formation of DOX-metal ion and DOX-metal ion-polymer complexes as a control release mechanism to design the system with optimum/desirable release of native DOX. A second example was said to show how the concept of drug-metal ion complexation could be applied to the formation of sustained release systems for metal-based drugs in that case Cisplatin complexed with polymer matrices comprising albumin dextran and chitosan. Examples of other ionic agents that can be used instead of dextran sulphate include, amylopectin sulphate, carrageen, chondroitin sulphate, heparin sulphate, heparin, fucoidan, polyaspartic acid, polyglutamic acid, polyinosinic acid, polylactic acid, polyvalent polymeric acids, SP-Sephadex, CM-Sephadex, dextran sulphate cellulose, dextran sulphate agarose, cationic ion-exchange resins and any other agents that contain acidic/anionic groups. The claims were as follows: A controlled release preparation comprising an ionic polymer matrix loaded with an active compound, said active compound being complexed with a complexing agent to modify the release of the active compound from the polymer matrix. A preparation according to claim 1, wherein the ionic polymer matrix is in the form of microspheres. A preparation according to claim 2, wherein the microspheres have a diameter in the size range of 10-200 micron, preferably in the size range of 20-70 micron. A preparation according to claim 1, wherein the active compound is a pharmaceutically active compound. A preparation according to claim 4, wherein the pharmaceutically active compound is a cytotoxic or cytostatic drug. A preparation according to claim 5, wherein the cytotoxic or cytostatic drug is doxorubicin, daunorubicin or cisplatin. A preparation according to claim 1, wherein the ionic polymer matrix comprises a biodegradable crosslinked albumin/dextran sulphate matrix. A preparation according to claim 1 wherein the complexing agent is metal ion. A preparation according to claim 8, wherein the metal ion is Fe. A preparation according to claim 1, wherein the ionic polymer matrix is selected from a crosslinked albumin/dextran sulphate matrix and a polystyrene-divinylbenzene based ion exchange resin, and the ionic polymer matrix is loaded with Fe-complexed doxorubicin. A preparation according to claim 1, wherein the ionic polymer matrix is selected from a crosslinked albumin/dextran sulphate matrix and a polystyrene-divinylbenzene based ion exchange resin, and the ionic polymer matrix is loaded with chitosan-complexed cisplatin. A pharmaceutical composition comprising a controlled release preparation according to any one of claims 1 to 11 wherein the active compound is a pharmaceutically active compound, together with a pharmaceutically acceptable carrier and/or diluent. A method of treatment of a human or animal patient, which comprises administration to the patient of a therapeutically effective amount of a controlled release preparation according to any one of claims 1 to 11 wherein the active compound is a pharmaceutically active compound. A method according to claim 13, wherein said controlled release preparation is administered parenterally, preferably intraarterially or intravenously. Use of a controlled release preparation according to any one of claims 1 to 11 wherein the active compound is a pharmaceutically active compound, in the manufacture of a pharmaceutical composition for use in the treatment of a human or animal patient. It was made between 31 January 1991 and 18 November 1993. The significance of the first date was derived from an application that Dr Chen made with Mr Blackbourn, a pharmacist at RPH, to the Medical Research Foundation for funding of a project entitled "Formulation of Sustained Release Carriers for Cisplatin". This application contained the earliest reference in the evidence to the use of chitosin microspheres. There was however at that point no reference to complexing chitosin with cisplatin which appeared in the provisional specification. So, it was said, the complete invention had not been identified at that time so far as it embodied that element. UWA again took a problem/solution oriented approach to the identification of the invention breaking it down into various individual components and attributing them to the work of particular researchers over particular periods. It listed the problems addressed by the DOX-Spheres inventors: Identification of a way of delivering sufficient quantities of the relevant drug to a target site. Identification of a way to suppress burst release of the drug from the controlled release preparation following administration to a patient and to control the rate of drug delivery into the tumour milieu. Components of the solution to the first problem were said to comprise selection of the appropriate ionic polymer matrix material for the microspheres, selection of appropriate microsphere size, selection of suitable active compounds and the use of the matrix material to deliver active compounds in the treatment of human or animal patients. As to the controlled delivery problem, its solution had, according to UWA, one component which could be identified with one or more of the claims in the DOX-Spheres PCT application. That component was the use of complexing agents to suppress burst release of the active compound from the matrix and to sustain its release. In my opinion the UWA approach did not address the inventive concept at the heart of the DOX-Spheres invention. This did not include, as it seemed to contend, the use of combined albumin/dextran sulphate microspheres. It was not an inventive step as at 1991. Nor, in my opinion, was the selection of anti-cancer drugs. They were reductions of the inventive concept into practice. In my opinion the inventive concept at the heart of the DOX-Spheres invention was the use of metal ions to suppress burst release of doxorubicin from the microsphere carrier. For the reasons already given, that was not an idea which can be attributed to Dr Chen. The relevant principle had been foreshadowed by Dr Hodgkin in 1982/1983 when he wrote "Metal Chelating Polymers" for the Encyclopaedia for Polymer Science. He had referred to "metal selective ion exchange resins (for potential microsphere carriers)" in a collaborative research application which he signed in March 1986. He had conducted his own experiments using drugs such as doxorubicin in combination with metal ions. The drugs he had obtained from his wife's oncological co-workers at the Alfred Hospital. The availability of these drugs allowed him to experiment with chelating resins. Dr Chen had made handwritten notes in 1991 of a telephone conversation she had with Dr Hodgkin, one of which read "Metal Chelat ... ion exchange resin + DOX". In my opinion the most probable explanation of the note is that it resulted from a comment made to her by Dr Hodgkin. And in February 1992 the notion of using metal ions and sulphonated dextran was communicated to her by Dr Hodgkin. Much of the experimental development of the practical application of metal ion complexing to reduce burst release was carried out by Dr McCulloch, an RPH employee. I have already referred to his evidence and preferred it to that of Dr Chen where there was conflict in their testimony about their respective roles. I am not satisfied on the evidence that Dr Chen was a contributor to the inventive concept as distinct from its reduction to practice and its verification in animal trials. The inventive concept seems to have been developed by a combination of Dr Gray, Dr Burton, Dr Hodgkin and Dr McCulloch. It may be debatable whether Dr Gray's contribution is sufficiently material that he could be regarded as a co-inventor albeit he initiated the line of research that sought to develop the idea of using microspheres to deliver anti-cancer drugs. I am not satisfied that Dr Chen made an inventive contribution which would qualify her as co-inventor. The invention in my opinion was developed within the general timeframe enunciated by UWA. That is to say it was developed at the time that Dr Gray, Dr Burton and Dr Chen were employees of UWA. The invention was said to be patentable and commercially significant. The description of the invention was set out in 27 subparagraphs reflecting claims. It is not necessary to set out those 27 subparagraphs. In his defence Dr Gray denied the allegation and denied that Thermo-Spheres-1 was developed and/or discovered in the course of, or within the scope of, his or Dr Jones' employment with UWA. He also asserted that the Thermo-Spheres-1 invention was not commercially significant. He said it was a product of work preceding his employment by UWA, funded by CRI and alternatively LCI or conducted at CACS to which the agreements and arrangements pleaded earlier in the defence applied. Sirtex made a similar pleading, but added references to other external funding sources in relation to the work which led to the invention. As noted, the application and provisional specification were the same as those lodged by Dr Gray on 12 September 1988 and 23 December 1994. The 1996 provisional application is claimed as the priority document for international application PCT/AU97/00287 entitled "Targeted hysteresis hyperthermia as a method for treating diseased tissue" which was filed on 9 May 1997. However UWA contends that the PCT application claimed an invention with components additional to the earlier application from which it derives priority. The content of the 1988 provisional specification has already been discussed in these reasons. It will be recalled that it included two appendices, one of which was said to provide a description of "the concept of the invention in greater detail". The other was said to describe "preliminary investigations that confirm the scientific credibility of the invention". The PCT application embodied elements reflected in a letter of instruction from Dr Stephen Jones to Gary Cox of Wray & Associates dated 20 February 1997. This letter, which has been referred to earlier in these reasons, identified the inventors as Drs Gray and Jones. A description of the invention set out in that letter has also been set out earlier in these reasons and, in particular, the development of the quantity devised by Dr Jones called the magnetic heating efficiency. UWA submitted that because the instructions to the patent attorney named Dr Jones as inventor of the invention to be disclosed in the Thermo-Spheres-1 invention PCT application it followed that it must have been completed after he commenced working with Dr Gray in January 1990. It was UWA's case that the Thermo-Spheres-1 invention was "finally settled" at some time between Dr Jones commencing work at UWA with Dr Gray and the end of 1993. UWA identified the three problems addressed by the Thermo-Spheres-1 invention and the elements of those problems as follows: The ability to maximise heating within the diseased tissue while maintaining hyperthermia within safe operating limits for the patient. The various "solutions" to the problems identified were cross-referred to claims in the PCT application. In relation to 1.1, UWA referred to the concept of magnetic heating efficiency (MHE) developed by Dr Jones and the reference in claim 7 of the PCT application to a range of substances suitable for use in the invention. Reference was then made to Dr Jones' NH & MRC application with Dr Gray and Professor Street on 20 February 1991 which referred to the study of barium ferrite. It was submitted that one of the class of compounds specified in claim 7 of the PCT application had been identified. Another application for grant funding dated 5 March 1993 was referred to in which reference was made to materials including acidular ion oxides, chromium dioxide and cobalt modified iron oxides having desired characteristics for hysteresis heating. It was submitted that the identification of these materials satisfied at least the requirements of claims 8 and 10 and, on a fair reading, claim 9. Thus it was said these components of the invention were identified by 5 March 1993. Evidence referred to earlier in these reasons concerning the attempts to obtain additional samples of S11, a form of cobalt modified gamma ferric oxide was also referred to. In particular, UWA mentioned Dr Jones' letter to Dr Eldridge of 16 November 1993 describing the Bayer S11 sample that they had been given as "extremely useful to us". It was submitted that measurements must have been made by that date of the hysteresis heating properties of S11. This was then linked to claim 5 of the magnetic material which required the MHE of the material to be above 1 x 10 -7 J.m/A.g when the magnetic field conditions were equal to or less than 7.5 x 10 7 A/s. In the PCT specification one substance was described as meeting that requirement. It was described as being a gamma-Fe 2 O 3 obtained from Bayer Chemicals. This, by a process of inference, led UWA to submit that the selection of cobalt treated gamma-ferric oxide compound referred to in claim 8 of the PCT application was finally settled upon between December 1992 and November 1993 and that Dr Gray and Dr Jones were employees of UWA during that period. As to the identification of the correct field/frequency parameters, UWA adopted a similar approach by reference to correspondence and applications concerning the development of apparatus to develop a suitable magnetic field. On the basis of those submissions it was said that claim 22 was finally settled on between about early 1993 and the end of 1993 and that during the entirety of that time both Dr Gray and Dr Jones were fulltime employees of UWA. UWA referred to claim 18 of the Thermo-Spheres-1 invention PCT application which required the rate of tumour heating to be above 100 mW/cm 3 . The CSIRO report of 30 July 1988 predicted that therapeutic heating would occur when magnetic microspheres were able to provide an input power of 60kW/m 3 of tissue. On this basis it was said that claim 18 was finally settled between July 1988 and February 1996. The UWA submissions then went over into the general issues canvassed in relation to SIRT-1 of size, density, composition and delivery of the microspheres. Dr Gray submitted that the concept of targeted hyperthermic hysteresis was a logical extension of his targeted microsphere technology. He also submitted, and I accept, that while in Melbourne he conceived and developed the concept of hysteresis hyperthermia with Dr Burton. Dr Burton, as indicated earlier in these reasons, had a particular interest in the use of hyperthermia. There was already a significant amount of published literature in existence in 1985 and 1986 to which reference has been made. In Dr Gray's letter to Dr Burton of 3 December 1986 he attached notes entitled "Adjuvant Hyperthermia in the Treatment of Cancer". He referred to the use of microspheres to enhance tissue heating. At the time his interest was in the use of fluctuating magnetic fields to induce heating in microspheres bearing magnetic material. He coined the term "thermospheres" for microspheres containing magnetic material. As he acknowledged at the time, the development of the technology was going to be expensive and beyond normal funding mechanisms. As was pointed out in the submissions on behalf of Dr Gray, he used the words that he had "finally put together some thoughts" which was consistent with a long standing interest in the targeted hysteresis hyperthermia concept. This was said to reinforce the evidence of both Dr Gray and Dr Burton that the concept was developed from their days in Melbourne. He was also aware of the potentiating effect of targeted hysteresis hyperthermia when combined with other treatment modalities. The first research grant application was written in June 1987 to the Clive and Vera Ramaciotti Foundation but was unsuccessful. Dr Gray wrote the whole of the application himself without input from Dr Detchen who was the co-author and before any experiments had been performed at UWA on target hysteresis hyperthermia. It was submitted that Dr Gray had a thorough understanding of all the concepts that underpinned targeted hysteresis hyperthermia before any research work was done at UWA. They were recast to become the provisional patent application that he wrote in 1988. It was submitted on behalf of Dr Gray that he did this at the request of Dr Nicholas. Dr Gray said he lodged the specification on instructions from Uniscan and I have found that he did it of his own accord. It was submitted on behalf of Dr Gray that there was no experimental work carried out by him at UWA. The entire idea had been developed conceptually, rather than experimentally. Dr Gray's submissions then referred to the collaborative agreement with the CSIRO to carry out tests of the effects of magnetic fields on appropriate sized particles. Evidence relating to discussions between UWA, Dr Gray and CSIRO about intellectual property in relation to work done by CSIRO has already been outlined in these reasons. Dr Jones was appointed in January 1990 under a Raine Research Fellowship and until his appointment no research experiments at UWA had been done on hysteresis hyperthermia. He made a successful grant application on 16 February 1990 to the Foundation. He referred in that application to new magnetic materials that had become available from commercial sources. He proposed to design and construct a benchtop alternating magnet system that would enable proper testing of a range of magnetic powders. It would be necessary to measure the heat generated from hysteresis effects as a function of field strength and frequency for particles of different composition, shape and size. On 20 June 1990 Drs Gray and Jones successfully applied to the Clive and Vera Ramaciotto Foundation for funding for the purchase of a Malvern series laser diffraction particle size analyser. Successive grant applications in relation to the hysteresis heating project were made on 31 January 1991 (to the Medical Research Foundation) and 20 February 1991 (to the NH & MRC). Unsuccessful funding applications were made in February 1992 and 11 August 1992 and on 5 March 1993. A successful application was made to the Medical Research Foundation in February 1994 for funds to purchase an induction heating coil for in vivo experimentation. Dr Gray's submissions referred to the article published by Jones, Gray, Burton, Codde and Street in 1992 referring to a combination of small ferromagnetic particles, high field strengths and low frequencies. The submissions on behalf of Dr Gray sought to identify the timing of the experimental work that led to the PCT application by reference to the identity between a graph attached to that application and Dr Jones' laboratory book which was said to identify the relevant research program as conducted between February and June 1996. Figure 2 in the PCT application was also said to be reproduced from a laboratory book started in March 1996. It was submitted for Dr Gray that the conclusion that followed was that the PCT application for the Thermo-Spheres could not have been completed as at August 1994, but was completed substantially with work conducted after 1996. There had been funding problems in the period 1993 and 1994. When Dr Jones was funded by CRI from 1994 onwards his work significantly developed. Sirtex sought to identify the inventive concept of Thermo-Spheres-1. It made the point that the first claim, referred to earlier in these reasons, contained several integers of a general and publicly known nature which could not possibly of themselves constitute the inventive concept of the invention in light of the prior art which was in evidence. It referred to the papers of Gilchrist et al in 1957, Borelli's 1982 US patent and the paper by Luderer and Borelli in 1983. Rand's 1991 US patent disclosed that at frequencies below 10Khz certain neuromuscular responses would be induced in a warm blooded animal because of the induction of current flow in nerves controlling those muscles. The requirement that specific magnetic field conditions be equal to or less than about 7.5 x 10 7 A/s was derived from Atkinson et al 1984. Claim 1 of the PCT application defined what Sirtex identified as the crucial parameter of magnetic heating efficiency of at least 4.5 x 10 -8 J.m./A.g. There was no evidence of any public disclosure of MHE of at least that amount prior to the filing of the Thermo-Spheres-1 PCT application on 9 May 1997. Selecting a magnetic material with an MHE of at least about 4.5 x 10 -8 J.m/A.g. 2. When magnetic field conditions are equal to or less than about 7.5 x 10 7 A/s. As Sirtex noted, none of those integers, let alone their combination, was disclosed in the provisional application PN9782 from which Thermo-Spheres-1 PCT application purported to derive priority. The Thermo-Spheres-1 PCT application named Drs Gray and Jones as inventors, whereas the provisional application named only Dr Gray as inventor. I accept the submission by Sirtex that it was not arguable that the Thermo-Spheres-1 PCT application was fairly based on provisional application PN9782. This means that the relevant priority date of the claims set out in Thermo-Spheres-1 PCT application was not earlier than its own filing date of 9 May 1997. The next question was, at what time was the inventive concept of Thermo-Spheres-1 formed? The exchange of faxes between Mr Cox and Dr Jones concerning the minimum MHE figure to be claimed took place on 8 and 9 April 1997. Dr Jones gave evidence that it was around this time that he first used the formula. As was submitted for Sirtex, Mr Cox' fax of 8 April 1997 supported that evidence because it indicated that Dr Jones had not previously communicated the formula for inclusion in the draft patent claim. The evidence also demonstrated, as Sirtex suggested, that the inventive concept was not conceived as a result of any particular experiment but following analysis of prior art to devise a new invention which lay beyond it. Sirtex then referred to the significance of the missing laboratory books which Dr Jones delivered to Dr Gray. These were the books SKJ Bk I to SKJ Bk IV. It was pointed out that Dr Jones' laboratory book SKJ Bk V covered the period from 27 March 1996 to 29 October 1998. The earliest reference in it to the calculation of MHE was 23 April 1997. The next reference was on the following page dated 23 June 1997. All of that suggested that the missing laboratory books were unlikely to contain evidence of the conception of a defined MHE of 4.5 x 10 -8 J.m/A.g. It was not put to Dr Jones in cross-examination that there was any reference to a defined MHE of that amount in the missing laboratory books. I accept that I cannot draw an inference from the absence of the books that they were likely to have contained the MHE figure ultimately inserted in the PCT application. I accept the submissions by Sirtex defining the inventive concept for Thermo-Spheres-1. I accept that there was no evidence that that inventive concept came into existence prior to April 1997. By that time Dr Jones was an employee of old Paragon Medical. He had resigned from CACS on 22 January 1997 with effect from 31 January 1997. Moreover, there was no evidence that Dr Gray was involved in the conception of the defined MHE. His employment by UWA, as already noted, was limited to the performance of clinical duties and not research. I accept therefore that the Thermo-Spheres-1 invention was not developed in the time that Dr Jones was an employee of UWA and was not developed in the course of Dr Gray's employment at UWA. Dr Gray denied the allegation and said that any invention by him and Dr Jones was not in the course of their employment by UWA and in the alternative said it was done for and on behalf of CRI. It was not in dispute that the only substantive difference between the Thermo-Spheres-1 PCT application and the Thermo-Spheres-2 provisional application relates to the use of a rotational magnetic field. UWA submitted that where statements in the Thermo-Spheres-2 invention provisional application were identical to those in the PCT application and those statements were the basis for claims defining the Thermo-Spheres-1 application, then the same statements in the Thermo-Spheres-2 provisional application were a sufficient basis for the identical claims in relation to Thermo-Spheres-2. It was said to follow that the timing of the inventions submitted by UWA in the case of Thermo-Spheres-1 applied equally to Thermo-Spheres-2. UWA submitted that the only analysis it needed to consider was the timing of the identification of the rotational magnetic field. Although the differences between the two inventions were limited, protection was sought for them as separate inventions. Thermo-Spheres-2 was not filed as a patent of addition under Chapter 7 of the Patents Act. It was filed on 29 October 1997. Its applicable prior art base included the information contained in the prior Thermo-Spheres-1 PCT application filed on 9 May 1997 and the provisional application PN9782 filed 10 May 1996. Sirtex submitted that even if the only new integer of Thermo-Spheres-2 was the addition of rotational magnetic fields, that was not novel as at 29 October 1997 because the concept of using rotational magnetic fields had been mentioned in the report attached to the Thermo-Spheres-1 provisional application PN9782 where four possible methods of field generation, including "rotating permanent magnets" were mentioned. Selecting a magnetic material with an MHE of at least 4.5 x 10 -8 J.m/A.g. 2. Sirtex submitted and I accept the submission that the inventive concept for the purposes of determining inventorship and entitlement to Thermo-Spheres-2 resided in this combination of integers. It criticised the UWA submissions as ignoring the factor of MHE of at least about 4.5 x 10 -8 J.m/A.g and its contention that it need only consider the timing of the identification of the rotational magnetic field for use in therapeutic application of hysteresis heating. That approach, it was said, could not assist in establishing entitlement to the inventive concept of Thermo-Spheres-2. I accept that the inventive concept of Thermo-Spheres-2 was not developed during the course of Dr Gray's employment at UWA or that or Dr Jones. In the defences no inventorship by any other person was raised. in a rotational magnetic field where the product of the amplitude and frequency of the applied field is less than or equal to 5 x 10 8 A/M.s, and the frequency of the applied field is at least 20kHz. Particles with predominantly cubic magnetocrystalline anisotropy come closest to approaching the specified behaviour in a rotational magnetic field since they have a hysteresis loop squareness as high as 0.86. The international application number PCT/AU00/00151 was filed on 3 March 2000. Dr Jones sent a preparation guide to Wray & Associates for the preparation of the provisional specification for the invention. This was relied upon by UWA as listing the inventive contribution of himself, Dr Gray and Dr Cammarano to the invention. Their contributions were said to be substantially similar to those identified in the patent preparation guide which Dr Jones sent to Wray & Associates for Thermo-Spheres-2. UWA pointed to similarities between the three Thermo-Sphere applications. It submitted that the timing of the dates upon which the inventions took place, identified by UWA in relation to each of those inventions are relevant to the timing of the Thermo-Spheres-3 invention. It did not allege that either Dr Jones or Dr Cammarano invented the Thermo-Spheres inventions while employed by UWA. The relevant conduct was that of Dr Gray. Neither of the patent preparation guides relied upon were prepared or sent or received by him. Each was prepared by Dr Jones. Neither was put to Dr Gray in cross-examination. Sirtex submitted that the Thermo-Spheres-3 provisional and PCT applications again stood as independent patents. specification of required micro particle density and size. It is convenient to deal with them in groups according to the Regulations said to have been breached. The Prompt Notification Condition pleaded was that imposed by regulation 6(1) of the Patents Regulations. Regulation 6 was directed to "any patentable invention made or developed wholly or in part during the course of [the employee's] duty or whilst using the University's research facilities". It was a regulation based on the premise that in such circumstances UWA would have property rights in connection with such an invention. So much was clear from the reference to UWA's "rights in the invention" in subregulations 6(2), 6(3) and 6(4). For the reasons already given that assumption, in its generality, was incorrect. The notification condition has no application to an invention in which UWA has no rights. In any event, as I have found, UWA had effectively abandoned the system for which the Patents Regulations provided from about 1988. Dr Gray submitted that throughout this time at UWA he made extensive and ongoing disclosures of his research activities, the outcomes of that research, his attempts to obtain funding, his role in old Paragon Medical and his intention to commercialise the technology. He said he had made disclosure of the research and development of microsphere treatment of liver cancer in his original application for the position of Professor of Surgery. In that application he had cited his research publications in the area. He submitted that UWA was on notice that he proposed to continue his work in Perth. This, he said, arose specifically out of his request that Dr Burton be appointed to the Department of Surgery following upon his own appointment so that they could continue with the research they had been doing together. He relied also upon the progress report which he tendered at the end of his first three years at UWA. Dr Gray's submissions also referred to dealings with Uniscan and the proposals he wrote for the three technologies in 1987/1988 in attempting to attract commercial interest for them. He submitted that by these three proposals, his dealings with Uniscan and UWA patent attorneys from 1986 to 1988, he made disclosure to UWA of the hyperthermia, SIR-Spheres and DOX-Spheres technologies. The disclosures were not in issue and are dealt with in the factual history set out earlier in these reasons. Assuming, contrary to my primary findings, that there were patentable inventions developed or made during Dr Gray's employment at UWA in respect of which UWA had rights, the kind of disclosure to which he referred would not, in my opinion, have constituted notification under regulation 6(1) of the Patents Regulations. That required a notification to the Vice-Chancellor of a patentable invention when it was made or developed. Disclosure of ongoing research activities and results to other elements of UWA would not have sufficed. Given the absence of any UWA rights in any of the inventions which it pleaded and the abandonment of the Patents Regulations process, there was no breach of contract flowing from the want of formal notification under the Prompt Notification Condition. The Restraint Condition was that imposed by regulation 4(11) of the IP Regulations. It prohibited an originator from applying for any form of protection for or commercially exploiting or otherwise dealing with any intellectual property or doing any act or thing in a way inconsistent with UWA's rights under the Regulations or otherwise. Dr Gray's breach of the Restraint Condition is said to arise out of applications and assignments made after 22 July 1996. That plea assumed that the IP Regulations came into effect on that date. For the reasons I have already given, it was not established that they came into effect before 30 November 1997. Moreover UWA could not, for reasons I have already given, validly acquire by regulation, rights in relation to inventions made or developed by Dr Gray or others employed to research. There was no relevant inconsistency between the conduct alleged against him and UWA's rights under the IP Regulations or otherwise which could have rendered that conduct a breach of regulation 4(11) or of his contract of employment. The Naming Condition was derived from regulation 4(13) of the IP Regulations and again, said to be in effect from 22 July 1996. It was said by UWA to require Dr Gray to make all applications for registration of any intellectual property in the name of UWA unless "expressly otherwise determined by the Pro Vice-Chancellor (Research)". The regulation applied, if at all, only after 30 November 1997. For the reasons already given, it could not validly apply to interfere with the property rights of academic staff arising from inventions made by them in the course of their research. To the extent that it depended upon UWA's assertion of ownership in regulation 4(11), it had no valid foundation. UWA could not by regulation acquire that which it did not own. There was no breach of contract based upon the Naming Condition. Dr Gray was also said to have breached the Prompt Reporting Condition imposed by regulation 6 of the IP Regulations. A condition of the application of that regulation was the creation of "any intellectual property to be owned by the University, which is likely to be commercially significant". Absent any relevant intellectual property interest in UWA in relation to the inventions, this regulation had no application regardless of the period over which it applied. The final category of breach of contract relied upon was failure to comply with the Cooperation Condition. Dr Gray was said to have failed to comply with this condition by failing to transfer upon demand his shares in Sirtex to UWA and by failing to account to UWA for any amount received from the disposition of any of those shares. He was also said to have breached the condition by failing to provide a full account to UWA of all benefits received in relation to the exploitation of the inventions in issue. Given the absence of any UWA interest in the inventions, this claim also fails. For the preceding reasons the claims against Dr Gray for breach of contract cannot succeed. In any event as far as the timing of the inventions is concerned, the findings I have made are adverse to UWA in all cases save for that of DOX-Spheres. I have not analysed the claims by reference to their application to particular inventions. Absent the global rejection of the contract claims for the reasons already set out, their viability with respect to each invention would depend upon the timing of the inventorship issues which have already been discussed. It is not necessary, however, to undertake that essentially hypothetical exercise nor to consider the plurality of pleaded defences to the contract claims. The way in which UWA framed its claim for breach of fiduciary obligation against Dr Gray was exemplified in the pleading with respect to the SIRT-Spheres inventions. It was also alleged that his receipt of shares in the Sirtex float constituted a continuing and further breach of those fiduciary duties. UWA in its submissions referred to what it said was Dr Gray's awareness of his fiduciary obligations and his awareness "... at critical times that he had made discoveries or had participated in the discovery or development of inventions of the kind which engaged his obligations to the University to protect that property and to conduct himself accordingly". The evidence was said to disclose that he preferred his own interests over those of UWA in relation to each of the inventions and the benefits which he derived from dealing with them. There was reference made to letters about each of the technologies, which Dr Gray had written, indicating his awareness of the existence or potential existence of intellectual property, its commercial significance and the need to enter into protective arrangements. They were said to demonstrate that with regard to each of the inventions Dr Gray knew of each of the matters that he was required to bring to the attention of UWA under the Patents Regulations and subsequently under the IP Regulations. It was also said that he was aware of dealing with the property in the manner in which the evidence established that he so did was in breach of those Regulations. Thereafter, Dr Gray's continued dealing with UWA's property was a continuing breach of his fiduciary obligations. Accepting the existence of the fiduciary obligations as pleaded, UWA's case as encapsulated in the closing written submissions, rested upon the premise that Dr Gray was dealing for his own benefit with rights in relation to various inventions which UWA owned or in which UWA had an interest. For the reasons already given, that premise is misconceived. UWA failed to establish that it had any rights or interests in any of the inventions even if they were made by Dr Gray or others in the course of their employment as researchers with UWA. There was no breach of fiduciary duty by Dr Gray. And on the findings I have made about inventorship, the only invention made within the timeframe asserted by UWA was DOX-Spheres. It was said to have been knowingly concerned in those breaches in various ways eg: by making each of the first SIRT-1 application and the second SIRT-1 Australian application (s/c 16A); by preparing and filing the SIRT-1 PCT application (s/c 20A); by preparing and filing the Gray SIRT-1 applications (s/c 25A); by undertaking of the SIRT-Spheres assignments (s/c 29); by making, with the consent of Dr Gray, the Thermo-Spheres-1 invention PCT application on or about May 1997 (s/c 75); by undertaking the Thermo-Spheres-1 invention assignments (s/c 83 and s/c 91); by filing the Thermo-Spheres-2 invention provisional application on or about 29 October 1997 (s/c 94 and 97); by undertaking the Thermo-Spheres-2 invention assignments (s/c 106 and 113); by making the Thermo-Spheres-3 invention provisional application (s/c 119 and 116); by making the Thermo-Spheres-3 invention PCT application (s/c 121 and 124); by undertaking the Thermo-Spheres-3 invention assignments (s/c 113 and 140); the issue by Sirtex of further shares and the receipt by Dr Gray of those shares (s/c 146A). The case against Sirtex for knowing involvement in Dr Gray's alleged breaches of fiduciary duty and knowing assistance depends crucially upon the primary case against Dr Gray. That case having failed, the claim against Sirtex cannot succeed and will be dismissed. I should add as I have already found that Sirtex was not at any time on notice of a potential claim by UWA through any of its directors other than Dr Gray. The application of any cause of action based on knowing involvement in his alleged breaches of fiduciary duty would have depended entirely upon his role as a director of Sirtex and whether his knowledge could be attributed to the company. The first was for misleading or deceptive conduct said to arise out of the Barber letter to CRI dated 22 January 1997. The second, was a claim for relief against groundless threats of infringement constituted by UWA's letter of demand of 26 October 2004 and these proceedings. Sirtex contended that the Barber letter of 22 January 1997 contained express representations made by UWA to CRI that it had no interest, financially or otherwise, in technology funded by CRI being that identified in the letter. In that letter UWA was also said to have impliedly represented that: It had made reasonable inquiries as to whether it had any interest in or claims in the intellectual property in or related to the CRI Claimed Technologies; and It had determined on the basis of those inquiries that it had no interest in or claim to the intellectual property in or related to the CRI Claimed Technologies. Sirtex alleged that UWA made the Barber representations in the course of trade or commerce and that they were as to a future matter. It relied upon s 51A of the TPA. Sirtex alleged that in reliance on the Barber representations it entered into the various transactions concluded on 1 May 1997 which have already been referred to. Nevertheless in its closing written submissions Sirtex put its case on the basis that if UWA were to succeed in its claim against Sirtex, then one or other of the representation was misleading. The proposition that the cross-claim against UWA was confined by the condition that it succeeded in its claim against Sirtex was borne out by the particulars of loss and damage which Sirtex asserted. These related to its investment of moneys in the acquisition, protection and development of the relevant technologies and in the acquisition of plant, equipment, infrastructure and distribution networks. It also referred to the money it had agreed to pay to Dr Gray, CRI and ASPL. As UWA has not succeeded in its claim against Sirtex, the cross-claim for misleading conduct will be dismissed. The second aspect of the Sirtex cross-claim against UWA arose out of the letter of demand from Jackson McDonald of 26 October 2004 and the commencement of these proceedings. Sirtex referred to UWA's assertion of entitlement to six families of patents applied for and/or registered in Sirtex's name and the orders which it sought against Sirtex in the amended application. Such a proceeding clearly falls within the scope of "other similar proceedings" for the purpose of s 128. It made the point, which is correct, that a threat is not justifiable on the ground that the person making the threat has an honest belief that the relevant conduct infringed or would infringe a claim of a patent. It referred in that context to Durack v Associated Pool Builders Pty Ltd (1983) 1 IPR 545 at 553. Apart from instituting revocation or rectification proceedings ... a person who suffers by the threats may not be able to prevent them, save in exceptional cases. In general the common law has not limited the freedom to institute claims or to threaten that they will be begun. Rather it insists that those who choose to succumb to a claim instead of fighting must abide by the consequences of their faint-heartedness. If the claim was in fact groundless, they are not in general permitted to re-open the controversy by having the settlement rescinded, by claiming back money paid or by suing for loss suffered because of their submission. ... In the case of patents, where the expense and uncertainty of infringement and validity proceedings is acute and the threat to sue is accordingly grave, an exception has long existed by statute ... A person aggrieved by the threat that he himself or someone else (such as a customer) will be sued for patent infringement may claim relief in civil proceedings in the form of a declaration that the threats are unjustifiable, an injunction against their continuance and/or damages for any loss that they cause (for example because a customer switches his orders to the threatener). Against that background the provisions of s 128 provide an exceptional remedy in respect of a particular class of threat. It is not to be read so expansively as to pick up conduct beyond the range of the particular mischief to which it was directed. In my opinion, the institution of proceedings does not constitute a threat of proceedings. No reliance can be placed upon the relief claimed in proceedings actually instituted to characterise the threat which preceded them. In the present circumstances the threat, if any, resides only in the letter of demand of 26 October 2004. The letter of demand did not threaten infringement proceedings. It asserted that Sirtex held the rights in relation to the claimed inventions under a constructive trust for UWA. It did not assert that Sirtex was not the legal owner of those rights. In addition, it had allegedly breached the constructive trust in allowing certain of the patent applications to lapse and by failing to pursue patent applications in countries designated in the PCT application. The letter does not foreshadow an infringement proceeding. The question is whether it foreshadows "a similar proceeding". A patent grants to the patentee exclusive rights, during the term of the patent, to exploit the invention and to authorise other persons to exploit it. Those exclusive rights are personal property and are capable of assignment and devolution by law (s 13). Infringement proceedings necessarily relate to dealings in products or processes of the kind identified in the definition of "exploit". Section 117 extends the concept of infringement to contributory infringement including the supply of patents for infringing purposes. In my opinion, whatever the scope of the term "other similar proceedings", proceedings in equity asserting dealings with a patent and associated rights as personal property contrary to the rights of their beneficial owner, do not fall within its range. The section was not intended to pick up actions in equity or contract about the disputed property rights generated in patents. To so extend it, would take it well beyond the mischief to which it was directed which relates to the peculiar character of infringement proceedings. There is no reason in that respect why threatened litigation about property rights to patents, which rights have their source in contract or equity, should be treated any differently to threats about property generally. In my opinion the cause of action for unjustified threats of infringement cannot succeed. The Sirtex cross-claim against UWA will be dismissed. The claim was based upon UWA's obligation under the Patents Regulations to assign back to an inventor rights which UWA itself had decided not to exercise. Dr Gray's pleading referred to the Uniscan decision in 1989 by which he said UWA abandoned any attempt to commercialise any of the research projects which he was undertaking. The cross-claim was posited upon UWA having had rights in relation to the relevant inventions. It had no such rights so this element of the cross-claim will be dismissed. The second cross-claim was for unjustified threats of infringement proceedings. It depended upon the letter of demand sent to Sirtex by UWA's solicitors on 26 October 2004. for the reasons I have already given I relation to the like cross-claim brought by Sirtex, Dr Gray's cross-claim for unjustified threats of infringement cannot succeed. The third cause of action in Dr Gray's cross-claim against UWA alleged misleading or deceptive representations by UWA that it did not assert and would not in future assert, a claim as to the intellectual property the subject of Dr Gray's research into microparticle delivery of radioactive material in the treatment of liver cancer in human beings. The occasions of the representations were said to have been two. The first was Uniscan's alleged abandonment at the beginning of 1989 of any attempt to commercialise any of Dr Gray's research projects and the fact that it informed him of that. The second was the letter from Professor Barber of 22 January 1997. In the cross-claim it was said that in so far as UWA's representation was a representation as to a future matter, Dr Gray relied upon s 51A of the TPA. It is well established that the making of a promise which is not performed or a prediction which is not fulfilled is not of itself misleading or deceptive: Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd [1984] FCA 180 ; (1984) 2 FCR 82 at 88; Boll Acceptance Corporation Ltd v GWA Ltd [1983] FCA 269 ; (1983) 50 ALR 242. A promise or prediction may contain an implied representation of present fact such as the promisor's intention or capacity to perform the promise. If such implied representations are false then the promise may be misleading or deceptive within the meaning of s 52 of the TPA. A prediction or promise apparently based on the expertise or experience of the representor may carry with it an implied representation as to the existence of that necessary expertise or experience and an implied representation that relevant inquiries have been undertaken to support the opinion being offered. Section 51A does not introduce a new rule of law that a promise which is not performed or a prediction which is not fulfilled is thereby deemed to be misleading or deceptive. It requires that a statement about a future matter made without reasonable grounds be treated as if it is misleading or deceptive. In many if not most cases, a person making a statement about the future will be treated as making an implied representation that he or she has reasonable grounds for the statement. If they do not exist, the statement will generally be misleading or deceptive although that need not always be the case. Pleading of misleading or deceptive conduct which relies upon s 51A should make clear that it involves an allegation that the representor did not have reasonable grounds for making the statement alleged. The section will then operate to require the conduct of the representor, if established, to be treated as misleading or deceptive. That is its substantive operation. Its adjectival operation puts the evidential burden on the representor and supports it with a deeming provision. If a pleading of misleading or deceptive conduct based upon a statement about future facts does not expressly plead want of reasonable grounds yet invokes s 51A then it should be taken to so plead or if that implication is not open it should be regarded as deficient. Dr Gray has not pleaded any implied representation but just a promise about the future conduct of UWA. A statement on behalf of a corporation that it will or will not do a certain thing does not convey an implied representation that its mind is unchangeable. No such representation was pleaded or can be implied in the conduct attributed to Uniscan or Professor Barber. In any event, given the circumstances in which Professor Barber's letter was prepared and Dr Gray's own knowledge of the foundation of the letter based as it was on the Gorn letter, no unpleaded implied representation as to reasonable independent inquiries being carried out by Professor Barber is apparent. In my opinion this is not a case to which s 51A can be applied. The grounds upon which Professor Barber's letter were written were identified in the letter itself and known to Dr Gray. This aspect of the cross-claim fails. Although there was a further pleading in the cross-claim by reference to matters referred to in [69.7] and [70.3] of Dr Gray's defence, this did not correlate with the numbering of the paragraphs in the defence. It appears to have been another representation extracted from the Barber letter that UWA did not assert any claim as to the DOX-Sphere's technology. This cross-claim fails for the same reason as its predecessor. The same is true of that element of the cross-claim relating to Thermo-Spheres. The next substantive cross-claim is Dr Gray's cross-claim for defamation based on the letter of demand. He pleaded that in its natural and ordinary meaning the letter meant and was understood to mean that: he wilfully and deliberately breached his employment obligations to UWA; he deliberately misappropriated the property of UWA. There were claims for aggravated and exemplary damages. Dr Gray accepted that, absent malice, the letter would be protected by qualified privilege. In reviewing the long history of events leading up to these proceedings I have made findings of fact in relation to the various matters upon which Dr Gray asserted malice including the timing and circumstances of the sending of the letter. For reasons previously given, I am not satisfied that any relevant malice was made out. If there were people at UWA who bore Dr Gray ill-will there was no causal connection shown between any such ill-will and the content or timing of the letter. Its content and timing seems largely to have been in the hands of Mr Heitman and UWA's solicitors. Assuming the letter to have contained the innuendos for which Dr Gray contended and to have been defamatory, the publication to Sirtex was on an occasion of qualified privilege. The defamation claim fails. The letter was revisited on the basis that the alleged defamatory representations were misleading or deceptive or likely to mislead or deceive in contravention of s 52 of the TPA. The letter was, on the face of it, a letter of demand asserting rights on behalf of UWA in respect of Dr Gray. It was addressed to a publicly listed company comprising professional and business people with the resources to obtain proper legal advice. It was a letter of demand from a legal practitioner on behalf of a client addressed to a commercially sophisticated recipient, it was never going to be accepted at face value or to raise a belief unexamined that Dr Gray had engaged in the conduct alleged. In my opinion there is no basis to the cross-claim for misleading or deceptive conduct founded on the letter of demand. Dr Gray's cross-claim against UWA is dismissed in its entirety. In paragraph 195 of the cross-claim Sirtex repeated paragraphs 162 and 164 to 171A of the defence. Paragraph 162 pleaded the incorporation of Sirtex in connection with the venture capital fundraising from Nomura/JAFCO and the conditions satisfied by that incorporation. Paragraphs 164 through to 171A pleaded the various agreements entered into in May 1997. Warranties provided by Dr Gray in the Gray Deed were pleaded. These included his warranty that to the best of his knowledge there were no pending claims or applications in respect of the patents, know how rights or intellectual property rights in any of the Acquired Inventions or the subject matter of any of them other than the patent applications transferred to Sirtex by the Gray Deed and the CRI Deed. Another warranty cited was that there was no allegation or threat of infringement of any rights by reason of use of any of the acquired inventions that had been made against any person. (b) communications between him and UWA between 1997 and 2000 which included assertions by UWA of its claim to ownership of some or all of the acquired inventions. The documents referred to included letters from Professor Barber to Dr Gray of 20 February 1997 and 5 March 1997, a letter from Professor Landau to Dr Gray of 5 March 1997 and the letter from Professor Robson to Dr Gray of 19 November 1997. In addition, Sirtex relied upon the letters from Professor Schreuder to Dr Gray on 17 June 1999, 7 October 1999 and 9 November 1999 as well as Dr Gray's letters to Professor Schreuder dated 28 June 1999, 16 July 1999 and 17 November 1999. Sirtex alleged that at all times on and after 1 May 1997 until receipt of the solicitor's letter of demand to Sirtex dated 26 October 2004, Dr Gray maintained that no person other than Sirtex had, or claimed any entitlement to each of the acquired inventions. The reference to s 232 of the Corporations Law of Western Australia may be taken, as at 2000, to be a reference to s 180 and s 181 of the Corporations Law as it stood in 2000 following the enactment of the Corporate Law Economic Reform Package Act 1999. Dr Gray took the point in closing submissions that although paragraph 171A of the defence was incorporated in the cross-claim there was no attempt made to advance an independent claim against him for breach of his duties to Sirtex. In closing oral submissions, counsel for Sirtex submitted, and I accept, that the case had been conducted on the basis that the claim against Dr Gray of breach of his duty to Sirtex was independent of the outcome of the UWA proceedings against Sirtex. No relevant prejudice was demonstrated on the part of Dr Gray. There was no unfairness to him in the way that Sirtex put its case in closing submissions and he met it in his. I will therefore deal with the cross-claim on the basis submitted by Sirtex. I do not consider that Dr Gray was required, in the discharge of his duties to Sirtex, to specifically refer to the letter sent to Dr Chen in 1994 by Wray & Associates. Nor do I consider that the 1997 exchange between himself and Professor Barber required disclosure. Professor Barber flagged the possibility that he doubted that the identification of intellectual property ownership between CRI and UWA would in future be as clear cut as he considered it was when he sent his letter of 22 January 1997. The focus of their exchange was otherwise on the possible conflict of interest that Dr Gray might have as a director of Paragon Medical and an employee of UWA. The November 1997 letter from Professor Robson related primarily to his directorship of Paragon Medical at the time. In my opinion the heart of the case by Sirtex against Dr Gray is to be found in Dr Gray's non-disclosure to Sirtex of the correspondence from Professor Schreuder in 1999. As Sirtex submitted, the correspondence indicated that UWA claimed to be entitled to some or all of the patents then being exploited by it. Dr Gray accepted that if the allegations in Professor Schreuder's letters were true, they would be very important for Sirtex. He said that in his view the allegations were spurious. Sirtex submitted that he could not reasonably have held that view. The allegations led to substantial litigation against it. Although Dr Gray had obtained legal advice in respect of the correspondence he did not give Sirtex the benefit of it. Sirtex submitted that it was a breach of Dr Gray's obligations as a director to fail to disclose the correspondence. In his closing submissions dealing with the merits of the Sirtex cross-claim, Dr Gray met the allegation of non-disclosure of Professor Schreuder's letter by arguing that he had given significant disclosures to Mr Cherry of Freehills. The disclosures he relied upon related to his involvement with Dr Burton working together at the University of Melbourne before their move to Perth and the work they had done there in relation to precipitation treatment of resin microspheres. Mr Cherry, he said, was aware that he had been working on the SIRT technology in 1983 with Dr Burton. Dr Gray's submissions also referred to a note of a telephone conversation between himself, Sandeep Mann and Ben Davey of Freehills on 24 March 2000. UWA stoush. Unfavourable terms left on. Potential conflict couple of years ago. Now not so. Quadruple cost of SIR-Sphere at Perth Hospitals RPH not related. Seek permission issue made. Mr Cherry was said to have had experience as early as 2000 that universities have polices and regulations relating to intellectual property. He had been a lecturer at Monash University in 2000. He recognised that UWA might well have a policy relating to intellectual property ownership. Dr Gray also referred to Mr Cherry's understanding, by 13 March 2000, that clinical trials were carried out by Dr Gray in his capacity as a Professor at UWA. He considered the need to check whether UWA had terms relating to intellectual property ownership in its professorial staff as he understood that many universities did have such terms. Dr Gray said this was sufficient to put Sirtex on notice of the potential for UWA to claim an interest in intellectual property. Dr Gray further submitted that he was entitled to view Professor Schreuder's correspondence of 1999 as part of a campaign intending to force him to resign from UWA. His resignation effectively ended UWA's complaints. They did not respond to his correspondence. I do not consider that the "disclosures" relied upon by Dr Gray and arising out of his communications with Mr Cherry and the other Freehills solicitors discharged the duty that he undoubtedly owed to Sirtex to draw to its attention the 1999 correspondence from Professor Schreuder. That correspondence indicated the possibility that UWA could inquire into whether it had interests in the relevant intellectual property. It was immaterial to that duty that Professor Robson was behind the letter or that Dr Gray thought it might "go away". It was a breach of his duties, including his statutory duty under s 180 and s 181, as a director of the company, not to disclose it. Having regard to his provision of the Barber letter of 20 February 1997 and his answers to the due diligence questionnaires, Dr Gray's silence on the 1999 letter was, in my opinion, misleading or deceptive. That is to say, the circumstances of his silence were such as to convey the wrong impression that no possibility existed that UWA had or was likely to be interested in the intellectual property underpinning the Sirtex float. In my opinion Sirtex is entitled to relief in respect of Dr Gray's breaches of his duties as a director and for misleading or deceptive conduct in contravention of s 10 of the Fair Trading Act 1987 (WA). Had it been aware of the correspondence it would, in all probability, have been advised to make further inquiries of UWA. It would either have been notified of a potential claim or would have negotiated a release for some consideration, perhaps by way of a share issue. It lost the opportunity to so resolve the matter with UWA and has been exposed to this litigation. The fact that the litigation was unsuccessful does not affect the Sirtex causes of action against Dr Gray in respect of his duties as a director and in respect of the claim for misleading or deceptive conduct. Sirtex is entitled to compensation or damages for the loss which it has suffered as a result of opportunity to avoid the instigation of these proceedings and to resolve matters in advance with UWA. The measure and assessment of damages will be a matter for a separate hearing if the quantum cannot otherwise be agreed between Sirtex and Dr Gray. Counsel for Sirtex indicated in argument that the recovery it would seek from Dr Gray would be related to the costs of the proceedings. If that is so, having regard to the outcome of the proceedings, the compensation or damages should be able to be agreed. Sirtex also sought to erect a rather elaborate case of fraud against Dr Gray based upon a constellation of circumstances and events. It is unnecessary to make any such finding. The finding of misleading or deceptive conduct and breach of the duty as a director of Sirtex does not require any finding of fraud. The breach of warranty claim was posited on UWA succeeding against Sirtex. The claim for misleading or deceptive conduct against CRI was based upon its provision of the Barber letter to Nomura/JAFCO and Sirtex. Again the claim, as put in the closing submissions, was posited on the UWA claim being successful. The Sirtex cross-claim against CRI will be dismissed. CRI took no part in the proceedings so there will be no order as to costs on the cross-claim. He alleged that on or about October or November 1993 she falsely represented to Dr Gray that she was the inventor or an inventor of the invention specified in the DOX-Spheres provisional application ultimately filed on 18 November 1993. Dr Gray sought a declaration against Dr Chen that she "had no interest at any particular time in the patent application [sic] referred to in paragraph 38 of the further substituted statement of claim". Dr Chen denied any false representation as alleged. She claimed that she was the inventor or at least an inventor of the invention specified in the provisional specification. I have read the submissions of both Dr Gray and Dr Chen in support of and in opposition to the cross-claim. I am unable to see the basis upon which Dr Gray can contend that he has an interest sufficient to warrant the granting of a declaration. Although I have made findings adverse to Dr Chen in the context of the dispute between UWA and Dr Gray, I decline, as a matter of discretion, to make a declaration. In any event the terms of the declaration sought are meaningless. There can be no interest in an application. The cross-claim by Dr Gray against Dr Chen is dismissed. In the circumstances that Dr Chen's factual contentions did not succeed there will be no order as to costs. I certify that the preceding (1619) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. 1. It is convenient to summarise their contents. SIRT 1 . The invention title was "Polymer based radionuclide containing microspheres". The applicant was Sirtex Medical Ltd and the actual inventor, Bruce Gray. The detailed description of the invention referred to irradiation of Yttrium oxide to form the isotope Yttrium 90 which was solubilised. Ion exchange resin was provided as an aqueous slurry of microspheres having a particle size of 20 to 50 microns, preferably 30 to 35 microns. Yttrium 90 solution was added to the slurry to absorb the Yttrium 90 onto the microspheres. The Yttrium 90 was precipitated as a phosphate salt to stably incorporate it into the microspheres. The resulting product would have a high pH which could cause serious side effects in a patient. To decrease the pH the microspheres were washed to remove unprecipitated Yttrium. It was very important that the pH of the microspheres suspension was to be lower than 9.5 and preferably less than 9 and, most preferably, less than 8. Mechanisms for providing a suspension of the required pH were described. The technique of Selective Internal Radiation Therapy was also described as involving either laparotomy to expose hepatic arterial circulation or insertion of a catheter into the hepatic artery via the femoral brachial or other suitable artery. Angiotensin-II could be infused to redirect arterial blood to the metastatic tumour component of the liver and away from normal parenchyma. Repeated injections of the microspheres were made until the desired radiation level was reached. The field of the invention was said to relate to a particulate material comprising a polymer, particularly a polymer and a radionuclide, to a method for the production thereof, and to methods for the use of the particulate material. In a specific aspect it related to microspheres comprising a polymer and a radionuclide such as radioactive Yttrium and to their use in the treatment of cancer in humans and other mammals. There were some 23 claims. Claim 6. The particular material according to claim 1 wherein the polymeric matrix is an ion exchange resin. Claims 7 to 10 specified different varieties of ion exchange resin including, in claim 10, an ion exchange resin comprising polystyrene partially cross linked with divinyl benzene. Claims 11 and 12 covered various radionuclides, claim 12 relating specifically to Yttrium 90 . Claim 13 specified a microsphere and in claim 14 a particulate material having a diameter in the range of from 30 to 35 microns comprising a copolymer comprised of styrene and divinyl benzene and precipitated Yttrium 90 . Claims 15 to 17 related to the process for the production of the microspheres. Claims 18 to 23 related to methods of administration and the use of the particulate material. 2. Dr Gray was shown as the actual inventor and applicant and also as the nominated person to whom the patent was to be granted. Davies Collison Cave were the Patent Attorneys. An international application claiming priority from 54724/94 was filed on 20 January 1995. It was allocated a number PCT/AU95/00027 through the PCT system and published by the World Intellectual Property Organisation (WIPO) on 27 July 1995. It entered the Australian national phase and was allocated Complete Patent Application number 15279/95 entitled "Particulate material". It was open to public inspection on 8 August 1995 and accepted on 6 March 1998. It was sealed on 13 August 1998 and given Australian Patent No 690630. 2.2 Complete specification in connection with application 54724/94, filed 21 January 1994. It was said to relate to the treatment of cancer in mammals by the use of small hollow particles (collectively called microspheres) containing a radioactive substance. They were designed to be administered into the arterial blood supply of the organ to be treated whereby they become entrapped in small blood vessels of the target organ and irradiate it. The claims defining the inventions focussed upon the methods for the production of hollow microspheres. Essential steps relating to grinding to a fine powder, combining base material with a suitable binder, spray drying the slurry and thermal spraying of the spray dried particles were referred to. The production of microspheres having a diameter from 10 to 200 microns was claimed in one claim. The use of Yttrium or any salt of Yttrium as the basic element of the microspheres was also claimed. 2.3 International application PCT/AU95/00027, filed at Australian Receiving Office on 20 January 1995 . This invention is described as "Particulate Material". It was said to relate to a particulate material comprising small hollow or cup shaped ceramic particles called microspheres, a process for their production and methods for its use. The claims in this specification included radioactive particulate material comprising hollow or cup shaped ceramic microspheres comprising a beta or gama radiation emitting radionuclide and having a diameter in the range of from 5 to 200 microns (claim 5). Narrower claims defined the material as Yttrium and diameters in the range from 20 to 80 microns. A process for the production of the material by forming aggregates of powdered base material with a suitable binder and thermal spraying to melt the base material and vaporise the binder to form hollow or cup shaped microspheres was also claimed. Related method and use claims were made. 2.4 Entry in the Patents Register in respect of Patent Number 690630 . This certified entry showed Paragon Medical as patentee and Dr Gray as inventor of an invention entitled 'Particulate material' and was given Application number 15279/95. The term of the patent was 20 years commencing 20 January 1995. It was stated to take priority from number 54724/94 dated 21 January 1994. The entry also recorded a change of name of Paragon to Sirtex, registered on 14 June 2000. 2.5 Patent specification 690630 . The invention entitled "Particulate Material" showed Paragon as applicant and Dr Gray as inventor. Again it related to the production of hollow or cup-shaped ceramic microspheres comprising the relevant radionuclide and having a diameter from 5 to 200 microns. 3. It was dated 15 November 1993. The address for service in Australia was shown as Davies Collison Cave. A letter from IP Australia indicated that an International Application claiming priority from PM2492 was filed on 17 November 1994. The International Application through the PCT system was allocated number PCT/AU94/00708 and was published by WIPO on 26 May 1995. The International Application entered Australian national phase and was allocated a Complete Patent Application No 81363/94 entitled "Controlled release preparation". That application was open for public inspection on 6 June 1995, accepted on 2 June 1998, sealed on 5 November 1998 and given Australian Patent No 693821. 3.2 Provisional Patent Application PM2492, filed on 18 November 1993 . This was a provisional specification for an invention entitled "Controlled Release Matrix for Drugs and Chemicals". The invention was said to describe a novel formulation for the transport and controlled release of a variety of therapeutic and chemical agents using metal ions-drug interaction as a release control mechanism in combination with either a degradable or non-degradable ionic supporting matrix. One particular application of the formulation was to transport cytotoxic drugs designed to be used in patients and animals for the treatment of cancer. The concept of using metal ion-drug complexes in combination with ionic polymers could also be used for the transport and controlled release of other drugs and chemicals for a variety of other applications. The invention was said to involve the use of metal ion complexation of the active drugs as a mechanism to control their release. Experimental results demonstrated that this resulted in many advantages over other formulations of drug-matrix complexes such as high loading, reduction of the initial burst release of drug, control of drug release and biodegradability. 3.3 International Application PCT/AU94/00708 filed 17 November 1994 . This related to the invention entitled "Controlled Release Preparation". There were some 15 claims. Subsequent claims defined the active compound as pharmaceutically active (claim 4). A cytotoxic or cytostatic drug (claim 4), doxorubicin, daunorubicin or cisplatin (claim 6). The claim was made for an ionic polymer matrix comprising a biodegradable cross linked albumin/dextran sulphate matrix (claim 7) and a preparation wherein the complexing agent was a metal ion (claim 8) and in which the metal ion was Fe (claim 9). The loading of the ionic polymer matrix with Fe-complex doxorubicin was claimed (claim 10) and with chitosan-complex cisplatin (claim 11). Methods of treatment and use were also claimed. 3.4 Entry in the Patents Register in respect of Patent Number 693821 . This entry showed Application No 81363/94 entitled "Controlled release preparation" as held by Paragon which changed its name to Sirtex. The inventors were shown as Yan Chen and Dr Gray. Its term was 20 years commencing 17 November 1994. 3.5 G ranted patent specification in respect of Patent Number 693821 . This was a certified copy of Patent Number 693821 entitled "Controlled release preparation" in the name of Paragon as applicant and showing Yan Chen and Dr Gray as inventors. It contained the same claims as set out in PCT/AU94/00708. 4. The applicant's name was "Bruce Gray". 4.2 Status report and Provisional Patent Request in connection with provisional patent application PN 9782, filed on 10 May 1996. " The applicant was Dr Gray and the actual inventor was Dr Gray. A letter from IP Australia indicated that the application was given number PN9782. An International Application claiming priority from it was filed at the Australian Receiving Office on 30 May 1997. The international application, through the PCT system, was allocated number PCT/AU97/00287 and was published by WIPO on 20 November 1997. The international application entered Australian national phase and was allocated a complete patent application number 26277/97 entitled "Targeted hysteresis hyperthermia as a method of treating diseased tissue". The application was open for public inspection on 5 December 1997 but never entered the Australian national phase. 4.3 Provisional patent application PN9782, filed 10 May 1996. The provisional specification was signed by Dr Gray and dated 10 May 1996. It appended two documents. The first described the concept of the invention in greater detail, while the second described the preliminary investigations said to confirm its scientific credibility. The first document was entitled "Patent Application for Tumour Hyperthermia by Hysteresis Heating". The second did not bear a title. It reported, under the heading "Scope of This Study" on the minimum power levels required, possible health and environmental effects and engineering constraints. 4.4 International application PCT/AU97/00287 filed on 9 May 1997 . The invention was entitled "Targeted Hysteresis Hyperthermia as a Method for Treating Diseased Tissue". Magnetic material with different characteristics was covered by claims 4, 5 and 6. These details indicated the applicant in respect of provisional application PP0081 was Paragon under the invention title "Improved targeted hysteresis hyperthermia as a method for treating diseased tissue". The provisional filing date was 29 October 1997. 5.2 Certified Provisional Patent Application PP 0081 . This is a provisional specification for an invention entitled "Improved Targeted Hysteresis Hyperthermia as a Method for Treating Diseased Tissue". This is a copy of the provisional specification in connection with the application PP0081 and entitled "Improved Targeted Hysteresis Hyperthermia as a Method for Treating Diseased Tissue". The application was filed by Paragon. The description of the invention follows that in the provisional specification mentioned in the preceding entry and bears the same title. 6.2 S tatus report and Provisional Patent request in connection with Provisional Patent Application PP 8998, filed on 3 March 1999 . The patent request accompanying the provisional specification was lodged on behalf of Paragon as applicant under the invention title "Magnetic Material". An International Application claiming priority from PP 8998 was filed at the Australian Receiving Office on 3 March 2000. The international application was allocated the number PCT/AU00/00151 and published by WIPO on 8 September 2000. It entered Australian national phase and was allocated a Complete Patent Application Number 28952/00 entitled "Heating of magnetic material by hysteresis effects". Ultimately it lapsed and was advertised in the Official Journal of 8 August 2002. 6.3 Provisional Patent Application PP 8998, filed 3 March 1999 . The invention was entitled "Magnetic Material". It was said to relate to "...magnetic materials that exhibit high magnetic hysteresis heating in a cyclic magnetic field".

patents inventions inventions made by employees academic staff of university employed to research whether duty to invent whether implied term in contract conferring rights on university no duty of non-disclosure no duty to invent significant requirement for external funding no implied term inventorship discovery inventive concept identification of inventive concept specification or claim by claim analysis unjustified threats of infringement or similar proceedings claim for constructive trust in patent rights whether "similar proceedings" not similar proceedings no unjustified threats contract employment implied term invention academic staff employment to teach and research whether duty to invent whether implied term vesting invention rights in university no implied term delegated legislation regulations university regulation making power promulgation requirement as condition of operation content of requirement construction whether regulations may validly acquire intellectual property rights from academic staff presumption against alienation or interference with property rights no valid authority to acquire or interfere with property rights by regulation not related to control or management of university property trade practices misleading or deceptive conduct representations future matters application of s 51a requirement to plead or demonstrate implied representations as to reasonable grounds corporations directors director's duties failure to disclose material information to company in due diligence prior to float information indicating risk of claim against intellectual property held by company loss of opportunity to company to avoid claim by negotiation or otherwise tort defamation qualified privilege malice letter of demand whether content and timing of letter of demand actuated by malice intellectual property

The cheese, when it was offered for sale by retailers to consumers, was packaged in plastic wrapping which contained the respondent's logo "Harvey Fresh" and also the words: "Fresh from South West" and "Truly 100% Western Australian owned". During the period 23 November 2008 to 25 January 2009, the respondent also caused advertisements to be published in newspapers circulating in Western Australia advertising the availability for sale of the cheese. The advertisements for the cheese were published in The West Australian newspaper on 4 December 2008; the South West Times (variously published as the Harvey Reporter , the Margaret River Times , and the Busselton/Dunsborough Times ) in the editions for the weeks beginning 27 November 2008 and 18 January 2009; and in the Bunbury Herald on 23 November 2008. Each advertisement contained images of the cheese and the words: "Truly 100 per cent West Australian...it's what makes Harvey Fresh different" and other statements which implied that the cheese was produced in Western Australia. During the relevant period, the respondent sold 5,471 cartons of the cheese. In fact, the cheese was not produced in the South West of Western Australia. The cheese was produced by Fonterra Cooperative Group Limited or the Murray Goulburn Co-operative in Victoria. The cheese was then sold to Marsh Dairies in Victoria in 20 kilogram blocks and Marsh Dairies cut the cheese into one kilogram blocks, packaged and labelled it and sold it to the respondent. On 7 May 2009, the applicant commenced this proceeding against the respondent alleging that the respondent's conduct, in representing that the cheese was produced in Western Australia, when it was not, contravened s 52 and s 53(eb) of the Trade Practices Act 1974 (Cth) (the TP Act). Those sections respectively preclude a corporation from engaging in misleading or deceptive conduct, or making false or misleading representations as to product origin, in trade or commerce. The respondent by its defence admitted the contraventions of the TP Act. The applicant and the respondent have signed a statement of agreed facts and have also agreed to a minute of proposed consent orders. When deciding whether to make consent orders in the terms proposed by parties to a proceeding, the Court gives considerable weight to the fact that parties have reached a consensus as to the disposal of their controversy. A Court will not lightly decline to give effect to the consensus reached between the parties. However, the Court does not simply accept that because the parties have agreed to the making of the proposed orders, that those orders should be made. The Court takes into account the public interest and assesses whether the proposed orders are at least consistent with the public interest. This principle applies to the resolution of private litigation by consent orders or undertakings. A fortiori it applies to proceedings brought by the Crown or public or statutory authorities to enforce the law in the public interest. The court has a responsibility to be satisfied that what is proposed is not contrary to the public interest and is at least consistent with it. This is because it records the Court's disapproval of the contravening conduct. It also serves to vindicate the applicant's claim that the respondent has contravened the TP Act and also provides assistance and guidance to the public, in relation to the operation of the TP Act and informs consumers of the contravening conduct of the respondent. The Court has the power under s 80 of the TP Act to grant injunctions, whether or not there is a continuing threat of contravening conduct. In my view, the contraventions in this case are serious. This is because the respondent has deliberately adopted a marketing strategy based on the representation that its products are produced in Western Australia. This marketing strategy is designed to appeal to the desire of Western Australians to promote Western Australian products and interests. This is a powerful marketing tool founded on the implicit assertion by the respondent of a common bond between Western Australian consumers and the respondent and its products. Accordingly, in my view, it is important that the faith that Western Australian consumers place in the respondent's statements of product origin is not misplaced or undermined. For these reasons, it is, in my view, appropriate that the injunction be granted. The making of orders that the respondent conducts an educational program for its employees involved in marketing and advertising the respondent's products is consistent with the public interest. The educational program will lead to the respondent's employees learning of the respondent's statutory obligations to consumers and the importance of compliance with the standards imposed by the TP Act. The orders for corrective advertising are also consistent with the public interest. As I have already mentioned, the marketing strategy is based on a representation of product origin which is designed to appeal to the good will of fellow Western Australians. It is important, therefore, that in making representations as to product origin the respondent complies with the law. It is also important for Western Australian consumers to know when the respondent has not done so. The corrective advertising complements the making of the declarations. Accordingly, in my view, the orders for corrective advertising should be made. There is nothing objectionable about the further orders proposed. As to the order that the respondent should pay the applicant's costs in the sum of $12,000, that is consistent with the admission by the respondent of its contravention of the TP Act. The last order is that the name of the respondent should be changed. That is also an appropriate order. Accordingly, I will make orders in terms of the minute of proposed consent orders. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.

representations by the respondent on labelling and in newspaper advertisements that cheese offered for sale to consumers in western australia was produced in western australia the cheese was actually produced in victoria whether consent orders for an injunction and corrective advertising should be made. trade practices

Both applicants are general insurers and are authorised under Pt III Div 2 of the Act to carry on insurance business in Australia. The second applicant, Calliden Limited (Calliden), is a wholly owned subsidiary of the first applicant, Calliden Group Limited (CGL). CGL wishes to transfer its insurance business to Calliden. CGL would then become a non-operating holding company (NOHC), and would apply for an "NOHC authorisation" under s 18 of the Act. 2 CGL and Calliden applied to the Court for its confirmation under s 17F of the Act of a scheme under which the whole of CGL's insurance business would be transferred to Calliden. 3 Section 17C(2) of the Act provides that an application for confirmation of such a scheme may not be made unless certain conditions set out in that subsection are complied with. One of those conditions is that referred to in para (c), namely, that "an approved summary of the scheme has been given to every affected policyholder". Section 17C(5) , however, provides that this Court may dispense with the need for compliance with that requirement in relation to a particular scheme if it is satisfied that, because of the nature of the scheme or the circumstances attending its preparation, compliance is not necessary. 4 The applicants included in their application a claim for interlocutory relief in the form of an order pursuant to s 17C(5) that the need for them to comply with s 17C(2)(c) be dispensed with in relation to certain affected policyholders. 5 On 11 October 2007 I made such a dispensing order subject to certain conditions. The order I then made appears at the front of these reasons for judgment. These reasons include my reasons for the making of that interlocutory order. 6 On 15 November 2007, I made orders confirming the scheme under s 17F of the Act subject to one modification: the scheme was originally to take effect at 11.59 pm on 31 December 2007 but the modification is that the time has been advanced to 11.59 pm on 15 November 2007 --- the date of the making of the confirming orders. Those orders also appear at the front of these reasons for judgment, which include my reasons for confirming the scheme. In about February 2000, after suffering considerable operating losses in the immediately preceding years, CGL was placed into run-off. Since that time, it has been actively commuting its inward reinsurance contracts. 8 Further detail appears in an affidavit of Mark James Moyes sworn 20 September 2007. Mr Moyes is the Managing Director of 3 red Pty Limited (3 red), which operates an insurance consultancy business with a specialisation in reinsurance and was retained by CGL to assist it in connection with the scheme. Mr Moyes states that in the late 1980s and early 1990s, the worldwide reinsurance market was very competitive with downward pressure on rates. The market was affected by several significant catastrophic events which Mr Moyes identifies. In the result, capital available to the reinsurance industry was constrained and reinsurance rates increased. This created favourable market conditions for new entrants. Against that background CGL was incorporated in 1993 as a listed company on the Australian Stock Exchange (ASX). 9 CGL acted primarily as a reinsurer with a client base mostly made up of insurers, other reinsurers and Lloyds syndicates. Most of its business was written offshore, particularly in the United States of America and Europe. On average, only about five percent of its annual earned premiums originated from Australian based clients. 10 During 1999, CGL undertook some limited business in the Australian direct insurance market through an insurance underwriting agency, Insure That Pty Ltd (Insure That). CGL and Insure That entered into an agency agreement on 1 July 1999 which ran until 31 March 2000. During that nine month period CGL issued policies to approximately 3,500 policyholders through the Insure That agency. 11 Peter Robin Hayward, a director of Insure That, has supplied a spreadsheet containing a list of all Insure That policyholders whose policies were underwritten by CGL during that period, with the exception of crop insurance policies (as to which, see [50]---[54] below). 12 According to Mr Moyes, in 1995, 1996 and 1998 CGL opened various overseas branch offices. In 1996 it established a subsidiary in Monaco called Monegasque de Reassurances SAM (Monde Re). 13 As at 31 December 1998, CGL's shareholders' equity was approximately $515.7 million, but one year later on 31 December 1999 it was down to $52.9 million and CGL was placed into run-off. CGL then ceased underwriting and closed its overseas offices. Its staff numbers were reduced from approximately 130 to 30, and the number continued to fall as the run-off progressed. 14 Upon entry into its run-off phase, CGL had 1,942 policyholders (excluding the Insure That policyholders) and 21,620 contracts of insurance on its books. 15 During its run-off phase, CGL undertook a commutation process. Between 31 December 1999 and the date of Mr Moyes's affidavit, 20 September 2007, CGL commuted most of its reinsurance policies so that it now has only 937 policyholders (excluding the Insure That policyholders) in respect of approximately 5,296 contracts. 16 Further, as at 31 December 1999, CGL's total liabilities were $1.4 billion, but as the commutation process has advanced, the amount of its total liabilities has fallen. By 31 December 2000, they were down to $834.4 million; by 31 December 2001, $510 million; by 31 December 2002, $199.5 million; by 31 December 2003, $53.2 million; and by 30 June 2007, less than $4 million. 17 Adrian Diggelmann, the Chief Financial Officer of CGL and of its wholly owned subsidiaries including Calliden (together, the Calliden Group), has also provided affidavit evidence of the corporate structure and businesses of CGL and Calliden. 18 CGL is the direct holding company of six subsidiary companies. They include Calliden, and two other companies to which reference will be made, Mansions of Australia Limited (Mansions), and Calliden Insurance Limited (CIL) which was known as Australian Unity General Insurance Limited (Australian Unity) prior to 1 August 2007. CGL is also the indirect holding company, through Calliden, of Calliden Trademarks Pty Ltd. In addition, CGL is the owner of 50 percent of the issued share capital of a further five companies. It recovers these costs from the other companies within the Calliden Group. This is APRA's Minimum Capital Requirement (MCR). The MCR is defined in GPS 110 para 5 as the "required level of capital for regulatory purposes". Once an insurer's MCR has been determined in accordance with GPS 110, its Capital Adequacy Measure (CAM) can be calculated. An insurer's CAM is determined by dividing its total base capital (also determined in accordance with GPS 110) by its MCR. APRA requires that the CAM be at least 1.2 times the MCR. 22 A joint actuarial report of Kevin Gomes and Geoff Atkins, respectively the approved actuaries of CGL and Calliden, addresses the effect of the scheme on CGL's MCR and CAM (see [85]---[91] below). (b) The second CAM concerns CGL's ongoing operations. Following the acquisition by CGL of the Australian Unity general insurance business, that is, the acquisition of 100 percent of the issued share capital of Australian Unity General Insurance Limited, which is now known as Calliden Insurance Limited, and 100 percent of the issued share capital of Mansions of Australia Limited (see below), the second CAM has been the MCR required by GPS 110 plus a further amount of 1.2 times the adjusted MCR of Calliden, Calliden's own MCR being required to be 1.5 times the APRA minimum standard. It conducts a general insurance business as an APRA-authorised general insurer pursuant to Part III Div 2 of the Act. 25 For the year ended December 2006, Calliden's written premiums grossed approximately $52 million. 26 APRA has determined that Calliden must have an MCR 1.5 times the minimum required by GPS 110. Mr Diggelmann states that in his experience a 1.5 times requirement is commonly applied to start up insurers to reflect the increased risk associated with a newly established underwriter. 27 On 31 July 2007, CGL completed an acquisition of the issued share capital of CIL and Mansions. This effected the acquisition of the Australian Unity general insurance business and a 50 percent interest in Farmers' Mutual Insurance Limited (due to Mansions' 50 percent shareholding in that entity). The purchase price for the acquisition was $62.5 million, funded by way of cash and scrip. 28 The acquisition of the Australian Unity general insurance business is relevant to the proposed scheme for two reasons. First, the acquisition has resulted in CGL's CAM being altered so that the current policyholders of CGL would enjoy a higher CAM following the implementation of the scheme (that is, if their policies become policies of Calliden) than if they were to remain with CGL. The respective Boards of Directors within the Calliden Group may decide to streamline further by placing the general insurance business wholly into either CIL or Calliden. The value of the liabilities was determined in accordance with the actuarial report to which I refer below. Mr Porteous has worked in the Australian insurance and reinsurance industry since September 1998. At that time he commenced employment with CGL and he remained employed by CGL until April 2005. From then until his commencement with 3 red on 1 April 2006, he was employed successively by two other companies. Mr Porteous deposed to steps that he took on behalf of 3 red in its role as a consultant to CGL. One task that he undertook was that of attempting to identify CGL's reinsurance policyholders. That information is housed by CGL on a combined computer software and operating system package called the "RAC System" (the RAC database). 35 Mr Porteous explained that the addresses entered on the RAC database for policyholders were often incomplete or were not entered at all. He stated that this was due to the fact that the reinsurance was placed through a reinsurance broker who often did not provide the address of the policy holder. 36 In late 2004 and early 2005, and again more recently, Mr Porteous took steps to identify the addresses of the "uncommuted reinsurance policyholders of CGL". Unfortunately, he came across instances where several entities were insured by the one policy, but the RAC database had listed only one of the insureds. The RAC database allowed for the listing of only one entity, per entry. 37 Mr Porteous also stated that in his experience no information was ever deleted from the RAC database, even if a policy ceased to operate or was commuted. The RAC database contains details of all individual contracts of reinsurance under which CGL was the reinsurer, including those that had ceased to operate and those that had been commuted. 38 Mr Porteous explained that in practice, CGL's employees did not use the RAC database in their day-to-day tasks, such as accessing policyholder information and producing financial and managerial reports. Rather, they used a "Microsoft Access database" onto which the data from the RAC database was downloaded regularly. The Microsoft Access database is more easily accessible and manipulable than the RAC database is. Mr Porteous stated, on the basis of his experience, that each month, CGL'S IT Manager, Ray Caldwell, would download the contents of the RAC database onto the Microsoft Access database. He said that the Microsoft Access database contains a complete set of CGL's records concerning its reinsurance policyholders. The searches that Mr Porteous conducted were of the Microsoft Access database. 39 Mr Porteous put into evidence a spreadsheet of all reinsurance policyholders of CGL (Policyholders Spreadsheet). The Policyholders Spreadsheet shows all insurance companies, reinsurance companies and Lloyds syndicates who had entered into contracts of reinsurance with CGL and who could therefore make claims on CGL. 40 No claims had been notified to CGL from the date of the currency of the Microsoft Access database (27 April 2007) and the date of Mr Porteous's affidavit (20 September 2007), and in that period there was only one commutation, namely, that relating to AXA Global Risks, United Kingdom (AXA UK). Although AXA UK was included in the Policyholders Spreadsheet, on 18 September 2007, CGL and AXA UK agreed to the terms of the commutation of AXA UK's reinsurance. In these circumstances, AXA UK should no longer be treated as a policyholder. 41 The Policyholders Spreadsheet identified 964 current policyholders of CGL (including AXA UK). Their names appeared in a column headed "Cedant Name per RAC". In a column headed "2005 Address Details" Mr Porteous included the policyholders' addresses that he verified in his investigation in late 2004 and early 2005. Where there was no address, Mr Porteous set about identifying the address of the individual policyholder. In some cases, he was able to do so by reference to worldwide insurance industry directories. He also resorted to the internet and searched various websites. He inserted addresses discovered in these ways into the Policyholders Spreadsheet in a column headed "2007 Address Details". Each had ceased operating and had closed and ceased to exist. There was no syndicate manager or other contact person whose details could be located by Mr Porteous. Mr Porteous explained that the Hawaii Hurricane Relief Fund was a statutory fund set up after Hurricane Iniki, which affected Hawaii in the 1992 storm season. The Fund had been closed in 1994 and no longer existed. The Protea Insurance Company was deregistered in South Africa with effect from 5 December 2001. The "Various Lloyds Underwriters Facultative" represented a reinsurance business that was administered by the reinsurance broker in such a way that CGL was never aware of the counterparties under each contract. CGL intended to write to the reinsurance broker responsible for the placement and administration of each of those contracts. There were in fact 82 individual contracts of reinsurance placed with CGL through eleven individual reinsurance brokers, and Mr Porteous set out a schedule of those brokers and their current addresses. The information containing outward reinsurance was also downloaded onto the Microsoft Access database on a monthly basis as part of the download of the entire suite of information housed on the RAC database. Mr Porteous ascertained that there were 163 current reinsurers of CGL as at 12 July 2007. He created an "Outward Reinsurance Spreadsheet" listing the names and countries of origin of the reinsurers. Of the 163 listed CGL reinsurers, Mr Porteous was able to find a current address for 104 of them, unable to locate a current address in the case of 32 of them, and the remaining 27 of them were reinsurers who were underwriting syndicates forming part of Lloyds of London, each of which syndicates had ceased operations, had closed and no longer existed. The first group was marked "OK", the second group "NA", and the third group "LL" on the Outward Reinsurance Spreadsheet. 46 Mr Porteous also searched the RAC database and obtained details of the reinsurance brokers who were responsible for the placement and administration of all contracts of reinsurance entered into by CGL. His search revealed that there were 209 reinsurance brokers involved with CGL as at the date of his search, 12 July 2007. Mr Porteous created a spreadsheet containing details of these reinsurance brokers (the Reinsurance Brokers Spreadsheet). Of the 209 CGL reinsurance brokers listed, Mr Porteous identified 185 whose addresses he could locate, and 24 whose addresses he could not locate, marked respectively "OK" and "NA" in the Reinsurance Brokers Spreadsheet. 47 Finally, Mr Porteous exhibited to his affidavit a copy of an Excel spreadsheet provided by Mr Hayward showing the names and addresses of the 3,524 individual policyholders of Insure That. 48 Harold Fredrick Kable, a director of Australia 2 Pty Limited (A2) which provides IT consultancy services to, inter alia, the insurance industry, provided affidavit evidence as to how the Excel spreadsheet of insurances effected by Insure That with CGL was prepared. He stated that since about 1 November 1999, Insure That has maintained lists of all of its policyholders on its computer software database known as "Titen". Mr Kable had worked as an IT consultant for Insure That since about July 1999, and A2 provided Insure That with IT consultancy services. One of Mr Kable's tasks at Insure That was to maintain and operate the Titen software, and he had an extensive knowledge of the way in which it operated and of its place in Insure That's business. 49 Mr Kable accessed the Titen system and isolated all of the insurance policies underwritten by CGL that were issued by Insure That at any time. He saved that information onto the Excel spreadsheet and emailed it to Mr Peter Hayward, the Managing Director of Insure That. Mr Kable stated that so far as he was aware, there were no insurance policies issued by Insure That underwritten by CGL that were not recorded in that spreadsheet, except for crop insurance policies. The crop insurance policies were on a standalone software system, with its own language that was not transferred to the Titen system. There was a problem in gaining access to the database relating to the crop insurance. 51 Mr Hayward of Insure That provided affidavit evidence in relation to his attempt, in response to the request by Mr Moyes of 3 red, to identify all insurance policies underwritten by CGL and procured by Insure That. He referred to the assistance he obtained from Mr Kable in relation to insurances other than crop insurances (see [48]---[49] above). 52 Mr Hayward confirmed that the data in relation to crop insurance was housed on a standalone database that was written in a language developed by a former IT consultant of Insure That (Crop Software Database) and was never transferred to Insure That's Titen software system maintained by Mr Kable. 53 The consultant who wrote the Crop Software Database had died. Mr Hayward was unable to access that database to gain a list of the crop insurance policyholders. He estimated the number of policyholders who took out crop insurance between July 1999 and December 1999 to be no more than 300, and possibly to be as few as 200. Mr Hayward was not able to give the names and addresses, however. 58 On 27 September 2007, APRA gave formal approval to the scheme documents sent to it on 21 September 2007. Also on that date, Mr Venkatramani of APRA, in his capacity as the Minister's delegate, provided a notice of go-ahead pursuant to the IAT Act. 59 On 28 September 2007, Mr Diggelmann caused to be served on APRA a copy of the application to this Court for its confirmation of the scheme and copies of all the affidavits and exhibits filed as at that date in this proceeding. On 4 October 2007, he caused APRA to be notified of the application to be heard on 11 October 2007 for the dispensation under s 17C(5) of the need for compliance with s 17C(2)(c) of the Act. At the same time, he advised APRA of the date that had been provisionally allocated for the final hearing (13 November 2007). The conditions were designed to ensure that the approved summary of the scheme was likely to come to the notice of the Class C policyholders identified by Mr Porteous and the crop insurance policyholders identified by Mr Hayward. The conditions related to the sending of the approved summary of the scheme by prepaid post to reinsurance brokers and to the last known address of each of the Class C policyholders, and in the case of the brokers, an appropriate form of covering letter. It was also proposed that there be a condition that notice (approved by APRA) of the intention to apply to the Court for confirmation of the scheme be placed in five nominated newspapers that have a wide circulation. 61 In the case of the crop insurance policyholders, the only condition was the one requiring publication of the APRA approved notice of intention in the five newspapers. 62 I was satisfied that the dispensing order under s 17C(5) of the Act should be made. 63 For the above reasons, on 11 October 2007 I made the dispensation orders as sought under s 17C(5) of the Act. The history of Monde Re was given in an affidavit of Stephen Fay, the Strategic Services Director at Calliden. As noted at [12], Monde Re was a subsidiary of CGL. It was incorporated on 23 December 1996. It entered into run-off in February 2000, following the suffering of significant underwriting losses in 1998 and 1999. 65 On 13 November 1997 CGL executed a deed poll in favour of persons entitled to cover pursuant to contracts of insurance or reinsurance issued by Monde Re. In the deed poll, CGL was called "Guarantor". The Guarantor must upon demand immediately pay the Insured any amount of Guaranteed Money not paid by the Insurer. The reason for the termination is that Monde Re was no longer writing reinsurance. 67 On 22 September 2005, at an extraordinary general meeting of Monde Re in Monaco, it was resolved to place Monde Re into voluntary liquidation and to appoint CGL, represented by Mr Fay, as liquidator. Mr Fay caused letters to be sent to all of the non-commuted policyholders of Monde Re calling for written proofs of debt by 22 December 2005. Between September 2005 and that date, he received three proofs of debt. The claims represented by those proofs were resolved. 68 On 22 August 2006 the liquidation of Monde Re was finalised and it was deregistered. As at the date of the deregistration, Monde Re had 223 uncommuted policies. All of the uncommuted policies expired by 2002 at the latest. So far as Mr Fay knows, no claims were made on Monde Re in respect of any of those uncommuted policies during the liquidation, notwithstanding that the policyholders were asked to submit proofs of debt if they thought they had a claim. 69 I accept the submission made by counsel for the applicants that the deed poll did not provide for insurance but was in the nature of a guarantee. Counsel referred to the distinction between contracts of insurance and other classes of contract including contracts of guarantee recognised in such cases as Prudential Insurance Company v Inland Revenue Commissioners [1904] 2 KB 658 at 662-664 per Channell J; Australian Health Insurance Association Ltd v Esso Australia Ltd (1993) 41 FCR 450; Seaton v Heath [1899] 1 QB 782 at 789, 792; Re Australian & Overseas Insurance Co Ltd [1966] 1 NSWR 558 per McLelland CJ in Eq. 71 I therefore agreed with counsel for the applicants that the deed poll had not been entered into as part of CGL's insurance business and that the applicants were not required to provide the approved scheme summary to the policyholders of Monde Re (unless, of course, they were also policyholders of CGL). 73 I do not find it necessary to refer to all of the evidence of compliance. However, one matter must be mentioned. Due to an oversight, the solicitors for the applicants made some very minor alterations to the form of the notice of intention and to the approval scheme summary. Both of those documents were referred to in my orders of 11 October 2007. Order 1(a)---(d) of the orders made on 11 October 2007 required that an approved summary of the scheme (meaning a summary of it approved by APRA) be sent with a view to notification to the Class C policyholders. Orders 1(e) and 2 of the orders made on 11 October 2007 required that a notice of intention in the form approved by APRA on 27 September be placed in five nominated newspapers on or before 16 October 2007. 75 The minor departures from the APRA-approved summary of the scheme and from the APRA-approved notice of intention signified that both s 17C(2) and the orders of 11 October 2007 were not complied with (it was a condition of the dispensation under s 17C(5) of the Act with the need to comply with s 17C(2)(c) of the Act that the orders be complied with). Upon becoming aware of the oversight, on Monday morning 15 October 2007 he telephoned APRA to advise it of the changes he had made. Later in the morning of 15 October 2007 he wrote to APRA, confirming his telephone advice. 79 APRA considered that it could not approve of the amendments retrospectively. It indicated, however, that it would have approved of them if its approval had been sought in advance. 80 The applicants submit that having regard to the minor and uncontroversial nature of the amendments, the Court should nonetheless confirm the scheme. 81 In Re Armstrong Jones Life Assurance Ltd (1997) 74 FCR 160, Emmett J had held that a provision in the Life Insurance Act 1995 (Cth) analogous to s 17C(2) of the Act did not lay down a condition precedent to the existence of jurisdiction in the Federal Court to confirm a scheme. In Re Royal & Sun Alliance Life Assurance Ltd [2000] FCA 1259 ; (2000) 104 FCR 37, Katz J adopted the same approach because his Honour did not think that Emmett J had been plainly wrong. In Re Insurance Australia Ltd [2004] FCA 524 ; (2004) 139 FCR 450, although with some doubt, I adopted the same approach, namely, of following Emmett J because I did not think his Honour was plainly wrong (at [63]). A similar approach was subsequently taken by Bennett J in Re MLC Lifetime Company Ltd (No 2) [2006] FCA 1367 at [11] . Perhaps predictably, I took the same approach in the present case in relation to the question of jurisdiction. 82 The changes made by the solicitors here were minor, uncontroversial and ameliorative. I had no hesitation in exercising my discretion not to allow those departures to stand in the way of confirmation of the scheme. 83 Helpfully, the applicants provided as an annexure to counsel's submissions a "Table of Compliance" listing in a column the paragraphs of APRA Prudential Standard GPS 410 and paragraphs of my dispensation order of 11 October 2007, and corresponding references to the evidence of compliance with the requirements imposed by GPS 410 and the orders. 84 I was satisfied that, subject to the matter mentioned above, there was compliance and that no policyholder had evinced any desire to oppose confirmation of the scheme. Their evidence took into account the fact that CGL and AXA UK had entered into a "Commutation and Release Agreement" dated 19 September 2007. By that agreement CGL undertook to pay to AXA UK some $212,515, upon receipt of which AXA UK released CGL from its liability as reinsurer. 86 The joint actuarial report referred to CGL's agreement on 6 July 2007 to purchase the Australian Unity general insurance business which included Mansions (an underwriting agency) and a 50 percent share in Farmers Mutual Insurance Limited, also an underwriting agency. 87 In their report, the actuaries considered the critical question of the impact of the scheme on the affected policyholders, being the inwards reinsurance policyholders of CGL. In table 4.1 in their report they summarised the financial positions of CGL and Calliden as at 31 December 2006, the date at which the most recent audited accounts of the two companies existed. The table showed the net assets of CGL as being $88,482,000 and those of Calliden as being $40,169,000. Table 4.6 stated the MCR and CAM for CGL both before and after acquisition of the Australian Unity businesses. Prior to that acquisition, the CAM was 5.4 and after that acquisition it was 1.3. That acquisition, however, had no impact on the capital adequacy of Calliden. 88 Table 4.7 gave a pro forma CAM as at 30 June 2007, prior to the scheme transfer but subsequent to the acquisition of the Australian Unity businesses. The CAM for CGL was 1.3 (as noted above) and that for Calliden was 3.4. 89 Table 4.8 gave the CAM for Calliden as at 30 June 2007 pre- and post-transfer pursuant to the scheme. Prior to the transfer, its CAM was 3.4 and, after it, its CAM would be 3.1. However, a CAM of 3.1 is still well above CGL's CAM of 1.3. 90 In summary, the "affected policyholders", that is to say, the policyholders of CGL, are substantially benefited by the scheme, whereas Calliden's policyholders are disadvantaged by the scheme, although only to a minor extent. Although the Act requires only the positions of the affected policyholders to be taken into account, the effect of the scheme on Calliden's policyholders is relevant to the exercise of discretion. 91 It was my view that the interests of the affected policyholders were more than adequately protected by the scheme, and those of the Calliden policyholders were disadvantaged only to such a minor extent that the disadvantage should not stand in the way of confirmation of the scheme. I certify that the preceding ninety-three (93) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

application under s 17f of the insurance act 1973 (cth) (the act) for confirmation of a scheme for the transfer of general insurance business by parent company to its wholly owned subsidiary dispensation order in relation to giving of approved summary of scheme to every affected policyholder sought and granted under s 17c(5) of the act distinction between contract of insurance and contract of guarantee guarantee given by deed poll by parent company in respect of insurance liability of its subsidiary. held : (1) contract of guarantee not a contract of insurance so that persons benefited did not have to be notified of proposed scheme as "affected policyholders"; (2) scheme confirmed. application under s 17f of the insurance act 1973 (cth) (the act) for confirmation of a scheme for the transfer of general insurance business by parent company to its wholly owned subsidiary dispensation order in relation to giving of approved summary of scheme to every affected policyholder sought and granted under s 17c(5) of the act distinction between contract of insurance and contract of guarantee guarantee given by deed poll by parent company in respect of insurance liability of its subsidiary. held : (1) contract of guarantee not a contract of insurance so that persons benefited did not have to be notified of proposed scheme as "affected policyholders"; (2) scheme confirmed. corporations insurance

On or about 24 or 25 January 2006 "Global Peace", with a pilot on board, was berthing in the port of Gladstone (the "berthing operation"), assisted by the tug "Tom Tough" (the "tug"). The second respondent in each action ("Adsteam") was the owner of the tug. During the berthing operation the tug came into contact with the hull of "Global Peace", causing damage which permitted the escape of oil into Gladstone harbour. Some of that oil adhered to the hull of the vessel "Medi Vitoria", owned by the plaintiff in action NSD 124 of 2006 ("Elbe"). Oil also adhered to the hull of the vessel "Nord Stream", owned by the plaintiff in action NSD 125 of 2006 ("SQ Marine"). Where appropriate I shall refer to Elbe and SQ Marine collectively as the "plaintiffs". Both plaintiffs incurred expenditure in cleaning the hulls. On 27 January 2006 Elbe issued a writ against "Global Peace", seeking damages, interest and costs. On the same day SQ Marine issued a writ against the same vessel seeking similar relief. At that time no proceedings were commenced against Adsteam or the tug. Subsequently, Giant Marine became first defendant in each action. On 18 April 2007 Adsteam was joined as second defendant in each action. 2 The first statements of claim against Giant Marine were filed on 19 April 2006. They alleged negligence in the conduct of the master of "Global Peace", the pilot and the master of the tug, and that Giant Marine was vicariously liable for the consequences of all such negligence. There was, at this stage, no allegation that the tug had been unfit to perform its function. Amended statements of claim filed on 11 December 2006 alleged that the tug was unfit for employment in the berthing operation because of defects in the starboard main engine clutch oil pump discharge pipe and in the starboard quarter fender. On 19 April 2007 further amended statements of claim were filed. By this time Adsteam had been joined. 3 Giant Marine, in its original defences filed on 18 August 2006, admitted the collision but denied, or did not admit, the other allegations in the statement of claim. Amended defences were filed on 6 October 2006, admitting that the collision between the tug and "Global Peace" was caused by the failure of the discharge pipe but denying any causal act or omission for which Giant Marine was vicariously liable. In the further amended defences filed on 10 January 2007 Giant Marine admitted that Adsteam had been negligent in connection with the discharge pipe and the fender but denied liability for such negligence. It is not necessary to address the defences to the further amended statements of claim, which defences were filed on 16 May 2007. On that date the second defendant also filed defences denying negligence. 4 By letters dated 4 December 2007, Adsteam admitted liability for each plaintiff's loss. On 7 February 2008, the total amount of the claim in action NSD 124 of 2006 plus interest was paid to Elbe. On 21 February 2008 the total amount of the claim in action NSD 125 of 2006 plus interest was paid to SQ Marine. Notwithstanding receipt by both plaintiffs of the full amounts of their claims, until 15 March 2008, they and Giant Marine proceeded upon the basis that all matters (other than damages) remained in issue in the actions. As between each plaintiff and Adsteam, questions of costs remained outstanding. An order pursuant to section 31A of the Federal Court of Australia Act 1976 and/or Order 18 r 4 of the Federal Court Rules that judgment be entered against the First Defendant. An order pursuant to section 43 of the Federal Court of Australia Act 1976 and Order 62 rules 1 and/or 3 of the Federal Court Rules that the First Defendant pay the Plaintiff's costs of the proceedings. Further and in the alternative, an order pursuant to section 43 of the Federal Court of Australia Act 1976 , Order 62 r 1 and/or r 3 that the First Defendant pay the Plaintiff's costs of the proceedings up to the date of joinder of the Second Defendant. Further and in the alternative, an order pursuant to section 43 of the Federal Court of Australia Act 1976 , Order 62 r 3 that there be no order as to costs in favour of the First Defendant as against the Plaintiff. An order that the First Defendant pay the costs of the instant motion. Such other orders as the court deems fit. Such other further orders as the court deems fit. I then heard the plaintiffs' motions as against Giant Marine. Excluding the relatively small amount of time spent in dealing with the matters concerning Adsteam, the hearing of these motions and associated arguments as to costs took about a day and a half. Although the plaintiffs were moving for judgment, it became relatively clear that their real purpose was to improve their chances of obtaining favourable costs orders against Giant Marine. We seek to deal with it in three very simple ways. The first way we seek to deal with it is we say on a summary judgment basis which isn't trial, its an interlocutory process, and we take your Honour very briefly to the terms of the contract between the second defendant and the first defendant, the UK Standard Terms. It identifies a vicarious responsibility for the very subject matter of these proceedings and based on those terms and some admissions I'll take your Honour to, we must be entitled to summary judgment. The significance of that is this, and this is the first way, is if we're entitled to summary judgment it must follow like night and day we're then successful. We're the successful party and costs would follow the event. That's the first issue that we seek to develop. It's been the subject of some observation by McHugh J, which your Honour would have seen in our written submissions, which means if your Honour is satisfied in essence that there was a strong prospect we would have succeeded, we should get costs under that. In essence, we say that for the same reasons in essence as we moved for summary judgment, we would plainly fall within Order 62 rule 3 which is a lower threshold than a General Steel-type test, but just so that your Honour understands the clarity with which we say one can be satisfied that we will have succeeded, we would meet a General Steel test when we come to look at it. We don't have to for the purposes of Order 62 rule 3. That's the second issue that we develop briefly and again, it turns on the same very brief and simple argument about the significance of the terms. The third issue that we seek to develop is, well, if we're not entitled, if we can't persuade your Honour that we should have won, then absent my learned friend persuading your Honour likewise that he should have won, the appropriate position is walk away but for issue costs in respect of some relevant delinquency. We say there has been some relevant delinquency in three respects arising from the pleadings and that will be a short argument that I'll take your Honour to, but in essence we would want issues costs, if I can describe it as that, issues costs in respect of negligence, seaworthiness and loss and damage from the commencement of the proceedings up until the joinder of the second defendant. So that's the third category, if I can put it in that way, your Honour. See Quinlan v Safe International Forsakrings AB [2006] FCA 1718 at [47] . This decision reflects a long line of cases in various jurisdictions. However it is not necessary to consider that proposition for present purposes. The plaintiffs assert that they are entitled to summary judgment or judgment upon the basis of admissions made by Giant Marine and upon the proper construction of the United Kingdom Standard Conditions for Towage and Other Services (Revised 1974) (the "Standard Conditions") which were incorporated into the contract between Giant Marine and Adsteam. 12 Counsel for the plaintiffs submit that notwithstanding payment in each action, I should simply "enter judgment" for each plaintiff. It is said that not infrequently, courts pronounce orders in that form. In my own experience, when a claim has failed completely, it is not uncommon for a court to order that there be judgment for the defendant. In those circumstances there is no need to say more, save as to costs. However, where judgment is entered for a plaintiff, it is almost axiomatic that some relief must be identified. It may be declaratory relief. It may be an award of damages. It may be the making of an injunction or an order for specific performance. To give judgment for a plaintiff without identifying the appropriate relief could be nothing more than a shorthand way of indicating that the plaintiff had been successful and that appropriate orders would be made accordingly. Where there are to be no such orders, such a "judgment" is pointless. Counsel sought to justify the proposed orders upon the basis that they would avoid further disputes between the parties, or between parties and third parties, as to liability for the collision and/or for the relevant damage. In some circumstances, fear of such a future dispute might justify declaratory relief. However, for present purposes, there is no evidence to suggest any reasonable basis for such a fear. 13 A court should not engage upon a determination of the merits of the case where the only outstanding claim is as to costs. See Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6 ; (1997) 186 CLR 622 and One.Tel Ltd v Commissioner of Taxation [2000] FCA 270 ; (2000) 101 FCR 548 at 552-553. Those cases also demonstrate that a court may inquire as to the reasonableness of the conduct of the parties to ascertain whether or not orders for costs should be made. Those cases would have no point if it were open to a party to ask the court to make a judgment in the very general form suggested by counsel. That in the present actions against Giant Marine, the Adsteam payments have disposed of all issues other than costs appears from the decision of the High Court in Baxter v Obacelo Pty Ltd [2001] HCA 66 ; (2001) 205 CLR 635 per Gleeson CJ and Callinan J at [38], [39], [40], [43], [46] and [47] and per Gummow and Hayne JJ at [55] and [56]. In particular it should be noted that Gummow and Hayne JJ approved the statement of "general principle" contained in the passage cited at [56] from the judgment of Auld LJ in Jameson v Central Electricity Generating Board [1998] QB 323. 14 That is the present position. The plaintiffs seek to distinguish these decisions by asserting that they do not apply to proceedings in rem. Assuming that the actions continue to be proceedings in rem, I see no merit in that assertion. The plaintiffs assert that they are entitled to enforce against the vessel any order for costs, including marshal's costs which they have paid. However, if any order for costs in these proceedings would, if accompanying a judgment on the merits, be enforceable as against the vessel then, as far as I can see, an order for costs, by itself, will be similarly enforceable. Nothing in the Admiralty Act 1988 (Cth) (the " Admiralty Act ") provides that enforcement against a vessel is dependent upon recovery of judgment on the substantive claim. In any event the plaintiffs are not presently entitled to any costs. They apply for a favourable exercise of the court's discretion. The question of whether payment of such costs would be enforceable against the vessel should be left until they have obtained a relevant order. 15 In a similar vein, the plaintiffs seek to rely upon their claims to maritime liens as justifying their applications for judgment. Proceedings upon a maritime lien are recognized by s 15 of the Admiralty Act as the proper subject matter of proceedings in rem. However s 6 provides that the Admiralty Act (other than s 34, which concerns damages for unreasonable demands as to security or unreasonable arrest) does not create new maritime liens. In para 1 of each amended writ, the relevant plaintiff claims damages "(p)ursuant to a maritime lien under s 15 of the Admiralty Act 1988 for damages done by the vessel "Global Peace" and for damage done by the oil which escaped from the vessel "Global Peace" ...". 16 The plaintiffs have not sought to establish such liens other than for the purpose of invoking the jurisdiction in admiralty. As they no longer seek damages from Giant Marine, their liens seem to be irrelevant. However the plaintiffs now assert that any order for costs, including marshal's costs, will be enforceable pursuant to such lien. As I have observed, the plaintiffs are not presently entitled to any orders as to costs. They rather apply for a favourable exercise of the court's discretion as to costs. Again, the question of whether such costs would be secured by any maritime lien should be considered after the plaintiffs have obtained appropriate orders. 17 In any event the plaintiffs may face substantial difficulty in seeking to establish their claims to maritime liens. They assert that their liens are for damage done to the vessels by the oil spillage. Such a lien is recognized by subs 15(2) of the Admiralty Act and in the textbooks and cases dealing with maritime liens. See, for example, Bankers Trust International Ltd v Todd Shipyards Corporation; "The Halcyon Isle" [1981] AC 221 at 232-233. However the circumstances in which a lien arises for "damage done by a ship" are limited. Currie v M'Knight [1897] AC 97 establishes that the damage must be "the fault of the ship itself", that is the ship against which liability is alleged. See also the observations of Lord Herschell at 108 and Lord Morris at 109-110. In "The Eschersheim " [1976] 1 WLR 430 at 438 Lord Diplock applied the decision in Currie v M'Knight in construing a statutory provision similar to para 4(3)(a) of the Admiralty Act . The facts of that case were similar to those in the present actions. In Opal Maritime Agencies Pty Ltd v Proceeds of Sale of Vessel MV "Skulptor Konenkov " [2000] FCA 507 ; (2000) 172 ALR 481 , the Full Court applied " The Eschersheim ", although in a somewhat different context. These cases might suggest that in the present case, the damage caused by the tug was not damage done by Global Peace which would give rise to such maritime liens. However it is not necessary to take the matter any further. 18 Finally, the plaintiffs seek to distinguish Lai Qin and One.Tel upon the basis that they presently ask for summary judgment or judgment on admissions and not a trial. I see no merit in that argument. In preparing for such an application costs will be incurred by both sides. In some cases those costs may be relatively insignificant. In others they may be substantial. The policy considerations supporting the decisions to which I have referred are as relevant to these applications as they are to trials. 19 I have not dealt with the "merits" of the plaintiffs' attempts to establish cases in negligence against Giant Marine despite the absence of any remaining damage. However my view concerning such "merits" will emerge from my consideration of the plaintiffs' prospects of success in the actions, to which question I now turn. They rely on the same matters as they rely upon in connection with the summary judgment application plus some aspects of the evidence filed in anticipation of a trial. Their position seems to be that Giant Marine ought to have responded to that evidence, and that its failure to do so demonstrates that their evidence ought to be accepted. There is an incongruity between such an approach and the decisions in Lai Qin and One.Tel to which I have previously referred. If the parties are to call and cross-examine witnesses, then the process starts to look very much like a trial on the merits for the sole purpose of deciding questions of costs. The plaintiffs' approach also ignores the possibility that even in the absence of contrary evidence, their evidence may have been discredited in cross-examination. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the cost of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence the litigation. ... Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in South East Queensland Electricity Board v Australian Telecommunications Commission ... where his Honour ordered the respondent to pay 80 per cent of the applicant's fixed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare. If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the costs discretion will usually mean that the Court will make no order as to the cost of the proceeding. This approach has been adopted in a large number of cases. 22 McHugh J was speaking in the context of a case in which the ultimate relief sought by the applicant had been obtained without the need for continued litigation. The court was fully aware of the basis upon which the matter was to be discontinued. In many cases the court will be told simply that the matter has been settled without any reference to the terms of settlement. In other cases the terms of settlement may say little or nothing about the relative merits of the case had it gone to trial. It seems unlikely that McHugh J, in referring to the likelihood of success, meant to suggest that such likelihood should be assessed by detailed reference to the evidence which would have been called had the matter gone to trial. Such an approach would be inconsistent with the second and third sentences in the above extract. McHugh J probably had in mind a settlement which occurred after a substantial part of the evidence had been heard. 23 In any event, even on the plaintiffs' approach, I am far from satisfied that they would probably have succeeded. Such anticipated success is said to be based upon the fact that Giant Marine admitted that the damage to the two vessels was ultimately caused by the failure of the discharge pipe and/or the defective fender and that Adsteam had failed to take reasonable care in the management of the tug by failing to detect such defects. The plaintiffs assert that Giant Marine is liable for Adsteam's negligence by virtue of the Standard Conditions. It is common ground that such conditions were part of the contract between Giant Marine and Adsteam. Whilst towing or whilst at the request, express or implied, of the Hirer, rendering any service other than towing, the mater and crew of the tug or tender shall be deemed to be the servants of the Hirer and under the control of the Hirer and/or his servants and/or his agents and anyone on board the Hirer's vessel who may be employed and/or paid by the Tugowner shall likewise be deemed to be the servant of the Hirer and the Hirer shall accordingly be vicariously liable for any act or omission by any such person so deemed to be the servant of the Hirer. 4. ) for any claim by a person not a party to that agreement for loss or damage of any description whatsoever. The expression "whilst towing" shall cover the period commencing when the tug or tender is in a position to receive orders direct from the Hirer's vessel to commence pushing, holding, moving, escorting or guiding the vessel or to pick up ropes or lines or when the tow rope has been passed to or by the tug or tender whichever is the sooner and ending when the final orders from the Hirer's vessel to cease pushing, holding, moving, escorting or guiding the vessel or to cast off ropes or lines has been carried out or how the tow rope has been finally slipped, whichever is the later, and the tug or tender is safely clear of the vessel. 25 The plaintiffs submit that these provisions result in Giant Marine being vicariously liable for the damage inflicted upon their vessels. I do not accept that proposition. The plaintiffs have not demonstrated any proper basis for their being permitted to enforce the terms of a contract to which they are not parties. Reference was made to the decision of the High Court in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107. In that case an insurer under a public liability insurance policy agreed to indemnify a company against liability for injury to persons at specified building sites. "The insured" was defined to include the company's contractors. A person was injured as the result of the negligence of a contractor which had not been a contractor when the policy was issued. That person recovered damages against the contractor. The majority of the High Court held that the contractor was entitled to relief against the insurer. However the reasons of the various members of the Court offer little assistance to the plaintiffs for present purposes. The injustice which would flow from such a result arises not only from its failure to give effect to the expressed intention of the person who takes out the insurance but also from the common intention of the parties and the circumstance that others, aware of the existence of the policy, will order their affairs accordingly. We doubt that the doctrine of estoppel provides an adequate protection of the legitimate expectations of such persons and, even if it does, the rights of persons under a policy of insurance should not be made to depend on the vagaries of such an intricate doctrine. In the nature of things the likelihood of some degree of reliance on the part of the third party in the case of a benefit to be provided for him under insurance policy is so tangible that the common law rule should be shaped with that likelihood in mind. This argument has even greater force when it is applied to an insurance against liabilities which is expressed to cover the insured and its subcontractors. It stands to reason that many subcontractors will assume that such an insurance is an effective indemnity in their favour and that they will refrain from making their own arrangements for insurance on that footing. That it seems is what happened in the present case. But why should the respondent's rights depend entirely on its ability to make out a case of estoppel? In the circumstances, notwithstanding the caution with which the Court ordinarily will review earlier authorities and the operation of long-established principle we conclude that the principled development of the law requires that it be recognized that McNiece was entitled to succeed in the action. 27 In other words, their Honours considered that there should, in the case of insurance policies, be an exception to the general rules relating to privity of contract, particularly where the policy contemplates the relevant claimant having the benefit of the cover, it knows of the policy and organizes its affairs accordingly. Speaking loosely, it might be said that pursuant to cl 4, Giant Marine "insured" Adsteam against certain loss, but it is fairly clear that Mason CJ and Wilson J were speaking only of insurance policies, properly so called. I see no justification for further extending the exception which their Honours were willing to make to a fundamental aspect of the law of contract. 28 Brennan and Dawson JJ both concluded that the contractor was not entitled to enforce the indemnity and ought fail in the action. Deane J considered that the contractor was not entitled to enforce the indemnity but might be able to demonstrate that the policy created a trust in its favour. The approach adopted by Toohey J (at 172) was similar to that adopted by Mason CJ and Wilson J. Gaudron J agreed generally with Mason CJ and Wilson J but differed from them in "two significant respects". The right of third party is not a right to sue on the contract: rather, it is a right independent of, but ordinarily corresponding in content and duration with, the obligation owed under the contract by the promisor to the promisee. The doctrine of privity of contract and the related requirement that consideration should be provided by the person seeking to enforce a contractual obligation do not deny the binding nature of a contractual promise the performance of which will benefit a third party. Breach of the contractual obligation may sound in damages at the suit of the promisee. However, it is not clear on existing authority whether the promisee is restricted to recovering damages for his loss only or whether the damages can also be recovered by the promisee for the third party's loss ... If damages are an inadequate remedy, the promisee may obtain a degree of specific performance of the contract ... The third party, however, cannot institute an action for breach of contract or for specific performance unless he can bring himself within one of the recognized exceptions to or qualifications of the rules. 29 To my mind none of the reasons supports the plaintiffs' present claims. There was no insurance policy, and so the views expressed by Mason CJ, Wilson and Toohey JJ do not apply. No attempt has been made to establish the existence of a trust. It cannot be said that either Adsteam or Giant Marine intended to benefit third parties such as the plaintiffs when they entered into the contract. At a relatively late stage in proceedings the plaintiffs sought to rely upon provisions in the Property Law Act 1974 (Qld) relating to contracts for the benefit of third parties. However no attempt has been made to plead or prove that either Giant Marine or Adsteam made any promise for the benefit of third parties such as the plaintiffs. 30 Clause 3 offers some evidence that the relationship between Giant Marine and Adsteam's employees on the tug was that of master and servant, but that is unlikely to have been the case. It is unlikely, for example, that Giant Marine was under any contractual or other obligation to pay the employees' wages. It is also unlikely that the employees would have understood that they were to obey direct instructions received from Giant Marine or its agents, rather than instructions relayed to them through the tug master. Further, it is unlikely that Giant Marine or Adsteam intended such results. Whilst the tug and the tug master may have been subject to directions by the pilot and the master of "Global Peace", it is difficult to avoid the conclusion that the tug master was obliged to exercise his own judgment in the operation of the tug, having regard to his obligations to Adsteam and the crew. Crew members were obliged to follow the tug master's directions. Clause 3 should be construed as regulating the relationship between Giant Marine and Adsteam and not that between either of them and the master and crew of the tug. 31 It is also important to keep in mind that cl 3 applies only during towing or whilst other services are being provided. I have already set out the definition of "towing". At most Giant Marine would bear vicarious liability for conduct occurring during the towing operation. Whilst Giant Marine has admitted that the owner of the tug failed to take reasonable care in its management, both with respect to the discharge pipe and with respect to the fender, it is not clear to me that such failure occurred during the berthing operation. I have briefly considered the evidence of the expert witnesses McAuley, Boulton and Crawford. That evidence seems to be more consistent with a design and system failure prior to, and at the time of, start up of the engines than with negligent conduct by the master and/or the crew during towing. 32 For these reasons Giant Marine's admission that Adsteam was negligent does not establish crew negligence for which it might arguably be liable as a result of cl 3. To establish any such negligence it would be necessary to go to the evidence. Even if, contrary to my initial impressions, the evidence establishes crew negligence, there is still the question of the extent to which I should go in assessing the possible outcomes in these actions had they gone to trial. As I have said, the plaintiffs assert that Giant Marine ought to have responded to their evidence, and that its failure to do so demonstrates that such evidence ought be accepted for present purposes. That assertion assumes that the plaintiffs are, in effect, entitled to insist upon trials of these issues, notwithstanding the fact that they are now entirely academic. It also overlooks the possibility that Giant Marine may have discredited the expert evidence by cross-examination rather than by calling its own evidence. I am not satisfied that the plaintiffs would have succeeded on the question of vicarious liability or on that of crew negligence. I accept that they had arguable, although not strong, cases. 33 I am unpersuaded that the plaintiffs can enforce cl 4 of the Standard Conditions against Giant Marine. I see no basis for so doing. I should also draw attention to the fact that cl 4 excludes liability for damage caused in the event of unseaworthiness brought about by default of the tug owner. Giant Marine indicated in its pleading its intention to rely upon this exclusion. On the material such a defence cannot be discounted. 34 The plaintiffs also seek, by reference to earlier decisions, to establish that under general principles of admiralty law, a vessel under tow is vicariously liable for damage done by the tug. The plaintiffs rely primarily upon the decision in The Niobe (1888) 13 PD 55. However that case, taken at its highest, does not support the proposition. The case appears to have been decided upon the basis of actual negligence on the part of the master of the vessel under tow. The President doubted "if the questions of law which have been discussed before me arise upon this occasion ...". The tug and tow are engaged in a common undertaking, of which the general management and command belongs to the tow, and in order that she should efficiently execute this command it is necessary that she should have a good look-out and should not merely allow herself to be drawn, or the tug to go, in a course which would cause damage to another vessel. As Dr. Lushington has pointed out, it is essential for the safety of vessels being towed that there should not be a divided command, and convenience has established that the undivided authority shall belong to the tow. The pilot, if there be one, takes his station on his tow, and the officers of the tow are usually, as in the present case, of a higher class and better able to direct the navigation than those of the tug. I may observe that it is clear from the evidence in this case that it was perfectly well understood by the captains of the tug and tow that the latter had the control of their movements, and that it was the duty of those navigating the tow to keep a look-out and check the tug if it were going wrong. 37 The case is authority for the proposition that the master of the tow must accept responsibility for the way in which the towing operation is conducted. He must keep a proper lookout and direct the tug appropriately. It does not follow from that decision that the tow will be responsible for actions by the tug over which it has no control. As much also appears from other cases referred to in argument. ... In all such cases, however, the real question is whether or not the relation of master and servant exists between the defendants, the owners of the vessel towed, and the persons in charge of the navigation of the steam-tug. Unless that relation exists, considerations of expediency cannot avail to impose liability on the owners of the vessel in tow. The question whether the crew of the tug are to be regarded as the servants of the owner of the vessel in tow must depend upon the circumstances in each case. 39 In Owners of the "SS Devonshire" v Owners of the Barge "Leslie" [1912] AC 634 at 645, Viscount Haldane LC approved the proposition advanced by Butt J in The Quickstep . This is not a question of law, but a question of fact, to be determined in each case on its own circumstances. See also The MSC Panther and the Ericbank [1957] 1 Lloyds Rep 57 at 67 (per Willmer J). 40 There is no general rule that the tow is liable for damage done by the tug. I am not persuaded that the plaintiffs would probably have succeeded had the actions gone to trial. Clearly, the reasonableness of the parties' conduct is a relevant consideration in determining the question of costs. McHugh J said as much in Lai Qin (supra). The plaintiffs submit that Giant Marine was unreasonable in not admitting negligence, unseaworthiness of the tug and damages. Giant Marine submits that the plaintiffs were unreasonable in failing to join Adsteam at an earlier stage in the proceedings. These two matters are closely related. Giant Marine also seeks to rely upon certain offers to settle made in the correspondence between the solicitors. 42 At one stage I expressed surprise at Adsteam's absence from the proceedings. At some time thereafter Adsteam was joined. My concern arose largely out of the fact that it seemed clear that the collision had been, at least substantially, caused by mechanical failure on the tug. The plaintiffs assert that their failure to join Adsteam at an earlier stage was the product of reasonable caution, designed to avoid the incurrence of unnecessary costs, given that they considered their cases against Giant Marine to be strong. That view was based upon an unrealistic assessment of the likelihood of establishing vicarious liability in Giant Marine. Although I disagree with the view taken by the plaintiffs, it was a matter of judgment. In any event, even if Adsteam had been joined earlier, it may not have paid earlier. Giant Marine's costs were incurred in defending proceedings brought against it. I am unable to conclude that such costs would not have been incurred had Adsteam been joined at an earlier stage. 43 Giant Marine's conduct in defending the actions must also be seen in light of the late joinder of Adsteam. From an early stage it was obvious that mechanical failure on the tug was the primary, if not the sole, cause of the plaintiffs' losses. It is reasonable to infer that Giant Marine would, if held liable, have looked to Adsteam for contribution or indemnity, subject to issues arising out of the Standard Conditions and any complications arising out of insurance arrangements. In those circumstances, Giant Marine could not safely make concessions as to liability or damages without reference to Adsteam. Adsteam's absence from the proceedings did not prevent Giant Marine from raising such matters with it, but Adsteam may have been reluctant to become involved. Further, despite the plaintiffs' views concerning the strengths of their respective cases, Giant Marine had reasonable prospects of success in resisting any finding of liability. In those circumstances I cannot see that it acted unreasonably in putting the plaintiffs to proof on all issues. 44 In the circumstances, I am not satisfied that either of the plaintiffs or Giant Marine acted unreasonably in the conduct of the proceedings up to the dates of Adsteam's payment in each action. I am therefore inclined to make no orders as to the costs incurred prior to those dates. 45 It is now necessary to deal with costs incurred after the dates of Adsteam's payments, in the case of action NSD 124 of 2007, 7 February 2008, and in the case of action NSD 125 of 2006, 21 February 2008. Counsel for the plaintiffs gave somewhat later payment dates in the course of submissions, but these dates appear from both Mr Wilson's affidavit filed on 27 February 2008 and Mr White's affidavit filed on 10 March 2008, both filed in action NSD 124 of 2006. The relevant costs include the costs of continued preparation for trial, the costs of the plaintiffs' motions for summary judgment and the costs associated with determining the appropriate orders as to costs. I should point out at this stage that numerous outstanding notices of motion were, during addresses, dismissed with no orders as to costs. Notices of motion dated 22 March 2006 remain outstanding. I understand that they are to be dismissed on a similar basis. I will do so, subject to any further submissions by the parties after delivery of these reasons. 46 Curiously, despite Adsteam's payments, the parties continued to prepare for trial. On 25 February 2008, the plaintiffs served affidavits and lists of documents. On 27 February 2008 the plaintiffs served unsealed copies of the notices of motion for judgment, together with a supporting affidavit. On 29 February 2008 there was a directions hearing before me. On 3 March 2008, the sealed notices of motion were served. On 7 March 2008 Giant Marine requested the plaintiffs to advise the identities of the witnesses required for cross-examination, at the same time indicating that the court should not be asked to embark upon a hearing on the merits. On 10 March 2008 Giant Marine served two further affidavits by Mr Turner, its solicitor, responding to the notices of motion. On 11 March 2008 Giant Marine notified the plaintiffs of its intention to amend its defences. On that day the plaintiffs advised Giant Marine that should the court refuse summary judgment on admissions, they would not seek hearings on the merits. On 12 March 2008 the plaintiffs served notices to produce. On 14 March 2008 Giant Marine served sealed copies of notices of motion to amend its defences, with a supporting affidavit. On 14 March 2008 the plaintiffs settled all outstanding issues between them and Adsteam. I am unable to say whether steps taken on and after 11 March 2008 were in preparation for trial or in connection with the motions. To the extent necessary that question can be addressed on taxation. 47 I infer that until 11 March 2008 the matter was proceeding to trial, notwithstanding Adsteam's payments. At the directions hearing on 29 February 2008, counsel for the plaintiffs informed me of the course which they proposed to take. I made it clear that unless the parties had previously disposed of all matters which remained in dispute, I would deal with them on the appointed hearing dates for the trials --- 17 and 18 March 2008. In the face of that indication it was for the parties to decide how they wished to proceed. The plaintiffs continued to assert that each was entitled to judgment, either on summary application or after trial. For as long as they maintained that position, Giant Marine was obliged to prepare for trial. Once the plaintiffs indicated that in the event that their motions for judgment failed, they would not proceed to trial, preparation for trial should have ceased. For reasons which I have given, it was unreasonable for the plaintiffs to persist in seeking judgments against Giant Marine once their claims (save as to costs) had been satisfied by Adsteam. 48 I turn to the offers to settle. " Having regard to the fact that the trial is scheduled to commence on 17 March 2008 and arrangements are now necessarily being made for the attendance of witnesses, this offer is open for acceptance until 5.00pm 12 March 2008. We reserve the right to appraise the court of the making of this offer in any submissions as to costs. 49 The letter was marked "Without prejudice save as to costs". We advise that we are instructed to hold open until 5.00pm this afternoon, Brisbane time, the first defendant's offer to settle on the basis that in each action the claim against the first defendant is struck out with the plaintiff and the first defendant each carrying their own costs of the proceedings (including reserved costs), subject only to any existing costs orders between the parties. The First Defendant pay to the Plaintiff in each matter the Plaintiff's costs in respect of the issues of negligence and loss and damage up to 19 April 2007 as agreed or taxed. Without prejudice to our clients' entitlement to recover the full amount of such costs, which we say is substantially in excess of the following, our client is prepared to agree that the quantum of those costs is A$40,000.00 in each matter if, at the time of acceptance of this offer, your client agrees to that amount. In the event that your client does not accept the proposal as to the agreed amount, these costs are to be taxed. All existing costs orders remain. No order in relation to reserved costs as between the Plaintiff and the First Defendant in each matter. The First Defendant's motion in each matter in relation to the mediation is dismissed with no order as to costs. The Plaintiff's motion for summary judgment in each matter is dismissed with no order as to costs. This offer is open for acceptance until 10.00am Queensland time tomorrow, Thursday 13 March 2008. The Plaintiff in each matter expressly reserves the right to rely on this letter in relation to any application for indemnity or other costs orders and to produce this letter to the court as necessary. We anticipate that our clients' disputes will be resolved with the Second Defendant. Our clients' rights in rem, in personam, on the motion for summary judgment/judgment on admissions and in relation to costs against your client have not been and will not be released. In each matter, the First Defendant agrees to an order for costs in favour of the Plaintiffs on the issues of loss and damage and negligence up to the date of joinder of the Second Defendant, as agreed or taxed. Otherwise, both parties walk away with existing costs orders to stand and no further order as to costs or reserved costs. All outstanding motions to be dismissed with no order as to costs. That letter was said to be "without prejudice save as to costs". As indicated in the email sent earlier this morning by Senior Counsel for the first defendant, Senior Counsel for the plaintiffs, the first defendant will favourably consider an offer that both parties "walk away" from the proceedings with no order as to costs (including no orders as to costs reserved), save for existing costs orders. 53 Obviously, Giant Marine has done considerably better than the orders which it proposed. Conversely, the plaintiffs have done significantly worse than the orders which they proposed. In action NSD 125 of 2006 there will be no order as to costs incurred prior to 21 February 2008. This order is based upon my view that no party's conduct prior to 21 February 2008 was such as to justify my making any other order. The offers to settle are irrelevant to these orders. 55 In the case of action NSD 124 of 2006 I am concerned with costs incurred between 7 February 2008 and 11 March 2008 in preparing for trial. In connection with action NSD 125 of 2006 I am concerned with costs incurred between 21 February 2008 and 11 March 2008. These costs were incurred simply because the plaintiffs declined to recognize the obvious consequences of their having accepted Adsteam's payments, namely that they no longer had causes of action which they could prosecute to judgment as against Giant Marine. Counsels' submissions to the contrary are without substance. In those circumstances, in action NSD 124 of 2006, I order that the plaintiff pay the first defendant's costs of, and incidental to, preparation for trial, incurred after 7 February 2008 and prior to 11 March 2008. In action NSD 125 of 2006 I order that the plaintiff pay the first defendant's costs of, and incidental to, preparation for trial incurred after 21 February 2008 and prior to 11 March 2008. As I consider that the plaintiffs' conduct unnecessarily caused the incurrence of such costs, they should be taxed and paid on an indemnity basis. I order accordingly. Although Giant Marine's offer of 5 March 2008 may have been relevant to some of these costs, my decision that they be taxed on an indemnity basis makes it unnecessary to have regard to it. 56 The plaintiffs' motions for judgment were misconceived. Clearly, they were filed primarily in the hope of improving the plaintiffs' chances of obtaining favourable costs orders. In each action I order that the plaintiff pay the first defendant's costs of, and incidental to, the motion for judgment. Given that the motions were, in my view, completely misconceived, those costs should be taxed and paid on an indemnity basis. Again, it is not necessary to consider the effect of Giant Marine's offer to settle. 57 It was, I think, inevitable that there be a hearing in connection with the ultimate disposition of the actions. However, in each case, the parties should only have appeared to consent to the dismissal of the actions. Subject to the offers to settle, it may also have been necessary to consider questions of costs. One might have hoped that the costs orders would be agreed, but there was always the chance of disagreement. As Giant Marine has been substantially successful in connection with costs, it should have its costs of, and incidental to, obtaining its orders. Again, subject to the offers to settle, I would order in each action that the plaintiff pay the first defendant's costs of, and incidental to, preparing for and appearing at the hearing on 17 and 18 March 2008 for the purpose of arguing all questions of costs, not including any costs incurred solely in appearing to consent to the dismissal of each action. Were it not for Giant Marine's offers to settle I would order that the costs be taxed on a party and party basis. However, in view of those offers, the costs of, and incidental to, the costs orders should be taxed and paid on an indemnity basis. 58 I am concerned that there may be some complication in applying these orders to Giant Marine's counsels' fees, depending upon whether, and when, they were briefed for trial. It is possible that the orders may not deal with all such fees or may deal twice with some of them. In each action I give liberty to the plaintiff and first defendant to apply, at any time prior to the final taxation of costs, to vary the above orders as they apply to the first respondent's counsels' fees. I do not wish to comment upon anything which occurred prior to Adsteam's payments. Following those payments the actions ought to have been disposed of in a much more expeditious and economical way than has been the case. It is extraordinary that the parties continued to prepare for trial. The motions for summary judgment were quite inappropriate. The parties, properly advised, should have been able to agree upon a basis for disposing of the costs issues without the need for a further hearing taking in excess of a day and half. To say the least it is disappointing that the involvement in these actions of experienced and well-respected legal advisers did not lead to that result. Where the parties cannot agree the court must decide. However that will rarely be the best way of resolving ancillary matters such as costs where substantive matters have been agreed or are, for some other reason, no longer in dispute. The parties and their legal advisers must accept the reality of such a situation. It is the duty of the legal advisers to use their experience, objectivity and wisdom to minimize the cost, to the parties and to the public purse, of bringing such proceedings to speedy resolution. The parties should generally act upon legal advice concerning such practical matters. 60 As previously indicated, I order that the notice of motion filed in each action on 22 March 2006 be dismissed with no order as to costs. The orders will otherwise be as I have indicated. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

ship under tow liability of ship under tow for loss and damage caused by tug imputation of liability under contract cannot be relied upon by third party summary judgment and judgment on admissions entering such a judgment for the plaintiff without appropriate orders admiralty practice and procedure

2 These appeals were heard immediately following the hearing of the appeals by Business and Research Management Limited (in liquidation) ('BARM'). Notwithstanding that the issues in these appeals are not coterminous with the issues in the BARM appeals, there is a possible common issue and they arise out of the same factual background, which is set out in [4] --- [41] of the reasons for judgment in Business & Research Management Pty Ltd v Commissioner of Taxation [2008] FCA 1652. The roles of ATTORI and AARI as the researchers in the Budplan projects are referred to at various parts of that background. In particular, it is noted at [8(3)] that ATTORI was engaged to conduct research and development for all projects except for Budplan 'A' Series No. 1 and Personal Budplan No. 5, where AARI was engaged to conduct the research and development activities. Unless the context indicates otherwise, terms defined in the BARM reasons that are used in these reasons, have the same meaning. 3 While the issue in the BARM appeals concerned the quantum of the management fees to be brought to account as assessable income in the hands of BARM, the issue of the quantum of the research fees to be brought to account as assessable income in the hands of ATTORI or AARI only arises if the income of ATTORI or AARI is not exempt from income tax on the ground referred to below. 4 There is at least one, but possibly two issues before the Court. 5 There was a third issue concerning additional tax. On the hearing of the appeals, I was informed that the parties had agreed on a level of further remissions of additional tax in the event that the applicants were unsuccessful 'in any significant way' and that in those circumstances it was unnecessary for me to address this issue. I indicated I was content to adopt that course. In some cases the exemption is subject to special conditions. The note to subsection 6-15(2) describes some of the other consequences of it being exempt income. It is common ground that facts going to: '[W]hat is the true nature and the objects and activities of the [entity]', to use the words of the Lord President (Clyde) in The Commissioner of Inland Revenue v The Aberdeen Medico-Chirurgical Society (1931) 16 TC 237 at 249 quoted with approval by Latham CJ in Royal Australasian College of Surgeons v Federal Commissioner of Taxation ('the Surgeons' Case ') [1943] HCA 34 ; (1943) 68 CLR 436 at 444, are relevant. But the Commissioner says that facts going to the commercial imperatives that drove both the entity's incorporation and its activities, as well as the arrangements through which, or the manner in which, it carries on its activities, and the lack of public availability or utility of the results of those activities, reflect on the 'true nature' of ATTORI and AARI and their activities and for that reason, are also relevant. 18 At its establishment, the directors of ATTORI were the subscribers to its Memorandum of Association, Messrs Donald Charles Priest, Glendon Michael Stotter, Alan James Gallagher, Peter Charles Lucas, Dennis Charles Lear and Gordon Quah-Smith. Mr Quah-Smith retired as a director on 5 December 1995, Mr Lear on 17 October 1996, Mr Lucas on 15 September 1997, Mr Gallagher on 31 January 1998, Mr Stotter on 19 June 1998 and Mr Priest on 21 May 1999. 19 At the time ATTORI went into liquidation on 6 June 2000, its directors were Messrs Stanley Nelson Coupe (formerly managing director of George Weston Ltd, from 16 October 1997), James Joseph Collins (formerly managing director of Parke Davis Pty Ltd, from 18 December 1997) and Robin Trevor Gray (formerly Premier of Tasmania, from 21 May 1999), none of whom were or had been directors or shareholders of BARM. 20 Each of the new directors became a member of ATTORI in May 1999, as did Dr Harvey Craig Bell. Mr Richard John Burns, who was then appointed business manager and company secretary, became a member in August 1999. In January 2000, Mr Stephen Leonard Law, who had preceded Mr Burns as company secretary, and Mr John Huntley Knox, a chartered accountant, also became members. Messrs Quah-Smith (December 1995), Lear (July 1998) and Priest (March 1999) resigned as members and Mr Gallagher was excluded from membership in April 2000. 22 Between April 1996 and June 1999, ATTORI received expendable resources (including interest of $21 million and cash research fees of $94 million but excluding the 'non-recourse' portions of the fees payable to it) of some $115 million, and after expenditure on research activities of $101 million was left with an 'operating surplus' of $14 million. 23 ATTORI contracted with BARM as agent for the Budplan syndicates to undertake research into the properties and applications of tea tree oil for use in acne treatment, hospital, antiseptic and oral hygiene applications; in tinea and other foot problems, dandruff, and candida; in skin care and personal hygiene; and to identify the composition of superior quality oil to prepare genetic maps of suitable families of Melaleuca to identify genetic markers to correlate with high oil yield and optimum oil composition, to cross Melaleuca with appropriate gene structures in order to produce high quality unique hybrids which qualify for commercial protection under plant variety rights legislation and to adapt tissue culture and growth protocols in order to mass produce Melaleuca seedlings by cloning using robotic tissue culture systems. ATTORI also contracted with BARM to research the properties and applications of celery seed extract and development of products specifically for use in treatment of arthritis, gout, and use as a diuretic; the properties and applications of Coenzyme Q10 for measuring general cellular bioenergy in humans and products to improve general energy, health and lifestyle; and the pet care products based on Australian essential oils and natural ingredients. 24 The research work so contracted for was undertaken and the results reported to the Research Advisory Board (as to which, see below). 25 The contracts with BARM were to do research work for a period of two years. They did not delimit the activities of ATTORI: for example, ATTORI took a lease of its premises for 10 years and invested in equipment with a useful life well beyond the term of the BARM contracts. 26 Commencing in January 1998, ATTORI undertook research contracts from other clients, for work in related research areas including analysis of lemon myrtle oil and provision of formulations, analysis of major actives in garlic, analysis of herbal extracts and of herbal raw materials, and research directed to formulations for personal care products, from a variety of independent businesses. Brochures offering its research services were prepared and distributed. Shortly before it was placed under external administration ATTORI was negotiating research and development contracts with both the Strathclyde Institute of Drug Research and Bio-Gene Bioprospecting Ltd from which its estimated revenue would have been $8 million over a four year research period. The Lismore RAB comprised Professor Barneston of Sydney University, Professor Baverstock of Southern Cross University, Professor Wyllie of UWS and Mr Collins, former managing director of Parke Davis. The Melbourne RAB comprised Emeritus Professor Linnane of the Centre for Molecular Biology and Medicine in Victoria, Professor Johnston of Melbourne University, Professor Nagley of Monash University and Dr Bell. 29 The RABs met regularly, generally every two months, and kept detailed minutes recording their deliberations on ATTORI's research. They reported regularly to the Board of ATTORI. The research staff was highly qualified: five doctorates and three other postgraduate or honours degrees, four with research experience of at least 20 years. Dr Leach, the most experienced staff member, had published 35 academic articles. By these means, ATTORI gained access to the experience and expertise of two exceptionally qualified scientists, Dr Lin and Professor Waterman. 32 Obtaining access to expertise resources in this way was a common practice for research institutes. In these facilities it installed, inter alia , six gas chromatographs and three liquid chromatographs with the ability to perform Gas Chromatography with Mass Spectrometry detection (GC-MS), Liquid Chromatography with Mass Spectrometry detection (LC-MS), Critical Fluid Extraction (CFE), headspace analysis and Atomic Emission Detection (AED) analysis. By June 1999, some $1.5 million had been spent on laboratory equipment and $650,000 on laboratory fit-out as well as further sums on other (office, vehicle, etc) equipment. 34 In establishing its premises on the university campus, ATTORI followed a course common for research bodies, so that the very expensive research equipment may be shared and research results may also be shared. 35 Where equipment beyond that possessed by ATTORI was required, ATTORI contracted the work out to other researchers. 37 The outcome of the research done by the staff of ATTORI was also published in scientific journals, in conference papers and in conference proceedings. Many of the published papers were the fruit of collaboration among ATTORI's staff and researchers at other institutions, in the course of which the advances resulting from the research were shared among the collaborating parties. Other institutions whose staff participated in and shared research results included the University of Western Sydney, the CSIRO and the University of Bristol. 38 Published papers acknowledged the sponsorship or participation of ATTORI in the research and posters exhibited at conferences. The staff of and contractors to ATTORI also published papers resulting from the research done. 39 The papers presented and published by researchers conducting the research undertaken by ATTORI have achieved wide recognition as being of scientific value, as evidenced by their citation by other scientists. The scientists who participated in the research were of high international standing, and the work done was, in the unchallenged opinion of Professor Baverstock, himself a scientist of the highest standing, of a very high calibre. That is, it was incorporated to meet the objectives of a broader commercial endeavour. Its activities after incorporation were directed predominantly, if not solely, to that commercial endeavour. It was not concerned with benefiting the public or advancing science for science's or the public's sake. No one was intended to benefit from the research but BARM and the Participants. • To provide the Budplan Participants and BARM, as Manager, with the 'Research Results' so that those results could be commercially exploited for the benefit of Participants and BARM. • To further the commercial interests of the Mainstar group of companies, particularly in relation to sales of the product, Main Camp Premium Pharmaceutical Grade Tea Tree Oil. • To perform the research function in a large commercial venture with a view to making profits and securing tax advantages for the various players. It stated that the Syndicate would contract with ATTORI to undertake necessary scientific research including enhancing existing product formulae and product concepts and to develop new products. 44 It is significant, in assessing the purpose of ATTORI, that the 'research' of ATTORI was to be limited to the tea tree oil from a single source (i.e. Main Camp). The prospectus noted that ATTORI would develop 'Product Packages' incorporating formulae and concepts of the Syndicate using Main Camp Pharmaceutical Grade Tea Tree Oil. The Main Camp Tea Tree Oil Group owned the world's largest tea tree plantation and was set up by Mr Glen Stotter, who was also one of the members of ATTORI and a director from 27 November 1995 --- 19 June 1998. The prospectus disclosed the fact that five of the directors of ATTORI were also directors of companies comprising the Main Camp Group, who were the suppliers of Main Camp Premium Pharmaceutical Grade Tea Tree Oil. 45 The prospectus revealed that a number of potential uses for Main Camp Pharmaceutical Grade Tea Tree Oil had already been identified from past research and three potential uses (i.e. acne treatment, hospital and antiseptic products and oral hygiene) had been 'singled out for further research and development work with a view to enhancing existing work and commercialising the results of this work on world markets'. Main Camp Group was aware of or had conducted its own research into the uses for Main Camp Tea Tree oil. ATTORI was incorporated to further that research and develop product packages for commercialisation by the Participants and BARM (and at all times using the Main Camp Tea Tree Oil). Indeed the prospectus stated that the research of ATTORI was intended to 'overcome limitations ... [in the form of] ... the lack of controlled clinical efficacy trials with defined chemical composition oil'. ATTORI subsequently conducted clinical trials. 46 Under the heading 'Research Approach', it is clear that an element of the business of the Participants was to bring products to world markets in the shortest possible time. In this regard, it was noted that the best possible resources would be used by the manager and ATTORI so that they could achieve the required results in a timely manner. The reference to time-frame is significant because it makes it clear that ATTORI's activities were to be conducted with the commercial imperatives of the Participants in mind. 47 Under the heading '12. Nature of your business', it was noted that if the research of ATTORI was not proving to be successful or in the opinion of the manager, might not produce a satisfactory commercial return, then the Manager would request ATTORI to substitute an alternative area of research, which, in the Manager's opinion, would provide a better return to the Participants. It was never the intention for ATTORI to be free to simply extend the boundaries of science. Rather the intention was for ATTORI to conduct successful research for the Participants that was going to be of commercial value and produce a satisfactory commercial return. It made clear that ATTORI was engaged by the Participants (under cl 6) to conduct the Research and Development (as defined) and in consideration would be paid research fees by the Participants. 49 The research was to be conducted in the manner set out in the Deed: cl 6.1. ATTORI was not free to pursue 'something higher and larger' (the Surgeons' Case 68 CLR at 447 per Starke J) in the promotion and advancement of science. Its objective instead was to create 'relevant' Research Results (cl 6.6) for the purposes of the Budplan Participants and BARM. 50 The 'Research Results' (cl 1.1.14) were to be the property of the Participants: cl 5.1. If those results had any commercial significance BARM would pursue commercialisation at its cost: cl 5.2. ATTORI was to provide BARM, with such follow-up support and data as was necessary to enable BARM to obtain the necessary licences and registrations for the fruits of AARI's research (that is, the 'Research Results') and to do all acts and things necessary to 'commercialise or patent such research and development or any part thereof': cll 6.4 and 6.8. 51 ATTORI agreed to keep confidential all information in respect of the research and development and covenanted that such information would only be used by ATTORI (and its employees and advisers) for the purposes of transactions contemplated by the agreement: cl 13. 52 ATTORI retained BARM as the manager for ATTORI to carry out 'all administrative and management functions ... including but not limited to the sourcing of suitable premises, facilities and personnel for the conduct of the research and development and the maintenance of all books accounts registers and licences necessary for its administration and conduct of research': cl 6.7. For this, ATTORI paid very substantial administration fees ($1,200 from each participation for each of the first two years): cl 6.10. It was also liable for ongoing fees after the first two years. 53 Importantly, proceeds from the 'commercialisation' of the Research Results were not to flow back to ATTORI to be re-invested for further scientific research in accordance with ATTORI's stated 'objects'. Rather, ATTORI was providing a service, as a part of a commercial scheme, to Participants and the Manager, who would be entitled to the proceeds of sale of the fruits of the research: cl 5. In other words, the proceeds derived from the fruits of ATTORI's research were intended 'to be diverted into the pockets of individuals': The Incorporated Council of Law Reporting of the State of Queensland v Federal Commissioner of Taxation [1971] HCA 44 ; (1971) 125 CLR 659 at 672. (b) Clause 2.2: In consideration of conducting the Research and Development, ATTORI will be paid research fees by the Participants. (c) Clause 5.1: ATTORI will provide follow-up support and data required to assist the manager to obtain necessary licences and registrations for the Research Results including Product Packages. (d) Clause 5.3: ATTORI is to undertake responsibilities (as defined) having regard to its objective to create relevant Research Results including Product Packages. (e) Clause 5.4: ATTORI undertakes to keep the manager informed at all times as to progress and developments in respect of the Research and Development and will immediately on completion of any facet of the Research Results that may be commercialised and/or patented, advise the manager and assist and do all things necessary to commercialise or patent the research and development or any part of it. (f) Clause 7.1: The Research Results will be the property of the Participant (subject to cll 7.3 and 7.4). (g) Clause 7.3: BARM is entitled to a lump sum royalty amounting to 50% of the gross sale proceeds of the sale of any of the Research Results and the Participants to the balance. (h) Clause 8.1: ATTORI agrees to pay an Administration Fee to BARM. (i) Clause 11.1: ATTORI agrees to keep confidential all information provided to it in the course of performing its duties under the agreement. 57 Personal Budplan No. 2, Company Budplan No. 1, Company Budplan No. 2 and Melaleuca Biotics Budplan, also involved 'research' using Main Camp Premium Pharmaceutical Grade Tea Tree Oil. 58 The Melaleuca Biotics Budplan also included in cl 2.1 a statement that ATTORI would have the rights to publish the research results unless there were compelling commercial reasons not to publish. It was further stated that such publications were expected to enhance credibility and market acceptance of the improved plants. In other words, results would only be published if that would benefit BARM, the Participants and the Main Camp Group (i.e. by preserving commercially valuable information and releasing non-commercially valuable information that might still have a benefit for Main Camp Group in terms of market acceptance). 59 Personal Budplan No. 3 concerned the development by ATTORI of product packages comprising the data required to manufacture, package, label, register and market a number of anti-inflammatory products using a recently developed 'celery seed extract'. It is noted that the Participants were required to pay a royalty to the owner of the intellectual property, Mobius Consultancy Pty Ltd (the managing director of whom was a current employee of Main Camp Marketing Pty Ltd that was to work with the manager to market the end product). Under the heading 'Methodology to Achieve the Technical Objectives', it is noted that 'New product development will be preceded by basic research work on the Main Camp celery seed extract relevant to the specific areas covered by this prospectus'. 60 The 'Supply of celery seed' was revealed to be from an Indian based company (Sri Mobius Pharma Private Limited) that was controlled by Main Camp Group through its 51% ownership. Sri Mobius Pharma Private Limited had a crude product using celery seed extract which would be replaced at a time when new and better information had been generated by Personal Budplan No. 3, thus giving a source of income to Participants from the time the new enhanced product was sold. The purpose of the 'research' to be conducted by ATTORI for Budplan No. 3 represented a way to improve a crude product currently marketed by a Main Camp group controlled company and the development of a new product that would be of ultimate benefit to the Main Camp Group. 61 In relation to all Budplans, equivalent submissions are made to those above in [43] --- [53] in respect of the Budplan Personal Syndicate. This is apparent from the nature of the Research Agreement and associated transactions, as set out above, which make it clear that its purpose was the fulfillment of contractual obligations. Its purpose was, ultimately, to facilitate the making of commercial profits for individuals and companies associated with Mainstar One companies. It did not have altruistic motives. 63 The relatives (Ms Gail Stotter and Mr Jordan Stotter) of one of the members of ATTORI (Mr Glendon Stotter) were beneficial owners of shares in entities that ultimately owned all of the shares in BARM and thus stood ultimately to benefit from any 'commercialisation' of the research results of ATTORI. 64 As already noted above, the Stotter family and the Mainstar group of companies also stood to benefit from the use and sales of Main Camp Pharmaceutical Grade Tea Tree Oil in the product packages ATTORI was to develop in accordance with the Budplans. (b) Mainstar One Funds Management Pty Limited was wholly owned by Mainstar One Holdings Pty Limited. 70 In respect of the year ended 30 June 1999, BARM received from ATTORI $9,415,562 in 'administration fees'. 73 The obligation to pay commissions under the Budplan Personal Syndicate was an obligation of the manager, BARM. The meeting considered the obligation of the Company to pay commissions to Security's Dealer for services rendered in engaging Participants in Budplan Personal Syndicate Prospects. This will require that on all future settlements the commissions to advisers will be borne by BARM and The Australian Tea Tree Oil Research Institute Limited ('ATTORI') in the proportion of 10%/90%, except for the Monpro Limited commission which will be borne solely by BARM. 3. (b) Personal Budplan No. 4. (c) Company Budplan No. 3. 77 The significance of the amounts of commissions payable by ATTORI is apparent from its financial statements. In the 1996 year, commissions expenditure amounted to 57% of ATTORI's total income. The earliest that scientists and researchers were employed by ATTORI appears to have been July 1996 (i.e. subsequent to the 1996 year) --- this is also the time that ATTORI is said to have commenced its research and development activities. An advertisement brochure for ATTORI, undated, also refers to it having been established in July 1996 by the Main Camp Tea Tree Oil Group (i.e. after the 1996 income year). 80 An external consultant's report relating to Budplan No. 2 refers to ATTORI as having officially opened on 15 October 1996 (i.e. well after the 1996 year). 81 On no view was it a scientific institution. It had been set up to undertake specific contractual obligations and had not even commenced fulfilling them. Importantly, all but one of the agreements included clauses assigning to ATTORI any 'inventions' (as defined) and preventing disclosure of information. 83 There were a total of seven agreements entered into by ATTORI with external research organisations whereby ATTORI out-sourced research activities. Importantly, all agreements protected on behalf of ATTORI, any intellectual property created and developed in the course of the project and all contained confidentiality clauses. 85 There were five agreements entered into by ATTORI with external research organisations whereby ATTORI out-sourced research activities. Importantly, all agreements protected for ATTORI any intellectual property created and developed in the course of the project and all contained confidentiality clauses. Importantly, agreements with universities contained a clause requiring the approval of ATTORI in order to be able to publish findings. Further, in the case of the agreement with the University of Tennessee, the University could publish results provided the confidential proprietary information of ATTORI was publicly known. 86 Importantly, there was a research agreement with the Centre for Molecular Biology & Medicine that appears to represent a complete out-sourcing of all the research and development obligations of ATTORI under Personal Budplan No. 4. In other words, the actual scientific activity in relation to Co-enzyme Q10 appears to have been entirely carried out by the Centre for Molecular Biology & Medicine at the Austin & Repatriation Medical Centre, West Heidelberg. Consistently with other employment agreements, the relevant employment agreement contained a clause assigning any 'inventions' (as defined) and preventing disclosure of information. 88 There were seven agreements entered into by ATTORI with external research organisations whereby ATTORI out-sourced research activities. Again, consistently with prior years, the agreements protected for ATTORI any intellectual property created and developed in the course of the project and all contained confidentiality clauses. Importantly, agreements with universities contained a clause requiring the approval of ATTORI in order to be able to publish findings. 90 The suggestion it was motivated by altruistic purposes or intended to engage in its activities for the public benefit should be rejected. On an examination of these contracts, all but one included clauses whereby the relevant employee assigned to ATTORI all right, title and interest to 'Inventions' and all contracts contained non-disclosure of information clauses. 93 Furthermore, in relation to research agreements concluded with academic institutions (e.g. Southern Cross University, University of Western Sydney), there was an additional clause in the agreements to the effect that the university could, but only with the written approval of ATTORI, publish findings of scientific significance which might arise from the project (cl 5.5 in most agreements). ATTORI could withhold its consent to a disclosure or statement if, in ATTORI's opinion, the disclosure or statement 'may adversely affect the ATTORI's commercial or scientific interests' (cl 5.7 in most agreements). It was between ATTORI and Southern Cross University and was not entered into until 14 January 1998. It protected the commercial interests of ATTORI and ultimately BARM and the Participants. Clause 3.6 noted that students may have to sign a confidentiality agreement in respect of their own research and their knowledge of other research in progress. All intellectual property (as defined) that was created or developed by the student in the course of a project that had vested in the University was to become the property of ATTORI: cl 8.2. Clause 8.3 provided that neither a student, nor any University staff member could publish findings of scientific significance during the term of a project or for an agreed period, following completion of the project, without the written approval of ATTORI: cl 8.3. Even examiners of the thesis of a student were required to enter into confidentiality agreements if ATTORI so required: cl 8.4. 96 A single fellowship agreement was entered into. It was not entered into until 1 January 1998 between Southern Cross University and ATTORI regarding Dr David Lin. Clause 3.1 provided that ATTORI and the Head of School were to agree on the content of any project and the Head of School would not unreasonably disagree with the content, research direction and priority of projects proposed by ATTORI. The fellowship agreement protected the commercial interests of ATTORI and ultimately BARM and the Participants. Clause 7.2 provided that any intellectual property (as defined) that was created or developed by Dr Lin in the course of an ATTORI project (as defined) would become the property of ATTORI. In relation to Joint Projects (as defined), cl 7.3 also protected the interests of ATTORI and ultimately BARM and the Participants by ensuring that whilst the intellectual property was shared, either party could exploit or deal in the intellectual property without further consent of the other party. 97 An unsigned copy of a letter dated 23 February 1999 purports to relate to the ATTORI sponsorship of a Chair of Phytochemistry. Clause 3 protected the commercial interests of ATTORI and ultimately BARM and the Participants by providing ATTORI with a right of first refusal for all intellectual property developed by non-contracted research by the current holder of the Chair. Under the agreement, all existing and future intellectual property rights developed in carrying out the services were assigned to ATTORI and all future intellectual property rights vested in ATTORI from the date of their creation: cll 3.2(a) & (b). ATTORI's prior written consent was required before Professor Waterman could disclose any of the results in any published article or at any conference or make any public statement relating to the services or any party's involvement in them: cl 3.3. Importantly, ATTORI could withhold its consent in relation to a disclosure or statement referred to in cl 3.3, if 'in ATTORI's opinion the disclosure or statement may adversely affect ATTORI's commercial or scientific interests': cl 3.4. Clause 8 required Professor Waterman to keep confidential all intellectual property and research results and commercial arrangements between the parties in relation to the services. Mr Stotter opened the meeting and gave an overview of the establishment of ATTORI. It was agreed that each member of ATTORI would sign a confidentiality agreement. All of the discussion then related to fulfilling contractual obligations to BARM and the Participants. 100 The confidentiality agreements were signed at the second meeting, also held at 85 Tamar Street. It was noted that three staff members from Main Camp Plantation had now been employed by ATTORI. 101 The subsequent meetings were held variously at 85 Tamar Street, the Mainstar One Holdings Ltd boardroom in Governor Phillip Tower, Sydney and the Southern Cross University. 102 The minutes make clear that the RAB concerned itself predominantly, and in fact, almost exclusively, with advancing the commercial interests of BARM and the Participants. It is clear that they acted in accordance with the directions of the ATTORI Board. Before any further projects are committed to, in relation to closed Budplans, the ATTORI Board wants a full value assessment of any new proposal forwarded to them for approval. sensitivity studies were carried out using Main Camp Pharmaceutical Grade (or PG) Tea Tree Oil, ATTORI was undertaking extensive trials of non-chemical insect control systems, where Main Group was noted to be producing tea tree oil using organic farming methods). The relevant references to the evidence are set out in the paragraphs immediately below. 104 A slide-pack, undated, for a presentation for ATTORI refers to certain conclusions reached in relation to sensitivity studies carried out using 'Main Camp PG tea tree oil'. 105 A report entitled 'Australia Tea Tree Oil' by Mr David Leach, which appears to have been included at a conference on 1-3 September 1997, refers to an investigation into the biosynthetic pathway of tea tree oil formation and as part of the ISO 9000 oil production process, Main Camp plantation has patented a post-distillation process that improves water separation, oil clarity and odour. There is an acknowledgement in the report of the support of Don Priest of the Main Camp Tea Tree Oil Group. 106 A report, undated, which appears to relate to Dr Craig Bell's article for Cosmetics, Aerosols and Toiletries, states that ATTORI was set up in late 1996 by the Main Camp Tea Tree Oil Group with the primary aim of conducting research into tea tree oil and developing products based on the better understanding of its properties and mode of action. It also provides that 'The Institute is funded by investors. Dividends are to be paid from the sale of the formulations, the intellectual property or 'discoveries' and in some cases sale of finished goods'. It is noted that 'Main Camp produces tea tree oil using organic farming techniques. As part of this program, ATTORI has carried out extensive trials of non[-]chemical insect control systems'. 107 A report by David Leach, which is said to relate to a conference in November 1997, refers to the ISO 9000 certified production process at Main Camp plantation that may be a significant contributor to the production of low irritancy oil whilst ensuring uniformity of product from batch to batch and season to season. Importantly, it says that ATTORI is following up this irritancy/sensitivity study with additional trials on panelists that displayed sensitisation. 108 An advertisement brochure for ATTORI, undated, refers to it having been established in July 1996 by the Main Camp Tea Tree Oil Group. 109 In the report, 'Progress in Essential Oil Research', 1-3 September 1997, David Leach acknowledges the support of Don Priest of the Main Camp Tea Tree Oil Group. Only one article was published in 1998 by a number of authors, the principal one apparently being Mr John Gustafson from Genetica Biotechnologies in Western Australia. A second article was also accepted for publication. Otherwise, Exhibit 2 contains the results of research for potential commercialisation for BARM and Participants. Each of the seven volumes is expressed on the first page to contain 'confidential information', which it is 'strictly prohibited' to reproduce or access without written approval. None of it was intended for consumption by the scientific community. 112 Dr Harvey Bell has given evidence of the 'research' conducted for 'other clients and research organisations'; that is, non-Budplan research. ATTORI provided potential customers with a standard pre-printed request form on which the customer was requested to 'please tick if required' against the relevant type of analysis. Mr Gallagher retired as a director on 10 June 1998, Mr Priest on 24 February 1998 and Mr Stotter on 26 March 1999. 118 At the time AARI went into liquidation on 6 July 2000, the directors of AARI were Ms Maree Patricia McCaskill (from 24 February 1998) and Messrs Coupe (from 26 March 1999) and Gray (from 10 June 1998), none of whom were or had been directors or shareholders of BARM. 119 Each of the new directors became a member of AARI in May 1999, as did Mrs Gray. Mr Burns became a member in August 1999. Mr Priest resigned as a member on 26 February 1999. 121 Between February 1997 and June 1999, AARI received expendable resources (including interest of $4 million and cash research fees of $19 million but excluding the 'non-recourse' portions of the fees payable to it) of some $23 million, and after expenditure on research activities of $21 million was left with an 'operating surplus' of $1.6 million. 122 AARI contracted with BARM as agent for two Budplan syndicates to undertake research into the properties and structures of the plant and fruit of table grapes and the development of new or enhanced varieties, and the development of genetically improved cultivars and rootstock of selected traditional wine grape varieties. These contracts were for performance of work over a period of two years. 123 The research work, so contracted for, was undertaken and yielded original research results in identifying molecular markers, discovering genes and transformation. The research work was successful at an early stage, with (for example) 'Thaumatin-like genes' being discovered by AARI's research and made the subject of patent applications relating to disease resistant genetic engineering only two years after the commencement of research. The research that led to this patent application also generated 'highly original' research results in relation to micro-satellites that were useful in patenting new grape varieties. 124 The research results were reported to the RAB, which sought means of commercialising the research. For example, in December 1998, the generation of saleable plants using disease resistance resulting from the transformation research was under consideration. 125 AARI also sought research contracts with other clients, for work in related research areas. One contract secured by AARI was for research into a mutant strain of cabernet sauvignon that produced bronze grapes. 128 The RAB met regularly, generally every two months, and received reports on the status of research projects. The deliberations on AARI's research activities were recorded in the minutes of the meetings. The RAB reported to the Board of AARI. In addition the University seconded to AARI to work exclusively with it, Dr Ablett, Dr Scott, Dr He, Dr Arnold and Ms Akula, as well as technical staff. 131 Obtaining access to expertise resources in this way was a common practice for research institutes. The entire CPCG tissue culture laboratory facility including preparation lab, tissue culture lab, instrument and incubator room, cold room and controlled-environment growth room, was provided for AARI's exclusive use for most of the time that the research projects ran, along with a significant portion of the separate and main CPCG laboratory and facilities. The laboratories used by AARI were at the forefront of plant genetics research facilities and compared very favourably on an international standard. Pursuant to the Research Contract, the University made available to AARI the use of a range of advanced equipment for its research including a Perkin-Elmer UV-vis spectrophotometer (valued at approximately $50,000), multiple PE thermal cycler 9700 PCR machines (valued at approximately $10,000 each), ABI 310 Genetic Analyser (valued at approximately $120,000), DNA microarray reader (valued at approximately $50,000), several sterile environment laminar flow cabinets (valued at approximately $15,000 each), -80deg.C ultra-low temperature freezers (valued at approximately $20,000 each), and controlled-environment incubators (valued at approximately $20,000 each). In addition, the University gave AARI access to the whole range of routine general biological laboratory apparatus required to conduct the kinds of research outlined above, equipment collectively worth many thousands of dollars. 133 In establishing its premises on the university campus, AARI followed a course common for research bodies, so that both the very expensive research equipment and the research results obtained from its use may be shared. 135 The outcome of the research done by the staff of AARI was also published in scientific journals, in conference papers and in conference proceedings. Many of the published papers were the fruit of collaboration among AARI's staff and researchers at other institutions, in the course of which, the advances resulting from the research were shared among the collaborating parties. Other institutions whose staff participated in and shared research results included the Institute for Cell and Animal Biotosy, Edinburgh University, Queensland Agricultural Biotechnology Centre, University of Queensland and Tropical Plant Sciences, James Cook University. 136 The data generated by AARI's genome research was known of and sought by other research institutions world wide, and AARI negotiated with other researchers concerning the terms of access to the data. Parts of the data have been made available to institutions in Chile, Switzerland and Japan. 137 Published papers acknowledged the sponsorship or participation of AARI in the research and so did posters exhibited at conferences. The staff of and contractors to AARI also published papers resulting from the research done. 138 The papers presented and published by researchers conducting the research undertaken by AARI have achieved wide recognition as being of scientific value, as evidenced by their citation by other scientists. The scientists who participated in the research were of high international standing, and the work done was, in the unchallenged opinion of Professor Baverstock, himself a scientist of the highest standing, of a very high calibre. That is, it was incorporated to meet the objectives of a broader commercial endeavour. Its activities after incorporation were directed predominantly, if not solely, to that commercial endeavour. AARI was not concerned with benefiting the public or advancing science for science's or the public's sake. No one was intended to benefit from the research but BARM and the Participants. 1 (Prospectus dated 10 March 1997, containing unexecuted copies of the Management Agreement and Research Agreement) and Personal Budplan No. • To provide BARM, as Manager, with the 'Research Results' so that those results could be commercially exploited for the benefit of Participants and BARM . 142 The Research Agreement for Budplan 'A' Series No. 1 is between AARI, the Participants, BARM and Australian Rural Group Limited ('ARG'). It is dated 16 June 1997. It makes clear that AARI is engaged by the Participants (Recital A) to perform the research and development: cl 4.1. 143 The research was to be carried out in keeping with the 'aims and parameters' set out in the relevant Research Agreement and its terms and conditions. AARI was not free to pursue 'something higher and larger' in the promotion and advancement of science. Its objective instead was to create 'relevant' Research Results (cl 5.3) for the purposes of the Budplan Participants and BARM. 144 The 'Research Results' (cl 1.1) were to be the property of the Participants: cl 7.1. If those results had any commercial significance, BARM would pursue commercialisation at its cost: cl 7.2. AARI was to provide BARM with such assistance, support and data as was necessary to enable BARM to obtain the necessary licences and registrations for the fruits of AARI's research (that is, the 'Research Results') and to do all acts and things necessary to 'commercialise or patent research and development or any part thereof': cll 5.1 and 5.4. 145 AARI agreed to keep confidential all information in respect of the research and development and covenanted that such information would only be used by AARI (and its employees and advisers) for the purposes of transactions contemplated by the agreement: cl 10. 146 AARI retained BARM as the Manager for AARI to carry out 'all administrative and management functions ... including but not limited to the maintenance of all books accounts registers and licences necessary for its administration and conduct of research': cl 6.1. For this, AARI paid very substantial administration fees ($1,250 from each participation for each of the first two years): cl 8. It was also liable for ongoing fees after the first two years. In the year ended 30 June 1999, BARM received from AARI $298,750 in 'administration fees'. 147 Further, AARI was liable to pay BARM 90% of the brokerage and commissions payable by BARM in respect of obtaining the Participants: cl 13.2. 148 As noted below, the research was in fact carried out by the University and ForBio. They were under strict confidentiality regimes and passed on intellectual property to AARI or its nominee and, later, ARG: see [163], [164] and [171] below. This is apparent from the nature of the Research Agreement and associated transactions, as set out above, which make it clear that its purpose was the fulfillment of contractual obligations. Its purpose was, ultimately, to facilitate the making of commercial profits for individuals and companies associated with Mainstar One companies. It did not have altruistic motives. 150 One of the members of AARI (Ms Gail Dawn Stotter), was also the beneficial owner of shares in entities that ultimately owned all of the shares in BARM and thus, stood ultimately to benefit from any 'commercialisation' of the Research Results. (b) Mainstar One Funds Management Pty Limited was wholly owned by Mainstar One Holdings Pty Limited. • Mr Law was the original secretary of AARI. In the 1997 year, Mr Law was the secretary of Mainstar One Holdings Pty Ltd, Mainstar One Funds Management Pty Ltd and BARM. 154 Mr and Mrs Stotter continued to be members of AARI and ATTORI at all material times. 155 Pursuant to the terms of the Research Agreements, in the event of any sale of the Research Results, BARM was entitled in its own right to the payment by the Participant of a lump sum royalty equal to 50% of the gross sale proceeds of the relevant Research Results. 156 There was no purpose other than fulfilling contractual obligations to BARM and to the Budplan Participants. Certainly, that was the predominant purpose of it being set up. It was incorporated on 20 January 1997. It did not employ anyone. The research only commenced in early 1998. 158 On no view was it a scientific institution. It had been set up to undertake specific contractual obligations and had not even commenced fulfilling them. In fact, he was not appointed until 25 May 1998. 160 Professor Lee, who was primarily responsible for overseeing the fulfillment of AARI's contractual obligations to BARM, was employed from 1 May 1998. 161 In the year ended 30 June 1998, AARI employed a total of four people (scientists and non-scientists). 162 The actual research --- that is, the actual scientific activity --- was carried out by the Centre for Plant Conservation Genetics at the University and charged to AARI. It was not in fact performed by AARI at all. • Project was defined to mean the work described in Schedule 1 (cl 1.1). It is clearly the research that AARI had contracted to provide to BARM. • All the 'Intellectual Property' would be AARI's (cl 4). • The University was not permitted to disclose any of the research or the 'Results' in any published article or conference (cl 4.3). AARI might consent to disclosure if, in AARI's opinion, the disclosure might affect AARI's 'commercial or scientific interests' (cl 4.4). The University had to keep all Intellectual Property confidential (cl 12). • The agreement did not constitute AARI as a joint venturer or partner of the University (cl 10). • The 'Principal Researchers' (cl 1.1) were ForBio Limited and the Centre for Plant Conservation Genetics (sch 4). • It is clear that the activities were only to commence in early 1998. • The commencement date was 1 July 1997: see Second Schedule at page 467. • Invoices for work issued in amounts totalling $5.6 million. The evidence does not disclose whether these were all paid (although some appear to have been). 165 The fact that it was the University and ForBio, and not AARI that carried out all of the scientific work is also evident from the University progress reports to AARI from 29 January 1998 to March/April 2000. It is also clear from the 'Deed of Commercialisation' between the Southern Cross University and ARG, unsigned and undated, but apparently entered into. 166 AARI's primary concern was, in reality, ensuring that the research was undertaken by the University and ForBio according to the agreements made with them, and considering aspects of commercialisation of that research for the benefit of BARM and the Participants. It did not have a laboratory in which to conduct its own research. 167 The scientific activities carried out by the University were carried out at the University's laboratory, namely the CPCG laboratory. All of the equipment in the University laboratory belonged to the University and not to AARI. AARI did not have a laboratory; the research it was to procure for BARM was conducted by others. 168 Neither did it undertake any activities of a scientific nature in any endeavour apart from those it was to provide pursuant to the Research Agreements with BARM (namely those provided by the University and ForBio). 170 Again, all of the actual research activities were undertaken by the University, pursuant to the agreement of 23 December 1997, and by ForBio. The University, in turn, entered into an agreement with DuPont in January 1999 to facilitate DNA sequencing. 171 On 6 May 1999, an 'Amending Deed To Research Agreement' was entered into with the University which, amongst other matters, replaced cl 4.2 such that the 'Intellectual Property' was assigned to ARG (for the Participants) rather than to AARI or its nominee (BARM). 172 AARI did not undertake any research activities apart from those carried out by the University and ForBio for it that were aimed at the commercial venture associated with the Budplans. Although AARI seeks to suggest it undertook one other activity, it is clear that the contract entered into by AARI was done so as agent for BARM. Even if this could have constituted some venture of AARI's not associated with the Budplans, it could hardly be regarded of such significance so as to transform the fundamental nature of AARI's activities. 174 The suggestion it was motivated by altruistic purposes or intended to engage in its activities for the public benefit should be rejected. That provision would survive any termination of employment. Dr Lee was forbidden from disclosing any information concerning 'the affairs or secrets' of AARI: cl 11. Dr Lee and AARI would not be in a relationship of joint venturers or partners: cl 13. 176 As noted above, by cl 10 of the Research Agreement, AARI agreed to keep confidential all information in respect of the research and development and covenanted that such information would only be used by AARI (and its employees and advisers) for the purposes of transactions contemplated by the agreement. They, like AARI, were under strict confidentiality requirements (see [163] and [164 above). 178 Leaving aside those research agreements, only one other research agreement was entered into between AARI and CRC (associated with the Universtity of Queensland). However, this was entered into by AARI 'on behalf of' (that is, as agent for) BARM. It contained a strict confidentiality regime (cll 4.11 to 4.14) and all intellectual property would be owned by AARI (as agent for BARM) (cl 4.1). Invoices totalled $308,000. It protects the commercial interests of AARI, BARM and the Participants. Clause 3.6 requires students to sign a confidentiality agreement in respect of their own research and their knowledge of other research. Nothing in the agreement operates to constitute AARI as agent or employee of the University, or joint venturer with it: cll 7.2 and 17.1. All intellectual property (as defined) shall become the property of AARI: cl 8.2. Clause 8.3 provides that neither a student nor any University staff member shall, without the written approval of AARI, publish findings of scientific significance during the term of a Project. Even examiners of the thesis of a student would be required to enter into agreements to maintain confidentiality: cl 8.4. 180 AARI paid two amounts for scholarships: $20,000 in relation to an invoice dated 30 July 1998 and $84,000 on 12 July 1999. 181 The provision of the scholarships was solely directed to the work which AARI had contracted to perform for BARM. It was not a scholarship for someone to pursue an area of research of their choice funded altruistically by AARI. 182 It paid nothing by way of sponsorship fees in the 1997 and 1998 years. 184 The first meeting, for which minutes are available, was on 27 October 1997. They determined not to invite CSIRO to participate on the Board and were placing adverisements for staff recruitment. Dr Lee had been 'seconded' to the position of program leader. BARM had appointed Dr Reed to the position of scientific auditor. It was clear from the outset that AARI's activities were conducted to fulfill its contractual obligations to BARM and that it would be audited throughout. 185 It is clear from the terms of the minutes that AARI was concerned solely with conducting the activities it was set up to undertake, namely those it had contracted to perform for BARM. It was dependent upon BARM for its funding. It did not engage in projects outside of those activities. Employees of AARI were not permitted to (see [175] and [176] above) and did not publish material of any commercial value (see below). • No articles were written in 1997 or 1998. • One article was written in 1999. In comparison to later articles, it is short and general. More significantly, however, it was only permitted to be submitted for publication because the material in it was the subject of a provisional patent application and AARI had approved it. • As noted above, employees were forbidden from disclosing material without AARI's consent. • The remaining articles were written from 2000 to 2005. Its activities in those years are of marginal, if any, relevance to the characterisation of its activities in the relevant years, namely 1997 to 1999. AARI went into administration on 19 May 2000. At that time, the research projects were not at a stage where it was likely that commercial realisation of the results could be achieved. • There was one in 1999. • As noted above, employees were forbidden from disclosing material without AARI's consent. • The remaining conferences were from 2000 to 2002. Its activities in those years are of marginal, if any, relevance to the characterisation of its activities in the relevant years, namely 1997 to 1999. AARI went into administration on 19 May 2000. At that time, the research projects were not at a stage where it was likely that commercial realisation of the results could be achieved. 189 On a careful analysis, it is evident that AARI is placing great emphasis on one article in 1999 and one conference in 1999. 191 A summary of the facts of that case assists an understanding of what was said by each of the members of the High Court and what can be drawn from those reasons by way of application to the facts of the present case. 192 The Royal Australasian College of Surgeons was registered in Victoria as a limited company. Some of its objects as stated in its memorandum of association were for the promotion of the professional interests of its members and others were for the promotion of the science of surgery. The members of the College were all surgeons. Its principal activities included: the holding of conferences of surgeons for the discussion and study of surgical matters and the dissemination of knowledge of surgery; the provision of a technical surgical library for the use of its members and the publication of a surgical journal; the conduct of examinations for admission to fellowship of the College; and the administration of funds for surgical research and for the award of scholarships to medical students. The Commissioner assessed the College to tax income received by it from investments. A case was stated before the Full Court of the High Court that asked the question whether the income of the College was exempt from income tax as being the income of a scientific, charitable or public educational institution within the meaning of s 23(e) of the ITAA 1936. 193 It was argued before the High Court by counsel for the College that it was a scientific or charitable institution within the meaning of s 23(e) in that its main object was the advancement of surgery and that any benefit that may accrue to its members was secondary. Counsel for the Commissioner argued that a scientific institution is one which has for its sole or dominant object the enlargement of scientific knowledge; that if there are two coordinate objects, one of which is outside the exception, the exception cannot apply. The College had two objects, namely, the advancement of science and the professional advancement of its members and it was impossible to say that one predominated over the other. 194 Each of the members of the High Court held that the College was a 'scientific institution' within the meaning of s 23(e) of the ITAA 1936 because the main, substantial, dominant or primary object of the College was to promote the science of surgery and the existence of another object, namely, the promotion of the professional interests of its members did not, in those circumstances, mitigate against that ultimate conclusion. 195 A more detailed and complete analysis of their Honours' respective reasons is given by Lockhart J presiding on a Full Court of this Court in Cronulla Sutherland Leagues Club Limited v Commissioner of Taxation (1990) 23 FCR 82 at 90 --- 93; see too, Beaumont J at 111 --- 113 and 117, and Foster J at 123. 196 While the ultimate issue in the present case is the same as it was in the Surgeons' Case , the real or substantive underlying issues are not. In the Surgeons' Case it was, according to Starke J at 447, '... rightly conceded, that the College was an institution'. And in Federal Commissioner of Taxation v Word Investments Ltd (2007) 164 FCR 194 , Allsop J noted at [8] and [9] that there was no dispute that 'Word' was an institution; the only question was whether it was a 'charitable institution'. In the present case, there is a real issue as to whether ATTORI and AARI are institutions. 199 Nevertheless, it is unnecessary to break the task up into component parts: Is it an institution? And if so, is it a scientific institution? It is an integrated, holistic inquiry directed to whether a body of facts and circumstances satisfies a legal category or conception. Cas. at 341]; Inland Revenue Commissioners v. Yorkshire Agricultural Society [(1928) 1 K.B. 611 at 625, 634]; Usher's Wiltshire Brewery Ltd. v. Bruce [(1915) A.C. 433 at 466]), but all the relevant facts are stated in the case and may perhaps be regarded as raising a mixed question of law and fact proper to be stated for the opinion of this Court pursuant to s. 198 of the Act. 202 In the Surgeons' Case , Starke J at 448 indicated that it was permissible to look outside the objects of the entity to its activities in determining whether the qualification for exemption was met, at least where the memorandum did not make it clear which objects of a mixed character are its main or dominating characteristics. They should be examined in conjunction with one another and in the light of the circumstances in which the College was formed and of the manner in which the College is fulfilling the purposes for which it was incorporated. In Cronulla Sutherland Leagues Club 23 FCR at 98, Lockhart J referred to this issue by reference to the decision of the High Court in Brookton Co-operative Society Ltd v Commissioner of Taxation (Cth) [1981] HCA 28 ; (1981) 147 CLR 441 where the ultimate issue was whether the taxpayer was a co-operative company within the meaning of s 117 of the ITAA 1936. One of the elements of the statutory definition was that the company 'is established for the purpose of carrying on any business having as its primary object or objects one or more of the following ... [objects]'. 205 Gibbs CJ did not find it necessary to decide whether, in considering whether a company came within s 117(1) , the subjective motives and intentions of the promoters should be taken into account, although he said that it was clear that the court must consider the activities that the company actually carried on (at 445). No doubt it was the presence of the words "is established" and the purpose of the section that led Fullagar J in A & S Ruffy Pty Ltd v Commissioner of Taxation (Cth) [1958] HCA 18 ; (1958) 98 CLR 637 ... and Menzies J in Renmark Fruitgrowers Co-operated Ltd v Commissioner of Taxation [1969] HCA 56 ; (1969) 121 CLR 501 ... to adopt this approach. To my mind it is evidently correct, allowing, as it does, that the purpose for which a company is established may change in the course of time and that with the change of purpose there may come a change in status as a co-operative company. Moreover, in Ruffy ... the Court explicitly rejected the suggestion that the objects of the business were to be gathered solely from the objects clause in the memorandum. In that case the Court, in characterising the object of the business, looked to the business activities of the company after its incorporation as well as to the purpose of its incorporation -- ... In Revesby Credit Union Co-op Ltd v Commissioner of Taxation (Cth) [1965] HCA 2 ; 112 CLR 564 ... McTiernan J said: "The main test to be adopted in ascertaining the primary object is to ask what the actual activities of the appellant society indicate it to be. In general a distinction is to be drawn between purpose on the one hand and motives and intentions of the promoters on the other hand, but I do not see why the intentions of the promoters may not be relevant in determining what is the purpose for which a company is established. That expression therefore has the significance of "maintained" or "kept in operation". This Court has held that the objects as set out in the company's memorandum of association or other constituent documents cannot be decisive and perhaps may be of only remote relevance. The purpose of its incorporation must be ascertained from what it did. In this instance Mason J (at 453), with the concurrence of Wilson J, thought that the intentions, if not the motives, of the promoters could be looked at, although Aickin J strongly disagreed: at 463. In the first place, it is obvious that a variety of opinions have been expressed from time to time in the highest appellate courts on this issue and they are by no means consistent. ... I therefore conclude that there is no authority which binds me to exclude evidence of the activities of the plaintiff company, or of the surrounding circumstances which led to the setting up of the scheme. What I am concerned with in the present case is an alternative test based on either exclusive or principal purpose and that entitles the court to have regard to a wide range of relevant factual circumstance, although I would not think that motive was one of the relevant circumstances. Of course it is necessary to look at the constituent documents, but in the present case, as with many of the cases which I have cited, those documents are of relatively little assistance, certainly in determining what is the principal purpose of the plaintiff company. This is not a matter to be resolved merely by the construction of a deed of trust, for it requires a realistic appraisal of whether the chief or major purpose of the scheme is the advancement of "the interests of a university or a school" of the relevant kind. For this purpose I would adopt the passage set out above (at 40) from Williams J's judgment in the Royal Australasian College of Surgeon's case, supra, at 452. 214 SSAU Nominees involved a claim for a sales tax exemption for 'goods for use ... by a society, institution or organisation established and carried on exclusively or principally for the promotion of the interests of a university or school conducted by an organisation not carried on for the profit of an individual'. The case otherwise turned on its own facts and the particular legislation. On the other hand, in the present case, I do not know that it is necessary to go that far; indeed, I do not know that there is any direct evidence of such motives and intentions; I was certainly not taken to any. As the Commissioner's submissions make clear, there is evidence of the circumstances in which ATTORI and AARI were formed and of the manner in which each has carried out its activities and both of those are relevant to the determination of what is the main or dominant purpose of ATTORI and AARI: see Williams J in the Surgeons' Case at [203] above. From that evidence, which is not disputed, certain conclusions can be drawn. 216 Put another way, in undertaking the task of deciding whether ATTORI and AARI are 'scientific institutions' for the purposes of s 23(e) of the ITAA 1936 or s 50 - 5 (item 1.3 ) of the ITAA 1997 in each of the relevant years of income, I do not think I am confined to a consideration of the objects in their respective memoranda of associations and their respective activities in vacuo . (2) The framework, if any, other than one imposed by reference to its objects, within which it carries on its activities in pursuit of these objects. (3) The imperatives, if any, which drove the activities, other than those imposed by reference to its objects, and an assessment of the purpose of such activities, in the light of any such imperatives. (4) The public accessibility to the results of research, both within the scientific community and the community at large; the public utility aspect. 217 As noted earlier at [199], the inquiry is an integrated holistic one directed to whether a body of facts and circumstances satisfied a legal category or conception; and that is the way each of the members of the High Court approached the task in the Surgeons' Case 68 CLR. 218 I have come to the conclusion that neither ATTORI nor AARI was a 'scientific institution' for the purpose of the applicable statutory provision in the relevant years of income. My reasons for coming to this conclusion are set out below, but it would be fair to say that these reasons in large part reflect my acceptance of the Commissioner's submissions at [41] --- [112] and [140] --- [189] above. 219 While the objects for which ATTORI and AARI were established (see [14] and [114] above) are consistent with those of a scientific research institute, and the prohibitions contained in the memoranda of associations against the distribution of income and property to their members either by way of dividend, bonus or otherwise or upon a winding up or dissolution are consistent with what one would expect to find in the constitution of such an institute (see, for example, the Surgeons' Case at 448), and both bodies carried out scientific research activities consistent with those objects; such matters or considerations only tell half the story. They do not tell you, by reference to objective indicia rather than the motives or intention of the promoters, why ATTORI and AARI were brought into existence; they do not tell you anything about the commercial/contractual framework within which ATTORI and AARI were to pursue their objects; they do not tell you anything about the commercial/contractual imperatives which drove those activities so as to enable an informed conclusion to be drawn as to their real purpose; and they do not tell you anything about the public utility of such activities. These are all matters or considerations that fall under the umbrella of why ATTORI and AARI were brought into existence and why and how they carried on their activities in pursuit of their objects. It is to those matters that I now turn. Southern Cross University, Centre for Molecular Biology & Medicine at the Austin & Repatriation Medical Centre). Employees of ATTORI and AARI were not permitted to publish material of any commercial value. In relation to academic institutions that were third-party contractors for ATTORI, their 'scientific findings' could only be published with the written approval of ATTORI and such approval could be withheld to the extent that disclosure of the findings might 'adversely affect ATTORI's commercial or scientific interests'. With isolated exceptions, the material pointed to in AARI's evidence was published from the year 2000 onward (i.e. after the period to which the present proceedings relate), and at a time when it was known to be unlikely that the research results could be commercially exploited. (2) They were incorporated to meet the objectives of a broader commercial endeavour. (3) Their activities after incorporation were directed predominantly, if not solely, to that commercial endeavour. (4) Their activities were not concerned with benefiting the public or advancing science as ends in themselves; no one was intended to benefit from the research but BARM and the Participants. (2) To provide the Budplan Participants and BARM, as Manager, with the 'Research Results' so that those results could be commercially exploited for the benefit of Participants and BARM. (3) In the case of ATTORI, to further the commercial interests of the Mainstar Group of companies, particularly in relation to sales of the product, Main Camp Premium Pharmaceutical Grade Tea Tree Oil. (4) To perform the research function in a large commercial venture with a view to making profits and securing tax advantages for the various players. 223 The findings in [221] and [222] manifest themselves in a number of different ways that are referred to in the Commissioner's submissions above. It serves no purpose to repeat them; they are all antithetical to a conclusion of status as a 'scientific institution'. 224 Viewed holistically, ATTORI and AARI were components of a larger commercial venture which had as its objective the commercialisation of the 'research results' for the financial benefit of the Participants and BARM. They did not manifest an independence and freedom, subject of course to financial constraints, in the activities each undertook in pursuit of the advancement of science. This is not to say that an entity claiming status as a 'scientific institution' cannot enter into contractual obligations to undertake scientific research for reward for a particular third party, but its entitlement to such status will be impaired if that is all it does or if such activities comprise the great bulk of its overall activities. Rather than being a scientific institution, it will be seen for what it is: a 'captive' scientific researcher undertaking research work for the benefit of a third party and its associates. In his oral submissions, senior counsel for the Commissioner referred to such a body as a 'service provider' and the description is apt; he suggested as an analogue, a company that undertook scientific research exclusively, or nearly exclusively, for a research-based pharmaceutical group; such a company, he submitted, would not be a scientific institution even though all its activities were devoted to the advancement of science. In my view, the analogue is also apt. 225 Finally, there is the absence of public benefit, except to the extent it can be said that the public benefits from scientific development for private commercial gain. The research results were kept strictly confidential by all concerned and the results were not to be published if ATTORI or AARI considered them to be of any commercial value. The material that did reach the public domain was minimal and was more in the nature of a mere by-product of ATTORI's or AARI's activities than the sole or even predominant or significant purpose for which each company was established. For an entity to claim status as a 'scientific institution', the results, albeit not necessarily the ownership, of the subject entity's activities should be freely available to the community at large; the public community as well as the scientific community. Neither ATTORI nor AARI qualified on this score. 226 My findings that ATTORI and AARI were not 'scientific institutions' within the applicable statutory provision in the relevant years of income necessitates that I address issue 2. Here, it is in respect of the research fees, but it arises out of the same factual background. 228 While the arguments in the present case were not identical to those that were ventilated in the BARM case, they do traverse common ground. For the reasons given in that case, the applicants in the present case cannot succeed on this issue. 229 The applications must be dismissed with costs. I certify that the preceding two hundred and twenty-nine (229) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds.

whether companies undertaking scientific research are 'scientific institutions' and in consequence exempt from income tax under applicable legislation relevant indicia for determining status as a scientific institution measure of research fees to be brought to account as assessable income if not exempt from income tax income tax

In 1995, Prismex Technologies granted to Interium Pty Ltd ('Interium') an exclusive licence to exploit the invention, and Interium did so until June 2006, when it went into liquidation. The principal question in this proceeding is whether the licence is revocable by Prismex Technologies, or whether it cannot be so revoked and is an asset assignable by the liquidator of Interium. The question is important because the liquidator purported to assign all the property of Interium, including intellectual property, to the first respondent, Keller Industries Pty Ltd ('Keller'), which was in competition with Interium, and which is still in competition with interests which were associated with Interium and which remain associated with Prismex Technologies. 3 The display system was invented by the fourth cross-respondent, Mr John Ashall ('Ashall') in about 1991, in which year the patent was applied for by Ashlar Screenprints Pty Ltd ('Ashlar'), a company with which Ashall was then associated. In July 1992, Ashlar assigned its interest in the patent application to a company called Illumination Research Group (Properties) Pty Ltd ('IRG'), which used the invention in the manufacture of an edge-lit diffusion system called 'Prismex'. Also in the early 1990's, Mr John Matyear ('Matyear') was in a separate business in the manufacture of edge-lit signs, called 'Interium'. In July 1994, he was approached by Mr Garry Buick ('Buick') of IRG who said that IRG was in financial difficulties, and suggested that they establish a new venture which would purchase the rights to manufacture the 'Prismex' panel. Whether or not connected with these developments, on 27 January 1995, IRG assigned its interest in the patent application, and in the then prospective patent, back to Ashlar. The patent was sealed only four days later, on 31 January 1995, in the name of IRG. The transfer to Ashlar was registered on 15 February 1995. By the time of important events in June and July 1995 to which I shall refer, Ashlar was the patentee. 4 Matyear and Buick commenced to develop their new business. They needed larger premises than were then available to them, and some factory space in Bayswater was offered by someone with whom Matyear had worked in the 1980's, the third cross-respondent, Mr Colin Taggert ('Taggert'). A little later, it seems, Matyear was told by a representative of Ashlar that the patent could be purchased for $150,000. Thus was born the idea of a business making edge-lit signs using the invention, which was referred to as the 'Prismex technology'. Taggert joined Matyear and Buick in the venture, as did Ashall himself, who had the technical skills required for the project. 5 The corporate structure for the business was discussed by the four venturers (Matyear, Buick, Taggert and Ashall) at a critical meeting in the office of their accountant, Mr Peter Mews ('Mews') on 9 June 1995. I was told that Buick is now deceased. Mews was not called to give evidence, a circumstance for which no explanation was offered by any party. The other three participants in the meeting gave evidence, but their recollections of the meeting were very general, and understandably influenced by their concept of what was the general plan at the meeting, rather than by any recollection of what was actually said or agreed. However, all were clear that there were to be two companies involved in the business, one to trade and the other to hold the patent. On 13 June 1995, Mews wrote a memorandum the stated purpose of which was 'to record the matters discussed' at the meeting on 9 June. Each witness accepted that this memorandum did accurately summarise what was discussed at the meeting. The work has been done by John Matyear and Garry Buick to a point where a market for the product has now been established. The arrangement for the incorporation of the companies and the transfer of the name is to be between Garry Buick and John Matyear. Prismex Technologies was to have paid-up capital of $150,070, $150,000 of which was required to purchase the patent from Ashlar. That was raised by each of Matyear and Buick contributing $30 (30 x $1 shares), by Ashall contributing $10 (10 x $1 shares) and by Taggert contributing $150,000 (30 x $1 shares at a premium of $149,970). Interium was to have paid-up capital of $100, which was raised by contributions of $30 (30 x $1 shares) from each of Matyear, Buick and Taggert, and of $10 (10 x $1 shares) from Ashall, together with a 'premium issued' (as Mews described it) of $99,960, giving total capital of $100,060. All four men were to be directors of Interium, in addition to having various working roles in that company: Taggert was to be General Manager and responsible for accounts and finance, and record-keeping; Buick was to be responsible for sales in Victoria; Matyear was to be responsible for sales elsewhere; and Ashall and Matyear together were to be responsible for research and development, and production. Interium Pty Ltd may then issue sub licences to other parties. 10 On 12 July 1995, two significant agreements were executed. Each was drafted by solicitors engaged by Ashlar. The first was an agreement to assign the patent, certain formulae and other property from Ashlar to Prismex Technologies ('the assignment agreement'). The sealing of the assignment agreement by Prismex Technologies was witnessed by Buick and Taggert. The second was an agreement for the sale of business from Ashlar to Interium ('the sale of business agreement'). The sealing of the sale of business agreement by Interium was also witnessed by Buick and Taggert. By these two agreements Ashlar, which had previously owned the patent and exploited the invention in its business, divested itself of the patent and the business, but each to a separate party. Prismex Technologies was obliged to 'procure' that Interium paid royalties to Ashlar for a 5-year period at the rate of 5% of the net proceeds (as defined therein) derived by Interium from sales of Prismex panels into the Australian market. Prismex Technologies was obliged to 'procure' that Interium notified Ashlar of its intention to sell or dispose of the Prismex panel business over the ensuing 5 years. If Interium went into liquidation, or if a receiver were appointed to Interium, Prismex Technologies itself was obliged, for the balance of the 5-year period, to pay an annual royalty to Ashlar equal to the average annual royalty that had been paid by Interium down to the date of liquidation or appointment of the receiver. The assignment agreement was supported by guarantees in favour of Ashlar given not only by the directors of Prismex Technologies, but also by the directors of Interium (who were, of course, the same people). 13 By the sale of business agreement, in consideration of the payment of $30,000 by instalments over the ensuing 12 months, Ashlar sold its business to Interium. The 'business' was defined as 'the business of screenprinting'. 647834 was the patent. Under the sale of business agreement, Interium was obliged to pay royalties to Ashlar for a 5-year period at the rate of 5% of the net proceeds (as defined therein) derived by Interium from sales of Prismex panels into the Australian market. This was Interium's primary obligation in relation to royalties, payment of which, under the assignment agreement, Prismex Technologies was obliged to procure. Interium was obliged to notify Ashlar of its intention to sell or dispose of the Prismex panel business over the ensuing 5 years. 14 In each of the assignment agreement and the sale of business agreement there were three recitals. 647834 to Prismex Technologies ..., which has agreed to grant a perpetual licence to [Interium] to exploit the invention. However, the warranties were introduced by the statement that Ashlar 'hereby warrants and agrees with [Interium] that ....' One of the warranties which followed was that 'the Recitals to this Agreement are true and accurate'. This provision assumed some importance in the present proceeding, as it was said (on behalf of Keller) that it constituted an assent by Taggert and Buick, who witnessed the execution of the agreement by Interium and who were, at the time, also directors of Prismex Technologies, to the truth and accuracy of the statement in the above recital that Prismex Technologies had agreed to grant a perpetual licence of the patent to Interium. The agreement to which Prismex Technologies itself was a party, the assignment agreement, did not contain such a warranty. 16 Although it is common ground that, in those months, Prismex Technologies did grant to Interium an exclusive licence, there is no document constituting or (save for the assignment agreement and the sale of business agreement) evidencing the licence. It is also common ground that, at the meeting on 9 June 1995, those who were to become the directors of both companies planned that Prismex Technologies would grant a licence to Interium to exploit the invention, yet it cannot be suggested that the licence was, at that meeting, granted orally, since neither Prismex Technologies nor Interium existed at the time. What the individuals were discussing at the meeting was what would happen, not what thereby did happen. 17 Nothing further was said or written on the subject of the licence of the patent to Interium until events of 2006 in which the subject became controversial and in relation to which the participants in the events of June and July 1995 were in dispute. 18 From the time of those events, Interium carried on the business of developing, manufacturing, marketing and selling edge-lit signs utilising the technology protected by the patent. The four initial venturers all had management roles in Interium: Taggert was Managing Director, Matyear was NSW Business Development Manager/Sales Manager, Ashall was Technical Director and Buick was a director and Victorian Sales Manager. The latter was removed as a director, and dismissed as an employee, in 1996. 19 In 1998, Interium applied for the registration of the trade mark 'PRISMEX'. Registration of the mark was achieved in 2000, and Interium remains the registered owner. 20 To the observer, Interium was the only company involved in the 'Prismex' name or technology. Not only was it Interium, not Prismex Technologies, that used the word in trade: on a number of occasions Interium, not Prismex Technologies, took proceedings to protect its interest in the patent, including taking opposition proceedings when third parties sought to register new patents considered to be relevant to the patent. From its incorporation in 1995 until the dispute which gave rise to the present proceeding, it seems, Prismex Technologies did virtually nothing. It did not even have a bank account. However, given the common shareholding and office-holdings within the two companies, Prismex Technologies must be taken to have been aware of Interium's exploitation of the invention, thereby justifying the suggestion that there was at least an implied licence to do so; and, given Prismex Technologies' own state of quiescence, it would take little extra to imply that the licence was intended to be exclusive (that is to say, exclusive of the rights of any other person, including the patentee itself). This latter aspect is not one which I am required to decide, since the existence of an exclusive licence is established on the pleadings. 21 At this point I should say something about the manufacturing process in which the invention was exploited. In the early 1990's, while employed by Ashlar, Ashall caused to be printed on to a sheet of acetate film, about 1200 mm square, millions of small dots in a particular matrix. The size and spacing of these dots was critical to the effectiveness of the invention. This particular piece of film was referred to by Ashall as the 'B-Dot' film. The next step was to engage a commercial silk screen printer to produce a pattern on a silk screen from the dots on the film. This silk screen was then used in the process of manufacturing the clear acrylic panels, about 10 mm in thickness it would seem, which were incorporated into the signs which Ashlar, and later Interium, manufactured. Using the silk screen, the matrix of dots was reproduced on to both sides of a panel, and the panel, with dots, was then placed immediately behind the front image of the sign in question. Then, as Ashall said in his evidence, 'you place the lamps down the side, the light travels through the acrylic and hits all these dots and they all light up'. The presence of the dots on both sides of the panel is said greatly to enhance the brilliance and evenness of the spread of the illumination across the whole sign. 22 It is evident that the physical item which is critical in the manufacturing process is the acetate film on which the dots are placed. The original 'B-Dot' film which Ashall produced in the early 1990's was used by Interium to the end. It had not been replaced by another film of the same dimensions. It could be, and presumably has been, used over and again for the production of silk screens with the corresponding matrix of dots. Silk screens themselves may, apparently, be used many times for the production of acrylic panels, but they are intrinsically delicate in their main component (the screen), which may have to be replaced from time to time when it suffers damage. The acetate film, by contrast, is quite robust. While working for Ashlar, Ashall produced a larger film which he described as the 'D-Dot' film, and later in the service of Interium he produced two smaller films, the 'A-Dot' film and the 'C-Dot' film. The production of these films from the original 'B-Dot' film was a relatively simple matter: Ashall explained that he merely instructed the outside supplier contracted to produce such things to expand, or to shrink, the pattern on the film to the desired size, and this was done, proportionally in all directions, by computer. In the result, the sizes of the dots themselves, and the distances between dots, were increased or decreased when films of different overall sizes were produced. 23 Returning to the course of events which preceded the present litigation, in 2003 Interium encountered serious cash flow problems as a result, it seems, of the failure of a particular overseas joint venture. This apparently left Interium with unpaid debts, and these were purchased by National Australia Bank ('the Bank') in June 2004 under what was described as a debtor finance facility. By way of security, the Bank took a fixed and floating charge over Interium's assets. 24 In 2003 Taggert was removed from his position as Managing Director of Interium, and in 2004 he resigned as director. Ashall's employment with Interium was terminated on 10 April 2006. In May and June 2006, the only one of the original four venturers who remained actively working in the business of Interium was Matyear, although Taggert and Ashall (or interests associated with them) remained shareholders, and Ashall remained a director. 25 On 10 May 2006, the Bank terminated Interium's debtor finance facility and demanded that Interium immediately repurchase the debts which it had sold to the Bank in 2004, a transaction which would have involved the payment of about $128,300. Interium could not and did not repurchase the debts, but on 11 May 2006 Matyear himself paid out the Bank and took an assignment from the Bank of its fixed and floating charge. On the same day, Matyear demanded repayment of the sum owing by Interium, and stated that, if payment were not made by the close of business on 12 May 2006, he would 'take such other steps as are necessary to enforce [his] Securities'. Payment was not forthcoming, and on 15 May 2006 Matyear appointed an administrator to Interium. At a meeting of creditors held on 22 May 2006, that administrator was replaced by a different administrator, Mr Peter Vince ('Vince'). 26 By letter dated 8 June 2006 to Vince, solicitors for Prismex Technologies noted that their client was the registered proprietor of the patent and was also the owner of the formulae for ink mixtures and films necessary for the manufacture of the Prismex panel. They noted that Interium used the patent and ink formulae pursuant to the licence. They noted (from the terms of a creditors' report dated 31 May 2006) that there were a number of parties interested in purchasing the business and assets of Interium. They asserted that Interium was incapable of assigning the licence or disclosing the ink formulae to interested purchasers without the permission of Prismex Technologies. In the event that Interium does not trade on, we are instructed that [Prismex Technologies] will immediately terminate the licence. Accordingly, any purchaser interested in continuing to use the patent, ink formulae and films must seek permission from [Prismex Technologies]. We are instructed to respond to any enquiries in this regard. Vince was the liquidator. Immediately after the meeting, he negotiated with two parties who were interested in purchasing Interium's business and assets: one was a company with which Taggert was associated, and the other was Keller. Keller's offer was accepted. No documentary record of the agreement between Vince and Keller on 30 June is in evidence, but the Managing Director of Keller, Mr Greg Pobke, stated that, as part of the purchase, Keller was required to enter into possession of Interium's premises 'under licence' from the commencement of trade the next business day. 28 At some time about 7.15 or 7.30 am on Monday 3 July 2006, Taggert and Ashall entered the premises of Interium, by means of a rear door which was open. Some employees were at work at that time, and Ashall spoke to one of them who was known to him from his own time working there. Taggert uplifted cylindrical containers which he believed to contain --- and which did contain --- the acetate films used in the production of silk screens, and removed them from the premises. Ashall used a piece of aluminium to slash a number of silk screens which he believed to have --- and which did have --- representations of dot patterns made from the films taken by Taggert. By these steps Taggert and Ashall made it practically impossible for the purchaser of Interium's business, Keller, to exploit the invention. Ashall also removed an item referred to as a jig from the premises. 29 By letter dated 4 July 2006, Vince's solicitors wrote to the solicitors for Taggert and Ashall. They mentioned the actions referred to in the previous paragraph, and demanded the return of the films and of the jig. They referred to the assignment agreement. We are instructed that no written licence between [Prismex Technologies] and Interium came into existence. Accordingly, the terms of any licence are unclear. At best, there was an implied licence for Interium to use the Patent and films. On any view, it cannot be said that such a licence purported to transfer title to the Patent and films to Interium. We note that the creditors resolved that Interium be wound up at the meeting on 30 June 2006. Accordingly, from that date Interium had no lawful entitlement to use the Patent or possess the films. Indeed, [Prismex Technologies] was entitled to the immediate delivery up of the films. [Prismex Technologies] has not provided permission. Further, we advised that [Prismex Technologies] would immediately terminate the licence if Interium did not trade on. Interium has no further entitlement to use the Patent or the dot matrix films. Moreover, it has no claim to ownership. They are the property of [Prismex Technologies]. Accordingly, our clients will not return them. 31 On 14 July 2006 a written agreement recording the sale of Interium's business assets to Keller was executed by Interium, Vince and Keller ('the asset sale agreement'). By that agreement, Keller bought all the 'business assets' of Interium (with certain presently irrelevant exclusions). The term 'business assets' was defined to include choses in action, intellectual property, licences and permits. The term 'choses in action' was defined to include Interium's rights against Prismex Technologies, Ashlar, Taggert and Ashall. The term 'intellectual property' meant the rights and interests used by Interium in ( inter alia ) any patent. The term 'licences and permits' was defined as various generically-expressed rights and interests, but limited 'to the extent assignable or transferable' to Keller. The term 'Rights' was defined to mean (inter alia) Interium's rights 'to use intellectual property rights in respect of Prismex, as recorded in' the assignment agreement. Keller acknowledged that Interium 'does not have absolute rights to assign or transfer the Rights'. Interium and Vince promised 'to use their best endeavours to assign or transfer the Rights'. 32 The asset sale agreement also provided that the purchase price of $370,000 (subject to adjustments) would be allocated, for all purposes, as set out in a schedule to the agreement. That schedule indicated that '$NIL' had been allocated to intellectual property. It was noted in a recital that, on 3 July 2006, Keller had been given 'access' to the premises on the terms set out in a licence annexed to the agreement. That licence was described as 'Exclusive Licence to Conduct Business of Interium Pty Limited (In Liquidation)'. It was executed by Interium and Vince (but not by Keller) on 3 July 2006. By the operative provisions of the licence, Interium granted to Keller a licence to conduct its business from the premises during the term of the licence. Keller agreed to 'use, operate, maintain and repair all of the Business Assets in a normal business manner consistent with past practice. ' It is recorded that Keller took possession of the premises at the 'commencement of trading' on 3 July 2006. The term of the licence was not explicitly stated, but a recital thereto notes that Interium and Vince had agreed to grant a licence to Keller to conduct the business from the commencement of trading on 3 July 2006 until completion of the agreement, then in contemplation, which became the asset sale agreement. On completion under the asset sale agreement, one of the obligations of Interium and Vince was to deliver to Keller an executed copy of an assignment of the lease pursuant to which Interium occupied the premises. A copy of the lease itself was annexed to the asset sale agreement: it was a lease of the premises by a company called Berona Nominees Pty Ltd to Interium for a term of 3 years and 2 months commencing on 1 November 2004. 33 In the meantime, on 5 July 2006, Taggert procured the incorporation of the second applicant, X-Position Pty Ltd ('X-Position'). He is the sole director and his own company is the sole shareholder. He gave evidence that, on the same day, he and Ashall, being a majority of the directors of Prismex Technologies, caused that company to grant to X-Position an exclusive licence to use the invention and to exploit the invention. It is proposed that X-Position will carry on business in the manufacture of edge-lit signs. Ashall is its Technical Manager. 34 Two of Interium's former employees on the sales side, one Brendan O'Rourke and one Phil Talbot, commenced employment with X-Position. In evidence is an email of 13 July 2006 from Talbot to someone apparently representing a potential customer for edge-lit signs. Talbot said that Interium had been placed into liquidation, but that 'all the Prismex technology relating to the manufacture of KFC signs has not been effected [sic] by the demise' of Interium. He said that 'the company who owns all the technology relating to Prismex' had appointed X-Position to market and promote the signs. He sent a similar email on 14 July 2006 to someone in Thailand, in which he asserted that X-Position held the 'exclusive rights to the Prismex edge-lit technology used by tens of thousands of customers throughout Australia and the world'. He asserted that X-Position could 'provide you the rights to use Prismex technology within Thailand'. In evidence also is an email of 31 July 2006 from O'Rourke to another potential customer. He said that X-Position 'manufactures quality edge-lit lightboxes and displays using the No. 1 primary light diffusion technology on the market PRISMEX TM '. He said that X-Position manufactured 'a wide range of standard and custom-designed edge-lit PRISMEX TM illuminated and non-illuminated signage solutions'. 35 At the end of July and the beginning of August 2006 correspondence passed between solicitors for Keller on the one hand and solicitors for Prismex Technologies and X-Position on the other hand in which each asserted their clients' rights to exploit the invention. On behalf of Keller it was asserted that Interium had, and that Keller purchased, a perpetual licence. On behalf of Prismex Technologies and X-Position, that was denied, and it was said that the licence had been terminated by the liquidation of Interium, or by the letter from Prismex Technologies' solicitors to Vince dated 5 July 2006. 36 By letter dated 9 August 2006, IP Australia informed Keller's solicitors that Keller's name had been entered in the Register of Patents as licensee in relation to the patent. This was said to be in accordance with a request from those solicitors received on 3 August 2006, which is not in evidence. Also, by letter dated 22 August 2006, IP Australia informed the solicitors that Keller was entered in the Register of Trade Marks as the owner of the mark 'PRISMEX', with effect from 7 August 2006. 37 The present proceedings were commenced by Prismex Technologies and X-Position against Keller on 11 August 2006. They allege that Interium's licence to use the patent was terminated on 30 June 2006 when it was placed into liquidation, alternatively by reason of the letter from Prismex Technologies' solicitors dated 5 July 2006. They refer to demands previously made that Keller cease to exploit the invention and deliver up any films etc which embodied the patent and any articles made using the patent. They claim a permanent injunction against infringement, orders for delivery up and damages or an account of profits. In its Defence, Keller asserts that the licence granted to Interium was both exclusive and perpetual. As I have mentioned above, Prismex Technologies admits that the licence was exclusive, but denies that it was perpetual. 38 By Cross Claim dated 20 September 2006, Keller makes a number of claims against Prismex Technologies, X-Position, Taggert and Ashall. It alleges that the licence of the patent was both exclusive and perpetual, and that it passed to Keller on the sale of Interium's business. It alleges that the letter from Prismex Technologies' solicitors to Vince on 5 July 2006, and the grant of a licence to X-Position, were breaches of the original licence to Interium. It says, alternatively, that Keller is the equitable owner of the patent by reason of a constructive trust arising from a series of actions undertaken by Interium, and statements by Taggert, in relation to the patent since 1995 (which I shall mention in more detail in due course). It alleges that X-Position has infringed the patent by manufacturing, selling etc articles made in accordance with the invention. It alleges that X-Position, by using the trade mark 'PRISMEX' in the course of trade, has infringed that mark, and that Prismex Technologies authorised the use of the mark by X-Position. It alleges that the exploitation of the invention and the use of the trade mark by X-Position, and the purported licence and authorisation by Prismex Technologies of X-Position to do these things, constituted a representation by both companies in trade and commerce that they were 'entitled to engage in such conduct', that that representation was misleading or deceptive, and that breaches of ss 52 and 53 (c), (d) and (g) of the Trade Practices Act 1974 (Cth) resulted. It says that Prismex Technologies and X-Position made unjustified threats of patent infringement. It alleges the acts of Taggert and Ashall at the former premises of Interium on the morning of 3 July 2006, and says that they amounted to trespass to land and to goods, and conversion. It also makes a number of claims of accessorial involvement against the cross-respondents. 39 The trial of the proceeding was expedited, and was conducted on 11, 12 and 13 October 2006. Part of the way through the trial, it appeared that Keller was working to the assumption that the trial, at this stage, was concerned with issues of liability only, and that questions of remedy would be heard subsequently. This assumption was not shared by the applicants or the cross-respondents. I heard short argument on the matter, the result of which was that, on 13 October 2006, I ruled that the issue of liability on the Application and the Cross Claim be heard and determined prior to the issue of quantum. 40 I shall consider first the main issue in the proceeding: whether the licence to exploit the invention granted to Interium in 1995 was not only exclusive but also perpetual, in the sense of being irrevocable by Prismex Technologies. It is alleged by Prismex Technologies, and admitted by Keller, that, by an agreement made in or about July 1995, Prismex Technologies granted a licence to Interium to use and exploit the invention. Prismex Technologies makes no further allegation about that agreement. There is no reference to any other terms of the agreement or to the consideration (if any) given by Interium for the grant of the licence. Neither are such matters raised by Keller in its Defence. Rather, in its Cross Claim, Keller alleges that, in or around June and July 1995, Prismex Technologies granted a perpetual and exclusive licence to exploit the invention to Interium. It is not suggested that this was pursuant to a contract. That an exclusive licence was granted in about June 1995 is admitted by Prismex Technologies in its Defence to the Cross Claim; but the grant of a perpetual licence is denied. 41 In support of its argument that the licence was irrevocable, Keller submitted that the licence was a species of property which was assignable ( Vitamins Australia Ltd v Beta-carotene Industries Pty Ltd (1987) 9 IPR 41), and that a licence 'coupled with an interest' was irrevocable, absent express contractual provision ( Cowell v Rosehill Racecourse Co Ltd [1937] HCA 17 ; (1937) 56 CLR 605, 616). It argued that, in this context, an 'interest' was an interest in property, real or personal ( Hounslow LBC v Trigonum Garden Developments Ltd [1971] Ch 233, 254). If it was intended, by these arguments, to advance the proposition that, in the absence of express provision to the contrary, a licence of a patent was necessarily irrevocable (because it was a species of property), I am bound to say that the argument strikes me as entirely circular. If a licence arises pursuant to contract, the nature and incidents thereof will be given content by the terms of the contract in question. As Megarry J said in Hounslow , 'a contractual licence is not an entity distinct from the contract which brings it into being, but merely one of the provisions of that contract. ' [1971] Ch at 254. It may be that an irrevocable licence (such as the licence expressed to be for the unexpired portion of the patent in the facts before the court in Vitamins Australia ) might, in certain circumstances, be regarded as a species of property, but manifestly it cannot be argued that, simply because the phenomenon in question is a patent licence and can be regarded for some purposes as property, the licence cannot be revoked. If it is a licence subtended from a contract, all will depend on the terms of that contract, and I can think of no reason why the express terms thereof only should be taken into account. If it is a licence created not by contract but by the voluntary act of the patentee, the question whether the patentee reserved a power of revocation would be a question of fact from case to case. Accordingly, the task for the court in the present case is to look at all the facts and circumstances which surrounded the grant of the licence by Prismex Technologies in 1995, and to decide, by reference to implications as well as to express terms, whether that grant was intended to be irrevocable. 42 It is important to identify the nature of the transaction --- even if implied --- by which Prismex Technologies granted the licence to Interium in 1995. There was nothing ostensibly contractual in the plans of the venturers which led to the patent being held by one company, and the trading being done by the other. Their discussions did not clearly involve a conscious exchange. Neither did Interium provide, on behalf of Prismex Technologies, any part of the cash consideration for the patent. The whole $150,000 was paid by Prismex Technologies from shareholders' equity. However, under the sale of business agreement, Interium paid royalties to Ashlar. Were these payments referable to the patent, or only to the business which Interium had acquired from Ashlar? I think the former. The purchase price under the sale of business agreement was the sum of $30,000. Royalties were a separate matter. Furthermore, royalties were payable specifically 'in respect of Prismex panels sold into the Australian market'. The business purchased by Interium, on the other hand, was something wider: it was 'the business of screenprinting'. Evidently, the business involved more than merely the bundle of activities involved in exploiting the invention. 43 It must be remembered that the two-company arrangement devised in 1995 was for the benefit of the venturers and their new business, not Ashlar. It was intended that Prismex Technologies would not trade, and would have no income. It is, therefore, unsurprising that it was not that company upon which the primary obligation to pay royalties was imposed. Put another way, the fact that Interium was subject to that primary obligation is not, in context, inconsistent with the proposition that those royalties were in fact part of the consideration passing to Ashlar for the assignment of the patent. The fact that they were tied not to Interium's total turnover but to Australian sales of Prismex panels strengthens the implication that they were. The matter is taken further in the same direction by the terms of Recital C to the assignment agreement which refers to the royalties as being 'in respect of use of the patented invention'. 44 In the circumstances, I consider that the correct way to view the transactions of mid-1995 is to treat Interium's promise to pay royalties to Ashlar under the sale of business agreement as having been made pursuant to an implied contract between Interium and Prismex Technologies, and as consideration for the latter's implied promise to allow --- ie to license --- Interium to use the patent. This has two possible consequences for the resolution of the question with which I am presently concerned. First, Keller's task of establishing that the licence was irrevocable is made a little less daunting than it might otherwise have been by virtue of the fact that Interium was not a mere volunteer, but a party which provided consideration. Secondly, in identifying the implied terms of the licence, it will be the presumed intentions of both companies, not those of Prismex Technologies alone, which will be relevant. 45 Before turning to the axis of the relationship between Prismex Technologies and Interium, however, I should consider the nature of the obligations owed by each of them to Ashlar under the assignment agreement and the sale of business agreement. Under the sale of business agreement, Interium was obliged to pay royalties to Ashlar over a period of 5 years from the making of that agreement. I have found that those royalties were implicitly referrable to the exploitation of the invention. Even if not, it seems to have been the common assumption of all in 1995 that the exploitation of the invention was likely to be the main driver of Interium's sales of Prismex panels. It may be thought odd, in those circumstances, that the assignment agreement contained no express covenant by Prismex Technologies not to revoke the licence within the 5-year period. Had the licence been revoked, it would be a fair inference that Interium's revenue from the sale of Prismex panels would have suffered, probably quite severely. This would have had a direct impact on Ashlar's receipts of royalties, something which, I infer, Ashlar would not have intended. By what provision of either of the agreements in 1995 did Ashlar protect itself from such an eventuality? If the circumstances were sufficiently serious to drive Interium into liquidation, Prismex Technologies would have been obliged to assume the obligation of paying the royalties. But, short of that, the agreements did not deal with a situation in which Prismex Technologies simply chose to revoke the licence, thereby impairing Interium's capacity to continue paying royalties to Ashlar. 46 There are two possible explanations for the absence from the assignment agreement of any express obligation on the part of Prismex Technologies not to revoke the licence during the period of Ashlar's receipt of royalties. The first is that the parties' solicitors at the time may have regarded the agreement as within the class of contracts under which the co-operation of one party was necessary to enable the other party to have the full benefit of the agreement. For Prismex Technologies, without proper cause being given by Interium, to have revoked the licence before Ashlar had received the benefit of its 5 years of royalties would in all likelihood have been regarded as a breach of the implied term of co-operation. If there were such a term, it would supply the deficiency to which I referred at the start of this paragraph. At the same time, if the problem were solved in that way, there would be no basis for the implication of a term to the effect that the licence could not be revoked after the end of the first 5-year period. 47 The second explanation is that Ashlar's concerns may have been put to rest by Recital C of the assignment agreement. That recital is the only statement by Prismex Technologies directly on the matter now in controversy, and it contains an unqualified statement that the licence was perpetual. Understandably, Recital C featured large in Keller's case that the licence was irrevocable. Keller contended that 'perpetual' meant for ever (ie for the remainder of the term of the patent). It relied upon Taggert and Buick --- who were two of Prismex Technologies' directors at the time --- having witnessed the execution of the sale of business agreement which contained a similar recital which Interium agreed was true and accurate. In these respects Keller made points which were of considerable forensic effect, but ultimately they begged the questions at issue. Those questions were, first, why did the parties to the assignment agreement include Recital C therein, secondly, what did those parties mean by the word 'perpetual', and thirdly (and critically) what was the content of the agreement between Prismex Technologies and Interium on the subject? 48 It seems that neither Taggert nor Matyear has any recollection of why the licence was described as perpetual in Recital C. When he was taken to the recital, and reminded that his signature appeared on the assignment agreement, Taggert denied that the licence was in fact perpetual, adding: 'It was a licence. Neither here nor there on that perpetual part. ' This was of course, an entirely self-serving response, and I give it little weight on the matter of the parties' intentions in 1995. Matyear was cross-examined about the assignment agreement at some length. We just - there was never any reasons given. It was never logically thought through to say these are the conditions under which it is going to be done even to the point where Ashlar actually set the agenda for the terms under which Prismex Technologies used its own licence. Ashlar wrote out the document that we all signed that stated the patent would be a perpetual - given to Interium in a perpetual licence. If we had sat down and discussed the matter we would have said, thank you, sell the patent to us and then we will decide what to do with it. We had the company selling it to us telling us what to do with our patent. He said that the agreement would have been considered by their own solicitors, and he presumed, in effect, that they were happy with it. So, yes, we were happy to have a perpetual licence. So we basically --- the document, we were happy with and we signed it. 49 From the tenor of this part of Matyear's evidence, I consider that he and his colleagues were 'happy' to have a perpetual licence only in the sense that he presumed, in hindsight, that their solicitors would have drawn attention to any provision in the agreement that was problematic, and they apparently did not do so in relation to Recital C. Having perused the assignment agreement and the sale of business agreement, I cannot accept that each was the work only of Ashlar's solicitors to the exclusion of any professional input on behalf of Prismex Technologies or Interium. The agreements contain many provisions which bespeak the careful attention of solicitors engaged by the latter companies, and I am satisfied that Matyear was correct in his supposition that their own solicitors would have drawn attention to any issues that arose in relation to this recital. 50 The fact remains that the assignment agreement was not intended to regulate the relations between Prismex Technologies and Interium. To give content to Recital C, it is necessary to ask why Prismex Technologies and Ashlar, the parties to that agreement, would have included the recital. I can think of no reason why Prismex Technologies would have pressed for its inclusion. I think it much more likely that this was one provision which found its way into the agreement on the initiative of Ashlar's solicitors, and which the solicitors for Prismex Technologies accepted. 51 Ashlar would seem to have had two reasons for wanting some comfort that the licence of the patent to Interium would endure. The first was its entitlement to royalties from Interium over the initial 5 years. That entitlement would not sustain an inference that the parties intended the licence to continue beyond that 5-year period. And the interest which Ashlar notionally had over the first 5 years did not even, within that period, extend to a circumstance in which Interium was liquidated, since that eventuality was covered by the obligation of Prismex Technologies itself to pay royalties to Ashlar in place of Interium. 52 Ashlar's second reason for wanting the licence to endure was that it had another basis for a continuing interest in the viability and manufacturing activities of Interium. The royalties due to Ashlar under the sale of business agreement related only to Interium's sale of Prismex panels into the Australian market. Under the heading 'Ongoing Relationship' in that agreement, the parties agreed to 'co-operate in relation to the ongoing marketing and development of framing systems incorporating the Prismex panels'. At Ashlar's request, Interium was obliged to make its premises available for demonstration of Prismex panels by Ashlar to its (Ashlar's) international customers. If requested by Ashlar, Interium was obliged to supply Prismex panels to Ashlar for export to Ashlar's customers out of Australia. If the parties could not agree on price, Interium was obliged to procure a royalty-free licence from Prismex Technologies for Ashlar to manufacture (but not to deal in) Prismex panels in Australia. Each of these obligations was supported by a corresponding provision in the assignment agreement under which Prismex Technologies was required to procure Interium to perform. Specifically, under that agreement Prismex Technologies itself was obliged to grant a royalty-free licence to Ashlar in the event that Ashlar and Interium were unable to agree on price. These provisions were not limited by reference to the 5-year period. Little was made of these provisions in the hearing before me, but at one point Ashall did express disappointment that, at some stage, his ex-partners had 'stolen' his interest in the international patent. However that may be, these provisions seem to be based upon an assumption by all three parties that Interium would hold a licence to exploit the invention at all times while the two agreements remained in force. The fact that the agreements were not limited in point of time might sustain the argument that an indefinite licence was intended. 53 I infer that Recital C was inserted into the assignment agreement at the request of Ashlar, and predominantly to give Ashlar comfort that Interium would be able to exploit the invention over the period in the future in which Ashlar had a continuing interest in Interium's operations. That interest was strongest, and most focussed, in the first 5 years. After that, Ashlar had no further direct financial interest in Interium's sales of Prismex panels. It did, however, continue to have an interest of the kind referred to in the previous paragraph. That interest, although more general, provides a basis for inferring to Ashlar an assumption that the licence would continue indefinitely, and an intention that Recital C should reflect that assumption. Since Prismex Technologies was the other party to the assignment agreement and was content to have this recital included therein, it too must be fixed with that assumption and that intention. 54 I do, therefore, hold that the inclusion of Recital C in the assignment agreement, and the terms of that recital, support Keller's argument that the licence was intended to be irrevocable. That support is, however, indirect, since the licence was granted not pursuant to the assignment agreement at all, but pursuant to an implied contract between Prismex Technologies and Interium. In this respect, it is significant that Recital C did not record the fact of an existing licence: it stated that Prismex Technologies 'has agreed' to grant a perpetual licence to Interium. The fact is that, although such an agreement existed, it was not constituted by any express written or oral communication between the companies concerned. On the evidence, the only express reference to the licence occurred at a meeting which took place before the incorporation of either company. If that reference may be taken as a basis for a finding as to the terms of an agreement which was later adopted by the companies (a construction of events which would be consistent with the way all parties conducted the case before me), the fact is that there is no suggestion that anyone said that the licence would be perpetual, or anything of the sort. There appears to have been no other communication as between Prismex Technologies and Interium about the licence. Indeed, on the evidence, I could only find that there was no overt act --- written or oral --- which constituted the granting of the licence. It is not as though the court may look to Recital C to confirm or to provide greater clarity about some identified transaction as between the parties directly concerned. There is, therefore, something artificial about using Recital C as a means of throwing light on the assumed transaction between Prismex Technologies and Interium. Since that transaction existed only as an implication, I consider that the surer route to an identification of the (necessarily implied) terms thereof is to look objectively at the facts and circumstances surrounding the relationship between Prismex Technologies and Interium in 1995 with a view to imputing to them their respective intentions as to the term of the licence. 55 Prominent amongst those facts and circumstances is the apparent purpose of the two-company structure devised in 1995. I place no reliance on the identification of that purpose given by the three then players who gave evidence in the case: I think that the passage of years, and the strong identification which each now has with the position of a party in this proceeding, presents such a risk of reconstruction as to make any such reliance unwise. For Prismex Technologies to have granted an exclusive, and irrevocable, licence would have so closely approximated an assignment of the patent itself as to defeat the apparent purpose of the two-company structure. The very people into whose hands the original venturers would have been most concerned to prevent the patent from falling --- their competitors --- would have been the ones with the greatest incentive to purchase the assets of Interium, if that company were to have failed. Such competitors could, by buying the assets and thereby the licence, have effectively acquired the patent and have put themselves, rather than the inventor and his associates, in a position commercially to exploit the invention over many years. This was the very thing which, according to Mews' memorandum, the venturers sought to avoid. I consider, therefore, that an identification of the purpose of the two-company structure points rather strongly to an implication that the licence was to be revocable by Prismex Technologies at least in circumstances where the liquidation of Interium was imminent. 56 The other circumstance which strikes me as of considerable importance is the provision of the assignment agreement which operated if Interium went into liquidation, or a receiver were appointed, within the 5-year period. Manifestly, if Prismex Technologies were, as was its obligation, to make the royalty payments thenceforth to Ashlar directly, the assumption would have been that Prismex Technologies would have the benefit of the invention for the purpose of generating income from which the royalty payments might be financed. That Interium might be liquidated and lose, or be obliged to assign, the licence to a third party without Prismex Technologies being able to do anything about it, while at the same time Prismex Technologies was obliged to continue making royalty payments, could not have been intended. Although this consideration is linked to the prospect of Interium being liquidated within the 5-year period, and is therefore of limited application, it does tell rather strongly against the argument that the licence could not be revoked in any circumstances. 57 Taking everything into account, the one objective conclusion which shines clearly through a constructional setting which is in other respects somewhat murky is that the retention of the licence by Interium in its own liquidation could never have been intended. I find as a minimum that, whatever the agreed term of the licence otherwise was, the licence was revocable by Prismex Technologies if the liquidation of Interium were imminent. At the other end of the spectrum, I consider that, if Interium continued to trade normally, it was implicit that Prismex Technologies would not revoke the licence within the first 5 years, while Interium was obliged to make royalty payments to Ashlar. The intermediate situation, in which the 5-year period had passed uneventfully and Interium was not at risk of liquidation, is unclear. The objective circumstances do not clearly point to an implication one way or the other on the matter of the revocability of the licence. I am somewhat disposed to the view that there is nothing which would justify the implication of a contractual restraint upon the patentee's power of revocation, but questions would then arise as to how, and on what notice, such revocation could be effected. I am spared the need to address such questions in the present case, since my finding that the power of revocation could be exercised when the liquidation of Interium was imminent is sufficient in the circumstances. 58 The next question is whether Prismex Technologies did revoke the licence in the events which occurred in 2006. It was submitted on behalf of Prismex Technologies that its solicitor's letter of 8 June 2006 constituted a notice of termination. On behalf of Keller, it was submitted that that letter did no more than to foreshadow some later act on the part of Prismex Technologies by which the licence would be terminated. In my view, the distinction made on behalf of Keller is not such as would be obvious to practical business people in the industry concerned. Within a practical context, I consider that the letter effectively notified Interium that it should treat the licence as terminated if it went into liquidation. 59 If there were any doubt about it, that doubt was removed by Prismex Technologies' solicitors' letter to Vince's solicitors dated 5 July 2006. Although postulating a legal proposition which Prismex Technologies did not seek to defend before me (that the licence terminated upon Interium going into liquidation 'in accordance with ordinary commercial practice'), the letter left the reader in no doubt but that Prismex Technologies, as grantor of the licence, regarded the licence as terminated upon the act of liquidation. Although it is true that Prismex Technologies could not have terminated the licence retrospectively, when read in the light of the earlier letter of 8 June 2006, (and if that letter was not, of itself, sufficient to terminate the licence by notice), the letter of 5 July 2006 at least had that effect from the date of receipt by Vince. I hold, however, that the licence to exploit the invention granted to Interium was terminated by Prismex Technologies on 30 June 2006. 60 It was next contended on behalf of Keller in the alternative that Interium was, and that Keller itself now is, the owner in equity of the patent, as distinct from, or possibly in addition to, being the licensee. The factual basis of that claim was that, over the period between its incorporation in June 1995 and its liquidation in June 2006, Interium had taken all the practical steps necessary to protect the patent, and generally represented to the world at large that it was the patentee. On 7 August 1995, Interium referred the assignment from Ashlar to Prismex Technologies to its solicitors for purposes of registration. b. d. On 23 October 1995, Taggert, on behalf of Interium, sent a facsimile to a company called Delta Electronics, in which he introduced himself as a director of Interium 'the purchaser of the Australian Prismex patent along with the existing business previously operated by Ashlar Screenprints. The minutes of the meeting noted: 'It was agreed by all parties that infringement of Interium's patent should be pursued. In that facsimile, Taggert said: 'The patent we hold is for Australia, there are other patents granted and pending for various countries, these are held by other parties listed below. ' The parties appear to be interests associated with IRG, and did not include Prismex Technologies. g. On 18 September 1997, Taggert sent a facsimile, on Interium paper, to a company called Phillips Lighting, in which it was stated that Interium 'is the Prismex technologies patent holder here in Australia. On 22 April 1999, Taggert sent a facsimile to a company called ACI Acrylics in India, in which Interium's background was described in a series of representations including the following: 'Australian Prismex representatives and Patent owners, company formed to commercialise the Prismex technology invented by Mr John Ashall (Interium --- Technical Director). In 1999, Taggert prepared a 32-page 'Export Marketing Plan' that was submitted to Austrade on behalf of Interium. The executive summary in that presentation contained the following statement: 'Interium ... was set up in 1995 and purchased the Australian patent for the Australian invented Prismex illuminated sign technology. 683874, and incurred costs of approximately $20,000 in connection with that opposition. l. Interium, not Prismex Technologies, was the opponent to patent applications Nos. 720265, 755876, and 683878 and paid all costs in connection therewith. m. Interium was involved in what is described as 'an intellectual property dispute' with a company called 3M Australia, and paid all costs in connection therewith. n. Interium paid all legal bills in connection with an action (by Interium) against a company called Australian Posters for infringement of the patent. 62 I shall consider first Keller's claims in equity to the extent that they rely on Prismex Technologies' acceptance of a history of representations, on behalf of Interium, to the effect that it occupied the position of patentee. I find it difficult to see how these claims could succeed. The question here is not whether Prismex Technologies would be precluded, as against a third party who had relied upon Interium's assertions of ownership, from denying the truth of those assertions. The question is whether the silence of Prismex Technologies, in the face of claims to ownership by Interium, would make it unconscionable for the former to assert its ownership rights as against the latter. The question needs only to be stated in this way for a negative answer to be obvious. However convenient it may have been for Interium to give the impression to the world at large that it was the owner of the patent, and however much Prismex Technologies might have stood by while that impression was given, nothing involved in those matters could in any way be regarded as affecting the conscience of Prismex Technologies in its dealings with Interium. All those involved in both companies well knew the true legal position, at least to the extent that Prismex Technologies was the patentee and Interium the licensee. That they did not bother to inform third parties of the true position was simply the way they carried on business. 63 Turning next to so much of Keller's claim in equity as alleges a constructive trust based upon Interium's considerable expenditure over the years to protect the patent, again it seems to me that this was but an incident of the way these two companies carried on business. For its part, Prismex Technologies, although the patentee, effectively turned over to Interium, to the exclusion of itself, the opportunity to exploit the invention. As a result, the whole commercial benefit of the patent was derived by Interium: and none of it by Prismex Technologies. As exclusive licensee, Interium had something valuable to protect. There is no reason to view its expenditure upon opposition proceedings and the like as done other than in its own interests. 64 Another way to arrive at the same result is to recognise that a constructive trust of the kind recognised in Muschinski v Dodds is necessarily born of the agreements, arrangements and understandings, express and implied, in the context of which equity will examine the conscience of the putative trustee. In that case, the original agreement between Ms Muschinski and Mr Dodds as to the purchase, and subsequent renovation, of the property which they shared was critical to the outcome, and gave content and definition to the trust which was found to exist. In the present case, if the implied terms of the agreement between Prismex Technologies and Interium in 1995 were as I have found them, equity could hardly do other than to follow the tenor of that agreement. It was an agreement under which Interium was the licensee only of the patent. 65 I consider next Keller's common law claims in trespass and conversion. Keller first alleges that the entry of Taggert and Ashall onto the premises formerly occupied by Interium on the morning of 3 July 2006 was trespass to land. It seems that this entry occurred before Keller itself entered into possession of the land, as alleged in the Cross Claim, at 8:30 am that day. Indeed, there is a very real question whether, even after that time, Keller was in possession of the land, or was merely a licensee pursuant to the licence agreement made that day to which I have referred. However, in the asset sale agreement, Keller purchased from Interium all its choses in action, and specifically its rights against various parties, including Taggert and Ashall. Treating Interium as the occupier in possession (which it was, pursuant to its lease) with standing to sue in trespass, when it filed the Cross Claim in court, Keller was relevantly in the shoes of Interium, and had assumed that standing. 66 There could hardly be in argument but that the entry of Taggert and Ashall onto the former premises of Interium on 3 July 2006 amounted to a trespass. They had not been invited (expressly or implicitly) to enter the premises, they had no (express or implied) authority to be on the premises and they had no lawful purpose to make their visit. Even if some or all of the items which Taggert recovered from the premises that morning belonged to Prismex Technologies (a matter to which I shall turn next), that circumstance would not, in my judgment, have permitted him to engage in an exercise of self-help without the prior consent of, and without even any previous consultation with, the occupier of the premises. Even that purpose, however, would not avail Ashall, as, on the evidence, it could not be suggested that he was on the premises with a view to recovering, or that he did in fact recover, any items belonging to Prismex Technologies. Should it be necessary to provide further reinforcement of these findings, I would add only that the circumstance that Taggert and Ashall entered the premises at an early hour of the morning, when they must have assumed that no-one in any real authority would be present, gives rise to the clearest of inferences that they well knew that their presence would not be welcome. I find that Taggert and Ashall did trespass on these premises on 3 July 2006, and I shall defer consideration of the question of damages, if any. 67 Turning to Keller's claim in conversion, I deal first with the acetate film which Taggert removed from the former premises of Interium on 3 July 2006. Prismex Technologies, and Taggert, assert that the film was never owned by Interium, but was merely bailed to that company as an incident of the licence of the patent. As to all film except the 'B-Dot' film and the 'D-Dot' film, that contention is groundless. It was those two films only which were made during Ashall's time with Ashlar. The other films were made during his time with Interium, and would be the property of Interium on any view. They are now the property of Keller. When he removed those films on 3 July 2006, Taggert had no legitimate basis for so acting. Manifestly he converted those films to his own use, or to the use of Prismex Technologies, and I shall defer consideration of the question of damages. 68 By contrast, the 'B-Dot' and the 'D-Dot' films had been made by Ashall during his time with Ashlar. Chattels which passed from Ashlar to Interium pursuant to the sale of business agreement were listed in the second schedule thereto. Although no submissions were addressed specifically to this point, I cannot see anything there which would be appropriate to describe these films. On the other hand, under the assignment agreement, Prismex Technologies purchased from Ashlar 'the formulae to all ink mixtures, films and program disks necessary for the manufacture of Prismex panels'. They were described in Schedule A to that agreement, and they included 'current dot matrix printing films'. I find, therefore, that the 'B-Dot' and the 'D-Dot' films taken by Taggert on 3 July 2006 were the property of Prismex Technologies. 69 That is not the end of Keller's claim in conversion, however. Interium was the bailee of the 'B-Dot' and the 'D-Dot' films. The possession of a bailee is sufficient to maintain an action in conversion: Fleming, The Law of Torts , 9 th ed, p 71. As against even the bailor where the bailment is not at will and has not been regularly determined, the bailee may succeed in detinue: City Motors (1933) Pty Ltd v Southern Aerial Super Service Pty Ltd [1961] HCA 53 ; (1961) 106 CLR 477. Fleming (at 71-72) treats that judgment as applicable also to an action in conversion, and there seems to be no reason in principle why it should not be so regarded. 70 The proceeding has been conducted on the basis that Taggert was the agent of Prismex Technologies when he entered the former premises of Interium on 3 July 2006. It follows that his removal of the 'B-Dot' film and the 'D-Dot' film should be treated as an act of the bailor. The question arises, however, whether the bailment was then subsisting and could not ipso facto be determined by Prismex Technologies. Like the licence, the terms of the bailment were implied. I consider that an obvious term was that the bailment, in effect, followed the licence, such that, if the licence were regularly determined, the bailment would be likewise. On the facts as I have found them, the licence was terminated on 30 June 2006. From that point forward, to the extent that these films remained physically at Interium's former premises, there was a bailment at will. It could be, and by the actions of Taggert on 3 July 2006 it was, terminated. Thus I would hold that the actions of Taggert did not amount to conversion of the 'B-Dot' or of the 'D-Dot' films. 71 No attempt was made by the cross-respondents to justify the removal of the jig from former premises of Interium on the morning of 3 July 2006. Taggert said that Ashall removed it. Ashall was not asked about it. No-one explained what its purpose was. Taggert said that the jig 'unfortunately ... got tied up in all this'. There was no reference to the statement in Prismex Technologies' solicitors' letter of 5 July 2006 that the jig had been made by Taggert's son-in-law: indeed, Taggert admitted that it had been made by an employee of Interium. In the circumstances, the jig is in the same category as the films other than the 'B-Dot' and the 'D-Dot' films. 72 Keller also claimed that the removal of the films and the jig by Taggert and Ashall on 3 July 2006 amounted to trespass to goods. I was not, however, favoured by any submission which illuminated how such a claim would differ in formulation, in outcome or in consequences from the claim in conversion with which I have just dealt. In the circumstances I shall make no findings with respect to trespass to goods specifically, but I give the parties leave to address me further on the subject should any of them consider that anything turns on it. 73 What I have said above with respect to the films (other than the 'B-Dot' and 'D-Dot' films) and the jig applies equally to Keller's case in conversion and trespass to goods against Ashall in regard to his deliberate destruction of silk screens on the morning of 3 July 2006. He had the clearest intent of thereby depriving the owner of those screens of their intended use: see Penfolds Wines Pty Ltd v Eiliott [1946] HCA 46 ; (1946) 74 CLR 204, 229; Fleming, p 68. 74 I consider next Keller's trade mark allegations. Keller alleges that the emails sent by O'Rourke and Talbot, to which I have referred in par 34 above, amounted to infringements of the mark 'PRISMEX'. In his evidence, Taggert frankly accepted that X-Position had no right to use the mark in this way and, as I understand it, has taken steps to ensure that such instances will not recur. It is beyond question that the emails were used for the purpose of promoting edge-lit signs, and that the mark was used in those emails in relation to goods in respect of which the mark is registered. Further, by the asset sale agreement, Keller has assumed the rights, in relation to the mark, that Interium had before the transfer of registration. Thus I consider that Keller has made good its case of infringement of the mark, and I shall receive submissions later on the question of relief. 75 Keller makes allegations against Prismex Technologies, and against X-Position, of misleading and deceptive conduct contrary to s 52 , and to pars (c), (d) and (g) of s 53 , of the Trade Practices Act . Keller puts these allegations two ways. The first relates to the patent, where the offending conduct is said to arise from Prismex Technologies purporting to licence X-Position to exploit the invention, and by X-Position doing so. In the light of the findings which I have made above as to the termination of Interium's licence to exploit the invention, these allegations cannot be sustained. 76 The second way in which Keller's trade practices allegations are advanced is to say that Prismex Technologies, by authorising X-Position to make use of the trade mark, and that X-Position, by using the mark, represented that they were entitled to engage in that conduct (ie use of the mark). There is no evidence, however, and, save for the allegation in the Cross Claim, there is no suggestion, that Prismex Technologies either authorised or purported to authorise X-Position to use the mark. On the other hand, as I have found, X-Position did in fact use the trade mark, and, in context, that use conveyed also the representation that X-Position was entitled to use the mark and was, and would be, marketing edge-lit signs by reference to the mark. I consider that this was misleading or deceptive, and thus in contravention of s 52 of the Trade Practices Act . I do not, however, consider that any contravention of s 53 was thereby involved. In submissions made on behalf of Keller, how the conduct of X-Position might be said to involve a contravention of s 53 was not dealt with at all and, for my own part, I am unpersuaded that the section has any operation in the circumstances of the present case. However, I do find a contravention of s 52 , and I will receive submissions as to the appropriate relief in due course. 77 Keller has also sought findings against Taggert and Ashall under s 75B of the Trade Practices Act that might be of assistance to it when I later consider the matter of remedies. The only findings of direct contravention of that Act which I have made are against X-Position and relate to its use of the trade mark 'PRISMEX' in promotional correspondence. Although Ashall is, apparently, employed by X-Position, there is no evidence that he did anything in relation to that correspondence that would attract the operation of s 75B. As for Taggert, although he was in day-to-day control of the business and activities of X-Position, there is no evidence that he authorised, or even knew of at the time, the correspondence which I have held to be in contravention of s 52 of the Trade Practices Act . Indeed, Taggert gave evidence under cross-examination, which I accept, that he did not authorise, and was not at the time aware of, the offending correspondence, and that he had, since becoming aware thereof, instructed the relevant staff that they should not use the trade mark. In the light of this evidence, and of the absence of anything to link Taggert to the sending of the correspondence, I make no finding against him under s 75B of the Trade Practices Act in relation to X-Position's contravention of s 52 thereof. 78 I propose to order that the proceeding be fixed for hearing on the question of the damages or other remedies, if any, to which the applicants and the cross-claimants are entitled in the light of these reasons. I certify that the preceding seventy-eight (78) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.

licence to exploit invention term of licence whether revocable effect of liquidation of licensee trespass to land unauthorised entry conversion rights of bailor whether bailment determined use of mark mark used in promotional correspondence whether mark used in relation to goods misleading and deceptive conduct representation of entitlement to use trade mark patents tort tort trade marks trade practices

I commenced my journey on 23 March 2005 when I left Sydney and returned to Australia on a Qantas flight leaving Mumbai, India on 8 June 2005. The application in the Federal Magistrates Court was in consequence of the termination of complaints lodged by the applicant with the Human Rights and Equal Opportunity Commission ('HREOC') alleging breaches of ss 5 , 6 , 11 and 24 of the DDA and ss 9 and 13 of the Racial Discrimination Act 1975 (Cth) ('the RDA'). At the time, Qantas permitted passengers to check in baggage up to 20 kgs. The applicant was permitted to check in 10 kgs over the limit of 20 kgs without additional charge and take carry-on baggage of unknown weight. On 8 June 2005, the applicant arrived at Mumbai airport in India. He attempted to check-in baggage weighing between 41 and 46 kgs of baggage. The additional baggage was not disability aids or equipment. The applicant said the additional items were shoes, a razor, books and souvenirs. The applicant was permitted to check in 26 kgs and take carry-on baggage of unknown weight. He was advised that he would need to pay excess charges for the remaining baggage. The applicant refused to pay for the excess baggage. On 17 July 2006, the applicant lodged a complaint form with HREOC alleging, inter-alia, that Qantas and two of its employees discriminated against him in Sydney and in Mumbai on the ground of race and disability (an injury to his left knee, arm and a sleep disorder). On 11 May 2007, the Delegate of the President of HREOC terminated those complaints on the following grounds: On 8 June 2007, the applicant filed an application in the Federal Magistrates Court. Section 46P0(3) of the then HREOC Act requires the 'unlawful discrimination' alleged in the application: On 23 August 2007, the applicant informed Qantas that he would seek leave to amend his application. The proposed amended application raised new and different issues to the complaint terminated by HREOC. The applicant claimed that Qantas unlawfully discriminated against him in the provision of services (s 24) and access to premises (s 23) on the ground of his disability under the DDA. The applicant also claimed that Qantas failed to comply with the Disability Standards for Accessible Public Transport Guidelines 2002 (Cth) in breach of s 32 of the DDA. Qantas opposed the proposed amendment to the application on the ground that the proposed amended application did not conform with the requirements of s 46PO(3) of the then HREOC Act. On 6 August 2009, the Federal Magistrate refused the application for leave to file an amended application. He noted that the case that the applicant wished to argue in his amended application was significantly different from his original claim: at [93] and [99] of his reasons. Further, Qantas sought an order that the application, as filed, be dismissed summarily pursuant to s 17A of the FMC Act and r 13.10 of the FMC Rules on the basis that the applicant had no reasonable prospect of successfully prosecuting the proceeding. Qantas submitted that the applicant's complaint concerned conduct in India and the DDA had no extra-territorial operation. Qantas relied on Brannigan v Commonwealth of Australia [2000] FCA 1591 ; (2000) 110 FCR 566 which held that federal discrimination laws have no extra-territorial operation. The Federal Magistrate found that the 'entirety of the applicant's claim relates to his treatment at Mumbai Airport in India' and '[t]he discriminatory act upon which the applicant relies is the refusal of the Qantas Manager and other staff at Mumbai Airport to allow him to take all his baggage onto the aircraft without paying the excess baggage charge of some $600.00. This act occurred in India, not in Australia': at [124] and [128] of his reasons. The Federal Magistrate accepted that Brannigan was a correct statement of the law. His Honour accepted that the Court had no jurisdiction to hear a claim about alleged discrimination that arose in Mumbai and was confined to matters that occurred there. The application was dismissed on the ground that the applicant had no reasonable prospect of successfully prosecuting the proceeding: at [136] and [137] of his reasons. In relation to the second matter, the applicant claims that his Honour failed to consider and give effect to various principles or provisions of the DDA and that he erred in concluding that the DDA had no extra-territorial effect. In relation to both matters, it is claimed by the applicant that his Honour's reasoning and conclusions were vitiated by the excessive delay of 14 months between the conclusion of the hearing and the giving of judgment. This was not pressed on the hearing of the application for leave, correctly in my view, because it is well-established that delay will not constitute a ground of appeal in its own right in civil proceedings, but the manner in which it can affect appellate review can vary from case to case: NAIS v Minister for Immigration & Multicultural & Indigenous Affairs [2005] HCA 77 ; (2005) 228 CLR 470 and Mastronardi v State of New South Wales [2007] NSWCA 54 at [63] . The highest it was put was by reference to the observations of Kirby J in NAIS at [87] and [88] that because extensive delay may sometimes tempt (or appear to tempt) the decision-maker to take the path of easy resolution, it is incumbent on a court, reviewing the impugned decision in an appeal or on judicial review, to approach its task with vigilance. The same considerations apply where the application for leave is heard by a single judge. It is for the applicant seeking leave to appeal to satisfy the court as to both these matters: Ogawa v University of Melbourne (No 2) [2004] FCA 1275. The considerations referred to in [20] above are not exhaustive. Whilst leave to appeal an interlocutory decision on a point of practice or procedure, rather than substantive rights, might less readily be granted, even a decision affecting the latter may be refused where the appeal would achieve no useful purpose. I commenced my journey on 23 March 2005 when I left Sydney and returned to Australia on a Qantas flight leaving Mumbai, India on 8 June 2005. There does not appear to be any difference in the palliative and therapeutic devices and auxiliary that the Applicant claims to have required. Accordingly, it does not come within the ambit of s.46PO(3)(a). At [103] and [104] his Honour found, correctly in my view, that these issues were never raised in the claim terminated by HREOC. The Federal Magistrate accepted Qantas' submission that ss 23 sand 24 of the DDA are mutually exclusive. It followed, in his Honour's view, that the applicant could not rely on essentially the same conduct in a claim under two mutually exclusive sections (at [110]). At [112], the Federal Magistrate concluded that, leaving aside the question of extra-territoriality, the facts upon which the applicant now sought to bring his claim were not the same or substantially the same as those in the complaint terminated by HREOC. In his Honour's view, the proposed amendments to the application were outside the limits of s 46PO(3) of the then HREOC Act. His Honour noted that where the unlawful discrimination alleged does not meet the test in s 46PO(3), the Court has no jurisdiction to hear the application and that, as he was satisfied that the unlawful discrimination alleged in the proposed amended application and points of claim does not come within the boundaries of s 46PO(3), it followed that granting leave to amend the application would be futile. The application for leave to file the amended application was therefore refused. On the hearing of the leave application, the applicant submitted that the Federal Magistrate erred in not applying the principle that (subject to considerations of fairness and case management) leave to amend should be given unless the proposed amendments are manifestly hopeless. This test requires a high standard of confidence that the claims cannot succeed. However, my reading of his Honour's reasons indicates that his Honour did reach the conclusion that the proposed amendments were manifestly hopeless for the reasons noted in the preceding paragraph. It was then submitted that if the Federal Magistrate had reached that state of confidence, he ought properly to have given detailed reasons for the conclusions. In my view, his Honour did. It was then said that when considering the applicant's application for leave to amend, the Federal Magistrate was influenced by Qantas' argument that the points of claim articulated matters outside the scope of the applicant's complaint to HREOC. It was submitted that the application for leave to amend was not concerned with leave to amend the points of claim, which had already been pleaded. The amendments sought were those amendments to the application set out in [23] above. What this submission ignores is that the proposed amendments to the application were designed to bring it into line with the previously pleaded points of claim and his Honour's reasons have to be read in that light. The applicant submitted that his Honour's conclusion, that ss 23 and 24 of the DDA are mutually exclusive and that the applicant could not rely on essentially the same conduct in a claim under two mutually exclusive sections, was an error of law. It was submitted that the provisions can and do operate mutually without excluding each other and reference was made to the decision of a Full Court of this Court in Queensland v Forest [2008] FCAFC 96 ; (2008) 168 FCR 532. Having closely read the reasons of the Full Court, both those of the majority (Spender and Emmett JJ) and the minority (Black CJ), I am not persuaded that this case is authority for that proposition. But even if these two provisions are not mutually exclusive and his Honour was in error in concluding that they were, in my view this would not vitiate his Honour's ultimate conclusion that the proposed amendments to the application are outside the limits of s 46PO(3) of the then HREOC Act. In my view, his Honour's refusal to allow amendment of the application in the terms proposed by the applicant, is not attended by sufficient doubt to warrant it being re-considered by this Court. His Honour paraphrased the issue, correctly in my view, as being whether the applicant had a reasonable prospect of successfully prosecuting his application. On the basis of the dismissal of the application to amend, his Honour observed, again correctly in my view, that the application to be considered was the original application filed on 8 June 2007: at [121] of his reasons. In order for his claim to succeed, the Applicant must establish that the Disability Discrimination Act applies outside Australia. The Delegate of the President of the Human Rights and Equal Opportunity Commission dismissed the Applicant's claims on the basis that the Act did not apply extra-territorially, relying on the decision in Brannigan v Commonwealth of Australia. This act occurred in India, not in Australia. On the hearing of the leave application, the applicant submitted that it was not the case that his unamended application was confined to matters in Mumbai because it refers to the purchase of a ticket in early 2005 and a refusal by Qantas to reasonably accommodate his disability aids. These claims, it was submitted, raise issues broader than the conduct of Qantas in Mumbai. That may be so but it does not lead to the conclusion that any part of the discriminatory act originally complained of took place anywhere other than in India. The applicant further submitted on the hearing of the leave application that the Federal Magistrate: I reject all of these submissions. The first is not supported on the facts; the second was not particularised in any way; and the third is devoid of any reasoning process. The Disability Discrimination Act has no extra-territorial effect. Had that been the intention of the legislature, then it would have been clearly stated in the legislation. On the hearing of the leave application, the applicant submitted that his Honour erred in his approach to the extra-territorial issue. It was submitted that a distinction was to be drawn between discrimination in employment by the Commonwealth occurring outside Australia with which Brannigan was concerned, and the application of the DDA to foreign corporations, trading or financial corporations or trade or commerce between Australia and a place outside Australia. According to the applicant, his Honour took Brannigan too far by treating it as having conclusively determined that the DDA can never be concerned with conduct occurring outside Australia. I do not agree, nor do I agree with the applicant's submission that his Honour ought to have left the complex legal issues raised by the extra-territorial issue to be argued in full at a hearing on the merits. The applicant's complaints have already been considered on a comprehensive basis by HREOC and terminated. The application must be refused with costs. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds.

application for leave to appeal an interlocutory judgment of the federal magistrates court whether the decision is attended by sufficient doubt to warrant it being reconsidered whether substantial injustice would result if leave were refused, supposing the decision is wrong no useful purpose would be served by a grant of leave nor will the applicant suffer substantial injustice if leave is denied. practice & procedure

The Tribunal there affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs to refuse the grant of a protection visa to the appellant. 2 The appellant is a citizen of India. He arrived in Australia on 26 March 1998. On 21 January 2000 he applied to the Department of Immigration and Multicultural Affairs for a protection visa. On 13 March 2000 the delegate refused his application for a protection visa. On 23 May 2001 the Tribunal (differently constituted) affirmed the delegate's decision. On 24 October 2005 the Federal Magistrates Court quashed the Tribunal's decision of 23 May 2001 and remitted the matter to the Tribunal to be determined according to law. 3 On 13 December 2005 the Tribunal affirmed the delegate's decision not to grant a protection visa. 4 In his application for a protection visa the appellant claimed that he was a Sikh and had completed 15 years of education graduating BA from Punjab University. He said that he had lived at the same address in Chandigarah for 10 years before he left India legally in March 1998 travelling on a valid Indian passport. From 1994 until 1998 he had been employed as a chef. 5 The appellant claimed in his application that his uncle was a member of the Armed Khalistan Commando Group as a result of which his family became under watch of the authorities. That was the reason why he left India. His uncle was underground but he said the authorities believed that the family knew of the uncle's whereabouts and were helping him. He claimed that the whole of his family were persecuted because of his uncle's role in that group. He claimed in that application his family was tortured but that he was not. 6 An Australian citizen who had been born in the Punjab was called as a witness at the hearing. He said that he had met the appellant in the year 2000, that they had become good friends, and that he had spoken to the appellant's father in India and had visited him. He said the appellant's parents had been tortured. It was his evidence that the appellant's parents' pension entitlements had been extorted by the police. He said that they had also lost their family home. He said that the family had moved to another town but the police harassment had followed that family. It was his evidence that the appellant would be in danger if he were to return to India. 7 During the hearing, and during the appellant's evidence, it was put to the appellant that the country information suggested that the conflict which had existed in the Punjab for the 10 years prior to 1995 had ended and that the Punjab was peaceful, and that the rule of law had been restored. It was put to him that the events about which he complained had occurred shortly after the insurgency had stopped and that there was now no real risk that he would suffer any harm if he were to return to the Punjab. 8 The matter was adjourned to allow the appellant to provide evidence contrary to the propositions which had been put to him. That you were not tortured in India. Your uncle ran a restaurant and the suspicions of the police were due to the fact that the militants came to eat at his restaurant and arms were found in the restaurant during a search. That you were tortured. Yes my uncle was running a restaurant and his involvement in terrorist activities was established when police found arms and ammunition in his restaurant and later declared him one of the members of armed Khalistan Commando Force. As told, after my uncle went underground and managed to flee out of India and me being the link because of my employment in his restaurant the police started harassing and torturing my parents. Then they started extorting money from my father on the pretext that in case their demands are not met they are going to implicate me in false terrorism case. When my father got exhausted of all his retirement benefits and belongings, he decided to lodge a complaint against those highly ranked police officers, which never got registered. To counter this move the police shifted over to me and started torturing me to accept in written (sic) that I knew about my uncle's terrorist activities and was also assisting him otherwise they will liquidate me in false police encounter case. I was left with no alternative other than to flee out of India for my life. 12 The Tribunal found that the appellant's reply on 8 December 2005 did not resolve the conflict between the claim which he originally presented and his oral evidence. For example, it did not resolve the conflict between his original claim that he had not been tortured and his later claim that he had. The Tribunal also found there was a conflict between his original complaint about his uncle's involvement with the Armed Khalistan Commando Group and his later claim that his uncle ran a restaurant where Sikh militants used to eat. 13 The Tribunal found that the appellant's account was inconsistent with independent country information. The Tribunal found that the appellant did not leave India until almost three years after the violence had ceased. The country information was inconsistent with his claim that the police harassed people. The country information indicated that the Indian judicial system functioned and that people wrongly accused of militancy were able to obtain a fair trial. It found that the appellant was not at risk of arrest or harm or any other risk for any Convention reason. The Tribunal did not accept the evidence of the appellant's witness in relation to the appellant's family and, in particular, in relation to the appellant's father. The Tribunal found that the appellant did not have a well-founded fear of persecution for a Convention reason. 14 The appellant brought proceedings in the Federal Magistrates Court seeking a review of that decision. The Federal Magistrate found that the nine separate grounds in support of the application for review 'fall into the error of merits review. They do not allege jurisdictional error, and I am unable to discern any jurisdictional error'. The Federal Magistrate dismissed the application for a review. The appellant is aggrieved that the dismissal order of the review application by FM SCARLETT on 24 May 2006 would jeopardise the appellant's safety upon return to his country as mentioned in his protection visa application that the applicant has been previously persecuted in India before coming to Australia. The refugee review tribunal denied the natural justice. The Tribunal decision was unjust and was made without taking into account the full gravity of the circumstances of the appellant's claims. The Tribunal had no other substantive material or evidence to justify its decision. The Tribunal cited so many reports and references, which are not relevant to the appellant's protection visa application when the appellants applied for protection visa with his own circumstances and claims. The Tribunal decision is involved in Jurisdictional error and also did not comply with mandatory obligations according to the Migration Act 1958 . Such as- the Tribunal did not comply with the mandatory obligations that contained in section 424A of the migration act. No submission was put forward to indicate that the Federal Magistrate was wrong in concluding that the application before him was merits based and did not identify any jurisdictional error. 17 Although the grounds of appeal to this Court claimed that the Tribunal denied the appellant natural justice which would, if made out, amount to jurisdictional error, no attempt has been made to particularise or identify the particular denial of natural justice. Ground 3 of the grounds is a merits based claim which cannot be entertained on the application for review. Ground 6 does raise a failure by the Tribunal to comply with s 424A of the Act but no particularity is given of that failure. In any event, the Federal Magistrate found, rightly in my opinion, that the Tribunal had complied with s 424A in the manner in which the Tribunal had written to the appellant. 18 In my opinion, no error has been shown on the part of the Federal Magistrate. No jurisdictional error on the part of the Tribunal has been made out. The appeal, therefore, must be dismissed. The appellant must pay the first respondent's costs. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander.

no point of principle appeal dismissed. migration

The first notice of motion is a notice of motion issued by the first two respondents in Peter John Humphries v Newport Quays Stage 2A Pty Ltd, MC Marina South Ltd and Rebecca McFarlane (SAD 153 of 2008). The second notice of motion is a notice of motion issued by the first two respondents in Anna Kathryn Humphries v Newport Quays Stage 2A Pty Ltd, MC Marina South Ltd and Rebecca McFarlane (SAD 152 of 2008). Ms Anna Humphries is Mr Peter Humphries' daughter. There is an overlap between the two notices of motion. Both notices challenge a group of paragraphs in the applicant's statement of claim, being the Third Further Amended Statement of Claim in the proceeding by Mr Humphries and the Further Amended Statement of Claim in the proceeding by Ms Anna Humphries. In the proceeding by Mr Peter Humphries, the notice of motion seeks an order striking out paragraphs 82, 84, 91, 92, 97, 106.6 and 106.7. Those paragraphs are mirrored in the proceeding by Ms Humphries (paragraphs 85, 87, 93, 94, 95, 102.2, 102.5, 103, 104, 107, 108.6 and 108.9) and an order is sought that they be struck out. It is common ground that the one ruling will apply to both groups of paragraphs. There is one matter raised in the proceeding by Ms Humphries which is not raised in the proceeding by Mr Peter Humphries. The first and second respondents seek an order that paragraph 56 of Ms Anna Humphries' statement of claim be struck out. Counsel for the third respondent in each proceeding indicated that she supported the first and second respondents' notice of motion. It is convenient to refer to the first and second respondents as the respondents. The respondents are the vendors. Mr Humphries claims that he was induced to enter into the property contracts by misleading or deceptive conduct of the respondents and their agents within s 52 of the Trade Practices Act 1974 (Cth) ("TPA"). The same conduct is said to give rise to unconscionable conduct in equity and under Part IVA of the TPA, and misrepresentations at common law and under the Misrepresentation Act 1972 (SA). The deposits under the various property contracts were provided by way of bank guarantees. Mr Humphries claims that, once he became aware of the misleading or deceptive conduct, he rescinded the property contracts. If his claim for rescission is upheld, the accompanying relief which he seeks relates to the deposits. The respondents deny that Mr Humphries was or is entitled to rescind the property contracts and they allege that Mr Humphries affirmed the property contracts before his purported rescission. They allege that Mr Humphries' purported rescission and refusal to perform the property contracts was a repudiation by him and that they have brought the property contracts to an end. The respondents have brought a cross-claim claiming relief in relation to the deposits and damages (liquidated or general) representing the difference between the contract prices of the various properties and the prices achieved on the resale of those properties. In what seems to be a defensive measure, Mr Humphries has pleaded in his statement of claim an alternative claim to his claim for rescission. He claims an order under s 87(1) of the TPA which will have the effect of preventing the respondents from relying on the contract prices of the various properties and permitting them to rely only on the true market value of the properties. The respondents claim that this alternative claim is not maintainable as a matter of law and should be struck out. They rely on the Court's power in O 11 r 16 of the Federal Court Rules to strike out part of a pleading which discloses no reasonable cause of action. In essence, their argument is that there are no circumstances in which Mr Humphries' claim for rescission would fail and yet his claim for alternative relief would succeed. In my opinion, Mr Humphries' claim for alternative relief is not unarguable in the sense referred to in the authorities ( General Steel Industries Inc v Commissioner for Railways (NSW) and Others [1964] HCA 69 ; (1964) 112 CLR 125) and the respondents' application in relation to Mr Humphries' claim for alternative relief must be refused. As I have said, Mr Humphries claims a right to rescind the property contracts, or an order under s 87 of the TPA that the property contracts have been rescinded, or are rescinded. 106.7 In the alternative to paragraph 106.3 above, an order that the First Respondent and the Second Respondent be permanently restrained from calling upon the Bank Guarantees. The claims for relief in paragraphs 106.6 and 106.7 are based on earlier paragraphs which are challenged. As I understand it, neither party is seeking an order for the specific performance of the property contracts and therefore the relevant plea in paragraph 82 is the plea that an order be made under s 87 of the TPA precluding the first respondent from asserting certain rights based on the provisions of the contracts. Paragraph 91 contains a plea that the respondents have exercised what the respondents assert are their legal rights under the contracts and have made claims for various monetary amounts. Paragraph 92 contains a plea of unconscionable conduct in equity and under Part IVA of the TPA. The conduct is identified as the representations previously pleaded and other conduct pleaded in the Statement of Claim. The conduct is said to be unconscionable because of what Mr Humphries pleads is "The True Position". In the alternative, by reason of their unconscionable conduct in equity, Newport Quays and Marina South are precluded from taking any steps against the Applicant to enforce the Contracts against the Applicant. The principal remedies are rescission of the contract and damages, or affirmation of the contract and damages. There are bars to rescission such as prior affirmation of the contract or an inability to restore the parties to their original positions. A party who has entered into a contract as a result of misleading or deceptive conduct by the other party has a range of remedies available to him under the TPA, including an injunction (s 80) , damages (s 82) or other appropriate orders (s 87). Section 87(2) sets out the type of remedies a Court may grant, but it is not exhaustive of the type of remedies which may be made under s 87(1). It has been said on a number of occasions that a Court may make a wide range of orders under s 87 of the TPA and it may do so in a wide range of circumstances. The section is engaged, and only engaged, where (assuming a proceeding within the terms of the section) a party has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in contravention of a provision of Part IV , IVA, IVB, V or VC. Where those conditions are present, the Court may make such order as it considers appropriate against the person who engaged in the conduct or a person who was involved in the contravention. The orders which may be made include those orders specified in subsection (2), but, as I have said, the Court is not limited to those types of orders. The order must be one which the Court considers will compensate the innocent party in whole or in part for the loss or damage or will prevent or reduce the loss or damage. The authorities establish that the Court's power to award relief under s 87(1) is not constrained by common law or equitable principles: Murphy v Overton Investments Pty Ltd [2004] HCA 3 ; (2004) 216 CLR 388 (" Murphy v Overton Investments Pty Ltd ') at 407 [44]. The provisions of s 87 enable a Court to overcome some of the difficulties of the common law including those inherent in deciding whether to rescind or affirm a contract: Mister Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23 (" Mister Figgins ") at 60 per Northrop J. Doctrines such as affirmation or the non-availability of restitutio in integrum which bar rescission in equity are no more than discretionary considerations in the exercise of the power in s 87(1): JAD International Pty Ltd v International Trucks Australia Limited (1994) 50 FCR 378 at 380. An order may be made under s 87(1) where, inter alia, a person is likely to suffer loss or damage and the order may be one that is appropriate to prevent or reduce that loss or damage. This gives the section a wide operation: Marks v GIO Australia Holdings Limited [1998] HCA 69 ; (1998) 196 CLR 494 at 505 per McHugh, Hayne and Callinan JJ; Murphy v Overton Investments Pty Limited at 407. Although quite a different case on the facts, the relief granted in Mister Figgins is illustrative of the broad power in s 87(1). Rescission was refused partly on the ground that the innocent party had affirmed the contracts, but nevertheless an order was made under s 87(1) varying the contracts. The orders sought in this case are orders refusing to enforce (in the sense of recognising for the purposes of the respondent' damages claim) provisions in the relevant property contracts. The orders sought seem to be similar to orders varying provisions of contracts and that is an order which could be made under s 87(1): see s 87(2)(b). The orders sought, or permissible variations of them, may, in the alternative, or in addition, fall within other paragraphs in s 87(2) (see, for example, s 87(2)(ba)). An order varying the contract price under a contract may be made under the section: Frith v Gold Coast Mineral Springs Pty Ltd [1983] FCA 28 ; (1983) 65 FLR 213 at 241 per Fitzgerald J. It may be likely that Mr Humphries' case as a whole will stand or fall on his claim for rescission. However, having regard to the wide terms of s 87 and the authorities, it cannot be said that his alternative claim for relief is bound to fail. In other words, it is possible that Mr Humphries will succeed on his claims under the TPA and yet the Court will award the alternative relief claimed by him. In those circumstances, the respondent's challenge must fail. Paragraph 37 pleads an attendance by Mr Humphries in August 2006 at the showroom as defined and on subsequent occasions. Paragraphs 38, 39, 40, 41, 42, 43, 44, 45, 46 and 47 contain pleas of matters that Mr Humphries saw or of matters he was told at the showroom. Paragraph 47 contains a plea that a brochure was given to Mr Humphries by Ms McFarlane and it contained various representations. Those alleged representations are then set out. Paragraph 49 contains a plea that Mr Humphries visited a website for the Newport Quays development. Paragraph 51 contains a plea that he read a number of newsletters when he visited the website and it sets out a number of representations which were allegedly contained in the newsletters. Paragraph 52 contains a plea of what are alleged to be verbal statements made by Ms McFarlane to Mr Humphries at the showroom in August 2006. Paragraph 54 contains a plea that Mr Humphries told Ms McFarlane that what was being and had already been conveyed to him as described in the Statement of Claim would be passed on to Ms Humphries. Paragraph 55 contains a plea of Mr Humphries' undertaking and belief as a result of the pictorial statements, brochure statements, newsletter statements, website statements and verbal statements. It pleads that Mr Humphries recommended to Ms Humphries that she purchase a property in the Newport Quays development. The respondents complain that the plea in paragraph 56 fails to disclose the information Mr Humphries conveyed to Ms Humphries before she entered into the relevant transactions and fails to plead how and when that information was conveyed to Ms Humphries by Mr Humphries. In my opinion, the respondents' contentions are correct. The plea in paragraph 56 has a tendency to cause embarrassment in the proceeding because it is vague and ambiguous. In the course of submissions, counsel for Ms Humphries made it clear that she was not asserting that Mr Humphries passed on to her what he had seen and been told but rather, that he made a recommendation that she enter into the property contracts. I must say that I would not have read the plea in paragraph 56 in that way, and counsel's explanation reinforces the conclusion that the plea is embarrassing within O 11 r 16 of the Federal Court Rules . If Ms Humphries' case is that she simply relied on her father's recommendation and nothing more was conveyed to her, then that should be made clear in her pleading. The allegation in paragraph 56 of the Further Amended Statement of Claim is struck out with leave to the applicant to replead. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

application to strike out provisions of statement of claim where plea for rescission of contracts for land because of misleading and deceptive conduct or unconscionability under trade practices act 1974 (cth) whether applicants could plead in the alternative claim for order preventing respondents from relying on contract price under s 87 practice and procedure

On 2 September 2003 she received formal notice that she was to be made redundant. On 8 September 2003 Ms Butler lodged a claim for compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth) ('the Act') in respect of 'nerve entrapment at elbow and nerve entrapment at wrist' of her left arm. 2 Telstra determined, and affirmed on reconsideration of that determination, that it was not liable to pay compensation to Ms Butler. Ms Butler sought review of Telstra's reconsideration decision by the Administrative Appeals Tribunal. The Tribunal affirmed the decision under review. 3 Ms Butler has now applied to the Court under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ('the AAT Act') and s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('the ADJR Act') for review of the decision of the Tribunal. It identified the issue that it was required to determine as whether that condition was work-related. 6 Ms Butler told the Tribunal that she first noticed pins and needles in her left fingers and palm in September 2002 and that in February 2003 she began to experience pain and weakness in her forearm at night or when she tried to lift an object. She conceded that she saw her general medical practitioner on more than five occasions between 21 October 2002 and 15 July 2003 without mentioning her arm symptoms to him. She consulted her general medical practitioner about her arm on 30 July 2003 when, as she claimed, the pain was so bad that she 'couldn't stand it' and she was taking four to eight Panadeine Forte per day and taking two to three days off work per week. However, she agreed that on 3 July 2003 she had asked to be given an increased amount of keying work. She said that she had told her manager about her condition in early August 2003 but did not make a claim. During the course of the Tribunal hearing Ms Butler alleged that she had injured her arm at work on 2 February 2002 while lifting a box. 7 The Tribunal concluded that the timing of Ms Butler's claim relative to her redundancy, the length of time that passed between the onset of her symptoms and her making anyone at work aware of those symptoms, and her late claim to have injured her arm on 2 February 2002 all affected the weight to be given to her evidence. 8 Ms Butler gave the Tribunal a document entitled 'Research Done by Teresa Butler' which sought to demonstrate that carpal tunnel syndrome may be due to repetitive work such as typing. She cited as general references websites of the National Occupational Health and Safety Commission , MedicineNet Medical Reference for Patients and Medline Plus . She also provided copies of a number of articles emanating from government occupational health and safety websites and referred to cases in which repetitive strain type injuries had been found to be causally linked to employment. 9 Five medical reports were available to the Tribunal. Ms Butler relied on a report of Dr Samuel Kwa, her treating Hand and Orthopaedic Surgeon, and Dr Peter Burgess, also an Orthopaedic Surgeon. Dr Kwa's report described Ms Butler's account of worsening symptoms 'due to work activities' and concluded, on that basis, that her condition was work related. Dr Burgess reported that Ms Butler had given a history of spending 'a large part of the day, two or three hours at least, holding a phone in her left hand with her elbow on the desk'. On the basis of that history, Dr Burgess expressed the opinion that prolonged flexion of the elbow was very likely the cause of her ulnar nerve pathology. Dr Burgess said that there was no medical evidence to support a causal connection between Ms Butler's work and her carpal tunnel syndrome. In respect of Dr Burgess' report the Tribunal noted that a sketch made by Ms Butler of her workstation showed her telephone on the right side. It also noted that Ms Butler had agreed that she did not mention leaning on her left elbow as a cause of her problem to any other doctor or to Telstra. 10 Telstra relied on reports of Dr Stephen Potter, Rheumatologist, and Dr F J Harvey, Orthopaedic Surgeon. Dr Potter stated that the pathology in Ms Butler's arms and her regional pain disorder were not due to her work. He attached to his reports medical articles from peer-reviewed medical journals and commentaries indicating that there is no causal relationship between clerical and keyboard duties and the onset of carpal tunnel syndrome or ulnar neuropathy of the elbow. I don't consider that carpel [sic] tunnel syndrome is caused by repetitive keyboard work either, but if a person has a propensity to carpel tunnel syndrome and does a lot of keyboard work, this can aggravate the situation and make the symptoms worse. The fact that her symptoms persisted after she stopped work and the decompression wasn't done until April 2004, is a strong indication that there is little relationship of her carpel [sic] tunnel syndrome to her employment. I believe that if the employment were an aggravating factor, one would anticipate that the symptoms would subside when the employment was ceased. Dr Fingleton offered no opinion on the cause of Ms Butler's condition but noted in a report dated 22 September 2003 that, after she ceased work, she started to get symptoms in her right elbow similar to those experienced in her left elbow. 12 The Tribunal preferred the evidence of Dr Harvey to that of Dr Kwa. It concluded that Ms Butler's carpal tunnel syndrome was not caused by her keying and her ulnar nerve entrapment was not caused by prolonged leaning on her elbow whilst on the telephone at work. As mentioned above, it affirmed the decision under review. It is not necessary to identify each of the questions that Ms Butler characterised as a question of law within the meaning of s 44 of the AAT Act and each of the grounds of review relied upon in respect of the application under the ADJR Act. Counsel for Ms Butler identified three issues on which the two applications were pressed. I am satisfied that each of these issues can be determined pursuant to the Court's jurisdiction under s 5 of the ADJR Act. It is therefore unnecessary to determine whether the Court's jurisdiction under s 44 of the AAT Act has additionally been properly invoked. She argued that it was not put to her, nor was she allowed to respond to the allegations, (a) that she did not hold the telephone in her left hand whilst at work; and (b) that symptoms developed in her right arm after she left work. She also contended that she was denied procedural fairness in that the Tribunal did not allow her to tender medical articles. On that basis Dr Burgess expressed the opinion that prolonged flexion of Ms Butler's left elbow was very likely the cause of her ulnar nerve pathology. The patient didn't give me any history of this. I would agree with Dr Burgess however, that this could possibly contribute to an entrapment of the ulnar nerve at the elbow if she did rest with the ulnar side of the elbow on the desk for prolonged periods. It was put to her that she had told Dr Burgess in December 2003 that she had a problem caused by leaning on her left elbow. The significance of the date December 2003 was suggested to be that she had learnt by that date that her claim for compensation had been declined as not being work related. It was drawn to her attention that a diagram of her workstation which she had prepared showed her telephone on the right hand side. She replied that she picked up the telephone with her left hand. The cross-examiner asked, 'Even though it's on the right hand side of your keyboard? ' She replied, 'That's correct'. She also replied, 'Yes' , when the cross-examiner asked, 'And the right hand side of your work station? ' The cross-examiner then asked her why she had not mentioned in either the statement that she gave to an investigator, or to any of the other doctors that she saw, that leaning on her elbow was triggering symptoms. She replied, 'It's a very good question' . 18 The above cross-examination was, in my view, sufficient to place Ms Butler on notice that the credibility of her claim that she lent on her left elbow while answering the telephone was challenged. She did not mention the issue of the hand in which she held the telephone. 20 In its reasons for decision the Tribunal did not identify the issue of which hand Ms Butler held the telephone in whilst at work as an issue that needed to be addressed to reach a decision on whether her condition was work related. Nor did the Tribunal expressly make a finding on this issue (see [4] above). 21 The basis of the Tribunal's decision is rather stated to be that it preferred the evidence of Dr Harvey to the evidence given by other medical practitioners. In relation to Ms Butler's conditions, even if such a relationship were established generally, I am mindful of Dr Harvey's evidence that the persistence of her symptoms after she left work (and some months after she stopped doing data entry work in early July 2003) is a strong indication against a causal relationship between her keying work and her conditions. The emergence of symptoms in her right elbow after she left work is similarly an indication that the same symptoms in her left elbow are not causally related to work (including leaning on that elbow whilst holding the telephone, as Dr Burgess suggested). 22 The contention that Ms Butler was denied procedural fairness in that it was not put to her that she did not hold the telephone in her left hand therefore fails on two bases. First, it was made clear to her that her evidence in this regard was challenged and she was given an opportunity to respond. Secondly, the Tribunal did not find to the contrary of her evidence on this topic. Rather, the Tribunal assumed its accuracy but decided, partly by reference to the evidence of Dr Harvey, that the symptoms that she experienced in her left elbow had no connection with the way that she held the telephone at work. 24 Ms Butler was cross-examined about when she first experienced symptoms in her right elbow and, in particular, if it was before or after her employment with Telstra ended. She said that she was unable to recall. She agreed that she had not told anyone that she had a problem caused by leaning on her right arm at work. She explained that she did not lean on her right elbow. She agreed that leaning on her right elbow could not account for the symptoms that she told Dr Fingleton about. 25 Counsel for Telstra submitted to the Tribunal that the opinion of Dr Burgess, which linked Ms Butler's symptoms in her left elbow to her leaning on that elbow, did not explain her symptoms in the right elbow. He observed that it was not clear when Ms Butler first experienced symptoms in her right elbow; they may have started shortly before she left her employment or they may have started after she left her employment. 26 The importance of the symptoms that Ms Butler acknowledged that she experienced with her right elbow was not the timing of their emergence but rather their probable cause. The Tribunal probably put the matter too definitively when it stated that the symptoms in her right elbow emerged after she left work. The evidence suggested that the symptoms probably emerged at about the time that she left work but did not rule out the possibility that they emerged while she was still at work. However, the only suggested link between the symptoms in her left elbow and her work was her practice of leaning on her left elbow while on the telephone. No comparable link was suggested so far as the symptoms in her right elbow were concerned. 27 I conclude that there was no procedural unfairness to Ms Butler in the Tribunal attributing significance to the evidence concerning the symptoms experienced by Ms Butler to her right elbow. She was made aware of the significance that might be attributed to those symptoms and given an opportunity to address the Tribunal on that issue. Although it was not put to her that the symptoms in her right arm developed after she left work, the true significance of those symptoms was not the timing of their development; it was that they arose in an elbow that she did not, as a matter of practice, lean on while speaking on the telephone. Ms Butler did not give evidence identifying the medical articles that she wished to place before the Tribunal. It is therefore not possible for this Court to determine whether those articles were relevant to any issue that the Tribunal was required to consider or, assuming that they were, whether they added in any significant way to the material already before the Tribunal. 29 In any event, examination of the transcript of the hearing before the Tribunal does not support the submission that Ms Butler was refused permission to tender medical articles. So you send a copy to the respondent at least three weeks before the next date and it may still be that the respondent, through Mr Kelly, has an objection to that evidence and you have to argue it out in front of me and I'll make a decision. I don't mean exactly, but generally, what kind of thing are you thinking about? Now, I will look at those articles that you've provided, but they're not going to carry a great deal of weight. They're not going to carry nearly as much weight as the opinions of medical experts that we have about you and your circumstances. General articles about medical matters just aren't specific enough. There's no surprises here. Everyone has to know what they're dealing with. The Tribunal was not under an obligation to receive an unlimited number of articles all tending to support the same proposition. 33 The compensation claimed by Ms Butler was only payable by Telstra in respect of an 'injury' as then defined by s 4(1) of the Act. Ms Butler has not placed reliance on paragraph (a) of that definition. 35 So far as the symptoms in her left elbow were concerned, the Tribunal was entitled, in the absence of expert evidence suggesting to the contrary, to draw the common-sense inference suggested by the fact that she experienced the same symptoms in each elbow; namely that their aetiology was the same ( Adelaide Stevedoring Co Ltd v Forst [1940] HCA 45 ; (1940) 64 CLR 538 esp per Rich ACJ at 563). 36 For the above reason, the onset of symptoms in her right arm that were of the same character as the symptoms in her left arm was not an irrelevant consideration. The Tribunal was not under an obligation to disregard the symptoms experienced by Ms Butler in her right arm because no person expressed an expert opinion on the relevance of the symptoms in Ms Butler's right arm other than in respect of her carpal tunnel syndrome. While acknowledging that the Tribunal was not bound by the rules of evidence, Ms Butler argued that 'there must be occasions and are occasions that a tribunal could reject evidence that is clearly inadmissible and based on extreme hearsay' . 38 Ms Carrall was Ms Butler's manager although she did not work at the same location as Ms Butler. She made a statement about the hours worked by Ms Butler and the nature of her duties. She also mentioned in a statement that Ms Butler was known to be a chain smoker and therefore would have taken numerous short breaks from her work to leave the office for a smoke. 39 Ms Carrall was required for cross-examination before the Tribunal and was questioned as to her knowledge of Ms Butler's duties including as to the amount of keying she did. 40 Ms Small was Ms Butler's team leader although, like Ms Carrall, she did not work at the same location as Ms Butler. She made a statement concerning the nature of the duties undertaken by Ms Butler. She was not required for cross-examination. 41 The evidence contained in the statement of Ms Carrall and Ms Small and the oral evidence of Ms Carrall was plainly relevant to the issues required to be determined by the Tribunal. Ms Butler's claim for compensation was dependent on her injury arising out of, or in the course of, her employment. Her credibility in respect of the nature of the duties performed by her in the course of her employment, and in particular as to the amount and duration of her keying, was challenged. Ms Butler's complaint is in reality a complaint as to the weight which the Tribunal accorded to the evidence of Ms Carrall and Ms Small as opposed to the evidence on the same topic given by Ms Butler. The weight to be given to evidence from different sources was a matter for the Tribunal to determine. The Tribunal entertained reservations about Ms Butler's credibility. It was not obliged to accept what she said, including what she said about the amount of keying that she did. 42 The Tribunal did not take into account an irrelevant consideration when it took into account the evidence of Ms Carrall and Ms Small. She submitted that the Tribunal looked at 'cause strictly' rather than applying the test of whether the injury, or the aggravation of an injury, arose out of, or in the course of, her employment. She also submitted that the Tribunal considered only whether her employment was the sole cause and failed to consider whether there was 'a nexus between the [Ms Butler's] employment and her medical condition' . Alternatively, Ms Butler suggested in the course of the hearing that a lifting incident in February 2002, when an archive box handle broke off in her hand, caused or contributed to her left upper limb condition. Telstra contends that Ms Butler's condition is not related to her work. The Tribunal was not satisfied of a general causal relationship between keying and nerve entrapment (including carpal tunnel syndrome and ulnar nerve entrapment). It preferred the expert evidence of Dr Harvey to the expert evidence of the medical practitioners on which Ms Butler relied. 46 An important part of the expert evidence of Dr Harvey is set out in [10] above. The expert opinions expressed by Dr Harvey can be summarised in the following way. The entrapment of Ms Butler's ulnar nerve at the elbow was not related to her keyboard work; her carpal tunnel syndrome was also not caused by her keyboard work but carpal tunnel syndrome can be aggravated by keyboard work; Ms Butler's carpal tunnel syndrome was unlikely to have been aggravated by her keyboard work because the symptoms persisted after she stopped work --- if her employment were an aggravating factor the symptoms would have subsided when she stopped work. 47 Read in context, the Tribunal's reference to Dr Harvey's evidence, and particularly his evidence concerning the persistence of Ms Butler's symptoms after she left work, makes clear that it did not overlook that the definition of 'injury' in s 4(1) of the Act includes aggravation of an injury whether or not that injury itself arose out of, or in the course of, the employee's employment. 48 I see no reason to conclude that the Tribunal misconstrued the definition of injury in s 4(1) of the Act. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

appeal from administrative appeals tribunal whether denial of procedural fairness whether aat took into account irrelevant considerations whether error of law s 4(1) safety, rehabilitation and compensation act 1988 (cth) definition of 'injury' held: no denial of procedural fairness considerations taken into account not irrelevant no error of law applications dismissed administrative law

The orders of the Federal Magistrate were interlocutory: r 44.12(2) of the Rules. The applicant therefore requires leave to appeal: Federal Court of Australia Act 1976 (Cth), s 24(1)(d) and s 24(1A). The respondent opposes the application for leave to appeal on the grounds that the applicant has no possible prospect of success in any appeal, nor is the judgment of his Honour attended with sufficient doubt to warrant the grant of leave to appeal. Furthermore, no sufficient injustice would result if leave to appeal were not granted: Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655 ; (1991) 33 FCR 397. She arrived in Australia on 15 July 2008 and lodged a protection visa application (PVA) on 21 July 2008. A delegate interviewed the applicant and refused to grant the visa on 18 September 2008. The applicant applied to the Refugee Review Tribunal (Tribunal) for review on 15 October 2008. She appeared at the hearing and gave oral evidence to the Tribunal on 27 November 2008. The Tribunal signed the decision affirming the decision of the delegate on 15 January 2009 and sent a copy to the applicant. The application to the Federal Magistrates Court was filed on 11 February 2009. The Federal Magistrate dismissed the application pursuant to r 44.12 of the Rules on 4 May 2009. In a statement attached to her PVA, the applicant claimed to fear harm as a sex worker in China which she claimed was a "minor group of people" who suffer discrimination from the government and such people generally are not "legally accepted". She claimed to have begun work as "a PR" in 2004, accompanying people for a drink. Her boss asked her to also provide sex to customers. Afraid of losing her job and lured by the prospect of more money she began to work as a sex worker. A customer asked for a "special service" which she refused. A few weeks later, the police came to her home and arrested her. She was then imprisoned for two years. She later learned that she could not have a normal life in China and her family helped her to come to Australia. In her interview with the delegate, she said that she had paid money to a friend to assist her with her PVA. She was divorced in 2005. She claimed her arrest and detention in July 2007, then said it was in July 2005. When asked if she had been convicted of a criminal offence, she stated that she had not committed a crime. She said she could not fight against the policeman who was powerful. She claimed she was sentenced for two years, but released after 1 year, 7 months on 30 January 2007. She claimed she was beaten in jail. After her release she claimed that she had stayed at home because she was depressed. She attempted to start a business but the police caused trouble and stopped her. They stole her things and whenever she went to work at different places, they told her employer not to help her anymore. The delegate discussed with the applicant that even if she had been arrested, she was within the legal system and this did not make her a refugee. He noted that she had been able to leave China on a passport in her own name which indicated she was not of interest to the authorities. He also noted that she had made a trip to Japan and returned to China and asked why, if she feared persecution in China, she had returned to China. The applicant said she wanted a "new mood" because the police had caused her problems. The delegate asked her why she had gone to New Zealand. She said that travelling was popular in China and she was happy at that time so she went to New Zealand. At her hearing in the Tribunal, the applicant changed her story significantly. She claimed she did not work as a sex worker but merely in a bar accompanying customers while they drank, pouring drinks and encouraging them to buy drinks. She claimed that a particular policeman wanted to have a relationship with her and began to harass her. He and his friends caused trouble in the bar, smashing glasses. She had a "sexual relationship" with him twice, later adding that her boss had forced her to do so. She added a new claim that one night in May 2005, after refusing to meet with the policeman, he physically abused her and put her in hospital for a week. She suffered bruising and required stitches. After this incident she returned to work at the bar because she needed money and to pay back the losses of her employer resulting from the damage by the policeman and his friends. She stopped working in the bar in late June 2005. A few days later, four policemen came to her home to arrest her. At the police station, the policeman was waiting and he accused her of illegal sexual activity as a sex worker. The applicant was sent to a re-education camp on 2 July 2005 and was released on 30 January 2007. The policeman continued to harass her after her release. The applicant told the Tribunal she had never worked as a prostitute. The Tribunal asked why the applicant could not relocate to another part of China. She claimed that she feared that her family would be harmed if she left. The Tribunal asked about her trip to Japan in April 2007 and asked why she had returned to China if she feared being harassed and re-arrested. The applicant said that the policeman was away from China travelling and he did not harass her during that period. In a s 424A Migration Act 1958 (Cth) (Act) letter, the Tribunal invited the applicant to comment on the following inconsistencies in her claims: The Tribunal also invited comment on the additional inconsistencies: The Tribunal explained that the above was relevant because it indicated that she had given highly inconsistent evidence and that the Tribunal may find that the cause of the inconsistency was that the claims were untrue. Finally, the Tribunal invited the applicant to comment on the fact that her passport indicated that she had visited Japan in April 2007. It explained this was relevant because, having made no attempt to remain in Japan, this visit was inconsistent with her claim to have been mistreated, severely beaten and hospitalised. The s 424A invitation was returned unclaimed by Australia Post. In light of the applicant's very inconsistent evidence on even fundamental parts of her story, coupled with a finding that some of its parts were also inherently implausible, it rejected all her other claims. I was forced to do sex work. I got bad memory due to my persecution. I was sent to prison for two years. I was hard to get evidence to prove it. It is not fair that RRT refused my application. I fear return to China. I won't have a job or normal life in China. I have no human rights in China. I was persecuted by police. RRT failed to access my risk to return to China. At a show cause hearing conducted pursuant to r 44.12 of the Rules on 4 May 2009, the Federal Magistrate considered the above grounds and also independently considered whether there was any jurisdictional error in the Tribunal's reasons. His Honour found (see SZNFX v Minister for Immigration and Citizenship [2009] FMCA 416 at [4] --- [6]) that: The applicant relies upon her show cause application filed 11 February 2009. That application is supported by a short affidavit, which I received. That affidavit asserts that the applicant was forced to do sex work although, in her statements from the bar table, the applicant denied that she had ever done sex work for money. The first ground in the application was that the Tribunal did not take account of her situation in China. The applicant asserts again in that ground that she was forced to do sex work. In her oral statements today from the bar table the applicant said that she was merely forced to have sex with a particular individual. Whatever the true situation, the Tribunal did take account of the applicant's written and oral claims. It was the inconsistencies in those claims that led to the adverse outcome for the applicant. No arguable case of jurisdictional error arises from ground 1. The second ground is that the applicant has a bad memory as a result of persecution including imprisonment. She asserts, apparently due to memory difficulties, that it was hard for her to give evidence to prove her claims. The applicant asserts that the refusal of her application was not fair. The applicant's oral submissions suggest that this assertion is no more than disagreement with the outcome of her review application. There is nothing in the court book to support an assertion of procedural unfairness. In particular, there is nothing to indicate to the Tribunal was on notice of any claim of a disability affecting the applicant's memory that the Tribunal needed to give special consideration to. No arguable case of jurisdictional error arises from the second ground. The third ground is simply a repetition of the applicant's fear of returning to China and it cannot support a claim of jurisdictional error. On my own reading of the material no arguable case of jurisdictional error arises. The Tribunal appears to have met its statutory obligations. The hearing opportunity afforded the applicant was a real one. The Tribunal appears to have understood and considered the applicant's claims. The conclusions reached by the Tribunal were open to it on the material before it. His Honour was not satisfied that an arguable case for the relief claimed had been made and accordingly (at [7]) dismissed the matter with costs: I find that no arguable case of jurisdictional error arises from the show cause application or from my own reading of the material. I will order that the application be dismissed, pursuant to rule 44.12(1)(a) of the Federal Magistrates Court Rules 2001 (Cth). The draft notice of appeal contains three proposed grounds in which she claims that the Tribunal was biased, that the Federal Magistrate dismissed her application despite her clarification of all her points to the Court, and asserts her belief that her application was not considered fairly. The claims are not support by any other materials. There is no possible basis for the applicant's complaints of bias by the Tribunal. The decision of the Tribunal demonstrates that the applicant was given an opportunity to present her claims at a hearing. In the face of the internal inconsistencies in the applicant's own evidence, the Tribunal's rejection of her claims was plainly open to it for the reasons which it gave. Nor is there any basis for the applicant's complaint of unfairness in the proceedings before the Federal Magistrate. The applicant was given an opportunity at the show cause hearing to make submissions and present her case. Her affidavit and oral statement to the Federal Magistrate were noted and plainly considered by his Honour: SZNFX [2009] FMCA 416 at [4] and [5]. There is no basis for concluding that the Federal Magistrate fell into error or did not provide a fair hearing; nor that the applicant has any prospect of success in an appeal. In the hearing before the Court, the applicant orally suggested the inconsistencies in her evidence, as found by the Tribunal, may have been due to interpreting difficulties. This was not an issue mentioned in her draft notice of appeal or previously. A perusal of the Tribunal's decision record does not indicate any such difficulty. The applicant does not say she mentioned any difficulties to the Tribunal, although she says she mentioned the issue to the interpreter. To the extent the applicant seeks to raise this as a new issue, I do not consider it has any substance, particularly as it has not previously been raised in the proceedings. The applicant also explained, orally to the Court, she had not brought information forward at earlier hearings by way of preparation, as she thought this might be considered "pretentious". Any such lack of preparation does not raise any relevant issue, having regard to the manner in which the proceedings below were in fact conducted. The Full Court in Décor [1991] FCA 655 ; 33 FCR 397 referred to two considerations which provide guidance in the exercise of discretion to grant leave to appeal. The first relates to the prospects of the proposed appeal, namely, whether the decision is attended with sufficient doubt to warrant it being reconsidered. As the Full Court indicated, the two questions are not isolated but bear upon each and require a balancing of considerations. In the present case there is no possible prospect of success on any appeal. Whatever injustice the applicant might feel by not being permitted to argue her case on appeal, it is clearly outweighed by this consideration. Leave should not be granted to allow a case to go forward which has no chance of success. The Court would order: The Tribunal should be joined as second respondent to the application. The application is dismissed. The applicant pay the first respondent's reasonable costs to be taxed, if not agreed. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker.

application for leave to appeal federal magistrate's decision leave refused application dismissed. migration

Roderick Mackay Sutherland (Mr Sutherland) is the voluntary administrator of each company. 2 Unfortunately, Mr Sutherland overlooked the date (3 July 2008) to which the second meeting of creditors of each company convened under s 439A of the Corporations Act 2001 (Cth) (the Act) was adjourned pursuant to s 439B(2) of the Act. In consequence, he did not send out a notice to creditors reminding or advising them of the adjourned date, and neither he nor any creditor attended at the time and place to which the meeting was adjourned. 3 Mr Sutherland sought an order which would enable a second meeting of creditors of each company to take place. He fairly proffered an undertaking to the Court that he would bear in his personal capacity, and not charge as part of the costs of either administration, any part of the costs of his application. 4 On 22 July 2008 I made orders accordingly. These are my reasons for the making of those orders. 6 The directors of each company are Stephen Frank Lumley and James Joseph Miskiewicz. They held in equal shares the issued capital of ZLM, and they and their wives held in four equal shares the issued capital of LMP. Mr Lumley was the Secretary of LMP and Mr Miskiewicz was the Secretary of ZLM. 7 On 14 March 2008, each company appointed Mr Sutherland as administrator pursuant to s 436A of the Act. 8 By notice dated 18 March 2008, Mr Sutherland convened the first meeting of the creditors of each company pursuant to s 436E of the Act, to be held on 27 March 2008 at the offices of Mr Sutherland's firm, Jirsch Sutherland, in the case of ZLM at 10.30 am and in the case of LMP at 11.00 am. In each case, Michael Chan of Jirsch Sutherland acted as chairperson. In each case, the creditors did not appoint a committee of creditors and did not remove and replace Mr Sutherland as administrator. 9 By notice dated 21 April 2008, Mr Sutherland convened the second meeting of the creditors of each company pursuant to s 439A of the Act, to be held on 30 April 2008 at the offices of Jirsch Sutherland, in the case of ZLM at 9.00 am and in the case of LMP at 9.30 am. The date 21 April 2008 was within the convening period specified in s 439A(5) of the Act, and the date 30 April 2008 was within the period specified in s 439A(2) of the Act for the holding of the meeting. 10 At their meetings on 30 April 2008, the creditors of the respective companies resolved that their meeting be adjourned to 3 July 2008 at the offices of Jirsch Sutherland, in the case of ZLM at 10.30 am and in the case of LMP at 11.00 am. The period of the adjournment did not exceed the period of 45 business days allowed by s 439B(2) of the Act. 11 By a letter dated 30 May 2008 Mr Lumley proposed to Mr Sutherland that LMP and ZLM execute a deed or deeds of company arrangement, and by a letter dated 20 June 2008, Mr Miskiewicz similarly proposed to Mr Sutherland that LMP and ZLM execute a deed or deeds of company arrangement. It must be said at once that the proposals, as expressed in the letters, are extremely vague. 12 Unfortunately, Mr Sutherland overlooked the fact that the second meeting of creditors of each company was adjourned to 3 July 2008. He did not notify or remind creditors of either company that the meetings had been adjourned to 3 July 2008. Although the dates for the adjourned meeting were entered into a centralised diary system which members of my staff and I maintain for the purpose of keeping track of various deadlines in respect of the administrations under my control, no entry was made to enable preparation of a further supplementary report to creditors providing an update on my Investigations and a recommendation in relation to the resolution of creditors at the adjourned second meeting. 45. Inadvertently, the date for the holding of the second meeting of creditors of LMP and ZLM was missed by me and my staff. This was because the diary entry in our centralised diary system was inadvertently deleted. 46. Since 1993 I would estimate that I have conducted in excess of 600 voluntary administrations. As far as I can recall, this is the only voluntary administration in which I have been the administrator in which the adjourned date for the second meeting of creditors has been missed. 14 At the times assigned for the meetings on 3 July 2008, neither Mr Sutherland nor any creditor attended the meeting room at the offices of Jirsch Sutherland. In the result, the proposals of Mr Lumley and Mr Miskiewicz, whether in their present form or in any more refined form, were not put to the creditors. 15 Mr Sutherland has taken certain steps to ensure that his firm's centralised diary system now allows only the person who enters the relevant diary entry to delete it, and he expects that meeting dates will not be inadvertently deleted in the future. 16 On 9 July 2008 Mr Sutherland sent a notice to the creditors of each company advising them that the adjourned second meeting of creditors had not been "convened". No doubt, he meant that he had not notified or reminded creditors of the adjournment that had been resolved upon at the meeting of creditors on 30 April 2008. According to his affidavit, no creditor notified him of any objection. The correct analysis is as follows. The adjournment was effected by the creditors' resolutions in exercise of the power to adjourn given by s 439B(2). It may have been good practice, but it was not required by law, for Mr Sutherland to send out notices reminding or advising creditors of the adjourned date. If the number of creditors required for a quorum had been present on 3 July 2008, it would have been the same meeting that continued on that date. However, the adjournment was aborted by the absence of a quorum, indeed the absence of any creditors at all, on 3 July 2008. In those circumstances, the meeting did not resume on 3 July 2008. An analogy is the situation in which all present at a meeting leave: obviously the meeting does not continue beyond the last moment when a quorum was present. In the present case, that moment was at the end of the meeting on 30 April 2008. The meeting ended then. 19 It follows that the voluntary administrations came to an end on that date. Since the administration ended on 3 July 2008, the directors have been at liberty to perform or exercise their functions and powers as directors: see s 437C(1) and (2) of the Act. 22 If a means cannot be found to facilitate the re-convening of the second meeting of creditors, it would be necessary, in order for the present stage to be reached again, for the companies again to appoint an administrator under s 436A of the Act and for the statutory procedure again to be followed. It is in the interests of creditors that a more expeditious course be followed if one is available. 23 The present application by Mr Sutherland has, however, been based on the misconception. 24 In the originating process, Mr Sutherland sought an order under s 447A of the Act to the effect that Pt 5.3A of the Act is to operate in relation to each company as if s 439B(2) had the effect that an adjournment to a date not later than 1 August 2008 was permitted. As I pointed out on the hearing, this might have been appropriate relief if the creditors had in fact resolved to adjourn the meeting to 1 August 2008, but they did not do so. The order sought would be of no avail in circumstances in which the creditors in fact resolved on 30 April 2008 to adjourn their meeting to 3 July 2008 and the meeting did not resume on that date. 25 Mr Sutherland faces two problems: first, the administration ended on 30 April 2008; and, second, the convening period expired on 22 April 2008. 26 The solution to the first problem is the making of an order under s 447A having the effect that in the present case, notwithstanding s 435C(1)(b) and (3)(e), the administration does not end where the meeting is adjourned to a date that is no more than 45 days after the first day on which the meeting was held (as permitted by s 439B(2) of the Act), and on that date, through oversight, neither the administrator nor any creditor of the company attends the adjourned meeting. 27 Section 447A of the Act empowers the Court to make such order as it thinks appropriate about how Pt 5.3A is to operate in relation to a particular company. The section is broad enough to permit the making of an order that has some retrospective effect, and, in particular, the effect of overcoming the ending of an administration that has occurred by the operation of the Act; see Re Greg Sewell Forgings Pty Ltd (1995) 17 ACSR 602 ; Re Madden (1996) 20 ACSR 10. 28 I raised with the solicitor who appeared for Mr Sutherland the necessity of having evidence that the directors had not in fact resumed control of the companies and committed them to transactions. He states that so far as he is aware, the directors have not purported to take any steps on behalf of the companies or to act as directors of them since Mr Sutherland's appointment as administrator on 14 March 2008. I am satisfied that the directors have probably not resumed an active role in the affairs of the company. 30 The second problem to which I referred at [25] above can be overcome simply by the making of an order under s 439A(6) of the Act extending the convening period. Since the Act was amended by the Corporations Amendment (Insolvency) Act 2007 (Cth) (Act No 132 of 2007), such an order may be made on an application made after the convening period as well as during it. It is appropriate to extend the convening period to 28 July 2008. If the proposed meeting date of 1 August 2008 is to be retained, Mr Sutherland will need to take care to ensure that he gives at least five business days' notice of the meeting: see s 439A(3) of the Act. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

administrator overlooks date to which second meeting of creditors adjourned, and therefore omits to give notice reminding or advising creditors of the adjourned date neither administrator nor any creditor attends on the adjourned date second meeting of creditors therefore ended without any resolution of creditors being passed. held : (1) order made under s 447a of corporations act 2001 (cth) having effect that administration did not end; (2) order made under s 439a(6) of act extending convening period so that administrator could convene a fresh second meeting of creditors. corporations

He became a member of the Tamil Nadu Muslim Munnetra Kalagam party ('TMMK') in 1995 and was nominated acting secretary in 1998. • The ruling Bharati Janatha Party ('BJP'), which is of Hindu belief, was opposed to Muslims including the TMMK and himself. • The police were Hindu, opposed to Muslims and favoured the ruling party. In November 2000 they arrested and beat him. • After his arrest in November 2000, he joined the Dravida Munetra Kalagam party and was pressured to join another party, the All India Anna Dravida Munetra Kalagam party ('AIADMK'). Instead of joining the AIADMK, however, he publicly accused its leader of corruption. • The AIADMK threatened to kill him and he fled to Rajasthan for nine months. He also said that he was arrested "each year" right before the anniversary of the destruction of the Babri Masjid. He appears in person in this Court assisted by an interpreter to appeal a judgment of Lloyd-Jones FM dismissing his application for judicial review of the Tribunal's decision ( SZCBQ v Minister for Immigration & Anor [2006] FMCA 735). 4 The appellant filed a document titled "Applicant's Submissions" which sets out a number of matters in general terms in a form that this Court has seen before in relation to other appellants. The document bore little or no relation to the grounds in the notice of appeal which are also in general, non particularised terms. 5 I asked the appellant whether he could add anything to the written submissions. He referred to two factual matters: first, that if he returns to India his life will be in danger and secondly, if he were to relocate within India from Tamil Nadu he will have language problems and difficulties. These matters are factual matters that do not assist the appellant in his appeal and are not directly relevant to the matters raised in his written submissions. 6 Mr Smith appears for the Minister and has assisted the Court by analysing the written submissions and isolating from them what might be called grounds of appeal. The appellant has confirmed that, in his analysis, Mr Smith did not leave out any grounds or, I infer, any detail in the submissions upon which the appellant wishes to rely. 7 The Minister takes no objection to the fact that the grounds of appeal now raised by the appellant were not raised in the notice of appeal nor, as to some, before the Federal Magistrate. Accordingly, I will deal with the six grounds of appeal as identified by Mr Smith and confirmed by the appellant as valid grounds of this appeal. It is apparent that that is not so. The Tribunal in its decision specifically referred to the matters that were and were not before it. The Tribunal observed ' for the avoidance of doubt ' that the departmental file did not contain the documents referred to in the decision under review under the heading "Part B: Evidence Before Me" but that documents specifically referred to in the decision were otherwise available and had been taken into account by the Tribunal in so far as they were considered to be relevant. Further, there is no evidence in the present case that the appellant was misled by anything said or done by the Tribunal in respect of those documents. Accordingly, Muin has no application to the present case and the ground of appeal is rejected. The Minister is required to notify the applicant for a protection visa of her decision to grant or refuse the visa in accordance with s 66 of the Act. 10 Mr Smith submits that s 66 has "no part to play" in this appeal. I agree. The decision under review by the Tribunal is dated 17 October 2002 and the application to the Tribunal for review was received by the Tribunal on 13 November 2002. The application includes an acknowledgment by the appellant of receipt of the delegate's decision. It follows that the application to the Tribunal was validly made within the relevant time limits (s 412(1)(b) of the Act). The Tribunal had jurisdiction to conduct its review and no relevant error is established. 11 In any event, a failure by the Minister to give notification of her decision does not affect the validity of that decision (s 66(4)) , nor the decision of the Tribunal. It is accepted that the Tribunal referred to and relied upon information in the material in support of the appellant's application for a protection visa adversely to him. Standing alone that would mean that there had been a contravention of s 424A(1) of the Act as no written notice of particulars of that information was given to the appellant. However, the appellant, in his application to the Tribunal under the heading '[y] our Reasons for making this application ', stated ' Please Refer my Statement Claim of my Refugee Application '. I am satisfied that in so doing he intended to and did refer to a document entitled ' Statement Claim of [the appellant]' which accompanied his protection visa application and is included in the Appeal Book. 13 In those circumstances, for the reasons given in VUAV v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 1271 at [10] to [13] and NBCM v Minister for Immigration & Multicultural Affairs [2006] FCA 1150 at [13] , the "Statement Claim" and the information therein fell within s 424A(3)(b) of the Act. I note that an application for special leave to appeal to the High Court in VUAV was refused on 12 April 2006 ( VUAV v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA Trans 183). Gummow J specifically said on that occasion that ' no error is apparent in Merkel J's decision upon the applicability of section 424A '. On that basis special leave was refused. The Tribunal's obligations pursuant to s 430(1) were considered by the High Court in Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323. No factual basis for any contravention of s 430 is made out. The ground of appeal has not been substantiated. The appellant also asserts generally and without particularisation that the Tribunal ignored relevant evidence including independent evidence. When I asked the appellant what additional information he was referring to he said that he had given no additional information to the Tribunal by way of additional evidence or documentation. 16 It is clear that the claims made by the appellant to the Tribunal were based upon his religion and political beliefs. The Tribunal considered both those claims. It did not accept the appellant's claim as to his political beliefs. It accepted that he was a Muslim but for the reasons which it gave and which were open to on the evidence before it, the Tribunal was not satisfied that that was sufficient to give rise to a well-founded fear of persecution. The Tribunal dealt with the appellant's claims, identified its findings on the questions of fact it considered to be material ( Yusuf at [69]) and was not obliged to refer to each and every aspect of the evidence before it in drawing its conclusion. No jurisdictional error is established on this basis. Nor has the appellant pointed to any matter that would lead to any conclusion of bad faith, bias or apprehended bias or of a denial of procedural fairness. To the contrary, a reading of the Tribunal's decision makes it apparent that the Tribunal took detailed account of the evidence of the appellant and considered it before coming to its conclusions. It follows that the appeal should be dismissed with costs. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett.

information provided by the appellant in his application for a protection visa was a part of the refugee review tribunal's reasons for affirming the minister's decision appellant requested in his application to the tribunal that it refer to that information information fell within s 424a(3)(b) appeal dismissed migration

The Tribunal set aside Customs' decisions to classify patented orthotic inserts imported by ICB Medical Distributors Pty Ltd as footwear or insoles rather than as orthopaedic appliances. The Tribunal remitted the matters to Customs with a direction that the goods be assessed at nil duty. Customs also sought relief under ss 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth) in respect of the same decision. 2 The issue is whether the orthotic inserts were correctly classified by Customs under heading 6406 in Schedule 3 to the Customs Tariff Act 1995 (Cth), rather than under heading 9021, as the Tribunal decided. Customs asserted that this raised a question of law. At the hearing, Customs applied to amend its originating process by claiming a declaration as to the proper construction of Note 6 to Chapter 90 of the third schedule to the Act. I heard the application to amend as part of the principal hearing. These were sold to medical practitioners. These were made of single or dual density closed cell ethylene vinyl acetate (EVA) foam, of various lengths from two-thirds, three-quarters to full. They were imported in seven standard sizes. • 'Pedistep' branded shoe inserts. These were sold as a retail range. They were made of single density EVA foam in various lengths and in a range of standard sizes. They are included in the Australian Register of Therapeutic Goods. 5 As the Tribunal noted, a classifier of goods for the purpose of a customs tariff must look objectively at the goods in their condition as imported in order to identify objectively their classification for duty: Chinese Food and Wine Supplies v Collector of Customs (Vic) (1987) 72 ALR 591 at 599 per Lockhart J with whom Woodward and Ryan JJ agreed. The subjective intention of the manufacturer, exporter or importer is not relevant to this task. In Times Consultants Pty Ltd v Collector of Customs (Qld) (1987) 16 FCR 449 at 463, Morling and Wilcox JJ said that the classification of goods for tariff purposes was a practical, 'wharf-side' task. Morling and Wilcox JJ also said that the classifier had to consider the characteristics of the goods themselves as they would present to an informed observer. The heart of the exercise is to determine the essential character of the goods by reference to their state or condition at the time of importation ( Times Consultants 16 FCR at 462). The purpose of this requirement is to ensure consistency in the classification of goods sought to be imported into Australia with that applied by States party to the International Convention on the Harmonised Commodity Description and Coding System, made in Brussels on 14 June 1983 (ATS 1988 No 30). The Brussels Convention provides, as best as possible, uniform categories of goods and rules for their classification as an aid to facilitating international trade and consistency in customs' assessment of goods. For the purposes of r 6 the section and chapter notes are also to apply unless the context otherwise requires. 8 In Schedule 3 to the Act the possible headings in which the goods could have been classified were 6406 and 9021. From 1 January 2005 these attracted a rate of duty of 7.5%. Item 9020.10.20 attracted 10% duty from 1 January 2005 and item 9020.10.30 attracted 7.5% duty from 1 January 2005. Examples of the goods were in evidence before the Tribunal. The contour supports the foot of the wearer and prevents any excessive movement of the foot either inwards (pronation) or outwards (supination) when walking or running. Following manufacture they are packed in pairs (left and right fitting) and labelled according to size. (Examples in the evidence show that the there is imprinted on each of the orthotic devices the words 'left' and 'right', as appropriate. ) The goods are received by ICB in Australia in that configuration. Customs does not challenge that finding. Again, there is no challenge to that finding. Nor did Customs challenge the Tribunal's finding that the appropriate classification was that the goods be recognised as 'orthotics'. It referred to Mr Kielt's evidence where he said that the goods were aimed at treating pathological conditions of the lower limb caused through structural dysfunction of the foot and leg. The primary goal of the goods was to support or balance the foot in order to eliminate the need for it to compensate for a structural deformity of misalignment. In that sense, Mr Kielt said that the device was both correcting and controlling. The Tribunal found that a condition which was pathological is one caused by disease. It found that the goods will correct structural dysfunctions caused by illness, operation or injury, as well as purely constitutional conditions. It also found that the goods were clearly designed to correct bodily deformities, including the dysfunction of gait. None of these findings was challenged by Customs. 19 The Tribunal rejected ICB's argument that the goods were 'made to measure' within the meaning of Note 6 to Chapter 90 and no challenge has been made to that conclusion. 20 The Tribunal also referred to volume 5 of the Harmonised System Explanatory Notes ('Brussels Notes') commenting on Chapter 90 heading 9021. Where expressions are ambiguous, the Brussels Notes are extrinsic aids for construing headings in Schedule 3 of the Act in the interest of promoting international uniformity. But the Brussels Notes, like all extrinsic aids, provide a secondary guide and cannot displace the plain words of the statute. Extrinsic material can be used to assist in resolving ambiguity in a statutory expression. It is not available to contradict the meaning of an Act of Parliament, being a meaning taken from its proper statutory context: Barry R Liggins Pty Ltd v Comptroller-General of Customs (1991) 32 FCR 112 at 120 per Beaumont J, Lockhart and Gummow JJ concurring. There the Full Court held that these principles applied to the use which may be made of the Brussels Notes. 21 The Tribunal observed that a reading of the Brussels Notes made it clear that Note 6 to Chapter 90 was a direct transposition of the same note from the Harmonised System. The Brussels Notes specifically excluded mass-produced footwear with an arched inner sole from the heading 'orthopaedic appliances'. The Tribunal found that the goods were not footwear and that the Brussels Notes did not assist on the question before it. Again, no issue has been taken with those matters. However, the Applicant submitted that the subject goods were not insoles. At Annexure 17 of Mr Kielt's Affidavit, an extract from the catalogue of a supplier of what one termed "physical therapy supplies", draws a distinction between orthotics and shoe insoles. A more technical discussion is given at Annexure 20 of Mr Kielt's Affidavit. This is a paper entitled "The History of Shoes; Shoemaking", by one Cameron Kippen of Curtain [sic] University of Technology, Perth, W.A. The in-sole covers the join between the upper and the sole in most methods of construction and provides attachment for the upper toe box linings and welting. This provides a platform upon which the foot can operate and separates the upper from the lower. The in-sole board is necessary in shoes that are constructed using cemented or Good Year welt techniques because it is the attachment for upper and lower components. The majority of in-sole boards are made of cellulose and are treated with additives to inhibit bacterial growth. Athletic shoe wear will often have a sock line, a piece of material placed over the top of the in-sole board (glued in position or removable). ... Other than lining a shoe, the only other clinical function an insole could have could be in its ability to absorb shock. Example [sic] of such special insoles including [sic] silicone based products such as those on pages 67 and 68 of Annexure 16. I find that the subject goods are more properly defined as orthotics, ie an artificial external device, such as a brace or splint, which prevents or assists relative movement in the limbs (OED 1982 ed). The goods are more than "insoles", as that term is commonly understood. The best description of the subject goods is that they are orthotic inserts (compare for example the patent which uses this term). Likewise, the Respondent's Statement of Facts and Contentions refers to the subject goods as being "shoe inserts". This being so, they are orthopaedic appliances for correcting bodily deformities. Quite clearly, the subject goods are not special insoles, nor are they made to measure. They are not footwear, nor are they insoles, special or otherwise. The only sub-heading that encompasses the said goods is 9021.10.90 --- Other. As a consequence, the Tribunal reasoned that they could not be 'special insoles' either. Customs contended, first, that the findings in [28] of the Tribunal's reasons were based on its acceptance of Mr Kielt's statement quoted in [27]. Customs asserted that, properly understood, Mr Kielt's evidence could only lead to the conclusion that nothing meeting the description of an 'insole' could fall within the concept of a special insole designed to correct orthopaedic conditions in Note 6 to Chapter 90. It said this was because, if Mr Kielt were correct, and if the Tribunal accepted his evidence, insoles simply were not designed to correct orthopaedic conditions. 25 Secondly, Customs contended that the Tribunal's decision did not discuss in terms its argument to that effect. It argued that because these terms had been used interchangeably in that material, the Tribunal had to give explicit reasons as to why it chose to find the goods were not insoles of any kind. Moreover, Customs said that the way in which the Tribunal had quoted from Mr Kielt's affidavit suggested that it accepted that no insoles could have a corrective function or alternatively that a good which could be an insole, but had a corrective function, was to be treated as an orthopaedic appliance. ICB pointed to other parts of the evidence which suggested that references to insoles being removed from shoes so that the orthotic appliance could be inserted suggested a distinction in common usage. 27 Customs referred to an extract from a textbook dealing with orthoses for the foot which Mr Kielt put in evidence before the Tribunal and about which he was questioned. That extract suggested that foot orthoses were a variety of devices used inside the shoe to influence foot position in some way. The extract noted that a variety of terms was used to describe foot orthoses. The descriptions depended upon the physical properties of the materials used in the construction of the appliance (soft, semi-rigid, or rigid), the method of fabrication (moulded or non-moulded) or the intended function or goal of the device (functional or accommodative). The aim of this was said to provide cushioning and padding underfoot, redistribution of load from a focal point of increased pressure and shock absorption in gait. 31 Customs also relied on a technical dossier produced by ICB for its Pedistep brand. That required a user to remove all arch supports or manufacturer inner soles and replace them with the Pedistep orthotics. 32 Customs argued that ICB's case before the Tribunal had been contained in Mr Kielt's evidence. There he had said that the easiest way to distinguish between an orthotic and an insole was to look at the function each performed. He described the insole as failing to perform a function because it was essentially flat and made of low density easily compressed material. He argued that because of that characteristic it could not control or hold the foot in a particular position and so was incapable of maintaining it in a neutral position during activity. For this reason he argued that an insole was only capable of enhancing the level of comfort of the wearer. The reason the Tribunal gave for rejecting that question was simple and correct: Mr Kielt, not being an orthopaedic surgeon, could not speak for one. 34 In his evidence Mr Kielt also sought to explain, perhaps argumentatively, that an orthotic had distinguishing features from an insole centred around its ability to control the position of the person who had the device in his or her shoe. He sought to make the point that insoles, such as in sports shoes, or replacements of those which could be purchased commercially, had a different function. 35 The Tribunal said, correctly, that no evidence was called to dispute ICB's evidence about what an insole was. Customs accepted that this was so, but said the Tribunal erred because it did not deal expressly with its arguments based on Mr Kielt's cross-examination as to other persons' descriptions of orthotics as insoles, which appeared in annexures to his affidavits, or to the other evidence which I have set out above. Customs complained that that description carries the position no further because it was common ground the goods were inserts. It argued that the classification envisaged that 'special insoles' could be orthopaedic appliances because they could correct orthopaedic conditions or pathology. It complained that the Tribunal's reasons made no apparent attempt to deal with that context, rather accepting opinion evidence and making findings in relation to special insoles which findings, it claimed, were inconsistent with that statutory context. DID THE TRIBUNAL ERR IN FAILING TO CONSIDER CUSTOMS' CASE? The Tribunal proceeded to find as a fact that the function which the goods performed was not the function of an insole. One of the functions of an insole is to line the inside of a shoe. The Tribunal at [26] quoted from a paper entitled 'The History of Shoes: Shoemaking' by Cameron Kippen, who was an academic, which said that an insole provided 'a platform upon which the foot can operate and separates the upper [of the shoes] from the lower'. The Tribunal used this to illustrate the difference between an insole or special insoles and the orthotic inserts here. 37 The patent for the goods to which the Tribunal referred described the goods as orthotic inserts. The Tribunal did not need to go through each of these explaining its conclusions about them. Its task, as the classifier, was to examine the goods in the condition in which they were imported and form its assessment of their essential character as an informed observer: Chandler 4 CLR at 1729 per Barton J; Times Consultants 16 FCR at 462 per Morling and Wilcox JJ. 39 In characterising the goods the Tribunal was entitled to have recourse to common-sense, as Brennan CJ, Dawson, Toohey, Gaudron and McHugh JJ emphasised in Collector of Customs v Agfa-Gevaert Pty Ltd [1996] HCA 36 ; (1996) 186 CLR 389 at 400. 40 It was for the Tribunal to evaluate, as a factual matter, the essential character which it perceived the goods to have. It also had to identify what the word 'insole' meant as an ordinary English word. That is why it was open to the Tribunal to select its characterisation of the best description of the goods as being orthotic inserts of the kind described in the patent. 41 I am of opinion that Customs' characterisation of the Tribunal's approach to its case is not correct. The Tribunal's reasons show that it proceeded in a conventional manner. First, it identified what the goods were in the condition in which they came to be imported into Australia. It found that they were orthopaedic appliances within the meaning of heading 9021. It explained that this finding was made because the goods were 'more properly defined' as an artificial external device such as a brace or splint which prevented or assisted relative movement in the limbs. In this finding the Tribunal was expressing its ascertainment of the essential character of the goods. It explained that the finding was based on the ordinary and natural meaning of an orthopaedic appliance. That meaning was one which Customs accepted was open to the Tribunal based on its earlier decision in JS Levy (unreported Tribunal decision No 101; dated 8 September 1978) and the Oxford English Dictionary definition. 42 Secondly, the Tribunal explained that an insole, in its ordinary and natural meaning (the inner sole of a shoe or boot), did not have the same essential character or perform a function as extensive as that of an orthotic insert of the character of the goods. It referred to the terms of the patent for the goods and came to the conclusion that these goods did not have the essential character of goods within the meaning of the terms 'footwear' and 'special insoles' as used in Note 6 to Chapter 90. 43 In my opinion, the reasons given by the Tribunal informed the parties why it came to the conclusion that it did. It made a finding as to how the goods would be viewed by an informed observer when they arrived at the wharf in Australia. In Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 272, Brennan CJ, Toohey, McHugh and Gummow JJ deprecated an attempt to scrutinise, overzealously on judicial review, the reasons of an administrative decision-maker. 44 Brennan J said in Repatriation Commission v O'Brien [1985] HCA 10 ; (1985) 155 CLR 422 at 446 that a decision of the Tribunal , if it is made in accordance with the statutory provisions that govern the exercise of its power, is not invalidated by a mere failure to expose fully the reasons for making it. Although that was a dissenting judgment, the principle his Honour stated is of general application (see Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 at 349 [75] per McHugh, Gummow and Hayne JJ). Of course, much will depend on the extent of the decision-maker's exposure of a reasoning process in determining whether or not the decision can stand. So, in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme [2003] HCA 56 ; (2003) 216 CLR 212 at 224 [39] , Gleeson CJ, Gummow and Heydon JJ referred to the authorities which enabled a court to infer that, where a decision-maker did not give any reason for his or her decision, he or she had no good reason for it. That is not this case. An obligation to give reasons, such as is found in s 43(2B) of the Administrative Appeals Tribunal Act , did not oblige the Tribunal to give a subset of reasons why it accepted or rejected individual pieces of evidence. It is sufficient if the Tribunal, as the decision-maker, sets out its findings 'on those questions of fact which it considered to be material to the decision which it made and to the reasons it had for reaching that decision': Yusuf 206 CLR at 349 [68] per McHugh, Gummow and Hayne JJ; see too Repatriation Commission v Cotton (2006) 93 ALD 118 at 128 [42] where I cited the authorities and SZCOQ v Minister for Immigration and Multicultural Affairs [2007] FCAFC 9 at [14] per Moore J, [27]-[28] per Besanko J, and [53]-[61] per Buchanan J (dissenting). 45 The different descriptions in the evidence before the Tribunal of other goods (than those which ICB imported) made by other people in other contexts, to some of which I referred above, resulted from factual assessments about those other goods by those other persons. Customs referred the Tribunal to those matters and there is no reason to doubt that it gave genuine and real consideration to them. 46 Customs asserted that the Tribunal did not consider its argument that if one looked at how other people described other goods for non customs purposes, the Tribunal should have concluded that the application for review be dismissed. Having considered the material Customs said was not addressed by the Tribunal, I am unable to see any error of law in the Tribunal's reasons or decision. That material went to the issue of characterisation. The Tribunal explained its reasons for its characterisation of the actual goods it was considering. The Tribunal was conscious of the argument of Customs and referred to its statement of facts and contentions (at [28]). There was no need for the Tribunal to go through a myriad of individual instances of what other people considered for other purposes was an appropriate expression to use in respect of other goods. 47 I am satisfied that the Tribunal addressed the correct question, understood the arguments and had regard to all relevant considerations and ignored irrelevant ones. This was a situation in which the Tribunal was not obliged to give more reasons than s 43(2B) of the Administrative Appeals Tribunal Act required. It set out its findings on material questions of fact and referred to the evidence and other material on which they were based, explaining logically why it came to the characterisation it did: cf: Re Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham [2000] HCA 1 ; (2000) 168 ALR 407 at 422-423; [2000] HCA 1 ; 74 ALJR 405 at 416-417 [65] - [67] per McHugh J. As Davies and Beazley JJ said in Sharp Corporation of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6 at 13F-G, it is fundamentally a question of fact whether goods have an essential character and what that character is (see too at 14G-15B; and per Hill J at 16A). 48 In my opinion the Tribunal was not obliged to give any more detailed explanation than it did as its reasoning process. That process was adequately disclosed. It dealt with the sole issue before it, characterisation, in a common-sense and lucid manner. DID THE TRIBUNAL'S DECISION DENY NOTE 6 OF CHAPTER 90 OF ANY APPLICATION? If the argument for Customs were correct then the only classification into which the goods could fall was 6406.99.20. They would fall relevantly, into the item 'parts of footwear (including uppers whether or not attached to soles other than outer soles); removable in-soles, heel cushions and similar articles'. But, as Note 1(e) provides, Chapter 64 did not apply to 'orthopaedic footwear or other orthopaedic appliances or parts thereof (9021)'. By identifying the goods as an artificial external device, such as a brace or splint, which prevented or assisted relative movement in the limbs, the Tribunal was identifying their function. That identification, in essence, was substantively different to the classification in Item 6406.99.20. Removable in-soles, heel cushions and 'similar articles' do not have the same functionality as that identified for the goods by the Tribunal. 50 Before me, Customs relied on a decision of the Harmonised System Committee in its 26 th Session in Brussels on 24 November 2000. The Committee determined a classification of post-operative shoes by applying the source wording of Note 6 to Chapter 90, which was taken directly from the Harmonised System wording. The Committee found that Note 6 should be interpreted as excluding footwear which had no correcting function. It found that a post-operative shoe designed to provide comfort, but not correction for the wearer, was not an orthopaedic appliance. Accordingly, the Committee regarded the correct classification for such a good as falling within subheading 6402.99. The Committee's determination was not brought to the Tribunal's attention. But in any event, Customs did not suggest here that the goods were footwear, as opposed to in-soles, for the purposes of characterisation. 51 No doubt those who framed Note 6 to Chapter 90 must have had in mind some goods capable of fitting into the description 'special insoles designed to correct orthopaedic conditions' which were mass-produced, presented singly and not in pairs and designed to fit either foot equally. The Harmonised System Committee there looked at an example of footwear which met all the latter characteristics but did not 'correct' orthopaedic conditions. The classification was arrived at because the Committee considered that the post-operative shoe there had no correcting function and so ' remained classified in heading 64.02' (emphasis added). 52 The reason those shoes remained classified in the footwear heading in Chapter 64 was because at their inception they had the character, and most particularly the function, of being footwear. An orthotic insert, as described by the Tribunal, did not appear to it to have the essential character of a good within the headings in Chapter 64. 53 In my opinion, Note 6 of Chapter 90 was not deprived of meaning by the Tribunal's decision. Reading Note 6 of Chapter 90 and Note 1(e) of Chapter 64 together shows that orthopaedic appliances are not intended to be characterised as falling under heading 6406. Footwear and 'special insoles' do fall under heading 6406 unless they meet the criteria in Note 6 of Chapter 90. As a matter of common-sense, a special insole capable of being worn indifferently under either foot which has the function of correcting orthopaedic conditions is not a good which is easy to conceive. An orthopaedic appliance, on the other hand, is readily understood. 54 It is difficult to conceive that Note 6 of Chapter 90 was framed with the intention to exclude every orthotic insert except one made to measure. Such a construction would render otiose the second category of 'footwear' or 'special insole' in Note 6. Customs did not point to a construction that gave any reality to the existence an orthotic insert which was not made to measure and which met the criteria in Note 6 of Chapter 90. That is a good reason for concluding that orthotic inserts are not, in general, to be characterised as 'special insoles': Australian Securities and Investments Commission v DB Management Pty Ltd [2000] HCA 7 ; (2000) 199 CLR 321 at 338 [34] - [35] . The argument of Customs deprives Note 1(e) of Chapter 64 of any real content because all orthotics, except those made to measure, would be excluded from being characterised as an orthopaedic appliance. Such a view is contrary to the words used in the Act and to common-sense ( Agfa-Gevaert 186 CLR at 400). I reject this argument. The circumstances in which Note 6 of Chapter 9 can operate are varied. I am not in a position to review all of them or to assess the impact which any particular form of declaratory relief might have on other goods. 57 If I had found that the Tribunal made an error in its approach, it would have been appropriate to remit the matter to it to proceed in accordance with the law. 58 What a 'special insole' is in any particular case must be a question of fact, as must the question as to whether the good satisfies any of the criteria in Note 6 which might bring it to assessment under heading 9021. The proposed declaration is loosely framed and objectionable in form: Minister for Immigration and Ethnic Affairs v Guo [1997] HCA 22 ; (1997) 191 CLR 559 at 579 per Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow JJ. 59 Customs argued that the question of construction addressed by its proposed declaration was not determinative in the Tribunal but would be likely to be determinative if the matter were remitted. I do not agree. The characterisation of the goods would remain a question of fact on any remitter. The construction in the proposed declaration does not clarify whether the goods are or are not 'special insoles' or orthopaedic appliances outside Note 6 to Chapter 90, as I have held. Declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions: Ainsworth v Criminal Justice Commission [1992] HCA 10 ; (1992) 175 CLR 564 at 582 per Mason CJ, Dawson, Toohey and Gaudron JJ. The proposed declaration does not answer any question in respect of the goods. It is framed in the abstract. 60 I am of opinion that the proposed amendment does not raise a fairly arguable claim to final relief and ought be refused: Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146 at 154-155 per Dawson, Gaudron and McHugh JJ. I have considered the matter on both bases. 62 In my opinion the proceedings should be dismissed with costs. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

classification of goods shoe inserts whether the tribunal erred in classifying shoe inserts as 'orthopaedic appliances' for the purposes of the customs tariff act 1995 (cth) ordinary and natural meaning tribunal's entitlement to have recourse to common-sense in classifying the goods s 43(2b) of the administrative appeals tribunal act 1975 (cth) tribunal's obligation to give reasons for its decision whether the obligation requires the tribunal to give a subset of reasons why it accepts or rejects individual pieces of evidence customs and excise administrative law

The Notice of Motion was supported by an Affidavit filed 13 February 2006 sworn by Mr Richard Mark Hamwood, a solicitor employed by the solicitors for the Respondent ('Mr Hamwood's affidavit'). 2 Through its solicitors, the Respondent had previously requested particulars of the Statement of Claim by letter dated 14 November 2005. All references in this judgment to 'Request' followed by a number, are references to requests for further and better particulars contained in that letter, attached as Exhibit RMH 1 to Mr Hamwood's affidavit. 3 At the time of the hearing on 13 February 2006 the Applicant had not yet provided a response to the Respondent's request for further and better particulars. The Respondent submitted that they had assumed that the response would be on similar terms to that given in the related Luce Optical matter (QUD370/2005). The Applicant informed both the Court and the Respondent that that was not the case. On 24 February 2006 the Applicant delivered by way of email to my Associate a document entitled 'Applicant's further and better particulars of the Statement of Claim in response to the Respondent's request dated the 14 November 2005'. This document was not formally filed in the registry until 13 March 2006 and it is unknown at what time the Respondent was served with this document. 4 The Notice of Motion was heard by me on 13 February 2006. Outlines of Submissions on behalf of both the Applicant and Respondent were filed at that time. On 16 February 2006 I caused my Associate to telephone both parties to request that supplementary submissions be provided in relation to this matter as both the oral and written submissions tendered at the hearing on 13 February 2006 mistakenly referred to the paragraph numbering in the related Luce Optical matter (QUD370/2005). On 22 February the Respondent filed its supplementary submissions in the registry. The Applicant's supplementary submissions were delivered by email to my Associate on 24 February 2006 but were not formally filed in the registry. Clearly it is important that submissions by Counsel be regularised before this Court either by making or filing in Court or by filing with the registry. As this has not happened despite repeated contact by my Associate, the supplementary submissions of the Applicant in relation to this matter are not before me and cannot be considered in delivery of this judgment. 5 The Applicant submits generally that the Respondent's requests for particulars are in the nature of interrogatories; are vexatious and oppressive due to the number of requests made and the repetitive nature of many of the requests; and that the requests generally fail to make any distinction between a request for particulars of material facts and a request for the evidence which might be led to establish a pleaded material fact. The Applicant contends that proper and appropriate answers have been provided to the Respondent and no further order should be made. 6 The Respondent submits that the particulars sought from the Applicant fall into four categories: (1) particulars of the form and circumstances relating to agreements or terms of agreements relied on; (2) particulars of the form and circumstances relating to specific communications; (3) particulars of supporting facts relied on; and (4) particulars to clarify what is meant or intended in the Statement of Claim without which there is unresolved ambiguity or uncertainty. The Respondent submits that each request is a proper request for particulars and should be provided by the Applicant. (Atkin's Encyclopaedia of Court Forms and Precedents in Civil Proceedings , Butterworths, vol 8, p 31). Particulars complete the picture of the applicant's cause of action with information sufficiently detailed to put the respondent on guard as to the case it has to meet and to enable it to prepare for trial ( Spedding v Fitzpatrick (1888) 38 Ch D 410; R v Associated Northern Collieries [1910] HCA 61 ; (1910) 11 CLR 738 at 741; Goldsmith v Sandilands [2002] HCA 31 ; (2002) 190 ALR 370 at 371; King v AG Australia Holdings Ltd ( formerly GIO Australia Holdings Ltd ) [2003] FCA 543 at pars 16-18). A request for further and better particulars should be made initially by letter, however the Court may order further and better particulars to be provided pursuant to O 12 Federal Court Rules . 8 Particulars and interrogatories have complementary functions in preparing for trial. Unlike further particulars, interrogatories may be only be filed and served by leave of the Court (O 16 r 1 Federal Court Rules ). And thus, while to a certain extent the giving of particulars may render interrogatories unnecessary by informing the opponent of the case he has to meet, they do not perform a function which is co-extensive with that of interrogatories. There are indeed occasions when it is proper to interrogate as to the truth of the particulars, and on the other hand there are cases in which it would not be proper to order particulars, but where interrogatories could be allowed. They are pointers rather than boundary marks'. ( The Atlantic Star [1974] AC 436 at 468). However it is claim of some seriousness, as 'vexatious and oppressive' conduct in the framework of litigation connotes an abuse of process of the court ( Walton v Gardiner [1992] HCA 12 ; (1992-1993) 177 CLR 378 at pp 392-393, International Entertainment (Aust) Pty Ltd v Churchill [2003] QSC 247 , para 24, Young v Holloway [1895] P 87, 90). 12 When these terms are sought to be applied to a request for further and better particulars, the practical application of them is not always an easy task. The special circumstances of each case must be carefully considered ( Wootton v Siev ier [1913] 3 KB 499 at 503). One test which can be applied is whether the pleading is such that no reasonable person could properly treat it as bona fide ( Norman v Mathews (1916) 85 LJKB 857). However, courts will not lightly rule that pleadings are to be struck out for this reason ( Bean v Flower (1895) 73 LT 371). ) Further, a request for particulars should not include a request to disclose evidence by which the applicant intends to prove its case at trial ( Temperton v Russell (1893) 9 TLR 319 at 322). The application of this principle to individual facts can be difficult. A useful illustration of the principle however was in Re Dependable Upholstery Ltd (1936) 3 All ER 741, where the liquidator of a company sought a declaration against two directors that dividends had been paid wholly out of the capital of the company and not out of profits, and that there had been no profits of the company out of which dividends could be paid. The defendant directors sought further and better particulars of the facts relied upon in support of these allegations. Crossman J held that the liquidators were not required to give particulars of those facts. But it is suggested by Mr Morton on behalf of the respondents, the directors, that you have to go behind that allegation and find out the allegations or facts upon which that statement is based. It seems to me if one begins there, I do not know where one would end in the particulars which would have to ordered; because the fact that each of the dividends was paid wholly out of the capital of the company is the fact on which each party relies in the claim or defence. The facts which lead up to that are, in my view, really the evidence of the fact that the dividends were in fact paid wholly out of the capital of the company. Paragraph 6 of the Statement of Claim states 'At approximately 9.30 am on Monday the 25 th October 2004, McKechnie, Mercer, Potter, Parry and Tame ("the Audit Team") entered the Budget Ipswich premises'. 17 The Respondent seeks particulars clarifying the difference (if any) in the acts asserted in para 6 (that at approximately 9:30 am on Monday 25 October 2004, the Audit Team 'entered' the Budget Ipswich premises) and para 7 in which the 'arrival' of the Audit Team is referred to. In addition the Respondent contends that it is entitled to know who the Applicant alleges notice or warning was to be given and why such notice or warning was required. 18 The Applicant objects to answering such request on the grounds that it is not a proper request for particulars. 19 In my view the Respondent is entitled to further but limited particularisation in relation to this paragraph. Insofar as Request 3(a) is concerned, the Respondent is entitled to clarification as to whether the 'arrival' of the Audit Team is intended to refer to the same event as referred to in para 6 of the Statement of Claim where it is alleged that the Audit Team 'entered' the Applicant's premises. The Applicant should provide the Respondent with sufficient particulars of the time of the event referred to in para 7. 20 In relation to Requests 3(b) and 3(c), although compelling arguments have been submitted from both parties, I am of the view that the Respondent is entitled to further and better particulars as sought. I accept the submission of counsel for the Respondent that para 7 contains an incomplete assertion, namely that notice or warning should have been provided to someone. The information sought here is limited, and is limited to the issue of to whom notice of the visit of the auditors should have been given. It is not akin to providing evidence of facts on which the parties pleading rely for claim or defence. In my view, this is part of the case the Respondent is required to meet, as distinct from evidence which the Applicant will lead to substantiate its claim. Further, in my view the request is not vexatious nor oppressive, nor in the nature of an interrogatory. The Respondent seeks particulars clarifying the acts and facts said to constitute the alleged 'attempt' by Mr Sarracino to obtain legal advice from the Franchisee's solicitor. In my view this request is in the nature of an interrogatory. The Respondent is not entitled to know the particulars of how Mr Sarracino attempted to contact the Franchisee's solicitor or why he did so. That that information is a request for evidence, and not part of the case the Respondent is required to meet. 23 The Respondent submits that they whilst it is aware of what records it says it copied, it does not know whether the Applicant alleges that it took any further material. The Respondent also seeks a time frame as to the events alleged in para 11 where the term 'subsequent' is used. 24 The Applicant objects to this request for particulars on the grounds that it is not a proper request for particulars and that it seeks enquiries into matters wholly within the knowledge of the Respondent. 25 With regard to Request 10, the Respondent is again entitled to particulars in relation to the timing of the alleged event. The Respondent cannot adequately answer the allegation if it is unclear as to when the event occurred. 26 The Respondent is entitled to the particulars it requests in Request 11 as such material is referred to in the Applicant's prayer for relief at para 33(b) of the Statement of Claim. The Applicant seeks an order that the Respondent, by itself, its servants or agents, yield up all information recorded or otherwise copied or taken from the Applicant. The Respondent is therefore entitled to know the details of what information or records the Applicant alleges it took, recorded or copied. Paragraph 13 of the Statement of Claim alleges an exchange of comments between one or more members of the Audit Team and Ms Wilde and Mr Livoni. The requests for further and better particulars in relation to paras 12 and 13 are similar. 28 The Respondent submits that it is entitled to know who is alleged to have had the relevant conversations with Ms Wilde and/or Mr Livoni and the substance of those conversations. 29 The Applicant objects to all requests for particulars relating to paras 12 and 13 of the Statement of Claim on the grounds that they are not a proper request for particulars. 30 In my view the Respondent is not entitled to the further and better particulars it has sought in relation to paras 12 and 13 of the Statement of Claim. The information sought is a request for evidence and not a proper request for particulars. The nature of the questions asked by members of the Audit Team to Ms Wilde and/or Mr Livoni, and conversations as a result of the posing of questions is a matter to be determined in evidence at the trial. 32 The Respondent seeks particulars of the Applicant's claim that permission was not 'freely given'. The Respondent seeks clarification as to whether the Applicant alleges that no permission was given or that permission was given but under some form of duress or after complaint. The Respondent submits that if it is said that permission was given but not 'freely', that is entitled to know the facts giving rise to that allegation. 33 The Applicant objects to the requests relating to para 14 on the grounds that they are not proper requests for particulars but are more in the nature of interrogatories. 34 I am prepared to allow limited particularisation of para 14. Again, in my view whether or not the hard drive was removed from the premises of the Applicant over the stated complaint or objection of the applicant is part of the case the respondent is required to meet. Further, in stating that permission was not 'freely' given the Applicant is alleging a condition of mind. The contents of any such complaint or objection are an issue of evidence and need not be pleaded. 37 The Respondent argues that it is entitled to know what records the Applicant alleges it collected along with any information relating to the substance of the request by the Respondent for the collection of records from the Applicant. The Respondent also seeks clarification of para 16(b) of the Statement of Claim which it submits is ambiguous (Request 20). 38 The Applicant has provided some particulars to the requests relating to para 16 of the Statement of Claim but objects to providing further particulars on the basis that the Respondent's requests are not proper requests for particulars but are more in the nature of interrogatories. 39 Earlier in this judgment I ordered limited particularisation of para 11 of the Statement of Claim. To the extent that the Applicant claims a report, produced by Ferrier Hodgson, is based on information and materials obtained by the Respondent, it should describe what that information and materials are. It may be appropriate for the Applicant to cross-reference para 16 to the particulars to be included in para 11. 40 In relation to Request 19, contrary to the submission of the Respondent I do not accept the analogy between the pleadings in the case before me, and those in Gold Coast City Council v Pioneer Concrete (Qld) Pty Ltd (1998) 157 ALR 135. In my view, in para 16(a) of the Statement of Claim the Applicant has supplied sufficient particulars to the Respondent. The remainder of the Respondent's request is a request for evidence and not a proper request for particulars. 41 In relation to Request 20, in my view para 16(b) of the Statement of Claim is ambiguous, for the reason that, on the face of the document, paras 6, 7, 8, 9, 10, 12 and 13 do not contain references to information obtained by the Respondent. The Applicant is required to either amend para 16(b) or provide particulars as sought by the Respondent. 43 The Respondent seeks particulars of what conduct the Applicant relies upon to assert the allegation and specific details of the policy decision or facts from which the policy decision may be inferred. 44 The Applicant objects to the request for particulars of the conduct establishing that the Respondent failed to 'act in good faith and fairly' on the grounds that it is not a proper request for particulars and says that it is not able to give further and better particulars in relation to the 'policy decision' until after disclosure. 45 Paragraph 22(b) of the Statement of Claim is currently drafted in broad terms, and makes serious allegations against the Respondent. In my view in order to be in a position to meet the case against it, the Respondent is entitled to particularisation of this paragraph as requested by Request 22, but only as to the facts upon which the Applicant is relying on to assert the allegation in subpara (b). In doing so I note the somewhat similar situation in The Briton Medical and General Life Association Limited v The Britannia Fire Association and Whinney (1889) 59 LT 888 where the plaintiff association claimed, inter alia, 'The defendants...knew or ought to have known, and must be taken to have known, the improper motives which actuated the said directors of the plaintiff association'. Kay J, in noting that he was required to draw a line between requiring the plaintiff association to make a statement which would prevent the defendant association being taken by surprise at the trial, and requiring the plaintiff association to make a statement of the evidence on which it intended to rely, nonetheless ordered the plaintiffs to give particulars of the improper motives alleged in that para (at 890). 46 Request 23(c) however, which relates to the alleged policy decision of the Respondent referred to in para 22(c) of the Statement of Claim, in my view is more in the nature of an interrogatory, and not a proper request for particulars. The Applicant asserts that the process undertaken on 25 and 26 October 2004 was unlawful and of no effect under the terms of the Franchise Agreement. 48 The Respondent requests particulars of what the Applicant alleges it should have done but failed to do in accordance with the terms of the Franchise Agreement. 49 The Applicant objects to the Respondent's request on the grounds that it is not a proper request for particulars. 50 The Applicant has alleged that the Respondent failed to act in accordance with the Franchise Agreement. The Respondent is entitled to particulars of the conduct constituting the alleged failure to act in order to properly answer the case against it. 52 The Respondent submits that this is akin to an allegation of fraud by both the Respondent and the author of the report. Therefore the Respondent seeks particulars of the facts upon which the allegation is based. 53 The Applicant objects to the Respondent's requests on the grounds that they are not a proper request for particulars. 54 In my view, this paragraph of the Statement of Claim makes serious allegations against the Respondent and the author of the report. While the Applicant contends that the claim is not in the nature of fraud, in my view it comes close. I note that O 12, r 2 Federal Court Rules requires a party pleading fraud to give particulars of any fraud on which he relies. I make no finding at this stage as to whether the Applicant is pleading fraud. In my view the Respondent is entitled to particularisation of this paragraph, in order to be in a position to meet the case against it.

requests for further and better particulars function of particulars comparison with interrogatories 'vexatious and oppressive' whether requests for further and better particulars amount to requests for evidence by which material facts are to be proved practice and procedure

These devices are amplifiers that are commonly used to limit the levels of sounds heard by call centre workers and to reduce the risk of acoustic shock which the workers sometimes experience. The devices that were compared used digital sign processing. Earlier versions were analogue devices. Since 2001 the applicant (Polaris) has sold a limiting amplifier called SoundShield, which is designed, through the use of internal settable controls, to be inter-operable with a wide range of host telephones and any headset type. Since about September 2006 the second respondent (Plantronics) has sold a competing limiting amplifier called M15D, which is designed solely for use with Plantronics equipment. M15D was developed as the result of collaboration between Plantronics and the first respondent (Dynamic) which commenced in early 2005. The aim of the collaboration, called the Tecate project, was to produce a limiting amplifier to compete with SoundShield, in particular in relation to Telstra, a major customer for such devices, which had its own particular requirements with respect to limiting amplifiers. These requirements were contained in Telstra's specification TP TT404B51 called "Specification --- Headset & Limiting Amplifier, Acoustic Protection" (TT4). Polaris was at the time a supplier of devices to Telstra. In mid-2005 Dynamic distributed a report entitled "Comparisons of Acoustic Protection Devices --- Plantronics ADRO® M15D versus the Polaris SoundShield®". The report was provided to Telstra, which gave a copy to Polaris on a confidential basis. Plantronics provided a copy to Siemens, which was then its exclusive distributor in Australia of acoustic shock protection devices and telephone headsets, for the purpose of distribution. Plantronics also gave a copy to Westpac. The report was distributed in long and short form, though only the short form is at issue in the proceeding. The report was produced at a time when Telstra was in the process of preparing a request for tender for the ongoing supply to it of acoustic shock protection devices. Plantronics and Polaris proposed to put in tenders. The Telstra tender was worth a considerable amount to the successful tenderer. The quantum is confidential. At the time of the report SoundShield was the dominant product in the market, having achieved a very large number of sales, a substantial proportion having been made to Telstra. The number and proportion are confidential. Apart from the title, the first page contains only Dynamic's name and logo, the names of the authors, Christi Wise, Bonar Dickson, Hayley Fiket and Peter Blamey, and a footnote by which Dynamic claims copyright in the report. The authors were all Dynamic employees when the report was prepared and distributed. Ms Wise conducted the testing the subject of the report. The open plan office layout typical of a call centre exposes phone operators to distracting background noises such as ringing phones, voices of fellow operators, and noise produced by office equipment. When the level or quality of the line signal is poor and the ambient noise level is high, speech can be hard to understand, even when the overall level of the speech is increased using the volume control. At high intensity levels, speech can sound distorted and become difficult to understand. This can cause fatigue and stress for the listener when straining to understand over long periods of time in these environments. It will be recalled that the title of the report includes the words "Plantronics ADRO® M15D". The Plantronics device was referred to by the parties and by witnesses as both ADRO and M15D interchangeably. I will refer to it as M15D. ADRO® was developed to meet specifications for acoustic shock protection whilst also providing superior sound quality and intelligibility in comparison to existing products. It uses a set of fuzzy logic rules to adjust gain so that the output signal is always within the comfortable and audible range of the listener. The system produces a high level of speech understanding, while also maintaining a comfortable loudness level and a high sound quality. The SOUNDSHIELD® is a handset amplifier commonly used in Australian call centres to provide protection from acoustic shock. The Plantronics Supra Monaural H51-TT3 headset was used with both ADRO® and SOUNDSHIELD®. Both headset amplifiers were adjusted to the lowest limiting setting and the maximum volume setting, as is typically done by phone operators to provide maximum intelligibility in quiet and in noise. The receive signal level was the same for both devices. In moderate level background noise (65dBA), the error rate for SOUNDSHIELD® increased to 26%, whilst the error rate for ADRO® only increased to 12%. To achieve an intelligibility score of 90% with the SOUNDSHIELD®, the background noise level of the call centres would have to be reduced to an unrealistic level of about 40dBA. ADRO® on the other hand, easily achieved 90% intelligibility with call centre background noise at a level of 55dBA. The graph is described as "Percentage Correct on PBM Word Lists as a Function of Background Noise". The expression "dBA" in the Figure and in the report is a specific variety of decibel (dB), described in the Australian Communications Industry Forum (ACIF) Guidelines referred to at [14] as "Logarithmic measurement of sound pressure level measured through an 'A' curve filter". A more readily understood description is that "dBA" is used for measuring sound in the environment, often called "in free field". Figure 2 illustrates that 95 to 100% of the responses were in favour of ADRO® in background noise at a level of 65dBA. G616 is ACIF Guideline "Acoustic safety for telephone equipment": ACIF G616: 2004 (G616). G616 is an industry wide document, whereas TT4 is Telstra specific. The work was covered by ethics approval from the Royal Victorian Eye and Ear Hospital Human Research and Ethics Committee (Project 03 529H). Underneath the references are statements that ADRO® is a registered trade mark of Dynamic and SOUNDSHIELD® is a registered trade mark of Polaris Acoustics Pty Ltd. At the foot of the page is the copyright note that also appears at the bottom of page 1. The others were added in May 2007. Dynamic and Plantronics admit making the representation. Polaris alleges that the lowest limiting setting representation was misleading or deceptive or likely to mislead or deceive because the lowest limiting setting at which SoundShield was tested was significantly lower than that for M15D, and the test results consequently conveyed a misleading assessment of the comparative performance capabilities of SoundShield. This allegation is denied by Dynamic and Polaris. Dynamic and Plantronics admit that the ethics approval representation was made, but deny that it was misleading or deceptive or likely to mislead or deceive. As to [21(a)] Dynamic and Plantronics admit the existence of G616 and TT4. Plantronics admits the allegation in [21(d)]. Otherwise they both deny or substantially deny the allegations in [21]. These, it is said, are to be implied. In its particulars Polaris says why the implication is to be made. I will return to the particulars at [201]. Dynamic and Plantronics either deny or substantially deny the above allegations. Polaris alleges that the unsuitability representations were misleading and deceptive or likely to mislead or deceive because SoundShield did have the attributes the representations claimed it did not have. Dynamic and Plantronics deny these allegations. These representations, it is said, are to be implied. In its particulars Polaris says why that is the case. Dynamic admits the making of the representations. Plantronics does not. Polaris alleges that the test set up representations were misleading or deceptive or likely to mislead or deceive because the test did not have the characteristics represented. In extensive particulars which are considered at [135] to [200], Polaris sets out the bases for the allegations. Dynamic and Plantronics deny the allegations. The hearing the subject of these reasons was concerned only with whether there had been contraventions. Plantronics admits that it provided a copy of the report to Westpac and Siemens, but otherwise denies [27(a)]. It admits that its provision of these copies was conduct in trade and commerce, but otherwise denies [27(b)]. It denies the other allegations. Dynamic does not plead to [27(a)] and denies the other allegations. Gillette and Energizer manufactured and distributed batteries. Gillette used the brand name "Duracell", and supplied alkaline batteries. Energizer used the brands "Energizer" and "Eveready". It supplied both alkaline and carbon zinc batteries. Alkaline batteries last longer but are more expensive than carbon batteries of the same size. Energizer sought to restrain Gillette's television advertisement which claimed that the Eveready Super Heavy Duty Battery (a carbon zinc battery) "just can't keep up", and that "with up to three times more power Duracell will always win", on grounds that included that the advertisement did not reveal that there was a substantial price differential between the two batteries, and thus consumers could be misled in comparing the value of the two. On that basis the trial judge granted an injunction. The Full Court allowed Gillette's appeal. There is no basis in the TPA for regarding comparative advertising as an inherently disreputable form of commercial conduct, to be viewed with suspicion by the courts. On the contrary, to the extent that comparative advertising provides consumers with accurate hard facts about competing products, it assists in the making of better informed consumer choices and thereby results in more effective competition. Of course, the more actual comparisons that are used, the more potential there is for error (and half-truth). So advertisers have to be careful ... Assertions of factual inaccuracy have to be carefully considered by courts in comparative advertising cases, no differently from any other cases. But to use general notions of unfairness, which bring to mind the concept of unconscionable conduct appearing elsewhere in the TPA, is to put an unwarranted gloss on the plain words of provisions of Pt V such as ss 52(1) and 53 (a). Provided the factual assertions are not untrue, or misleading half-truths, an advertiser can lawfully compare a particular aspect of its product or service favourably with the same aspect of a competitor's product or service. If that claim is true, s 52 does not oblige airline X to provide in its advertisement detailed information as to the other factors which might influence consumers choosing between airlines. And if airline Y wanted to advertise that its fares were cheaper, its aircraft more modern, and its flights more frequent, that would be legitimate so long as "no untruths or misleading half-truths are stated": at [23]. I do not see how it could be said that such a consumer has been misled or deceived. Indeed, it would be inconsistent with the policy and objectives of the TPA to restrict a trader from publicising, truthfully, a feature of its product which is superior to the same feature of a competitor's product. The other members of the Full Court were of the same opinion: Lindgren J at [53] (pages 646-647 point (7)) and Merkel J at [85], [91] and [93]. It first manufactured SoundShield in 2001. Mr Guest has over 25 years experience in the sale of telecommunications equipment in Australia. He has no formal technical or scientific qualifications. However his experience in the manufacture, importation and sale of this equipment has exposed him to a wide variety of technical matters associated with sound regulation. He said he is familiar with the various technical standards that apply to telecommunication devices in Australia. He has personally installed SoundShields and other telecommunications equipment in a range of customer premises, has programmed SoundShield on numerous occasions and is familiar with the device and the settings contained within it. Mr Guest swore four affidavits and wascross-examined at length. He came across as an honest witness. On one occasion, when he was describing a test he had done of SoundShield, he seemed to gild the lily by describing it as a comparative test of SoundShield and M15D. However, I think this was attributable to confusion on his part and was not an attempt to mislead the Court. He conceded that he was wrong to characterise his test as a comparative one. Mr Guest accepted that his lack of formal technical qualifications meant he could not express authoritative opinions about scientific, electronic and audiological matters. However, his long involvement in the acoustic protection device industry, his participation in the formulation of industry standards, and his hands on experience, provided sufficient basis for the evidence he gave as to the industry, the general effect of the standards and the mechanisms of SoundShield. I have emphasised the word "general" because Mr Guest was not seised of the detail of the standards or of the technical attributes of the various devices. The best example of this was his confusion about the headset profiles, when he was at odds with his own experts. In addition, Professor Blamey took exception to many of Mr Guest's measurements, in particular his unexplained transition between the different types of decibels --- dB, dBA, dB SPL at DRP --- as though they were all the same. Thus, on matters of a technical nature, I do not regard him as having the expertise to express opinions that can compete with those of acknowledged experts. Ben Minski joined Polaris in 2004 as an account manager. More recently he has been the project/implementation manager of the major roll outs of SoundShields into call centres nationally. His experience includes installing over 20,000 SoundShields in approximately 80 call centres Australia wide, and he was consequently familiar with the device, the different technical settings contained within it, which settings best suit particular technical environments and users, and what happens if a device is not correctly customised to its particular environment and user. His evidence was largely uncontroversial. He was cross-examined. I thought him an honest witness, a conclusion that was confirmed by the fact that on one topic his evidence did not assist Polaris' case. Rodney Thompson was in charge of the technical side of Polaris' business. He has tertiary electronic engineering qualifications, and experience as an engineer with Telstra and since 2006 with Polaris. He is familiar with the measurement of sound signals and signal levels generally, the various telecommunications standards in use in Australia, and what those standards mean in technical terms for the Australian telephone network and devices that operate in conjunction with it. He was cross-examined, and the concessions he made in the course of his evidence made it clear that he was giving a truthful account of matters on which he spoke. Philip Newell is an Emeritus Professor at the Speech, Hearing and Language Research Centre, which is part of the Linguistics Department at Macquarie University. He is a qualified audiologist with postgraduate degrees in biomechanics and audiology. As a result of his qualifications and experience over nearly 30 years, he has a detailed understanding of the different factors that affect speech, sound and signal quality generally, including the way devices such as hearing aids, amplifiers and telephone equipment operate to modify sounds and signals, and the effects of those modifications on human hearing and speech intelligibility generally. Professor Newell's expertise was not challenged by the respondents, though they claimed he was not truly independent of Polaris. I preface my discussion of this issue by saying that this was the first time Professor Newell had given expert evidence, and I sensed that he found it somewhat of an ordeal. In his first affidavit he disclosed his several letters of instruction. In the letter dated 11 September 2007 Professor Newell was told that Michael Fisher of National Acoustic Laboratories (NAL) had undertaken a further intelligibility study and that the Professor had "kindly agreed to verify and confirm these results". These were the results of a test Mr Fisher carried out in July 2007. Professor Newell had earlier been provided with a report detailing the results of tests Mr Fisher made in January 2006. The letter went on to say that arrangements had been made for Professor Newell to attend NAL's premises and undertake the following: Supervise the repetition of the intelligibility test undertaken by Mr Fisher. Verify the testing protocols used are in accord with Telstra TT4 Specifications and associated documents. Confirm the results of the tests. Polaris' solicitors were obviously happy with Mr Fisher's July 2007 test. But because of his closeness to SoundShield --- he was its inventor --- I infer that they thought the results needed some independent imprimatur. Professor Newell was to "verify and confirm" Mr Fisher's results. Of course Professor Newell cannot be blamed for his letter of instructions. In cross examination he was challenged about his independence, and I accept his response that, notwithstanding the unfortunate verbiage of his instructions, he did not see his task to be simply to endorse or confirm Mr Fisher's results. He said that if the results of his test differed from those earlier obtained by Mr Fisher, he would say so in his report. However, my acceptance that Professor Newell would report his results as they were, even though they may not have corresponded with Mr Fisher's, is not the end of the matter. The respondents also submit that Mr Fisher had such an input into the setting up of the test that Professor Newell was not truly independent. Professor Newell's description of his commission confirms Mr Fisher's close involvement in what the Professor subsequently did. He agreed that: the test was set up mostly by Mr Fisher, though he did have some input the word list used in the test was suggested by Mr Fisher, and the Professor agreed with the suggestion Mr Fisher made a large number of suggestions, but the Professor was generally very happy with them Mr Fisher had significant input into the design of the experiment and the setting up of the equipment Mr Fisher suggested the input voltage the Professor should use in the tests, namely in the order of 40 to 60mV he relied completely on what Mr Fisher told him about the various inputs to SoundShield he took "on trust" what Mr Fisher told him was the appropriate input voltage level and the appropriate setting. Professor Newell did not attempt to hide Mr Fisher's involvement in the setting up of the tests. He stressed, however, that he only implemented Mr Fisher's suggestions because he agreed with them. He said he was given the opportunity to disagree with Mr Fisher's suggestions or modify them if he wished. He also said that although when he went to the laboratory the test was all set up, he had to spend quite some time with Mr Fisher looking in great detail at how the equipment was attached together and what the control settings were. It "was almost as if I had set it all up myself". I have concluded that Mr Fisher's involvement does not establish that Professor Newell's test was not independent. However, I bear in mind in assessing the weight to be accorded to the results that Mr Fisher had an important input into the construction of the test. The respondents also relied on the fact that Professor Newell was one of the supervisors of Mr Fisher's ongoing research for a PhD to show his closeness to Mr Fisher. In an affidavit the Professor said the research was "not related to the subject matter of this proceeding". An extract from the university website's description of Mr Fisher's research topic was put to him. Many of these problems are interdependent. The aim of this research is to investigate aspects of these problems and to develop methods for improving the outcomes of headset use. His statement that Mr Fisher's PhD was "not related to the subject matter of this proceeding" became "there are many areas of the PhD which have relevance to the court proceedings, and that is what I meant". However this issue has not led me to think that the Professor's involvement in Mr Fisher's research project, with its partial overlap with some of the issues in the case, would lead him to carry out his tests with any partiality or to give evidence that was not impartial. Michael Fisher is a senior research engineer employed by Australian Hearing at NAL. He has a broadcasting certificate, a broadcast operator's certificate of proficiency and is a Bachelor of Communication Engineering from RMIT. In his thirteen years with NAL he has undertaken research in audio signal processing, acoustics, digital signal processing, hearing, hearing impairment, psychoacoustics and speech analysis. Mr Fisher is listed as the inventor on Australian Standard Patent 2002318963 entitled "Digital Signal processing system and method for telephony interface apparatus" that covers various algorithms, including a method of reducing the amplitude of "shrieks" (the shriek rejection algorithm) that are the major source of acoustic shock injury. The patentee is HearWorks Pty Ltd and Polaris is now the licensee from HearWorks of software designed to instruct a digital signal processing device to perform the shriek rejection algorithm. Mr Fisher receives from HearWorks a small distribution of the royalties paid to it by Polaris. He has assisted Polaris with implementing the software in the SoundShield device. I do not doubt Mr Fisher's expertise. He was the inventor of SoundShield, and admitted that he was affronted by the results of the comparison test. He was, I think, anxious to prove it wrong. In that behalf he carried out two tests of his own, and helped set up Professor Newell's test. His affront manifested itself in expostulations, noisy exhalations and gestures of bewilderment. When he sensed that Table 5.9 of TT4 (see [145] below) was being used to suggest that SoundShield may not be TT4 compliant, he described the table as "absolutely crazy". I do not think that the fact that he was offended by the comparison report affected the quality of his evidence on the technical matters with which it dealt. He was employed by Plantronics Inc (US) between 1992 and 2007 as a senior electronics engineer/project lead. In that role he designed the hardware of the M15D and led the project team which developed its firmware. In February 2008 he performed a measurement of what he called the "acoustic limit for speech" for a M15D and a SoundShield. Mr McNeill was cross-examined by video link to California in the United States. His expertise was not in doubt. He gave his evidence concisely and authoritatively. Although he had until recently a Plantronics background, I saw no reason to doubt his credibility, and have for the most part accepted his evidence. Graeme Gherbaz has been Plantronics' Managing Director for more than ten years. Before then he was employed by Siemens and earlier by Telstra in sales and marketing and product management roles relating to telecommunications headsets. He has a certificate of technology in electronics from Footscray Technical College and is a Bachelor of Business Management from RMIT. He has over 25 years experience in the telecommunications industry, in technical, sales and management roles. Mr Gherbaz's evidence was largely about the development of M15D, collaboration between Plantronics and Dynamic and the development of the comparison report and its distribution. It was largely uncontroversial. I have generally accepted his evidence as credible, notwithstanding that he had a strong interest in the outcome. He ceased to be a director in December 2007. He is still an adviser to Dynamic. Since 2002 he has been a Professorial Fellow in the Department of Otolaryngology at The University of Melbourne. Before then he had research appointments in that Department from 1979. His academic qualifications are in Physics. His business interests are in the commercial application of digital signal processing for hearing aids, headsets and telephony products. Professor Blamey was cross-examined at length. He displayed an impressive grasp of the topics upon which he gave evidence, and handled with ease the volume of documentary material he was asked to consider and review in the witnesses box. He retained his composure through some gruelling technical cross examination. He refused to be hurried in his responses, and when necessary called for a document in order to be sure he understood what was being asked of him. He asked that corrections be made to parts of his affidavit which he had discovered since swearing it to be wrong. Polaris criticised him for occasional lapses of recollection, but I attach no importance to that having regard to the length of his evidence and the topics covered. Professor Blamey was involved in the comparison test and the compilation of the ensuing report. He was then a director of Dynamic and is still an adviser to the company. In those senses, he is partisan. Nevertheless, I regard him as a witness of truth, and have for the most part accepted his evidence. He and Mr Fisher were at odds on many points. Bonar Dickson is Chief Technology Officer of Dynamic. He was the engineer for the Tecate project in which the digital signal processing software was developed for the M15D. The software has been referred to as ADRO in the proceeding. Mr Dickson's affidavit evidence dealt with but one issue. He was cross-examined briefly. I have no reason to doubt the truth of his evidence, and I accept the central point of it, namely that the graph he prepared in December 2005 containing output levels of two settings of the M15D, two settings of SoundShield and one setting of another device shows the same output levels that would have applied in May 2005 when the comparison was carried out by Dynamic. One of those circumstances, in a case such as the present, is the class of persons to whom the conduct was directed. The inquiry thus is to be made with respect to this hypothetical individual why the misconception complained of has arisen or is likely to arise if no injunctive relief be granted. Questions of allegedly misleading conduct, including questions as to what the conduct was, can be analysed from two points of view. One is employed in relation to "members of a class to which the conduct in question [is] directed in a general sense". The other, urged by the purchasers here, is employed where the objects of the conduct are "identified individuals to whom a particular misrepresentation has been made ..."; they are considered quite apart from any class into which they fall. But the former approach is inappropriate, and the latter is inevitable, in cases like the present, where monetary relief is sought by a plaintiff who alleges that a particular representation was made to identifiable persons, of whom the plaintiff was one. Polaris is not complaining that it was misled by the representations in the comparison report. It is worried that whoever might have received the report could be misled. Thus it is necessary to identify the class of persons who, having received the report, are likely to be influenced by it. The market for noise suppression devices of the kind referred to in the report consists of businesses which conduct call centres in Australia. Telstra is one such business. Mr Gherbaz, Plantronics' managing director, said the M15D was being developed for both the forthcoming Telstra RFT and for the general market. The comparison report was intended to be used and was used for the general market as well as to assist Plantronics in relation to the tender. He said the potential readers of the report would be Occupational Health and Safety (OH&S) managers in organisations and call centre managers. They were the officers with whom Plantronics would deal in connection with enquiries about its devices and sales of them. Thus it was the OH&S manager of Westpac who enquired of Mr Gherbaz about its products and what path to go down. He sent her a copy of the report. The report was not made available to the general public. It was common ground that call centres have staff with technical skills and qualifications who can deal with headset or computer problems. Often call centres will have access to audiologists. According to Mr Gherbaz, when a call centre encounters an acoustic shock protection problem, or seeks information about protection devices, its information technology telephony people will contact suppliers such as Plantronics or Polaris. Accordingly, those who read the comparison report would have an understanding of call centre operations and the difficulties encountered by telephone operators, such as those summarised in the "Background" part of the report. Because readers will be of a managerial class accustomed to dealing with noise and other problems encountered by their operators, they are likely to have some understanding of the technical issues with which the report deals. They are likely also to have access to experts, including audiologists, to discuss issues raised by the report. In short, the likely reader of the report will have a much greater ability to understand and assess the report, and the technical matters with which it deals, than an ordinary member of the public. The potential reader would thus be in a good position to determine whether a statement in the report about an attribute of one device carried with it an implication that the other device did not have that attribute. The reader would also pick up that the report was dealing only with intelligibility and not with the overall attributes of the two devices. Telstra made up approximately one third of the overall market and the other entities approximately two thirds. Since December 2001 Polaris had been the sole supplier to Telstra. That arrangement was to have come to an end in December 2004, but in fact continued until mid 2005. SoundShield was also sold widely in the general market. Dynamic and Plantronics developed the M15D device during 2005 with a view to it competing in the Telstra and general markets for acoustic shock protection devices. The name ADRO was often used to describe the M15D because the ADRO software that had been developed by Dynamic for use in hearing aids was later used in the M15D. Dynamic and Plantronics were aware that the Telstra RFT would be issued in 2005, and Plantronics intended to submit a tender. It required the output of the devices to be limited to 85dB SPL (see [70]). The stated intent of TT4 was to minimise the symptoms of acoustic shock whilst maintaining speech intelligibility of not less than 90% with background voice chatter to 55dBA and with acoustic treatment to provide 49dB acoustic attenuation between adjacent workstations: clauses 3 and 5.2.2. The parties were at odds as to whether the intelligibility requirement was operative at the time of the test the subject of the comparison report (May 2005). Dynamic maintained that, on Polaris' pleading, the requirement did not come into existence until December 2005, when Telstra's RFT was published and introduced it. Dynamic said that prior to that, 90% intelligibility was only an objective or recommendation. I do not think that is the effect of the pleading. Paragraph 10C of the statement of claim alleges that Telstra's RFT "included a requirement, as specified in TT4", that any device supplied to Telstra must satisfy the intelligibility requirement. The copy of TT4 in evidence, issued in June 2001, contains the intelligibility requirement. The copy of Telstra's RFT in evidence is incomplete, but I would infer from clause 1.1 of Schedule 9, which requires products supplied to meet "the requirements of the specifications and addendums provided", that the provisions of TT4 formed part of the specifications. "Specification" is defined by reference to a Schedule that is not part of the document in evidence. I proceed on the basis that the intelligibility requirement was in place in May 2005. In May 2005 Australian Standard S004, administered by the Australian Communications and Media Authority, required the output of acoustic shock protection devices to be limited to 118dB. S004 is a mandatory standard. It does not have an intelligibility requirement. G616 was published in 2004. It is a non-binding general Australian guideline for acoustic safety for telephone equipment. As a condition of a device being marketed as an acoustic shock protection device, it imposes an acoustic limit of 102dBA SPL at DRP measured by the use of pulsed tones over a time interval of 125 milliseconds. The symbol dBA is explained at [12]. SPL means Sound Pressure Level and DRP means (ear) Drum Reference Point. Shortly after Polaris entered into the 2001 contract with Telstra, Telstra relaxed its limiting requirements for Polaris by five decibels (TT4+5) (ie 90dB). Details of the relaxation were not published. In the weeks preceding the 10 May 2005 comparison test Dynamic and Plantronics made enquiries with a view to discovering the settings used on the SoundShield device in call centres. This did not involve intelligibility testing. Trillium reported that M15D complied with TT4+5 for acoustic limiting. At some time after May 2005 Plantronics carried out two call centre trials of M15D, including centres which used SoundShield. One trial was done in Australia and the other in the United States. On 10 May 2005 Dynamic undertook the speech intelligibility test the subject of the comparison report. The test used a Plantronics H51-TT3 headset with each of the devices set to the lowest limiting setting. Headset profile 1 was used in SoundShield. The combination of lowest limiting setting and headset profile 1 in SoundShield was its general market mode and not that used in Telstra call centres. Similarly, the lowest limiting setting of M15D was its proposed general market mode and not the proposed Telstra mode. The testing used the same input levels for each device. Before carrying out this test, Professor Blamey did a pre-test for intelligibility with himself as the subject. This test is considered in more detail at [161]-[165]. He found an average intelligibility across all conditions of 96%. The intelligibility scores were reported as phonemes correct and not whole word correct. In July 2007 Mr Fisher again tested SoundShield Mk1 on the same basis as the January 2006 test, except that the intelligibility scores were reported as whole word as well as phonemes correct. The results were 97% correct on monosyllabic words, using phonemic scoring, and 93% correct using whole word scoring. Set to TT4+5 the device met Telstra's intelligibility requirement under both scoring methods. In October 2007 Professor Newell did a test of SoundShield Mk1 on substantially the same basis as Mr Fisher's July 2007 test. There was very little difference between the responses of the two devices, though SoundShield scored better on overall receive quality. In August 2005, as part of his work in the development of M15D, Mr Dickson carried out tests of two settings of M15D, two settings of SoundShield and one setting of another device, and measured their respective output levels. The graph recording the results showed much the same output levels for M15D and SoundShield as in the comparison test (91.7 and 91.4dB SPL at DRP respectively). The SoundShield device was that used in the May 2005 comparison test. Version 13a of the ADRO software was used in the August 2005 test of M15D whereas version 1.10a was used in the May test. Mr Dickson said there were minor differences between those two versions of the software, which did not affect output levels or speech intelligibility. Thus, he said, the graph showed the same output levels for the devices that would have applied in May 2005. In 2006 Mr Fisher tested three devices for acoustic level: the M15D, what has been called "the technically equivalent device" to that used in the comparison report (DM15), and the SoundShield Mk1, all in combination with a Plantronics H51 headset. He observed that the DM15 increased its output when the background noise level increased. This was a test applying pulsed tones according to the G616 method. It did not involve speech input. The DM15 technically equivalent device was delivered to Polaris pursuant to a consent order of the Court made on 26 April 2006 under Order 15A rule 12 of the Rules that the respondents produce to Polaris for inspection and analysis the M15D device used in the carrying out of the May 2005 comparison test or a technically equivalent device to that used. In February 2008 Mr McNeill carried out a measurement of what he called the "acoustic limit for speech" for a M15D and a SoundShield, using a Plantronics H51N-TT3 headset. The two devices were set to the same settings as were used in the test for the comparison report: limiting mode 1 for SoundShield and limiting mode 3 for M15D (the setting with the least amount of limiting). These are units used to measure sound pressure level as a ratio compared to a known reference level. There are different kinds of dBs. As already indicated, one of them, dBA, is typically used for measuring sound in the environment, and so is used for OH&S limits in factories. Professor Blamey said there were four or five other types of dB that appear in the material before the Court. They express different concepts and are not directly comparable without an appropriate translation factor. It is therefore important to identify the precise concept in use to ensure that any comparison is meaningful. Limits, inputs and outputs in acoustic terms can be measured in different ways. Thus the points of measurement may differ. The point may be in the environment (free field) expressed as dBA, ear reference point (ERP) and drum reference point (DRP). Measurements can be made over different time intervals (for example, 125ms, 32ms and instantaneous). These differences are reflected in Table 7.3 of TT4 (page 38). Again it is important to identify and use comparable parameters of measurement in order for comparisons and observations about acoustic limits, inputs and outputs to be meaningful. The lowest limiting setting prescribed by TT4 as it operated in 2005, in order to avoid hearing damage to a call centre operator, was 88dB, relaxed for Polaris to 88dB + 5dB. To achieve that outcome when SoundShield was used in TT4 mode, the device was set to limiting mode 2, which imposed a limit of about 90dB, and headset profile 18. That profile was developed specifically to comply with the requirements of TT4 and was not made available to the general market, which did not require it. In the general market (95dB), limiting mode 1 was used for SoundShield by most non-Telstra customers. For the Plantronics H51 headset, profile 1 was the correct profile. That was also the case with the Plantronics H51 TT3 headset, when used in the general market mode. (This headset could be set to either mode. ) During 2005 there were two alternative settings for the M15D which were programmed into each device separately. These were the G616 (general market) mode which used the least amount of limiting, and a TT4 mode. During 2005 both were in the process of development and testing. In the testing for the comparison report the M15D was used in its general market mode, as was SoundShield. Both modes in the M15D were achieved by the operation of software. This included Xenica speech processing software developed by Dynamic. The G616 mode software versions of the Xenica software had the suffix 'a' and the TT4 mode versions had the suffix 'b'. A numbering system was used to identify the version of the software. Thus version 1.9 preceded version 1.10a and 10b (the versions under development and testing during 2005). There were slight changes between release 1.10a and release 1.13a of the M15D, but they had no impact on the way the software dealt with speech inputs. The comparison report testing was of speech with simulated background noise and no other signal. It is not disputed that Dynamic represented that the testing of the two devices at their lowest limiting settings provided an appropriate comparative basis for testing for intelligibility of speech. The s 52 contravention pleaded is that the lowest limiting setting at which SoundShield was tested was significantly lower than that for M15D, and the test results consequently conveyed a misleading assessment of the comparative performance capabilities of the SoundShield device. The lowest limiting setting is 80dB, and it was to the lowest limiting setting that the comparison report states that the device was set. However the longer form of the comparison report (dated 31 May 2005) states that during the test the device was set at "Limiter Setting 1", which is 95dB. (b) M15D has an absolute acoustic ceiling, and therefore a lowest limiting setting, of 102dB. Mr Guest's initial complaint seems to have been that the report wrongly said that SoundShield was set to 80dB, which was its "lowest limiting setting", whereas it was in fact set to 95dB, which was its "least limiting setting" (ie setting 1). On Professor Blamey's evidence, which I accept, there is no difference between "lowest limiting setting" and "least limiting setting". Both mean the setting that provides the least limiting, namely 95dB, being the setting chosen. In any event, Polaris' case was not conducted on the basis of Mr Guest's initial understanding of the position, but on the basis that SoundShield was tested on a limiting setting of 95dB whereas M15D was tested on a limiting setting of 102dB. Polaris' contention was that a louder sound was heard on the M15D, which would enhance intelligibility. This was the way Mr Guest put Polaris' complaint in his second affidavit: the M15D device used in the comparison test had an acoustic ceiling of at least 7dB more than SoundShield, and this difference "would have resulted in the device with the higher limit being easier to hear with ie have higher intelligibility". As appears from [70], the voluntary G616 standard prescribes an upper limit of 102dBA SPL at DRP. It was common ground that SoundShield's lowest limiting setting was setting 1 or the 95dB setting. The M15D was a pre-release prototype. The M15D ultimately released to the market was advertised as having a limit of 102dBA. Mr Gherbaz and Mr McNeill both said the M15D used in the comparison test had a lowest limiting setting of 102dBA. Thus, says Polaris, the comparison was between SoundShield with limiting of 95dBA and the M15D with limiting of 102dBA. This comparison was said to be unfair because the M15D provided less limiting, and thus the listener received more sound than a listener to SoundShield, "with a resultant likely effect on intelligibility" --- the SoundShield caused sound to be heard more quietly. Polaris relied on Professor Newell's evidence to establish these matters. The respondents relied on Mr McNeill's test, which is described at [83]. They said this showed that both devices were limiting speech signals at the same level: around 95dBA SPL at DRP (94.7 for M15D and 96.3 for SoundShield) measured at 125ms RMS. Polaris took issue with the relevance of Mr McNeill's test. It said that although he described the test as "a measurement of the acoustic limit for speech" of the two devices, it was not that, but a measurement of their outputs with a single 100mV input, which did not test the limiting of the devices. In cross-examination Mr McNeill accepted that he had measured the devices' acoustic outputs at the ear drum. He was not trying to verify compliance with any specification. He was trying to reproduce the conditions of the Dynamic test to verify that it was fair in that both headsets were putting out "similar output levels, acoustic levels". In my view Mr McNeill's test does not displace the prima facie 7dB gap between SoundShield's limiting of 95dBA and M15D's limiting of 102dBA. Putting the matter another way, the test does not establish that the M15D tested by Dynamic had the same limit as the SoundShield tested, namely 95dBA as opposed to its published limit of 102dBA, the limit Mr Gherbaz, and Mr McNeill in another connection (see [93]), said it had. As Mr McNeill conceded, it was not a test of the acoustic limits for speech, but of output levels. As appears at [96], Mr McNeill was trying to reproduce the conditions of the Dynamic test to verify that it was fair in that both headsets were putting out similar output levels. Polaris drew attention to many respects in which Mr McNeill's test did not replicate Dynamic's. I mention only one of them. The Dynamic test was done with background noise. Mr McNeill's was not. This is an important difference for present purposes because, as Mr McNeill pointed out, it was a feature of the M15D (not shared by SoundShield) that when it detected an increase in ambient background noise, it attempted to increase the output volume level "so long as that does not exceed the limiting profile selected". In other words, the measured output for the M15D in the absence of background noise is likely to be lower than the output in otherwise the same conditions but with background noise. As Polaris points out, this would explain the difference in perceived loudness recorded by the subjects in the Dynamic test (Figure 2), with the M15D increasing its output in background noise. More importantly, for present purposes, because a higher output could be achieved in different test conditions (with background noise), Mr McNeill's test is not a test of any limit of the M15D. The respondents also relied on Mr Dickson's August 2005 test described at [80], which showed much the same output levels for M15D and SoundShield --- 91.7 and 91.4dB SPL at DRP respectively. Mr Dickson's test was of the same character as Mr McNeill's. It tested output levels and not acoustic limits for speech. He agreed that what his graph demonstrated was output measurements, and that they did not directly give any information about the acoustic limits of the devices. His test was done without background noise, and he agreed with Mr McNeill that the M15D had attributes that improved loudness in noise. Confirmation that Mr Dickson tested for output levels and not limiting levels is contained in the note of a telephone call made by Professor Blamey in December 2005 to Dr Harvey Dillon of NAL in response to an enquiry as to the limiting level for the M15D tested in May 2005. HD asked what was the limiting level for the ADRO device tested. He inferred that the poorer performance of the SoundShield device may have been caused by using a lower limiting level than was used for the ADRO device. The output levels for the two devices had been measured and matched at the start of the study. SoundShield was set to the typical settings used in Australian call centres as stated in the document. The ADRO device was set to a similar output level. Mr Dickson's graph was provided to Professor Blamey in response. Professor Blamey said it showed output levels or spectra for speech averaged over 10 seconds. It is clear therefore that the measurement referred to in the fifth sentence of the passage quoted at [100] is Mr Dickson's, and that it was not a measurement of limiting levels. The respondents have not established, by resort to Mr McNeill's or Mr Dickson's tests, that in the Dynamic test both devices had more or less the same acoustic limits. SoundShield was tested on a setting of 95dBA and M15D on 102dBA. Professor Blamey agreed that his statement that the acoustic limit for speech for the M15D in the measurements performed at Plantronics was 95dB SPL at DRP was based on Mr McNeill's test and that he was not aware of any other test "for acoustic limit for speech" for the M15D that had been performed for this litigation. He also agreed that the only tests for the output levels for the devices were those of Mr McNeill and Mr Dickson. Polaris claimed that Dynamic could have done a "fair" test by setting both devices to TT4 limiting settings or TT4+5dB. In this connection it relied on an email from Trillium (Mr Hecker) to Plantronics (Mr Gherbaz) of 20 April 2005 in which Mr Hecker expressed "concern" that Plantronics was "trying to benchmark against something that isn't TT4". Mr Hecker said he had tested SoundShield to TT4 and it appeared to be "behaving properly". Polaris also relied on an email from Mr Dickson to Mr McNeill of 29 April 2005 which disclosed that the former was "currently finalising two versions of Tecate/Xenica software". One was M15D version 1.10a to compete with SoundShield on non-Telstra setting, and the other, version 1.10b, to compete with SoundShield "for full TT4 compliance test at Trillium". On this basis Polaris contended that Dynamic could have done a test comparing like with like, but chose not to. This, it said, left the reader of the report to infer that the lowest limiting setting was the same for each device, when it was not. That was what was misleading about the report. In this same connection Polaris relies on Mr McNeill's evidence in cross-examination. He was asked what he understood Mr Hecker meant in the 20 April 2005 email that Plantronics was "trying to benchmark against something that isn't TT4". They wouldn't be a fair benchmark. The first was that "both devices were set at the lowest limiting setting", which meant that the volume of the sound heard by the listener was least restricted by the devices. It is true that SoundShield was set to its lowest limiting setting of 95dB and that M15D was set to its lowest limiting setting of 102dB. However, Polaris' grievance is that the report misleadingly represented that the two devices were set to the same lowest limiting setting, when they were not. As appears above, I have concluded that they were set to different settings. Dynamic's second reason for asserting that Polaris' claim must fail was that both devices were set to the lowest setting each was capable of giving for speech, namely 95dB, which on both is the point at which their speech limiting capacities commence to operate. As I have found, the devices were not set at the same 95dB setting. Dynamic's third reason was that both devices were tested by measurement of their sound output level at 91.4dB SPL at DRP (M15D) and 91.7dB SPL at DRP (SoundShield) in the conditions used, the effect of which was that the sound used was below the sound limiting capacities in each device. This contention is based on Mr Dickson's measurements of December 2005 and his supporting graph. As appears from what I have said at [99], Mr Dickson, as he conceded, was measuring outputs and not the acoustic limits of the devices. Dynamic's third reason is itself predicated on a sound output level measurement. Dynamic's other related submissions founder on the failure to distinguish between maximum sound outputs and acoustic limits. Polaris' complaint relates to the latter. The admitted representation is that the testing of the two devices at their lowest limiting settings provided an appropriate comparative basis for testing for intelligibility of speech. The representation is said to be misleading because the lowest limiting setting at which SoundShield was tested was significantly lower than that for M15D. This does not involve a comparison of maximum sound outputs, but of acoustic limits. Thus Dynamic's assertion that Mr Dickson's evidence that both devices produced the same level of sound to listeners rebutted Polaris' contention that the M15D was tested at a higher volume than SoundShield, does not meet Polaris' point. Similarly, Dynamic's concluding submission that Polaris has failed to establish that the devices were tested "at unequal volumes" also misses the point, based as it is on Mr McNeill's and Mr Dickson's tests of sound outputs. Plantronics relied on a passage in Mr McNeill's second affidavit in which he said that from his role in leading the design team for the M15D, he was aware that "the limiting regime provided for by limiting mode 3 causes the 125ms RMS speech average for the M15D to be limited to 95dB SPL at the drum reference point". Mr McNeill provided no reasoning or explanation to support this bald assertion. He was not in this affidavit relying on his February 2008 test, which had since his earlier affidavit been subjected to criticism by Mr Fisher. Before the Court can assess the value of an opinion, it must know the facts on which it is based. If the opinion is based on irrelevant facts or facts that are clearly not going to be proved, the opinion is likely to be valueless. It should not be for a cross-examiner to endeavour to elicit the facts or assumptions upon which an opinion is expressed, and it would be unfair to leave such matters to the cross-examiner. Except in a straightforward, uncomplicated case, where the facts are admitted or otherwise readily identified, opinion evidence would normally be rejected under s 135 if the facts or assumptions upon which the opinion is based are not expressly stated. Opinion evidence, like any other evidence, must be comprehensible and reach conclusions that are rationally based. The process of inference or reasoning that leads to conclusions ought to be stated or revealed in a way that enables the conclusions to be tested and a judgment to be made about their reliability and the weight that should be given to them. This is far from being a "straightforward, uncomplicated case", and the evidence in issue is of central importance to the lowest limiting setting issue. Mr McNeill's assertion amounts to no more than that he knows something because of his expertise. I attach no weight to the assertion. Polaris relied primarily on Professor Newell's evidence to establish this. In his initial report (3 November 2007) Professor Newell said that a device set to an acoustic limit of 100 or 102dBA SPL at DRP will result in "potentially better speech intelligibility ... especially in background noise" than one set to "an average maximum of 95dB SPL at DRP" (presumably 95dBA SPL at DRP). Polaris' solicitors later asked him whether, assuming everything else about the two devices was the same, the difference in speech intelligibility would be significant. His answer was that, if three conditions were met, it would be significant. The first was that the two devices were identical in all respects other than the acoustic limiting level. The second was that the devices were driven to a level in which there was significant limiting of the speech by the device with the lower acoustic limit. The third was that the background noise in the room and on the line was of a significant level. Professor Newell's answer is theoretical and unhelpful. He makes no attempt to apply it to the facts of the case. Polaris did not point to any evidence that Professor Newell's first condition was satisfied, namely that the two devices were identical in all respects other than the acoustic limiting level. Indeed the evidence disclosed many respects in which they differed. The only matter it relied on in relation to the second condition was that in the comparison report test both devices were in limiting. That does not establish that SoundShield was driven to a level at which there was significant limiting. After all, the SoundShield setting was the least limiting setting. As to the third condition, Professor Newell did not identify the level at which background noise becomes significant. So we are left with Professor Newell's default position (where the conditions are not satisfied) that a device set to 100 or 102dBA will not result in significantly better speech intelligibility than one set at 95dBA. The difficulty with Polaris' case on this point is that it did not carry out a test of the two devices with speech input, and thus was unable to show whether there was "significant limiting" of SoundShield, or more generally whether intelligibility in fact increased as a result of M15D's extra 7dB. The respondents relied on Mr Fisher's test of January 2006 to show that a 5dB difference in limiting in SoundShield MK1 had no effect on intelligibility in test conditions. If it were correct that an extra 5dB enhances intelligibility, one would expect that to be shown by the table. Instead, in the test done with a noise level of 55dBA, the average percentage correct at 95dB is lower than that at 90dB, and with a noise level of 65dBA, the average scores are the same. Mr Fisher's evidence contradicted the proposition that hearing a louder sound on the M15D would have enhanced intelligibility. He rejected the proposition put to him in cross examination that "for the purpose of providing the best speech intelligibility, a louder sample will be more intelligible than a softer". He agreed that one reason for this was that the louder sample may be distorted by the device that is reproducing the sound. He also said that as sound gets louder and louder, the listener doesn't understand it as well; that is to say, intelligibility decreases. His opinion was that speech intelligibility is best at a speech level of around 73dBA in the free field. If there was background noise of 55dB, intelligibility would be best at 67dBA. The topic was not touched on in re-examination. Polaris submitted that Mr Fisher was dealing with face to face and not telephone conversation. His reference to distortion shows that he was initially dealing with telephone conversation. Then he shifted to face to face (free field) conversation. But it is apparent from a reading of ensuing responses that Mr Fisher was making the loudness point in relation to speech generally, and not limiting it to face to face conversation. Mr Guest's evidence was not entirely consistent. In his second affidavit he said he had listened to SoundShield set at each of its different limiting settings, all 5dB apart. He said a five dB increase was clearly noticeable. Even with all other settings appropriately adjusted, SoundShield's intelligibility improved each time the acoustic limit was increased. The 95dB setting was the one easiest to hear with. The account Mr Guest gave in cross-examination about the test he carried out was to a different effect. Here he said he listened to the M15D and SoundShield and "the M15D sounded louder to me". When pressed as to why he had not mentioned this comparative test in his affidavit (which referred only to testing SoundShield), he departed from the claim that he had listened to M15D as well as SoundShield. It was put to him that he had not in fact listened to M15D to make a comparison. He replied that he made the comparison "based upon knowing that SoundShield had an absolute limit of 95dB and either the testing of Fisher at 102 and/or the published information of Plantronics". He ultimately accepted that his opinion about intelligibility was simply based on two numbers --- 95dB and 102dB and nothing else. Mr Guest's evidence was unsatisfactory. He claimed to have conducted a test that he had not in fact carried out. His evidence does not establish that the 5dB difference between SoundShield and M15D increased the intelligibility produced by the latter. Mr Guest is not an expert in speech, audiology or acoustics, and did not pretend to be. On the other hand, Professor Newell is an expert audiologist, and Mr Guest's evidence cannot be used to fill the gaps caused by Polaris' failure to satisfy the conditions attached to Professor Newell's opinion. I accept Mr Fisher's evidence that loudness does not necessarily increase intelligibility, and Professor Newell's evidence that it does so only if certain conditions are satisfied. There is no evidence that they were satisfied. However, even accepting the test Mr Guest actually did (ie listening to SoundShield alone), it says nothing as to whether a 102dB limit on a different device would be easier to hear with than 95dB on SoundShield. Mr Fisher's evidence shows that one cannot by extrapolation from 95dB upwards expect to achieve greater intelligibility. As part of their attack on Mr Guest's evidence the respondents relied on the contents of his email to Dynamic's former Chief Executive Officer, Elaine Saunders, of 16 January 2006. Mr Guest asked Dr Saunders for the acoustic limiting level for the M15D used in the comparison test. Mr Guest told her that the 7dB difference between SoundShield's acoustic limit of 95dB and the European version of M15D (Polaris did not have an Australian version) meant that it had the "theoretical potential to be more intelligible than SoundShield, though he doubted that "in actual use it is effectively more intelligible". In cross examination, after attempts to explain away what he had written, he eventually conceded that what he had said was "true", and that he doubted whether in actual use M15D would be effectively more intelligible as a result of the extra 7dB. Mr McNeill's statement that SoundShield's limiting setting 1 produced a louder output than settings two, three and four speaks only of loudness, and not intelligibility for speech. Polaris posed the correct question to Professor Newell: whether the difference in speech intelligibility would be significant in the circumstances posited. However his heavily conditional answer did not provide the answer Polaris needed. Nor does Polaris derive assistance from Mr McNeill's observation that if Plantronics was benchmarking the M15D with a limiting profile of TT4 against SoundShield with a limiting profile of TT4+5, there "wouldn't be a fair benchmark". Again, this opinion was based on Mr McNeill's earlier statement about loudness or output. Even if he had gone on to relate loudness/output to speech intelligibility, I would have preferred Professor Newell's evidence recorded at [112]. He has had some 30 years experience working and teaching in audiology, including speech intelligibility generally. I have earlier referred to the respondents' submission that Professor Newell's evidence on certain topics was not that of an independent expert because of Mr Fisher's involvement in the testing. His intelligibility for speech evidence was not one of those topics. Professor Newell's expertise in audiology and intelligibility for speech is much greater than Mr McNeill's. Polaris has not established that the difference between the lowest limiting settings of the devices would have made M15D more intelligible than SoundShield. However, it has not established that the difference between the two settings made speech heard through the M15D significantly more intelligible than that through SoundShield. Thus it has not established that the testing of the two devices at their lowest limiting settings provided an inappropriate comparative basis for testing intelligibility of speech. To use the language of Polaris' submission, the 7dB difference did not confer a relevant "benefit" on the M15D. The same applies to Mr Fisher's 5dB difference. Polaris contends that this was misleading because the research was not covered by ethics approval. The confidential particulars provided throw no light on why the research was not covered. Polaris propounded this claim on the basis that the research was covered by ethics approval, but the approval was obtained by amendment after publication of the comparison report. In my view this claim has no substance. On 11 June 2003 Dynamic applied for ethics approval for "investigations with digital signal processing strategies in audio applications for normally hearing listeners and individuals using hearing aids". On 7 July 2003 approval was granted. The project was given the number 03/529H. The approval letter stated that the Committee required an annual progress report, and that any proposed amendments to the protocol that accompanied the application required its approval. A final report was required at the conclusion of the research. On 23 June 2006 Dynamic wrote to the Committee stating that it would like to use university students in the listening experiments and pay them a fixed hourly rate. It asked the Committee to confirm that the recruitment of normally hearing listeners in this way was acceptable. On 27 July 2006 the Committee replied requesting clarification of the purpose of the tests on normal hearing volunteers and why they were to be conducted. On 30 July Dynamic provided the information sought. The letter, however, does not mention the type of study that was recently brought to our attention by your legal advisors, Griffith Hack. That study compared two competing commercial devices, and there was an implication that the results would be used in the marketing of those devices. Dynamic said that "the most effective way for us to counter" would be to have a letter confirming that it did have cover for the study. On 25 August 2006 the Committee informed Dynamic that the testing of a variety of devices using normal hearing subjects was covered by the approval for project 03/529H. Do you agree? There was no retrospective approval of the study. The Committee's final communication makes clear that the study specified in Dynamic's letter of 25 August 2006 was covered ab initio by the approval granted in 2003. Polaris drew attention to the fact that Dynamic had not replied to the query raised in the Committee's letter of 10 August about the results of the study being used in the marketing of the two competing commercial devices. Dynamic's letter of 18 August explained the litigation context, and asked for a letter confirming that it did have approval for the study. The Committee was obviously satisfied with the response, and provided two letters of approval. Polaris has not established that the ethics approval representation was misleading or deceptive. Plantronics denies them. However, in its closing submissions Plantronics said that in view of Dynamic's admissions, it would make no submissions on whether the representations were made. In par 6 of the statement of claim Dynamic is alleged to be the publisher and distributor of the comparison report. Plantronics is alleged to have requested and approved the publication. I find the representations were made. This is done in order to improve intelligibility. Both Mr Fisher and Mr McNeill likened receive gain setting to a motor vehicle's gears, with SoundShield being a manual car with three gears (LOW, MID and HIGH) and M15D an automatic. The appropriate receive gain setting depends on the input signal to which the device is exposed. Acoustic shock protection devices are installed between the telephone and the headset of the call centre operator. The input signal to a device is the output signal from the telephone. It was Polaris' case that exposing SoundShield to a higher input signal than that for which it was programmed causes distortion which in turn decreases intelligibility. Polaris' Administrator Programming Manual (Manual) describes the device's settings by reference to the type of telephone in use rather than as a particular measured output in millivolts. Five telephones are listed in Appendix 1, all with the MID receive level. The Manual states that if the receive setting for the host equipment is not listed in the Appendix, the setting must be tested and created. In other words, there is no general mode setting for non-listed host equipment. Mr Fisher's evidence was that the LOW setting was designed for input signal levels up to about 15mV, the MID setting for signals up to 40mV, 50mV as a maximum, and the HIGH setting for signals in excess of 50mV up to 272mV. Mr Thompson's evidence of average inputs was 12mV for LOW, 33mV for MID and 80mV for HIGH. The comparison report testing was done with a 100mV input signal. There is no evidence as to the basis for the selection of this signal. Professor Blamey said Dynamic used the MID receive gain setting for the SoundShield, based on information received from a call centre the name of which he provided on a confidential basis. His evidence was not clear, because he also referred to an email which stated that the appropriate setting "varies by agent", the agent being the operator. He also said that the information as to the MID setting "may have come from another source or an additional source to this". It is not clear whether "this" referred to the call centre or the email. Professor Blamey accepted that when the comparison test was done, Dynamic did not know what Polaris' recommendations were in relation to the receive gain for the input signal used. Mr Gherbaz explained what was meant by "varies by agent". He said that at this particular (confidential) site the agents had a number of headsets, and as they moved from desk to desk, the supervisor would reprogram the SoundShields, and so "there was quite a bit of variation from setting to setting from SoundShield to SoundShield". Mr Gherbaz also said that he did not know the receive gain setting for this particular customer. Mr McNeill gave evidence on a confidential basis of global studies that led Plantronics engineering community worldwide to select an input that supported Dynamic's selection. However he did not say that was why the 100mV input was selected for the comparison test. Clause 5.3.2 of TT4 lists several telephones whose requirements "are to be accommodated by an acoustic protection device". They include Nortel P-phones, Exicom BT450 and Alcatel TF200. Polaris arranged for Trillium to test the Nortel P-phones. Mr Thompson converted Trillium's measurements of the output of the phones to millivolts --- between 33 and 36mV. Mr Fisher carried out a similar test of the Exicom and Alcatel phones and found that their speech signal level was typically 25mV. Professor Blamey took issue with this measurement on the ground that it assumed, without justification, that the output of handsets can be compared directly to the output of headsets. He did not explain why this was so, or what a proper "indirect" comparison would show. I attach no weight to this unhelpful evidence. Mr Fisher said that the 100mV signal used by Dynamic was a particularly high input signal level, and that if SoundShield was exposed to that signal the most appropriate receive gain setting would be HIGH, as that would moderate the high input signal and avoid distortion of the signal which causes decreased intelligibility. Professor Newell said while the 100mV input used by Dynamic was within the highest level of the specification in TT4 (see Table 5.9), it was generally recognised that such a level was unrealistic and never encountered in call centre equipment. This data is relevant because the SoundShield connects to either the headset or handset part of a telephone console in place of a direct connect headset or handset. Headsets and handsets produce high sound levels when speech signals with an average level of 100 mV are applied to them. Michael Fisher has calculated this average speech level to be equivalent to around 89 dBA SPL in the field which is well in excess of the average speech level people in call centres listen to which was found to be 77 dBA by Patel and Broughton. None of the headset users in the Patel and Broughton study listened at a level as high as 89 dBA SPL in the field. It is the fact that people do not (or very rarely) listen to speech at these high average sound levels (ie 89 dBA SPL in the field) that tells me the input speech signal level (ie 100 mV) into these devices that causes such high sound levels is not being applied. ... It is essential that correct operation be achieved with the typical range of inputs from the various CPE as tabulated below. This may be achieved by the use of internally settable controls or by other means as determined by the manufacturer. The table, part of which is rendered below, includes columns dealing with "Level at input to limiter". Column 1 deals with CPE with low level output to limiter input. Column 2 deals with CPE with mid level output to limiter input. Column 3 deals with high level output to limiter input. CPE introduces a variable level between the input from the network and the port to which the amplifier is connected. To be able to function with a range of CPE the amplifier/headset combination must have a range of settings, which can accommodate the level and wire function requirements. The settings to accommodate the various CPE must be internal settings, which are not accessible in day to day operation ... Note: Column 3 requirement may not be required. Check with Product Manager. He also said that because it was also within the range of all three columns (low, mid and high), the choice of the particular setting was "not particularly crucial". In his oral evidence he expressed the view that the table "suggests that in every setting of the device which is designed to be used with typical telephones in call centres, the device ... should be able to accept 100mV input signal and achieve 90 per cent speech intelligibility with that input signal". Professor Blamey accepted that 100mV was above the mid point in columns 1 and 2 (the mean or average signal level). Accordingly, the signal chosen was above the signal specified for the low to mid range for the mean active speech levels. These levels were what Mr Thompson called the levels "likely to be encountered". For present purposes the only relevance of Table 5.9 is for the light it throws on input signals used in typical Australian call centres. The comparison report test was not directed to ascertaining SoundShield's TT4 compliance. It was not a test constructed so as to be able to do that. In view of other evidence, the table throws very little light on input levels in fact used in call centres, especially non-Telstra centres. There was no evidence that the table was used by any call centre or by any manufacturer of acoustic protection devices. Professor Blamey's evidence about the confidential call centre's settings was confusing and unsatisfactory. The settings were those identified in the exchange of emails referred to at [196]. They did not include the input signal. So the 100mV input did not come from the confidential call centre. Polaris' own evidence was that the table's low, mid and high levels were not the source of SoundShield's three settings. The only clear evidence about a manufacturer's use of the table is that Mr Fisher consulted it when designing SoundShield, but did not ultimately use it. His tests at Telstra call centres showed that the input levels encountered were considerably lower than those specified in the table, and accordingly SoundShield was modified to have a higher receive amplification. There was no evidence that the table was part of Dynamic's decision-making process that led to the selection of the 100mV input signal. If the table offers any guidance as to inputs in call centres, the mean active speech levels therein would be the obvious ones to apply --- 48mV for LOW and 68mV for MID. Polaris' experts, Mr Fisher, Mr Thompson and Professor Newell, were clear that 100mV was a much higher input than that typically encountered in Australian call centres, though they did not all come up with the same range as to what was typical. Mr Thompson said that the relevant figures in the table are those listed against long term mean active speech level for which the table ascribes a value of 48mV RMS as the likely input to a device for low output CPE, and a value of 68mV RMS for mid level output CPE. He treated the table as stating that the range of likely inputs to devices in call centres was 48-68mV. Mr Thompson's opinion was based on columns 1 and 2 of the table. Column 3 deals with "CPE with high level output to limiter input". It has a footnote that "Column 3 requirement may not be required. Check with Product Manager". There was no evidence as to the provenance of this note. Mr Thompson's conclusion was that a 100mV input signal did not simulate the likely output signal from a telephone in a call centre in practice, which is instead in the range of 33-36mV, and is not within the likely range specified in the table (48-68mV). Mr McNeill agreed with Polaris' witnesses that the receive gain settings were a matter for determination by the manufacturer. Professor Blamey agreed that in making decisions about receive gain settings for the comparison test, it would have been very useful to know whether Polaris made any use of Table 5.9 in its settings. Polaris' Manual disclosed that the HIGH setting should be selected for hosts/consoles with a high output level. Mr Thompson said that on a 100mV input the HIGH setting was the appropriate one, because on a MID setting there would very likely be overamplification and distortion. He agreed that he had not done a specific test to establish this, for want of the necessary equipment at Polaris' premises, but said that from measurements he was able to make, he could infer the likelihood of distortion. In cross-examination he said that if set on MID with a 100mV input, SoundShield would perform less satisfactorily than if set on HIGH. Professor Newell was of the same opinion. As limiting amplifiers are designed to accept the same signal that are provided to headsets and handsets these are also high level signals for limiting amplifiers to be exposed to. It therefore is appropriate that a limiting amplifier should be set to a HIGH receive setting. I am advised by Michael Fisher that this is the case for speech signals with average levels greater than 50 mV. 100mV is therefore a high level rather than a normal level from a telephone console. Dynamic should have known from the Patel and Broughton article to which it referred in the comparison report, that 100mV was a high signal level. Patel and Broughton's measurements at 15 call centres in the United Kingdom showed a mean output of 77dBA, with 70% of the measurement output levels being within the 72-82dBA range. The maximum measured level was 88dBA. Professor Blamey said that the mean of the output translated from 100mV to dBA was 84dBA, which he agreed was towards the upper end of the range. Dynamic was aware of the importance of getting SoundShield's receive gain setting correct. It did not have a copy of the Manual, which would have disclosed the need for a HIGH setting. It did not seek to obtain the relevant information from Polaris. Based on the evidence of Mr Thompson, Mr Fisher and Professor Newell, I find that the average input in typical Australian call centres was between 12 and 80mV: 12 for LOW, 33 for MID and 80 for HIGH. On an input of 100mV, the appropriate setting was HIGH. Polaris' case was not simply that an input of 100mV was too high. It was that if with that input SoundShield was set to the MID receive gain setting, it would be overdriven and would distort, with a consequent deleterious effect on intelligibility. That would have been avoided had the HIGH receive gain setting been selected. Has Polaris established that with a 100mV input, SoundShield will be overdriven and distort with an adverse effect on intelligibility for speech? In his principal affidavit Professor Blamey said that before the test was administered to the eight subjects he inspected the set up of the experiment and checked the equipment as set up. He also listened to sound output of both devices in the settings that had been proposed and satisfied himself that they were appropriate for the use of both devices in a simulated call centre environment. Professor Blamey elaborated on this in the course of cross-examination. It was put to him that he had not done a pre-test for intelligibility. So that could be interpreted as a pre-test for intelligibility. He went on to say that the two devices were "very similar in loudness": one was slightly louder, though he had no way of knowing which it was. In re-examination he repeated that before the subjects were tested he sat in the booth and the protocol was run through with him. He agreed that: Many other tests, comparative and non-comparative, were in evidence. Most of them were more or less readily distinguishable from the Dynamic comparison test. The one test that cannot thus be put aside or distinguished is Professor Blamey's pre-test for intelligibility. Obviously he used the same test set up as the eight subjects. Although he was not asked about distortion, I infer from the fact that both devices appeared to be working, that he didn't hear anything to suggest that one was very different from the other, and that they were of similar loudness, though one was slightly louder, that there was no apparent distortion. I have taken into account that Professor Blamey has an interest in the outcome of the case, but I cannot reject his evidence on that ground alone. I have earlier said that I regard him as a witness of truth. He said it was standard practice to test the equipment prior to an experiment. While Polaris criticised Professor Blamey's recollection of facts and detail as "unreliable", it did not attack his credit. It was not put that he had not carried out the pre-test for intelligibility or that he had fabricated the results of his experiment. In any event, I accept that he did test the equipment and found it to be in working order. I infer from the fact that he didn't hear anything to suggest that one device was very different from the other, and that they were of similar loudness, that neither was distorting. In contrast to Professor Blamey's practical experiment, Polaris' expert evidence was largely of a theoretical character. As indicated at [155], Mr Thompson's opinion that there would "very likely" be overamplification and distortion of SoundShield with a 100mV input on MID, was not based on any test to measure distortion on that input and that setting. Nor had he done any measurements that would demonstrate that SoundShield was capable of accepting a 100mV input set on HIGH. He said both those measurements could have been carried out, but Polaris did not have the necessary facilities for that to be done at its premises. He said that distortion is a well known effect which is measurable using a Distortion Analyser or a Spectrum Analyser, which he had used extensively to measure signal distortion in acoustic shock protection devices. --- No, that's not correct. --- This goes to the question of what you mean by 'satisfactorily'. The question I've asked is whether or not the SoundShield, if it receives a 100mV signal when it's set in receive level 2, the mid receive setting, whether it would perform satisfactorily with that input voltage? --- Less satisfactorily than compared when used in the high receive gain setting. Applying that to the present case he said it was "reasonable to suggest" that SoundShield's poor intelligibility result was due to overdriving which caused it to distort the signal. In cross-examination Professor Newell said that if he had put in a 100mV signal, it would have been necessary to see whether SoundShield was being overdriven. By this I took him to mean that it would have been necessary to carry out an appropriate test, perhaps using one of the analysers of which Mr Thompson spoke. Mr Fisher's opinion that if SoundShield was exposed to a 100mV signal, the most appropriate receive gain setting was HIGH, as that would moderate the high input signal and avoid distortion causing decreased intelligibility, was theoretical. He undertook no test with a 100mV signal on the MID setting, though he agreed he could have done this. He relied on two matters for his opinion. The first was his controversial interpretation of Mr McNeill's 2008 test. The second was that he knew what SoundShield sounds like with an input level of 100mV, though he had not performed a test with subjects. He said "I know what it sounds like and it doesn't sound good". Otherwise he simply asserted, based on "lots of ... knowledge in this area", that there is overamplification with a 100mV signal. Based on Professor Blamey's personal test carried out immediately before the comparison test with subjects, which is more persuasive than the Polaris evidence recorded at [166]-[168] for the reasons there given, I have concluded that Polaris has not established that at a 100mV input on MID receive level SoundShield is overdriven and distorts. It was common ground that the relevance of distortion for present purposes lies in its adverse effect on speech intelligibility. On that finding I am unable to hold that the test set up representations were misleading or deceptive or likely to mislead or deceive for any of the reasons alleged in par 10I of the statement of claim to the extent those allegations depend on the input signal used. I have considered whether, despite the above finding, I could uphold the contention in par 10I(b) that the test conditions were not an accurate reflection of the conditions experienced in call centres, based on the evidence, which I have accepted, that input signals of 100mV were not encountered in call centres. However, I consider par (b) to be a composite plea --- that as a consequence of the test conditions not accurately reflecting call centre conditions, the test conditions were biased to favour M15D. This reading of par (b) is supported by the companion allegation in par 10H(b) that the report represented that the test conditions were not biased to favour one device over the other, "but instead were an accurate reflection of the conditions normally experienced in call centres". Polaris' counsel drew attention to the unsatisfactory nature of the pleadings in this respect, but the matter was not otherwise addressed in submissions. These filters are more commonly known as Head Profiles. This will accommodate a possible 18 different headset models. The only two numbers presently relevant are 1 for Plantronics H51 headset model and 18 for Telstra's TT4 model H51-TT3. Polaris says the proper selection of the headset profile was acknowledged by the respondents to be an important issue. Its case is that Dynamic used the H51-TT3 headset in the test using profile 1. According to Polaris' Manual, the correct setting for that headset is profile 18. Profile 1 was to be used with headset H51 and not for H51-TT3. The former was for use in the general market and the latter for Telstra call centres. The evidence of Polaris' own witnesses, Mr Guest and Mr Thompson, does not support this complaint. Mr Guest accepted that profile 1 was correct for the general 95dB (non Telstra) setting. He said "We could not deliver profile 18 to the general market because of the special acoustic limiting that Telstra wanted, which is lower than the Australian Standards". The "special acoustic limiting" is of course 90dB as opposed to 95dB. Mr Thompson agreed that when used in the general mode (95dB) the Plantronics H51-TT3 headset is set to profile 1, and on the 90dB setting, to profile 18. That, he said, was because Telstra requires a greater limiting setting of certain frequencies likely to be encountered. Mr Fisher maintained his stand that profile 18 was the correct profile. He was unswayed by Mr Guest's and Mr Thompson's evidence. He was clearly unhappy with the latter's evidence that if SoundShield was not to be used for Telstra, profile 1 should be used. He did not want to say Mr Thompson was wrong. Instead he said it was not for him to "pass comment on this", and that what Mr Thompson had said was "just poorly expressed". I do not accept Mr Fisher's evidence on this point. Polaris did not carry out any test with the H51-TT3 headset on profiles 1 to 18 so as to show that there was a difference between them for intelligibility. Nor was there any evidence that the profiles were relevantly different. There was no evidence of differences between the H51 and H51-TT3 headsets showing that they needed different profiles. Plantronics, the manufacturer of both headsets, said through Mr Gherbaz that there were no significant differences between them: they were "in effect the same headset with the same speaker, although H51-TT3 has slightly higher production tolerances". Mr Fisher agreed that the two models were the same except that "the manufacturing tolerances on H51-TT3 are narrower". On the basis of Mr Guest's and Mr Thompson's evidence, I find that in general (non-Telstra) use, the correct profile is profile 1, which was that used by Dynamic in its test. It does however lend support to other findings of misleading representations. It is not pleaded that the arrangement between the respondents was not disclosed. In my view the mere existence of the arrangement, which Polaris pleads in par 5 of the statement of claim and repeats in its particulars, could not establish that the representations were misleading. The comparison report disclosed that: In my view the intended recipients of the report, namely call centre and OH&S managers contemplating the purchase of acoustic protection devices, could not have been misled in any relevant way by the mere fact of the disclosed relationship. In and of itself, it does not provide a basis for finding that the test was not properly designed, that SoundShield was not properly set up, that the test conditions were not an accurate reflection of a call centre environment, or that the test results were not an accurate reflection of the relative performance of the two devices. Polaris also claimed, though not in its pleadings, that the report made no sufficient disclosure of the commercial arrangement between Dynamic and Plantronics, in that the report did not disclose the existence of an agreement between them under which Dynamic derived a direct financial interest in sales of the M15D units. The content of the agreement is confidential and I will record more about it. Given the state of the pleadings, I need not deal with this claim of inadequate disclosure. It was conducted in a call centre. Polaris claims that it demonstrated that there was "very little difference between the responses for the two units". The result of the tests is described by Mr Shilton of Dynamic in an email to Mr Gherbaz of 8 July 2005. Overall there is very little difference between the responses for the two units. This is a good result, especially considering that the subjects were all acclimatized to the SoundShield. We would have expected that people would be strongly biased towards the familiar product. The responses to the question relating to receive noise levels indicate that Tecate may be better but the difference was not great enough to be statistically significant with only twelve subjects. Both units were rated similarly in relation to protection against loud sounds. Blind A/B comparisons also indicated that Tecate is perceived to be louder (results attached). The respondents point out that the nature and circumstances of the July 2005 test were different from those of the comparison report. The July 2005 test was not a test in controlled conditions as was the comparison test. The users tested were accustomed to their existing devices, and call centre operators tended to favour their existing devices. The number of users tested was small (12 users). The test used ratings rather than percentage correct items. With only 12 users asked a single question about sound quality, only 12 data points are collected compared with 400 in the Dynamic test. In an uncontrolled environment, context assists with intelligibility because whole sentences are being used, rather than random word lists. The evidence of Mr Gherbaz and Professor Blamey, which I accept, establishes these differences between the circumstances of the July 2005 and the comparison test, and justifies the conclusion that the result of the former does not of itself show that the latter was misleading in any of the respects pleaded in par 10I of the statement of claim. It was said that this should have been done because the May 2005 results were "significantly inconsistent" with the "belief" referred to and the July 2005 results. The "belief" relied on is found in an early draft of the comparison report, though not in the published report. I accept Plantronics' submission that this complaint is not a particular about the test set up. Rather, it is a contention that Dynamic ought not to have believed the results of its own testing. In any event, Dynamic's failure to do a further test before publication could not lead a reader of the comparison report to be misled in any of the ways pleaded. Polaris' contention to the contrary is bizarre. Professor Newell gave evidence about the significance of a control condition. In drug trials it is typically the condition in which the placebo is given. In this experiment it is the condition that does not involve using the SoundShield device. It is the reference condition which can be confirmed by others doing similar experiments. It enables data ... from different experiments to be compared. If there is a problem in a particular experiment set up or the subjects from a particular experiment are different from another experiment then this will show up in a change in the control condition results. In the control condition the results of this experiment are almost identical to an earlier experiment done under the same conditions several months previously. In the control condition the average percentage of words correct in the first experiment was 94% and in this experiment it was 95%. The average percentage of phonemes correct in both experiments was 98%. The variability in both experiments was very similar the resulting standard errors were 1% in both cases for words and 0.4% (October experiment) and 0.5% (July experiment) for phonemes. The consistency in the control condition gives a high level of confidence that the experiment is reliably repeatable. Dynamic's own protocol for the comparison test did not require a control condition. Professor Blamey claimed that SoundShield was itself the control condition. The experimenters did not test for baseline performance (eg without any device) and therefore did not know the source of the errors and flaws in their experimental set up. It was put to Professor Blamey that he had represented to the Committee that experiments would be conducted without the algorithm being applied. In this condition, the condition without the algorithm was the SoundShield device. The condition with the algorithm was the M15 device. In other experiments that had been done under the same ethics approval, there has been one device which included the algorithm and another device that did not. In my view it is not appropriate to use a device with a different algorithm as a control to test a particular algorithm. Accordingly, the comparison test was not a properly conducted scientific test, and the representation that it was such a test was misleading. The representation was that the test was a properly conducted scientific test designed and undertaken with an appropriate level of skill, independence and expertise. The mere fact of a departure from the protocol does not in my view establish that the test was not a properly conducted scientific test. Professor Blamey explained why there were only eight subjects. The particular design that was used required equal numbers of lists and subjects in each condition. Because there were four conditions, the easiest way to design the test was to use a multiple of four --- either four, eight, twelve and so on. More importantly, he rejected the suggestion that testing eight subjects was inadequate to be of high statistical significance. This was because the software package used to do the statistical calculation took into account the number of subjects and the variability of the results, and at the end produced "an estimate of the statistical significance which was highly statistically significant". Based on that data, Professor Blamey said there was no need for concern. He agreed that eight subjects was a small sample, but said that even small samples can be highly significant if the difference is big enough. If "you're looking for a very small difference, then you need more subjects". That was not the case here; the difference was large enough for the result to be highly statistically significant. Professor Blamey returned to the statistical analysis in re-examination in response to a question as to why the July 2005 test did not cause him to redo the comparison test. He responded that there was no occasion to re-test because the statistical analysis indicated that there was a very low possibility that the results would have been obtained by chance if the two devices were actually performing at the same level. That analysis gave him confidence that a similar result would be obtained if the test was repeated in exactly the same way. He identified the computer program used to analyse the results statistically --- "Minitab" --- which became an exhibit. He explained that the program is an analysis of variants, which means that it looks at the variability of the different groups of data. One of the columns, which is labelled "P", is called the "significance level", or the probability that this particular result would have been obtained by chance. It showed that the probability that the difference between the results would have been obtained by chance was less than one in 1000. I accept this evidence, and conclude that Polaris has not established that the fact that there were eight rather than ten subjects had the effect that the test was not a properly conducted scientific test. Whether the departure from the randomisation regime meant that the test was not a properly conducted scientific test is difficult to determine because of the paucity of evidence as to the object of randomisation and the significance of a departure from it. Dynamic's protocol is not of much help. Under the heading "Speech Intelligibility: NAL Phonetically Balanced Word Lists", it says that "Noise levels and starting conditions will be randomised". Under the heading "Subjective Assessment", it says " all tests are performed in Random Order to test the systems capability of dealing with rapid change". Later, under the same heading, the protocol says "All noise levels and conditions will be randomly varied and assigned to each participant". It is not apparent whether the comments under the "Subjective Assessment" heading are relevant to speech intelligibility. The randomisation table itself is uninformative. It has a "Key" which might be expected to be explanatory of features of the table. These include "MI = Male voice 1" and "F3 = Female Voice 3". However neither appears in the table. Doing the best I can on the meagre material available, I have concluded that randomisation was an important part of the test. There must have been some significant reason for including it in the protocol. The fact that the protocol says that all tests are performed in random order so as to test the systems' capability of dealing with rapid change, suggests that failure to follow randomisation may affect the result of the comparison. Mr Fisher drew attention to what he described as three deficiencies in following the protocol. One was that there were only eight subjects. Professor Blamey gave an elaborate and persuasive response to this. See [181]-[182]. The second was that there was an error in the calculation of the results. This was not pleaded, though Professor Blamey explained that its impact resulted in a fraction of a percent change which could not have had a significant effect on the result. He explained why this was so. The third deficiency was that it appeared that the testing did not follow the randomisation table. Professor Blamey made no response to this. In his lengthy cross-examination on this topic, he conceded that there had been a failure to follow the table. Unlike his response to the other defects alleged, he did not assert that this failure had no statistical or other significance to the end result. On the basis of the foregoing matters, I infer that the departure from the table was of sufficient significance to result in the test not being a properly conducted scientific test. For completeness, I should say that I did not understand Professor Blamey to have contended that the Minitab statistical analysis "cured" any departure from the randomisation table. The first is that Dynamic was unfamiliar with the various settings contained within SoundShield when it conducted the comparison test. The second is that it did not enquire of Polaris as to the appropriate settings. In fact Dynamic knew of the existence of the internal settings, but not what to set them to. By the assertion that Dynamic was unfamiliar with the various settings within SoundShield, I think the pleader meant Dynamic did not know how they should be set. Polaris relied on a series of emails between the respondents as evidence that Dynamic did not know the proper settings. Mr Gherbaz and Mr McNeill said that the correspondents were not seeking information for use in the comparison test, but in order to test whether M15D in TT4 mode, using version 6 of the Xenica software, was TT4 compliant. In order to do this it was necessary to discover the settings actually in use by Telstra. While Dynamic knew that Telstra's TT4 requirements had been relaxed, it did not know the extent of the relaxation. Polaris disputed that the respondents' email enquiries about the proper settings were directed not to the upcoming comparison test, but exclusively to other tests as to M15D's compliance with TT4. If that were true, it said, enquiries would not have been made as to the settings in use at the non-Telstra confidential site. I do not need to resolve the dispute because, quite apart from the emails, I am satisfied that the respondents did not know all the proper settings before they did the comparison test. In fact they selected the correct headset profile, but the wrong receive gain setting for the 100mV input signal. Professor Blamey agreed that he did not know the correct receive gain setting for that signal. Mr Gherbaz agreed that he did not know the receive gain setting used by the confidential call centre. Mr McNeill agreed that the respondents had no direct knowledge of the settings in April 2005. Nevertheless Dynamic carried out the test without either asking Polaris for the correct settings or doing another test on different settings. Having regard to its incomplete knowledge of the relevant settings, the test set up representations were misleading because the test was not a properly designed and conducted scientific test, SoundShield was not appropriately set up for the test conditions and the results of the test were not an accurate reflection of the relative performance of the two devices in call centres. As Mr McNeill said: "If you don't know what the settings are, then you probably shouldn't have done the test in the first place". Standing alone, this does not establish that the test results were unreliable. Dynamic's Ethics Committee protocol contemplates that its employees may be used as subjects. Further, it appears from an article by three of the authors of the comparison report (Ms Wise, Mr Dickson and Professor Blamey) describing the comparative test, that it was a "blind paired comparison" of devices. That is to say the subjects did not know which device was being used to transmit the test material. See "Adaptive Range Optimisation for Telephony", Acoustics Australia vol 34 (December 2006) 117. Professor Blamey said the same thing in his oral evidence. It was not a double blind test. The tester knew which device was being tested. What I have said at [198] is applicable here. Dynamic did not know all the correct settings and did not have a copy of the Manual that would have filled in the gaps in its knowledge. In those circumstances, to publish a report was misleading in the respects set out at [198]. These representations are set out at [23]. The class in question consists of managerial staff contemplating the purchase of acoustic shock protection devices for use in call centres. They are likely to have a familiarity with call centre conditions and the way they operate. They will know the types of phone calls their operators receive, and be aware of the phenomenon of acoustic shock and the means of reducing the risk of that shock by the use of devices such as SoundShield. They are also likely to be aware that SoundShield is commonly used in Australian call centres. The report states that the test was carried out using the Phonetically Balanced Monosyllable (PBM) word test with typical call centre background noise levels. The subjects were asked to repeat all the words they heard. A member of the class of readers referred to above would know that call centre operators do not hear random words. They hear sentences providing context. Their minds will deal with the problem of a muffled, distorted or missed word by resort to the context in which it appears. Potential gaps will thus be filled. There was evidence to this effect, and common experience of telephone use and conversation in general supports it. Call centre operators do not hear "scythe", which might in isolation be heard as "size", followed by "pit" which might be heard as "hit". They hear a whole sentence. On the above basis, the respondents submitted that a member of the relevant class would not carry away from a reading of the report a representation that SoundShield was unsuitable for use in call centres. Rather, the reader would take away the actual message of the comparison report, namely that M15D's intelligibility was much better than SoundShield's on the PBM word test administered to the subjects. Mr Guest did not read the report in that way. When explaining his initial concerns about it, he focused on the percentage errors in the word scoring with 55 and 65dBA background noise compared with the 90% at 55dBA background noise required by TT4. He said that with a score of that nature, where the error would be one word in five, "we wouldn't be selling any SoundShields". Mr Guest's "one word in five" error rate derives from reading the comparison report as stating that at 55-65dBA operators using SoundShield will mishear 18 to 26% of words spoken to them. That is not what the report says. Professor Blamey stated the obvious when he explained that the score on a PBM word test does not reflect the error rate for sentences in a call centre environment. He said that an 80% word score means that users will still be scoring close to 100% on sentences in a typical call centre environment. Mr Guest would seem to have derived his "one in every five words" error rate from Mr Fisher's evidence to that effect. Professor Blamey's evidence, which I accept, disposes of his opinion on the error rate. However this error does not itself mean that the question posed at [202] should be answered in the negative. Mr McNeill did not read the report as implying that SoundShield was unsuitable for use in typical call centre environments, or that it would be "ineffective" for such use. So, you know, people in call centres don't write down word lists. Taking into account the characteristics of the class of persons likely to read and be influenced by the comparison report, I am of the view that a member of the relevant class would take away from the report that the authors were stating that SoundShield was unsuitable for use in call centres because of its poor intelligibility when background noise is present. It is true that the report concerned a PBM word test, and that call centre operators deal with conversation which provides a context that word lists do not. Nevertheless, the passage relied on in particular (b) at [201] transposes a word test based result into a call centre environment, and uses that result for the conclusion that for SoundShield to achieve 90% intelligibility, the background noise level of the call centre would have to be reduced to an unrealistic level. I do not agree with Plantronic's submission that the report's statement that SoundShield is commonly used in Australian call centres is inconsistent with an implication that the device is not suitable for such use. In its particulars Polaris also relies on Figures 1 and 2 in the report which are set out below. There was a faint suggestion by Polaris that the dotted line in Figure 1 could be read as representing an actual measurement. In my view no attentive reader of the relevant class would read the Figure in that way. The text describes the dotted line as an extrapolation of the PBM results . Mr Fisher and Professor Blamey disagreed as to the significance of the extrapolation in Figure 1, made by the dotted straight line to show a correlation between increasing intelligibility score and reducing background noise. In his first affidavit Mr Fisher described the extrapolation as "linear", and said it was accepted in the scientific literature that it is incorrect to linearly extrapolate percentage correct scores and noise levels, because this is a non-linear function. In response, Professor Blamey referred to Figure 6.6 in TT4 which shows intelligibility as a function of noise level. He said that in its extrapolation Dynamic approximated the relationship as shown in that figure with a straight line over a 10dB range of background noise level. He said that if Dynamic had used the non-linear function in Figure 6.6, this would have been to the disadvantage of SoundShield. In order to achieve 90% speech intelligibility, the background noise would have had to be reduced even lower than 40dBA. Replying, Mr Fisher said resort to Figure 6.6 was "completely inappropriate" because it related to face to face conversation and not to the situation in which there is "monaural presentation of band limited, equalised and amplitude compressed speech". In his third affidavit Mr Fisher explained further why in his first affidavit he said a linear extrapolation was incorrect. He said one needs to consider the extremes of noise levels to realise that a linear relationship is impossible. Once the noise becomes inaudible, no further reduction in its level will improve speech intelligibility, and once the noise is so great that it has made the speech inaudible, the speech intelligibility score will fall to zero and no further increase in the noise level will reduce the performance. Professor Blamey's oral response was that Dynamic's extrapolation did not extend above 100 percent or below zero percent. In cross-examination Polaris' counsel showed Professor Blamey an extrapolation downwards from the 76% correct result to 105dBA and put to him that it was unrealistic to extrapolate on a linear basis. He replied that counsel's extrapolation was certainly unrealistic. This written and oral exchange consumed much time, generated many words, but threw little light on the significance of the linear/non linear controversy. I need not attempt to resolve the disagreement between the experts. As I have said, Figure 1 is a pictorial representation of the words in particular (b). The Figure and the sentence explain each other, and the sentence relied on in particular (b) carries the implication asserted by Polaris. Although its particulars rely on Figure 2 in the report, I did not understand Polaris to have persisted in that reliance. In any event, in view of what I have said about the sentence in particular (b), I need not spend time on Figure 2. The question is whether the comparison report implies that SoundShield does not comply with this requirement. Professor Blamey accepted that the 90% sentence in the report was "derived from TT4". This is the part of the report in which the informed reader will be most interested --- the result of the comparison test. That reader, especially one with a Telstra affiliation, would recognise the 90% at 55dBA as Telstra's speech intelligibility requirement, and would take from the assertions that to achieve an intelligibility score of 90% with SoundShield, the background noise would have to be reduced to an unrealistic 40dBA, that M15D easily achieved 90% intelligibility with 55dBA background noise, and that SoundShield did not comply with Telstra's speech intelligibility requirement. The 90% at 55dBA has only one reference point to anyone with knowledge of the specifications applicable in Australia, and that is TT4. Dynamic was promoting the report as being concerned with TT4 compliance. It contained the statement that M15D was suitable for TT4 compliance. Dynamic sent a copy of the report to Telstra asserting, wrongly according to Professor Blamey, that the prototype M15D was TT4 compliant. If this particular stood alone, I would not take it to imply that SoundShield was not TT4 compliant. There was much evidence about market awareness of SoundShield. It had, and probably retains, market dominance. A vast number of sales have been made since 2001 --- at least 60,000. On the other hand, M15D was a new product, unknown to the market. In those circumstances, the report's qualified and knowledgeable audience would not see in a statement about M15D an implicit statement to the opposite effect about SoundShield. However, the particular (c) sentence does not stand alone. In my view it follows from what I have said about the particular (b) sentence and the one following it (see [218]), that the report implies that SoundShield is not suitable for TT4 compliant operation. That is because, while speech intelligibility (90% at 55dBA) is only one TT4 requirement, non-satisfaction with it results in a device's non-compliance, even if all other requirements are satisfied. The comparison report is concerned only with intelligibility for speech. G616 has no intelligibility requirement. The assertions referred to at [218] give rise to no implication about SoundShield's compliance with G616. An informed reader would not see in particular (c) an implication that SoundShield was not G616 compliant. I refer to what I have said in relation to TT4 at [220]. Were the unsuitability representations misleading? I have found that representations (a) and (b) at [23] were made, and that representation (c), so far as it concerns TT4 compliance, was made. The next question is whether they were misleading. Only three of the particulars to par 10G of the statement of claim were pursued. The first is that Telstra has purchased SoundShields since 2001 and continues to do so. I am satisfied that it would not have done this on a past and continuing basis if the devices were unsuitable for use in call centres because of poor intelligibility where background noise is present. Indeed it was common ground that SoundShield was capable of operating satisfactorily in call centres on MID with an input of 33-36mV. The second particular is that since 2001 more than 60,000 SoundShield devices, set up by appropriately trained people utilising the Manual, have been installed in call centres throughout Australia without any reported intelligibility problems. Mr Guest said complaints about poor intelligibility were "very rare". When there was a complaint, Polaris checked that the settings were properly programmed for the customer's premises. Adjusting and correcting the settings usually resolved the problem. Mr Guest's inspection of warranty returns disclosed no case of return as a result of complaints about intelligibility. Mr Minski said customers had intelligibility problems "quite often" during his five years with Polaris. But he was speaking of teething difficulties and not substantive problems. Although the evidence does not establish that there were no reported intelligibility problems over the period during which SoundShield was sold, I am satisfied that apart from teething problems experienced at or shortly after installation, there were very few complaints about intelligibility, and that these were sorted out by Polaris' installers. That is further evidence (ie in addition to the Telstra custom) that SoundShield is suitable for use in call centres as aforesaid. The third particular is that when set up by an appropriately trained person utilising the Manual, SoundShield achieves speech intelligibility of 90% in call centres with background voice chatter to 55dBA. Polaris relies on Mr Fisher's January 2006 and July 2007 tests and Professor Newell's October 2007 test, which it said demonstrated compliance with the 90% intelligibility requirement. In the January 2006 test Mr Fisher did not use the word test specified in TT4. He used phonemes instead of words. Polaris accepted that this was not a complete test of the Telstra intelligibility requirement. Subject to one issue with which I deal at [230], Mr Fisher's 2007 test demonstrated compliance with the 90% intelligibility requirement. This time he used the word lists specified in TT4. However Polaris relied primarily on Professor Newell's test. That used the limiting requirements, word lists and background noise levels specified in TT4. The input signal of 48mV was within the range in Table 5.9. Sixteen test subjects were involved. Professor Newell's test was scored by word correct and incorrect and by phoneme correct and incorrect. The 90% requirement was met in all conditions however scored. Subject to the issue referred to at [230], Professor Newell's test shows that SoundShield complies with the Telstra intelligibility requirement. The reservation referred to at [228] and [229] relates to Professor Blamey's claim that the input level used in Mr Fisher's test (40mV) and in Professor Newell's test (48mV) did not demonstrate that SoundShield could accept the range of inputs specified in Table 5.9 of TT4. This table is considered in detail (at [145]-[159]) in connexion with the test set up representations. Professor Blamey's opinion was that the table "suggests that in every setting of the device which is designed to be used with typical telephone in call centres, the device ... should be able to accept 100mV input signal and achieve 90 per cent speech intelligibility with that input signal". For the purpose of dealing with the unsuitability requirements, I do not need to come to a conclusion about this very controversial table. That is because I am satisfied that if set up by an appropriately trained person using the Manual, SoundShield would achieve speech intelligibility of 90% in call centres with voice chatter to 55dBA. If the installer chose an input in the range 33-48mV, the device would be set to MID. If the customer insisted on an input of 100mV, the installer would select the HIGH setting in accordance with the instruction in the Manual that "High will be selected for hosts/consoles with a high output level". There was consistent evidence from the Polaris camp that for a 100mV input the HIGH receive gain setting should be used. In relation to (c), "suitable" is the word used in Polaris' pleadings and in the comparison report. By that word, I understand Polaris to mean that SoundShield is capable of meeting the intelligibility standard required by TT4, as opposed to being TT4 compliant in the more general sense. As appears above, Professor Blamey did not dispute that the device was able to meet the Telstra intelligibility requirement at "lower input levels". The case was not concerned with SoundShield's compliance with TT4 in respects other than speech intelligibility. Hence the words "so far as speech intelligibility is concerned" in (c). However Polaris has not established that the difference between the two settings made speech heard through the M15D significantly more intelligible than that through SoundShield. Thus it has not established that the testing of the two devices at their lowest limiting settings provided an inappropriate comparative basis for testing for intelligibility of speech. The ethics approval representation was made, but was not misleading or deceptive or likely to mislead or deceive. The test set up representations were made. The representations pleaded in pars 10H(a), (c) and (d) were misleading or deceptive or likely to mislead or deceive by reason of the fact that: the test upon which the comparison report was based did not contain a suitable control condition; in conducting the test, Dynamic did not follow the randomisation table in the test protocol; and Dynamic did not inform itself adequately of the appropriate settings for SoundShield in the test conditions, nor did it enlist the assistance of a person appropriately trained in the installation of SoundShield. The unsuitability representations pleaded in par 10F(a) and (b) of the statement of claim were made. It was also represented that SoundShield was not suitable for TT4 compliant operation. There was no representation that the device was not G616 compliant. The representations were misleading or deceptive or likely to mislead or deceive. Polaris has thus made out its case under s 52 of the Act in relation to the unsuitability representations. Polaris also pleaded its case in relation to the lowest limiting setting and unsuitability representations in reliance on s 53(a) of the Act, namely that the respondents falsely represented that the two devices were each of a particular comparative standard, quality or grade. I did not understand it to be in dispute that if the unsuitability representations were found to have been made and were misleading, that would constitute a contravention of s 53(a). In any event, I have concluded that s 53(a) was contravened. The representations that SoundShield was unsuitable for use in call centres, did not comply with Telstra's intelligibility requirement and was not suitable for TT4 compliant operation, were all false representations that SoundShield was of a particular standard, quality or grade, in that it did not measure up to levels that were required for an acoustic limiting device to be suitable for use in call centres, to comply with Telstra's intelligibility requirement and to be suitable for TT4 compliant operation. Polaris has alleged breaches of s 9 and s 12(a) of the Fair Trading Act 1991 (Vic). What I have said about s 52 and s 53(a) of the Act is applicable to ss 9 and 12(a) as well. Dynamic admits that it published and distributed the report. Plantronics admits that it provided a copy of the report to Westpac and Siemens, but denies that it caused the report to be published and that it adopted and disseminated the statements and representations contained in it. I am satisfied that the report was prepared by Dynamic in consultation with Plantronics. Mr Gherbaz suggested amendments and modifications to the document initially proposed by Dynamic. Plantronics was not a mere conduit for the carriage of information to those who received the report. The recipients would regard Plantronics as having adopted its contents, and thus as having made the representations contained in it. See Gardam v George Wills & Co Ltd [1988] FCA 194 ; (1998) 82 ALR 415 at 427. I did not understand this matter to have been in dispute. I will stand the matter over in order that the parties have an opportunity to consider the orders that should be made to give effect to these reasons, and to deal with the question of costs. If by 25 August 2009 the parties are unable to agree on the orders that should be made, Polaris should within seven days of that date file and serve a notice of the orders it proposes should be made together with an outline of submissions in support thereof, not to exceed five pages in length. Dynamic and Plantronics should each, within seven days of receipt of Polaris' notice and outline, file and serve a notice of the orders it proposes should be made together with an outline of submissions in support thereof, not to exceed five pages in length. I certify that the preceding two hundred and forty-two (242) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg.

misleading or deceptive conduct comparative advertising acoustic protection devices whether report on comparative merits of devices contained misleading representations trade practices

The judgment of the Federal Magistrates Court had dismissed an application for review of a decision of a Registrar to make a sequestration order against Mr Murdaca's estate. 2 Stone J had earlier made an order that the sequestration order against Mr Murdaca's estate be stayed pending the outcome of the appeal to this Court, or further order of the Court, on certain conditions. Those conditions were designed to ensure that the value of Mr Murdaca's interest in a property, which I understand to be his home, was maintained and that he delivered up vacant possession of that property to his trustee in bankruptcy should his appeal be dismissed. I note, incidentally, that her Honour ought not to have been invited to stay the sequestration order (s 37(2) of the Bankruptcy Act 1966 (Cth)). The appropriate order was a stay of proceedings under the sequestration order ( De Robillard v Carver [2007] FCAFC 73 at [125] ). 3 Mr Murdaca has not given vacant possession of the property to his trustee in bankruptcy and has been served with a writ of possession. He now seeks orders allowing him to remain in possession of the property pending the determination of an application made by him to the High Court for special leave to appeal from the judgment of this Court. Presumably, if he obtains special leave to appeal, he will make a further application for an order to maintain the status quo. The Chief Justice has now directed that the appellate jurisdiction of the Court in relation to the appeal be exercised by a single judge. It seems to me that the order now sought by Mr Murdaca invokes the appellate jurisdiction of the Court in relation to his appeal and thus that I may determine the present application and need not refer it to a Full Court. In Jennings Construction Limited v Burgundy Royale Investments Pty Ltd (No 1) [1986] HCA 84 ; (1986) 161 CLR 681 at 684 Brennan J made clear that such an application should in the first instance be made to the court below which is familiar with the matter rather than to the High Court. In each case when the Court is satisfied a stay is required to preserve the subject matter of the litigation, it is relevant to consider: first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and fourthly, where the balance of convenience lies. I understand Brennan J's reference to the prospect of a grant of special leave being 'substantial' to be intended to convey no more than that there should be a real, as opposed to a remote or insubstantial, possibility of special leave being granted. It also seems to me that the interest of the administration of justice could be understood to require consideration by the High Court of the judgment because authoritative guidance from the High Court, or indeed the Full Court of this Court, is not presently available on that question of law (s 35A of the Judiciary Act 1903 (Cth)). 9 The act of bankruptcy on which the creditor's petition was founded was Mr Murdaca's alleged failure to comply with a bankruptcy notice. The bankruptcy notice required payment of a judgment debt within 21 days after the service of the notice. At the time of issue and service of the bankruptcy notice, execution of the relevant judgment had not been stayed (see s 41(3)(b) of the Bankruptcy Act ). However, an ex parte stay of proceedings in respect of the judgment was granted within the period of 21 days after the service of the notice; that is, before the commission by Mr Murdaca of the purported act of bankruptcy on which the creditor's petition was founded. 10 The learned Federal Magistrate rejected a submission that the stay of proceedings which had been ordered by the Local Court of New South Wales, precluded the creditor from 'pursuing the petition' . His Honour took the view that the stay order could not affect the rights of the creditor as the bankruptcy notice had been issued prior to the stay order. The reasons for judgment suggest that the Federal Magistrate placed weight on three authorities none of which was directly on point. However, as discussed below, there was a judgment of this Court directly on point to which his Honour's attention should have been drawn and which supported the view taken by his Honour. 11 I turn first to the authorities to which the Federal Magistrate relevantly referred. Re Moss; Ex parte Tour Finance Ltd [1969] ALR 285 is a decision of Gibbs J sitting as the Federal Court of Bankruptcy. The case concerned whether a stay that had been lifted before the issue of a bankruptcy notice nonetheless prevented the judgment from being described in the bankruptcy notice as a judgment 'the execution of which had not been stayed' . His Honour concluded that it did not. It was in that context that Gibbs J described the time of the issue or the service of the notice as the critical time for the purpose of s 41(3)(b) of the Bankruptcy Act . 12 The judgments of the Full Court of the Federal Court in Wiltshire-Smith v Mellor Olsson (1995) 57 FCR 572 and of Weinberg J in Lindholt v Merritt Madden Printing Pty Ltd [2002] FCA 260 similarly were not concerned with a situation in which a judgment was stayed between the date of service of a bankruptcy notice and the expiry of the time provided for compliance with the notice. 13 The authority that should have been drawn to the attention of the Federal Magistrate is Schekeloff; Ex Parte Schekeloff v The Hopkins Group Pty Limited (1989) 22 FCR 407. In that case Burchett J gave consideration to a factual situation relevantly indistinguishable from the present. His Honour concluded that, for the purposes of s 40(1)(g) of the Bankruptcy Act , the time for consideration whether a judgment on which a bankruptcy notice is founded has not been stayed is the time of issue, or at the latest, service of the notice. In reaching this conclusion Burchett J placed considerable weight on Re Dennis; Ex Parte Dennis (1888) 60 LT 348, a decision of the Court of Appeal concerning the service of a garnishee order nisi on the judgment debtor after the service of a bankruptcy notice on him. 14 Schekeloff has been referred to in a number of Federal Court judgments with apparent approval, but in none that I have been able to identify has a comparable factual situation been under consideration (see, for example, Re Frasersmith; Ex Parte J Blackwood & Son Limited (1992) 36 FCR 144 (Beaumont J); Re Roberts; Ex Parte Bower (1994) 48 FCR 350 (Einfeld J); Re Johnson; Ex Parte Johnson v Tonkin (1994) 53 FCR 70 (Spender J); Re Sgambellone; Ex Parte Jacques (1994) 53 FCR 275 (Drummond J)). 15 In my respectful view, the correctness of the decision in Schekeloff is open to reasonable question. It is at least arguable, in my view, that a debtor does not commit an act of bankruptcy by not complying with a demand to pay a judgment debt which becomes unenforceable during the period allowed for compliance with the demand --- albeit that the debt had been due and payable at the dates of issue and service of the bankruptcy notice. 16 Mr Murdaca acted for himself before the Federal Magistrates Court although he had legal representation at the hearing of his appeal. The grounds of appeal set out in his notice of appeal were unhelpfully drawn and not properly particularised. I assume that they were drafted by Mr Murdaca. Stone J understood Mr Murdaca to claim that the Federal Magistrate erred by failing to go behind the judgment of the lower court and further erred in exercising his discretion in favour of making a sequestration order. 17 Her Honour declined to allow Mr Murdaca to adduce on the appeal evidence in addition to that adduced in the Federal Magistrates Court. In general the Court must be satisfied that the evidence could not, with reasonable diligence, have been adduced at the trial; Council of the City of Greater Wollongong v Cowan [1955] HCA 16 ; (1955) 93 CLR 435 at 444. Moreover the evidence that was not presented at the trial must have sufficient probative value that it is likely to have produced a different result had it been presented at the trial; Guss v Johnstone [2000] FCA 1455 , Freeman v National Australia Bank Limited [2003] FCAFC 200. Although the fact and date of the stay order had been established before the Federal Magistrates Court, the content of the affidavit which Mr Murdaca sought to have received in evidence on his appeal could have been seen as throwing light on at least one of the bases on which he sought to have the judgment of the Federal Magistrates Court set aside. 20 In any event, the issue identified above is a question of law capable of being addressed on the evidence that was adduced before the Federal Magistrate. It does not appear that it was argued before his Honour that the dismissal by a Registrar of Mr Murdaca's application to have the bankruptcy notice set aside placed any impediment in the way of his challenging the alleged act of bankruptcy on which the creditor's petition was founded ( Makhoul v Barnes (1995) 60 FCR 572). 21 I conclude that Mr Murdaca's prospects of success on his application for special leave are sufficiently real to be characterised as substantial in the sense discussed in Burgundy Royale [1986] HCA 84 ; 161 CLR 681 (see [7] above). After taking the opportunity to review Mr Murdaca's records of payments made by or on his behalf, including payments of rates, utility charges, strata levies and mortgage instalments, the trustee did not oppose the grant of a stay of proceedings under the sequestration order so as to allow Mr Murdaca to retain possession of his home. His home secures repayment of a mortgage debt. The judgment debt is modest when compared with the equity apparently held by Mr Murdaca in his home. If the property is sold, costs, including agent's fees and commission and trustee's remuneration, will be incurred. Should Mr Murdaca ultimately succeed on an appeal to the High Court it may prove impossible for the status quo to be restored. The writ of possession directed to the Sheriff of New South Wales dated 31 May 2007 be stayed until the hearing or earlier determination of the appellant's application to the High Court for special leave to appeal from a judgment of this Court dated 30 April 2007. 2. Proceedings under the sequestration order made in respect to the appellant's estate be stayed until the hearing or earlier determination of the appellant's application for to the High Court for special leave to appeal from a judgment of this Court dated 30 April 2007.

failure to comply with bankruptcy notice which required payment of judgment debt within 21 days judgment stayed between date of service of bankruptcy notice and expiry of time provided to comply with the notice sequestration order nevertheless made against appellant's estate following unsuccessful appeal, appellant served with writ of possession order sought to stay writ of possession and proceedings under the sequestration order pending determination of special leave application consideration of prospect of success of special leave application, loss to the respondent and balance of convenience held: stay of writ of possession and proceedings under sequestration order granted bankruptcy appeals

The proceedings are urgent because the applicant, Ms George, seeks leave to appeal against an interlocutory decision of Burnett FM to refuse to stay a three-day hearing in the proceedings in the Federal Magistrates Court, which hearing is listed to commence before his Honour on the morning of Monday 8 December 2008, and a further stay of those proceedings. 2 In Court this morning Ms George was self-represented, and the first, second, third and fourth respondents were represented by Counsel. An Amended Application before the learned Federal Magistrate, filed on 7 November 2008 by William John Fletcher as trustee for the bankrupt estate of Ms George (the trustee in bankruptcy), is currently listed for hearing in the Federal Magistrates Court at Brisbane on 8 December 2008. A declaration that the Heads of Agreement dated 19 February 2008 remains valid and enforceable. 2. A declaration that as at 24 February 2006 the legal and beneficial ownership of 130 Landing Road, Moggill vests in the trustee. 3. A declaration that there is no trust in favour of the bankrupt's minor son or any other person in respect of that property or any property stored or located there. 4. A declaration that as at 24 February 2006 the legal and beneficial ownership of a Toyota Landcruiser and of a Hanoverian mare known as Stellamara vests in the trustee. 5. A declaration that the deed of settlement between the trustee and Susan Jane Wilson dated 28 October 2008 remains valid and enforceable. 6. An order that Susan Jane Wilson be joined to the proceeding. 7. An order that Dr Peter Ironside Pty Ltd, Peter Ironside and the National Australia Bank be joined to the proceeding. 8. That as at 24 February 2006 the legal and beneficial ownership of the items listed in Schedule A vests in the trustee. 9. Any further or such order the Court deems fit. 4 The application before me arises from a hearing in the substantive proceedings on 18 November 2008 before Burnett FM, where Ms George sought a stay of hearing of particular matters listed for hearing on 8 December 2008. The Heads of Agreement dated 19 February 2008 remain valid and enforceable. 2. As at 24 February 2006, the legal and beneficial ownership of lot 30 on SP145714 County of Stanley, Parish of Moggill, title reference 50440445 (the Landing Place property) vests in the applicant as trustee of the bankrupt estate. 3. As at 24 February 2006 the legal and beneficial ownership of items listed in schedule A vests the trustee of the bankrupt estate. 5 These matters related to paras 1, 2, 3 and 8 of the trustee in bankruptcy's Amended Application filed 7 November 2008. 6 The application for a stay in the substantive proceedings before his Honour resulted from the commencement of separate proceedings by Ms George in the Supreme Court of Queensland (the Supreme Court proceedings) in April 2008. The Supreme Court proceedings involved claims by Ms George for declarations that she was trustee for her son in respect of property the subject of the substantive proceedings, in particular the Landing Place property. I note that the learned Federal Magistrate found (at [9]) that there was a common substratum of facts and issues arising in relation to claims by Ms George in the Supreme Court of Queensland, and claims by the trustee in bankruptcy in the substantive proceedings. This finding is not disputed by the respondents before me, although in Court this morning Ms George disputed his Honour's finding that she was not necessarily in disagreement with this finding. I understand from submissions of Counsel for the trustee in bankruptcy that, after the trustee in bankruptcy was joined as a party to the Supreme Court proceedings by order of the Court, there was commonality between the parties to the Supreme Court proceedings and the parties to the substantive proceedings. The joinder of the trustee in bankruptcy to the Supreme Court proceedings is not in dispute. 7 The application brought by Ms George before his Honour for a stay of the substantive proceedings was listed for hearing before his Honour on 18 November 2008. It is not in dispute that, on that morning, Ms George applied for an adjournment of the stay application for a number of reasons including (in summary) a power cut which had affected her ability to be ready for the hearing, the fact that she had been served with material by the respondents approximately 2 hours 20 minutes late, and that she was ill on that day with medical certificates to support that assertion. 8 The Federal Magistrate refused to adjourn the hearing of Ms George's application for a stay and, after hearing the application, refused it. His Honour's reasons appear in Fletcher & George (No 5) [2008] FMCA 1628. The determination of title to the Landing Place property by either the Federal Magistrates Court or the Supreme Court of Queensland would determine the ultimate issues. If the title were properly attributable to the bankrupt the assets would vest in the trustee in bankruptcy; alternatively if the property were held by the bankrupt on trust other rights would follow (at [9]-[10]). • It was accepted by all parties save Ms George that the Federal Magistrates Court and the Federal Court were invested with exclusive jurisdiction under the Bankruptcy Act 1966 (Cth) ("Bankruptcy Act"), and that the Supreme Court has no jurisdiction in respect of such matters (at [11]). His Honour referred to Meriton Apartments Pty Ltd v Industrial Court of New South Wales [2008] FCAFC 172 as authority for the proposition that contests concerning matters within s 31 Bankruptcy Act fall within the exclusive jurisdiction of the federal courts. His Honour found that the matter of real property and chattels as particularised in paras 1, 2, 3 and 8 of the Amended Application filed 7 November 2008 involved questions of determining the title of the trustee in bankruptcy and must be settled in the federal courts, or alternatively falls within the accrued jurisdiction of the courts (at [13]). Fencott v Muller [1983] HCA 12 ; (1983) 152 CLR 570 and Philip Morris Inc v Adam P Brown Fashions Pty Ltd [1981] HCA 7 ; (1981) 148 CLR 457 were also relevant authorities. • Notwithstanding the absence of commonality of parties because at that time the trustee in bankruptcy was not a party to the Supreme Court proceedings, the interest of the trustee in bankruptcy in the Supreme Court proceedings had been flagged and identified, and the trustee in bankruptcy has reserved his position. (As I have already observed the trustee in bankruptcy was subsequently joined to the Supreme Court proceedings by order of that Court. It was appropriate that the matter should proceed to trial on the due date. Denial of Justice and abuse of process in the judicial system by Respondents solicitor who utilized seizure orders to breach legal privilege and obtain advantage in the Supreme court proceedings 3747/08. 2. Professional Misconduct by Respondents solicitor --- breach of legal privilege --- proceedings compromised along with the respondents application dated 7/11/08 grounds for dismissal. 3. Illegal request/execution of 3 seizure warrants not in accordance with existing orders of the Supreme court dated 9/5/08 which required minimum 4 day execution of service upon the appellant prior to any hearing or determination of the matter. 4. Illegal detainment of appellant in the Brisbane Watch house not in accordance with the sect 78 of the Bankruptcy act to obtain advantage in the proceedings by the respondent. The Respondent be prohibited from proceeding with a hearing of the allegations particularized in their application filed 7/11/08 points 1,2,3,7,8,9 at trial date scheduled 8-1- December 2008. That these proceedings be permanently stayed and or dismissed pending the outcome of the Supreme court proceedings 3747/08 trial March 2009. 2. The trial dates 9-10 December 2008 be vacated in these proceedings and the matters be limited to the Horse named Stellamarra, Cabernet, Toyota Land cruiser, Horse float tools of trade; Rocking Horse of minor, assets of deceased estate JK Cordes --- silverware and watch. 3. A declaration that the true material owner of Stellamarra and the Toyota Land cruiser is SJ Ironside. Further declaration that the true material owner of Cabernet and the Horse float and equipment, and imported semen is Richard Siebert. A further declaration that the Childs rocking horse be returned and is owned by minor Alexander George. A further declaration that the deceased estate items --- silverware and watch of the late Kathleen J Cordes be returned to the appellant or damages awarded. 4. That the second, third, fourth respondent, sixth respondent be released from these proceedings. 5. Orders dates 29/10/2008, 31/10/2008, 3/11/08, 5/11/08, 6/11/08, 18/11/08 at Brisbane along with part of judgment delivered on 4/11/08 orders 3,4 5,6,7,8,9 and part of judgment delivered on 12/11/2008 being orders 3,4 be set aside. 6. Costs and damages be awarded to the appellant. Under Federal Court act 1976 section 29 request a stay on the hearing the allegations particularized in the Respondents application dated 7/11/08 points 1, 2, 3, 7, 8, 9 pending the outcome of the notice of appeal dated 24/11/08 the Supreme court proceedings 3747/08 and the investigation by the legal commissions and the crown prosecutor on solicitor Nick Humzy-Hancock solicitor for the 1st respondent. Or in the alternative The Respondent be prohibited from proceeding with a hearing of the allegations particularized in their application dated 7/11/08 points 1, 2, 3, 7, 8, 9 at trial date 8-10 December. That these proceedings be permanently stayed and or dismissed pending the outcome of the Supreme court proceedings 3747/2008 trial date March 2009 which will determine all of these issues. 2. That the second, third, fourth respondents be released or excused from the proceedings. 4. The appellants seeks an abridgement of time for service of the notice of motion upon the respondents to assist the parties set down trial matters at tomorrow directions hearing for points 1 and 2. The grounds are found in her affidavit filed 1 December 2008. The affidavit is 265 pages in length and contains detailed assertions by Ms George in relation to the history of the substantive proceedings, the Supreme Court proceedings, and other proceedings arising from her bankruptcy. As a result of the format of the affidavit Deputy District Registrar Belcher directed Ms George to file and serve on each other party brief written submissions in support of her application for leave to appeal of no more than five pages, including particularised grounds on which the application was based. Late service of an application dated 29 October 2008 by the respondents in the Supreme Court proceedings. 2. The fact that the applicant was not served with an application for search and seizure, but rather an order was made ex parte by the Federal Magistrate, which in turn caused prejudice to the applicant. 3. The Federal Magistrate allowing inadmissible evidence. 4. The applicant being illegally detained in the Brisbane Watchhouse. 5. Illegal and improper execution of the search warrants by a solicitor for the respondents contrary to the Bankruptcy Act . 6. Abuse of process, including that the Supreme Court proceedings have substantially progressed and the applicant cannot afford to refile the material in the Federal Magistrates Court. 7. Misconduct by a solicitor for the respondents and resultant injustice to the applicant. 8. Breach of legal privilege by a solicitor for the respondents. 9. The fact that the Supreme Court proceedings are not ready to go to trial because discovery has not yet concluded in that Court. 10. The applicant still needs to file two more expert witness statements, one supporting affidavit and one final affidavit, which will not be completed until January 2009. Further, eight witnesses need to be called and no subpoenas have yet been issued. 11. The applicant has between 4,000 and 5,000 documents to read, in addition to filing new documents to support her case, which will be attended to in December 2008. 12. The applicant's pro bono counsel will be available in early February to settle her pleadings. 13. Any delays in the matter being ready for trial are not the fault of the applicant, but relate to problems of disclosure. 14. The orders of the Federal Magistrates court can simply not be complied with by the applicant without injustice and prejudice and a denial of her rights to receive disclosure. The orders require her to close and file pleadings but which she is not capable of doing without assistance from her pro bono counsel. 15. The National Australia Bank supports the matter remaining in the Supreme Court of Queensland. 16. Fencott v Muller is not relevant because it relates to the Trade Practices Act 1974 (Cth). 17. The matter properly belongs in the Supreme Court of Queensland because it is a civil matter comprising of contract law, law of equity, trusts and fraud and has no elements of bankruptcy to be determined. Parliament can not confer jurisdiction on a federal court with respect to a matter simply because it is associated even closely associated with one of the matters mentioned. 18. The respondents are inappropriately forum-shopping. The first respondent was aware of the Supreme Court proceedings for 8 months before filing an application in the Federal Magistrates Court. 19. There is no commonality of parties between the Supreme Court proceedings and the substantive proceedings. 20. The applicant would not receive a fair trial in the Federal Magistrates Court. 15 The applicant in this case is self-represented, and as is sometimes the case with self-represented litigants has adopted a "scatter-gun" approach to her case. The applicant has cited a significant number of grounds in support of her application for leave to appeal. However in my view key questions are those I have stated in the previous paragraph, and in that light it is clear that the application for leave to appeal must be dismissed because I find no fault in his Honour's reasoning. 16 The decision of the Federal Magistrate was to refuse an application for a stay of proceedings listed for hearing on 8 December 2008. The applicant's grounds in support of her application are largely irrelevant to that decision. I also consider that Ms George has misunderstood the relevance of principles articulated in Fencott v Muller and Philip Morris to these proceedings. The trustees in bankruptcy of the estate of the husband denied any entitlement in the appellant trustee to an equitable mortgage of Torrens title land and contended that the appellant's claim related to a provable debt under s 82 of the Bankruptcy Act . The appellant required leave under s 58(3)(b) to commence the proceeding. [112] Applying the earlier authorities, the court described s 27 as the "seminal" source of the court's jurisdiction in bankruptcy [17]. The court held that s 27 fell to be understood in context and that s 31(1)(f) elucidated what the drafter "had in mind as falling within 'bankruptcy' in s 27(1) as defined in s 5(1)" [18]. Thus, applications declaring for or against the title of the trustee to any property would be encompassed within the s 27 concept of jurisdiction in bankruptcy. The court distinguished Sutherland v Brien on the ground that s 31(1)(f) made it plain that as against the trustees in bankruptcy, the proceeding before the Full Court was within s 27 as a proceeding under or by virtue of the Bankruptcy Act . Many of those questions will depend for their answers on the provisions of the Bankruptcy Act . One class of such questions relates to the nature of the rights of persons to property. Austin J held that nothing in the Bankruptcy Act precludes the exercise in such cases of the well established jurisdiction of courts other than those mentioned in s 27(1) "to determine and declare rights to property and make orders as to its destination". But that undoubted jurisdiction will yield to any aspect of the jurisdiction for determination and declaration of such rights which the Bankruptcy Act itself places in the hands of s 27(1) courts. In Scott v Bagshaw the Full Federal Court noted that among the matters so placed in the hands of those courts, is "applications to declare for or against the title of the trustee to any property". Because this is one of the matters s 31(1) of the Act requires "the Court" to hear an open court, it is identified as a matter within the definition of "bankruptcy" and thereby seen to be within s 27(1). That aspect of the general jurisdiction "to determine and declare rights of property and to make orders as to its destination" which entails "applications to declare for or against the title of the trustee to any property" is accordingly reposed in s 27(1) courts alone. 20 The facts of this case bear strong similarities to those in Scott v Bagshaw . It appears that Ms George, who is a bankrupt, has sought to commence proceedings in the Supreme Court of Queensland, claiming that property which would otherwise fall within the terms of her bankruptcy, and to which accordingly her trustee in bankruptcy would have title, is actually the subject of a separate trust, and therefore outside the terms of her bankruptcy. In my view, this is clearly an "application to declare for or against the title of the trustee to any property" for the purposes of s 31(1)(f) Bankruptcy Act . Upon the [trustee in bankruptcy] becoming trustee, the title to the properties...became vested in them: subs 58(1) and s 132 of the Act. The consequence of any such order must therefore be that it would have a necessary adverse effect on the title of the [trustee in bankruptcy] to the extent that it established title in [Ms George as trustee]. That is a matter that falls within the jurisdiction in bankruptcy. 21 Accordingly I see no error in his Honour's findings as to the exclusive jurisdiction of the Federal Magistrates Court and the Federal Court to hear any dispute as to title in relation to the Landing Place property or any other property which prima facie appears to be "property of the bankrupt" within the meaning of s 5 Bankruptcy Act . The Federal Magistrate was correct in my view in finding commonality of issues between the proceedings in the Federal Magistrates Court and the Supreme Court of Queensland. The substantive proceedings commenced by the trustee in bankruptcy in the Federal Magistrates Court were properly commenced in that Court. The fact that Ms George had brought proceedings in the Supreme Court of Queensland is, therefore, no reason to justify a stay of proceedings properly commenced by the trustee in bankruptcy in the Federal Magistrates Court. 22 In relation to Ms George's submissions concerning her lack of preparedness for trial commencing 8 December 2008, I understand that the relevant issues before his Honour were as to, inter alia , further discovery and further issues to be raised by Ms George. Ms George has raised before me other matters including as to calling witnesses and adducing additional evidence. However in relation to the decision of his Honour I am unable to identify error in his Honour's approach to the applicant's conduct of her case. Notwithstanding that the applicant claimed that she would not be able to afford to refile the material filed in the Supreme Court of Queensland in the Federal Magistrates Court, I note that his Honour ordered in para 5 of his orders of 18 November 2008 that any documents filed in the Supreme Court proceedings be taken as filed in this proceeding. 23 In this respect I note similar findings of Weinberg J in Goldberg v Morrow [2004] FCA 1490 at [36] . 24 In conclusion, the decision of his Honour is not attended by such doubt as to warrant it being reconsidered. Accordingly, leave to appeal is dismissed. It follows that this is not an appropriate case to warrant the exercise of discretion by the Court to order any stay of the hearing of the substantive proceedings on 8 December 2008. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.

application for leave to appeal from interlocutory decision of federal magistrate whether decision attended by sufficient doubt to warrant reconsideration whether federal magistrates court has exclusive jurisdiction under bankruptcy act 1966 (cth) in this matter practice and procedure

By their amended statement of claim, the PFA and TPA have alleged that the Secretary of TPA, a Senior Sergeant Paul Mullett ("Mullett") has been engaged on behalf of TPA in industrial negotiations and the prosecution in the Australian Industrial Relations Commission ("the AIRC") of industrial disputes with the Commissioner and has also campaigned against proposed changes to the Police Regulation Act 1958 (Vic) ("the PRA "). It is further alleged in the amended statement of claim that Mullett has convened meetings of members, or delegates' conferences of TPA which have carried motions of no confidence in the Commissioner. 2 A separate part of the amended statement of claim alleges that Mullett and TPA successfully made political representations which resulted in an agreement being concluded, without any involvement by the Commissioner, about matters to be included in a new enterprise bargaining agreement. It is also asserted that the PFA had, in August and September 2007, instigated industrial action by its members in support of what it claimed should be contained in the proposed new enterprise bargaining agreement. 3 It is further alleged in the amended statement of claim that Mullett has convened meetings of members or delegates' conferences of TPA which have carried motions of no confidence in the Commissioner. As well, the amended statement of claim recited various complaints by the Commissioner that TPA had misrepresented, on various issues, her position and had made her personally a target of aspects of its campaigns. 4 A specific focus of hostile relations between the Commissioner on the one hand, and Mullett and TPA on the other, is identified in par 141 of the amended statement of claim as "the Bullying Allegations. The report characterises the alleged behaviour of the Secretary and others in leadership positions as falling into the category of bullying and intimidatory behaviour. The complaint supports the findings of the Report and submits that the TPA has not done enough to address the alleged behaviour of the Secretary". In a report issued in April 2007, the latter recommended that Victoria Police should "further investigate the matter by interviewing all relevant witnesses and the Secretary of the Police Association [Mullett] (if necessary under direction). " By par 150D which was introduced as part of the amended statement of claim, it is recited that, on 16 November 2007, Mullett complained to TPA that he had been the victim of contraventions of Part 16 of the Workplace Relations Act 1996 ("the WRA ") and the application which instituted the substantive proceedings in this matter was filed in this Court on 20 December 2007. If the member chooses not to co-operate, the investigators will then consider the use of the provisions of Section 86Q of the Police Regulation Act, and directing the member to provide specific information. I understand that the meeting was electronically recorded. I ask that you provide the Assistant Commissioner ESD, or the investigators with a copy of the recording of that meeting. Please feel free to contact the investigators. Superintendents Tim Cartwright (03 8398 9859) and Tony Biggin (03 9865 2129), to finalise any arrangements. The assistance that you provide will help ensure a full and fair investigation and consideration of this matter. The respondents' conduct referred to in each of paragraphs 154 to 159 was done and continues to be done for a prohibited reason or for reasons that include a prohibited reason within the meaning of s 793(1)(a) of the WR Act, namely that Mullett is an officer of an industrial association, namely the PFA and/or the TPA. He has also deposed that he has no knowledge of allegations of bullying within the Victoria Police Force having been referred to the Force's Ethical Standards Division ("ESD") for investigation pursuant to Part IV of the PRA . Moreover, according to Davies, "any member of the Force subject to investigation by the [ESD] is regarded by the membership of the Force as under suspicion and accordingly that member's reputation is detrimentally affected. The complaint alleges serious misconduct for the purposes of s86L2(A) of the Act and I am required to investigate the matter. The Whistleblowers Protection Act 2001 applies to the complaint and the source of the complaint. It is important that your organisation is aware of the statutory protections given to whistleblowers under Part 3 of that Act and the confidentiality and penalty provisions that exist. It is also important to take note of the victimisation provision in s. 86V of the Police Regulation Act . Persons causing or inciting detriment are also personally liable for civil damages. You would also be aware that I am obliged under the Police Regulation Act to investigate complaints of serious misconduct and report the receipt of the complaint to the Director of Police Integrity. The report characterises the alleged behaviours of the Secretary and others in leadership positions as falling into the category of bullying and intimidatory behaviour. The complaint supports the findings of the report and submits that the TPA has not done enough to address the alleged behaviour of the Secretary. Victoria Police also has an interest in ensuring that such obligations are met by the TPA given that a significant majority of police members are members of the Association and all management and executive positions are held by police members. Bullying is unacceptable in the workforce and if practiced by police members, whether in an official capacity or not, brings disrepute to the force and attracts disciplinary measures. This matter raises issues of mutual concern and it is hoped that we can approach it in the spirit of mutual cooperation. That, it was said, would particularly be so if the assumed investigation were to involve the use of coercive powers conferred on the ESD by the PRA rather than being conducted, as it was said investigations into bullying usually are, by the Human Resources Department of the Police Force. Proof of the reason for engaging in the prescribed conduct is the subject of s 298V. 18 Although Davies acknowledged that the Ombudsman's report of April 2007 had recommended that the Bullying Allegations should be investigated further by both the Police Force and WorkSafe, he contended that the recommendation in respect of WorkSafe could not warrant re-opening the investigation to the extent that it concerned Mullett. That was because the only relevant Workcover claim by an employee of TPA based on an anxiety disorder claimed to have been caused by workplace bullying implicated another police officer, a Mr Kent, and made no allegation against Mullett. In combination, it was said on behalf of the applicants, the unusual aspects of the investigation of the Bullying Allegations raise serious questions to be tried as to whether, for a prohibited reason, Mullett has been injured in his employment or had his position altered to his prejudice; see Squires v Flight Stewards Association of Australia (1982) 2 IR 155, at 164 and Health Services Union of Australia v State of Tasmania (1996) 73 IR 140, at 145. 19 The PRA appears to draw a distinction between breaches of discipline by members of the Police Force and conduct which is capable of being the subject of a complaint and investigation under Part IVA of the PRA . 21 Section 86M, which is likewise in Part IVA of the PRA, contemplates that an investigation of a complaint made to a member of the Police Force about the serious misconduct of another member must be carried out by the Chief Commissioner. Section 71(1) creates a further discretion in the Chief Commissioner if, after conducting a preliminary investigation, he or she reasonably believes that a member of the Force has committed a breach of discipline, to charge the member with that breach of discipline. The following sub-sections of s 71 contain machinery provisions, including s 71(3) empowering the Chief Commissioner, in respect of a charged member, to transfer him or her to other duties, direct him or her to take any accrued leave or suspend the member from the Force with or without pay. Section 75 prescribes the procedure to be observed in the conduct of an inquiry and s 76 stipulates a range of determinations which may be made if the person conducting the inquiry finds that the charge has been proved. 27 The evidence discloses that Cornelius holds an active delegation from the Chief Commissioner under s 6A of the PRA . That delegation is said to be "in relation to the conduct of investigations into alleged disciplinary matters involving sworn members of Victoria Police under Parts IV and IVA of the [ PRA ]". According to Cornelius, on 10 March 2006 he interviewed one of the two confidential complainants who had made allegations of bullying by Mullett in his capacity as Secretary of TPA. That complainant indicated that he or she intended the complaint to be treated as an allegation of serious misconduct and investigated under the PRA . After receiving further details from the complainant, Cornelius formed the view that "at least some of the conduct alleged might have amounted to 'serious misconduct' if proven after a thorough investigation. Those officers were later instructed to commence their investigation on 24 May 2006. 29 In pars 55 to 65 of the same affidavit, Cornelius described steps taken in, and reports made to him of, the investigations undertaken by Biggin and Cartwright. Those steps taken included interviews with various witnesses and the reports to Cornelius enabled him to depose that "Some of the alleged behaviours identified at the preliminary level included physical confrontations, bullying behaviour, intimidation and harassment. " That part of the account by Cornelius concluded with the making of a report by Biggin and Cartwright of their initial investigation and the decision by the Commissioner, on the advice of Cornelius, to refer the Bullying Allegations for investigation by WorkSafe because of the inability of Biggin and Cartwright to complete a full investigation without the benefit of evidence from non-police witnesses. As the complainants attract the protection of the Whistleblowers Protection Act , it is not appropriate for me to identify them in this correspondence, however I would be happy to disclose their identity, should you require this in the discharge of your functions as either the Director of Police Integrity, or the Ombudsman. The initial investigation has also identified evidence that Senior Sergeant Paul Mullett is a principal agent in the propagation of that culture and has engaged in direct bullying behaviour. You will note the reasons for adopting this course are outlined in the investigation report, the key reasons being a concern that the use of the power will be challenged in the Supreme Court and the significant risk to witnesses and protected complainants, should the matters be particularised and so allow their identity to be deduced. However, in this case, the application of these guidelines are problematic as the TPA workplace is beyond our reach and includes a mix of police and non-police employees. Accordingly, mediation, management intervention and workplace based remediation are options which are not available through the application of this policy in the TPA workplace. Again, in the normal course of events, these interventions would be sufficient to settle a complaint and allow the matter to be concluded without further disciplinary action. Further, while we do not have the capacity to secure safety in another employer's workplace, it is clear that WorkSafe Victoria has the capacity to intervene and work with the TPA (as the employer) to recover workplace safety at the TPA workplace. we have concluded that the matter should be referred to WorkSafe Victoria for investigation and resolution. They have also indicated that witnesses would be afforded protection similar to that available under the Police Regulation Act and the Whistleblowers Protection Act , under their legislation. They have also indicated that they would seek to negotiate with the TPA the implementation of systems and processes which would prevent the perpetuation of a bullying culture and hold individuals accountable for changing their behaviour. Please do not hesitate to contact me to discuss any aspects of this matter which may concern you. 32 At the instigation of the complainants who had made the Bullying Allegations, the Ombudsman undertook his own investigation of the matter and, on 16 November 2006, the Deputy Ombudsman confirmed that, until that investigation had been completed, Victoria Police should take no further action in relation to the allegations. 33 The Ombudsman's report, already noted at [18] of these reasons, was tabled in the Victorian Parliament on 18 April 2007. It recorded the Ombudsman's criticisms of the investigations of the Bullying Allegations which, to that date, had been carried out by two WorkSafe Inspectors. The Ombudsman's report also identified what were seen as deficiencies in the PRA including the absence of a counterpart to s 102EA in respect of the secondment of members of Victoria Police to TPA. While I acknowledge the constraints the Act has placed on Victoria Police, the whistleblowers should be asked if they are prepared to have their identity revealed for the purposes of an investigation. I also consider that it is unsatisfactory that the allegations have not been put to the Secretary of The Police Association. The whistleblowers and other witnesses have indicated to my office that they are willing to cooperate with an investigation, including disclosing their identity, if necessary. As well, investigations were continued or resumed within Victoria Police. A copy of the Lyon Report was furnished to Biggin and Cartwright but their investigation of the Bullying Allegations was suspended after Cornelius and the Commissioner became aware that the OPI was conducting private and public hearings into alleged hampering of, or interference with, a taskforce set up within Victoria Police and code-named "Operation Briars". The allegations with which the OPI was concerned suggested that Mullett had been implicated in hampering or interfering with Operation Briars. In the event, Mullett was called as a witness at one of the public hearings conducted by the OPI. In those circumstances Cornelius instructed Cartwright that, in pursuing the investigation of the Bullying Allegations, he should not have recourse to s 86Q of the PRA in relation to any person who was a potential witness at the OPI hearings. In the course of his communications with Cornelius, Cartwright intimated that he intended to have, on 3 January 2008, a detailed discussion with WorkSafe to learn what progress had been made in its parallel investigation and that "his briefing would be finalised on that date". However, the final draft of Cartwright's brief for the Commissioner was prepared on 31 December 2007 and presented to the Commissioner on 8 January 2008 without incorporating the results of Cartwright's discussions of 3 January 2008 with WorkSafe if, in fact, they occurred. However, the letter was not delivered to TPA until 18 January 2008, a delay which has been explained by Cornelius as attributable to Biggin's absence on leave until 17 January 2008. 41 It was argued on behalf of the respondents that to be subject to a disciplinary investigation does not amount to an injury in employment or an alteration of the position of an employee to his or her prejudice in the sense used in s 792(1) of the WRA ; see Community and Public Sector Union v Telstra Corporation Ltd [2001] FCA 267 ; (2001) 107 FCR 93. The fact that the coercive powers conferred by s 86Q of the PRA can be called in aid of such an investigation does not, the respondents contended, advance the case of the applicants. Moreover, because s 86Q is capable of being applied to all potential witnesses who are members of Victoria Police, its application could not involve any "singling out" of Mullett. Nor, since he has already been suspended from the Police Force in relation to other serious matters, could the resumption of an investigation into the Bullying Allegations against him have a significant detrimental affect on his reputation or standing. 42 In the light of the history which I have just recounted, I consider that a serious question remains as to whether the resumption of the inquiry by Biggin and Cartwright amounts to an injury to Mullett in his employment. Not every disciplinary inquiry or investigation of alleged misconduct by an employee will have that effect. For example, the inquiry may be conducted in such a way that only the affected employee and a few other persons directly involved in it are aware that it is taking place. Likewise, the subject matter or particulars of the alleged breach of discipline may, on balance, not be reasonably capable, at least before the investigation has been completed, of damaging the reputation of the employee or adversely affecting his or her standing in the workforce or among the wider community, assuming the fact of the inquiry to be so widely known. 43 However, the investigation within Victoria Police of the Bullying Allegations against Mullett cannot, on the evidence as it stands, be regarded as similarly innocuous. It has, perhaps necessarily, been notified to the President and Executive of TPA but has also been brought by a general email to the attention of "all staff of Victoria Police. " A related consideration is the apparent election by or on behalf of the Commissioner not to attempt to resolve the complaints underlying the Bullying Allegations by conciliation as contemplated by s 86O(2) of the PRA . 44 Another potential source of injury in employment in the sense used in s 792 of the WRA is the facility afforded by s 86Q of the PRA for the employee under investigation to be directed to furnish any relevant information, produce any relevant document or answer any relevant question. The present respondents have not disavowed an intention to subject Mullett to a direction of that kind. Indeed, it is my understanding that, unless restrained, they propose that Biggin and Cartwright should give him a direction under s 86Q in the near future. 45 Another consideration which would enable the resumption of the investigation of the Bullying Allegations to inflict injury on Mullett is the unique position which he occupies as Secretary of TPA on secondment from Victoria Police. That position requires him to act as spokesman on industrial issues, like salaries and working conditions, for members of the Force generally and, perhaps, also for individual members in relation to disciplinary matters. His ability to retain the confidence of members of Victoria Police in his discharge of those functions is likely to be impaired significantly once it becomes generally known that an investigation of long standing and already attended by intense publicity has been resumed. Although it is undesirable at this interlocutory stage to venture a concluded view on the matter, it is my opinion that the resumption of the investigation on behalf of EDS is capable of constituting an injury to Mullett in his employment by Victoria Police within the meaning of s 792(1) of the WRA . 46 In light of the conclusion just reached on "injury", it is strictly unnecessary to consider the alternative question of whether the resumption of the EDS investigation of the Bullying Allegations can amount to an alteration of Mullett's position as an employee of Victoria Police. However, in my view, "alteration" in this context requires a substantive change in, or reduction of, the advantages enjoyed by the employee in that capacity. Merely to be subject to a disciplinary inquiry or investigation does not, without more, constitute such a substantive change. Examples of relevant substantive changes include reduction of salary, deprivation of overtime, diversion to a less congenial shift, forced taking of leave, transfer to lower duties or suspension from duties. Some changes of this kind are expressly contemplated as being within the disciplinary regime for Victoria Police instituted by s 71 of the PRA and noted at [24] above. The laying of the charges imposes a burden on the persons charged to respond to allegations relating to their conduct as employees of the board. I do not consider that one can separate out the effect and consequence of the charges from the fact that they occurred because of the employee's employment by the board. I do not accept that a person charged is not affected in his or her employment until the charge has been proven. The expressions found in s 298K(1)(b) and (c) encompass a wide range of conduct both direct and indirect. The laying of the charges exposes an employee of the board to a potential disadvantage in his or her employment if the charges are ultimately proven . Of course, it is otherwise where the charge is made out and some deleterious consequence is visited on the employee. That is the significance of the words to which I have added emphasis in the extract from Goldberg J's reasons reproduced at [47] above. Until the charge has been proved, the disadvantage to the employee, as his Honour acknowledged, remains merely "potential. It follows that neither of those alterations of Mullett's position as an employee of Victoria Police was a consequence of any decision to resume the investigation by EDS of the Bullying Allegations. (b) Is the reverse onus of proof imposed by s 809(1) of the Workplace Relations Act available to support a motion for interlocutory relief? That question, it was said, seriously suggested that Mullett had been "singled out" in the sense used by Ellicott J in Squires v Flight Stewards Association (supra). The existence of such a question was also said to be reinforced by the coincidence between the resumption in January 2008 of the investigation of the Bullying Allegations and the institution, on 23 December 2007, of the present proceedings challenging Mullett's suspension from the Police Force. That coincidence, it was claimed, permitted the inference that the resumption of the investigation was an industrial or legal tactic and not attributable to operational policing considerations. 51 In further support of the existence of a serious question to be tried, Mr Borenstein SC invoked the rebuttable presumption raised by s 809(1) of the WRA . It also requires it be proved that the employee was at the time of the dismissal dissatisfied with his or her industrial conditions, and was a member of an industrial association that was seeking better industrial conditions. In order to make the link between the dismissal and the circumstances which the applicant must establish to bring the dismissal within s 298K, the Act provides in s 298V a statutory presumption that the link exists in certain circumstances. Under s 298V in proceedings under Div 6 of Pt XA of the Act for a contravention of a section in Pt XA, an allegation in those proceedings of conduct for a prohibited reason is sufficient for it to be presumed that the conduct was engaged in for that reason unless the employer proves to the contrary. Section 298V does not relieve the applicant in proceedings under Div 6 of Pt XA of the Act from proving on the balance of probabilities each of the ingredients of the contravention. It enables the allegation to stand as sufficient proof of the fact unless the employer proves otherwise: R v Hush; Ex parte Devanny [1932] HCA 64 ; (1932) 48 CLR 487 at 507. If a serious question to be tried is made out in respect of the other ingredients of the alleged contravention, s 298V operates to establish there is a serious question to be tried that the dismissal was for a prohibited reason. It remains available to the employer to demonstrate at the interlocutory stage that the reason for the dismissal was other than for a prohibited reason. The weight of that evidence may be such as to persuade the court there is no serious question to be tried. They referred to the discussion by Gaudron J in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [1998] HCA 30 ; (1998) 195 CLR 1 of what was formerly s 298U of the WRA . Although the expression "interim injunction" is sometimes used in a technical sense to mean an injunction granted until the happening of some specific event (such as a named day or further order) [ Meagher, Gummow and Lehane, Equity: Doctrines and Remedies, 3rd ed (1992), par 2183] and the expression "interlocutory injunction" is sometimes used to mean an injunction until the final hearing or further order [Spry, Equitable Remedies , 5th ed (1997), p 508], it is not uncommon for the expression "interim injunction" to be used more widely so as to include relief in the nature of an interlocutory injunction. "Interim injunction" is used in that sense in s 80(2) of the Trade Practices Act 1974 (Cth) [See, eg, World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 at 185, per Bowen CJ], which provides that "the Court may grant an interim injunction pending determination of an application under subsection (1)". It would not be surprising if the words "interim injunction" were used in the same sense in s 298U(e) of the Act [See the discussion in World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 at 198-199, per Brennan J; cf ICI Australia Operations Pty Ltd v Trade Practices Commission [1991] FCA 527 ; (1992) 38 FCR 248 at 263, per Gummow J; Spry, Equitable Remedies , 5th ed (1997), pp 445-446]. The principles governing the determination of applications for interlocutory injunctions are well established. First, the Court must decide whether there is a serious question to be tried. If the answer to that question is an affirmative one, then the Court must consider whether the balance of convenience favours the grant of the relief sought. Sometimes interim injunctions and interlocutory injunctions are spoken of as if they are interchangeable terms. The former is more appropriately used in the case of an injunction granted for a finite period usually brief and sometimes ex parte. The latter is usually granted to preserve the status quo pending trial. The Workplace Relations Act in one of the sections (s 298U(e)) with which the Court is concerned, uses the term "interim injunction", and it is not clear in which sense the Act uses it. Items 2613-2616 of that Schedule sought to explain the effect of the proposed s 270 which later became s 809 of the WRA . It is based upon pre-reform section 298V of the WR Act. The reverse onus would not apply to the granting of interim injunctions. This differs from pre-reform section 298V of the WR Act, and is intended to address the problems that can arise from the interaction of the reverse onus with the 'balance of convenience' test that applies to interim injunctions. However, the Explanatory Memorandum does not cast any light on how the insertion of what is now s 809(2) addresses "the problems that can arise from the interaction of the reverse onus with the 'balance of convenience' test that applies to interim injunctions. Nor does the Explanatory Memorandum cast any useful light on what effect, if any, is to be given to the presumption in resolving, as the first step in determining an application for an interlocutory injunction, whether there is a serious question to be tried at the final hearing of the action. 62 It seems clear enough that s 809 creates a rebuttable presumption of law. However, as the authorities illustrate a presumption of that kind may take one of two forms. One form has the effect merely of shifting to a respondent the burden of going forward with evidence, in a case like the present, as to whether the employer's conduct was actuated by a proscribed reason. If the respondent adduces some relevant evidence, the court has to resolve, in the light of all the evidence, whether the applicant has discharged the ultimate burden of proving, or risk of non-persuasion, that the conduct was carried out for a proscribed reason. That seems to be effect of the passage from the judgment of Dixon J in R v Hush; Ex parte Devanny [1932] HCA 64 ; (1932) 48 CLR 487 which was relied on by Wilcox and Cooper JJ in the passage from Davids Distribution Pty Ltd v National Union of Workers (supra) which I have reproduced at [52] above. Once evidence has been led it must be weighed without using the presumption as a make-weight in the scale for legitimacy. So even weak evidence against legitimacy must prevail if there is not other evidence to counterbalance it. The presumption will only come in at that stage in the very rare case of the evidence being so evenly balanced that the court is unable to reach a decision on it. I cannot recollect ever having seen or heard of a case of any kind where the court could not reach a decision on the evidence before it. In Heidt v Chrysler Australia Ltd (1976) 13 ALR 365 Northrop J regarded s 5(4) of the Conciliation and Arbitration Act 1904, one of the forerunners of s 809(1) of the WRA , as being of that character. The "burden of proof" in this sense is stable but the burden of introducing evidence at any particular time may shift from time to time: see Purkess v Crittenden [1965] HCA 34 ; (1965) 114 CLR 164 per Barwick CJ, Kitto and Taylor JJ, at 167---8. The circumstances by reason of which an employer may take action against an employee are, of necessity, peculiarly with the knowledge of the employer. It is for this reason that s 5(4) is of such importance -- it has the effect of shifting the onus of proof to the employer with the result that the employer is obliged to prove a negative if he is to avoid being found guilty of the offence charged if all the other facts and circumstances constituting the offence are proved. The onus so cast upon the employer is to prove a negative on a preponderance of probabilities: Bowling v General Motors-Holdens Pty Ltd, supra, at 200---1. For example s 30 r (1 ) Crimes Act 1914 provides: "In any prosecution for an offence under this Part or for an offence to which any provision of this Part is material the averments of the prosecutor contained in the information or indictment shall be prima facie evidence of the matter or matters averred. The consequence was that the respondent, in order to succeed, was not bound to adduce evidence that the appellant was actuated by that reason, a matter peculiarly within the knowledge of the appellant. The respondent was entitled to succeed if the evidence was consistent with the hypothesis that the appellant was so actuated and that hypothesis was not displaced by the appellant. To hold that, despite the subsection, there is some requirement that the prosecutor brings evidence of this fact is to make an implication which, in my view, is unwarranted and which is at variance with the plain purpose of the provision in throwing on to the defendant the onus of proving that which lies peculiarly within his own knowledge. 67 I have examined at some length the authorities on the nature of the presumption created by s 809(1) and its predecessors because the examination exposes a real difficulty in construing and applying the limitation imported by s 809(2) that the presumption "does not apply in relation to the grant of an interim injunction. " One approach is for a court considering a motion for an interim or interlocutory injunction (on the wider view of "interim injunction" more favourable to the respondents) to exercise its discretion as if s 809(1) did not exist. 68 However, that approach might, in some cases, create an insuperable difficulty for an applicant for interlocutory relief in making out a serious question to be tried where one of the issues to which the question must be directed is the reason or reasons which actuated the alleged conduct of the respondent. ...Section 298V of the Act does not, in my view, allow the applicant to circumvent that finding. Rather it is to be construed as an aid to proof of the intent or reason of the respondent which motivated, or formed part of the motivation for, the respondent's conduct. It may fairly be presumed that the section is intended to alleviate the difficulties of proof by one party of the state of mind or motivation of another. The impact of s 298V, in my view, is simply to alleviate the evidentiary difficulty facing the applicant of providing proof of the intent or reason which motivated, or formed part of the motivation for, the respondent's conduct following the absence of the employee from work. I consider that such a restrictive and apparently unjust interpretation should only be given to a provision which occurs in what seems to be a beneficial or facultative legislative scheme if the language of the sub-section intractably requires it. In my view, a construction more consonant with the statutory context and history and the preparatory material is that s 809(2) precludes the court from finding, on an application for an interim or interlocutory injunction, even provisionally, by recourse solely to the presumption, that the respondent's conduct was for a proscribed reason or for reasons that included a proscribed reason. However, I do not construe s 809(2) as preventing the court, in assessing whether there is a serious issue to be tried, from having regard to the availability of the presumption in the final determination of the application. Similarly, I consider that account can be taken of the ultimate availability of the presumption when assessing the respective strengths of the case for the applicant and that for the respondent as part of exercising the general discretion to grant or withhold interlocutory relief. This approach, in my view, is consistent with that long taken by courts of equity in undertaking what are often necessarily limited reviews of evidence in the course of deciding whether to grant interlocutory injunctions. The only basis on which the respondent suggests an affirmative answer could be made to this question is to be found in s 298V. But, in my opinion, that would be to put on the section a weight it cannot bear. Its function is not to transform a case, to change the complexion of the facts; its function is to raise (via a presumption) an evidentiary onus. (Of course, at the interlocutory stage, the burden on an applicant would anyway be only to show a serious question to be tried. ) But the s 298V onus was discharged when the circumstances were revealed. Because of the gaps in the evidence, it was (I am prepared to assume) not discharged to the full extent of proof that the sole reason for the dismissals was that given. But it was discharged to the extent that the circumstances showed clearly the nature of the dispute to which only any hidden reason must, as a matter of common sense, have related. The circumstances being known, there was simply no room for a separate reason connected, not with the strike, but with the state of mind to which par (l) refers. However, it cannot be the law that such a presumption will always entitle an applicant to interlocutory relief, whatever the facts, because it shows a question to be tried, and full answer is not possible at an interlocutory hearing. At all events where, as in the present case, the applicant relies on nothing but the presumption, and the circumstances are the subject of detailed evidence pointing strongly to reasons other than the one alleged, I do not accept that it is appropriate to ground a decision on the presumption. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality. (c) The reason or reasons for the resumption of the investigation of the Bullying Allegations. In the first place, reference was made to the failure of the Commissioner to go into evidence despite the fact that she had signed the letter of 3 May 2006 instigating the inquiry into the Bullying Allegations and the letter of 8 January 2008 giving notice of its resumption. In the same context, it was pointed out that Cornelius had acted in consultation with the Commissioner and had briefed her at various points about the progress of the investigation and the WorkSafe inquiry as well as the recommendations of the Ombudsman and the OPI. Accordingly, so the argument went, the ultimate decision to resume the investigation of the Bullying Allegations was that of the Commissioner and so her reasons for taking that decision were critical to the question of whether the resumption of the investigation into the Bullying Allegations was for a prohibited reason or for reasons that included a prohibited reason. A parallel was drawn between the absence of evidence from the Commissioner and the absence of evidence from the directors which was discussed by Mason J in General Motors-Holden's Pty Ltd v Bowling (supra). Yet it is clear enough from the evidence that the effective decision to dismiss the respondent was not made by them in South Australia but by the two directors in Melbourne after they had consultation with Mr Gould, not with Mr Rosenboom. It left uncontroverted the possibility that the respondent's position as a shop steward was an influential, perhaps even a decisive, consideration in their minds. Nor had he purported, as he might have done on this interlocutory application, to give evidence of those reasons on information and belief derived from the Commissioner herself. It was accepted that Cornelius had expressly deposed that neither Mullett's complaint to the TPA nor his involvement in the institution of the proceedings in this Court had been the reason for action taken at any time by Cornelius himself. However, there was only silence about the reasons which had actuated the Commissioner who had been the effective decision-maker. 74 Mr Parry SC, who appeared with Mr Richard Dalton for the respondents, traced the history of the investigation of the Bullying Allegations from the time when they were first made by the complainants in March 2006. That history has largely been set out at [27]-[40] of these reasons. Mr Parry SC referred in particular to the report of the Ombudsman of April 2007, extracts from which have been reproduced at [34] above and which included a recommendation that Victoria Police "further investigate the matter [of the Bullying Allegations] by interviewing all relevant witnesses and the Secretary of the Police Association (if necessary under direction)". 75 Attention was also drawn on behalf of the respondents to the evidence of Cornelius of his receipt of the status report of 10 December 2007 containing the recommendations set out at [37] of these reasons. Members of the Executive of course ... ... and who may be able to provide corroboration to alleged events, including access to recordings and notes of conversations. At the same time, commence that approach to members of the Executive. In fairness to all parties, it is important that all available evidence be obtained. The use of 86Q could be seen as a deliberate pursuit of members of the Executive, rather than as a pursuit of the available evidence. The whole history of the investigation by Victoria Police of the Bullying Allegations and, in particular, the matters to which Counsel drew attention, were said to indicate that Cornelius has been intimately involved in the process and has been the effective decision-maker throughout. We had some difficulty over the course of April in arranging a mutually convenient time, and ultimately in late April 2006, the President notified me that she no longer wished to meet regarding the matter. Nevertheless, Counsel claimed, it was "on her simple say so" that the management of Victoria Police decided to desist from any further attempt to resolve the matter by conciliation. That was said to support the inference that the resumption of an investigation under s 69 or s 71 of the PRA with its ancillary recourse to the coercive powers conferred by s 86Q was for an ulterior and prohibited reason or purpose. 79 It was next argued in reply that the respondents are required positively to negative a prohibited reason for their conduct as it affected Mullett. It is not enough to say that the Ombudsman's report, standing alone, would have provided a non-prohibited reason for the conduct as the decision-makers within Victoria Police were still required to comply with the relevant provisions of the WRA ; see Patrick Stevedores v Maritime Union of Australia (supra) at 41 [62]. 80 Applying the test formulated in Municipal Council of Rockdale v Municipal Council of Kogarah and quoted at [69] of these reasons, I am satisfied that, if the evidence remains as it is, the applicants will probably succeed in establishing that the investigation by Victoria Police of the Bullying Allegations against Mullett has been for a prohibited reason or for reasons that included a prohibited reason as described in s 793(1)(a), (j) and (k) of the WRA . 81 The first factor which has led to my attaining that state of satisfaction is the extent to which industrial relations considerations have obtruded themselves at various points when the investigation of the Bullying Allegations arose for action or decision within Victoria Police. That was, perhaps, inevitable given that Mullett, against whom the Bullying Allegations had been made, occupied a central industrial office as Secretary of TPA and had for many years had a high profile as the spokesman and public face of that industrial organisation. In any event, Cornelius acknowledged in his letter of 14 September 2006 to the OPI the "sensitivities which attach to the use of the s 86Q questioning power against a person who is a full time union official. " Similarly, one of the arguments noted against the adoption of Option 1 in the briefing paper of 31 December 2007 quoted at [75] above was that "the intent to use 86Q and the investigation itself" would be portrayed by TPA as an interference in union matters and seen as overbearing. As well, the anomaly created by a full time union official and officer of TPA being at the same time a serving police officer was adverted to by the Ombudsman in Recommendation 5 of his report on the investigation of the Bullying Allegations which is reproduced at [34] above. 82 Also capable of being inspired by industrial considerations was the publication on 21 September 2006 to all staff of Victoria Police of the outcome of the initial investigation and the referral to WorkSafe. That statement was simultaneously issued to "the media" and bore the legend that "Media inquiries relating to this issue must be directed to the Victoria Police Media Unit. " The explanation that most readily suggests itself for that conduct is that the existence of the investigation was seen as damaging to Mullett in his capacity as Secretary of TPA and therefore as weakening his effectiveness in waging, as it seems on several fronts, an industrial campaign on its behalf. The converse inference is also open that the resumption of the investigation was seen from an employer's perspective as strengthening the hand of the Commissioner in resisting demands by the TPA or improving, in the eyes of the workforce or the general public, her image as a protagonist in an industrial dispute. It may also be that the email of 21 September 2006 was seen as a retaliatory salvo in response to industrial propaganda generated by Mullett and the TPA. 83 I am satisfied on the evidence as it stands that the Commissioner herself was actively involved in various decisions taken between May 2006 and January 2008 in relation to the investigation of the Bullying Allegations. By "signing off" on Cartwright's recommendation of Option 1 in his briefing paper of 31 December 2007 and by signing the letter to TPA of 8 June 2008, the Commissioner gave rise to the strong inference that she had herself considered the consequences of a resumption of the investigation and affirmatively decided that it should occur. That inference has not been rebutted by any direct evidence from her in opposition to the motion for interlocutory relief. Nor has it been attested on information or belief derived from the Commissioner by any other witness that she did not make or influence the decision to resume the investigation or take any relevant action for reasons that included a prohibited reason. If that remains the state of the evidence at trial, it would be open to the Court to infer, applying the rule in Jones v Dunkel (1959) 101 CLR 298 , that the Commissioner's evidence would not have assisted the respondents' case. That reasoning commended itself to the majority of the Australian Industrial Court in Bowling v General Motors-Holden's Pty Ltd (1975) 8 ALR 197 , at 209 and was approved by the majority of the High Court in General Motors-Holden's Pty Ltd v Bowling (supra), esp at 242. 84 A similar adverse inference is presently available from the respondents' failure, at this stage, to adduce evidence of a convincing explanation of the decision not to attempt to resolve the Bullying Allegations by mediation or conciliation through the Human Resources Department of Victoria Police or otherwise as contemplated by s 86O(2) of the PRA . Nor can the possibility be excluded, on the present state of the evidence, that the resumption of the investigation of the Bullying Allegations was seen as reinforcing or supporting in some way the Commissioner's prohibition on 15 November 2007 of Mullett from entering any police premises unless directed to do so. 85 The involvement of the Commissioner which can presently be presumed for the reasons just indicated was, I consider, partly attributable to the industrial relations implications which the investigation was seen to have by Cornelius, Cartwright and Biggin and perhaps others. It is true that other considerations would also have justified, and may have prompted, the Commissioner's taking decisions or other actions about the investigation. Those considerations included the recommendations of the Ombudsman and the OPI and the duty or discretion to investigate or report cast primarily on the Commissioner by provisions like ss 70, 71 and 86M of the PRA noted at [21] and [24] above. However, it will not avail the respondents to establish at trial merely that those considerations influenced the resumption of the investigation. Because conduct is proscribed by s 792(1) of the WRA if it occurs "for reasons that include a prohibited reason", it will be necessary for the respondents at trial to establish affirmatively that the investigation was not resumed partly for one of the prohibited reasons alleged by the applicants. In making what is necessarily a provisional assessment of the likely outcome at trial, I have had regard, in the manner described at [68]-[71] above, to the reverse onus of proof imposed by s 809(1) of the WRA . " It went, he said, to the need for a timely resolution of complaints in the interests of complainants. Nevertheless, the argument continued, the investigation of the complaints was now almost three years old and the need for expedition did not outweigh the interests of the applicants in preserving the subject matter of their litigation in full until trial or judgment. In a related way, it was pointed out that the four persons who, in 2005 and 2006 as members of the Executive of TPA had been pressing for an investigation of the Bullying Allegations against Mullett, were no longer members of that Executive and should have no further apprehension that any conduct of Mullett might be directed against them. In any event, matters of concern within the Executive of TPA had been resolved, partly by the recommendation in June 2007 that the members of the Executive together with Mullett, the Assistant Secretary and Davies should undertake leadership training. A related matter militating against an immediate resumption of the ESD investigation into the Bullying Allegations was the continuing parallel inquiry by WorkSafe. Likewise, Counsel for the applicants pointed to the acknowledgement in a briefing paper of 9 November 2007 by Biggin and Cartwright that "any offences committed on 6 June 2006 are now outside the statute of limitation for laying of charges. " In the same passage it was recorded that "Section 69 offences have no statutory limitation. With respect to the possibility that relevant witnesses might resign or retire from Victoria Police and so be no longer amenable to the coercive powers conferred by the PRA , it was pointed out that the inapplicability of that Act to members seconded to TPA had been the reason for the reference of the Bullying Allegations to WorkSafe. 88 Finally, it was said that any concern which may be imputed to the persons against whom the Bullying Allegations had been made to be exonerated speedily is answered by the fact that they are all members of TPA which is one of the applicants for the present injunctive relief. It should be assumed, according to this argument, that those members have acquiesced in any delay until the hearing and determination of the action and are content for it to occur. 89 On behalf of the respondents it was argued that, in assessing the balance of convenience, the personal concerns of Mullett have to be weighed against a broad public interest in the continued investigation of the Bullying Allegations which have been alleged to amount to serious misconduct within the meaning of s 86A of the PRA . Mr Parry SC referred to the interests of the complainants and "others who are to be interviewed. " It was acknowledged on behalf of the respondents that the amended statement of claim which pleads the causes of action relied on by the applicants in their substantive application runs to some 164 paragraphs, raises a complex series of issues, all of which will be strongly contested and necessitate voluminous discovery of documents. As well, the substantive case was said to be likely to give rise to extensive debates about legal professional privilege, public interest privilege and confidentiality. In those circumstances, it was likely, even if all reasonable steps were taken to expedite it, that a trial of the action would not commence in under twelve months. 90 In submissions in reply directed to the balance of convenience, issue was taken with the suggestion on behalf of the respondents that there were still persons seconded to TPA who had an interest in the investigation and resolution of the complaints which had given rise to the Bullying Allegations. In this context, the applicants relied on the second affidavit of Davies sworn 1 February 2008 where it is deposed at par 18 that the only persons who might possibly have been complainants "are no longer members of the Executive of TPA and no longer come into any regular contact with the Secretary or staff of TPA. That would prevent, until the hearing and determination of the action as a whole, the taking through any agency of Victoria Police or the State of Victoria generally, of "any further action with respect to the investigation" of the Bullying Allegations against Mullett. There seems to be no realistic prospect of bringing about a speedy trial by way of a final hearing of the action as presently formulated. Nor has either side evinced any willingness to facilitate the trial of a separate question or issue focused on the resumption of the investigation of the Bullying Allegations. 92 In these circumstances, I consider that an interlocutory injunction restraining for a substantial time any further action with respect to the investigation would unreasonably stultify the investigation. On the other hand, I do not apprehend that significant harm would be caused to the applicants or Mullett if the investigation were to proceed to the extent of completing the taking of statements from persons, other than Mullett, who are perceived as able to provide information relevant to the Bullying Allegations. One of the difficulties which has oppressed me in trying to resolve this interlocutory motion is the absence of specific evidence as to the extent to which statements from relevant witnesses have already been procured, either directly by Biggin and Cartwright on behalf of the ESD, or as a result of the parallel inquiries which WorkSafe has been commissioned to undertake, at times as the sole investigative agency. However, I assume that, apart from interviewing Mullett, little remains to be done by way of completing the inquiry to a point where particulars of a charge, if it is decided to bring one, can be formulated as required by s 72 of the PRA . 93 I note parenthetically that it is the absence of particulars or any other specification of the conduct alleged against him that has caused me, in part, to regard the investigation todate of the Bullying Allegations as capable of exposing Mullett to serious hardship or prejudice. That would particularly be so if he were directed pursuant to s 86Q of the PRA , as seems to be the respondent's present intention, to furnish information or answer questions relevant to the Bullying Allegations. Accordingly, I regard the balance of convenience as requiring only that the respondents be restrained from issuing to Mullett a direction pursuant to that section in relation to the Bullying Allegations. 94 I have come to the conclusion just indicated on the balance of convenience, partly after having regard to the fact that the investigation pursuant to the PRA of the Bullying Allegations is not, of its nature, confined to a decision taken once and for all. On the contrary, it is open to the Commissioner, or a delegate duly authorised by her who is unacquainted with the history and industrial implications recounted above, to take fresh decisions in relation to the investigation which could be shown not to have been influenced by any of the prohibited reasons enumerated in s 793(1)(a), (j) and (k) of the WRA . I have also assumed that the rules of natural justice have not been excluded in relation to the inquiry into, and determination of, a charge for which s 73 of the PRA provides. On that assumption, if an inquiry and determination of a charge against Mullett, properly particularised, occurs without a prior direction to him pursuant to s 86Q, he will have available to him in the Victorian courts the full range of remedies necessary to protect him from a denial of procedural fairness. 95 In case one or other of the assumptions made earlier in this part of these reasons should prove unfounded or some other unforeseen circumstance should arise which is capable of causing hardship or injustice to one side or the other, I shall reserve liberty to apply. I shall reserve liberty to any party to apply on not less than 48 hours notice in writing to the other parties. The costs of each party of and incidental to the notice on motion dated 23 January 2008 will be costs in the cause. There will be a directions hearing herein on 2 May 2008 when the applicants and the respondents should bring in minutes of the directions which they respectively consider to be appropriate to ready the application as a whole for trial. I certify that the preceding ninety-six (96) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan.

interlocutory injunction to restrain contravention of s 792(1) of workplace relations act 1996 resumption of disciplinary inquiry into allegations of workplace bullying against secretary of police associate said to be for prohibited reason or reasons that included a prohibited reason whether serious issue to be tried whether "interim injunction" in s 809(2) of workplace relations act includes interlocutory injunction effect of s 809(2) balance of convenience effect of staying disciplinary investigation. claim that resumption of inquiry into allegations of workplace bullying against secretary of police association for prohibited reason or reasons that included a prohibited reason whether "interim injunction" in s 809(2) of workplace relations act includes interlocutory injunction effect of s 809(2) on reverse onus of proof imposed by s 809(1). injunctions industrial law

Those provisions afford an exemption to a taxpayer in respect of certain foreign termination payments made to the taxpayer. 2 Section 27CD of the Assessment Act relevantly provided that, if an exempt non-resident foreign termination payment is made in relation to a taxpayer, the taxpayer's assessable income does not include that payment. 3 The applicant, Mr Michael Branson ( the Taxpayer ), received a payment on 1 May 2003 from Deutsche Australia Limited ( Deutsche Australia ). The payment was made following the termination of his employment by Deutsche Australia upon his redundancy. At the time of the termination, the Taxpayer had been on secondment in Tokyo, Japan with Deutsche Securities Limited ( Deutsche Securities ), a company related to Deutsche Australia. 4 The payment made to the Taxpayer on 1 May 2003 was the sum of $535,068.03. Following an unfavourable objection decision by a delegate of the respondent, the Commissioner of Taxation ( the Commissioner ), the Taxpayer sought review of that decision by the Administrative Appeals Tribunal ( the Tribunal ). On 24 January 2008, the Tribunal affirmed the Commissioner's decision that the Taxpayer's assessable income included the amount of the Redundancy Payment. The Taxpayer then appealed to the Federal Court pursuant to s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) ( the Tribunal Act ). In 2000, he agreed to be seconded to the Tokyo branch of Deutsche Securities. The terms of the secondment were evidenced by a letter of 28 July 2000 to the Taxpayer from Deutsche Bank AG and a letter of 9 August 2000 to the Taxpayer from Deutsche Securities. 8 The letter of 28 July 2000 confirmed the Taxpayer's assignment to Deutsche Bank, Tokyo. The letter stated that, during the period of the assignment, the terms contained in the letter were to prevail over any of the Taxpayer's terms of employment with Deutsche Australia that may be inconsistent with any of the terms of the letter. The letter stated further that the Taxpayer's employing company would continue to be Deutsche Australia throughout the assignment. The letter dealt with the expected period of assignment, the Taxpayer's remuneration and incidental matters such as transportation and relocation allowances. The letter of 9 August 2000 confirmed the Taxpayer's assignment to Deutsche Securities and dealt with the date of commencement and the duration of the assignment, the salary payment to be made by Deutsche Securities and other incidental matters concerning the terms of the secondment. 9 On 14 October 2002, while still on secondment pursuant to those arrangements, the Taxpayer was informed by a representative of Deutsche Australia that his position had become redundant. Because of the termination of the Taxpayer's employment with Deutsche Australia, his assignment with Deutsche Securities was also terminated. Thus, the Taxpayer worked in Tokyo from 1 August 2000 to 15 October 2002 and was resident in Japan for the whole of that time. The Taxpayer returned to Australia on 22 December 2002. 10 On 17 October 2002 the Taxpayer was informed by telephone that he would be paid an amount in lieu of notice equal to three months' salary. The Taxpayer responded that that was totally unacceptable and was not consistent with his understanding of the practice of Deutsche Australia. 11 On 5 November 2002 Deutsche Bank AG wrote to the Taxpayer setting out the termination payment, repatriation and other arrangements arising as a consequence of the Taxpayer's redundancy, effective 15 October 2002. The termination payment was to include a sum in Australian dollars and another sum in Japanese yen. The Australian dollar amount included the sum of $262,625 as a termination payment equal to 11 months' salary. The Japanese yen payment included a payment in yen of 2.5 months' notice. The letter stated the "home shadow salary" on which the Australian dollar amounts had been calculated. The letter also stated that the 2.5 month notice period payment had been calculated at the Taxpayer's net salary rate in yen. 12 On 18 November 2002 the Taxpayer's solicitors wrote to Deutsche Australia saying that the termination payments proposed in the letter of 5 November 2002 reflected only part of the Taxpayer's lawful entitlements. The letter then recited the employment history of the Taxpayer with Deutsche Australia and his secondment to Japan. It also stated the details of bonuses and salaries received while on secondment to Japan. The letter went on to assert that, since there was no express agreement between Deutsche Australia and the Taxpayer as to the length of notice required to terminate his employment, he was entitled to reasonable notice. A payment of three months' notice is insufficient. The letter went on to demand a payment in lieu of reasonable notice calculated on the basis that the reasonable notice period was 18 months. The letter asserted that the proposed redundancy payment of 11 months' base monthly salary based on the Taxpayer's Australian shadow salary did not reflect his entitlement at law. 13 Deutsche Australia's solicitors replied on 9 December 2002. After reciting various contentions and arguments, the letter made an offer on behalf of Deutsche Australia to make a payment of a sum in Australian dollars representing an actual payment or payment in lieu of a total of 14 months' salary. The payment was to be in full and final satisfaction of any entitlements that the Taxpayer may have "to notice of termination and redundancy pay". That proposal is consistent with the proposal in the letter of 5 November 2002. That is to say, the 14 month calculation involved 11 months' redundancy pay and three months' payment in lieu of notice. 14 The proposal for redundancy pay and notice is reflected in redundancy guidelines of Deutsche Australia published to various employees on 25 May 2001. Notice: 3 months for Directors and Managing Directors and 1 month for all other staff. 15 On 12 December 2002, the Taxpayer's solicitors responded to the letter of 9 December 2002. Their letter canvassed various arguments on behalf of the Taxpayer and included the assertion that the Taxpayer did not accept the proposition that a three month period was reasonable and maintained that 18 months was reasonable for the circumstances that had previously been advised. 16 A draft Statement of Claim by the Taxpayer against Deutsche Australia in the Supreme Court of New South Wales was provided to Deutsche Australia's solicitors on a without prejudice basis in February 2003. While that draft was not before the Tribunal, a Statement of Claim that was subsequently filed made a claim for a payment equivalent to 24 months' salary. An inference can therefore be drawn that the draft Statement of Claim made such a demand. 17 In any event, following the provision of the draft Statement of Claim to Deutsche Australia's solicitors, they wrote again to the Taxpayer's solicitors on 26 February 2003, saying that Deutsche Australia proposed to pay the Taxpayer the sums that it believed he was entitled to in connection with the termination of his employment and some additional amounts as a gesture of good faith. After referring to payments that had already been made, the letter said that Deutsche Australia proposed to pay a further net total of $1,052,426.72. The letter went on to assert that the payment to the Taxpayer would not include a payment in lieu of 24 months' notice, which was said to be "unreasonable and unjustifiable on any analysis, having regard to [the Taxpayer's] contractual entitlements and circumstances". 18 The Taxpayer's solicitors responded on 2 April 2003 taking issue with a proposal in the letter of 26 February 2003 to deduct tax in respect of certain of the payments. The letter asserted that Deutsche Australia would have no compulsory Australian or Japanese withholding obligations in relation to payments referable to the Taxpayer's Japanese employment, such as the redundancy payment and the Japanese annual leave payments. The letter asserted that such payments were plainly not eligible termination payments within s 27A of the Assessment Act. 19 On 10 April 2002, the Taxpayer's solicitors wrote again to the solicitors for Deutsche Australia, indicating that a point of difference appeared to be withholding tax from the amount referred to as the 14 month termination payment. He was a non-resident during the whole time of the relevant employment and the payment will be made only in relation to the redundancy from that employment. The letter enclosed a termination payment schedule showing the calculation of an Australian Related Net Payment of $535,068.03 and a Japan Related Net Payment of $595,040.17. 21 However, the Taxpayer was still not content and, on 30 June 2003, commenced a proceeding against Deutsche Australia in the Supreme Court of New South Wales, claiming damages for wrongful termination of his employment without adequate notice. The proceeding was subsequently settled and on 8 June 2005 a Deed of Release was entered into between the Taxpayer and Deutsche Australia. After reciting, inter alia , the two payments that had already been made on 1 May 2003 by Deutsche Australia and Deutsche Securities, the Deed of Release provided that Deutsche Australia would make a further payment of $700,000 to the Taxpayer as an additional discretionary bonus. In addition, the Deed of Release contained mutual releases of the parties. • Was part of the Redundancy Payment of $497,068.83 an exempt non-resident foreign termination payment? 25 It was common ground that the Redundancy Payment was made in consequence of the termination of the Taxpayer's employment and that the payment would be an eligible termination payment, such that paragraphs (i) and (ii) of the definition in s 27A(1) of the Assessment Act were satisfied. The grounds of appeal relate to the application of paragraphs (iii) and (iv). 26 The Tribunal found that the Taxpayer's employment over the last two years had been performed in Japan but that he was still employed by Deutsche Australia throughout that period. The Tribunal considered, therefore, that the character of the Redundancy Payment in the Taxpayer's hands would depend on all the surrounding circumstances. 27 The Tribunal found that the Redundancy Payment compensated the Taxpayer for the termination of his position with Deutsche Australia at least in part. The Tribunal observed that, as set out in the Deed of Release, the calculation of the Redundancy Payment was based on 14 months' salary, being 3 months' salary in lieu of notice and an additional payment in accordance with Deutsche Australia's redundancy guidelines. The Tribunal considered that there was nothing to suggest that the payment was to compensate solely for the period of employment while not a resident of Australia, despite the fact that the Taxpayer was in Japan when he was informed of his redundancy. 28 The Tribunal observed that the Deed of Release was not explicit as to whether the payment was compensation for the loss of the Australian employment or for the loss of the position in Tokyo. However, the Tribunal considered that there was a clear implication that the payment was governed by the employment terms in Australia. Thus, the payment was made by Deutsche Australia, the Australian employer, and it was made in accordance with the guidelines applying to Deutsche Australia employees. The Tribunal considered that the perception that the Redundancy Payment was related principally to the long term Australian employment of the Taxpayer was reinforced by the circumstance that Deutsche Securities made a separate payment to the Taxpayer at the same time. That suggested to the Tribunal that Deutsche Securities paid the Taxpayer what it considered was due to him in accordance with the employment letter whereby Deutsche Securities agreed to pay the Taxpayer his Japanese salary. 29 The Tribunal observed that, had the Redundancy Payment been for employment that was service in a foreign country, that could have been made clear by several methods. Nevertheless, since the Commissioner's objection decision had accepted that the payment was for service in a foreign country, the Tribunal declined to vary the decision in that respect. Thus on one view, the Tribunal appears to have concluded that the employment of the Taxpayer, in consequence of the termination of which the Redundancy Payment was made, was service in a foreign country. 30 However, later in its reasons, the Tribunal cast doubt on that as a finding of fact, saying that it was satisfied that the Taxpayer came within paragraphs (i) and (ii) "and possibly...(iii), but does not satisfy paragraph (iv)...because [the Redundancy Payment] was calculated by taking into account the whole period of his service in and outside Australia. The Tribunal considered that, having regard to the terms of the Deed of Release, the Taxpayer received the Redundancy Payment at least partly in consequence of the loss of his position with Deutsche Australia. That redundancy also brought the overseas secondment to an end. However, the Tribunal did not consider that that automatically meant that the payment was made for the purpose of compensating the Taxpayer for the loss of the employment in Tokyo. 32 The Tribunal found that the Redundancy Payment compensated the Taxpayer for the loss of his employment at Deutsche Australia, including the loss of his contractual entitlement to resume work with Deutsche Australia in Australia when his secondment to Deutsche Securities ended. The Tribunal concluded, therefore, that the amount of the Redundancy Payment took into account the period of the Taxpayer's service within Australia, in addition to his period of service in Japan, and that it followed that the Redundancy Payment did not satisfy the requirement that it be related solely to a period of the employment during which the Taxpayer was not a resident of Australia. 33 The Tribunal then considered the Taxpayer's contention that the Redundancy Payment should be dissected into components. That was an assertion apparently made by the Taxpayer's accountant. 34 The Tribunal considered that the definition of exempt non-resident foreign termination payment in s 27A required that the relevant payment must relate solely to a period of the employment during which a taxpayer was a non-resident of Australia. The Tribunal considered that it is the characterisation of that whole payment, not its constituent parts, with which the definition is concerned. Accordingly, the Tribunal concluded that, while it may be possible to attribute a portion of the Redundancy Payment to the Taxpayer's service in Tokyo, the whole of the Redundancy Payment nonetheless did not meet the relevant criteria of the definition. (b) whether the question of whether a payment "related solely to a period of the [taxpayer's] employment during which the taxpayer was not a resident of Australia" within para (a)(iv) of the definition ... is to be determined by an objective consideration of the facts and circumstances, or whether the subjective beliefs either of the employer or the taxpayer, or the beliefs of each, are determinative or to be taken into account. The existence of a question of law is not merely a qualifying condition to ground an appeal from a decision of the Tribunal. Rather, it and it alone, is the subject matter of the appeal and the ambit of the appeal is confined to that question of law: Brown v The Repatriation Commission [1985] FCA 194 ; (1985) 7 FCR 302. The Commissioner contends that the first three of those purported questions are not questions of law and should be struck out. 37 The thrust of the Taxpayer's contentions, in effect, is that, at the time of the termination of his employment, he was physically located in Tokyo and was not a resident of Australia. He contends that, while the period of reasonable notice may properly be determined by reference to the time of his employment by Deutsche Australia, the relevant fact is that, at the time of termination, he was being remunerated by Deutsche Securities and the Redundancy Payment was made in circumstances where he had asserted, through his solicitors, an entitlement to a payment equivalent to 24 months' salary, and had asserted that any such payment would not be subject to deduction of tax because it was a payment within the definition in s 27A. 38 The grounds of appeal are not easy to comprehend. First, the Taxpayer says that the Tribunal erred in considering that legal employment by Deutsche Australia, an Australian entity, was service not in a foreign country under paragraph (iii). Rather, he says, the Tribunal should have considered the legislative context, which included s 23AG of the Assessment Act, which had the effect that salary paid while not a resident would be exempt. The Taxpayer asserts that, had he been given reasonable notice, the reasonable notice period of 14 months would have been worked out in Japan for which he would have received salary that would have been exempt. However, there was no finding to that effect by the Tribunal. Indeed, the Tribunal was not asked to make such a finding. It is certainly not self-evident that such a finding should or could have been made on the material before the Tribunal. The first ground has no substance. 39 The second ground is that, in so far as the Tribunal inferred from the fact that the Taxpayer's legal employment was with Deutsche Australia, an Australian entity, that there was in fact some service not in a foreign country during the period of the Taxpayer's secondment to Japan, the Tribunal made an error of law. The Taxpayer contended that, while on secondment, his service was service in Japan and he was made redundant from that Japanese position, and that, therefore, the payment was a payment in lieu of notice of termination of his service in Japan. 40 However, that is not the finding made by the Tribunal. The Tribunal clearly found that the payment related not only to the time that the Taxpayer served on secondment in Japan but also to the time of his service in Australia from 1992 until 2000. That was a finding of fact from which there is no appeal under s 44 of the Tribunal Act. In any event, the finding was clearly correct in the light of the exchange of correspondence between the Taxpayer's solicitors and the solicitors for Deutsche Australia. 41 The third ground is that the Tribunal should have characterised the Redundancy Payment solely by reference to that in respect of which it objectively was a payment, that is to say, it was a payment in lieu of reasonable notice of termination of in Japan. As I have said, that is a question of fact and, on the material before the Tribunal, there appears to be no error. 42 The Taxpayer contended that the Tribunal erroneously calculated the Redundancy Payment by reference to how it was calculated by Deutsche Australia. The Taxpayer contends that it is erroneous to characterise a payment by the means by which it is calculated. He contends that it is highly irrelevant that Deutsche Australia called the payment "14 months' salary. " What is relevant, he says, is that the payment was in response to his claim for a payment equivalent to 24 months' salary in lieu of 24 months' reasonable notice of termination of his Japanese secondment. He asserts that, since there was no agreement as to the character of the payment made by Deutsche Australia to the Taxpayer, one is left with the objective circumstances. The Taxpayer contends that the Tribunal erred in focusing on the subjective view of Deutsche Australia. He says that that erroneous view is magnified by its observation that the Taxpayer had not presented any corroborative evidence of his own view of how the money should be apportioned. 43 The Taxpayer contends, further, that the Tribunal erred in considering the recitals in the Deed of Settlement as evidencing what one party had stated and done unilaterally some two years previously. He advanced the proposition, which is undeniable, that the conduct of the parties after the event could not, by itself, change the character of the payment. However, that is not what the Tribunal was doing. It was endeavouring to do precisely what the Taxpayer contended, namely, to characterize the redundancy payment by reference to the surrounding circumstances. One relevant factor is that, albeit two years later, the two parties entered into a Deed of Settlement in which they acknowledged the character of the payment. While, as I have said, that acknowledgement cannot change the character, it is of relevance in terms of how the parties considered it at the time when the payment was made. 44 The Taxpayer emphasised that the payment was made only because he had claimed wrongful termination of his Japanese secondment. When made in 2003, the Redundancy Payment was in partial satisfaction of the Taxpayer's claim for payment in lieu of 24 months' notice of termination of his Japanese secondment. Again however, that misstates the circumstances. The clear thrust of the correspondence is that the Taxpayer had been employed by Deutsche Australia for eight or nine years before his secondment to Japan. The payment made on 1 May was paid by reference to 14 months' salary. That payment represented three months' pay in lieu of notice and one month for each year of employment, including Australian employment, in accordance with the guidelines of Deutsche Australia. 45 A fair reading of the Tribunal's reasons indicates that it had regard to the exchanges of correspondence and the assertions made by the Taxpayer's solicitors. It is difficult to see any error on the part of the Tribunal in concluding that the payment related to employment in Australia as well as the period of employment in Japan. The Redundancy Payment was calculated in accordance with the guidelines, which recognised that the period of employment in Australia was relevant. That is precisely the contention that was advanced by the Taxpayer's solicitors prior to the payment. I do not consider that there is any substance in the third ground. 46 The fourth ground advanced by the Taxpayer is that the Tribunal erred in applying a subjective test in having regard to the fact that Deutsche Australia took into account, in deciding what it would pay the Taxpayer, the long term employment of the Taxpayer by Deutsche Australia. For the reasons I have already indicated, I do not consider that that is an accurate characterisation of the approach adopted by the Tribunal. The material before the Tribunal made it patently obvious that the Redundancy Payment related to the Taxpayer's service with Deutsche Australia in Australia as well as his service in Tokyo. 47 I do not consider that there is any error of law on the part of the Tribunal in concluding that the redundancy payment did not relate solely to a period of employment of the Taxpayer during which he was not a resident of Australia. The Tribunal found as a fact, on the material before it, without error, that the Redundancy Payment related both to the period of his employment while a resident of Australia from 1992 to 2000, as well as the period of his employment during which he was resident in Japan. 48 That then raises the second real issue, namely, whether the Tribunal erred in failing to hold that part of the Redundancy Payment related solely to the period of the Taxpayer's employment during which he was resident in Japan. The Commissioner accepts that that raises a question of law but says that there was no error on the part of the Tribunal in the conclusion that it reached. 49 It would be wrong to allow a determination of the character of a receipt in the hands of the recipient to be affected by a consideration of the uncommunicated reasoning that led the payer to agree to make the payment. On the other hand, in a proper case, a single payment or receipt of a mixed nature may be apportioned amongst the several heads to which it relates. Thus, it may be appropriate to follow such a course where the payment or receipt is in settlement of distinct claims of which some at least are liquidated or are otherwise ascertainable by calculation. On the other hand, it will not be appropriate where the payment or receipt is in respect of a claim or claims for unliquidated damages only and is made or accepted under a compromise that treats it as a single undissected amount of damages. In such a case, the amount must be considered as a whole: McLaurin v Federal Commissioner of Taxation [1961] HCA 9 ; (1961) 104 CLR 381 at 391. 50 The Commissioner accepts that, had there been a basis for apportioning part of the Redundancy Payment, such that it could be said that that part was attributable to the Taxpayer's service in Japan and related solely to the period of his employment in Japan, it may have been possible to dissect the Redundancy Payment. However, no such apportionment was made by the Taxpayer and Deutsche Australia. There was a dissection made, in the correspondence that led to the payment, insofar as a distinction was drawn between redundancy and payment in lieu of notice. However, that distinction was not related to the respective periods of employment in Australia and in Japan. The 11 months' redundancy was calculated by reference to the total period of employment of the Taxpayer by Deutsche Australia from the Taxpayer's commencement in 1992 until his termination in 2002. Similarly, the payment in lieu of notice was not limited to the period of his employment in Japan. The material before the Tribunal indicated that the Taxpayer continued to be employed by Deutsche Australia. Deutsche Australia terminated his employment, albeit at a time when he was serving in Japan and was non-resident. 51 It may have been possible for the Taxpayer and Deutsche Australia to agree on the manner in which the Redundancy Payment was to be apportioned as between service in Japan and service in Australia, such that that part attributable to the service in Japan would not be included in the Taxpayer's assessable income. However, they did not do that. There was no error of law on the part of the Tribunal in concluding that dissection of the Redundancy Payment was not permissible in the circumstances before it. 52 It follows that the Taxpayer's appeal must be dismissed. I understand the parties have agreed that the Commissioner will bear the Taxpayer's costs in any event. I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

appeal from decision of administrative appeals tribunal reviewing decision of commissioner appellant was made redundant while on secondment in japan whether redundancy payment constituted exempt non-resident foreign termination payment no error in tribunal's decision that redundancy payment was not solely referable to period of employment in foreign country no error in tribunal's decision that redundancy payment could not in the circumstances be apportioned between employment in australia and employment in japan appeal dismissed taxation

It also alleged that the Australvic group of companies were trading while insolvent, had failed to keep proper books and records and that Mr Kyriackou had improperly diverted the companies' funds for his own use. Orders were sought for: (a) the winding up of the scheme; (b) the removal and replacement of the liquidator of the second defendant; and (c) the winding up of the third to seventh defendants. 2 ASIC now seeks to discontinue the action for three reasons. First, part of the relief sought by ASIC is no longer necessary. Since the commencement of the action the fifth and sixth defendants have been deregistered and the liquidation of the third defendant is imminent. Second, ASIC is of the opinion that the fourth and seventh defendants pose no risk to the public interest given the cessation (as has occurred) of the alleged scheme. Third, ASIC does not wish to incur the disproportionate costs that would be involved in a trial dealing with only the fourth and seventh defendants. 3 Order 22 of the Federal Court Rules requires ASIC to obtain leave to discontinue the action. That course will not be opposed. What is in issue is whether ASIC must pay Mr Kyriackou's costs of the proceeding to date. 4 For this purpose, Mr Kyriackou served ASIC with a notice to produce which, in substance, calls for the production of all ASIC files brought into existence since the investigation into the Australvic group commenced. The notice to produce also seeks production of ASIC's files in relation to a number of individuals who are not parties to this suit. The reason these documents are sought is for Mr Kyriackou to establish his central proposition on costs; namely that from the outset of this action ASIC's case against the defendants was bound to fail. If the documents support that contention they will no doubt be tendered in support of his costs argument. Mr Levine, who appeared for Mr Kyriackou, indicated that Mr Kyriackou would seek costs on an indemnity basis. 5 In effect what Mr Kyriackou is attempting to achieve, if he finds the evidence to support his contention, is to have a trial of the action solely for the purpose of achieving a favourable costs order. The question I must resolve is whether Mr Kyriackou is entitled to take that course. ASIC contends that he is not and has applied to have the notice to produce set aside. 6 I think that the cases are against Mr Kyriackou. It is now well established that a court can determine costs without the need for a trial. Indeed, the view that has been taken is that if a case has settled or has otherwise come to an end there should be no trial for the sole purpose of deciding who should bear the costs. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In that case Hill J considered the circumstances in which a court could make a costs order without a trial. (2) It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a Court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial. This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue. He said (at [49]) that it may be possible to adduce evidence on the question of costs. However he went on to say that "the evidence must be confined and not venture into areas of disputed fact". See also Ziegler v Piva (No 3) [2005] VSC 331 , [20] and [21]. 10 It is a very sensible rule that where an action has been settled or is to be discontinued that costs should be determined without a trial. Not only is the trial hypothetical, in the sense that there is no longer a controversy about the substantive issues raised in the litigation, it would be extraordinarily wasteful, both of the court's time and the parties' resources, to require a trial solely confined to costs. Unless there was direct authority requiring me to impose a trial, I would not do so. I can find no such authority. 11 I will make an order that ASIC is not required to comply with the notice to produce. It should have its costs of the application. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.

proceeding to be discontinued notice to produce served documents sought for argument on costs party anticipating trial on costs no right to trial notice to produce set aside practice and procedure

The Australian Competition and Consumer Commission ('the ACCC') alleged that a series of arrangements or understandings existed, between competitors in that market, each containing a provision having the purpose, or having or being likely to have the effect, of fixing those prices. Further, the ACCC alleged that, on a number of occasions in 1999 and 2000, the parties to all or some of those arrangements or understandings gave effect to their arrangements or understandings, by fixing the retail price of unleaded petrol ('ULP'). This conduct was alleged to have contravened s 45(2)(a) and (b) of the Trade Practices Act 1974 (Cth) ('the Trade Practices Act '). 2 The relief sought is primarily the imposition of pecuniary penalties (of a civil, not a criminal, kind), but also includes declaratory and injunctive relief. 3 Some respondents have admitted the substance of the allegations against them. Some of the natural person respondents, associated with the corporate respondents, gave evidence on behalf of the ACCC at the trial of the proceeding. In addition to that direct evidence, the ACCC relied on circumstantial evidence, principally a document compiled from data available to the ACCC of records of telephone communications between participants in the Geelong retail petrol market, and records of changes to the retail price of ULP by various participants in that market. The ACCC also sought to rely on the formal admissions made by some respondents, and on other admissions. In some instances, it sought to use admissions by one party against another party, on the basis that the two parties concerned were engaged in the furtherance of a common purpose, and that the statements of one were admissible against the other. 4 These reasons for judgment deal extensively with the factual issues arising from the evidence. They also deal with some legal issues, principally those concerned with the elements necessary for the existence of an arrangement or understanding for the purposes of s 45(2) of the Trade Practices Act . They are necessarily long, because the trial occupied 31 days, and the quantity of documentary evidence tendered was substantial and required extensive analysis. Part VI of the Trade Practices Act relates to enforcement and remedies. By s 76(1B) , the pecuniary penalty payable by a person other than a body corporate is not to exceed $500 000 for each act or omission to which s 76 applies. By s 77(1) , the ACCC may institute a proceeding in a court for the recovery on behalf of the Commonwealth of a pecuniary penalty referred to in s 76. According to the Evidence Act 's dictionary, an admission means a previous representation that is made by a person who is or becomes a party to a proceeding and is adverse to the person's interest in the outcome of the proceeding. Previous authorities, in which the courts have pronounced upon the meanings of particular provisions, may be binding, and are often helpful. Sometimes, however, those pronouncements are made in the context of the resolution of particular issues, which may differ from those raised in a current case. As Merkel J recognised in Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd [2004] FCA 1678 (2004) 141 FCR 183 (' the Ballarat case ') at [57], previous statements of principle can be difficult to apply in a case that raises different issues. As his Honour said, it is necessary to return to the words of the statute. 24 Section 45(2)(a) of the Trade Practices Act uses the terms 'contract', 'arrangement' and 'understanding'. These are plainly intended to represent a spectrum of consensual dealings. The words of the statute themselves so demonstrate. They provide that a corporation is not to 'make' a contract or arrangement, or to 'arrive at' an understanding, if the contract, arrangement or understanding has a specified content. A corporation cannot 'make' a contract or arrangement, or 'arrive at' an understanding, without there being at least one other party to the contract, arrangement or understanding. The other party must also participate in the making, or the arriving at, before there can be a contract, arrangement or understanding. Clearly, it is not possible to 'make' something, or to 'arrive at' something, unless what is made or arrived at exists at the end of the process of making or arriving at. What must exist for s 45(2)(a) to apply is one of the three forms of consensual dealing. 25 The term 'contract' is well understood by lawyers. A contract is the result of the acceptance by one party of an offer made by another, resulting in the minds of the two parties being at one as to the agreement they have made. It must be supported by good consideration, have sufficient certainty of terms that it be possible to determine what has been agreed, and be accompanied by an intention on the part of the parties that a legally binding relationship should be established by it. In ordinary circumstances, the obligations created by a contract are enforceable in a court, but their enforceability is subject to the possibility of defences arising from the nature of the contract itself, or from external circumstances. One defence arising from the nature of the contract itself results from the illegality of its purpose. In using the word 'contract' in s 45(2)(a) of the Trade Practices Act , Parliament must have intended to refer to a consensual dealing having the fundamental characteristics of a contract, but not necessarily being enforceable in a court of law, because s 45(2)(a) would itself give rise to the defence of illegality, and thereby prevent enforcement. Thus, the word 'contract' for the purposes of s 45(2)(a) describes a consensual dealing with a high degree of formality. 26 The word 'arrangement' is less clearly understood, and more susceptible of elasticity as to its meaning. In general, it appears to connote a consensual dealing lacking some of the essential elements that would otherwise make it a contract. For instance, a dealing that would otherwise be a contract may be described as an 'arrangement' if the parties to it intended not to create a legally binding relationship, but only to give expression to their intentions as to the obligations that each felt morally bound to adhere to in relation to what was to pass between them, or to be carried out by them. Of course, an arrangement might be a broader concept than this, because it is a term the boundaries of which have not been fixed in the traditional understanding of lawyers. The Oxford English Dictionary gives as the apparently appropriate meaning of the word 'arrangement' 'a settlement of mutual relations or claims between parties; an adjustment of disputed or debatable matters; a settlement by agreement', or alternatively, 'disposition of measures for the accomplishment of a purpose; preparations for successful performance. ' The ordinary understanding of what amounts to an 'arrangement' makes it difficult to envisage that an arrangement could come about without express negotiations between the parties, although there have been suggestions that an arrangement can be tacit. See Federal Commissioner of Taxation v Cooper Brookes (Wollongong) Pty Ltd (1979) 41 FLR 277 at 301 --- 302 per Fisher J, with whom Brennan and Deane JJ agreed, referred to by Franki J in Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 at 24 in the context of s 45(2) of the Trade Practices Act . At the very least, there must be some express communication between the parties, although what is said may not amount to offer and acceptance for the purposes of the law of contract. The need for express communication is also suggested by the use of the verb 'make' in conjunction with both 'contract' and 'arrangement' in s 45(2)(a) of the Trade Practices Act . It is hard to see how two parties could 'make' an 'arrangement' without doing so expressly, at least as to the substance of the arrangement, even if the acceptance by one party of what the other has communicated is implicit in some act, rather than expressed in words. 27 The word 'understanding' is obviously intended to connote a less precise dealing than either a contract or arrangement. This is so because of the meaning of the word 'understanding' itself, and because, in the terms of s 45(2)(a) , the parties to it may 'arrive at' it instead of making it. Once again, the Oxford English Dictionary supplies an appropriate definition: 'a mutual arrangement or agreement of an informal but more or less explicit nature. ' It is the informal and less explicit nature of an understanding that led Smithers J to describe the concept of an understanding as 'broad and flexible' in L Grollo & Co Pty Ltd v Nu-Statt Decorating Pty Ltd (1978) 34 FLR 81 at 89. 28 However broad and flexible an understanding might be, for the purposes of s 45(2)(a) of the Trade Practices Act it must be a consensual dealing between parties. Like an arrangement, it falls outside the sphere of contractual obligations of a kind normally enforceable in a court. Unlike an arrangement, it can be tacit, in the sense that it can be arrived at by each party, either by words or acts, signifying an intention to act in a particular way in relation to a matter of concern to another party. In order to be a consensual dealing, however, an understanding must involve a meeting of minds. Where the minds of the parties are at one that a proposed transaction between them proceeds on the basis of the maintenance of a particular state of affairs or the adoption of a particular course of conduct, it would seem that there would be an understanding within the meaning of the Act. It is unnecessary to set out all of the authorities in which it has been referred to. I accept the correctness of what Smithers J said without hesitation. It is important, however, not to confuse what is required for the formation of an understanding within the meaning of s 45(2)(a) of the Trade Practices Act with what is required to be the content of an arrangement or understanding for the purposes of s 45(2)(a). Counsel for the ACCC were inclined to rely on authorities describing the formation of an understanding, when attempting to persuade the Court as to the required content. 31 Section 45(2)(a) of the Trade Practices Act , and the other provisions found in s 45 and s 45A , which are set out above, make a number of things very clear. To fall within s 45(2)(a) , an arrangement or understanding must be substantial enough to contain at least one 'provision'. Further, the kind of provision contemplated by s 45(2)(a)(ii) is a provision capable of having a 'purpose' or an 'effect'. This element is supplied by the deeming effect of s 45A(1) if the provision has the purpose, or has or is likely to have the effect, of fixing, controlling or maintaining, or providing for the fixing, controlling or maintaining of, among other things, a price. By s 45A(5) , the determination of whether a provision of the required kind exists is not dependent upon form, or upon express description. The requisite provision can be in the form of a recommendation, according to s 45A(6). What is important is its substance. There must therefore be sufficient substance to whatever is the result of the formation of an understanding for it to contain a provision of the required kind. 33 In Federal Commissioner of Taxation v Lutovi Investments Pty Ltd [1978] HCA 55 ; (1978) 140 CLR 434, the High Court was dealing with the meaning of the word 'arrangement' in legislation other than the Trade Practices Act . But in our view it is not essential that the parties are committed to it or are bound to support it. An arrangement may be informal as well as unenforceable and the parties may be free to withdraw from it or to act inconsistently with it, notwithstanding their adoption of it. Plainly, it contemplates that there must be something of substance from which the parties can withdraw, or with which they can act inconsistently. By their 'adoption' of whatever matter of substance is part of the arrangement or understanding, the parties will necessarily have adopted a provision that they see as an appropriate way to regulate their future conduct. To say that they are able to withdraw from the adoption of such a provision, or to act inconsistently with it, is to say nothing more than that an arrangement or understanding is not enforceable in a court of law in the way that a contract is. The notion of an arrangement or understanding that each party will act as it sees fit on every occasion is entirely foreign to s 45 of the Trade Practices Act . 35 Counsel for the ACCC found it necessary to grapple with the use of the word 'commitment' in the judgment of the Full Court in Apco Service Stations Pty Ltd v Australian Competition and Consumer Commission [2005] FCAFC 161 (2005) ATPR 42-078 (' Apco Service Stations ') at [43] --- [47]. In that case, which concerned allegations that dealers in the Ballarat retail petrol market had been involved in an arrangement or understanding to fix the price of petrol, and which involved some of the parties to the present case, the trial judge had declined to make a finding that one dealer became committed to any price increase agreed on by the other dealers. In addition, his Honour had made a finding that the other dealers had no expectation that the uncommitted dealer's readiness to receive telephone calls about prices meant that the uncommitted dealer would substantially match those prices. The Full Court expressed the view that these findings led to the unavoidable conclusion that the uncommitted dealer was not a party to any understanding that it would fix its prices at the same level as the other dealers or at any particular level, or even that it would increase its prices at all. In expressing this view, at [45], the Full Court pointed out that the appellants in that case had not disputed that the trial judge had enunciated the correct legal principles. The trial judge had referred, and the Full Court also referred, to observations of Lindgren J in Australian Competition and Consumer Commission v CC (NSW) Pty Ltd [1999] FCA 954 (1999) 92 FCR 375 at [141] , which were specifically endorsed by a Full Court in Rural Press Ltd v Australian Competition and Consumer Commission [2002] FCAFC 213 (2002) 118 FCR 236 at [79] . A mere expectation that as a matter of fact a party will act in a certain way is not enough, even if it has been engendered by that party. In the present case, for example, each individual who attended the Meeting may have expected that as a matter of fact the others would return to their respective offices by car, or, to express the matter differently, each may have been expected by the others to act in that way. Each may even have "aroused" that expectation by things he said at the Meeting. But these factual expectations do not found an "understanding" in the sense in which the word is used in ss 45 and 45A . The conjunction of the word "understanding" with the words "agreement" and "arrangement" and the nature of the provisions show that something more is required. The Full Court then referred at [47] to the judgment of Lockhart J in Trade Practices Commission v Email Ltd (1980) 31 ALR 53 as a practical illustration of the proposition that a mere hope or expectation that a party will act in a particular way is insufficient to constitute an 'understanding' for the purposes of s 45(2) of the Trade Practices Act . The Full Court pointed out that Lockhart J in Email held that, whilst sending price lists to a competitor assisted the competitor to follow the sender's prices if it chose to do so, and to do so more quickly than might otherwise be the case, in the absence of any commitment such communications were not sufficient to give rise to the meeting of minds essential to an arrangement or understanding. The Full Court held that the same principle was applicable in the Apco Service Stations case. Information conveyed by some dealers to the uncommitted dealer may have been useful to the uncommitted dealer in enabling him to have his franchisees check competitors' prices and know when to raise his own prices if he chose to do so, but the absence of any expectation that he would do so was fatal to the existence of any understanding. 37 In the present case, counsel for the ACCC recognised that the judgment in Apco Service Stations was binding on me. They made the formal submission that the Full Court was in error when it required that there be some commitment, before there could be an understanding for the purposes of s 45(2)(a) of the Trade Practices Act . The reality is that the previous authorities dealing with the content of an understanding, as distinct from its formation, provide ample support for what the Full Court said in Apco Service Stations . More than ample support is also found in the analysis of the relevant provisions, which I have already set out in [24] --- [34]. As I have said, for the purposes of s 45(2)(a) there can be no such thing as an understanding that leaves each party to it free to do whatever it wishes. Whatever word may be chosen to represent the essential element of an understanding for the purposes of the relevant statutory provisions, it is clear that element involves the assumption of an obligation, unenforceable in any court of law, but merely morally binding or binding in honour. Any reservation that may have existed about this has been dispelled by the High Court, which dismissed the ACCC's application for special leave to appeal from the Full Court in Apco Service Stations on 2 June 2006. See ACCC v Apco Service Stations Pty Ltd & Anor [2006] HCATrans 272. In the light of the facts as found, the case does not raise any issue of law suitable to a grant of special leave to appeal. The application is dismissed with costs. 39 As I have said, the concepts of contract, arrangement and understanding relevant to the application of s 45(2)(a) of the Trade Practices Act are concepts representing points on a spectrum of consensual dealings. It is possible that the spectrum might be extended in one direction beyond contract, to include even more solemnly binding consensual obligations, such as deeds under seal. It is difficult to see that the spectrum of consensual dealings could extend in the other direction beyond the concept of 'understanding', whilst still remaining relevant for the purposes of s 45(2)(a). That end of the spectrum, therefore, lies somewhere between the outer limits of what constitutes an 'understanding' and the closest form of non-consensual dealing that could be imagined. It is possible that this closest form is the expectation that a party will act in a particular way, engendered by that party, to which Lindgren J referred in CC (NSW) Pty Ltd at [141]. It may be in the realm of parallel conduct, even conscious parallel conduct, such as the adoption of identical prices for homogeneous products, which clearly lies beyond the realm of 'understanding'. See the American authorities cited by Lockhart J in Email at 56 --- 57. 40 The line between what amounts to an 'understanding' for the purposes of s 45(2)(a) and what falls outside the spectrum of consensual dealings relevant to that provision will always be difficult to draw. This is particularly so in a case such as the present, in which there is an absence of evidence of express communications from which arrangements or understandings might have been derived, and a consequent reliance upon courses of conduct, coupled with circumstantial evidence, as the only means by which the existence of arrangements or understandings can be established. The crucial question in this case is on which side of the shadowy line delimiting 'understanding' the conduct of various parties fell. 41 Counsel for the ACCC cited numerous authorities on the question whether, for an arrangement or understanding to exist, it is necessary for the parties to have assumed mutual obligations, or whether an arrangement or understanding can exist where only one party assumes an obligation towards the other party. It is unnecessary to cite these authorities, or to refer to them in detail, because the question is academic so far as the present case is concerned. The ACCC has pleaded a series of arrangements or understandings to the effect that both (or all three in the case of one alleged arrangement or understanding) parties to each of them would increase their prices to the same or a similar amount at or about the same time. It is unnecessary to consider what would have happened if the allegation had been that only one party would so increase its prices, whilst the other party was free to do whatever it saw fit. Apart from anything else, it is obvious that it would be more difficult to sustain an allegation of an arrangement or understanding of that kind than it is to make good an allegation of the existence of an arrangement or understanding involving mutual obligations. The use of the word 'may' in the rule itself indicates this. If authority be needed to make good the proposition that the power is discretionary, it is found in Termijtelen v Van Arkel [1974] 1 NSWLR 525 at 529 per Hope JA and at 534 --- 535 per Bowen CJ in Eq. In that case, the Court of Appeal of New South Wales was examining three separate legislative grants of power to give judgment based on admissions arising from pleadings. Their Honours held that each of the three grants of power was a grant of discretionary power. 43 There is some authority, apparently not conclusive, as to the circumstances in which the discretion might be exercised. As long ago as Gramophone Co Ltd v Magazine Holder Co (1911) 28 RPC 221, the House of Lords recognised that there were circumstances in which a court should not be bound to accept admissions. No doubt Courts of Law allow and indeed encourage parties to simplify litigation by making admissions and to a certain extent by waiving their rights, because, when there is a real controversy depending upon real facts, everyone ought to facilitate its authoritative settlement. But that is a very different thing from allowing people to obtain an adjudication upon the footing that something exists or has happened which in truth does not exist, or has never happened. The objection to such a course is most striking when the parties agree to admit as true something which lies at the root of the jurisdiction, and any judgment obtained upon the footing of its truth may be used as a weapon in terrorem against persons not parties to the admission. A Court of Justice can never be bound to accept as true any fact, merely because it is admitted between the parties. At [148], Heydon JA identified the problem as being 'the extent to which the parties, by their conduct of proceedings, can prevent the court from deciding a case in accordance with the law or the facts. ' At [149], his Honour acknowledged that the pleadings define the issues in a civil case, and that a party failing to plead a claim or defence will generally be unable to rely on it at a later time. His Honour then proceeded to discuss the various ways in which admissions of fact can be made: informal out-of-court admissions at [151]; formal admissions in answer to interrogatories at [152]; and formal admissions pursuant to rules of court at [153]. His Honour pointed out that each kind of admission can be contradicted by other evidence, or the court can choose not to act on the admissions. The effect of such admissions is to narrow the issues in dispute: they can thus have the effect of restricting the evidence to be tendered and can prevent evidence being called to the contrary. His Honour also made reference to a statutory power permitting agreed statements of facts. ' His Honour then cited the Gramophone Co case, quoting an extensive passage from the speech of Lord Loreburn LC, including the passage I have quoted at [43]. At [158] and [159], his Honour referred to two other English cases, Adams v Naylor [1946] AC 543 and Royster v Cavey [1947] KB 204, in both of which it had been held that crucial admissions on which the cases had been conducted at first instance should not be accepted, because they were contrary to fact. To do so is tantamount to giving advisory opinions and to encouraging collusive litigation. On the other hand, the courts will act on admissions of or agreements about matters of fact where there is no reason to doubt their correctness. But they are reluctant to do so where there is reason to question the correctness of the facts admitted or agreed. However, these perils do not exist here. It has not been demonstrated that the hypothesis that No 3 wall was common property is plainly incorrect. There is some evidence that it was incorrect; on this appeal evidence strongly pointing in the contrary direction has been filed. Courts commonly act on admissions in relation to matters of fact which might be disputed if the parties desired to do so, but which they have chosen to arrive at a compromise about. The Court could not be so satisfied if it only took the view that the applicant had failed to discharge its burden of proof in relation to the fact or event admitted. To apply a lesser test, it was argued, would be to place an admitting respondent in no different position from a non-admitting one. Counsel for the ACCC also referred to the public policy encouraging the settlement of litigation, which underlies the readiness of the courts to accept admissions on the pleadings as removing the admitted facts from the field of dispute. 49 In my view, to confine the non-acceptance of admissions on the pleadings to circumstances in which their falsity has been established would be too stringent a rule. I recognise that it is important that a party whose allegations in the pleadings have been admitted ought to be entitled to rely upon those admissions. Too great a willingness to depart from those admissions would lead to the lengthening of trials and to uncertainty in the administration of justice, both of which are very undesirable. It seems to me, however, that Heydon JA's formulation of the test in Damberg is the appropriate one, namely that the Court can (and perhaps should) decline to act on admissions when there is 'reason to doubt their correctness', or 'reason to question the correctness of the facts admitted or agreed. The size of this piece of litigation, and the expense of retaining solicitors and counsel to conduct a full-scale defence in a long trial, provide a powerful incentive to the making of admissions, in the hope of securing leniency. In a case in which admissions on the pleadings are made by parties who lack the resources to conduct lengthy litigation in their own defence, the Court should be more ready to put aside the admissions if they appear to be unreliable. Further, in a case such as this, allegations are made of the existence, and the giving effect to, of arrangements or understandings between various parties. There is no alleged arrangement or understanding the existence of which is admitted by both (or, in one instance, all three) parties to it. At best for the ACCC, one party to an alleged arrangement or understanding has admitted the existence, and the implementation, of that arrangement or understanding. The other alleged party (or, in one instance, two parties) to each such admitted arrangement or understanding has defended itself against the allegation. In those circumstances, if the applicant fails to prove against the non-admitting party (or parties) the existence of the arrangement or understanding, then there is a considerable risk that the processes of the Court will be brought into disrepute, if the Court should be required to find against the admitting party that the arrangement or understanding existed and was implemented, but finds in favour of the denying party (or parties) that it did not exist. Members of the public would have some difficulty in understanding how the Court, in a civil case, could reach such contradictory findings. Again, this provides a substantial reason for refusing to act on admissions on the pleadings if, in the light of the evidence, those admissions may be unreliable. 51 Another factor pertinent to a case such as the present is that an admission may amount to a concession as to a matter of law, or a conclusion on a matter of mixed fact and law. If the law is complex, or there is difficulty in determining on which side of an indistinct line the particular facts fall, it is necessary to be wary of accepting an admission conflicting with conclusions drawn on the evidence, and with the benefit of full submissions as to the law. 52 The other issue that may arise in this case, with respect to which it is necessary to look at some authorities, is the question of the admissibility against one respondent of an admission made by another respondent. For instance, if A gives evidence of a conversation between A and B, and A's evidence is that, in the course of the conversation, B said something probative of the existence of an arrangement or understanding between B and C, the evidence is plainly admissible against B as an admission, pursuant to the exception in s 81(1) of the Evidence Act to the hearsay rule in s 59(1). It provides in its own terms that it deals only with the relevance of evidence. Indeed, it is one of the provisions in Pt 3.1 of the Evidence Act , all of which deal with relevance. There can be no doubt that, if the statement made by B in the conversation with A is indicative of the existence of an arrangement or understanding between B and C then, consistently with s 57(2) , the Court may use the content of that statement to determine whether it is evidence that the requisite common purpose existed, and therefore that the evidence is relevant to that question. Given its relevance, the evidence is still not admissible against C unless s 87(1)(c) of the Evidence Act applies. For that to apply, it must be reasonably open to the Court to find that the statement was made in furtherance of a common purpose that B and C had. It is clear that s 87(1)(c) can only operate if it is reasonably open from evidence other than the statement itself that the statement is made in furtherance of a common purpose. This follows from the terms of s 87 itself. The three paragraphs of subs (1) deal with three different situations in which a representation by one person is taken to be an admission by another person. Subsection (2) makes provision for the prerequisites to admissibility under s 87(1)(a) and (b) to be proved by a representation by the same person who made the representation that is tendered as an admission. The prerequisite representation may, and often will, be contained in the same statement that is sought to be tendered as an admission against the party who made it. Section 87(2) says nothing at all about the manner in which the prerequisite to admissibility under s 87(1)(c) is to be established. If the existence of the required common purpose could be established by the representation itself, then a statement by B that indicated that B had a common purpose with C would always be admissible against C. The statement by B would be permitted to pull itself up by its own bootstraps. This would be an undesirable, and unintended, result of the application of s 87(1)(c). 54 Some confirmation of this proposition is available from the authorities. On two occasions, the New South Wales Court of Criminal Appeal has said that s 87(1)(c) of the Evidence Act 1995 (NSW) (which is in the same form as s 87(1)(c) of the Evidence Act ) reproduces the pre-existing common law. See R v Macraild (unreported, NSW Court of Criminal Appeal, Sully, Dunford and Simpson JJ, 18 December 1997) at 9 and Watt v R [2000] NSWCCA 37 at [8] . The pre-existing common law is found in Tripodi v R [1961] HCA 22 ; (1961) 104 CLR 1 at 7 and Ahern v R [1988] HCA 39 ; (1988) 165 CLR 87 at 100. In both of these cases, the High Court of Australia made it clear that the statement by B could only be admissible against C if there were 'reasonable evidence' establishing the existence of the common purpose, apart from the statement itself. I do not necessarily accept, as the New South Wales Court of Criminal Appeals appears to have done, that the 'reasonable evidence' test is identical to the formulation 'reasonably open to find' preferred by the legislature. For present purposes, however, Macraild and Watt stand as authority for the proposition that, so far as they are consistent with the terms of s 87(1)(c) of the Evidence Act , Tripodi and Ahern are to be taken as providing authority on the proper construction of that provision. It follows that s 87(1)(c) must be applied on the basis that the admissibility of B's statement as against C can only be determined by reference to evidence other than the statement itself. 55 Termijtelen is authority for the proposition that the fact that an admission is a deemed admission, pursuant to a provision such as O 11 r 13 of the Federal Court Rules , does not have any effect on the question whether the Court should make a finding in accordance with it if the admission appears unreliable. It is also possible for the Court to dispense with compliance with the requirements of O 11 r 13, under the general dispensing power found in O 1 r 8 of the Federal Court Rules . See Australian Competition and Consumer Commission v Francis [2004] FCA 487 (2004) 142 FCR 1 at [42] --- [43]. It is clear that the powers in O 18 r 4(1) and (2) respectively are discretionary; the Court is not obliged to give judgment on the basis of admissions made, whether in pleadings or otherwise. Nor is it obliged to give such judgment without determining the other issues remaining in the proceeding. By s 6A(2)(a) , the ACCC is a body corporate and by s 6A(2)(d) it may sue in its corporate name. The ACCC is a party given standing by s 77(1) of the Trade Practices Act to institute a proceeding for the recovery on behalf of the Commonwealth of a pecuniary penalty referred to in s 76. Section 80(1) also gives the ACCC standing to apply for an injunction. They are respectively: the first respondent, Leahy Petroleum Pty Ltd ('Leahy'); the second respondent, Apco Service Stations Pty Ltd ('Apco'); the third respondent, Pegasus Retail Pty Ltd ('Pegasus'); the fourth respondent, United Geelong Pty Ltd, formerly called United Fuels Pty Ltd ('United Fuels'); the fifth respondent, Brumar (Vic) Pty Ltd ('Brumar'); the sixth respondent, United Retail Pty Ltd ('United Retail'); the seventh respondent, Liberty Petroleum Pty Ltd ('Liberty') and the eighth respondent, Andrianopoulos Motors Pty Ltd ('Andrianopoulos'). 58 On 4 February 2004, Leahy filed a defence in this proceeding, in which it admitted some allegations against it. On 11 April 2005, Leahy entered into voluntary administration. At a creditors' meeting on 6 May 2005, Leahy was placed in liquidation. The ACCC sought the leave of the Court, pursuant to s 500(2) of the Corporations Act 2001 (Cth) ('the Corporations Act '), to continue the proceeding against Leahy, on the basis that it wished to obtain declaratory relief against Leahy, and to have imposed on Leahy a pecuniary penalty, which would not be provable in the liquidation. The only evidence about the affairs of Leahy discloses that, at the time it went into liquidation, Leahy's liabilities exceeded its assets by in excess of $1 600 000. In the circumstances, I declined to grant leave to proceed. The trouble and expense of proceeding to impose a pecuniary penalty on Leahy, which is extremely unlikely ever to be collected, is unwarranted. Declaratory relief is a largely pointless exercise at the best of times, and has absolutely no point in a case in which the person about whose conduct the declaration is sought is never going to conduct any further activities. If the function of a declaration is to record in a formal way the past acts of a corporation, so that its past conduct may be taken into account against it if it should ever contravene the law in a relevant way again, there is no point in making a declaration when the corporation has ceased to function permanently. As will be seen, there are two natural persons who are alleged to have given rise to the contravening conduct alleged against Leahy. If those contraventions were to be established, and declaratory relief is of any symbolic value at all, any desire for such relief would be satisfied amply by making declarations about the conduct of the two natural persons. In the absence of leave to proceed, no relief can be sought or granted against Leahy in this proceeding. 59 On 15 August 2005, during the trial of the proceeding, the ACCC discontinued the proceeding against Pegasus. The ACCC also abandoned its allegations of conduct contravening the Trade Practices Act in relation to Pegasus. 60 United Fuels came into existence in order to merge the business interests of Eino Heikkila (the 14th respondent), which involved wholesale and retail distribution of Shell-branded petroleum products in Geelong, and Robert James Riordan, which involved similar activities in Colac. With encouragement and assistance from Shell, the two formed United Fuels, of which they and their respective spouses were directors. Responsibilities were divided between them, with Mr Heikkila being in charge of retailing in Geelong, including setting prices for the United Fuels outlets, and Mr Riordan being in charge of wholesaling, and of the operations to the west of Geelong, including Colac. With the passage of time, a personal rift developed between Mr Heikkila and Mr Riordan, and progressed to the point where they were barely able to communicate. As a result, with the cooperation of Shell, they negotiated a settlement, under which Mr Heikkila left the business, and the petroleum retailing industry, altogether. The wholesale distributorship was sold to an unrelated company, Triton Petroleum Pty Ltd ('Triton'), which was said to be controlled by Shell. Mr Riordan formed United Retail, which he controlled, to carry on the retail business as the operator of a number of Shell outlets. Robert Keith Hambrook was employed by United Fuels as its accountant, and became the financial controller for United Retail. Mr Riordan and Mr Hambrook gave evidence on behalf of United Fuels and United Retail at the trial. United Fuels ceased to trade on 30 September 1999, and subsequently changed its name. Accordingly, conduct in contravention of the Trade Practices Act is only alleged against United Fuels up to that date. From 1 October 1999, United Retail effectively became the successor to United Fuels in the conduct of the relevant business. Accordingly, conduct in contravention of the Trade Practices Act is alleged against United Retail only after that date. 61 On 17 December 2004, Merkel J delivered judgment in the Ballarat case , to which I have referred in [23], in a proceeding in which the ACCC alleged the existence of an arrangement or understanding to fix the prices of petrol in the City of Ballarat and its surrounding area. Among those found to be parties to the Ballarat arrangement or understanding was Brumar. Merkel J also found that Brumar had given effect to that arrangement or understanding on some 53 occasions. See the Ballarat case at [382]. On 17 March 2005, his Honour imposed a pecuniary penalty of $4 000 000 on Brumar in respect of those contraventions. See Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) [2005] FCA 254 at [42] . By that date, Brumar was already in liquidation, consequent upon a creditors' meeting on 17 February 2005. Earlier, Brumar had sold its business assets for a sum exceeding $26 000 000. Settlement of the sale occurred on 26 July 2003. After satisfaction of secured and other creditors out of the proceeds of sale, Brumar was left with $994 400. By the time of the liquidation, Brumar was said to have had total assets of $50 000 and creditors totalling $400. After investigation by the liquidator, on 18 May 2005, the liquidator expressed the view that a distribution to creditors of close to 100c in the dollar would be likely, subject to the resolution of a dispute as to whether any debt in respect of the costs awarded against Brumar by Merkel J on 17 March 2005 was provable in the liquidation. The liquidator contended that such a debt could not be proved in the liquidation. For practical purposes, any surplus of assets over liabilities of Brumar would be more than exhausted by the payment of the penalty imposed by Merkel J and the payment of any costs ordered by his Honour. The prospect of the ACCC recovering any pecuniary penalty from Brumar appears to be non-existent. Accordingly, for reasons similar to those I have given with respect to Leahy in [58], I also refused the ACCC's application, pursuant to s 500(2) of the Corporations Act , for leave to proceed against Brumar. 62 There is no dispute that each of Apco, United Fuels, United Retail, Liberty and Andrianopoulos answers the description of 'trading corporation formed within the limits of Australia', and is therefore a 'corporation' for the purposes of the provisions of the Trade Practices Act to which I have referred. Prior to their respective liquidations, Leahy and Brumar also fell within the same provision of the definition of 'corporation' in s 4(1) of the Trade Practices Act . 64 Each of the natural person respondents is an officer or employee of one (or, in two cases, two) of the corporate respondents. The ninth respondent, Ian Lesley Carmichael, was Operations and Transport Manager of Leahy. The 10th respondent, Michael John Warner, was the Corporate Accountant for Leahy. Peter Joseph Anderson, the 11th respondent, was a director and secretary of Apco, and also Apco's General Manager. Up to September or October 1999, the 12th respondent, Bruno Gallucci, was the Retail Business Manager of Pegasus. From October 1999 until May 2000, the position of Retail Business Manager of Pegasus was held by Andrew Ronald Pitman, the 13th respondent. At the same time as it discontinued the proceeding against Pegasus, the ACCC discontinued the proceeding, and abandoned its claims, against Mr Gallucci and Mr Pitman. The 14th respondent, Eino Kalevi Heikkila (whose two given names have been joined as if they were a single name in the title to the proceeding) was a director and the secretary, and occupied the position of General Manager, of United Fuels up to 30 September 1999, when United Fuels ceased trading. The 15th respondent, Garry Victor Dalton, was the Operations Coordinator for Geelong and Ballarat of Brumar from October 1998. Colin James Williamson, the 16th respondent, was employed by United Fuels, in the management of one of its retail outlets, until 30 September 1999. Thereafter, he continued to work at the same outlet, as an employee of United Retail, with the title Customer Service Leader, and additional responsibilities. Alan Shuvaly, the 17th respondent, was National Pricing Manager of Liberty. The 18th respondent, Christos Andrianopoulos ('Chris Andrianopoulos'), was Director of Marketing for Andrianopoulos. 65 Ian Carmichael, Michael Warner, Eino Heikkila and Alan Shuvaly filed defences, each admitting the allegations made against him and against the corporation with which he was associated. Each gave evidence on behalf of the ACCC. Garry Dalton gave evidence in his own defence. Peter Anderson, Colin Williamson and Chris Andrianopoulos did not give evidence. There was some evidence that Colin Williamson had suffered a major heart attack not long before the trial and that his poor health may have been a factor in his decision not to give evidence. Although, on the pleadings, the extent of the relevant market was a matter of controversy, the controversy did not surface in the course of the trial. There was no expert evidence about the structure of the market. It was largely accepted by the parties, if not common ground, that there was a market for the sale of petroleum products, including ULP and Super, to members of the public in the Geelong metropolitan area. It is also the case that some of the retailers of petroleum products operating in the Geelong metropolitan area had retail outlets in outlying towns around Geelong, so that price movements in the Geelong metropolitan area tended to be influential on price movements in those outlying towns, which included Meredith, Lara, Bannockburn, Drysdale, Queenscliff, Point Lonsdale, Torquay and Anglesea. The reverse did not apply; price movements in those outlying towns did not themselves influence prices in the Geelong retail petrol market. A corporation might own and operate its own retail outlets, employing its own managers and staff. In such cases, officers of the corporation would set prices for fuel sold through the corporation's outlets, and communicate any changes in those prices to the managers and staff, usually by telephone. Alternatively, the corporation might let retail outlets to an agent or agents, and supply them with fuel for sale to the public, again at price levels set by the corporation itself. The agent at an outlet might be remunerated by a set percentage of the price, or a set amount of money per litre of fuel sold or, as in the case of Liberty's Geelong outlet, a flat monthly fee. Such outlets are known as commission sites, and the people who operate them are known as commission agents. Some corporations had a mixture of outlets they operated themselves and outlets operated by commission agents. There were also privately-owned outlets, the operators of which set their own prices, selling to the public fuel supplied to them by a corporation which functioned for this purpose as a wholesaler. A number of outlets sold products under one of the well-known brands of the multinational oil companies, BP, Shell, Mobil and Caltex. In those cases, the premises at which the products were sold would be decorated with the colours, logos and names of the brands. Fuels would come, either directly or indirectly, from the oil companies, which acted as wholesalers and distributors, even if not themselves responsible for refining the petroleum and manufacturing the fuels. Other outlets sold petroleum products in their own names, or in the names of the corporations operating them, or for which the outlets were commission sites. Many of those who gave evidence in the proceeding recognised a distinction, perhaps imprecise but nonetheless regarded as real, between the 'majors' and the 'independents'. Speaking generally, the majors were regarded as those whose prices were set, or influenced strongly, by the four oil companies. The 'independents' were generally those free to set their own prices, subject to the constraints of the wholesale prices they had to pay to procure fuels. They tended to be the outlets selling fuels in names other than the four well-known brands, although some independents sold under the banner of the oil companies that supplied them. Some independents regarded themselves as discounters. The City of Geelong lies to the south and west of Corio Bay, with its commercial centre on the southern side, close to where the coastline of the bay turns northward. Running through the metropolitan area, south of the commercial centre, is the Barwon River, which follows a course broadly from north-west to south-east. Geelong is linked to Melbourne by the Princes Highway, which enters the metropolitan area from the north and runs in a generally southerly direction until after it has crossed the Barwon River, where it turns generally south-westerly in the direction of Colac. The Princes Highway goes by different names within the metropolitan area. Thus, in Geelong North, near the western end of Corio Bay, it is Melbourne Road. For a short distance, it becomes Keera Street. Along the western edge of the commercial centre of Geelong, it is known as Latrobe Terrace. South of the Barwon River, it is Settlement Road, before it again becomes the Princes Highway. 70 There are other major roads. At Norlane, the Bacchus Marsh Road intersects with the Princes Highway. It heads in a generally northerly direction through Meredith to Bacchus Marsh. At the point at which the Princes Highway changes from Melbourne Road to Keera Street, it intersects with Church Street. A short distance to the west, Church Street intersects with Ballarat Road, which heads in a north-westerly direction and becomes the Midland Highway. From the commercial centre of Geelong, heading in an easterly direction, Ryrie Street becomes Portarlington Road, which goes through Drysdale and Portarlington to Queenscliff. A little to the south of it and almost parallel with it in the metropolitan area is the Bellarine Highway, connecting Geelong with Point Lonsdale, via Leopold. From the Bellarine Highway, it is possible to turn southward to Ocean Grove and Barwon Heads. From Settlement Road, Torquay Road runs south and becomes the Surfcoast Highway. The Anglesea Road intersects with the Princes Highway at Waurn Ponds. West of the commercial centre, Aberdeen Street heads in a westerly direction and becomes the Hamilton Highway. All of the fuels were sold, and the sites were branded, in the name of BP. Throughout the period, Leahy's owned and operated sites were at 276 High Street, Belmont ('BP Hillford') and 694 Bellarine Highway, Leopold ('BP Leopold'). A site at 314 Murradoc Road, St Leonards ('BP St Leonards') was operated by Leahy itself until about October 1999, and thereafter was a Leahy commission site. Until about April 2000, Leahy operated its own site at 1 Newcomb Street, Portarlington ('BP Portarlington'). From about September 1999, Leahy also operated its own site at 42 Bell Street, Torquay ('BP Torquay'). Leahy commission sites throughout the whole period were at: 77A Roslyn Road, Belmont ('BP Belmont Plus'); 2 Station Street, Norlane ('Geelong Off-Road Centre'); 8 Thompson Road, Geelong North ('BP Fairway'); 1 Forrest Road, Lara ('BP Lara'); Bridge Road, Barwon Heads ('BP Sandbar'); Point Lonsdale Road, Point Lonsdale ('BP Point Lonsdale'); and Midway Highway, Bannockburn ('BP Bannockburn'). Until the end of 1999, Leahy also had a commission site on the corner of Wallace and Wilson Streets, Meredith ('BP Meredith'). Leahy also sold fuels under the BP brand through outlets in Ballarat. 72 In the relevant period, Apco sold fuels to the public under its own Apco brand at a number of outlets. Until about April 2000, Apco itself operated a site at 228-244 South Valley Road, Highton ('Apco Highton'). From about April 2000, Apco Highton became an Apco commission site. Similarly, Apco operated its own site at 5 Mill Road, Lara ('Apco Lara'), until about May 2000, when the site became an Apco commission site. Up to about April 1999, Apco sold fuels through a commission site at 367-369 Moorabool Street, Geelong South ('Apco Geelong South'). From about April 1999, that site became an Apco-operated site. Other Apco commission sites throughout the relevant period were at: 64 Portarlington Road, Newcomb ('Apco Newcomb'); 57 Ormond Road, Geelong East ('Apco Geelong East'); 343-355 Thompson Road, Geelong North ('Apco Geelong North'); 238 Princes Highway, Waurn Ponds ('Apco Waurn Ponds'); and 41 Geelong Road, Barwon Heads ('Apco Barwon Heads'). Apco Geelong North is of some significance, because it was adjacent to the Apco head office. Apco also had a large number of retail fuel outlets outside Geelong, including some in Ballarat. 73 The Shell branded sites in the Geelong petrol market were divided between Brumar on the one hand and United Fuels (until 30 September 1999) and United Retail (from 1 October 1999) on the other. The Brumar sites tended to be in more prominent locations, on busier roads and to be larger and more obviously decorated as Shell sites, than the sites operated by United Fuels and United Retail. The Brumar sites, all operated by Brumar itself, were at: 468 Melbourne Road, Norlane ('Shell Norlane'); 3 Settlement Road, Belmont ('Shell Belmont'); 202-210 Latrobe Terrace, Geelong ('Shell Latrobe Terrace'); 247 Melbourne Road, North Geelong ('Shell Speedwings'); 480 Moorabool Street, Geelong ('Geelong Car Spa'); 21 Church Street, Geelong West ('Shell Westoria'); 12 Barrabool Road, Highton ('Shell Highton'); and 107 Great Ocean Road, Anglesea ('Shell Anglesea'). Brumar also had sites in Ballarat. The Shell sites operated by United Fuels, and then United Retail, were at: 176 Princes Highway, Waurn Ponds ('Shell Waurn Ponds'); 108 Geelong Road, Torquay ('Shell Surfcoast'); 110 High Street, Drysdale ('Shell Drysdale'); and 85 The Terrace, Ocean Grove ('Shell Ocean Grove'). In addition, there were commission sites of United Fuels and then United Retail at 137 Victoria Street, North Geelong ('Shell Victoria Street') and 44 Bellarine Highway, Point Lonsdale ('Shell Point Lonsdale'). From about February 2000, United Retail added a further site in Fellmongers Road, Breakwater ('Shell Breakwater'). 74 From a date which is not certain, but probably early in the second half of 1998, Liberty operated a single site in the Geelong area, at the corner of Thompson Road and Victoria Street, Geelong North. This was one of many sites through which Liberty sold fuels to the public throughout Victoria and elsewhere. It sold fuel under its own Liberty brand. 75 Also throughout the relevant period, Andrianopoulos sold fuel to the public under the BP brand, through a commission site at 298-304 Princes Highway, Norlane ('BP Norlane'). This was one of a number of sites through which Andrianopoulos, or related business interests controlled by the family of Chris Andrianopoulos, sold fuels to the public in Victoria. To gain a more complete picture of the Geelong petrol market, it is necessary to have regard to the activities of a number of other businesses. Outlets at which fuels were sold to the public under the brand name Mobil fell into three categories. There were commission sites, supplied by Pegasus. A number of sites were controlled by a company called Strasburger Enterprises (Properties) Pty Ltd ('Strasburger'). So far as Pegasus was concerned, these were reseller sites, but so far as Strasburger was concerned, they were commission sites for it. There was also a company called Rafinc Pty Ltd ('Rafinc'), to which Pegasus sold fuel for resale to the public. Several of the Mobil branded sites changed during the relevant period. The site on the corner of Shannon Avenue and Aberdeen Street, Manifold Heights ('Mobil Manifold Heights') was a Pegasus commission site until about 19 July 1999, and a Rafinc site thereafter. The site at 19 Settlement Road, Belmont ('Mobil Belmont') was a Pegasus commission site until about 10 March 1999, then a Strasburger site until 7 September 1999, then a Rafinc site until 23 August 2000, and again a Strasburger site for the balance of the relevant period. The site at 325 Latrobe Terrace, Geelong South ('Mobil Latrobe Terrace') was a Pegasus commission site until about 10 March 1999, and thereafter a Strasburger site. A similar change of regime, from Pegasus to Strasburger, on the same date, also occurred in relation to the site at 180 Barwon Heads Road, East Belmont ('Mobil East Belmont') and the site at 122 Torquay Road, Grovedale ('Mobil Grovedale'). The site on the corner of Barrabool and Valley Roads, Highton ('Mobil Highton') followed a similar pattern, except that it ceased to be a Strasburger site in 3 October 1999. The site on the corner of Bacchus Marsh Road and Purnell Road, Corio ('Mobil Corio Village') was a Strasburger site until about 13 July 1999, when it became a Rafinc site. Other Strasburger sites, operated as its commission sites throughout the relevant period, were at: the corner of Thompson Road and Naughton Avenue, Geelong North ('Mobil Geelong North'); 151 Drysdale Road, Moolap ('Mobil Moolap'); 369 Portarlington Road, Moolap ('Mobil Point Henry'); 194 Queenscliff Road, Newcomb ('Mobil Newcomb'); and 189 Bellarine Highway, Newcomb ('Mobil Gateway'). Portcliff Geelong Pty Ltd ('Portcliff') was the commission agent operating six sites for Strasburger: Mobil East Belmont (from about 26 October 1999); Mobil Grovedale (from about 26 October 1999 to December 2000); Mobil Moolap; Mobil Point Henry; Mobil Newcomb; and Mobil Gateway. Phillip Andrew Carmichael was the sole director and the secretary of Portcliff. He is also Ian Carmichael's brother. 77 The principal retailer of fuels under the Caltex brand (and under the Ampol brand, after it became merged with Caltex) in the Geelong petrol market was J Chisholm Pty Ltd ('Chisholm'). The directors of this company, who were both involved in its management, were the brothers Graeme Leslie Chisholm and Robert Stanley Chisholm. In addition, Darren John Campigli was the Manager of Chisholm's Geelong depot. Chisholm was not a respondent to the proceeding, because at all times it cooperated with the ACCC. Both Graeme Chisholm and Darren Campigli gave evidence on behalf of the ACCC. Chisholm operated its own sites at: 272 Princes Highway, Corio ('Chisholm Corio'); 35-37 Shannon Avenue, Geelong West ('Chisholm Geelong West'); 406 Shannon Avenue, Newtown ('Chisholm Newtown'); 168 Torquay Road, Grovedale ('Chisholm Grovedale'); and 808 Bellarine Highway, Leopold ('Chisholm Leopold'). It also sold fuel to the public through commission sites at 254 High Street, Belmont ('Chisholm Belmont') and 1-5 High Street, Bannockburn ('Chisholm Bannockburn'). 78 One very prominent site carrying the Caltex brand, was under the name of the Caltex Quick Bite. It was on the corner of the Princes Highway and School Road, a site highly visible to traffic entering Geelong from Melbourne, at or near the start of the Geelong metropolitan area. It was a large site, described as having 16 fuel pumps. It is not clear by whom the Caltex Quick Bite was operated. The ACCC did not seek to gather any information about it until, at a directions hearing on 22 March 2005, counsel for Andrianopoulos and Chris Andrianopoulos complained that the ACCC had not made discovery of any information with respect to the Caltex Quick Bite. Thereafter, the ACCC did obtain, and discover, some information, and some found its way into evidence. 79 7-Eleven Stores Pty Ltd ('7-Eleven') operated two retail fuel outlets in the Geelong petrol market at: the corner of Sydney Parade and Swanston Street, Geelong East ('7-Eleven Geelong East'); and the corner of Bellarine Highway and Coppards Road, Newcomb ('7-Eleven Newcomb'). Jacques Bodourian was the Territory Manager for 7-Eleven. 80 A partnership, known as G H and K L Primmer operated a retail fuel outlet at Meredith ('BP Meredith'), which was a Leahy commission site until the end of 1999, and a reseller of fuel supplied by Leahy from 1 January 2000. Gordon Henry Primmer was one of the partners and the principal person involved in managing the business of BP Meredith. 81 United Petroleum Pty Ltd ('United Convenience') sold fuels to the public through one site in Bacchus Marsh Road, Corio. United Convenience is not related to either United Fuels or United Retail. The Operations Manager of United Convenience was Stan Kerr. 82 Perrowood Pty Ltd ('Mortimer Petroleum') sold fuels to the public under the name and brand Mortimer Petroleum, at two outlets, which it owned and operated. They were at 495 Ballarat Road, Batesford ('Batesford Roadhouse') and at High Street, Drysdale. David Andrew Mortimer was the General Manager of Mortimer Petroleum. 83 For approximately 10 years up to 1998, Anton Lesley Maurer was employed by Leahy. After he had ceased to be so employed, in about March 1999, Mr Maurer became an employee of Expotech Pty Ltd ('Expotech'). He became the Retail Site Manager at an outlet through which Expotech sold fuels to the public under the BP brand. The outlet was called 'BP Corford Express' and was situated at the corner of Melbourne Road and Surrey Road, Geelong North. 84 It is also necessary to mention Wayne Kingsley Purtell, who gave evidence at the trial on behalf of the ACCC. Wayne Purtell was involved in the Geelong petrol market, first on behalf of Provincial Fuels Pty Ltd ('Provincial Fuels'), and subsequently on behalf of Westfuels Pty Ltd ('Westfuels'), each of which operated the Brumar sites in the Geelong area in succession, before Brumar took over those sites in 1998. Until 15 February 1999, Wayne Purtell continued to be the Geelong Operations Coordinator for Brumar. This was apparently a universal practice. The advent of computer technology, and its adoption in the more modern retail outlets, enabled this to be done by means of computer-operated signs. In such a case, an operator could change from a computer console inside the shop or office of the outlet not only the price displayed on the sign, but the price displayed on each of the fuel pumps at the outlet as well. Simultaneous change of prices was therefore possible. Without that technology, prices were advertised by means of sandwich boards, or other flat signs, to which could be attached (by means of hooks or otherwise) metal plates, displaying figures. Prices on the external signs could only be changed manually, sometimes only with the assistance of a pole with a hook, enabling the operator to remove metal plates and substitute others. In such cases, the prices on each individual fuel pump had to be changed manually as well. The process of effecting a change of prices could involve the advertising of a different price for ULP from the prices appearing on the pumps. Of course, it was necessary to take care not to upset customers by advertising to passing motorists cheaper prices than those for which the pumps were actually set. In an outlet at which only one person was on duty, the timing of a price change could be affected by the volume of trade experienced. It was sometimes necessary to wait for a lull, during which the driveway was empty of cars, before a price change could be put into effect. Whether they were computerised or manual, the signs on which prices were advertised to passing motorists were known as 'boards', and the prices displayed on them were known as 'board prices'. In some cases, it was possible for the operator of an outlet to see the board prices of a competitor from within the operator's premises, or by walking out onto the street. There were two striking examples of this. Apco Geelong North and Mobil Geelong North faced each other across Thompson Road. Because this proximity gave passing motorists a direct choice between the two, a change in the board prices at one of them would very likely be followed swiftly by a change in board prices at the other. United Fuels, and later United Retail, had an office at 247-261 Melbourne Road, North Geelong, next door to Shell Speedwings. Mr Riordan and, while he worked from that office, Mr Heikkila could see the board price at Shell Speedwings from the office. 87 In order to obtain a broader sample of board prices, it was common for those engaged in setting petrol prices, or other employees who reported to them, to drive around the streets observing the board prices of their competitors. Several witnesses gave evidence of driving around, specifically to observe board prices, often more than once in a day. Ian Carmichael, Michael Warner, Alan Shuvaly, Darren Campigli, Wayne Purtell, Phil Carmichael, Eino Heikkila and Robert Riordan all gave evidence about spotting board prices of competitors. A circuit commonly used for this purpose involved Melbourne Road and the Princes Highway, Purnell Road, the Bacchus Marsh Road, Cox Road, Thompson Road, the Ballarat Road and Church Street. A trip around this circuit enabled the observer to see the boards of Shell Speedwings, BP Corford Express, BP Norlane, Shell Norlane, Mobil Corio Village, Apco Geelong North, Mobil Geelong North, Liberty and BP Fairway. If a broader sample were desired, a short extra loop, or short extensions at the northern end of this circuit permitted observation of the boards at Caltex Quick Bite and United Convenience. Likewise, a short extra loop at the southern end of the circuit would enable observation of board prices at Chisholm Newtown in Shannon Avenue, Mobil Manifold Heights, Shell Latrobe Terrace and Mobil Latrobe Terrace. 88 In addition, it was common for those responsible for setting prices to note any board prices they passed on their daily journeys to and from work, and to instruct their employees to do likewise, and to report their observations. Robert Riordan's morning routine involved driving from his home in Newtown to the Geelong Football Club at Kardinia Park, for his morning exercise. His route took him down Latrobe Terrace, and enabled him to observe the board price of Mobil Latrobe Terrace, shortly after 6.00 am, when it opened. As part of his exercise program, Mr Riordan would run around the perimeter of Kardinia Park and onto Moorabool Street, past Apco Geelong South and the Geelong Car Spa. After the completion of his exercise program with a shower and breakfast, Mr Riordan would drive to his office, next to Shell Speedwings. On the way, he would observe the board prices displayed at Shell Latrobe Terrace and Mobil Latrobe Terrace. On occasions, he continued up Melbourne Road and the Princes Highway, to observe the board prices at BP Corford Express and Shell Norlane, before making a u-turn and returning to his office. When United Retail commenced business, and Colin Williamson was given additional responsibilities as well as managing Shell Waurn Ponds, Mr Riordan also gave him a mobile phone at United Retail's expense, and instructed him to report on any board prices that Mr Williamson observed on his way to Shell Waurn Ponds each morning, and to observe board prices in the area from time to time during the day. 89 Operators who also engaged in transport of fuel often obtained information about board prices of other petrol retailers from the drivers of their trucks. In the case of Leahy, there was evidence that the drivers would sometimes provide managers with information about prices in Melbourne. Sometimes, customers would comment to a site manager about the level of prices at the outlets of competitors. In general, operators of retail petrol outlets in the Geelong petrol market were keen to obtain any information they could about fuel prices. Prices for super were usually set at a margin above the prices of ULP. The margin was reasonably consistent across the industry. The sawtooth pattern is so called because, on a line graph tracing price movements from day to day, the pattern has the appearance of teeth like those of a saw-blade. The pattern is characterised by steep rises to peaks, followed by more gentle descents to troughs. 91 A sawtooth pattern of this kind is not a feature confined to the Geelong petrol market. Such a pattern is common in the petrol markets in comparatively densely populated areas throughout Australia. Concern about variations in petrol prices led the federal government to request the ACCC 'to examine the feasibility of placing limitations on petrol and diesel retail price fluctuations throughout Australia', in early March 2001. The then Minister for Financial Services and Regulation requested the ACCC to provide a report as soon as possible. On 14 June 2001, the ACCC released a discussion paper. In December 2001, the ACCC produced a report entitled Reducing Fuel Price Variability . The price cycles in these areas are fairly regular and frequent. They generally exhibit a sawtooth pattern, that is, prices increase rapidly over a short period of time and then steadily decrease. In Melbourne, for instance, the average size of the variation of price cycles in the first half of 1998 was 3.7c. In the first half of 2001, it was 7.5c. The ACCC also found that the duration of price cycles, the number of days between the low point of one price cycle and the low point of the next, also increased between 1998 and 2001. In the first half of 1998, the average duration of a price cycle in Melbourne was 6.6 days, with the most common duration being seven days. In the first half of 2001, the average duration of price cycles in Melbourne had increased to 8.9 days, although the most common duration was still seven days. It referred to international factors, such as prices of crude oil and refined petroleum products, and the exchange rates between the Australian dollar and the US dollar. These factors were important, because, as the report said, 'movements in Australian petrol prices generally follow movements in Singapore refined petroleum product prices. ' The report also identified the level of federal and state excise and taxes as local factors. It is influenced by supply and demand factors, barriers to entry, the presence of independents, the potential availability of imports, and the extent of vertical integration. The causes of local price cycles are complex. Price cycles appear to be influenced by many factors. These include: competition for market share; oil company price support for their franchisees; differential wholesale petrol pricing; short-term excess product at the refineries; changes in demand; the current regulatory structure; fuel blending; possible anti-competitive practices; and movements in refiner margins. Therefore, competition is based primarily on price. For the individual retailer, there is incentive for substantial discounting to attract sales from competitors when demand is low. Thus there is greater incentive to discount when demand declines. As supply of, and demand for, petrol are relatively inelastic, small changes in these can lead to large changes in price. ' [Footnotes omitted. The degree of competition is mainly affected by the extent of price support retailers receive and the extent to which discounts are available at the wholesale level. Independents typically seek volume in this way. However, this increase in volume may be short lived, as competitors will be compelled to reduce their prices to regain market share. One of the retailers may then decide to significantly raise prices, with competitors rapidly following suit. However, prices may also rise as a result of a successful attempt by a market participant to increase profits by raising prices in a locality. After a short period, the price cycle starts again. Retailers bear two types of costs: fixed costs, which are incurred independently of how much the retailer sells (such as costs of the site and labour costs), and variable costs, which vary with the quantity of petrol and convenience products sold. As a result, they must maintain or increase sales. However, to retain or increase sales volume, retailers compete on price. This competition continues to a point where there is little or no margin over their variable costs. Pricing at or close to variable costs for sustained periods is unprofitable for all retailers. Therefore, at some point, retailers must achieve a margin above their variable costs of supply to recover their fixed costs. This dynamic is reflected in the market whereby retail petrol prices are gradually competed down to variable cost (or below) before rapidly adjusting upwards. Multi-site franchises can reap the benefits of economies of scale and can assist those sites within their operation that face greater competition. Given their presence and spread in the market, multi-site franchises can also influence the timing of price rises. As some franchisees operate in very competitive areas, ongoing price support may be provided for long periods of time. These operations may not be viable without this assistance. The Commission understands that in the past the oil majors provided price support to independents, however this was removed around two to three years ago. Such schemes also give the oil major control over the degree of support for its retail outlets, the depth of the discounting, and often the duration of the discounting. Therefore, it appears that oil majors that provide price support may be doing so in response to competitive pressures. However, sometimes oil majors lead market prices down. A submission from the Motor Traders Association of Australia even suggested that the application and subsequent withdrawal of price support was the cause of retail price fluctuations. It may be that the trough of the cycle is not as low or that price increases occur more quickly. The evidence about those characteristics is summarised as follows. The price mark-ups on the goods in these shops were generally higher than those in supermarkets. Because the margin of the retail price over the cost price of petrol was generally very low, operators relied on the turnover of these shops to pay other business costs, and to provide a measure of profit. Attracting customers by means of discounting the prices of ULP and Super, in the hope that the customers would also purchase items from the shops, was an important consideration in the setting of prices. The evidence was generally to the effect that quite small reductions in petrol prices could have significant effects on sales at particular outlets. Because of the relative homogeneity of petrol, which limited competition to price, motorists were conditioned to looking for the lowest prices that they could obtain. It was even suggested by some witnesses that motorists were prepared to spend more than they would save, by driving to a more distant outlet at which the price was cheaper. The variations in prices were such that, at and near the low point of each price cycle, the retail price was often lower than the wholesale price. Selling at such a loss would mean that a retail outlet would be unable to stay in business for very long. In order to keep outlets bearing their brand names open, the oil companies engaged in various forms of price support schemes. In substance, these involved the payment of subsidies to the operators to eliminate or reduce the losses they would otherwise suffer, or to give them a small profit margin. During 1998, BP ceased to pay price support subsidies to Leahy, when it introduced a new pricing system for supplying petrol, called 'terminal gate pricing'. 102 During the period relevant to this case, Caltex continued to be involved in a price support scheme, involving what Graeme Chisholm described as a 'rebate', for the Chisholm outlets. According to his evidence, Caltex would engage in making payments of price support rebates for a period, perhaps for several days, towards the lower end of a price cycle, but would tire of the expense involved. Caltex would then notify the Chisholm outlets that price support would be removed, usually giving them notice of up to two hours. This would lead inevitably to Chisholm increasing its prices, because to do otherwise would have meant trading at a considerable loss. Sometimes Caltex withdrew price support after there had been a movement in the price levels in the market. At other times, the withdrawal of price support precipitated a price movement, at least by Chisholm. Darren Campigli's evidence was to similar effect in relation to Chisholm. 103 During the relevant period, Shell also provided price support to Brumar and to United Fuels and United Retail. In relation to United Fuels and United Retail, Shell also provided a subsidy known as 'profitability support'. Whereas price support was provided according to the number of litres sold, profitability support was based on the overall trading position, and was designed to keep United Fuels, and later United Retail, in business. If price support was withdrawn by Shell, United Fuels and United Retail would raise their retail prices of petrol, in order to avoid trading at a loss. The motivation for such a move is obvious. At the low end of a price cycle, if price support was non-existent or had been withdrawn, the incentive for a particular retailer to increase prices was very powerful. There was no choice but to increase, if the retailer wished to stay in business in the long term. A unilateral attempt would sometimes fail, because other retailers would not follow suit, even if they had spotted the increase in board prices of the attempted initiator. If that occurred, the retailer which had attempted to initiate the price increase would be forced to lower its prices again, usually to the point at which they had stood before the attempt was made, in order to retain market share. Witnesses described this chain of events as involving a price rise that did not 'stick'. 105 For a price rise to stick, a number of witnesses saw it as necessary for most, if not all, the retailers in the Geelong petrol market to increase their prices, although clearly not all at exactly the same time, nor all to exactly the same price. According to the preponderance of the oral evidence, even one significant outlet failing to raise its prices in line with a general price increase could cause that price increase not to stick, by causing other outlets in its vicinity to begin discounting heavily, in order to retain their market share. In turn, this would cause the circle of discounting to widen, until all or most of the retailers in the market found it necessary to bring their prices down to somewhere near where they had been before the attempted price rise. Thus, there was a perceived need to ensure that all of the significant market participants were aware of an increase, to monitor the board prices of competitors to see if they had also increased, and to endeavour to persuade them to increase if they had not done so, in order for a price rise to stick. It must be said that other evidence does not support the proposition that a universal, or near-universal, response was necessary for a price rise to stick. As will be seen, a number of price rises in fact stuck without anything like the full participation of competitors in the Geelong petrol market. 107 The only officer of the ACCC who gave evidence was Jane Louise Edwards, who was in charge of the team of officers conducting the investigation of possible petrol price-fixing in Geelong, after that investigation became separated from a similar investigation in relation to Ballarat. Ms Edwards did not concede that there was any correlation between petrol price movements in the Geelong petrol market and petrol price movements in Melbourne. She reached her conclusion that no such correlation existed as a result of a trial comparison of average daily Melbourne prices for ULP with daily prices for ULP at an outlet described as a Liberty site at Waurn Ponds. Apart from this trial, there was no evidence concerning prices at this site. Although described as a Liberty site, it appears not to have been operated by Liberty, or by any commission agent on Liberty's behalf, during the relevant period. The average daily Melbourne prices were obtained from an information supplier called Informed Sources. This type of information is available for a fee. The ACCC subscribes to it, as part of its monitoring of petrol prices for the purpose of providing information to the public. 108 The comparison for the month of January 1999, presented in a graph with the prices on the vertical axis and the dates on the horizontal axis, shows five declines in price and four steep rises for each of Melbourne and the Waurn Ponds site. The lowest price point of each occurred on the same day every time. This means that the sharp rises occurred on the same day although, on three of the four occasions of sharp rises, the Melbourne peak was reached on the day after Waurn Ponds reached its peak. The two price levels were rarely exactly the same, because the comparison is between prices averaged from a number of significant outlets on the one hand and prices from a single outlet on the other. The two lines on the graph appear to follow similar paths. A similar graph for the months of February, March and April 2000 shows four rises and four declines in February. Two of the Melbourne peaks appear to have preceded the Waurn Ponds peak by a day, with the other two falling on precisely the same days. The lowest point on each cycle also shows Waurn Ponds trailing Melbourne by a day on each occasion. In March, two peaks and two troughs were a day later than Melbourne, and one peak and two troughs occurred on the same day. There is also a sharp rise, followed by a decline, shown in Melbourne over a period of several days during which Waurn Ponds continued to decline slightly. For April 2000, the graph shows another period of several days on which there was a sharp rise, followed by a decline, in Melbourne, while the price at Waurn Ponds continued to decline. There were two troughs and one peak occurring on the same day, with one trough and two peaks showing Waurn Ponds trailing Melbourne by a day. There are also graphs for the whole year, which do not show the daily comparisons in enough detail to enable a precise judgment to be made about any delay. What is clear from them is that, for the most part, the rises and falls in prices in both Melbourne and Waurn Ponds occurred in close proximity to each other. In 1999, there was a period in May and June, during which there were five or six peaks in Melbourne, but only one at Waurn Ponds. In 2000, there can be detected two periods when sharp rises occurred in Melbourne but Waurn Ponds continued to decline, and two sharp rises in Melbourne in conjunction with which the Waurn Ponds price rose but by nowhere near as much. Otherwise, the paths of the two lines are very similar. 109 Even on the basis of this material, it is somewhat surprising that Ms Edwards was prepared to deny any correlation between Geelong and Melbourne as strenuously as she did. The comparison between average daily Melbourne prices and those at the Waurn Ponds outlet demonstrates a quite high correlation. Even more significantly, among the ACCC's documents was a graph, apparently compiled using information from Informed Sources, showing a comparison of daily average ULP prices, being averages of hourly board price surveys over a 12-hour period, from both Melbourne and Geelong. The period covered is the first three months of 1999. The graph shows a remarkable correlation between rises and declines in prices. The only dissimilarities are that, on occasions, there is a lag between the Melbourne peak and the Geelong peak, and both the peaks and the troughs tend to be lower in Geelong than in Melbourne. Even when confronted with this document, Ms Edwards refused to accept that it demonstrated a correlation, conceding only 'an observable similarity. Estimates of the time lag involved between a rise in Melbourne and a rise in Geelong varied from a matter of hours to two days, with the most common estimate being that Geelong prices rose the day after Melbourne prices had risen. There was consistency to the effect that Geelong prices followed those of Melbourne, both in the sharp upward movements and the slower declines. Michael Warner described Geelong as a suburb of Melbourne, in relation to petrol prices. Eino Heikkila agreed with this description. 111 It is no surprise that a connection between Geelong petrol prices and Melbourne petrol prices would exist. Geelong is linked to Melbourne by a freeway, and is close enough to enable those who live in Geelong to commute to Melbourne by car for work. Large numbers of people do so. Again, estimates varied, but it is clear that the number of motorists travelling from Geelong to Melbourne in the morning, and returning in the evening, on a regular basis, is in the order of tens of thousands. Most are likely to use the Westgate Freeway to gain access to the Princes Freeway to Geelong. On each side of the Westgate Freeway, before the motorists travelling from Melbourne to Geelong cross the Westgate Bridge, is a major Shell outlet, displaying board prices so that they are visible to passing motorists. At Laverton, a further Shell outlet, also displaying its board prices, is visible to motorists using the freeway. The next petrol outlet a Geelong-bound motorist encountered in the relevant period was the Caltex Quick Bite, as he or she entered Geelong. It would be in the interests of the operator of the Caltex Quick Bite to ensure that commuting motorists could rely on its prices being either identical to, or slightly lower than, those of the Shell outlets visible to returning commuters. If motorists could have some reliance on this kind of relationship between Melbourne and Geelong prices, they would be more likely to delay their petrol purchases until they reach Geelong. Similarly, it would in the interests of operators on the eastern side of the Princes Highway in Geelong to ensure that their prices matched, or were slightly better than, those of the Caltex Quick Bite. If motorists could rely on this relationship of prices, they might be induced to delay their petrol purchases until they had travelled further towards the centre of Geelong. 112 There can be little doubt that, if prices on the eastern side of the Princes Highway in Geelong were set by reference to those of the Shell outlets on the Westgate Freeway and at Laverton, this would have a significant effect on prices of other outlets in the Geelong petrol market. The sites on the eastern side of the Princes Highway were prime sites for other operators to observe board prices. In the order in which a motorist coming from Melbourne would pass them, they were BP Norlane (Andrianopoulos), Chisholm Corio, and Shell Speedwings, all encountered before the Princes Highway becomes Latrobe Terrace. Outlets on the western side of the Princes Highway in that area would undoubtedly be influenced to set their prices according to those of their competitors on the opposite side of the road. Others in the market, who spotted board prices in the manner described in [86] --- [89], would be inclined to adjust their own prices to match, or to be slightly cheaper than, the sites observed by commuters returning home at the end of the day, in order to attract market share. It is therefore easy to see that the influence of Melbourne board prices in Geelong would be highly significant. 113 A further factor existed, also connecting Melbourne petrol prices to those in the Geelong petrol market. This was the fact that the people responsible for setting the prices at some of the major outlets were themselves based in Melbourne. This was the case for all the Mobil outlets, Liberty Geelong North, BP Norlane, both the 7-Eleven outlets and BP Corford Express. In addition, at least early in the period relevant to the present case, Craig Brown, a Territory Manager for Shell, also had a role in the management of Brumar and was responsible for setting the prices at the Brumar outlets in Geelong. Although it is highly likely that Melbourne-based managers setting petrol prices for the Geelong petrol market would try to obtain information about other prices in Geelong, it is also highly likely that they would take into account their own decisions, or those of their colleagues, as to the setting of prices for Melbourne outlets. 114 As well as commuter traffic, there is other significant traffic from Melbourne to Geelong. The Princes Highway carries traffic from Melbourne to places beyond Geelong, particularly the beach resorts on the Bellarine Peninsula and the Surf Coast. That traffic tends to be at its heaviest in the summer, and particularly on Friday evenings coming from Melbourne, and on Sunday afternoons and evenings returning to Melbourne. This traffic provides an opportunity for operators of retail petrol outlets in Geelong to attract market share, but only if their prices are comparable to, or more advantageous to the motorists concerned than, the prices of outlets in Melbourne. 115 The desire of the operators of petrol outlets in Geelong to exploit commuter traffic and beach resort traffic, to gain market share, might well help to explain the gaps, commonly appearing in the data, between Geelong prices and Melbourne prices. In general, both the peaks and the troughs of each price cycle tended to be lower in Geelong than they are in Melbourne. Lower prices would tend to attract people who were heading to or passing through Geelong to delay their petrol purchases until they saw a suitably cheap outlet in Geelong. 116 For all of these reasons, I find that there was a significant connection between Melbourne petrol prices and prices in the Geelong petrol market. To a considerable extent, Geelong prices were influenced by those in Melbourne. So far as there is data available in the evidence, it shows a high degree of correlation between the prices in the two places, particularly as to the timing of the sharp increases and the more gentle decreases in the sawtooth pattern of petrol price cycles. This correlation is confirmed by the oral evidence. In August 2005, the ACCC published for the information of members of the public a booklet entitled Understanding petrol pricing in Australia: Answers to some frequently asked questions . prices rise rapidly over a short period and then steadily decrease. As some factors are also interdependent, they cannot be considered in isolation. Their influence may also vary between locations and over time. Further, the sawtooth pattern of price cycles has continued to occur in Geelong since the relevant period, up until the trial. Just as the ACCC noted in Reducing Fuel Price Variability , the pattern itself has varied in some of its features with the passage of time, but it remains in essence a sawtooth pattern, characterised by steep increases and slower decreases. The fact that such a pattern occurs independently of alleged price-fixing raises a serious question as to the relevance to the occurrence of the pattern of any attempts to fix prices. In the present case, the ACCC alleged that there existed eight separate arrangements, seven of them bipartite and the eighth tripartite. Counsel for the ACCC described them as 'interlocking'. In effect, they were alleged to have operated serially, consequent upon steps taken to give effect to the principal arrangement or understanding, alleged to exist between Apco and Leahy. In adopting this style, I do not intend it to be understood that I have accepted from the outset that any arrangement or understanding in fact existed or was carried into effect. Nor is the use of convenient shorthand to be taken to signify that I have neglected the allegation that each of the numbered arrangements is alleged to have been either an arrangement or an understanding. It is only the complexity of designating the alleged arrangement or understanding between Leahy and Apco in such long form that has driven me to refer to it as 'Arrangement No 1' and the other alleged arrangements or understandings in a similar way, using different numbers. It was alleged to have five distinct provisions, which are summarised as follows: (a) Leahy and Apco would communicate with each other regarding the amount and timing of proposed increases in the retail price of ULP and Super to be charged at Leahy outlets and Apco outlets, including commission sites; (b) Leahy and Apco would endeavour to agree to increase such prices to the same or about the same prices at or about the same time; (c) between them, Leahy and Apco would advise or cause to be advised some or all of the other participants in the Geelong petrol market of the amount and timing of the proposed increases, each knowing and intending that other market participants would be likely to increase their prices at or about the advised time to prices the same or about the same as the advised prices; (d) Leahy and Apco would at or about the advised time increase the retail prices for ULP and Super at Leahy outlets and Apco outlets to prices the same or about the same as the advised prices; and (e) Leahy and Apco would use their best endeavours to persuade or influence other market participants to increase the retail prices for ULP and Super at their sites to the advised prices, if they had not done so shortly after the advised time (these endeavours were described during the trial as 'follow-up calls'). In the course of the trial, as I have said, the ACCC discontinued the proceeding against Pegasus and withdrew its allegations with respect to Arrangement No 2. In summary, this arrangement was alleged to contain provisions that: (a) Leahy would advise Chisholm of the amount and timing of proposed increases in the retail price of ULP and Super to be charged at Leahy sites, each knowing or intending that Leahy or other market participants would advise some or all of the other market participants of the amount and timing of the proposed increases and other market participants would in the ordinary course be likely, upon being so advised, to increase their prices at or about the advised time to prices the same or about the same as the advised prices; (b) Chisholm would advise 7-Eleven of the amount and timing of the proposed increases; and (c) Leahy and Chisholm would at or about the advised time increase the retail prices for ULP and Super at Leahy sites and Chisholm sites, including commission sites, to prices the same or about the same as the advised prices. Its terms were similar to those of Arrangement No 3, with the substitution of United Fuels for Chisholm, and with the substitution of Brumar for 7-Eleven in the provisions. Arrangement No 5 was alleged to have been made between United Fuels and Brumar. Its provisions were in substance the same as those of Arrangement No 3, with the exception of provision (b), and with the substitution of United Fuels and Brumar for Leahy and Chisholm respectively. Arrangement No 6 was alleged to have existed between Leahy and United Retail. In substance, it was alleged to contain the same provisions as Arrangement No 5. Its provisions were alleged to be in substance the same as those of Arrangement No 3, with the substitution of Gordon Primmer for Chisholm and United Convenience for 7-Eleven. In substance, the provisions of this arrangement were alleged to be that: (a) Apco would advise Liberty and/or Andrianopoulos and Liberty and Andrianopoulos would advise each other of the amount and timing of proposed increases in the retail price of ULP and Super to be charged at Apco sites, each knowing or intending that Apco or other market participants would advise some or all of the other market participants of the amount and timing of the proposed increases, and other market participants would be likely to increase their prices at or about the advised time to prices the same or about the same as the advised prices; and (b) Apco, Liberty and Andrianopoulos would at or about the advised time increase the retail prices for ULP and Super at Apco sites, the Liberty site and the Andrianopoulos site to prices the same or about the same as the advised prices. In their closing address, counsel for the ACCC contended that the evidence demonstrated giving effect to one or more of the alleged arrangements or understandings on 63 occasions in that two-year period. This lowering of the ambitions of the ACCC was the result of the manner in which the evidence unfolded at the trial. To understand how this occurred, it is necessary to discuss briefly the kinds of evidence that were led. The direct evidence was principally the oral evidence of 12 witnesses who had been participants in the affairs of corporations trading in the Geelong petrol market during or prior to the relevant period. Four of those witnesses are respondents to the proceeding, who are alleged to have been directly or indirectly knowingly concerned in the contraventions of s 45 of the Trade Practices Act alleged against the corporate respondents with whom they are associated. Those four had filed defences admitting the allegations against them, and had cooperated with the ACCC after the commencement of the proceeding. Apart from Ms Edwards, the other witnesses were people who had cooperated with the ACCC prior to the commencement of the proceeding. In some cases, they might have been people the ACCC might have wished to include as respondents, if they had not cooperated. 129 The circumstantial evidence was in documents, particularly a document that became known as 'Annexure B'. This document was originally Annexure B to the amended statement of claim. It emerged as a result of an order made prior to the trial, pursuant to s 50 of the Evidence Act , permitting the ACCC to adduce evidence of the contents of a mass of documents acquired by it in the course of its investigations, including the exercise of its powers of compulsion under s 155 of the Trade Practices Act . 130 The admissions included formal admissions made on the pleadings in this proceeding, admissions made to the ACCC in the course of interviews or examinations on oath under s 155 of the Trade Practices Act , and admissions made in written statements prepared and signed by those intending to give evidence on behalf of the ACCC. The ACCC sought to rely on admissions to make its case against each party making the admissions. It also sought to rely on admissions made by one party to an alleged arrangement or understanding as evidence against another party to that same alleged arrangement or understanding, on the basis that it could effectively treat those persons as co-conspirators, so that the acts of one were admissible against all parties to the conspiracy. This raises questions the answers to which depend upon the application of s 87 of the Evidence Act . It is necessary to apply s 87(1)(a) and (b) to determine whether admissions by natural persons are admissible against the corporate parties with which the natural persons were associated. Then, it is necessary to apply s 87(1)(c) to determine whether admissions made by one corporate party are admissible against another corporate party, where both are alleged to have been parties to an arrangement or understanding. There was no witness who could remember even a single specific conversation concerning the fixing of petrol prices, or even events that occurred in relation to any fixing of petrol prices, on any particular day. Among a dozen witnesses, giving evidence of events occurring in a two-year period, even one as long ago as 1999-2000, this lack of recollection struck me as unusual. It is relatively common for people to be able to remember specific transactions because of the temporal relationships between those transactions and other events, trivial or important, in those peoples' lives. No-one who gave evidence could remember being distracted from some other task or pleasure by the need to deal with an issue about petrol pricing, so as to provide a clue as to the date on which that issue might have arisen. All that the witnesses could do was to give their recollections of general patterns of conversations, and of practices of making changes in the prices of petrol. 132 One problem with the lack of specific evidence was that it soon became clear that evidence of general patterns and practices did not appear to be consonant with the data available in Annexure B on a great number of occasions. In some cases, the oral evidence was inconsistent with the data in Annexure B. At an early stage, it appeared that witnesses had not been shown Annexure B before being called to give their evidence. Counsel for the ACCC told me that they had refrained from showing any witness Annexure B before calling that witness to give evidence, because they did not wish it to be alleged that they were prompting the witness to give evidence of a particular kind. I suggested that it was not necessarily fair to witnesses to encourage them to give evidence in general terms of patterns and practices, and then to endure cross-examination about the inconsistencies between that evidence and the data available in Annexure B. As a consequence, counsel for the ACCC began taking the witnesses to particular pieces of the data in Annexure B during their evidence-in-chief. Instead of prompting recollection of actual events, this process only caused the witnesses to engage in speculation as to how the data in Annexure B for particular occasions might be said to fit the general evidence already given. The process of attempting to reconcile the direct and the circumstantial evidence is one that I have to undertake in these reasons for judgment. The terms of those agreements are of some importance in evaluating the evidence of those respondents as witnesses. In the agreement between Ian Carmichael and the ACCC, Mr Carmichael agreed to negotiate and file an agreed statement of facts; to be interviewed by ACCC officers or legal representatives and to provide signed statements or sworn or affirmed affidavits; to consent to orders being made against him; to use his best endeavours to negotiate an agreed pecuniary penalty; to provide information or documents reasonably requested by the ACCC; and to provide full, frank and timely disclosure to the ACCC of information or facts relevant to his own conduct or activities, or those of any other industry participant, in the Geelong petrol market. The relevant provisions in relation to withdrawal in Mr Warner's agreement are found in cll 12.1, 12.2 and 12.3. The agreement between the ACCC and Alan Shuvaly differs in some respects from those of Ian Carmichael and Mr Warner, particularly in that there appears to be no provision under which the ACCC is to be entitled to withdraw from the agreement on the basis that Mr Shuvaly was the ringleader or originator of any conduct in the Geelong petrol market. In addition, that agreement contains a term fixing the amount of the penalty that the parties agree should be proposed to the Court as being appropriate for the conduct admitted by Mr Shuvaly. The agreement between the ACCC and Eino Heikkila is different in form. It is constituted by correspondence between solicitors on behalf of the relevant parties. It contains agreement to $125 000 as the appropriate penalty for conduct admitted by Mr Heikkila, but does not contain any provision allowing the ACCC to withdraw from it. 136 It can be seen that the provisions of the agreement entered into between the ACCC and Ian Carmichael and Mr Warner respectively have the disadvantage that they provide an incentive to each to give evidence maximising the role of persons other than themselves as ringleaders or originators of any relevant conduct. This consideration has some importance in relation to the evidence of Ian Carmichael, the tenor of which was that, at least on most occasions, the initiator of a round of increases in petrol prices in the Geelong petrol market was Peter Anderson of Apco. It is designed to enable comparison to be made between the times of telephone calls between corporations and persons operating in the Geelong petrol market, including the respondents, and changes in the prices of ULP at various outlets in that market. The document has undergone a number of changes since it was first annexed to the statement of claim. Initially, the only petrol pricing information it contained was of increases in the prices of ULP. As a result of the requests of respondents during the trial, the document was amended to show all changes in prices of ULP in the Geelong petrol market, to the extent to which the information is available to the ACCC. This includes information of price changes at the Caltex Quick Bite, an outlet not included originally because the ACCC did not obtain any information from the Caltex Quick Bite until after March 2005. 138 Annexure B does not contain any information about prices at a number of outlets, including outlets of some respondents, and does not contain information for certain periods about some outlets. According to the evidence of Robert Riordan, Annexure B in its revised form referred to about 60 per cent of retail petrol outlet sites in Geelong and those sites accounted for approximately 85 per cent of the volume of petrol sales in Geelong. 139 The source documents for Annexure B were all disclosed to the respondents as part of the process of discovery of documents by the ACCC. This enabled respondents to make comparisons between Annexure B and that source material. At a late stage in the trial, there were allegations of errors in Annexure B, said to have been found on a comparison of some source documents with the finished product. As a consequence, I requested counsel for the ACCC to ensure that a complete audit of Annexure B was carried out, by checking it against the source material, to ensure that it was free of errors and omissions. This exercise was carried out over several weeks after the conclusion of the trial. With the consent of all parties, the further revised version of Annexure B, with any errors discovered during the audit corrected, was forwarded to the Court. This does not mean that all of the respondents accept that the information contained in Annexure B is accurate. It does mean that the parties are agreed that Annexure B is a valuable working tool, enabling a comparison to be made of the times of relevant telephone calls and price changes in ULP. 140 As such a tool, Annexure B has limitations. So far as it records telephone call information, it was compiled by obtaining the office telephone numbers and mobile phone numbers of the various participants, and obtaining information from the suppliers of telephone services about records of calls made to and from those numbers. Different providers of telephone services gave information of different kinds. For instance, information about the length of telephone calls appears in some cases as the elapsed time of the calls, and in other cases as units of 30 seconds. This means that it is not possible to gauge whether a 30-second call involved a conversation or an unsuccessful attempt to contact someone. In some cases, information was available from the telephone service provider as to which calls had been diverted to message bank services. In other cases, this information was not available. 141 When United Retail took over control of the United Fuels retail outlets, it sold its distributorship business to Triton. Robert Riordan gave evidence that United Retail and Triton shared the office at 247-261 Melbourne Road. For a time, Triton had the United Retail administration number listed as its telephone number in the White Pages telephone directory. There was confusion in the Geelong petrol market between Triton and United Retail, and between phone numbers. Robert Hambrook gave evidence that Triton took over three of six telephone lines, all six of which had previously been used by United Fuels. Triton notified customers of the wrong telephone lines, so that calls came through to the United Retail numbers after 1 October 1999, and had to be transferred internally to Triton. This situation lasted somewhere between eight and 10 weeks, because of difficulties sorting out the telephone numbers with Telstra. This means that, during that period, calls recorded in Annexure B as originating in, or being directed to, United Retail's office cannot necessarily be relied upon as communications of any substance involving United Retail. 142 So far as it records petrol pricing information, Annexure B is derived from a variety of kinds of information. In some cases, petrol retailers retained in their records daily running sheets of their outlets, giving details of the times at which prices were changed, and the amounts to which they were changed. In other cases (United Fuels, United Retail and Andrianopoulos), records simply showed that the price of ULP was increased or decreased to a particular amount at some time during a particular day, but gave no indication of the time at which the increase occurred. Some prices given for particular days have been calculated from daily average prices, usually involving a calculation using total takings for the day from sales of ULP, and the total number of litres sold on that day. With respect to the information about Liberty's ULP prices in Geelong, Alan Shuvaly explained how the averages appearing in Annexure B had been calculated. They could be affected by the fact that the commission agents did not always close off the books at the same time of day, but rather chose a time that was convenient to themselves. They could also be affected by want of care in measuring the contents of underground tanks at the outlet. 143 Some of the data was only available from transactions in which the purchaser of petrol paid for it by means of credit cards, usually cards available for use only at outlets selling a particular brand of petrol, eg Caltex StarCard and Mobil Card. In such cases, information is only available as to the time of the first purchase involving use of such a card after a price increase. In such cases, Annexure B now records the last card transaction at the old price as well as the first card transaction at the new price, so that the time-span within which the increase occurred can be seen. In the case of Apco outlets, computer records were available, showing the times of price increases. As they are shown in Annexure B, the significant price increases for Apco Geelong South were shown as occurring approximately one hour earlier than the increases for other Apco outlets in the Geelong petrol market during periods when daylight-saving times were in operation. Counsel for Apco explained this apparent anomaly by suggesting that the computer at Apco Geelong South had not been adjusted for the time difference during those periods, and this explanation appeared to be accepted by counsel for the ACCC. 144 Information concerning records of telephone calls between operators in the Geelong petrol market and the managers or staff of their various outlets is among the information the ACCC obtained from telephone service providers. It is not included in Annexure B, with the exception of Friday, 3 December 1999, when Colin Williamson is shown as making two rounds of telephone calls to the United Retail office, Shell Waurn Ponds, Shell Breakwater, Shell Drysdale, Shell Victoria Street and Shell Torquay, as well as a United Retail outlet at Winchelsea, in a period of less than 22 minutes. The inclusion of this particular information illustrates that information about telephone calls by someone on behalf of an operator, to that operator's outlets, might have been valuable in helping to fix the time of a petrol price increase in cases where no other information as to the time is available. Prior to the close of the ACCC's case, I raised with counsel the non-inclusion of this information in Annexure B, and the fact that it had not been tendered in any other form. Counsel for the ACCC conceded that the information was available to the ACCC. I indicated that its non-inclusion could only lead to the inference that its inclusion would not have assisted the ACCC's case. The information has not been included, and I therefore draw the inference that it would not have been valuable to the ACCC in showing a temporal connection between telephone calls among the participants in the Geelong petrol market and the increases in prices of ULP at outlets for which there is otherwise no information about the timing of those increases. 145 Notwithstanding these limitations, Annexure B has considerable value as a compilation of records of what actually occurred in the Geelong petrol market during the relevant period. In their opening at the trial, counsel for the ACCC submitted that Annexure B would constitute useful corroboration of the direct evidence, rather than primary evidence in the ACCC's case. In the end, however, it was necessary for the ACCC to rely heavily on Annexure B, in their closing address, as evidence that the alleged arrangements or understandings existed and that effect was given to them. 146 Annexure B shows a very great number of telephone calls between various participants in the Geelong petrol market. The majority of these calls are not alleged to have been associated with increases in the prices of ULP. In fact, there were many reasons why those operating in the market might have needed to contact each other by telephone. These reasons encompassed such matters as the distribution of fuel and other petroleum products, and the provision of cartage services. In the case of some respondents, which operated outlets outside the Geelong petrol market as well as within it, calls might not have related to the Geelong petrol market at all. Because the information in Annexure B goes no further than information about the fact that a telephone call was made from one number to another, and the time and duration of that call, it is impossible to tell whether any particular call related to petrol pricing in the Geelong petrol market, or only to some other subject. Ideally, a call cycle would involve an initial telephone contact between the Apco head office or Peter Anderson's mobile phone on the one hand, and the Leahy office or Ian Carmichael's or Michael Warner's mobile phone on the other. Shortly afterwards, there would be phone calls from Leahy, Ian Carmichael or Michael Warner to other participants, particularly the Chisholm office, Graeme Chisholm or Darren Campigli; the United Fuels office or Eino Heikkila, or later Colin Williamson on behalf of United Retail; Gordon Primmer; Mortimer Petroleum or David Mortimer; Andrianopoulos or Chris Andrianopoulos; or Portcliff or Phil Carmichael. Even more ideally, this pattern would be followed closely by a telephone call from United Fuels or Eino Heikkila's mobile to Brumar or Garry Dalton in the relevant period, and by telephone calls between Apco or Peter Anderson, Liberty or Alan Shuvaly, and Andrianopoulos or Chris Andrianopoulos. 148 In fact, such ideal patterns of phone calls occur in Annexure B rarely, if ever, even on the occasions on which the ACCC relies as the occasions on which the respondents, or some of them, gave effect to the alleged arrangements or understandings, or some of them. Instead, it is more common to find patterns of phone calls including only some of the relevant market participants, on some occasions when it is possible to make some temporal connection between those patterns of phone calls and increases in the price of ULP in the Geelong petrol market generally. Further, there are occasions when what appear to be patterns of telephone calls, not of an ideal but of a partial nature, occur without any corresponding increase in the price of ULP. 149 As Annexure B indicates, the sawtooth pattern of petrol prices in Geelong occurred in relation to ULP on a number of occasions when there is no discernable pattern of telephone calls on which reliance could be placed. At my request, the parties endeavoured to agree on the number of occasions on which significant price increases (in the order of 5c or more) occurred in the Geelong petrol market, as shown by Annexure B. The resulting figure is approximately 110 such occasions. Of those, only 63 are now alleged to have been the result of the respondents, or some of them, giving effect to the alleged arrangements or understandings, or some or one of them. In many cases, it might be expected that an arrangement or understanding arose by reason of express communication to the effect that there should be such an arrangement or understanding. Alternatively, it might be the case that a culture has developed amongst those engaged in a particular market, so that the recipient of a certain type of information will know that there is an expectation that he or she should act upon that information in a particular way. The present case fits neither of those categories. With the possible exception of Arrangement No 7, none of the alleged arrangements or understandings was alleged to have its origin in any specific communication, written or oral, between the parties to it. There is no evidence of any retailer in the Geelong petrol market saying to another words to the effect of 'if I nominate a price for ULP and a time, can I reasonably expect that you will increase your prices for ULP to about that amount at about that time? ' or 'if you tell me a price and a time, you can reasonably expect that I will increase my prices of ULP to about that amount at about that time'. Nor was there any suggestion in the evidence that there was any form of code, commonly understood by retailers in the Geelong petrol market, under which the communication of a price and a time was to be understood as generating an expectation that all recipients of the communication would increase their prices of ULP to about that price at about that time. 151 In the amended statement of claim, each of the arrangements or understandings alleged was said to have been made or arrived at 'orally or as a result of a course of conduct'. In the absence of any evidence that any alleged arrangement or understanding was arrived at orally, the ACCC was driven to rely on such evidence as it could of the arrangements or understandings having been arrived at as a result of a course of conduct, or on its alternative proposition that the existence of those arrangements or understandings could be inferred from the fact that they were given effect to. 152 In the case of Arrangement No 1, Ian Carmichael was asked in evidence-in-chief about telephone conversations Peter Anderson would make to him about prices. In answer to the question, 'do you remember how that got started? I can't pinpoint a time. I think it just happened, maybe because of our contact in the early 1990s. We knew each other. It became a normal course of business. Nothing was said as to the manner in which that arrangement or understanding was alleged to have developed during the course of the telephone calls. There is no evidence about what Mr Carmichael or Mr Warner came to believe to be the significance of the phone calls, or how they came to believe it. There is no evidence about how they perceived Mr Anderson to understand the significance of the phone calls, and how they came to perceive this. The proposition that an arrangement or understanding could develop out of a course of dealing, in this case conversations about price increases, would not be surprising. The longer the course of conduct, the more opportunities there would be for an arrangement or understanding to develop. The difficulty in the present case is that there is little enough evidence about the development of Arrangement No 1 from a course of conduct. There was little or no express evidence about the evolution of any alleged arrangement or understanding. In the case of some of the alleged arrangements or understandings, there was little or no opportunity for any course of conduct from which an arrangement or understanding could have developed to occur. 155 Neither Ian Carmichael nor Michael Warner was asked any question, and neither gave any evidence, about how Arrangement No 3 came into being, notwithstanding that Leahy is alleged to have been a party to it. In his evidence-in-chief, Graeme Chisholm was asked whether he could say from his recollection when he first received calls from Ian Carmichael about pricing. Although these answers say something about the time when communications about pricing between Leahy and Chisholm began, they say nothing about how Arrangement No 3 might be said to have developed or evolved from the communications. 158 In his evidence-in-chief, Ian Carmichael said that from 1998, he had telephone conversations with Eino Heikkila, in which each informed the other of any moves in petrol prices of which either knew, and that those conversations included references to prices and times. He also said that Mr Heikkila was not part of his regular call cycle. 160 There was evidence possibly pointing to arrangements or understandings between United Fuels and Provincial Fuels, and between United Fuels and Westfuels, before Brumar became involved in the Geelong petrol market. Provincial Fuels operated some Shell outlets in Geelong until it sold them to Westfuels in 1997. In turn, Westfuels sold those sites to Brumar in 1998. Kieran Gerard Davison worked for Provincial Fuels until some time in 1997. One of his duties was petrol pricing in Geelong and Ballarat. His immediate superior, Denis Manton, told Mr Davison that he should ring Eino Heikkila to talk to him about pricing. Mr Davison had met Mr Heikkila on a couple of occasions, and subsequently had telephone conversations with him. Mr Heikkila would ask Mr Davison to ring the Provincial Fuels sites and keep an eye on the price there. Mr Davison would either telephone the Provincial Fuels sites or wait for a further call from Mr Heikkila. In cross-examination by counsel for United Fuels and United Retail, Mr Davison said that he may have committed to increasing a price at a particular time, but he could not recall an occasion on which that happened. Provincial Fuels made its own decisions about price movements. 163 This evidence is somewhat inconclusive as to whether there existed any arrangement or understanding between United Fuels on the one hand and Provincial Fuels, and later Westfuels, on the other. More importantly, there was no attempt to link Mr Davison's evidence with the allegation of Arrangement No 5, a later arrangement or understanding alleged to have come into existence between United Fuels and Brumar, after Brumar had taken over the former Provincial Fuels sites in 1998. There was no suggestion that Brumar had inherited any arrangement or understanding from Provincial Fuels, via Westfuels, only that Brumar had made its own arrangement or understanding with United Fuels. 164 Wayne Purtell's evidence might have shed some light on how Arrangement No 5 came into existence. He was an area supervisor for Provincial Fuels after Mr Davison. Mr Purtell remained in the same position, working for Westfuels when that company took over the Provincial Fuels sites in Geelong. He continued to fill the same role for Brumar when it took over those sites, until mid-February 1999. Setting petrol prices in Geelong and Ballarat was part of Mr Purtell's responsibilities, but in the Brumar days the ultimate decision-maker on prices for Brumar was Craig Brown from Shell. Mr Purtell first met Mr Heikkila around 1997, when Provincial Fuels was taking over the Geelong sites. They were introduced by Denis Manton. Mr Purtell became the Geelong area coordinator for those sites in about September 1997. He was told that Mr Heikkila would be a good source of contact to talk about price changes and the fluctuating market in the area. He confirmed that telephone calls from Mr Heikkila started in about 1997 and continued until Mr Purtell left Brumar. He said that the most common of the calls 'would be to arrange for the pricing in the Geelong area to go up. ' Mr Heikkila would ring him to see if he was receiving any information from Craig Brown. Mr Heikkila would also ring to see whether Mr Purtell could follow in the pricing structure that Mr Heikkila was trying to achieve. Most of the time, Mr Heikkila would mention a particular price and a time. Mr Purtell would report to Mr Brown, to see if he was able to go to that price. If Mr Purtell received instructions from Mr Brown that he could not go to that price, Mr Purtell would ring Mr Heikkila to tell him this. Often, Mr Heikkila would try to arrange another time for the change, or Mr Purtell would provide a time when he was authorised to change. Mr Purtell was not asked to say, and did not say, that any arrangement or understanding between Provincial Fuels or Westfuels and United Fuels was carried over to Brumar. He was not asked to give, and did not give, any evidence about the origin of Arrangement No 5, except for the proposition that his telephone interaction with Mr Heikkila remained unchanged from 1997 until Mr Purtell left Brumar. 165 In January or February 1999, Mr Purtell gave Brumar two weeks' notice that he was leaving his employment with Brumar. He spent a good part of a day in Geelong with Garry Dalton, who became Mr Purtell's replacement as area coordinator for Brumar, in relation to its sites in Geelong. The two returned to Brumar's office in North Melbourne on that day. At that time, or perhaps on another day shortly afterwards, Mr Purtell discovered that Brumar did not wish him to work out his two weeks' notice, and that Mr Dalton was to be his replacement immediately. Because Mr Purtell had to give up his company car immediately, Mr Dalton, who lived in Ballarat, drove him home to Daylesford. In the course of the trip, Mr Purtell explained to Mr Dalton that Mr Heikkila would call him. Mr Purtell could not recall taking Mr Dalton and introducing him to Mr Heikkila in the United Fuels office, adjacent to the Shell Speedwings site, on the day that he and Mr Dalton were together in Geelong. 166 Mr Dalton gave evidence that, on that day in January 1999 when Mr Purtell and he were in Geelong, they were at Shell Speedwings in the mid or late afternoon, when Mr Purtell suggested that they meet Mr Heikkila and have a cup of coffee. Mr Purtell explained to Mr Dalton that Mr Heikkila worked for the Shell wholesaler for Geelong and that Mr Heikkila would sometimes give Mr Dalton a call if he saw any price movements in the market. Mr Purtell, Mr Dalton and Mr Heikkila met over a cup of coffee in the United Fuels office and talked for 20 or 30 minutes. 167 In cross-examination by counsel for United Fuels and United Retail, Mr Dalton agreed that the purpose of the visit to the United Fuels office was to have a cup of coffee and to put a face to a name. According to his evidence, Mr Purtell was explaining to Mr Heikkila where he was going after he left Brumar, and Mr Dalton was asked about his background. 168 In cross-examination by counsel for the ACCC, Mr Dalton was asked to confirm that this conversation occurred. Apart from believing that the conversation did not occur on Mr Purtell's final day, he agreed that it occurred. He was not asked anything about the content of the conversation. He agreed that Mr Purtell told him that Mr Heikkila would be in contact with him on matters of retail pricing, and spoke of Mr Purtell describing Mr Heikkila as 'another pair of eyes'. At no stage was the proposition put to him that there was any discussion in the conversation between Mr Heikkila, Mr Purtell and Mr Dalton about price-fixing. At no stage was the suggestion made to Mr Dalton that he knew of any arrangement or understanding existing between Brumar and United Fuels, from Mr Purtell's time with Brumar, and that Mr Dalton continued to operate such an arrangement or understanding. Mr Dalton volunteered that he did not recall any conversation with Mr Purtell about Mr Heikkila ringing Mr Purtell to arrange for prices in the Geelong area to go up. Despite the quite detailed evidence about the handover from Mr Purtell to Mr Dalton, the possible origins of Arrangement No 5 were never explored fully. 169 In relation to Arrangement No 6, Ian Carmichael gave evidence-in-chief that he had a conversation with Mr Heikkila when the latter was leaving the petroleum retail industry. Mr Carmichael said that he remembered Mr Heikkila mentioning 'another couple of names that I could talk to regarding price. ' He said that Mr Heikkila mentioned Colin Williamson and a Mr Hall. In his evidence, Mr Heikkila denied that this conversation occurred. Assuming that it did, it must have occurred towards the end of September 1999, which was the date on which Mr Heikkila ceased his involvement with United Fuels, and the eve of United Retail's taking responsibility for the relevant sites in Geelong. Ian Carmichael and Colin Williamson were old friends, who had known each other since Mr Carmichael was in his teens. They were supporters of the same football club, saw each other socially and spoke by telephone from time to time. Mr Carmichael did not give any evidence that he ever mentioned to Mr Williamson the existence of any arrangement or understanding between Leahy and United Fuels, or his expectation that any arrangement or understanding would exist between Leahy and United Retail, with respect to the fixing of petrol prices. Mr Carmichael's only evidence was that he began making telephone calls about price information to Mr Williamson after the United Retail operation began. 170 It was Robert Riordan, on behalf of United Retail, who gave Mr Williamson some responsibility in relation to the setting of prices, along with a mobile telephone, so that Mr Williamson could contact the United Retail office and those on duty at its outlets in relation to prices. Mr Riordan's evidence was that he was unaware of any arrangement or understanding between Leahy and United Fuels. According to his evidence, he certainly did not authorise Mr Williamson to enter into any such arrangement or understanding, or to continue in existence any that had previously existed between United Fuels and Leahy. 171 In the absence of any evidence that any prior course of conduct between Leahy and United Fuels was continued between Leahy and United Retail, the allegation that an arrangement or understanding came into existence after 1 October 1999 between Leahy and United Retail is dependent on evidence of a course of conduct from which the evolution of such an arrangement or understanding could be deduced. There is no evidence of such a course of conduct. It was alleged that effect was given to Arrangement No 6 on 3 and 4 December 1999. If that allegation were true, the arrangement or understanding would have had to exist at that date, and to have been derived from a course of conduct occurring in the preceding two months. No such course of conduct appears from the evidence. It is extremely unlikely that Mr Carmichael would not have had some express communication with his old friend Mr Williamson about any price-fixing arrangement or understanding that Mr Carmichael might have regarded as existing between Leahy and United Fuels, and might expect to exist between Leahy and United Retail, if Mr Heikkila had told Mr Carmichael that Mr Williamson was the one to whom he should talk. The origin of any arrangement or understanding between Leahy and United Retail is entirely mysterious. 172 The origin of Arrangement No 7, the alleged arrangement or understanding between Leahy and Gordon Primmer, is also unclear. In response to the allegation in the amended statement of claim of the existence of Arrangement No 7, each of Leahy, Ian Carmichael and Michael Warner made admissions in the same form. They admitted that, at or about the time that BP Meredith ceased to be a Leahy commission site in December 1999, Mr Primmer requested that Leahy inform him when it increased its retail prices for petroleum products and that, from time to time, Mr Carmichael and Mr Warner did so. This admission might have formed a basis from which the ACCC might have sought to establish an express origin for Arrangement No 7. Despite the making of this admission, when Mr Primmer gave evidence, he was not asked about it. He was not asked any questions at all about the origin of Arrangement No 7. BP Meredith became an independent reseller, receiving supplies of petrol from Leahy, at the beginning of 2000. Arrangement No 7 is first alleged to have been implemented on 1 and 2 February 2000. There was therefore little or no opportunity for the occurrence of any course of conduct from which an arrangement or understanding might have developed. 173 Alan Shuvaly and Chris Andrianopoulos had become friends in about 1980, when Mr Shuvaly was working in the petroleum industry for a company called Astron. The two went to watch football together. In the 1990s, when Mr Shuvaly resumed working in the petroleum industry, for Liberty, he re-established contact with Mr Andrianopoulos. Mr Shuvaly knew Mr Anderson, having met him in early 1998, when Mr Anderson telephoned Mr Shuvaly and came to his office, and spoke to him about whether Liberty could be a wholesale supplier of petrol for Apco. 175 When Liberty established its site at Geelong North, Mr Shuvaly, who was responsible for setting prices, set out to obtain a significant market share by discounting aggressively. According to him, he sold at a discount of between half a cent and one cent for six to eight, or even 12, weeks. During this time, Mr Shuvaly did receive a call from Mr Anderson. He remembered Mr Anderson as sounding aggressive. The ACCC alleged that Apco, Liberty and Andrianopoulos gave effect to Arrangement No 8 on 20 April 1999, eight or so months after this stand-off over Liberty's aggressive discounting occurred. Counsel for the ACCC did not ask Mr Shuvaly to give, and he did not give, any evidence as to how an arrangement or understanding came into existence in that period. Mr Shuvaly was not invited to say, and did not say, that any arrangement or understanding evolved from a course of conduct between himself, Mr Anderson and Mr Andrianopoulos, or between anybody else on behalf of Liberty, Apco and Andrianopoulos. The origin of Arrangement No 8 was never explained. The evidence of those witnesses occupied a dozen or so days of the trial. It included evidence relating to matters on which I have made findings elsewhere in these reasons but, even so, the evidence dealing with the central issues is voluminous. To have it all set out would make the task of any reader enormous. I therefore endeavour to provide a fair summary, and to deal with a witness's evidence on each topic in one place, although in the transcript that evidence might be spread through evidence-in-chief and cross-examination by various counsel. If he found out that there had been an upward move in Melbourne, he would 'try and get the price up' in Geelong, in his conversations with competitors. Leahy liked to have all of the sites it controlled increase their prices at the same time, so they would be advised from the Leahy office of the price to which they were to move, and the time. Mr Carmichael said, 'that was also the agreed time with some of our other competitors when we were going to move and follow the Melbourne market. This led to an increase in the number of conversations Mr Carmichael had with competitors. 181 When asked initially about his call cycle, Mr Carmichael nominated Peter Anderson, Darren Campigli, Colin Williamson and Phil Carmichael, each of whom had contacts in Melbourne, and would be likely to know of any moves in the market. Later, he said that he spoke to two named persons at the Mobil depot ('Balgee depot'), and to David Mortimer and Chris Andrianopoulos as well. He said that he did not have direct contact with 7-Eleven. On some occasions, when Peter Anderson was away, Mr Carmichael spoke with Robert Anderson, Peter's brother. He also spoke with Graeme Chisholm, and on occasions with Robert Chisholm, in addition to Darren Campigli at Chisholm. In an earlier period, Mr Carmichael had spoken with Robert Levick at the Balgee depot. In 1998 and 1999, Mr Carmichael had conversations with Eino Heikkila, in which each would inform the other 'of any moves' that they knew of, and would nominate a time for such moves. According to Ian Carmichael, as much as once a week or once a fortnight, in 1999 and 2000, he rang Anton Maurer at BP Corford Express and informed him of the board price that Leahy was intending to go to. 182 Mr Carmichael described a typical call cycle pattern, which had a number of features. Peter Anderson would ring him, and tell him that the Melbourne market had moved. Mr Anderson would nominate a price for ULP and one or other of them would nominate a time. On some occasions, Mr Anderson would suggest that Mr Carmichael ring his contacts. On a lot of occasions, the phone calls occurred in mid-afternoon (at 2.00 or 3.00 o'clock) and the nominated time would be an hour later, in order to give Mr Carmichael time to contact the others in his call cycle, and all of the Leahy sites. On some occasions, a price for liquefied petroleum gas was nominated as well as one for ULP, but there was no discussion of super prices (which were related to those of ULP in any event), or of diesel fuel, which was priced separately. On some occasions, Mr Carmichael rang Mr Anderson, if he had seen evidence of an increase in board prices while he was driving around Geelong. 183 The Apco prices did not always rise at the times mentioned in these telephone conversations. If they did rise, they might not rise to the price mentioned for ULP. On some occasions, there might be 0.2c or 0.3c difference. Because Apco did not always increase, either Darren Campigli or Phil Carmichael gave him the nickname 'forked tongue'. In 1999 and 2000, some 70 per cent of telephone conversations between Mr Anderson and Mr Carmichael resulted in price rises in the Geelong petrol market. 184 On occasions, Mr Carmichael asked Mr Anderson if Chris Andrianopoulos knew about the price increase. Mr Anderson said that he was aware of it. Mr Carmichael said that he may have asked Mr Anderson a similar question about Liberty, and been told that they were also aware. Mr Carmichael had the impression that Mr Anderson had already been in touch with Chris Andrianopoulos and with Liberty. 185 As part of his call cycle, Ian Carmichael would ring Chisholm. If he spoke to Darren Campigli, he would tell him the price and the time of an increase for ULP. Mr Campigli would thank him and say, 'I will pass it on. ' Mr Carmichael was aware that Graeme Chisholm was in touch with Jacques Bodourian about prices at the 7-Eleven outlets. Sometimes Mr Carmichael spoke directly to Graeme Chisholm himself. On occasions, when he spoke to Mr Campigli, Mr Campigli would ask whether Peter Anderson knew of a proposed price increase and whether 'the Greek', meaning Chris Andrianopoulos, also knew. Mr Carmichael would tell him that they were aware. Mr Chisholm would thank Mr Carmichael for the information and either say that he would look into it, or would pass it on. Many of Mr Carmichael's calls to Chisholm were met with non-committal responses such as 'I'll look at it'. From time to time, someone from Chisholm would ring Mr Carmichael, to tell him that Melbourne had moved, and that Chisholm would also be moving. In that case, the Chisholm representative would tell Mr Carmichael the Melbourne price. 186 Chris Andrianopoulos was not part of Ian Carmichael's normal call cycle, although he did have telephone conversations, some of which were about supplying fuel and lubricants. Sometimes, if Ian Carmichael did not see the board prices up at Andrianopoulos, he would call Chris Andrianopoulos to tell him that the market had moved in Geelong. 187 Ian Carmichael had not met Eino Heikkila, but had spoken to him on the phone. Mr Heikkila was not part of Mr Carmichael's regular call cycle. On the occasions when they did converse, the conversation would involve the nomination of a price and a time. Subsequently, when United Retail came into operation, Mr Carmichael would telephone Colin Williamson, to inform him of any price increases that Mr Carmichael knew of. He would give him the time and the price. Mr Williamson would say that he would pass on this information. The information would include the proposition that prices in Melbourne had moved. There were also occasions on which Mr Williamson rang Mr Carmichael, to tell him that prices at Shell outlets had increased. This would initiate a call cycle by Mr Carmichael. He would inform people that Shell had gone up and that Leahy would make a move. 188 On occasions, Ian Carmichael telephoned Gordon Primmer and informed him, either of price movements that had occurred, or of price movements that were to occur. Mr Carmichael would nominate a time and a price. Sometimes he spoke to Mr Primmer's daughter in the same way. Sometimes, Ian Carmichael rang David Mortimer to inform him of price movements. 189 Those whom Mr Carmichael called as part of his call cycle did not always increase their prices at the time stated, or to the price stated. There was never any discussion among market participants about moving the price down, only ever about moving it up. 190 Mr Carmichael also described telephone calls that were in the nature of complaint, or follow-up calls. On occasions, Phil Carmichael, one of whose Portcliff outlets was close to a 7-Eleven outlet, rang Ian Carmichael to complain that 7-Eleven had not gone up. If he received a call from his brother, Ian Carmichael would ring Chisholm and speak to either Darren Campigli or Graeme Chisholm, to inform them that 7-Eleven's prices had not moved. Peter Anderson would sometimes ring Ian Carmichael, to tell him of sites where the prices had not been increased, which Peter Anderson saw as affecting Apco's interests. Sometimes, Mr Anderson complained about Shell Drysdale, in which case Mr Carmichael would ring Mr Williamson. Sometimes, Mr Anderson would complain that Batesford Roadhouse had not increased its prices, and Mr Carmichael would ring Mr Mortimer, to tell him that his failure to raise the prices could cause the market to come down. Mr Mortimer would say that he would 'get onto it. ' Conversely, Mr Mortimer sometimes complained about Apco's prices not moving, and Mr Carmichael would ring Mr Anderson. Sometimes, Mr Anderson would blame others for Apco's failure to increase its prices. The greatest number of follow-up or complaint calls that Ian Carmichael made were to Peter Anderson. 191 Shortly before Easter 2000, a petrol retailer in Ballarat rang a Melbourne radio station and made public the petrol price-fixing practices in Ballarat, which Merkel J subsequently found to have existed in the Ballarat case . The ACCC then announced that it would conduct an investigation into petrol pricing in Ballarat. Leahy was one of the corporations investigated in respect of its activities in Ballarat. Although he was not involved with the setting of prices for the Leahy outlets in Ballarat, Mr Carmichael became aware of a notice to Leahy under s 155 of the Trade Practices Act in relation to its Ballarat activities. He thereby became aware, about the middle of 2000, that the ACCC was using telephone call records to prove its case in Ballarat. 192 The initial announcement of the ACCC investigation in Ballarat made Ian Carmichael and Peter Anderson reluctant to discuss petrol prices on the telephone. They were not sure that the ACCC was not listening to their telephone calls. They began visiting each other's offices and talking in person about price movements. After a time, Mr Carmichael became 'a little bit cocky'. While he was keen on communications other than by telephone, there were occasions when Mr Carmichael would arrange to meet either Graeme Chisholm or Darren Campigli in the car park between Leahy's depot and the Caltex depot, where Mr Chisholm and Mr Campigli worked. 193 Fear of being detected by telephone bugging also led Mr Carmichael to invent a code, by which he hoped to communicate prices and times to those to whom he spoke. He would ring up and announce to the recipient of the call (Peter Anderson, Darren Campigli, Colin Williamson or Phil Carmichael) that an aeroplane of a particular model (eg a 939, representing 93.9c per litre) was due to land at Avalon Airport at a particular time, with a specified number of passengers (which represented the price of liquefied petroleum gas). The first time Mr Carmichael used this device, the recipient of the call did not understand it. 194 When Leahy received a notice pursuant to s 155 of the Trade Practices Act in relation to the Ballarat investigation, he told some of those in his call cycle about it. He arranged a meeting with Peter Anderson at the Eureka Hotel in Geelong. The meeting took place after Mr Carmichael had been examined in relation to Ballarat. At the meeting, they discussed putting forward legitimate reasons for their telephone conversations. Such legitimate reasons did exist, and I refer to them in more detail in [195]. The tenor of the discussion was that, if questioned, both Mr Carmichael and Mr Anderson would use these legitimate reasons as a pretext for their telephone conversations. Similar discussions took place between Mr Carmichael and others on his call cycle list. 195 Mr Carmichael and Mr Anderson had good commercial reasons for speaking to each other on the telephone, reasons which involved calls initiated by either of them. A major one was that Leahy performed fuel cartage for Apco, which necessitated frequent communication. In the course of the 1999-2000 period, Apco purchased its own B-double tanker truck, to do some of its own cartage. Mr Carmichael gave Mr Anderson a good deal of assistance in relation to the purchase of the truck, particularly as to various specifications. He also assisted in relation to issues of the appropriate workplace agreements for drivers of the truck. Apco purchased diesel fuel from Leahy on occasions when its regular supplier was unable to supply, or when Leahy offered a better price. This involved frequent communications about diesel fuel wholesale prices. Sometimes, Apco 'borrowed' diesel fuel from Leahy, ie Leahy supplied fuel to Apco to cover a shortage and Apco replaced the fuel at a later date. Mr Carmichael also made a number of calls to Mr Anderson during the relevant period in relation to petrol prices in Ballarat. United Fuels also purchased products from Leahy, including heating oil and bulk petroleum products. 196 Mr Carmichael made numerous calls, often daily, to competitors in the Geelong petrol market, simply for the purpose of finding out what their prices, or the prices of other competitors, were at the time. Information about the prices of competitors was a very important consideration in the setting of petrol prices. He also made calls to competitors who had contacts in Melbourne, and who would be in a position to know what had happened to Melbourne prices. Sometimes, in order to obtain a Melbourne price, Mr Carmichael would ring several different competitors to crosscheck the reliability of the information he was being given. Phil Carmichael sometimes rang Ian Carmichael to tell him that the Portcliff Mobil sites had raised their prices of ULP. Mobil often led a price rise in Geelong. 197 In cross-examination, Ian Carmichael dealt with the time likely to have elapsed between a call cycle and the beginning of the rises in the price of petrol. He was definite that it would not occur that there would be a phone call at 10.00 am on one day, specifying the time of a price rise as 9.30 am on the following day. If the phone call was at 10.00 or 11.00 am, the price rise would be between 2.00 and 4.00 pm. Five or six hours was the maximum time to elapse. Mr Carmichael said that generally the elapsed time would be half an hour, sometimes an hour, rarely more than two hours. It could have been four, five or six hours, but he could not remember an occasion on which it was more than two hours. If price rises began first thing in the morning, phone calls could have begun late on the afternoon before, but they did not happen very often in Mr Carmichael's recollection. His recollection was that price rises mostly occurred in the afternoon. 198 Mr Carmichael's evidence was that many of his phone calls were of an indirect nature. He would say that he had heard that the market was moving and he would ask what were the plans of the recipient of the call. Most of the responses were non-committal. They were in the nature of 'I'll look at it'. If a call recipient said that another competitor had not moved, Mr Carmichael would use his contacts to communicate, directly or indirectly, with that competitor. His aim was to ensure that a price rise would stick. Often the indirect contacts were made in the hope that the messages sent would cause the competitor concerned to raise its price. They were not always successful. 199 Apco was often slow to rise, but Mr Carmichael did not see himself as being able to ring Mr Anderson and tell him off about Apco failing to move its price upwards. He would have expected a hostile reaction from Mr Anderson if he had attempted to do so. Mr Carmichael knew that Apco was a discounter, and would be unlikely to be the first to go up. You always saw him, did you not, as morally free to do battle with the other discounters and if he thought commercially he couldn't lift his price, you always at all times regarded him as morally free to not lift his price, didn't you?---He was an independent, yes. If he did lift his price to cycle it down as fast as he had to to compete with the other discounters, didn't you?---That was his choice. You always felt that they were free in every sense of the word, including morally, to not shift their price if for commercial reasons they didn't want to shift their price?---That's correct. We area [ sic ] all free. He sometimes used body language to signify that there would be a likely price increase in the Geelong petrol market. He would face the palms of both his hands upwards and move them up. These incidents occurred at times when the price of ULP was low, there was commercial pressure to lift prices, and Melbourne prices might already have risen. 201 Mr Carmichael agreed with the proposition that it would make no commercial sense for three discounters like Apco, Andrianopoulos and Liberty to make an arrangement to fix prices. Such an arrangement would have no effect on the market unless other competitors in the market changed their prices as well. 202 Ian Carmichael's calls to Chris Andrianopoulos were merely by way of saying that the market had moved in Geelong. He could never tell Mr Andrianopoulos what to put his price to. He never said to Mr Andrianopoulos, or to anyone, that they should put their prices up. 203 Mr Heikkila never committed to entering into a price-fixing arrangement and always gave non-responsive answers to Mr Carmichael's calls. Nor did Colin Williamson ever commit to a price-fixing arrangement. His response to any information about prices from Mr Carmichael was to the effect that he would pass the information on. Some of Mr Carmichael's calls to Mr Williamson were simply to ask what was the price at Apco Highton. During the period relevant to this case, he was employed by Leahy as the management accountant. To some extent, he shared with Ian Carmichael duties in relation to the prices of petrol and other products. When Mr Carmichael was absent, Mr Warner would perform his functions in relation to pricing. Sometimes, even when Mr Carmichael was available, Mr Warner would also be involved in performing those duties. It was Mr Warner's task to give instructions to Leahy's retail outlets and commission agents as to the prices at which petrol should be sold from time to time. Consequently, if Mr Carmichael received a call from Mr Anderson, Mr Carmichael would then tell Mr Warner that there was a move on, to a particular price at a particular time, and Mr Warner would convey the instructions to the Leahy sites. Usually, Mr Warner would do this by instructing someone else in the office to make the actual telephone calls to the sites. He would do this as soon as he was aware of a price move. If he received information that the price was going to rise on the following morning, he would probably put the Leahy prices up on the night before, ie at closing time for the sites. Leahy only had one 24-hour site, BP Leopold, and one at BP Torquay that was open 24 hours a day during the summer and then closed at midnight for the rest of the year. 205 In Mr Warner's experience, during 1999 and 2000, most of the time that Mr Carmichael told him that he had received a call from Mr Anderson about prices, prices in the market went to that level. If the price rose overnight, and Leahy had increased its prices at the closing time of its outlets, Mr Warner would look at the competitors' prices in the morning. If the market had not risen to that level by about midday, Leahy would decrease its prices. According to Mr Warner, 'we used to hang out for the increase in the cycle, that's where we used to make some money. ' If others had not gone up, Leahy would make follow-up calls, to ask why they hadn't gone up. If the particular competitors did not go up after the follow-up calls, Leahy would bring its price down in order to compete, and to maintain sales volume. 206 Sometimes, Leahy would increase its prices after a sustained period of discount, without making any contact with anybody. It would choose a price that enabled it to make a margin of three cents over the wholesale price per litre, which was necessary to pay all the outgoings. It did this in an attempt to test the market, but Mr Warner said that these attempts never worked. Leahy had to bring its prices down the next day, because it was losing too much in the way of sales volume. Account customers would complain. These solo attempts occurred three or four times during the 1999-2000 period. 207 During the relevant period, Mr Warner had telephone conversations with Peter Anderson. Mr Anderson would say that, 'we are moving to a price of X at such and such time'. Mr Warner would say, 'thank you, Peter' and hang up. According to Mr Warner's evidence, he had these conversations with Mr Anderson when Ian Carmichael was not available, four or five or more times during the 1999-2000 period. Mr Warner's understanding of these phone calls was that Apco's board prices would go to the stated level at the stated time. After those calls, competitors, including Liberty and Andrianopoulos, would go up. The market generally would go up. 208 After receiving a call to the effect that the market was moving, Leahy would call Chisholm (usually Darren Campigli), Phil Carmichael, and Colin Williamson, 'to let them know what the market was doing as well. ' These calls could have occurred weekly in the relevant period. 209 When Mr Warner rang Mr Campigli, he would tell him that there was a move on to a particular price at a particular time. Mr Campigli would say, 'thanks very much'. Sometimes there would be a follow-up call if, for example, 7-Eleven hadn't moved up the board price of its site opposite one of Phil Carmichael's sites. Mr Warner would ask Mr Campigli if he knew that 7-Eleven wasn't up. Mr Campigli would say that he would call Jacques Bodourian, or let Jacques Bodourian know. Mr Warner did not think that he spoke to Graeme Chisholm during the relevant period. 210 Similar phone calls occurred with Phil Carmichael. Although Mr Warner was aware that Phil Carmichael did not set the prices for the commission sites that he ran, Mr Warner hoped that he would pass the information to the person who did set them. 211 If Leahy decided to increase its price because it felt it had been discounting for too long, it would call Peter Anderson and Phil Carmichael and name the price and the time. Mr Warner made such calls. The recipients of them would say 'thank you, we will wait and see'. In those instances, the price rise did not stick. In Mr Warner's experience, the only times a price rise would stick were when Leahy got a call from Peter Anderson. Chisholm was never the initiator. 212 Sometimes when Mr Anderson rang, he would put Apco's prices up to a lower level than he had advised. There may have been a time when he did not go up. For the majority of the occasions, the Apco price went up to the level advised. Sometimes it was 0.4c or 0.2c below that price. 213 Mr Warner did speak to Eino Heikkila on two or three occasions, advising him of a price and a time. Mr Heikkila would say, 'thanks, I'll look into it. ' In those cases, the United Fuels sites would move to the level discussed, but later than others in the market. Mr Warner also had similar conversations with Colin Williamson. He also received calls from Colin Williamson, asking for information about possible price increases. He could remember one conversation along the same lines with David Mortimer's mother, and similar conversations with Gordon Primmer, who would pass on the information to Stan Kerr at United Convenience. Mr Warner could also remember speaking to Chris Andrianopoulos, along similar lines. Mr Warner did not call Anton Maurer. 214 After the publicity about the investigation into Ballarat petrol pricing in April 2000, Ian Carmichael expressed a concern that the telephones were being tapped. He and Mr Warner thought that Leahy would be watched a lot more closely. Mr Warner was aware of Mr Carmichael's code. Mr Warner himself devised a code that he used with Chisholm, that involved a fake delivery advice, the price being expressed as a number of litres and the time as the arrival time of the truck. Darren Campigli would thank him, and say that he would wait for the truck. 215 In cross-examination, Mr Warner agreed that, in any conversations he had with Peter Anderson, in Mr Warner's mind, Mr Anderson was perfectly free to keep Apco's prices down if there was a commercial necessity for him to do so. Leahy was equally free not to change their prices if they chose not to change them, notwithstanding any discussion with any competitor. There were occasions when Ian Carmichael commented to him that Mr Anderson hadn't moved, and Chisholm had called Leahy to complain about this. We just passed information on about what the boards were going to go to. I wasn't telling people how to set their price, what to set their price to. I was passing on the information that I was given as to what the market was going to go to. At the time of giving his evidence in this case, he still believed that he was not fixing prices. He took and passed on information and made phone calls to competitors and told them the time and the price Leahy was going to. Mr Warner said that he did not have the financial resources to defend the proceeding, and the easy way out was to make admissions. 219 The period of one or two hours after a call cycle was very significant, in Mr Warner's view, in determining whether the price rise would stick. In his view, if certain competitors did not go up during that time, there would be a quick reaction by some of the larger players to bring the price back down. Two hours was 'the critical time'. Sometimes Mr Warner would instruct the smaller Leahy outlets to increase prices immediately he became aware of an imminent price increase, but instruct the higher-volume sites to remain at a lower price for longer. Because there was little traffic around, it was safe to increase prices in the middle of the night. This would have no impact on the volume of sales. When he was on his way to work in the morning, Mr Warner would check the prices of a number of key sites. If there had not been a general market increase, he might then instruct the Leahy sites to move their prices back down, or to hold out at the higher price for a couple of hours and see if the rest of the market rose. 220 Mr Warner spoke of receiving phone calls from Colin Williamson, who was asking him what was happening in the market place. We need someone to go up so we can all make some money," or was that the kind of thinking of them?---No, we were all educated into that weekly price cycle. When the prices went up, every week the price would go up to that level. We would be down at the bottom and then the cycle would start, and we were all educated to that fact and we were all waiting for it. We were all waiting for that price to go up. We were just waiting for it. It was like a lifeline for the business. For instance, sometimes he would arrange for BP Leopold to raise its prices during the evening peak traffic period, on the basis that the outlet was on the wrong side of the road for traffic leaving Geelong, so an increased price would not make a big difference to the volume of sales, but would offer the possibility of a small margin over the wholesale price on whatever petrol was sold. He would arrange for the other Leahy outlets to increase their prices at midnight, when most of them closed. I suppose as I said before, we thought --- well, I thought by just passing on the information to competitors was not contravening the Act. We just --- we weren't telling people what to do with their boards. We were just saying this is what we've gone to, sort of, the market has gone to and just left it at that and we would then wait and see what they would do and see what the [ sic ] response we would get. His understanding was that it was the predictive nature of the information that involved a contravention. He said that he could not afford to contest the case. Setting prices would be Mr Chisholm's responsibility if Mr Campigli was away. Mr Chisholm had telephone conversations with competitors, discussing either price or supply of products. He had such conversations with Ian Carmichael and Michael Warner, 90 per cent of which were with Mr Carmichael. Typically, Mr Carmichael would give him a time and a price and Mr Chisholm would thank him. This happened somewhere between 10 and 20 times in the 1999-2000 period, according to Mr Chisholm's recollection. Calls from Mr Warner were similar to those from Mr Carmichael. 225 According to Mr Chisholm, there was always a call prior to the price going up, and there were follow-up calls, in which those from Leahy would say that they had gone up, and would ask what was happening at Chisholm. 226 Mr Chisholm gave evidence of Mr Carmichael's use of coded language after Easter 2000. After media reports of the investigation in Ballarat, Mr Carmichael asked to meet Mr Chisholm in the car park between Chisholm's two depots. He could not remember what the conversation was about. 227 After receiving a call, Chisholm would not simply raise its price at the time mentioned in the call. Someone from Chisholm would drive around Geelong spotting board prices. If they still had price support from Caltex, Chisholm would keep its prices low for an hour or two to try and increase the volume of sales. 228 Chisholm did cartage of fuel for 7-Eleven. Mr Campigli had a line of communication with someone there. If Phil Carmichael complained to Ian Carmichael that 7-Eleven had not increased its prices, Ian Carmichael would ring Chisholm and ask for assistance in getting the prices at 7-Eleven up. Mr Chisholm only ever rang 7-Eleven about petrol prices on one occasion. 229 In cross-examination, Mr Chisholm said that he never felt obligated to move Chisholm's prices when he received calls. He never undertook to do anything, and regarded himself as having a total free choice as to what he would do with the information and with Chisholm prices. Nobody at Leahy ever rang Mr Chisholm and ticked him off or criticised him for not moving the Chisholm prices up at any given time. He would not have taken kindly to such a ticking off. Mr Chisholm never rang Leahy and ticked them off about their prices. It did not cross his mind to do that. 230 Also in cross-examination, Mr Chisholm said that Caltex set the price at which Chisholm purchased petrol, and the buying price was the major factor in fixing the selling price. After its initial period of aggressive discounting, when it opened its Geelong outlet (see [175]), Liberty concentrated on the volume of sales at that site. The manager of the Liberty outlet in Geelong was required to spot board prices on his way to work every morning, and to fax the information to Mr Shuvaly. In addition, on one or two days each week, Mr Shuvaly visited Geelong and spotted board prices for himself. People who were required to report to Mr Shuvaly proved to be not always reliable. 232 Mr Shuvaly regarded Andrianopoulos and Apco as Liberty's particular competitors in Geelong. He knew them as discounters, as Liberty was. He made a call and said, "The market has started to move. Some independents are likely to do something. Would you be part of it if it happened? We would always evaluate the situation, and act accordingly. What would be your---?---My answer was if the market was fairly strong and we felt comfortable, yes, we would support to the level it goes to. But they can rest assured that we would support it, but to what level they are not aware. Not a great deal. And that's the reason we sort of contacted each other, I guess, to verify if the information was right. If he had some information from his agents as to the market movement, he would say that he had heard something and vice versa. What did you do?---I would take it on board and wait until such time as there was a realistic move in the market for myself to react. A few times, when Mr Andrianopoulos rang, he would say that he had received a call from Peter Anderson. If Mr Andrianopoulos told Mr Shuvaly that he had received a call from Mr Anderson and there was a market move, he would ask Mr Shuvaly if Liberty would be looking at moving. Mr Shuvaly's answer was 'always that if the market was strong enough and comfortable enough, then I would support it. ' Peter Anderson also sometimes rang Mr Shuvaly and asked him if Liberty would be moving if the market panned out the way it should. Mr Shuvaly's answer was that Liberty would have a look at it. 235 If Liberty did not increase its prices, there would be follow-up calls. Mr Anderson would ring and tell him that if Liberty did not move, it would 'totally fuck the market'. Mr Shuvaly was upset by this. 236 Mr Shuvaly recalled one incident when Mobil Geelong North had not moved when the rest of the market had. Liberty's commission agent rang Mr Shuvaly and told him that Mobil Geelong North had not moved. Mr Shuvaly rang Mr Anderson and told him that Liberty would not move until such time as Mobil Geelong North moved. Mr Anderson responded that he would make a call to Mobil. After a short period, Mr Shuvaly's agent checked and Mobil Geelong North had moved, so Mr Shuvaly increased Liberty's price in Geelong. 237 Mr Shuvaly's view of the Geelong petrol market was that changes in the price were initiated by the majors. Sometimes, the majors would attempt a move and see if it would be followed. If the move was not strong, they would bring their prices back down and try again later to increase them. 238 Mr Shuvaly's evidence was consistent in that he maintained that he only ever received calls from Mr Anderson or Mr Andrianopoulos, or made calls to either of them, passing on information about what had already occurred in the Geelong petrol market. He denied receiving information about price rises that were yet to happen. This consistency led to counsel for the ACCC applying for leave, pursuant to s 38(1)(c) of the Evidence Act , to cross-examine Mr Shuvaly about a prior inconsistent statement. The statement was made pursuant to the leniency agreement between the ACCC and Mr Shuvaly, to which I have referred in [135]. The terms of the statement, which Mr Shuvaly signed, were negotiated between him and his counsel on the one hand and the ACCC on the other. There were several drafts before the final version was signed. The statement appears to have been Mr Shuvaly's only in the sense that he signed it. It does not appear to have been his own words in any real sense. 239 After hearing argument, I granted leave to counsel for the ACCC to put certain passages from the statement to Mr Shuvaly. 240 The signed statement included the proposition that, in telephone calls from Mr Anderson about increasing retail petrol prices in Geelong, Mr Anderson told Mr Shuvaly that 'the majors had moved or less often would be moving up to a particular price at a particular time'. When this passage was put to him, Mr Shuvaly said there was only one incident, the date or time of which he could not remember, when he was told that Mobil and the independents would be moving. Despite strenuous attempts of counsel for the ACCC in cross-examination, Mr Shuvaly would not concede anything more as to the predictive nature of Mr Anderson's calls, other than that there was one incident in which Mr Anderson told him that Mobil would be moving at a later time. He said this was the incident to which he had intended to refer, without clarifying that, when he made the signed statement. Another assertion in the signed statement was that Mr Anderson had said to Mr Shuvaly by telephone that 'the market will be moving to X cents per litre at Y o'clock. Are you going to support it? ' Counsel for the ACCC attempted to persuade Mr Shuvaly to agree that he had understood Mr Anderson, when he used the phrase 'the market' in the first sentence of that passage to mean 'the majors'. Mr Shuvaly would not agree with this. He adhered to his evidence that, with the exception of the single incident when Mobil was mentioned, Mr Anderson only gave him information about moves that he had already seen on the part of the majors. 241 Two other passages from Mr Shuvaly's signed statement were put to him, but he was not asked to say whether they were truthful or not. The overall effect of the attempt to cross-examine Mr Shuvaly on his signed original statement was at best minimal. He adhered strongly to the evidence he had been giving, in his own words, in answer to questions he was asked in evidence-in-chief. The only predictive element that Mr Shuvaly would concede to any significant extent in relation to his telephone conversations with Mr Anderson was the prediction that the independents would be moving. With the exception of the one incident in which Mr Anderson referred to Mobil (which may or may not have been within the period relevant to this case), predictions of moves by the independents were always based on information Mr Anderson gave to the effect that the majors had already moved, or begun to move. 242 Although Mr Shuvaly thought that Mr Anderson was a reliable source of information about what was happening in the Geelong petrol market, he had other means of checking that information, which he used regularly. One was his own commission agent, who managed the Liberty outlet in Geelong. The other was Chris Andrianopoulos. Sometimes Mr Shuvaly would ring Mr Andrianopoulos to check the accuracy of information Mr Anderson had given him. On one occasion in 1998, Mr Shuvaly said that he agreed with Mr Andrianopoulos that both of them would try and 'support the market at a particular time when we saw the market strong enough. ' By this, he meant to increase board prices to the level that everybody else had moved to. Mr Shuvaly was aware that if he did not support a market movement, he would probably get 'some sort of flak. ' He said he was not very concerned about this because he was looking after Liberty's interests. 243 After he had had a discussion with Mr Andrianopoulos about prices, which included a discussion about what Mr Anderson had said to either one, Mr Shuvaly's expectation was that prices of the independents would move. If he delayed increasing the prices of Liberty's Geelong site, he might receive a telephone call from Peter Anderson complaining that Liberty had not moved, to which he would respond that he would 'look at it'. Only if Mr Shuvaly felt comfortable enough about the market would he move. 244 In cross-examination by counsel for Andrianopoulos and Chris Andrianopoulos, Mr Shuvaly confirmed that, if he received a telephone call about prices in the Geelong market, he was his own man. No-one could tell him when Liberty was to change its prices, or by how much, or whether it was to change them at all. A decision to make a change depended upon Mr Shuvaly's judgment as to the interests of Liberty. He also confirmed that he never attempted to persuade other people to move their prices up and never agreed with any suggestion of Mr Anderson or Mr Andrianopoulos that he should do so. It had always been Liberty's policy never to discuss pricing with competitors, and Mr Shuvaly always applied that policy. On occasions when Mr Anderson attempted to talk about prices to him, he either said that he was not interested, or listened only out of politeness, because Apco was a customer of Liberty. 245 Mr Shuvaly also agreed that there was a lot of communication in the petroleum industry, including telephone communication, in which competitors sought information from each other about a variety of things and spread information, or gossip, about a variety of things. Mr Shuvaly and Mr Andrianopoulos spoke to each other about a great number of matters on many occasions. When he was unavailable, which he estimated occurred 20 or 30 per cent of the time, Graeme Chisholm would perform that function. 247 During the relevant period, Chisholm had price support from Caltex at the rate of 2.9c per litre, by way of a rebate, to assist Chisholm to match other prices in the Geelong petrol market. The pumps at the Chisholm outlets were linked by computer network to the Caltex head office in Melbourne, so Caltex would know at what price Chisholm was selling. Price support was the main influence on setting the prices for Chisholm's outlets. The prices of competitors were another influence, and Mr Campigli would spot board prices. The main competitor he spotted was Andrianopoulos, which was close to the Chisholm depot, but he also took into account the prices at Shell and Mobil outlets. Andrianopoulos, United Convenience and Apco seemed to lead the price down more than anybody else in the Geelong petrol market. They would be perhaps 0.2c or 0.3c cheaper than other petrol retailers. The Mobil and Shell outlets seem to follow the market down. When the market was up, Chisholm would adjust its prices to match the market. 248 Mr Campigli received calls from Ian Carmichael and Michael Warner about price movements. These were after the Melbourne market had moved up. Mr Carmichael would say that there was probably going to be a move of board prices later in the day or overnight. He would mention a price and a time. Mr Campigli would give one of three responses: he would thank the caller; on occasions would say that he would move Chisholm's board prices as well; or sometimes he would say that he would 'have a look at it'. Sometimes, Chisholm's prices were already up, well above the market, because Caltex had already withdrawn price support. Sometimes, Mr Campigli asked Mr Carmichael about what Andrianopoulos was going to do, and sometimes he would ask about Apco. Mr Carmichael would say that 'it should be alright. ' Occasionally, Mr Campigli would ask Mr Carmichael what Shell or Mobil were going to do. Once or twice, Mr Carmichael mentioned that he had spoken to Colin Williamson, and Mr Campigli assumed that this meant that United Retail would be moving their board prices up and other Shell outlets would probably be following. Mr Carmichael would only have mentioned Colin Williamson once or twice in 1999 and 2000. 249 Mr Campigli gave evidence about Mr Carmichael's code, which he adopted after Easter 2000. Mr Campigli said he understood what Mr Carmichael was intending to convey. He asked why Mr Carmichael was using the code, and Mr Carmichael replied that he had to be careful. Mr Campigli was not scared by the Ballarat investigation, because he did not realise that what he was doing was wrong. 250 Calls from Mr Warner to Mr Campigli were similar to those from Mr Carmichael. 251 In his evidence-in-chief, Mr Campigli was asked whether Mr Carmichael or Mr Warner ever told him why they were making calls to him. They just never ever told me that I had to move my boards or anything like that. I just assumed that by letting people know that we might adjust our price in the market and the market would be similar instead of being big differences. On most occasions after he received the calls, Mr Campigli would instruct the Chisholm sites to change their board prices to the price mentioned in the phone call at the time mentioned. On other occasions, an hour or so after the call, he would drive around spotting board prices and, if the market had moved, he would move the Chisholm prices. As for overnight price changes, there were occasions when Mr Campigli asked the managers of the Chisholm outlets to put the prices up at closing time, and occasions when he would ask them to put them up when he arrived at work in the morning. 253 On occasions, Mr Campigli would ring Ian Carmichael or Michael Warner to let them know that he was aware of competitors whose prices had not moved up. Mr Carmichael or Mr Warner would thank him and say that they would see what they could do. Sometimes the sites that had not moved were Apco or Andrianopoulos, but they could have been Shell or Mobil sites. On a couple of occasions, a BP-branded outlet at Ocean Grove had not risen, and Mr Campigli rang Ian Carmichael. Mr Carmichael said that there was not much he could do, because the site was not under Leahy's control, but he would let the operator know what the Geelong market was doing. 254 Chisholm made deliveries of fuel to the 7-Eleven sites in Geelong, on behalf of Caltex. Mr Campigli dealt with Jacques Bodourian in relation to these deliveries. 7-Eleven's prices in Geelong in 1999 and 2000 would generally match the market, or occasionally undercut it by 0.2c per litre. Sometimes, Mr Campigli would provide Mr Bodourian with information about prices in the Geelong petrol market, when he was speaking with him about deliveries. Mr Campigli would tell him what he knew of the price at Apco Geelong East, which was near 7-Eleven Geelong East, and also what he knew of the price at Andrianopoulos. A couple of times, Mr Campigli rang Mr Bodourian to let him know that there might be a movement in the market, but on other occasions he rang after he knew that the market had moved up. Mr Carmichael or Mr Warner sometimes rang Mr Campigli about 7-Eleven, because 7-Eleven was often a bit slow in moving its prices up. In response to these calls, which suggested that 7-Eleven had not risen, Mr Campigli would say that he would give Mr Bodourian a ring and let him know that the market was up. Even having said this, Mr Campigli did not always ring Mr Bodourian, but he sometimes received further complaint calls and then would give Mr Bodourian a ring. Mr Bodourian would thank him, and say that the sites were very busy, but that he had spoken to them. Sometimes, in their calls of this kind, Mr Carmichael or Mr Warner would mention to Mr Campigli that Peter Anderson was not happy that 7-Eleven had not gone up. 255 Mr Campigli estimated that he received calls from Ian Carmichael or Michael Warner, telling him that there would be a movement at a particular time to a particular price, about 30 or 35 times in each of the years 1999 and 2000. 256 In cross-examination by counsel for Apco and Peter Anderson, Mr Campigli agreed that Chisholm made its own decisions, as a matter of its own choice, about pricing. Regardless of anything that those from Leahy said, Mr Campigli never felt obliged to change Chisholm's prices. His understanding was that, if Chisholm wanted to move its prices, it was up to Chisholm. Mr Carmichael and Mr Warner never told him what Chisholm had to do and he never felt obliged to raise prices just because they had telephoned. Likewise, Leahy was free to do what it liked with its pricing. He was one of those who communicated to Leahy outlets instructions to change prices. For the first five years of his employment, he was the main person who answered the phones and put callers through to those in the office to whom they wished to speak. He recalled one instance of someone at BP Torquay ringing to say that they did not want to put the price up because a rival Mobil outlet at Torquay had not yet risen. Mr Maurer passed on the message. Although he did not hear conversations between Mr Carmichael or Mr Warner and competitors about prices, he did remember overhearing a conversation in which Mr Carmichael was telling Peter Anderson that there was a 747 landing. (Mr Maurer must have overheard this conversation much earlier than Easter 2000, because he was no longer working in the Leahy office by Easter 2000. Its prices were set from Melbourne, in response to information about the prices at nearby sites, which Mr Maurer would communicate by computer. The particular nearby sites were Shell Speedwings, Apco Geelong North and Mobil Geelong North. Mr Maurer would drive past those sites on his way to work each morning and on his two trips to the bank during each day. 259 On occasions, either Mr Carmichael or Mr Warner would ring Mr Maurer to inform him that there was to be a price rise. Mr Maurer did not recall any mention of times. Even if Mr Carmichael began by talking about horseracing or football, or social matters, the conversation would always lead to prices. Mr Maurer described these calls as 'letting me know what the market was doing. ' He did not act on these calls, and repeatedly told Mr Carmichael and Mr Warner that the calls had no influence, because the price at BP Corford Express was totally out of his hands. There were never any calls about price decreases. Communications about the purchase by BP Corford Express from Leahy of lubricants and two-stroke fuel were always initiated by BP Corford Express. Communications about occasional cartage of fuel by Leahy for BP Corford Express were between BP and Leahy, and did not involve Mr Maurer. 260 In cross-examination, Mr Maurer said he thought that he had received 30 or 40 calls from Mr Carmichael or Mr Warner, about price increases, in the two-year period relevant to this case. The change from commission agents to resellers was alleged, and admitted on the pleadings, to have occurred on 1 January 2000. Leahy set the retail petrol price at BP Meredith. The required price was communicated by phone, generally by Michael Warner and sometimes by others including, on occasions, Ian Carmichael. Mr Primmer would be told that the price was going up to a particular figure and at a particular time. Price decreases were generally left to him. There were also phone calls about the supply of petrol and other products. 262 Mr Primmer had a lot of conversations with Mr Warner. Most of them were when Mr Warner rang to tell Mr Primmer there was going to be a price rise. He usually mentioned a time. On occasions, he mentioned a couple of other people. On one occasion, when the price had not moved, Mr Warner said that Andrianopoulos would get on to him. Mr Warner asked Mr Primmer to pass on information about price rises to Stan Kerr at United Convenience or, if United Convenience had not raised its price, asked Mr Primmer to contact Stan Kerr to see what was going on. Mr Primmer would then ring Mr Kerr. 263 When Mr Primmer passed on information to Mr Kerr, Mr Kerr would give one of three responses: sometimes, he would say that he would see what he could do; sometimes, he would say that, if others moved their prices up, he would as well; sometimes, he would say that he would move his prices up. On some occasions, Mr Primmer would report these conversations back to Mr Warner. 264 When he received price information from Leahy, Mr Primmer always moved his prices to what he had been told the new price would be. After he became a reseller, sometimes he would ask whether the rest of the market was up, or suggest that Leahy should get the price at Bannockburn increased and then Mr Primmer would go up. Sometimes, Mr Primmer had to ring Mr Kerr two or three times when United Convenience was not raising its price. 265 After the Easter 2000 scare in relation to the Ballarat investigation, Mr Primmer had a conversation with Mr Warner in which Mr Warner suggested that Mr Primmer ring him on his mobile phone, not on the office phone any more, because it might be bugged. After that, Mr Primmer did not worry too much about conversing with Mr Warner. He still received some calls from Mr Warner, or others at Leahy, and did not make any further calls to Mr Kerr. He had a similar role with Westfuels, the previous multi-site franchisee of a number of Shell outlets in Geelong, until Brumar acquired that business. Prior to that, he was working for a company called Provincial Fuels, which then held that multi-site franchise, until Westfuels acquired it. While he was with Provincial Fuels, Mr Purtell was introduced to Eino Heikkila. Mr Purtell's boss, Denis Manton, told him that Mr Heikkila would be a good source of contact to talk about price changes and the fluctuating market in the Geelong area. 267 From some time in 1997, until he left Brumar in January 1999, Mr Purtell received telephone calls from Mr Heikkila, which he described as 'to arrange for the pricing in the Geelong area to go up. ' Mr Heikkila would ask if Mr Purtell had any information from Craig Brown, who was responsible for setting the prices for Brumar. Mr Heikkila would tell Mr Purtell what he was going to do, and ask whether Mr Purtell could follow 'in the pricing structure that he was trying to achieve. ' Most times he would mention a price and a time. Mr Purtell would contact Mr Brown to find out whether he was able to go to that price. Often, Mr Purtell would have to call Mr Heikkila back, or would receive a call back from Mr Heikkila, to confirm whether he would be able to change his prices. If Mr Purtell's instructions were not to change, Mr Heikkila would try to arrange another time, or Mr Purtell would give him another time at which he would be able to change. If Mr Purtell had instructions to change, he would let Mr Heikkila know this and tell him what the timeframe was. Sometimes, Mr Heikkila would ring about Shell sites in Geelong that had not gone up when others had. Mr Purtell had no other business or personal matters to discuss with Mr Heikkila. 268 Mr Purtell was based in North Melbourne, but spent most of his time in the different Shell sites in Geelong. Normally he would work from one of those sites, or would be solving problems at other sites. Whilst he was in Geelong, he would spot board prices. He would maintain contact with Mr Brown about what was happening in the Geelong petrol market, from what Mr Purtell learned through watching sites and from Mr Heikkila. He would sometimes report to Mr Brown if a competitor had not increased prices at a particular site. It was Craig Brown who had authority to make adjustments to prices of petrol for all of Brumar's outlets. Prices were therefore set by Shell. Often, on a Friday, Mr Brown would delegate responsibility for price setting to Mr Purtell for the weekend, giving him a maximum and a minimum and allowing Mr Purtell to use his discretion within that range. 269 When Mr Brown gave Mr Purtell instructions about prices, he would give him a price and a time. He would often say that Mr Purtell should watch the opposition, to make sure that everybody was following suit. Mr Purtell would get information from console operators coming and going from their shifts, from his own board-spotting, or from Mr Heikkila. If a competitor hadn't moved, he would let Mr Brown know and await further instructions. Sometimes he would be told to wait and see if the competitor responded, or to ring Mr Heikkila and see what the situation was. 270 In cross-examination by counsel for Apco and Peter Anderson, Mr Purtell agreed that, sometimes when he passed on information to Mr Brown, he was told not to do anything with prices at that stage. Sometimes he was told to match the market if the market was moving up. This required him to check that other sites were moving, or had moved to that price. Mr Purtell could not predict what response Mr Brown would give to him when he passed on information. 271 Mr Purtell also agreed that Brumar was a price follower, both on the way up and on the way down. Strasburger therefore set the prices for those outlets. According to Mr Carmichael, Melbourne prices generally went up on a Thursday and he would be instructed to increase Portcliff's prices either on Thursday night or Friday morning. Mr Carmichael had authority to decrease prices to match Portcliff's competitors. He described Portcliff as a follower as to price. 273 From late 1998 onwards, Phil Carmichael had conversations with his brother Ian Carmichael about petrol prices. Phil Carmichael remembered one occasion when he told his brother that Portcliff would be going to a certain price at a certain time, and his brother responded 'you'll be a shag on a rock because no-one else is moving in Geelong at that time. ' Phil Carmichael also had conversations with Michael Warner about petrol prices. Both to Mr Warner and to his brother, he would pass on information that he had been instructed to increase prices, and see if he could get a time or an indication whether the rest of the market in Geelong was intending to move. He would report this information to Aaron Incoll, who gave him instructions on behalf of Strasburger. He would sometimes try to persuade Mr Incoll to delay price increases, on the basis that he had reliable information that the Geelong market would not be moving until a later time than Mr Incoll had instructed him to move. 274 Phil Carmichael received calls from Ian Carmichael and Michael Warner when they had information about a prospective price move. He passed that information on to Mr Incoll, to let him know that there was going to be a move at a particular time in Geelong. More often, calls were initiated by Phil Carmichael, because Mobil was the first to move, so he had the information first. When he rang Mr Incoll with information from Ian Carmichael or Michael Warner, seeking to delay price increases, he was more successful as time went by, because the information he passed on from the Leahy personnel was considered to be reliable. 275 Not all of Portcliff's immediate competitors would increase their prices at the same time. 7-Eleven tended to be fairly slow in going up when most others had gone up. Phil Carmichael would ring his brother or Mr Warner to let them know that 7-Eleven had not gone up, assuming that they may have had some form of contact to find out whether or not 7-Eleven intended to go up. Generally, they said they would get back to Phil Carmichael, or would check out the information that 7-Eleven had not gone up. 276 There were occasions when Phil Carmichael asked his brother or Mr Warner where they received the information they were giving him about proposed price increases. They did not tell him, other than that Phil Carmichael could recall asking on one occasion whether Apco was increasing its price at a particular time, and being told that someone at Leahy had had a conversation with Peter Anderson. 277 Phil Carmichael recalled his brother and Michael Warner using codes, relating to airline arrivals or fuel deliveries, after the investigation into petrol pricing in Ballarat began in 2000. 278 In cross-examination by counsel for Apco and Peter Anderson, Phil Carmichael said that he had managed Mobil Geelong North in the early 1990s. Subsequently, he would sometimes telephone Mobil Geelong North to get Apco Geelong North's price, knowing that Apco's prices were consistent throughout the Geelong petrol market. It would save him from going out board-spotting at an Apco site. DE Potter Pty Ltd was itself a commission agent of Mobil. Mr Potter managed Mobil Geelong North from the end of 1996 until October 1999. Mobil set the retail prices of petrol at the site. Mobil supplied price support during the low-end of a price cycle. Mr Potter reported to Mobil changes in prices that he observed from the boards at Apco Geelong North, across the road. Whereas Apco Geelong North was a 24-hour site, Mobil Geelong North closed at about 10.00 pm and opened at 6.00 am. Later, at a time that Mr Heikkila did not specify, they began discussing and passing information on retail petrol pricing. Mr Carmichael or Mr Warner would advise Mr Heikkila of a possible price increase, to take place at a particular time, or would inform him of a price increase that had already occurred. They did not always mention a time in relation to future increases. 281 Mr Heikkila would drive around spotting board prices at 8.00 o'clock in the morning, again at lunchtime or in the afternoon, and on his way home from work. If he received a call from Mr Carmichael or Mr Warner, he would drive around spotting board prices and, if others had raised their prices, he would instruct the United Fuels outlets to raise their prices. In the calls, he would thank the caller for the information. He did not discourage the making of these calls, because the information he received was useful to him in United Fuel's own business and was also of assistance for other businesses that United Fuels supplied with fuel. 282 In Mr Heikkila's experience, Mobil was often the initiator of a round of price increases, followed by Apco. 283 Mr Heikkila could see the board price at Shell Speedwings from his office. If he noticed that Brumar had increased its price at Shell Speedwings, he would call Ian Carmichael and tell him that Shell had increased the price. 284 Once Mr Heikkila was happy that the prices in the large sites had gone up, he would telephone the managers of the United Fuels sites and instruct them to put their prices up. 285 Sometimes the time specified in the phone calls Mr Heikkila received was midnight. Sometimes it was 7.00 am. In those cases, Mr Heikkila would check the prices of competitors at 8.00 am. 286 Mr Heikkila spoke to Wayne Purtell, to pass on information he had been given about price increases, because Brumar was based in Ballarat and did not have anyone driving around in Geelong to spot board prices. He continued to make telephone calls to Garry Dalton when Mr Dalton took over Mr Purtell's job. He would pass on the information he had received about a price and a time. The recipient of the call would thank him, and indicate that they would look at the situation. 287 Mr Heikkila described his purpose in making these calls as 'just for market information'. He wanted to let people know what was happening in the market, so that they would not miss out on a price increase and run the risk of going broke. Generally, Brumar waited for Mr Heikkila's call before putting their price up, because they had no other source of information about market prices in Geelong. Mr Heikkila also had other telephone conversations with Mr Dalton, because United Fuels was Brumar's back-up supplier for bulk products and oil. He estimated that he had two or three conversations a month with Mr Dalton in the first nine months of 1999 about these matters. 288 Sometimes, Mr Heikkila received telephone calls from Ian Carmichael in relation to Brumar, if the Brumar price had not gone up. Mr Carmichael would ask Mr Heikkila if he knew what Brumar's position was. Mr Heikkila would indicate that he would check. He would ring Mr Purtell or Mr Dalton and ask if Shell were intending to put the price up. They would say that they were looking at it, or something similar. Mr Heikkila may have confirmed with Mr Carmichael that he had done this, but not very often. 289 Mr Heikkila was asked whether he discussed the calls from Mr Carmichael with Robert Riordan. He indicated that he and Mr Riordan did not communicate with each other very often, as they were not getting on by 1999. He said that there possibly had been discussions about the calls, but only in general terms, not individually. 290 Counsel for Garry Dalton also asked Mr Heikkila if he recalled calls from Ian Carmichael about increases that were to happen within an hour or two of the call. Mr Heikkila's recollection was that the time for an increase was generally either close of trade that evening or in the morning. 291 Mr Heikkila said that he would always go and look at the prices of competitors after he received a phone call and would not simply put up the prices at the United Fuels outlets without doing this. He accepted that, on occasions when he rang Mr Dalton, he did not mention that he had been in touch with any other competitor about pricing information. On occasions when he rang Mr Dalton, Mr Heikkila may have been in his car, providing information about board prices generally. Sometimes his calls were diverted to a message bank, because Mr Dalton's phone was either switched off or was out of its area of communication. Mr Heikkila would not leave pricing messages, but would request a call back. From July 1999 onwards, Mr Heikkila did not call Mr Dalton at all. Mr Dalton never agreed with Mr Heikkila about what he would do with his prices. Mr Heikkila never asked Mr Dalton to agree to anything. In Mr Heikkila's mind, Mr Dalton remained free to do what he liked with his prices. Mr Heikkila felt that he himself remained free to do what he liked with his prices. He hoped that he would get the Brumar prices up at some point after the call, but the call was made merely in the hope that this would happen. Brumar was a bit slow off the mark. 292 There were times when the market rose without Mr Heikkila making or receiving any calls, as a result of ordinary market practice. Generally, Geelong would be a day later than Melbourne. 293 Mr Heikkila accepted that, in the period from March to 8 July 1999, when calls from him to Mr Dalton were recorded in Annexure B, it was possible that he did not make any call of a follow-up nature, ie a call responding to a complaint by Mr Carmichael that a Brumar site had not increased its price. 294 In cross-examination by counsel for United Fuels and United Retail, Mr Heikkila said that, on every occasion when he received a call from Mr Carmichael and Mr Warner about fuel prices, he made his own inquiries. 295 Mr Heikkila accepted that the failure of United Fuels to increase the price of petrol at Shell Victoria Street would not be something that would cause a price increase not to stick. Similarly, Shell Waurn Ponds was not a site of great significance to the Geelong petrol market at that time. 296 In Mr Heikkila's view, if most of the market, especially the market leaders, failed to increase their board prices within one or two hours of the beginning of a price increase, the price increase would not stick. The period of one or two hours was essential. If anyone did not follow the market up within that period, but a price increase stuck in any event, it would mean that the particular competitor was not influencing the market. The market leaders were Mobil, Apco, Andrianopoulos, United Convenience and Liberty. Sometimes Brumar led the prices up but, if it did not, and Brumar did not increase its prices, the price rise would not stick. United Fuels followed the market, and was never a market leader. 297 In cross-examination by counsel for Andrianopoulos and Chris Andrianopoulos, Mr Heikkila was asked to deal with a hypothetical situation in which Mobil initiated a price increase, followed by the other majors. He was asked if the independents did not go up, how long it would be before the majors decided that the price increase would not stick, and brought their prices down. He guessed that it would be six or eight hours. Essentially, the strategy was to match competitors as the market was going down, sometimes to lag behind to gain a small amount of profit margin if possible, and then to move up as soon as the market went up. Mr Dalton saw Brumar's main competitors as Apco, Mobil and some of the BP sites, particularly BP Corford Express. Although Mr Purtell, from whom Mr Dalton took over, had made all the pricing decisions himself, Mr Dalton gave some of the site managers in Geelong authority to change prices to match a competitor, and to inform Mr Dalton of the changes by means of his paging service. He would set a limit, so that if the price of the competitor were to drop by 8c or 10c, the site manager was instructed to page Mr Dalton before making an alteration. The site managers who had this authority were at Shell Belmont, Shell Latrobe Terrace, Shell Norlane and Shell Speedwings, which were the four main sites operated by Brumar, in the sense that they were the most high profile sites, with the highest turnover. 299 Mr Dalton recalled Eino Heikkila telephoning him every week or two. He would start with some small talk, and then say that he had just noticed that there were some price movements going on. Usually, they would be price rises. Almost always, Mr Heikkila would make the call on his mobile phone, and Mr Dalton had the impression that Mr Heikkila was driving around when he made the calls. Sometimes he would inform Mr Dalton that he had just driven past, or had just seen a particular price. Sometimes Mr Dalton received messages from his paging service asking him to call Mr Heikkila. Sometimes, Mr Dalton was already aware that prices had moved in Geelong, because the staff at Brumar sites would check their competitors on their way to work, or when they were travelling from site to site, and put the information onto the paging system. Sometimes, when Mr Dalton would telephone staff at the Brumar sites, he would ask whether they had seen anything of significance in relation to pricing. 300 When Mr Heikkila would ring and tell Mr Dalton something about Geelong prices, Mr Dalton would ring a few of the Brumar sites that had competitors within view and ask them to look and see what the price was. If the information was that the price was up, Mr Dalton would make a decision to move the sites in accordance with Brumar's pricing policy. 301 Price support had an influence on Mr Dalton's pricing decisions. Mr Heikkila's information about Geelong prices never influenced Mr Dalton's pricing decisions. Mr Dalton never rang Mr Heikkila to ask him what the United Fuels sites' prices were. He did not ring Mr Heikkila to ask about Geelong prices in general. Indeed, after a short period of dealing with Mr Heikkila, Mr Dalton took the opportunity not to talk to him if he could. He found the calls annoying. Mr Dalton was getting good information from his own sites. He found the small talk from Mr Heikkila wasteful of time. 302 In Mr Dalton's view, Brumar was a follower in pricing. He did not believe Mr Heikkila ever told him anything predictive about prices. Mr Heikkila never made subsequent calls to Mr Dalton about any of Brumar's prices not having gone up. He never said anything to Mr Dalton to suggest that Mr Heikkila was in touch with other competitors about prices in Geelong. He never agreed with Mr Heikkila on the setting of Brumar's prices. 303 In cross-examination by counsel for the ACCC, Mr Dalton agreed that he was unable to deny that, in some of the telephone calls to him, Mr Heikkila referred to prices to which United Fuels was intending to go. He did not think that Mr Heikkila said this. If Mr Heikkila had rung and told Mr Dalton that he was going to move a United Fuels site to a particular price at a particular time, Mr Dalton said he would not have taken much notice of it. He would not have factored this information into the decisions that he would have made about prices at Brumar sites. The information would have been irrelevant. As far as Mr Dalton was concerned, United Fuels was not a market leader, and its sites were small, backstreet sites, not high-volume sites. He was more interested in Mobil sites, Apco sites and sites that sold a lot of fuel. In setting prices for United Fuels, the main factor influencing Mr Riordan was board prices. United Fuels had to function within a business plan, updated regularly in conjunction with Shell. Its pricing had to fit within that business plan. Price support and profitability support from Shell were also considerations. 305 About the middle of 1996, Provincial Fuels purchased two Shell franchise sites, Shell Speedwings and Shell Belmont, from United Fuels. Under the contract for the transfer of the franchise of these sites, which was entered into in conjunction with Shell, United Fuels had obligations to assist Provincial Fuels to become established in the Geelong market, where it was also acquiring other franchise sites. The assistance United Fuels provided included the provision of information about board prices. 306 Mr Riordan said that a price increase in the Geelong petrol market would stick if all the majors put their prices up. The rest would follow. United Fuels was a follower. 307 From 5 to 14 February 1999, Mr Heikkila was on holiday in Tasmania. From 18 to 21 February 1999, he was on holiday in Adelaide. From 6 to 14 August 1999, he was at a conference in Queensland, and from 7 to 25 September 1999, he was in Bali. During these times, Annexure B shows no calls from United Fuels office, or from Mr Riordan, to any competitors. Mr Riordan confirmed that, when Mr Heikkila was on holidays, Mr Riordan never called any competitors. 308 Mr Riordan spoke of commercial dealings between United Fuels and Chisholm and Leahy, in which United Fuels was able to supply fuel to its other competitors, and often exchanged them for other products, particularly for heating oil from Chisholm, when Shell was not manufacturing heating oil. United Fuels also supplied fuel to Mobil distributors and purchased heating oil and kerosene from them. United Fuels acted as agent for Shell, supplying Brumar and invoicing in the name of Shell for the supply. Mr Riordan said that he knew that Mr Heikkila had conversations with competitors in relation to commercial dealings, but Mr Heikkila did not tell him that he was having discussions about retail petrol prices. Mr Riordan did not know Ian Carmichael, Michael Warner, Alan Shuvaly, Wayne Purtell, Garry Dalton, Phil Carmichael, Anton Maurer or Gordon Primmer. He did know Darren Campigli and Graeme Chisholm. He saw Graeme Chisholm often through their common membership of the Geelong business club, the Pivots coterie at the Geelong Football Club and other places. He sometimes met Mr Chisholm for a drink. He denied ever having price-fixing conversations with Graeme Chisholm. 309 According to Mr Riordan, United Fuels would receive information from Shell that Melbourne prices had risen and that Shell was intending to remove price support. United Fuels would receive other information from customers, its own drivers, and radio broadcasts. Sometimes, someone from United Fuels would ring one of the Westgate Bridge Shell outlets and ask what its prices were. 310 Mr Riordan set retail fuel prices on behalf of United Retail. In the event of his unavailability, Robert Hambrook had the task. In November 1999, Colin Williamson was given a company car and a mobile phone, and responsibility for driving around the southern and western region of Geelong, to report to Mr Riordan what board prices in that region were. Mr Williamson was never authorised to increase prices on his own decision. Mr Riordan said that, when he gave Mr Williamson the mobile phone, he cautioned Mr Williamson that if he ever talked to competitors about anything, he should not talk to them about price. Mr Williamson said he would not do that. Mr Riordan was not aware of Mr Williamson having telephone conversations with Ian Carmichael or Michael Warner. Mr Williamson never told Mr Riordan that there would be a price increase to a particular sum at a particular time. 311 When Mr Riordan made decisions about price changes for United Retail, he was aware from his contact with Triton that the Melbourne market had moved. He would also spot board prices as part of his morning routine, to which I have referred in [88]. His decisions were also based on United Retail's wholesale price, the margins it was attempting to achieve, considerations of the volume of sales and board prices in the Geelong market. 312 In cross-examination, Mr Riordan agreed with a suggestion by counsel for Apco and Peter Anderson that some petrol outlets in Geelong would occasionally raise their board prices for a short time, to see if others would follow. Mr Riordan said his own companies had tried that practice themselves. They did not have any site that influenced the market. 313 In cross-examination by counsel for the ACCC, Mr Riordan denied knowing of conversations about prices between competitors in the Geelong petrol market, and in particular conversations about prices between Ian Carmichael and Colin Williamson. He also denied that, if he got a phone call from Mr Williamson about prices in the market, he would decide immediately whether to put prices up. He said that sometimes he would go for a drive, and sometimes he would ring Triton and ask about the Melbourne market. He denied that it was more often than not the case that, before a price rise, he would get a call from Mr Williamson. He never had any discussion with any of those persons, or others, about the prices of petrol. 315 From 1 October 1999, Robert Riordan was the only person authorised to set retail prices for United Retail. When Mr Riordan was unavailable, Mr Hambrook took over that function. Even if Mr Riordan had taken leave, Mr Hambrook would telephone him after receiving information from Colin Williamson. Mr Hambrook sometimes did his own spotting of board prices. 316 Mr Hambrook said he was never aware of Mr Williamson having telephone communications with Ian Carmichael or Michael Warner. Mr Williamson never told Mr Hambrook that he had had such calls. He never told Mr Hambrook that he was speaking to Mr Carmichael or Mr Warner about pricing. He never told Mr Hambrook that Leahy would be raising its price to a particular amount at a particular time. His information concerned his observations of board prices. 317 Mr Hambrook said that he had never had any discussions with competitors about making arrangements to fix prices in the Geelong petrol market, even when both Mr Heikkila and Mr Riordan were out of the office, and Mr Hambrook was in effect in charge of the office, although this was a daily occurrence. I do so for the purpose of seeing whether the general descriptions of the patterns and content of telephone calls between competitors in the Geelong petrol market, given by the witnesses, are consistent with what occurred, so far as it is known. I also undertake this analysis for the purpose of determining whether, in conjunction with the direct evidence, there is sufficient evidence to justify a finding that effect was given to any arrangement or understanding in the relevant period. 319 Annexure B contains shaded periods, which are designated by colour shading as those that the ACCC contends were periods during which effect was given to one or more of the alleged arrangements or understandings. In its original form, Annexure B had shaded periods that comprised whole or parts of days, whereas the shaded periods are now complete days. Originally, Annexure B contained 62 shaded periods in 1999 (36 of them on two days, 14 on three days, 10 on four days and two on five days), a total of 164 days, and 46 periods in 2000 (one on one day, 14 on two days, 21 on three days and 10 on four days), a total of 132 days. In the two-year period, the total number of days in Annexure B, all or part of which were shaded, was 296, shown as 108 shaded periods. These were the dates on which the ACCC then alleged that effect was given to one or more of the alleged arrangements or understandings. By the time of final addresses in the proceeding, allegations that effect was given to one or more of the arrangements or understandings had been reduced to 33 periods in 1999, of which five were only one day each and the remainder were two days, a total of 61 days, and 30 periods in 2000, of which 13 were one day and the other 17 were two days, a total of 47 days. Thus, the number of periods of alleged giving effect was reduced from 108 to 63, and the number of days from 296 to 108. 320 My detailed examination of Annexure B is confined to the periods, each of one or more days, ultimately relied on by the ACCC as demonstrating that effect was given to various arrangements or understandings. Following that examination, I attempt to analyse the data in Annexure B generally, for the purpose of comparing that data for periods other than those relied on by the ACCC. 321 In the course of this analysis, where reference is made to the name of a corporate respondent or other corporation, this is to be taken as an indication that the call originated from, or was directed to, a fixed telephone line in the office of that corporate respondent or other corporation. Where the name of a natural person is given, it indicates that the call originated, or was directed to, the mobile telephone of that person. The time of day when an event occurred is given according to the 24-hour clock, so as to avoid specifying whether a time is before or after midday. In some cases, Annexure B contains information about the times of commencement of telephone calls that reveals precise seconds, but I have preferred to list those starting times only down to minutes. Prices of petrol, and amounts of rises or falls, are given in cents per litre. 323 Tuesday, 19 January 1999 began with prices decreasing across the market, as they had on the previous day, so far as the data in Annexure B goes. The call cycle relied on began in the afternoon at 16.47, when Peter Anderson rang Leahy. The call lasted one minute 26 seconds. Leahy immediately rang Chisholm and then Eino Heikkila. The second of these calls lasted five minutes and 36 seconds. At 16.55, Mr Heikkila rang Wayne Purtell. The call is timed at 17 seconds, suggesting that Mr Heikkila might have been unsuccessful in his attempt to speak with Mr Purtell. At 17.00, Chisholm apparently returned the earlier phone call from Leahy (which was timed at 36 seconds), in a call lasting two minutes 43 seconds. No significant price increase occurred on that day, so far as Annexure B records. No data is available during that period for any Chisholm site or any United Fuels site. 324 Price rises began occurring on the following morning at about 09.00. At precisely that time, Shell Latrobe Terrace increased its ULP price from 63.9 to 67.5. There was a series of increases by Mobil sites, the precise timing of which is unknown, as the only data available from some Mobil outlets is for sales in which the purchaser used a Mobil charge card, so the time of the price increase can only be fixed as somewhere between the last sale at the old price and the first sale at the new price, in which such a card was used. Between 08.37 and 09.45, Mobil Gateway increased from 61.9 to 67.5. Similar increases occurred between 08.24 and 10.33 at Mobil Newcomb, between 09.52 and 10.25 at Mobil Moolap, between 09.55 and 11.08 at Mobil Geelong North, and between 09.34 and 11.51 at Mobil Point Henry. In the meantime, at 09.57, Brumar lifted its price at Shell Norlane from 63.9 to 67.5. At 10.01, Leahy increased BP Hillford from 61.9 to 67.5. Similar increases are recorded for Apco Geelong South at 10.02 (assuming the correctness of the assertion that the computer at that outlet had not been adjusted for daylight saving), Apco Geelong East at 10.03, Apco Highton at 10.10, Apco Newcomb at 10.12 and Apco Geelong North at 10.18. 325 The ACCC relied heavily on the temporal proximity of the increases by Leahy and Apco, in conjunction with the phone call the previous afternoon, as indicative of the giving effect to of Arrangement No 1. In the light of the evidence about the proximity between phone calls and the stated times of price increases (see [197]), this is unlikely. Indeed, Ian Carmichael's evidence was that it never occurred. Even if it be accepted that overnight price increases were sometimes the subject of telephone calls, these price increases occurred several hours after opening time for any of the Leahy sites (on the assumption that the evidence that Leahy liked to raise the prices for all of its sites at the same time is accepted). Further, the ACCC submission ignores the fact that two of what were regarded as the majors had already begun to move before 10.00 on 20 January. As their prices were set in Melbourne, it is safer to assume that they were the results of Melbourne price increases, rather than that the Brumar price increases were the result of the lengthy call from Leahy to Mr Heikkila, followed by the very brief call from Mr Heikkila to Mr Purtell, on the previous afternoon. (Mr Heikkila had already spoken to Mr Purtell for one minute and seven seconds at 16.19 on 19 January. Immediately afterwards, Leahy telephoned Mr Heikkila. At 10.23, Leahy telephoned Chisholm. At 11.11, Chisholm telephoned Jacques Bodourian and Leahy telephoned BP Corford Express. BP Corford Express increased its price of ULP from 63.9 to 67.5 at 11.31 and 7-Eleven increased its prices at 7-Eleven Newcomb and 7-Eleven Geelong East between 11.37 and 11.42, and between 11.33 and 11.50 respectively, from 61.9 to 67.9. The ACCC contended that Leahy's call to Chisholm, and Chisholm's call to Jacques Bodourian, should be seen as related, and should be seen as an attempt by Leahy to have 7-Eleven prices increased in accordance with its own and those of Apco. Similarly, the ACCC contended that Leahy's call to BP Corford Express should be seen as an attempt to persuade BP Corford Express to increase. Both of these conclusions are unlikely. There is no indication of any complaint call about 7-Eleven to Leahy. Leahy telephoned Peter Anderson at 10.19, so that it can hardly be said that the purpose of the call was for Mr Anderson to complain, although Mr Anderson might have made a complaint during the call. Given that BP Corford Express had its prices set from Melbourne, and that Leahy had legitimate reasons for contacting BP Corford Express, it cannot be assumed that the phone call and the subsequent price increase are necessarily related. By 11.31, when its price was increased, BP Corford Express's staff had had ample opportunity to become aware of surrounding price increases and to communicate them to Melbourne, where the decisions about its pricing were made. 327 On balance, my view is that the data for this period does not lend support to the ACCC's case. On the basis of that data, when coupled with the oral evidence, I am not prepared to find that effect was given to Arrangement No 1. The low point of a price cycle in the Geelong petrol market appears to have been reached on Thursday, 11 March 1999, when prices as low as 58.5 were recorded. On that day, at 13.59, Chris Andrianopoulos telephoned Liberty. The call is timed at 10 seconds, suggesting that he was unsuccessful in speaking to whomever he was calling. Immediately afterwards, at 14.00, he rang Alan Shuvaly on the latter's mobile phone. The call lasted one minute and 47 seconds. At 14.29, Peter Anderson rang Chris Andrianopoulos, and spoke for three minutes and three seconds. It is hard to see that this call was related to the earlier conversation between Mr Andrianopoulos and Mr Shuvaly, or that it was only about an impending price increase, given its length. More than two hours later, at 16.42, Mr Andrianopoulos spoke to Mr Shuvaly for 54 seconds. Mr Andrianopoulos again spoke to Mr Shuvaly for one minute and three seconds at 17.50. 329 In the meantime, at 14.30, BP Corford Express raised its price of ULP from 61.9 to 64.9. At 15.46, BP Corford Express dropped its price back to 61.9. At some time between 15.46 and 15.58, Mobil Grovedale increased its price from 58.5 to 65.9, but by 17.09, it had dropped its price back to 58.5. These attempts at testing the market, to see whether it would support an increase, appear to have no relationship whatever with any conversation between Mr Anderson, Mr Andrianopoulos and Mr Shuvaly. It is also hard to see how the calls between those parties could be said to be related to each other, because of the time lapse between them. 330 Mr Shuvaly was asked in his evidence-in-chief to look at the data for 11 and 12 March 1999. His interpretation of the phone calls between himself and Mr Andrianopoulos, and between Mr Andrianopoulos and Mr Anderson, was that they were sharing information about what they had observed by way of prices in the Geelong petrol market. They may also have been about other issues, prices outside Geelong, social matters such as football, or the Melbourne petrol market. 331 General price increases did not begin until the morning of 12 March 1999. At 09.01, Leahy increased the price at BP Hillford from 58.7 to 64.7. At 09.44, Caltex Quick Bite increased from 59.3 to 64.9. Apco began increasing its prices at 09.44, from 58.5 to 64.7. It began with Apco Geelong South at that time, followed by Apco Geelong East and Apco Geelong North at 10.04, Apco Newcomb at 10.26 and Apco Lara at 10.44. Oddly, Apco Highton is recorded as having decreased its price from 67.1 to 64.9 at 10.21. Brumar increased its prices to 64.9 or 66.9, beginning with Shell Latrobe Terrace at 10.08. The Mobil outlets increased to 64.7, beginning with Mobil Manifold Heights at 10.00. BP Corford Express caught up with the general rise late in the evening, at 22.53. 332 At some time on 12 March 1999, Andrianopoulos increased its price at BP Norlane from 58.9 to 64.7. On the same day, it dropped its price to 58.5. It increased the price again at some unknown time on Saturday, 13 March 1999 to 64.7. Liberty's average price for 12 March 1999 moved from 58.5 to 63.2. As this is an average over some period, it cannot be said with any confidence to precisely what figure it increased its price, or at what time. 333 The ACCC submitted that the fact that Apco's outlets and the Andrianopoulos outlet all increased to 64.7, and that Liberty also increased its price on the same day (it was submitted most likely some time in the morning, and to the same price), was evidence that the three had given effect to Arrangement No 8 by raising their prices to the same amount at or about the same time. The evidence points against this. The attempted rises by BP Corford Express and Mobil Grovedale on 11 March suggest that prices in the Melbourne petrol market had risen, and the operators of those outlets were attempting to precipitate a price increase in the Geelong petrol market. When the increase began in earnest, the data in Annexure B suggests that it was Leahy which started it, without any evidence of relevant telephone calls involving Leahy, Ian Carmichael or Michael Warner. One of the early risers on 12 March 1999 was the Caltex Quick Bite, confirming that the market move was probably a response to a move in the Melbourne market. The rises by Mobil outlets and Brumar, apparently without relevant telephone communications, suggest that they were following information from Melbourne. 334 Any telephone communication between Mr Andrianopoulos, Mr Shuvaly and Mr Anderson was many hours before any relevant price increase. The gaps between the telephone calls of those three on 11 March 1999 appear to be inconsistent with collusion about a price increase. Plainly, there was no urgency about passing on price information at that stage. The fact that Andrianopoulos, having raised its price to the market level at some time, dropped it back at some time until the following day also suggests an absence of collusion. 335 In my view, the case for giving effect to Arrangement No 8 in this period is not made out. On Thursday, 25 March 1999, prices of ULP in the Geelong petrol market were generally falling, with a large number of outlets declining to 65.3 in the morning, and then declining further to 64.7 in the afternoon and 64.3 in the evening. At 15.45 on that day, Peter Anderson rang Leahy. The conversation lasted for one minute and two seconds. At 15.59, Leahy rang the United Fuels office and, at 16.16, Leahy rang Chisholm. 337 On the following morning, at 09.09, someone from Leahy left a 15-second message on Peter Anderson's message bank. At 09.20, Leahy increased the price of ULP at BP Hillford from 64.7 to 70.5. It may be assumed that Leahy increased the prices at its other outlets similarly at about the same time. At 10.09, Apco began increasing its prices from 64.3 to 71.5, first at Apco Geelong South, then at Apco Geelong East at 10.12, Apco Highton at 10.20, Apco Newcomb at 10.21 and Apco Geelong North at 10.24. At 10.32, it reduced the price at Apco Geelong East from 71.5 to 70.5. This was followed by similar reductions at Apco Newcomb and Apco Geelong North at 10.50, Apco Highton at 10.52 and Apco Geelong South at 11.26. The price increase at Apco Lara was later than the general round of Apco increases, the price being increased from 64.3 to 70.5 at 10.35. In the meantime, from 10.05, the Mobil outlets also began increasing from 64.3 to 71.5, the first increase being at Mobil Latrobe Terrace. Brumar was still decreasing its prices, before joining in the increases from 11.07, with Shell Speedwings being the first to increase. 338 It is unlikely that Apco and Leahy gave effect to any arrangement or understanding on this occasion. The time elapsing between the conversation between Peter Anderson and anybody at Leahy and the commencement of any price increases is inconsistent with the oral evidence about the proximity of calls about prices to increases in prices. In his evidence, Mr Warner accepted that it was highly improbable that Leahy and Apco had agreed to go to 70.5, because they initially went to different prices. The fact that Apco subsequently reduced its prices to match those of Leahy does not suggest that the initial increase was the result of any communication between Apco and Leahy. 339 There is no data available for Chisholm during this period, so it is impossible to test whether the conversations between Leahy and Chisholm on 25 March 1999 were likely to have had any relationship to the earlier conversation between Peter Anderson and Leahy. The price at Shell Victoria Street fell from 65.7 to 64.3 at some time on 26 March, making it unlikely that the decision to reduce the price resulted from the telephone communication between Leahy and United Fuels on the previous day. 340 I am not satisfied that the increases of prices by Leahy or Apco during this period were the result of those parties giving effect to Arrangement No 1. By the afternoon of Thursday, 8 April 1999, 69.5 appeared to be the most common price of petrol in the Geelong petrol market, particularly among the Apco, Mobil and Brumar outlets. It is worth noting that, on 8 April, Andrianopoulos reduced its price by 0.4 to 63.3 at some time during the day. At some time during that day, Liberty increased its price, because its average for the day moved from 63.3 on 7 April to 66.7 on 8 April. Also at some time during the day, United Fuels increased its price at Shell Victoria Street from 63.3 to 69.5. No data is available in Annexure B at that time in respect of Shell Waurn Ponds. 342 Prices remained relatively stable on 9 April. Andrianopoulos moved from 63.3 to 69.5, and then back to 63.3 at some time during the day. Liberty's average price for the day increased to 69.5, suggesting a possible change to that price at the beginning of the day, as it is unlikely that Liberty would have adopted a price above that to which the market eventually moved. 343 The telephone call cycle on which the ACCC relied is said to have begun at 15.30, with a call from Ian Carmichael to his brother Phil Carmichael. There had already been calls from Phil Carmichael to Leahy, the first at 09.52 (lasting 15 seconds, which suggests that he did not speak to whoever he was calling) and the second at 11.09 (lasting two minutes and 50 seconds). At 14.52, someone from the Leahy office spoke to Phil Carmichael for one minute and two seconds. The call from Ian Carmichael to Phil Carmichael at 15.30 lasted one minute and 40 seconds. At 15.32, Ian Carmichael rang Chisholm, the call lasting one minute and 38 seconds. At 15.36, Ian Carmichael rang United Fuels. The call lasted only 22 seconds, suggesting that its intended recipient was not available. At 15.37, Ian Carmichael rang Eino Heikkila, the call lasting 46 seconds. At 15.38, Ian Carmichael rang Chris Andrianopoulos for 22 seconds. At 15.38, Mr Heikkila rang Garry Dalton for 40 seconds. At 15.48, Mr Heikkila again rang Garry Dalton for 17 seconds. These two calls of Mr Heikkila were transmitted through Lorne and Aireys Inlet respectively, suggesting that Mr Heikkila was travelling. The ACCC contended that the proximity of these calls to the call from Ian Carmichael to Mr Heikkila suggests that Mr Heikkila was passing on to Mr Dalton information about a forthcoming price increase, which Mr Carmichael had provided. At 16.20, Mr Heikkila rang the Leahy office from Torquay, the call lasting 59 seconds. At 16.28, the Leahy office rang Mr Heikkila back for two minutes and five seconds. 344 No significant price increases occurred until the morning of Saturday, 10 April 1999. The first such rises may well have been at the 7-Eleven outlets, whose prices were set from Melbourne, or at some Mobil outlets. At some time between 07.49 and 09.35, Mobil East Belmont increased from 69.5 to 74.5, as did Mobil Point Henry at some time between 08.00 and 13.34 and Mobil Moolap at some time between 09.27 and 13.23. At some time between 08.46 and 08.55, 7-Eleven Geelong East increased from 69.5 to 74.5. At some time between 08.52 and 09.05, 7-Eleven Newcomb recorded the same increase. Apco began to move its prices from 69.5 to 74.5 with Apco Geelong East at 08.53, Apco Geelong South at 09.13, Apco Geelong North at 09.24 and Apco Lara at 09.27. At 10.13, Apco Highton moved from 69.9 to 74.5. In the meantime, other Mobil outlets also moved from 69.5 to 74.5, with Mobil Latrobe Terrace moving at 09.15, Mobil Manifold Heights at 09.28, Mobil Newcomb between 09.02 and 09.33, Mobil Geelong North at 09.34, Mobil Highton at 09.35, Mobil Belmont at 09.39, Mobil Gateway between 09.23 and 09.51, Mobil Corio Village between 09.56 and 10.24 and Mobil Grovedale between 09.00 and 11.02. Leahy moved its prices by the same amount at 09.19, as exemplified by BP Hillford's rise at that time. Caltex Quick Bite moved by the same amount at 09.33. The first of the Brumar sites to move from 69.5 to 74.5 was Shell Belmont at 09.37. Shell Anglesea, Shell Highton and Shell Westoria moved from 71.5 to 76.5 at 10.22, 10.29 and 12.52 respectively. Shell Speedwings and Shell Latrobe Terrace moved from 69.5 to 74.5 at 10.53 and 11.15 respectively. At 13.57, Apco began discounting to 73.7. The discounting cycle began again, with the majors (from 14.08) and Leahy (at 17.57) following. On the morning of 10 April 1999 (it closed in the afternoon) Shell Victoria Street's average price moved from 69.5 to 74.5. 345 It is significant that the price increases of the alleged parties to Arrangements Nos 4 and 5 (Leahy, United Fuels and Brumar) came in the context of a general price rise in the Geelong petrol market, precipitated (as far as the data in Annexure B demonstrates) by a virtually simultaneous move by 7-Eleven, Apco and Mobil. There is no suggestion of telephone contact between Leahy and Apco, or between Leahy and 7-Eleven about this proposed price increase. The likelihood is that, prior to 09.00 on 10 April, either Apco or 7-Eleven began the round of price increases in Geelong East, and that the remaining participants in the market followed suit, as a result of spotting board prices. It is possible that, in one of Phil Carmichael's conversations with Leahy or Ian Carmichael on 9 April, Phil Carmichael gave Ian Carmichael information about a proposed price increase for Mobil outlets. Phil Carmichael also had two telephone conversations with someone at the Leahy office at 09.04 and 09.15 on 10 April. The time lapse between the call cycle on 9 April and the price increases on 10 April tends to suggest that the two were not connected and is inconsistent with the oral evidence about the usual proximity of price information calls to price increases. There is also a variation between the prices to which Brumar outlets went on 10 April, suggesting that Mr Dalton's authorisation of the site managers to set their own prices within limits was in operation. 346 I am satisfied on the balance of probabilities that the price increases that occurred at the outlets of Leahy, United Fuels and Brumar on 10 April did not involve those parties giving effect to any arrangement or understanding between them. As I have said, it is unlikely that the telephone conversations on 9 April were connected with the price increases on 10 April. On 19 April 1999, and early on 20 April, retail prices of ULP in the Geelong petrol market were tending to move downwards. On 19 April, the average price at Shell Victoria Street dropped from 67.7 to 66.5. Most other outlets were at 66.9 by the end of the day. On 20 April, at 06.17, Apco Geelong North moved to 66.5. Several Mobil outlets also moved from 66.9 to 66.5 over the next hour and a half or so, while three significant Brumar outlets moved to 66.5, Shell Belmont at 07.54, Shell Latrobe Terrace at 07.57 and Shell Speedwings at 08.18. 348 At 08.26, Phil Carmichael rang the Leahy office. The call lasted 38 seconds. At 08.31, the Leahy office rang the Apco office for 17 seconds. At 08.57, the Leahy office again rang the Apco head office, the call lasting one minute and five seconds. Very soon after that call, the Leahy office rang the United Fuels office for one minute and 19 seconds at 09.00 and BP Corford Express for 46 seconds at 09.01. At 09.07, Eino Heikkila rang Garry Dalton for 21 seconds. The call was apparently returned at 09.11, for one minute and 10 seconds. The ACCC relied on the contact between the Leahy office and the Apco office, between Leahy and United Fuels, and between Mr Heikkila and Mr Dalton as the foundation for subsequent price increases by Apco, Leahy, United Fuels and Brumar. 349 At 09.16, the price at Apco Geelong North moved slightly downwards to 66.3. At 09.17, Leahy moved its price at BP Hillford from 66.9 down to 66.3. Someone in the Leahy office spoke to someone at Chisholm for one minute and 49 seconds at 09.25. There was also a call from the Leahy office to the United Fuels office at 09.27, lasting 31 seconds. At 09.29, Mobil Geelong North moved down from 66.5 to 66.3, and other Mobil outlets followed. At 09.39, Shell Norlane dropped from 67.8 to 66.5, and at 09.43, Shell Highton dropped from 69.7 to 68.5. Thus, prices were still moving slightly downwards. 350 The price increases may have begun with Mobil outlets. Mobil Point Henry moved from 66.5 to 74.5 between 09.22 and 10.47. Mobil East Belmont moved from 66.9 to 74.9 between 09.26 and 10.49, Mobil Gateway from 66.5 to 74.5 between 09.40 and 10.30 and Mobil Moolap from 66.5 to 74.5 between 09.44 and 10.25. The Apco moves began with Apco Newcomb at 10.03, moving from 66.9 to 74.5. This was followed two minutes later by Apco Geelong South, with an identical move. At 10.09, the price at Brumar's Geelong Car Spa dropped from 67.7 to 66.5, but the price at Brumar's Shell Westoria rose from 69.7 to 76.5. At 10.10, Apco increased its price at Apco Geelong East from 66.9 to 74.5. At 10.21, Shell Latrobe Terrace increased from 66.5 to 74.5. Apco Lara also increased from 66.9 to 74.5 at 10.26. At 10.28, Mobil Manifold Heights increased from 66.3 to 74.5. At 10.31, Leahy increased its price at BP Hillford from 66.3 to 74.5. Other participants in the market also increased. Notably, the price at Shell Norlane moved from 66.5 to 74.5 at 10.55. At 10.59, Caltex Quick Bite increased from 66.7 to 73.7. Although some rises were still taking place, Apco began discounting at 11.10 at Apco Geelong South, moving from 74.5 to 73.9. Over the next few minutes, it reduced its prices to 73.9 at Apco Geelong East and Apco Newcomb. Contrary to this trend, Apco did not increase its price at Apco Highton from 66.9 to 74.5 until 11.15 and, at 11.20, increased its price at Apco Geelong North from 66.3 to 73.9. At 11.57, Shell Highton moved from 68.5 to 76.5. Increases from 66.5 to 74.5 did not occur at Geelong Car Spa, Shell Belmont and Shell Speedwings until 13.49, 14.25 and 14.33 respectively. At 14.37, Leahy reduced BP Hillford from 74.5 to 73.9. In the course of the afternoon, discounting saw the prices at a number of outlets reduced to 73.5, 73.7 or 73.9. At some time during the day, United Fuels dropped its price at Shell Victoria Street from 66.5 to 66.3. That price increased from 66.3 to 73.9 at a later time, which the ACCC submitted was probably in the late morning (based on volumes of sales at the respective prices). The fact that 73.9 was chosen suggests that whoever made the decision was aware that prices were already coming down from the peak of 74.5. The average price at Shell Waurn Ponds increased from 67.2 to 71.1, making it difficult to discern the time or amount of the rise. 351 The ACCC contended that the specific terms of Arrangements Nos 4 and 5 that were said to be put into effect involved a price rise to 74.5 at around 10.00. This is one of the few occasions on which it can be said that a call cycle occurred within two hours of significant price increases, at least on the part of two parties. The connection between the two is by no means clear. As I have said, so far as the data in Annexure B shows, it might well have been the Mobil outlets that led the price increase. It may be that the initial calls from the Leahy office to the Apco office were the result of information from Phil Carmichael a few minutes earlier that Mobil prices were about to increase. 352 If the call cycle concerned a price increase to 74.5 at 10.00, it is somewhat strange that Apco, Leahy and Brumar continued to decrease their prices for some time after the calls. Decreases occurred at Apco Geelong North at 09.16, BP Hillford at 09.17, Shell Norlane at 09.39, Shell Highton at 09.43 and Geelong Car Spa at 10.09. If the phone calls gave rise to an understanding that there would be a price increase to 74.5 at about 10.00, these decreases seem at odds with that understanding. The Apco and Leahy decreases were only 0.2 and 0.6 respectively, hardly worth making if the price was due to increase by 8.0 or thereabouts within 45 minutes. The Brumar decrease at Geelong Car Spa was after the allegedly appointed time for an increase. The timing of Brumar's price increases also suggests that it was not the result of the communication between Mr Heikkila and Mr Dalton. In addition, whenever the increase at Shell Victoria Street occurred, it was not an increase to 74.5. Rather, the decision to increase appears to have been taken with knowledge that prices had eased back to 73.9, and for the purpose of matching that price. 353 In short, despite the relative temporal proximity of the telephone communications to the price rises, there is every reason to think that the price increases by Apco, Leahy, United Fuels and Brumar on 20 April 1999 were not the result of giving effect to any arrangement or understanding, but were simply a matter of following a price rise that had occurred in the Melbourne petrol market. The fact that United Fuels did not adopt the same price as that supposedly arranged between it and Leahy, and between it and Brumar leads to the conclusion that there was no implementation of either Arrangement No 4 or Arrangement No 5, because the supposed middle link in the chain is missing: the oral evidence does not suggest that United Fuels would convey to Brumar its intention to implement a price increase proposed by Leahy, which it did not intend to implement itself. It acknowledges that there is no evidence in Annexure B of contact between Leahy and Apco, but asserts it is possible that some form of contact between those two, other than by telephone, might have been responsible for what it says is Leahy's communication with United Fuels and also with BP Corford Express. 355 At the beginning of 28 April 1999, the most common retail price for ULP in the Geelong petrol market was 66.5. At some time on the day before, Andrianopoulos had dropped its price from 68.7 to 66.5, and then raised it to 66.7. At 09.09 on 28 April, someone in the Leahy office rang Chris Andrianopoulos. The conversation lasted one minute and 47 seconds. At 09.11, Leahy telephoned United Fuels for three minutes and 26 seconds. At 09.15, Leahy telephoned BP Corford Express for one minute and 53 seconds. The ACCC relied on the evidence of Anton Maurer that he only ever received calls from the Leahy office about price rises (although Ian Carmichael said that Mr Maurer was a keen punter, and he did speak to Mr Maurer about betting). 356 Leahy raised its price at BP Hillford (and presumably at its other outlets) from 66.5 to 71.5 at 10.40. United Fuels raised its price at Shell Victoria Street from 66.5 to 71.5 at some time on that day, probably during the morning, having regard to the volumes of sales recorded at the two different prices. The daily average price at Shell Waurn Ponds increased from 66.4 to 70.2, making it difficult to determine the amount or time of the increase. The only evidence to support the implementation of Arrangement No 4 is therefore the fact that both Leahy and United Fuels (at Shell Victoria Street) increased their prices in the morning, and there had been communication between them by telephone earlier that morning. 357 It is also necessary to look at other price movements. There can be little doubt that the rise from 66.5 to 71.5 was initiated by the Mobil outlets. Such rises occurred at Mobil East Belmont between 07.31 and 10.35, Mobil Grovedale between 08.15 and 09.59, Mobil Gateway between 08.37 and 11.36, Mobil Corio Village between 09.04 and 11.02, and other Mobil outlets during the morning. Apco began implementing the same increases at Apco Geelong South at 10.02, Apco Newcomb at 10.16, Apco Geelong East at 10.22 and Apco Geelong North at 10.43. These increases might well have been a response to Mobil increases, or to information about the Melbourne petrol market. Brumar increased its prices identically at Shell Belmont at 10.26, and Shell Norlane at 10.27. Shell Westoria dropped its price from 68.7 to 68.5 at 10.28, the same time as Shell Latrobe Terrace increased from 66.7 to 71.5. Shell Anglesea and Shell Highton moved from 68.7 to 73.5 at 10.30 and 10.34 respectively. Geelong Car Spa also moved from 66.5 to 71.5 at 10.47. Whatever motivated changes in Brumar's prices, it was not communication from United Fuels or Eino Heikkila. According to Annexure B, Mr Heikkila rang Garry Dalton at 10.58, the call lasting only 18 seconds. Mr Dalton rang Mr Heikkila at 11.05 and they spoke for one minute and 56 seconds. 7-Eleven participated in the general run of price increases, moving its prices from 66.5 to 71.5 at 7-Eleven Geelong East at 10.46 and 7-Eleven Newcomb between 10.54 and 10.59. Interestingly, Andrianopoulos, on whose communication from Leahy at 09.09 the ACCC relied, increased its price from 66.7 to 72.5 and dropped it back to 66.5 at some time during the day. BP Corford Express increased at 11.48 from 66.7 to 71.3. 358 It is somewhat surprising that the ACCC should rely on the data in Annexure B relating to 28 April 1999 as seeking to establish that effect was given to a single arrangement. In the light of the evidence about legitimate reasons why Leahy would ring United Fuels, it is not possible to surmise that Leahy was passing on information about a forthcoming price increase, obtained from Apco by means other than a telephone call. Even assuming that someone at Leahy had received information from Apco, there is no explanation as to why no attempt was made to telephone other people in Ian Carmichael's supposedly usual call cycle. The price data for that day provides every indication that Leahy simply followed a general increase in the market, initiated by Mobil, Apco and Brumar. In the absence of information about a precise time of any United Fuels increases, it would be speculating to suggest that they resulted from the telephone call at 09.11. If the telephone call from Leahy to BP Corford Express was about prices, it was plainly ineffective to persuade BP Corford Express to increase its prices either to the same level as others or at the same time. BP Corford Express increased its prices later than most of the market participants, and to a slightly lower amount. On the evidence, it is more probable than not that the price increases by Leahy and United Fuels on 28 April 1999 were not the result of giving effect to any arrangement or understanding between them. The first thing to note about this period is that the price movements in the course of the two days were generally quite small, mostly within a four-cent range. 360 On the morning of 7 May, prices generally were falling so that, by early afternoon, the Caltex Quick Bite, a number of Mobil outlets and several Apco outlets were at 70.3. The only price rise that occurred on 7 May was at BP Corford Express, which moved from 70.9 to 72.9 at 15.00. 361 At 14.56, Peter Anderson telephoned the Leahy office for a call lasting two minutes and 52 seconds. Between 15.11 and 15.15, Ian Carmichael rang Chisholm for two minutes and 16 seconds, Phil Carmichael for 57 seconds and United Fuels for two minutes and eight seconds. At 15.18, Ian Carmichael rang Peter Anderson for two minutes and 33 seconds. The ACCC characterised this call as Ian Carmichael reporting to Mr Anderson the outcome of his call cycle, although there is no oral evidence that Ian Carmichael ever reported back to Mr Anderson, and it seems unlikely that he would have needed to do so if arrangements or understandings of the kind alleged existed. 362 At 15.43, United Fuels telephoned Garry Dalton for one minute and 37 seconds. At 16.49, the Leahy office rang the Balgee depot for 30 seconds and at 16.50, the Leahy office rang Eino Heikkila. 363 At 09.08 on the morning of 8 May, a telephone call lasting three minutes and 16 seconds was made by the Leahy office to BP Corford Express. This would be a remarkably long call for a discussion about a proposed price increase, especially one as modest as that which occurred. At 09.40 on that morning, Leahy increased its price at BP Hillford from 70.3 to 72.5. At 09.54, the price at Apco Geelong South increased from 70.3 to 73.5. Three minutes later, Shell Speedwings lowered its price from 70.5 to 69.7. Apco raised its price at Apco Geelong North from 69.5 to 72.5 at 10.04, and at Apco Geelong East and Apco Newcomb from 70.3 to 72.5 at 10.08. In the meantime, between 08.54 and 10.00, Mobil Newcomb went from 67.2 to 70.3, and some time between 09.51 and 10.05, Mobil Corio Village reduced from 69.7 to 69.5. Prices at Brumar outlets continued to fall slightly until 10.24, when Shell Belmont increased from 69.7 to 72.5. Even after that, there were other falls at Brumar outlets until 11.10, when Shell Highton moved from 71.7 to 74.5. 364 At 11.09, Ian Carmichael telephoned Chisholm for 26 seconds. At 11.15, he called Mr Heikkila for one minute and six seconds. At 11.18, Mr Heikkila called Mr Dalton for 10 seconds, suggesting that there was little, if any, conversation between them. At 11.19, Leahy dropped its price at BP Hillford from 72.5 to 69.5. 365 There then followed a round of telephone calls, in which Ian Carmichael rang Mr Heikkila at 11.26 for 30 seconds, Mr Anderson (only reaching his message bank) at 11.28, Mr Heikkila again at 11.30 for 29 seconds, and at 11.31 Phil Carmichael for one minute and 51 seconds. In the meantime, Mr Anderson rang the Leahy office for 16 seconds. Mr Anderson rang Ian Carmichael at 11.36 for 20 seconds and the Leahy office again at 11.45 for 14 seconds. At 11.50, Ian Carmichael rang Mr Anderson and they spoke for one minute and 21 seconds. 366 It was only in the course of this round of calls that Brumar's price rose to 72.5 at Geelong Car Spa and Shell Latrobe Terrace at 11.31, and Shell Speedwings at 11.34. It was also only during this round of calls that Apco increased its price at Geelong North from 69.5 to 72.5 at 11.39. Immediately after the last call between Ian Carmichael and Mr Anderson, Apco began reducing its prices. At 11.51, Apco Geelong South moved from 73.5 to 69.5, at 11.54 Apco Newcomb moved from 72.5 to 69.5, and at 11.55 both Apco Geelong East and Apco Geelong North also reduced from 72.5 to 69.5. Prices in the market trended downwards for the rest of 8 May. At some time during the day (the ACCC submitted mid-morning, based on the volume of sales at the respective prices), United Fuels increased the price at Shell Victoria Street from 70.9 to 72.5. The only figures available for Shell Waurn Ponds are an average for three days, 7, 8 and 9 May, being Friday, Saturday and Sunday. The average price for that period decreased from 70.3 to 69.1. 367 The nature of the price movements during this period, both as to their magnitude and as to their timing, makes it very difficult to say that effect was given to any arrangement or understanding. The price movements that occurred show no sign of coordination, either among the market participants, or within their own organisations. The gap between the call cycle on the afternoon of 7 May and the start of price increases on the morning of 8 May is too long to establish any connection between the two events. At best, from the ACCC's point of view, it could only be said that someone at Leahy (probably Ian Carmichael) was attempting to persuade others to move their prices up, but the attempt failed. This explanation would not explain why Mr Carmichael did not broaden his call cycle to include others he said were often part of it. The more likely explanation is that the price increase by BP Corford Express at 15.00 on 7 May reflected a modest increase in the Melbourne petrol market, which flowed through into the Geelong petrol market on the following day, in a sporadic fashion. Even before any such increase had taken hold, discounting was already occurring, either by reduction in prices, or by those who raised them raising them to a figure lower than that adopted by some others. Even assuming that the telephone calls to which I have referred were about petrol prices, it cannot be said that they resulted in the parties to them giving effect to any arrangement or understanding. There was a considerable amount of telephone contact between the parties to these alleged arrangements or understandings. Before dealing with the telephone calls, however, it is worthwhile examining the data in Annexure B as to petrol price movements. 369 On this occasion, the Apco outlets did not move in the same direction at the same time. Their movements were spread over almost a 48-hour period. Annexure B records price rises beginning on 17 June with Apco Newcomb increasing from 60.9 to 67.9 at 00.05, and Apco Lara moving from 61.1 to 67.9 at 00.14. The ACCC was inclined to suggest that, because these increases were anomalous, they had erroneously been put in Annexure B on 17 June, when they really belonged just after midnight on 18 June. In an ACCC document, which was used in the compilation of Annexure B, these entries appear and are marked as 'confirmed'. In the circumstances, it would be wrong to assume that the ACCC's allegation is correct, and that therefore the entries are anomalous and should be treated as if they are 24 hours out, and then to use them to prove the ACCC's allegations. In any event, even if these figures are anomalous, there are still apparently uncoordinated movements in the Apco price. 370 At 13.26 on 17 June, Apco Geelong North moved from 61.1 to 60.9, following a general downward move by Mobil outlets, particularly Mobil Geelong North, which had made a similar move at 12.05. At 14.40, BP Hillford also dropped its price from 61.1 to 60.9. 371 Towards evening, prices at Apco outlets began to vary in an unusual way. At 18.03, Apco Geelong East rose from 61.1 to 67.9. At 18.32, Apco Geelong South dropped from 61.1 to 60.9. At 18.33, Apco Newcomb also dropped from 61.1 to 60.9 (this possibly lends support to the anomaly theory, because there is no record of Apco Newcomb having lowered its price to 61.1 during the day). At 19.24, Apco Highton moved from 61.1 to 60.9. At 22.13, Apco Highton increased from 60.9 to 67.9. At 23.46, BP Hillford changed from 60.9 to 67.9. 372 At 00.29 on 18 June, Apco Geelong North moved up from 60.9 to 67.5. If it be assumed that the moves at Apco Newcomb and Apco Lara, shown as occurring a little more than 24 hours earlier, actually occurred only a few minutes earlier, it should be noted that the price levels differed by 0.4. At 14.30, Apco Geelong East and Apco Newcomb each dropped from 67.9 to 67.5, 14 hours after Apco Geelong North had set its price at the latter level. Apco Lara similarly dropped from 67.9 to 67.5 at 14.55 and Apco Highton likewise at 15.26. BP Hillford made the same price cut at 17.31, to match what had become the generally applicable price at Apco and Mobil outlets. It was not until 23.54 on 18 June that Apco Geelong South increased its price from 60.9 to 67.9. 373 United Fuels increased its price at Shell Victoria Street from 61.1 to 67.5 at some stage during 18 June. The ACCC contended that this was on opening, apparently based on figures for sales volumes. This appears unlikely, as 67.5 was a price not adopted by anybody other than Apco Geelong North and BP Corford Express (at 08.46) until Caltex Quick Bite began a downward move from 67.9 to 67.5 at 13.24. Given that United Fuels was not a price leader, it is unlikely that Shell Victoria Street opened at 67.5 on the morning of 18 June. The data from Shell Waurn Ponds suggests some kind of an increase on 18 June, when the average price moved from 61.1 to 67.2. 374 Brumar sites recorded no change on 17 June and no increase until 08.29 on 18 June, when Shell Speedwings increased from 61.1 to 67.9. By that stage, a number of Mobil outlets had already increased to the same price, and other Mobil outlets followed suit during the morning. At 08.53, Geelong Car Spa moved from 61.1 to 67.9. Identical moves were made by Shell Belmont at 09.35, Shell Westoria at 09.40, Shell Norlane at 11.18 and Shell Anglesea at 13.51. Finally, Shell Latrobe Terrace increased from 61.0 to 67.9 at 16.56. 375 The apparently uncoordinated timing of these price increases makes it difficult to suggest that they were the result of giving effect to any arrangement or understanding as to amount and timing. When the telephone calls did come, if the data about the early Apco moves is correct, the price increases at Apco Newcomb and Apco Lara had already occurred. On 17 June, what the ACCC contended is a call cycle was precipitated not by either Apco or Leahy, but by Eino Heikkila ringing Leahy at 13.03, for 29 seconds. Immediately afterwards, Mr Heikkila rang Ian Carmichael on his mobile for 28 seconds. At 13.10, Mr Heikkila rang the Leahy office for one minute and six seconds. At 13.11, Mr Heikkila rang Garry Dalton for 29 seconds. At 13.12, the Leahy office rang Peter Anderson for 15 seconds. At 13.14, the Leahy office rang the Apco office for 32 seconds. The shortness of these two calls from Leahy suggests that Mr Anderson was unavailable either on his mobile phone or at the office. Indeed, he must have received a message, because he rang the Leahy office at 14.10, his call being transmitted through Skye. In the meantime, at 13.16, Michael Warner had rung Chisholm for two minutes and 31 seconds. Mr Warner also rang Mr Heikkila at 13.39 for 46 seconds. At 14.52, Mr Anderson again rang the Leahy office, for two minutes and one second, from Seaford. At 15.08, Mr Anderson rang Chris Andrianopoulos from Carrum Downs for 25 seconds. At 15.37, there was another call from the Leahy office to Chisholm, lasting one minute and two seconds. At 16.01, Mr Anderson rang the Liberty office for 37 seconds. At 16.19, the Leahy office rang David Mortimer. At 16.24, Mr Anderson again rang the Leahy office for one minute and two seconds. At 16.30, the Leahy office rang Chisholm for two minutes and 23 seconds. At 16.32, the Leahy office rang United Fuels for 46 seconds. At 17.34, Mr Heikkila rang Mr Dalton for 46 seconds. The Apco price changes, to which I have already referred, then occurred. Leahy's price increase apparently occurred at or near closing time for BP Hillford that night. 376 Overnight, Mobil prices began to increase. Between 18.20 on 17 June and 07.24 on 18 June, Mobil Moolap moved from 60.9 to 67.9. A move of the same magnitude occurred at Mobil Newcomb between 18.58 on 17 June and 07.21 on 18 June. At 07.04 on 18 June, Mobil Geelong North also increased its price from 60.9 to 67.9. 377 There were more telephone calls on 18 June. At 07.49, the Leahy office called Phil Carmichael. It appears that the latter may not have been available, because the call was timed only for 10 seconds. At 07.52, the Leahy office reached Mr Heikkila's message bank. At 07.56, the Leahy office made another attempt to reach Phil Carmichael, this time for 21 seconds. At 08.11, the Leahy office rang David Mortimer for 12 seconds. At 08.35, the Leahy office rang Mr Heikkila for one minute and 19 seconds. The Brumar increases had already begun. At 09.18, Ian Carmichael called Gordon Primmer for 21 seconds. At 09.20, Gordon Primmer rang Stan Kerr for 23 seconds. The ACCC submitted that this was an attempt by Ian Carmichael to use Mr Primmer as an intermediary, to persuade United Convenience to increase its price. At some stage on 18 June, United Convenience increased its price from 60.9 to 67.7 and later dropped it back to 67.3. At 09.23, the Leahy office also called BP Corford Express for one minute and 35 seconds. The ACCC characterised this call as an attempt to make sure that the price increase would stick. 378 Given the timing of the supposed call cycles and the timing of price changes, it is very difficult to see a relationship between them. Mr Warner indicated that he would have expected to see an earlier price rise, given the timing of the calls. While it is possible that there was information transmitted about pricing, there is none of the orderliness that would be expected if there were arrangements or understandings being put into effect. The pattern of phone calls is certainly not the classic pattern described by Ian Carmichael, in which he received a phone call from Peter Anderson, and then phoned a number of other participants in the Geelong petrol market. In this case, the call cycle did not begin with Mr Anderson, and the calls were spread over several hours. They appear to bear no relationship to the price changes. In my view, it is unlikely that any arrangement or understanding in relation to prices was put into effect by means of these calls during this period. On the morning of Tuesday, 22 June, prices at Mobil and Apco sites decreased to 64.9. Some others were above this level. Shell Victoria Street and Shell Waurn Ponds had both apparently finished the previous day at 65.7. One of those above the general level was BP Hillford, which moved its price down from 65.1 to 64.9 at 12.22. In the early afternoon, Mobil and Apco outlets eased further to 64.7. 380 At 09.09 on 22 June, Peter Anderson rang the Leahy office for one minute and 40 seconds. At 10.22, the Leahy office attempted to get Mr Anderson, but reached his message bank. At 11.05, Mr Anderson again rang the Leahy office for one minute and eight seconds. Twenty minutes later, the Leahy office rang Gordon Primmer for one minute and 33 seconds. Mr Primmer then rang Stan Kerr for one minute and 10 seconds at 11.28, followed by the Leahy office for 14 seconds at 11.29. The Leahy office rang Mr Anderson at 11.31, but only for eight seconds. At 12.13, Mr Primmer again rang the Leahy office for 20 seconds, and then immediately reached Michael Warner's message bank. The ACCC submitted that this chain of calls involved the passage of prospective price information from Mr Anderson to Leahy, to Mr Primmer and to Mr Kerr. If so, the information had no effect so far as Mr Kerr was concerned, because the price at United Convenience dropped from 65.1 to 64.5 in three falls in the course of 22 June, and followed the market up to 69.5, before discounting to 68.7 in three more steps on 23 June. 381 Another round of calls, on which the ACCC relied, began at 16.46 on 22 June, when Mr Anderson rang the Leahy office for one minute and 41 seconds. At 16.48, the Leahy office rang Chisholm. At 16.52, the Leahy office rang United Fuels. At 17.29, Chisholm rang Jacques Bodourian. If this chain of calls involved the passage of prospective price information, it is impossible to tell whether it had any effect on prices at Chisholm or 7-Eleven. No data is available at this stage in Annexure B for Chisholm. Annexure B does not contain any record of any 7-Eleven price change on either of the days in this period. 382 The price increases began at 21.35 on 22 June, and were led by Mobil outlets. At that time, Mobil Geelong North increased from 64.7 to 69.9. Identical increases were recorded at Mobil Highton at the same time and at 23.08 at Mobil Latrobe Terrace. It is possible that some Mobil sites went up earlier than Mobil Geelong North. Mobil prices went to 69.9 at Mobil Gateway between 18.46 on 22 June and 07.02 on 23 June, at Mobil Corio Village between 18.53 on 22 June and 04.37 on 23 June, at Mobil Moolap between 18.59 on 22 June and 07.14 on 23 June and at Mobil Newcomb between 19.39 on 22 June and 07.21 on 23 June. BP Hillford increased from 64.9 to 69.9 at 23.31 on 22 June. According to Mr Warner's evidence, what probably happened was that the phone calls earlier in the day were about a price rise overnight, and he would have given instructions for this price increase to occur before he ceased work for the day. The first recorded Apco increase was at Apco Geelong East, from 64.7 to 69.9 at 23.33. Apco Lara increased by the same amount at 23.57. At 00.20 on 23 June, Mobil Belmont increased to 69.9. Apco Geelong North did not rise until 00.32, when it also moved from 64.7 to 69.9. Apco Highton followed at 01.27. 383 At 06.22, Apco Geelong North reduced its price by 0.4 to 69.5, followed at 06.30 by Mobil Geelong North. At 06.56, the first Brumar rise was recorded, at Shell Belmont, from 65.1 to 69.9. 384 Prices at Apco and Mobil outlets eased to 69.5 during the morning, apparently led by Apco Geelong North. 385 At 07.54 on 23 June, Ian Carmichael rang BP Corford Express for one minute and 18 seconds. BP Corford Express increased its price from 65.5 to 69.9 at 08.45. At 08.49, BP Hillford joined the downward trend of Mobil and Apco sites, by easing to 69.5. Brumar prices continued to increase to 69.9 or thereabouts. 386 At 10.12 on 23 June, the Leahy office rang Eino Heikkila for 39 seconds. At 10.30, the Leahy office rang BP Corford Express for 18 seconds. At 11.19, the Leahy office reached Mr Heikkila's message bank. At 12 noon, BP Corford Express eased its price to 69.5. 387 United Fuels increased its price at Shell Victoria Street from 65.1 to 69.5 at some time on 23 June. The ACCC contended that this increase was on opening. If so, Mr Heikkila must have been aware of the easing of prices from about 06.20 that morning. He was clearly not giving effect to any arrangement or understanding that prices would increase overnight to 69.9. The average price at Shell Waurn Ponds is shown in Annexure B as increasing on that day from 65.0 to 65.5. The ACCC contended that this is an error in Annexure B, and the figure should read 68.5. Any such error ought to have been corrected as a result of the audit to which I have referred in [139], but the figure remains the same in the latest version of Annexure B. Even if there were an error, the suggested figure indicates an increase at some time during the morning of 23 June. It is inconsistent with the setting of a price at 69.9, or even at 69.5 on opening. 388 Even disregarding Ian Carmichael's evidence about the temporal connection between telephone calls and price rises, it is clearly not possible to say that effect was given to Arrangement No 4 during this period. The only relevant call was from the Leahy office to United Fuels at 16.52 on 22 June. On the ACCC's theory, Leahy had been in possession of information about a prospective price increase since Peter Anderson called the Leahy office at 11.05 that morning. Even assuming it was the call from Mr Anderson at 16.46 that alerted Leahy, and that earlier calls on that day should be disregarded, it is difficult to believe that Arrangement No 4 was carried into effect. The Leahy prices increased to 69.9 on closing that evening (exemplified by BP Hillford, the only data available). Accepting that Mr Warner would have given instructions for this increase shortly after the Leahy office spoke to the United Fuels office, it would have been expected that Shell Victoria Street would have lifted its price to 69.9 on opening. Instead, its price increase was to a lower amount. It would also have been expected that Shell Waurn Ponds would have increased on opening to 69.9. Manifestly, it did not. 389 It is also difficult to say that Arrangement No 1 was carried into effect. The ACCC did not attempt to characterise the call from Leahy to Chisholm at 16.48 and the call from Chisholm to Mr Bodourian at 17.29. The evidence is that, if an increase was occurring and 7-Eleven was not participating, Leahy sometimes rang Chisholm as a means of communication with Mr Bodourian, to attempt to persuade 7-Eleven to increase its prices. At the time of the call from Leahy to Chisholm, there was no price rise in progress. The time lapse between that call and the call from Chisholm to Mr Bodourian suggests no connection at all between them. 390 It is true that Leahy and Apco increased their prices to 69.9 overnight. It is also likely that Apco's price rise to that figure in the market was precipitated by the increases at Mobil outlets. The likelihood is that the increases in Geelong were triggered by increases in Melbourne, which the Mobil outlets were following. There may have been information shared about that Melbourne increase. It is unlikely that the sharing of information involved any specific reference to a time. If it did, Apco reneged on it very swiftly when it led the price drop to 69.5 at 6.22 on 23 June. 391 The ACCC characterised Ian Carmichael's call to BP Corford Express at 7.54 on 23 June as a follow-up call, because BP Corford Express had not increased its price. This may have been so, although it is clear that BP Corford Express was never involved in any arrangement or understanding to increase prices, which were set in its case from Melbourne. Just how the call from Leahy to BP Corford Express at 10.30 should be characterised is difficult. Leahy had already begun to reduce its prices, in line with the Mobil and Apco outlets by that time. Interestingly, BP Corford Express followed suit an hour and a half after the call, although the evidence is overwhelming that there were never phone calls about price decreases. 392 In all, it is clear that it is unlikely that effect was given to Arrangement No 4 in this period. It is not possible to say on the balance of probabilities that effect was given to Arrangement No 1. By early afternoon, it appeared that the low point of the price cycle had been reached, with a large number of Mobil sites at 64.1. This was matched by Apco Geelong North, with the other Apco sites at 64.3, which was also the price at a large number of Brumar sites. 394 At 14.19, the Leahy office rang the Apco head office. The 12-second duration of the call suggests that the caller failed to reach the intended recipient. So does the immediate call, at 14.20, to Peter Anderson's message bank, which lasted 20 seconds. At 14.24, the Leahy office rang Eino Heikkila for 29 seconds. At 14.37, Mr Anderson apparently returned the call to the Leahy office, for a conversation lasting one minute (Mr Anderson's mobile phone calls were apparently being billed in 30-second units by this time, so the call may have been less than one minute). 395 At 17.00, Mr Anderson rang Chris Andrianopoulos for up to 30 seconds. Half an hour later, Mr Andrianopoulos rang Alan Shuvaly for 55 seconds. The ACCC's case is that the call from Mr Anderson to Leahy, and the subsequent calls from Mr Anderson to Mr Andrianopoulos and Mr Andrianopoulos to Mr Shuvaly, were about a price increase to take place early the next morning. 396 What in fact happened was that the Mobil outlets began making significant upward price moves in the late afternoon or the evening of 29 June. Some time between 17.45 on 29 June and 07.49 on 30 June, Mobil Moolap moved from 61.9 to 69.7. Between 18.34 on 29 June and 06.49 on 30 June, Mobil Grovedale moved from 64.1 to 69.9. Moves from 64.1 to 69.9 were also recorded at Mobil East Belmont between 19.58 on 29 June and 06.12 on 30 June, Mobil Corio Village between 21.33 on 29 June and 06.12 on 30 June, Mobil Highton at 21.36, Mobil Latrobe Terrace at 23.03 and Mobil Belmont at 23.57 on 29 June, and Mobil Manifold Heights at 00.01 on 30 June. Andrianopoulos lowered its price from 64.9 to 64.3 and then increased it again to 64.9, at times unknown on 29 June. The Liberty average price for 29 June was 64.2. The Shell Victoria Street price dropped from 64.5 to 64.1 at some time during the day and the Shell Waurn Ponds average price for 29 June increased from 61.4 to 65.0. 397 Apco began increasing its prices to 69.9 at Apco Geelong East at 05.27 on 30 June, followed by Apco Newcomb at 06.04, Apco Geelong North at 06.08, Apco Lara at 06.21 and Apco Highton at 06.46. In the meantime, Apco Geelong North dropped its price from 69.9 to 69.7 at 06.38. 398 At 06.17 on 30 June, after the Apco price increases had begun, Peter Anderson telephoned Ian Carmichael, the call being timed at 30 seconds. At 07.13, Mr Carmichael rang Mr Anderson for one minute. Mr Carmichael then rang Phil Carmichael at 07.17 for one minute, BP Corford Express at 07.28 for one minute and Peter Anderson again at 07.33 for 30 seconds. These three calls were from different locations, suggesting that Mr Carmichael was in his car at the time. At 07.39, there is a call recorded from the Leahy office to Eino Heikkila for 31 seconds. At 07.40, the Leahy office telephoned Darren Campigli for one minute and six seconds. 399 By 08.09, a number of the Mobil outlets were easing their prices back to 69.7, apparently following the lead of Apco Geelong North. At 08.09, Leahy increased the price at BP Hillford from 64.3 to 69.7. At 08.20, Mr Heikkila rang Garry Dalton for one minute and 30 seconds. The ACCC submitted that this was the result of the earlier call from Leahy to Mr Heikkila, and involved passing on to Brumar information about a price increase. Brumar increased its prices from 64.3 to 69.7 at Shell Latrobe Terrace and Shell Speedwings at 09.02, Shell Anglesea at 09.12, Shell Belmont at 09.17 and Shell Norlane at 09.27. 400 At 09.56 on 30 June, Mr Anderson telephoned the Liberty head office for three minutes and 30 seconds. The ACCC characterised this as a complaint call, suggesting that Liberty had failed to increase its prices in accordance with the alleged arrangement or understanding. During the late morning and early afternoon, there was a large amount of telephone traffic, involving Leahy (and Michael Warner), United Fuels (and Mr Heikkila), Mr Andrianopoulos and Mr Shuvaly, David Mortimer, and the Liberty office and the Apco office (and Mr Anderson). Within a few minutes, between 12.58 and 13.04, Apco Geelong North lowered its price from 69.7 to 63.9 and then increased it to 69.5. In the late afternoon, Mobil outlets began easing the price back to 69.3. 401 At times unknown in the course of the day, the price at Andrianopoulos rose from 64.9 to 69.5, dropped to 63.9, rose again to 69.7, dropped to 64.1 and rose again to 64.3. Liberty's average price for the day was 68.2, up from 64.2. The average price at Shell Waurn Ponds was 69.6, up from 65.0, suggesting a fairly early increase or a larger late one. At Shell Victoria Street, the price went to 69.7. The ACCC submitted that this was shown by the data sheets to have occurred on opening. If it did, it may have anticipated the fall from 69.9 to 69.7 that was becoming apparent elsewhere in the market. 402 Precisely how this data is supposed to fit the ACCC's theory of the giving effect to of arrangements or understandings is unclear. If, as is submitted, the crucial call about an increase occurred between Mr Anderson and the Leahy office at 14.37 on 29 June, the call was far earlier than the oral evidence suggests ever occurred in relation to an overnight increase, let alone an increase that was not to occur until the following morning. If that call contained the crucial information passed by Mr Anderson to Leahy (and was not simply returning Leahy's two earlier attempts to reach Mr Anderson about something unrelated to price), then no-one at Leahy took any step to communicate that information until the following morning, when Apco had already increased its price. If Mr Anderson were spreading information about an impending price increase to Leahy at 14.37 on 29 June, it is odd that he delayed communicating it to Mr Andrianopoulos until 17.00, if he wished to put into effect Arrangement No 8. The occurrence of the price increases at the Mobil outlets suggests strongly that Apco's price increases early on 30 June were related to the Mobil moves, rather than to any other information. If the phone call from Mr Anderson to Ian Carmichael at 06.17 on 30 June, probably returned at 07.13, was to pass on information about price increases, it was about price increases already occurring. Even so, there was some delay about Leahy implementing any price increase, which would not be expected if the flurry of calls between 07.17 and 07.40 were to spread the word that the prices should go up. If that were the purpose of those calls, then Mr Heikkila was fairly casual about ringing Mr Dalton. Indeed, if he rang Mr Dalton about a price increase at 08.20, on the ACCC's case, it was a price increase that had already been put into effect by United Fuels. The greater likelihood is that Brumar responded to what was becoming the prevailing market price by beginning to move its major outlets to 69.7 after 09.00 on 30 June. It is simply impossible to tell from the price data about Andrianopoulos and Liberty whether they effected any price increases on the basis of any information they received from Mr Anderson, or from each other. The ACCC submitted that the reductions in the price at Andrianopoulos must have been at insignificant times, and for short periods, or they would have caused the general price increase to collapse. This is mere speculation. The timing or amount of Liberty's price increase is also unclear. 403 In short, the data for this period bears no resemblance to the case pleaded by the ACCC and no resemblance to the pattern of price increases suggested by the oral evidence. Significantly, price data for Chisholm is available for this period. 405 On 5 July, prices were generally falling during the day. The lowest recorded was a fall from 59.5 to 59.4 at Shell Latrobe Terrace at 02.42. As the day went on, 59.5 seems to have become the most common price. There were a couple of solo attempts to secure a large rise in the course of the day. At 10.15, Caltex Quick Bite increased from 63.9 to 70.9. In the absence of market support for the move, it dropped back to 61.9 at 11.03 and to 59.9 at 11.37. Between 13.10 and 13.38, 7-Eleven Newcomb attempted a small increase, rising from 59.9 to 61.7, before dropping back to 59.9 by 14.04 and further to 59.5 by 14.18, to reflect the market price. Between 14.02 and 14.11, Mobil Moolap increased from 59.5 to 66.3. It too dropped back to 59.5 at 15.49. At 15.45, BP Corford Express increased from 66.5 to 70.9, before dropping back to 66.5 at 16.26. Between 15.23 and 16.29, Mobil Point Henry attempted a small rise from 59.5 to 61.5. At 16.29, Caltex Quick Bite rose 0.8 to 60.7. These attempts by market participants whose prices were set in Melbourne suggest that the Melbourne petrol market had already moved upwards, and, because the market price in Geelong had fallen to a particularly low level, there were market participants keen to see an increase occur. 406 The relevant phone calls began at 17.37 on 5 July, when Peter Anderson rang Ian Carmichael for one minute and 30 seconds. At 17.39, Mr Carmichael rang Chisholm for one minute. At 17.48, he rang Eino Heikkila for one minute. At 17.49, Ian Carmichael rang Phil Carmichael for one minute. Also at 17.49, Mr Heikkila rang Garry Dalton for 30 seconds. At 17.52, Mr Anderson rang Liberty for four minutes. Some time later, at 19.13, Mr Anderson rang Chris Andrianopoulos for one minute. Between 19.16 and 19.18, there were three brief calls (less than 30 seconds each) from Mr Anderson to Apco outlets at Apco Geelong East, what Annexure B there (and nowhere else) describes as 'Apco Geelong', and Apco Newcomb. (This is one of the rare occasions when Annexure B records communications that might have been instructions by a market participant to one of its own outlets to set prices at a particular level at a particular time. Thus, at some time between 16.26 on 5 July and 06.48 on 6 July, Mobil Moolap increased its price from 63.0 to 70.9. At some time between 17.22 and 06.09, Mobil Geelong North increased from 61.5 to 70.9. At some time between 19.24 on 5 July and 06.44 on 6 July, Mobil Grovedale increased from 61.5 to 70.9. At some time between 19.36 and 05.38, Mobil Corio Village increased from 61.5 to 70.9. An identical rise occurred at Mobil East Belmont between 20.44 and 07.35. At some time between 21.05 and 07.12, Mobil Gateway increased from 59.5 to 70.9. 408 The first recorded actual time increases were on 5 July from 59.5 to 70.9 at 20.03 at Chisholm Grovedale and 21.38 at Chisholm Leopold. At 21.50, Mobil Highton moved from 61.5 to 70.9. At 21.55, Chisholm Geelong West moved from 59.5 to 70.9. At 23.16, Mobil Latrobe Terrace moved from 61.5 to 70.9. 409 The first Apco increase occurred at 23.38, when Apco Geelong South increased its price from 59.5 to 70.9. Leahy did the same at BP Hillford at 23.41. According to Mr Warner's evidence, it is likely that he gave the instruction for this rise before he finished work for the day. Before midnight, at 23.56 and 23.57, both Mobil Belmont and Mobil Manifold Heights moved from 61.5 to 70.9. 410 Apco increases continued shortly after midnight on 6 July, with Apco Newcomb moving from 59.5 to 70.9 at 00.11, Apco Geelong North from 59.5 to 70.9 at 01.01, Apco Lara from 61.5 to 70.9 at 01.26 and Apco Highton from 61.5 to 70.9 at 01.56. 411 Somewhat anomalously, the first move by Brumar on 6 July was at 05.27, when Shell Speedwings dropped from 59.5 to 59.4. At 06.11, Shell Latrobe Terrace increased from 59.5 to 70.9. At 06.23, Apco Geelong East also increased from 59.5 to 70.9. Caltex Quick Bite also increased its price that morning at 07.32, but only from 60.7 to 69.5. Shell Belmont moved from 61.5 to 70.9 at 07.34. At 07.35, Ian Carmichael telephoned BP Corford Express for one minute and 30 seconds. BP Corford Express increased its price at 07.57, from 66.5 to 69.7. 412 At 08.02 on 6 July, Leahy telephoned Chris Andrianopoulos for 26 seconds. At 08.16, Michael Warner telephoned Gordon Primmer for two minutes and 30 seconds. At 08.34, Peter Anderson rang Mr Andrianopoulos for five minutes and 30 seconds, certainly longer than would be necessary to discuss prices. At 08.42, Leahy rang David Mortimer for 38 seconds. 413 At 08.50, Chisholm began easing its prices downwards, moving from 70.9 to 69.5 at Chisholm Geelong West, followed by the same decrease at 08.54 at Chisholm Leopold and 08.56 at Chisholm Grovedale. Caltex Quick Bite finally moved up to what appears to have been the preferred market price of 70.9 at 09.07. Shell Speedwings moved from 59.4 to 70.9 at 10.08 and Shell Norlane from 59.5 to 70.5 at 10.29. Mobil Point Henry even attempted to go higher, moving from 70.9 to 71.2 between 10.34 and 10.39. Prices then began to fall in earnest, with Mobil Geelong North dropping to 69.5 at 10.50, followed by Apco Geelong South, Apco Newcomb and Apco Geelong North at 10.52, 11.05 and 11.06, and Apco Geelong East and Apco Lara and Apco Highton at 11.16, 11.26 and 12.03 respectively. Brumar prices began to move down to 69.5, starting with Shell Westoria at 12.14, followed by Shell Speedwings, Shell Latrobe Terrace and Shell Belmont at 12.15, and Shell Norlane at 12.17. Other Mobil sites also settled downwards to 69.5. At 17.10, BP Corford Express moved down to 69.3. 414 United Fuels increased the price at Shell Victoria Street from 59.5 to 70.9 on opening on the morning of 6 July. The average price at Shell Waurn Ponds rose from 59.6 to 68.7, suggesting a rise at some time during the morning. Liberty's average price for the day moved from 59.5 to 69.8, consistent with an increase early in the day to about the market price, on the basis of Mr Shuvaly's evidence that Liberty liked to have its price set at about 0.2 below the market. On 6 July, Andrianopoulos moved from 61.5 to 69.5, then up to 70.5 and then back to 59.5 in the course of the day. 415 In his evidence, Mr Shuvaly was asked to look at the data in Annexure B for this period. His interpretation was that 'it has probably moved at a particular stage during the day and it fell over and then there was another move later on in the evening'. By 'it fell over', he meant that 'there wasn't a strong enough move or not enough people moved, I guess'. This view is hardly consistent with the data. There were two Melbourne-initiated moves early in the day on 5 July (Caltex Quick Bite and BP Corford Express). There was one round of telephone communications in the late afternoon. There was an overnight price increase, in which a number of Mobil outlets, Chisholm, Leahy and Apco all participated. Brumar, Caltex Quick Bite and BP Corford Express joined them on the morning of 6 July. There was no collapse of the increase. Indeed, it appeared to 'stick' well until discounting began on that morning. What might have led to the round of telephone communications on that morning does not appear to have been a collapse of the price rise. 416 5 and 6 July 1999 is the first period in which it can be said that the data in Annexure B appears to conform with some of the oral evidence about patterns of telephone calls and price rises. It is necessary to ignore Ian Carmichael's evidence about the maximum two-hour time-span between telephone calls and price rises, because the price increases by Chisholm, Apco and Leahy were spread overnight. Those increases also occurred in conjunction with Mobil increases, which might well have become visible earlier than the first of Chisholm's increases. The attempts to increase the price earlier in the day, particularly those by Caltex Quick Bite and BP Corford Express, are strongly suggestive of a move having occurred in the Melbourne petrol market. The fact that each attempted to increase the market price in Geelong to 70.9, the price to which most outlets eventually moved, is significant. It may be that the phone calls in the course of the afternoon were for the purpose of spreading information about the price increase that appeared imminent. Whether they were for the purpose of indicating a time at which those alleged to be parties to the various arrangements or understandings would move remains speculative. The moves were uncoordinated, at least to the extent that Chisholm had begun to discount before Brumar had moved all of its sites up to 70.9. The possibility cannot be ignored that Chisholm was driven to leading up the market, because its supplier notified it that price support was to be terminated. Again, this is consistent with the Melbourne influence. 417 Although the data is consistent with the ACCC's case, it is equally consistent with an innocent explanation. In the circumstances, I ought not to find that any of Arrangements Nos 1, 3, 4 or 5 was put into effect during this period. As for Arrangement No 8, it is impossible to tell how the price movements at Andrianopoulos and Liberty coordinated with those of Apco. I therefore ought not to find that Arrangement No 8 was implemented. It should be noted that there is no allegation that Apco and Leahy gave effect to Arrangement No 1, which is advanced generally by the ACCC as the head arrangement, from which all of the others followed. This is because, not only is it not possible to identify any relevant telephone conversation involving anyone from Leahy and anyone from Apco, but there are no relevant Apco price increases in the period. 419 The call cycle identified by the ACCC during this period occurred on the afternoon of 8 July. At 16.16, Leahy rang Chisholm for 13 seconds. At 16.17, Leahy rang United Fuels for 22 seconds. At 16.23, Leahy again rang Chisholm for 54 seconds, possibly achieving communication with someone who had been unavailable at the time of the first call. About two hours after the phone contact between Leahy and United Fuels, Eino Heikkila rang Garry Dalton for one minute at 18.18. 420 The price increases relied on by the ACCC began with Chisholm, probably at or about closing time. At 20.05 on 8 July, Chisholm Grovedale increased its price from 66.9 to 71.9. At 21.42, Chisholm put into effect the same price increase at Chisholm Leopold. At 23.36, Leahy increased the price at BP Hillford from 66.9 to 71.9. Again, if Mr Warner's evidence is correct, he would have given the instruction for this price increase before he ceased work for the day. 421 Chisholm then increased its price at Chisholm Geelong West from 66.9 to 71.9, soon after opening time, at 06.40 on Friday, 9 July. At 07.19 on 9 July, Shell Norlane reduced its price by 0.1 from 69.6 to 69.5. Brumar's price increases began at 07.43, with Shell Speedwings moving from 69.5 to 71.9, followed by Shell Anglesea at 07.52 and Shell Norlane at 09.32. Subsequent Brumar price changes involved smaller increases, or in some cases decreases, to 71.7 at 09.37 (Shell Latrobe Terrace), 10.20 (Shell Westoria), 10.21 (Shell Anglesea and Shell Belmont), 10.23 (Shell Norlane), 10.24 (Shell Speedwings) and 10.25 (Geelong Car Spa). 422 United Fuels increased the price at Shell Victoria Street from 66.9 to 71.9 on opening on 9 July. The average price at Shell Waurn Ponds increased from 67.0 to 71.3 on 9 July, suggesting an increase in the morning. 423 The missing ingredient to put these price changes into a context is information with respect to times of increases at many Mobil outlets. At some time between 17.46 on 8 July and 08.20 on 9 July, Mobil Moolap increased its price from 66.9 to 71.9. Other Mobil sites at which the price was increased to 71.9 (all but one from 66.7) were Mobil Newcomb between 18.09 and 07.41, Mobil Point Henry between 18.33 and 08.03, Mobil Highton (from 65.5) between 19.07 and 06.43, Mobil East Belmont between 19.41 and 06.30, Mobil Gateway between 20.48 and 07.27, Mobil Latrobe Terrace between 21.16 and 08.03, Mobil Geelong North between 21.34 and 07.21, Mobil Manifold Heights between 21.57 and 04.25, Mobil Belmont between 22.53 and 05.39, Mobil Corio Village between 23.07 and 05.38 and Mobil Grovedale between 23.08 and 06.51. It is entirely possible that the brief phone calls on the afternoon of 8 July did not involve communication about prices, but that the price increases that occurred were precipitated either by a removal of Chisholm's price support, or the Mobil moves, or a combination of both. Again, the possibility of a preceding increase in the Melbourne petrol market cannot be ignored. The Brumar price increases came later than any of those on the part of Chisholm, Leahy or United Fuels, and probably reflected the Mobil moves, which would certainly have been apparent by the time Brumar acted. The fact that BP Corford Express moved from 66.9 to 71.9 at 07.44 on 9 July also suggests that the move followed a move in the Melbourne petrol market. The increases from 66.7 to 71.9 by 7-Eleven Geelong East between 06.36 and 07.07 and from 66.9 to 71.9 at 7-Eleven Newcomb between 08.04 and 08.13 support this view. There is a gap in Annexure B during this period, in that no data is available for Apco between 6 July and 16 July 1999. Other market participants, including Andrianopoulos, Liberty and United Convenience, all appear to have moved to 71.7, or something slightly more, at some stage during the day. 424 On the evidence available, an innocent explanation for the price increases is at least as likely as the giving effect to any arrangement or understanding, so it would be wrong for me to find that there was any such giving effect in this period. Although there were price rises at Apco outlets similar to those at Leahy and Chisholm outlets, the Apco price rises occurred later than those of Chisholm and Leahy, and there is no evidence of any relevant telephone communication. Of course, it is possible that this was a day on which Peter Anderson communicated with Ian Carmichael other than by telephone, but it would not be possible to make a finding to this effect in the absence of evidence. Once again, the timing of Mobil price increases might have been significant. 426 During the morning and early afternoon, prices in the Geelong petrol market were generally falling, the most common lowest price being 71.3. At 17.02, the Leahy office telephoned Eino Heikkila for one minute and four seconds. At the same time, a call was made from the Leahy office to Chisholm for 34 seconds. The fact that these calls overlapped suggests that they were made by different people. At 17.03, Leahy also rang BP Corford Express for 31 seconds. At 17.20, Leahy rang David Mortimer for three minutes and 26 seconds, substantially longer than would be necessary to talk about price increases. Mr Mortimer rang Ian Carmichael back at 17.26 for one minute. 427 The price rises relied on began again with Chisholm, probably at closing time for its outlets. At 19.59 on 22 July, Chisholm Grovedale rose from 71.3 to 76.7. The same increase occurred at Chisholm Leopold at 22.01 and at Chisholm Geelong West at 22.03. BP Hillford also rose from 71.3 to 76.7 at 23.10, probably approaching its closing time. Apco increases occurred from 00.01 on 23 July onwards, beginning with Apco Geelong North. 428 United Fuels increased its price at Shell Victoria Street on opening, but only from 71.3 to 75.9, 0.8 below the price adopted by Chisholm and Leahy. The average price at Shell Waurn Ponds for the three day period from Friday 23 to Sunday 25 July increased from 71.4 to 75.4. The probability is that any increase was early, unless there were other changes made during the weekend. 429 The range of times between the last sale at 71.3 and the first sale at 76.7 at Mobil outlets was as follows: Mobil Newcomb 16.30 on 22 July to 07.25 on 23 July; Mobil Moolap 17.26 to 07.28; Mobil Point Henry 18.08 to 07.37; Mobil East Belmont 18.46 to 06.19; Mobil Corio Village 19.40 to 06.22; Mobil Grovedale 20.29 to 08.08; Mobil Gateway 21.22 to 07.58; and Mobil Manifold Heights 22.12 to 04.18. The recorded times of price increases from 71.3 to 76.7 at other Mobil outlets were 22.13 on 22 July (Mobil Geelong North), 23.11 on 22 July (Mobil Latrobe Terrace) and 00.12 on 23 July (Mobil Belmont). Thus, it is possible that increases by Mobil again precipitated the market price rise, which was simply followed by Chisholm and Leahy. Certainly, by the time Mr Heikkila was on his way to work, it is probable that there were Mobil price boards showing a price of 76.7, as well as Apco price boards showing the same price. 430 The fact that the calls to Mr Heikkila and Chisholm on the afternoon of 22 July were most likely to have been made by different people in the Leahy office reduces the likelihood that both were about coordinating a price increase. None of the oral evidence suggests that Ian Carmichael and Michael Warner worked in tandem to make call cycles, and there is no evidence in Annexure B suggesting that they may have done so on other occasions. It is more probable that a previous Melbourne price increase precipitated a move in Geelong, by causing Caltex to abandon price support for Chisholm and causing Mobil to move its prices up. The ACCC's case is not made out in respect of this period. There is no Apco price data in Annexure B for this period. 432 On 26 July, in the morning, Chisholm, Leahy and United Fuels all reduced their prices to 73.9. The call cycle relied on began at 16.40, with a call from the Leahy office to Eino Heikkila, lasting 28 seconds, with no apparent preceding contact from Apco or Peter Anderson. At 16.50, Leahy rang Chisholm for 57 seconds and at 16.51, Leahy rang Mr Heikkila again for 11 seconds. The precise timing of these calls shows that they overlapped by 27 seconds, so it is likely that they were made by different people. At 16.52, Leahy rang BP Corford Express for 17 seconds and, at 16.53, Leahy rang David Mortimer for 22 seconds. At 17.25, Leahy again rang Chisholm for 31 seconds. This was followed by a 14-second call from Leahy to BP Corford Express at 17.26, a call to Mr Heikkila's message bank at 17.28 and another call to David Mortimer at 17.32 for 23 seconds. Again, the price changes by Chisholm and Leahy were at or approaching closing time for the various outlets. At 21.58, Chisholm Geelong West moved to 76.5, the same price to which Chisholm Leopold moved at 22.07 and BP Hillford at 23.04. United Fuels increased its price on opening on the morning of 27 July, but only to 76.3. The average price for Shell Waurn Ponds for 27 July was 76.4, suggesting an increase early in the day. 433 The ACCC identified another call cycle on the morning of 27 July, which it submitted was an attempt to make the price rise initiated the previous day stick. At 08.00, the Leahy office called Chris Andrianopoulos for 22 seconds. At 08.02, the Leahy office called BP Corford Express for 16 seconds. At 08.04, the Leahy office called Chisholm for one minute 44 seconds and at 08.13, Leahy called Mr Heikkila's message bank. At 08.56, Leahy called the United Fuels office. Why these last three calls should have been necessary, when Chisholm and United Fuels had increased their prices, is not apparent. 434 Again, the missing element in the ACCC's scenario is the Mobil increases, which could have occurred from an early time on 26 July. The following Mobil outlets increased from 73.9 to 76.5 in the following time ranges: Mobil Moolap between 18.00 on 26 July and 06.35 on 27 July; Mobil East Belmont between 18.50 and 06.37; Mobil Newcomb between 19.18 and 07.19; Mobil Point Henry between 20.07 and 07.54; Mobil Grovedale between 20.56 and 07.56; Mobil Corio Village between 21.00 and 06.46; Mobil Manifold Heights between 22.00 and 06.14; and Mobil Gateway between 22.40 and 07.11. Mobil Highton and Mobil Latrobe Terrace also increased from 73.9 to 76.5 at 21.47 and 23.53 respectively on 26 July. 435 The comments that I have made about the previous two periods are equally applicable to this one. The Mobil increases might have reflected a Melbourne increase, flowing into the Geelong petrol market. The Melbourne increase might have caused Caltex to remove price support from Chisholm, forcing it to raise its prices, as Graeme Chisholm said often occurred. The Mobil increases may have become visible from an early time, prompting Chisholm and Leahy to take advantage of an impending upward move. In addition, the disconformity between the Chisholm and Leahy rises on the one hand and the United Fuel rise at Shell Victoria Street on the other suggests a lack of coordination as to price. The ACCC's case is not made out in respect of this period either. Leaving aside the question of whether it is consistent with the ACCC's case for Arrangement No 3 to be regarded as a stand-alone arrangement, this is an odd period to choose. The price increases concerned were of less than one cent, and occurred following similar price increases on the part of Mobil and Apco outlets. 437 The allegation depends on a telephone call from the Leahy office to Chisholm at 15.58 on 29 July, lasting three minutes and six seconds, far longer than would be required to discuss a price increase. At 17.23, Chisholm telephoned Leahy for 36 seconds. This was shortly before Leahy actually decreased its prices from 75.9 to 75.7 at BP Hillford. 438 Overnight, there were increases from 75.7 to 76.5 at Mobil Geelong North at 22.02, Mobil Latrobe Terrace at 23.40, Apco Geelong North at 23.54 and Apco Geelong East at 23.55 on 29 July, and at Mobil Belmont at 00.04, Apco Newcomb at 03.08 and Apco Geelong South at 04.14 on 30 July. In addition, there were several increases at other Mobil sites for which only a time range is available. The range is from the last sale at the old price at Mobil Newcomb at 17.33 on 29 July, and the first sale at the new price at Mobil East Belmont at 07.24 on 30 July. In this context, it is not surprising to find that BP Hillford increased its prices from 75.7 to 76.5 at 08.05 on 30 July, or that Chisholm increased its prices from 75.9 to 76.5 at Chisholm Grovedale at 08.08, Chisholm Geelong West at 08.55 and Chisholm Leopold at 09.14. It is highly unlikely that there was any connection between the telephone calls on the afternoon of 29 July and the price increases on the morning of 30 July. It is highly likely that both Leahy and Chisholm were separately following the price increases of Mobil and Apco. It is surprising that the ACCC even attempted to rely on these events in support of its case. The market generally moved up during this period, with most operators moving to 78.7. Interestingly, the first outlet to move to this price, from 71.9, was Mobil Belmont as early as 11.57 on 19 August. Even though other outlets were still decreasing at that time, Mobil Belmont's move is a sign that a market increase was a possibility. 440 The call cycle may have begun with a call from Leahy to United Fuels at 16.36 on 19 August, which lasted two minutes and five seconds, more than enough time to talk about a prospective price increase. The ACCC relied on another call at 16.42, when Leahy rang Peter Anderson for 27 seconds. Immediately, Leahy rang Chisholm for one minute and two seconds. At 16.44, Leahy rang BP Corford Express for 26 seconds. At 16.56, Mr Anderson rang Leahy for one minute. 441 At 19.57 on 19 August, probably close to closing time, Chisholm increased its price at Chisholm Grovedale from 71.3 to 78.7. The same increase was applied at Chisholm Leopold at 21.56, again probably shortly before closing time. The time for a similar increase at Chisholm Geelong West does not appear in Annexure B. At 23.26, approaching closing time at BP Hillford, Leahy increased the price from 70.9 to 78.7. 442 The Apco increases began with Apco Newcomb moving from 70.9 to 78.7 at 00.34 on 20 August, and Apco Geelong North at 02.00. Identical increases occurred through the early hours of the morning at Apco Geelong South (03.27), Apco Lara (03.38), Apco Highton (03.42) and Apco Geelong East (05.32). In the late morning, all Chisholm and Apco sites began moving slightly downwards, to 78.4. 443 Once again, the ACCC did not factor into its submissions the possible time range of the Mobil increases, which were also to 78.7. The earliest times at which these could have occurred on 19 August were 17.39 at Mobil Newcomb, 18.22 at Mobil Gateway, 19.15 at Mobil East Belmont, 19.44 at Mobil Point Henry, 19.57 at Mobil Grovedale and 20.31 at Mobil Manifold Heights. Definite Mobil increases, also to 78.7, occurred at 21.16 at Mobil Highton and 21.54 at Mobil Geelong North. 444 On 20 August, United Fuels increased the price at Shell Victoria Street from 70.9 to 78.5. The three day average for Friday, Saturday and Sunday 20, 21 and 22 August at Shell Waurn Ponds increased from 70.9 to 77.3, suggesting a rise at some time on the Friday, in the absence of data suggesting other price changes during the subsequent weekend. It is significant that, even though Shell Victoria Street appears to have increased on opening, it increased to a price lower than the rest of the market. 445 Once again, the more likely explanation for the pattern of price increases appears to be that Mobil outlets began following a previous Melbourne petrol price increase, with Mobil Belmont being the early mover. The Chisholm increases might well have been precipitated by the cessation of price support from Caltex, consequent upon the same Melbourne petrol price increase. By the time BP Hillford moved, a move in the market was already apparent, although the effect of this is lessened if Mr Warner's evidence, that he gave instructions for increases overnight before he ceased work for the day, is to be accepted. Even so, it is possible that Mobil moves had become known by the time Mr Warner ceased work on 19 August. In the light of a possibly innocent explanation, it would be unsafe to find on the balance of probabilities that any arrangement or understanding was implemented during this period. One remarkable feature of this period is that, although the call cycle relied on by the ACCC began with the Apco office communicating with the Leahy office, the only Apco increase recorded in Annexure B is Apco Geelong East at 23.54 on 26 August from 72.7 to 78.7. Prices at other Apco outlets do not appear from Annexure B to have moved up during the period. By the afternoon on 26 August 1999, prices in the Geelong petrol market had generally moved downwards to between 72.7 and 72.9. At 16.52, the Apco office telephoned the Leahy office for two minutes and two seconds. At 17.06, the Apco office again called the Leahy office for 52 seconds. At 17.08, the Leahy office telephoned Chisholm for one minute and 13 seconds. At 17.09, the Leahy office telephoned United Fuels for 29 seconds. At 17.10, the Leahy office telephoned BP Corford Express for 30 seconds. The ACCC would have it that this call cycle involved Leahy passing on information received from Apco about an impending price increase. In his evidence, Darren Campigli imagined that the call Chisholm received would have been to provide information that the market was moving up that night or the next morning, and that he would have instructed his sites to increase their prices at closing time, in consequence of the call. 447 Indeed, the Chisholm sites did increase at or about closing time. The increases were from 72.9 to 78.7, and occurred at 20.17 at Chisholm Grovedale, 22.00 at Chisholm Leopold and 22.02 at Chisholm Geelong West. Leahy also increased at close to closing time, at 23.52 at BP Hillford. Shell Victoria Street eased from 73.7 to 72.9 at some time on 26 August, but does not appear to have increased on 27 August. The average price for Shell Waurn Ponds increased from 72.8 to 77.5, for the three-day period from Friday, 27 August to Sunday, 29 August. It is difficult to say when this increase would have occurred, in the absence of any evidence about other price movements at Shell Waurn Ponds during the weekend. The ACCC submitted that it occurred early in the three-day period, but it is unlikely to have occurred at opening time on the Friday. 448 Once again, the missing element in the ACCC's analysis in respect of this period is the timing of the Mobil increases. Mobil sites increased to 78.7 within the following time ranges: 17.24 on 26 August to 06.45 on 27 August (Mobil East Belmont); 17.42 to 06.59 (Mobil Gateway); 17.42 to 07.41 (Mobil Moolap); 19.41 to 07.19 (Mobil Newcomb); 20.07 to 06.00 (Mobil Corio Village); 20.19 to 04.19 (Mobil Manifold Heights); 21.01 to 08.50 (Mobil Grovedale); and 21.18 to 09.28 (Mobil Point Henry). Definite Mobil increases occurred on 26 August at 21.53 at Mobil Highton and 22.03 at Mobil Geelong North, both to 78.7. It is possible that these Mobil increases, if they occurred early in the possible time ranges, were becoming apparent before Chisholm and Leahy moved up. In the circumstances, particularly the absence of an across the board Apco increase, it is not possible to say on the balance of probabilities that the increases that did occur were the result of the giving effect to of any arrangement or understanding. It is at least as likely that the Geelong petrol market was simply following news of an increase in the Melbourne petrol market, with outlets that closed overnight increasing their board prices before closing time, and others doing so at or about opening time on 27 August. The call cycle relied upon began on Thursday, 2 September 1999, by which time the most common price in the market was 71.9. At 16.48, Peter Anderson rang the Leahy office for two minutes. At 16.50, the Leahy office rang Chisholm for one minute and 16 seconds. At 16.53, the Leahy office rang Eino Heikkila for one minute. At 16.55, the Leahy office rang David Mortimer for 29 seconds. The first two of these calls were longer than would be necessary to discuss a particular price and a particular time if there were in existence well-grooved arrangements or understandings. 450 That evening, and on Friday, 3 September, prices in the Geelong petrol market generally rose to 78.5. The first rises were at Mobil outlets. For those for which only a range of times is available, the earliest possible time for the rise would have been 17.03 on 2 September at Mobil Moolap, with the last possible time in its range being 06.44 on 3 September. Other time ranges for these Mobil outlets were: 18.18 to 07.45 at Mobil Newcomb; 18.19 to 07.58 at Mobil Gateway; 20.33 to 07.18 at Mobil Corio Village; 20.25 to 07.34 at Mobil Point Henry; 20.48 to 06.23 at Mobil East Belmont; 22.06 to 08.43 at Mobil Grovedale; and 23.13 to 04.13 at Mobil Manifold Heights. Increases certainly occurred on 2 September at 21.46 at Mobil Highton, at 21.59 at Mobil Geelong North and at 23.17 at Mobil Latrobe Terrace. In the meantime, BP Hillford increased to 78.5 at 23.09. 451 Apco increases did not begin until after midnight and occurred at 00.02 (Apco Geelong East), 01.59 (Apco Geelong North), 02.02 (Apco Newcomb), 02.54 (Apco Highton) and 03.34 (Apco Geelong South). Apco Lara did not move until 10.44 on 3 September, when it moved to 77.5, a price to which a number of Apco and Mobil outlets decreased in the early afternoon. 452 Chisholm did not increase its prices until the morning of 3 September, with Chisholm Leopold moving at 07.53, Chisholm Geelong West at 07.58 and Chisholm Grovedale at 08.05. 453 At 07.23 on 3 September, Ian Carmichael telephoned BP Corford Express. The ACCC submitted that this was an attempt to get the price at that outlet increased. In fact it did increase at 07.35, but only to 78.3. There is no data during this period for Shell Victoria Street, but the average price at Shell Waurn Ponds rose from 72.0 to 77.4 for a three-day period from 3 September until 5 September. If anything, this does not suggest a rise particularly early on Friday, 3 September. 454 Bearing in mind Mr Warner's evidence that he would have given instructions for the Leahy increases to be put into effect at closing time on 2 September, there is still a long gap between any possible relevant telephone calls and price increases by other parties. If Ian Carmichael's evidence about the maximum two-hour gap between a phone call from Mr Anderson and a price increase is to be accepted, then Apco's increases did not fall within that period. Chisholm's certainly did not. The increases are consistent with Mobil outlets having led the price up, consequent upon an increase in Melbourne petrol prices, with others following on the morning of 3 September, particularly Chisholm. It is highly unlikely that Chisholm would have been party to the implementation of an arrangement or understanding to increase its prices in line with those of Leahy and Apco, but would have delayed doing so until around 08.00 the following morning. Obviously, those responsible for setting prices at Chisholm were only prepared to increase if they saw that the rest of the market had actually moved. Ian Carmichael's call to BP Corford Express may well have been for the purpose of conveying information that the Geelong petrol market had moved, and Anton Maurer may well have passed on this information to those in Melbourne who set BP Corford Express's petrol prices. This may have resulted in a price increase, but not to the same price as Leahy or Apco. 455 The probability is that the increases occurring during this period were not the result of the giving effect to of any arrangement or understanding. In other words, the alleged provisions of that arrangement involving Leahy contacting other competitors in the market were not put into effect. 457 The only possible relevant calls occurred on the morning of Thursday, 9 September 1999, when the Leahy office rang Peter Anderson at 10.05 for 28 seconds and then one hour and 40 minutes later the Leahy office rang the Apco office for 22 seconds. The Apco office rang the Leahy office at 14.46 for 16 seconds. At 18.15, Ian Carmichael reached Peter Anderson's message bank, but the call was apparently not returned on that day. The ACCC contended that, as early as 14.46, Apco had advised Leahy of an overnight price increase. Although Leahy did nothing to pass on this information to any other operator in the Geelong petrol market, it is contended that both Leahy and Apco implemented the arrangement or understanding by increasing their prices overnight. The ACCC alleged that the call from Ian Carmichael to Peter Anderson's message bank at 18.15 was an attempt to confirm the information. 458 Perhaps inconsistently with this theory, at 18.43, the price at BP Hillford diminished from 72.5 to 71.9, the latter being the most common price in the market at that time. If Mr Warner gave instructions for a price increase for Leahy before he ceased work for the day, it is hard to see how he would have given instructions for this decrease if he already knew that there was to be a price rise overnight. The data in Annexure B does not show any means by which Michael Warner would have ascertained information that would have caused him to give a subsequent instruction for an increase. 459 A more likely scenario is that Ian Carmichael learned from Phil Carmichael of an impending Mobil increase. At 18.12, Aaron Incoll from Mobil spoke to Phil Carmichael for one minute. At 18.14, Phil Carmichael rang Ian Carmichael for one minute. This was immediately prior to Ian Carmichael's call to Mr Anderson, which may have been an attempt to pass on information about a pending Mobil increase. At 18.19, Ian Carmichael rang Phil Carmichael back for 30 seconds, following which Phil Carmichael rang Aaron Incoll for three minutes. Mobil sites did begin to increase. Again, there is the difficulty of time ranges. The possible earliest of the increases to 77.5 at Mobil outlets was Mobil Newcomb between 14.07 on 9 September and 07.27 on 10 September. Mobil Moolap moved between 17.38 and 07.03. Mobil Gateway moved between 20.03 and 06.59. Mobil East Belmont moved between 20.54 and 07.52 and Mobil Grovedale moved between 21.09 and 06.38. Definite times for Mobil increases are available for Mobil Geelong North (21.25 on 9 September), Mobil Highton (21.37 on 9 September), and Mobil Latrobe Terrace (23.24 on 9 September). Interestingly, Chisholm moved its prices at Chisholm Grovedale and Chisholm Geelong West up to 77.5 at 20.09 and 21.59 respectively, with Chisholm Leopold only going up at 09.21 the following morning. 460 In the midst of all this market movement, Leahy increased its price at BP Torquay to 77.5 at 22.53 and its price at BP Hillford to 77.5 at 23.42. The Apco increases were all to 77.5, and began at Apco Geelong East at 23.40. This was followed by Apco Newcomb at 00.58, Apco Geelong North at 02.05, Apco Lara at 02.15, Apco Highton at 03.07 and Apco Geelong South at 03.30. 461 It is stretching credulity to suggest that Arrangement No 1 was implemented by means of a telephone call at 14.46 on 9 September, with price rises by Leahy and Apco not occurring until almost midnight. Those price increases are far more likely to have been a reaction to Mobil's lead. In the same way, Chisholm also apparently reacted to Mobil's lead, or acquired its information about a possible market increase from sources other than Leahy, or was driven to increase its price by removal of price support consequent upon a move in the Melbourne petrol market. The period is a good illustration of the danger of assuming Chisholm's motivation in increasing its prices at closing time to be the implementation of an arrangement or understanding. The ACCC's case is certainly not made out in respect of this period. The call cycle relied on began at 16.47 on Monday, 13 September 1999, with a call from Apco to the Leahy office for two minutes and 19 seconds. This was longer than would be required just to discuss a prospective price increase. It was followed by calls from the Leahy office to United Fuels at 16.51 for 42 seconds, Chisholm at 16.52 for 45 seconds and BP Corford Express at 16.53 for one minute and 17 seconds. Graeme Chisholm gave evidence that the call to Chisholm may have fitted in with a trend of calls in which Chisholm was told that prices were going up, and then made its own decision about what it would do. He said that Chisholm was often told that prices would rise at close of business that night, possibly for opening time in the morning. 463 Leahy increased its prices at BP Torquay at 22.42 and BP Hillford at 23.40 that night, both from 72.9 to 77.5. The Apco increases were of the same magnitude and were timed at 23.57 for Apco Geelong East, 00.41 on 14 September for Apco Highton, 00.59 for Apco Geelong North, 01.18 for Apco Lara, 01.39 for Apco Newcomb and 03.35 for Apco Geelong South. 464 In the meantime, there was the usual pattern of Mobil increases that seems to have accompanied price rises in this period. Mobil Highton increased from 72.9 to 77.5 at 21.40 on 13 September. So did Mobil Latrobe Terrace at 23.03. Mr Warner gave evidence that he would not have been influenced by the former of these increases, because he would have given instructions for the price rise at about 17.30, when he left work to go home. The ranges of other Mobil site increases were certainly later than 17.30, so that if Mr Warner's speculation (it was not recollection) about when he would have given instructions is accurate, then he would not have been influenced by Mobil price increases. It is possible, therefore, that Leahy was influenced by information it received from Apco to increase its prices before closing time on 13 September. It is also possible that Apco waited until an increase at Mobil stations was evident before increasing its prices. Chisholm clearly waited until the morning of 14 September, increasing at Chisholm Geelong West at 07.32, Chisholm Leopold at 08.16 and Chisholm Grovedale at 08.43, each from 72.9 to 77.5. Between the Leopold and the Grovedale increases, Chisholm received a phone call from the Leahy office for one minute and 12 seconds, which Graeme Chisholm thought might have been a call to point out that Chisholm Grovedale had not increased its price. According to his evidence, normally all Chisholm sites were instructed to go up at the same time, so the operator at Chisholm Grovedale must have been too busy to put the price up earlier. If that were the case, Chisholm would not have been influenced by the call at 08.19. The decision to increase its prices had already been made. Graeme Chisholm said that the decision on this occasion would have been made after Darren Campigli had spotted board prices on his way to work and had seen that the prices had increased. 465 At 12.58, Phil Carmichael telephoned the Leahy office for one minute. At 12.59, Leahy telephoned Chisholm for one minute and 50 seconds. Graeme Chisholm said that he thought that this would have been a complaint call about 7-Eleven not having risen, but on this occasion there was no communication from Chisholm to 7-Eleven concerning that, so that the call might have been about something else altogether. 466 This period fell during the time that Eino Heikkila was on holidays, leading up to his departure from United Fuels. Although the call from the Leahy office to United Fuels at 16.51 on 13 September may have been to pass on information about a potential price increase, there was no-one at United Fuels to act on it. It was not suggested to Mr Riordan or Mr Hambrook that either of them had done so. Mr Heikkila did not suggest that anyone else at United Fuels was involved in price setting, or in acting on calls received from other market participants about prospective price increases. Interestingly, the average price at Shell Waurn Ponds rose from 73.2 to 77.0 on 14 September. Shell Victoria Street also increased from 73.4 to 76.6, suggesting a rise late in the day, when other market participants had begun to drop their prices from 77.5 to between 76.7 and 76.9. It is also interesting to notice that BP Corford Express did not increase until 07.41 on 14 September, suggesting that the telephone call from Leahy to it at 16.53 on 13 September was not influential in the decision to increase. 467 All that can be said about this period is that it is possible that Apco communicated to Leahy information about a prospective price increase in a call dealing with that as well as another subject or other subjects. Leahy may well have acted on the information in deciding to increase its price, but it is likely that Apco reserved its position until it saw that Mobil sites were increasing. It is even more likely that Chisholm did not act on the information alone, but waited to confirm that a price increase had occurred before raising its prices on the morning of 14 September. Viewed in isolation from surrounding data, the data in Annexure B is consistent with the giving effect to of Arrangement No 1, but it is unlikely that effect was given to Arrangement No 3, because Chisholm obviously waited to see what others in the market would do. The relevant call cycle began with a call from Peter Anderson to the Leahy office at 16.15, lasting up to three minutes. At 16.18, Leahy rang Chisholm for one minute and 12 seconds. At 16.19, Leahy rang United Fuels for 37 seconds. At 16.23, Leahy rang BP Corford Express for 22 seconds. At 16.40, Leahy again rang United Fuels for 41 seconds. This time, Chisholm increased its prices before closing on the evening of 16 September. It moved from 74.9 to 78.7 at Chisholm Grovedale at 20.02, from 75.7 to 78.7 at Chisholm Leopold at 21.57 and from 74.5 to 78.7 at Chisholm Geelong West at 22.05. The ACCC contended that these were the first increases recorded in the market. It is possible that they were not the first increases to occur, however, because Mobil Newcomb increased from 74.9 to 78.7 between 17.56 on 16 September and 06.23 on 17 September and Mobil East Belmont increased similarly between 19.54 and 06.15. 469 The Apco increases, also to 78.7, began at Apco Geelong East at 23.59 on 16 September. This was followed by Apco Lara at 00.17 on 17 September, Apco Geelong North at 00.58, Apco Highton at 02.01, Apco Geelong South at 04.04 and Apco Newcomb at 04.07. 470 Once again, although Mr Heikkila was on holidays and no-one else at United Fuels was involved in any arrangement or understanding on its behalf, the average price at Shell Waurn Ponds increased from 75.4 to 77.8 during 17 September, and Shell Victoria Street increased to 78.4 at some time during the day, possibly late when the market was moving slightly down from 78.7 towards this figure. The United Fuels data during Mr Heikkila's absence in September 1999 illustrates the danger of assuming a connection between a price rise and an earlier telephone call. At best, with Mr Heikkila absent, the telephone calls would have been regarded as containing an item of information to be taken into account in setting prices, and certainly would not have been regarded as determinative. 471 The principal factor suggesting collaboration in raising prices in this period is the temporal proximity between the rises of Leahy and Apco. During this period, Chisholm's increases occurred at or near closing time for its outlets, as did those of Leahy. Consistently with Mr Warner's evidence, instructions for the Leahy increases may have been given before he ceased work for the day on 16 September, not very long after the phone calls. Nevertheless, there are difficulties about accepting that the data is consistent with the oral evidence. The call cycle was late in the afternoon and the price rises were overnight, so it would be necessary to disregard Ian Carmichael's evidence about the maximum of two hours elapsing between a phone call from Peter Anderson and a price increase. The Mobil increases may indicate the possibility of an increase in the Melbourne petrol market flowing to Geelong. It is a poor example from the ACCC's point of view, because the price rise concerned was only 2.0, and was already occurring in the Geelong petrol market well before any relevant call cycle. 473 The Mobil outlets increased overnight from 20 to 21 September, each adopting 77.9 as its price. Increases to that figure were recorded at Mobil Geelong North at 21.39, Mobil Highton at 21.46 and Mobil Latrobe Terrace at 23.32 on 20 September. The range of times within which other Mobil sites might have increased began as early as 17.49 at Mobil Moolap, 18.10 at Mobil Grovedale, 18.22 at Mobil Newcomb, 18.28 at Mobil Gateway, 20.42 at Mobil Belmont, 20.52 at Mobil East Belmont, 22.24 at Mobil Corio Village and 22.26 at Mobil Manifold Heights. The Mobil sites all again lowered their prices to 75.7 during the morning on 21 September. This is evidence that a price increase had occurred in Melbourne, and Mobil had tried to introduce it into Geelong, but it had not by then taken effect. The next move was made by Caltex Quick Bite at 08.54, moving to 77.5. At 09.23, Caltex Quick Bite lowered its price to 76.9. At 10.30, Apco head office rang the Leahy office for one minute and 14 seconds. The call was fairly clearly not made by Peter Anderson, because at precisely the same time he was telephoning Bruno Gallucci on his mobile telephone, the call being transmitted through Geelong. (Mobile telephone calls from the Apco head office generally registered as having been made from Geelong North, so Peter Anderson was unlikely even to have been in the office at that time. ) At 10.33, the Leahy office spoke to Mr Anderson on his mobile phone for one minute and eight seconds. At almost 10.35, the Leahy office telephoned Chisholm for one minute and 14 seconds, then immediately telephoned United Fuels for 50 seconds, Phil Carmichael for 34 seconds and BP Corford Express for 15 seconds. Within minutes, at 10.49, Apco Geelong South increased from 75.7 to 77.5. This was followed by identical increases at 10.50 at BP Hillford, 11.00 at Apco Newcomb, 11.04 at Apco Geelong North, 11.05 at Chisholm Leopold, 11.05 at Chisholm Geelong West, 11.06 at Chisholm Grovedale, 11.09 at BP Torquay, 11.15 at Apco Geelong East, 11.18 at Apco Lara, and 12.05 at Apco Highton. BP Corford Express also increased from 75.9 to 77.5 at 12.00. 474 At 11.22, Phil Carmichael rang the Leahy office. At 11.23, the Leahy office returned the call for two minutes and 36 seconds, more than long enough to talk about a price increase. This was followed by a call at 11.26 from the Leahy office to Chisholm for 52 seconds, and another one of the same length at 11.45. At 11.46, Chisholm rang Jacques Bodourian for 31 seconds. 7-Eleven Newcomb increased its price from 75.7 to 77.5 between 11.43 and 12.05, and 7-Eleven Geelong East increased from 75.9 to 77.5 between 13.17 and 13.26. 475 This is the first occasion on which it can be said that the timing of the call cycle and subsequent price increases fits the pattern described by Ian Carmichael. Other aspects of the data on this occasion do not fit that pattern, however. Once again, the ACCC's analysis failed to take account of the possible timing of increases at Mobil outlets. Mobil Newcomb moved to 77.5 at some time between 09.15 and 11.57 on the morning of 21 September. Mobil Point Henry's move to the same price came after 09.51 and before 14.17. It is highly likely that what was discussed in the telephone calls was information about a rise already occurring, especially in light of the early move at Caltex Quick Bite. The small size of the price increase involved (1.8 in most cases) is also an element that makes this occasion not fit squarely within Ian Carmichael's pattern. Once again, it must be remembered that Mr Heikkila was not at United Fuels, but the average price at Shell Waurn Ponds increased from 76.0 to 76.9 on 21 September. Shell Victoria Street lifted its price to 76.6 at some stage during the day, but it is not clear when. 476 Nor is it clear why there should have been what appears to be another call cycle after Apco, Leahy and Chisholm had increased their prices. At 12.54 on this day, Ian Carmichael spoke to the Apco office for four minutes. At 13.13, he again spoke to the Apco office for one minute and 30 seconds. At 13.36, the Leahy office rang Phil Carmichael for 19 seconds. At 13.56, the Leahy office rang Chisholm for one minute and 54 seconds. At 14.06, there was a call from Ian Carmichael to Chisholm for one minute and 30 seconds. At precisely the same time, the Leahy office rang Chris Andrianopoulos, so it appears that the call was not made by Ian Carmichael, who was engaged on a conversation with Chisholm. A call from Mr Andrianopoulos to Mr Shuvaly of 18 seconds is listed as occurring at exactly the same time as the Leahy call to Mr Andrianopoulos, which is mysterious. The ACCC's submissions ignored this and suggested that the purpose of this call was for Leahy to inform Andrianopoulos, and for Andrianopoulos to inform Liberty, of a price rise that had already occurred. At 14.07, Leahy rang Chisholm again for two minutes. At 14.36, Chisholm rang Leahy for one minute and 20 seconds. At 14.38, Leahy rang United Fuels for 59 seconds and at 14.53, Phil Carmichael rang Leahy for one minute. No further price increases beyond the limited one that had occurred that day took place. Indeed, discounting to 77.3 began at Mobil and Apco outlets from 15.04 onwards. 477 This occasion provides some support for the ACCC's contention that information about price increases was passed by telephone by Apco to Leahy and by Leahy to other participants in the Geelong petrol market. On this occasion, however, it is unlikely to have been information that was instrumental in procuring the price increases that took place, having regard to the fact that Mobil and Caltex Quick Bite had already apparently begun to bring into Geelong a relatively small price increase from the Melbourne petrol market. It is hard to see why Phil Carmichael would have been using Leahy to approach Chisholm to attempt to procure an increase by 7-Eleven, and why Leahy and Chisholm would have acted in this respect, when the price rise generally was plainly one that would stick and was of such a small amount in any event. Again, the call cycle was one that occurred during the afternoon. At 16.44, Peter Anderson telephoned Leahy, the call being transmitted through Werribee. The call lasted two minutes and 30 seconds, more than long enough to speak about a prospective price increase. At 16.47, Leahy telephoned Chisholm for one minute and 33 seconds. At 16.49, Leahy telephoned United Fuels for 53 seconds. Mr Heikkila was still on holidays. At 16.50, Leahy telephoned BP Corford Express for 19 seconds. 479 Again, there is the possibility that some Mobil outlets in fact led the price increase. In particular, Mobil East Belmont increased from 75.4 to 78.7 at some time between 14.25 on 23 September and 06.16 on 24 September. So far as the data in Annexure B is able to fix times, the first increase was at Chisholm Grovedale, to 78.7, at 20.04 on 23 September. This was flanked by small decreases, to 74.9 at Caltex Quick Bite at 19.03, Apco Geelong North at 19.49, Apco Lara at 20.18 and Apco Highton at 20.53. The decreases were of 0.5 to 1.0. Mobil Geelong North increased to 78.7 at 21.46. Chisholm Leopold did likewise at 21.57 and Chisholm Geelong West at 21.58. Mobil Latrobe Terrace also increased to 78.7 at 23.32. In the early hours of the morning of 24 September, there were increases to 78.7 at Apco Geelong East at 00.07, Apco Geelong North at 00.59, Apco Newcomb at 01.20, Apco Lara at 01.39, Apco Highton at 02.04 and Apco Geelong South at 03.24. Leahy did not move until 08.04 at BP Hillford and 08.19 at BP Torquay. In the meantime, prices at a large number of Mobil outlets went up, and the two 7-Eleven sites and BP Corford Express had also increased, although in two cases the amounts were slightly different. The average price at Shell Waurn Ponds increased from 75.4 to 77.3 on 24 September, and Shell Victoria Street rose at some time during the day to 78.3. 480 This is an occasion on which it is fairly clear that Leahy did not give effect to Arrangement No 1 or to Arrangement No 3, because its price increase was substantially later than those of Chisholm and Apco. The ACCC conceded that it is probable that Leahy only increased after spotting board prices on the morning of 24 September, confirming that the rise had occurred. Graeme Chisholm speculated in his evidence that the Chisholm increases were probably the result of Darren Campigli's observation of board prices on his way home from work. He said that it would not have been normal for Chisholm to agree to go up straight away. He surmised that Chisholm must have been 'taking a hammering', so decided that the sooner it could get the price up, the better. I take it that this was intended to convey that it is likely that Caltex had removed Chisholm's price support, leaving it with no choice but to increase its price. This is a period that does not support the ACCC's case. The call cycle began on the afternoon of 27 September at 16.16, when Leahy telephoned Chisholm for one minute and 33 seconds. At 16.18, Leahy telephoned BP Corford Express for 13 seconds. At 16.19, Leahy telephoned Phil Carmichael, but simultaneously Leahy telephoned the United Fuels office for 20 seconds. It is likely that these two calls were made by different callers in the Leahy office. Chisholm telephoned Leahy at 17.42, but only for three seconds. 482 Chisholm increased its prices from 73.5 to 78.7 at Chisholm Grovedale at 19.56, Chisholm Leopold at 21.54 and Chisholm Geelong West at 21.56, all apparently close to closing time for those outlets. Leahy increased its price at BP Hillford by the same amount at 23.43, probably close to closing, but its increase at BP Torquay did not occur until 16.22 on 28 September. Mr Warner explained this on the basis that the manager at BP Torquay probably disobeyed a direction on 27 September to increase the price earlier, as he tended to be 'a law unto himself'. 483 Once again, the simplicity of the picture is clouded somewhat by increases at Mobil outlets. An increase from 73.5 to 78.7 occurred at Mobil East Belmont some time between 17.17 on 27 September and 06.36 on 28 September. Mobil Moolap increased similarly between 17.33 and 08.34. Mobil Newcomb's identical increase was between 18.46 and 07.22. The earliest times for some other Mobil outlets were later in the evening of 27 September. Mobil Geelong North certainly increased at 22.01 and Mobil Latrobe Terrace at 23.25. It is clear that Mobil was introducing into the Geelong petrol market during this period a price increase following one that had probably occurred in the Melbourne petrol market. The situation is therefore consistent with Chisholm's decision being made on the basis that Caltex had withdrawn price support, consequent upon the Melbourne increase. Bearing in mind that a call was made to United Fuels, it is also worth noting that Mr Heikkila was still on holidays, that the average price at Shell Waurn Ponds increased from 73.7 to 78.2 during 28 September, but that Shell Victoria Street rose to 78.0, probably late in the day when a number of outlets, including Chisholm, Leahy and several Mobil outlets, had dropped to 77.9. 484 This is another period in which the data is consistent with an innocent explanation and does not fit Ian Carmichael's pattern. I ought not to find that there was any giving effect to of any arrangement or understanding in those circumstances. It was during this period that United Fuels ceased to conduct its business, which was taken over by United Retail. 486 So far as Leahy and Chisholm were concerned, the price increase in this period amounted to 3.2, from 75.5 back to 78.7. It is also worth noting that an increase of this order occurred at Apco Geelong East at 23.30 on 30 September, and at Apco Geelong North at midnight, without any apparent contact between Apco or Peter Anderson and Leahy about any pricing issues. The average price at Shell Waurn Ponds increased on 1 October from 75.4 to 77.8, suggesting a rise at some time during the day, but not particularly early. 487 The relevant call cycle began at 17.24 on 30 September, when Leahy telephoned Chisholm for 33 seconds. At 17.25, Leahy telephoned United Fuels for 39 seconds. At 17.27, Leahy telephoned BP Corford Express for 38 seconds. Only after those calls had occurred, at 17.35, did Peter Anderson telephone Leahy for two minutes, longer than would be required to find out about a price increase. 488 Once again, Chisholm increased at its relevant three outlets shortly before closing, 20.10 at Chisholm Grovedale, 22.02 at Chisholm Geelong West and 22.15 at Chisholm Leopold. Leahy increased at BP Hillford at 23.27. Anomalously, it had already increased its price at BP Torquay from 76.9 to 78.7 at 08.17 on 30 September, suggesting that even as early as that there was already information current about an increase back to that figure, perhaps reflecting Melbourne petrol prices. 489 Once again, the position is complicated by the Mobil outlets, where similar price increases could have occurred as early as 18.08 at Mobil Gateway, 18.26 at Mobil East Belmont, 18.32 at Mobil Newcomb and 19.46 at Mobil Point Henry. Again, this is suggestive of a price rise in Melbourne and the real possibility of removal of price support from Chisholm, precipitating its decision to anticipate the general rise by lifting its prices at closing. Mobil Highton certainly increased at 21.41 and Mobil Geelong North at 21.52. The latter increase probably had more to do with the Apco increases than anything else. 490 The ACCC relied on Mr Warner's evidence that he would have given instructions for the BP Hillford increase before he ceased work for the day. This does not explain the much earlier BP Torquay increase to what was to prove to be the market price in the Geelong petrol market in the evening and the following morning. 491 There is also a suggestion that a call by Phil Carmichael to Ian Carmichael at 07.51 on 1 October for one minute was a complaint call about 7-Eleven not having risen. Certainly, the call was followed immediately by a call from Leahy to Chisholm for one minute and 33 seconds, but Chisholm does not appear to have acted on the information. 7-Eleven Geelong East had already increased to 78.7 between 07.06 and 07.11, and 7-Eleven Newcomb rose similarly between 08.12 and 08.19. 492 What is somewhat mystifying is the occurrence of what appears to be a classic call cycle on the morning of 1 October, which was not followed by any price increase. At 11.28, Mr Anderson rang Leahy for one minute and 30 seconds. At 11.30, Leahy rang United Retail for 25 seconds. At 11.38, Leahy rang Chisholm for one minute and 12 seconds. This illustrates the difficulty of relying on apparent call cycles as involving the implementation of arrangements or understandings, when those call cycles are followed at some later time by price increases. It does not allege the implementation of Arrangement No 1, because a significant call from Apco to Leahy was omitted originally from Annexure B. It now appears there, at the start of what is relied on as a call cycle. 494 Relevant telephone communications occurred in the afternoon of 7 October. At 14.27, Alan Shuvaly rang Chris Andrianopoulos for one minute and 30 seconds. At 15.16, Mr Shuvaly again rang Mr Andrianopoulos for 30 seconds. At 15.52, Mr Shuvaly rang Peter Anderson for 30 seconds. At 16.00, Apco rang Mr Shuvaly for two minutes and two seconds. At 16.02, Apco rang the Leahy office. The call lasted three minutes and 48 seconds, so it must at least have involved matters other than just a prospective price increase. This is the call that originally did not appear in Annexure B. At 16.03, Mr Shuvaly rang Mr Andrianopoulos for one minute. At 16.06, there began what is described as the call cycle from Leahy. Leahy rang Chisholm for one minute and 15 seconds. Leahy had already rung Chisholm at 15.20, for 18 seconds, before Leahy had received the call from Apco, so it might have been the case that Leahy was simply ringing Chisholm again at 16.06 about something unrelated to price increases. Leahy then rang BP Corford Express for 26 seconds at 16.08. Immediately, Leahy rang the United Retail office. Of course, Mr Heikkila was no longer there and Mr Williamson, whom the ACCC alleges was the channel of communication between Leahy and United Retail, worked at Shell Waurn Ponds, not in the United Retail office. This call again illustrates the danger of assuming that what appears to be part of a call cycle is necessarily related to the implementation of an arrangement or understanding. In this case, the call clearly was not about a price increase. No arrangement or understanding even existed between Leahy and United Retail one week after United Retail had begun operating, because no such arrangement or understanding had had time to evolve (see [169] --- [171]). 495 Chisholm lifted its prices from 72.9 back to 78.7 at about closing time for its various outlets, Chisholm Grovedale at 20.00, Chisholm Leopold at 21.56 and Chisholm Geelong West at 22.06. Leahy increased its prices at BP Hillford from 72.5 to 78.7 at 23.35 and from 73.5 to 78.7 at BP Torquay at 23.40. In the meantime, of course, Mobil outlets were increasing in the evening, the earliest possible time for which was Mobil Moolap at 18.23. This increase, which was to 78.8, could have occurred at any time up to 06.36 on the morning of 8 October, and was fairly quickly followed by a drop from 78.8, to 78.7, to match other prices. Mobil Geelong North certainly increased at 21.47 on 7 October to 78.7. So did Mobil Latrobe Terrace at 23.48. The Apco increases began with Apco Geelong North at 00.57 on 8 October. This was followed by Apco Lara at 02.14, Apco Highton at 02.15, Apco Geelong South at 02.58 and Apco Geelong East at 05.39. The 7-Eleven outlets also rose early in the morning, 7-Eleven Newcomb between 05.57 and 06.06 and 7-Eleven Geelong East between 07.05 and 07.14. So did Shell Latrobe Terrace at 07.01, Shell Belmont at 07.38 and Shell Speedwings at 07.43, most probably reflecting the fact that a Melbourne petrol price increase was flowing into the Geelong petrol market yet again. Certainly, there was no suggestion of any equivalent of Arrangement No 5 existing by this time, and there is no record in Annexure B of any communication with Garry Dalton on the part of anybody. 496 Once again, it is unsafe to assume in these circumstances that Chisholm acted on the basis of a phone call to increase its price, since an impending increase might have brought about the cessation of its price support from Caltex. While Leahy may have acted upon the information it received from Apco, there is no reason to suppose that it did so because it had any arrangement or understanding with Chisholm. 497 The issue of giving effect to Arrangement No 8 is even more problematic. The only witness who gave oral evidence about this alleged arrangement or understanding was Mr Shuvaly. There is no suggestion in his evidence that he was ever the initiator of a move to coordinate a price increase on the part of Liberty, Andrianopoulos and Apco. It is highly likely that the calls that occurred between Mr Shuvaly and Mr Andrianopoulos, and between Mr Shuvaly and Mr Anderson at Apco on the afternoon of 7 October 1999 were for another purpose altogether. When asked about the many calls shown in Annexure B for 7 October, Mr Shuvaly said, 'I guess there has been a market move, there were obviously some discrepancies I guess with either ourselves or somebody in the market that wasn't moving. ' There is no support in the data for 7 October for the suggestion that anybody had made a move in the Geelong petrol market on 7 October, before Mobil or Chisholm led the price increases in the evening. The Apco increases took place in the early hours of the morning on 8 October. Liberty's average price for that day increased from 72.6 to 78.2, making it difficult to determine when any increase or increases occurred. Andrianopoulos increased its price from 72.9 to 78.3, then lifted it to 78.7 and lowered it again to 72.5 on the same day. It is impossible to say that any arrangement or understanding to increase prices on the part of those three parties was implemented during this period. On this occasion, a price rise in the Geelong petrol market was clearly led by Brumar. At 12.48, Shell Latrobe Terrace increased its price from 68.5 to 76.9. Shell Norlane did the same at 13.11 and Shell Anglesea increased from 69.5 to 77.9 at 13.37. Shell Belmont followed at 14.03, from 68.5 to 76.9, as did Shell Highton at 14.07. At 14.27, Leahy telephoned Chris Andrianopoulos for one minute and 38 seconds. At 14.29, Leahy telephoned Chisholm for four minutes and 23 seconds. Having regard to the respective lengths of these calls, it is unlikely that they were about price increases in any event, although information about prices may have been passed during the calls. 499 Leahy's price increase was almost immediate, at 14.33. It matched the Brumar price of 76.9. At 14.40, Leahy increased its price at BP Torquay to 76.9. Apco, Mobil and BP Corford Express increased their prices at various outlets during the afternoon. Chisholm did not implement any increase until 16.29 when it lifted its price at Chisholm Leopold to 76.9. This was followed by similar increases at Chisholm Grovedale at 16.34 and Chisholm Geelong West at 16.42. In the meantime, Leahy had rung Chisholm at 15.15 for 20 seconds, at 15.59 for one minute and 15 seconds, at 16.03 for one minute and eleven seconds and at 16.30 for one minute and 26 seconds, and had received a phone call from Chisholm at 16.06 for 17 seconds. There was a further eight-second call from Leahy to Chisholm at 17.28. Whatever it was that Leahy and Chisholm were talking about on that day, it is far-fetched to suggest that they were implementing an arrangement or understanding to increase prices at or about the same time. The passage of time between the Leahy increases and the Chisholm increases is sufficient to discount this altogether. The fact that the market generally was moving to 76.9 makes it abundantly clear. 501 At 14.43 on 4 November 1999, Peter Anderson telephoned Leahy for 30 seconds. At 14.57, Mr Anderson again telephoned Leahy, this time for four minutes and 30 seconds. Whatever business he had with Leahy on that occasion was not only about petrol prices, although he might have passed information about them during either call. 502 Leahy made two calls to Chisholm, one at 15.01 for 36 seconds and one at 15.17 for one minute and 58 seconds. At 15.19, Leahy rang Phil Carmichael for 30 seconds. At 15.23, Leahy rang BP Corford Express for 39 seconds. Ian Carmichael made two calls to David Mortimer, one at 17.50 for 30 seconds and one at 17.51 for one minute. 503 Chisholm increased its prices from 71.5 to 78.7 at about closing time on that evening, Chisholm Grovedale at 21.07, Chisholm Leopold at 21.43 and Chisholm Geelong West at 22.09. Apco began increasing at Apco Geelong East at 22.58, from 71.3 to 78.7. Leahy increased its price at BP Hillford from 71.5 to 78.7 at 23.39 and at BP Torquay at 23.57. Other Apco outlets increased from 71.3 to 78.7, Apco Highton at 00.16 on 5 November, Apco Newcomb at 00.39, Apco Geelong North at 01.59, Apco Lara at 02.14 and Apco Geelong South at 02.30. 504 Once again, there is a considerable time-lag between telephone calls and price increases, much greater than that to which Ian Carmichael referred. Once again, there were possible Mobil increases, this time perhaps as early as 19.28 at Mobil Moolap and 19.51 at Mobil Gateway, although Mobil Geelong North did not increase until 06.00 on 5 November and Mobil Corio Village until 06.11 on that day. This presents the possibility that prices in the Melbourne petrol market had risen, and that Mobil was about to implement them. It also presents the possibility that Caltex had withdrawn price support from Chisholm, thereby precipitating Chisholm's increase. 505 In this period, it is no doubt possible that Apco passed information to Leahy, which passed it to Chisholm and others about an impending price increase, probably based on a Melbourne increase. Even assuming that the instruction for Leahy's increases was given before Mr Warner finished work on 4 November, there is no reason to suppose that Chisholm did not take into account other factors (such as the withdrawal of price support) or that Apco did not take into account the fact that Mobil price increases had already begun to occur, before it implemented its own. 506 The ACCC's submission also drew attention to a phone call from Phil Carmichael to Leahy at 08.42 on 5 November, for 30 seconds, followed by a call from Leahy to Chisholm at 08.44 for 56 seconds. The suggestion was that Phil Carmichael was complaining about the failure of 7-Eleven to increase its prices, and that Leahy was attempting to use Chisholm as a channel to reach Jacques Bodourian. 7-Eleven Geelong East had already risen between 06.46 and 07.42, at least an hour earlier than Phil Carmichael's call, but it is feasible that he was unaware of this increase when he made the call, because 7-Eleven Newcomb was closer to the Portcliff outlets at Mobil Newcomb and Mobil Gateway. Chisholm did not telephone Mr Bodourian on this occasion, and 7-Eleven Newcomb did not increase its price until between 09.39 and 09.49. 507 There were other telephone communications between Leahy and Chisholm at 09.03, 10.53, 17.14 and 17.24 on 5 November. Indeed, there was what appears to be a call cycle beginning at 17.12 that afternoon when Apco telephoned Leahy for 47 seconds, Leahy telephoned Chisholm for 28 seconds and Leahy telephoned BP Corford Express for 29 seconds, but there was no associated price increase. This again illustrates the danger of assuming that what appears to be a call cycle is related only to price increases. 509 The call cycle began at 15.42, with a phone call from Peter Anderson to Leahy, timed at one minute. At 15.43 on 11 November 1999, Leahy telephoned Chisholm for 49 seconds. At 15.44, Leahy telephoned Phil Carmichael for 16 seconds. At 15.45, Leahy telephoned BP Corford Express for 14 seconds. No increases occurred until close to Chisholm's closing times, with Chisholm Grovedale moving from 71.5 to 78.7 at 21.06, Chisholm Leopold doing likewise at 21.53 and Chisholm Geelong West the same at 22.03. BP Hillford moved from 71.5 to 78.7 at 23.43. The first Apco increase was at midnight, at Apco Geelong North. This was followed at 00.24 on 12 November by Apco Highton, at 00.46 by Apco Newcomb, at 02.38 by Apco Geelong South and at 05.39 by Apco Geelong East. BP Torquay increased from 72.9 to 78.7 at 05.45 on 12 November, presumably on opening. BP Corford Express moved from 72.5 to 78.7 at 07.18 on 12 November. 510 Once again, there are Mobil increases that could have preceded any of the above increases on 11 and 12 November 1999, with the earliest time for Mobil Newcomb being 18.18, Mobil Point Henry 18.39, Mobil East Belmont 19.00, Mobil Corio Village 19.39, Mobil Belmont 21.51, Mobil Gateway 22.05 and Mobil Manifold Heights 22.32. Mobil Geelong North increased at 06.04 on 12 November. 511 The pattern is by now familiar. It appears that Mobil was in the process of implementing a price increase in Geelong, probably based on an increase in Melbourne. Chisholm may have been forced to move by the removal of price support resulting from the same Melbourne increase. Apco may have only increased its prices when it became aware of increases at Mobil outlets. Whilst the data in Annexure B for this period is consistent with the ACCC's case, there remains the possibility that there were factors motivating Chisholm and Apco to increase other than simply their communications with Leahy, even assuming that the instructions for Leahy's increases were given before Michael Warner finished work for the day on 11 November. 512 The ACCC also contended that a call at 07.43 on 12 November from Phil Carmichael to Ian Carmichael, lasting one minute, was probably a complaint call about 7-Eleven. This is unlikely, because it was not until 08.11 on that morning that Leahy called Chisholm for 39 seconds. Leahy called Chisholm again at 08.40. The time delays are inconsistent with the desire to pass on a complaint. Leahy telephoned Chisholm at 16.28 for 30 seconds and then telephoned BP Corford Express at 16.29 for 20 seconds. Chisholm increased its prices at Chisholm Geelong West at 21.51 and at Chisholm Leopold at 22.06, both from 72.5 to 78.7. Leahy increased its prices at BP Torquay from 73.5 to 78.7 and at BP Hillford from 72.5 to 78.7 at 22.42 and 23.46 respectively. Once again, there are Mobil outlets that could have preceded these increases, the range at Mobil Newcomb beginning at 16.40, at Mobil Moolap at 18.08 and at Mobil Gateway at 19.06. Again, the inference is that the Melbourne petrol market had moved and Mobil was implementing the move in Geelong. Price support may well have been withdrawn for Chisholm as a consequence of the Melbourne price move. In the light of an equally available inference of innocence, it would be wrong to find that Arrangement No 3 was given effect to on this occasion. This is the first occasion on which such an allegation is made in respect of Arrangement No 6, alleged to be an arrangement or understanding between Leahy and United Retail. 515 The occurrence of an increase in prices in the Melbourne petrol market, about to flow into the Geelong petrol market on Friday, 3 December 1999 was signalled on the morning of Thursday, 2 December. At 09.36 on that day, the price at Shell Speedwings rose from 75.9 to 79.9. An identical rise occurred at 11.02 at Shell Norlane. These rises at two very prominent sites would have alerted those who were board-spotting in Geelong to the likelihood of a price increase. Brumar could not force the market up by itself, and both Shell Norlane and Shell Speedwings dropped back to 75.9 at 07.01 and 07.29 respectively on the morning of 3 December. Prices generally moved downwards to about 74.9 on that morning. There was a very considerable amount of telephone traffic between Leahy and Chisholm during the morning, but no reliance is placed on it. The relevant call cycle, which took place during the afternoon, was also very involved. At 16.10 on 3 December 1999, Ian Carmichael rang Peter Anderson for 30 seconds. At 16.12, Mr Carmichael rang BP Corford Express for one minute. At 16.14, he rang Chisholm for one minute. At 16.15, he rang BP Corford Express again for 30 seconds. At 16.16, Ian Carmichael rang Colin Williamson for one minute. At 16.17, Ian Carmichael rang Phil Carmichael for one minute. At 16.18, Colin Williamson rang Shell Waurn Ponds, but only for three seconds. At 16.19, Ian Carmichael rang Chris Andrianopoulos for one minute and 30 seconds. Simultaneously, Colin Williamson rang Ian Carmichael for 13 seconds, probably to leave a message, as Ian Carmichael was already on the telephone to Mr Andrianopoulos. Between 16.19 and 16.23, Colin Williamson made short calls, varying from 22 to 57 seconds to the United Retail office first and then to the United Retail outlets at Shell Breakwater, Shell Drysdale and Shell Victoria Street, as well as to another Shell outlet at Winchelsea. At 16.25, Colin Williamson also rang a Shell outlet at Torquay for 36 seconds, and at 16.26 he rang Shell Waurn Ponds for one minute and one second. At 16.37, Ian Carmichael rang Chisholm for two minutes and 30 seconds, far longer than necessary to deliver price information. At 16.37, Colin Williamson also attempted to ring Ian Carmichael, the call being timed at 26 seconds, so probably not reaching him, as he was already on the phone to Chisholm. At 16.38, Colin Williamson rang the Leahy office for 23 seconds. At 16.41, Ian Carmichael rang Colin Williamson for 30 seconds. Colin Williamson then rang the United Retail office at 16.41 for two minutes and 32 seconds, and then made another round of calls, all for less than one minute, to Shell Breakwater, Shell Drysdale, Shell Ocean Grove, the Shell outlet at Winchelsea, the Shell outlet at Torquay, Shell Waurn Ponds and again Shell Breakwater between 16.44 and 16.50. At 16.50 he then rang Ian Carmichael again for 21 seconds. This is the only occasion on which the ACCC inserted into Annexure B any of the material that it had in its possession recording telephone conversations between Colin Williamson and United Retail outlets, possibly for the purpose of giving instructions as to the level at which to set prices. Nothing happened in the way of price rises for some hours after that flurry of calls, except that Brumar increased the price at Shell Speedwings from 74.9 to 79.9 at 17.15. Brumar also increased the price at Shell Anglesea from 75.9 to 80.9 at 17.51 and, at 19.32, increased the price at Shell Highton from 75.0 to 79.9. Brumar was making another serious attempt to lead the market price upwards on a summer Friday afternoon, when much traffic would be expected to pass through Geelong, heading for the surfing resorts. 516 Chisholm increased its prices from 74.9 to 79.7 at Chisholm Grovedale at 20.59, Chisholm Leopold at 21.51 and Chisholm Geelong West at 22.12. At 23.42, Leahy increased its price to the same extent at BP Hillford. At 23.55, Mobil Latrobe Terrace also moved to 79.7. 517 The first Apco increase for this period was at 00.18 on 4 December, when Apco Lara moved from 74.9 to 79.7. At 00.23, Apco Geelong East moved by the same amount and, at 02.38, Apco Geelong South repeated the move. Leahy increased the price at BP Torquay at 05.23 from 75.7 to 79.9. Prices at a number of Mobil outlets also went to 79.7, some of them potentially earlier than the Chisholm increase: Mobil Moolap's move was between 17.25 on 3 December and 09.21 on 4 December and Mobil Gateway's move was between 19.11 and 08.00. Data for the initial rises from Apco outlets other than those I have specifically mentioned appears to have been unavailable for Annexure B. The first recorded entries for Apco Geelong North and Apco Highton on 4 December 1999 are decreases, later in the day. 518 Shell Victoria Street recorded an increase from 76.7 to 79.2 some time on the Saturday morning, 4 December. The only available figures for Shell Waurn Ponds are an average for the Friday, Saturday and Sunday, and involve an increase from 76.6 to 78.6 over the three days. The ACCC contended that, because sales were very much lower on Saturday and Sunday than on Friday, this suggests an increase to around 79.7 towards the end of Friday, 3 December. If that were the case, the increase is likely to have been based on awareness by Robert Riordan of Brumar's attempt to lead the Geelong petrol market up. Shell Speedwings, which was visible from the United Retail office had been one of the early outlets to move, so Mr Riordan would have been aware of an impending increase. Exactly what all of the telephone traffic on the afternoon of 3 December was about is unclear. The ACCC conceded that it cannot advance a theory as to why there were two rounds of calls from Colin Williamson to the United Retail outlets. 519 It cannot be contended that the data supports the theory that any arrangement or understanding was implemented, on the balance of probabilities. Plainly, there was a petrol price rise from Melbourne, being carried into the Geelong market by Brumar and Mobil outlets. The possibility that Chisholm moved because of the removal of price support, based on the Melbourne petrol price increase, rather than because of any telephone contact from Leahy cannot be ignored. The elapsed time between any telephone contact and any price increase places the data outside the pattern described by Ian Carmichael, although some of Michael Warner's evidence is more consistent with the ACCC's case in this respect. The number of phone calls between Ian Carmichael and Chisholm, and the length of the last of them (two and a half minutes) tend to suggest that there were things other than price movements being discussed. The ACCC relied on a call cycle which it sees as beginning at 15.51 on Thursday, 9 December 1999. Prior to that, on that day, there had been no less than 18 telephone calls involving parties to those three alleged arrangements or understandings, or those who were officers or employees of them. 521 At 15.51, Peter Anderson reached Alan Shuvaly's message bank. Mr Anderson then rang the Liberty office for up to 30 seconds at 15.52. At the same time, Leahy attempted to ring Peter Anderson, reaching his message bank. At 15.55, Mr Shuvaly, whose call was transmitted through Oakleigh at that time, reached Mr Anderson's message bank. At 15.58, Mr Anderson reached Mr Shuvaly's message bank. All of these calls of Mr Anderson were transmitted through Warrnambool. Finally, at 16.00, Mr Shuvaly and Mr Anderson spoke in a call from the former lasting two minutes. At 16.02, Mr Anderson rang Leahy for two minutes and 30 seconds. At 16.03, Mr Shuvaly rang Chris Andrianopoulos for one minute and 30 seconds. At 16.05, Leahy rang Chisholm for 26 seconds. At 16.06, Leahy rang BP Corford Express for 39 seconds. At 16.08, Leahy rang Phil Carmichael for 28 seconds. At 16.17, Mr Shuvaly rang Mr Andrianopoulos for 30 seconds. At 16.21, Leahy rang Mr Andrianopoulos for 24 seconds. At 16.31, Mr Shuvaly rang Mr Andrianopoulos again for 30 seconds. At 16.37, Mr Shuvaly again rang Mr Andrianopoulos for 30 seconds. At 16.40, Mr Shuvaly again rang Mr Andrianopoulos, this time for one minute. Whether he had only been reaching Mr Andrianopoulos's message bank up till that time is unclear. At 16.41, Colin Williamson rang Ian Carmichael for one minute and 25 seconds. At 16.43, Ian Carmichael rang David Mortimer for 30 seconds. At 18.24, Mr Shuvaly again rang Mr Andrianopoulos for one minute. 522 Chisholm increased its price from 76.5 to 78.7 at Chisholm Grovedale at 21.01, and at Chisholm Leopold at 21.56. Leahy also increased from 76.9 to 78.7 at BP Torquay at 23.02, and from 76.5 to 78.7 at BP Hillford. On 9 December, Andrianopoulos moved down from 77.5 to 76.5, up to 76.7 and then up to 76.9 at times unknown during the day. Liberty's average price for the day was 76.5. 523 Apco began increasing its outlets at 00.01 on 10 December, with Apco Lara moving from 76.5 to 78.7. Next to move was Mobil Latrobe Terrace, at 00.09, from 76.5 to 78.7. Apco then moved Apco Geelong East at 00.21, Apco Newcomb at 00.32, Apco Lara at 01.07, Apco Highton at 01.49, Apco Geelong North at 01.59 and Apco Geelong South at 02.39, all to 78.7 except Apco Lara, which moved further to 78.9. Chisholm Geelong West moved up to the same price at 05.58, presumably on opening. There were, of course, some Mobil outlets that could have increased their prices prior to any of these increases, notably Mobil Newcomb at some time after 17.17 on 9 December and before 06.50 on 10 December, and Mobil Grovedale after 19.43 and before 06.46. Other Mobil outlets moved up overnight or in the morning. BP Corford Express moved to 78.7 at 07.17 on 10 December. 7-Eleven increased its prices to 78.7 between 06.49 and 07.24 at 7-Eleven Newcomb and between 08.37 and 08.55 at 7-Eleven Geelong East. 524 Liberty's average price for the day on 10 December was 78.7. At times unknown on that day, Andrianopoulos moved from 76.9 to 78.5, down to 76.5 and up to 78.7. These moves are probably inconsistent with a move to the last-mentioned figure early in the day. 525 The ACCC submitted that a call at 07.55 on 10 December from Ian Carmichael to Chisholm, followed by a call at 08.22 from Chisholm to Jacques Bodourian was about 7-Eleven failing to increase its prices, but Leahy had received nothing that could be characterised as a complaint call, and 7-Eleven Newcomb had in fact moved more than half an hour before the first of these calls. 526 The ACCC also submitted that a call at 12.15 on 10 December from Leahy to Gordon Primmer, followed by a call from Gordon Primmer to Stan Kerr was an attempt to persuade United Convenience to increase its price. United Convenience in fact moved from 76.3 to 78.5 at some stage during the day, but it is hardly likely that United Convenience would have brought undone a general price increase that was already prevalent in the Geelong petrol market. The Liberty average price moved from 76.5 to 78.7 on 10 December, suggesting that it moved at the beginning of the day. In his evidence, Mr Shuvaly thought it had probably moved around midnight. He thought that he would have given instructions for this move at about 22.00 or 23.00, '[a]fter I knew there had been a market move'. He said that he would have obtained information about a market move from competitors, or from his agent in Geelong in the course of the evening. Although he thought that the calls shown in Annexure B earlier in the day were about prices, Mr Shuvaly said that he did not receive information about price moves that were about to happen. He thought that there would have been a market move during the day, by the major oil companies, to which others did not react quickly enough, so that there would have been another attempt after the evening driving peak. He was assuming that this was what took place. Mr Warner thought that the calls were about a move to a new price that was going to happen that night. 527 Comments similar to those I have already made about other periods might be made in relation to Arrangements Nos 1 and 3 in this period. The time gap between the call cycle and the price increases was outside Ian Carmichael's pattern of events. On a day when there appears to have been a great deal to talk about among participants in the market, isolating particular calls seems difficult. As the Mobil increases demonstrate, it is highly likely that the Geelong petrol market was following the Melbourne market upwards. Information about this may have been shared around in the telephone calls but, apart from Leahy (if Mr Warner's evidence about when he gave instructions for price increases is to be accepted), both Chisholm and Apco appear to have waited. Again, it may have been that Chisholm was deprived of price support. It may have been that Apco became aware of moves by Mobil outlets before moving itself. 528 As to Arrangement No 8, it is very unlikely that this was put into effect during this period. Mr Shuvaly's comments on the data in Annexure B do not support the implementation of that alleged arrangement or understanding. Nor do the price moves by Andrianopoulos, which seem to have been uncoordinated with those of Apco. 529 At best, the data is consistent with part of the oral evidence led by the ACCC, but other explanations for the decisions to make increases are equally likely. In those circumstances, it would be wrong to find that Arrangements Nos 1 and 3 were put into effect. As I have said, if Arrangement No 8 existed, it was very unlikely to have been put into effect on this occasion, particularly in the light of the absence of evidence of coordinated price increases by those and other participants in the Geelong petrol market. The first significant price increase for the day preceded any apparently relevant telephone calls. It was at Mobil Belmont at 12.05 on 30 December 1999, a price rise from 73.9 to 79.7. It was 79.7 that effectively became the market price overnight. This suggests that there had been an increase in Melbourne, and that decisions had been made in Melbourne to spread the price increase to Geelong. 531 On 30 December 1999, Alan Shuvaly was in Brisbane. At 13.14, he rang Chris Andrianopoulos for one minute. Mr Shuvaly then rang Mr Anderson for a call timed at 30 seconds. Mr Shuvaly then rang Mr Andrianopoulos twice more, for 30 seconds at 13.54 and for one minute at 14.06. At 16.28, Mr Andrianopoulos rang Mr Shuvaly, and the call was diverted to another mobile number. At 16.38, Mr Anderson rang Mr Shuvaly for two minutes. In his evidence, Mr Shuvaly thought that the calls were the result of him obtaining information, possibly from his Geelong agent, about what was happening in the market, and his desire to check that information with Mr Andrianopoulos and Mr Anderson. At 16.40, Mr Anderson rang Leahy for one minute. Calls from the Leahy office to Chisholm followed at 16.41 for one minute and 21 seconds, BP Corford Express at 16.42 for 15 seconds, Phil Carmichael at 16.44 for one minute and 32 seconds and Colin Williamson at 17.26 for 30 seconds. Michael Warner then rang Gordon Primmer at 17.59 for four minutes and 30 seconds, a call which from its length appears not to have been part of any price call cycle. Amongst the calls from Leahy, Apco Geelong East increased its price from 73.9 to 75.7 at 17.13. This increase was somewhat anomalous when compared with other prices in the market, and with other Apco prices. 532 The price rises began with Leahy increasing BP Leopold from 73.9 to 79.7 at 18.12. Mr Warner said that he sometimes raised the price at BP Leopold during the evening peak hour, earlier than at other Leahy outlets, because it was on the wrong side of the road to capture commuter traffic from Geelong, and he was trying to ensure that the business was profitable. 533 Chisholm then increased its price at Chisholm Geelong West at 21.56, probably shortly before closing time. Chisholm did not increase its prices at Chisholm Grovedale or Chisholm Leopold until 07.04 and 07.25 the following morning. In the meantime, Leahy increased its price at BP Hillford from 73.9 to 79.7 at 23.26. Mobil Latrobe Terrace also increased by the same margin at 23.46, Apco Geelong North at 23.59 and Mobil Corio Village at 23.59. 534 As was usual, data for some Mobil outlets only supplies a range of times between which an increase occurred. In particular, Mobil Moolap increased at some time between 18.24 on 30 December and 06.28 on 31 December. Mobil Newcomb increased between 19.15 and 06.36. Mobil Point Henry increased between 20.42 and 06.55. 535 Shortly after midnight, Apco sites other than Apco Geelong North began increasing to 79.7, Apco Highton at 00.07, Apco Geelong East at 00.21, Apco Newcomb at 00.45, Apco Lara at 01.22 and Apco Geelong South at 02.23. In the midst of these increases Mobil Manifold Heights also increased at 00.09. Leahy did not increase its price at BP Torquay until 05.33 on 31 December, when it also went to 79.7. Mobil Geelong North went to the same price at 06.04. Brumar joined the rises with Shell Latrobe Terrace at 06.40, going only to 78.7, but Shell Westoria went to 79.7 at 07.04, Shell Belmont at 07.29 and Shell Norlane at 07.34. BP Corford Express also went to 79.7 at 07.19. 7-Eleven Geelong East went to the same price between 06.46 and 07.39, and 7-Eleven Newcomb between 07.53 and 08.01. At 09.01, the Geelong Car Spa went to 79.7. Caltex Quick Bite went to 79.7 at 09.09 and then to 80.5 at 09.15. 536 The ACCC sought to characterise a call from Chisholm to Jacques Bodourian at 08.06 on 31 December as a complaint that 7-Eleven had not gone up (although both 7-Eleven outlets had been up for almost half an hour before the call was made). If it were such a complaint, it was not in response to any call from Phil Carmichael to Ian Carmichael, or from Leahy or Ian Carmichael to Chisholm. 537 On 31 December, BP Norlane increased from 75.9 to 79.7, dropped to 73.7 and then increased to 73.9 at times unknown during the day. Liberty's average went from 74.0 to 78.9, suggesting an increase at some stage during the day, or to a lower price, or both. Shell Victoria Street increased to 79.7 at some stage during the day. The average price at Shell Waurn Ponds increased from 76.0 to 78.1 over four days from 31 December to 3 January, consistent with a rise at some stage on 31 December. 538 The data for this period suggests that an increase in the Melbourne petrol market was flowing into Geelong, particularly via Mobil. It may be that information about it was spread by means of phone calls, although there must be some doubt about the calls involving the parties to Arrangement No 8, because they were spread over a long period. To a large extent, the price increases were sporadic, even among those who are alleged to have been coordinating them. Those of both Chisholm and Leahy were partly in the evening and partly in the morning, with the Apco increases around midnight and through the early hours of the morning. Given the spread of price increases, the time elapsing between the phone calls and the increases in general, the possible early moves by some Mobil outlets (signalled by Mobil Belmont's very early rise at 12.05 on 30 December), and the absence of any data giving a clue as to time for Andrianopoulos, Liberty, and United Retail, it is not possible to find on the balance of probabilities that there was anything other than a spreading of information about a price rise that was already occurring, inherited from Melbourne, and the making of independent decisions to follow that rise. By late afternoon on Wednesday, 5 January 2000, most Apco outlets and a number of Mobil outlets had reached the apparent low point of a price cycle, with their prices at 74.9. Some other market participants were at 75.2. At 18.04, Leahy reduced its price at BP Hillford from 75.2 to 74.9. 540 At 18.36, Peter Anderson telephoned Ian Carmichael for one minute and 30 seconds. At 18.41, Mr Carmichael rang David Mortimer for 30 seconds. At 18.43, Mr Carmichael rang Colin Williamson for 30 seconds. At 18.50, Mr Carmichael rang Chisholm for 30 seconds. At 18.52, Mr Carmichael rang BP Corford Express for 30 seconds. Whether he actually spoke to anyone is unknown. The fact that all four calls were timed at what may have been a maximum of 30 seconds is perhaps significant. 541 At 19.01, Leahy increased the price at BP Leopold from 75.2 to 79.7. Mr Warner gave evidence that he sometimes raised the price at BP Leopold earlier than at other Leahy outlets, because it was 12 kilometres out of Geelong and was on the right-hand side of the road for commuter traffic leaving Geelong, so that a price rise late in the day did not have a significant effect on the volume of sales. It was not until 22.26 that evening that the price at BP Torquay rose from 76.9 to 79.7, and 23.05 that the price at BP Hillford rose from 74.9 to 79.7. 542 Apco did not commence its increases until 23.46, with Apco Highton moving from 74.9 to 79.7 at that time, Apco Lara moving similarly at 23.49 and Apco Geelong North at 23.58. Other Apco increases followed at Apco Geelong East at 00.35 and Apco Geelong South at 02.34 on 6 January 2000. 543 Chisholm did not increase at all until 07.17 on 6 January at Chisholm Geelong West, 07.34 at Chisholm Grovedale and 08.14 at Chisholm Leopold. In each case, the increase was from 75.2 to 79.7. Chisholm Geelong West and Chisholm Grovedale were both opening at 06.00 each day at that time, so the increases were well over an hour after opening time. 544 Both Shell Victoria Street and Shell Waurn Ponds increased from 75.9 to 79.7 at some time on 6 January, but the time is unknown. 545 Once again, the unknown factor is the times of Mobil increases. The data in Annexure B shows that ULP prices at a number of Mobil outlets increased to 79.7 overnight or in the morning during this period. The earliest possible time for such an increase was 14.08 on 5 January at Mobil Moolap. Mobil Gateway increased some time between 19.38 on 5 January and 06.35 on 6 January, Mobil Belmont between 20.25 and 00.21, Mobil Corio Village between 20.48 and 05.51, Mobil Grovedale between 20.45 and 08.10, Mobil Newcomb between 20.37 and 08.08, Mobil Point Henry between 22.51 and 08.23 and Mobil Manifold Heights between 23.38 and 06.44. It may also be significant that Shell Latrobe Terrace increased from 75.9 to 79.7 at 06.42 on 6 January. At 07.45 on 6 January, BP Corford Express also increased from 75.9 to 79.7. 546 The Mobil increases, and the early move at one Brumar outlet, suggest that prices in the Melbourne petrol market had already increased, and the increase was flowing into Geelong inevitably. It may be that the call cycle on 5 January was the vehicle for passing information about this price increase, but the range of times at which Leahy, Apco and Chisholm increased their prices makes it unlikely that they were doing so in a coordinated fashion. Having regard to the length of the telephone calls in the call cycle on 5 January, it may be that Ian Carmichael did not manage to speak to anyone other than Peter Anderson, and that the price increase from Melbourne just flowed through the Geelong petrol market in the usual way, as a result of decisions made consequent upon board-spotting. It is difficult to see that this period supports the ACCC's case in any significant way. It may be that the relative proximity of some Leahy increases and the majority of Apco increases could be used to suggest that there was some coordination resulting from the telephone conversation between Ian Carmichael and Mr Anderson, but the data also makes it appear possible that Apco was simply following increases at Mobil outlets. On 10 January 2000, Alan Shuvaly was in Brisbane. He made two calls of 30 seconds each to Chris Andrianopoulos from Brisbane at 12.37 and 12.57 respectively. At 13.46, Peter Anderson rang the Liberty office for 30 seconds. He then immediately rang Mr Shuvaly. The call lasted four minutes, suggesting that it was about something other than a prospective price increase, although not ruling out the possibility that price information was passed. At 13.51, Mr Shuvaly rang Mr Andrianopoulos for one minute and 30 seconds. At 14.55, Mr Shuvaly again rang Mr Andrianopoulos for 30 seconds. At 15.29, Mr Shuvaly rang Mr Anderson for 30 seconds. At 15.30, Mr Shuvaly rang Mr Andrianopoulos for two minutes. Whatever was passing between the alleged parties to Arrangement No 8 on this occasion, it appears to have been more complicated than information about a price level and a time. In his evidence, Mr Shuvaly was asked what he believed would have happened on this occasion, based on his recollections or his experience. Then I rang up Chris to verify if the information was correct. From what I gather, the market had moved and we supported it overnight, and confirmed it the next day. There was no call cycle from Leahy or Ian Carmichael or Michael Warner following those conversations. The only relevant contact from the Leahy office was a phone call to Chisholm at 16.41, for one minute and 43 seconds. 549 Leahy increased the price at BP Leopold from 75.9 to 79.7 at 16.58 on 10 January. This may have been in accordance with the practice, about which Michael Warner gave evidence, of increasing the price at that outlet during the afternoon traffic peak hour, because such an increase did not have a big effect on the volume of sales (see [221]). It does suggest that Leahy was aware of an impending increase before 16.58 on 10 January. 550 At that time, however, other prices were still moving down. At 16.57, Mobil Newcomb dropped from 75.9 to 75.7. Mobil Gateway did the same between 16.38 and 17.00. Price decreases continued at some Mobil and Apco outlets; Mobil Point Henry between 16.39 and 17.46, Mobil Moolap between 15.42 and 18.17, Apco Geelong East at 18.27 and Apco Newcomb at 19.55. 551 At 23.04 on 10 January, BP Torquay moved from 76.9 to 79.7 and at 23.43, BP Hillford moved from 75.9 to 79.7. Both these Leahy outlets were operating on a 24-hour basis in this high-summer period. The Apco increases began shortly before midnight, with Apco Geelong North moving from 75.9 to 79.7 at 23.49, a similar increase at Apco Lara for which a time does not appear in Annexure B, Apco Newcomb moving from 75.7 to 79.7 at 00.09, Apco Highton from 75.9 to 79.7 at 01.03 and Apco Geelong South from 75.7 to 79.7 at 02.39 on 11 January. In the meantime, of course, there were moves to 79.7 at a number of Mobil outlets. Mobil Newcomb moved between 18.40 on 10 January and 07.23 on 11 January, Mobil Grovedale between 18.41 and 07.33, Mobil Moolap between 18.42 and 06.36, Mobil Point Henry between 19.26 and 08.10, Mobil East Belmont between 19.39 and 07.14, Mobil Gateway between 21.25 and 09.00, Mobil Belmont between 21.26 and 00.59, Mobil Manifold Heights between 21.47 and 06.41 and Mobil Corio Village between 23.22 and 06.15. Mobil Geelong North moved at 06.04 on 11 January. Mobil Latrobe Terrace is the earliest of the definite Mobil price moves, at 22.53 on 10 January. Interestingly, Chisholm (the only recipient other than Apco of a phone call from Leahy on 10 January) did not increase its prices until well beyond an hour after opening time on 11 January, with Chisholm Geelong West moving to 79.7 at 07.20, Chisholm Leopold at 07.37 and Chisholm Grovedale at 07.59. Without the benefit of any phone call from Leahy, BP Corford Express moved to the same figure at 07.24 on 11 January. 552 Again, there is no definite information as to the times of movements of the alleged parties to Arrangement No 8, other than Apco. It seems that Liberty probably increased its price to 79.7 at somewhere around midnight in the relevant period, because its average for 11 January is 79.7. At some time on 11 January, Andrianopoulos moved from 76.9 to 79.7 and at some other time, it moved down to 75.9. Interestingly, both Shell Victoria Street and Shell Waurn Ponds raised their prices to 79.7 on 11 January, without the benefit of any communication from Leahy. 553 The ACCC pointed to a telephone call from Mr Shuvaly, still in Brisbane to Mr Andrianopoulos at 08.02 on 11 January, and to Mr Shuvaly's evidence (quoted in [233] above), as confirmation that Liberty had supported a price move overnight. One other fact to which the ACCC drew attention is that Caltex Quick Bite increased from 75.9 to 79.7 at 08.21 on 11 January. The ACCC invited me to draw the inference that this was about the time of the Andrianopoulos increase. 554 This period is a good illustration of the dangers of assuming that, because price increases followed phone conversations, the two were related. As I have said, the telephone traffic between Mr Shuvaly, Mr Andrianopoulos and Mr Anderson on 10 January was far more than would have been required to pass information about a prospective price rise, especially a relatively small one of only 4.0 or thereabouts. If Mr Anderson did acquire information from Mr Shuvaly about a proposed price increase, he delayed at least an hour, and possibly almost three hours, before passing it on to Leahy. Contrary to the allegation that Arrangement No 1 contained a term that Leahy would inform other participants in the Geelong petrol market about a prospective price increase, the only call that Leahy made was to Chisholm, 10 minutes after any relevant conversation with Mr Anderson. The ACCC did not allege that the price increases at Chisholm the following morning were the result of Leahy and Chisholm giving effect to Arrangement No 3. 555 It is fairly obvious from the Mobil increases that the Melbourne petrol market must have moved up and that Mobil was implementing the increase in the Geelong petrol market. Leahy may have anticipated the move, and may have done so on the basis that it had information from someone, perhaps even Peter Anderson, that a move was in the offing. It would be strange, however, that Apco would drop the prices at some of its outlets by 0.2 if it had already appointed a time and a higher price, and would then only raise its prices at about midnight in the context of what appeared to be an overall increase at Mobil. Even if Liberty did increase at about midnight, the strong chance is that it was doing so in reliance upon knowledge acquired of an increase in Melbourne. Even if it did acquire information from Mr Anderson in the four-minute conversation between Mr Anderson and Mr Shuvaly at 13.47 on 10 January, it is unlikely that such information was the sole motivation for an increase about 10 hours later. The proposition that Andrianopoulos increased its price at about the same time as Caltex Quick Bite (if correct) would be consistent with it following the Melbourne petrol market move, translated into Geelong by Caltex Quick Bite and others, rather than implementing any arrangement or understanding with Apco or Liberty. 556 In my view, on the evidence, it was unlikely that any of the price rises in the Geelong petrol market in this period were the result of giving effect to of any arrangement or understanding. The period is characterised by a fairly short-lived price rise in the market to 82.7 overnight, with reductions to 79.9 on 2 February. 558 At 16.46 on Tuesday, 1 February 2000, Leahy telephoned Peter Anderson. The call lasted three minutes and 45 seconds. Its purpose is unlikely to have been to convey information about a forthcoming price increase, although such information may have been conveyed in the course of it. At 17.02, Colin Williamson rang Leahy for three minutes and 38 seconds. At 17.03, Mr Anderson rang Leahy for two minutes and 30 seconds. Again, this was longer than necessary simply to talk about a price and a time. At 17.07, Leahy rang Chisholm. The duration of the call appears in Annexure B as 0:00:94, in other words 94 seconds, but this is inconsistent with the notations of times greater than one minute, so the figure is probably unreliable. At 17.09, Leahy rang BP Corford Express for 19 seconds. At 17.11, Leahy rang David Mortimer for 49 seconds and at 17.13, Leahy rang Phil Carmichael for 38 seconds. At 17.30, Leahy rang Gordon Primmer for one minute and 35 seconds. This is the call cycle on which the ACCC relied. 559 The first of the increases, from 72.9 to 82.7 was at BP Leopold at 18.14 on 1 February. This was possibly in accordance with Mr Warner's practice of anticipating a price increase by raising the price at BP Leopold, referred to in [221]. It is also probable that, in accordance with his evidence, Mr Warner gave the instruction to other Leahy outlets to increase their prices before he left work, about that time. Increases at Chisholm occurred at 21.48 at Chisholm Leopold and 22.03 at Chisholm Geelong West, probably prior to closing, but not at Chisholm Grovedale until 07.59 the following morning, well after opening time. 560 At 23.23 on 1 February, Apco Geelong North increased from 72.7 to 82.7. At 23.34, BP Hillford increased from 72.9 to 82.7. At 23.54, BP Torquay increased from 73.4 to 82.7. Apco Geelong East moved to 82.7 at 00.07 on 2 February, Apco Newcomb at 00.14, Apco Lara at 00.51 and Apco Geelong South at 02.33. At some time on 2 February, Shell Victoria Street moved from 73.4 to 82.7, but the Shell Waurn Ponds move appears to have been at a later time, because it was from 73.5 to 79.9. Oddly, Apco Highton is not recorded as moving to 82.7 until 23.50 on 2 February, many hours after the market, including other Apco outlets, had moved downwards to 79.9 or 79.7. BP Corford Express moved from 74.9 to 82.7 at 07.59 on 2 February. Brumar price increases to 82.7 began at Shell Latrobe Terrace at 08.21 and continued at Geelong Car Spa at 08.53, Shell Speedwings at 08.55 and Shell Belmont at 10.33. 561 Once again, an unknown factor is the precise timing of the increases at a number of Mobil outlets. The ranges are 19.01 on 1 February to 07.06 on 2 February at Mobil Moolap, 19.47 to 06.47 at Mobil Gateway, 20.26 to 13.10 at Mobil Point Henry, 20.58 to 07.03 at Mobil Newcomb and 21.14 to 07.17 at Mobil Grovedale. Definite times for Mobil moves are for Mobil Corio Village at 00.12 on 2 February, Mobil Manifold Heights at 00.18, Mobil Belmont at 00.54, Mobil Geelong North at 05.59 and Mobil Latrobe Terrace at 06.28. An interesting fact is that, apparently without the benefit of any telephone information from a competitor, 7-Eleven Newcomb moved from 72.9 to 82.1 at some time between 00.31 and 01.14 on 2 February, and 7-Eleven Geelong East moved similarly between 04.26 and 05.12 on that day. 562 There was quite a lot of telephone contact between competitors in the Geelong petrol market on the morning of 2 February, when prices generally were beginning to drop from 82.7 to 79.9. To suggest that the calls were about the price decreases would be to fly in the face of the consistent evidence that there were never attempts to coordinate price decreases. 563 The pattern of calls on 1 February is interesting. Both of the conversations between someone at Leahy and Mr Anderson were quite long, as I have already said. The call by Colin Williamson to Leahy, which was also quite long, must have been with someone other than the person Mr Anderson rang at Leahy shortly afterwards. It is unclear whether Ian Carmichael was on duty at this time. None of the calls in this period was initiated from his mobile phone. Only two calls were made to his mobile phone, one by Darren Campigli at 07.43 on 2 February, for 27 seconds, and the other at 08.13 on the same day by Colin Williamson, for 25 seconds. It is difficult to regard the call from Colin Williamson to Leahy on 1 February as part of any call cycle. In view of the apparent lack of coordination in United Retail's price increases, it is unlikely that United Retail had any involvement in the passage of information about price increases. It is therefore unlikely that its price rises were anything to do with giving effect to Arrangement No 6. 564 Assuming that Ian Carmichael's evidence about the time lapse between a call cycle and the time for a price increase can be disregarded, there is the possibility that the price increases by Leahy, Chisholm and Apco were the result of the passage of information between them. All went up at different times overnight. Once again, the unknown factor is the precise timing of Mobil price increases. Overall, the pattern suggests that a previous increase in the Melbourne petrol market was flowing into Geelong. It may have done so by the spread of information by telephone, with Leahy as the pivotal party. Certainly, there does not appear to have been any precise time for such an increase, which was not well coordinated. The fairly abrupt decrease on the morning of 2 February suggests that some factor other than coordination was at work. It could not be said with any degree of probability that the price increases by Apco, Leahy and Chisholm were the result of giving effect to Arrangements Nos 1 and 3. There is no information in Annexure B about price changes at BP Meredith, so any suggestion that effect was given to Arrangement No 7 can be based only on the fact that the call cycle included a call (some time after the other calls) to Gordon Primmer. It is a period involving an unusually large number of telephone calls between participants in the Geelong petrol market on both days. The ACCC contended that it is a case of an attempt to put into effect the various arrangements and understandings, which failed, giving rise to a second attempt, which was successful. 566 One of the strange elements of this case is that the very first increase, from 76.3 to 82.7, was effected at 13.17 on Thursday, 10 February 2000 by Leahy at BP Leopold. This was not in accordance with Mr Warner's practice of increasing the price at BP Leopold during the evening peak hour (see [221]), but Mr Warner also said that he took whatever opportunity he thought he could to increase the margin of the retail price over the wholesale price of ULP at BP Leopold, and he may have been doing that on this occasion. The increase at BP Leopold was well prior to any possible relevant telephone call, yet it was an increase to the price to which a number of Mobil outlets moved overnight during the period. Another strange feature is that, at 13.18 on 10 February, Leahy decreased its price at BP Hillford from 76.3 to 74.9, in line with previous decreases at Apco, Mobil and Chisholm outlets. The ACCC submitted that the early increase at BP Leopold was an attempt by Leahy to signal a desire for a market increase. Not only is this inconsistent with Leahy subsequently following the market down at other outlets, it could also be described as a prescient decision, having regard to the later Mobil increases to the same amount. What the early BP Leopold increase does suggest is that, as early as the middle of the day on 10 February, Leahy had information that a price rise was likely to flow from the Melbourne petrol market, and that 82.7 was likely to be the market price in Geelong. If it did have such information, Leahy did not acquire it from a competitor in Geelong, at least as far as Annexure B shows. 567 This is not the ACCC's theory about this period, however. The ACCC pointed to a round of telephone calls, commencing with a 48-second call from the Apco office to Alan Shuvaly at 16.57. It seems to be suggesting that Apco might have obtained its information about a prospective price rise from Mr Shuvaly, who had already been involved in four telephone conversations, or attempted conversations, with Chris Andrianopoulos over the preceding few hours, three of them initiated by Mr Shuvaly and one by Mr Andrianopoulos. None of this is consistent with the Leahy increase at BP Leopold at 13.17. 568 In any event, immediately after the conversation with Mr Shuvaly, someone at the Apco office telephoned Leahy at 16.58 for one minute and 18 seconds. There was then a flurry of calls emanating from the Leahy office. At 17.00, Leahy rang BP Corford Express for 18 seconds. At 17.01, Leahy rang Chisholm for 47 seconds. At 17.02, Leahy rang Phil Carmichael for 20 seconds. At 17.04, Leahy rang Colin Williamson for 26 seconds. At 17.05, Leahy rang David Mortimer for 47 seconds. At 17.06, Leahy rang Gordon Primmer for 12 seconds. At 17.09, Leahy rang BP Meredith for one minute and 26 seconds. Leahy then rang BP Meredith again for 56 seconds at 17.53. 569 Overnight, Mobil sites began increasing to 82.7. The earliest possible increases were at 17.45 at Mobil Moolap, 21.16 at Mobil Point Henry and 22.09 at Mobil Gateway. At 23.57, Mobil Manifold Heights also increased to 82.7. On 11 February, Mobil Belmont at 00.07, Mobil Corio Village at 00.15, Mobil Latrobe Terrace at 06.15, Mobil Geelong North at 07.05 and Mobil East Belmont at 07.16 all went to 82.7. Apart from these outlets, the only increases to 82.7 were by Leahy, which raised the price at BP Hillford at 23.15 and at BP Torquay at 23.31 on 10 February. Apco did not move. Chisholm moved, but well after opening time, and only to 82.5, at Chisholm Geelong West at 07.22, Chisholm Grovedale at 07.34 and Chisholm Leopold at 07.38 on 11 February. 570 On the morning of 11 February, at 07.05, only three minutes after its increase, Mobil Geelong North dropped from 82.7 to 74.9. At 07.57, Mobil Latrobe Terrace reduced to 73.9, followed by Mobil Manifold Heights at 07.59, Mobil East Belmont also at 07.59, Mobil Geelong North at 08.01, Mobil Corio Village at 08.14 and Mobil Newcomb at 08.30. 571 At 07.37, Ian Carmichael left a message on Peter Anderson's message bank. At 07.41, Darren Campigli rang Ian Carmichael for 54 seconds. At 07.43, Ian Carmichael rang his brother Phil Carmichael for 30 seconds. At 07.46, Ian Carmichael rang Colin Williamson for 30 seconds. At 07.50, Mr Anderson rang the Leahy office for 30 seconds. At 07.50, Mr Campigli rang Ian Carmichael for one minute and 41 seconds. At 07.52, Mr Anderson rang Ian Carmichael for 30 seconds. At 07.53, Mr Williamson rang Ian Carmichael for 26 seconds. At 07.54, Ian Carmichael again reached Mr Anderson's message bank. Mr Anderson rang him back for 30 seconds at 07.56. At 07.58, Ian Carmichael and Peter Anderson began another conversation, for two minutes and 30 seconds. This overlapped with a phone call at 07.59 from Mr Campigli to the Leahy office for two minutes and 42 seconds. 572 At 08.13, Leahy rang Peter Anderson for one minute and 12 seconds. According to the ACCC, this initiated another call cycle. At 08.15, Michael Warner rang Phil Carmichael for two minutes and 30 seconds. At 08.17, Leahy rang Chisholm for one minute and 30 seconds. Because of the overlapping times, this call appears to have been made by someone other than Mr Warner. At 08.19, there was a call from Shell Waurn Ponds to Leahy for one minute and 20 seconds. At 08.22, Leahy dropped the price at BP Leopold from 82.7 to 73.9. 573 At 08.27, Leahy telephoned Chisholm again for one minute and 39 seconds. This call must have been made by someone other than Ian Carmichael, who rang Colin Williamson for 30 seconds at 08.28. At 08.30, Mr Warner called Gordon Primmer for two minutes, and at 08.30 the Leahy office left a message on Phil Carmichael's message bank. At 08.31, Leahy telephoned Chris Andrianopoulos for 29 seconds. 574 The next price increase was by Caltex Quick Bite at 08.50, from 75.9 to 82.9. At 08.52, Leahy telephoned Gordon Primmer for 23 seconds and, at 08.53, Leahy telephoned Chisholm for 57 seconds. There was another call from Leahy to Mr Primmer, for 31 seconds, at 08.57. 575 Chisholm dropped its prices from 82.5 to 74.9 at Chisholm Leopold at 08.36, Chisholm Geelong West at 08.36 and Chisholm Grovedale at 08.52. It began increasing them back to 82.5 at 10.02 at Chisholm Grovedale, 10.11 at Chisholm Geelong West and 10.21 at Chisholm Leopold. These increases were roughly simultaneous with increases to 82.5 at BP Leopold at 10.03 and BP Hillford at 10.12. Apco Geelong South made the same move at 10.11, Mobil Geelong North at 10.18, Mobil Manifold Heights at 10.21, Mobil Latrobe Terrace at 10.22, Apco Highton at 10.28, Mobil Grovedale at 10.32, Apco Newcomb at 10.33, Mobil Belmont at 10.35, Mobil East Belmont at 10.36, Mobil Moolap at 10.37, Apco Geelong North at 10.39, Apco Lara at 10.50, Mobil Corio Village at 10.58 and Apco Geelong East at 11.05. 576 In the meantime, Leahy rang Apco at 10.19, Leahy rang Phil Carmichael for 16 seconds at 10.20, Colin Williamson rang Ian Carmichael for 43 seconds at 10.20, Colin Williamson rang Ian Carmichael again for 32 seconds at 10.30, Chisholm rang Jacques Bodourian for 25 seconds at 10.45 and Colin Williamson rang Ian Carmichael at 11.04. Ian Carmichael rang David Mortimer for 30 seconds at 11.09, BP Corford Express for 30 seconds at 11.12, Phil Carmichael for one minute at 11.13 and Chisholm for six minutes at 11.14. Chisholm rang Jacques Bodourian for two minutes and 26 seconds at 11.21. Also at around this time, between 10.57 and 11.16, 7-Eleven Newcomb had increased its price to 82.5 and, between 11.08 and 11.20, 7-Eleven Geelong East had increased to 82.9. 577 Other increases to 82.5 occurred at Shell Latrobe Terrace at 11.25, Mobil Gateway between 09.35 and 11.26, Mobil Newcomb between 09.09 and 11.43, Mobil Point Henry between 10.11 and 11.56, Shell Belmont at 12.02, BP Corford Express at 14.02 and Shell Speedwings at 14.21, before the market began to fall again. United Retail increases were to 82.9 at Shell Victoria Street, characterised by the ACCC as being either on opening or in the morning, and at Shell Waurn Ponds, but only to 81.9. 578 This period represents a fine example of the difficulty of trying to make assumptions about the content of telephone conversations, based on the sequence of those conversations. Although the telephone calls made on the afternoon of 10 February 2000 look very like a complete call cycle, of the kind described by Ian Carmichael, they were obviously utterly inconsequential in terms of any price increase. By the time they had begun, Leahy had already raised its price at BP Leopold to the very figure to which Mobil outlets were to move overnight and no-one else was to move at all. In fact, if the ultimate price rise is taken to have been a rise to 82.5 on 11 February, it was Chisholm that signalled it on that day. Given the lapse of time since the telephone calls on the afternoon of 10 February, the fact that Chisholm's increase did not occur at opening time for its outlets, and the fact that it was to a different figure from that to which Leahy had gone, by far the most likely explanation for Chisholm's attempted increase on the morning of 11 February is that it had lost its price support from Caltex and was feeling the need to increase its prices. Although it had to bring its prices down soon afterwards, Chisholm effectively led the price rise to 82.5 when it did occur. It is extremely unlikely that it did so as a result of persuasion from Leahy, given that the first three telephone conversations between anyone at Chisholm and anyone at Leahy on the morning of 11 February were all initiated by Darren Campigli, and that the calls were all of quite significant length. 579 Whatever was said by Apco or Leahy in the other conversations on 10 February, it is unlikely that it resulted in any price increase. If there were in existence well-established arrangements or understandings of the kinds alleged by the ACCC, it would be expected that the price rises would have followed the call cycle. Instead, there was the enormous amount of telephone traffic on the morning of 11 February. The fact that the Geelong petrol market eventually moved to 82.5, substantially during that morning, and only briefly, probably had nothing to do with what was said in the telephone calls. The market was moving in any event. BP Corford Express was hardly hurried up by the call from Ian Carmichael to it at 11.12, when it did not increase to 82.5 until 14.02, only an hour and a half before Chisholm began to lead the price down again (on the assumption that the Apco Geelong South computer was still showing its time inaccurately by one hour). Whether Batesford Roadhouse was or was not up before Ian Carmichael rang at 11.09 is something that cannot be gleaned from Annexure B. If Ian Carmichael's call to Chisholm at 11.14, for six minutes, was to convey a complaint by Phil Carmichael that 7-Eleven had not yet increased, the complaint was not initiated by Phil Carmichael by means of a call. The call at 11.13 was from Ian Carmichael to his brother. In any event, 7-Eleven Newcomb either had already increased, or was on the point of increasing at the time when Ian Carmichael rang Phil Carmichael. The call from Chisholm to Jacques Bodourian at 11.21 was clearly not about any failure of 7-Eleven to increase. The call lasted for two minutes and 26 seconds. If the caller had been complaining about the failure of 7-Eleven to increase, Mr Bodourian would have informed him that instructions for the increase had already been given (and, indeed, the increases had already occurred), so the call would have been over very quickly. There is no information about price changes by BP Meredith. 580 If the identification of this period has any evidential value, it tends against the ACCC's case that there were well-established arrangements or understandings in existence at that time and that they were being put into effect. There was considerable telephone traffic between various participants in the Geelong petrol market on that afternoon, including what appears to be a classic call cycle, beginning with two calls from Mr Anderson to the Leahy office of four minutes and one minute respectively at 16.59 and 17.06, followed by calls from Ian Carmichael to Colin Williamson at 17.08, the Leahy office to Phil Carmichael also at 17.08, Leahy to Chisholm at 17.09, Leahy to BP Corford Express at 17.10, Leahy to Chris Andrianopoulos at 17.14 and Ian Carmichael to Colin Williamson again at 17.25. There was also a call from Mr Shuvaly to Mr Andrianopoulos at 17.46. Despite all this telephone activity, there was no significant price rise in the market until almost midnight on 18 February, so far as Annexure B records. 582 On 18 and 19 February 2000, the ACCC alleges that effect was given to Arrangements Nos 1, 3, 6, 7 and 8. Prices tended generally down throughout the day on 18 February. A substantial amount of telephone communication took place between various parties in the morning and early afternoon. The ACCC case focused on a phone call from Alan Shuvaly to Chris Andrianopoulos, lasting one minute and 30 seconds, at 15.00. At 15.02, Mr Shuvaly rang Mr Anderson for 30 seconds. These two calls were made from Mount Waverley and Clayton North respectively. The ACCC contended that they were calls by Mr Shuvaly to set up a price increase, and were instrumental in the implementation of Arrangement No 8. 583 There does not appear to have been any great urgency about any price increase on this occasion, as Mr Anderson delayed for more than half an hour before ringing the Leahy office at 15.38 for 30 seconds and then, at 15.39, Ian Carmichael for 30 seconds. Mr Carmichael immediately rang Chisholm for one minute at 15.40 and BP Corford Express for two minutes at 15.41. Both of these calls were transmitted through Bellarine. The second of them was obviously longer than would be necessary just to pass on pricing information. At 15.43, Michael Warner, whose call was also transmitted through Bellarine, telephoned Gordon Primmer for one minute and 30 seconds, obviously again too long just for the transmission of pricing information. At 15.44, Ian Carmichael rang Colin Williamson for 30 seconds. Mr Williamson returned the call at 15.45 for 17 seconds. At 15.48, Gordon Primmer rang Stan Kerr for one minute. Immediately, Mr Primmer rang the Leahy office for 30 seconds. At 15.50, Mr Primmer rang Mr Warner for one minute. 584 In the meantime, at 15.49, Leahy raised the price of petrol at BP Leopold from 76.3 to 83.7. This was earlier in the day than most of the increases for BP Leopold, which Mr Warner said he caused to be made during the afternoon traffic peak, but may have been another attempt by Mr Warner to increase the profit margin at BP Leopold when he felt that he could. Subject to the unknown factor of the precise times of increases at a number of Mobil outlets, it was a lone move until almost midnight that night. 585 These calls were followed by yet more telephone communication. At 15.56, Ian Carmichael rang Mr Andrianopoulos. Immediately after that, Mr Williamson rang Mr Carmichael, but the call was timed at only three seconds. At 15.57, Shell Waurn Ponds rang the Leahy office for 36 seconds. Mr Williamson rang Mr Carmichael again at 15.58, for 20 seconds. Mr Carmichael rang Mr Mortimer at 16.03 for 30 seconds. At 16.04, Mr Mortimer returned the call for one minute. At 16.06, Mr Carmichael again rang Mr Mortimer for one minute and 30 seconds. At 16.27, Darren Campigli called Mr Carmichael for one minute and five seconds. At 18.21, Mr Shuvaly called Mr Andrianopoulos for two minutes. The ACCC submitted that this call was for the purpose of passing on information about a price rise discussed with Mr Anderson earlier in the afternoon. On the evidence, this is unlikely. The delay between Mr Shuvaly's conversation with Mr Anderson and Mr Shuvaly's conversation with Mr Andrianopoulos is more than three hours. The call at 18.21 was timed at two minutes. It could not have been just for the purpose of passing on information about a prospective price increase. At 18.31, Ian Carmichael rang Phil Carmichael for 30 seconds. 586 Once again, there were increases at a number of Mobil outlets within a range of times. Increases from 75.7 to 83.7 occurred at Mobil Moolap between 19.01 on 18 February and 09.32 on 19 February, at Mobil Newcomb between 19.57 and 08.32, Mobil Point Henry between 21.48 and 08.40, Mobil Gateway between 22.14 and 09.12 and Mobil Grovedale between 22.21 and 07.51 (the starting price at this outlet being 75.9). The first definitely timed Mobil outlet increasing was Mobil Manifold Heights, which moved from 75.9 to 83.7 at 23.54. 587 Slightly earlier than Mobil Manifold Heights, BP Hillford moved from 75.9 to 83.7. The first Apco move was Apco Geelong North at 00.05 on 19 February. Eighteen minutes later, however, Apco Geelong North moved down from 83.7 to 75.9 again. Other Apco outlets increased from 75.9 to 83.7, Apco Newcomb at 00.46, Apco Lara at 01.02, Apco Geelong East at 01.16, Apco Highton at 01.50, Apco Geelong South at 02.00 and Apco Geelong North again at 04.27. Mobil Geelong North then moved similarly at 05.55 and Mobil Latrobe Terrace at 06.26. 588 At some time between 07.28 and 07.40 on the morning of 19 February, 7-Eleven Newcomb moved from 75.7 to 83.7 and, at some time between 06.53 and 07.52, 7-Eleven Geelong East did the same. Although there was a one-minute call from Phil Carmichael to Ian Carmichael at 07.03, it does not appear to have been followed up by Ian Carmichael with any call to Chisholm, to prompt a call to Jacques Bodourian to attempt to persuade 7-Eleven to join the market increase. Indeed, the only possibly relevant phone call between Chisholm and 7-Eleven was at 15.10 on 18 February, when Darren Campigli rang Jacques Bodourian for one minute and five seconds, half an hour before Ian Carmichael's call to Chisholm as part of the call cycle. It is apparent that 7-Eleven increased its prices without prompting from anyone in Geelong, so far as Annexure B shows. 589 At 07.57 on 19 February, Ian Carmichael rang Darren Campigli for one minute. At 08.07, Chisholm telephoned Leahy for 30 seconds. The ACCC sought to draw the inference that this call was to persuade Chisholm to increase its prices. Chisholm did not increase its prices to 83.7 until 08.10 at Chisholm Leopold, 08.18 at Chisholm Geelong West and 08.27 at Chisholm Grovedale. In the meantime, at 07.51, Caltex Quick Bite increased from 76.9 to 83.5. This was also the price to which Brumar outlets began moving, with Shell Highton at 08.28 and Shell Speedwings at 08.46. The ACCC also submitted that a call from Ian Carmichael to Mr Andrianopoulos at 07.56, for 30 seconds, was an attempt to persuade Andrianopoulos to raise its prices. 590 In the course of the morning, price discounting to 83.4 began. Mobil Corio Village made this move at 10.17, Mobil Manifold Heights at 10.18, Mobil Belmont at 10.19. Apco joined the trend at 11.09 at Apco Geelong East, 11.41 at Apco Highton, 11.52 at Apco Geelong North and 11.56 at Apco Newcomb and 12.01 at Apco Lara. If the Apco Geelong South computer was still showing non-daylight saving time, it made a similar move at 11.33. Leahy reduced its prices at BP Leopold at 16.43 and BP Hillford at 16.51, both from 83.7 to 83.4. 591 The average price at Liberty Geelong North moved from 76.0 to 83.6 on 19 February. The ACCC contended that this suggests an increase at a very early stage to 83.7. Batesford Roadhouse increased from 76.7 to 83.4, suggesting an increase late in the day, when the Geelong prices had already declined to this figure. Similarly, the increase at United Convenience was from 75.9 to 83.4, suggesting that it did not move up particularly early. Andrianopoulos moved from 76.7 to 83.7, down to 75.9 and up to 76.3 at times unknown. Shell Waurn Ponds moved from 77.5 to 83.7 at a time unknown on 19 February. The only available figure for Shell Victoria Street shows an increase from 76.9 to 81.9 in the course of the weekend or on the morning of Monday, 21 February. 592 The large amount of telephone communication between the various parties on 17, 18 and 19 February 2000 is inconsistent with the proposition that there existed a series of interconnected arrangements or understandings as to price-fixing, involving nothing more than the passing of information as to a price and a time, in order for the parties to those arrangements or understandings to increase their prices to the stipulated price at or about the specified time. If such arrangements or understandings did exist, it ought not to have taken the number of repeated communications that occurred in order to secure a market-wide price increase that would stick. Plainly, even allowing for an exception for Leahy's decision to increase the price at BP Leopold very early, the price increases that did occur were spread over a considerable amount of time. After what the ACCC pointed at as the relevant call cycle, prices continued to decrease, with Leahy and Chisholm both moving down (other than at BP Leopold), to match earlier decreases at Apco and Mobil outlets to 75.9. It is true that both Leahy and Apco can be said to have moved up to 83.7, with the rises staggered from shortly before midnight on 18 February until 04.27 on 19 February (followed by the early decrease at Apco Geelong North, apparently to match Mobil Geelong North). Elsewhere, the possible influence of Mobil price increases cannot be disregarded. It suggests that a price increase from Melbourne was flowing into the Geelong petrol market in any event. The increases at the 7-Eleven outlets support this proposition. Notably, Chisholm did not increase until well after the opening time of its outlets on 19 February. If it were the case that the call from Ian Carmichael to Darren Campigli at 07.57 on that morning was to complain that Chisholm had not gone up, this would suggest that the call on the previous afternoon, as part of the call cycle, had no influence on Chisholm's decision. Only after it was satisfied that sufficient other market participants had moved did Chisholm make its own move. This suggests that there was no implementation of any arrangement or understanding between Leahy and Chisholm in this period. Although United Retail moved its price up to the standard of 83.7 on 19 February, its failure to make any kind of move at Shell Victoria Street also suggests that there was no implementation of Arrangement No 6. The absence of price data for BP Meredith makes it impossible to say that Arrangement No 7 was implemented. The absence of any specific times for price moves by Andrianopoulos make it impossible to find on the balance of probabilities that effect was given to Arrangement No 8. In the light of the early move by Leahy at BP Leopold and the range of times for other moves, it is also impossible to say on the balance of probabilities that Leahy and Apco were giving effect to Arrangement No 1. I cannot find that the data for this period supports the general oral evidence, or the ACCC's case. In fact, in the course of the two days, there were three identifiable call cycles, among a large number of other calls involving participants in the Geelong petrol market. 594 The low point of the price cycle appears to have been 79.5, to which the Apco outlets and most of the Mobil outlets had moved by late morning on Thursday, 24 February 2000. 595 The ACCC identified the first call cycle as beginning at 11.34, when Apco rang Liberty for three minutes and one second, considerably longer than would be necessary to communicate information about a prospective price increase. At 11.37, Apco rang Leahy for 29 seconds. At 11.38, Leahy rang Phil Carmichael for 27 seconds and then Chisholm for two minutes and 26 seconds, again longer than necessary if the call were only about a price increase. At 11.41, Leahy rang Colin Williamson for 52 seconds. At 11.42, Leahy rang BP Corford Express for 18 seconds. At 11.43, Leahy rang Gordon Primmer for 37 seconds and at 11.48, Leahy rang BP Meredith for 15 seconds. There were 26 further telephone calls, involving participants in the Geelong petrol market, between 12.30, when Chris Andrianopoulos rang Alan Shuvaly, and 16.08, when Leahy rang Chisholm. Five of these calls involved Chisholm and either the Leahy office or Ian Carmichael. Five more involved Colin Williamson and either Ian Carmichael or the Leahy office. Leahy rang BP Meredith twice and Gordon Primmer once, the calls being timed at one minute and 39 seconds, one minute and 48 seconds and four minutes and 20 seconds. Mr Primmer rang Stan Kerr twice and rang the Leahy office between those two calls. 596 The second call cycle identified began at 16.34, when Leahy rang the Apco office for one minute and 19 seconds. At 17.24 and 17.29, Michael Warner rang Colin Williamson for one minute and 30 seconds on each occasion. The first call was transmitted through Corio and the second through Geelong North, suggesting that Mr Warner was on the road at the time of the second call, although not far from the Leahy office. At 17.33, Leahy rang Colin Williamson for one minute and 12 seconds. At 17.34, the price at BP Leopold increased from 79.7 to 86.7. This was the earliest increase of significance during the period, and was substantially earlier than any other increase. It is clear that Leahy had formed the intention to increase its prices by this time. 597 At 17.34, Leahy rang Chisholm for 51 seconds. At 17.35, Leahy rang BP Corford Express for 18 seconds. At 17.38, Mr Warner rang Mr Primmer for one minute and 30 seconds. On this occasion, the call was transmitted through Geelong, suggesting that Mr Warner was still heading away from the Leahy office. Also at 17.38, Leahy rang Phil Carmichael, for a call lasting two minutes and 20 seconds, much longer than would be required for information about a prospective price increase. Mr Warner speculated in his evidence that this second call cycle would have concerned a prospective price increase, of which Leahy would have informed Apco an hour or so earlier at 16.34. He did not offer an explanation for the delay in contacting other competitors. 598 Early in the evening, between 19.51 and 22.16, four Brumar outlets all increased from 79.9 to 81.9, an increase of only 2.0. At 23.31, BP Torquay moved from 80.9 to 86.7 and at 23.35, BP Hillford moved from 79.7 to 86.7. Having regard to Mr Warner's evidence about the time at which he normally gave instructions for price increases, it can be inferred that he instructed these outlets to lift their prices at close to midnight, possibly before Mr Warner left the office prior to 17.30 on 24 February, and prior to the increase at BP Leopold. 599 The Apco increases all occurred between 00.46 and 03.06 on 25 February (making the usual assumption about Apco Geelong South). They were all from 79.5 to 86.7. The ACCC contended that the fact that Leahy and Apco had both increased their prices at this time suggests that the price increase was arranged in the telephone call at 16.34 the previous afternoon, well outside the time range that Ian Carmichael insisted was never exceeded, but in accordance with the pattern that Michael Warner said sometimes occurred, in which late afternoon phone calls led to an overnight price increase. 600 It is noteworthy that there is no sign of any Mobil increases on this occasion. Both the 7-Eleven outlets, 7-Eleven Newcomb and 7-Eleven Geelong East moved from 79.5 to 85.9 within the range of 03.31 to 05.11 on the morning of 25 February. This suggests that an increase in the Melbourne petrol price, probably occurring on Thursday, 24 February, was set to flow into Geelong on the Friday. No other recipient of a phone call from Leahy, Ian Carmichael or Michael Warner on 24 February increased prices at all, until Chisholm increased to 86.5 at Chisholm Geelong West at 07.16, Chisholm Leopold at 07.23 and Chisholm Grovedale at 07.46, all substantially after opening time. By the time of the last of these increases (if the usual assumption be made about the timing of Apco Geelong South), Apco began reducing its prices to 79.5, first at Apco Geelong North at 07.45, then at Apco Geelong South at 08.00, Apco Geelong East at 08.24, Apco Highton at 08.27, Apco Newcomb at 08.30 and Apco Lara at 08.52. In the meantime, Caltex Quick Bite had increased to 86.9 at 08.17. The Brumar sites began increasing to 86.7 with Shell Speedwings at 08.38, Shell Norlane at 08.45, Shell Belmont at 08.48, Geelong Car Spa at 08.54, Shell Westoria at 08.56 and Shell Highton at 09.12. 601 There were more telephone calls on the morning of 25 February. At 07.22, Ian Carmichael rang Colin Williamson for one minute and 30 seconds. At 07.26, Phil Carmichael rang Ian Carmichael for one minute. At 07.43, Darren Campigli rang Ian Carmichael for three minutes and nine seconds. It is difficult to see what this call would have had to do with price increases, having regard to its timing and length, and to the fact that the prices at Leahy and Chisholm outlets were already up, albeit to different amounts. 602 At 08.37, apparently without any contact with Apco, but perhaps with knowledge from board-spotting that Apco prices were decreasing, Leahy rang BP Corford Express for 13 seconds. At 08.39, Leahy rang Chisholm for 26 seconds. At 08.40, Leahy rang Phil Carmichael for 16 seconds. Phil Carmichael then rang Aaron Incoll at Mobil, for two minutes at 08.41, and Mobil Geelong North for one minute at 08.47. He then rang Ian Carmichael for one minute and 30 seconds at 08.49. At 08.51, Leahy rang Mr Anderson for two minutes and 23 seconds. At 08.54, Leahy rang Mr Mortimer for 28 seconds. At 08.56, Leahy rang Colin Williamson for 32 seconds. At 09.08, there was another call from Leahy to Mr Williamson for one minute and 22 seconds and at 09.10 another call from Leahy to Mr Primmer for 33 seconds. At 09.11, Mr Primmer rang Stan Kerr for 30 seconds. Leahy rang Apco for 16 seconds at 09.11. Mr Primmer rang Leahy back at 09.12 for 30 seconds and Leahy rang Mr Primmer at 09.14 for three minutes and 28 seconds. 603 At 09.17, Leahy rang Chisholm for two minutes and 32 seconds. At 09.21, Leahy rang Chris Andrianopoulos for 19 seconds. Mr Andrianopoulos returned the call at 09.22 for 15 seconds. Shell Waurn Ponds rang Leahy for one minute and 38 seconds at 09.27 and Chisholm rang Leahy for 26 seconds at 09.29. Leahy rang BP Meredith for one minute at 09.48 and at 09.54 rang David Mortimer for 49 seconds. Mr Primmer rang Leahy at 10.14 for 30 seconds. Shell Waurn Ponds rang Leahy at 10.21 for one minute and 32 seconds. Leahy rang Mr Andrianopoulos at 10.24 for 17 seconds and Phil Carmichael at 10.28 for 42 seconds. 604 In the meantime, prices at Mobil outlets had begun to move up to 86.5. The ranges for those for which precise times are not available were Mobil Point Henry (between 08.16 and 11.38), Mobil Moolap (between 08.26 and 09.46), Mobil Newcomb (between 09.05 and 11.16), Mobil Gateway (between 09.10 and 09.55) and Mobil Grovedale (between 09.19 and 11.14). The precise times were Mobil Geelong North at 09.15, Mobil Manifold Heights at 09.16, Mobil Belmont at 09.17, Mobil Corio Village at 09.18 and Mobil Latrobe Terrace at 09.20. 605 Apco increases to 86.5 began at 10.05 at Apco Geelong South, and continued at 10.21 at Apco Highton, 10.28 at Apco Lara, 10.31 at Apco Geelong North, 10.32 at Apco Newcomb and 11.07 at Apco Geelong East. In the meantime, BP Corford Express moved to 86.9 at 10.26. Leahy had already begun decreasing its prices from 86.7 to 86.5 at 09.07 at BP Leopold, followed by BP Hillford at 09.14. There was a further move downwards on the part of Mobil outlets and Apco outlets, to 85.9, in the course of the morning and the early afternoon, which Leahy followed at 17.04 at BP Leopold and 17.54 at BP Hillford. In the meantime, there continued to be very heavy telephone traffic between participants in the Geelong petrol market throughout the day. 606 At some time on 25 February, the ACCC submitted on opening or in the morning, Shell Victoria Street increased to 86.9, suggesting a price rise based on information other than any obtained by speaking with anyone at Leahy, because its price matched those set from Melbourne at Caltex Quick Bite and BP Corford Express. When Shell Waurn Ponds increased, it was only to 85.9, suggesting an increase later in the morning or in the afternoon, when the market had settled on this price. 607 This period represents another example of the lack of smooth functioning of the alleged arrangements or understandings which, by this time, might have been expected to be well-grooved. It is hard to believe that it was necessary to make three rounds of calls to secure a price increase towards the end of a week in the summer. Plainly, Chisholm did not adjust its prices in accordance with any move conveyed by either of the call cycles on 24 February. The lapse of time between the telephone conversations and the price increases, coupled with the fact that Chisholm adopted a price different from that of Leahy, makes this clear. Similarly, the two different price levels at the United Retail sites for which data is available suggest a lack of coordination both as to price and to time with Leahy. The number of communications between Leahy and BP Meredith, and their respective personnel, would make it difficult to suggest when Mr Primmer might have been induced to move his price to 86.7. In particular, there were communications from Leahy to him both shortly before and shortly after Leahy had begun to move its prices down to 86.5. 608 The ACCC case as to this occasion appears to be that there was an attempt to give effect to Arrangement No 1, by means of the second call cycle on 24 February. Not only was this call cycle initiated by Leahy, but there was a substantial time gap between the making of the call from Leahy to Apco and the commencement of what might have been described as a call cycle. If it could be said that Apco increased its prices because of that telephone conversation, it took very little time for Apco to reverse its decision when it became apparent that there was no move from any Mobil outlet. This fact tends to support the proposition that Mobil was a significant player in the market and was influential in Apco's decision to go up on other occasions, ie that Apco's moves on other occasions were not made as a result of telephone conversations with anyone at Leahy. If that were the case, the likelihood that the prices were increased because of telephone contact with Leahy is also diminished on this occasion. The greater likelihood is that Apco made its own decision, perhaps after receiving information from Leahy about a price rise in Melbourne, but very quickly resorted to a price reduction to maintain its sales volume when its major competitor, Mobil, did not increase. 609 The ACCC picked out certain phone calls on the morning of 25 February and sought to have the Court draw sinister inferences from them. It submitted that, when Ian Carmichael telephoned Mobil Geelong North at 08.47, it was to complain that Mobil was jeopardising the price rise. It said that the subsequent, quite lengthy, conversation between Leahy and Anderson at 08.51 did not result in Leahy reducing its prices, because it had confidence as a result of the phone conversation that Apco would again increase its prices. This was said to have precipitated the further round of calls. If that were the case, it would be more likely that the recipients of them, such as Batesford Roadhouse, would have moved only to 86.5, which was the new price in the market, and the price to which Leahy itself was in the process of moving. It is noteworthy that all of the telephone communication involving Leahy, Gordon Primmer and Stan Kerr did not result in any increase of significance at United Convenience. As for BP Meredith, nothing can be said, as there is no data. 610 I am unable to find on the balance of probabilities that effect was given to any such arrangement or understanding as that alleged by the ACCC during this period. On Thursday, 2 March 2000, Leahy made an attempt unilaterally to raise the market price to 87.5, by lifting its price at BP Leopold to that level from 81.3 at 13.31. 87.5 was the price to which other Leahy outlets, Apco outlets, most Mobil outlets, the Chisholm outlets and the Brumar outlets all increased overnight or in the morning. Clearly, Leahy did not derive the information on which it relied to initiate this price increase from the phone call it received from Peter Anderson at 16.03 on 2 March. It is that phone call that the ACCC pointed to as the beginning of the call cycle. 612 Indeed, there was what appeared to be a call cycle immediately after the telephone call from Mr Anderson to Leahy, which lasted for three minutes and 30 seconds, far longer than would be required to communicate a price increase and a time for that increase. The call was transmitted through Seymour. At 16.08, Leahy rang Colin Williamson for 54 seconds. At 16.10, Leahy rang BP Corford Express for 25 seconds. At 16.11, Leahy rang Chisholm for two minutes and 12 seconds. At 16.13, Leahy rang Phil Carmichael for 37 seconds. There is no telephone call recorded in Annexure B from Leahy, Ian Carmichael or Michael Warner to Mortimer Petroleum or David Mortimer until 07.09 on 3 March 2000, by which time a significant number of retailers in the Geelong petrol market had already increased their prices to 87.5. 613 There was a call from Michael Warner to Gordon Primmer at 17.43 for one minute, an hour and a half after the last call of the call cycle. Nevertheless, the ACCC argued that this was Mr Warner attempting to urge Mr Primmer to persuade Stan Kerr to increase the price at United Convenience, because Mr Primmer rang Mr Kerr for 30 seconds at 17.47. Mr Primmer then rang the Leahy office for one minute at 17.49, and Michael Warner for one minute at 17.50. The ACCC characterised these calls as being Mr Primmer's report back to Mr Warner (who was not in the Leahy office when he made his call to Mr Primmer) about the result of his call to Mr Kerr. 614 In the afternoon of 2 March, Apco moved its prices down as low as 80.2. At 23.08 that evening, Leahy's prices were lifted from 81.5 to 87.5 at BP Torquay and 80.4 to 87.5 at BP Hillford, the upper level being the same as that which had prevailed at BP Leopold since lunchtime on that day. 615 By that time upward moves on the part of Mobil outlets may already have been evident. Mobil Newcomb moved from 80.4 to 87.5 at some time between 17.13 on 2 March and 07.06 on 3 March. Mobil Moolap moved to 87.5 between 17.27 and 07.02. Mobil Gateway moved to 87.5 between 20.49 and 07.35. Mobil Manifold Heights moved to 87.7 at 23.47 and Mobil Belmont moved to 87.7 at 23.50. 616 As was usual at this time, the Apco increases began shortly after midnight, with Apco Geelong East at 00.16, Apco Newcomb at 00.22, Apco Geelong North at 01.58, Apco Highton at 02.00, Apco Lara at 02.07 and Apco Geelong South at 02.35 (or 03.35 if its time recording had not been adjusted for daylight saving). Mobil Geelong North did not move until 06.17 on 3 March and Mobil Latrobe Terrace also moved at 06.23 on that day, both to 87.5. In the meantime, Chisholm began its moves at Chisholm Leopold and Chisholm Geelong West at 06.13, shortly after opening, to 87.5, with a similar move later at Chisholm Grovedale at 07.28. Between 06.26 and 06.55, 7-Eleven Geelong East moved to 87.5 and at 07.20, BP Corford Express moved to 87.3. 617 Despite the move at 7-Eleven Geelong East, and the absence of any telephone call from Phil Carmichael, the ACCC submitted that calls at 08.02 and 08.03, from Leahy to Chisholm for 18 seconds and Darren Campigli for 33 seconds respectively, are likely to have been for the purpose of encouraging Chisholm to telephone Jacques Bodourian to persuade him to increase the 7-Eleven prices. It is more likely that someone at Leahy was returning a call made by Mr Campigli to the Leahy office at 07.58 for 38 seconds, than that Leahy was calling to urge a phone call to Mr Bodourian. In any event, 7-Eleven Newcomb increased its price between 08.41 and 08.47 that morning to 87.5. At 08.18, Caltex Quick Bite increased to 87.5. Brumar outlets began increasing to that figure with Shell Latrobe Terrace at 08.36, Shell Norlane at 09.16, Shell Belmont at 10.35, Shell Speedwings at 10.37, Geelong Car Spa at 10.43, Shell Westoria at 10.50 and Shell Highton at 11.11. 618 Also at 11.11, Mobil Corio Village dropped abruptly from 87.5 to 80.4. The ACCC contended that the possibility that Mobil was jepoardising the price increase by dropping its price was responsible for a flurry of telephone calls involving Leahy between 12.13 and 12.46 on 3 March. At 12.13, Leahy telephoned Gordon Primmer for 27 seconds. At 12.19, Mr Primmer called Stan Kerr for two minutes. At 12.21, Mr Primmer rang Leahy for 30 seconds. At 12.25, Leahy rang Mr Primmer again for 45 seconds. At 12.26, Leahy rang Chisholm for one minute and 12 seconds. At 12.27, Leahy rang Phil Carmichael for one minute and 22 seconds. At 12.29, Leahy rang Mr Primmer again for one minute and four seconds. At 12.30, Leahy rang Chris Andrianopoulos for one minute and six seconds. At 12.32, Leahy rang Mr Anderson for five minutes and 52 seconds. At 12.44, Mr Primmer rang Mr Kerr again for one minute. Mr Primmer then rang Leahy again for one minute at 12.46. At 12.46 also, Leahy rang Phil Carmichael for 30 seconds. 619 At 13.05, Apco Geelong North dropped from 87.5 to 80.4. This appears to have been a response to Mobil Corio Village reducing its price to that level almost two hours earlier. At 13.19, not long after Apco's reduction at Apco Geelong North, Mobil Corio Village increased from 80.4 to 87.5. By this stage, most of the Brumar outlets had reduced their prices by 0.2 to 87.3. Prices generally began to ease back. Apart from the sharp dive at Mobil Corio Village and Apco Geelong North, the most significant decrease was at 13.30, when Leahy decreased its price at BP Leopold from 87.5 to 86.7. Oddly enough, BP Leopold was the leader again, because approximately half an hour after this, Mobil Manifold Heights at 14.01, Mobil Corio Village and Mobil Belmont all dropped to the same price, 86.7. At 14.53, Apco Geelong North followed Mobil Corio Village back up, but only to 86.7. The Apco and Chisholm sites all settled down to this price in the course of the afternoon, as did other Mobil sites and Brumar sites. 620 There was a series of telephone calls, all initiated by Michael Warner, beginning at 13.56 to Gordon Primmer for one minute, then at 13.57 to Peter Anderson for 30 seconds, at 13.58 to Ian Carmichael for 30 seconds, at 13.59 to Leahy for one minute, at 14.00 to Chris Andrianopoulos for 30 seconds and at 14.00 to Phil Carmichael for one minute. These were all transmitted through the mobile phone facility at Corio, but appear not to have been made from the Leahy office, because that was the destination of one of the calls. Mr Warner may have been on the road board-spotting at the time. It is unlikely that the decision by Leahy to reduce to 86.7 was the result of information conveyed by Mr Warner on this trip, because the price at BP Leopold had already been reduced to 86.7 and the price at BP Hillford was so reduced at 14.10. 621 Both Shell Victoria Street and Shell Waurn Ponds increased from 81.5 to 87.5 early in the day on 3 March. The price at United Convenience moved from 80.4 to 86.7 at some time during that day. The level adopted suggests that the move did not occur until after the market had begun to settle at that level. 622 The early rise at BP Leopold is a clear indication that Leahy was aware of a move in the Melbourne petrol market well before any telephone communication from Peter Anderson, and that Leahy also knew that the increase was likely to flow into Geelong and to be at that level. In this context, it is difficult to characterise the call from Mr Anderson to Leahy at 16.03 as initiating the implementation of Arrangement No 1. The call lasted for three minutes and 30 seconds. It may have involved an inquiry as to what Leahy knew of a likely price increase, but it is hard to see why the call could have occupied so much time if it were only about prices. Nevertheless, soon afterwards, there was a call cycle and there were price increases overnight. Again, the influence of Mobil outlets is apparent, but the difficulty of determining precise times of increases makes it difficult to know who was leading whom. On this occasion also, the Chisholm price increases did occur close to opening times for two Chisholm outlets, and Graeme Chisholm's evidence that the instructions for these increases were most likely to have been given on the previous day suggests that the decision might have been based on information obtained during the rather lengthy phone call from Leahy at 16.11 on 2 March. 623 The mysterious aspect of this period is all of the telephone activity on 3 March. There were few outlets, if any, that had not moved to 87.5 by 11.11 on 3 March, when Mobil Corio Village made its 7.1 reduction. This reduction did not lead immediately to a rush to follow Mobil Corio Village down. Indeed, it took almost two hours for Apco Geelong North to make a similar reduction, which Mobil Geelong North followed at 13.41, by which time Mobil Corio Village had already moved back up. It is hard to see how this little piece of maneouvring could have caused Leahy to think that the settled price rise was jepoardised, even if United Convenience had not yet risen, and could have led to the round of telephone calls to which I have referred above. The greater likelihood is that those telephone calls were about something other than prices. 624 Although it seems certain that Leahy did not rely on Peter Anderson to supply information about a prospective price increase, but obtained information from another source and implemented it without consulting any competitor, this period provides stronger circumstantial evidence than most of the periods chosen by the ACCC to support the theory that Arrangements Nos 1, 3 and 6 were given effect to. Of course, Ian Carmichael's time limitation must be disregarded, because the price increases were overnight, but the fact that both Chisholm and United Retail appear to have raised their prices early on the morning of 3 March, as well as the uniformity of prices adopted between Leahy, Apco, Chisholm and United Retail, makes the theory more plausible than in most instances. Again, however, the degree of influence of the Mobil outlets is unknown. The ACCC would like to have it that there was no influence on the overnight increases by a number of Mobil outlets moving at some time, but that the influence of a single Mobil outlet dropping its price on the following day was sufficient to cause a flurry of telephone calls. The latter proposition is less likely than the former. In the absence of price data for BP Meredith, it is impossible to say that effect was given to Arrangement No 7. This is one of only a handful of periods during the two years in question in this case on which it is even contended that all of the arrangements or understandings alleged to have been in existence at the time were put into effect. There are indications in the data in Annexure B that a price rise from Melbourne was about to flow into the Geelong petrol market. One such indication may be unreliable. The data shows Mobil Belmont increasing from 83.3 to 89.5 at midnight between 7 and 8 March. It may be that this entry should have been for midnight between 8 and 9 March, because otherwise it is isolated completely from moves at other Mobil outlets, which would be highly unusual. The Mobil outlets generally did not move totally independently of each other, so far as Annexure B shows. 626 Other indicators are more reliable, however. At 12.46 on 8 March, Leahy lifted its price at BP Leopold from 83.3 to 89.5. The fact that Mr Warner apparently felt confident enough to increase the retail margin at BP Leopold this early in the day suggests that, by that time, Leahy was in possession of information about the Melbourne increase and was signalling it to the Geelong petrol market. Whether it acquired that information from Peter Anderson in the course of two earlier phone calls from Leahy to Mr Anderson on that morning, or from some other source or sources, will never be known. At 15.18, Mobil Corio Village increased from 83.3 to 87.9. Again, this was a stand-alone increase, unless the Mobil Belmont increase really did occur at the beginning of that day. Both Mobil Belmont and Mobil Corio Village had their prices set by the same company, Rafinc. Perhaps the most significant indicator of a price increase flowing from Melbourne was that, at 15.40 on 8 March, BP Corford Express moved from 82.7 to 89.9. At 16.44, Alan Shuvaly telephoned Chris Andrianopoulos for one minute. This was in fact the fourth call by Mr Shuvaly to Mr Andrianopoulos, or the fourth attempt to reach him, there having been three 30-second calls at 15.59, 16.02 and 16.13 respectively, and an apparently returned call, lasting only two seconds, at 16.15. In the meantime, at 16.43, Mr Shuvaly reached Mr Anderson's message bank. At 17.05, Mr Anderson rang Mr Shuvaly and reached his message bank. At 17.06, Mr Anderson spoke to the Liberty head office for three minutes and 30 seconds. At 17.10, Mr Anderson rang Leahy for two minutes. At 17.12, Leahy rang Chisholm for one minute and 42 seconds. At 17.14, Leahy rang BP Meredith for 19 seconds. At 17.15, Leahy rang Phil Carmichael, reaching his message bank. At 17.15, Leahy rang BP Corford Express for 20 seconds. At 17.16, Ian Carmichael rang Colin Williamson for one minute. At 17.21, Leahy rang David Mortimer for 23 seconds. Mr Mortimer rang back at 17.29 for two minutes. At 17.54, Ian Carmichael spoke to Phil Carmichael for three minutes and 30 seconds. Again, this was far longer than was required simply to talk about an impending price increase. 627 At 18.22, Peter Anderson telephoned Mr Shuvaly and reached his message bank. At 19.31, Mr Shuvaly rang Mr Andrianopoulos for one minute and 30 seconds. At 20.20, Mr Shuvaly rang Mr Anderson for one minute and 30 seconds. 628 At 22.53, Leahy increased the price at BP Torquay from 82.9 to 89.5. At 23.47, Leahy increased the price at BP Hillford from 82.7 to 89.5. Once again, some of the Mobil outlets may have moved at earlier times. At some time between 17.45 on 8 March and 07.11 on 9 March, Mobil Newcomb moved to 89.3. At some time between 19.07 and 07.05, Mobil Moolap also moved to 89.3. At some time between 22.09 and 07.27, Mobil Point Henry moved to 89.3. Mobil Corio Village and Mobil Manifold Heights moved at 00.09 and 00.28 respectively. Because these are both Rafinc sites, it is possible that Mobil Belmont moved at about the same time; Annexure B shows no move upwards for Mobil Belmont, but it is shown decreasing from 89.5 to 88.5, along with Mobil Manifold Heights and Mobil Corio Village, at 18.53, 18.55 and 18.56 respectively, on 9 March. 629 The Apco moves began with Apco Highton at 01.51 on 9 March and proceeded until 02.34, with Apco Geelong North at 01.59, Apco Newcomb at 02.02, Apco Geelong East at 02.16, Apco Lara at 02.18 and Apco Geelong South at 02.34. All of these increases were to 89.7, except Apco Highton, which was to 89.5. 630 At some time between 04.58 and 05.04 on 9 March, 7-Eleven Geelong East moved to 89.3. A similar move was effected at 7-Eleven Newcomb between 05.22 and 05.32 on that morning. 631 Mobil Geelong North moved to 89.5 at 06.12, Mobil Latrobe Terrace at 06.18 and Mobil East Belmont at 06.38. No doubt to match the Mobil prices, Apco Geelong North dropped to 89.5 at 06.25. The first Brumar site to move was Shell Latrobe Terrace at 06.51, the price being 89.5. 632 The Chisholm moves were again well after opening time for its outlets, and were all to 89.5, Chisholm Geelong West moving at 07.22, Chisholm Leopold at 07.49 and Chisholm Grovedale at 07.49. At 07.23, BP Corford Express dropped to 89.5. Other Apco outlets also dropped to 89.5 during the morning. At 07.57, Leahy reduced the price at BP Leopold from 89.5 to 89.3. Brumar sites when they increased during the morning all came to 89.5, as did Mobil sites that had not yet increased. Oddly enough, Mobil Corio Village dropped from 89.5 to 82.9 at 08.20, only to return to 89.5 at 10.16. Leahy seems to have led the price reduction to 89.3, with BP Hillford and BP Torquay both reducing to this at 09.14. Chisholm followed at Chisholm Leopold at 10.48. So did Apco and other Mobil outlets. 633 There was an exchange of calls between Ian Carmichael and Colin Williamson, beginning at 07.27 with a call by the former to the latter, lasting 30 seconds. The call was returned at 08.24 for one minute and 12 seconds. The ACCC tended to suggest that the motivation for these calls was that Brumar had not generally increased by this time, but there is no evidence of any line of communication between United Retail and Brumar in relation to prices, so this is unlikely. In addition, the ACCC pointed to an exchange of calls between Michael Warner and Gordon Primmer, beginning at 17.33 on 9 March, and interspersed with a call from Mr Primmer to Stan Kerr. By that stage, the market had eased substantially, with the most common prices being 88.5 or 88.9. It is hard to imagine what these calls might have been about. In the late morning and the afternoon, there was a considerable amount of telephone communication between various parties, which appears not to have been about prices at all, because the evidence is unanimous that there was never any passing of information about price decreases. 634 The average price at Liberty Geelong North increased from 82.8 to 89.0 for whatever period for which it was calculated on that day. The ACCC submitted that the magnitude of the upper figure indicates an increase early in the day. It is difficult to tell to what price Liberty increased. Andrianopoulos increased from 83.7 to 89.5, then dropped to 82.7 and increased slightly to 82.9 at times unknown during the day. United Convenience increased to 89.2 at some time during the day. Batesford Roadhouse increased from 82.7 to 89.5 and then reduced to 89.3. The amount of the first increase suggests that Mortimer Petroleum was falling in with the market price, whether because of information passed on the previous day from Leahy or because of board-spotting is unknown. Similarly, United Retail increased its price from 83.9 to 89.5 at both Shell Victoria Street and Shell Waurn Ponds, apparently early in the day. Even at that stage, Robert Riordan would have done his usual daily round. From his office, he could have seen that Shell Speedwings was at 89.5 from 08.07. 635 The circumstantial evidence for this period clearly suggests that an increase from the Melbourne petrol market was flowing into Geelong. Leahy appears to have pioneered the increase, with its very early price hike at BP Leopold, but others were also prepared to put the price up. Again, the influence of the Mobil outlets is very likely to have been significant. If nothing else demonstrates it, this is shown by the apparent ambivalence about the exact level of the price, with Apco Highton moving only to 89.5, in line with Leahy and the Mobil outlets, but other Apco outlets moving to 89.7, until Apco Geelong North was forced to discount by 0.2 to match the Mobil price. The variation in price between Leahy and most of the Apco outlets suggests that each was arriving at its own decision as to the magnitude of the increase independently of the other. This makes it likely that the price increases were not the result of the implementation of Arrangement No 1. The fact that the Chisholm increases were delayed until well after opening time suggests that Chisholm was also making its own decision, and not raising its prices overnight simply because it had heard from Leahy on the previous afternoon. The situation with United Retail is unknown. On the face of the circumstantial evidence, it might have been matching Leahy's price because of information received about that price, or it might have been simply matching the market, particularly the Mobil outlets and Shell Speedwings. As for BP Meredith, it is simply impossible to say. It is going a very long way to say, as the ACCC attempted to do, that the calls between Michael Warner and Gordon Primmer in the late afternoon were an attempt to induce United Convenience to increase its price. By that stage, most of the market had increased, and discounting was already in progress, so it is difficult to see that the increase had not 'stuck'. 636 The attempt to rely on the circumstantial evidence to allege that effect was given to Arrangement No 8 is pure speculation. The calls between the relevant parties were spread over a much longer period, and were more numerous and lengthy than would be expected if all that was necessary was to give a price and a time. The absence of clear data as to times of price increases makes it impossible to establish by reference to the circumstantial evidence that each of the parties to Arrangement No 8 gave effect to it by increasing to the same price at or about the same time. So far as Liberty is concerned, it is not even possible to say that it adopted the same price. The fact that Andrianopoulos, having increased, decreased by a considerable amount on the same day suggests that it was following its usual pattern of attempting to be seen as significantly lower than the rest of the market, rather than giving effect to an arrangement or understanding that a price increase would occur to a particular amount. 637 In respect of this period, the circumstantial evidence does not support the ACCC's contention that effect was given to arrangements or understandings in relation to the price of petrol. In it, the ACCC alleges that effect was given to Arrangements Nos 1, 3, 6, 7 and 8, again the full range. The weekend immediately following Friday, 10 March was a long weekend, with a public holiday on Monday, 13 March. Prices had not had much time to decrease, and did not decrease much, from 9 March. The most common low price reached on 10 March was 87.9. The increase that did occur overnight on 10-11 March was not a very large one. The most common high price was 91.5, only 2.0 higher than the most common high price on 9 March, and less than 4.0 higher than the most common low price reached on 10 March. 639 In the morning and the early afternoon of 10 March, there was considerable telephone communication between various parties, particularly Mr Shuvaly and Mr Andrianopoulos, but also calls involving the Apco office, Mr Anderson, Leahy, Chisholm and Gordon Primmer. These are not calls on which the ACCC relied. Significantly, at some time between 15.38 and 16.02, Mobil Moolap increased its price from 87.9 to 90.4, suggesting that a further increase in the Geelong petrol market was in the offing. 640 At 16.25 on 10 March 2000, Chris Andrianopoulos rang Alan Shuvaly for 15 seconds. At 16.33, Mr Shuvaly rang Mr Anderson for one minute. At 16.38, Mr Andrianopoulos rang Mr Shuvaly back for 35 seconds. 641 At 16.39, Leahy increased its price at BP Leopold from 88.5 to 91.5, thereby signalling an increase to the price at which most of the market participants would later settle. Whether it did so on the basis of information given by Peter Anderson in a four-minute telephone call at 14.29 cannot be known. After the increase had occurred, Mr Anderson again made a four-minute call to Leahy at 16.48. At 16.53, Ian Carmichael rang Colin Williamson for 30 seconds. At 16.53, the Leahy office also rang BP Corford Express for 22 seconds. At 16.55 Leahy rang Phil Carmichael for 38 seconds. At 16.56, Colin Williamson rang Ian Carmichael back for 24 seconds. At 16.58, Leahy rang BP Meredith for two minutes and five seconds. At 17.03, Leahy rang David Mortimer for two minutes and 14 seconds. The length of these two calls, and their proximity, suggests that their principal subject at least was something other than petrol pricing. At 17.21, Apco called Leahy. The length of this call is unclear: the figure that appears in Annexure B is '233'. At 17.46, Mr Shuvaly rang Mr Andrianopoulos for 30 seconds. At 17.57, Mr Primmer rang Mr Kerr for 30 seconds, apparently unprompted by any communication from Leahy suggesting that he should do so, unless he delayed for almost an hour after such communication. 642 In the meantime, Leahy decreased its prices at BP Hillford at 17.55 and BP Torquay at 18.33 from 88.5 to 87.9. Apart from BP Leopold and Mobil Moolap, the first price increases in the market on 10 March were towards closing time for the Chisholm outlets. At 21.22, Chisholm Grovedale, at 21.58, Chisholm Leopold and at 22.05, Chisholm Geelong West all moved to 91.5. Mobil Latrobe Terrace also moved to 91.5 at 22.59. Leahy moved BP Hillford at 23.39, also to 91.5 and Mobil Manifold Heights moved at 23.46 to the same level. BP Torquay increased to 91.5 at 00.10 and Mobil Belmont at 00.24 on 11 March. The Apco increases probably began at 01.51 with Apco Highton, followed by Apco Newcomb at 02.20, Apco Geelong North at 02.21, Apco Lara at 02.23, Apco Geelong South at 02.38 and Apco Geelong East at 05.30. Between 03.08 and 03.26, 7-Eleven Geelong East moved to 91.5. 643 Once again, there were Mobil increases the precise times of which are unknown. The earliest may have been Mobil Moolap between 19.18 on 10 March and 10.26 on 11 March, Mobil Newcomb between 19.37 and 08.45, Mobil Point Henry between 21.33 and 10.42 and Mobil Grovedale between 22.00 and 07.39. 644 BP Corford Express moved to 91.5 at 06.55 on 11 March. Between 06.56 and 07.48, so did 7-Eleven Newcomb. Caltex Quick Bite was quite late on the scene at 09.55, as were the Brumar sites, led by Shell Speedwings at 11.40. The ACCC submitted that a call from Ian Carmichael to Colin Williamson for one minute at 07.48, a return call at 07.53 for 50 seconds, and subsequent calls from Mr Williamson to Mr Carmichael at 09.11 for 43 seconds and Mr Carmichael to Mr Williamson at 09.35 for one minute, Mr Williamson to Mr Carmichael at 10.44 for 52 seconds and Mr Carmichael to Mr Williamson at 10.50 for one minute may have been related to the fact that Brumar was not up. As I have said, the evidence is that United Retail had no line of communication with Brumar at this stage. Indeed, there had been no relevant line of communication since several months before Mr Heikkila's departure and the switch from United Fuels to United Retail in running the relevant Shell outlets. The number of the calls between Ian Carmichael and Colin Williamson suggests that there was some other subject agitating them. 645 Peter Anderson rang Leahy at 10.57 for 30 seconds on 11 March, and then rang Ian Carmichael for four minutes at 10.58. These calls were plainly not about a price increase. Indeed, not long after they were made, Leahy reduced the price at BP Leopold from 91.5 to 87.9. Mobil Corio Village went down in two steps, from 91.5 to 90.9 at 11.34, and from 90.9 to 87.9 at 11.45. Mobil Belmont dropped to 87.9 directly from 91.5 at 11.49. At 11.51, Apco began decreasing to 90.9 at Apco Geelong North. At 12.12, Leahy raised the price at BP Leopold again to 90.9. Also at 12.12, Mobil Geelong North followed Apco Geelong North down to 90.9. Other Mobil outlets also began to decrease to the same figure, as did Chisholm at Chisholm Geelong West. Interestingly, Chisholm Leopold and Chisholm Grovedale both dropped to 87.9. 646 The ACCC submitted that a call from Apco to Leahy at 11.46 was probably a complaint call about the reduction at BP Leopold. This is unlikely, in the light of the evidence that there were never calls about discounting, particularly never calls protesting about discounting. The ACCC also speculated that calls from Ian Carmichael to Graeme Chisholm at 12.59 and 13.08, both for 30 seconds, were about the fact that Chisholm had dropped its price, and to advise that Leahy had raised its price at BP Leopold. Again, this is unlikely. The evidence is clear that there were no phone calls in which market participants attempted to persuade other market participants not to reduce their prices once they had raised them. In any event, when Chisholm did raise its prices again, it was to a price that had become the common one in the market, at a lower level than the original price increases. It is more likely that the two phone calls in which Ian Carmichael spoke to Graeme Chisholm were concerned with matters other than prices. 647 United Retail increased its prices at Shell Victoria Street and Shell Waurn Ponds on Saturday, 11 March 2000, but to different amounts. Shell Victoria Street moved from 88.5 to 90.7. This increase must have occurred at some time during the morning or very early afternoon, because Shell Victoria Street did not remain open all day. As the increase was to a price slightly below that to which the market was moving down in the late morning and early afternoon, it is highly likely that the increase was late rather than early. Shell Waurn Ponds increased from 87.9 to 91.5, apparently early in the day. The fact that the timing and the amounts were different suggest that United Retail was not acting pursuant to any arrangement or understanding when it made its decisions about the prices at those two outlets. 648 Liberty Geelong North increased its average price for 11 March from 88.1 to 91.3. If it be assumed that it moved to 91.5 as a maximum price, then its move must have been early. As is quite usual, the Andrianopoulos price movements bore little resemblance to those of any competitor. At times unknown on 11 March, Andrianopoulos increased from 89.5 to 91.5, dropped back to 87.9 and then increased to 88.5. The circumstantial evidence is not sufficient to support the allegation of collusion between Apco, Andrianopoulos and Liberty in relation to petrol prices during this period. The most common price on the morning of Friday, 24 March was 83.5. In the course of that day, a large number of retail petrol outlets in the Geelong petrol market rose to 89.5, before easing to 89.1 and then to 88.9 (Apco and a number of Mobil outlets) before the end of the day. 650 The call cycle on which the ACCC relied began at 10.43 on 24 March, when Leahy rang Apco for one minute and 25 seconds. There was no initiating phone call from either Apco or Peter Anderson. This call followed immediately on a call from Leahy to Phil Carmichael. It is possible that, in that call, Leahy received information of a prospective Mobil price increase. Immediately after the call to the Apco office, at 10.44, Leahy rang Phil Carmichael for 26 seconds. At 10.45, Leahy rang Chisholm for 45 seconds. At 10.46, Leahy rang BP Corford Express for one minute and 23 seconds, significantly longer than would be necessary to pass on information about a price increase. At 10.48, Leahy rang David Mortimer for 38 seconds and at 10.49 Leahy rang BP Meredith for 44 seconds. At 10.53, Gordon Primmer rang Stan Kerr for one minute and 30 seconds, again longer than would be necessary to pass on information about a price increase. At 10.53, Leahy rang Chris Andrianopoulos for 19 seconds. At 11.10, Ian Carmichael rang Colin Williamson for one minute and 30 seconds, again a call of significant length. 651 Leahy began increasing its prices from 83.5 to 89.5 at 11.33 at both BP Leopold and BP Hillford. In Annexure B, these entries are followed at 11.34 by an entry suggesting that Mobil Point Henry decreased from 89.1 to 88.9 at some time between 07.59 and 11.34. This figure appears anomalous, and can probably be disregarded. There is no indication of any earlier increase at Mobil Point Henry to 89.1. The more likely explanation is that the decrease belonged to the morning of 25 March, rather than 24 March. 652 Some Mobil price increases may have begun occurring even before the Leahy increase. At some time between 10.31 and 12.17, Mobil Newcomb moved from 83.5 to 89.5, as did Mobil Gateway at some time between 11.19 and 12.38. Other Mobil sites followed shortly after. Apco increases began (on the assumption that the Apco Geelong South computer was still programmed for Eastern Standard Time) at 11.46 at Apco Highton, followed by Apco Newcomb at 11.47, Apco Geelong South and Apco Lara at 11.58 and Apco Geelong North at 12.02. Leahy increased its price at BP Torquay at 12.40, and Apco Geelong East at 12.41. 653 Chisholm also began increasing its prices, with Chisholm Grovedale moving from 83.5 to 89.5 at 11.52 and Chisholm Geelong West at 12.17. 654 Strangely, another round of telephone calls occurred during these price increases. Shell Waurn Ponds rang Leahy at 11.52 for 55 seconds. Ian Carmichael rang Peter Anderson, reaching his message bank at 11.55. At 11.59, Leahy rang Apco. At 12.21, Ian Carmichael rang Colin Williamson for two minutes and 30 seconds. At 12.28, Mr Williamson rang Mr Carmichael for 41 seconds. At 12.50, Mr Carmichael rang Mr Andrianopoulos for 30 seconds. At 13.03, Mr Carmichael then rang Gordon Primmer for one minute; at 13.08, he rang Colin Williamson for 30 seconds; at 13.10, he rang BP Corford Express for 30 seconds; and, at 13.13, he again rang Chisholm for two minutes. 655 BP Corford Express increased its price from 83.7 to 89.5 at 13.22, a minute before Caltex Quick Bite increased from 84.9 to 89.5. There were more telephone calls passing between Mr Williamson or Shell Waurn Ponds and Ian Carmichael or Leahy at about this time. The ACCC argued that these calls were related to the fact that Brumar outlets had not yet increased. This is highly unlikely. The number and duration of the telephone calls suggests strongly to the contrary. In any event, there is no evidence that anyone from United Retail was in touch with anyone from Brumar at this stage about prices; the evidence is to the contrary. Brumar increases in Geelong began at 14.28 with Shell Highton, followed by Shell Speedwings at 14.39, Shell Westoria at 14.48, Shell Belmont at 15.02, Shell Latrobe Terrace at 15.57 and Geelong Car Spa at 16.00. 656 In his evidence, Mr Warner suggested that it was possible that the phone call from Leahy to Apco at 10.43 was for the purpose of passing on to Apco what Leahy was intending to do in relation to prices. In relation to the second round of phone calls, Mr Warner said that these were probably follow-up calls, explained by the fact that price rises were spread over some hours. The problem with accepting this is that the second round of phone calls involved Chisholm, whose prices had already increased. 657 Shell Waurn Ponds increased its price at some time during 24 March from 83.5 to 88.9. The ACCC submitted that this was an early increase. If that were the case, it was clearly to a different price from the one to which other market participants went. In fact, the price matched the price to which Apco and Mobil outlets were coming down later on 24 March. It is more likely that United Retail did not increase its price at Shell Waurn Ponds until quite late in the day. Shell Victoria Street remained on 83.5 throughout the whole of 24 March, and only increased from that figure to 88.9 on the morning of Saturday, 25 March. The price data for United Retail, together with the amount of telephone traffic and the duration of some of the telephone calls all suggest that United Retail was not part of any price-fixing arrangement or understanding on this occasion. 658 At some time during the day on 24 March, United Convenience lifted its price from 83.5 to 89.1. At a later time, it reduced its price to 88.5. The only move at Andrianopoulos on that day was to reduce from 83.9 to 83.5 at some time. 659 The best that can be said about this occasion from the ACCC's point of view is that the data is consistent with the first round of telephone calls in the morning being instrumental in the price rises by Leahy, Apco and Chisholm. Once again, the timing of Mobil price rises is unclear. As I have said, United Retail is unlikely to have been involved. There is no evidence of any increase on the part of BP Meredith. The relevant call cycle began at 08.19, when Leahy telephoned Apco for two minutes and 16 seconds, a call unlikely to have been related solely to questions of price increases. There was no immediate follow-up to this call. At 08.31, Ian Carmichael rang Colin Williamson for 30 seconds. At 08.34, Leahy rang Phil Carmichael, reaching his message bank. At 08.37, Mr Williamson rang Ian Carmichael for 32 seconds. At 08.38, Leahy rang BP Corford Express for 15 seconds. At 08.39, Leahy rang David Mortimer for 26 seconds. At 09.00 Leahy rang Gordon Primmer for one minute and 18 seconds. Mr Primmer rang Stan Kerr at 09.03 for 30 seconds. At 09.28, Leahy rang Chisholm for three minutes and 30 seconds, with a follow-up call for a further 55 seconds at 09.41. The length of these calls makes it unlikely that they were related solely to a prospective price increase. At 10.07, Leahy rang BP Meredith for one minute and 39 seconds. At 10.23, Ian Carmichael rang Mr Williamson for 30 seconds. At 10.23, Ian Carmichael rang Chris Andrianopoulos for one minute. At 10.24, Ian Carmichael rang BP Meredith for two minutes and 30 seconds, again too long to be related only to the provision of information about a prospective price increase. At 10.37, Leahy rang Mortimer Petroleum for 57 seconds. There were then five separate telephone calls between Shell Waurn Ponds or Mr Williamson and Leahy or Ian Carmichael, between 10.53 and 11.24. At 11.30, Mr Primmer rang Leahy for 30 seconds. At 11.39, Leahy rang Mr Primmer for 25 seconds and at 11.42 Mr Primmer rang Leahy for two minutes. 661 In the meantime, the first of the price increases shown in Annexure B occurred at 09.00 at BP Corford Express, which raised its price from 82.5 to 86.9. The next price rise shown in Annexure B is at 11.31, when Leahy increased its price at BP Leopold from 81.7 to 86.5. This was followed by an identical increase at 11.44 at BP Hillford. 662 Chisholm began increasing to 86.5 at Chisholm Grovedale at 12.29, Chisholm Leopold at 12.30 and Chisholm Geelong West at 12.48. In the meantime, Apco began to increase at Apco Geelong North at 12.41. 663 The range of times for increases at Mobil outlets where precise times were not recorded began at Mobil Grovedale, where the price increased from 81.7 to 86.5 at some time between 10.48 and 14.03. Mobil Moolap moved between 11.28 and 15.16. Mobil Point Henry's range was from 11.58 to 14.30. Definite times are available for Mobil Corio Village, Mobil East Belmont and Mobil Geelong North, being 12.18, 12.21 and 12.43 respectively. Leahy's increase to 86.5 at BP Torquay occurred at 13.03. 664 Plainly what occurred on this day was that a price rise from the Melbourne petrol market flowed into the Geelong petrol market. This is clear from the fact that the earliest price increase was at BP Corford Express, the prices for which were set in Melbourne, independently of any phone call from Leahy. If it were to be supposed that the BP Corford Express rise was the result of the telephone call from Leahy 22 minutes earlier, then it was a rise that did not conform to the time of other price increases in the Geelong petrol market; indeed, it preceded those rises by three hours or more. 665 Graeme Chisholm's evidence was that Chisholm would have received a call to the effect that midday was the time for price rises, and would have checked board prices at other competitors before instructing its sites to increase. This evidence is consistent with the early Mobil increases, prices which were set in Melbourne and no doubt reflected what had occurred in the Melbourne petrol market. Given the lapse of time between 08.19 and the earliest Apco increase, it is unlikely that the telephone call was the trigger for that increase. It is more likely that Apco acted on other information as to Melbourne prices and possibly as to Mobil price increases. The large number of return calls between Leahy or Ian Carmichael and other market participants also tends to suggest that the calls were about matters other than price increases. If arrangements or understandings of the kind that the ACCC alleges were in place, it would appear to be unnecessary to have such a large number of calls. If it be suggested that the call from Mr Primmer to Stan Kerr at 09.03, following the call from Leahy to Mr Primmer at 09.00 was an attempt to persuade United Convenience to increase its price, it is unclear whether it was successful. At some stage, United Convenience increased from 81.9 to 86.3, a price to which Mobil Grovedale came down from 86.5 at some time between 15.49 and 16.53. Andrianopoulos had three price moves on that day, from 82.5 down to 81.7, then up to 81.9 and then up again to 82.5. Both Shell Victoria Street and Shell Waurn Ponds reduced on that day from 82.5 to 81.7. 666 It is unlikely that the price increases on this day reflected the giving effect to of any arrangement or understanding. The time lapse between the first round of telephone calls and any price increases would make the pattern inconsistent with that described by Ian Carmichael in his evidence. It is much more likely that the price rises that did occur simply reflected the flowing on of a price increase from the Melbourne petrol market to the Geelong petrol market. The period is characterised by a very large number of telephone calls between participants in the Geelong petrol market, as well as by some considerable price movements, both up and down. 668 In the early afternoon of Friday, 14 April, there was an apparent call cycle, on which the ACCC did not rely. At 14.42, Leahy reached Chris Andrianopoulos's message bank for 19 seconds. At 14.48, Leahy again rang Mr Andrianopoulos, this time reaching him for 32 seconds. At 14.49, Leahy rang Chisholm for five minutes and 53 seconds. This call must have been made by someone other than Ian Carmichael because, at 14.50, he rang Phil Carmichael's message bank on his mobile, then at 14.51 he rang BP Corford Express for one minute and then at 14.52 Colin Williamson for one minute. 669 The call cycle on which the ACCC did rely began at 15.42, with a one-minute call from Mr Andrianopoulos to Alan Shuvaly. At 15.47, Mr Andrianopoulos rang Peter Anderson for one minute and 44 seconds. At 15.54, Mr Anderson rang Mr Shuvaly for one minute and 30 seconds. At 15.57, Mr Anderson rang Leahy for five minutes and 30 seconds. At 16.03, Leahy reached Mr Andrianopoulos's message bank for a mere seven seconds. There appears to have been little urgency about the communications between the various parties up to that time. Telephone activity began in earnest at 16.05, when Leahy telephoned Chisholm for one minute and 32 seconds. At 16.06, Mr Carmichael rang Colin Williamson for one minute. At 16.08, Leahy rang BP Meredith for 46 seconds. At 16.09, Leahy rang BP Corford Express for one minute and 32 seconds. At 16.11, Leahy rang Phil Carmichael for 20 seconds. At 16.16, Leahy rang David Mortimer for 48 seconds. At 16.28, Colin Williamson rang Ian Carmichael for 53 seconds. At 16.33, Mr Anderson rang Leahy again for one minute. At 16.35, Leahy rang Mr Andrianopoulos for 40 seconds. At 16.36, Leahy rang Mr Anderson for one minute and eight seconds. 670 At 16.31, Apco Geelong South increased from 72.9 to 83.9. The time is likely to have been recorded accurately, because daylight saving had ceased on 26 March. At 16.36, Leahy began increasing its prices, with BP Leopold from 72.9 to 83.9, followed at 16.41 by BP Torquay from 73.9 to 83.9. There was then a further flurry of telephone calls, with Mr Shuvaly ringing Mr Andrianopoulos for one minute at 16.44, Mr Shuvaly reaching Mr Anderson's message bank at 16.45, Mr Anderson calling Mr Shuvaly for one minute and 30 seconds at 16.48, Mr Shuvaly calling Mr Andrianopoulos for 30 seconds at 16.51 and Mr Anderson calling Leahy for two minutes at 16.52. Leahy then rang Phil Carmichael for four minutes and 52 seconds at 16.53. Mr Anderson rang Leahy again for a further two minutes at 16.54. At 16.55, Mr Shuvaly rang Mr Andrianopoulos for 30 seconds. 671 At 16.55, Chisholm began increasing its prices to 83.9 at Chisholm Leopold, followed by Chisholm Grovedale at 17.06 and Chisholm Geelong West at 17.11. Caltex Quick Bite increased to the same price at 17.03. The Mobil increases began at 17.05, with an increase from 73.4 to 83.9 at Mobil Corio Village. Almost immediately, at 16.33, Apco lowered its price at Apco Geelong South to 83.5. 672 Apco continued its price increases with Apco Lara moving to 83.9 at 17.04, which it then dropped to 83.5 at 17.11, Apco Newcomb to 83.5 at 17.10 and Apco Geelong East at 17.31. 673 Still there were phone calls. At 17.43, Mr Anderson rang Mr Shuvaly for 30 seconds. At 17.45, Mr Shuvaly reached Mr Andrianopoulos's message bank. Mr Andrianopoulos returned the call, reaching Mr Shuvaly's message bank at 17.46. There is then recorded a one-second call from Mr Andrianopoulos to Mr Shuvaly at 17.46. Mr Shuvaly reached Mr Andrianopoulos's message bank again at 17.47. Mr Andrianopoulos reached Mr Shuvaly's message bank at 17.47. Finally, at 17.48, the two appear to have spoken in a call from Mr Andrianopoulos to Mr Shuvaly for 47 seconds. 674 At 17.53, Shell Speedwings, the first of the Brumar outlets to increase, moved to 83.9. At 18.00, BP Corford Express lifted its price to 83.5. Apco Highton also increased to 83.5 at 18.05. Mobil Belmont moved to 83.5 at 17.50, with other Mobil sites following some time later, Mobil Latrobe Terrace at 19.05, Mobil East Belmont at 19.10, Mobil Geelong North at 19.11, Mobil Newcomb at some time between 18.06 and 19.12 and Mobil Point Henry apparently at some time between midnight and 19.18. 675 There were yet more telephone calls. Phil Carmichael rang Ian Carmichael for two minutes and 30 seconds at 18.08, and again for one minute at 18.30. Darren Campigli rang Ian Carmichael for 41 seconds at 18.31. Ian Carmichael rang Mr Anderson for two minutes at 18.32 and then rang Phil Carmichael at 18.34. David Mortimer rang Ian Carmichael for 26 seconds at 18.37. Ian Carmichael rang Phil Carmichael for one minute and 30 seconds at 18.43. Colin Williamson apparently failed to reach Ian Carmichael shortly after this call was made. At 18.45, Ian Carmichael again rang Mr Anderson for one minute and 30 seconds. Ian Carmichael then rang Phil Carmichael for four minutes at 18.47. At 19.18, Ian Carmichael again rang Phil Carmichael for one minute. At 19.19, Ian Carmichael rang BP Meredith. At 19.20, Colin Williamson rang Ian Carmichael for 28 seconds. At 19.22, Mr Carmichael rang Mr Williamson back for one minute. At 19.24, Gordon Primmer rang Ian Carmichael, apparently returning the earlier call. Mr Primmer then rang Stan Kerr for one minute at 19.26, and rang Mr Carmichael again for 30 seconds at 19.27, with another 30-second call at 19.28. 676 At 19.35, Ian Carmichael rang BP Corford Express for one minute. At 19.37, Mr Carmichael rang Colin Williamson for two minutes and 30 seconds. At 19.37, Mr Anderson rang Mr Shuvaly for three minutes and 30 seconds. At 19.40, Ian Carmichael rang Phil Carmichael for five minutes. Also at 19.40, Mr Anderson reached Mr Shuvaly's message bank and Mr Shuvaly reached Mr Andrianopoulos's message bank. At 19.42, Mr Andrianopoulos spoke with Mr Shuvaly for one minute and 46 seconds. 677 Prices then began to revert to the levels at which they had been much earlier in the day. At 19.47, Mobil Manifold Heights reduced from 83.5 to 72.9. Mobil Belmont did the same at 19.48 and Mobil Corio Village at 19.50. Apco followed suit at 19.52 at Apco Lara, 19.53 at Apco Geelong East, 19.54 at Apco Geelong North and 19.59 at Apco Newcomb. The ACCC contended that this was evidence that, for some reason that is not immediately apparent, the price rise did not 'stick'. 678 There was yet more telephone activity on 14 April. At 20.02, Mr Anderson rang Ian Carmichael for three minutes. At 20.05, Ian Carmichael rang Phil Carmichael for two minutes. At 20.10, Mr Anderson rang Mr Shuvaly for one minute and 30 seconds. At 20.13, Mr Shuvaly rang Mr Andrianopoulos for 30 seconds. At 20.15, Ian Carmichael rang Peter Anderson for two minutes and 30 seconds. 679 At 20.26, Apco began increasing its prices again, to 83.5, with Apco Geelong North at that time, Apco Lara at 20.34, Apco Geelong South at 20.48 and Apco Geelong East at 22.10. In the middle of these increases, Apco Highton dropped to 72.9 at 20.43, and then increased back to 83.5 at 21.05. These increases were closely in tandem with Mobil outlets, Mobil Geelong North moving to 83.5 at 20.27, Mobil Latrobe Terrace at 20.31, Mobil Manifold Heights at 20.34, Mobil Belmont at 21.01 and Mobil Corio Village at 21.16. 680 In the course of 14 April, Liberty's average price decreased from 74.5 to 74.1. The price at Andrianopoulos dropped from 74.9 to 72.9, increased to 73.9 and then to 74.5. United Convenience also eased its price during the day from 73.9 to 73.4 and then to 72.9. 681 On the morning of Saturday, 15 April, some prices were still increasing, whereas others were beginning to decline. Brumar outlets were still increasing, with Shell Highton going from 74.4 to 84.9 at 07.17 and Shell Anglesea from 74.4 to 84.5 at 07.36, Shell Norlane moving from 73.4 to 83.5 at 08.15 and Shell Westoria doing likewise at 08.31. In the meantime, however, Shell Speedwings and Shell Belmont dropped from 83.9 (to which they had moved on the previous day) to 83.5. Between 06.56 and 07.42, 7-Eleven Geelong East increased from 73.9 to 83.5, as did 7-Eleven Newcomb between 07.05 and 07.47. At 10.12, Shell Highton dropped from 84.9 to 84.5 and at 11.05, Shell Latrobe Terrace declined from 83.9 to 83.5. Chisholm joined the reductions of 0.4, moving to 83.5 at Chisholm Grovedale at 12.16, Chisholm Geelong West at 12.16 and Chisholm Leopold at 12.22. Leahy joined in with BP Hillford, moving at 13.05 to 83.5. In the course of the afternoon, the Apco outlets and a number of Mobil outlets moved downwards to 82.9, and then to 82.5, the latter price being matched by Leahy at BP Leopold at 17.47 and BP Hillford at 18.16. 682 At 11.43 on 15 April, Mr Shuvaly rang Mr Andrianopoulos for two minutes. At 16.10, Mr Anderson rang Mr Andrianopoulos for three minutes and 30 seconds. The ACCC endeavoured to characterise the latter call as a complaint from Mr Anderson to Mr Andrianopoulos, about the latter failing to raise the prices at Andrianopoulos. In fact, at some time during the day, prices at Andrianopoulos moved up from 74.5 to 83.5, down to 72.9, back up to 83.5 and down again to 72.9. Given the length of the telephone call it is difficult to suggest that it was entirely concerned with a complaint about failure to raise the price. Liberty's average price for the day increased from 74.1 to 83.2, which the ACCC submitted was indicative of a price increase early in the day. Finally, United Convenience increased from 72.9 to 83.5 at some time during the day. 683 The large amount of telephone communication on 14 April is at odds with the oral evidence of arrangements operating smoothly, in which it was only necessary for a call to be made to convey a price and a time, in order to induce the other party to increase the price to a stated level at that time. Many of the telephone conversations, which apparently occurred at crucial times for giving effect to arrangements or understandings, were of such a length as to suggest that far more was conveyed than just a price and a time. Indeed, in the light of the oral evidence, it is difficult to accept that long conversations were ever needed, whether to initiate a price rise or to complain that it had not been carried into effect. For instance, if Mr Anderson were really ringing Mr Andrianopoulos at 16.10 on 15 April to complain that Andrianopoulos had not increased its price, he would hardly have required three minutes and 30 seconds to convey that message in what was apparently his blunt style. 684 Apco's quite swift move to reduce its prices from 83.9 to 83.5 suggests that it had no confidence in a price increase to 83.9 occurring, despite the considerable amount of telephone activity. Plainly, in so reducing its price, Apco was reacting to something other than telephone information, although the data in Annexure B does not reveal to what it was reacting. Similarly, the abrupt dropping of prices on the evening of 14 April by Apco and some of the Mobil outlets, suggests other forces at work. Leahy and Chisholm had both moved to 83.9 within a relatively short time of each other, but within that time Apco was already coming down. Having apparently been forced to reduce its prices dramatically (probably by the Mobil moves, which were set from Melbourne), Apco then made another attempt in the evening to push the price back up to 83.5, which appears to have been successful, at least as far as its Mobil competitors were concerned. The absence of any sign of an upward move on the part of either Andrianopoulos or Liberty on 14 April is entirely inconsistent with the proposition that effect was given to Arrangement No 8. Even allowing for the possibility that Liberty moved its prices up to around 83.5 fairly early in the morning on 15 April, both it and Andrianopoulos did not move until after midnight, a long time after other prices had already moved. 685 The best that can be said for the ACCC's case for this period is that telephone communication between Leahy and Chisholm was followed closely by increases in their prices, which remained firm. Of course, it is not known whether the increase reflected an increase from the Melbourne petrol market, flowing into Geelong on a Friday, coupled with a removal of price support from Chisholm by Caltex. At 10.20, Ian Carmichael rang Peter Anderson for 30 seconds, the second such call for the day (the first was at 09.13). It was not until 11.06 that Mr Carmichael engaged in what the ACCC identified to be the rest of the relevant call cycle. At 11.06, Mr Carmichael rang Colin Williamson for one minute. At 11.07, he rang Chisholm for one minute and then at 11.08 he rang Darren Campigli for one minute. At 11.09, Mr Carmichael rang Phil Carmichael for 30 seconds. At 11.10, he rang BP Corford Express for 30 seconds. At 11.11, Mr Carmichael rang Chris Andrianopoulos for 30 seconds. At 11.23, he rang Mortimer Petroleum for one minute. At 11.34, Leahy telephoned Chisholm for 11 seconds. 687 At 11.46, Leahy increased its price at BP Hillford from 76.5 to 83.5. It did the same at BP Leopold at 12.12. In the meantime, Leahy telephoned BP Meredith for 56 seconds at 11.50. 688 Mobil sites began moving up at 12.12, with Mobil Manifold Heights also moving from 76.5 to 83.5, followed by Mobil Belmont at 12.33, Mobil Corio Village at 13.03, Mobil Geelong North at 13.27, Mobil Latrobe Terrace at 13.31, Mobil East Belmont at 13.42, Mobil Moolap at some time between 12.57 and 13.43, Mobil Grovedale at some time between 13.09 and 13.45. 689 In the meantime, Shell Waurn Ponds telephoned Leahy for 29 seconds at 12.52. Colin Williamson then called Ian Carmichael for 22 seconds at 12.53. 690 Brumar began increasing its prices to 83.5 at 12.58 at Shell Latrobe Terrace, 13.00 at Shell Highton, 13.08 at Shell Speedwings, 13.41 at Shell Norlane, 14.15 at Shell Belmont and 14.43 at Shell Westoria. Leahy increased the price at BP Torquay to 83.5 at 13.14. Chisholm began its increases at 13.26, with Chisholm Grovedale, followed by Chisholm Geelong West at 13.38 and Chisholm Leopold at 13.44, all to 83.5. Apco similarly increased from 76.5 to 83.5 at Apco Geelong South at 13.31, Apco Geelong North at 13.33, Apco Newcomb at 13.38, Apco Geelong East at 14.26 and Apco Highton at 14.27. 691 As early as 14.38, discounting began, with Mobil sites beginning to move down to 82.9. BP Corford Express did not increase its price until 15.15, shortly before Leahy dropped its price at BP Leopold to 82.9 at 15.26. The Apco prices all moved to 82.9 (or in the case of Apco Newcomb to 81.9) between 15.34 and 16.29. Chisholm followed the downward movement in the evening, probably at closing time for each of its outlets. 692 At some time on 20 April, Shell Waurn Ponds increased from 77.9 to 83.5. Shell Victoria Street apparently remained on 76.9 throughout the entire day. 693 This day represents a fairly obvious example of the flowing of a Melbourne market increase into the Geelong petrol market. Apart from Leahy, with its increases at BP Hillford and BP Leopold, the first to move were the Mobil outlets. The Apco move at Apco Geelong North followed within about six minutes the move at Mobil Geelong North. Brumar was among the early movers, apparently without the benefit of telephone communications. The moves by Mobil and Brumar provide the clearest evidence that a Melbourne petrol price increase was spreading to Geelong. Ian Carmichael may have had prior knowledge of the Melbourne increase, and may have spread news of it to others. If his phone call at 10.20 did spread news of it to Mr Anderson, the latter took more than three hours to react to the news, and reacted only after Mobil Geelong North (directly across the road from Apco Geelong North, and from the Apco office) had moved. Similarly, Chisholm appears to have delayed by more than two hours after any telephone communication from Mr Carmichael. United Retail clearly did not implement any arrangement or understanding at Shell Victoria Street, and the time at which it increased its price at Shell Waurn Ponds to 83.5 probably reflected information Mr Riordan had about market moves more than it did any telephone communication. 694 On balance, the data for 20 April 2000 does not support the ACCC's contentions with respect to any arrangement or understanding. The call cycle identified began at 13.12, with a phone call for 30 seconds from Peter Anderson to Leahy. This was followed at 13.14 by a call from Mr Anderson to Ian Carmichael, this time for three minutes, far longer than required to communicate a price and a time. At 13.18, Mr Carmichael rang Colin Williamson for 30 seconds. Colin Williamson returned the call at 13.19 for 13 seconds. Mr Carmichael rang Chisholm for two minutes and 30 seconds at 13.22, again for longer than was necessary to communicate brief information. At 13.24, Mr Carmichael reached Mr Anderson's message bank. At 13.25, Mr Carmichael rang the Apco office for 30 seconds. 696 In the course of this chain of telephone calls, Leahy reduced the price at BP Torquay from 78.9 to 78.5. Some seven minutes after the last phone call from Mr Carmichael to Apco, Leahy increased its price at BP Hillford from 78.5 to 86.5. This was followed by an increase from 77.4 to 86.5 at BP Leopold at 13.44, and an increase from 78.5 to 86.5 at 13.45 at BP Torquay. In the meantime, Apco began increasing its prices, starting with Apco Geelong North at 13.43. Apco Newcomb moved to 86.5 at 13.45, Apco Lara at 13.46, Apco Highton at 14.17 and Apco Geelong East at 14.25. Chisholm also increased to 86.5 at 14.18 at Chisholm Grovedale, 14.31 at Chisholm Leopold and 14.32 at Chisholm Geelong West. Mobil increases began, possibly as early as 13.25 at Mobil Point Henry, but certainly at 14.23 at Mobil Latrobe Terrace, 14.28 at Mobil Belmont, 14.31 at Mobil Corio Village, 14.36 at Mobil Geelong North, 14.39 at Mobil Manifold Heights and 14.43 at Mobil East Belmont. The earliest Brumar increase to 86.5 was not until 16.27 at Shell Latrobe Terrace. 697 At 16.21 for one minute and 30 seconds, and again at 16.29 for three minutes and 30 seconds, Phil Carmichael rang Michael Warner. At 16.30, the Leahy office rang Chisholm. At this time, Mr Warner would still have been engaged in his second conversation with Phil Carmichael, so he was unlikely to have been communicating the content of that phone call to Chisholm. At 17.07, Phil Carmichael rang Mr Warner again for one minute. Leahy then rang Chisholm for one minute at 17.10, with a return call at 17.11. The ACCC submitted that these calls match the pattern described of Phil Carmichael complaining about a failure on the part of 7-Eleven to increase and Leahy attempting to urge Chisholm to use its relationship with Jacques Bodourian to persuade 7-Eleven to match the increase. In fact, between 16.21 and 16.41, 7-Eleven Newcomb had moved from 78.5 to 84.9. In between 17.08 and 17.23, it made a further move to 86.5, matching what had become the prevailing market price. 7-Eleven Geelong East also moved to that price between 17.21 and 17.36. 698 There is some evidence suggesting that an increase in the Melbourne petrol market price was flowing into Geelong on this occasion. At 17.45 on Tuesday, 9 May 2000, BP Corford Express (the prices for which were set in Melbourne) increased from 79.5 to 85.9. Some time in the morning on 10 May, BP Corford Express dropped its price to 79.9. It moved it to 86.5 at 15.14. The move on 9 May was probably the result of a price move in Melbourne, and was designed to anticipate a price move in Geelong that did not occur overnight. 699 Otherwise, the evidence for this occasion is consistent with the proposition that Mr Anderson communicated to Leahy information about a prospective price increase and that Ian Carmichael communicated it to Chisholm, although both phone calls were likely to have been about something else besides a price increase, if they were about that subject at all. The more or less simultaneous movements in the prices of Leahy, Apco and Chisholm lend some support to the proposition that effect was being given to Arrangements Nos 1 and 3. This is one of the few occasions on which less than two hours elapsed between telephone calls and price rises, although only on the part of three market participants, Leahy, Apco and Chisholm. Interestingly, at 08.07 on Thursday, 18 May, Mobil Belmont increased its price by 10 to 87.9, which was to become the market price during the afternoon of 19 May, before prices eased to 87.5. At 09.17 on 19 May, Ian Carmichael telephoned Apco for two minutes. He did not engage in any call cycle immediately following this phone call. At 10.04, Apco began increasing its prices to 87.9, first at Apco Geelong North and Apco Geelong South, then at Apco Geelong East at 10.05, Apco Newcomb at 10.08, Apco Lara at 10.09 and Apco Highton at 10.44. The Leahy increases were only to 87.5, and occurred at 10.25 at BP Leopold, 10.48 at BP Hillford and 11.13 at BP Torquay. Only after they had occurred was there any sign of any communication from Leahy to other competitors. At 11.39, Mr Carmichael rang Chisholm for one minute. At 11.44, he rang Mr Anderson for 30 seconds. Chisholm increased to 87.5 at Chisholm Geelong West at 11.45 and Chisholm Leopold at 12.04. At some time between 11.50 and 12.05, 7-Eleven Geelong East moved to 87.5. At 12.26, Caltex Quick Bite increased to 87.9. 701 Shortly afterwards, at 12.30, Apco began decreasing its prices to 77.5, first at Apco Geelong East at 12.30, then at Apco Geelong South at 12.40, Apco Geelong North at 12.42, Apco Newcomb at 12.43, Apco Lara at 12.50 and Apco Highton at 13.22. 702 At 12.39, Mr Anderson again rang the Leahy office, this time for four minutes. At 12.53, Ian Carmichael rang Mr Anderson for one minute and 30 seconds. 703 Mobil sites began moving up from 13.25 with Mobil East Belmont, Mobil Geelong North, Mobil Manifold Heights and Mobil Corio Village all within 20 minutes and all to 87.9. Other Mobil sites followed. Apco moved up again from 14.04 at Apco Newcomb to 87.5, with a similar move at Apco Geelong North at 14.07, followed by Apco Geelong South at 14.24, Apco Geelong East at 14.29, Apco Highton at 14.42 and Apco Lara at 14.45. 704 Mr Anderson rang Leahy at 15.04 for four minutes and 30 seconds. At 15.26, Ian Carmichael rang BP Corford Express for one minute. BP Corford Express increased its price to 86.9 at 15.35. Brumar then began increasing to 87.5, starting with Shell Belmont at 15.44. There were several telephone calls involving Peter Anderson, Ian Carmichael and other participants in the Geelong petrol market later in the afternoon. 705 The ACCC attempted to characterise this day as one on which Leahy and Apco collaborated to attempt to increase the market price, but the rise did not stick. This is unlikely. The length of the telephone call at 09.17, and the fact that it was not followed by any call cycle, suggest that the call was about something other than a price rise. The probabilities are that Apco was attempting to increase the price, trying to push it to 87.9. When Leahy did increase its prices, it was only to 87.5, suggesting that its information about any preceding Melbourne petrol price increase caused it to choose a lesser price. Apco was forced to bring its price down when no-one else followed suit, and only went up again after the Mobil outlets began to move. This suggests the absence of collusion. The evidence about the setting of prices for BP Corford Express in Melbourne, and the choice of a price differing from that of Leahy, suggest that the phone call at 15.26 from Mr Carmichael to BP Corford Express did not influence the price increase. 706 19 May 2000 does not provide evidence supporting the proposition that effect was given to Arrangement No 1. Once again, in this period, BP Corford Express appears to have signalled an impending increase, flowing from the Melbourne petrol market, when it increased its price from 82.7 to 89.5 at 14.30 on Thursday, 25 May. At 08.14 on 26 May, BP Corford Express dropped its price back to 82.9, roughly the market price in Geelong at that time. 708 At 13.06 on 26 May, Alan Shuvaly reached Peter Anderson's message bank. Mr Anderson rang back at 13.34, for a call timed at seven minutes, extraordinarily long to discuss a prospective price increase. At 13.45, Mr Anderson again reached Mr Shuvaly's message bank for one minute. At 13.50, Mr Shuvaly rang Chris Andrianopoulos for 30 seconds. There is also recorded a call from the Apco office to Mr Shuvaly's message bank at 13.57, timed at eight minutes and 19 seconds, which seems unusually long for the leaving of a message, and is therefore probably inaccurate. 709 At 14.11, Apco reduced its price at Apco Geelong North from 82.7 to 79.9, a decrease followed six minutes later by Mobil Geelong North. 710 At 14.33, Mr Andrianopoulos rang Leahy for two minutes and 40 seconds. At 14.50, Phil Carmichael rang Michael Warner for three minutes and 30 seconds. At 14.56, Leahy rang Mr Anderson for one minute and eight seconds. Mr Anderson then rang Mr Shuvaly at 14.59 for two minutes and Mr Shuvaly rang Mr Andrianopoulos at 15.03 for two minutes. Mr Anderson himself then rang Mr Andrianopoulos at 15.06 for one minute. Ian Carmichael rang Mr Anderson for one minute and 30 seconds at 15.14. Mr Shuvaly had another 30-second call to Mr Andrianopoulos at 15.15. At 15.18, Mr Andrianopoulos rang Leahy for one minute and 21 seconds and then, at 15.20, he reached Mr Shuvaly's message bank for 11 seconds. 711 At 15.22, Ian Carmichael began what the ACCC described as a call cycle with a phone call for 30 seconds to Colin Williamson. At 15.37, Leahy rang Chisholm for 25 seconds. At 15.47, Leahy rang Gordon Primmer for 49 seconds. At 16.18, Mr Anderson rang Leahy for 30 seconds and, at 16.20, Leahy rang Apco for a mere nine seconds. 712 The price-jousting between Apco Geelong North and Mobil Geelong North continued, with the former increasing to 82.7 at 16.30, followed by the latter at 16.45. In the meantime, Ian Carmichael rang Mr Andrianopoulos for two minutes at 16.26. Mr Primmer rang Leahy at 16.49 for one minute and 36 seconds. Mr Shuvaly rang Mr Andrianopoulos for one minute at 17.32 and Mr Andrianopoulos reached Mr Anderson's message bank for 16 seconds at 17.37. At 17.44, Mr Shuvaly made another call to Mr Andrianopoulos, which lasted two minutes. At 17.45, Leahy rang David Mortimer for 17 seconds. 713 At 18.26, Leahy began price increases to 88.9, with BP Leopold. It followed this at 19.17 at BP Torquay but did not increase BP Hillford until 20.02. In the meantime, at 18.58, Mr Anderson rang Mr Andrianopoulos for 15 minutes and 30 seconds. At 19.20, Mr Anderson rang Mr Shuvaly for two minutes. 714 Apco began increasing its prices to 88.9 at 19.49 at Apco Lara, followed by Apco Geelong East at 20.00, Apco Geelong North at 20.04, Apco Newcomb at 20.05, Apco Highton at 20.13 and Apco Geelong South at 20.15. At about this time, there were similar increases at some Mobil outlets, Mobil Latrobe Terrace at 20.02, Mobil Geelong North at 20.04 and Mobil East Belmont at 20.06. The first of the Brumar increases was Shell Speedwings at 20.26. Chisholm moved up at 19.51 at Chisholm Grovedale to 88.9, with a similar move at Chisholm Leopold at 21.12 and Chisholm Geelong West at 21.26. By this time, Apco had already begun moving down, with Apco Geelong North easing to 87.9 at 21.23, followed by Apco Geelong East at 21.24, Apco Newcomb at 21.33, Apco Geelong South at 21.33, Apco Lara at 21.41 and Apco Highton at 22.10. 715 Liberty's average price decreased for the day from 83.0 to 82.9. Andrianopoulos moved from 84.5 to 82.9, up to 83.2 and then up to 83.9 at some time during the day. Plainly, Liberty and Andrianopoulos had not responded on 26 May to any urging for a price increase. Both United Retail sites, Shell Victoria Street and Shell Waurn Ponds, remained at 83.5 throughout the entire day. There is no data for prices at BP Meredith, so it cannot be said that effect was given to Arrangement No 7 on 26 May. 716 On Saturday, 27 May, there was more telephone contact. At 07.45, Phil Carmichael rang Ian Carmichael for four minutes and 30 seconds. At 07.50, Ian Carmichael rang BP Corford Express for 30 seconds. At 07.51, he rang Darren Campigli for 30 seconds also. At 08.05, Leahy rang Graeme Chisholm for 18 seconds. The ACCC invited me to draw the inference that these calls involved a complaint by Phil Carmichael that 7-Eleven had not increased, with Leahy attempting to persuade Chisholm to put pressure on Jacques Bodourian to effect an increase. 7-Eleven Geelong East moved from 83.0 to 88.9 some time between 08.27 and 09.11, and 7-Eleven Newcomb moved similarly between 08.50 and 09.14, apparently without communication from Chisholm to Jacques Bodourian. Prices then generally eased down during the rest of the day as discounting occurred. 717 The average price for Liberty on 27 May increased from 82.9 to 86.7, suggesting that any increase was either not particularly early or not quite up to the prevailing market price. Andrianopoulos again put into effect multiple moves. Its first was from 83.9 to 87.9, suggesting that it was matching what the price had come down to at the Apco and Mobil outlets. It then dropped the price to 82.7 and increased it again marginally to 82.9. Shell Victoria Street increased from 83.5 to 87.9 at some time on the Saturday morning. Shell Waurn Ponds increased only from 83.5 to 83.7 on that day. This variation in United Retail's prices, together with the time elapsing between any relevant telephone call and any price increase by United Retail makes it very unlikely that effect was given to Arrangement No 6 in this period. 718 The call cycle identified for 26 May was a fairly desultory affair on the part of Leahy, with quite significant gaps between the calls. Whatever it was that involved communication between Mr Anderson and Mr Shuvaly, it occupied an inordinate amount of time for the mere discussion of a price increase at a particular time. In any event, a considerable time must have elapsed before Liberty increased its price, or else it did not increase to the level nominated. Either way, it is unlikely that it was implementing Arrangement No 8. It is impossible to tell at what time Andrianopoulos increased, so it cannot be said that it did so in response to any telephone call from either Mr Shuvaly or Mr Anderson. At best, from the ACCC's point of view, there might be said to be some temporal connection between the price increases at Leahy, Apco and Chisholm, although the increases are separated from any relevant phone calls by several hours, and are spread over a period themselves. In addition, on the very evening on which it had gone up, Apco began to discount its prices again, suggesting that it did not feel bound to maintain them at any particular level. It could be said that the data in Annexure B is consistent with the implementation of Arrangements Nos 1 and 3, if the maximum two-hour time limit between phone calls and price rise is ignored, but the data is also open to the alternative interpretation that a market increase from Melbourne was simply flowing into Geelong on a Friday (as signalled by BP Corford Express on the previous day) and that Apco, Leahy and Chisholm, along with Mobil and Brumar, were responding to that. Clearly, there had been a price increase in Melbourne, which was flowing into the Geelong petrol market. 85.9 was to be the new Geelong price. Leahy increased its prices to this level on the preceding day, 6 June, at BP Torquay from 82.9 at 13.45, and BP Leopold from 81.6 at 14.37 and BP Hillford from 81.9 at 14.38. Brumar also increased to 85.9 on that day, from 81.4, at Shell Belmont at 15.16 (easing to 85.8 at 18.40), Shell Highton at 15.33, Shell Speedwings at 15.36, Shell Latrobe Terrace at 15.45 and Shell Westoria at 19.36. Caltex Quick Bite increased from 81.5 to 84.9 at 16.35 on 6 June. At 18.03, Leahy began dropping its prices, with BP Leopold falling to 81.6 at that time, BP Hillford also to 81.6 at 18.50 and BP Torquay to 81.9 at 05.41 on 7 June. At 08.08 and 08.09 respectively on 7 June, Geelong Car Spa and Shell Norlane also increased from 81.4 to 85.9. Leahy then began increasing its prices again, with BP Torquay moving from 81.9 to 85.9 at 08.14. This was before any apparently relevant call cycle. 720 The call cycle on which the ACCC relied began at 08.30, with a call from Peter Anderson to Leahy for one minute and 30 seconds. At 08.32, Ian Carmichael rang Colin Williamson for 30 seconds. At 08.34, Mr Carmichael rang Chisholm for three minutes. At 08.38, he rang Chris Andrianopoulos for 30 seconds. At 08.39, and again at 08.49, he rang Colin Williamson, each call being timed at one minute and 30 seconds. 721 Prices in the market then began a peculiar oscillation. Shell Latrobe Terrace moved up slightly to 86.0 at 08.48 and Shell Belmont to 85.9 at 08.58, but Shell Speedwings dropped from 85.9 to 81.4 at 09.17, with Geelong Car Spa and Shell Westoria doing the same at 09.23 and 09.26. At 09.28, Leahy increased at BP Leopold from 81.6 to 85.9. The first Apco increase was at 09.40 at Apco Geelong South, from 81.4 to 85.9. At 09.45, Leahy increased at BP Hillford from 81.6 to 85.9. There were two more Apco increases from 81.4 to 85.9, Apco Newcomb at 09.56 and Apco Geelong North at 10.00. The first Chisholm move was from 81.6 to 85.9 at Chisholm Geelong West at 10.21. Mobil East Belmont and Mobil Geelong North both rose from 81.4 to 85.9 at 10.22 and 10.24 respectively, before Shell Norlane and Shell Belmont dropped from 85.9 to 81.4 at 10.24 and 10.27. Chisholm Grovedale rose from 81.6 to 85.9 at 10.28. Apco Lara rose from 81.4 to 85.9 at 10.33. Also at 10.33, BP Corford Express increased from 81.9 to 85.9, apparently without the benefit of any telephone call from anyone in Geelong to prompt such an increase. At 10.36, Caltex Quick Bite increased from 84.9 to 89.9. Mobil Latrobe Terrace at 10.37 and Apco Highton at 10.52 both increased from 81.4 to 85.9, before Caltex Quick Bite eased to 85.9 at 10.56. Shell Highton dropped to 81.4 from 85.9 at 11.07. At some time between 11.34 and 11.47, 7-Eleven Geelong East increased from 81.5 to 85.7. 722 Mobil outlets then began to fall, with Mobil East Belmont and Mobil Latrobe Terrace dropping from 85.9 to 81.4 at 12.03 and 12.53 respectively. Shell Latrobe Terrace dropped from 86.0 to 81.4 at 12.22, although BP Corford Express increased by a further 4.0 to 89.9 at 12.30. At 13.04, Leahy joined the move to drop prices, reducing from 85.9 to 81.4 at BP Leopold, followed by a similar move at BP Hillford at 13.11. In the meantime, Apco increased at Apco Geelong East from 81.4 to 85.9. At 13.30, BP Corford Express dropped back to 85.9 from 89.9. At 13.41, Shell Latrobe Terrace increased again from 81.4 to 85.9. 723 At 13.29, Mr Anderson rang Leahy for one minute and 30 seconds. At 14.06, Michael Warner rang Phil Carmichael for two minutes and 11 seconds. Phil Carmichael rang Mr Warner back for 30 seconds at 14.20, and Mr Warner rang him again at 14.24 for 45 seconds. Mr Warner then rang Chisholm for 47 seconds. Chisholm rang Leahy at 14.27 for one minute and 21 seconds. Mr Warner again rang Phil Carmichael for 40 seconds at 14.29. There were two more calls from Mr Anderson to Leahy at 14.29 for 30 seconds and 14.30 for three minutes and 30 seconds. At 14.37, Leahy rang David Mortimer for 25 seconds. At 14.56, Phil Carmichael again rang Michael Warner, this time for two minutes. In the meantime, Leahy had again increased its prices to 85.9 at BP Hillford at 14.39 and BP Leopold at 14.41. 7-Eleven Newcomb had also moved to 85.9 at some time between 14.33 and 14.42, apparently without any relevant telephone communication from anyone in Geelong. Mobil East Belmont and Mobil Latrobe Terrace moved back up to 85.9 at 15.04 and 15.13 respectively. At some time on 7 June, both Shell Victoria Street and Shell Waurn Ponds moved to 85.9, the former from 81.9 and the latter from 82.9. 724 The ACCC's argument pointed to the fact that Leahy, Apco and Chisholm all increased at some of their sites within an hour of telephone communications between them. The ACCC contended that the price rise did not stick, because the Brumar sites and some Mobil sites moved down, but Apco's and Chisholm's stayed up, and Leahy increased its prices again after receiving reassurance by telephone from Mr Anderson. The ACCC also submitted that the exchange of telephone calls between Phil Carmichael and Michael Warner was to do with the failure of 7-Eleven Newcomb to increase until after those telephone calls had been made, although Chisholm appears to have taken no action to contact Jacques Bodourian after Michael Warner spoke to someone at Chisholm. 725 This argument ignores a number of features of the data for the day in question and the preceding day. The rises on the preceding day to 85.9 cannot be ignored. Plainly, Brumar and Leahy both felt a need to increase, and both settled on 85.9 as the appropriate price to increase to, apparently without any collusion. Caltex Quick Bite also made two attempts to increase late in the afternoon on 6 June, although only to 84.9. The increase to 85.9 at Batesford Roadhouse at some time on 6 June is also significant. It does not appear from the data in Annexure B that Mortimer Petroleum received its information about that price from Leahy, or from any other competitor in the market. 726 Although Leahy dropped its prices again on 6 June, when much of the market had not moved, it is clear that it had determined to increase them again before any telephone communications on the morning of 7 June. It had done so at BP Torquay before such communications occurred. The increase was not in response to any prompting from Mr Anderson, but was clearly based on information from elsewhere. This information may have been shared with Colin Williamson (but would have had no effect on Mr Riordan's decision to increase United Retail's prices) and with Chisholm, but it is clear that a price rise to 85.9 was coming in any event. The relatively early rises at two significant Mobil outlets, as well as the BP Corford Express rise indicate this. It is understandable that some retailers would have felt some nervousness about the security of the rise, in view of the fact that Brumar had dropped its prices at some of its highly visible outlets at a fairly early time. The fact that Leahy also dropped its prices showed that it was not acting according to any arrangement or understanding with Apco, but was reacting to moves in the market. It is significant that, approximately one hour before Leahy's return to 85.9 early in the afternoon on 7 June, Brumar's prominent outlet at Shell Latrobe Terrace had already increased back to that level. 727 As for the contention that the calls between Phil Carmichael and Michael Warner were related to an attempt by Phil Carmichael to engineer an increase at 7-Eleven outlets, there are several points to be made. The first is that the chain of calls was initiated by Mr Warner, in the longest of the calls that were made, not by Phil Carmichael. The second is the obvious one that, although Mr Warner and perhaps somebody else at Leahy spoke with somebody at Chisholm, nobody from Chisholm appears to have contacted Jacques Bodourian. The third is that, in any event, 7-Eleven Geelong East had already increased more than two hours before the chain of phone calls to a price that was only 0.2 below the upper market price for most outlets on this day. 728 The uncoordinated nature of the price increases generally on this day, and the preceding day, the fact that Leahy had begun to increase before any relevant phone calls, and the other factors to which I have referred make it unlikely that Leahy and Apco increased their prices by giving an effect to any arrangement or understanding that each would do so. The same can be said in relation to Leahy and Chisholm. In the absence of specific evidence as to the time of increase of the United Retail sites, and in the light of the evidence about how its prices were set, and the evidence that the board price at Shell Speedwings was readily visible from the United Retail office, it is unlikely that the increases at the United Retail sites were the result of United Retail giving effect to any arrangement or understanding with Leahy. It is a day on which there were large numbers of telephone calls between market participants, and on which the ACCC submitted that an original price rise did not stick, so further telephone communication was necessary, to persuade various market participants to move up to the arranged price of 87.9. 730 The first round of relevant telephone conversations identified by the ACCC began at 08.22, when Peter Anderson rang Leahy for one minute. At 08.24, Mr Anderson reached Michael Warner's message bank. At 08.52, Mr Warner reached Mr Anderson's message bank. The two appear to have spoken finally for one minute and seven seconds at 09.15. There was then a brief delay before what is identified as the call cycle, beginning with a call from Leahy to Chisholm at 09.30 for two minutes and seven seconds, followed by a call from Leahy to Colin Williamson for 28 seconds at 09.32 and a call from Leahy to Gordon Primmer at 09.36 for one minute and three seconds. 731 Almost an hour later, Leahy began increasing its prices, with BP Leopold moving from 82.9 to 87.9 at 10.26, BP Hillford doing the same at 11.05 and BP Torquay moving from 83.5 to 87.9 at 11.55. Apco began moving at 11.02 at Apco Geelong South, followed by Apco Lara at 11.05, Apco Geelong North also at 11.05, Apco Newcomb at 11.12 and Apco Geelong East at 11.36, all from 82.5 to 87.9. Mobil East Belmont moved from 82.5 to 87.9 at 11.29. Shortly after the last of its upward moves, and shortly before Leahy's upward move at BP Torquay, Apco Geelong North moved back down from 87.9 to 82.5. 732 At 12.00, Phil Carmichael rang Michael Warner for one minute and 30 seconds. At 12.02, Leahy rang Peter Anderson for 30 seconds. At 12.02, Mr Warner rang Phil Carmichael back for 20 seconds. At 12.03, Phil Carmichael rang Mobil Geelong North for one minute and 30 seconds. At 12.05, Mr Warner rang Mr Anderson for 12 seconds. Also at 12.05, Mobil Latrobe Terrace increased from 82.5 to 87.9. At 12.05, Phil Carmichael rang Michael Warner for 30 seconds. Mobil Geelong North increased from 82.5 to 87.9 at 12.13. At 12.17, Apco Geelong North returned to 87.9. In the meantime, Apco had also increased its price to that level at Apco Highton. The ACCC submitted that the sequence of phone calls leads to the inference that Mr Warner sought Phil Carmichael's assistance in persuading Mobil Geelong North to increase its price to 87.9. Phil Carmichael's evidence was that, in 1999 and 2000, he regularly rang Mobil Geelong North to find out what the Apco price was. The ACCC's submission is also inconsistent with the chain of events. There was no communication from Apco to Leahy that might have contained information that Mobil Geelong North had not increased its price, and a request for assistance in that regard. The chain of telephone conversations was initiated by Phil Carmichael, not by Michael Warner, suggesting that it was about something other than prices. If, at 12.05, Mr Warner was reporting back to Mr Anderson that he had sought Phil Carmichael's assistance, he must have been doing so without any information from Phil Carmichael as to the outcome of his call to Mobil Geelong North. The next call from Phil Carmichael to Michael Warner came after the 12.05 call by Mr Warner to Mr Anderson. 733 At 12.30, Leahy began decreasing its prices from 87.9 to 82.5, with BP Leopold at that time and BP Hillford at 13.13. BP Torquay decreased to 82.9 at 13.46. Shortly after the first of these increases, another round of telephone communications began. At 12.34, Phil Carmichael rang Michael Warner for one minute. At 12.37, Leahy rang Chisholm for one minute and 30 seconds. At 12.45, Phil Carmichael rang Aaron Incoll for three minutes. Phil Carmichael then immediately rang Mr Warner again for one minute and 30 seconds. At 12.49, Leahy rang Colin Williamson for one minute and 13 seconds. At 12.59, Mr Anderson rang Leahy for 30 seconds, and at 13.00 he reached Michael Warner's message bank. Mr Warner rang Mr Anderson back at 13.01 for one minute and 25 seconds. At 13.03, Mr Warner rang Phil Carmichael for 58 seconds. Phil Carmichael then rang Mr Incoll for two minutes and 30 seconds. At 13.06, Leahy rang Chisholm for 52 seconds. 734 At 13.09, Apco began decreasing its prices from 87.9 to 82.9 at Apco Geelong South, followed by Apco Newcomb at 13.10, Apco Geelong East at 13.12, Apco Lara at 13.13 and Apco Geelong North also at 13.13. Apco Geelong South decreased by a further 0.4 to 82.5 at 13.37. Mobil Geelong North decreased to 82.9 at 13.56 and Mobil Latrobe Terrace at 14.01. 735 Leahy then initiated another round of increases to 87.9. It began this at BP Leopold at 14.15, with BP Hillford following at 14.58 and BP Torquay at 15.07. Brumar sites began to increase to 87.9, with Shell Speedwings at 14.20 and Shell Latrobe Terrace at 14.24. In the meantime, Apco sites were still decreasing, with Apco Geelong East moving to 82.5, Apco Highton from 87.9 to 82.9, Apco Newcomb, Apco Geelong North and Apco Lara all decreasing from 82.9 to 82.5 at 14.24 and 14.25. Similarly, Mobil Latrobe Terrace, Mobil Geelong North and Mobil East Belmont all decreased to 82.5 at 14.29, 14.30 and 14.33. Shell Westoria decreased to 82.5 at 14.39. 736 A third round of telephone calls then occurred. At 14.39, Leahy telephoned Mr Anderson for one minute. At 14.42, Leahy rang Chisholm for 35 seconds. At 14.43, Leahy rang Darren Campigli for one minute and 43 seconds. At 14.45, Leahy rang Mr Anderson for 18 seconds. At 14.50, Leahy rang Colin Williamson for 21 seconds. At 14.51, Leahy rang Gordon Primmer for 22 seconds. In the meantime, Brumar increased its price at Shell Highton to 87.9 at 14.49. 737 Chisholm began increasing at Chisholm Geelong West at 14.52, moving from 82.5 to 87.9. It followed this move at Chisholm Grovedale at 15.10 and at Chisholm Leopold at 15.13 (from 82.9). 738 At 15.04, Chisholm rang Leahy for two minutes and 22 seconds. At 15.07, Leahy rang Colin Williamson for 18 seconds. At 15.19, Leahy rang BP Corford Express for one minute and 29 seconds. At 15.24, Apco decreased its price at Apco Highton from 82.9 to 82.5. Shortly thereafter, Apco began to increase its prices, with Apco Geelong South, Apco Newcomb and Apco Geelong North all moving back to 87.9 at 15.32, 15.37 and 15.39 respectively. At 15.43, Mr Anderson rang Mr Warner for two minutes and 30 seconds. BP Corford Express increased from 82.5 to 87.9 at 15.45. 739 At 15.46, Phil Carmichael rang Mr Warner for 30 seconds. At 15.47, Leahy rang Chisholm for one minute and 30 seconds. The ACCC invited me to draw the inference that this was a complaint about 7-Eleven's failure to increase, with Mr Warner conveying the complaint to Chisholm. If that were the case, Chisholm did not act on it. 740 From 15.48 onwards, Mobil outlets, other Apco outlets, a couple of Brumar outlets and 7-Eleven Newcomb all moved to 87.9 (7-Eleven Geelong East moved to 87.5 at 15.56), before Apco began easing its prices to 87.5 at Apco Geelong South at 17.21, a move followed by Leahy at BP Leopold at 18.23. At some time during the day, the ACCC said at an early time, Shell Waurn Ponds moved to 87.9, but United Retail maintained the price at Shell Victoria Street at 83.9 throughout the day. 741 The most obvious feature of 15 June 2000 is that the extraordinarily high amount of telephone communication passing between the parties to the alleged arrangements or understandings is inconsistent with the existence of a smoothly-operating chain of arrangements or understandings. It certainly cannot be said that, by this date, it was necessary only to have a series of brief phone conversations, in which a price and a time were nominated, in order to produce a price rise in the market to that price at about that time. The second important consideration is that this day was during a period when, according to the oral evidence, there was nervousness about discussing prices, because of the ACCC's investigation into allegations of price-fixing in the Ballarat petrol market. This factor reduces the likelihood that the participants in the market would engage in such a high level of discussion about prices on a single day. The apparently uncoordinated manner in which prices moved is also inconsistent with the suggestion that the price moves were the result of collusion. 742 It is true that there was some temporal coincidence between the price increases by Leahy and Apco in the morning. It is also clear, however, that Apco did not have confidence in the fact that the move to 87.9 would flow through the market, by means of the chain of arrangements or understandings, because it moved swiftly to drop its price back to the low point at Apco Geelong North at 11.48, and even after the second round of telephone calls at its other outlets. That round of telephone calls obviously did not instil confidence that the higher price would be achieved. Leahy had very obviously made its decision to attempt to increase its prices again before the third round of telephone calls. It had already done so at BP Leopold, even though Apco and some Mobil outlets were decreasing. The Chisholm increases in the afternoon may have come in consequence of the third round of telephone calls, but they apparently did not occur in response to calls in either the first or the second round. Even after Leahy and Chisholm, and some Brumar sites, had increased, Apco was fairly slow in raising its prices yet again, which suggests that it was more interested in finding out what the rest of the market was doing than in relying on any information received from Leahy. 743 There was also a suggestion that Phil Carmichael was passing on to Michael Warner information about a prospective Mobil price increase. Phil Carmichael gave evidence that he sometimes passed on to Leahy such information, for the purpose of finding out if Leahy could provide a time for a price increase, so that Phil Carmichael could attempt to persuade Aaron Incoll to fall in with this time (which Phil Carmichael said he was usually unsuccessful in doing). To suggest that this was happening on 15 June 2000 is speculation. On that day, Mr Warner initiated three telephone calls to Phil Carmichael, at 08.56 (three minutes and 18 seconds), 12.02 (20 seconds) and 13.03 (58 seconds). Phil Carmichael initiated a further six telephone calls to Mr Warner, at 12.00 (one minute and 30 seconds), 12.05 (30 seconds), 12.34 (one minute), 12.48 (one minute and 30 seconds), 15.31 (six minutes) and 15.46 (30 seconds). It is unlikely that Phil Carmichael would have needed nine telephone conversations with Michael Warner to pass on information about prospective Mobil price increases. Plainly, there was something else about which the two needed to talk to each other on that occasion. 744 In summary, 15 June 2000 lends little or no support to the ACCC's case. This is another occasion on which it is obvious that a price increase had already occurred in the Melbourne petrol market, and was flowing into the Geelong petrol market. The increase was signalled at 14.33 on 6 July, when BP Corford Express lifted its price from 86.5 to 91.9. No competitor followed on that day, so far as Annexure B records. In the late afternoon, there were several telephone calls, which the ACCC said are significant. At 17.12, Peter Anderson rang Liberty for two minutes and 30 seconds. At 17.18, Mr Anderson rang Leahy for one minute and 30 seconds. At 17.20, Mr Anderson rang Chris Andrianopoulos for three minutes. Each of these calls must have been about something other than simply a price increase, if it was about a price increase at all. At 17.21, Leahy rang Gordon Primmer for 12 seconds. At 18.46, Alan Shuvaly rang Mr Andrianopoulos for one minute. 746 At 07.31 on Friday, 7 July, BP Corford Express reduced its price from 91.9 to 84.9. At 10.13, however, it again lifted its price to 91.9. In the meantime, at 08.26, Michael Warner had telephoned Mr Anderson for 20 seconds. More than two hours after that phone call, Apco began increasing its prices, first with Apco Geelong South at 10.29, from 85.5 to 92.9. Leahy's first increase was at 10.59 at BP Leopold, the increase being from 85.9 to 92.9. At 11.04, Brumar began moving at Shell Speedwings, to 91.9, a move followed at Shell Norlane at 11.05, Shell Highton at 11.16 and Shell Belmont at 12.17, although Geelong Car Spa moved at 12.02 to only 89.9. In the meantime, Mobil Latrobe Terrace moved to 92.9 at 11.07, BP Hillford at 11.13, Apco Geelong North at 11.14, Apco Newcomb at 11.16, Mobil Geelong North at 11.31 and Apco Lara at 11.33. 747 Leahy telephoned Chisholm for two minutes and 35 seconds at 11.05, almost two and a half hours after the contact between Mr Warner and Mr Anderson on that morning. The length of the call suggests that it was about something other than a price rise, even if it included information about a price rise. At 11.25, Darren Campigli telephoned Leahy for 53 seconds. Chisholm's price rises were at 11.40 at Chisholm Grovedale, 11.41 at Chisholm Leopold and 11.42 at Chisholm Geelong West. All were to 92.5, a different price from that adopted by Leahy and Apco. Leahy moved its price at BP Torquay to 92.9 at 11.46. Apco Geelong East did likewise at 12.00. At some time between 11.26 and 11.48, 7-Eleven Geelong East moved to 92.9, as did 7-Eleven Newcomb between 11.29 and 12.01. This was without any prompting from any competitor in Geelong, so far as Annexure B records. 748 At 13.21, Leahy reduced its price at BP Hillford to 91.9, matching the price at BP Corford Express, Shell Speedwings, Shell Norlane, Shell Highton and Shell Belmont. At 15.10, BP Corford Express moved up to 92.9 from 91.9. The increase at Caltex Quick Bite came at 15.12, from 85.9 to 92.5. Leahy, some of the Mobil outlets and Apco all eased their prices to either 91.9 or 91.1 during the afternoon and early evening. 749 At some time unknown during Friday, 7 July, Andrianopoulos increased from 86.5 to 92.5, then dropped back to 85.5 and moved slightly up to 85.9. The average price at Liberty rose from 86.0 to 90.0. The ACCC submitted that this indicates a price increase around the middle of the day. It might equally well indicate a lower price increase than the rest of the market adopted. 750 Based on this information, it is far-fetched to suggest that effect was given to Arrangement No 8. The only possible relevant communications were on the afternoon of 6 July, the last of them being at 18.46 when Mr Shuvaly rang Mr Andrianopoulos. The time delay between those calls and any price increase is far too long for them to have been connected. 751 It is also extremely difficult to construct a call cycle out of the calls to which I have referred. The initial contact by Mr Anderson with Leahy was at 09.58 on 6 July. Leahy did not ring Chisholm until 11.14 on that day, and did not ring any other competitor until 17.21, when it rang Gordon Primmer for 12 seconds. Mr Warner may have spoken briefly to Mr Anderson at 08.26 on 7 July, but Leahy made no call to any other competitor until 11.05, when it called only Chisholm and for a time much longer than required to deliver information about a price increase. The only other contact between Leahy and Chisholm on that morning was initiated by Mr Campigli in his two calls at 11.25 and 11.40. Chisholm's decision to increase its prices (to a different amount from that to which Leahy had already gone) must already have been made before the last of those phone calls. To suggest that the call from Leahy to Mr Primmer at 11.34 was somehow related to the earlier conversation between Leahy and Chisholm at 11.05 and the conversation between Mr Warner and Mr Anderson at 08.26 is to depart from the oral evidence about call cycles. 752 Interestingly, what could be regarded as fitting into the pattern of a call cycle occurred from 13.40 onwards on 7 July, after all of the relevant price increases had occurred. It involved Ian Carmichael ringing Mr Anderson, Mr Warner ringing Mr Primmer, Mr Primmer ringing Leahy, Ian Carmichael ringing Chisholm, Mr Primmer ringing Mr Warner's message bank, Mr Warner ringing Mr Primmer back, Mr Warner ringing Phil Carmichael, Ian Carmichael ringing Mr Andrianopoulos and Leahy contacting Mr Anderson's message bank. The first of this cycle of calls occurred at 13.40, the rest were all in the space of 11 minutes from 14.25 to 14.36. Mr Anderson made three return calls to Leahy at 15.19 for two minutes, 15.22 for one minute and 17.05 for 25 seconds. These can have had nothing to do with price increases, which had already taken place. Finally, Leahy rang Mr Primmer at 17.23 for 46 seconds, which also can have had nothing to do with price increases. 753 The data in Annexure B for this period does not fit the oral evidence about the alleged arrangements or understandings at all. The first price increase recorded in Annexure B was by BP Corford Express at 09.59, from 87.5 to 91.9, suggesting that a price increase from the Melbourne petrol market was about to flow into Geelong on a Friday. 755 Peter Anderson appears to have been in or near Wangaratta, and then travelling towards Melbourne, in the late morning. At 11.44, he rang Liberty for five minutes and 30 seconds. His call was transmitted through Wangaratta. The length of the call suggests that it was about something far more than a price increase. At 11.49, Mr Anderson rang Leahy for three minutes, the call being transmitted through Glenrowan. Again, the length suggests that the call was about something more than a price increase. At 11.54, Leahy reached Mr Anderson's message bank. At 11.56, Mr Anderson had another three minute call with Liberty, again transmitted through Wangaratta. His 11.58 call to Leahy for one minute was transmitted through Winton. At 11.59, Leahy rang Gordon Primmer for 44 seconds. At 12.00, Mr Anderson rang Ian Carmichael for 30 seconds, the call being transmitted through Benalla. At 12.35, Mr Anderson's next call to Leahy was transmitted through Euroa, and lasted three minutes and 30 seconds. 756 At 12.35, Apco Geelong South increased from 87.5 to 92.5, a price higher than that adopted by BP Corford Express. At 12.39, BP Leopold increased from 85.9 to 92.5. At 12.41, Mobil East Belmont increased from 85.9 to 92.5. At 12.43, Apco Lara increased from 87.5 to 92.5. At 12.43, BP Hillford increased from 85.9 to 92.5. There followed increases at Mobil Geelong North at 12.45, Mobil Latrobe Terrace at 12.47, Apco Geelong North at 12.52, Apco Newcomb at 12.54 and Apco Geelong East at 12.55, all to 92.5. Finally, Leahy increased its price at BP Torquay from 87.9 to 92.5. 757 The ACCC sought to have me draw the inference that the price rise was arranged between Peter Anderson and Ian Carmichael in one or other of the telephone calls leading up to the three-minute call at 12.00. There are two obvious points to make. One is that the amount of telephone communication involved was much more than would have been required if arrangements or understandings of the kind alleged existed. The other is that, with the possible exception of the call to Mr Primmer at 11.59, Leahy did not give effect to the provision of Arrangement No 1 that it would notify other competitors in the market. The assumption that the call was to notify Mr Primmer of a prospective price increase assumes that the price increase had already been communicated by Mr Anderson to Leahy prior to 11.59. 758 Indeed, there was considerable communication between a number of participants in the Geelong petrol market during the early afternoon on 14 July, but no allegation is made that any other arrangement or understanding was given effect to. Chisholm also increased its prices to 92.5 in the afternoon, as did most of the Brumar outlets, but in the course of the afternoon Leahy, 7-Eleven, Apco and some Mobil outlets began decreasing to 91.9 or even less. 759 The more likely explanation for the events of this day is that the calls were related to something other than prices, and that Apco, Leahy and some Mobil outlets were implementing a Melbourne petrol price increase from the previous day, already signalled by BP Corford Express, although at a lower amount than was adopted throughout most of the Geelong petrol market. It was to this lower amount that prices moved during the afternoon. 760 This is an occasion on which it would have been important for the ACCC to have provided evidence of records of telephone calls from Mr Anderson to someone else at Apco, or to Apco sites, which might have involved Mr Anderson giving instructions to implement the price increase. Counsel for Apco informed me from the bar table, without objection by counsel for the ACCC, that the telephone records discovered by the ACCC showed that no such call was made after any communication with Leahy on this day. If this were the case, the only conclusion could be that the calls between Mr Anderson and Leahy were not about petrol prices, but that each increased its prices independently of the other, on the basis of information from other sources. 761 There is, of course, no evidence of whether prices at BP Meredith rose at all, or at what time and to what level they rose if they did. It is impossible to say that effect was given to Arrangement No 7. It is highly unlikely that Leahy would have been implementing that alleged arrangement or understanding whilst neglecting Arrangements Nos 3 and 6. It is much more likely that the call to Mr Primmer was about something other than petrol prices. 763 Leahy increased its prices from 93.9 to 97.9 at BP Torquay at 23.46 on Monday, 14 August, shortly before closing time. It increased at BP Hillford from 93.7 to 97.9 at 23.56 on that day. At 00.05 on 15 August, it also increased BP Leopold from 93.7 to 97.9. Apco increased only three of its sites in Geelong shortly after midnight, and only from 93.7 to 96.9. The sites were Apco Geelong North at 00.05, Apco Geelong East at 00.18 and Apco Newcomb also at 00.18. The remaining Apco sites did not increase until shortly before midday on 15 August, nearly 12 hours after the initial increases. 764 These increases by Leahy and Apco are alleged to have been by way of the implementation of Arrangement No 1. The only relevant phone call was at 15.33 on 14 August. The phone call was from Peter Anderson to Leahy and lasted two minutes and 30 seconds. If it concerned a prospective price increase, it must have concerned something else as well. Leahy did not ring any of the others in its call cycle for more than four hours after this telephone call. At 19.39, Ian Carmichael rang Darren Campigli for 30 seconds. Chisholm did not increase any of its prices until 08.22 on 15 August, when Chisholm Grovedale moved from 93.7 to 96.9. This was followed by a move from 94.7 to 96.9 at Chisholm Geelong West at 08.48, and from 93.7 to 96.9 at Chisholm Leopold at 08.58. By that stage, those who set prices for the Chisholm outlets had had ample opportunity to observe not only the boards at the Apco outlets, but also Mobil Geelong North and Mobil East Belmont, which had moved to 96.9 at 07.50 and 08.06 respectively. Indeed, shortly afterwards, Leahy began dropping its prices to 96.9, which was obviously to be the new market price. BP Leopold dropped at 08.22, the same time as the first Chisholm price rise. BP Hillford dropped at 08.30 and BP Torquay went even lower to 96.5 at 08.36. The suggestion that two phone calls, separated by more than four hours on 14 August, were what produced price rises to different amounts, at markedly different times, travels far outside any pattern identified in the oral evidence. Whatever it was that caused Leahy, Apco and Chisholm to increase their prices during this period, it was not the implementation of Arrangements Nos 1 and 3. 765 The suggestion that Arrangement No 8 was implemented in this period is even more intriguing. The first phone call identified was at 18.02 on 14 August, when Alan Shuvaly rang Chris Andrianopoulos for 30 seconds. At 19.34, Mr Shuvaly again rang Mr Andrianopoulos for one minute. At 19.41, Mr Shuvaly rang Mr Andrianopoulos for four minutes and 30 seconds. At 21.03, Mr Shuvaly rang Mr Andrianopoulos again for one minute. Only then, at 21.07, did Mr Shuvaly ring Mr Anderson for one minute. What these calls had to do with a price increase is anybody's guess. An arrangement or understanding of the kind alleged would not require this much communication. More was to come on the morning of 15 August. At 07.32, Mr Shuvaly rang Mr Andrianopoulos for 30 seconds. At 07.56, Mr Shuvaly rang Mr Andrianopoulos again for 30 seconds. At 08.25, Mr Shuvaly rang Mr Andrianopoulos for another 30 seconds. At 08.27, Mr Shuvaly rang Mr Andrianopoulos for one minute and 30 seconds. The ACCC surmised that Mr Shuvaly was passing on in all of these calls what he had learned from Mr Anderson in the one minute call on the previous evening. This would not explain why the next communication between the relevant parties was from Apco to Mr Andrianopoulos at 12.49 on 15 August, for 24 seconds. The ACCC submitted that the fact that Apco finally increased its price at Apco Lara nine minutes after this call can be taken as an indication that the call from Apco to Mr Andrianopoulos was a follow-up call. This raises the question what Apco was following up at that stage. Apco Lara was the last of its outlets to increase, so the decision to increase all outlets must have been made at some earlier time. There was no serious suggestion that Apco Lara was in direct competition with either Andrianopoulos or Liberty. 766 It is also interesting to follow, so far as is possible from Annexure B, what occurred in relation to prices at Andrianopoulos and Liberty during this period. The average price at Liberty dropped from 94.9 to 94.1 on 14 August. At some time during that day, Andrianopoulos dropped from 94.7 to 93.9 and then rose again to 94.7. The times, of course, are unknown. On 15 August, the Liberty average price increased from 94.1 to 97.2, making it clear that Liberty had adopted a higher price than Apco's 96.9. It was also a higher price than that of Andrianopoulos, which increased to 96.9, dropped to 93.7 and then increased again to 93.9 at times unknown during the day. Interestingly, the ACCC's submission invites the inference that the major increase was around midday after Caltex Quick Bite had increased its price to 96.9 at 12.05. If that were the case, it would suggest that Andrianopoulos was reacting to a market move that already included, as well as Leahy, Apco and Chisholm a number of Brumar outlets, both 7-Eleven outlets and BP Corford Express. It would suggest that the Andrianopoulos increase had nothing whatever to do either with the telephone calls from Mr Shuvaly to Mr Andrianopoulos on the previous afternoon and evening, or with the apparently unconnected call from Apco to Mr Andrianopoulos at 12.49 on 15 August. On the data in Annexure B, it is highly unlikely that effect was given to Arrangement No 8 during this period. Price moves actually began on the previous day, when Brumar moved Shell Latrobe Terrace from 96.0 to 99.9 at 21.52, and Shell Speedwings from 95.9 to 99.9 at 22.22. At 00.01 on Wednesday, 23 August, Shell Speedwings actually increased by 0.1 to 100.0. At 06.57, Shell Highton increased to 99.99, to which Shell Speedwings dropped at 07.57. Shell Westoria moved to that price at 08.10, Shell Anglesea at 08.33, Shell Belmont at 08.34 and Shell Norlane at 08.44. Brumar was obviously attempting to push the price up in the Geelong petrol market, probably consequent upon an increase in the Melbourne petrol market. This is borne out by the fact that, between 09.40 and 09.45 on 23 August, 7-Eleven Newcomb increased from 95.5 to 99.9. The price appears to have been an over-estimate however, and the Brumar sites came back to 95.5, starting with Shell Speedwings at 08.54, followed by Shell Belmont at 09.16, Shell Westoria at 09.28, Shell Latrobe Terrace at 09.59, Shell Norlane at 10.32 and Shell Highton at 10.43. Geelong Car Spa, which had not previously gone higher, also came to this price at 09.33. 768 In the meantime, at 08.33 on 23 August, Ian Carmichael rang Peter Anderson for 30 seconds. At 08.38, Mr Carmichael rang Colin Williamson for 30 seconds. At 10.40, Mr Carmichael reached Mr Anderson's message bank. Mr Anderson apparently returned the call, ringing the Leahy office at 10.41, for three minutes. At 10.45, Mr Carmichael rang Colin Williamson for one minute and 30 seconds. At 10.48, he rang Chisholm for two minutes and 30 seconds. 769 At 11.04, Apco increased its price at Apco Geelong North from 95.5 to 99.7. Mobil Geelong North followed suit at 11.07. Leahy made the same move at BP Leopold at 11.08 and BP Hillford at 11.14. Apco did likewise at Apco Lara at 11.16, Apco Newcomb at 11.23, Apco Geelong South at 11.25 and Apco Geelong East at 11.47. In the meantime, Mobil Latrobe Terrace also moved to 99.7 at 11.20. BP Corford Express increased from 95.5 to 99.7 at 11.50. So did Mobil East Belmont at 11.51. The first Chisholm increases were from 11.52 at Chisholm Geelong West, followed by Chisholm Grovedale at 11.56 and Chisholm Leopold at 12.10. In the meantime, Ian Carmichael rang BP Corford Express for 30 seconds at 11.53. Leahy finally increased its price to 99.7 at BP Torquay at 12.02. In the early afternoon, the Brumar sites rose to 99.7, as did the Caltex Quick Bite. At 15.10, Apco began discounting to 99.5, and subsequently to 98.7. It was followed down by Mobil, and part of the way by Leahy. 770 At some time during the day, United Retail increased its price at Shell Victoria Street from 95.9 to 99.7. The price increase recorded in Annexure B for Shell Waurn Ponds is from 95.5 to 98.7. The daily data sheet of Shell Waurn Ponds for that day is also in evidence. It records two prices for ULP, 95.5 and 99.7, and contains an endorsement, apparently written by the same person who wrote the figures, 'PRICE CHANGE MIDDAY'. If this inscription is accurate, it would mean that Shell Waurn Ponds increased its price for ULP to the same price as Leahy, Apco and Chisholm, within an hour of the increases by them. This would make the ACCC's case that effect was given to Arrangement No 6 much stronger than Annexure B makes it. 771 There is undoubtedly a temporal coincidence between the start of the Apco rises and the start of the Leahy rises. It is a little difficult to tell in which, if any, phone call the requisite information was passed. Ian Carmichael was the initiator of communications at 08.33, and made another attempt at 10.40. The return call from Mr Anderson for three minutes was much longer than would have been necessary to pass pricing information. It is possible that each had information from Melbourne from which the appropriate price could be calculated. The fact that BP Corford Express went to 99.7 without any prompting by telephone might suggest that those who were setting its prices in Melbourne regarded this as the appropriate price. The Mobil outlets may have had similar information, which they did not derive from any communication recorded in Annexure B, or may have derived the price from the example of Apco Geelong North, which was followed immediately by Mobil Geelong North across the road. The ACCC submitted that the phone call from Mr Carmichael to BP Corford Express was related to price, on the basis that Mr Maurer said that he only received calls from Mr Carmichael about price rises. If that were the case, it was certainly a call about a price rise that was already occurring. It is difficult to see that Mr Carmichael would have been ringing BP Corford Express at that stage to ask it to put up its prices in accordance with any arrangement or understanding that Leahy had with any other competitor, when he had not rung BP Corford Express in the first place for that purpose. Whatever the reason for the call, as I have said, BP Corford Express had already had its price increased without any prompting. 772 The delay in Chisholm implementing any price rise, if it received information from Mr Carmichael in the call at 10.48 (which was longer than was necessary for such information) suggests that Chisholm took the course of waiting to see what the market did before committing itself. The best that can be said is that what occurred on this day is consistent with the possibility that Arrangement No 1, as described by Ian Carmichael, was put into effect, but it is less likely that Arrangement No 3 was. 773 As I have said, the case for consistency between the circumstantial evidence and the allegation of giving effect to of Arrangement No 6 on this day is stronger if regard is had to the Shell Waurn Ponds daily data sheet than if reliance is placed on Annexure B. If the figure of 98.7 is accurate, it would suggest that the increase was late in the day, after various other market participants had moved down to that figure. Coupled with the increase at Shell Victoria Street, the evidence from the daily data sheet provides perhaps the best example of the possible implementation of Arrangement No 6. 774 The ACCC also contended that a call at midday from Phil Carmichael to Michael Warner for one minute, followed by a call from Leahy to Chisholm at 12.04 for two minutes and one second and a call from Ian Carmichael to Chisholm at 12.08 for one minute and 30 seconds, were related to the fact that 7-Eleven had not increased. Apart from the obvious problem of the length of the two calls to Chisholm, Chisholm certainly did not follow up these communications with any phone call to Jacques Bodourian. This is another occasion which began with Brumar attempting to push up the price in the Geelong petrol market, apparently based on a rise that had occurred in Melbourne. On this occasion, unlike on 23 August 2000, Leahy, Apco and Chisholm all increased to a cent higher than the original Brumar increase. Shell Latrobe Terrace had the first rise recorded in Annexure B, at 20.34 on Thursday, 7 September, from 90.5 to 98.9. Shell Highton moved from 91.5 to 98.9 at 21.59. Shell Speedwings at 07.15 on 8 September, Shell Norlane at 07.18 and Shell Westoria at 07.27 all moved from 90.5 to 98.9. At 07.30, Shell Belmont moved, but only to 98.8. The rise must have appeared unsustainable, because at 07.38 Shell Speedwings reduced to 89.9, followed by Shell Westoria at 08.29, Shell Belmont at 08.35, Shell Norlane at 09.40, Shell Latrobe Terrace at 09.58 and Shell Highton (to 90.9) at 10.01. In the meantime, probably confirming that a rise flowing from the Melbourne petrol market was in the offing, between 08.52 and 09.20, 7-Eleven Geelong East increased from 89.9 to 99.8. 776 At 10.00, before any relevant phone calls, Leahy had clearly decided to put into effect what it saw as a coming increase. Its price at BP Hillford went from 89.9 to 99.9. Only at 10.02 did Leahy ring the Apco office for one minute and eight seconds. At 10.03, Leahy rang Phil Carmichael for 12 seconds. At 10.04, Leahy rang Chisholm for one minute and 18 seconds. At 10.05, Ian Carmichael rang Colin Williamson for 30 seconds. At 10.08, Leahy again rang Chisholm for 52 seconds. At 10.10, Leahy rang BP Meredith for 57 seconds. Apco then began its increases from 89.9 to 99.9 at 10.11 at Apco Geelong South, 10.12 at Apco Geelong East, 10.40 at Apco Newcomb, 10.49 at Apco Lara and 10.56 at Apco Geelong North. Leahy continued its increases, moving from 91.5 to 99.8 at BP Torquay at 10.23, and from 89.9 to 99.9 at 10.51 at BP Leopold. Mobil Geelong North made a brief attempt to push the price even higher, moving to 102.9 at 11.15, but dropping to 99.9 four minutes later. 777 Gordon Primmer rang Leahy for 11 seconds at 10.30. Chisholm delayed its increases until 11.53, when it moved the price at Chisholm Grovedale from 90.9 to 99.9, followed by Chisholm Geelong West at 11.58 and Chisholm Leopold at 12.14. BP Corford Express appears to have needed no prompting by telephone from within the Geelong petrol market to move from 90.9 to 99.9 at 12.12 and at Caltex Quick Bite made a similar move at 12.25. 7-Eleven Newcomb moved from 89.9 to 99.9 between 12.06 and 12.34. The Brumar sites then began to move up to 99.9, starting with Shell Westoria at 12.49. Interestingly, Shell Latrobe Terrace attempted a higher price at 102.5 at 13.05, dropped it to 102.4 at 13.25, and then to 99.9 at 13.38. In the afternoon, Apco began discounting to 98.5 and other outlets (including the Mobils which had also gone up to 99.9) followed it down. 778 Both Shell Victoria Street and Shell Waurn Ponds increased to 99.9. The ACCC said that the former increase occurred on opening or in the morning and the latter increase during the day. 779 The fact that Leahy had increased its price before ringing the Apco office makes it absolutely clear that the price was not arranged between Leahy and Apco. The much greater likelihood is that it was a price based on information from Melbourne. Whether this information was passed to Apco in the relevant telephone call, or whether Apco acquired it from other sources, remains unknown. The data in Annexure B for this day does not therefore support the proposition that effect was given to Arrangement No 1. 780 The delay in the implementation of any price increase by Chisholm suggests the probability that, if it did receive information about the price increase that Leahy was already undertaking in the telephone call at 10.04 or the telephone call at 10.08, it adopted a wait and see attitude for almost two hours, to see what other market participants did, before deciding to increase its prices. If, as the ACCC said, the price increases at United Retail outlets were at significantly different times, this would be another factor added to the already strong oral evidence that calls from Leahy were not influential at all in the setting of United Retail's prices. As is usual, no data appears for prices at BP Meredith. The communications between Leahy and BP Meredith, and between Mr Primmer and Leahy, by themselves are insufficient to suggest that BP Meredith increased its price in accordance with any arrangement or understanding. At 15.10 on that day, Apco Geelong East increased from 89.5 to 99.9. No other Apco site appears to have had a similar increase on that day. Shortly afterwards, at 15.16 and 15.20 respectively, Leahy moved the prices at BP Hillford down from 91.5 to 89.5. At 15.32, Leahy moved BP Torquay from 89.5 to 99.9. There was no apparently relevant communication between Leahy and Apco, or anyone on their behalf. The Leahy rise at BP Torquay was followed by identical rises at BP Leopold at 16.11 and BP Hillford at 16.18. 782 Chisholm also increased its prices to 99.9, beginning with Chisholm Geelong West at 16.20, then Chisholm Grovedale at 16.21 and Chisholm Leopold at 16.22. At 16.24, Apco Geelong East came down by half a cent to 99.4. 783 Leahy reduced its prices at 17.13 on 3 October at BP Hillford, 17.14 at BP Leopold and 18.15 at BP Torquay, all to 89.5. There were also decreases to 90.5 at two Chisholm outlets on 3 October, at 18.10 at Chisholm Grovedale and at 18.15 at Chisholm Geelong West. 784 In the evening of 3 October, Brumar moved the prices at a number of its outlets to 99.9. The moves were at Shell Highton at 18.26 (from 90.5), Shell Westoria at 18.28, Shell Speedwings at 19.19, Shell Belmont at 20.04 and Shell Latrobe Terrace at 20.18 (all from 89.5). At a time unrecorded, Apco Geelong East appears to have decreased further to 98.9. On 4 October, Geelong Car Spa at 06.46 and Shell Norlane at 07.43 continued the Brumar moves from 89.5 to 99.9. 785 The rises attempted appear to have been unsustainable. Chisholm dropped its price to 91.5 at Chisholm Leopold at 17.05, Chisholm Geelong West at 17.06 and Chisholm Grovedale at 17.07. Brumar must also have found that it was losing volume of sales, because it reduced its prices to 89.5 at Shell Latrobe Terrace at 07.48 on 4 October, Shell Speedwings at 08.06, Geelong Car Spa at 08.15, Shell Norlane at 08.16 and Shell Belmont at 09.09, with Shell Highton coming down to 90.5 at 08.59. 786 At 07.42 on 4 October, Colin Williamson rang Ian Carmichael for 44 seconds. At 08.47, Mr Williamson rang Mr Carmichael again for 28 seconds. At 09.32, Mr Carmichael rang Chisholm for one minute. He then rang Mr Williamson for 30 seconds. Ian Carmichael then rang Phil Carmichael for one minute at 09.34. At 09.47, Leahy raised its price at BP Torquay from 89.5 to 99.9. At 09.57, Apco began increasing, apparently without any relevant communication. Apco Geelong South moved from 89.5 to 99.9 at that time, Apco Newcomb did the same at 10.15, Apco Geelong North went to 99.5 at 11.05, and Apco Highton moved to 99.9 at 11.13, as did Apco Lara at 11.19. In the course of that time, BP Hillford and BP Leopold also went up to 99.9 again. There was another call from Leahy to Chisholm at 10.42, for 18 seconds. The ACCC submitted that this was a follow-up call, because Chisholm was not yet up. Darren Campigli twice rang Leahy for 20 seconds at 11.28 and for two minutes and 47 seconds at 11.30. In the event, Chisholm waited until 11.59 before increasing its price to 99.5 at Chisholm Grovedale. It did the same at Chisholm Geelong West at 12.03 and at Chisholm Leopold at 12.26. Between 12.00 and 12.08, 7-Eleven Geelong East also moved to 99.9, apparently without any relevant communication from anyone in Geelong. Mobil Geelong North began the Mobil rises at 12.09, with Mobil East Belmont and Mobil Latrobe Terrace also moving to 99.9. BP Corford Express moved to 99.9 at 14.10, apparently without prompting from any competitor in Geelong. 787 Apco then began discounting, first to 99.4 and then to 98.9, with a number of the Mobil outlets following. 788 Shell Victoria Street increased from 92.5 to 99.9. The ACCC submitted that this was on opening or in the morning. By contrast, Shell Waurn Ponds only increased from 91.5 to 98.9. The ACCC invited the inference that this was early in the day, but it matched the price to which Apco and some Mobil outlets were moving in the course of the mid to late afternoon. 789 This is clearly another day on which the Geelong petrol market was poised to follow a move in the Melbourne petrol market. 99.9 was recognised widely as the appropriate price. One Apco outlet, all the Leahy outlets and the Chisholm outlets attempted to move to it on 3 October, but the rest of the market did not move and so they dropped again. Perhaps the strongest signal that the increase would flow into Geelong at that level was given by the Brumar outlets on the evening of 3 October and the morning of 4 October. Apco managed to achieve this level, at all its outlets except Apco Geelong North, in the morning without any apparent communication. If Colin Williamson did receive any information from Ian Carmichael about pricing in the course of his calls that morning, it was not implemented uniformly by United Retail, adding to the already strong evidence that any information received in such calls was of no effect in setting the United Retail prices. Once again, Chisholm delayed, apparently for the purpose of assuring itself that it was safe to increase. When it did increase, it adopted a price different from Leahy and from most of the other outlets. It is unlikely that either Arrangement No 3 or Arrangement No 6 was implemented on this occasion. The first price rise in the period was at 11.24 on 19 October. Apco increased its price at Apco Geelong North from 88.9 to 99.9. The increase appears anomalous, because Apco was in the process of reducing prices at its other outlets from 89.9 or 89.5 to 88.9. In addition, the 11.0 rise at Apco Geelong North was not matched by Mobil Geelong North until 06.18 the following morning, and it was unusual for Apco to set its price so much higher than Mobil Geelong North at its outlet across the road from that Mobil outlet. The fact that Apco was prepared to endure the loss of sales volume that must have followed from this increase at Apco Geelong North on this occasion, while it was reducing its prices at its other outlets, tends to suggest that it was in possession of knowledge that a price rise from the Melbourne petrol market was about to flow into the Geelong petrol market. So far as Annexure B demonstrates, Apco did not acquire that knowledge from Leahy, or from any other competitor in the Geelong petrol market. There are no relevant telephone calls shown. 791 Nothing occurred in relation to pricing for much of the day, other than small downward movements at most outlets. At 16.22, Ian Carmichael rang Colin Williamson for 30 seconds. At 16.23, Leahy rang Chisholm for two minutes and 59 seconds. At 16.25, Ian Carmichael rang Phil Carmichael for 30 seconds. At 16.30, Leahy rang BP Meredith for 32 seconds. The call was apparently returned at 17.06 when Gordon Primmer rang Leahy for 12 seconds. He may have succeeded in getting through to the person he wished to speak to at 17.15, because a call from Mr Primmer to Michael Warner, lasting one minute and 42 seconds, is recorded at that time. At about that time, Leahy was still reducing its prices from 89.9 to 88.9, in line with most of the rest of the market. BP Leopold so reduced at 17.12 and BP Hillford at 17.19. 792 By 19.02, Leahy had apparently acquired information that a rise to 99.9 was in the offing. At that time, it increased its price at BP Hillford from 88.9 to 99.9. It did the same at BP Leopold at 19.39. BP Torquay did not increase until 07.02 on 20 October, when it also increased to 99.9. By that time, the Chisholm outlets had increased, beginning with Chisholm Grovedale at 20.00 on 19 October, then Chisholm Leopold at 20.54 and Chisholm Geelong West at 22.01, all from 89.9 to 99.9. Apco outlets also went to 99.9 between 22.24 on 19 October and 00.16 on 20 October. 793 Quite early in the morning on 20 October, Leahy began to reduce its price to 99.5, starting at BP Torquay at 07.33. This was the price to which Caltex Quick Bite had gone at 05.33 that morning. Although BP Corford Express went to 99.9 at 07.46, 99.5 appeared to become the preferred price, with Mobil Latrobe Terrace moving up to it at 08.02 and Apco moving down to it at Apco Geelong South at 08.04 and Apco Newcomb at 08.20. Apco Geelong East finally moved from 88.9 to 99.9 at 08.24. 794 Leahy rang Chisholm at 08.24 for 40 seconds. What, if anything, the ACCC would seek to make of this call is not apparent to me. Leahy continued to move down to 99.5 at BP Leopold at 08.26 and BP Hillford at 08.30. 795 Between 08.52 and 09.03, 7-Eleven Geelong East moved up from 88.9 to 98.9. The ACCC pointed to a call from Ian Carmichael to Chisholm, for two minutes and 30 seconds, at 09.18, to a return call from Chisholm to Leahy at 09.21 for one minute and 32 seconds and then to a call at 09.23 from Chisholm to Jacques Bodourian for 16 seconds, probably a message, with Jacques Bodourian ringing Chisholm back at 09.24 for two minutes and 43 seconds, as being related to the fact that 7-Eleven Newcomb moved from 88.9 to 99.9 at some time between 09.23 and 09.47. This does not accord with the oral evidence that calls to Chisholm to complain about 7-Eleven not having increased its prices were initiated by Phil Carmichael, and there is no call from Phil Carmichael recorded in Annexure B at about that time. 796 The time lapse between the communication from Leahy to Chisholm at 16.23 on 19 October and the increases in price by Leahy from 19.02 and Chisholm from 20.00 places this period outside the description given by Ian Carmichael of the pattern of telephone calls and price increases. It appears more likely that information that 99.9 was to be the new price came from Melbourne to several participants in the Geelong petrol market and caused them to move to that independently. If the information was conveyed in the telephone call from Leahy to Chisholm at 16.23, Chisholm may well have taken steps to check that it was accurate, rather than simply deciding to raise its prices at closing time of its various outlets. The anomalous move by Apco much earlier on 19 October suggests this scenario, rather than the giving effect to of any arrangement or understanding. Once again, the suggestion that Arrangement No 7 was implemented is based entirely on the fact that a telephone call was made from Leahy to BP Meredith, and that Mr Primmer rang Leahy back and subsequently spoke to Michael Warner. There is no data for price increases at BP Meredith, so it is impossible to know when Mr Primmer raised his prices. 797 Particularly in the absence of any suggested implementation of Arrangement No 1, the data for this period does not support the proposition that Arrangements Nos 3 and 7 were implemented as stand-alone arrangements. Apco initiated a substantial price increase in the market by lifting its price at Apco Geelong East from 90.5 to 99.7 at 09.05. This was before the first relevant telephone call, which was from Leahy to the Apco office at 09.10, and lasted one minute and 18 seconds. At 09.11, Leahy rang Chisholm for one minute and 44 seconds. At 09.12 and 09.14 respectively, Apco Newcomb and Apco Geelong South increased from 90.5 to 99.7. At 09.15, Leahy rang Chisholm again for one minute and four seconds. At 09.17, Ian Carmichael rang Colin Williamson for one minute. At 09.20, Leahy rang Andrianopoulos for 52 seconds and then immediately Ian Carmichael rang Chris Andrianopoulos for 30 seconds. At 09.22, Leahy rang Phil Carmichael for 10 seconds. The fact that Phil Carmichael immediately left a message on Aaron Incoll's message bank, followed by a further message at 09.37, was relied on by the ACCC to suggest that Leahy had communicated pricing information to Phil Carmichael, who was passing it on to the Mobil price-setter. 799 At 09.41, Leahy began increasing its prices, with BP Torquay moving from 91.5 to 99.7. At 09.47, Michael Warner rang Gordon Primmer for 27 seconds. The call was transmitted through Meredith, suggesting that Mr Warner was on the road, adjacent to Mr Primmer's outlet at the time, and not in the Leahy office. Apco continued to increase, with Apco Geelong North going up to 99.7 at 10.06, Apco Highton at 10.11 and Apco Lara at 10.13. Leahy increased to 99.7 at BP Leopold at 10.08 and BP Hillford at 10.21. The first Mobil increases recorded in Annexure B were for Mobil Geelong North at 10.22, Mobil East Belmont at 10.47 and Mobil Latrobe Terrace at 11.34, all to 99.7. 800 At 10.46, Leahy telephoned Darren Campigli for one minute and 40 seconds. Also at 10.46, someone in the Leahy office telephoned the Chisholm office for 15 seconds. Mr Campigli rang the Leahy office back at 10.49 for one minute and two seconds and Chisholm rang Leahy at 10.59 for 56 seconds. Chisholm then increased the prices at its sites from 11.01, but only to 98.9. Chisholm Grovedale was the first to go at 11.01, followed by Chisholm Leopold at 11.17 and Chisholm Geelong West at 11.39. Oddly, 98.9 was the price to which Caltex Quick Bite moved at 11.43. The ACCC also invited the inference that the calls between Leahy and Chisholm and between Leahy and Mr Campigli concerned the fact that 7-Eleven outlets had not risen, because at 11.02 Chisholm rang Jacques Bodourian for 30 seconds and 7-Eleven Geelong East increased between 11.02 and 11.44, with 7-Eleven Newcomb going up between 11.20 and 11.45. If this was the purpose of any communication from Leahy to Chisholm or Mr Campigli, it was not the result of any apparent complaint made by Phil Carmichael to Leahy, or to Ian Carmichael. 801 On the basis of this data, it is unlikely that Arrangement No 1, as alleged, was being implemented on this day. Apco had already risen without any reference to Leahy. The only possibly relevant communication between Leahy and Apco was initiated by Leahy at 09.10. In his evidence, Mr Warner accepted that it was highly likely that Apco had given instructions to its outlets by that time that they were to increase their prices to 99.7. He said that this was contrary to the kinds of situations he recalled being involved in with Mr Anderson. It is plain that Apco had made its decision to move and that Leahy was not involved in that decision. 802 It also appears unlikely that Arrangement No 3 was implemented. Chisholm apparently made its decision to move at some time after the moves by Leahy, and then moved to a different figure. If the telephone calls between 10.46 and 10.59 were, or involved, attempts to urge Chisholm to adhere to Arrangement No 3, in the first place it is surprising that they were necessary, and in the second place they were unsuccessful because Chisholm did not move to the price supposedly arranged. 803 As to Arrangement No 7, the only communication between anyone at Leahy and anyone at BP Meredith shown in Annexure B is the phone call at 09.47 from Mr Warner to Mr Primmer, at a time when Mr Warner was somewhere in the region of Meredith. In the absence of evidence that Mr Warner was in the Leahy office earlier that morning, at a time when information about a prospective price increase was received there, or that he received any communication from the Leahy office in the meantime, and that he had sufficient time to get to within telephone range of Meredith before ringing Mr Primmer at 09.47, I cannot assume that these things occurred. As there was no other relevant communication to Mr Primmer or BP Meredith, I cannot assume that Arrangement No 7 was implemented. 805 The first telephone call to which the ACCC pointed was at 12.28 from Chris Andrianopoulos to Alan Shuvaly, apparently for 40 seconds. Between 12.33 and 13.02, Mr Shuvaly made four separate calls to Mr Andrianopoulos of 30 seconds, one minute and 30 seconds, 30 seconds and 30 seconds respectively. Mr Shuvaly then waited until 13.23 to ring Peter Anderson. His call lasted for two minutes and 30 seconds. At 13.39, Mr Shuvaly made another call to Mr Anderson for one minute. It is not apparent why such a large amount of time needed to be spent on the phone by those who are alleged to have been parties to Arrangement No 8, if they were merely discussing a proposed increase to a particular price at a particular time. 806 The same might be said for the call from Peter Anderson to Leahy at 13.43, which lasted for four minutes. Nevertheless, the ACCC pointed to the fact that, at 13.47, Ian Carmichael rang Colin Williamson for 30 seconds and, at 13.48, Leahy rang Phil Carmichael for 16 seconds. Also at 13.48, Leahy rang Chisholm for two minutes and 56 seconds and, at 13.52, Ian Carmichael rang Mr Andrianopoulos for 30 seconds. At 13.53, Mr Andrianopoulos rang Mr Carmichael back for 24 seconds. At 13.57, Mr Andrianopoulos reached Mr Shuvaly's message bank for 14 seconds. Leahy then rang BP Meredith at 13.58 for 26 seconds, Gordon Primmer at 13.59 for five seconds and Mr Primmer again at 13.59 for 10 seconds. Mr Andrianopoulos and Mr Shuvaly then exchanged calls at 13.59, initiated by Mr Andrianopoulos for 79 seconds and, at 14.09, returned by Mr Shuvaly for one minute. 807 The first price increase was at Apco Newcomb at 14.16, from 88.9 to 98.9. Other Apco outlets followed, Apco Geelong South at 14.18, Apco Highton at 15.05, Apco Lara at 15.09, Apco Geelong East at 15.33 and Apco Geelong North at 16.15. In the meantime, some Brumar sites began to move to 99.9, notably Shell Latrobe Terrace at 14.27 and Shell Belmont at 14.32, and BP Corford Express also raised its price from 88.9 to 98.9 at 14.30. 808 At 14.20, Mr Williamson called Mr Carmichael for 22 seconds. At 14.58, Mr Shuvaly called Mr Andrianopoulos for one minute. There was a call at 15.38 from Chisholm to 7-Eleven for 45 seconds, but it is not suggested that this was in response to any complaint about any failure of 7-Eleven to move. Indeed, at that time Chisholm had not moved. It made its first move at 15.43 at Chisholm Leopold, from 89.9 to 98.9, followed by Chisholm Grovedale at 15.44 and Chisholm Geelong West at 15.44. 809 Leahy did not move until 15.48, when BP Torquay went from 89.9 to 98.9. This was followed by BP Leopold from 88.9 to 98.9 at 16.09, and an identical move at BP Hillford at 16.16. In the meantime, Shell Highton had moved to 99.9 at 15.58. Also at 15.58, BP Corford Express dropped back to 88.9. Two minutes later, Ian Carmichael rang BP Corford Express for two minutes and 30 seconds. The call was transmitted through Corio, suggesting that Mr Carmichael was in or near the Leahy office. It can hardly be suggested that he was ringing to complain about the decrease, because it is highly unlikely that he had knowledge of it at that stage. Nor can it be suggested that he was ringing to complain of a failure to increase, because BP Corford Express had been up well before Leahy's first increase, and to the same price. 810 From 16.00, when Mobil Geelong North moved from 88.9 to 98.9, the Mobil sites for which information is available in Annexure B joined the move to 98.9 or, in the case of Mobil Latrobe Terrace at 16.11, 99.9. At 16.17, Caltex Quick Bite increased, but only to 93.9. At 16.35, Brumar sites began to ease to 98.9, starting with Shell Westoria at that time. 7-Eleven Geelong East did not increase until some time between 17.11 and 17.23. 811 At 16.43, Ian Carmichael telephoned Chisholm. At 16.48, Mr Shuvaly telephoned Mr Andrianopoulos for one minute and 30 seconds. At 17.37, Mr Shuvaly called Mr Andrianopoulos again for 30 seconds. Mr Andrianopoulos called Mr Shuvaly twice at 18.52 and 18.55 for 21 and 42 seconds respectively. At 19.31, Caltex Quick Bite increased from 93.9 to 97.9. 812 The average price for Liberty Geelong North increased only marginally on 3 November, from 89.1 to 91.4. Andrianopoulos dropped its price from 90.9 to 88.9 and then increased it to 89.9 during the day. Shell Victoria Street moved from 89.9 to 98.9, but Shell Waurn Ponds did not increase until some time on 4 November. 813 On 4 November, at 06.13, BP Corford Express increased from 88.9 to 98.9. At 09.17, Caltex Quick Bite moved up a little more to 98.5. At 09.23, Apco began decreasing its prices to 97.9, first at Apco Lara and then at other sites around the middle of the day and early afternoon. Shell Highton attempted a minor increase from 99.9 to 100.0 at 09.25, as did Shell Anglesea at 13.18. Otherwise, prices began to move downwards, including those at Chisholm and Leahy in the course of the afternoon. Shell Waurn Ponds increased from 89.9 to 98.9 at some time during the day, the ACCC submitted early. The Liberty average went from 91.4 to 98.6, suggesting either an early increase on 4 November or the adoption of a slightly lower price than the rest of the market. Andrianopoulos increased from 89.9 to 98.9 and then dropped to 88.9 at times unknown during the day. The ACCC submitted that it did this at about 09.00, to match the 09.17 increase to 98.5 at Caltex Quick Bite. 814 For all of the telephone communications during this period, the price increases seem remarkably uncoordinated if arrangements or understandings of the kinds alleged existed. Mr Warner conceded that the timing of the price increases suggested that there was no arrangement or understanding between Apco and Leahy to increase at about 14.00 on 3 November. Shortly after that time, Apco did increase. All but one of its sites had risen before Chisholm began to increase at 15.43. Chisholm's increases preceded those of Leahy, the most significant of which did not occur until 16.16. This staggering makes it unlikely that there was any meeting of minds about a time for an increase. It may have been that the telephone calls involved the passing of information about the level to which the market was likely to go but, in the absence of apparent coordination as to time, it cannot be said that this amounted to the implementation of Arrangements Nos 1 or 3 as they are alleged. Clearly, Arrangement No 6 was not implemented, because United Retail raised its prices at the two outlets recorded in Annexure B on separate days. Even if the increase at Shell Waurn Ponds were found to have been early in the day on 4 November, this would still leave a significant lapse of time between any relevant telephone call and that increase. 815 As to Arrangement No 7, there is no data for BP Meredith's prices. 816 The suggestion that Arrangement No 8 was implemented during this period cannot be accepted. Quite apart from the inordinate amount of telephone communication, which would have been unnecessary simply to communicate a price and a time, there was clearly no coordination as to the timing of price increases between the parties to this arrangement. Apco was the earliest riser, from early afternoon on 3 November. If Liberty rose on that day to anything like 98.9, its rise must have been very late because the increase in its average price is only 1.5. It is more likely that, if Liberty did rise to 98.9, it was after midnight. Andrianopoulos must also have risen after midnight. The time gap between those increases and those at Apco suggests that the increases were made by independent decisions, and not by any form of collusion. 817 The data in Annexure B does not support the proposition that any arrangement or understanding was implemented during this period. 819 During the morning of Friday, 17 November, Leahy rang Peter Anderson for 19 seconds at 10.38 and then immediately rang the Apco head office for 23 seconds. It appears that Mr Anderson was in Wangaratta on that day, because most of the calls recorded from him were transmitted through Wangaratta. At 11.58, Peter Anderson rang Alan Shuvaly for one minute. At 12.16, Ian Carmichael rang Phil Carmichael, reaching his message bank. The call is shown in Annexure B as being transmitted through Bathurst. A call from Phil Carmichael to Portcliff Geelong at 12.48 is also shown as having been transmitted through Bathurst, so it is possible that both brothers were in Bathurst on that day. 820 Brumar led the price rises in the Geelong petrol market on Friday, 17 November, probably flowing on a price increase from Melbourne. All of the Brumar outlets increased from either 87.5 or 88.5 to 98.5. The increases were at Shell Latrobe Terrace at 12.52, Shell Westoria at 12.56, Shell Belmont at 13.48, Shell Norlane at 14.03, Shell Speedwings at 14.45, Shell Highton at 15.02, Geelong Car Spa at 15.54 and Shell Anglesea at 15.59. In the course of these increases, at 15.09, Mr Shuvaly rang Chris Andrianopoulos for 30 seconds. At 15.13, Mr Shuvaly again rang Mr Andrianopoulos for one minute. At 15.50, Leahy rang Mr Anderson for 47 seconds. At 15.52, Mr Anderson rang the Liberty office for one minute and 30 seconds. Mr Warner's evidence about this call was that Leahy had probably become aware of the Brumar increases and that he had probably telephoned Mr Anderson to let him know of them. 821 At 16.07, Mobil Geelong North attempted an increase, from 87.5 to 97.9. At 16.41, however, it reduced its price again, to 87.5. In the meantime, there was a series of telephone calls between the parties to Arrangement No 8. At 16.12, Mr Andrianopoulos rang Mr Shuvaly for 34 seconds. Also at 16.12, Mr Anderson rang Liberty for three minutes and 30 seconds. At 16.24, Mr Andrianopoulos rang Mr Shuvaly for 53 seconds. At 16.30, Mr Shuvaly rang Mr Anderson for one minute. At 16.31, Mr Anderson then rang Leahy for one minute and 30 seconds. At 16.34, Mr Anderson reached Mr Shuvaly's message bank. The ACCC contended that the concentration of this block of telephone calls suggested that they were related to price. If it be assumed that Mr Anderson already knew of the Brumar price move, and if there had been an arrangement or understanding such as Arrangement No 8 was alleged to have been, it is difficult to understand why so many calls would be needed to provide information about a price and a time for an increase to be implemented. 822 Forty-five minutes after the conversation between Mr Anderson and Leahy at 16.31, Leahy and Michael Warner began what is described as a call cycle. At 17.16, Leahy rang Colin Williamson for 37 seconds. At 17.17, Leahy reached Phil Carmichael's message bank. At 17.20, Mr Warner rang Chisholm for four minutes and five seconds, far longer than would have been necessary to convey information about a price and a time. Mr Warner then reached Mr Anderson's message bank twice more and Phil Carmichael's message bank again, before ringing BP Meredith for 46 seconds at 17.39 and Colin Williamson for one minute and 25 seconds at 17.42. 823 Assuming that the computer at Apco Geelong South had still not been adjusted for daylight saving time, the Apco increases began at 18.00, with Apco Geelong East moving from 87.5 to 98.5, followed by Apco Geelong North at 18.09, Apco Highton at 18.18, Apco Lara at 18.21, Apco Geelong South at 18.28 and Apco Newcomb at 18.51. Leahy began its increases at 18.29 at BP Torquay, also moving from 87.5 to 98.5, with BP Leopold following at 19.09 and BP Hillford at 19.18. Mobil sites began joining in, with Mobil Geelong North at 18.39, Mobil East Belmont at 18.41 and Mobil Latrobe Terrace at 18.52. 824 At 19.12, Mr Warner made two calls to Darren Campigli, timed at 22 seconds and seven seconds respectively. At 20.27, Mr Warner reached Mr Anderson's message bank again. At 20.28, Mr Warner rang Phil Carmichael for two minutes and 47 seconds. 825 The Chisholm increases began at 20.53 at Chisholm Grovedale, which moved from 88.5 to 98.7, a higher price than that adopted by Apco and Leahy. At 20.57, Chisholm Leopold moved from 88.9 to 98.7 and at 21.57 Chisholm Geelong West moved from 88.5 to 98.7. By this stage, both of the 7-Eleven sites had gone up to 97.5, 7-Eleven Geelong East between 19.25 and 19.54 and 7-Eleven Newcomb between 21.16 and 21.18. On the evening of 17 November, there was more communication between Mr Anderson and Mr Shuvaly. At 21.03, Mr Anderson reached Mr Shuvaly's message bank for a call timed at four minutes and 30 seconds, apparently a very long message if the timing is recorded accurately. This call was transmitted through Somerton, so that Mr Anderson was on his way back from Wangaratta to Geelong when he made it. At 21.56, Mr Anderson apparently spoke to Mr Shuvaly for one minute, the call being transmitted through Corio. At 22.09, Mr Shuvaly reached Mr Anderson's message bank for six minutes and 30 seconds, again an extraordinarily long message, especially to leave information about Liberty's intentions in relation to a price increase. 826 On that day, the average price at Liberty increased by 0.5, from 87.8 to 88.3, suggesting either a very small increase or an increase very late in the day. Andrianopoulos dropped from 92.9, to which it had risen on 16 November, to 87.5 and then increased by one cent. Shell Victoria Street dropped from 88.9 to 85.9 and Shell Waurn Ponds from 91.5 to 85.9. 827 On Saturday, 18 November, shortly after midnight, Caltex Quick Bite increased from 87.9 to 98.2. Brumar then began dropping its prices at some of its outlets to 87.4, 87.5 or 88.5. When business hours began, Mr Warner rang Chisholm for 11 seconds at 08.09, and then rang Mr Williamson for one minute and 15 seconds at 08.10. Caltex Quick Bite dropped to 96.9 at 08.15. Chisholm reduced by 0.2 at 08.18 at Chisholm Geelong West, 08.19 at Chisholm Grovedale and Chisholm Leopold. At 08.48, Mr Andrianopoulos reached Mr Shuvaly's message bank for 13 seconds. At 08.48 and 09.00 respectively, Mobil East Belmont and Mobil Latrobe Terrace dropped their prices from 98.5 to 87.5. Also at 09.00, Caltex Quick Bite went back up to 98.2 and then, five minutes later, dropped to 96.5. There were two more calls from Mr Shuvaly to Mr Andrianopoulos at 09.15 for two minutes and 09.18 for one minute. At 09.20, BP Corford Express moved from 87.5 to 98.5, apparently without prompting by telephone from any Geelong competitor. At 09.21, Mr Shuvaly had another four-minute conversation with Mr Andrianopoulos. 828 At 09.30, Apco Geelong East dropped its price from 98.5 to 97.5. During the morning, Brumar sites continued to drop to 87.5 or 88.5, between 10.23 and 10.49. At 10.30, Caltex Quick Bite moved from 96.5 down to 94.9. At 10.53, Mr Shuvaly reached Mr Anderson's message bank for 30 seconds. At 10.54, Mobil Latrobe Terrace again raised its price from 87.5 to 98.5. It lowered it by one cent to 97.5 at 10.59, two minutes after Mobil Geelong North had also lowered its price from 98.5 to 97.5. Apco Geelong North did the same at 11.01. At 11.03, Mr Shuvaly rang Mr Andrianopoulos for 30 seconds. At 11.09, Mr Anderson rang Mr Shuvaly for four minutes. At 11.14, the last of the Brumar sites to come down, Shell Norlane, moved from 98.5 to 87.5. Almost immediately, at 11.17, Shell Latrobe Terrace increased from 87.5 to 98.5. At 11.24, Mobil East Belmont lifted its price from 87.5 to 97.5. At 11.26, Mr Warner rang Colin Williamson. Thereafter, Brumar sites proceeded to go back up to 98.5 (98.6 in the case of Shell Latrobe Terrace), Caltex Quick Bite dropped back to 87.5 at 11.45, but most of the market began discounting in small stages to 96.5 by the end of the day. 829 Liberty's average for 18 November increased from 88.3 to 97.3. This may be indicative that its peak price was lower than the rest of the market, that its rise was a little later, or that it also dropped its price as the day proceeded. At some time unknown, Andrianopoulos increased from 88.5 to 97.5 and dropped back to 87.5. The ACCC invited me to draw the inference that this increase happened between 09.00 and 10.00, around the time of the Caltex Quick Bite increase to 98.2. If this be accepted, it is difficult to conclude that any telephone communications between Andrianopoulos and Apco or Liberty had any effect on the decision made by Andrianopoulos. Both Shell Victoria Street and Shell Waurn Ponds increased from 85.9 to 98.5. The Shell Victoria Street increase must have been in the morning, because it closed on Saturday afternoons. The ACCC said that the Shell Waurn Ponds increase was also early in the day. 830 It is probable that Brumar was attempting to introduce into the Geelong petrol market a rise that had already occurred in the Melbourne petrol market. The degree of competitiveness of the Geelong petrol market apparently made this difficult, so that Brumar outlets dropped their prices even as some other market participants were increasing theirs, and Caltex Quick Bite fluctuated quite significantly. 831 If, as Mr Warner suggested, the call from Leahy to Mr Anderson at 15.50 on 17 November was to inform him of the Brumar rise, the information had little effect. Even assuming that Leahy waited for communication of Mr Anderson's approval for an arranged price increase, that approval would have to have come in the call at 16.31. It is difficult to see why Leahy would then wait until 17.16 to start informing other market competitors of the prospective increase. There is something of a temporal coincidence between the Apco increases and the Leahy increases, but in the circumstances it is an inference equally available that each made its own decision about when and to what price it would increase, as that each increased because the other had said it would. Chisholm appears to have delayed somewhat longer in making any price increase, and then to have chosen its own figure. This is consistent with it making its own decision, based on other factors. Even if the United Retail price increases did take place early in the morning on 18 November, they were so separated in time from relevant telephone communications that the connection between the two is unlikely. There was one call from Mr Warner to BP Meredith at 17.39 on 17 November, and no information about BP Meredith's prices, so it cannot be suggested that Annexure B supports the proposition that Arrangement No 7 was implemented. 832 Arrangement No 8 is even more problematic. The extraordinarily large amount of telephone communication between the three participants in this alleged arrangement or understanding is inconsistent with the proposition that there was in existence a simple arrangement or understanding by which each would raise its price to the same level at or about the same time. In the event, Apco certainly went alone, between 18.00 and 18.51 on 17 November. Nothing occurred at all by way of a price increase at Liberty until very late that evening, and more likely the following day. Certainly nothing occurred at Andrianopoulos until the following day, and then its price was one cent lower than that adopted by Apco on 17 November. 833 This period lends no support to the proposition that Annexure B demonstrates the giving effect to of the alleged arrangements or understandings. At 09.16, Apco telephoned Leahy for 24 seconds. Leahy did nothing immediately. Colin Williamson rang Ian Carmichael for 25 seconds at 09.50. At 09.51, Chisholm rang Leahy for 14 seconds. At 10.03, Leahy rang Chisholm for one minute and 11 seconds and at 10.05 Ian Carmichael rang Colin Williamson for 30 seconds. This was followed by a call at 10.09 from Leahy to Phil Carmichael for two minutes and 14 seconds. The ACCC submitted that this was a call cycle, but the call from Leahy to Chisholm and the call from Mr Carmichael to Mr Williamson were more likely to have been return calls. They do not appear to have had any connection with the earlier call from Apco to Leahy. 835 Apco began increasing its prices at 10.30, with Apco Geelong North moving from 89.1 to 99.5, followed by Apco Newcomb at 10.35, Apco Highton at 10.37, Apco Geelong South at 10.48 (assuming that its computer remained unadjusted for daylight saving), Apco Geelong East at 11.02 and Apco Lara (from 89.2) at 11.02. At 10.40, Mobil Geelong North increased from 89.1 to 99.5, and other Mobil sites followed suit. Chisholm's increases began at Chisholm Geelong West at 10.57, followed by Chisholm Grovedale at 11.09 and Chisholm Leopold at 11.11. In each case, the increase was from 89.9 to 99.5. Leahy did not begin to increase until 11.35, when BP Torquay moved from 89.1 to 99.6. BP Leopold moved from 89.1 to 99.5 at 11.36, as did BP Hillford at 12.05. 836 At 10.49, there was a further call from Mr Carmichael to Mr Williamson for 30 seconds. At 10.55, Chisholm rang Jacques Bodourian for 19 seconds. The ACCC invited me to draw the inference that Chisholm was passing on a price increase. There is nothing whatsoever to support this inference. In particular, there is no prior call from Phil Carmichael to Leahy, relayed to Chisholm, that could be characterised as a complaint about the failure of 7-Eleven to increase. In any event, the 7-Eleven sites did increase to 99.5, 7-Eleven Geelong East between 11.10 and 11.36 and 7-Eleven Newcomb between 11.15 and 11.20. 837 At 13.13, Ian Carmichael rang BP Corford Express for 30 seconds. BP Corford Express increased its price to 99.5 at 14.07. By this time, most of the Brumar sites (except Shell Belmont) and Caltex Quick Bite had increased to 99.5 and Apco had begun to ease its price to 98.9, leading the market into another discounting cycle. 838 At some time during the day, Shell Victoria Street increased its price from 89.5 to 99.5. The price at Shell Waurn Ponds remained unchanged throughout the day at 89.9, and moved to 97.9 on 29 November. 839 The data in Annexure B for this day does not fit the pattern of events accompanying the implementation of Arrangement No 1 pleaded by the ACCC or suggested in the oral evidence. The time lapse from the 24-second call from Apco to Leahy at 09.16 to the first Leahy increase was more than two hours. There is no apparent call cycle, because the calls from Leahy to Chisholm and from Mr Carmichael to Mr Williamson at 10.03 and 10.05 appear to be responses to earlier calls. Leahy appears to have waited until after Apco and Chisholm had gone up, something that Mr Warner said was unusual. For it to adopt this attitude on this occasion suggests that it did not have the prior assurance by telephone of a price rise by Apco, and that it had not passed on any information about a price rise to anybody else. The fact that United Retail behaved as it did, leaving Shell Waurn Ponds at its low price throughout the day, is altogether inconsistent with the implementation of Arrangement No 6. 840 The data for this period does not support the ACCC's contentions. The relevant telephone call is said to have been from Peter Anderson to Leahy at 17.09 for one minute. At 17.14, Ian Carmichael rang Colin Williamson for 30 seconds. This is perhaps alleged to be the implementation of the provision that Mr Carmichael would notify other market participants. The Apco increases began at 17.50, with Apco Highton moving from 91.7 to 98.9, followed by Apco Geelong North at 17.51, Apco Geelong South at 17.53 (on the same assumption), Apco Lara at 18.00, Apco Newcomb at 18.15 and Apco Geelong East at 18.27. The Leahy increases were also from 91.7 to 98.9 at BP Torquay at 18.04, BP Leopold at 18.30 and BP Hillford at 18.48. Brumar sites began to join in at 18.04 with Shell Westoria, and Mobil sites at 18.07 with Mobil Geelong North. Chisholm sites also moved from 19.04 onwards and BP Corford Express at 19.40. Apco led the market down slightly to 98.7 from 18.39. United Retail did not increase at all on that day and, on the next day, increased both Shell Victoria Street and Shell Waurn Ponds to 98.7. 842 The ACCC even contended that a call recorded from Mr Anderson to Ian Carmichael for one minute and 30 seconds at 18.36 might have been a complaint call, because Leahy was slower to go up at BP Hillford than at other places. If anything, this would be inconsistent with Leahy implementing any arrangement or understanding. 843 The occurrence of a telephone call from Mr Anderson to Leahy at 17.09, followed within an hour by Apco price increases and within two hours by Leahy price increases is consistent with part of the pattern of implementation of Arrangement No 1 alleged. These rises were also apparently the first in the Geelong petrol market. It is not clear why the provision of Arrangement No 1 that Leahy would notify other market participants was not carried into effect. If the call at 17.14 from Ian Carmichael to Mr Williamson was intended to pass on price information, it had no effect whatsoever on United Retail's behaviour. The explanation might be that both parties had confidence that a previous price increase in the Melbourne petrol market would flow into Geelong on a Friday without much effort on their behalf in any event. This seems to be confirmed by the fact that Brumar sites also began to move shortly after the Apco moves, and Chisholm's prices also increased early in the evening, apparently without the benefit of any communication from any market participant in Geelong. On balance, it seems more probable than not that the phone call from Mr Anderson to Leahy at 17.09 was not about price, but that Apco simply led the market up, confident that others would follow because Melbourne prices had already risen. The data for this day therefore does not provide strong support for the ACCC's contentions. 845 I have chosen to look at the whole two-year period in issue in this case, in order to see what Annexure B reveals about price rises by Apco and Leahy, and their temporal relationship, as well as their proximity to telephone communications between Apco and Leahy, or those on their behalf. This choice is for several reasons. Arrangement No 1 is a pivotal feature of the ACCC's case, and its implementation is alleged on more occasions than any other alleged arrangement or understanding. The data for price rises by Apco and Leahy is more complete than the data for price rises by many competitors alleged to be parties to arrangements or understandings other than Arrangement No 1. For the times when Annexure B contains data for Chisholm's price rises, I have also chosen to look at that data, as well as telephone calls involving Chisholm, Graeme Chisholm or Darren Campigli, in conjunction with the Leahy and Apco information, to see if it provides any clues as to the analysis of the information in the periods on which the ACCC relies. This is largely because, for the periods for which it appears in Annexure B, the Chisholm data is complete as to times of price changes. My examination of patterns to be found in the data in Annexure B therefore involves the parties to Arrangement No 1 and Arrangement No 3. Annexure B does not contain information about precise times of price increases for both (or, in the case of Arrangement No 8, all) parties to any other alleged arrangement or understanding. 846 Some general points can be made at the outset. Annexure B contains information that does not support the existence of connections between price rises and telephone calls, as well as information that does provide that support. I have already mentioned that the ACCC identified approximately 110 occasions during the 1999-2000 period on which there were increases in the price of ULP in the Geelong petrol market, of around 5.0 or more, on the part of a significant number of operators in that market. By the time of closing addresses in the case, the ACCC was not relying on anything like that number of occasions as occasions when effect was given to one or more of the arrangements or understandings alleged. As can be seen from the above examination of the occasions on which the ACCC still relies, only a handful are said to involve effect being given to the entire chain of arrangements or understandings alleged to have been in existence at the time. That is to say, in the period between January and September 1999, when United Fuels was still trading and Arrangement No 5 was alleged to exist between it and Brumar, there is no occasion on which the ACCC contends that effect was given to all of Arrangements Nos 1, 3, 4, 5, 7 and 8. Only on six occasions during 2000 does the ACCC submit that Annexure B demonstrates that effect was given to all of Arrangements Nos 1, 3, 6, 7 and 8, the arrangements or understandings alleged to have been in existence between 1 October 1999 and 31 December 2000. 847 In addition, counsel for the ACCC conceded that Annexure B shows a significant number of occasions on which a pattern of telephone calls, apparently amounting to a call cycle, occurred without there being any indication of any possible associated price rise. They identified 93 call cycles in 1999 and 80 in 2000, by reference to the following criteria: contact between the Leahy office or Ian Carmichael or Michael Warner, and Peter Anderson or the Apco head office, followed within an hour by at least two calls from the Leahy office or Ian Carmichael or Michael Warner to at least two other participants; or, without any contact between the Leahy office or Ian Carmichael or Michael Warner and Peter Anderson or the Apco head office, at least three calls by the Leahy office or Ian Carmichael or Michael Warner to other participants within an hour of the first call to a market participant. These criteria do not necessarily reflect the generality of the oral evidence as to what was a call cycle. Even so, using these criteria, in 1999, counsel for the ACCC pointed to 72 call cycles on days on which it could be said that there was a relevant price increase, 49 of which occurred during periods on which the ACCC relies as periods in which effect was given to alleged arrangements or understandings. This left 21 call cycles in 1999 not apparently associated with any price increase at all. For 2000, of the 80 call cycles identified, 58 were in circumstances in which it was possible to identify a relevant price increase, 46 of which are in periods relied on as periods when effect was given to arrangements or understandings. This leaves 22 call cycles clearly not associated with any relevant price increase. On all but four of these occasions, the first of its price increases occurred between 09.00 and 11.00, ie in the period following the morning traffic peak. Of the four occasions when Leahy increased its prices outside this time range, three were not very far outside it. They were 26 February (11.21), 5 May (11.32) and 8 June (11.40). The other occasion on which Leahy increased its prices outside its normal time-span for this period was 3 June (19.50). 849 During the same period, Apco increased its prices 28 times. All but three of these increases occurred between 09.00 and 11.00. The three exceptions involved one increase shortly prior to that time-span, on 10 April (08.53). The other two were 28 May (16.51) and 3 June (20.09). 850 Thus, on most occasions when there were price increases during this period, Leahy and Apco increased their prices at times close to each other's increases. There were only two occasions when Apco increased its prices and Leahy did not. These were 30 March and 28 May. There was one occasion when Leahy increased its price and Apco did not, namely 21 May. In this period, there was therefore a total of 26 occasions when both Leahy and Apco increased their prices on the same day. On those 26 occasions, Apco's increases were earlier than Leahy's on 17 occasions and Leahy's increases preceded those of Apco on nine. 851 Of the 29 occasions on which one or other, or both, of Apco and Leahy increased prices in this period, on 13 of those occasions, no telephone communication between Apco and Leahy, or anyone on their behalf, is recorded in Annexure B for more than 24 hours prior to the first of the price increases. These 13 occasions are 7 January, 15 January, 12 February, 26 February, 12 March, 17 March, 23 March, 30 March, 8 April, 28 April, 27 May, 3 June and 8 June. On the other 16 occasions, it is possible to identify from Annexure B telephone communications between Apco and Leahy, or someone on their behalf, within 24 hours prior to the first of the price increases. On 10 of those 16 occasions, the last such telephone communication was on the afternoon preceding the price rise, and at least 16 hours prior to the first of the price increases. These 10 occasions are 20 January, 26 January, 17 February, 3 March, 20 March, 26 March, 1 April, 5 May, 8 May and 21 May. On one of the 16 occasions, 10 April, when the first price increase of either Apco or Leahy was at Apco Geelong East at 08.53, the only telephone communication between the two parties within the preceding 24 hours was a call from Leahy to Apco at 09.12 on 9 April, only just within 24 hours of the price increase. On the other five occasions out of the 16, there are phone calls recorded in Annexure B on the same day as the price increase. These occasions are 3 February, 23 February, 14 April, 20 April and 28 May. It will be noted that the last-mentioned of these occasions involving a telephone call on the same day as a price increase was 28 May, on which Apco increased its price but Leahy did not. Also, on 21 May, when Leahy increased its price and Apco did not, there was a telephone call on the preceding afternoon. 852 The four occasions on which the ACCC alleges that Apco and Leahy gave effect to Arrangement No 1 during this period are 20 January, 26 March, 20 April and 8 May. Of those four occasions, all involved price increases in the 09.00-11.00 time-span. Only 20 April involved a telephone call on the same morning as the price increase. On each of the other three occasions, the last telephone communication involving parties to Arrangement No 1 was more than 16 hours before the first of the price increases. Of the occasions when the price increases occurred between 09.00 and 11.00, the shortest time gap between the first Leahy rise and the first Apco rise (on the assumption that Apco Geelong South's computer was not adjusted for daylight saving) was two minutes and the longest gap was 65 minutes. There appears to be no discernible difference in the pattern of price increases of Apco and Leahy according to whether there was a telephone call on the same day, or on the preceding day, or no telephone call at all. Nor does the behaviour of other market participants appear to have affected the pattern. Those 20 periods are 17-18 June, 22-23 June, 5-6 July, 19-20 August, 2-3 September, 9-10 September, 13-14 September, 16-17 September, 4-5 November, 11-12 November, 3-4 December, 9-10 December, 30-31 December 1999, and 10-11 January, 18-19 February, 24-25 February, 2-3 March, 8-9 March, 10-11 March and 14-15 August 2000. In addition, the ACCC relied on a further seven periods, when it alleged the implementation of arrangements or understandings other than Arrangement No 1, in which the Leahy price rises occurred shortly before midnight. These seven periods are 8-9 July, 22-23 July, 26-27 July, 26-27 August, 30 September-1 October, 7-8 October and 18 November 1999. I have listed the dates of all of these pre-midnight Leahy rises here, in order to demonstrate that, with one exception, every one of the periods involving a Leahy price increase shortly before midnight fell between 17 June 1999 and 11 March 2000. The exception is 14-15 August 2000. 854 An examination of the data for the period between 17 June 1999 and 11 March 2000 reveals that there were three periods, not relied on by the ACCC at all, in which Leahy increased its prices shortly before midnight and Apco began its increases shortly after midnight. On 15 July 1999, at 23.46, the price at BP Hillford increased from 71.5 to 75.5. At 01.00 on 16 July, Apco increased its prices at Apco Newcomb from 71.9 to 75.5 and Apco Geelong North from 71.5 to 75.5, followed by Apco Lara from 71.5 to 75.5 at 01.45 and Apco Geelong South from 71.9 to 75.5 at 03.44. On 14 October 1999, Leahy increased its price at BP Torquay from 72.6 to 76.7 at 23.17. The time of any increase at BP Hillford is not shown, although BP Hillford, along with BP Torquay, eased from 76.7 to 76.5 on the morning of 16 October. Apco increases to 76.7 began at 23.55 on 14 October, when Apco Lara moved to that price from 71.4, followed by Apco Geelong North at 23.57, and Apco Geelong East at 00.03, Apco Highton at 01.11 and Apco Geelong South at 03.29 on 15 October, all from 71.2 to 76.7. On 22 December 1999, BP Hillford rose from 74.7 to 79.7 at 22.41. The Apco increases began at 00.51 with Apco Newcomb and Apco Geelong North, followed at 00.58 by Apco Geelong East, 01.03 by Apco Lara and 02.20 by Apco Geelong South. All were from 74.7 to 79.7, except for Apco Geelong East, which moved to 81.9. In respect of each of these periods, Annexure B shows no telephone communication between Leahy and Apco, or anyone on their behalf, during the day on which the Leahy increase occurred. 855 In addition to those three periods, regard should be had to some possibly comparable examples. On 13 August 1999, Leahy increased its price at BP Hillford from 72.7 to 77.5 at 23.23. The first Apco increase was Apco Geelong South at 08.13 on 14 August, followed by Apco Newcomb at 08.18, Apco Geelong North at 08.44, Apco Geelong East at 09.17, Apco Lara at 09.23 and Apco Highton at 09.42. All moved from 72.3 to 77.5. Annexure B records a telephone call for one minute and 27 seconds from Leahy to Apco at 16.32 on 13 August. On 26 November 1999, at 23.29 and 23.39 respectively, Leahy increased its prices at BP Torquay from 72.9 to 79.7 and at BP Hillford from 70.9 to 79.7. There appears to have been an absence of data relating to Apco price changes on 25 and 26 November, so it is not possible to tell when Apco increased, although decreases from 78.9 to 77.9 are shown late in the day on 28 November. There were seven telephone calls between Leahy and Apco during 26 November, six of them initiated by Leahy, five of which were to the Apco office and one to Mr Anderson, and one initiated by Mr Anderson to the Leahy office. The last of these calls was at 16.12. 856 The point of referring to these periods is to demonstrate that, between 17 June 1999 and 11 March 2000, Leahy frequently increased its prices shortly before midnight. In that time-span, Leahy increased its price for ULP on 46 occasions. Annexure B shows only 15 occasions when Leahy increased its prices otherwise than shortly before midnight. These are 30 June, 14 July, 30 July, 10 August, 21 September, 24 September, 26 October and 30 December 1999, and 5 January, 20 January, 1 February, 10 February, 18 February, 8 March and 10 March 2000. Of these 15 non-midnight price increases by Leahy, 12 fell within periods relied on by the ACCC as periods when effect was given to one or more arrangements or understandings to which Leahy was alleged to be a party. Those occasions are 30 June, 30 July, 21 September, 24 September, 26 October and 30 December 1999, and 5 January, 1 February, 10 February, 18 February, 8 March and 10 March 2000. I have dealt with these 12 periods in detail above (without finding that any of them provides clear support for the ACCC's case). On seven out of these 12 occasions (30 December 1999, and 5 January, 1 February, 10 February, 18 February, 8 March and 10 March 2000), the only price increase by Leahy not close to midnight was at BP Leopold, where Mr Warner sometimes raised the price considerably earlier than he raised the prices at other Leahy outlets, either because it sold very little volume of petrol during the evening peak hour, or because he wished to take advantage of what he perceived to be opportunities to increase the retail margin. On these seven occasions, the ACCC relied on the fact that increases occurred at other Leahy outlets shortly prior to midnight. 20 January 2000, on which the ACCC did not rely, also involved an early increase by Leahy at BP Leopold, at 17.43, with a much later increase at BP Hillford at 23.00 that night. The five other occasions (on two of which the ACCC did not rely) on which Leahy raised its prices other than shortly prior to midnight, during what I have called the midnight increase period, all involved relatively small increases. They were 14 July (3.8), 30 July (0.8), 10 August (1.8), 21 September (1.8) and 24 September 1999 (3.3). 857 Within the midnight increase period, between 17 June 1999 and 11 March 2000, with the exception of five relatively small increases, eight increases that were early at BP Leopold and otherwise near midnight, and one other exception, every one of the price increases by Leahy occurred shortly prior to midnight. There were 31 Leahy increases at or near midnight, plus another eight occasions on which the only Leahy increases not close to midnight were at BP Leopold, a total of 39. The ACCC alleges that effect was given to one or more arrangements or understandings on 31 of these occasions, leaving eight occasions on which no such allegation is made. The increases appear to have occurred shortly prior to midnight irrespective of the presence or absence of telephone communications with any other market participant, and irrespective of what other market participants did in relation to their prices, or when they did it. They occurred shortly prior to midnight on occasions when the ACCC alleges that they involved giving effect to arrangements or understandings, and on occasions when the ACCC makes no such allegation. Price rises shortly prior to midnight are a consistent feature of Leahy's behaviour during that time. After 11 March 2000, so far as Annexure B shows, Leahy abandoned the practice of increasing shortly prior to midnight completely. With the sole exception to which I have referred, 14 August 2000, Leahy never engaged in a price increase shortly prior to midnight on any day between 12 March 2000 and the end of 2000. There was no explanation sought, or given, for Leahy's adoption from 17 June 1999 onwards of a practice of making its price increases shortly prior to midnight, or its abandonment of that practice after 11 March 2000. 858 In what I have called the midnight increase period, Apco also increased its prices on a number of occasions close to midnight. Between 17 June 1999 and 11 March 2000, there were 38 periods when Apco is recorded in Annexure B as having increased its price for ULP in Geelong. The increases were usually spread over a few hours among its various outlets, but the first increase occurred shortly before, at, or shortly after midnight on 32 of these 38 occasions. The first increase was shortly prior to midnight on 22 June, 5 July, 29 July, 9 August, 26 August, 9 September, 13 September, 16 September, 30 September, 14 October, 4 November and 30 December 1999, and 5 January, 10 January, 20 January and 1 February 2000. The earliest time before midnight at which such an increase occurred was 22.49 on 20 January 2000. The first Apco increase occurred precisely at midnight on 11-12 November 1999. The first increase was shortly after midnight on 16 July, 23 July, 20 August, 3 September, 24 September, 8 October, 4 December, 10 December, 17 December and 23 December 1999, and 19 February, 25 February, 3 March, 9 March and 11 March 2000. The latest time for such an increase was 01.51 on each of 9 March and 11 March 2000. All of the other post-midnight increases by Apco to which I have referred were within one hour of midnight. In addition, there were increases by Apco shortly after midnight on both 17 and 18 June 1999, but that was a highly unusual period, in which Annexure B shows that Apco increases were spread over almost 48 hours (see the details in [369] --- [372]). Therefore I have not included either day as a first increase close to midnight. Of the 32 occasions on which Apco increased close to midnight during the midnight increase period, there are 10 on which the ACCC does not allege that the increases concerned were part of the giving effect to of any arrangement or understanding to which Apco is alleged to be a party. These are 16 July, 23 July, 29 July, 9 August, 26 August, 30 September, 14 October, 17 December and 23 December 1999 and 20 January 2000. On 8 October 1999, Apco's increase is alleged to have been by way of giving effect to Arrangement No 8 only. The other 21 occasions, on which the ACCC does allege that Apco gave effect to Arrangement No 1, or to both Arrangement No 1 and Arrangement No 8, are dealt with in detail above. 859 Besides 17 and 18 June, there were five occasions when Apco increased its price during the midnight increase period on which the first increase did not occur close to midnight. There were first increases by Apco at 05.27 on 30 June, 08.13 on 14 August, 10.49 on 21 September, and 15.00 on 26 October 1999, and 10.11 on 11 February 2000. Of these, 30 June, 21 September and 11 February are occasions on which the ACCC alleges that Apco gave effect to one or both of the arrangements or understandings to which it is alleged to be a party, and 14 August and 26 October are not such occasions. 860 Thus, it appears that, like Leahy, Apco had a practice of raising its prices close to midnight during the period that I have characterised as the midnight increase period. The increases took place at that time irrespective of whether there had been telephone communications between Apco and other parties to Arrangement No 1 or Arrangement No 8, and irrespective of whether competitors did, or did not, raise their prices. Like Leahy, Apco is recorded in Annexure B only once raising its price close to midnight outside the period between 17 June 1999 and 11 March 2000. That one occasion was at 00.05 on 15 August 2000. There is no explanation in the evidence as to why Apco adopted the practice of midnight increases during the midnight increase period, and then abandoned that practice. 861 For most of the midnight increase period, Annexure B contains details of the times of Chisholm's price rises. It is interesting to look at what Chisholm did in the midnight increase period, because its outlets all closed by 22.00 at the latest. Between 5 July 1999 and 10 March 2000, Annexure B records 43 periods when Chisholm increased its prices of ULP. All but five of these can be seen to fall within three distinct ranges. The largest number, 15, were within the early evening range of 19.56-20.17, ie around the closing time for most Chisholm outlets in the non-summer months, which was 20.00 (except for Chisholm Geelong West, which closed at 22.00, and Chisholm Corio, which closed at 19.00, all year round). The occasions within the early evening range were 5 July, 8 July, 13 July, 15 July, 22 July, 5 August, 13 August, 19 August, 26 August, 9 September, 16 September, 24 September, 27 September, 30 September and 7 October 1999. Of these, five (13 July, 15 July, 5 August, 13 August and 9 September) are not the subject of allegations that Chisholm gave effect to Arrangement No 3. From the beginning of November 1999, it appears that closing time was at 22.00 for most of the Chisholm outlets. There are 12 occasions when the first price increase occurred within the late evening range, 20.51-21.58. They are 26 July, 4 November, 11 November, 18 November, 26 November, 3 December, 9 December, 16 December, 22 December and 30 December 1999, and 1 February and 10 March 2000. Of these, three (26 November, 16 December and 22 December 1999) are not the subject of allegations of giving effect to Arrangement No 3. The other distinct time range is the morning range 07.16-08.10, at least an hour after opening time for the Chisholm outlets, which opened at 06.00, except for Chisholm Corio, which opened at 07.00. The 12 occasions on which Chisholm's first price rise occurred within the morning range are distributed throughout the midnight increase period. They are 30 July, 10 August, 3 September, 14 September and 15 October 1999, and 6 January, 11 January, 21 January, 11 February, 19 February, 25 February and 9 March 2000. Of them, four (10 August, 15 October, 11 January and 21 January) are not the subject of allegations that Chisholm gave effect to Arrangement No 3. The four Chisholm increases when the price did not fall within the early evening range, the late evening range or the morning range are 3 August (09.20, more than an hour after the morning range), 21 September (11.05), 26 October (16.29) and 3 March (06.13, shortly after opening). Of these, only 3 August is not alleged to have been a day when Chisholm gave effect to Arrangement No 3. 862 In the midnight increase period, therefore, Chisholm was a great deal less consistent than either Leahy or Apco in the timing of its price increases. The increases within the three ranges seem to have occurred irrespective of whether there were telephone calls from Leahy, or anyone on its behalf, to Chisholm, or anyone on its behalf. In relation to the periods when the ACCC does allege that Chisholm gave effect to Arrangement No 3, the ACCC's view is often that a Chisholm increase in any of the three ranges can be said to have been at about the same time as an increase by Leahy shortly before midnight. My analysis of the data in Annexure B in respect of Chisholm increases during the midnight increase period suggests that their timing was entirely independent of Leahy increases, except in the sense that the increases by both Leahy and Chisholm might have been associated with general increases in the Geelong petrol market. On all but five of these occasions, the first Leahy increases occurred earlier than 18.00. There was only one increase close to midnight, on 14 August. On all but two of the occasions, the first price increases were later than 09.00. I have therefore called this period the daytime increase period. Predominantly, Leahy's price increases were scattered throughout the day. Apco increased its prices on 36 occasions during the daytime increase period. All but four of its first increases were earlier than 18.00 (one of the four was at 18.00 and another, on 15 August, was shortly after midnight), and only one was earlier than 09.00. Chisholm's increases during the daytime increase period, which occurred on 38 occasions, tended to be later than those of Leahy and Apco. Seven of Chisholm's first increases occurred after 18.00 and three before 09.00. 864 During the daytime increase period, there were six occasions when Leahy, Apco and Chisholm all made their first increases within one hour. These were 24 March, 14 April, 10 May, 23 August, 29 August and 25 September 2000. On four of these occasions, Leahy was first to increase, with Apco and Chisholm being first on one occasion each. The first four of these are occasions on which the ACCC alleges that effect was given to Arrangements Nos 1 and 3. No such allegation is made as to 29 August, when Leahy increased first and the first increases were all within 35 minutes, or as to 25 September, when Chisholm increased first, and the first increases all took place within 23 minutes, with Leahy and Apco only one minute apart. There were a further 15 occasions when the first increases of two out of the three (Leahy, Apco and Chisholm) occurred within one hour, with the third following not more than two hours after the first. These are 31 March, 28 April, 3 May, 19 May, 7 July, 14 July, 18 August, 8 September, 15 September, 22 September, 27 October, 10 November, 28 November, 8 December and 15 December. In respect of seven of these occasions (28 April, 3 May, 18 August, 15 September, 22 September, 10 November and 8 December), the ACCC makes no allegation of the giving effect to of any arrangement or understanding. There are seven occasions when the first increases of Leahy and Apco occur within one hour, but Chisholm's increase is beyond two hours after the first of those increases. They are 15 June, 28 June, 31 July, 10 August, 14-15 August (the only midnight increase in the daytime increase period, when Chisholm's first increase did not occur until 08.22 on 15 August), 17 November and 21 December. Of these, four (28 June, 31 July, 10 August and 21 December) are not the subject of any giving effect allegation. There are four occasions when the first increases of two out of Leahy, Apco and Chisholm occurred within one hour, but the other increased earlier than, but within two hours of, those two. They are 20 April (Leahy first, Apco five minutes after Chisholm), 26 May (Leahy first, Chisholm two minutes after Apco), 7 June (Leahy first) and 3 November (Apco first, Leahy five minutes after Chisholm). All are alleged by the ACCC to be giving effect to days. 865 A few occasions in the daytime increase period need to be dealt with more specifically. On 25 May, Leahy's first increase followed Chisholm's by seven minutes, but there was no increase by Apco at all. The ACCC does not allege that effect was given to Arrangement No 3 on that day. 3-4 October involved two sets of increases, one on each day. Apco increased its price at Apco Geelong East at 15.10 on 3 October, followed by Leahy's first increase at 15.32 and Chisholm's first increase at 16.20. Chisholm and Leahy both dropped back, starting at 17.05 and 17.13 respectively. On the morning of 4 October, Leahy's first increase was at 09.47, with Apco's remaining outlets beginning to go up from 09.57, but Chisholm holding off until 11.59. The ACCC makes no allegation about 3 October, but alleges that effect was given to Arrangement No 3 on 4 October. On 10 October, Chisholm attempted an early increase from 08.27, but abandoned it over the next half-hour. Leahy's first increase was at 09.54 and Apco's at 10.16 on that day. Chisholm finally began going up again at 11.45. The ACCC makes no allegation about this occasion. On 19 October, Leahy's and Chisholm's first increases were 58 minutes apart, but Apco had begun increasing more than seven hours earlier. The ACCC alleges that Leahy and Chisholm were giving effect to Arrangement No 3 on that day. Finally, 29 December is the only occasion during the daytime increase period when it can be said that no two of Leahy, Apco and Chisholm made their first increases close together in time. Leahy's was at 17.38, Apco's at 19.27 and Chisholm's at 20.54. The ACCC makes no allegation about this day. 866 During the daytime increase period, there were 10 occasions when Leahy's first increases and Apco's first increases were to the same amount and were within one hour, but the ACCC does not allege the giving effect to of Arrangement No 1. These occasions are 28 April, 28 June, 10 August, 18 August, 29 August, 15 September, 22 September, 10 October, 10 November and 21 December. In addition, on 3 May, Leahy's first increase was at 12.00, to 86.5. Apco's first increase was at 12.30, to 85.5. One hour and 15 minutes after Apco's first increase, at 13.45, Leahy began to decrease its price to 85.5. The ACCC does not allege the giving effect to of Arrangement No 1 on 3 May. Of those 11 occasions, there were five on which no telephone communication is recorded in Annexure B between Leahy and Apco or anyone on their behalf in the 24 hours preceding a price increase. Those occasions are 3 May, 18 August, 29 August, 15 September and 10 October. As with the similar occasions in the first half of 1999, on some of these 11 occasions Leahy increased its prices first and on others Apco did so. On some of these occasions, other market participants had already increased their prices and on others Leahy or Apco was the first to go up. 867 Similarly, during the daytime increase period, there were seven occasions when Leahy's first increases and Chisholm's first increases were within one hour, but the ACCC makes no allegation of the giving effect to of Arrangement No 3. They are 25 May, 18 August, 29 August, 22 September, 25 September, 3 October and 8 December. In respect of only one of these, 29 August, Annexure B records no telephone communication between Leahy and Chisholm, or anyone on their behalf, in the 24 hours preceding the first of the price increases. For almost the first six months of the relevant two years, the morning post-peak increase period, both Leahy and Apco had a practice of increasing their prices in the morning increase period. For the next nine months, the midnight increase period, both had a practice of increasing their prices at around midnight. During the remainder of the two years, the daytime increase period, when neither of these practices appears to have been in operation, the prices of both still seemed to move in a parallel way. 869 These conclusions make it all the more difficult to rely on what might otherwise have been inferences drawn from Annexure B in the periods on which the ACCC relied, that correlations in time between telephone calls and price increases meant that the former were the cause of the decisions to make the latter. In fact, the presence or absence of telephone communications seems to have made remarkably little difference to the behaviour of Leahy, Apco and Chisholm in relation to prices. So far as these admissions concern conduct by Leahy, as a party to various alleged arrangements or understandings, no difficulty arises in the application of s 87(1)(a) or (b) of the Evidence Act . The admissions made by Leahy are identical with those made by Mr Carmichael and Mr Warner, so it is unnecessary to discuss the extent of the authority of Mr Carmichael and Mr Warner to make admissions on behalf of Leahy, or to determine whether the admissions they made fell within the scope of their employment or authority. 871 Leahy's defence was filed on 4 February 2004, Mr Warner's on 11 February 2004 and Mr Carmichael's on 18 February 2004. At the time, the statement of claim in the proceeding was still in the form in which it had been filed at the commencement of the proceeding, on 7 November 2003. Importantly, par 41 of the statement of claim pleaded the existence of Arrangement No 1. 872 Paragraph 42 contained the allegations of the giving effect to of Arrangement No 1. The particulars to par 42 referred to Annexure B in its original form, alleging that 'On or about each of the dates shaded in' Annexure B, Mr Carmichael or Mr Warner on behalf of Leahy made or arranged for the making of telephone calls to, or received telephone calls from, some or all of various other market participants listed in the particulars, and that, 'On or about each of those days,' the retail prices of ULP at sites at which the 'Market Participants' supplied ULP for sale to the public increased to the same or about the same amount within a short period of the telephone call or calls between such 'Market Participants'. The phrase 'Market Participants' was defined in par 38 to include the original eight corporate respondents to this proceeding, as well as the operators of Mobil outlets in Geelong, Chisholm, 7-Eleven, Gordon Primmer, United Convenience, Mortimer Petroleum and Expotech (the operator of BP Corford Express). As I have said in [319], at that time, Annexure B designated 108 periods, covering all or parts of 296 days in 1999 and 2000, alleged to be periods in which effect was given to one or more of the alleged arrangements or understandings. In its final form, Annexure B designates 63 periods, covering 108 days in the same two years, as giving effect to periods. 873 The defences of Leahy, Mr Carmichael and Mr Warner did not respond directly to the particulars, of course. In response to par 42 of the statement of claim, each admitted that effect was given to an understanding (but not an arrangement) 'between 1 January 1999 and 31 December 2000'. If these admissions were to be taken as admissions that, on each of the occasions then included in the shaded periods in the original Annexure B, effect was given to Arrangement No 1, they would be manifestly unreliable admissions. If they are not taken to be admissions as to the giving of effect to Arrangement No 1 on any specific occasion, then plainly it remained for the ACCC to establish at the trial, otherwise than by means of the general admissions, the dates on which effect was given to Arrangement No 1. With this example in mind, I turn to the defences of Leahy, Mr Carmichael and Mr Warner themselves, to ascertain exactly what was admitted. 874 In response to par 41 of the statement of claim, each admitted that, between January 1999 and 31 December 2000, there existed an understanding between Mr Carmichael and Mr Warner on behalf of Leahy and Peter Anderson on behalf of Apco, containing the provision to the effect alleged in par 41(c) of the statement of claim. These were defined as 'Involved Suppliers'. Save for the admissions, the allegations in par 41 of the statement of claim were denied. 878 Otherwise the allegations in par 42 were not admitted. 879 Arrangement No 3 was pleaded in par 45 of the statement of claim. 880 Otherwise, the allegations in par 45 of the statement of claim were denied. 881 As to the allegations that effect was given to Arrangement No 3, each of Leahy, Mr Carmichael and Mr Warner admitted that, during the period from 1 January 1999 to 31 December 2000, effect was given to the admitted understanding by Mr Carmichael or Mr Warner, or Mr Campigli or Mr Chisholm, advising of the amount and timing of proposed increases to the retail price of ULP and Super at Leahy sites or Chisholm sites respectively and by causing such changes to be made. Otherwise, the allegations in par 46 of the statement of claim (of the giving effect to of Arrangement No 3) were denied. The effect of these admissions was to leave it unclear on how many, or which, occasions during the relevant period effect was given to Arrangement No 3. At the time, the statement of claim referred to Annexure B, but the only reference to dates in the particulars to par 46 was 'On or about certain of the dates shaded'. In other words, the allegation itself was non-specific. Interestingly, although there was an admission that the admitted understanding contained a provision about advising other Involved Suppliers, there was no admission that effect was ever given to that provision. It is clear that the ACCC was left with the task of proving on which occasions effect was given to Arrangement No 3. 882 The admissions with respect to Arrangements Nos 4 and 6 followed the same pattern as those in relation to Arrangement No 3. It is unnecessary to detail those admissions further for present purposes. 883 As to Arrangement No 7, Leahy, Mr Carmichael and Mr Warner made an admission in a very limited form. They admitted that, at or about the time that BP Meredith ceased to be a Leahy commission site in December 1999, Gordon Primmer requested that Leahy inform him when it increased its retail prices for petroleum products at Leahy sites and that, from time to time, Mr Carmichael and Mr Warner did so. Otherwise, the allegations in par 53 of the statement of claim, in which the existence and provisions of Arrangement No 7 were pleaded, were denied. So were the allegations that effect was given to Arrangement No 7, save for the admission that, from time to time, Leahy advised Mr Primmer when it increased its retail prices for petroleum products. 885 They also admitted that, by engaging in their admitted conduct, Leahy arrived at an understanding or understandings, a provision or provisions of which had the purpose, or had or were likely to have the effect, of substantially lessening competition in the retail markets for ULP and Super in the Geelong area. Otherwise, allegations of contravention were denied. All three admitted that, by engaging in their admitted conduct, Leahy gave effect to a provision or provisions of an understanding which had the purpose, or had or were likely to have the effect, of substantially lessening competition. Each of Mr Carmichael and Mr Warner admitted that he was directly or indirectly knowingly concerned in or party to the respective contraventions by Leahy that were admitted. In its own defence, United Fuels denied all of the material allegations against it. A question therefore arises whether Mr Heikkila's admissions in his defence are admissible in evidence against United Fuels. It is clear that neither s 87(1)(a) nor s 87(1)(b) of the Evidence Act makes those admissions admissible evidence against United Fuels. The defence was filed well after any time at which Mr Heikkila had authority to make statements on behalf of United Fuels, and well after he had ceased to be an employee and a director of United Fuels or to have any authority to act for United Fuels. Nor can the admissions be admissible against United Fuels under s 87(1)(c). They were made after the event, in a pleading, at a time when there was no possibility that Mr Heikkila and United Fuels were any longer acting in the furtherance of a common purpose. Accordingly, the admissions are admissible against Mr Heikkila only. They cannot be used by the ACCC to assist in proving its case against United Fuels. 887 As I have said, Mr Heikkila's defence simply admits the allegations made against him in the statement of claim in its original form. The admissions are all subject to the qualification that the defence asserts that United Fuels generally increased its fuel prices after Leahy had increased its prices. Nor do they choose among the alternatives offered in par 47 ('arrangement or arrangements', 'alternatively arrived at an understanding or understandings'). They must therefore be taken to be admissions of whatever of these alternatives the ACCC is capable of establishing by evidence, if any. Similarly, as to Arrangement No 5, par 49 of the statement of claim pleaded a time or times unknown, and contained similar alternative pleadings. Again, the bald admission (subject to the qualification to which I have referred) does not indicate anything as to a time conceded for the origin of Arrangement No 5, or resolve any of the choices inherent in the alternatives. 890 The allegations of giving effect to Arrangements Nos 4 and 5 are pleaded in pars 48 and 50 of the original statement of claim respectively. The particulars then merely referred to 'certain of the dates shaded' in the original version of Annexure B. The admissions of those allegations in Mr Heikkila's defence, which are also subject to the qualification about United Fuels having generally increased its fuel prices after Leahy increased its prices, do not therefore amount to admissions that effect was given to either Arrangement No 4 or Arrangement No 5 on any particular date. Insofar as pars 57, 58 and 59 of the original statement of claim contain allegations as to the purpose and likely effect of provisions in arrangements or understandings, against him and United Fuels, Mr Heikkila admits those allegations. Similarly, relevant allegations about Mr Heikkila being a person directly or indirectly knowingly concerned in or party to the contraventions by the corporate respondents are also admitted. Mr Shuvaly's defence was filed on 30 April 2004, and Liberty's on 4 May 2004. In substance, the admissions they made are the same, so it is unnecessary to be concerned as to whether Mr Shuvaly's admissions are also admissions by Liberty, pursuant to s 87(1) of the Evidence Act . Because the admissions by Liberty and Mr Shuvaly were made in pleadings, well after any time at which Liberty and Mr Shuvaly are alleged to have been giving effect to any purpose common to them and any of Apco, Peter Anderson, Andrianopoulos or Chris Andrianoploulos, those admissions are not admissible under s 87(1)(c) of the Evidence Act against Apco, Peter Anderson, Andrianopoulos or Chris Andrianopoulos. 892 Both Liberty and Mr Shuvaly admitted the allegations in par 55 of the statement of claim, in which the ACCC pleaded the existence of Arrangement No 8. Liberty expressly admitted the alternatives as pleaded ('arrangement or arrangements, alternatively...an understanding or understandings). Mr Shuvaly simply admitted all of the allegations in par 55, necessarily including the alternatives. As to the allegations that effect was given to Arrangement No 8, each of Liberty and Mr Shuvaly simply admitted the allegations in par 56 of the statement of claim. At that time, the particulars to par 56 referred to 'certain of the dates shaded' in Annexure B. Each of Liberty and Mr Shuvaly also admitted all of the purpose or likely effect allegations, and the allegation of giving effect to a provision or provisions of an arrangement or understanding in contravention of s 45(2)(b)(ii) of the Trade Practices Act . Mr Shuvaly also admitted that he was a person directly or indirectly knowingly concerned in, or party to, any contraventions by Liberty of s 45(2)(a)(ii) of the Trade Practices Act referred to in par 59 of the statement of claim. Again, these admissions are riddled with alternatives. 893 It is worth noting that Liberty's defence, whilst expressly admitting most of par 55 of the statement of claim, did not refer to the allegation in that paragraph that the alleged arrangement or arrangements, or understanding or understandings, were made 'At a time or times unknown to the Applicant but not before May 1998'. Counsel for the ACCC submitted that, because of the absence of a specific denial of this allegation, it was deemed to be admitted pursuant to O 11 r 13 of the Federal Court Rules . Having regard to the fact that the substance of the allegations in par 55 is admitted (subject to the problem of the alternatives pleaded), and the time is not denied, this submission is good. There remains a question whether the Court should rely on the deemed admission, in the light of the failure of the ACCC to explore with Mr Shuvaly when he was in the witness box, and to lead any other evidence of, the origin of Arrangement No 8. In all, there were 471 pages of material in this folder. In final submissions, reference was made to some 36 pages of this material. There was no reference at all to what Mr Andrianopoulos said. A passing reference was made in oral submissions to some of what Mr Williamson said about the procedure for filling in returns from United Retail's outlets, from which some of the material in Annexure B was derived. In oral submissions, counsel for the ACCC also referred to six answers given by Mr Williamson in his interview, all involving denials. Counsel for the ACCC invited me to find that these were false denials, on the basis of the oral evidence of Ian Carmichael and Michael Warner, for the purpose of seeking to rely on the false denials as evidence of a consciousness of guilt on the part of Mr Williamson. Of the references made to 36 or so pages of questioning of Mr Anderson, out of 297 pages, only seven pages concerned admissions. And he would say, "Yes. " Or I might ring him and say, "What has happened down there? " And sometimes a slip of the tongue, whatever it may be, you may mention a price, right, you try not to and you try to keep yourself, particularly now, a lot more vigilant about what you are saying and it is just because of a friendship. But if you think that by talking to Chris Adrianopoulos [ sic ] I am going to affect the price in Geelong, you have got a rude shock coming because Chris will tell you where to go, in no uncertain terms...And he won't mince his words. And we have discussed the market in general and we have been able to get information, the same as Chris has wanted information out at Geelong. You have got to remember I am in the Geelong market. You soon find out if it is wrong. Yes, I am on X; end of story. Then he would do what he likes with the information. ' He then went on to say, 'And I might add market information only, what is out there. ' Subsequently, Mr Anderson said that he may have had conversations with Liberty about where the market was at the time. Maybe a market information call, what's the prices in Melbourne, because I had maybe heard something was moving down there, so I have made a call to find out. There may be --- that information may have passed, that the prices currently in Geelong are X, Y, Z. What is illegal about that? The Commission seems to think it is. They may use that information as a basis of making a decision to increase prices. What were the other prices in the town, might I add, at this stage? Isn't that right? It is up to them what they want to do. It can be taken that this evidence is admissible against Apco, pursuant to both s 87(1)(a) and s 87(1)(b) of the Evidence Act , having regard to Mr Anderson's position with Apco. They are not admissible against Mr Andrianopoulos, Andrianopoulos, Mr Shuvaly or Liberty under s 87(1)(c) , because the admissions were not made in the furtherance of a common purpose. They were made in the course of an investigation after the event. 899 Counsel for the ACCC described Mr Anderson's admissions as having been 'guarded', and attempted to characterise them as admissions of more than they actually were. It would be unwise to engage in semantics about the meaning of particular admissions. It was certainly the case that Mr Anderson was reluctant to admit anything, but it is not possible to draw from that any conclusion that, when he did admit something, he was really admitting more than he was saying. Only if the other evidence proved conduct by Mr Anderson in contravention of s 45(2) of the Trade Practices Act would it be possible to say that Mr Anderson was hiding something in his interview and examinations, but in that event it would be unnecessary to say so, as the case would have been proved in any event, and a finding that Mr Anderson was admitting more than he said would be unnecessary. 900 The remainder of the interview and examinations of Mr Anderson, tendered in evidence by the ACCC, so far as it contains matters of substance relevant to this case, contains denials by Mr Anderson of most of the matters put to him, and of any wrongdoing. This includes the other specific passages from the material, to which counsel for the ACCC referred in submissions. In particular, Mr Anderson consistently denied having discussions relating to prices with Mr Carmichael and Mr Warner. Counsel for the ACCC referred in final submissions to these denials. The submission was that, as counsel for Apco and Mr Anderson had not put the denials expressly to the ACCC's witnesses, particularly Ian Carmichael and Michael Warner, I should reach the conclusion that Mr Anderson did not give evidence because his evidence would not have assisted his case. It is true that Mr Anderson did not give evidence. What he might have said if he had chosen to give evidence, instead of exercising his right to have the case determined on whatever evidence the ACCC brought forward, must be entirely a matter of guess work. If he had given evidence consistent with his denials, it might have been possible to be critical of his counsel for not putting expressly to Mr Carmichael and Mr Warner the contradictions of their evidence inherent in the denials. If Mr Anderson had given evidence inconsistent with his denials, he might have exposed himself to prosecution for perjury, for the answers he gave on oath in the examinations under s 155 of the Trade Practices Act . These possibilities are beside the point. The case must be determined on the evidence the ACCC tendered. If there should be an issue of fact about whether some conduct of Mr Anderson, proved by other evidence, was capable of an innocent explanation, then the failure of Mr Anderson to give evidence may have some relevance to the way in which that issue of fact should be determined. That would be the case without reference to any denials of Mr Anderson in his earlier interview and examinations. I see no point in attempting to speculate on what evidence Mr Anderson might have given, and whether it would or would not have been consistent with his earlier denials. The simple fact is that he did not give evidence. 901 In final submissions, counsel for the ACCC also invited me to reject Mr Anderson's denials in his interview and examinations, on the basis that they are inconsistent with the evidence given in this proceeding. I see no point in engaging in such an exercise. Mr Anderson's denials are only part of the evidence in this case because the ACCC chose to tender them. Having chosen to tender them, it may well have made them evidence against its own case, but the denials are self-serving statements, and therefore evidence of very little weight. I would only reject them if I were satisfied on the other evidence led by the ACCC that Arrangement No 1 existed, and that effect was given to it. If I should be so satisfied, it would be unnecessary to take the further step of expressing findings that Mr Anderson's denials were false. It would be enough to say that the ACCC's case in respect of Arrangement No 1 was made out. There can be no doubt as to the admissibility of such admissions against the party making them, pursuant to s 81(1) of the Evidence Act . The ACCC also sought to rely on those admissions as being evidence against the other party in each case, admissible pursuant to s 87(1)(c) of the Evidence Act , on the ground that the person making the admission was doing so in furtherance of a common purpose with the other party. The following are some examples. 903 Ian Carmichael was asked in evidence-in-chief whether, in his phone calls with Peter Anderson, he had discussed anybody else. He said that he had. When asked to describe the discussions, he said, 'I asked Mr Anderson if Chris [Andrianopoulos] had known the price. ' When asked what Mr Anderson said in response to this, Mr Carmichael said, 'He said he [Mr Andrianopoulos] was aware of it. ' Mr Carmichael went on to say that, in 1999, he may also have asked Mr Anderson a similar question in relation to Liberty, and Mr Anderson may have also said that Liberty was aware of the price. Subsequently, Mr Carmichael gave evidence that, when he passed on to Darren Campigli information that Mr Anderson and Mr Andrianopoulos both knew about price increases, his awareness of knowledge on the part of Mr Andrianopoulos was the result of his conversation with Mr Anderson. 904 For this evidence of Mr Carmichael to be admissible against Andrianopoulos, Mr Andrianopoulos, Liberty and Mr Shuvaly, I would have to be of the view that it is 'reasonably open to find' that the statements attributed to Mr Anderson were made by him in furtherance of a common purpose he had with Andrianopoulos, Mr Andrianopoulos, Liberty and Mr Shuvaly. I assume that the common purpose relied on is the implementation of Arrangement No 8. It is not sufficient to say that the statements by Mr Anderson that Mr Andrianopoulos and Mr Shuvaly were aware of price increases were made in the furtherance of a common purpose between Mr Anderson and Mr Carmichael. What is required is that it be reasonably open to find that the statements were made in the furtherance of a common purpose between Mr Anderson and Andrianopoulos and Mr Andrianopoulos, or Liberty and Mr Shuvaly, respectively. It would thus be necessary for it to be reasonably open to find, from evidence other than the statements by Mr Anderson, that Arrangement No 8 was such that the parties to it had a common purpose that Mr Anderson would advise another market participant, such as Mr Carmichael, of a price increase. Such a purpose is pleaded in the amended statement of claim against the parties to Arrangement No 8, but only indirectly. There is no allegation that Arrangement No 8 contained a provision requiring any of the parties to advise any other market participant (in contrast with the pleading of Arrangement No 1, which is alleged to contain such an express provision). The relevant provision of Arrangement No 8, as pleaded in par 55 of the amended statement of claim, is that the parties to the alleged arrangement or understanding would advise each other of the amount and timing of proposed increases in the retail price of ULP and Super to be charged at Apco sites, each knowing or intending that Apco or other market participants would advise some or all of the market participants other than the parties to Arrangement No 8 of the amount and timing of the proposed increases. This may be sufficient to justify the admissibility of Mr Anderson's statements against the parties to Arrangement No 8, and Mr Andrianopoulos and Mr Shuvaly, if there is good reason to find that Arrangement No 8 existed and contained such a provision. 905 The ACCC also sought to rely on evidence given by Mr Warner of statements made by Ian Carmichael to Mr Warner to the effect that Mr Anderson had telephoned Mr Carmichael about a prospective price increase. Counsel for the ACCC argued that s 87(1)(c) of the Evidence Act makes admissions by Mr Carmichael, made to Mr Warner, of Mr Carmichael's conversations with Mr Anderson admissible against Mr Anderson as well as against Mr Carmichael. It could be argued that, in instructing Mr Warner to give effect to an increase in petrol prices at Leahy outlets, Mr Carmichael was acting in furtherance of a purpose common to himself and Mr Anderson, and that these admissions of Mr Carmichael are therefore admissible against Mr Anderson. The point is hardly worth considering, however, as Mr Carmichael himself gave evidence of his own conversations with Mr Anderson. The only purpose of relying on the evidence of what Mr Carmichael then told Mr Warner would be to demonstrate its consistency with Mr Carmichael's own evidence of what Mr Anderson said. 906 In the course of giving his evidence about conversations he had with Mr Anderson, Alan Shuvaly was asked, 'Do you remember if any of the independents were mentioned to you at all? Not a great deal. Again, in the light of the fact that Mr Carmichael and Mr Warner gave evidence, it is hardly evidence of great weight. It is difficult to see how what Mr Anderson said could be admissible against Chisholm, because there is no allegation of the existence of any common purpose between Chisholm and Apco or Mr Anderson. 908 The ACCC also sought to rely on evidence given by Darren Campigli about his conversations with Ian Carmichael. Mr Campigli said that he sometimes asked Mr Carmichael about Andrianopoulos and Apco because he knew that Leahy had business dealings with those two companies. Mr Campigli would ask Mr Carmichael if he had any idea whether Apco or Andrianopoulos would be moving their price up as well. Mr Carmichael replied that 'it should be all right'. These conversations occurred not all the time, but a few times while Chisholm was receiving calls in 1999 and 2000. Occasionally, Mr Campigli said that he would ask Mr Carmichael about Shell or Mobil. Once or twice, Mr Carmichael mentioned that he had spoken to Colin Williamson, and Mr Campigli assumed that that meant that United Retail would be moving its prices and other Shell outlets would be following. These conversations occurred only once or twice during 1999 and 2000. Subsequently, when giving evidence about calls from Ian Carmichael or Michael Warner concerning the failure of 7-Eleven to increase its prices, Mr Campigli said that, occasionally, Mr Carmichael or Mr Warner would mention that Mr Anderson was not happy that 7-Eleven had not gone up. Again, it is possible to argue that these admissions by Mr Carmichael or Mr Warner were made in the furtherance of a common purpose with Mr Anderson to give effect to the provision of Arrangement No 1 about advising other market participants. No common purpose is alleged between Leahy, Ian Carmichael or Michael Warner on the one hand and Andrianopoulos or Chris Andrianopoulos on the other. In any event, given that Mr Carmichael and Mr Warner gave evidence themselves about conversations with Mr Anderson, the evidence is of very little weight. In addition, its vagueness makes it of very little value. 909 Finally, in his evidence-in-chief, Phil Carmichael was asked whether, in 1999 or 2000, he had asked Ian Carmichael or Michael Warner where they had obtained information they gave him about intended price increases. He said that he asked about discussions they may have had with other competitors. He recalled asking, 'Is Apco going at that particular time? ' He was given an affirmative answer, and told that Ian Carmichael or Mr Warner had had a conversation with Mr Anderson. Again, it might be possible to discern a common purpose in the alleged implementation of the provision of Arrangement No 1 that other market participants would be advised of price increases by Leahy, but the weight of the evidence is not significant in the light of the fact that first-hand evidence from Ian Carmichael and Mr Warner was given. 910 In the circumstances, it seems hardly worth attempting to determine whether it is reasonably open to find that these various statements were made in the furtherance of a common purpose. With the possible exception of the evidence relating to Arrangement No 8, the value of the other evidence is so slight, because direct evidence of the types of conversations alleged is available. In relation to Arrangement No 8, there might be some importance in determining whether it is reasonably open to find that Mr Anderson was making his statements in furtherance of a common purpose with Andrianopoulos, Chris Andrianopoulos, Liberty or Alan Shuvaly, because the evidence is that Mr Anderson's statements were made in the context of conversations about impending price increases. I shall deal with this question in considering the evidence about the existence and implementation of Arrangement No 8 itself. 911 As I have said in [238] --- [241], counsel for the ACCC obtained leave to cross-examine Alan Shuvaly about a number of passages in his statement. In the course of the cross-examination consequent on that grant of leave, counsel for the ACCC put to Mr Shuvaly, and read into the transcript of this proceeding, some admissions that Mr Shuvaly made in his statement. ' In answer to further questions, he confirmed that there was only one such incident when he was told that the majors would be moving. He did not remember when the incident was, but said that it involved a mention that 'the Mobils and independents will be moving. ' Although pressed about the inconsistency between his use of the phrase 'less often', and his recollection in the witness box that there was only one such incident, Mr Shuvaly adhered to the proposition that what he was saying in the witness box was his only recollection. He agreed that he had not made this clear in the statement, but insisted that that was the way he intended his statement to be understood. Will you support it? The independents are going to X cents per litre at Y time. Will you support it? Are you going to support it? Are you going to support it? He reiterated that the reference to the majors was in the one incident, and said that the third alternative related to what Mr Anderson had seen out in the marketplace, and to his prediction that the independents would be moving if Mr Shuvaly was to 'support the market' or 'participate in the move'. Again, he insisted that there was only one incident, in which Mr Anderson mentioned Mobil, that fitted within the third alternative. He was asked to explain the passage in his statement that sometimes, instead of referring to the market, Mr Anderson referred to the majors. He agreed that, sometimes when he and Mr Anderson spoke, the conversation included that 'the majors will be moving up'. He agreed that Mr Anderson was not distinguishing between majors and independents, but was talking about 'the prices that are going up'. Because the statement was not made in the furtherance of a common purpose with Mr Anderson, they are not admissible against Mr Anderson or Apco pursuant to s 87(1)(c). To the extent to which Mr Shuvaly adopted the admissions in the witness box, they are evidence by him against Mr Anderson and Apco. It is not possible to say on how many occasions such information was passed, or between which competitors. There is no evidence about specific conversations. All that Annexure B shows is that telephone calls occurred, but there were reasons other than petrol prices for a number of parties to the alleged arrangements or understandings to have telephone communications between them. From the call cycles identified in Annexure B, in conjunction with the oral evidence and some of the admissions, it is possible to say that the number of occasions on which price information was transmitted was substantial. There may also have been occasions on which such information was passed in face to face conversations, particularly between Ian Carmichael and Peter Anderson, but the number of occasions on which this occurred can only have been very small and the dates of them are unknown. 923 The passing of information about prices does not necessarily indicate that it was done pursuant to any arrangement or understanding, in contravention of s 45(2) of the Trade Practices Act . In a competitive market involving a number of competitors, information about the prices of others is certainly one of the most useful factors in the setting of a dealer's own prices. In such a market, there is a tendency for prices of homogeneous commodities to move towards uniformity across the market. Petrol is such a commodity. The public display of board prices by all or most competitors would ensure a high degree of uniformity in the market in any event. Telephone calls and face to face conversations were other ways in which information about prices was conveyed. 924 Throughout the trial, the ACCC placed much emphasis on the proposition that what was being passed in the communications between competitors was advance notice of prices to be adopted, as distinct from notice by means of price boards of prices already being charged. In principle, there is little or no difference between the two. A dealer in the market who has decided to adopt a particular price communicates it to competitors, as well as to the public at large, once it is displayed on a price board. If, instead, the price is conveyed by means of oral communication, the result is the same. The ACCC does not seek to establish that whichever of Peter Anderson and Ian Carmichael initiated a communication simply told the other that his company may or may not increase its price for ULP to a particular level at a particular time. The case is that the initiating party would indicate that it had already made a decision to change its price to a particular level from a particular time. If that party had posted notices outside its outlets, advertising that its price would increase to a particular level at a particular time, and competitors took advantage of that information in making their own pricing decisions, there could have been no complaint. The practical advantage for the recipient of a communication about a decision to increase prices before the implementation of the decision is obvious. The competitor has more time to consider whether to increase its price to match the communicated price and, if so, at what time. The recipient of the communication did not have to wait until the board price was displayed by a competitor, and information of that price was conveyed as a result of observation of the board, either by the decision-maker or by someone else. 925 There is nothing inherently sinister about the use of the telephone to convey information. A telephone call in which one competitor informed another that the first had just increased its prices to a particular level, or had just observed the board price of another competitor, would not be an illegitimate means of conveying information about existing board prices. Of course, private communication of intended price increases, without communication of the intention to potential purchasers, lends itself readily to price-fixing. It does not constitute price-fixing, in contravention of s 45(2) of the Trade Practices Act , without more. Advance notice of the proposed implementation of a decision already made to increase prices would provide a competitor with the advantage of more time, but cannot itself be indicative of the existence of an arrangement or understanding containing a provision to fix prices. There are additional elements that need to be established before a finding can be made that an arrangement or understanding exists, or that effect is being given to it. To an extent, this is true, but a number of points need to be kept in mind. 927 The price cycle for petrol was not a phenomenon confined to Geelong, nor to the time prior to the end of the year 2000. It is a mistake to treat the Geelong petrol market as isolated from other petrol markets, or as unique. As the ACCC itself recognised from its research prior to the commencement of this proceeding, the sawtooth pattern of petrol prices manifests itself in Australian cities and large country towns on major highways. In particular, as the evidence in this case bears out amply, the sawtooth pattern of petrol prices was present at all relevant times in the Melbourne petrol market. The ACCC has advanced publicly a number of possible causes of this pattern, only one of which is said to be the result of conduct that would be a contravention of the Trade Practices Act . The evidence in this case discloses a clear and rational connection between prices in the Melbourne petrol market and those in the Geelong petrol market. It would not be possible to find otherwise than that the price cycles in Geelong generally followed those in Melbourne. The sawtooth pattern of price cycles has continued in the Geelong petrol market after the year 2000. As the data in Annexure B demonstrates, the same pattern was evident throughout 1999 and 2000, irrespective of the presence or absence of call cycles. It is difficult, therefore, to say that the sawtooth pattern of price cycles in those years was the result of giving effect to arrangements or understandings between competitors in the Geelong petrol market. It was a pattern that occurred in any event and, at least on many occasions, must have occurred for reasons other than telephone communications between competitors in that market. 928 There is no doubt that, when petrol prices reached the low point of a price cycle, there were powerful incentives for petrol retailers to increase their prices. Selling at a loss, ie at a retail price below the wholesale price at which the dealer purchased the petrol, is not sustainable. The incentive to increase the price to above the wholesale price is very powerful, particularly in the case of dealers who do not receive any form of price subsidy or support from the major oil companies, or whose price subsidy or support has been discontinued for that cycle. The incentive to increase is balanced, however, by the desire to maintain or increase the volume of sales. The quest for maximum volume of sales is the principal factor leading to discounting, and to the progressive reduction of the price from the top of the price cycle. The greater the volume of sales, the more customers would pass through the convenience store associated with a petrol outlet, and the greater was the potential for sales of goods in that store, at retail prices significantly in excess of wholesale prices. Thus, to an extent, a lower price leading to greater volume of sales of petrol could help to offset the loss from the sale of petrol itself by attracting customers to buy other goods. Plainly, the offset could never be sufficient to make a business profitable if it maintained its petrol prices at the lowest point in the price cycle. Otherwise, some dealers would never have found it necessary to increase their petrol prices. It may therefore be accepted that, when the price cycle approaches or reaches its low point, all dealers in the market had a substantial incentive to increase their prices, unless they were still in receipt of some form of subsidy or price support from a major oil company. 929 In this environment, it can be seen that any dealer in the market would be seeking an opportunity to increase its price, but would perhaps also be reluctant to take the initiative because of the danger that other competitors would keep their prices low, and the initiator would lose sales volume. In those circumstances, the initiative of increasing the price would be unsuccessful from a profit point of view, because there would be fewer customers both for petrol and for other goods. There can be no doubt that the existence of arrangements or understandings to the effect that all or most of the competitors in such a market would increase their prices at or about the same time, and to about the same amount, would reassure a dealer that it would be safe to increase its prices without too great a sacrifice of volume of sales, because other competitors would do likewise. In this sense, the ACCC's case that the nature of petrol price cycles was conducive to the existence of arrangements or understandings is correct. 930 This cannot be the entire picture, however. Arrangements or understandings might not be the only source of the necessary reassurance to increase prices. Information that other competitors have already increased, or have already decided to increase, very likely would be equally reassuring. So also would information that prices in the Melbourne retail petrol market had increased, coupled with past experience that this almost inevitably resulted in a general increase in the Geelong petrol market. As Annexure B indicates, there were significant numbers of occasions when competitors in the Geelong petrol market did increase their prices in the absence of any indication that, by doing so, they were implementing any arrangement or understanding. It follows that they must have had sufficient reassurance, from sources other than communications with their competitors, that it was safe for them to increase their prices without losing too much by way of sales volume. The petrol price cycle apparently worked in the same way in any event. It is therefore not possible to say that arrangements or understandings about concerted price increases were a necessary part of that cycle. Indeed, to find that they were would be to contradict the findings from the ACCC's own investigations into changes in the retail price of petrol. It would be to assume that, in all cases, the rises in the petrol price cycle were the result of the implementation of arrangements and understandings. It is abundantly clear that, whilst the price cycle may have provided an environment conducive to arrangements or understandings, it did not provide an environment that necessarily produced them. 931 The ACCC's case also attempted to make good the proposition that, without arrangements or understandings to increase prices, a price rise would not stick. There is a good deal of oral evidence about the necessity for a price rise to take effect generally in the market in order for it to stick. Because of the attraction for customers of discounted petrol, with some even going to considerable lengths to find and take advantage of discount outlets, a price increase must always have been vulnerable to destruction by the dealer or dealers who opted to keep their prices low, for the purpose of increasing their sales volumes. The data in Annexure B establishes, however, that a general price rise was achievable without the implementation of any arrangement or understanding. Many such general increases did stick in the two-year period covered by Annexure B without any allegation by the ACCC, or even any hint from the data, that they stuck only because of communications between competitors about prices. There are very few occasions to be found in Annexure B when the ACCC felt able to allege that effect was given to the entire chain of what it said were arrangements or understandings. The proposition that a price rise would not stick unless every competitor was brought into it by means of the implementation of an arrangement or understanding is demonstrably false. The call cycles recorded by Annexure B had no consistency as to the recipients of the calls. The occasions when Ian Carmichael or Michael Warner chose to communicate with the whole list of those who could have been said to make up their call cycles were very few. Even fewer were the occasions when Peter Anderson, Chris Andrianopoulos and Alan Shuvaly all communicated with each other in circumstances that were such as to make it appear that the communications might have been concerned with price increases in Geelong. Plainly, implementation of the whole chain of alleged arrangements or understandings was not necessary for a price rise to stick in the Geelong petrol market. This fact underscores the point that reassurance that it was safe for each competitor in that market to increase its prices was often available by means other than communications with competitors. A more detailed examination, such as the one I have undertaken in these reasons for judgment, shows that the data is at best equivocal, and in many instances more apt to refute than to support the ACCC's contentions. I have referred to the very small number of occasions on which what is recorded in Annexure B enables the ACCC even to allege that effect was given to the entire 'chain' of alleged arrangements or understandings. On a significant number of occasions, the ACCC is driven to alleging that Annexure B shows Leahy and others giving effect to alleged arrangements or understandings other than Arrangement No 1. In some cases, it is alleged that effect was given to Arrangement No 3 on a stand-alone basis. These occasions are inconsistent with the notion that Arrangement No 1 was the leading arrangement or understanding, and that the implementation of the other alleged arrangements or understandings came about by Leahy (and on a small number of occasions Apco) giving effect to the provision of Arrangement No 1 that, between them, Leahy and Apco would advise or cause to be advised some or all of the market participants other than themselves of the amount and timing of proposed increases. It is true that, consistently with the evidence of Ian Carmichael, there may have been occasions on which a call cycle in which the calls originated from Leahy, Ian Carmichael or Michael Warner, might have been prompted by a face to face conversation between Peter Anderson and Ian Carmichael. The number of such occasions must have been quite small, however, and the ACCC has not attempted to surmise from the data in Annexure B on which occasions communications other than by telephone may have occurred. It is quite impossible to find on the balance of probabilities which of the shaded periods in Annexure B that do not appear to contain relevant telephone communications between Apco or Mr Anderson and Leahy or Mr Carmichael or Mr Warner might have involved communications between Mr Anderson and Mr Carmichael by other means. There is, therefore, an inconsistency between Annexure B and the oral evidence, to the extent that the evidence of Mr Carmichael and Mr Warner is to the effect that call cycles resulted from communications with Mr Anderson. It is likely that at least some did not. 933 The data in Annexure B also tends to be inconsistent with the ACCC's case, and with the oral evidence, when more than one call cycle occurs in a shaded period. The ACCC's theory is that it was only necessary for a price and a time to be nominated in a series of brief telephone calls, passing through the chain or chains of competitors, for each competitor to be sufficiently reassured to bring about the price increase. Ian Carmichael and Michael Warner gave evidence that there were occasions when it was necessary to make supplementary calls to particular competitors, after the appointed time, when they had been slow in implementing a price increase. The reality, as I have shown in my detailed examination of Annexure B, is that there were significant numbers of occasions when two, or even three, call cycles preceded any price increase by any of the competitors, so far as Annexure B records. These are not cases in which Apco and Leahy have raised their prices but it has been necessary to keep urging other competitors to do so (which would in any event have been inconsistent with the ACCC's case), but are instances of call cycles apparently not resulting in a price rise by any competitor. Interestingly, examples of the occurrence of more than one call cycle in a shaded period occur in Annexure B in the second half of 2000. If the ACCC's case were correct, by that stage, the alleged arrangements or understandings ought to have been sufficiently well practised by all parties to them that no more than a series of brief telephone calls was necessary. 934 The other feature of the multiple call cycle occasions, and the fact that they appear in the latter months of the year 2000, is that they are inconsistent with the oral evidence about the reluctance of the parties to make telephone calls about prices once it became known that the ACCC was investigating possible petrol price-fixing, after the existence of price-fixing practices in Ballarat was made public just before Easter in 2000. The eight-month period from 1 May to 31 December 2000 contains 17 occasions on which the ACCC alleges that effect was given to one or more of the alleged arrangements or understandings, only one fewer than the eight-month period from 1 January to 31 August 1999. The eight months from 1 September 1999 to 30 April 2000 contain a significantly higher number of alleged giving effect to occasions (29), but the occasions are not distributed evenly between the months within that period. The peak occurred in September 1999, in which the ACCC alleges that effect was given to one or more of the arrangements or understandings on seven occasions, plus the two-day period on 30 September and 1 October. There are four such occasions in February and five such occasions in March 2000. Otherwise, the numbers of occasions of alleged implementation of arrangements or understandings in the months in this middle period are two or three a month, comparable with the figures in the earlier and later eight-month periods. In other words, there appears to have been no appreciable diminution in call cycles after Easter 2000. This suggests either a lack of concern that the ACCC would find out about the content of the telephone calls, or that the calls themselves were not about price-fixing. Ian Carmichael can hardly have supposed that his elementary code, involving the use of numbers representing the models of supposed aircraft and supposed arrival times, would not be cracked easily. When someone did fail to understand the code, it was of so little importance to Mr Carmichael that he was prepared to explain it in the very same telephone calls in which he used it. Whatever it was that competitors in the Geelong retail petrol market were talking about during call cycles, they were perfectly willing to continue talking about it even after they were aware that the ACCC was investigating alleged petrol price-fixing in Ballarat. 935 The unavailability of precise data about times of price increases for a number of participants in the Geelong retail petrol market makes Annexure B less useful than it might otherwise have been. It makes it impossible to make any finding based on Annexure B alone about the possible implementation of Arrangements Nos 4 and 6. It must be assumed that the ACCC took the view that it could not make its case as to the timing of price increases any better by tendering the material, available to it, of telephone calls between United Fuels and United Retail and their various outlets, from which conclusions might have been drawn as to when instructions were given to implement a price increase. 936 Where Annexure B does contain specific data for the timing of price increases, the picture becomes very confused. On the one hand, it is possible to point to price increases, particularly by Apco, Leahy and (with the exception of the early months of 1999) Chisholm, preceded by telephone calls that might have been about the prospective price increase. The ACCC sought to use Annexure B extensively in this way. On the other hand, significant parts of the data in Annexure B involving precise times of petrol price increases are inconsistent with the ACCC's contentions. There are occasions when increases by Brumar, Mobil outlets, Caltex Quick Bite or BP Corford Express preceded increases by any of Apco, Leahy or Chisholm, thereby providing evidence that a price rise from Melbourne was finding its way into the Geelong petrol market through participants in that market whose prices were set in Melbourne. There are other occasions when it is only possible to determine the range of times during which a price increase at some Mobil outlets might have occurred, so the evidence of the flow-on of a Melbourne price increase is not so clear. Even more damaging to the ACCC's case are the significant numbers of occasions when price increases by Apco, Leahy and Chisholm occur at times that might suggest coordination, but Annexure B contains no sign of any telephone calls that might have contained information about prospective increases. In my detailed analysis of Annexure B, I have drawn attention to the way in which price increases by Apco and Leahy, and (when information about Chisholm's increases was available) Chisholm, fell into clear patterns, which were remarkably consistent throughout the relevant periods, whether or not there were telephone calls and whether or not the price increases by those parties were preceded by increases by other competitors. It seems clear that, although Annexure B had been available to all parties to this proceeding for some considerable time before the trial, no-one had discerned the existence of these patterns, so no attempt was made to lead any oral evidence that might have explained them. The existence of the patterns in Annexure B lends considerable support to the evidence that the petrol price cycle occurred in much the same way irrespective of the presence or absence of communications between competitors that might have concerned petrol prices. It is therefore necessary to examine closely the oral evidence to see whether the requisite elements for an arrangement or understanding are made out. In the absence of any allegation that any of the alleged arrangements or understandings had an express origin, the ACCC was driven to relying on evidence of courses of conduct, from which arrangements or understandings might have developed, and on the perceptions of the witnesses as to what it was they were engaged in and how communications between them affected their own behaviour. 938 On the question of courses of conduct, I have already pointed out in some detail that there is a considerable lack of evidence of the origins of any of the alleged arrangements or understandings. Only in relation to Arrangement No 1 is there any evidence at all. That is only to the effect that the practice of passing price information between Apco and Leahy had evolved over a number of years, as a result of many telephone conversations between Ian Carmichael and Peter Anderson. 939 As to the other alleged arrangements or understandings, there is no express evidence of a course of conduct from which an arrangement or understanding was said to have resulted. Graeme Chisholm and Darren Campigli gave evidence of when they began to receive telephone calls about price increases. Wayne Purtell spoke of his contact with Eino Heikkila between 1997 and early 1999, when Mr Dalton took over Mr Purtell's position. Mr Heikkila did not specify when he began talking with Ian Carmichael or Michael Warner about prices, other than to say that it was in the mid-1990s. He did give evidence about his conversations with Mr Purtell, and with Garry Dalton. There is a complete absence of evidence about any course of conduct from which any arrangement or understanding between Leahy and United Retail might have come into existence. Gordon Primmer was not asked to give any evidence about a course of conduct from which an arrangement or understanding between Leahy and the partnership which operated BP Meredith may have come into being. In view of the limited nature of the admission made by Leahy, Mr Carmichael and Mr Warner (detailed at [883]), which is an admission of a conversation between Leahy and Primmer after BP Meredith ceased to operate as a commission agent for Leahy and became an independent retailer at the beginning of 2000, it is strange that Mr Primmer was not invited to give any evidence about the origins of Arrangement No 7. In view of Alan Shuvaly's evidence about what passed between him and Peter Anderson a few weeks after Liberty opened its Geelong outlet, it is also surprising that the evidence is completely silent as to any course of conduct from which Arrangement No 8 might have developed. The judgment of the Full Court in Apco Service Stations was delivered on 17 August 2005. That was the eighth day of the trial in this case. Ian Carmichael, who was the ACCC's first witness other than its own leading investigation officer, was still in the witness box and did not complete his evidence until part of the way through the morning of 18 August 2005. If the ACCC had been unaware of the significance of the element of commitment, or moral obligation, or obligation binding in honour only, from earlier authorities, it must have become aware from the Full Court's judgment that it ought to give attention to that issue in this case. Even if the ACCC believed that the Full Court was wrong in Apco Service Stations (as it apparently did), it was still at risk if it did not attempt to address the issue of commitment. No application was made to reopen the evidence-in-chief of Ian Carmichael. Despite the fact that he had given evidence about the issue in cross-examination, no attempt was made to re-examine him about it. Counsel for the ACCC did not invite any witness to give evidence of his own state of mind on receiving information about a prospective price increase, as to whether he felt constrained to act on the information, or about whether he regarded the person providing the information as constrained to act on it. These subjects were left to those cross-examining. 941 In his cross-examination by counsel for Apco, Ian Carmichael assented readily and unequivocably to a number of propositions. Mr Carmichael did not see himself as being able to ring Peter Anderson and tell him off about Apco's failure to increase its price. He did not think Mr Anderson was in any way obliged to move his price up. He could only give Mr Anderson information and hope that he would move. Mr Anderson was morally free not to lift his price and had a free choice. The same was true for Chisholm. Mr Carmichael volunteered that it was true for 'all'. Leahy was free to do what it liked. In cross-examination by counsel for United Fuels and United Retail, Mr Carmichael agreed that neither Eino Heikkila nor Colin Williamson ever committed to a price-fixing arrangement. The former always gave non-responsive answers to Mr Carmichael's calls, and the latter only answered to the effect that he would pass on the information. 942 In cross-examination by counsel for Apco, Michael Warner agreed that Peter Anderson was perfectly free to keep Apco's prices down if there was a commercial necessity for him to do so. Leahy was equally free not to change its price if it chose not to change it, notwithstanding any discussion with any competitor. Mr Warner himself said that there was no commitment to effect a price rise. Leahy just passed on information about prospective price rises. He did not see himself as telling people how to set their price. He was just passing on information that he had been given as to what the market was going to do. At the time of giving evidence in this case, Mr Warner believed that he was not fixing prices. 943 Also in cross-examination by counsel for Apco, Graeme Chisholm said that he never felt obligated to move Chisholm's price when he received a call. He never undertook to do anything. He regarded himself as having a total free choice as to what he would do with the information and with Chisholm prices. Nobody at Leahy ever rang him to tick him off or criticise him for not moving Chisholm's prices up at any given time. Mr Chisholm never rang Leahy to tick them off about their prices. It did not cross his mind to do that. 944 Mr Shuvaly's evidence made it clear at a number of points that he would only increase Liberty's price at its Geelong outlet if he felt comfortable enough about the state of the market. In cross-examination by counsel for Andrianopoulos and Chris Andrianopoulos, Mr Shuvaly confirmed that he was his own man. No-one could tell him when Liberty was to change its prices, or by how much, or whether to change them at all. A decision depended on Mr Shuvaly's judgment as to the interests of Liberty. He never attempted to persuade others to move their prices up and never agreed with any suggestion of Mr Anderson or Mr Andrianopoulos that he should do so. 945 Darren Campigli made it very clear in his evidence that Chisholm would not necessarily increase its prices in response to telephone calls on behalf of Leahy about prospective price increases. His three possible responses to such calls were to thank the caller, to say that Chisholm would move its prices, or to say that it would check what other competitors had done before making a decision. In evidence-in-chief, Mr Campigli volunteered that Mr Carmichael and Mr Warner never told him that he had to move Chisholm's prices, or anything like that. He assumed that receipt of information allowed the adjustment of prices, so that the market would be similar, instead of having large price differentials. In cross-examination by counsel for Apco and Peter Anderson, Mr Campigli agreed that Chisholm made its own decisions, as a matter of its own choice, about pricing. Mr Campigli never felt obliged to change Chisholm's prices. It was up to Chisholm to decide whether to increase its prices. Mr Carmichael and Mr Warner never told him what Chisholm had to do and he never felt obliged to raise prices just because they had telephoned. Leahy was also free to do what it liked with its pricing. 946 Gordon Primmer also made it clear that he did not necessarily increase his prices as a result of the receipt of information from Leahy about a prospective price rise. Sometimes he asked whether the rest of the market was up, or suggested that if a competitor at Bannockburn were to increase, then BP Meredith would also go up. 947 Wayne Purtell's evidence also made it clear that Brumar would make its own decisions about price increases, based on information from a variety of sources, including that which Mr Purtell received from Mr Heikkila. Mr Heikkila's evidence was that, when he made telephone calls to Mr Purtell, and later to Mr Dalton, his purpose was just to pass on market information. In cross-examination by counsel for Garry Dalton, Mr Heikkila said that he would not simply increase prices at the United Fuels outlets as a result of a telephone call, without spotting the board prices of competitors. Mr Dalton never agreed with Mr Heikkila about what Brumar would do with its prices. Mr Heikkila never asked him to. In Mr Heikkila's mind, Mr Dalton remained free to do what he liked with his prices. Mr Heikkila felt that he remained free to do what he liked with his prices. His calls to Brumar were made merely in the hope that Brumar would increase its prices at some time after the call. In cross-examination by counsel for United Fuels and United Retail, Mr Heikkila confirmed that, whenever he received a call from Mr Carmichael or Mr Warner about fuel prices, he made his own inquiries. 948 Thus, all of the witnesses called to give evidence for the ACCC who acted on behalf of parties to the alleged arrangements or understandings confirmed to a greater or lesser degree the absence of any commitment, moral obligation, or obligation binding in honour on the part of any party to any of those arrangements or understandings. The evidence on the issue is all one way. It is not possible to dismiss it, as counsel for the ACCC attempted to do in submissions, as indicative of freedom to withdraw from, or to act inconsistently with, an arrangement or understanding on a particular occasion. The plain fact is that there was nothing by way of constraint to raise prices, felt or otherwise, from which any party had to withdraw, or with which it was necessary to act inconsistently, if prices were not increased on a particular occasion. The express evidence is overwhelmingly to the effect that an essential element of an arrangement or understanding, whether in the abstract or as pleaded, in the form of a commitment or obligation to increase prices, did not exist. The ACCC invited me to draw the inference from the circumstantial evidence that, in fact, such a commitment or obligation did exist in the case of each alleged arrangement or understanding. For numerous reasons that I have already given, the circumstantial evidence does not point to this conclusion. Even if it did, it would not do so with sufficient strength to cause me to disbelieve the oral evidence on this issue. The situation was that each party to each alleged arrangement or understanding was free to do as it wished on every occasion when information about a prospective price increase was passed to it. As I have said, an arrangement or understanding in which each party is free to do as it wishes is a creature unknown to s 45(2) of the Trade Practices Act . 949 This finding is fatal to the ACCC's case. The absence of any element of commitment, or obligation, from any of the alleged arrangements or understandings must lead to the conclusion that none of those arrangements or understandings is capable of amounting to an arrangement or understanding within the meaning of s 45(2)(a) of the Trade Practices Act . None of them is capable of containing a provision for the fixing of prices. It is advisable that I should summarise those reasons, although I have referred to them in more detail elsewhere in these reasons for judgment. 951 From the data in Annexure B, it is clear that Ian Carmichael's recollection of the timing of telephone conversations he had with Peter Anderson, and of subsequent price rises, is inaccurate. In evidence-in-chief, Mr Carmichael said that he would often receive a phone call from Mr Anderson between 2.00 and 3.00 o'clock in the afternoon, and the nominated time for the price rise would be about an hour later. In cross-examination, he said that his recollection was that most of the price increases occurred in the afternoon. He could not remember an occasion when the price rise was more than two hours after the telephone call. As my analysis of Annexure B demonstrates, afternoon price increases were unusual in the two-year period covered by Annexure B. Consistently during both the morning post-peak increase period and the midnight increase period, both Leahy and Apco increased their prices otherwise than in the afternoon. Even during the daytime increase period, not all of the increases occurred in the afternoon. The substantial majority of price increases by Leahy and Apco began well outside two hours of any telephone communication between them. In submissions, counsel for the ACCC tended to ignore Mr Carmichael's evidence about timing, and to focus more on the evidence of Mr Warner, who said that some of the price increases were overnight. It is true that some were but, with one exception, those that were were concentrated entirely in the midnight increase period, when Leahy consistently raised its prices at about midnight. Elsewhere in his evidence, Mr Warner also spoke of the two hour period after a telephone call from Mr Anderson as being crucial in determining whether a price rise would stick. As Annexure B shows, the occasions on which price increases occurred within two hours of a call cycle were very rare. 952 There were other difficulties about the reliability of the evidence of Mr Carmichael and Mr Warner. On the one hand, Mr Carmichael seemed to be keen to present himself as the central figure in the process of disseminating price information in the Geelong petrol market. On the other hand, perhaps because of the clause in his leniency agreement that would have entitled the ACCC to repudiate that agreement if Mr Carmichael turned out to have been the ringleader in petrol price-fixing in Geelong, Mr Carmichael was anxious to point to Mr Anderson as the source of the information and to himself as a conduit for it to other competitors. In cross-examination, Mr Carmichael was very keen to concede that almost any proposition put to him 'could have been' true. A large part of his difficulty may have arisen from the fact that, when he was called to give evidence, he had no idea what the data in Annexure B showed. Had he been given the opportunity to know that that data was inconsistent with his recollection at a number of points, Mr Carmichael might have realised that his recollection was faulty, and might have been able to give evidence more helpful to the ACCC's case. Mr Warner backed away substantially from admissions that he had made, when he adopted in cross-examination the position that all that he and Mr Carmichael had been doing was passing on information about pricing. Even leaving aside the issue of commitment, having regard to the circumstances of the Geelong petrol market and, in accordance with s 140(2)(c) of the Evidence Act , the gravity of the allegation, it would be very difficult to make a finding against Mr Anderson, on the balance of probabilities, that he was a party to an arrangement or understanding containing a provision for the fixing of the price of petrol. The evidence relating to the passing of information about intended price increases between Apco and Leahy, and about the conveying of it by Leahy to other competitors, is susceptible of the innocent explanation that it was to urge competitors to increase their prices, and perhaps to facilitate reassurance among them that the price would increase. There is insufficient substance in the evidence to warrant a refusal to accept the innocent explanation. 953 The ACCC's inability to prove the existence of Arrangement No 1 must have a significant impact on the question whether I should find that the other alleged arrangements or understandings existed, because the ACCC's conception of the case is that of a chain of arrangements or understandings. If Leahy's telephone calls as part of the call cycles were not passing on a price and a time arranged between Leahy and Apco, but were merely passing on information about a prospective price increase, it is unlikely that any such arrangement or understanding as is alleged to have involved any party to this proceeding existed. 954 There are even greater problems with respect to some of the specific arrangements or understandings. Whatever might have been the case with Arrangement No 5 during Wayne Purtell's time at Brumar (and I do not suggest that the evidence discloses that any such arrangement or understanding existed), there is no suggestion in the evidence that Garry Dalton inherited the same arrangement or understanding. Mr Dalton's evidence that any information he received from Mr Heikkila was of no value to Brumar in making its decisions about setting prices makes it abundantly clear that there was no arrangement or understanding between United Fuels and Brumar, containing a provision for the fixing of prices. This evidence is confirmed by the fact, demonstrated by the data in Annexure B, that telephone contact between Mr Heikkila and Mr Dalton ceased in early July 1999. Mr Dalton's evidence in this regard was not the subject of serious challenge in cross-examination on behalf of the ACCC, most of which was directed to attempting to establish that Mr Heikkila's calls were about intended price increases by United Fuels. It was rational for Mr Dalton to regard Mr Heikkila's information as irrelevant to Brumar's decisions on pricing, because his view of United Fuels conforms with the other evidence about United Fuels, namely that its outlets were not high profile sites, the prices at which would be likely to impact on the rest of the market. 955 There is also great difficulty in finding that Arrangement No 6 existed. Apart from the improbability of an arrangement or understanding coming about from a course of conduct in a period of a little over two months, when no relevant conduct appears to have occurred, the allegation of such an arrangement or understanding is inconsistent with the evidence of Robert Riordan and Robert Hambrook. At the heart of that evidence is that Colin Williamson did not relay to Mr Riordan (or in his absence Mr Hambrook) information Mr Williamson had received from Leahy. In other words, such information was not taken into account in the setting of prices by United Retail. There is no reason not to accept the evidence of Mr Riordan and Mr Hambrook. That evidence went into detail about the manner in which Mr Riordan kept track of the prices of competitors in the Geelong petrol market, and the impact of Shell's price support on United Retail's decisions about pricing. It is impossible to accept that Mr Williamson was influencing decisions taken by Mr Riordan or Mr Hambrook about the setting of prices, by passing on to them information obtained from Leahy in the guise of some other information about prices in the market. 956 The fact that the major oil companies, particularly Caltex and Shell, operated systems of price support applicable to Chisholm, United Fuels, United Retail and Brumar is very damaging to the ACCC's case. In particular, the evidence that a withdrawal of price support necessitated a price increase, whatever was happening in the rest of the market, coupled with the absence of any evidence as to particular dates or times of withdrawal of price support, makes it impossible to tell from Annexure B which price changes were the result of information from competitors and which were the result of decisions by the major oil companies. 957 The absence of specific times for price increases on the part of United Fuels, United Retail, BP Meredith, Andrianopoulos and Liberty means that there is no effective circumstantial evidence from which it can be said that a particular price rise may have been related to a particular telephone conversation. 958 As I have said, Leahy, Ian Carmichael and Michael Warner made only very limited admissions in relation to Arrangement No 7. What they admitted was nowhere near enough to establish the existence of an arrangement or understanding. No attempt was made to explore this issue in oral evidence. The uncertainty of what passed between Mr Carmichael and Mr Warner on the one hand and Mr Primmer on the other about prices, coupled with the absence of any price data for BP Meredith in Annexure B, makes it impossible to say that any such arrangement or understanding as is alleged between them existed. 959 Arrangement No 8 presents particular problems. There is an element of improbability inherent in the proposition that three agressive discounters would collaborate to fix the price of the commodity they were discounting. Only a Geelong-centric view of the world would lead to an assumption that all of the very many telephone calls between Peter Anderson, Chris Andrianopoulos and Alan Shuvaly recorded in Annexure B were concerned with Geelong. Each had responsibilities in relation to outlets in a number of other places in Victoria. Mr Shuvaly's evidence is to the effect that they communicated often about a variety of subjects. Mr Shuvaly's evidence is entirely inconsistent with the existence of any arrangement or understanding between Liberty, Apco and Andrianopoulos, both as to any possible origin for such an arrangement or understanding, and as to the possibility that effect was given to it. The ACCC could only point to 16 periods in the two years covered by Annexure B on which it is able to find data enabling it to contend that effect was given to Arrangement No 8. If an arrangement or understanding of the kind alleged did exist, it is difficult to see why it would have been put into effect on such a small number of occasions. There is so little evidence supporting the allegation that Arrangement No 8 existed, or that effect was ever given to it, that I am obliged to conclude that it is not reasonably open to find that Mr Anderson's admissions, to which I have referred in [903] --- [905], were made in furtherance of a common purpose with Andrianopoulos, Mr Andrianopoulos, Liberty or Mr Shuvaly, so as to make those admissions admissible in evidence against any one of those four parties. 960 The overall effect of the evidence in this case is that it is more probable than not that none of the arrangements or understandings alleged by the ACCC in fact existed. Not only did the evidence led by the ACCC fail to prove the existence of such arrangements or understandings, particularly the requisite element of commitment, but the preponderance of the evidence suggests that no such arrangements or understandings existed. There can be no doubt that a good deal of information about price increases was passed between competitors in the Geelong petrol market, most of it by means of telephone conversations, but this did not amount to the fixing of prices. It was more likely to have been the mere passage of such information in the hope that a general price rise could be achieved. On occasions, it amounted to urging a decision to increase a price, particularly in the case of what was designated as follow-up or complaint calls, but the fact that these were made is itself inconsistent with the existence of the alleged arrangements or understandings. There are many reasons why it is impossible to say on the evidence that a price rise by any particular competitor in the Geelong petrol market on any particular occasion was the result of making an arrangement or arriving at an understanding that the rise would be made. The evidence abounds with factors that impacted on decisions to make price increases, so it is impossible to isolate one. The unavailability of data for price increases on the part of a number of competitors means that there is an absence of circumstantial evidence that would be crucial to making out the allegation. The case was never seriously put on the basis that each conversation amounted to the making of a separate arrangement or the arriving at of an understanding. Those made by Leahy, Ian Carmichael and Michael Warner were quite specific in some respects. They do involve blanket admissions of the existence of understandings containing provisions for the fixing of prices, but these are admissions of conclusions from a number of different factual and legal elements, and it is unclear whether each of those elements has been admitted. In particular, there is no admission of the vital element of commitment or obligation, moral or otherwise. If the admissions were taken to amount to admissions of an understanding falling within s 45(2)(a) of the Trade Practices Act , they would be so far inconsistent with the evidence, including the evidence of Mr Carmichael and Mr Warner, that it would be necessary to decide the case without relying on them. Insofar as other respondents made formal admissions riddled with alternatives, and amounting to admissions of matters that involve both fact and law, those admissions are themselves unreliable and in conflict with the evidence, and I do not make findings in accordance with them. This includes Liberty's deemed admission, to which I refer in [893]. 963 The admissions made in interviews and examinations under s 155 of the Trade Practices Act do not amount to anything like significant evidence in relation to the crucial issues in the case. Peter Anderson's admissions that he discussed petrol prices with representatives of competitors in Geelong are hardly necessary. The evidence makes it clear that a number of competitors in Geelong had such discussions. Mr Anderson's admissions go no further than that in supporting the ACCC's case. In particular, they do not go to the commitment issue. Alan Shuvaly's admissions, in the statement that he signed in fulfilment of his obligation under the leniency agreement, are largely in conflict with his evidence. For the most part, in cross-examination he continued to insist that his evidence-in-chief was correct. Because his evidence was given in his own words, I regard it as more reliable than the words negotiated between his lawyers and those acting for the ACCC to satisfy that obligation. Counsel for the ACCC did persuade Mr Shuvaly in the witness box to make admissions that he had received predictive phone calls from Mr Anderson about price increases but, as I have said, this kind of evidence does not go anywhere near establishing the existence of an arrangement or understanding to fix prices. 964 Similarly, the issues that emerged in evidence, in relation to which the ACCC sought to rely on s 87(1)(c) of the Evidence Act , are not of great significance, particularly on the commitment issue. At best, they assist in establishing that there had been discussions about prices, a fact that is hardly contentious on the evidence. Having regard to the evidence generally, it is not reasonably open to find that arrangements or understandings existed, or that effect was given to them, so as to make the admissions of one party admissible under s 87(1)(c) against the other party or parties to that alleged arrangement or understanding. My refusal to rely on the admissions made by the respondents who consented to the case being decided against them, coupled with the finding that the alleged arrangements or understandings did not exist, also leads to the conclusion that I should not give effect to the consents. It follows that the application should be dismissed altogether. The ACCC must certainly be made to pay the costs of all respondents who defended the proceeding. Issues may arise, however, in relation to the respondents who consented to the making of orders against them, which I have declined to make. So far, no party has had an opportunity to make submissions about those issues, and any other issues of costs that might arise as a result of the dismissal of the application. If all costs issues cannot be resolved by consent before that date, it will be necessary for me to hear oral submissions on that day and to resolve outstanding costs issues.

price-fixing arrangements or understandings whether existed between competitors within the geelong retail petrol market whether contained provisions for the fixing of retail petrol prices whether necessary for parties to have commitment or moral obligation applicant pleaded existence of seven bipartite and one tripartite interlocking arrangements or understandings and that effect was given to them on a number of occasions within a two-year period relied on oral evidence of some alleged parties to them, circumstantial evidence in the form of data as to times of telephone communications between parties to alleged arrangements or understandings and changes in retail price of petrol, as well as admissions by some alleged parties to arrangements or understandings whether evidence established existence, and giving effect to, of arrangements or understandings whether evidence of origins of alleged arrangements or understandings sufficient whether oral evidence and circumstantial evidence inconsistent oral evidence not specific as to any particular occasion circumstantial evidence often inconsistent with oral evidence, and with applicant's allegations whether judgment should be given on admissions admissions whether appropriate to exercise discretion to pronounce judgment based on admissions whether reason to question correctness of facts admitted or agreed whether previous representations made in furtherance of common purpose whether reasonably open to find that representations were made in furtherance of common purpose existence of common purpose established by evidence other than previous representation itself "contract" , "arrangement" , "understanding" , "make an arrangement" , "arrive at an understanding" , "provision" trade practices evidence words and phrases

The decision of the trial Judge marked the commencement of a new round of litigation engaged in by the appellant. He had originally made an application for a protection visa on 8 January 2002. A delegate of that first respondent refused that application of 27 May 2002. The appellant lodged an application with the second respondent, the Refugee Review Tribunal ('the Tribunal') on 24 June 2002. They are still looking for me. So many times they went to my house and threaten my parents to kill me if they see me again. Under same circumstances one of our party worker got killed in other area. If I go back they will find me and kill me. The appellant signed the usual declaration in Section E of the application form undertaking to inform the Tribunal of any changes to his personal circumstances while his application was being considered. There he also acknowledged that he understood that if he changed his contact details and did not inform the Tribunal of a new address, a decision could be made in his absence. 4 On 6 November 2002, the Tribunal wrote to the appellant and his agent, Mr Jivani stating inter alia, 'The Tribunal has considered the material before it in relation to your application but is unable to make a decision in your favour on this information alone,' but then invited the appellant to a hearing of the Tribunal to give oral evidence and present arguments in support of his claims and notified him that he could ask the Tribunal to obtain oral evidence from other persons. The hearing was fixed for 12 December 2002 at a time and place set out in the notice. 5 A Response to Hearing Invitation form was attached to that notice and was returned by or on behalf of the appellant having been signed by Mr Jivani on 13 October 2002 indicating that he wished to have a hearing, did not wish to have any witnesses or other persons attend and did not need an interpreter. On 11 December 2002, Mr Jivani asked the Tribunal to postpone his interview to a later date because the appellant was not able to attend on the next day due to acute back pain. A medical certificate in support was attached. 6 The Tribunal acceded to that request and on 16 January 2003 wrote to the appellant referring to the fact that on 11 December 2002 he had asked the Tribunal to postpone the hearing and advised him that a new hearing was to be held on 10 February 2003. That letter did not set out any information of that nature set out in the letter of 6 November 2002, that the appellant would be giving oral evidence or presenting arguments in support of his claims, or that he could ask the Tribunal, once again, to obtain oral evidence from other persons in order to set out a Response to Hearing Invitation form. 8 On 7 March 2003 the Tribunal again wrote to the appellate and Mr Jivani rescheduling the hearing for 14 April 2003. Lastly, on 31 March 2003, the Tribunal referred to its previous letter of 7 March 2003 and rescheduled the hearing date to 29 April 2003. The first said that the appellant did need an interpreter and the second that the language was said to be Hindi. On 28 April 2003, the Tribunal received a fax from a new migration agent saying he was acting for the appellant, a Mr Sardar. Mr Sardar informed the Tribunal that he had been engaged that day as adviser of the appellant and requested that a short adjournment be granted to him because he had to study the whole case and to interview the appellant. 11 Mr Sardar sent a form 956 (authorisation of person to act and receive communication) with the letter which was an authority in a form authorising the Department of Immigration and Multicultural and Indigenous Affairs ('the Department') to communicate with Mr Sardar in respect of the appellant's case. The signature on the form 956 purporting to be the appellant's signature appears to be quite different to the other forms of signature which the Tribunal may have had in its records. 12 The CMS case notes of the Tribunal record that at 9.15 am on 29 April 2003 the new adviser was telephoned to inform him that the request for a postponement of the appellant's hearing had been denied; there was no answer and the phone rang out. It then records that on 9.35 am on that day the Member phoned the adviser and told him that the appellant's hearing was to go ahead and to pass the message on to the appellant. 13 On 5 May 2003, the Tribunal wrote to the appellant care of Mr Sardar advising him that the Tribunal had considered all the material relating to his case and had made its decision and would hand it down on 23 May 2003, which it did. The decision affirmed the decision not to grant a protection visa. In the course of the decision, the Tribunal member referred to material that had not been supplied for the purposes of the review by the appellant within the meaning of s 424A(3)(b) of the Migration Act 1958 (Cth) ('the Act'). It referred to the appellant's travel activities, as taken from his passport. Notwithstanding that the applicant has claimed that he was the subject of persecution because of his political activities in India, he did not provide any specific details of his claims at all, merely making general assertions about what he did and what might happen to him if he returns to India. Consequently, his claims were vague and generalised, and appeared to be generic, and I am unable to establish the relevant facts of the matter. I would have questioned the applicant about the specific details of his claims at a hearing if he had attended. Accordingly, I am unable to accept that the applicant's claims have any credibility or veracity. The applicant's claims of his political activity were almost completely lacking in detail. His claims were general in nature avoiding any of the where, how, why and when. He did not produce any supporting evidence of his membership of the political party he claimed to have belonged to, nor of his specific responsibilities within that organisation, despite claiming to have been an active member and important member of the BJP in his local area. He did not provide any details at all of any of his activities in supporting candidates in local elections, when the elections might have occurred or of the violence and attacks he claimed to have suffered or feared at the hands of opposition Congress Party workers. In light of this evidence, I am not satisfied that the applicant was the subject of persecution for his political activities in India or that there is a real chance of being the subject of persecution if he returns to India. I am supported in this respect by the applicant's travel activities. The applicant was able to obtain a passport in March 1997 and a temporary business visa to travel to Australia in November 2001. He was able to leave India without difficulties and incident in November 2001. Having arrived in Australia on 24 November 2002, the applicant did not make a protection visa application until 8 January 2002, some 7 weeks after arriving in Australia. These are not the travel details of a person who claimed that he was of adverse interest to political opponents and the authorities, and who claimed to fear persecution in India. Accordingly, I am not satisfied that the applicant has a well founded fear of persecution by reason of his political opinion or for any other Convention reason in India. Further, I am not satisfied that the applicant has a well founded fear of persecution in the foreseeable future if he was to return to India by reason of his political opinion or for any other Convention reason. Having considered the evidence as a whole, the Tribunal is not satisfied that the applicant is a person to whom Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol. Therefore the applicant does not satisfy the criterion set out in s 36(2) of the Act for a protection visa. 16 Dissatisfied with this result, the appellant applied to this Court for judicial review by an application filed on 19 June 2003. The grounds for review in the application made to the Court on that occasion did not assert that the appellant had been aggrieved by the failure of the Tribunal to hear him give evidence. The grounds of review asserted, relevantly, that the Tribunal had affirmed the decision of the Department, the appellant was aggrieved by that; the Tribunal had failed to take into consideration the merits of the case; it had failed to act on proper principles of fairness and natural justice and it did not act in good faith to make the decision. 17 Grounds for those contentions were set out as being: the decision made by the Tribunal was an improper exercise of the powers conferred by the Act and the regulations and it involved an error of law, being an incorrect interpretation of the applicable laws and the incorrect application of the law to the facts. The application did not get any more specific than that. 18 On 7 December 2003, the appellant applied by affidavit to the Court for an adjournment of the hearing that had been fixed at 10.15 am on 8 December 2003 before Stone J. He said he was unable to attend the hearing and that a medical certificate annexed to the affidavit was provided as evidence. No medical condition was set out which warranted the assertion in the certificate. On 8 December 2003, Stone J ordered that the application be dismissed pursuant to O 32 r 2(1)(c) of the Federal Court Rules and that the appellant pay the then only respondent's costs, that respondent being the Minister for Immigration and Multicultural and Indigenous Affairs ('the Minister'). 20 On 15 October 2004, the appellant applied for an extension of time in which to file and serve a notice of appeal from her Honour's decision. That application came before Emmett J on 11 November 2004, who dismissed it ordering the appellant to pay the respondent's costs in a fixed sum. The appellant then applied to the High Court of Australia for special leave to appeal, by an application filed on 4 February 2005. 21 On 27 April 2005, McHugh and Heydon JJ dismissed that application for leave to appeal. He arrived in Australia on 25 November 2001 and lodged an application for a protection visa on 8 January 2002. On 27 May 2002 a delegate for the Minister for Immigration and Multicultural Affairs refused to grant the visa. The Refugee Review Tribunal affirmed that decision on 30 April 2003. The applicant did not attend the determination hearing and the Tribunal refused to grant the postponement requested by the applicant. On 8 December 2003, Stone J dismissed an application to have the Tribunal's decision set aside by the Federal Court. On 11 November 2004, Emmett J dismissed an application for an extension of time to appeal against Stone J's decision. He claims that the Tribunal did not take all relevant information into account and that the decision was affected by actual bias. The applicant has not included in the papers the reasons for the orders made by Stone J and Emmett J, and did not particularise these allegations. Upon examining the Tribunal's reasons, nothing amounting to denial of procedural fairness or actual bias is apparent. The applicant does not specifically claim that he was denied procedural fairness due to the refusal to postpone the determination hearing. In any event, such a claim could not succeed in light of the history of correspondence between the Tribunal and the applicant in relation to fixing a hearing date, and the fact that the Tribunal contacted the applicant's agent, who informed the Tribunal that he would inform the applicant of the refusal and that the applicant should attend the hearing. There is nothing in the draft notice of appeal or summary of argument to suggest that either the Tribunal or the Federal Court erred in their findings. An appeal in this matter would have no prospect of success. Accordingly, the application must be dismissed. I publish our joint reasons. That application claimed a declaration that the decision of the Tribunal was not a privative clause decision, it was made in excess of the jurisdiction of the Tribunal and was consequently an order of no effect and sought mandamus, requiring the Tribunal to hear and determine the matter according to law. 23 The grounds for the application asserted an excess of jurisdiction or a constructive failure to exercise the jurisdiction by asking a wrong question regarding persecution and not taking into consideration 'the oral evidence that was given by the RRT hearing'. Quite how that could be alleged, given that there was no oral evidence, I do not understand. The next ground alleged that the Tribunal denied natural justice to the appellant because it was biased or that there was an apprehension of bias. The next ground alleged that there was an excess of jurisdiction, being a constructive failure to exercise jurisdiction in that the appellant's genuine claims were not assessed and that it was harsh of the Tribunal to have said its investigation had found that his claims had not been established without any investigation. 24 It was said that the Tribunal should not have said his claim was fabricated; that the country information gathered by the Tribunal and used in the decision was specific and not general; that the appellant was a political activist and generally persecuted in his previous country of residence, and the Tribunal was preoccupied and did not have a fresh look at his case. It then said that he had never been in the Federal Magistrates Court and therefore this was the first time there. References were then made to Plaintiff S157 v The Commonwealth [2003] HCA 2 ; (2003) 211 CLR 476. It can be seen that once again there was no reliance upon failure to have an oral hearing. 25 The matter came before his Honour on 28 October 2005. The substantial issue argued before his Honour was that the Tribunal ought not to have used the failure of the appellant to appear at the hearing set for 29 April 2003 as a basis on which it could proceed thereafter to determine the application for review on the papers. His Honour set out the reasons which the Tribunal gave and the account of what had happened in the review process. Paragraphs 15 and 16 of the Tribunal's reasons, in substance repeated the procedural history between 6 November 2002 and the letter of 31 March 2003 which I have set out above. On 17 April 2003 the Tribunal received a response to hearing invitation, dated 13 October 2002, indicating that the applicant would be attending the hearing and that he did require an interpreter in the Hindi language. On 28 April 2003, at about 4 pm, the applicant's new migration agent tendered by facsimile a Form 956 authorisation of person to act and receive communication, and requested a postponement of the hearing as the applicant had appointed him as his new migration agent that day and he needed to study the whole case and interview the applicant. The Tribunal attempted to contact the applicant and the new migration agent to inform them that the postponement was refused. The applicant had not provided the Tribunal with a telephone, facsimile or email contact. The Tribunal finally contacted the migration agent by telephone on 29 April 2003, at about 9:30 am, and he was informed that the postponement was refused and that the applicant should attend the hearing. He was also informed that time for additional submissions would be discussed with the applicant and migration agent at the hearing. The migration agent informed that he would contact the applicant, inform of the refusal of the postponement and that the applicant should attend the hearing. The applicant did not appear before the Tribunal on the day and at the time and place at which he was scheduled to appear. In these circumstances, and pursuant to s 426A of the Act, the Tribunal has decided to make its decision on the review without taking any further action to enable the applicants to appear before it. I agree with his Honour's conclusion both for the reasons that his Honour gave, brief as they were, and from my own independent review of that evidence. I am not physically not fit for appear before your Honour abovementioned hearing date tomorrow (Medical Certificate attached). Search has not revealed any reasons given by either of Emmett or Stone JJ for their decisions. 28 The applicant filed a detailed argument against the Minister's notice of motion that had been filed in the Federal Magistrates Court for summary dismissal as an abuse of process (a similar submission was made orally by the Minister to me today). Then on 14 October 2005, the appellant sent an outline of submissions to the Federal Magistrates Court containing two specific contentions which were agitated before his Honour and re-argued with more detail by counsel, who, for the first time appeared for the appellant before me. 29 In substance, what was asserted in the submissions considered by his Honour was that the invitation to a hearing in the letter of 31 March 2003 did not comply with the statutory requirements of the Act as it failed to give a prescribed notification period to the applicant. That ground has not been pressed, as I understood the argument today before me. Next the appellant submitted that the Tribunal had failed to give a prescribed notification period under s 425A(3) to him and therefore by reason of the decision of the High Court in SAAP v The Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 215 ALR 162 there was a jurisdictional error. 30 His Honour noted that the Minister's submissions pointed out that the contravention of s 425A(3) alleged then was that the appellant had got more than the prescribed statutory period of notice. His Honour then noted submissions on the merits that the applicant had made to him. His Honour considered and rejected the argument that there had been a non-compliance with s 424A in relation to the material in [36] of the Tribunal's reasons. However, I think that argument was well-founded and the trial judge erred in rejecting it. His Honour dismissed the argument on the basis that [36] was not 'integral' to the Tribunal's reasoning process. In my opinion, that is unlikely to be correct because of the way in which the Tribunal expressed its reasons. In [36], it stated that its earlier conclusion (that in light of the consideration that the material put forward by the applicant for review did not justify a finding that he was the subject of persecution for his political activities or that there was a real chance of him being persecuted if returned to India) was supported by the travel activities of the appellant which led to the final conclusions in [37] and [38]. 31 In SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs , [2006] FCAFC 2 Allsop J at [233], with whom Weinberg J agreed at [155], said that if it could be shown that a reason given by the Tribunal for affirming the decision under review which failed to follow the procedure mandated by section 424A was entirely independent of another basis which did not fall foul of any jurisdictional error, the independent basis could support the decision under review notwithstanding the other jurisdictional error. 32 The appellant also argued to his Honour that he had not been given an opportunity to give evidence at the hearing before the Tribunal. His Honour concluded that it was open to the Tribunal to refuse the request for the adjournment that had been made by Mr Sardar and, inter alia, adopted the opinion expressed by McHugh and Heydon JJ in their reasons for refusing special leave which I have set out above. 33 An applicant for review is bound by the way in which his agent acts on his behalf even though the agent may do things that cause the applicant to be unaware of what is happening. The Full Court concluded at [16] that " the asserted fact that the applicant was unaware of the Tribunal's hearing was of no legal relevance" . However, the appellant argued that because of the irregularity of what purported to be the appellant's signature on the form 956 sent in by Mr Sardar on 28 April 2006, the Tribunal ought to have realised that the appellant had not authorised Mr Sardar to receive communications and then in some way it should then have not merely communicated with Mr Sardar or perhaps not communicated with him at all but sought to communicate with the appellant. A number of hurdles appear to this argument. 35 The first involves the fact the appellant, on the material before the Court, namely that I have set out, appeared to authorise Mr Sardar to make the application. There is no evidence that his signature is a forgery. I accept the signature looks different. I have already dealt with an application to adduce further evidence on appeal and rejected it for reasons I gave earlier today. Accordingly, on the material before me, in the conduct of this appeal, there is no evidence that the signature, albeit that it was different to the ordinary signature appearing on other documents at least that the Tribunal had before it, would have, in the ordinary course, been looked at by the Tribunal as being or be thought by it to be anything other than regular. 36 Secondly, the appellant sought an adjournment from the Tribunal which was rejected. Communication of the rejection was made to the agent. If Mr Sardar, was unauthorised, to be the appellant's agent because the signature on the form 956 was a forgery or if the Tribunal had accepted the reasoning which I am asked to accept that a glance at the form 956 would have shown Mr Sardar had put forward a signature that could not be relied on as that of the appellant, then communications with him should have been of no moment to the Tribunal. The fact is Mr Jivani was previously notified of the hearing and had sent back, as recently as 17 April 2003, a form of response to an invitation to hearing indicating that the appellant knew of the hearing and wished to give evidence. Mr Jivani had not sought any adjournment. 37 A party is not entitled to blow hot and cold about a position such as that which is relied on here. What the appellant is seeking to do is approbate the application for an adjournment as being made on his behalf but reprobate its source, namely Mr Sardar. Albeit this is an application for judicial review, it is difficult to understand why a person in the position of the Tribunal, having received an application for adjournment apparently made on behalf of the appellant and having communicated the refusal of that application to the person who made it, should be bound to go behind that communication and communicate directly with the appellant in the circumstances of the notification of the application at about 4 o'clock in the afternoon before the hearing and its consideration and rejection early the next morning. 38 If the appellant is entitled to rely on the application for adjournment at all, I think he must be taken as being bound by communication to Mr Sardar by the Tribunal rejecting the application. The appellant gave the Tribunal no independent immediate means of communicating with him, that is by telephone or otherwise, apart from by letter, as to the result of the application for adjournment. If it were refused, the proceeding was going to take place as, indeed, it did. in Pilcher v. Rawlins (7 Ch App 259, at pp. 268 et seqq)). It is a conclusion of law when the necessary facts are established. It looks, however, chiefly to the conduct and position of the person who is said to have waived, in order to see whether he has "approbated" so as to prevent him from "reprobating"--in English terms, whether he has elected to get some advantage to which he would not otherwise have been entitled, so as to deny to him a later election to the contrary (see per Lord Shaw in Pitman v. Crum Ewing ((1911) AC 217, at p. 239)). His knowledge is necessary, or he cannot be said to have approbated or elected. Such was Mr Sardar's request of 28 April 2003. 41 I think that if the appellant wants to rely on that request having been made for an adjournment, as having been one which the Tribunal should have taken notice of, he must accept that it was reasonable for the Tribunal in the circumstances to take Mr Sardar as being the person authorised to receive communications in response to that request, including a rejection and to leave it to him to communicate with the appellant about it. Therefore, in addition to the reasons that his Honour gave for rejecting the argument concerning the refusal of the adjournment for these additional reasons above, I would also refuse that ground of appeal. I hasten to add that I agree with his Honour's analysis and the analysis for rejecting that ground as an independent ground. 42 The appellant argued that the letter of 31 March 2003 was not signed by a person within the meaning of s 407 of the Act, being a Registrar of the Tribunal, a Deputy Registrar or other officer of the Tribunal. In my opinion this ground is without substance. The letter stated that there was a contact officer, Ms Flores, who I infer, pursuant to my powers under the Evidence Act 1995 (Cth) from the form of the document was authorised to send the document. It is a business record. It records accurately that Ms Flores was an officer of the Tribunal as it stated. She was the person who sent the document or on whose behalf it was sent. Therefore it was a document that emanated from an officer of the Tribunal. I reject the ground of appeal that asserts to the contrary. 43 Next it was argued that there was non-compliance with the statutory regime prescribed by Division 4, Part 7 of the Act in relation to the way in which the letter of 31 March 2003 notified the hearing. 45 It was accepted by the appellant that the original letter of 6 November 2002 did comply with the statutory scheme. He argued that, in effect, what was required was that whenever the Tribunal rescheduled, before any hearing had taken place or any oral evidence had been given, the hearings or time for the appellant to give oral evidence, complete compliance with this regime was necessary. Accepting the argument that the Tribunal had, in the original letter, given an invitation to the appellant to appear before it to give evidence and present arguments relating to the issues arising in relation to the decision under review by its letter of 6 November 2002, the appellant argued that section 425A(1) created an additional requirement. 46 The argument ran that an invitation having once been given, the Tribunal was required to give the applicant for review notice of the day and the time and place at which the applicant is 'scheduled' to appear. The notice had to comply with the requirements, inter alia, of s 426A and 425A(4). By force of s 426, each notice scheduling a hearing under s 425A had to include a notification to the applicant that he or she is invited to appear before the Tribunal to give evidence and must set out the effect of s 426(2), namely that the applicant has within 7 days of being notified under s 426(1) to give the Tribunal written notice that he or she wants the Tribunal to obtain oral evidence from a person or persons named in the notice. 47 These steps had been followed in the letter of 6 November 2002 but they were not followed in any of the subsequent letters and, in particular, in the letter of 31 March 2003. The appellant also relied on the word 'rescheduling' in s 426A(2) which picked up the word 'scheduled' in s 425A(1) in contradistinction to the use of the word 'adjourn' in s 427(1)(b). 48 The appellant says that by failing to notify the appellant in the letter of 31 March 2003 of the effect of s 426(2) the Tribunal fell into the same kind of jurisdictional error as occurred in SAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 215 ALR 162. It was said that one of the purposes of the requirement of giving notice was to ensure that the natural justice to which the appellant was entitled by force of s 422B(1) would be provided and any failure to adhere strictly to this code constituted a jurisdictional error. 49 The Minister responded by arguing that in SZEFM v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 78 at [7] - [8] Bennett J had explained why a failure to comply strictly with a 14 day notification period when a rescheduling or adjournment occurred before an appellant had actually given evidence at a hearing was the exercise of power under s 427(1)(b) of the Act. Her Honour applied a remark of the Federal Magistrate in that case that it was clear that the Tribunal had seen itself as exercising its adjournment power in rescheduling when video conferencing facilities were not available due to technical difficulties on the day and at the time appointed for the hearing. 50 I think that the present facts are different in that the re-schedulings that have occurred in the history of the appellant's notifications all happened well before any hearing had been appointed, apart from the first which was done at his request on the day before the hearing. I am fortified in this view by the fact that the language of ss 425A and 426A use the expression 'scheduled and rescheduling' rather than the word 'adjourned' as in s 427(1)(b). 51 Bennett J did not, of course, have this argument before her when deciding the case to which I have just referred. In my opinion there is some substance in the argument, but I do not propose to decide it as I think it is appropriate to decide this matter on a different ground. I have already referred to the substantial delays which this matter has had in its progress. The appellant, for whatever reason, sought an adjournment without appearing before the Tribunal on 29 April 2003. I understand the argument that that occurred because his migration agent asked for an adjournment, it was refused and the appellant was not able to attend, whether because he was not told of the adjournment having been refused, or was unable to make it to the hearing that day for other reasons. 52 Then, when the matter first came before this Court, the appellant put forward material to Stone J seeking an adjournment which gave no basis in the medical certificate on which the Court could exercise its discretion and he left it to the Court to do as it might. Thereafter, the appellant delayed a period of over 10 months before filing an application seeking leave to appeal. No explanation is before the Court for that delay. 53 Once again it appears from the material accepted by his Honour in evidence, that an application was made to Emmett J on medical grounds that an adjournment should be had of that application. Once again that was refused. Then almost 3 months later, on 4 February 2005, an application for special leave to appeal was filed in the High Court and after that was refused another 2 months delay occurred before an application was filed before the Federal Magistrates Court. 54 Although the appellant asserts that he wants to give evidence to the Tribunal and did in fact accept its invitation to do so on two occasions by the responses sent in by Mr Jivani, there is nothing in the material before me to suggest any reason for the unexplained delays and the failure of the appellant to look after his own interests, particularly after the first unfortunate experience before the Tribunal of not having someone present when the hearing was set down. To then treat this Court, on two occasions, as not requiring him to attend, even when he had, accepting that he did have, some kind of medical problems, is, in my opinion, a substantial factor to be weighed in considering whether the time of the Court should be taken up by further applications or appeals. 55 I have taken into account that this is the first occasion on which the appellant has been legally represented and competently so, but the delays that had occurred up to the time at which the matter was heard by his Honour below were such that I can see no reason why, in the exercise of the discretion to grant prerogative relief under s 39B of the Judiciary Act 1903 (Cth), I should do so. The period of delay was not explained before his Honour beyond what was in the appeal papers. His Honour's independent reason for refusing to grant relief, albeit on the assumption contrary to what I have found, at least on the s 424A point, that there was a jurisdictional error, seems to me to be perfectly well warranted. 56 I do not think there was any injustice whatsoever in the failure to tell the appellant of the travel matters, the subject of [36] of the Tribunal's reason. In SAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 215 ALR 162, it was held that where jurisdictional error occurs, it is not a proper basis, in the exercise of discretion, to refuse relief because to do so would be in the opinion of the Court futile or that the case is so weak that it does not warrant appellate intervention. 57 However, the critical passages in that case, for present purposes are what the majority said about the issue of discretion in a case where, unlike that case, there had been delay or other circumstances which would actuate the exercise of the discretion. Discretionary relief may be refused under s 39B if the conduct of the party is inconsistent with the application for relief. It may be inconsistent, for example, if there is delay on the part of the applicant or the applicant has waived or acquiesced in the invalidity of the decision or does not come with clean hands. Discretionary relief may also be refused if the applicant has in fact suffered no injustice, for example, because the statutory law compels a particular outcome. There is no basis, in this case, on which the undoubted discretion to refuse relief sought should be exercised against its grant. There has been no suggestion of delay, waiver, acquiescence or other conduct of the appellant said to stand in their way. 60 In my opinion the facts in that case are quite remote from the facts in the present case. In this case it seems to me that the delays, in the history that I have set out, are substantial. They have no substantive meritorious explanation that would weigh the exercise of my discretion to ignore them to allow points which might be argued in favour of the appellant, including an error I found under s 424A, and the possible constructional error of some nicety in relation to the notification provisions, to be addressed. Both the error in relation to s 424A and possible error to which I have adverted are not, in my opinion, an injustice sufficient to overcome the delay of the appellant in this case. 61 I can take into account in considering that there is substantial unexplained delay or inadequately explained delay after many applications to the Court as in this case, as a matter to affect the exercise of my discretion. However, I am not going to do that in this particular case. 62 In my opinion there is a public interest in finality of litigation. It is important that litigants know that Courts are here to administer justice fairly and impartially, but once their cases have been heard or the procedures of the law have been put in motion and the litigants have had adequate opportunity to appear and present their cases and do not take the opportunity up for reasons which are not substantial enough, it is wrong to put the other party or parties to further expense by allowing the litigation to proceed. 63 It seems to me that it would be quite unfair to the respondent Minister, in this case having been engaged now in the fifth separate application to the Court, that the appellant has made, bearing in mind there were applications that were disposed of by Stone J, Emmett J the High Court and the trial Judge below and now by me, to decide this case on new arguments which are presented on the appeal for the first time to suggest errors in what had happened when the matter was heard by the Tribunal in 2003. 64 I see no error in the way that his Honour would have exercised his discretion had there been a jurisdictional error. But for the reasons that I have given, I am of the opinion that no adequate explanation for the delay has been given and that the interests of justice would not be served having regard to the delays with or without any such explanation by granting prerogative relief. I would refuse to exercise my discretion even were I satisfied that there were an additional error, to the one I have identified, in the new argument about notification sought to be raised. 65 I do not think that this case is a proper vehicle in which those arguments should be raised. The appellant had the opportunity to put fully his case to the Tribunal, in writing, in his application for review. He did not do so. He had the opportunity to attend and give evidence to the Tribunal, albeit that there is some explanation for his not doing so, the fact is he did not give his account to the Tribunal in writing even after the scheduled but unattended hearing. Maybe that was a result of his being unrepresented; that will enable him to have his remedies against whoever gave him bad advice. 66 In my opinion, the consequences of that bad advice should not be visited in the circumstances of this case on the respondents. The explanations, such as they are, that have been given do not satisfy me that in the exercise of my discretion I should grant relief. In my opinion the appeal should be should be dismissed with costs. 67 The Minister has asked that I fix $5500 as the amount of the costs to which, in an order for costs, she would be entitled. I am of the opinion that that is a reasonable sum and it is appropriate, in the exercise of my discretion, that I do fix it. Accordingly the orders I make are the appeal is dismissed; the appellant is to pay the costs of the first respondent in the sum of $5500. I certify that the preceding sixty seven (67) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

whether judicial discretion to grant relief should be exercised in view of substantial unexplained or inadequately explained delay by the appellant public interest in the finality of litigation appeal dismissed migration

To do this he needed the approval of the Secretary of the Department of Health and Ageing; National Health Act 1953 (Cth) s 90. The Secretary may only approve an application for relocation if the Australian Community Pharmacy Authority, the respondent in this proceeding, recommends in favour of the relocation. The Authority recommended that the applicant's application not be approved because the distance between the applicant's proposed premises and the nearest other pharmacy, measured in accordance with the relevant rules determined by the Minister under s 99L , was not sufficient to meet the statutory requirement. The applicant appealed to the Administrative Appeals Tribunal. The Tribunal made the following findings: 1. The distance between the proposed premises and Fegents Pharmacy was greater than 1.5 kilometres by straight line measurement and less than 2 kilometres by lawful access measurement; 2. The distance between the proposed premises and Chemworld Chemist was less than 1.5 kilometres by straight line measurement and greater than 2 kilometres by lawful access measurement. 4 The Tribunal concluded that Chemworld Chemist, being less than 1.5km from the proposed premises, is the nearest existing pharmacy to them and that therefore the application must fail. In reaching this conclusion the Tribunal held that it was only necessary to consider rule 6(b)(i) and that it was unnecessary to consider Fegents Pharmacy. The Tribunal added, however, that if Fegents Pharmacy were to be considered the application would fail by reason of rule 6(b)(ii). The respondent filed a notice of contention also claiming that the Tribunal was in error in failing to apply rule 6(b)(ii) but asserting that, given the Tribunal's factual findings, the error made no difference to the result which, in the circumstances, was correct. 6 I agree with both parties that, as the two limbs of rule 6(b) are separated by the disjunctive, 'or', the applicant only needed to show that the proposed premises satisfied one of the two limbs of rule 6(b). The Tribunal was in error on this point however as, for reasons given below, I have concluded that the Tribunal's ultimate conclusion was not affected by this error, nothing turns on it. 7 The real issue in the appeal is the meaning of the phrase 'nearest other premises' which occurs in both rule 6(b)(i) and 6 (b)(ii). In particular, the issue was whether the phrase had the same or different meaning in each subrule. Despite a cogent argument put by Mr Zipser, counsel for the applicant, I have concluded that the meaning of the phrase is determined by the context of the subrule in which it occurs and for that reason 'nearest other premises' has a different meaning in each subrule. If that principle were to be applied, the first step in the application of either subrule would be to identify the ' nearest other premises' in respect of which a pharmacist is approved under s 90 of the Act. On that basis the premises so identified would be the same whether one was applying subrule 6(b)(i) or 6(b)(ii). 9 The Act does not say how one is to determine which other premises is the 'nearest' and therefore, subject to other indications to the contrary, one would give the word its ordinary English meaning. In the subrules under consideration 'nearest' is used in respect of proximity or distance; it is the superlative form of the adjective, 'near' which, according to the Oxford English Dictionary, means 'to, within or at a short distance' or 'close to a place, thing or person in respect of space or time'. The 'nearest' other premises are the 'closest' other premises or those which are the shortest distance away. 10 The shortest distance between two places is colloquially referred to as being a 'beeline' or 'as the crow flies', meaning a direct route that has no obstacles and is roughly a straight line measurement. On this analysis, the nearest other premises to the proposed premises are not necessarily those that are the quickest to reach from the proposed premises. The statement that 'X pharmacy is the closest' (or nearest), but that it would be 'quicker to get to Y pharmacy' is immediately understandable as making that distinction. 11 Measurement 'as the crow flies' is imprecise although the meaning is clear. Using the straight line measurement, it is less than 1.5 kilometres from the proposed premises but more than 2 kilometres by the shortest lawful access route. Therefore, according to the applicant's construction of the relevant provision, the proposed premises fails to meet the requirement in rule 6(b)(i) but does satisfy rule 6(b)(ii). Consequently, the applicant submits, the Tribunal should have found that a positive recommendation to the Secretary was mandated. 13 The applicant's position must be accepted unless there is a good reason to give the phrase 'nearest other premises' a meaning other than its ordinary English meaning. The respondent finds that good reason in the context of each subrule and in the background and policy of the rules governing the relocation of approved pharmacies. The subrules are expressed as alternatives and each provides a different means of measuring distance. In the respondent's submission, it is 'inherently unlikely' that Parliament would have intended the distance measurement expressed in one of these subrules to affect the calculation performed under the other subrule. Accordingly, the respondent submits that the ordinary meaning of the phrase 'nearest other premises' must yield to the context in which it is expressed. 15 Further, the respondent submits that the applicant's interpretation defeats the purpose of having two rules as it would leave rule 6(b)(ii) with nothing to do. The respondent also submits that the applicant's interpretation involves reading into rule 6(b)(ii) an unarticulated criterion to determine the 'nearest premises'. According to the respondent the reference to the method of measurement is part of the definition of 'nearest other premises' in each subrule and thus to apply rule 6(b) one finds both the premises that are nearest to the proposed premises by straight line measurement as well as the premises that are nearest by the lawful access measurement. 16 This exercise might identify only one other pharmacy (say premises A) as the 'nearest' by both criteria in which case a positive recommendation can only be made if the distance from A to the proposed premises is at least 1.5 km by straight line measurement or at least 2 km by the lawful access measurement. In other circumstances, however, finding the nearest other premises could lead to two premises (say A and B) being identified as the 'nearest' under subrules 6(b)(i) and 6(b)(ii) respectively. In that case a positive recommendation could only be made if the distance from the proposed premises to A was at least 1.5 km by straight line measurement or the distance from the proposed premises to B was at least 2 km by the lawful access measurement. Counsel for the respondent submitted that rule 6, in providing these alternatives, gave effect to the intention expressed in the Third Community Pharmacy Agreement to simplify the measurement process and thereby provide an alternative for pharmacists who could benefit from the straight line measurement in rule 6(b)(i). On this analysis the respondent submits that the application must fail because: • by straight line measurement, Chemworld Chemist is the nearest premises and since it is less than 1.5 kilometres from the proposed premises, the proposed premises do not satisfy rule 6(b)(i); and • by lawful access measurement, Fegents Pharmacy is the nearest premises and, since it is less than 2 kilometres from the proposed premises, the proposed premises do not meet the requirement in rule 6(b)(ii). 17 Finally, the respondent submitted that if the ordinary meaning of the word 'nearest' was 'nearest, measured by a straight line measurement' then there would be no need, in rule 6(b)(i), for the words 'by straight line measurement'. I doubt that this submission adds much to those already put and it is not necessary to discuss it further. Both of these cases were concerned with earlier versions of the rules than those presently under consideration. For the purposes of paragraph 99K(1)(b) of the Act, the rules with which the Authority must comply in making a recommendation on an application by a pharmacist for approval under s 90 of the Act in respect of particular premises are set out in paragraphs 4 to 9. Approval of a pharmacist under section 90 of the Act in respect of particular premises must not be recommended except as provided for in paragraphs 5 to 8. Her Honour found no warrant for such an approach in the words of the provision and held that in relying on evidence as to which pharmacy in the vicinity of the proposed premises was the 'closest' the decision maker took into account an irrelevant consideration. 22 I respectfully accept that the context of the phrase 'nearest other premises' justified Branson J's conclusion in the Pharmacy Guild , and that this meaning might coherently be adopted in respect of the present provisions. However, the present provisions are different from those considered by Branson J and the significance of that difference must be examined. Whereas previously the relevant rules used only one criterion to test distance from the nearest other premises, rule 6, in 6(b)(i) and 6(b)(ii) respectively, uses both the straight line measurement and the lawful access measurement. Accordingly, there is a competing principle to the principle of contextual analysis applied by Branson J namely the 'sound rule of construction' referred to in [8] above. The issue is which of the two competing principles should prevail? 23 The respondent also referred to Murphy v Farmer [1988] HCA 31 ; (1988) 165 CLR 19 in connection with the weight that should be given to the principle referred to in [8]. In Murphy the appellant had submitted that there was a presumption that the word 'false' should mean the same thing in s 229 of the Customs Act 1901 (Cth) as it did in s 234 of that Act. On the other hand, as Gibbs J. commented in Clyne v Deputy Commissioner of Taxation, the presumption that a word is used with a uniform meaning in a statute is not one "of very much weight... it all depends on the context". In the same case, Mason J. pointed out that the "presumption readily yields to the context". His Honour referred to an agreement made in 1990 between the Government and the Pharmacy Guild of Australia which was intended to reduce the number of pharmacies approved to supply pharmaceutical benefits. Provision was to be made for closure payments and, where an amalgamation or closure payment was made, no new approval in respect of the premises was to be granted unless certain approval criteria were met. The Third Community Pharmacy Agreement, made in 2000, refers in clause 21(d) to a purpose in amending the rules governing pharmacy relocations as being "to enhance competition consistent with the maintenance of a viable and well distributed community pharmacy network". In my view the reasons for interpreting 'nearest other premises' as set out in [8]-[10] are coherent and acceptable subject to there being indications in the statute or otherwise that a different meaning was intended. In addition, I do not accept that the applicant's interpretation defeats the purpose of having the two subrules with their different modes of measurement. On the applicant's interpretation once the 'nearest' premises have been identified, if the straight line measurement is at least 1.5 kilometres then the application must be approved. If, however, that measurement is less than 1.5 kilometres then the distance from the proposed premises by lawful access measurement must be determined. If that distance is 2 kilometres or more then a positive recommendation must be made under rule 6(b)(ii). For instance, using a common example, assume pharmacy A is only 500 metres by straight line measurement from the proposed premises but is directly across a river so that the shortest means of lawful access is across a bridge some 3 kilometres downstream. In that example the criterion in subrule 6(b)(ii) would be met and a positive recommendation made even though subrule 6(b)(i) has not been met. 28 Ultimately the strength of the respondent's interpretation and the possible conflict between the applicant's interpretation and the policy behind the provisions lead me to conclude that the respondent's interpretation is to be preferred. The point can be illustrated by elaborating and sharpening the example in [26]. Assume that pharmacy B is on the same side of the river as the proposed premises and is 600 metres away by both straight line and lawful access measurement. Despite the distance between pharmacy B and the proposed premises being considerably less than that provided for in either 6(b)(i) or 6(b)(ii), on the applicant's interpretation, this would be irrelevant. Pharmacy A is the 'nearest other premises' referred to in both subrules and pharmacy B would not be considered. This result does not seem to be consistent with 'the maintenance of a viable and well distributed community pharmacy network' or the final objective of the Third Community Pharmacy Agreement, 'the fostering of a stable and viable community pharmacy sector in Australia'. Indeed there is the potential to produce absurd results. Consider the following example: pharmacy A is only 100 metres from the proposed premises but because it is on the other side of a major expressway the lawful access measurement is a distance of 6 kilometres. Pharmacy B is 110 metres away from the proposed premises on the same side of the expressway with the lawful access measurement being 150 metres. Were the applicant's construction to be adopted, the proposed premises in this example would satisfy rule 6(b)(ii) , resulting in two pharmacies within 110 metres of each other. 29 Even at its extremes the respondent's interpretation does not present such incongruity. The application fails on the respondent's interpretation because Chemworld Chemist is the nearest to the applicant's proposed premises by straight line measurement (less than 1.5 kilometres) and Fegent's Pharmacy is the nearest by lawful access measurement (less than 2 kilometres). On the applicant's analysis the relocation would be approved because Chemworld Chemist is more than 2 kilometres from the proposed premises. 30 On the respondent's interpretation the most extreme case might result in an application being refused with the result that the pharmacies in a particular area are over 4 kilometres apart however this does not suggest any distortion of the policy that the rules are intended to support. While this result may seem harsh to the applicant, who is denied relocation to the premises of his choice, ultimately, the policy behind the relocation rules is not directed to individual rights but to maintaining the desired pharmacy network. As indicated above, the rules under consideration here were implemented pursuant to the Third Community Pharmacy Agreement. The 2006 determination is made pursuant to the Fourth Community Pharmacy Agreement. The preamble to Part 4 of the Fourth Community Pharmacy Agreement notes that, in addition to correcting difficulties associated with the previous location rules, the amendments to the location rules contained in the agreement 'are intended to provide greater flexibility to respond to community need for pharmacy services and to improve access to pharmacy services'. In addition, the Fourth Community Pharmacy Agreement indicates several objectives of the Location Rules that are not evident in the Third Community Pharmacy Agreement --- for instance to ensure that 'all Australians have access to PBS medicines'. It seems clear that the Fourth Community Pharmacy Agreement has different objectives from the Third Agreement even if those objectives have evolved from those in the earlier Agreement. There is no basis on which to suggest that the later rules can be relied on to clarify the meaning of the earlier rules. In the circumstances the caution advocated by Gummow J in Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 at 382 is well advised. 33 The orders in this matter must be that the respondent's notice of contention is upheld, the application is dismissed and the applicant must bear the respondent's costs.

appeal from decision of the administrative appeals tribunal review of decision to recommend that an application for relocation of pharmacy premises not be approved meaning of 'nearest other premises' method to be used in identifying nearest other premises administrative law

Declarations are also sought to the effect that the respondent has breached that subsection, and also pars (a) and (e) of subs (2) of s 16 of the OHS Act. By motion of which notice was given on 25 March 2009, the applicant applies for an order that John Holland Pty Ltd ("John Holland") be added as a party in the proceeding pursuant to O 6 r 8(1)(b) of the Federal Court Rules . The respondent opposes the application, but makes no submission about it. John Holland resists the joinder, contending that the rule relied on is inapplicable to the circumstances which exist, or alternatively, that, as a matter of discretion, the court should not order the joinder sought by the applicant. It is established on the pleadings that the respondent is a rail contractor that constructs, refurbishes and maintains railways; that it is the holder of a licence granted pursuant to ss 103 and 104 of the Safety, Rehabilitation and Compensation Act 1988 (Cth); that it is a "non-Commonwealth licensee" within the meaning of s 5 of the OHS Act; and that it is an employer within the meaning of that section. It is not strictly established on the pleadings, but appears to be the fact, that both the respondent and John Holland are subsidiaries of John Holland Group Pty Ltd. The facts of the case relate to an injury which befell a worker called Michael Merideth on or about 17 June 2007 whilst he was employed on construction works on a section of the St Kilda light rail. At the time, Merideth was employed by Skilled Group Limited ("Skilled"). The terms of, and the parties to, the contract with Skilled pursuant to which Merideth was supplied to work on the project are not matters of consensus as between the parties, but at least it is clear that Merideth was so working when he was injured, and that he was employed neither by the respondent nor by John Holland. That combination of circumstances has given rise to the question which is presently controversial. The basic duty to maintain a safe workplace is imposed by s 16 of the OHS Act upon an "employer". As I have said, while it is admitted that the respondent was, at material times, an employer, it seems that it was not the employer of Merideth. That brings s 16(4) of the OHS Act into play. It contends that the place where Merideth was working when he was injured was not "non-Commonwealth licensee premises of [the respondent]" as required by s 9A(4). The respondent denies that allegation. Indeed, the respondent alleges that Yarra Trams (which was the client for whom the construction works were being performed) granted John Holland occupation of the premises in question for a period which included the day upon which Merideth was injured. Although not a matter of exact consensus between the parties, it seems from the pleadings that the contract by which Yarra Trams engaged for these construction works to be performed was made between itself and John Holland. The applicant alleges that John Holland contracted with the respondent to carry out the rail component of the project. That is denied by the respondent, which refers to a memorandum of 16 March 2007 in which it "informed John Holland that it could, on the terms set out in the memorandum, undertake reconstruction works on the St Kilda light rail for a total price of $243,220 (ex GST)". The applicant alleges that John Holland and the respondents were granted occupation of the relevant premises for the purpose of carrying out the construction works, and that the premises were thereafter occupied by the respondent. These allegations are denied by the respondent, which says that Yarra Trams granted John Holland occupation of the premises. The position, therefore, comes down to this. The obligation to maintain a safe working environment falls upon the occupier of the premises in question. Premises normally occupied by Yarra Trams were, for the purposes of the construction project, given over to John Holland or to the respondent. Both are members of the same corporate group. At this stage, the exact nature of the arrangements as between John Holland and the respondent is not clear. The respondent denies that it is the occupier of the premises. If it succeeds in that denial, it will, it seems, succeed in the proceeding generally. In that eventuality, the applicant would be obliged to commence fresh proceedings against John Holland. All of the facts and circumstances which had been proved, and all of the issues of law which had been resolved, in the current proceeding would then have to be revisited. However, John Holland would not be bound by the ruling made in the present proceeding that the respondent was not the occupier. It would be free to contend that it was not the occupier. Since it has not been proposed by anyone that an entity other than the respondent or John Holland was the occupier at the relevant time, the potential for inconsistent judgments is obvious. In the circumstances referred to above, the applicant seeks the joinder of John Holland as a respondent, in order to make allegations in the alternative against it. The applicant relies on par (b) of O 6 r 8(1) of the Rules of Court. Manifestly, the premises in question were occupied by someone, and the applicant contends that there was, on those premises, a contravention of s 16(1) of the OHS Act. The convenience, and justice, of having the question of occupancy decided in a single proceeding to which all relevant parties are joined does seem so obvious as to require no further elaboration. John Holland might well have been made a party at the outset and, had the applicant then known of the position apropos occupancy which the respondent now takes, it may be inferred that it would have joined both companies at that stage. That position, however, was disclosed only upon the filing of the respondent's Defence, which then gave rise, in my view, to the very circumstance to which par (b) of O 6 r 8(1) refers. It is submitted on behalf of John Holland, however, that there is authority, which I should follow, to the effect that recourse to O 6 r 8 is not available in circumstances such as the present. If the defendants are liable for the penalties for which the plaintiff sues, their liability will be several and not joint. The action as presently constituted is one in which the existing defendant is sued for penalties for breaches of s 48 of the Act. The action is properly constituted as to parties and there is no person other than the first defendant who is interested or concerned in the relief which is claimed. All matters in dispute in the proceeding may be effectually and completely determined and adjudicated upon in the proceedings as they are presently constituted. In effect, the liability of each would be independent of the liability of any other of them. According to his Honour, however convenient it might have been to try the several claims together, the fact was that the joinder of subsequent respondents was not necessary to ensure that the matters in dispute as between the Commission and the existing respondents could be effectually and completely determined and adjudicated upon. Westco is, in my view, an unsatisfactory precedent for circumstances of the kind presently facing the court, where, on the applicant's case, there has been a single contravention committed, but there is a question whether the party bound by the statutory provision was the respondent or John Holland. It is next necessary to refer to three judgments of the court upon which John Holland did not, at least directly, rely. The reasons for doing so will appear presently. The first judgment is that of Sheppard J in Tytel Pty Ltd v Australian Telecommunications Commission (1988) 11 IPR 223. It seems that the respondent Commission had imported telephones from Japan, but (because it was exempt from the payment of import duty) gave the impression (or so it was alleged) that the telephones came from a country from which imports were exempt from duty, specifically Taiwan. This was said to amount to misleading conduct under s 52 of the Trade Practices Act 1974 (Cth). At an early stage in the proceeding, the applicant (Tytel) sought to join the overseas supplier of the telephones as a respondent, upon the basis that the documents which it had created falsely stated that the country of origin of the telephones was Taiwan, and in other respects aided and abetted the misleading conduct of the respondent Commission. Counsel for the supplier resisted the joinder upon the basis that the allegations made against his client did not disclose a cause of action. Sheppard J accepted that submission. That is to say, his Honour rejected the application under O 6 r 8 for the reason that the case against the supplier, if allowed to proceed, would have no prospect of success, in accordance with the principle for which General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 is authority. The second judgment is that of Heerey J in Review Australia Pty Ltd v Redberry Enterprise Pty Ltd [2003] FCA 1009. In that matter, there were two proceedings, in each of which the applicant (Review) alleged infringement of copyright. In each proceeding, the applicant sought the joinder, under O 6 r 8, of additional respondents. There was, it seems, no suggestion that the proceeding as then constituted could not go forward to judgment without the joinder of these additional parties. However, it seems that the facts underlying the applicant's allegations against the existing, and the proposed, respondents were either the same or substantially related. Heerey J said (at [5]) that the applicant needed to show an arguable case against the proposed respondents, relying in this respect upon Tytel . His Honour considered whether such an arguable case had been established and, in relation to those proposed respondents with respect to which, or to whom, it had, he made an order for joinder under O 6 r 8. The third judgment is that of Tamberlin J in Universal Music Australia Pty Ltd v Cooper [2004] FCA 78. This was also a copyright proceeding, in which the applicant (Universal) applied for the joinder of additional respondents on the basis that they had authorised the infringing acts of the existing respondents, and had entered into a common design with those respondents in the commission of the acts complained of. Tamberlin J referred to O 6 r 8, and opined that an applicant for joinder must show that there was an arguable case sufficient to resist the entry of summary judgment against the party sought to be joined. In this respect, his Honour relied upon Review and Tytel . Applying that principle, his Honour granted the application for joinder. Perhaps because of the nature of the allegations made against the proposed respondents, it appears not to have been suggested to Tamberlin J that the application should be rejected simply on the ground that the proceeding in its existing form was sufficient to permit the determination of the applicant's claims against the existing respondents, without the addition of the parties proposed to be joined. That is to say, it appears not to have been in contest that, if the applicant could show a legitimately arguable case against the proposed respondents, the circumstances were otherwise such as would activate the operation of O 6 r 8, assuming that discretionary considerations were generally favourable to joinder. That brings me to the next judgment of the court upon which John Holland relies, namely, that of Branson J in Warner Music Australia Limited v Swiftel Communications Pty Ltd (2005) 67 IPR 27. That was also a copyright case (including also elements arising under the Trade Practices Act and corresponding State legislation) which had been transferred to the court from the Federal Magistrates Court. The applicant (Warner) then applied for the joinder of two individuals who had not been parties in the Federal Magistrates Court. It is not clear to what extent those individuals were alleged to have been involved in the unlawful conduct alleged against the existing respondents. Indeed, Branson J decided the application, so it seems to me, by reference to a silent assumption that the only common element in the applicant's allegations against the existing respondents and the proposed respondents was that the applicant also had claims against the latter which could be conveniently dealt with at the same time as those against the former. Further, it appears from her Honour's reasons (at [10]) that counsel for the applicant claimed an entitlement to an order under O 6 r 8 upon establishing no more than that there were causes of action against the proposed respondents that could not be demonstrated to be manifestly groundless, in which respect they relied upon Universal . Branson J rejected that approach. It seems to me that O 6 r 8 is concerned with proceedings improperly constituted by reason of the failure to join a person as a party. A person does not become a person who "ought to have been joined as a party" or whose joinder as a party is "necessary to ensure that all matters in dispute in the proceeding may be ... completely determined and adjudicated upon" simply because a cause of action against that party may legitimately be prosecuted in the proceeding. I also agree that it will not be sufficient for an applicant seeking joinder merely to show that he or she has claims against the proposed respondent which could not be dismissed as unarguable in the General Steel sense. However, with respect to Branson J, neither do I accept that O 6 r 8 is concerned only with existing proceedings which are "improperly constituted by reason of the failure to join a person as a party". I consider that such a view takes too narrow an approach to the concept of ensuring that all matters in dispute in the proceeding are effectually and completely determined and adjudicated upon. It is sufficient for present purposes to say that I consider that the expression "all matters in dispute in the proceeding" extends at least to matters which are placed in dispute by an existing party and which, if determined in a particular way, would result in a finding that another person, rather than the existing party, should be called to account for the transgression presently alleged by the applicant. John Holland relied also upon the judgment of Rares J in Commonwealth Bank of Australia v Peto (No. 2) [2006] FCA 516 ; (2006) 152 FCR 362. In that proceeding, the applicant (the Bank) proceeded against two individuals upon mortgages and guarantees which they had given to secure moneys advanced by the Bank to third parties. In their defences, those individuals asserted that the securities which they had executed had not been properly explained to them, and that the Bank had thereby acted in contravention of certain statutory provisions, and in ways which were unconscientious. It seems that there was a solicitor who had certified to the Bank that she had explained the terms and nature of the securities to the two parties who proceeded to execute them. The Bank claimed that it had advanced the moneys to the third party in reliance on the solicitor's certificate. To guard against the prospect that the existing respondents might succeed in their defence that the securities were not properly explained to them, the Bank sought to join the solicitor as an additional respondent, and to make allegations, in effect, that it had relied upon the sufficiency of the explanation as to which she had certified. The claim against the solicitor was, in that sense, alternative to the claim against the existing respondents. Rares J held that, however convenient it might be for the Bank to join its claim against the solicitor in the proceeding against the existing respondents, it was not necessary to do so for the purpose of ensuring that all matters in dispute, as between the Bank and those respondents, might be effectually and completely determined and adjudicated upon. However, a moment's reflection will demonstrate how different are the circumstances which came before Rares J from those now before me. In Commonwealth Bank , there was no element of the defence of the existing respondents that had the necessary consequence that the solicitor would be liable. The claims against those respondents, and the solicitor, were truly separate, the latter being, in effect, a second string to the Bank's bow. In the present case, by contrast, there was a single circumstance by reference to which the applicant makes its allegations, and the respondent seeks to deflect liability, in presently relevant respects, not only by denying that it was the occupier of the premises in question, but by asserting that John Holland was the occupier. Unlike Rares J in Commonwealth Bank , I consider that I am faced with a true "either-or" situation, in which the success of the respondent's defence will have the necessary consequence that John Holland was the contravening party (assuming, for present purposes, that contravention there was). Finally in this regard, it was submitted on behalf of John Holland that the position for which it contended had the support of the Full Court judgment in News Ltd v Australian Rugby Football League Limited [1996] FCA 1256 ; (1996) 64 FCR 410 , 523-525. There, persons who had not been joined as parties, but who were heard as interveners on appeal, successfully contended that the trial Judge had erred by making orders which affected them in various ways, when they had not been parties to the proceeding. It is the effect of the orders upon the third party that must be determined. The test is not whether the conduct of the third party is raised in the pleadings between the existing parties, or whether the third party is a party to a contract, the meaning or effect of which is pleaded as a matter relevant to the ascertainment of the rights between those parties. Where the orders sought establish or recognise a proprietary or security interest in land, chattels or a monetary fund, all persons who have or claim an interest in the subject matter are necessary parties. This is because an order in favour of the claimant will, to a corresponding extent, be detrimental to all others who have or claim an interest .... Where the subject matter of the proceedings is not of this kind, the ascertainment of necessary parties who ought to have been joined may be more difficult. In their Lordships' view one of the principal objects of the rule is to enable the court to prevent injustice being done to a person whose rights will be affected by its judgment by proceeding to adjudicate upon the matter in dispute in the action without his being given an opportunity of being heard. To achieve this object calls for a flexibility of approach which makes it undesirable in the present case, in which the facts are unique, to attempt to lay down any general proposition which could be applicable to all cases. While their Lordships agree that the mere fact that a person is likely to be better off financially if a case is decided one way rather than another is not a sufficient ground to entitle him to be added as a party, they do not find the dichotomy between "legal" and "commercial" interests helpful. A better way of expressing the test is: will his rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action? The joinder was done because the original appellant had settled the appeal by agreement with the respondent. The contractor's interest in the appeal was based on the terms of a contract which it had with the original appellant: if she succeeded in her appeal, the contractor stood to benefit. Thus the test proposed by their Lordships made sense in the circumstances of that case (in which the Federal Court had also made the original appellant a respondent after she had discontinued her appeal). The contractor's rights against the original appellant would be directly affected by the resolution of her original appeal, not because any resulting order would be binding on it, but through the contract which it had with her. What comes out of these and other authorities, in my view, is what their Lordships described as "the great variety of circumstances in which it may be sought to join an additional party to an existing action". In Pegang , the judgment at first instance had been adverse to the original appellant, and therefore (indirectly) to the contractor. The contractor sought to be added as an appellant as it was its only chance to challenge that judgment and thus to advance its own derivative position. News Ltd was essentially a procedural fairness case. Although not bound by the orders made at first instance, the interveners were adversely affected by them. In my respectful view, it is something of a distraction to propose that the present case can be decided only by reference to a test which was crafted with an eye on the circumstances of a non-party who, to advance his or her own position or to achieve procedural fairness, needed and wanted to be heard. Rather, the present case falls to be determined by reference to the very words of par (b), where the need effectually and completely to determine all matters in dispute is the principal consideration. A matter in dispute in this proceeding is whether the respondent was the occupier of the premises at the relevant time. The respondent denies that it was. It alleges that John Holland was the occupier. If that dispute were determined only as between the applicant and the respondent, it would not be effectually or completely determined because the court would have proceeded unaware of what John Holland would say on the subject, and John Holland (which might by then have been found to be the occupier) would not be bound by the result. The course which the submissions made on behalf of John Holland silently imply --- giving John Holland, in a later proceeding, the opportunity to contend that it was indeed the respondent that was occupier of the premises at the relevant time --- would stand as a conspicuous and, in my view, embarrassing demonstration of the ineffectual and incomplete nature of the court's determination in this proceeding. Indeed, such a course would so manifestly be calculated to bring the administration of justice into disrepute as to justify the conclusion that the joinder of John Holland is necessary within the terms of r 8(1)(b). John Holland also submits that, if O 6 r 8 is available as a source of power in the present circumstances, the court should nonetheless, as a matter of discretion, decline to make the order sought by the applicant. It submits that its joinder to the current proceeding would give rise to a situation in which the applicant was making inconsistent allegations, one of which must be wrong, and must be known to the applicant to be wrong. John Holland refers to the applicant's own enforcement policy, which provides that civil proceedings will not be commenced or continued where the applicant believes that such proceedings have no reasonable prospects. It is put that, as a matter of logic, the applicant must hold such a belief in relation to either the respondent or John Holland. Further, John Holland relies upon a series of judgments which, while recognising the availability of alternative allegations in an appropriate case (ie pursuant to provisions such as O 11 r 8(2)), make it clear that an allegation which must be known to the parties to be false is embarrassing and will be struck out as an abuse of process. The difficulty with these submissions is that there is no party or proposed party in relation to which I could find that the applicant must know that its allegations, or proposed allegations, are false. Neither is there any party, or proposed party, in relation to which I would be justified in finding that the applicant has no reasonable prospects of success. It was not suggested on behalf of John Holland that, when the proceeding commenced, it was unreasonable of the applicant to have supposed that occupation of the relevant premises had been handed to the company which was engaged in the construction work on the light rail. That supposition was, perhaps, consistent with what might be taken to be customary practice in like situations as between companies at arm's length. In its Defence, the respondent has denied that it was the occupier, and asserted that John Holland was the occupier. Clearly, on the current state of the allegations, one of those companies was the occupier. However, the applicant does not know which. Given the terms of the respondent's Defence, the applicant is in no position to conclude that it has no reasonable prospects against either company, notwithstanding that, as a matter of logic, its success against one would seem to involve failure as against the other. I consider that the applicant's proposed case against John Holland is a legitimate alternative one, such as is permitted by O 11 r 8(1). Allowing the joinder sought by the applicant would not produce a situation in which it was making the allegations known to be false. Rather, the proposed suite of allegations would maximise the prospect that the court would, in its determination of the proceeding, decide which company was the occupier at the relevant time and carried, therefore, the obligations imposed by s 16 of the OHS Act. For that reason, and also for the reasons discussed in my consideration of the scope and purpose of O 6 r 8, I take the view that every discretionary consideration favours the making of an order in the terms sought by the applicant. For the above reasons, I propose to grant the applicant's motion. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.

application by applicant for addition of further respondent allegation of breach of statutory provision by occupier of premises defence that related company was occupier whether joinder of related company was necessary to ensure that all matters in dispute may be effectually and completely determined. practice and procedure

Summary judgment be entered against the Respondent, on part of the Applicant's claim against the Respondent, in the sum of $309,455.00 pursuant to Section 31A of the Federal Court of Australia Act 1976 . 2. The Respondent pay the Applicant interest pursuant to Order 35 Rule 8 of the Federal Court Rules from 13 May 2002 until the judgment amount is paid. 3. Section 31A makes provision for the Court to give summary judgment for an applicant in relation to the whole or any part of the proceeding upon it being satisfied that the respondent has no reasonable prospect of successfully defending the proceeding or that part of the proceeding. It also provided for a judgment in the nature of summary dismissal of the whole or any part of a proceeding on the application of a respondent in the event that it was satisfied that the applicant had no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. 4 The effect of s 31A was to soften the test for a successful application for summary judgment as stated by the High Court in Theseus Exploration N.L. v Foyster [1972] HCA 41 ; (1972) 126 CLR 507 ('Theseus Exploration') and also the test for a successful application for summary dismissal as stated by Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 ('General Steel Industries'). (2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is defending the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. (3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: (a) hopeless; or (b) bound to fail; for it to have no reasonable prospect of success. (4) This section does not limit any powers that the Court has apart from this section. ... [the] cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action --- if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal --- is clearly demonstrated. The test to be applied has been variously expressed; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense". ... ... Dixon J. (as he then was) sums up a number of authorities in Dey v Victorian Railways Commissioners where he says: "A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process. " Although I can agree with Latham C.J. in the same case when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings, in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed. By special leave the plaintiff appealed from that refusal to the High Court. Having entertained full argument upon the legal matters in dispute between the parties and in circumstances where there were no disputed issues of fact, the High Court allowed the appeal and ordered that summary judgment be entered for the plaintiff. However, the High Court did not formally rule upon the primary judge's refusal of the application for summary judgment. Theseus Exploration was also decided before the passage of s 31A(3) of the Federal Court of Australia Act . The jurisdiction to give summary judgement should not be exercised "where a difficult question of law is raised" --- see generally the Supreme Court Practice (1970) vol. 1 pp. 126-130. Perhaps the summary intervention to prevent the continuance of a plaintiff's action ought to be much rarer than the giving of summary judgment but there is sufficient correspondence in the two situations to make apposite to this case much of what I said in General Steel Industries Inc. v. Commissioner for Railways (N.S.W.). Indeed, on one view of the law as stated in Bundock Bros. v. Bergl and Co., he was bound to dismiss it. No doubt the remarks in these cases were not intended to preclude the exercise of some discretion by a judge to whom application for summary judgment is made in deciding whether the question of law raised is so difficult that it ought not to be decided summarily, and no doubt also sometimes some explanation or reference to authorities will be necessary to enable a judge to decide whether a question is really unarguable. However, in the present case the questions were serious and disputable and, assuming that the learned primary judge had a discretion, it was entirely proper for him to decline to dispose of them in chambers. 22. Subsection 31A(3) provides that for the purposes of giving summary judgment, a proceeding or part of a proceeding, or a defence to a proceeding or part of a proceeding, need not be hopeless or bound to fail for it to have no reasonable prospect of success. This moves away from the approach taken by the courts in construing the conditions for summary judgment by reference to the 'no reasonable cause of action' test, in Dey v Victorian Railways Commissioners ... and General Steel Industries Inc v Commissioner for Railways (NSW) ... [both of which were summary dismissal cases]. These cases demonstrate the great caution which the courts have exercised in regard to summary disposal, limiting this to cases which are manifestly groundless or clearly untenable. 23. Section 31A will allow the Court greater flexibility in giving summary judgment and will therefore be a useful addition to the Court's powers in dealing with unmeritorious proceedings. 12 It may be observed that the word 'may' in the expression 'may give judgment' in s 31A(1) and s 31A(2) is permissive not mandatory. 13 The concept of 'no reasonable prospect of successfully prosecuting ' a proceeding, which is a relevant issue where summary dismissal is sought under s 31A(2) of the Federal Court of Australia Act , was addressed by Rares J in Boston Commercial Services Pty Ltd (ACN 114 658 070) v G E Capital Finance Australasia Pty Ltd (ACN 070 396 020) [2006] FCA 1352 ; (2006) 236 ALR 720. The concept of a party having "no reasonable prospect of successfully prosecuting a proceeding" has some similarity to the test at common law for determining whether a jury properly instructed could reach a verdict for the plaintiff. 16 Section 31A(1) of the Federal Court of Australia Act permits the Court to give judgment for an applicant against a respondent 'in relation to ... any part of a proceeding' if the applicant is prosecuting 'that part of the proceeding' and the Court is satisfied that the respondent has no reasonable prospect of successfully defending that part of the proceeding. 17 In the present case the applicant is not presently 'prosecuting the proceeding', rather, it is prosecuting 'a part of the proceeding'. The relevant 'part' was identified by the applicant by reference to prayer for relief No. 5 as contained in the Application filed 5 July 2007. Alternatively, damages of $3,363,858 plus any further amounts payable by the applicant to Rapid Metal Developments (Australia) Pty Ltd or such other sum as this Court shall determine. 6. Interest pursuant to s.51A of the Federal Court Act (sic) 1976. Costs. 5 above. The sum of $309,455.00 is said to form part of the 'damages of $3,363,858' sought in prayer for relief No. 5. 19 The context in which the applicant brought its proceedings against the respondent was that during 2000 the respondent had been engaged to build a high rise office tower at 240 St George's Terrace, Perth, Western Australia. The building, subsequently known as the Woodside Building, was duly erected. 20 The applicant's interest in the project was as a formwork subcontractor. 21 In its defence filed 15 November 2007 the respondent admitted that it entered into a written contract with the applicant on or about 25 September 2001. The Principal has engaged the Main Contractor [referring to the respondent] to carry out and complete the Main Contract Works on the terms and conditions of the Main Contract. B. The Main Contractor wishes to engage the Subcontractor [referring to the applicant] to carry out and complete the Subcontract Works. C. The Subcontractor has agreed to accept the engagement and carry out the Subcontract Works in accordance with the Subcontract. 26 Annexure Part B was entitled ' Approved form of unconditional undertaking '. The form of unconditional undertaking bore the subtitle ' Approved form of unconditional bank guarantee '. It provided for a financial institution to unconditionally undertake to pay on demand any sum or sums which may from time to time be demanded by the Main Contractor to a maximum aggregate sum, which was to be inserted into the form of bank guarantee. The approved form provided for the undertaking to continue until notification had been received from the Main Contractor that the sum was no longer required by the Main Contractor or until the undertaking was returned to the financial institution or until payment to the main contractor by the financial institution of the whole of the sum or such part as the Main Contractor may require. 27 On 17 October 2001 two Unconditional Bank Guarantees were provided by HSBC Bank Australia Limited each unconditionally undertaking to pay on demand any sum or sums which may from time to time be demanded by the respondent to a maximum aggregate of $A308,625.00. Notwithstanding the form of bank guarantee provided for in the subcontract, each undertaking was expressed to expire 'at 5 pm on 27 October 2002 in Western Australia'. 28 Subsequent to the entry by the parties into the formwork subcontract and the provision of the two bank guarantees, a Loan Agreement was entered into between the applicant and the respondent. 32 The reference to 'repaying the Obligations' in clause 10.2(b) of the Loan Agreement is not easily understood in the context of the definition of 'Obligations' in clause 1.1 of the Loan Agreement. 34 It may be seen, expressing the matter in somewhat general terms, that the bank guarantees were provided under the formwork subcontract, albeit in slightly different terms from that required by the subcontract, to provide security for the due performance of the subcontract by the applicant and to take the place of retention monies which might otherwise be withheld under progress payments. The bank guarantees also had significance in relation to the due performance by the applicant of its obligations under the loan agreement, entered into with a view to providing the applicant with working capital with which it could, presumably, commence to discharge its obligations under the subcontract. 35 The applicant's Amended Statement of Claim filed 23 August 2007 is broken up into various sections under marginal headings recorded as ' PARTIES AND OTHER PERSONS ' (paragraphs 1 --- 6), ' ENTRY INTO FORMWORK CONTRACT ' (paragraphs 7 --- 22), ' CAUSE OF ACTION --- CONTRAVENTION OF WORKPLACE RELATIONS ACT ' (paragraphs 23 --- 25), ' CAUSE OF ACTION --- CONSPIRACY ' (paragraphs 26 --- 30), ' CAUSE OF ACTION --- MISLEADING OR DECEPTIVE CONDUCT ' (paragraphs 31 --- 34), ' CAUSE OF ACTION --- CONTRACT ' (paragraphs 35 --- 39) and ' CAUSE OF ACTION --- CONVERSION ' (paragraphs 40 --- 43). 36 For the purposes of the summary judgment application the Court's attention has been directed to that part of the Amended Statement of Claim recorded under the heading ' CAUSE OF ACTION --- CONTRACT '. In particular the Court has been referred to paragraph 36, which has been somewhat unusually expressed in terms appropriate to a claim in tort and appears to have little relationship to the contract claims in respect of the subcontract works which surround it. The Respondent has wrongfully drawn down two performance bonds provided by the Applicant in the total sum of $617,250 and has not repaid that sum to the Applicant, despite demand and despite the Applicant not being indebted to the Respondent or otherwise liable to suffer the payment of the said sum to the Respondent. 37. On 17 May 2002 the Respondent terminated the said contract pursuant to the term pleaded in paragraph 35.1 but has made no payment to the Applicant pursuant to the term pleaded in paragraph 35.2 or at all. 38. By reason of the matters pleaded in paragraphs 36-39 the Respondent is indebted to the Applicant in the sum of $3,363,858.40 plus the amount of Rapid Metal Developments (Australia) Pty Ltd's claim against the Applicant. It may be observed that the relevant paragraph does not plead the loan agreement or any terms thereof and does not plead any breaches of any promises said to be contained in the loan agreement. It may also be observed that the paragraph is not expressed as a common money count for money had and received by the respondent for the use of the applicant. 38 The applicant has sought to satisfy the Court that the respondent has no reasonable prospect of successfully defending that part of the proceeding which is the subject of paragraphs 36 and 39 of the Amended Statement of Claim in relation to $309,455 being part of the sum of $617,250 referred to in paragraph 36 of the Amended Statement of Claim and part of the sum of $3,363,858.40 referred to in paragraph 39, by relying upon admissions and matters pleaded by the respondent in its Defence filed 15 November 2007 and, relevantly, two statements contained in the affidavit of Fiona Touhill, a solicitor in the employ of John de Mestre & Co, the solicitors for the applicant, sworn 1 April 2008, which was read on the hearing of the motion. ... I am informed by Warren Anderson, the sole director of the Applicant and verily believe that the issuing bank appropriated $617,250 cash from the applicant which had been provided as security for the Bank Guarantees. 7. ... The respondent has not repaid any part of the $617,250 to the applicant. 40 The matters referred to in the Defence, upon which the applicant relies in support of its motion, are to be found, primarily, in paragraph 24 of the Defence which is expressed to be 'In answer to paragraph 36 of the Claim'. The applicant also refers to paragraph 32 of the Defence which was expressed to be 'In further or alternative answer to paragraphs 23 to 39 of the Claim'. It is submitted that the vice in paragraph 24 lies in subparagraph (e) which follows subparagraphs (a)-(d). Particular reliance is placed by the applicant upon paragraph (24)(e)(iii) and (vii). The Applicant does not pay at or before the due time on the due date and in the specified manner, any amount payable by it under any Transaction Document (including the Loan Agreement and the AF Subcontract) and such default is not cured within 5 Banking Days (clause 10.1(a)); B. • in the circumstances, the applicant seeks summary judgment in respect of the amount of $309,455 together with interest at the relevant Federal Court rate from 13 May 2002 to 7 April 2008 of $191,849.39, a total of $501,304.39. Firstly, clause 10.2(b) of the Loan Agreement entitled the respondent "without any notice to the [applicant], [to] make a claim or claims on the Bank Guarantee[s] any (sic) apply to (sic) proceeds received therefrom towards repaying the Obligations". As has previously been observed "Obligations" under the Loan Agreement extend to "all the liabilities of [the applicant] to [the respondent] under or by reason of" not only the Loan Agreement but also any other "Transaction Document" and "any other transaction matter or event" and includes liabilities which are "present, prospective or contingent" and liabilities which "come into existence after the date of this [loan agreement]". 44 Secondly, one cannot disregard subparagraphs (c) and (d) of paragraph 24 of the Defence which put in issue any obligation on the part of the respondent to repay $617,250 to the applicant and joined issue with the assertion in paragraph 36 of the Amended Statement of Claim that the applicant was not indebted to the respondent or otherwise liable to suffer the payment of the monies drawn down under the guarantees, to the respondent. 45 In my opinion, the evidence does not support a finding that the respondent has no reasonable prospect of defending that part of the proceeding, which has been identified by the applicant as relating to the sum of $309,455. 46 It seems to me that an important question of law will arise as to the true meaning of clause 10.2(b) of the Loan Agreement and to the reach thereof. Furthermore, the evidence, to which reference has been made, which has been led by the applicant, does not rule out any entitlement in the respondent to apply or retain the monies drawn down under the bank guarantees in consequence of the provisions of the subcontract requiring the applicant to provide security. 47 In my opinion this is not a proper case for summary judgment for the applicant against the respondent in relation to part of the proceeding. The Notice of Motion should be dismissed with costs. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.

application for summary judgment for an applicant in relation to part of a proceeding consideration of "no reasonable prospect of successfully defending" and of "part of the proceeding" limited utility of principles relating to verdicts by direction when assessing whether a respondent has a reasonable prospect of successfully defending the proceeding or any part of the proceeding practice and procedure

The Patent is for a term of 20 years. The applicant's Patent "relates to a barrier", primarily for application as a traffic barrier. The function of a traffic barrier, the evidence shows, is to redirect or arrest an errant vehicle safely and prevent the errant vehicle from passing through it. The purpose for doing so may be to protect the occupants of the vehicle from colliding with a roadside or other hazard or may separately or also be to prevent the errant vehicle from colliding with people working or otherwise positioned in the area behind the traffic barrier. The applicant also seeks relief under s 82 of the Trade Practices Act 1974 (Cth) (the TP Act) for an alleged breach by the first and second respondents of s 52 of the TP Act. In its Amended Application, filed 3 April 2006, the applicant seeks the following relief: A declaration that the Respondents have infringed Australian Patent 774224 A barrier (the Patent). The resulting damage often severely weakens the structural integrity of the barrier. Other advantages of this invention will hereinafter become apparent. Advantageously, providing a guard which overlies a plurality of adjacent barrier elements serves to increase the stability of the barrier system and render it less deformable when subjected to minor impact. The guards 17 are arranged end to end and are secured to the barrier elements by threaded fasteners 18. Individual guards are positioned such that they overlie the connection between adjacent barrier elements 11. The first respondent is a corporation incorporated in Australia, which has manufactured and offered for sale the Guardliner traffic barrier system. The second respondent admits that he was responsible for the placing of advertisements, in the magazine "ROADS" at pages 37 and 38 of the December 2004/January 2005 edition, entitled "Guardliner Series --- relocatable guardrail road barrier system --- by Barron & Rawson Pty Ltd", and at page 29 of the June/July 2005 edition. Each advertisement also refers to a Roadliner 2000™ S series plastic crash traffic barrier system. These proceedings are concerned only with the Guardliner road barrier system. The applicant pleads that the offering for sale of the Guardliner traffic barrier system infringes its rights under the Patent, as the applicant has not licensed the first respondent to do so. However in the course of these proceedings the allegations of infringement have been confined to Claims 1, 2 and 4 of the Patent. Claim 1 is set out above, in [6]. Claims 2 and 4 of the Patent are: A barrier system as claimed in claim 1, wherein said one or more guard members extend across said side walls in a generally horizontal direction. The second respondent did not give evidence in these proceedings, although statutory declarations sworn by him were exhibited, inter alia , to the affidavit of Ian Tannahill, a Patent and Trademark Attorney employed in the Patent Attorneys for the applicant. A statutory declaration declared on 16 September 2005 by Anthony James Carey says: Barron & Rawson Pty Ltd has a barrier product, Roadliner 2000™ This barrier met the relevant safety standards, but in order to increase market penetration it was desired to improve its crash performance. At the time I had a business relationship with Barron & Rawson Pty Ltd in relation to the marketing and sales of crash barriers. I developed the Guardliner system and I kept Barron & Rawson Pty Ltd informed of the developments in the Guardliner system, including of the progress of the patent application. He says, " I was responsible for the advertisement and its content . " An invoice for the advertisement was directed to him. Similarly, he says that he caused the advertisement to be placed in ROADS magazine in June 2005/July 2005 edition, was similarly responsible for the advertisement and its content, and received an invoice for that advertisement. A reference to 'Patent Pending' in the advertisement of the first respondent published in the June 2005/July 2005 edition of ROADS Magazine forms the basis of the applicant's claim under the TP Act. The applicant claims that Australian Patent Application 2003281553 lapsed on 24 February 2005 and there was therefore no patent pending in mid-2005 when the advertisement was published. The applicant's claim under the TP Act has been deferred until after the determination of the challenge to the validity of the applicant's Patent and the applicant's infringement claims. With the consent of the parties, the Court ordered, pursuant to O 29 r 2 of the Federal Court Rules , that the issues of the validity of Australian Patent 774224 and the infringement by the respondent of the said patent be determined separately, and prior to, any other issues in this litigation. Those issues fall to be determined in the context of the provisions of the Act, prior to the amendments to that Act introduced by the Patents Amendment Act 2001 (Cth). This appears from the Joint Expert Report of Dr Rod Troutbeck and Dr Malcolm Jenkins of 10 October 2006. The consequence is that the only issue for determination, in respect of infringement, is whether the Guardliner system has the features detailed in Claim 1 of the Patent, which is set out in [6] above. It is the last part of Claim 1 of the Patent, " ... at least one thin walled, longitudinally extending guard member that is mounted on and overlies the side walls of at least two adjacent barrier elements", on which the dispute between the parties is focused. Dr Malcolm Jenkins, who gave evidence in the applicant's case, is a mechanical engineer and is the General Manager of the firm WBM Pty Ltd, a firm of Consulting Engineers. He holds a B.E. (1 st class hons) (Mech), with a University Medal, University of Sydney (1972), and a Ph.D. (Mechanical Engineering), University of Sydney (1978). (Civil, Hons) from the University of Melbourne (1971), M Eng Sc, Civil Engineering, University of Melbourne (1974) and a Ph D in Civil Engineering from the University of Queensland (1989). From 1972 to 1974, he was a Construction Engineer and Traffic Engineer with the the Country Roads Board Victoria. From 1974 to 1989, he was a Senior Research Scientist, and later, Principal Research Scientist with the Australian Road Research Board. Then from 1989 to 2004, he was an academic at the Queensland University of Technology, being Head of School of Civil Engineering at QUT from 1994 to 2004, and from 1994 to 2004, a full-time Professor of Civil Engineering at QUT. He continues to be a part-time Professor of Civil Engineering as well as conducting a separate consultancy business, Troutbeck and Associates Pty Ltd. Since 2004, Dr Troutbeck, through his consultancy, has done work in relation to safety barriers as follows: evaluating the safety barrier requirements (including relocatable barriers) for Queensland Motorways Limited; evaluating safety barriers (including relocatable barriers) at the Gold Coast Indy Circuit; advising on the development of safety barrier selection (including relocatable barriers) and approval processes for the Roads and Traffic Authority of New South Wales. advising on the use and installation of safety barrier terminals for steel W beam guard fences for Queensland Main Roads; and evaluating documents for the installation of safety barriers for the Roads and Traffic Authority of New South Wales. Since June 2006 I have been Chairman of CE33. Australian Standard number AS/NZS 3845:1999 was first published in January 1999. It was the first Australian Standard in the area of road barriers and, although a review process is currently occurring, it has not been amended since its introduction. The facility was attached to Crashlab which then tested the safety performance of new vehicles. The project was funded by the Motor Accident Insurance Commission in Queensland, and the project involved developing hardware and procedures for testing the performance of road safety barriers. The Transportation Research Board operates a number of committees looking into various aspects of road safety. In 1988 I joined a sub-committee of Committee number A2A04 (now AFB20), called the Sub-Committee on International Research on Roadside Safety Features. Following a further invitation in 1997, I joined a research panel for the US National Co-operative Highway Research Program (NCHRP) projects 22-14(1) and 22-14(2). This panel was part of the US National Research Council and reported to Committee number AFB20 on the further development and upgrade of the report entitled 'Recommended Procedures for the Safety Performance Evaluation of Highway Features' (also known as the NCHRP 350 Report). The Australian Standard (number AS/NZS 3845:1999 and developed by Committee CE33) refers to and incorporates much of the NCHRP 350 Report. The NCHRP research panel continues to guide the research project NCHRP 22-14(2) to identify shortcomings in US testing standards for safety barriers, and the development of an updated version of those standards. However, the specification, including the claims, is not to be read in the abstract, but instead construed with common sense, in light of the common general knowledge in the art as at the priority date: Bennett J in Austal Ships Pty Ltd v Stena Rederi Aktiebolag [2005] FCA 805 ; (2005) 66 IPR 420 at [71] . Her Honour, in Sachtler GMBH & Co KG v RE Miller Pty Ltd ( [2005] FCA 788 ; 2005) 65 IPR 605 referred to the cases dealing with the principles for construing claims at [41], and at [42] set out in some detail the principles apposite to the construction of the claims in a patent. The Court is to place itself "in the position of some person acquainted with the surrounding circumstances as to the state of art and manufacture at the relevant time," and educate itself about the meaning of the technical terms: Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8 ; (2001) 207 CLR 1 , [24]. These principles were summarised by Hely J in Flexible Steel Lacing Co v Beltreco Ltd [2000] FCA 890 ; (2001) 49 IPR 331 , where his Honour said at 350: A person skilled in the art for the purposes of determining the scope of a patent's claims is a hypothetical, non-inventive worker in the relevant field of technology in Australia, who is equipped with the common general knowledge in the art ( Minnesota Mining and Manufacturing Co and 3M Australia Pty Ltd v Beiersdorf (Aust) Ltd [1980] HCA 9 ; (1980) 144 CLR 253). This does not mean that the relevant person is to be a technician or person with only practical and non-academic qualifications. In fields such as chemistry, such a person can be a person or group with high level qualifications and a capacity for original research ( Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59 ; (2002) 212 CLR 411 , [30] and NSI Dental Pty Ltd v University of Melbourne [2006] FCA 1216 , [151]). In this matter, Dr Malcolm Jenkins for the applicant and Dr Rod Troutbeck for the respondents were said to be such people skilled in the art. It is their evidence which has been submitted to the Court to permit a decision on the meaning and extent of Claim 1 in the patent and accordingly whether the Guardliner system infringes the patent. " Dr Jenkins' evidence for the applicant on this point is most apparent from his report, which is exhibited to his affidavit filed 30 June 2006. As seen in Figure 8, the barrier units have interlocking ends so that they can be joined end to end so as to form a barrier. The illustrations in the advertisements (Figures 6 & 7) make it clear that the intention is to arrange the units end to end to form a barrier. That is, any horizontal section through the Guardliner units would show, at each location, a pair of generally parallel side wall sections on opposite sides, and a pair of parallel end wall sections on opposite ends. Although the side walls have indentations, with portions of wall running across the width of the unit, the side walls are continuous and at each location have areas which are opposed in pairs. Similarly the end portions are opposed, as well as being handed so as to interlock with one another. The interlocking is seen in Figures 6, 7 & 9, where the interlocking units are arranged to form a continuous barrier. The lengths of individual portions of the guardrail are twice the lengths of the barrier units. Therefore each guardrail unit overlies at least two barrier element side walls. The guardrail is mounted on the barrier units by way of brackets, which are seen most clearly in Figure 8. This is why the requirement in the broad statement of the invention and claim 1 is that the guard member be mounted on and overlies. In my opinion mounted on is equivalent to being secured to the barrier elements by a physical connection and this is stated in the seventh sentence in this passage. However, in my opinion, the patent is not confined to any particular method by which the guard member is to be secured to the side wall, although it does give some examples in the eighth and ninth sentences. This can be done by any convenient means . A person interest in building a system as described in the patent has a wide variety of choices available. This is the case now and was also the case in 1999. The eighth sentence gives a number of examples but, to me, clearly these are not given by way of limitation. As long as the guard member is connected (mounted on) to the barrier elements it will work in the way intended. The method of securing the guard member would have to be some form of physical connection so that it is mounted on the side wall. This is necessary to achieve the structural benefit (the composite beam effect) and is also consistent with the examples given in this passage. The requirement for physical connection is also necessary because, as the guard member is required to be mounted on the side walls, it could not be held in place by gravity. In my opinion, based upon my reading of the Patent, the patentee requires the 'guard member' to be connected directly across the surface of the barrier elements. This is both because of my understanding of the context of what the patentee is describing and the matters which I describe in paragraphs 98(a) to (f) above, and also because if this was not intended by the patentee, I would have expected the patentee to say that it was mounted 'directly or indirectly' on the barrier elements or to have used other language, or for there to have been some discussion of this possibility by the patentee in the Patent. I consider that the W-beam would act so as to shield the barrier elements and would therefore be a 'guard member' as I understand that term is used in the Kinabalu Patent. Instead the W-beam is 'mounted on' metal brackets, which are themselves 'mounted' within deep recessed apertures in the end portions of the barrier elements. I consider that the metal brackets which are attached to the W-beam are mounted within recesses in the end portions of the Guardliner barrier elements, and not on its side walls (I have explained in paragraphs 9 and 10 what I consider the 'end portions' to be). By way of contrast, Figure 1 of the Kinabalu Patent illustrates the feature of claim 1 of the guard member mounted on the side walls of the barrier elements using threaded fasteners (numbered '18') which extend through the side walls, and not through the end portions, of those barrier elements. As I understand the way that word is used in the Kinabalu Patent, I do not consider that the steel W-beam in the Guardliner 'overlies' the barrier elements as the W-beam does not lie directly over the surface of those barrier elements. Instead, the W-beam is located several centimetres out from the surface of the barrier elements, as shown most clearly in photograph number 7 of RT-11. The Guardliner system uses metal brackets to connect the steel W-beam to the barrier elements. In my opinion, metal brackets are just one method of doing this. The use of metal brackets as a connection or mounting means was well known in 1999. For instance, the bumper bars in motor vehicles from the 1960s and earlier have often been connected to the vehicle by the use of brackets. Similarly, hand rails and equivalent have often been connected to the structure by brackets. In my opinion, this is a mandatory, not optional, requirement of the patent. I believe that this is an essential feature of the invention and follows on from the passage mentioned in para 10.7 above ... guard member that is mounted on and overlies the sidewalls of at least two adjacent barrier elements. The second sentence makes it clear to me that the guard member is concerned with increasing the structural integrity of the assembly as a whole. The assembly will do this by operating as a composite beam in the same way as a laminated timber beam used in building construction operates. If two or more sections are secured together, so that the sections cannot slide or move relative to the other sections, then this makes up a composite beam. The strength of the composite beam can be greater than the sum of the strengths of the individual components. This is precisely what will happen when the guard member is secured to the side walls of the barrier elements. I believe that the second sentence recognises this feature. In my opinion overlie is being used here to refer to the location of the guard member in the sense that it must extend longitudinally so as to be positioned or located over the side walls of more than one barrier element. Furthermore, in my opinion overlies does not mean that the guard member has to be located immediately on the face of the side walls. This would not be essential to the working of the system as a composite beam. The thrust of the patent is that the guard member must extend horizontally but the patent is not concerned that it always be fitted to the face of the side walls. This is apparent from the passage discussed in para 10.12 above which only refers to this as an optional feature. It is also consistent with the references to the guard member being longitudinally extending and to the guard member overlying two or more of the barrier elements. In my opinion, based upon my reading of the Patent, the patentee requires the 'guard member' to be connected directly across the surface of the barrier elements. As I understand the way that word is used in the Kinabalu Patent, I do not consider that the steel W-beam in the Guardliner 'overlies' the barrier elements as the W-beam does not lie directly over the surface of those barrier elements. Instead, the W-beam is located several centimetres out from the surface of the barrier elements, as shown most clearly in photograph number 7 of RT-11. In my opinion the side wall is the outer surface of the barrier element parallel to traffic while the end portions are those surfaces that allow one barrier element to interact with the adjacent barrier element. In the diagrams of the Kinabalu Patent, the side walls are indicated with the number 12 and what is indicated is the side of the barrier element which is parallel and adjacent to traffic. Whereas the end portion, which is not indicated in the diagrams of the Kinabalu Patent, in my opinion includes the sections which interact with the adjacent barrier. On examining the photographs, it appears that the mounting in both cases (top and bottom) is on the front face (side wall) of the barrier elements. The locating hole for the bolt is perpendicular to the side wall. Furthermore, it is plain from those photographs that the relevant end portions have a side wall as a continuation of the barrier element side wall and integral with it. I am satisfied that the thin walled W section guardrail on the Guardliner system extends longitudinally over at least two barrier element side walls. The W section guardrail is mounted on a metal bracket which in turn is bolted to the side walls of the barrier element. In my view, the guardrail is "mounted on the side walls" of at least two adjacent barrier elements, and notwithstanding that it is proud of the surface of the side walls of those elements, the guardrail "overlies the side walls of at least two adjacent barrier elements". I do not accept that, on its proper reading, the patent requires the guard member to be attached to and directly in contact with the surface of the side walls of the barrier elements. In particular, and contrary to the view of Dr Troutbeck expressed in para 98(g) of his affidavit set out in [49] above, I do not accept that "mounted on" means "directly mounted on". Whether the guardrail is directly or indirectly mounted on the barrier elements, it is mounted on the barrier elements. I am therefore satisfied that the Guardliner system possesses the features described in Claim 1 of the applicant's Patent. It is accepted between the parties that the Guardliner system does have the same features as described in both Claims 2 and 4 of the Patent. In my judgment therefore, if the applicant's Patent is valid, the Guardliner System infringes Claims 1, 2, and 4 of the Patent. I am further satisfied that if the first respondent has infringed the applicant's Patent, then the second and third respondents are also liable. It is admitted that there is a licence between the third respondent and the first respondent to make the Guardliner barrier system, which is the subject of the proceeding, and which was the subject of the advertisements. The first respondent is the manufacturer of the Guardliner barrier system. The third respondent is a company of which the second respondent is secretary, and the moving party of the third respondent. The second respondent in the capacity of consultant to the first respondent caused to be placed the advertisements by the first respondent of the Guardliner barrier system, and the second respondent, in its capacity with both the third respondent, and as consultant to the first respondent, had tests done relevant to the Guardliner barrier system and liaised with regulatory authorities in Australia to obtain regulatory approval for the Guardliner barrier system. In seeking revocation of the patent, the respondent bears the onus of proof in establishing successfully a ground of invalidity ( Ryan v Lum (1989) 14 IPR 513 , 518-520). 5,531,540), which includes by incorporation the "Yodock" Patent (US Patent No. 5,123,773). From the evidence, particularly the joint expert report of Dr Jenkins and Dr Troutbeck, it is apparent that these experts agree that all of the integers of Claims 1, 2 and 4 of the applicant's Patent are present in the Wasserstrom Patent, except for (a) mounted on the side walls; and (b) overlies at least two adjacent barrier elements. It must also be shown that the [prior] specification contains clear and unmistakable directions so to use it. An hypothetical infringement may be posited on the assumption that somebody does or makes what the alleged anticipation suggests. If something remains to be ascertained which is necessary for the useful application of the discovery, that affords sufficient room for another valid patent. A direction, recommendation or suggestion may often, of course, be implicit in what is described and commonly the only question may be whether the publication describes with sufficient clarity the claimed invention or, in the case of a combination, each integer of it. The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentee. Save the finding with respect to fair basis, Crennan J was of the view that Claim 10 was fairly based on the matter described in the specification. I turn then to consider the evidence concerning lack of novelty, in the light of the above exposition of principle. It is necessary to set out that evidence at some length. The Wasserstrom Patent is dated July 2, 1996. It is to be found in exhibit 2 at pages 39 to 49. More particularly, the present invention relates to a reinforcement system for highway barriers which can be used to effectively distribute and transfer forces away from and along a highway barrier, which may occur upon impact of a vehicle upon which the reinforcement system is mounted. Such an improved system will prevent heavy vehicles, or vehicles driven at great rates of speed, from crashing through a continuous line of highway barriers. In accordance with a preferred embodiment, the reinforcement system comprises a frame structure which adapted to be mounted on the surface of an associated highway barrier. The reinforcement system also comprises force distributing means for distributing forces along a horizontal direction upon impact of a vehicle into the associated highway barrier. The distribution of the forces will lessen the degree of force that would otherwise be applied to the highway barrier as a result of the impacting vehicle. The forced distributing means is secured to the frame structure and extends substantially horizontally and parallel to the associated highway barrier and the road surface on which the highway barrier is arranged. In addition to its function of supporting the force distributing means, the frame structure may also serve the function of distributing a portion of the forces away from the point of impact along vertical distribution paths. The frame structure may also comprises a pair of side assembles that are connected to the pair of top sections at respective opposite sides of the associated highway barrier. Each of the side assemblies may extend downwardly along the pair of side surfaces toward the bottom surface of the associated highway barrier. It is preferable for the pair of side assemblies to be substantially identical. However, in other embodiments, the frame structure of the present invention may only include one side assembly or may include a pair of side assembles wherein the side assembles are not identical to each other. Further, alternate embodiments of the reinforcement system of the present invention may include a single top section as opposed to a pair of top sections. In a referred embodiment, the securing means may comprise at least one cable which has a first end connected to one of the side assemblies and a second end connected to the other side assembly. In this preferred embodiment, the cable preferably extends between the first and second side assemblies along the bottom surface of the associated barrier when the reinforcement system is in its assembled position. In my experience, however, more civil engineers are involved in the design of safety barriers around the world, which I think is because of the relationship between safety barriers and the design of roads, bridges and structures, which are areas in which civil engineers specialise. In my opinion it is intended by the patentee that by use of the system described in the Patent, the forces from the impact of a vehicle will be resisted by many barrier cells through the horizontal interconnected frame structure. In another preferred embodiment, the at least one hollow pipe may comprise a plurality of hollow pipes which extend substantially parallel to each other. This is the embodiment that is illustrated in the drawings in the Patent. The male member and the female receptacle may have means for forming a releasable connection to a corresponding female receptacle and male member on adjacent pipe sections. In a preferred embodiment, the male member is arranged partially within the second end of the corresponding pipe and extends partially beyond the second end. In this embodiment the male member is adapted to be connected to a respective one of the female pipe sections. Each of the female receptacles may include a pair of apertures whereby the apertures are aligned with the slot for placement of a bolt therethrough when the male member is connected to the female member. In this embodiment, a preferred method of assembling the reinforcement system may comprise the steps of placing substantially flat elongated members which extend from the second end of a first set of pipes within corresponding aligned female receptacles arranged at a second end of a second set of pipes so that the slotted passage way of the flat elongated member is in alignment with transversely arranged aligned apertures. Threaded bolts may then be placed through the aligned apertures on the slots and corresponding threaded nuts may be placed on the threaded bolt to complete assembly of the system. It is the fact that the metal pipes are connected that makes this barrier continuous in structure (which I discussed above at paragraph 35) and allows a number of barrier cells to attenuate the impact energy. That is, the joints between the pipes must be able to resist being pulled apart, and rotated (about a vertical axis). The Wasserstrom Patent shows that the inventor has designed the joint to resist being pulled apart (by bolting the joints together) and being rotated (by inserting the steel plate at the end of one pipe, into a receptacle at the end of the connecting pipe and by having a pipe on each side of the barrier, for example as described in column 4 at lines 15 to 30). A simple overlap joint would also be capable of doing this, provided that the two overlapping portions were tightly bolted together. The bolts would both resist the pipes from being pulled apart, and would resist rotation of that joint. I also think that the steps taken would also have been routine in 1996, when I am told by Freehills that the Patent was published. The Wasserstrom Patent also refers to a Guardian trade marked system (at column 11 line 44). While the photographs show that there are bolts through the pipe joints, the description in the Handbook also makes it clear to me that the pipes are to allow the forces developed on impact to be resisted by many barrier cells rather than one or two and therefore the joints between the pipes would need to be designed, in a routine manner, to achieve this. The National Highway Institute is, and has been since well prior to 1999, been a premier education and training facility for transport engineers and planners. I consider that anyone in Australia conducting any research into road safety engineering would be aware of the Federal Highway Administration and the National Highway Institute and its publications which it makes available for purchase. The National Highway Institute also operated a stand at the Transportation Research Board Annual Meeting at which its materials were offered for sale. This is a major conference, now attracting about 10,000 delegates, which I have attended since about 1990. The conference has been growing, and probably attracted around 7,000 delegates in 1998. I have generally attended this conference with a number of Australian colleagues of mine, and recall other Australians also attending this conference before 1999. The conference covered all aspects of transportation, and was not restricted to safety barriers. Page 6.5.5-2 of that Guide describes the 'Guardian with 350 Highway kit' system. The Guide contains a cross-sectional picture of the system, and explains that it is a patented, commercially available product which must be installed in accordance with the manufacturer's drawings and specifications. It also says that, with the 350 Highway Kit fitted, it met NCHRP test level 2. I considered prior to 1999, and still consider, that it was a comprehensive and well-respected publication and I believe that this view was generally held by people working in the area of relocatable barriers. The question is whether the Wasserstrom Patent teaches what is to be found in the applicant's Patent. I was not previously aware of that patent. I was not aware of the Guardian System before reading Dr Troutbeck's affidavit. I have not seen the Guardian System in use. For clarity, when I refer to the Guardian System I mean the barrier units when fitted with the 350 Highway Kit as shown in exhibits RT7 and RT8. Both systems attempt to do this by using a structural component (the force distributing means or pipes in the Guardian and Wasserstrom Systems and the guard member in the Kinabalu Patent) which may be assembled from multiple segments and when assembled extends beyond the ends of individual barrier units. The saddles create an offset mounting point for the side panels, such that the upper longitudinal pipe is five inches from the vertical face of the barrier. The pipe assemblies consist of two formed flat bars with two pipes welded across at specific elevations. The pipe assemblies are then secured under the saddles and secured to the barrier with steel cables that pass under the barrier. The cable prevents the system from lifting upon impact from a vehicle. The barrier is connected to the next in line by means of an external pipe sleeve splice element. Rather the pipes are connected to the frame assembly consisting of the inverted U shaped saddles which are linked by the steel cable passing under the base of the barrier units. The cable is necessary to prevent the saddles from riding up from the collision impact. Neither is the frame assembly. Rather the pipes are connected to the frame assembly which in turn sits upon the barrier units (using the inverted U shaped saddles) constrained against vertical movement by the steel cables. The Wasserstrom Patent uses the term "mounted on" in the same way as a rider is mounted on a horse; there is no physical connection. There are two aspects of the term mounted on. The first is that the guard element, being in some way supportively connected to the barrier element, would be adjacent to the side wall (as distinct from the top, bottom or other surface of the barrier element). The second aspect would relate to the method of connection and support. That is, the guard element would be mounted on the side wall if the connection or connecting structure were to the side wall (as distinct from the top, bottom or other surface of the barrier element). For instance, because it is not secured or connected to the side wall of the barrier unit, it is possible for the frame assembly to move longitudinally as well as vertically. Structurally, the Wasserstrom and Kinabalu barriers operate differently. This only requires connection to the side wall. This can be contrasted with the frame assembly in the Guardian and Wasserstrom Systems which (when linked with the cable) encircles the whole barrier unit. I expect that this is a deliberate choice by the designer. The reason I say this is that assembling and fitting the frame assemblies, connecting the base plate cables and then connecting the pipes for each barrier unit could be a time consuming exercise. I have never worked with the Guardian unit but I believe it would be difficult to assemble the 350 Highway Kit unless the barrier units were empty. This suggests to me that the designer has in mind the possibility (or probability in my view) that the assemblies and pipes would be left in place on, and moved with, the barrier units. The pipes would then be aligned and connected when the assembly is made up. This would explain why the pipes stop at the ends of the barrier units. Claim 1 makes it clear to me that the guard member must extend beyond the end of the individual barrier units. The specification which I discuss in para 10.16(c) and 10.16(d) makes it clear that the inventor prefers that, where the guard member is constructed of segments (as is the case in the Guardian and Wasserstrom disclosures) the segments should extend over the join and end or terminate at the midpoint of the next barrier unit. This is preferable from a structural stability viewpoint but it would make it more difficult to move the barrier units without first dismantling the guard member, as the guard member would extend beyond the end of the individual units. This is one of the functions of the guard member in the Kinabalu Patent but it also has the other two functions which I have discussed above. In my opinion, a person designing a barrier assembly made up of relocatable barrier elements of the type the subject of the Kinabalu Patent in 1999 would incorporate an effective joint design into the barrier elements. To be effective the joint design would resist the tensile forces (the adjacent barrier elements being separated) whilst still allowing flexibility in use. However, the metal pipes (or force distributing means) in the Wasserstrom Patent are mounted on the frame assemblies which, in turn, are not mounted on (in the sense used by Kinabalu Patent; this requires physical connection to achieve the composite structure effect) the side walls of the barrier elements. In my opinion, the metal pipes as shown in the Wasserstrom Patent do overlie the side walls of the barrier elements. I disagree with this statement. The ends of the metal pipes coincide with the ends of the barrier elements. Further, it should be self evident that if the metal pipes are longer than the barrier elements then the join between the pipes cannot be located at the end of the barrier element and must be located at a place further along the barrier elements (that is, not at the join between the two barrier elements). Further, if the metal pipes on each barrier element are longer than the barrier element, then the barrier elements cannot be connected to each other as a barrier assembly so long as the metal pipes are connected. I believe this is a deliberate choice which has been made by the designer of the Wasserstrom system probably to achieve the benefit of modularity. Because the Wasserstrom system is not concerned to achieve a single composite structure (the barrier elements and the guard element operating together as a single unit) the designer of the Wasserstrom system is not concerned with the problem that the two weak points are then located at the same position. The essential point of difference between the Wasserstrom system and the Kinabalu Patent system is that in the Kinabalu system the guard member and the barrier elements operate together as a single structural unit. This does not occur in the Wasserstrom system because there is no physical connection between the metal pipes and the barrier elements. In particular, relative longitudinal movement is possible between the metal pipes and the barrier elements. I agree with the view of Dr Jenkins expressed in para 27 of his affidavit filed 2 October 2006 that the barrier system described in the Wasserstrom Patent, and the barrier system described in the Kinabalu Patent both set out to solve or reduce problems caused by the impact from collisions. I agree also that both systems attempt to do this by using a structural component (the force distributing means or pipes in the Guardian and Wasserstrom systems, and the guard member in the Kinabalu Patent, which may be assemblied from multiple segments, and when assembled, extends beyond the ends of individual barrier units. The Abstract speaks of " a reinforcement system for highway barriers comprising a frame structure mounted on the surface of an associated highway barrier ...". Dr Jenkins frequently expresses the view that the frame assembly is not secured or connected to the barrier units. The frame assembly in the Wasserstrom System is not secured or connected to the barrier units. It follows, in Dr Jenkins' view, that it would not operate to provide the composite beam effect, and by way example, because it is not secured or connected to the side wall of the barrier unit. In Dr Jenkins' view, "It is possible for the frame assembly to longitudinally as well as vertically. This does not occur in the Wasserstrom system because there is no physical connection between the metal pipes and the barrier elements. In my view, in the Wasserstrom patent, the force distributing means are mounted on the frame assemblies, which, in turn, are mounted on the side walls of the barrier elements. The suggestion by Dr Jenkins is that the frame assemblies are mounted on the barrier elements in the same way that one could say a rider is mounted on a horse. That is to say, the saddle, the frame structure, sits on the barrier element, but is not physically connected to the barrier element, in the same way that a rider mounted on a horse is not physically connected to the horse. In my opinion, a closer analogy relates to the relationship of a saddle to a horse. The saddle is, in my view, secured or connected to the horse by means of the girth strap or cincture in the same way that the frame structure consists of the upper saddle secured to the barrier element by " at least one cable connected to one of the side assemblies, and the second end connected to the other side assembly ". In this sense, the frame structure is " securely mounted" to the associated highway barrier. In my judgment, therefore, the applicant's Patent is invalid for want of novelty. The contention for the respondents is that one sees in the claimed invention simply a guard being used for its function of protection. The submission by the respondents is that the invention as claimed is obvious; that it really is a matter of ordinary perception that the guard member would have the shielding function and could be used as a truss, or as a reinforcement across the barrier elements. I do not agree. In my opinion, the Patent is not invalid for lack of inventive step pursuant to s 18(1)(b)(ii) of the Act. That does not mean that the threshold requirement of "an alleged invention" corresponds with or renders otiose the more specific requirements of novelty and inventive step (when compared with the prior art base) contained in s 18(1)(b). It simply means that, if it is apparent on the face of the specification that the quality of inventiveness necessary for there to be a proper subject of letters patent under the Statute of Monopolies is absent, one need go no further. So it is simply a guardrail for the barrier system, and that, we submit, is simply just another use of a known product for its known purpose, and for which its properties make it suitable. The incorporation of the particular integer of " at least one thin walled, longitudinally extending, guard member that is mounted on and overlies the side walls of at least two adjacent barrier elements " to inhibit or prevent damage to interlocking barrier elements results in an invention, in my opinion. There is, in my assessment, the necessary quality of inventiveness to constitute the subject matter of the claim a manner of new manufacture for the purposes of the Statute of Monopolies. Further, the specification says of that integer: " advantageously, providing a guard which overlies a plurality of adjacent barrier elements serves to increase the stability of the barrier system and render it less deformable when subjected to minor impact ", and says of a preferred embodiment of the invention illustrated in Figure 1: " In use, the guards 17 protect the barrier elements 11 from direct contact with a motor vehicle and help strengthen the connection between adjacent barrier elements . " The combination of integers including that integer therefore aids in the intended function of a barrier as set out in para 2 above, and is an invention, in my opinion. In my judgment, for the above reasons, the threshold requirement of a patentable invention under s 18(1) is met in the case of the applicant's Patent. Whether the invention as claimed in Claims 6 to 9 is "a manner of manufacture" within the meaning of s 6 of the Statutue of Monopolies 1623 is therefore irrelevant. A requirement of the Patent in Claim 1 is that the guard member overlie the side walls of at least two adjacent barrier elements. A guard member that overlies only some part of the side walls of each of two adjacent barrier elements does not overlie the side walls of two adjacent barrier elements, and thus does not satisfy that requirement of Claim 1. I therefore propose to make a declaration that Australian Patent 774224 A barrier is, and has been at all material times, invalid; and order that Australian Patent 774224 A barrier , and each and all of the claims of the complete specification thereof, be revoked. I will hear the parties on costs. I certify that the preceding one hundred and sixteen (116) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender.

application claiming infringement of patent whether respondent infringed the applicant's patent where respondents manufactured and sold road safety barriers whether the guard member on the road barrier is "mounted on" the barrier elements where guard member is not connected flush to the barrier elements where guard members are connected to barrier elements by use of brackets where guard members are mounted on the barrier elements notwithstanding that they are proud of the surfaces of the barrier elements where guard member need not be in direct contact with the side walls of the barrier elements where applicant's patent is infringed if the patent is valid application claiming infringement of patent whether respondent infringed the applicant's patent where respondents manufactured and sold road safety barriers whether the guard member connected to the barrier elements "overlies the side walls of at least two adjacent barrier elements" where guard member is not connected flush to the barrier elements where guard member extends longitudinally over at least two barrier element side walls where guard member need not be in direct contact with the side walls of the barrier elements where applicant's patent is infringed if the patent is valid cross-claim claiming applicant's patent is invalid whether applicant's patent is invalid by virtue of lack of novelty due to prior publication where a us patent is identified as substantially similar whether us patent is similar enough to constitute lack of novelty whether there is a physical connection between reinforcing metal pipes and barrier elements where the frame structure is securely mounted to the barrier where the us patent anticipates the applicant's patent where the applicant's patent is invalid for want of novelty cross-claim claiming applicant's patent is invalid whether applicant's patent is invalid by virtue of lack of inventive step whether the applicant's patent is invalid on the grounds that it is not a patentable invention where the incorporation of an additional guard member to inhibit or prevent damage to interlocking barrier elements results in an invention where the applicant's patent is a patentable invention cross-claim claiming applicant's patent is invalid whether applicant's patent is invalid by virtue of lack of clarity in the patent claims where the patent claim is sufficiently clear claim under section 52 of the trade practices act whether actions of the respondents breached section 52 where claim deferred until determination of patent claims patents patents patents patents patents trade practices

The hearing of 3 September 2007 is adjourned to a date to be fixed due to Dr Ulrich von Arnim's medical condition. 2. Dr Ulrich von Arnim is to file and serve an affidavit by 10 September 2007 attaching a medical report from his treating doctor, which outlines his medical condition and when the doctor estimates he will be fit for hearing in this Court in Sydney. 2 Self-evidently there was a problem with the dates contained within the orders as made. Whether or not an application was made to the Federal Magistrate to vary the orders is not known. That is the course which should have been pursued. 3 The course in fact pursued by the Applicant was to file in this Court an Application for Leave to Appeal . That Application was filed on 12 November 2007, together with an Affidavit . 4 The orders made by the Federal Magistrates Court are interlocutory. Leave to appeal to this Court is thus required by s 24(1A) of the Federal Court of Australia Act 1976 (Cth). Also required is an extension of time within which to commence these proceedings. 5 The Application came before this Court on 10 December 2007, and on that occasion there was no appearance for the Applicant. Attempts to telephone the Applicant during the course of the proceedings proved unsuccessful. The matter was adjourned to 4 February 2008 for hearing. As I have insulin dependent diabetes the reason why I could not answer the phone on 10 Dec 2007 was because I fell into hypoglycemic unconsciousness and therefore did not hear the phone ringing. The ambulance had to attend to me. Moreover, I have currently two other matters on, NSD 1779 and SAD 153, both of these matters are on before His Honour Justice Sundberg. These two cases deal with the fraudulent conduct of the NAB, MEDFIN & Ors. The Federal Court of Australia has given this matter so much importance that they have appointed Pro Bono Counsel to represent the matter on my behalf. Amongst other things I have been requested to obtain certain documents from certain European authorities. Therefore, I am currently until at least March 08 in Europe. I wish to advise the court that preliminary findings in NSD 1779 and SAD 153 of 2007 have determined that MEDFIN has without any doubt received the 390,000 due to it pursuant to the settlement deed. However, these documents form an essential part of the case against the respondents in NSD 1779 and SAD 153 of 2007 and pursuant to the Commonwealth Evidence Act I cannot use these documents in any other proceeding without leave of His Honour Justice Sundberg. As matters currently stand cases NSD 1779 and SAD 153 of 2007 are set to be finalized in May 08. This also includes the issues raised by MEDFIN leading up to NSD 2224 of 2007. I humbly request that all hearing dates for NSD 2224 of 2007 be adjourned until the other two cases have been finalized. In any event I will not be in Australia on the date set for hearing. 6 A copy of that letter was provided to the Respondent. I understand that the direction hearing is going ahead on 4 Feb 2008. I wish to advise the honourable court that on that day I will no [sic] be available. As I am a layperson and have no formal legal training, despite having made the initial application for leave, I am neither physically nor legally capable of conducting such proceedings correctly. I hereby formally request that the honourable Court refer the matter to the Registrar for his consideration to appoint Pro Bono Counsel. 7 On 4 February 2008 there was again no appearance for the Applicant, perhaps not surprisingly given the terms of his January letters. On that occasion the Respondent sought an order that the proceedings be dismissed pursuant to O 32, r 2(1)(c) of the Federal Court Rules 1979 (Cth). 8 Intervening, namely on 29 January 2008, a sequestration order was made against the Applicant in the Federal Magistrates Court in Melbourne. On 27 February 2008 a letter was forwarded to the trustee of the estate of the Applicant, requesting the trustee pursuant to s 60(2) of the Bankruptcy Act 1966 (Cth) to make an election to either prosecute or discontinue these proceedings. 9 On 25 March 2008, the trustee of the estate of the Applicant sought funding from creditors to substantiate and/or pursue the action so as to avoid it being abandoned on 26 March 2008. Within the 28 day period prescribed by s 60(3) of the Bankruptcy Act the trustee did not make that election and the trustee is therefore " deemed to have abandoned the action ". 10 Accordingly, the appropriate order to be made pursuant to that section is that the proceedings should be dismissed. 11 It should be further noted that, irrespective of that provision, an extension of time within which to file the Application would not have been granted. The affidavit evidence as filed by the Applicant in support of an extension of time has been considered and it provides little evidence to support an extension being granted other than providing a general statement that the Applicant is an insulin diabetic, and a further statement that he did not become aware of the order of the Federal Magistrate until 1 November 2007. 12 Why the Applicant only became aware of the September orders of the Federal Magistrate in November 2007 remains unexplained. It is not understood that Mr von Arnim is asserting that his medical condition precluded or otherwise affected his ability to obtain a copy of the orders made by the Federal Magistrate prior to November 2007. 13 One available inference is that he simply gave the Federal Magistrates Court proceedings no thought or consideration prior to November 2007. If an extension of time is sought, it remains a matter for the party seeking the extension to set forth a factual basis upon which the discretion may properly be exercised. Rules of court, particularly those relating to time, should never be allowed to become an " instrument of tyranny ": see Outboard Marine Australia Pty Ltd v Byrnes [1974] 1 NSWLR 27 at 30. But prima facie , they must be obeyed. The factual basis upon which Mr von Arnim is seeking an extension of time is, it is considered, not sufficient to justify an exercise of discretion in his favour. Even had an extension of time been granted, leave to appeal would also not have been granted. 14 The fact remains, however, that the trustee was given notice and no election was made within the 28 day period prescribed by s 60(3) of the Bankruptcy Act . The proceedings be dismissed. 2. The Applicant to pay the Respondent's costs, including reserved costs, as agreed or taxed. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.

intervening sequestration order no election by trustee proceedings dismissed interlocutory decision extension of time and leave refused in any event practice and procedure

Mr Zoia appeared in person. At an earlier directions hearing, leave was given to Mr Zoia to amend the name of the respondent. Additionally, attempts were made to provide pro bono legal assistance for Mr Zoia. It was not possible to obtain such assistance. Neither has the amendment been made to correct the name of the respondent. That can be attended to at the next hearing. There is no objection to the amendment. Rather than proceeding with his appeal, Mr Zoia contended that there was a fatal defect in his own notice of appeal as the notice of appeal makes reference to an appeal from the 'ATT' rather than the 'AAT'. The notice of appeal had nevertheless been accepted for filing by the District Registry. Mr Zoia described the acceptance of the filing of his notice of appeal as a 'miscarriage of justice'. His submission appeared to be that by virtue of the reference to the 'ATT' rather than the 'AAT' or the Administrative Appeals Tribunal, there was a fatal error which rendered his appeal a nullity. He submitted that counsel for the respondent was therefore not entitled to appear. Doing the best I can, I take Mr Zoia's submission to be a motion to preclude the respondent from appearing by counsel, or at all, to oppose Mr Zoia's application for relief under s 44 of the AAT Act. Mr Zoia argued that because there was no valid notice of appeal, the Australian Government Solicitor had no right to appear on an invalid appeal. To that the respondent indicated that it had been served with the notice of appeal and it filed an appearance in response to the notice of appeal. The respondent had not noticed the typographical error (and it is doubtful whether anyone else had). It was perfectly clear which decision Mr Zoia was seeking to be reviewed. It was made clear to Mr Zoia that the appeal was before the Court and that any minor typographical error of that nature could be amended so as to permit the appeal to proceed. The respondent also made clear that any amendment of that nature would not be opposed. The respondent wished to proceed with the substantive hearing. Mr Zoia, however, did not wish to make such an amendment and opposed the amendment being made by the Court. Although the 'appeal' was listed for hearing, Mr Zoia did not wish to and did not address any of the grounds in his notice of appeal but rather chose to address the procedural point. The Constitution of the Commonwealth of Australia. The High Court Judgment --- Huddart, Parker & Co Pty Ltd v Moorehead [1909] HCA 36 ; (1909) 8 CLR 330. Failed Justice. Failed Natural Justice. Failed Magna Carta, any charter guaranteeing liberty, any fundamental constitution or law guaranteeing rights. My Unemployment Benefits was cancel on Peter Langley information. I said to Peter, could you make the date after the hearing. Set the decision aside and substitute a new decision, that is despot justice, and also make them judge and jury. Set the decision aside, cancel, and substitute a new decision, that new decision can not be cancel. ARO, Brenda Parker can not correct a deception. Centrelink was trying to collect a debt from me. Constitution 64. can not be delegated. This month at Max Employment, I was told, a Lawyer can get it but I can't. About Peter Langley information or notes. Federal Court Rules --- Pro Bono Publico. The Hon Court to summon Peter Langley to give his information. Secretary, Department of Employment and Workplace Relations to be changed to Minister, for Centrelink, under Constitution 64. The Constitution of the Commonwealth of Australia. The High Court Judgment --- Huddart, Parker & Co Pty Ltd v Moorehead [1909] HCA 36 ; (1909) 8 CLR 330. Peter Langley information and notes. 5. Justice and Natural Justice. This Order is directed to the issue of filing forms with the District Registry. It is not concerned with the substantive issue, such as the grounds of appeal. There is no doubt, in my view, that the minor typographical error which has confused nobody and probably has been noticed by nobody other than Mr Zoia, does not of itself mean that there has not been substantial non-compliance with the Rule. In SAAK v Minister for Immigration and Multicultural Affairs (2002) 121 FCR 185 it was held that even if the form of application required under O 54B r 2 FCR required it to be completed in English, the Court would generally exercise a discretion under O 1 r 8 FCR through leave for non-compliance in a case where a non-English speaking applicant without access to translation services filed the form in a language other than English. Rule 8 of O 1 is a slightly different provision entitling the Court to dispense with compliance of the requirements of the Rules where appropriate. Kiefel J also observed in Rishmawi v Minister for Immigration and Multicultural Affairs [1999] FCA 611 that r 7 is to be contrasted with r 8 in that the latter does not impose a test of 'substantial' compliance. Her Honour pointed out that r 7 was a provision which permitted compliance to be achieved as distinct from r 8 which was concerned with dispensation where it cannot be achieved. ... The Rules of Court are not intended to be restrictive and litigants are not expected to adhere slavishly to procedures that may not be appropriate in the particular circumstances of a case. The liberality that is available to litigants is quickly found in O 1. Subrule 7(2) states that "it shall be a sufficient compliance with these Rules as to the form of any document if the document is substantially in accordance with the requirement or has only such variations as the nature of the case requires". But no such application for an exemption was made. While substantial compliance is required under r 7 as compared with r 8, the underlying philosophy in each instance is clearly to endeavour to achieve such justice as is appropriate in the case. As this case illustrates, the approach contended for by Mr Zoia would cause the wheels of justice to grind to a holt. I do not accept Mr Zoia's submission that there has been a miscarriage of justice by the acceptance of his notice of appeal which bears reference to an appeal from the 'ATT' rather than the AAT. This is an appropriate case for concluding that there has been sufficient compliance with the Rules. The respondent made it clear that if, in my reserved decision, I were to reject Mr Zoia's submission as to the 'miscarriage of justice', that the respondent would be content to have the appeal determined on the papers if Mr Zoia were also content. I would be willing to determine the appeal on the papers but as Mr Zoia is unrepresented, I believe he should have the opportunity in open Court to say anything further in support of his appeal. The matter will be re-listed for hearing of the substantive appeal as soon as reasonably possible. I will order that: The applicant's oral motion be dismissed. The applicant pay the respondent's costs of the motion in any event. The application be re-listed for substantive hearing. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

notice of appeal form of document whether sufficient compliance with federal court rules whether the proceeding should be determined on the papers when litigant is in person practice and procedure

QUD 279/2004 is otherwise in abeyance until QUD 389/2005 is determined. On 11 July 2006 the State of Queensland filed notices of motion in respect of both matters seeking orders that the proceedings brought by each of the applicants in each substantive matter be permanently stayed. 2 In respect of these two notices of motion, the submissions made by the parties, and the issues to be considered, are identical. I propose to consider them together. 3 As the State of Queensland is the first respondent in the substantive action QUD 279/2004 and the only respondent in substantive action QUD 389/2005, it is convenient for the purposes of the notices of motion before me to refer to the State of Queensland as 'the respondent' although it is obviously the applicant in the present proceedings. In turn, it is convenient to refer to the applicants in the substantive actions QUD 279/2004 and QUD 389/2005 as 'the applicants' for the purposes of this judgment. 4 The Christian Brethren of Australia Inc was not represented before me at the hearing of the notice of motion to which it is a respondent (QUD 279/2004). From information provided in affidavits tendered on behalf of the State of Queensland, including searches of the Australian Securities and Investments Commission database, it is questionable whether such an entity continues to exist. I shall refer in this judgment to the Christian Brethren of Australia Inc, and other relevant manifestations of the Christian Brethren, as 'the Christian Brethren'. 6 The involvement of the Christian Brethren at the Doomadgee Mission appears to date from the early 1930s. In 1941 an Order of Council was published in the Queensland Government Gazette Vol CLVI, dated 14 June 1941, No 141, p 2181, a copy of which is annexed to the affidavit of Mr Smith. By that Order the Doomadgee Mission was placed under the management and control of the Committee for the Doomadgee Aboriginal Mission pursuant to The Aboriginals Preservation and Protection Act of 1939 (Qld). I understand that the Committee for the Doomadgee Aboriginal Mission was constituted by members of the Christian Brethren. 7 In 1958, Mr Allan Hockey was appointed Acting Superintendent of the Doomadgee Aboriginal Mission Reserve and Protector of Aboriginals assigned to the Aboriginal District comprising the Petty Sessions District of Burke, as from 1 November 1958. Mr Hockey was a member of the Christian Brethren. I understand that Mr Hockey remained in a senior management position until he left Doomadgee on 6 April 1983. 8 Mr Smith has deposed in his affidavit affirmed 22 May 2006 that, following Queensland Government Cabinet Decision 40190 dated 10 May 1983, a progressive take-over commenced by the State of Queensland, of staffing, administration, accountability, servicing and responsibility for the material wellbeing of the Doomadgee Aboriginal Community, from the Christian Brethren. Mr Smith has further deposed that Cabinet Decision 40190 has not yet been released for public scrutiny and is the subject of the privilege afforded cabinet papers. However I do not understand this evidence to be in contention. 9 I note that, as from 1 July 1986, employees of the Department of Community Services at Doomadgee were transferred to the Doomadgee Aboriginal Council. A delegate of the President of HREOC terminated the complaint pursuant to s 46PH(2) of the Human Rights and Equal Opportunity Commission Act 1986 (Cth) ('the HREOC Act'). 11 In the substantive matters the applicants have applied under s 46PO HREOC Act for orders including a declaration that the respondent discriminated against each of the applicants pursuant to s 9 and s 15 Racial Discrimination Act 1975 (Cth) ('the Act'); an apology, $500 000 in damages, interest and costs. Their claims relate to the period 1975-1986 when they were allegedly paid wage rates lower than other employees at the time, or lower than the award. The applicants claim that the reason for those lower payments was that they were Aboriginal. 12 The claim of the applicants in par (a) of their substantive application in each matter seeks a declaration in one or both of two forms, namely: • that the respondent discriminated against each of the applicants pursuant to s 9 and s 15 of the Act in their employment with the respondent between 1975 and 1986; and/or • that the respondent discriminated against each of the applicants through the payment, by the respondent to the Christian Brethren, of grants for the payment of the applicants' wages that were based on race and resulted in the applicants receiving wages which were at a rate less than that to which they were entitled. 13 This claim assumes one of two relationships between the respondent and each applicant, namely either: • the respondent was the 'direct' employer of the applicant; or • the respondent was, through the Christian Brethren, the 'indirect' employer of the applicant. 14 The respondent in its Defence to QUD 389/2005 acknowledges a 'direct' relationship of employment between it and the first, second and third applicants at various times between 1975 and 1986 on the basis of a written communications regarding their employment, however no such relationship prior to 5 December 1986 in relation to the fourth applicant. 15 So far as I can ascertain from the pleadings and the submissions of the parties, the only manner in which the respondent is otherwise alleged to be the employer of the applicants was as a result of the connection with the Christian Brethren. 16 The period 1975-1986 encompasses the time from the commencement of operation of the Act in 1975 to the transfer of employees to the Doomadgee Aboriginal Council in 1986. I understand that applicants also submit that they received award wages from 1986. 17 During that period the applicants claim that, although they received wages directly from the Christian Brethren, a relationship of employer and employee existed between the applicants and the respondent. The claim may be summarised as follows: • The Aborigines Act 1971 (Qld) empowered the State to control Aboriginal reserves including the employment of and serving of apprenticeships by Aborigines on those reserves. • The Doomadgee reserve was placed, by the Governor-in-Council, under the management of the Christian Brethren. • The manager of the Doomadgee reserve was subject in his management of the Doomadgee Mission to the officers of the respondent, namely the Minister and the Director of the Department of Aboriginal and Island Affairs and its successors ('the Department'). • The respondent determined the policies that were applicable to the employment of Aborigines on the reserves. • The respondent determined the amount to be paid in wages to the applicants through the Christian Brethren or the Aboriginal Council, as the determinations as to the amount to be paid in wages by the Christian Brethren to the applicants were Cabinet Decisions which outlined what was to be paid to Aboriginal/Islander employees who did not receive award rates of pay. These decisions were made periodically between 1975 and 1986, and were normally made at intervals of approximately 12 months. The applicants' claim that the amounts to be paid in wages were communicated to the Christian Brethren or the Aboriginal Council within a short time of the relevant Cabinet Decisions. • The respondent paid grants to the Christian Brethren or the Aboriginal Council four times per annum, representing the wages it determined could be paid by the Christian Brethren or the Aboriginal Council to the applicants. • The determination of the amounts to be paid to the applicants, and the amount constituting the grants paid by the respondent, was based on race, namely on the basis of the Aboriginality of the applicants, pursuant to the Aborigines Act 1971 (Qld) and pursuant to regulations of the Aborigines Regulation 1972 (Qld). • The respondent knew that the determinations and grants could or would be determinative of the amounts that would be paid to the applicants in wages. • The amount paid to each of the applicants was in accordance with the wage levels determined by the Cabinet decisions. • Payment of lower wages to the applicants constituted, inter alia , a distinction based on, inter alia , the race of the applicants, contrary to art 5 of the International Convention on the Elimination of All Forms of Racial Discrimination . • These actions constituted a breach of the Act on the part of the respondent, in particular s 9 and s 15. The respondent submits further that, because a fair trial is not possible due to effluxion of time, each proceeding would constitute an abuse of process. 21 The nature of the power to grant a permanent stay of proceedings itself reveals an important principle which confines its exercise --- namely that the power is, in essence, a power to refuse to exercise jurisdiction. The power is to be viewed in light of the principle that the conferral of jurisdiction imports a prima facie right in the person invoking that jurisdiction to have it exercised (Gaudron J in Jago v District Court (NSW) [1989] HCA 46 ; (1989) 168 CLR 23 at 76). 23 Proceedings which are an 'abuse of process' however are potentially a broad class, not limited to fixed categories. Development continues. 25 Applications for permanent stay based on effluxion of time appear to be rare (note comments of Bryson JA in Newcastle City Council v Batistatos [2005] NSWCA 20 at 56). The issue has however been the subject of comment by the High Court of Australia in the context of criminal proceedings ( Jago ), in relation to tribunal deliberations ( Walton v Gardiner ), and recently in relation to civil proceedings ( Batistatos ). 26 For present purposes, it is important to note that O 20 r 2 Federal Court Rules , upon which the respondent relies, contemplates orders for permanent stay or summary dismissal arising from the grounds in O 20 r 2 pars (a), (b), (c). At common law, different tests are traditionally applied by the courts in respect of permanent stay or summary dismissal, and indeed s 31A Federal Court of Australia Act 1976 (Cth) (which is only effective in respect of claims commenced after 1 December 2005) establishes a new test for summary judgment for claims before this Court. In relation to abuse of process however, the discussion in the cases has tended to consider similar principles, whether the application is for a stay of proceedings or summary judgment. 27 In the case before me the respondents have sought only a permanent stay of the applications, not summary dismissal. Accordingly my comments in this judgment refer only to legal principles with respect to permanent stay. 28 In any event, the caution with which courts approach an application for a permanent stay of proceedings before them is also well-known. It has been described as an exercise of discretion by a court in only the most exceptional circumstances. The principle, in general paramount, that a claim honestly made by a suitor for judicial relief must be investigated and decided in the manner appointed, must be observed. A litigant is entitled to submit for determination according to the due course of procedure a claim which he believes he can establish, although its foundation may in fact be slender. It is only when to permit it to proceed would amount to an abuse of jurisdiction, or would clearly inflict unnecessary injustice upon the opposite party that a suit should be stopped. 30 In the case before me the respondent relies on the recent High Court decision in Batistatos , where the Court considered Pt 13 r 5 of the NSW Supreme Court Rules . In Batistatos , the majority of the High Court upheld a decision of the New South Wales Court of Appeal to impose a permanent stay on an action for damages which had accrued 40 years earlier. It is useful to analyse the decision in Batistatos before turning in more detail to the notices of motion before me. In 1938 he was 'scheduled' under the Lunacy Act 1898 (NSW) and committed to the Newcastle Mental Asylum, from where he was ultimately discharged in 1956. On the evening of 20-21 August 1965 while returning from a party the plaintiff was involved in a motor vehicle accident in Stockton in New South Wales, as a result of which he was rendered quadriplegic. The plaintiff pleaded that the accident occurred when he 'came upon an unmarked and unposted bend in the road in the vicinity of Meredith Street and its northern approaches'. 32 Legal representatives were instructed in 1993, and a statement of claim was filed late 1994. 33 The defendants, namely the Road Traffic Authority and the Newcastle City Council, applied to the Supreme Court of New South Wales for orders that the plaintiff's action be summarily dismissed or permanently stayed pursuant to Pt 13 r 5 Supreme Court Rules (NSW). They also applied for the exercise of the Court's inherent powers to stay the proceedings permanently. (ii) The defendants were highway authorities at the relevant time and there was no evidence that they had created any relevant danger causing the accident. (iii) The defendants were irretrievably prejudiced by reason of the delay in the proceedings being brought. 37 As the Court of Appeal of New South Wales pointed out ([2005] NSWCA 20 at [13]): • grounds (i) and (iii) were the same in substance, as there was no suggestion that the proceedings in Batistatos were an abuse of process other than because the defendants were irretrievably prejudiced by reason of the delay in the proceedings being brought; and • ground (ii) indicated reliance by the defendants on the power of the Court to summarily dispose of proceedings in Pt 13 r 5, the test for which was whether the case was so clearly untenable that it could not possibly succeed (Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; [1964] 112 CLR 125 at 129-130). Accordingly, his Honour declined to make an order summarily dismissing the plaintiff's claim. The conclusion of Hoeben J on this issue was endorsed by the NSW Court of Appeal ([2005] NSWCA 20 at [48]). That particular aspect of the decision of the Court of Appeal was not appealed to the High Court. 39 However, at first instance Hoeben J also rejected the submissions of the defendants that the Court should grant a permanent stay of the proceedings on grounds (i) and (iii). The essence of these submissions was that, as an objective consequence of the lapse of time since 1965, a fair trial was not possible for the defendants, and so the plaintiff's proceedings constituted an abuse of process. In particular the defendants in Batistatos alluded to the general deterioration of the evidence, including: • inability to obtain police records of investigations relating to the accident • inability to locate hospital or medical records concerning the plaintiff's treatment before 1980 • inability to locate documents relevant to the design and construction of the street where the accident took place • difficulty in identifying and locating any person who had an active involvement in road maintenance work in and before 1965 who could give relevant evidence • inability to locate records that could assist in proving the insurer on risk at the time • the fact that the physical state of the road had altered significantly since 1965. 42 The defendants appealed this aspect of the decision to the Court of Appeal of New South Wales. The question whether information is sufficiently available to the defendants, on their making reasonable inquiries, to make it possible for a fair trial on the plaintiff's allegations to take place has to be considered in association with what the plaintiff's allegations are. The plaintiff's allegations are of the most general kind, and although they occupy some folios when written out they communicate next to nothing as particulars of negligence. The object of inquiry by the defendants for evidence is not defined. They have not been told by the plaintiff even to the decade when it was alleged that their negligent acts or omissions occurred; nor, in any real way, what those negligent acts or omissions were. As a result, the defendants submitted that the proceedings were unfair and unjustifiably oppressive to them. 46 Although Hoeben J was persuaded by the plaintiff's location of three additional witnesses who had recollections of the road and the events which had happened in 1965, and affidavits of those witnesses, that the defendants had not taken steps reasonably open to them to identify and locate other persons with similar information, the Court of Appeal was not similarly influenced. Bryson JA considered that the information in the affidavits of the three 'new' witnesses was 'extremely slight and goes no real distance at all to establishing in any concrete way the state of affairs in which the accident happened in 1965... These three affidavits illustrate, to my mind rather fully, the process of degradation of the availability and quality of evidence where there are long delays' ([2005] NSWCA 20 at [65]). Accordingly, the Court of Appeal considered that Hoeben J erred in concluding that the defendants had not taken steps reasonably open to them to elicit knowledge and evidence of what the position then actually was ([2005] NSWCA 20 at [67]). Their Honours observed that the appeals before them concerned abuse of process as understood in the exercise of the 'inherent jurisdiction' of superior courts to stay proceedings (at [5]). 51 There was no suggestion at any stage of the case that the plaintiff had acted vexatiously, or that there had been an abuse of process in any sense other than that the defendants had been irretrievably prejudiced by reason of the delay in the commencement of the proceedings. The majority noted the application of s 52 Limitation Act 1969 (NSW) suspending the running of limitation periods for the duration of a person's disability. It is subject to the operation of the whole of the applicable procedural and substantive law administered by the court, whose processes are enlivened in the particular circumstances. This includes the principles respecting abuse of process. The Court of Appeal held that this was so serious that a fair trial was not possible. The result was that to permit the plaintiff's case to proceed would clearly inflict unnecessary injustice upon the defendants. His Honour emphasised that there is no 'requirement that the continuance of the action would involve moral delinquency on the part of the plaintiff'; what was decisive was the objective effect of the continuation of the action. Bryson JA in terms did so. He went on to remark in that connection that the defendants had not shown that the plaintiff's action was "clearly without foundation". But, he concluded that there was "in practical terms nothing of utility to place in the balance against the defendants' claim for a permanent stay. Each notice was supported by four affidavits, namely: • an affidavit affirmed 11 July 2006 by Maxwell Athol Smith, Senior Lawyer, Crown Law Division • an affidavit sworn 12 July 2006 by Lachlan David Edmonds, Senior Lawyer, Crown Law Division • a further affidavit sworn 13 July 2006 by Lachlan David Edmonds, Senior Lawyer, Crown Law Division • a further affidavit affirmed 21 July 2006 by Maxwell Athol Smith, Senior Lawyer, Crown Law Division. 55 The affidavits sworn or affirmed by the deponents on corresponding days in respect of each notice of motion are substantially identical. I shall return later in this judgment to the evidence in those affidavits. 56 The submissions made by the respondent can be summarised as follows: (i) By reason of effluxion of time since the period 31 October 1975 to August 1983 a fair trial is not possible for the respondent, and therefore each proceeding constitutes an abuse of process. (ii) The case sought to be made out by the applicants can be gleaned from their pleadings, which are sweeping and imprecise. (iii) The respondent has engaged in significant, time-consuming, expensive and exhaustive investigations in attempts to respond to allegations of the applicants, however despite this the respondent has been unable to obtain evidence as to many of the key factual allegations made by the applicants. (iv) In relation to alleged employment of the applicants by either the State of Queensland or the Christian Brethren, and wages paid: • of two witnesses who held management positions at Doomadgee Mission during the relevant period, one is deceased and the other, Mr Allan Hockey, is very old and the respondent has no capacity to obtain evidence from him. I shall discuss the position in relation to Mr Hockey providing evidence later in this judgment • other than fragmented time and wage records annexed to the affidavit of Mr DEF Sutton sworn 22 November 2005, due to effluxion of time there is no documentary evidence, including group certificates, to verify employment on the Mission of the applicants, or as to any amounts paid in wages to the applicants, or the actual employer of the applicants. (v) In relation to the amount paid in wages by the Christian Brethren: • Mrs Eunice Hockey, who was responsible for the budget and wages for the Doomadgee Mission during the relevant period, is deceased • an important witness for the respondent, Mr Patrick Killoran, has sworn an affidavit to the effect that the State did not direct the Christian Brethren what to pay Aboriginal mission workers at Doomadgee, however his health is such that he would not be available for cross-examination. (vi) In relation to whether amounts paid in wages by the Christian Brethren or the Aboriginal Council to the applicants was in any way determined by the respondent: • Evidence of Mr Allan Hockey and Mrs Eunice Hockey is crucial to this point, however Mr Hockey is unlikely to be able to give evidence, and Mrs Hockey is deceased. Another potential witness was Mr Bernie Bedford who assisted Mr and Mrs Hockey in relation to the Mission, however he is also deceased. • Financial records may have existed at some time, however they can no longer be identified. (vii) The unavailability of key witnesses and documents frustrate a proper analysis of key issues relevant to whether the respondent has acted in breach of s 9 of the Act, including: • reliance of the Christian Brethren on State Government subsidies • independent sources of income • capacity to pay wages from funds generated on the community • wages paid to either the applicants or non-Aboriginal employees. (viii) In relation to the alleged breach by the respondent of s 15 of the Act, there is now no-one who hired and fired Aboriginal mission workers at Doomadgee available to give evidence. (ix) The applicants have provided little evidence supportive of their case. (x) No relevant documents are now available at Doomadgee. (xi) The entity the 'Christian Brethren Inc of Australia' cannot be located. (xii) The lapse of time is particularly acute because the Christian Brethren, unlike other churches, do not adopt a diocesan or unified model of operation or ministry. It is not possible to seek evidence from a central church body. (ii) Limitations as to the evidence available would probably be more disadvantageous to the applicants as they bear the onus of proof, and (iii) A great deal of evidence is already filed with the court relating to the events in issue, which would enable the court to conclude that the respondent was in breach of the Act. 58 In relation to witnesses: • The applicants did not concede that Mr Hockey would be unable to give useful evidence. I shall deal with this issue later in the judgment. • The respondent has already filed and served affidavits of a number of people who had some knowledge of the relationship between the respondent and the Church-run Aboriginal reserves in the relevant period, namely: o Sir Llewellyn Edwards o Hugh Lionel Fawssett o Sir Leo Arthur Hielscher o Patrick James Killoran o Eugene Fraser Sutton. • Additionally, the respondent has already filed and served affidavits of: o Bernadette Irene Albert o Evelyn May Barker o Shane Arthur O'Connor o Eric Michael Porter o Maxwell Athol Smith o Paul Toolis. 59 The applicants submitted that the evidence already filed and served in this Court, as well as the oral evidence of Mrs Sutton given in a previous hearing, disclosed a very close financial relationship between the respondent and the Christian Brethren, and that the relationship between the respondent and the Christian Brethren was very similar to that between the respondent and other churches managing Aboriginal reserves. The applicants also submit that the evidence indicates the details of the financial relationship between the respondent and the Christian Brethren. 61 Given the reliance of the respondent in this case on the findings of the majority of the High Court in Batistatos , the question may be narrowed to ask whether, in light of the claims of the applicants as detailed by their pleadings, there is in fact evidence of utility to place in the balance against the respondent's claim for a permanent stay, or whether because of the effluxion of time there is actually no useful evidence available upon which to conduct a trial into the question whether the respondent has acted in breach of s 9 and s 15 of the Act. 62 I note that, despite the considerable passage of time since the occurrence of the relevant events, the respondent is not raising any issue relevant to limitation periods (note for example TS 26 July 2006 p 29 ll 9-13). 63 In considering the question before the Court, it is important to keep in mind that an application for a permanent stay does not equate in any way to the trial of the substantive matter. The Court has not had the benefit of being taken through the all the evidence by the parties or cross examination of the witnesses. 64 However, the terms of the application and the submissions of the respondent on the issue of abuse of process before me clearly do require me to give consideration to the evidence which is before me, to carefully consider whether there is useful material upon which a trial could be conducted into the claims of the applicants. 65 Although as a general rule the applicants are entitled to bring their claims before the Court and have their claims heard, as I have already noted this entitlement is subject to principles in respect of abuse of court process. In reviewing the material before me however, I keep in mind the warning of Dixon J in Cox v Journeaux and approach the matter with caution. 66 Key questions of evidence before the Court, for the purposes of this analysis, may be summarised as follows: 1. What is the likelihood of Mr Allan Hockey giving evidence? 2. To paraphrase Bryson JA in Batistatos , is there useful evidence available upon which to conduct a trial, or is the position that a trial of the proceedings could not rise above a debate about the effect of scraps of information with the result that no more than a formal enactment of the process of hearing and determining the plaintiff's claim could take place? This second question should be particularly considered in light of evidence to which the applicants refer, including: A) Records before the Court, as contained in the affidavit of Mr David Sutton sworn 22 November 2005, and the further evidence given by Mr Sutton arising from cross-examination on 17 July 2006. B) The affidavit of Mr Patrick Killoran sworn 12 May 2006. C) Affidavits of Sir Llewellyn Edwards, Hugh Lionel Fawsett and Sir Leo Arthur Hielscher. d) Queensland Government Cabinet documents from the relevant period. E) Affidavits of Bernadette Irene Albert, Evelyn May Barker, Shane Arthur O'Connor, Eric Michael Porter, Maxwell Athol Smith and Paul Toolis. WHAT IS THE LIKELIHOOD OF MR ALLAN HOCKEY GIVING EVIDENCE? Mr Hockey was appointed Acting Superintendent of the Doomadgee Aboriginal Mission Reserve from 1 November 1958. I understand he remained in that management position until some time in 1983, and that he eventually left Doomadgee on 6 April 1983. His management role means that he would be able to give key evidence as to the role of the respondent in the conduct of the Doomadgee Mission over that period, and to explain relevant documents and records from that period. The importance of that evidence is enhanced by the fact that a number of key witnesses involved in the management of Doomadgee mission, and liaison between the Doomadgee Mission and the respondent during the relevant period have died (for example, Mrs Hockey and Mr Bedford), or are elderly, frail and unable to give evidence (for example, Mr Killoran). 68 It is clear however that Mr Hockey himself is now elderly, and in frail health. 69 At the hearing on 14 July 2006 the ability of Mr Allan Hockey to give evidence at a hearing of the substantive matter was in dispute. Counsel for the applicants indicated that he had spoken with a third party who had been in contact with acquaintances of Mr Hockey, and was able to provide evidence that Mr Hockey was capable of giving evidence relevant to the issues in dispute. I indicated that, if this were the case, the best evidence would be that from Mr Hockey himself. I adjourned the hearing to allow the parties the opportunity to contact Mr Hockey and ascertain his ability to give evidence, whether at the hearing itself, by a preservation of evidence hearing, by affidavit or otherwise. 70 In an affidavit of Mr Maxwell Smith affirmed 21 July 2006, Mr Smith deposed that: 1. Following the hearing before this court on 14 July 2006 he made attempts to contact Mr Allan Hockey. 2. He had been informed by Mr Hockey's elder son that Mr Hockey was spending the winter months in Cairns with his family. 3. With the approval of Mr Hockey, he had contacted Mr Hockey's medical practitioner Dr Paul Illes who told him that Mr Hockey had become ill after Mr Smith's interview with Mr Hockey earlier this year; that Mr Hockey was not well enough to undergo cross examination; and that Dr Illes would prepare a medical report to that effect. 71 Annexed to Mr Smith's affidavit was a medical report prepared by Dr Paul Iles dated 20 July 2006. In the report, Dr Iles stated that he had been Mr Hockey's medical practitioner for 15 years, and that: • Mr Hockey had multiple medical problems including a history of brain stem infarct and relapsing organic psychosis • in Dr Iles opinion, Mr Hockey is unable to withstand the rigors of cross examination either face to face in court or by telephone • Mr Hockey's memory recall is not accurate • in Dr Iles' opinion, Mr Hockey's mental problems are such that he would consider Mr Hockey quite unfit for the situation. 72 Mr Hockey did not appear at the next hearing of 26 July 2006, nor was any evidence produced from him by affidavit or otherwise. At the hearing of 26 July 2006, two witnesses were subject to examination and cross-examination by telephone. They were: • Ms Pamela Jones, a volunteer worker for FAIRA Aboriginal Corporation which provides assistance to the applicants in these proceeding, who was called as a witness by the applicants, and • Dr Paul Iles, who was called as a witness by the respondent. She swore: • that Mr Hockey had sounded coherent on the telephone • that, while it was not easy to get information from Mr Hockey, it was possible to obtain information so long as she was patient, persevered with questioning, and allowed Mr Hockey to answer questions in his own way • that Mr Hockey had said, inter alia , that he recalled the Christian Brethren were paid a sum of money by the State Government to run the Mission at Doomadgee the respondent had told the Christian Brethren the amount of wages to be paid to Aboriginal workers; and the respondent had told the Christian Brethren what the minimum standard wage was at any particular time; and that the Christian Brethren did not have the money to contribute to the pay of Aboriginal workers. 74 The affidavit of Ms Jones was accepted by the respondents as admissible for the purposes of the interlocutory hearing, but the respondents did not concede that the affidavit would be admissible at trial. 75 In my view Ms Jones is an honest and credible witness, however she admitted during the course of cross-examination that she had never met Mr Hockey, and the only conversation she had ever had with him was a telephone conversation of 10 minutes to which she deposed in her affidavit. In my view, her evidence as to the ability of Mr Hockey to give evidence, and the reliability of any evidence Mr Hockey could give, is of limited assistance. During the examination-in-chief, Dr Iles said that: • Mr Hockey has a past history of having had a stroke which affected his speech and memory • residual effects of the stroke are that Mr Hockey's thinking has dulled, his thought processes have slowed, and he has increased difficulty in remembering details • Mr Hockey has a long history of psychiatric problems; other psychiatrists consider his illness could be a manic depressive psychosis with a delusional content • Mr Hockey's physical health is typical of an 84 year old man, including a renal failure problem, episodes of anaemia, hepatitis, amoebic dysentery, diverticulitis and haemorrhoids • Mr Hockey is showing signs of an early dementia. 77 Under cross-examination from Counsel for the applicants, Dr Iles expressed the opinions that: • Mr Hockey would not be reliable in what he says, or at best it is likely to be unreliable • a court appearance, even if questions were posed in a very relaxed way, would be more than Mr Hockey could handle, and his evidence would be no more reliable if it were given from his home by telephone. 78 While Ms Jones' credibility is in no way in dispute, she does not know Mr Hockey, and has only ever spoken with him once on the telephone. In considering the evidence given by Dr Isles and Ms Jones in relation to the ability of Mr Hockey to give evidence in the substantive matters, I prefer Dr Iles' evidence for the following reasons: • Dr Iles is a medical practitioner. • The parties did not dispute that Dr Iles as a medical practitioner was qualified to form opinions as to the mental capacity of one of his patients. • He is currently Mr Hockey's medical practitioner. • He has been Mr Hockey's medical practitioner for 15 years and has knowledge of Mr Hockey and his capacity from that relationship. • In his evidence, he described the distressing effect of the interview between Crown Law and Mr Hockey on Mr Hockey and his health. Accordingly, it appears that Dr Iles has had direct experience of the impact on Mr Hockey of participating in judicial proceedings, even those as remote as an interview outside court. 79 At the hearing on 26 July 2006 Mr O'Gorman for the applicants foreshadowed an application to the Court pursuant to s 46PR HREOC Act seeking permission for Mr Hockey to be examined and cross-examined in a non-traditional manner. This would entail that 'each party be given the opportunity to gently ask Mr Hockey questions and in so doing take him to documents making it clear to him at the outset that no one at all is being critical of him, but rather he has been asked along to assist the court as far as he can and as far as his memory will permit as to what actually occurred in the relevant days when he was at Doomadgee' (TS 26 July 2006 p 43 ll 6-11). No such application has yet been brought by the applicants. 80 Neither the applicants nor the respondent have asked me to make a finding as to the ability of Mr Hockey to give evidence. However, it is necessary that I comment on this issue. The parties have been at some pains to bring evidence to the Court of the ability --- or otherwise --- of Mr Hockey to give evidence in the substantive matters. As I have already indicated, his evidence would be very important at the hearing. 81 I am not required at this stage to consider whether s 46PR HREOC Act would be of assistance to the applicants, or whether comments of the Full Court in Hagan v Trustees of the Toowoomba Sports Ground Trust (2001) FCA 123 at 20 would be relevant in relation to the evidence which the applicants would seek to elicit from Mr Hockey. However it is, in my opinion, important to consider realistically what evidence is before or likely to come before the Court. 82 From the evidence of Dr Illes, it appears that even non-traditional questioning of Mr Hockey could be harmful to his health. On the facts before me I am of the view that Mr Hockey would not be able to give evidence in any form capable of being used by this Court, whether by affidavit, elicited by examination and cross-examination or otherwise as foreshadowed by Mr O'Gorman, or in person, by telephone or otherwise. 83 The ability of Mr Hockey to give evidence could be critical in that he could potentially explain such documents as exist relating to the management and operations of Doomadgee Mission. He appears to be the only person living with an intimate knowledge of the management of Doomadgee Mission during the relevant period, or who has the first hand knowledge to be in a position to explain documents relating to management of the Mission during that time. 84 I shall now turn to consider those documents. IS THERE USEFUL EVIDENCE AVAILABLE UPON WHICH TO CONDUCT A TRIAL, OR IS THE POSITION THAT A TRIAL OF THE PROCEEDINGS COULD NOT RISE ABOVE A DEBATE ABOUT THE EFFECT OF SCRAPS OF INFORMATION WITH THE RESULT THAT NO MORE THAN A FORMAL ENACTMENT OF THE PROCESS OF HEARING AND DETERMINING THE APPLICANTS' CLAIMS COULD TAKE PLACE? 86 In my view the most appropriate way in which to answer this question is to consider the nature of the evidence before the court to which the parties referred during the hearing, and then to consider the value of that evidence in light of the claims of the applicants under s 9 and s 15. He deposed that during that time that he was responsible for the financial accounts relevant to the Department's operations, including the oversight of banking and financial record-keeping throughout the Department, and was engaged in regular consultation with the Director and the Deputy Director as to the financial affairs of the Department. 88 Mr Sutton has been in ill health, however he was able to be examined and cross-examined in relation to his affidavit at a preservation of evidence hearing held before me on 21 March 2006. The evidence of Mr Sutton found in his affidavit and the annexures thereto is critical to the conduct of the case for a number of reasons: 1. The position he held and his resultant knowledge, including the fact that most of the correspondence from the Department to the relevant churches during the period 1971-1980 on the subject of grants for wages and wage increases was drafted by Mr Sutton or under his supervision and direction. 2. There is a large volume of relevant financial information annexed to his affidavit, which possibly only Mr Sutton can interpret from personal knowledge, as other key witnesses from Doomadgee Mission or the Christian Brethren are either deceased or unable for health reasons to give evidence. 3. As conceded by counsel for the applicants, there do not appear to be any records remaining at Doomadgee (TS QUD 389/05 3 May 2006 p 5 l 14). 89 The affidavit evidence of Mr Sutton may be summarised as follows: • Each financial year during the period 1975 to 1983, a Cabinet-approved cash grant was made from the Department's Consolidated Revenue Expenditure, to church entities accepting responsibility for Aboriginal and Islander welfare. The Doomadgee Mission was one of those entities. • Each year the Department would write to churches requesting actual expenditure and receipts for the year to date, as well as an estimate of future expenditure and receipts for the remainder of that year and the next financial year. The purpose of these requests was to assist the Department to prepare estimates for Queensland Treasury of the Department's expenditure on cash grants for the next financial year. • The churches conducting Aboriginal communities provided their responses to the Department in approximately June of each year during the relevant period. The responses included Statements of Receipts and Expenditure. This information was assessed by the Department to calculate estimates of the grants to the churches conducting Aboriginal communities for the next financial year. • Each May Queensland Treasury would write to the Department requesting information expenditure for the Department, and following the annual budget approval by Parliament grants to churches conducting Aboriginal communities would be allocated according to a formula. The grants included wage increase components, although the Cabinet approval did not breakdown the total grant for each Church into particular components. • From 1975-1980 the Department sent letters to churches conducting Aboriginal communities advising of Cabinet approved increases in rates paid to Aboriginal employees, and grants paid to churches were increased to cover the wage increases. • The Department did not prescribe pay rates for persons employed by the churches, nor in particular fix wage rates payable by the Doomadgee Mission, and Doomadgee Mission never requested approval to pay particular rates of wages to Aboriginal workers. • In or about 1979 the Department conducted a survey of workers employed on Government operated Aboriginal communities and their rates of pay to identify areas of possible improvement in productivity, and the Department also requested the churches to review their respective workforces. As a result of this process, on or about 5 November 1979 the Department provided the church with a suggested workforce structure for Doomadgee. • On 26 May 1980 Cabinet approved a general increase in allowances paid to adult and junior workers on Aboriginal reserves. • From 1980 to 1983 the budget cash grant allocation for churches conducting Aboriginal missions was determined by a formula referable to a wages component, a contingency component to assist in general running costs, an allowance for inflation, and any subsequent increases in the Guaranteed Minimum Wage. Assistance in kind was also provided. Additional funds were given to churches to assist them to increase the wage rates of Aboriginal employees who were not in receipt of award wages. • The grants provided by the Department were not the only source of funding for the Doomadgee Mission. During the relevant period the Mission engaged in income-earning activities including retail store sales, agency commissions, and cattle and beef sales. • Unlike on State-operated Aboriginal communities, no Departmental employees managed or worked on church-conducted Aboriginal communities, or visited church-conducted Aboriginal communities to inspect the administrative practices or the accounting records of those communities. • As from 8 August 1983 the Department assumed responsibility for the administration and management of the Doomadgee Mission, including employment of the first and third applicants in QUD 389/2005, physical aspects of payment of wages to Aboriginal employees at Doomadgee, and recording each Aboriginal employee's earnings for taxation purposes. Fortnightly wage rates applied to each Aboriginal Community worker from the time the Department became directly responsible were in accordance with the advice provided by the Departmental Manager at Doomadgee. 91 At the hearing of 26 July 2006, Mr Murdoch SC for the State of Queensland made a number of submissions based on the evidence of Mr Sutton, referable to the lack of information available upon which the State could defend the applicants' allegations. These submissions included the following points: 1. Fragmented time and wage records were annexed to Mr Sutton's affidavit, but otherwise there was no evidence as to amounts paid in wages to the applicants during the relevant period, and the key witnesses who managed the payment of wages --- Mr and Mrs Hockey --- are unable to give evidence. 2. The corollary of the claim of the applicants that the State, through subsidies, determined the amount that was paid in wages to workers on the mission, and hence was the employer of the workers at Doomadgee, is that the church had no other source of funds that it could utilise to pay wages. 3. The available records indicate that alternative sources of income were available, in particular the retail store at Doomadgee where the third and fourth applicants in QUD 389/2005 worked during the relevant period, and such material as is available suggests that the wages of the workers in the store weren't ever intended by the State to be covered by the subsidies that the State was giving the church to pay wages. 4. However in relation to the store, there are no financial records or bank records, nor are Mr and Mrs Hockey available to give evidence as to money which was being made from the store. 5. From such fragments as remains, it appears that the store was in profit at certain stages and that there were substantial accumulated funds. 6. The Mission had an account or accounts which appeared to be the repository of the proceeds of commercial activities such as sale of cattle, sale of beef to community residents, sale of petrol, vehicle hire, commissions from Bush Pilot Airways, Mobil, Commonwealth Savings Bank and the Post Office and that there were substantial drawings on accounts which may have included payment of wages. 7. That in, for example, the half year 1 July 1980 to 31 December 1981 the subsidy from the State Government was $230 000 but a schedule of operation costs sent by Mr Hockey to the Department shows that the deficit of $264 190 in operation costs was met from 'margin profits on Store Sales', indicating that the store was a very substantial profit centre. 8. Documentation, including a letter of 8 May 1981 from Mr Hockey to the Department, suggests that wages for Aboriginal employees of the store, the bakery and the cattle business were paid from the fruits of those businesses, however without the evidence of the Hockeys to explain the documentation it is impossible to do other than hypothesise. 9. Other documentation, including a letter containing estimated operation costs for the financial year ended 30 June 1982, included an amount described as '50% of Wages Erection New Homes', but no explanation exists as to the sourcing of that amount, or the sourcing of the balance of the wages for employees in that case. 10. In a letter from Mr Hockey to the Department dated 20 October 2005, Mr Hockey wrote 'I now enclose copy of July wages for permanent employees as we do not calculate on a weekly basis'. The July wages attached included named employees, their net wages, reference to the Departmental subsidy component of the wages, where they were employed, but no explanation as to the source of the balance of the wages. Mr Murdoch submitted that this was a very strong signpost that there was money coming in from some source other than the State government subsidy, however the State was frustrated in its efforts to defend itself on this basis because, in spite of the signposts and pointers, there are no people available as witnesses to explain those signposts and pointers. 11. None of the records located by the State broke down the subsidy into a per-employee, per-week or per-month amount. 12. Attached to the letter dated 15 September 1979 from Mr Hockey to the Director of the Department are documents including one headed 'ABORIGINAL/ISLANDER WAGES SURVEY', with further detail 'Present Funding Source: Doomadgee Mission', 'Alternative Funding Source: Subsidising Wages DAIA', 'Work group responsibility --- brief overview of objectives of group', 'Functional Area: Stores & Supply', 'Work Group or Gang Description: Retail'. Mr Murdoch drew the Court's attention to the fact that information relevant to the third and fourth applicants' wages was included in this survey. From the information appearing on the face of the survey, it appears that both women were junior females, 18 years of age, single, grade 10 education, working in the store, and doing the same job, however they earned different weekly wages. Mr Murdoch submits that the inference may be drawn that whoever fixed those wage rates was making some sort of work value assessment of the employee to the enterprise of the store, however the State is frustrated in establishing that it was not involved in handing down schedules of amounts that were to be paid to persons as their weekly wages, because of the unavailability of witnesses involved in managing the store at the time. 13. Mr Murdoch submits that, as evidenced by a staff card for the first applicant for his employment in the public service effective 8.8.83 (Exhibit DEFS-22 annexed to Mr Sutton's affidavit) and similar document for the third applicant (Exhibit DEFS-23 annexed to Mr Sutton's affidavit), employees of the State received a Staff Card on commencing employment with the State. The absence of a staff card before that date suggests that the first and third applicants were not employees of the State before August 1983. 14. A letter from the Department to the Manager at Doomadgee dated 5 August 1983 advising that, with the transfer of responsibility for the payment of staff from Doomadgee Mission to the Department as of 8 August 1983, accounting procedures satisfactory to the State would need to be implemented. The inference which could be drawn from this letter is that prior to 8 August 1983, the employment of the applicants and responsibility for payment of their wages as employer, rested with the Mission rather than the State. He has provided an affidavit four pages in length. I understand that Mr Killoran is not available for cross-examination on his affidavit for health reasons (TS 26 July 2006 p 34 ll 12-13). As a result of the unavailability of the witness for cross-examination due to ill health, less weight may be attached to his evidence since it has not been tested in cross-examination (see JD Heydon Cross on Evidence Seventh Australian Edition Butterworths 2004 par 17480 and the cases referred to therein). 93 Mr Killoran's evidence as contained in his affidavit is to the effect that: • churches conducting Aboriginal Communities, including the Christian Brethren, were given a Cabinet-approved cash grant paid quarterly which the Department administered • the Department would take into account the actual expenditure and receipts of the communities for the year to date and estimates for the forthcoming year to calculate estimates of grants to be paid • the Department did not inform or direct the Christian Brethren as to the amount or rate to be paid in wages to Aboriginal workers at Doomadgee, and the annual grants were not the outer limit of the amount the Christian Brethren could spend on wages or on anything else • the State Government assumed responsibility for the management of the community at Doomadgee in 1983 as a result of a request by the Christian Brethren who were having staffing difficulties • prior to the assumption of control of the Mission in or about August 1983 the Department provided a member of its staff, Mr Shane O'Connor, to act in a 'caretaker' role at Doomadgee in April 1983, subject to the direction of the Christian Brethren as to the conduct of the Mission. He has provided an affidavit four pages in length. Sir Llewellyn's evidence is to the effect that: • during the relevant period, the Under-Treasurer would write annually to all state government departments including the Department requesting details of estimated expenditure and receipts for the upcoming financial year • those details were provided by government departments, and in the case of the Department included estimates of grants to church-conducted Aboriginal communities • whether a department received the amount of money it sought via its estimates depended on a range of factors • once budget figures were determined he would take the budget to Cabinet and then Parliament for approval • funds for grants to church conducted Aboriginal communities did not refer to specific communities but was a lump sum amount paid to the Department to be subsequently apportioned among each of the communities • the churches were entitled to expend the grant monies as they saw fit and augment the grant monies as they saw fit and were able • his clear understanding as a member of the government was that the Aboriginal communities conducted by churches including Doomadgee were independent from the State of Queensland and their operations intimately controlled and decided upon by the relevant churches • as with all departments which supplied funding to non-government bodies, there was discussion and liaison with the churches at Department level • the State did not decide matters with respect to the number of Aboriginal employees or the budget of the Christian Brethren in respect of its conduct of the Doomadgee Mission • during the period 1975 to 1983 there were regular Cabinet decisions approving funding for increases in the rates of pay for Aboriginal workers on State government-run communities and funding to provide additional funds to the churches to cover increases in wages for Aboriginal workers in church-conducted communities • at all times the governing body of a church remained free if it desired and felt able to pay higher wages to employees. He has provided two affidavits --- one sworn 17 March 2006 a little over three pages in length, and another sworn 19 May 2006, three pages in length. His evidence is to the effect that: • Doomadgee Mission School became a State Government school in 1975 when the Queensland Department of Education took on the responsibility for fully staffing the school • from 1975 all employees at the Doomadgee State School, both Aboriginal and non-Aboriginal, were paid directly by the Department of Education • between 1975 and 1982 Doomadgee Mission remained actively interested in the recruitment of teachers, however after 1982 recruitment of teachers passed from Doomadgee Mission to the Department of Education • the second applicant came on to his staff at the Doomadgee State School during 1976 as a temporary janitor/groundsman, and was in that position full time when Mr Fawssett left Doomadgee in 1983 • Mr Fawssett recalled seeing Departmental communications to the second applicant regarding his employment • he recalled the second applicant taking annual leave • he recalled that the second applicant was entitled to benefits payable by Education Queensland such as a locality allowance • he recalled the first applicant was employed at the school as a teacher aide during the early to mid 1970s • prior to 1975 Aboriginal persons employed in the Doomadgee Mission School were paid by the Doomadgee Mission • prior to 1975, non-Aboriginal teaching staff and the Principal at the Doomadgee Mission School were not paid salary or wages. His affidavit sworn 12 May 1984 is three pages in length. His evidence is essentially: • between 1975 and 1983 Treasury would write to the Department each financial year to request the Department to submit to the Treasury details of the Department's estimated expenditure and receipts for the upcoming year • the Department would provide the Treasury with estimates, including estimates of grants to church-run Aboriginal communities such as Doomadgee Mission • as Under Treasurer he did not have a detailed knowledge of the management or funding of church-run Aboriginal communities, however he states that the allocation for grants to churches conducting Aboriginal communities was a subsidisation of the activities of the respective churches to assist them in their work with the Aboriginal people, and that it was for the churches to determine how much additional funding was contributed from other sources • from 1983 the State Government, through the Department, assumed the management of the Doomadgee Aboriginal reserve, from which time the approved allocation to the Department was amended to reduce the allocation for grants to the church-run Aboriginal communities and to increase the allocation for running costs of Department-run Aboriginal communities • the amount of the allocation to the Department for the period 1975-1986 was dependent upon the funds available to the State Government. The Cabinet Submission refers to additional financial assistance sought by church organisations conducting Aboriginal Communities, including Doomadgee Mission. The Cabinet Decision approved special and additional finance for church sponsored communities in budgetary problems. 98 In his affidavit affirmed 22 May 2006, Mr Maxwell Smith of Crown Law deposed as to the content of a number of Cabinet Submissions and Cabinet Decisions, the contents of which had not yet been released. In particular in his affidavit, Mr Smith described the following documents: • Cabinet Submission 36007 marked 'Security Classification "A" --- Secret' was submitted by the Minister for Northern Development and Aboriginal and Islander Affairs on or about 6 May 1983 regarding the future of the Doomadgee Aboriginal Community. Mr Smith deposed that it had become clear to the Minister that the Management Committee of the Doomadgee Mission were faced with a management situation which in economic, staffing and practical terms was beyond that committee's ability to maintain, administer and effectively service (Affidavit par 59). • Cabinet Decision 40190 dated 10 May 1983 approved the recommendations made in Submission 36007, in principle, subject to discussions on the full financial implications. Following this Decision, a progressive take over by the Department from the Christian Brethren of staffing, administration, accountability, servicing and responsibility for the material wellbeing of the Doomadgee Aboriginal Community began (Affidavit pars 61-62). • Cabinet Submission 37862 submitted on or about 13 January 1984 concerned various grants to religious bodies that were accepting responsibility for Aboriginal and Islander welfare, and included a reference to the State assuming full administrative control of the area from mid-1983. Cabinet Decision 42170 was, presumably, made on that basis of that Submission. She commenced employment with Education Queensland in January 1989. She deposed in her affidavit sworn 29 June 2006 that she has perused the personnel records of Education Queensland and: • Ascertained that the third applicant commenced employment with Education Queensland at Doomadgee in January 2000. There is no record of the third applicant's employment with Education Queensland prior to January 2000. • She has extracted the personnel records of the second applicant which show that he was employed as a Janitor Grounds person by the Department of Education from 3 May 1976, and that the award covering the position was, and still is, the Public Service Award --- State. She has also deposed that the second applicant was entitled to receive and did receive the pay rates and benefits provided by that award. Ms Barker deposed , inter alia , that: • she worked as a volunteer for the Doomadgee Mission from around mid-1979 until August 1983 when the State Government took over the Mission and Ms Barker was offered and accepted a position with the Queensland Public Service • from time to time she assisted Mrs Eunice Hockey with tasks of developing the budget for Doomadgee Mission, keeping the Mission's Books, and payment of the wages • on occasions when Mrs Hockey was away, Ms Barker had the responsibility of making the required entries in the Mission's books of account, wage books, and for paying the wages to the Mission's workers • Mr and Mrs Hockey conducted the Mission, and she has no recollection of, at any time prior to 1983, the State of Queensland providing any direction as to how the Mission should be conducted • the Aboriginal workers were directed in the performance of their work by the Hockeys or the staff of the Mission, and the Hockeys decided which Aboriginal residents would be employed, their hours of work and their wage rates • the Mission issued group certificates for the Aboriginal workforce. In summary, Mr O'Connor deposes: • while he was employed by the Department, he provided an interim management service on a loan basis to the church administration in or about 1983 at Doomadgee Mission due to staffing problems that Doomadgee was experiencing • during that time he was instructed by the Director of the Department, Mr Killoran, not to interfere with the administrative policy of the mission • during that time one of his tasks was to oversee the preparation of the estimates of expenditure • the workforce of Doomadgee was and had always been a church responsibility and he made no attempt to interfere because to do so would have been contrary to his understanding of the brief under which he was working • the wages of the Aboriginal workers was determined by the Christian Brethren, and not set by the Department. Since 2002 he has conducted his own Industrial Relations Consultancy Business. • He has appeared extensively before the Queensland and Australian Industrial Relations Commission on behalf of the State of Queensland in relation to disputes and issues involving persons employed by the State of Queensland. • In 1986 he was a member of a team established by the Queensland government to, inter alia , survey local authority type functions undertaken by Aboriginal and Torres Strait Islander Communities conducted both by the State and various churches, and report detailed survey findings and recommendations to the Queensland Government. As part of that process he visited Doomadgee on 30 July 1986. • He has perused such records as are available, and provided a comparative table for the alleged period of employment for each applicant to show wages received or an estimate thereof, the applicable award and classification under that award, and the wage rates applicable by reference to that award and increases in rates during the relevant time. Mr Smith is a Senior Lawyer employed in the office of the Crown Solicitor for the State of Queensland. 104 I note that a number of affidavits have also been filed by Mr Lachlan Edmonds who is also a Senior Lawyer employed in the office of the Crown Solicitor. For completeness I will also briefly consider this evidence. 106 In this affidavit, Mr Smith deposes to the contents of a number of Cabinet Submissions and Decisions which have not yet been released for public scrutiny and are the subject of the privilege afforded to Cabinet papers. • He has undertaken a very time-consuming task of perusing files at the Queensland State Archives which were potentially relevant. • He accessed Cabinet documents relating to the Aboriginal communities of Doomadgee, Aurukun and Mornington Island for the period 1975-1986. Those documents predominately related to cabinet decisions to approve further grants to the various church bodies conducting Aboriginal missions including Doomadgee. • A number of the cabinet documents relevant to the proceedings were extracted from the retrieved files and listed in the respondent's List of Documents dated 14 October 2005, and the Supplementary List of Documents dated 6 July 2006, however the documents do not include information relevant to the relationship between the respondent and the Christian Brethren who allegedly conducted the Doomadgee Mission on behalf of the respondent during the relevant period, the determination of wages or the actual amount of wages paid to the applicants by the Christian Brethren during the relevant period. • At best, there are documentary fragments that relate to the employment of and wages paid to some of the applicants, at particular moments in time only. • He has discovered the names of people who were apparently involved in running the Doomadgee Mission as a Christian mission at the relevant time, as well as the names of the employees of the respondent who were involved in the provision of the annual grant to Doomadgee at the relevant time. • There is evidence that, from the perspective of the Doomadgee Mission, the late Mrs Hockey co-ordinated the relationship with the respondent. Further, there is evidence that Mr Bernard Bedford, a member of the committee of the Christian Brethren based in Brisbane, liaised with the Department on behalf of the Doomadgee Mission during the relevant period, however Mr Bedford is deceased. • The current President of Doomadgee Incorporated, Dr Dennis Lennox, has no understanding of the annual grants made by the Department to the Christian Brethren nor the matters relating to the payment of wages to the Aboriginal workers at Doomadgee for the relevant period. There is evidence that Mr Bedford kept a number of records relating to the Christian Brethren, however Dr Lennox could find only two letters relevant to this matter, one of which had already been discovered and the other of which was annexed to Mr Edmonds'affidavit. • Because of the unavailability of key witnesses the respondents were unable to confirm that Mr Hockey, as manager of Doomadgee Mission, had access to sufficient funding from sources other than government subsidies to pay mission wages, however the financial records indicate that such other resources were available. During August 1983 he co-ordinated the institution of Departmental business processes. While this work proceeded, an officer acting on behalf of the Christian Brethren Church closed its books and accounts. He recalled handing letters of appointment to the first and third applicants in early August 1983, which meant that they would be paid by cheque from the Treasury payroll system ex Brisbane. Another 15 or 20 former Church employees were also engaged at the time. In doing so, I note that to date little evidence has been filed by the applicants themselves, other than information as to when they were working and allegations that they did not receive proper wages for that work. 111 The structure of the claims in QUD 279/2004 and QUD 389/2005 is such that, except to the extent that there is evidence relevant to a specific applicant's circumstances (for example, specific dates of employment and specific positions held), the evidence presented in QUD 389/2005 is, I understand, the same as that which would be before the Court if QUD 279/2004 proceeds. 112 The claims of the applicants are framed in terms of s 9 and s 15 of the Act. Section 9 is a general provision whereas s 15 relates specifically to employment. 113 At the hearing of 26 July 2006, Mr O'Gorman for the applicants conceded that the applicants were perhaps on weaker ground in relation to the application for the permanent stay under s 15, on the basis that what is required there, among other things, is evidence as to the arrangement between the church and the individual employees and the like. Mr O'Gorman also acknowledged that without the availability of witnesses involved in the management of Doomadgee, it could well be that I might think it appropriate to permanently stay that part of the application relating to s 15 (TS 26 July 2006 p 44 ll 11-19). It is useful to first consider the applicants' claim with respect to s 15 and then to turn to the claim pursuant to s 9. Historically, employers could be liable for wrongs inflicted on a third party by an employee, but not where the worker was an independent contractor (see for example B Creighton and A Stewart Labour Law: An Introduction (The Federation Press, 2000) pars 7.02-7.06 and the recent discussion of these principles by the High Court in Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19 ; (2006) 227 ALR 46 at 49). This distinction is not relevant in the case before me --- the only point is whether the applicants were employees of the respondent at the relevant time. 118 Whether an employer/employee relationship exists between parties is determined by the nature of their relationship and whether indicia of employment are evident. This issue has been the subject of much judicial comment. The leading Australian case on the topic is Stevens v Brodribb Sawmilling Company Pty Ltd [1986] HCA 1 ; (1986) 160 CLR 16 per Mason J at 24 and Wilson and Dawson JJ at 36, recently considered by the Full Court of the Federal Court in ACT Visiting Medical Officers Association v Australian Industrial Relations Commission [2006] FCAFC 109 at [19-21] , where incidents of the employment relationship were identified as: • the measure of control that the putative employer is entitled to exercise over the worker • the mode of remuneration • the provision and maintenance of equipment • the obligation to work • the hours of work • the provision for holidays • the deduction of income tax • the delegation of work • the right to have a particular person do the work • the right to suspend or dismiss the person engaged • the right to the exclusive services of the person engaged • the right to dictate the place of work. 119 In reviewing the evidence before me, three issues are clear. 121 While it is possible that further information could emerge in cross-examination, available evidence-in-chief which has been gleaned from the recollections of witnesses more than twenty years after the relevant events is consistent with the proposition that the Doomadgee Mission was under the control of the Christian Brethren, that the Aboriginal employees were in the employment of the Doomadgee Mission conducted by the Christian Brethren who determined their conditions of employment including wages, and that the State paid grants to the Mission as a subsidy to the Mission's operations with no direction as to the manner in which the Mission spent the money, and interest only to the extent that the Mission could justify receiving financial assistance from the State. 122 Evidence to this effect before me includes: 1. The evidence of Mr Killoran that the Department did not inform or direct the Christian Brethren as to the amount or rate to be paid in wages to Aboriginal workers at Doomadgee. 3. The absence of any indication in the evidence of Sir Llewellyn Edwards, Mr Fawssett or Sir Leo Hielscher supporting the claim that the applicants were employees other than in relation to the second applicant whose direct employment does not appear to be disputed. In relation to these witnesses, it is difficult to see what further evidence these witnesses could provide given that they were not directly involved in the management of the Doomadgee Mission, and in light of the positions they held in government at that time. 4. The inconclusive contents of the Cabinet Submissions and Cabinet Decisions in relation to this claim. 5. The evidence of Ms Barker that the Aboriginal workers were directed in the performance of their work by the Hockeys or the staff of the Mission, and the Hockeys made all decisions as to which Aboriginal residents would be employed, their hours of work and their wage rates. This evidence is supported by the fact that the third and fourth applicants received different weekly rates in 1979 despite being the same age, experience, gender, and education, and employed in the same position in the store, which indicates some value attributed to their performance in the store. 123 From the evidence provided, there is absolutely no indication of any indicia of an employer/employee relationship between the State and the applicants other than where the applicants were 'directly' employed by the State. All evidence points towards control of the employees by the management at Doomadgee Mission. To the extent that an emanation of the Christian Brethren was in control of Doomadgee Mission and an employer of staff, it appears that that entity was the Committee for the Doomadgee Aboriginal Mission, however it is difficult in the absence of further evidence, including Group Certificates from the relevant period, to determine this issue. This is evident from: • In my view, the clear inability of Mr Hockey to give evidence. • The fact that there do not appear to be any records remaining at Doomadgee (note apparent concession by Counsel at TS QUD 389/05 3 May 2006 p 5 l 14). • The affidavits of Mr Smith and Mr Edmonds to the effect that comprehensive searches have been undertaken to locate documents relevant to the proceedings. • The evidence of Mr Smith to the effect that Christian Brethren church-focused congregations were organisationally independent, with no over-arching administrative body and no formal order of clergy, which means in turn that there appears to be no 'head office' or indeed entity still in existence which would have relevant records. This does not appear to be disputed. 125 Accordingly, a trial on this claim would proceed only upon such evidence as is already before the Court. In particular, as submitted by Mr Murdoch SC at the hearing of 26 July 2006 there are many 'signposts' to evidence that Doomadgee Mission received substantial income from a variety of commercial activities. This appears particularly from the material annexed to the affidavit of Mr Sutton. 127 These 'signposts' potentially negate the inference that wages for Aboriginal workers were determined by grants paid by the respondent to the Mission. As already detailed in this judgment those alternative sources of income included the retail store, the bakery, commercial activities such as sale of cattle, beef and petrol, vehicle hire, and commissions from Bush Pilot Airways, Mobil, the Commonwealth Savings Bank and the Post Office. 128 I have already noted that it in the present circumstances Mr Hockey will almost certainly not be in a position to give evidence either elaborating on or explaining those 'signposts'. Key witnesses are either deceased (for example Mrs Hockey and Mr Bedford) or cannot give evidence for health reasons (for example Mr Killoran). 129 The other witnesses to whom I have referred in the course of this judgment and who have provided evidence were, with respect: • on the periphery of events during the relevant period, for instance Ms Barker, Mr Fawssett, Mr Toolis and Mr O'Connor; or • while in positions of authority, were far removed from the day to day operations at Doomadgee Mission and almost certainly could not give evidence as to the conduct of the Mission from first hand knowledge, for instance Sir Llewellyn Edwards and Sir Leo Hielscher. 130 In my view, as a result of the effluxion of time, and taking into account the fragmentary nature of the evidence, the indications of other sources of income of the Mission, and the lack of witnesses to either explain those fragments or fill in evidentiary gaps, in the words of Bryson JA: • there is no useful evidence available upon which to conduct a hearing in relation to the applicant's claims based on s 15 of the Act • no further search or inquiry is in any way likely to locate such evidence • the trial would not rise above a debate about the effect of scraps of information • it is impossible to inform the debate with any realistically useful information • the trial would be only a ceremonial enactment of an opportunity to establish whether the applicants have the rights they claim. 131 In my view, it would be an abuse of the process of the Court under O 20 r 2(1)(c) to allow this part of the claim to proceed. 132 Accordingly, it would be appropriate to permanently stay the claim of the applicants against the State in terms of s 15 to the extent that the applicants' claim that the respondent discriminated against each of them through the respondent's payment to the Christian Brethren of grants for the payment of the applicants' wages that were based on race and resulted in the applicants receiving wages which were at a rate less than that to which they were entitled. • That is based on race, colour, descent or national or ethnic origin; and • The existence of that racial distinction is the basis of the relevant act in the sense that the act occurred by reason of or by reference to the racial distinction. The inquiry is not one as to motive --- rather the inquiry is into whether the racial distinction is a material factor in the making of the relevant decision or the performing of the relevant act (Doyle CJ in Aboriginal Legal Rights Movement Inc v South Australia (No 1) (1995) 64 SASR 551 at 553). 137 The validity of s 9 of the Act was confirmed by the High Court in Koowarta v Bjelke-Petersen (1982) 39 ALR 417. The grounds in s 9 of the Act have been described as a 'mini Bill of Rights' (P Bailey Human Rights: Australia in an International Contex t Butterworths 1990 p 188). 138 Section 9 is expressed in general terms, and in most cases is pleaded in association with other provisions of the Act including s 15 as was the situation in this case (another example of a case involving both s 9 and s 15 is Meka v Shell Company Australia Ltd [2005] FMCA 250). It provides a basis for challenge to many forms of discriminatory action ... However apart from Koowarta's case, s 9 has not so far been greatly used. This is probably because of its generality, and also because many of the major discriminations will be caught by the particular provisions in the remainder of Part II of the Act. In that case, Weinberg J at first instance found inter alia that: • 'based on' in s 9(1) encompasses the broader, non-necessarily causative, relationship expressed in the phrase 'by reference to' • motive, intention or purpose are irrelevant under s 9(1). 140 The applicants in their Statement of Claim submit that the 'act' for the purposes of s 9, was: • a payment by the respondent to the Christian Brethren of grants that were based on race and resulted in the applicants receiving wages which were at a rate less than that paid by the respondent to its non-Aboriginal employees doing similar work and/or pursuant to the Award applicable to each of the applicants • the payment by the Christian Brethren of wages to the applicants at a rate that was based on race and that was less than that paid to its non-Aboriginal employees. 141 At the hearing of 26 July 2006, Mr O'Gorman for the applicants submitted that it would be inappropriate to permanently stay the applicants' claim based on s 9 because of the volume of evidence which is already before the court, and in particular that of Sir Llew Edwards, Sir Leo Hielscher, Mr Killoran and Mr Sutton. 142 In relation to this point, Mr Murdoch SC for the respondent submitted that, in order for the applicants to succeed in relation to s 9, they must make good their assertion that it was the State that was determining the wage rates paid to individuals and that the church had alternative means of contributing to wage rates. Mr Murdoch SC submitted further that in this context, the unavailability of key witnesses and documents frustrate a proper analysis of the: • degree of reliance of the Christian Brethren on State Government subsidies • independent sources of income • capacity of the Christian Brethren to pay wages from funds generated on the community, for example, retail store sales • actual wages paid to either the applicants or non-Aboriginal employees of the 'Christian Brethren of Australia Inc'. 143 In my view, it is difficult to separate the claims of the applicants that the respondents have breached s 9 from their claims in respect of s 15. The substantive claims of the applicants do not distinguish in any material respects between acts of the respondent said to breach s 9 and those said to breach s 15. Both claims as framed by the applicants rely on the establishment of an employment relationship between themselves and the respondent. 144 This is demonstrated by the Application and the Statement of Claim. The applicants seek a declaration that the respondent discriminated against each of the applicants pursuant to s 9 and s 15 of the Act in their employment with the respondent between 1975 and 1986 and/or a declaration that the respondent discriminated against each of the applicants through the payment, to the Christian Brethren, of grants for the payment of the applicants' wages that were based on race and resulted in the applicants receiving wages which were at a rate less than that to which they were entitled. 145 The nexus between: (a) the payment of the grant by the respondent to the Christian Brethren; and (b) the resultant payment by the Christian Brethren of wages to the applicants at a rate that was based on race and that was less than that paid to its non-Aboriginal employees. I do not understand that the applicants are claiming that the payment of grants by the respondent to the applicants simpliciter is an 'act' of discrimination within the meaning of s 9. • It appears that the wages of Aboriginal employees were at least partly subsidised by additional sources of Mission income, however the same issues arise as previously noted in respect of identifying those additional sources. • There appears to be no further useful evidence to inform the debate. • The effluxion of time has meant not only that records of the Christian Brethren were lost, but that key witnesses are no longer available to give evidence or interpret fragments. Indeed the Christian Brethren no longer exist as an association. 147 In summary, because of the effluxion of time, the causal link between the payment of the grants, the sums involved, and the level of wages received by the applicants is not evident, and evidence which could be given on behalf of the respondent and witnesses who could provide insight into the management of the Doomadgee Mission and the employment of the applicants at the relevant time is no longer available. 148 Mr O'Gorman has submitted that a great deal of evidence has already been filed with the Court relating to the events in issue, which would enable the Court to conclude that the respondent was in breach of the Act. However in my view that evidence is, again because of the effluxion of time, fragmentary, and of necessity, general (because of the nature of the witnesses involved and the positions they held), inconclusive, and likely to be of little assistance. While there is clearly evidence that grants were made to Doomadgee Mission and that those grants subsidised the operations of the Mission including payment of wages, there is not, nor is there likely to be from further examination of witnesses identified by the applicants, further information forthcoming as to how the State grants had the result that the applicants received lower wages than non-Aboriginal workers at Doomadgee. 149 For these reasons I am also satisfied that it would be an abuse of the process of the Court to allow this part of the claim to proceed. However, the submissions of the respondent in respect of these notices of motion have addressed the claimed 'indirect' relationship of employment between the respondent and the applicants for the period 1975-1983. This is somewhat curious, given that the claim of the applicants is for the period 1975-1986. I note that from August 1983 there was a transition period during which control of management functions passed from Doomadgee Mission to the Department and then to the Doomadgee Aboriginal Council (Affidavit of Maxwell Athol Smith 22 May 2006 pars 69-72). The respondent has also stated that it ceased paying grants to the Christian Brethren in relation to the conduct of the Doomadgee Mission in August 1983 (Defence par 7(f)). 151 In light of the submissions and the evidence which could be available at trial, it would not be appropriate to permanently stay such of the applicants' claims as relate to discrimination by the respondent against the applicants in their 'direct' employment with the respondent between 1975 and 1986. I do not understand that, given the record-keeping facilities of the State of Queensland and the records which have already been tendered in evidence, effluxion of time would result in a trial on this matter being an abuse of process as articulated in Batistatos . Accordingly, I am not prepared to stay the claimants' applications to the extent that they claim that the respondent discriminated against each of the applicants pursuant to s 9 and s 15 in their 'direct' employment with the respondent between 1975 and 1986. 152 However, for the reasons I have already given, in my view it is appropriate to order a permanent stay of applications in QUD 279/04 and QUD 389/05 to the extent that the applicants are claiming that the respondent discriminated against each of them pursuant to s 9 and s 15 of the Racial Discrimination Act 1975 (Cth) through the respondent's payment to the Christian Brethren of grants for the payment of the applicants' wages that were based on race and resulted in the applicants receiving wages which were at a rate less than that to which they were entitled. The proceedings brought by each of the applicants in QUD 279 of 2004 and QUD 389 of 2005 be permanently stayed to the extent that the applicants are claiming that the respondent discriminated against each of them pursuant to s 9 and s 15 of the Racial Discrimination Act 1975 (Cth) through the payment by the respondent to any manifestation of the Christian Brethren, including the Christian Brethren of Australia Inc of grants for the payment of the applicants' wages that were based on race and resulted in the applicants receiving wages which were at a rate less than that to which they were entitled.

application for permanent stay pursuant to o 20 r 2(1)(c) federal court rules whether abuse of the process of the court claim relates to the period between 1975 and 1986 whether by reason of effluxion of time a fair trial is no longer possible application of the high court decision in batistatos v road traffic authority of new south wales [2006] hca 27 whether any useful evidence remains upon which to conduct a trial racial discrimination in employment s 9 and s 15 racial discrimination act 1975 (cth) whether such fragmentary evidence as exists shows a relationship of employment between the state of queensland and the applicants whether further information is available whether evidence which does exist can be properly explained practice and procedure discrimination

It is now common ground that no case of such breach was pleaded against CFMEU NSW. (2) Lane, Primmer, Kelly, CFMEU and CFMEU NSW contravened s 45D of the Trade Practices Act 1974 (Cth). (3) Lane, Primmer, Kelly, CFMEU and CFMEU NSW interfered with the contract between LGB and Silvestri P/L. 2 Damages for breach of s 45D of the Trade Practices Act 1974 (Cth) and interfering with the contract and penalties for breach of s 170NC must now be determined. It is not necessary to repeat the factual background to the proceeding, save for where it is relevant to the consideration of remedies. Phrases and terms used in these reasons (if otherwise undefined or unexplained) are to be understood by reference to the judgment on liability. I disagree. Both parties to the contract understood that the job entailed all of the excavation required at the site. I so held in the judgment on liability ( A & L Silvestri Pty Ltd [2007] FCA 1047 ; (2007) 165 IR 94 at [83] ). The benefit of that arrangement was denied by reason of the wrongful actions of the respondents. 4 Silvestri P/L's primary claim is for damages based upon the time that was taken to complete the job by other contractors --- many months, with more than one machine operating at times. I do not accept that approach. The question is the time that Silvestri P/L would have taken. Both Antonio Silvestri and Krkovski estimated that the job would take three to four weeks. There was evidence of inefficiency on the part of successive excavation contractors in completing the job and there was a holiday period. Nonetheless, the time actually taken does indicate that the parties were over-optimistic in the estimate of three to four weeks. Any such estimate would necessarily depend upon the nature of the material encountered, weather and other factors. I will take eight weeks working at the rate of five days and 40 hours per week as to length of the job. I allow $105 per hour to take account of excavator and hammer hire as well as excavator hire, leading to a loss of revenue of $33,600 less variable costs of $100 per day for fuel and oil totalling $4,000 leaving a net loss of revenue of $29,600. During the eight week period from 22 October 2003, Silvestri P/L earned $6,687 for excavator, mini excavator and mini excavator float hire. The amount lost is therefore near enough to $23,000 plus interest from 22 October 2003 to the date of judgment. I cannot see that there is any practical difference as to calculation of damages between the count in tort and the count based upon s 45D. The applicants submit that each of the "explicit threats" by Lane constituted a separate breach of s 170NC by both Lane and the CFMEU and therefore each can and should be the subject of a separate penalty. They seek declarations for, in effect, six contraventions, each relating to an identified event. The respondents submit that the application and the amended statement of claim allege only one contravention of s 170NC and seek only the imposition of one penalty in respect of the conduct pleaded. In the alternative, the respondents contend that, if there are separate contraventions by Lane (and through him the CFMEU), then they were part of a single course of conduct to which the totality principle would apply, as in imposing a penalty for a number of offences it is necessary to ensure that the penalties in aggregate are just and appropriate. I accept that only one contravention evidenced by a series of actions is alleged on the pleadings and will proceed accordingly. 6 A number of authorities discuss the factors to be taken into account in fixing a penalty, many of them borrowing from related fields, including the criminal law. It is sufficient to refer to the recent case of Kelly v Fitzpatrick [2007] FCA 1080 ; (2007) 166 IR 14 as an example. However, the discretion is at large. There are no mandatory statutory criteria and it is wrong to regard factors seen as relevant by one court as statutory criteria. Indeed, lists of factors can confuse an essentially straightforward task and lead to over-elaborate reasoning. The maximum penalty for the Union is $11,000 and $2,200 for Lane. His actions were concerted, deliberate and persistent over a period. They affected not only a small business operator in Silvestri P/L, but a significant project in the city of Wollongong. This cannot be seen as an isolated incident out of character. Lane presented his demands as part of a campaign to control industrial relations in the building industry in Wollongong. His conduct was belligerent and arrogant. He denied the case against him and fought it all the way. "I had no goal whatsoever of extracting an EBA between (Mr Silvestri) and his employees, because there were no employees" he said. In a letter addressed to the Court on 10 August 2007, Lane stated that he did not recall making the comments as quoted but did not deny making them. He withdrew his comments and apologised to the Court for making them, adding that they were made in haste with insufficient thought. The evidence shows that Lane's apology was the result of a direction by the CFMEU State Secretary. He is not entitled to any discount for genuine contrition as to the events of October 2003. 8 A number of character references were tendered on behalf of Lane. The references show that Lane is well regarded by his peers in the industry. However, some of the references seem to suggest that Lane's conduct was characteristic and justifiable. It may be accepted that Lane is generally of good character, but the relevant issue here is whether he is prepared to abide by the law of the land as to workplace relations and union activity. 9 The relevance of that question is emphasised by noting the facts found in relation to his activities in relation to another site in the Wollongong area not long after these events ( Hadgkiss v Construction, Forestry, Mining and Energy Union (No 3) [2007] FCA 87 , (2007) 160 IR 263; Hadgkiss v Construction, Forestry, Mining and Energy Union (No 4) [2007] FCA 425 , (2007) 161 IR 338; Hadgkiss v Construction, Forestry, Mining and Energy Union [2008] FCAFC 22). 10 All in all, I regard a penalty of $1,800 as appropriate. Counsel for the CFMEU relies upon the absence of evidence that the controlling body of the CFMEU had prior knowledge of Lane's conduct or that there was any specific authorisation of his conduct in advance. He correctly submits that there is no evidence that the "directing mind and will" of the CFMEU was involved in Lane's conduct. It was submitted that the contemporaneous complaint to the Union was dealt with in a satisfactory manner. That may be accepted. There was evidence of action taken to educate organisers and delegates as to compliance with the Workplace Relations Act . 12 On the other hand, the CFMEU chose to actively defend the conduct of Lane to the end, notwithstanding the overwhelming evidence marshalled against his version of events. Furthermore, it is hardly sensible to view this incident as the wildcat actions of an aberrant official. Lane acted with other officials in his actions in relation to this building site. Notwithstanding the complaints to the Union in this case, Lane acted in a generally similar manner in relation to another site a short time later. There is a long and well-documented history of unlawful activity by union organisers and delegates in the building industry in Australia that counsel for the CFMEU acknowledged, but submitted that there has been a considerable change in culture over recent years. This makes it desirable that any return to the bad old days be appropriately penalised. 13 A number of findings involving unlawful behaviour by officials related to the CFMEU have been made in recent years, in addition to the other case involving Lane (eg Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) [1999] FCA 1714 , (1999) 94 1R 231; Construction, Forestry, Mining & Energy Union v Hamberger [2003] FCAFC 38 ; (2003) 127 FCR 309 ; Alfred v Walter Construction Group Ltd [2005] FCA 497 ; Martino v Construction, Forestry, Mining and Energy Union, Magistrates Court of Victoria (Industrial Division), 10 May 2006; Alfred v Construction, Forestry, Mining and Energy Union , District Court of New South Wales, 3 March 2004; Hadgkiss v Blevin [2004] FCA 697 ; [2004] FCA 917 ; Hadgkiss v Construction, Forestry, Mining and Energy Union [2007] FCA 524 ; (2007) 162 IR 385; Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65 ; (2007) 158 FCR 543 ; Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union [2006] FCA 1730 ; (2007) ATPR 42-140 ; Cruse v Multiplex Ltd [2007] FCA 2015 ; Cruse v Construction, Forestry, Mining and Energy Union [2007] FMCA 1873 ; and Alfred v Lanscar [2007] FCA 1001 ; (2007) 167 IR 320). Counsel for the CFMEU submits that only building industry cases are relevant, and then only those that involve the relevant divisional branch (the New South Wales Construction and General Divisional Branch), bearing in mind that the Union is an amalgamated federation ( Re Election for Office in the Construction, Forestry, Mining and Energy Union; Ex parte Sutton [2002] FCA 971 ; (2002) 115 IR 345 at [23] ). I agree that the classes of case identified are the most relevant, but I do not agree that the other cases are irrelevant. Ultimately, union officials will act in accordance with the policies of the union. An official of one geographic or industry branch will observe the manner in which policies are applied by the federal body in relation to other branches. These various cases illustrate that the federal body has not been effective in ensuring that officials act in accordance with the law. I note that there is no evidence of offending officials (including Lane) suffering any serious disciplinary penalties. 14 In my opinion, notwithstanding the purely vicarious nature of the liability of the CFMEU, the penalty in this case, when compared with the maximum penalty, should adequately reflect the systematic nature of the failure of the CFMEU to deter or prevent actions of the kind involved in this case and act as a spur towards effective action by the CFMEU and the State entities connected with it. A penalty of $5,500 will be imposed. The respondents should pay the first applicant damages in the sum of $23,000 plus interest from 22 October 2003 to the date of judgment. The respondent Lane is to pay a penalty of $1,800. The respondent CFMEU is to pay a penalty of $5,500. The applicants should bring in revised draft minutes of order to give effect to these reasons. Costs can be considered. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

breach of s 170nc of the workplace relations act by union officials and union level of penalties appropriate penalty where union vicariously liable where breach of s 45d of the trade practices act where interference with contract no practical difference as to calculation of damages between s 45d count and tort count in instant circumstances damages to be measured by loss of net revenue by contractor industrial law damages

The applicants claim by way of relief: Specific performance of the guarantee accompanying the share sale agreement. Damages for breach of a share sale agreement and the guarantee. Damages for breach of duty as a director pursuant to s 1317H of the Corporations Act 2001 (Cth). Interest pursuant to a share sale agreement or pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth). Costs. The respondents submitted that the applicants have abandoned aspects of their claim relating to breaches of duty under the Corporations Act . Although there was no express abandonment of the Corporations Act claims by the applicants, in my view the respondents' submission is substantiated by the facts that: I consider it appropriate to treat this aspect of the applicants' claim as abandoned. Mr Poh Kiat, who gave evidence on behalf of the applicants at the hearing of this matter, and who was a key witness in these proceedings for the applicants, was at all material times Managing Director of both Forbes Asia and Teamsphere Ltd. The second applicant ("Forbes Australia") was, at all material times, a company incorporated in Australia which carried on business both within and outside Australia. Prior to September 1997, Forbes Australia was a specialised company based in Brisbane which provided services to the concrete industry, notably in relation to establishment of plants and the construction of equipment for transportation of concrete. After the sale of shares of Forbes Australia in September 1997 the company continued to carry on business in the same industry. Until September 1997 the owners of the shares in Forbes Australia were two companies, Pearlbunch Pty Ltd ("Pearlbunch") and Talrate Pty Ltd ("Talrate"), both of which were controlled by the first respondent, Mr Forbes, as sole director. Mr Forbes was sole shareholder of Pearlbunch, and was also the sole director and (with Mrs Forbes) a shareholder of another company, Forbes Screens Pty Ltd ("Forbes Screens"). At the time of the share sale agreement executed by Forbes Asia as purchaser and Pearlbunch and Talrate as vendors on 22 September 1997 by which the shares in Forbes Australia were transferred to Forbes Asia ("share sale agreement"), Mr Forbes was the managing director and chief executive officer of Forbes Australia. He retained this position until 22 February 2000. At all material times Mr Forbes and Mrs Forbes were joint owners of certain property described as Lot 8 on RP 229240, County of Stanley, Parish of Toombul ("Lot 8"). Until 15 June 2000, Forbes Screens owned an adjoining property ("Lot 9"). On 22 September 1997 Forbes Screens entered into a lease of Lot 9 with Forbes Australia. The share sale agreement took place following what appear to be extensive negotiations during July, August and September 1997 between the parties. The initial negotiations in respect of the acquisition took place primarily between Forbes Asia represented by Mr Poh, and the interests of the vendors of the shares in Forbes Australia represented by Mr Forbes. Formal discussions in the period prior to execution of the share sale agreement involved the parties' legal representatives (including Mr Steven Grant for Mr Forbes and the vendors and Mr Freddy Chan for the purchasers) and accounting advisers. I shall return to consider these negotiations later in this judgment, because findings in respect of the negotiations are important in relation to a number of the applicants' claims in this case. Key provisions of the share sale agreement for the purposes of these proceedings were cl 2.3 and cl 3.3, Annexure 1 and cl 3.4. The purchase price for the shares in Forbes Australia was to be paid in three tranches or "cash injections". Clause 2.3 of the share sale agreement provided for the circumstances of the payment of third cash injection in the amount of $1,099,999. Of that amount, $500,000 (referred to as "the Retention Sum") was to be retained in escrow unless the terms of cl 3.4 were satisfied and the balance of the purchase price was paid. It recited the execution of the share sale agreement and the lease of Lot 8. If the Profit Shortfall exceeds 100% of such Rent, then we shall release and discharge FEH of FEH'S obligations and liabilities to pay to us the Rent for YE/98. If the Profit Shortfall is less than such Rent, then FEH shall deduct such Profit Shortfall from the Rent for YE/98. Such deductions shall be recovered by FEH by deductions of the same amount to the Rent payable by FEH to us under the Lease (for the YE/98). We hereby waive all our rights to defences available to (sic) in respect of the above guarantee and indemnity under the laws of Queensland, and shall pay to you on demand all monies, losses and damages and costs and expenses, suffered or incurred by you as a result of the Vendors' breach or failure to comply with the Vendors' obligations and covenants under the SS Agreements. All covenants and agreement herein made by us are so made by us jointly and severally and binding on our respective successors-in-title, heirs and personal representatives. In the event that under such adjustments we are required to refund to you such portion of the rent as have been paid by you to us, we shall pay to you on demand such refund of rent in full immediately. If we shall have defaulted in such refund, without prejudice to your rights against us for our said default, we shall pay interest at the rate provided under Clause 6.8 of the Lease on such refund calculated from the date of our receipt of your demand until the date of actual payment of such refund. If the Profit Shortfall exceeds 100% of such Rent, then we shall release and discharge FEH of FEH'S obligations and liabilities to pay to us the Rent for YE/98. If the Profit Shortfall is less than such Rent, then FEH shall deduct such Profit Shortfall from the Rent for YE/98. Such deductions shall be recovered by FEH by deductions of the same amount to the Rent payable by FEH to us under the Lease (for the YE/98). In the event that under such adjustments we are required to refund to you such portion of the rent as have been paid by you to us, we shall pay to you on demand such refund of rent in full immediately. If we shall have defaulted in such refund, without prejudice to your rights against us for our said default, we shall pay interest at the rate provided under Clause 6.8 of the Lease on such refund calculated from the date of our receipt of your demand until the date of actual payment of such refund. However the respondents plead that, as no relief is sought against Forbes Screens Pty Ltd, the matters pleaded in those paragraphs are irrelevant and embarrassing. These directors, Mr Freddy Chan (appointed September 1997) and Mr Norman Lee (appointed July 1998) were associates of Mr Poh. For the purposes of these proceedings the relevant deeds were the second, third and fourth deeds of variation. The second deed of variation was executed on 12 January 1998 by Pearlbunch, Talrate, Forbes Asia, Mr Forbes, Mrs Forbes and Forbes Screens. The deed provided that it was effective to vary the share sale agreement as from 22 September 1997. The second deed recited that Forbes Asia, Pearlbunch and Talrate had entered into the share sale agreement, that Mr Forbes, Mrs Forbes and Forbes Asia had entered into a "Letter of Indemnity" on 22 September 1997, and that Forbes Asia and Forbes Screens had entered into a "Letter of Indemnity" on 22 September 1997. (It is clear that the "Letters of Indemnity" to which the deed refers are the Forbes Guarantee and the Forbes Screens Guarantee respectively. ) The deed recited further that an error had been discovered in cl 3.3 of the share sale agreement and cll 3.1, 3.2 and 3.3 of the Letters of Indemnity (Forbes Guarantee and Forbes Screens Guarantee). If the Profit Shortfall exceeds 100% of such rent, then we shall release and discharge FEH of FEH's obligations and liabilities to pay us the rent for YE/98. If the Profit Shortfall is less than such rent, then FEH shall deduct such Profit Shortfall from the rent for YE/98. Such deductions shall be recovered by FEH by deductions on the same amount to the rent payable to FEH to us under the lease (for the YE/98). The Retention Sum shall not be released or drawn upon without the written consent of the Purchaser, unless in pursuant to the terms set out in Clause 3.4 below and the BPP shall have been paid by the Purchaser to the Vendors on the Completion Date (as hereinafter defined) in pursuant to Clause 2.4 or pursuant to Clause 5.1 or 5.2. The fourth deed of variation executed by Pearlbunch, Talrate, Forbes Asia and Mr Poh on 23 March 1998 acknowledged the earlier variations of the share sale agreement. Correspondence took place between Mr Forbes and Mr Poh in relation to, inter alia , the terms upon which the acquisition of Favco was to take place. Indeed there is some evidence before the Court that at one point Forbes Australia was subject to voluntary administration under Pt 5.3A of the Corporations Act (affidavit of Poh Kiat affirmed 18 December 2006 para 4). These sums represented profit shortfalls alleged by the applicants to have been experienced by Forbes Australia in the years ending 31 December 1998 and 31 December 1999 respectively. The applicants' demands were made pursuant to the profit guarantees in cl 3.3 of the share sale agreement and as stated in the letter of demand "the relevant side letters". The respondents conceded that cl 3.3 of the share sale agreement was in the nature of a guarantee of performance by the vendors. The share sale agreement upon its proper construction permitted the parties who were potentially liable in respect of the guarantee under cl 3.3 to undertake their own assessment, and challenge any assertion as to, inter alia , the profit earned by Forbes Australia in each of the 1997, 1998, and 1999 calendar years (para 4B (ba)(ii)). The guarantee under cl 3.3 was, upon its proper construction, premised on the continuation of certain matters set out in cl 3.1 of the share sale agreement, namely that the vendors were and remained entitled to control the make up of the board of Forbes Australia. This did not occur --- instead Forbes Asia controlled the make-up of the board of Forbes Australia and appointed new directors as and when it saw fit. Accordingly, the guarantee under cl 3.3 was discharged (para 4B(c)). Alternatively, prior to the formation of the share sale agreement, Mr Forbes provided profit forecasts to Forbes Asia in respect of Forbes Australia's business as it then was, namely based entirely in Brisbane. Forbes Asia knew that the profit forecasts were based upon Forbes Australia's Brisbane-based business as it then was. The profit guarantees in cl 3.3 of the share sale agreement were based on the Brisbane-based business of Forbes Australia. In 1999 Forbes Australia's business was altered significantly and substantially by the acquisition of Favco. The acquisition of Favco rendered the profit forecasts originally provided by Mr Forbes inapplicable to Forbes Australia's business after the acquisition. Accordingly, the acquisition of Favco was a fundamental alteration to the transaction guaranteed by the respondents and discharged the respondents from any liability under the profit guarantees (para 4B(d)). The respondents deny that they incurred any liability under the Forbes Lot 8 Lease Guarantee; alternatively that there was no valid consideration for it and accordingly it was void (para 4D). While the respondents admit the existence of the deeds of variation to the share sale agreement: the third deed of variation replaced the existing cl 2.3 of the share sale agreement with an entirely new and materially different clause. Neither of the respondents agreed to extend any existing guarantee or indemnity provided by them to Forbes Asia. The Forbes Guarantee was discharged by the third deed of variation or alternatively was unenforceable (para 4F(d)); alternatively, the fourth deed of variation substantially amended cl 2.3 of the share sale agreement which meant that the Forbes Guarantee was discharged or alternatively was unenforceable (para 4F(e)). In defence of the entire claim the respondents say that the applicants' cause of action arose more than six years prior to the commencement of the claim and is thereby statute barred (para 12 --- see also TS p 16 and p 17). Alternatively, the respondents say that Forbes Asia is estopped from relying on the profit guarantees in circumstances where: on or about 15 or 16 September 1997, prior to the execution of the share sale agreement and the side letters in respect of Lot 8 and Lot 9, Mr Poh on behalf of Forbes Asia said to Mr Forbes that the profit guarantees would never be enforced by Forbes Asia and were just matters necessary to be included to satisfy the demands of its parent company Teamsphere Ltd; in reliance on this representation Mr Forbes executed the documents; subsequent to the execution of the documents, Mr Poh on behalf of Forbes Asia has repeated to the respondents that it would not enforce the Profit Guarantee thereby maintaining the representation. The proceedings do not involve an attempt by Forbes Asia to enforce the terms of the share sale agreement against the vendors of shares in Forbes Australia, nor do the applicants seek any relief from Forbes Screens. Accordingly, relief sought by the applicants in the amended application for damages for breach of the share sale agreement is without foundation, because the vendors of the shares who were parties to the share sale agreement are not named as respondents to this litigation. The key issues in these proceedings relate to the enforceability or otherwise of guarantees given by Mr and Mrs Forbes in terms of the profit guarantees in the share sale agreement. Mr and Mrs Forbes were parties to the Forbes Guarantee and the Forbes Lot 8 Lease Guarantee. In my view, the following issues require decision. Did Forbes Australia experience a profit shortfall in the financial year ending 31 December 1998? What is the position of Mrs Forbes in relation to the 1998 profit shortfall? Was the effect of cl 3.3 and Annexure 1 of the share sale agreement such that the production of audited figures for the financial year ending 31 December 1999 was conclusive evidence of those figures, consistent with the decision of the High Court in Dobbs v National Bank of Australasia Ltd [1935] HCA 49 ; (1935) 53 CLR 643? Was the change of control of Forbes Australia from the vendors to Forbes Asia an alteration in the factual substratum sufficient to discharge the respondents as guarantors? Did the third and fourth deeds of variation to the share sale agreement result in the discharge of the respondents as guarantors? Did the transaction resulting in the acquisition of Favco by Forbes Australia result in the discharge of the respondents as guarantors under the Forbes Guarantee? Even if the vendors' profit guarantees as articulated in cl 3.3 of the share sale agreement are valid, are the applicants estopped from relying on them because of the alleged representations of Mr Poh as pleaded in para 13 of the respondents' defence? Was the applicants' cause of action statute barred? Was the Forbes Lot 8 Lease Guarantee enforceable? What are appropriate rulings in relation to the notice of motion filed 12 September 2007? I now turn to each of these issues. 1. Did Forbes Australia experience a profit shortfall in the financial year ending 31 December 1998? So far as concerns the 1998 financial year the applicants submit in their Statement of Facts, Issues and Contentions as follows: The respondents submitted in summary: Mr Forbes agreed with Mr Poh that the agreed profit shortfall for the 1998 calendar year was $127,284 but the agreement was founded upon a misapprehension on the part of Mr Forbes that there had been a proper accounting of all of Forbes Australia's sales for the 1998 calendar year. Forbes Australia had failed to record approximately $241,000 in sales, which sales had occurred in 1998 rather than 1997. Although invoices were issued in November and December 1997, Forbes Asia asked for invoices to be re-issued to suit Forbes Asia, and therefore new invoices were issued in respect of the same goods in February 1998. Forbes Asia, by its request for the issuing of credit notes in respect of those sales, knew that the sales had occurred in 1998. Had those sales been taken up on Forbes Australia's accounts for the 1998 calendar year, there would have been no profit shortfall that year. The respondents submit that those sales should have been recorded in Forbes Australia's 1998 calendar year accounts. Notwithstanding statements of Mr Brauer and Mr Poh in relation to the accruals accounting basis of Forbes Australia: there is no evidence as to whether Forbes Asia treated the sales as having occurred in 1997 or 1998; the re-issued invoices state that title to the goods does not pass until payment for the goods is received (affidavit of Terrence Brauer filed 18 January 2008 exhibit "TB 5" invoices 23295 and 232396); Mr Lytras' evidence, which was not tested or challenged, its that on the face of the relevant invoice documents it is not possible to tell without access to Forbes Australia's books and records whether the sales should properly be attributed to the 1997 or 1998 calendar years (affidavit of Elia Lytras affirmed 11 February 2008 para 4 and para 5). Accordingly, it would be unconscionable to permit the applicants to enforce the agreement formed on 14 January 1999. In any event, the agreement formed on 14 January 1999 did not involve, and was not binding upon, Mrs Forbes. Further and alternatively, it is an abuse of process to permit the applicants to enforce the agreement of 14 January 1999 because Forbes Australia has failed to maintain its financial records, meaning that the respondents cannot reasonably and properly identify Forbes Australia's correct sales for the 1998 calendar year. The agreement was to the effect that Forbes Australia had suffered a profit shortfall of $127,284 for the financial year ending 31 December 1998. It appears that this profit shortfall was calculated by Mr Brauer, the accountant for Forbes Australia, and Mr Kang Ching Hong, the internal auditor for Teamsphere Ltd, and accepted by Mr Poh and Mr Forbes. It also appears that at that meeting the parties discussed the method by which the profit shortfall would be remedied by Mr Forbes. Subsequently Forbes Australia recorded the sum of $127,294 as a prepayment of rent payable under the Lot 8 lease in the books of account of Forbes Australia. A clear inference may be drawn that this action was in accordance with both the Forbes Guarantee and the Forbes Lot 8 Lease Guarantee which as already noted provided respectively that Mr and Mrs Forbes guaranteed certain profits and that any profit shortfall would be met by way of waiving lease payments. The fact that the oral agreement between Mr Poh and Mr Forbes did not result in a written amendment to the Forbes Guarantee does in my view detract from the validity of the agreement with respect to the 1998 profit shortfall so far as concerns Mr Forbes, where the agreement was implemented by reference to journal entries in the accounts of Forbes Australia (cf Koenigsblatt v Sweet [1923] 2 Ch 314). Notwithstanding the agreement reached by Mr Poh and Mr Forbes however, it also appears clear that despite the relevant journal entry Forbes Australia continued to pay Mr Forbes rent in respect of the Lot 8 lease (TS p 302 ll 9-11). Subsequently a journal entry reversing the prepayment was entered in Forbes Australia's general ledger on 30 June 1999. The fact that this event occurred does not appear to be in doubt (for example evidence that it occurred was given by Mr Brauer in his affidavit sworn 25 January 2006 para 28). Prima facie on these facts, it follows that if the 1998 profit shortfall agreed by the parties on 14 January 1999 is enforceable, not only is that amount ($127,284) outstanding from the respondents, but because Forbes Australia continued to pay rent of Lot 8 and Lot 9 and any purported prepayment of rent was reversed in the accounts, the applicants have substantiated their claims that: However despite the agreement of 14 January 1999, the respondents contend that it should not be enforced. Three relevant issues arise. The first issue is whether any finding as to a profit shortfall or otherwise can be made in the absence of the books and records of Forbes Australia for 1998, which books and records are no longer available. The second issue concerns the claim by the respondents that in fact the agreement of Mr Poh and Mr Forbes was based on a false assumption as to the value of sales which took place in 1997, but which in fact should have been accounted as having taken place in 1998. The third issue concerns the position of Mrs Forbes, which I will consider later in the judgment. It became clear prior to the trial of the substantive proceedings that the second applicant simply had not retained source financial documentation relating to its affairs in the 1998 and 1999 calendar years. Further, it appears that notwithstanding an order of this Court for third party discovery, Deloitte Touche Tohmatsu (which conducted an audit of the accounts of Forbes Australia for the calendar year ending 31 December 1999) did not have this documentation. I accept the submissions by the applicants that the respondents had not asked for source financial documentation until October 2006, which is after the seven year retention period in relation to the documents had elapsed. There is no suggestion that source documentation had been deliberately destroyed. In my view no adverse inferences can be drawn in relation to the absence of the relevant source financial documentation. The courts have recognised the importance of access to source financial documentation in the face of conflicting financial evidence (for example, Hamilhall Pty Ltd v AT Phillips Pty Ltd [1994] FCA 1446 ; (1994) 54 FCR 173 , ALF No 12 Pty Ltd v Starkey [2006] QSC 297). However the fact that source financial documentation is not available does not mean that the Court is unable to make a determination on a question of financial position (for example, David Towney v Minister for Land & Water Conservation for NSW [1997] FCA 656 , ALF No 12 Pty Ltd v Starkey [2006] QSC 297). In this case, notwithstanding that the books and records of Forbes Australia from the 1998 financial year are not available, the evidence is clear that Mr Poh and Mr Forbes, assisted by informed accounting advisors, agreed on 14 January 1999 that on available figures the profit shortfall for 1998 would be $127,284. I do not consider that the absence in these proceedings of the source financial documents of Forbes Australia from 1998 undermines the existence of that agreement or in any way gives rise to an abuse of process with respect to this aspect of the claim (an issue to which I will return later in the judgment). I refer to paragraphs 5 to 9 of my First Affidavit affirmed on 25 October 2005. Following what Mr Forbes had said during that meeting, I understood that there had been agreement between Mr Forbes and myself that the amount of the 1998 profit shortfall was $127,284 for the purposes of the Profit Guarantee. I expected that the shortfall would be made up by Mr Forbes in the manner described. Consequently, I did not arrange for Forbes Australia to have its accounts audited by the company auditor (Deloitte Touche Tohmatsu) for the year ended 31 December 1998. Because I understood that there was an agreement as to the amount of the 1998 profit shortfall and expected it to be honoured, I considered the cost of an audit to be unnecessary. Were Forbes Australia's sales for 1998 actually understated by $240,866.42? Of greater concern is the possibility that information which came to the parties' attention after 1998 demonstrated that in fact the agreement of 14 January 1999 was based on inaccurate data. I refer to paragraph 34 of Kiat's 2nd Affidavit. In paragraph 35 of my First Affidavit, I say that I verily believe that the profit figure for the year ended 31 December 1998 exceeded the Profit Guarantee figure of $1.4 million by $151,156.00. My belief was based on calculations made by Forbes Australia's staff that were provided to my (sic) early in 2000. The calculations were given to me in the form of a handwritten note, a true copy of which is Exhibit "MF-9" to this Affidavit. My recollection is that at or shortly after the time I received this note I referred them to Terry Brauer. I have since been informed by Terry Brauer that he no longer holds the view that the 1998 sales were understated by the sum of $418,000.00 and that the credit notes issued by Forbes Australia at the direction of the First Applicant all appear valid to the extent that the sales recorded in the invoices to which the credit notes relate are recorded elsewhere. In the circumstances, Forbes Australia's profit for the 1998 calendar year was understated by $240,866.42 (not $418,000.00 as I indicated in my First Affidavit) when account is taken of the fact that credit notes were issued, at the request of the First Applicant, in respect of sales that actually took place in 1998 rather than the end of 1997. Indeed Mr Forbes in his affidavit deposed that sales in 1998 had been understated by $240,866.42, which is the sum total of the sales referred to in Invoices 21701 and 23702. Invoice 23702 refers to the same mixer serial numbers as those supplied pursuant to Invoice 23701, however Invoice 23702 is an invoice for the labour to assemble those mixers. These invoices are exhibited to the affidavit of Mr Brauer sworn 18 January 2008. However it became clear during cross-examination of Mr Forbes and Mr Brauer that the sales which the respondents claimed should have been credited to the 1998 year actually took place in 1997, and were properly accounted as 1997 sales, as claimed by the applicants. In fact, the sales which took place in 1997 were, as the applicants claimed, simply reinvoiced in 1998. I note in particular Counsel's cross-examination of Mr Forbes (TS p 284 et seq) with respect to Invoice 21701, (dated 20 February 1998) which Invoice referred to the supply of ten hydraulic mixers and the serial numbers of mixers, and which on the face of the invoice totalled $140,000. As Mr Jones' cross-examination demonstrated, Invoice 23701, dated 20 February 1998, merely reflected sales that were invoiced and shipped in 1997. Further, I note that Mr Brauer conceded during cross-examination that the sales referred to in Invoice 23701 actually took place in 1997 (TS p 327 ll 21-24). Mr Poh deposed that the two invoices 23701 and 23702 were not actual sales but repeat billings for the sales made in November and December 1997, and the Credit Notes 485 and 549 exhibited on pp 36 and 37 of exhibit TB5 to Mr Brauer's affidavit sworn 18 January 2006 were correctly issued to reverse those repeat billings. In my view this evidence correctly represents the position with respect to the sales referred to in those invoices. I note further that the expert evidence in relation to the existence (or otherwise) of a Forbes Australia profit shortfall for 1998 is conflicting and of marginal assistance. Expert evidence tendered by both parties was qualified by the absence of audited financial statements for 1998. The expert report prepared by Mr Blackwood for the applicants and dated 18 September 2006 calculated a profit shortfall for the year ended 31 December 1998 as either $195,397 or $171,096, depending on a number of variables. Mr Lytras in giving expert evidence for the respondents deposed that from the information available and given the multiple invoices, it was not possible for him to definitively determine the calendar year in which the sales of hydraulic mixers the subject of invoices 23701 and 23702 took place (affidavit of Elia Lytras affirmed 11 February 2008). However I consider that Mr Lytras' evidence in relation to this issue is of little value in light of the concessions made by both Mr Forbes and Mr Brauer during cross-examination. On this basis, contrary to evidence of Mr Forbes and affidavit evidence of Mr Brauer, I do not accept that that the profits of Forbes Australia were understated by $240,886.42 in 1998, or that the agreement of Mr Poh and Mr Forbes on 14 January 1999 as to the profit shortfall experienced by Forbes Australia in 1998 was based on inaccurate data. In relation to the 1998 profit shortfall however, it is clear that the fact and amount of a profit shortfall for 1998 were agreed, on an informed basis, by Mr Poh on behalf of both applicants and Mr Forbes. Failing other reasons which have been advanced by the respondents, and to which I shall turn shortly, in my view the amount of $127,284 represents the profit shortfall for the year ending 31 December 1998 for the purposes of cl 3.3 of the share sale agreement and is recoverable from Mr Forbes by the applicants pursuant to the Forbes Guarantee. 2. What is the position of Mrs Forbes in relation to the 1998 profit shortfall? Notwithstanding any findings by the Court in relation to the position of Mr Forbes, the respondents deny that Mrs Forbes is bound to the agreed 1998 profit shortfall amount of $127,284 on the basis that she was not present during discussions about this issue. The respondents claim further that Mrs Forbes cannot be bound by any agreement of Mr Forbes to the 1998 profit shortfall amount because Mr Forbes had no authority to act on behalf of Mrs Forbes. The pre-payment of rent could be used to pay Forbes Australia's rent on the leases of Lots 8 and 9 for the next seven months. But if Forbes Australia achieves a profit over and above the 1999 profit target, I will use my entitlement of 10% of that profit to pay the 1998 shortfall. The applicants submit that Mrs Forbes had allowed Mr Forbes to carry out all of the dealings in respect of these transactions, including the contractual negotiations, and in those circumstances she clothed him with ostensible authority to reach the agreed 1998 profit shortfall on her behalf. The Forbes Guarantee specifically referred to the profit guarantees in cl 3.3 of the share sale agreement and the formula in Annexure 1 to that agreement, both of which in turn referred to the machinery for calculating audited profits before tax. The agreement reached between Mr Poh and Mr Forbes as to the 1998 profit shortfall, clearly in substitution of the machinery of calculation provided in the share sale agreement, was a material alteration to the terms of the Forbes Guarantee with respect to the 1998 year. Mr Poh has submitted that it is binding, and, as I have already found, it is binding on Mr Forbes. The position is, however, different with respect to Mrs Forbes. It is not in dispute that Mrs Forbes was not present at the meeting of 14 January 1999 when the agreement as to the 1998 profit shortfall was reached by Mr Poh and Mr Forbes. Indeed in this case there is no evidence of any contact between either applicant and Mrs Forbes in relation to the agreed 1998 profit shortfall (or any other matter), and certainly no actual agreement. Principles of actual and ostensible authority in agency law are well-known. To the relationship so created the agent is a stranger. He need not be (although he generally is) aware of the existence of the representation but he must not purport to make the agreement as principal himself. The representation, when acted upon by the contractor by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting that he is not bound by the contract. It is irrelevant whether the agent had actual authority to enter into the contract. It is, however, important to emphasise that the authority impliedly granted by the principal to the agent must be such as could be validly granted by express agreement. The applicants submit that Mrs Forbes had clothed Mr Forbes with authority to conclude such an agreement on her behalf. However the only evidence before the Court relevant to Mrs Forbes in the context of the meeting of 14 January 1999 and the agreement there reached is that the applicants were aware that Mr Forbes and Mrs Forbes had separated. In the absence of evidence to the contrary (of which there is none before me) such circumstances run counter to any claimed representation that Mr Forbes had authority to bind Mrs Forbes to an agreement with the applicants in any respect. Further, I agree with the respondents that the agreement concluded between Mr Poh and Mr Forbes in relation to the 1998 profit shortfall was couched only in terms of Mr Forbes' obligations. It is settled law that a surety will be discharged from his or her obligations where there is a fundamental alteration to the guaranteed obligations to which the surety has not consented: Ankar [1987] HCA 15 ; (1987) 162 CLR 549 , Wallace-Smith v Thiess Infraco (Swanston) Pty Ltd [2005] FCAFC 49 at [302] . According to the English cases, the principle applies so as to discharge the surety when conduct on the part of the creditor has the effect of altering the surety's rights, unless the alteration is unsubstantial and not prejudicial to the surety. The rule does not permit the courts to inquire into the effect of the alteration. The consequence is that, to hold the surety to its bargain, the creditor must show that the nature of the alteration can be beneficial to the surety only or that by its nature it cannot in any circumstances increase the surety's risk, e.g. a reduction in the debtor's debt or in the interest payable by the surety. The mere possibility of detriment is enough to bring about the discharge of the surety. Further, the substituted agreement with respect to the 1998 profit shortfall represented a material alteration to the calculation of that shortfall, the terms of the principal agreement and in particular the liability of the guarantors with respect to the amount guaranteed for the year ending 31 December 1998. It is not claimed, and there is no evidence, that this alteration in any way benefited Mrs Forbes. Accordingly, any liability of Mrs Forbes in relation to a profit shortfall for the calendar year ending 31 December 1998 pursuant to the Forbes Guarantee and cl 3.3 of the share sale agreement was discharged in light of the substituted agreement reached by Mr Poh and Mr Forbes in respect of that year, and to which she has not consented. 3. Was the effect of clause 3.3 and Annexure 1 of the share sale agreement such that the production of audited figures for the 1999 financial year was conclusive evidence of those figures, consistent with the decision of the High Court in Dobbs v National Bank of Australasia Ltd [1935] HCA 49 ; (1935) 53 CLR 643? In relation to the year ending 31 December 1999 the applicants submit that Forbes Australia recorded an audited loss before tax, calculated by reference to the Formula in Annexure 1 of the share sale agreement, of $341,284.00. This loss, recorded in Forbes Australia's audited financial report for that year prepared by Deloitte Touche Tohmatsu, together with the failure of Forbes Australia to reach the guaranteed profit of $1,350,000 (being 90% of $1,500,000 in accordance with cl 3.3.3 of the share sale agreement as varied) resulted in Forbes Australia experiencing a profit shortfall for that year of $1,691,284. The applicants submit further that the fact that the loss was recorded following an audit in accordance with Annexure 1 of the share sale agreement means that it is conclusive evidence of that loss. The applicants refer to the decision of the High Court in Dobbs [1935] HCA 49 ; (1935) 53 CLR 643 as authority for this proposition. Now, in evidence is the only document which fits within that description. It's the audit by Deloittes, the company auditors. They are the audited accounts. If they are not audited accounts, and if they are not audited accounts to which that clause refers, then, one may ask rhetorically what conceivably could possibly fit that description of audited accounts. There's no suggestion, there's no pleading that that audit report, those accounts are in any way were fraudulently prepared or are not what they say they are... There's much complaint raised that, "Oh, we can't test it. " That's true to a point, insofar as that every single document which those auditors would have seen are no longer available, and there's the evidence, particularly, that the correspondence between the instructing solicitors explain why that is, and, namely, that the company went into a period of administration for a period of time, and lost control of all of its records, and when it came out of administration it never got those --- all of those records back. And for some reason the accountants --- the administrators no longer have them, and unfortunately Deloittes no longer have everything either. Now, but it's... And it's a novel proposition put by the respondent that the plaintiff, in particular a company can't rely on its own audited accounts, which is what we're seeking to do. Now, if your Honour accepts that they are the audited accounts of the company for the period 31 December 1999, then, in our submission, that is the end of the story. They fit the description of the accounts referred to in the profit guarantee clause, and clearly on their face, they comply with the terms in the share sale agreement. My friend, in his submissions, put to your Honour that they don't, they merely --- there's a further step that needed to be done, and that hasn't been done, is the effect of my friend's submission. If you Honour will turn to exhibit 1A, at page 148, which is at the end of the audit report --- Deloittes audit report. There it is. That's the calculation in accordance with clause 3.3 of the share sale agreement. So the applicant has done all it can conceivably, in terms of establishing what the profit was or --- and rather the loss was, and what the profit shortfall was, in this case. And you have the subsequent to that report is the report of Ernst and Young which merely confirms the position of the Deloittes calculation. But your Honour need not, strictly speaking, rely on refer to it as the only report, because the Deloittes report is what it is, the audited reports of the company. In relation to the applicants' interpretation of cl 3.3, the respondents submit that the applicants' claims with respect to the final and conclusive nature of an audit report allegedly produced in compliance with cl 3.3 of the share sale agreement are unsustainable in light of ordinary principles of interpretation applicable to commercial contracts because: Further submissions of the respondents with respect to the authority of the Deloitte Touche Tohmatsu report are in summary: The respondents submitted that, in light of these concerns with respect to the Deloitte Touche Tohmatsu report, it should be ruled inadmissible. It is not in contention that, following the resignation of Mr Forbes as chief executive officer of Forbes Australia, Mr Poh asked Mr Singh, the new chief executive officer of Forbes Australia, to ask Deloitte Touche Tohmatsu to prepare audited financial statements for the 1999 financial year (TS p 215), and that Deloitte Touche Tohmatsu did so. The applicants rely on that report as being final and conclusive evidence in relation to that aspect of their claim concerning the alleged profit shortfall for the year ending 31 December 1999. In Dobbs [1935] HCA 49 ; (1935) 53 CLR 643 the bank brought an action against the appellant to recover the sum of ₤998 8s 7d pursuant to a guarantee signed by the appellant. A certificate signed by the manager or acting manager for the time being of your head office or of any other office of your bank at which the banking account of the customer shall for the time being be kept stating the balance of principal and interest due to you by the customer shall be conclusive evidence of the indebtedness at such date of the customer to you. It is not a qualification of the undertaking to pay contained in the first clause. It does not make a certificate a condition precedent to recovery. The promise remains a promise to pay the amount owing; it does not become a promise to pay the amount owing if certified or a promise to pay only what is certified as owing. The bank could recover without the production of a certificate if, by ordinary legal evidence, it proved the actual indebtedness of the customer. But the clause, if valid, enables the bank by producing a certificate to dispense with such proof. It means that, for the purpose of fixing the liability of a surety, the customer's indebtedness may be ascertained conclusively by a certificate. It was contended, however, for the appellant that, upon its true construction, the clause did not make the certificate conclusive of the legal existence of the debt but only of the amount. It is not easy to see how the amount can be certified unless the certifier forms some conclusion as to what items ought to be taken into account, and such a conclusion goes to the existence of the indebtedness. ...(T)he manifest object of the clause was to provide a ready means of establishing the existence and amount of the guaranteed debt and avoiding an inquiry upon legal evidence into the debits going to make up the indebtedness. The most conspicuous example, perhaps, is the certificate of the engineer or architect under contracts for the execution of works or the construction of buildings. However, after considering the submissions of both parties I have concluded that the applicants have not substantiated their case in relation to alleged profit shortfall for the 1999 calendar year based on the Deloitte Touche Tohmatsu report. Although there is force in the submission of the applicants to the effect that, if the audited financial statements for 1999 prepared by the auditors of Forbes Australia did not contain information as to "audited profits before tax" of that company as described in cl 3.3 and Annexure 1 of the share sale agreement, one indeed might ask what else in the circumstances of this case could conceivably fit that description, I am not persuaded that the reasoning in Dobbs [1935] HCA 49 ; (1935) 53 CLR 643 applies in these circumstances for the following reasons. It is clear that the profit guarantee under cl 3.3 exists solely for the benefit of Forbes Asia. Such a clause should be strictly construed ( Je Maintiendrai Pty Ltd v Australia and New Zealand Banking Group Ltd (1985) 38 SASR 70 at 71, Apple Computer [2003] NSWSC 126 at [127] , O'Donovan J & Phillips J, The Modern Contract of Guarantee (4th ed, looseleaf) at 5.920). The legal principles emerging from Dobbs [1935] HCA 49 ; (1935) 53 CLR 643 have been largely confined to circumstances where a banker's certificate has been issued as to the amount of indebtedness of a debtor to the bank (for example Dobbs [1935] HCA 49 ; (1935) 53 CLR 643 , Je Maintiendrai Pty Ltd v Australia and New Zealand Banking Group Ltd (1985) 128 SASR 70, Campbell v National Australia Bank Ltd [1994] SASC 4526 , Equus Financial Services Limited v Sabri [1994] FCA 1331 , George Biritz v National Australia Bank Limited [1995] VSC 91 , Shomat v Rubenstein (1995) 124 FLR 284 , Thurwood v First for Finance Pty Ltd [1997] FCA 559 , Australia & New Zealand Banking v Pan Foods Company Importers & Distributors Pty Ltd [1998] VSC 346 , Jenkins v National Australia Bank Ltd [1999] VSCA 33 , State Bank v Lo [2000] NSWSC 1191 , State Bank of NSW v Kit Cheng Chia [2000] NSWSC 552 , Australia and New Zealand Banking Group Ltd v Dzienciol [2001] WASC 305 , Julong Pty Ltd v Fenn [2002] QCA 529 , Apple Computer [2003] NSWSC 126 , Commonwealth Bank of Australia v Bouwman [2003] WASC 205 , Timms v Commonwealth Bank of Australia [2004] NSWSC 76 , Permanent Trustee Company Limited v Gulf Import and Export Company [2008] VSC 162). Since --- and possible because of --- Dobbs [1935] HCA 49 ; (1935) 53 CLR 643 , bankers' certificates have become well-known in practice. That is not to say that the principle articulated in Dobbs [1935] HCA 49 ; (1935) 53 CLR 643 has not been extended beyond the banker/customer/surety relationship, however circumstances in which the Dobbs [1935] HCA 49 ; (1935) 53 CLR 643 principle is applicable are primarily confined to those involving the issue of a certificate as to the existence of a fact pursuant to legislation, or certain types of agreement, for example: As observed by McPherson J in Parker v QBSA [2000] QCA 422 at [13] , the provision concerning conclusiveness of certificate of title under the Torrens system of registration is perhaps the best known Australian legislative example of the issue of a certificate having a final effect. In this case it is clear that: Any clause which purports to specify how a particular issue will be determined so as to preclude the parties from subsequently ventilating that issue in court must be expressed in the clearest of terms ( Stylis v United Medical Protection Ltd [2007] NSWCA 109). Neither cl 3.3 (nor Annexure 1) clearly express such a limitation. While these provisions do purport to prescribe a method of calculation of profits, they do not purport to have the effect of finality as was the situation in many of the cases to which I have referred. In the absence of such language the Court will be loath to impute such an effect: Permanent Trustee Company Ltd v Gulf Import and Export Company & Emirates Trading Agency LLC [2008] VSC 162 at [38] . The preparation of an audit opinion in accordance with Australian Accounting Standards, while usually undertaken by experts, is clearly not a banker's certificate as contemplated in Dobbs [1935] HCA 49 ; (1935) 53 CLR 643 and the overwhelming majority of cases where the Dobbs [1935] HCA 49 ; (1935) 53 CLR 643 principles have been applied. Nor, in my view, is it akin to a banker's certificate, whereby a person nominated by the relevant bank certifies the existence of a fact appearing in bank records, namely the recorded amount of indebtedness of a customer to the bank. Further, in the sense that an audit report is produced, albeit in an expert fashion, but based upon information provided by the company itself, in my view it is not akin to a certificate given by an engineer, an architect or a builder, who certifies the existence of a state of affairs in relation to construction of a building which he or she has personal knowledge and control. Clause 3.3 can be contrasted with cll 3.4.2, 3.4.3 and 3.4.4 of the share sale agreement which do purport to prescribe certifications by third parties in a manner akin to cases where Dobbs [1935] HCA 49 ; (1935) 53 CLR 643 has been applied. Clauses 3.4.2, 3.4.3 and 3.4.4 provide for conclusive certification by nominated persons of certain facts. Such language does not appear in cl 3.3. Significantly, cl 17 of the share sale agreement provides that " any dispute in connection with the agreement should be finally settled by arbitration by an independent person appointed by the President for the time being of the Australian Society of Certified Practising Accountants (Queensland) at the request of either party". This clause did not exclude disputes in respect of cl 3.3. The existence of cl 17 and the fact that it applies to all disputes militates against an interpretation that audited financial statements were to be a final and conclusive determination of the profits of Forbes Australia within the meaning of cl 3.3. The High Court in Dobbs [1935] HCA 49 ; (1935) 53 CLR 643 accepted that a clause of this nature should not be interpreted as covering all grounds which go to the validity of the amount certified, for example illegality (at 651). Similarly, the Courts have found that a certificate can be challenged on such grounds as fraud and obvious error ( Permanent Trustee Company Limited v Gulf Import and Export Company [2008] VSC 162) , although if the certificate is properly tendered the onus falls upon the defendant to demonstrate by acceptable evidence that the certificate is incorrect ( Commonwealth Bank of Australia v Oberdan [2000] SASC 428 at [14] , Concrete Constructions Group Pty Ltd v Coddlestone Pty Ltd [1995] ACTSC 332). In this case cl 3.3 and Annexure 1 are not framed in such terms that an audit report is final and conclusive irrespective of any errors (whether manifest or otherwise) in calculations of the audited financial statements or failure of the audit report to comply with the prescribed formula in Annexure 1 (contrast for example State Bank of NSW v Chia [2000] NSWSC 552). Accordingly it could not be contended that the claimed profit shortfall of $1,691,284 as stated in the Deloitte Touche Tohmatsu report would be final and conclusive even if the respondents were able to demonstrate flaws in the calculations which arrived at that figure, including failure to comply with the prescribed formula in Annexure 1 or otherwise. The respondents submit that because of the absence of source financial documentation, they cannot test the accuracy of the report through cross-examination or other analysis. In light of this submission I note the following: The expert accounting evidence tendered during the proceedings suggests deficiencies attendant upon the Deloitte Touche Tohmatsu report; The expert report of Mr Angus Blackwood dated 18 September 2006 for the applicants is of minimal assistance in relation to the report because Mr Blackwood's comments in relation to the 1999 profits are based upon the audited financial statements by Deloitte Touche Tohmatsu. Mr Elia Lytras, an expert witness for the respondents, deposed that in order to determine the audit profit shortfall or excess for Forbes Australia for the year ended 31 December 1999 he required copies of all the instructions, working papers and files of Deloitte Touche Tohmatsu in relation to their audit of the Financial Reports of Forbes Australia (affidavit of Elia Lytras affirmed 18 January 2007). It is not in dispute that the documentation requested by Mr Lytras was not available. Mr Robert Edwards, a registered company auditor who gave expert evidence for the respondents, deposed that as at the date of his affidavit there was an absence of essential documentation necessary for him to prepare an audit of the accounts of Forbes Australia for 1999. More significantly, Mr Edwards deposed that the lack of essential documentation provided by Deloitte Touche Tohmatsu in response to requests for information meant that he was unable to assess the quality of the 1999 audit of Forbes Australia undertaken by Deloitte Touche Tohmatsu (affidavit of Robert Edwards affirmed 21 September 2007). Annexure 1 requires that, in calculating the audited profit before tax of Forbes Australia and its subsidiaries, the following were to be excluded: extraordinary items; abnormal items; gain or loss on disposal and/or revaluation of assets; expenses relating to research and development; provisions for long service leave; additional depreciation and amortisation resulting from the value of any item. The significance of these items is apparent from the undisputed evidence of Mr Lytras in his affidavits affirmed 11 September 2007 and 11 February 2008. In his affidavit affirmed 11 September 2007, Mr Lytras stated that Deloitte Touche Tohmatsu was unable to provide any data which explained a $1,068,399 variance in their audited figures from the management accounts for the year ended 31 December 1999. In a briefing note exhibited to his affidavit affirmed 11 February 2008 (exhibit 6), Mr Lytras stated that he believed that the variance arose due to a substantial and material write-down of trade debtors, accompanied by raising a significant bad debt provision, as at 31 December 1999. At least one of the debts written off was more than twelve months prior to 31 December 1999. The nature of the Favco Australia amounts written off were unclear. The write-down causing the variance accords with the definition of "abnormals", was of significant size and had a significant impact upon the entity's trading performance for the subject period. In view of the lack of source financial documentation it was unclear whether the write-down was extraordinary. In summary, Mr Lytras' evidence was that the possible treatment of extraordinary and abnormal items potentially affected the 1999 calendar year profit result, as stated in the Deloitte Touche Tohmatsu report. In the absence of the source financial documentation, it is not possible to be confident that the accounts were produced in accordance with the Australian Accounting Standards or that the formula in Annexure 1 had been followed. In my view this evidence demonstrates that there are grounds for inferring either errors in the Deloitte Touche Tohmatsu report, or that the report does not comply with Annexure 1 of the share sale agreement. On this basis I do not consider that the audit statements in the report are reliable evidence of the profit position of Forbes Australia in the year ending 31 December 1999. Should the Deloitte Touche Tohmatsu report be ruled inadmissible? Finally, the respondents submit that the Deloitte Touche Tohmatsu report should be ruled inadmissible on the basis of both s 135 and s 136 of the Evidence Act 1995 (Cth). The applicants concede that, if I were to so rule, there is a cascading effect in relation to the report prepared by Ernst & Young dated 4 October 2001 (exhibited to Mr Poh's affidavit) based on the Deloitte Touche Tohmatsu Report, so that my decision in relation to the Deloitte Touche Tohmatsu report will determine the fate of the Ernst and Young document (TS p 26 ll 9-13). The Deloitte Touche Tohmatsu Report is in the form of an expert opinion, however the applicants do not press for its admission on that basis. Rather, the applicants submit that it falls within the exception to the hearsay rule for business records in accordance with s 69 of the Evidence Act . Note 1: Sections 48 , 49 , 50 , 146 , 147 and subsection 150(1) are relevant to the mode of proof, and authentication, of business records. Things recorded or communicated in the course of the business and constituting or concerning business activities are likely to be correct. There is good reason for the courts to afford to such records the same kind of reliability as those engaged in business operations customarily do. The same is not true of publications made for wider dissemination, for entertainment, for advertising or for public relations purposes. Such publications are justifiably received with healthy scepticism. It would not occur to the people creating those documents that they should set out to justify their opinions in the same way that an expert would do in preparing a written report for a court hearing. In those circumstances, to apply the opinion rule to business records that meet the requirements of s 69 would be substantially to undermine, if not to negate, the implementation of the policy underlying the business records provisions, asserted so forcefully by Hope JA in Albrighton (at 548-549) and by the Australian Law Reform Commission in its Interim Report on Evidence at [709]. Courts would be prevented from having access to substantial components of the records of businesses so as to assess them for what they are, on the ground that they do not satisfy requirements which their authors would not have regarded as relevant. As Brownie AJ remarked in a somewhat different context ( Linfox Transport (Aust) Pty Ltd v Arthur Yates & Co Ltd (2003) 47 ACSR 261 at [23]), "it does not seem apt in this context to draw a lawyerly distinction between the way a witness might or might not be permitted to give opinion evidence in court with the way in which a company officer routinely reports to his superiors". I have noted the absence of witnesses capable of giving evidence as to the Deloitte Touche Tohmatsu report, and the lack of opportunity of the respondents to test the contents of the report. This is not, however, automatically fatal to the admissibility of a business record. The ordinary meaning of the language is that it is sufficient that the person who made the representation, whoever he or she is, had or might reasonably be supposed to have had, personal knowledge of the asserted fact. The policy behind the provision is clear enough. Routine business records, made before any legal proceeding arises or is contemplated (cf the exception in s 69(3)) , have an inherent likelihood of reliability which outweighs the common law's aversion to hearsay evidence where the maker of a statement cannot be tested by cross-examination. The utility of s 69 would be greatly diminished if it were necessary to locate among large organisations, perhaps over a long period of time, persons who made representations, often in circumstances where the practical needs of the organisation did not require any identification at the time the representations were made. Although the Deloittes Touche Tohmatsu report may be a "business record" for the purposes of s 69 of the Evidence Act and prima facie admissible, a balance must be struck between the probative and prejudicial value of the report. In my view the prejudice likely to be suffered by the respondents from admission of the Deloittes Touche Tohmatsu report outweighs its probative value. I form this view because as I have already explained, I consider that the evidence discloses grounds for serious concern as to the compliance of the Deloitte Touche Tohmatsu audit report with cl 3.3 and Annexure 1 of the share sale agreement. This issue is compounded by the absence of the author of the report, any witness who could speak to the report, and the absence of source financial documentation, all of which mean that the contents of the report cannot be properly tested by the respondents. Accordingly I consider the Deloitte Touche Tohmatsu report should be ruled inadmissible pursuant to s 135 of the Evidence Act . As I have also noted, the same fate applies to the Ernst & Young report of 4 October 2001. 4. Was the change of control of Forbes Australia from the vendors to Forbes Asia an alteration in the factual substratum sufficient to discharge the respondents as guarantors? The respondents claim that, because of the alteration to the factual substratum brought about by the change in control of Forbes Australia's operations, the respondents were discharged from any liability in respect of the profit guarantee within cl 3.3 of the share sale agreement and the side letters. The clause cannot be reasonably construed in the manner sought, because once the vendors had sold their shares they inevitably lost their power to appoint the directors. Clause 3.6 makes it clear that it was never intended that the respondents would be entitled to appoint directors at will and exercise complete control after execution of the share sale agreement. Additionally the Vendors shall ensure that the Company shall not change any of its mandate to operate the bank accounts of the Company or open new bank accounts without the written consent from the Purchaser if the mandate for such new accounts is not the same as that referred to in Clause 2.1.2. In any event Mr Forbes' employment contract gave him control of Forbes Australia to the exclusion of Mr Poh. This is not to say, however, that an agreement leading to this state of affairs is not enforceable by the principal. In relation to this issue I accept the submissions of the applicants. Clause 3.1 clearly related to the position of the vendors at the time of the share sale agreement. It is a warranty one would typically expect to find in an agreement of this nature. Further, as the applicants submit, the point of the share sale agreement was to transfer ownership of shares --- which generally carries with it the power to appoint directors --- from the vendors to Forbes Asia. It is not surprising therefore that Forbes Asia, as owner of the shares in Forbes Australia, should have appointed Mr Chan and Mr Lee to the board of Forbes Australia. Indeed as already observed, cl 3.6 --- which was another covenant of the vendors to the share sale agreement --- specifically prohibited the vendors of the shares appointing any person as a director of Forbes Australia after the execution of the share sale agreement without the prior written consent of Forbes Asia. If the respondents' construction of cl 3.1 was valid, the profit guarantee contained in cl 3.3 would always be meaningless because once the vendors had sold their shares they lost all power to appoint the directors of Forbes Australia. I do not accept the respondents' submission that they were discharged from any liability in respect of the profit guarantee within cl 3.3 of the share sale agreement because the vendors ceased to retain control over the board or indeed the company after execution of the share sale agreement. As an additional observation I note that pursuant to the Contract of Employment between Forbes Australia and Mr Forbes (pp 83-93 of exhibit PK1 to Poh's affidavit affirmed 25 October 2005) dated 22 September 1997 (the same date as the share sale agreement) Mr Forbes was appointed chief executive officer of Forbes Australia. The Schedule to the agreement defined the Mr Forbes' duties as "all operations of the company" and gave Mr Forbes significant authority in respect of entering into contracts on behalf of the company, signing cheques on behalf of the company. Further, cl 6 of the share sale agreement specifically gave Mr Forbes control over expenses related to the formula for calculating the audited profit before tax of Forbes Australia, prescribed by cl 3.3 as the key determinant of the vendors' profit guarantee. Clearly Mr Forbes remained subject to control by the Board --- and to some extent the views of Mr Poh as managing director of the parent of Forbes Australia --- however on a daily basis Mr Forbes clearly continued to retain control over a significant aspect of the operations of Forbes Australia after the sale of shares in the company. In this light, and in addition to the views I have already expressed as to the respondents' claims concerning cl 3.1, I do not accept the respondents' contentions as to the justice of the case in respect of the vendors' liability for profit guarantees under cl 3.3 or the respondents liability in respect of those profit guarantees. Accordingly, I consider that this aspect of the respondents' defence fails. 5. Did the third and fourth deeds of variation to the share sale agreement result in the discharge of the respondents as guarantors? In summary, the respondents submit: The applicants submit in summary: The third and fourth deeds of variation in no way touched on the profit guarantee. The respondents have adduced no evidence to show that the deeds fundamentally altered the obligations regarding the profits of Forbes Australia. Clause 4 of the Forbes Guarantee applies. The indemnity given by the respondents which the applicants seek to enforce in no way relates to the consideration paid or payable by Forbes Asia to the vendors. The parties to the third deed of variation executed on 16 February 1998 were Pearlbunch, Talrate and Forbes Asia. The primary amendment to the share sale agreement effected by this deed was in respect of cl 2.3 and the nature of the final cash injection under the share sale agreement. In summary, the final cash payment of $1,099,999 to the vendors was altered to $599,999 in cash and the balance by way of 1.8 million ordinary shares in Teamsphere Ltd. The parties to the fourth deed of variation executed on 23 March 1998 were Pearlbunch, Talrate, Forbes Asia and Mr Poh. This deed had the effect of altering new provisions inserted by the third deed of variation in respect of the final cash injection under the share sale agreement --- the 1.8 million ordinary shares in Teamsphere Ltd were amended to instead be 180,000 shares in Teamsphere Ltd. An examination of the deeds of variation indicates that there were numerous other amendments made to the share sale agreement, and upon which the respondents have elected not to rely, presumably on the basis that those other amendments were either unsubstantial or did not cause prejudice to the respondents. Although Mr Forbes was not personally a party to either deed of variation, I note that Mr Forbes was actually the sole director of both vendors who were parties to the deeds of variation. Presumably Mr Forbes had personal knowledge of the reasons for the variations to the share sale agreement, notwithstanding that he personally was not a party to them. In any event, the amendments to the share sale agreement in the third and fourth deeds of variation upon which the respondents rely relate only to the form of consideration payable by Forbes Asia to the vendors. In no way do these amendments impact upon the covenants of the vendors under the share sale agreement, which are guaranteed by the respondents. In no way do the amendments increase the liabilities of the vendors. In no way do the amendments impact upon the rights of the respondents as sureties. Further, and of particular relevance to these proceedings, in no way is it apparent that the alteration in the form of consideration payable to the vendors would impact upon the profits of Forbes Australia. I also note that, as submitted by the applicants, the claims of the respondents that the vendors would suffer prejudice --- whether actual or potential --- by being required to accept shares in Teamsphere Ltd rather than cash as part payment of the third instalment under the share sale agreement were not supported by any evidence whatsoever. The contentions of the respondents as to prejudice were, in my view, purely speculative and unsubstantiated. In summary, in my view the amendments upon which the respondents rely do not affect the suretys' rights. I am not satisfied that the amendments to the share sale agreement operated to discharge the obligations of the respondents as guarantors. Not likely do the Courts assume that a party to a contract gives up all defences available at law. However in my view the respondents' defence with respect to the variations to the share sale agreement are not assisted by their submissions in respect of cl 4. Unlike the situation as considered in Corumo Holdings (1991) 24 NSWLR 370 , variations to the share sale agreement in this case were not such as to impact on the obligations of the respondents. Prima facie , the respondents are bound by cl 4 of the Forbes Guarantee. 6. Was the transaction resulting in the acquisition of Favco by Forbes Australia an alteration in the factual substratum sufficient to discharge the respondents as guarantors? In relation to this point the respondents submit in summary: The applicants submit in summary: The acquisition of Favco was Mr Forbes' idea alone. The evidence of Mr Poh, which Mr Forbes did not dispute in his evidence in chief, was that Mr Poh expressly told Mr Forbes that it was his (that is, Mr Forbes') decision. Mr Forbes, as chief executive officer, had exclusive control over such expenses of the company. The acquisition of Favco, being Mr Forbes' own decision, cannot alleviate him of his responsibility under the profit guarantee. I form this view for the following reasons. First, the acquisition of Favco by Forbes Australia was clearly the result of decisions made in the course of management of Forbes Australia. The managing director and chief executive officer at the time of the acquisition was Mr Forbes. Now, it was Poh Kiat's plan, and it would certainly never be my plan if I owned Forbes Engineering myself, prior to the takeover, I would never be buying Favco because I wouldn't have had the funds to do so. That's what you say; that's your evidence?---That's what I'm saying. Under the proposal, Forbes Australia was to purchase certain fixed assets and manufacturing facilities of Favco in Wetherill Park, and in return, Favco would purchase from Forbes Australia certain quantity of completed units of concrete mixers and batching plants to set-off the purchase consideration of Favco's assets. The purchase of Favco was strongly recommended by Mr Forbes. I am therefore not in a position to influence your decision. A copy of the memorandum I received from Mr Forbes regarding the terms of the deal with Favco is at Exhibit PK2 at pages 116 to 121. Second, in any event I consider the facts that the profit forecasts which formed the framework for negotiations and discussions in relation to the profit guarantee related only to the Brisbane-based business of Forbes Australia, and that there was no suggestion prior to 22 September 1997 that Forbes would undergo any radical expansion in its operations, are of no moment in relation to the liabilities of the respondents as guarantors. I take this view because I consider that the acquisition of Favco in the circumstances I have outlined was actually, to paraphrase comments of Phillips J in City of London v New Hampshire Insurance Company (unreported, Phillips J Queens Bench Division (Commercial Court) 18 January 1991), discussed in Butterworth's Journal of International Banking and Financial Law , March 1991, pp 144-5 and cited in Duffy Bros Fruit Market (Campbelltown) v Gumland Property Holdings Pty Ltd [2007] NSWCA 7 at [220] ) an event "arising out of a contemplated course of dealing" and as such it remained within the scope of the guarantee. No provision of the share sale agreement or the guarantees signed by the respondents limited the activities of Forbes Australia following execution of the share sale agreement. The expansion of the business of Forbes Australia under the control of Mr Forbes as chief executive officer by the acquisition of Favco was not an event which could be considered as outside the terms of either the share sale agreement or the relevant guarantees. There was no covenant in any relevant agreement that, for example, Forbes Australia would continue to operate a business based only in Brisbane (contrast for example Spencer, Turner and Boldero v Lotz (1916) 32 TLR 373 where the Court held that the intention of the parties was that the guarantee should only be in respect of goods supplied in a certain location and not otherwise). Third, even if contrary to my view as to the weight of evidence before the Court the acquisition of Favco was not the decision of Mr Forbes, the acquisition of Favco was not an event which caused a material variation to the terms of the share sale agreement: Ankar [1987] HCA 15 ; (1987) 162 CLR 549 at 559. It could not be said, for example, that the acquisition of Favco involved conduct on the part of the creditor (Forbes Asia) having the effect of altering the suretys' rights: Ankar [1987] HCA 15 ; (1987) 162 CLR 549 at 559. Finally, the respondents cannot point to any provision in the terms of the guarantee side letters as executed by the respondents which support the proposition that the acquisition of Favco involved a departure from the terms as agreed in the guarantee. In this respect the events of which the respondents complain can be contrasted with, for example, the facts of Ankar [1987] HCA 15 ; (1987) 162 CLR 549 itself, where the High Court held that the surety had been discharged from liability because, inter alia : Accordingly, I consider that this aspect of the respondents' defence fails. 7. Even if the vendors' profit guarantee as articulated in clause 3.3 of the share sale agreement is valid, are the applicants estopped from relying on it because of the alleged representations of Mr Poh as pleaded in paragraph 13 of the respondents' defence? In relation to this issue, the respondents submit in summary: The applicants submit in summary that: Mr Poh denies ever telling Mr Forbes that he would not call on the profit guarantees Even if there is a factual basis for the estoppel in relation to the alleged promise not to enforce the profit guarantees, the estoppel cannot be enforced by the respondents because cl 13 of the share sale agreement expressly provides that the written contract is the entire agreement and the estoppel is inconsistent with the clear and unambiguous terms of the guarantee. Mr Forbes deposed that Mr Poh said words to the effect that "the profit guarantees would never be enforced by him and were just something that he needed to have in the documentation for the other directors of Teamsphere Ltd" (para 15). He deposed further that at the conclusion of a meeting on 14 January 1999 he spoke with Mr Poh and said words to the following effect "Your representation to me was that the profit guarantees would never be enforced", in response to which Mr Poh agreed that he would not enforce the profit guarantees (para 22 and para 24). Finally, Mr Forbes deposed that after the release of the prospectus for Teamsphere Ltd on 27 March 1999, he attended a press conference in Singapore during which Mr Poh responded to a specific question from a member of the press in relation to Forbes Australia and the profit guarantees. He recalled that Mr Poh responded to the question with words to the effect that "The profit guarantees are no longer relevant" (para 28). In his affidavit affirmed 15 March 2006 Mr Poh denied that he had made any representations alleged by Mr Forbes, at either meetings with Mr Forbes or at the press conference. Mr Poh gave a different account of the events at the meeting of 21-22 September 1997, in which Mr Forbes did not walk out of the meeting, but rather Mr Poh approached Mr Forbes in the room to have a private discussion with him away from the professional advisers, and in which Mr Poh did not say that he would not enforce the profit guarantees. On the evidence before me I do not accept that Mr Poh gave an assurance to Mr Forbes that profit guarantees would never be enforced by him, as claimed by Mr Forbes. I form this view for the following reasons. First, Mr Poh was adamant during cross-examination that he had never promised not to enforce the profit guarantees. I was impressed by Mr Poh's demeanour as a witness. Second, Mr Forbes deposed in his affidavit sworn 16 December 2005 at para 23 that, in relation to his failure to raise the issue of the promise not to enforce the guarantee with Mr Poh at the meeting of 14 January 1999, "I did not raise my concern referred to in Paragraph 23 during the meeting due to MR KANG'S presence". One obvious inference which can be drawn from his reluctance is that Mr Forbes was not confident as to the veracity of any such alleged representation, and believed that Mr Poh would refute its existence. Third, as became clear during cross-examination, the only person Mr Forbes recalled telling about Mr Poh's alleged representation was Mr Grant, on the basis that Mr Grant was "more like a confidante, a trusted friend, a family friend, that I had had for years and years, and he's been my solicitor, and I confided in him in most of the business dealings I had had" (TS p 293 ll 38-40). Mr Grant's evidence was that Mr Forbes told him during a break from negotiations for the terms of the share sale agreement that Mr Forbes had told him that Mr Poh had said Forbes Australia would never rely on the profit guarantees (affidavit of Steven Grant affirmed 23 January 2008 para 14). However even assuming that this communication did take place, Mr Forbes' --- and presumably Mr Grant's --- apparent lack of confidence in the existence of this representation is reflected in the fact that no steps were taken to commit the representation to writing in any way, including reflected in any agreement between the parties. Notwithstanding this alleged representation, no provision was even made to qualify the right of Forbes Asia to enforce the profit guarantees. This is particularly important in light of the fact that cl 13 of the share sale agreement provides that the agreement was an entire agreement. Presumably Mr Grant as Mr Forbes' solicitor was aware of these issues. Fourth, Mr Brauer claimed during cross-examination that Mr Forbes had told him about Mr Poh's promise after completion of the negotiations (TS p 325 ll 41-45) however it appears from both Mr Forbes' evidence-in-chief and his evidence under cross-examination that Mr Forbes had no such recollection. In my view Mr Brauer's evidence is of no weight as evidence of the occurrence of the alleged representation by Mr Poh. Fifth, as became clear during cross-examination of Mr Forbes, Mr Forbes never mentioned the alleged promise of Mr Poh not to enforce the profit guarantees during board meetings of Forbes Australia when the profit guarantees were discussed (TS p 303 ll 14-18). Sixth, any alleged promise of Mr Poh not to enforce profit guarantees runs counter to the fact that the profit guarantees were clearly an important aspect of the sale of shares in Forbes Australia. The importance of the profit guarantees is reflected not only by cl 3.3 and Annexure 1 to the share sale agreement, but also by the provisions of the guarantees given by the respondents. Finally, the alleged representation of Mr Poh is inconsistent with Mr Poh's concern that Mr Forbes comply with his guarantee obligations in relation to the 1998 profit shortfall. While on the evidence before me it appears that, in light of the launch of the Teamsphere Ltd IPO in early 1999, Mr Poh did not wish to publicise the existence of the 1998 Forbes Australia profit shortfall or the obligation of the respondents to make up that shortfall, relevant events including journal entries and reversal of journal entries which I have already described in my view make it clear that the obligation of the respondents in relation to the 1998 profit shortfall was never waived by the applicants. This aspect of the respondents' defence is not substantiated on the evidence. 8. Was the applicants' cause of action statute barred? The respondents claimed in defence of the applicants' entire claim that the applicants' cause of action arose more than six years prior to the commencement of the claim and is therefore statute barred. This aspect of the defence was not pressed at the hearing by the respondents. In my view it is clear that the respondents' claim in this respect is not substantiated, because: Accordingly, this aspect of the respondents' defence fails. 9. Was the Forbes Lot 8 Lease Guarantee enforceable? In the event that under such adjustments we are required to refund to you such portion of the rent as have been paid by you to us, we shall pay to you on demand such refund of rent in full immediately. If we shall have defaulted in such refund, without prejudice to your rights against us for our said default, we shall pay interest at the rate provided under Clause 6.8 of the Lease on such refund calculated from the date of our receipt of your demand until the date of actual payment of such refund. It is not in dispute that Mr Forbes and Mrs Forbes entered into a lease of Lot 8 with Forbes Australia on 17 September 1997. The respondents admit the existence of the Forbes Lot 8 Lease Guarantee, but deny that the respondents incurred any liability to the applicant under the agreement. As the purported consideration for the agreement was the respondents' agreement to enter into the Lot 8 Lease --- a past event --- the respondents also plead that the agreement is not supported by valid consideration. Further, the respondents contend: It does not appear that the applicants rely upon the Forbes Lot 8 Lease Guarantee in relation to their claim in relation to either the alleged 1998 profit shortfall or the alleged 1999 profit shortfall; and In any event, it is plain that only past consideration was given in relation to the Forbes Lot 8 Lease Guarantee, rendering it unenforceable. For the year ending 31 December 2000 - $138,690.16 (being all of the rent paid in that year). As I have already found, a journal entry was made in the books of Forbes Australia whereby the agreed profit shortfall for 1998 was treated as a pre-payment of Forbes Australia's rent in respect of the Lot 8 Lease (presumably in accordance with the Forbes Lot 8 Lease Guarantee) but this journal entry was subsequently reversed on 30 June 1999. The evidence is clear that Forbes Australia continued to pay the respondents rent in 1999 notwithstanding the agreed existence of the 1998 profit shortfall and the terms of the Forbes Lot 8 Lease Guarantee, and that the respondents did not refund the rent notwithstanding the agreed 1998 profit shortfall. It does not appear to be in contention that Forbes Australia paid the respondents rent in 2000 in the amount of $138,690.16 although having made this observation I note that the applicants claim no relief referable to the year ending 31 December 2000. The applicants plead that, by reason of the alleged breaches of both the Forbes Guarantee and the Forbes Lot 8 Lease Guarantee, both applicants suffered loss and damage (amended statement of claim para 31 and para 32). It is clear that the amounts in respect of loss and damage which the applicants claim arise from the breaches of the Forbes Guarantee and the Forbes Lot 8 Lease Guarantee are alternative, not cumulative. Accordingly, I do not accept the respondents' contention that the applicants do not rely on the Forbes Lot 8 Lease Guarantee in relation to their claims (although clearly more reliance is placed on the terms of the Forbes Guarantee). Of more substance is the claim by the respondents that, because the nominated consideration for the respondents entering the Forbes Lot 8 Lease Guarantee was the previous agreement of Forbes Australia to enter into the Lot 8 Lease with the respondents, the consideration for this agreement is past consideration and invalid. Of particular moment is the fact that the Forbes Lot 8 Lease Guarantee is not in the form of a deed, where consideration would have been unnecessary ( Morley v Boothby [1825] EngR 575 ; (1825) 3 Bing 107 ; 130 ER 455). It is trite law that past consideration is no consideration ( Eastwood v Kenyon [1840] EngR 80 ; (1840) 11 A & E 438 , 113 ER 482 , Roscorla v Thomas [1842] EngR 70 ; (1842) 3 QB 234 , 114 ER 496, and see the discussion in such learned texts as Chitty on Contracts (30th ed, Vol 1, Sweet & Maxwell, 2008) at 270 et seq and Carter JW, Carter on Contract (Vol 1 looseleaf, Butterworths, 2002) at [06-230] et seq). However where the giving of the consideration and the making of the promise are substantially one transaction, the exact order of events is not decisive and the consideration is treated as executed consideration rather than past consideration (Carter JW, Carter on Contract (Vol 1 looseleaf, Butterworths, 2002) at [06-250], Chitty on Contracts (30th ed, Vol 1, Sweet & Maxwell, 2008) at 271). So, for example, a contract to erect buildings on land and a contract to grant of lease of land were in fact one transaction, notwithstanding that the lease was not entered until the relevant buildings were completed: Westminster City Council v Duke of Westminster [1991] 4 All ER 136 , discussed in Chitty at 271). Further, executed consideration is good consideration in circumstances where an act is done at the request of the promisor, it is understood that payment would be made, and the payment is legally recoverable ( re Casey's Patents [1892] 1 Ch 104 , Pao On v Lau Yiu Long [1979] UKPC 2 ; [1980] AC 614 at 629). In this case I consider that the Forbes Lot 8 Lease Guarantee is enforceable, for the following reasons: To the extent that the respondents claim that the Forbes Lot 8 Lease Guarantee is unenforceable I consider that the respondents' defence fails. 10. An order pursuant to Order 20 rule 2 of the Federal Court Rules , or the inherent jurisdiction of the Court, that this proceeding be permanently stayed as an abuse of process. Such further or other order or direction as this Honourable Court deems necessary or appropriate. In summary, the respondents claimed that these documents were critical to properly investigating: It was not in contention between the parties that the source financial documents were missing and unavailable. I have already considered this issue in detail. The respondents submit that: The orders sought by the respondents were pursuant to O 20 r 2 of the Federal Court Rules or the inherent jurisdiction of the Court. Prior to amendments on 25 July 2007 O 20 r 2 empowered the Court to permanently stay a proceeding where the proceeding was frivolous or vexatious or an abuse of process of the Court. Since that date O 20 r 2 has applied to proceedings commenced before 1 December 2005 and allows the Court to give summary judgment where the respondent to a proceeding has, inter alia , no defence to a claim or the defence discloses no answer to the claim . It is now s 31A of the Federal Court of Australia Act 1976 (Cth) which allows the Court to give summary judgment against a party where, inter alia , the Court is satisfied that a party has no reasonable prospects in relation to their case. The notice of motion was filed on 12 September 2007 and is not couched in the language of O 20 r 2 following the amendment. However placing to one side apparent procedural irregularities with respect to the respondents' notice of motion and the basis of the order they seek, I find in any event that the respondents have not substantiated their claim that the applicants' claims were in any way an abuse of process. As Dixon J observed in Cox v Journeaux (No 2) [1935] HCA 48 ; (1935) 52 CLR 713 at 720, the jurisdiction of the Court to stay an action as vexatious is to be exercised only when the action is clearly without foundation and when to allow it to proceed would impose a hardship upon the respondents which could be avoided without risk of injustice to the applicant. The absence of source financial documentation was, as I have already found, irrelevant in relation to the validity and enforcement of that agreement. In relation to the alleged profit shortfall for the year ending 31 December 1999, while I consider that the absence of source financial documentation was a key issue for reasons I have already explained, I do not consider that the applicants' claim with respect to alleged profit shortfall for that year was in any fashion an abuse of process. The applicants pleaded, inter alia , that the Deloitte Touche Tohmatsu report satisfied the requirements of cl 3.3 and Annexure 1 of the share sale agreement akin to a certificate as discussed in Dobbs [1935] HCA 49 ; (1935) 53 CLR 643. In my view this was a legitimate claim, notwithstanding that this aspect of the applicants' claim was unsuccessful. It follows that the Ernst & Young report dated 4 October 2001 and the letter from Freehills on behalf of the applicants to Mr Grant dated 6 April 2001 are also inadmissible pursuant to s 135 of the Evidence Act . In the interests of completeness however I note that even had I not considered the Deloitte Touche Tohmatsu report inadmissible in accordance with s 135 I would have made such an order in respect of the Ernst & Young report dated 4 October 2001 on the basis that: While there is evidence that the original instructions from Mr Poh to Ernst & Young to prepare to the report were given in 2000 (and possibly prior to contemplation of litigation), evidence also demonstrates that 19 months passed before the report was delivered to the applicants during which time letters had been exchanged between the legal representatives of the parties. Further, in the covering letter dated 4 October 2001 from Ernst & Young to Mr Poh delivering the report, the author notes "... the procedures were performed solely to assist you in determining the quantum and importance of certain financial issues to be raised with the previous Managing Director, Mr Mark Forbes". I do not consider that an order pursuant to either s 135 or s 136 of the Evidence Act should be made in relation to para 34 and para 35 of, and pp 13-54 of annexure "PK2" to, the affidavit of Poh Kiat affirmed herein on 15 March 2006. I take this view because: Mr Poh's evidence directly answered evidence of Mr Forbes in his affidavit sworn 16 December 2005 and Mr Brauer in his affidavit sworn 25 January 2006. A letter from Marsh & Partners to the directors of Forbes Group Australia dated 16 February 2000 and a letter from Marsh & Partners to Mr Forbes dated 14 March 2000, both of which are exhibited to Mr Poh's affidavit (and found within pp 13-54 of Annexure "PK2" to which the respondents object) are also exhibited to Mr Forbes' affidavit sworn 16 December 2005 as Annexure "MF-4". Accordingly, it is clear that the respondents were relying on some of the same material they now seek to impugn. The material is relevant to both the applicants' claims concerning the 1998 profit shortfall and the respondents' defence. I do not consider that an order pursuant to either s 135 or s 136 of the Evidence Act should be made in relation to Mr Blackwood's expert report. In my view no grounds have been substantiated by the respondents' to support such an order. I consider that the applicants are entitled to recover the agreed 1998 profit shortfall under the share sale agreement and the Forbes Guarantee as damages from Mr Forbes, being the sum of $127,284. The applicants have also sought interest "pursuant to a share sale agreement" or pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth). The parties have not directed my attention to any interest rate specified in the share sale agreement the subject of these proceedings. The usual practice in the Federal Court is to adopt the rates of interest applied in the Supreme Court of the State in which the application is commenced unless there is evidence that the rates are penal or not commercial: GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 688 at [7] . The current rate of interest prescribed under s 48 of the Supreme Court Act 1995 (Qld) is 10% per annum. No submissions were made by the parties as to an appropriate rate of interest. I consider that the rate of interest of 10% per annum should be applied in respect of the sum of $127,284 to which the applicants are entitled from the date the applicants' cause of action arose. In view of the mixed outcome in the case I consider it appropriate to invite the parties to make submissions as to costs orders. The respondents are to file and serve submissions as to costs, and copy them in electronic form to the associate, by 4.00 pm on 20 July 2009. The applicants are to file and serve submissions as to costs in reply, and copy them in electronic form to the associate, by 4.00 pm on 27 July 2009. The issue of costs is to be decided on written submissions without the necessity for a hearing unless either party should contact my chambers and the other party by 4.00 pm on 30 July 2009 and request a hearing or unless the Court schedules a hearing to hear oral submissions. I certify that the preceding one hundred and eighty-eight (188) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.

breach of guarantee damages claimed from respondents for breach of guarantee of profit shortfall of company profit guarantee originally given by vendor companies in share sale agreement respondents guaranteed any profit shortfall of company the subject of share sale agreement in 1998 and 1999 applicants leased property from respondents any profit shortfall to be made up by reduction of rent payable to applicants in respect of lease profit shortfall claimed by applicants in 1998 and 1999 respondents failed to refund rent to purchaser company in amounts of profit shortfall whether oral variation of agreed profit shortfall for year ending 1998 whether audit report for 1999 compliant with machinery of calculation in share sale agreement whether profit shortfall for 1998 understated whether change in control of company discharged respondents from guarantee whether acquisition of a new business by the company discharged respondents from guarantee whether valid consideration for guarantee whether written variations to the principal share sale agreement discharged guarantee whether applicants' claim statute barred whether managing director of first applicant represented that guarantee would not be enforced order 20 rule 2 of the federal court rules whether claim was abuse of process due to missing source financial material whether audit report detailing profit shortfall in 1999 admissible whether audit report akin to a banker's certificate whether provision for audit report in relation to profit shortfall in share sale agreement a "dobbs clause" audit report on 1999 profit shortfall based on source financial source material now missing whether audit report prejudicial to respondents and inadmissible under section 135 and section 136 of the evidence act 1995 (cth) whether audit report a business record under section 69 of the evidence act 1995 (cth) whether subsequent report created for the purpose of litigation and inadmissible under section 69(3) of the evidence act 1995 (cth) whether co-surety second respondent liable for 1998 profit shortfall guarantee amount orally varied by first respondent and the first applicant whether first respondent had ostensible authority to bind second respondent to oral variation of profit shortfall amount for 1998 contracts evidence agency

Ms Ranallo is a pharmacist. On 20 August 2007 she applied to the Authority for approval to supply pharmaceutical benefits at proposed premises at the Tandara Medical Centre in Gosnells, Western Australia (the Centre). On 28 September 2007 the Authority recommended that the application not be approved. On 13 February 2008, Ms Ranallo made a second application for approval under s 90 of the National Health Act 1953 (Cth) (the Act). On 25 July 2008, the Authority on consideration of the second application by Ms Ranallo, recommended that it be not approved under s 99K of the Act. Ms Ranallo's application required the cancellation of an existing approval in force in respect of other pharmacy premises and a relocation of the pharmacy to the Centre. On this application Ms Ranallo contended, but the Authority was not satisfied, that on the date of the application and for the preceding six months 'the equivalent of at least 8 full-time prescribing medical practitioners' were practising at the Centre. If there has not been an error of law, no intervention is appropriate. Mason CJ in Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 emphasised that the ADJR Act was not intended to change the position of the Federal Court as having the obligation to review the legality, not the merits , of a decision. It is scarcely to be supposed that the Parliament, in so providing, nevertheless intended to invest the Federal Court with a similar jurisdiction under the AD(JR) Act, for that would be the effect of that Act if it were to confer jurisdiction to review findings of fact generally. Indeed, the concept of judicial review which finds literal expression in the title of the AD(JR) Act and in its operative provisions tells against the existence of such a wide jurisdiction. Ms Ranallo contends that the Authority and the Tribunal adopted an interpretation of the rules which was too restrictive and that it was only that impermissibly restrictive approach that led to Ms Ranallo's application being rejected. It is common ground that for the whole of the relevant 6 month period there were in fact six medical practitioners practising at the Centre and each of those was a prescribing medical practitioner. The Authority applied the earlier decision of the Administrative Appeals Tribunal (the Tribunal) dealing with Ms Ranallo's first application ( Amber-Jane Ranallo [2008] AATA 533 at [36] ) to the effect that the adjective 'full-time' was addressed to the working or practising hours of the relevant medical practitioners and not to the volume of work performed as reflected in, amongst other things, the number of patient attendances and medical services carried out by those practitioners. The Authority followed the view expressed by the Tribunal that the adjective 'full-time' referred to a medical practitioner who is working on a full-time (as opposed to a part-time) basis, that is, a medical practitioner who is working at least the numbers of hours comprising a normal working week. The Tribunal in Ranallo had accepted that this required a medical practitioner to be working for at least 38 hours per week spread over a normal working week of at least five days. The Tribunal in Ranallo had also concluded that if the Minister had intended that the application for approval of the relocation of a pharmacy to a large medical centre be determined on the basis of the work output including the number of patient attendances, prescriptions and medical services of medical practitioners practising at the relevant medical centre, rather than on the number of hours worked by those medical practitioners, it would have been a simple matter to draft par 3(a) of item 112 in terms reflecting that intention. The Authority concluded as had the Tribunal in Ranallo [2008] AATA 533 , that the total number of hours worked by the six medical practitioners practising at the Centre throughout the relevant period was less than the requisite number of hours. It was on that basis that the Authority was not satisfied that on 13 February 2008, the date of the application under s 90 of the Act and for six months before that day the equivalent of at least 8 full-time prescribing medical practitioners were practising at the Centre. The parties accept that the sole question is whether or not the Authority erred in concluding that the phrase 'equivalent of' in par 3(a) of item 112 of Sch 1 of the Rules can relate only to full-time working hours and may not relate to, or include consideration of, work output, including the number of patient attendances and medical services. To understand the context of the expression, it is necessary to consider additional statutory provisions. Permission required to operate a pharmacy is dependent on a number of factors including the perceived community need for the particular pharmacy services. The Authority is bound by rules in considering such applications. The rules are said to be designed to achieve the perceived optimum community access to such services. In some geographic areas the number of pharmacies is higher than others, depending on community need. While access by all Australians to Pharmaceutical Benefit Scheme (PBS) medicines through pharmacies is said to be a high priority, so also is the availability of a commercially viable and flexible network of competing pharmacies. These principles are reflected in the statutory and regulatory materials to which I will refer. Part 7 of the Act deals with pharmaceutical benefits which are defined in s 84. Section 85 of the Act provides that the benefits must be provided by the Commonwealth in accordance with the Part in respect of drugs and medicine preparations in relation to which the Part applies. This has become known as the PBS under which the Commonwealth subsidises the supply of certain drugs and medicines that are on the PBS list. Section 90 indicates the requirements for an approved pharmacist to nominate premises in respect of which it is desired to supply pharmaceutical benefit drugs. The Authority's powers are found predominantly in s 99K of the Act. The Authority's recommendation is made pursuant to the Rules which are in turn, determined by the Minister under s 99L of the Act. The recommendation of the Authority is then considered by the delegate of the Secretary which is currently Medicare Australia. This is provided for under s 90 of the Act. The proposed premises are in a large medical centre. It was argued that output is clearly relevant to the consideration of whether or not approval should be given for a pharmacy to be established in a large medical centre as the 'output' will have a bearing on the need for pharmaceutical benefits. The starting point for statutory construction is to give the words of the statute their natural and ordinary meaning. The rule serves the important purpose of ensuring that those who are subject to the law understand the nature and extent of their rights and obligations. And because it serves that purpose, good reason must be shown before it will be concluded that the legislature did not intend the consequences that would flow if the provision in question were given its natural and ordinary meaning. If the choice is between two strongly competing interpretations, as we have said, the advantage may lie with that which produces the fairer and more convenient operation so long as it conforms to the legislative intention. If, however, one interpretation has a powerful advantage in ordinary meaning and grammatical sense, it will only be displaced if its operation is perceived to be unintended. The requirement that a court look to the purpose or object of the Act is no longer dependent on ambiguity. The mischief or purpose rule required an ambiguity or inconsistency before a court could have regard to purpose: Miller v The Commonwealth [1904] HCA 34 ; (1904) 1 CLR 668 at 674; Wacal Developments Pty Ltd v Realty Developments Pty Ltd [1978] HCA 30 ; (1978) 140 CLR 503 at 513 and see Judge Byrne [1999] HCA 16 ; 196 CLR 141 at [48] per Gaudron J. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole" [ Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26 ; (1981) 147 CLR 297 at 320, per Mason and Wilson JJ. See also South West Water Authority v Rumble's [1985] AC 609 at 617, per Lord Scarman, "in the context of the legislation read as a whole".]. In Commissioner for Railways (NSW) v Agalianos [1955] HCA 27 ; [(1955) 92 CLR 390 at 397], Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed [ Toronto Suburban Railway Co v Toronto Corporation [1915] AC 590 at 597; Minister for Lands (NSW) v Jeremias [1917] HCA 41 ; (1917) 23 CLR 322 at 332; K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd [1985] HCA 48 ; (1985) 157 CLR 309 at 312, per Gibbs CJ; at 315, per Mason J; at 321, per Deane J]. It was argued that the construction contended for by Ms Ranallo was preferable because such a construction accorded with the context of the Rule in its widest sense ( CIC Insurance Ltd v Bankstown Football Club [1997] HCA 2 ; (1997) 187 CLR 384 at 408). Reliance was also placed on Forsythe v Deputy Commissioner of Taxation [2007] HCA 8 ; (2007) 231 CLR 531 at [39] and Minister Administering the Crown Lands Act v NSW Aboriginal Land Council [2008] HCA 48 ; (2008) 249 ALR 602 per Kirby J at [2]. Ms Ranallo also argued that the Authority's narrow construction fails to pay close attention to the actual text itself and in this regard relies on the passage at [68] in NSW Aboriginal Land Council per Hayne, Heydon, Crennan and Kiefel JJ. The context may include extrinsic material such as the history under which the rule was developed. The need for the Rule in its current form was first identified by the National Competition Review of Pharmacy in 2000. That review concluded that the then rules did not adequately allow for the fact that medical centres at large shopping centres may create sufficient and specialised demand to sustain a viable pharmaceutical benefits service. The review noted that submissions to it suggested that this demand could be measured by the number of patient consultations at a centre. However, and importantly, the review did not adopt those submissions. Some parties to the Review suggested that this could, in the case of a medical centre, be based on the number of general practitioner consultations of that centre in a given period . Volumes of prescriptions per patient or resident could also be taken into account. It would be preferable for the Commonwealth, in consultation with other jurisdictions, the community pharmacy industry and profession and other relevant health and aged care providers, to adopt agreed definitions of eligible facilities. If a facility then satisfies an agreed statutory definition, it should simply be eligible to be a site for a new or relocated pharmacy or dispensary. Relevantly, the operative parts of that Agreement emphasised the need for location rules that properly and fully responded to community need for pharmacist services. The amendments to the Location Rules as set out in Attachment 1 are intended to provide greater flexibility to respond to community need for pharmacy services and to improve access to pharmacy services. These arrangements also aim to address those difficulties and anomalies in the Location Rules identified in the joint review of the Location Rules undertaken by the Commonwealth and the Guild in 2005. Ms Ranallo argued that the Australian Community Pharmacy Authority Applications Handbook published by the Authority also suggests that the concept of equivalency is focussed on services provided by medical practitioners at the Centre and did not refer to hours worked. It may include a number of part time medical practitioners that, together, provide the same level of service that a full-time medical practitioner provides. Alternatively, a single medical practitioner may provide the same level of service that more than one full-time medical practitioner provides. What was stressed by counsel for Ms Ranallo was that the actual work output of medical practitioners in terms of patients seen has an 'obvious and strong correlation' to prescription volumes and therefore the need for pharmacy services. This presumption was not accepted by the Authority. The Authority contended, correctly in my view, that while that presumption may be so for some practices, other practices may adopt different styles of medical service provision which does not necessarily require a significant number of or volume of prescriptions for pharmacy services. The assumption therefore that a higher number of patients will always produce a higher number of prescriptions was an assumption for which there was no evidentiary basis. Rather, it was contended, 'equivalent' was directed to the composite expression 'full-time prescribing medical practitioner'. There are various dictionary definitions for the word 'equivalent': such as being 'equal in value, function or meaning' as defined in The New Oxford Dictionary 1998 , Oxford University, New York or 'equal in power, efficacy or import having equal or corresponding significance' or 'something equal in value or worth; also, something tantamount' as in the Shorter Oxford English Dictionary on Historical Principles, Clarendon Press, 1980 (ed). In particular, these definitions were in contrast, it was said, to meaning 'the same as'. In particular, it was argued that what is 'equal' does not necessarily mean what is 'identical to': Re Higham (1986) 5 ACLC 352. To support this contention it was argued that the use of the word 'prescribing' suggests that the activity or work output is a relevant matter for the Authority to consider in determining equivalency. This, it is said, is supported in the definition of 'prescribing medical practitioner' to be found in the Rules which expressly refers to the issuing of prescriptions for pharmaceutical benefits. The argument is that it is not just the time spent by the medical practitioner but what the practitioner does in that time. However, in my view, 'prescribing' where it appears in the Rules is simply a descriptive qualifier to distinguish a prescribing medical practitioner from one who for whatever reason, may not prescribe pharmaceutical benefits. Ms Ranallo contends that to simply compute the number of hours practitioners were working, would not be an appropriate discharge of the discretionary deliberations which the Rules required. To do so would just be a mechanical mathematical calculation. In contrast, it was argued for Ms Ranallo that as the Rule required the Authority to 'be satisfied', an element of discretion was reposed in the Authority in determining what was equivalent ( Re Higham 5 ACLC 352 at [370]). Ms Ranallo contends that the Rule was not limited to that simple mathematical exercise and if that was what was intended, the Rules could simply have specified the minimum number of doctor hours at a centre. In this regard, it was submitted that it was relevant to note that the terminology used in the Rule was in contrast to par 3(a) or par 3(b) of item 112 of the Rules and item (b) of the definition of large medical centre which both expressly referred to hours. Thirty-eight hours, ..., is simply used as a guideline, as a benchmark - as was set out in Ms Prstec's affidavit --- on the basis that it's a generally accepted community standard. In ordinary parlance can the commitment required of the employee to the employment fairly be described as full-time according to current community standards? Viewed broadly this construction in my opinion more closely accords with the general intention of the parties as disclosed by the whole award than the construction contended for by the respondent. The respondent's argument that an employee who regularly works the same shifts as weekly employees and who works between 45 and 60 hours per weekly work cycle, is nevertheless to be treated as other than in "full-time" employment because once each week a shift is deliberately cut short by six minutes to disqualify the employee from the benefit which cl 6(e)(i) is intended to bestow, is, at the least, unreasonable. I have no hesitation in concluding that the scope for artificial practices like this was not within the contemplation of the parties. It is necessary to consider the meaning of the expression 'full-time' in the full context of 'at least 8 full-time prescribing medical practitioners'. It is not possible to determine what constitutes 'the equivalent of' until the meaning of the full expression is first determined. of, or relating to, or taking all the normal working hours (opposed to part-time) 2. of, or relating to, something which occupies a person all the time. 3. Sport of or relating to the time at which play is to end: the full-time whistle --- adverb 4. during all normal working hours. --- noun 5. Sport the time at which play is to end. The expression, therefore, is concerned with the number of hours worked by prescribing medical practitioners over a normal working week so as to determine who may be classed as being full-time. A 'full-time' prescribing medical practitioner for the purpose of par 3(a) is one who works at least 38 hours per week over a normal working week of at least five days. It does not appear to me that this approach results in any absurdity. Further I consider it is consistent with the purpose of ensuring reasonable public access to viable pharmacies. Given the ordinary meaning of full-time in relation to a person's occupation or employment, I am unable to identify any error of law in the Authority's conclusion. Does 'the equivalent of' affect the approach? Although in this case the evidence demonstrated that a measure other than hours worked may be obtained, there was no clear indication that this would always be so. Paragraph 3(a) of item 112 of the Rules could have been expressed such that it required the large medical centre in question to have the equivalent of at least 8 full-time workload equivalent (FWE) general practitioners (as that term is used by Medicare) practising at the Centre. See the evidence of Ms Angela Mikalauskas. That the Rules do not refer to the measure of output tends to leave the conventional meaning of the expression 'full-time' as the appropriate yardstick. A simple headcount on this basis treats all GPs equally, though there is significant variation in the hours worked and the number and type of services provided by GPs. Measures used in other industries to calculate workforce activity or supply are usually based on the number of hours worked . The Medicare system does not record the actual hours worked by general practitioners. However, a wealth of information about the services provided to patients by GPs is captured. The vast majority of work undertaken by most GPs involves consultations. More than 85% of GP activity is represented by standard and long consultations , being Medicare Items 23 and 36 respectively. The main difference between the standard and long consultations relates mostly to the time taken to perform the service rather than any other factors. A standard consultation is one that lasts less than 20 minutes, and a long consultation is one that lasts between 20 and less than 40 minutes. FWE is calculated by dividing each doctor's Medicare billing for the previous 12 months by the average billing of full-time doctors for the year. Medicare billing is defined as the total schedule fee value of all Medicare items claimed by the general practitioner (GP), excluding Bulk Billing Incentive items 10990-10992. The threshold income which defines full-time doctors is indexed on an annual basis in accordance with CPI figures published by the Australian Bureau of Statistics. When a GP provides services in more than one practice location, their FWE is calculated based on the share of the total schedule fee billing provided at each location. Support for this approach may be found from two other sources. In Thompson and James v Australian Community Pharmacy Authority [1996] AATA 367 which dealt with the former 1995 Rules, the same argument presently being advanced was considered. In that decision of the Tribunal at [47]-[51] inclusive the learned Senior Member said: In a document which is Annexure D to Exibit (sic) A1, it is stated on behalf of the Kable Street Practice that it sees 70 patients a week in the Glossodia surgery and visits patients at home twice a week on average. Of the patients, one half require prescriptions to be written. In addition 50 patients a week, who are residents of Glossodia, Freemans Reach or East Kurrajong, visit the Kable Street practice in Windsor in the morning and at least 50 Glossodia patients a week attend the Kable Street surgery in the afternoons and evening when the Glossodia surgery is unattended. At present the medical practice has no commitment to opening for longer hours at Glossodia . The Applicants argue that on the bases of the number of patients from the catchment area seen both at Glossodia and at Windsor, the Kable Street practice is effectively the "equivalent" of a full-time medical practitioner at Glossodia. The word "equivalent is defined in the Macquarie Dictionary as: "1. This may be undertaken either alone or in conjunction with other practitioners or practices. It may be a neat question whether an after hours locum service would qualify but, whatever permutations may be suggested in future cases, I cannot see how a medical practice which, within the catchment area, is available for consultations only between the hours of 9am to 1pm Monday to Friday qualifies as the equivalent of a full- time medical practitioner. It aims to facilitate timely and convenient access to the supply of pharmaceutical benefits for patients of large medical centres that operate extended hours. Large medical centre is defined at subsection 6(1) of Part 1 as a medical centre that is under single management and operates for at least 55 hours each week . It may include a number of part-time medical practitioners that, together, provide the same level of service that a full-time medical practitioner provides. Alternatively, a single medical practitioner may provide the same level of service that more than one full-time medical practitioner provides. In my view, both the Tribunal's original interpretation and the Authority's adoption of that interpretation in the second application were correct. To measure 'full-time' by reference to productivity or output rather than to hours in attendance, could introduce any number of arguments as to how productivity in the context of this legislation scheme should be measured. I do not consider that anything in the scheme itself or references to it in the secondary materials, would support the introduction of potentially subjective and possibly vague concepts in considering whether or not the equivalent of at least 8 full-time prescribing medical practitioners have been practising at the Centre at the date of the application and for six months before that date. Accordingly, I am unable to conclude that the Authority was in error. I will order: The application be dismissed. The applicant is to pay the respondent's costs to be taxed if not agreed. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

application for review of decision of australian community pharmacy authority authority recommended that the applicant not be approved to supply pharmaceutical benefits from proposed premises approval denied because premises did not have the 'equivalent of at least 8 full-time prescribing medical practitioners' practising at the centre error of law alleged interpretation of terms 'equivalent' and 'full-time' terms held to be directed at hours worked not output administrative law

2 The Applicant in the proceedings before the Federal Magistrate sought to review a decision evidenced by a letter to the Applicant's solicitors dated 3 September 2007. You requested that the Minister for Immigration and Citizenship, the Hon Kevin Andrews MP, exercise the public interest power under section 417 of the Migration Act 1958 (the Act) in Mr Biryukov's case. Your letter has been referred to me for response. As you may be aware, while section 417 of the Act provides the Minister with the power to substitute for a decision of the Refugee Review Tribunal a decision more favourable to the applicant, it is a non-compellable power. This case was previously brought to the attention of a Minister and was not considered. Cases previously brought to the attention of a Minister will not be considered unless additional information is provided that brings the case within the Guidelines and whereby it may be in the public interest to substitute a more favourable decision for that of a review authority. This case has been reassessed in the light of your letter. The additional information provided, in combination with the information provided previously, does not bring the case within the Minister's Guidelines. Therefore, no further action will be taken in respect of this request. Mr Biryukov should contact the nearest Regional office of this Department to discuss his status in Australia. 3 The learned Magistrate dismissed the application under Rule 44.12(1)(a) of the Federal Magistrates Court Rules 2001 (Cth). Such a decision is an interlocutory decision requiring the grant of leave to appeal to this Court: Federal Court of Australia Act 1976 (Cth), s 24(1A). It is considered that leave should be refused. Whichever view of the character of the officer's action is taken, the relief sought could not be related to a power of decision whose exercise is amenable to this Court's jurisdiction. The grant of relief in relation to a refusal to take steps required by s 417 is precluded by s 476(2)(d). The grant of relief in relation to administrative action not referrable to s 417, is precluded by s 476(1) in the absence of any conceivable other source of statutory duties under the Migration Act . I therefore consider that there is no prospect of the applicant having even an arguable case to establish jurisdiction to give any form of relief relating to the officer's letter. 6 The Magistrate has referred to what his Honour described as " a long line of authority " addressing the jurisdiction to undertake the review then being urged upon that Court and correctly concluded that " the applicant has no arguable case for establishing jurisdiction in relation to the relief sought in this matter ". Included among those authorities was the review of the authorities undertaken by Lindgren J in Raikua v Minister for Immigration & Multicultural & Indigenous Affairs [2007] FCA 370 , 158 FCR 510. 7 In Raikua , review was sought of both the failure of the Minister to exercise the power conferred by s 417 of the Migration Act 1958 (Cth) and the decision of the Manager of the Ministerial Interventions Unit (Ms Connolly) not to bring Ms Raikua's subsequent s 417 application to the attention of the Minister. Ms Connolly had made that decision because she had formed the view that the subsequent application fell within Guidelines which had been issued in respect to the exercise of the power. In the present case, his decision not to consider exercising that power was of a more limited kind. It is plain that the Minister's intention, as expressed in his note of 14 August 2003 relating specifically to this case, and in paras 6.5.7 and 6.5.11 of Guidelines MSI 387, was to decide not to consider exercising the power in the case of any request where the criteria of 'unique or exceptional circumstances' were not met 'in the opinion of the assessing officer' (his note of 14 August 2003) or where it 'appears' or is 'found' (to or by the relevant officer) (respectively Guidelines MSI 387 paras 6.5.7 and 6.5.11) that they are not met. [63] The Minister's decision not to consider exercising his power under s 417(1) in the particular case of the applicants comprises his decision just referred to operating upon the subjective judgment formed by Ms Connolly. There is no suggestion in the evidence that the Minister intended anything other than that provided the officer in good faith formed the view that the 'unique or 'exceptional circumstances' criterion was not met, the Minister did not wish to consider exercising his s 417(1) power. The applicants do not suggest that Ms Connolly did not act in good faith. [64] Ms Connolly's decision is not something provided for by the Act, and does not itself affect legal rights; cf Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 335---338. The decision of Ms Connolly is not susceptible to judicial review. The only decision that might conceivably be susceptible to judicial review is that of the Minister. However, it was permissible for the Minister take the decision not to consider exercising his power under s 417(1) by laying down guidelines as to the classes of case that were not to be referred to him ( Bedlington v Chong (1998) 87 FCR 75...) , and because of s 417(7), the jurisdiction-denying provisions, whether found in the former s 476(2) or in the present ss 474(1), (2) and (7), 476(2) and 476A(1)(a), cannot be avoided in relation to the Minister's decision by resort to the notion of jurisdictional error. In SZFDZ v Minister for Immigration & Multicultural Affairs [2006] FCA 974 Moore J concluded that a like application for leave should be refused and reached that conclusion " regardless of whether the request was forwarded to the Minister ". First, the Federal Magistrate was clearly correct in concluding that there was no jurisdiction to review the Minister's decision for the reasons accepted by the Federal Magistrate. This was so regardless of whether the request was referred to the Minister for her personal consideration, and regardless of whether the delegate's decision was affected by jurisdictional error, notwithstanding there was no evidence at all to support such an assertion. Secondly, as was clear from s 417(7) of the Act, the Minister had no duty to consider the power under s 417, and therefore relief could not have been granted in the Court below even if there had been jurisdiction to consider the application. 9 There is considered to be no relevant distinction between the facts of the present case and the facts before Lindgren J. No reason has been shown to reach any different conclusion to that reached by His Honour. His Honour's conclusion, with respect, is considered to be manifestly correct. 10 Nothing is gained by a further review of either the provisions of ss 417 , 474 or 476 of the Migration Act 1958 (Cth) or the authorities. 11 The present Application , it may be noted, was heard concurrently with another Application for Leave to Appeal involving s 351 of the 1958 Act. Leave was also refused in the proceedings concerning that other Application : Trinh v Minister for Immigration & Citizenship [2008] FCA 299. 12 Leave should be refused as the Application has no prospects of success. 13 An Affidavit has been filed by the Respondent Minister estimating its costs on a party-party basis to be $1,800. In the event that the Application was refused, Counsel for the Applicant neither opposed the making of an order for costs nor an order in the sum estimated. The Application for Leave to Appeal be refused. 2. The Applicant to pay the costs of the First Respondent in the sum of $1,800. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.

application for ministerial intervention unreviewability of decision not to refer application to minister application for leave to appeal refused migration

The applicant, Mr Bishop, claims that the respondent breached subs 170WG(1) of the Act by applying duress to an employee, namely himself, in connection with an Australian Workplace Agreement ('AWA'). A penalty is sought to be imposed on the respondent pursuant to s 170VV of the Act for breach of subs 170WG(1) of the Act. 2 Since the filing of the application and the hearing in this matter, the Act has been substantially amended and subsequently renumbered by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) ('the WC Act'). While the WC Act also makes provision as to duress in connection with an AWA, the application of the law in this case requires a consideration of the Act as it stood prior to these amendments (see Reg 2.19 of the Workplace Relations Regulations 2006 (Cth)). As such, any references to provisions of the Act are references to it in its previous form. The greater part of Landscape Direct's business is based in the Australian Capital Territory where it is engaged by both public and private clients at a variety of sites and properties. Ground maintenance services are provided by Landscape Direct to a number of Australian Defence Force ('ADF') sites, including the Australian Defence College, Weston Creek in the ACT ('ADC Weston'). ADC Weston is an ADF facility that is maintained by Landscape Direct on behalf of a head contractor, Euro Support Services, which contracts directly with the Commonwealth Government for the provision of multi-activity services to the ADF. 4 The applicant commenced fulltime employment with Landscape Direct as a General Groundsman Qualified Horticulturalist at its ADF sites in June 2003. He was employed under the AWU Miscellaneous Worker's Award 1998 and earned $525.16 gross per week in wages, which represented a base rate of $13.82 per hour, plus superannuation. 5 In October 2003 Landscape Direct began discussions with the ACT and Region Chamber of Commerce and Industry with a view to obtaining assistance and advice as to the drafting and introduction of a basic form of AWA capable of being tailored to the particular situation of each Landscape Direct employee. An AWA precedent for Landscape Direct was subsequently developed by the ACT and Region Chamber of Commerce and Industry in conjunction with the respondent. 6 In January 2004 a position of Site Supervisor at ADC Weston became vacant. The position was advertised internally by Landscape Direct, in accordance with company policy. The applicant orally expressed his interest in the position to Mr David Trethewey, at that stage, the respondent's Contract Overseer. Mr Trethewey asked the applicant if he would be interested in 'acting' in the position. The applicant accepted the offer and from 20 January 2004 was employed as 'acting Site Supervisor' at ADC Weston. 7 In his position as acting Site Supervisor, the applicant continued to receive the base hourly rate, to which he was entitled as a General Groundsman in addition to a 'higher duties allowance' of $2.18 per hour. As a General Groundsman the applicant also received a weekly industry allowance of $0.545 per hour, which he continued to receive in his position as acting Site Supervisor. From time to time the applicant also received additional allowances (for example, a 'Weeds/Vermin' allowance) which he had also received in his position as General Groundsman. Whilst acting as Site Supervisor, both parties understood that any leave which the applicant took was to be paid at the base hourly rate to which he was entitled as General Groundsman and would not attract the higher duties allowance. 8 On 10 February 2004 a staff notice was issued by Mr Gary Batchelor, the Australian Capital Territory Regional Manager of Landscape Direct, advising staff that an AWA had been produced for Landscape Direct and that all new positions or vacant higher positions would be subject to the AWA, a policy which was to take effect immediately. 9 On 18 March 2004 Mr Trethewey telephoned the applicant to advise him that Mr Batchelor was going to offer him the job of Site Supervisor on a permanent basis. The applicant subsequently received a telephone call from Mr Batchelor in which he was offered the position and invited to a meeting at Mr Batchelor's office in order to look through some documents. At this meeting, which occurred later that same day, Mr Batchelor advised the applicant that all new appointments within the company were to be subject to an AWA before explaining to him the AWA he would have to sign. Mr Batchelor told the applicant that he would have a period of 14 days to consider the AWA and obtain advice in relation to the document. Mr Batchelor also said that if the applicant were to elect not to sign the AWA, the position would be advertised internally. The applicant understood that if he signed the AWA he would be permanently appointed to the position of Site Supervisor in which he had been acting. The remuneration offered in the AWA for the position of Site Supervisor was $627.00 gross per week in wages, plus superannuation. 10 The applicant consulted his union, the Construction, Forestry, Mining and Energy Union ('CFMEU'). On the recommendation of a CFMEU representative the applicant sought legal advice from Gary Robb and Associates, solicitors. On or about 29 March 2004 the applicant advised Mr Batchelor that he did not want to sign an AWA for the full time position of Site Supervisor at ADC Weston, stating that he did not 'believe in' AWAs by way of explanation for declining the offer. On 2 April 2004 the applicant's solicitors wrote to Landscape Direct advising that its intention to advertise the position of Site Supervisor was contrary to s 170WG(1) of the Act and that further action, in the form of an application for interlocutory relief, would be taken should the position be advertised. On or about 2 April 2004 the position of Site Supervisor was advertised internally in a staff memorandum dated 1 April 2004. The applicant took a copy of this memorandum to his solicitors, who sent a further letter to Landscape Direct, dated 7 April 2004, repeating their assertion that further action, in the form of an application for an injunction, would be taken were the notice not withdrawn. 11 Nevertheless, by arrangement between the parties, the applicant continued to act in the role of Site Supervisor until he took some leave towards the end of June 2004. Upon return from leave on 3 August 2004, Mr Tretheway invited the applicant to rethink the question of the AWA, as otherwise the position would be advertised internally with a view to it being permanently filled using an AWA. The applicant again declined to sign an AWA, repeating his in-principle objection to AWAs. According to the applicant, the subject of an AWA was brought up on one further occasion some few days following this conversation, again by Mr Trethewey when he repeated Landscape Direct's position that, unless the applicant signed the AWA, someone else would be appointed permanently to the position. 12 In early to mid August 2004 Landscape Direct informed the applicant that the position of Site Supervisor, the duties of which he had been performing in an acting capacity, was to be filled by another staff member. The applicant was advised that he would return to the permanent position he held prior to commencing higher duties and would be moved to a different site. 13 On 10 September 2004 the respondent gave the applicant the choice of returning to either Russell/Campbell Park or HMAS Harman, both ADF facilities, as a Qualified General Groundsman/Second in Charge as of 14 September 2004. The applicant elected to go to HMAS Harman where he continued to receive the base hourly rate he had received whilst acting as Site Supervisor, but without the higher duties allowance he had received in that role, a loss of $2.18 per hour. 14 On 25 October 2004 the applicant resigned from Landscape Direct. Section 4 of the Act defined an AWA as 'an Australian workplace agreement under Part VID '. Part VID included ss 170VA to 170X. That term was defined by subs 170VV(4) to include subs 170WG(1). This policy included an intention to prevent employers, in an attempt to induce entry into an AWA containing particular terms, from applying pressure which, in the circumstances, is illegitimate: ibid at [23]. A similar view of the legislative policy was adopted by Ryan J in Maritime Union of Australia v Burnie Port Corporation Pty Ltd (2000) 101 IR 435 (' Burnie Port '). What is illegitimate is a question of fact to be decided in the circumstances of each case which may include whether there is an existing relationship of employer and employee or some other relationship of utmost good faith between the parties to the proposed AWA. It would do no more than place the potential employee in the position of either declining or accepting the employment on those terms and regulated that way, that is by an AWA. Something more is probably necessary'. The Court said (at [22]): 'In our view, the Explanatory Memorandum indicated only that to stipulate that entry into an AWA is essential to obtain employment with the offeror will not, of itself, or necessarily, constitute duress'. 21 As Moore J said in Schanka No 1 at [43], for the application of pressure to become illegitimate: 'it must be pressure that is likely to have the effect of denying the exercise of free will if an AWA was made. It also must be intended to have that effect'. It follows that s 170WG(1) does not confine the prohibition on duress to situations which have actually resulted in the conclusion of an AWA. The authorities make it clear that s 170WG(1), with its prohibition of duress 'in connection with' an AWA, applies to both the formulation of an AWA and to the completed AWA, regardless of whether entry into an AWA by an employee or employer eventuates. The question raised by the section is whether duress was applied which can be answered by considering whether illegitimate pressure was applied to secure, at the very least, ostensible agreement to enter an AWA and thereby to secure, again at the very least, ostensible agreement to the terms and conditions of employment embodied in the AWA. That is, to repeat what I said in the judgment of 24 September 1999, whether illegitimate pressure was applied, and conduct was engaged in, by a person (in this case the prospective employer, ENA) that might result in illusory and not real negotiation or bargaining and general agreement'. If such a relationship, from pre-existing employment or otherwise, had existed, it would have been relevant to examine the circumstances of the employer's conduct to determine whether there were features which rendered illegitimate or unconscionable a threat or inducement offered to procure entry into an AWA and thereby amounted to duress . In the present case, the Corporation has sought to compel prospective employees to enter into AWAs which are not markedly disadvantageous in their terms. Having regard to those considerations, what is left of the alleged duress in the present case is that entry into the AWAs was made a condition of appointment to vacancies in circumstances where the prevailing scarcity of employment made it more likely that the condition would be accepted by those interviewed. I have been unable to discern any positive conduct by the Corporation beyond its decision to offer employment under the AWAs, albeit with some knowledge of that circumstance. This, I consider, does not amount to illegitimate pressure of the kind needed to establish duress under s 170WG. As Ryan J noted in Canturi at [88]: '[t]he requisite openness and freedom is lost if one party to an existing relationship in a position of great economic superiority uses that advantage to apply illegitimate or unconscionable pressure to induce the other party to enter into an AWA'. 25 Economic pressure that is applied illegitimately can amount to duress. Such is the position in relation to the common law torts: Universe Tankships Inc of Monrovia v International Transport Workers Federation [1981] UKHL 9 ; [1983] 1 AC 366 at 400 per Scarman LJ. However, as Finn J observed (in Australasian Meat Industry Employees' Union v Peerless Holdings Pty Ltd [2000] FCA 1047 ; (2000) 103 FCR 577 at [54] ): 'Economic duress should not be found lightly'. 26 In the Schanka litigation, employees who were transferring from one enterprise to another were offered employment in positions that required them 'to perform the same or substantially the same work in the same position and location' as they had previously done (see Schanka No 2 at [102]). However, as a precondition to employment, those employees were required to enter into AWAs. As a result, each employee 'was, in substance, rendered impotent in negotiating or bargaining about the terms and conditions on which they would perform the work which differed from the terms and conditions on which they had, to that point, enjoyed' ( Schanka No 2 at [102]). Moore J further said at [102]: 'the offer of employment in the same job is, in my opinion, the singularly most important of the matters particularised in ... the statement of claim as evidencing illegitimate pressure'. I understand the rationale for this reasoning to be that the employees would have had a reasonable expectation that they would obtain positions with the new employer that would be held on conditions not materially inferior to those applicable in the previous employment, but that they were threatened with loss of such existing expectations unless they entered into the AWAs. Their relative position in the marketplace was thus threatened. 28 Having regard to the decision of Ryan J in Burnie Port the applicant conceded that, without more, offering a non-employee a position conditional upon entering into an AWA is probably not duress. As a consequence of refusing to enter into an AWA, the opportunity of future promotion in other representative roles was also closed off to the applicant. The applicant felt threatened. The threat was simple: if he did not sign the AWA, he would be denied the position. As a result, the applicant's freedom of negotiation was removed. The applicant contended that the subsequent reiteration of this same proposal after the initial offer constituted multiple breaches of s 170WG(1). 30 The applicant submitted that the concept of duress addressed by the Act and s 170WG differs from that which would apply in other contexts. 31 In essence, the applicant submitted that, while there is no case directly on point, Mr Bishop's case was more analogous with the transferring ENA workers in Schanka or the bus drivers in Canturi than that of the non-employees offered new employment on an AWA in Burnie Port . By analogy with the Schanka litigation, the applicant submitted that a breach of s 170WG occurs when an employer makes the signing of an AWA the condition upon which existing employment is retained and continued. While the Schanka cases concerned continuation of employment, the applicant submitted, in effect, that the present set of circumstances concern the practical continuation of promotion. Given this similarity, the applicant argued that the present case should be governed by the same principles. 32 Similarly, the applicant submitted that, by analogy with Canturi , a 15.8 percent reduction in salary would have a similar effect to the withdrawal of the more congenial types of available work. The applicant also submitted that the employment arrangement in Canturi was not one of permanency, but one in which the employees had been rostered onto the tourist route or given overtime (the preferred work) over a long period of time. Thus, relying on Canturi at [45], duress also includes disadvantaging an employee in relation to the position he or she held . 33 The applicant also submitted that an expectation about his potential transition from acting to permanent Site Supervisor had been generated by the respondent. The applicant said that, after accepting the role of acting Site Supervisor but prior to his commencement in the position, Mr Trethewey told him that, subject to a trial period in the higher position, the job would be his on a permanent basis. Indeed, the applicant acted in the position for a period of eight months. Although Mr Trethewey denied indicating that the applicant would get the position permanently, that there was a trial period, or giving him any understanding that he was 'on a promise', the applicant submitted that a reasonable expectation that he would remain in the Site Supervisor's position had been generated. Further, there had been a pattern of employees acting in positions for the respondent, and then being promoted on a permanent basis. Under those circumstances, the applicant could have reasonably expected to be confirmed in the position. However, here the circumstances were different. First, the respondent had made an offer of permanent employment to Mr Bishop in terms and on conditions it was lawfully able to make, one of those terms being the execution of an AWA. Second, the respondent provided various opportunities over several months for further discussion with Mr Bishop in relation to the proposed AWA. Third, the applicant did not consider the particular AWA in issue as he was opposed to all AWAs in principle. Fourth, at no point did the applicant proffer any reasons for his refusal to sign the AWA in question, and in particular, did not tell Mr Trethewey or Mr Batchelor about any concerns he may have had relating to particular clauses or elements of the AWA, nor did he attempt to negotiate the content of that AWA. 35 Landscape Direct was engaged in a legitimate and lawful process of regulating their employment relationships with their employees. There was no dispute about the applicant's performance. As a result, the current dispute could be characterised thus: the applicant had simply elected not to avail himself of an opportunity for a new contract of employment in a position with higher status and wages because he had declined to sign an AWA. The applicant was simply faced with a choice, and the process of making that choice was not polluted by the exertion of illegitimate pressure by the respondent. 36 The respondent was entitled to require all new employees or employees entering into promotion positions to enter into an AWA as part of their terms and conditions of employment. The Act specifically sets out these steps and Landscape Direct was doing no more and no less than following the steps so provided. 37 As a secondary submission, the respondent contended that the Court's jurisdiction to entertain the applicant's claim for relief under s 170WG is only enlivened if the Court is satisfied that the behaviour of the respondent or the circumstances of the allegations could be considered to have been 'in connection with an AWA'. It was submitted that the circumstances of the allegations did not show the necessary connection or inter-relatedness to satisfy the requirements of the section. The applicant had never, either individually or through his legal representatives who were writing letters seeking to protect him in other ways, sought to raise anything that might be wrong with the particular AWA in question, and his evidence was to the effect that he was not going to sign 'any AWA'. 38 That is, the respondent contended, the evidence demonstrates that the applicant had never turned his mind to the particular AWA in question, as he was opposed in principle to the operation, intent and policy of AWAs at large. As a consequence, the respondent argued that the applicant was not able to then rely on s 170WG. Nothing happened 'in connection with an AWA'. While the respondent conceded that a finalised AWA was not necessary to enliven s 170WG(1), it contended that, because the applicant's position was that, regardless of what form the AWA took, he did not want to make an AWA, the incidents in question were not 'in connection with an AWA'. 40 The respondent also submitted that the applicant was mistaken as to the amount he would be paid in the respective positions. The 15.8 percent loss of remuneration asserted by the applicant was not a real loss at all. While employees would not have received the (small) Weeds/Vermin allowance, for example, under the AWA, the intention was that the quantum of the higher duties allowances would be part of the rate available under the AWA. The respondent submitted that the applicant's belief as to whether he thought he would be disadvantaged under the AWA was wrong. The respondent relied upon evidence given by Mr Batchelor to the effect that he was aware that the Office of the Employment Advocate would not allow an AWA to pass that paid an individual less wages than would have otherwise been available under the relevant award. Mr Batchelor said that it had not been his intention to lower the hourly rate of an employee who entered into an AWA, and that any such decrease in income was purely the result of oversight on his part. Furthermore, he said that, if he had been notified of such an instance, he would have re-examined his calculations and adjusted the amounts accordingly if a decrease would in fact have occurred. However, at no stage had Mr Bishop raised his concerns with Mr Batchelor or any other agent of the respondent. I accept Mr Batchelor's evidence on this matter. 41 Furthermore, no application of duress had occurred in the present case because there was no suggestion, and no evidence to suggest, that the applicant's enjoyment of his substantive position (the Groundsman position) was in any way affected by the offer in relation to the Site Supervisor position. As a starting point, it is worth noting the notion of freedom of contract that underpins the legal framework of social intercourse and interaction. It is therefore left to them sometimes to fail to make bargains or to fail to agree on particular terms. Well meaning, paternalistic interference by courts in the market place, unless authorised by statute or clear authority, transfers to the courts the economic decisions which our law, properly in my view, normally reserves to parties themselves'. The object of the legislation is not to prevent any pressure being felt by the employee. The result in Burnie Port , given the extreme paucity of jobs and the dire economic environment locally, highlights this. Rather, the provisions seem to be intended to create a situation whereby entry (or the refusal of entry) into an AWA is determined by the authentic strength of the parties in the market. The legislation is not concerned with saving an individual from his or her poor economic position: it is a question of ensuring that the other party does not exacerbate that position and thereby distort labour market forces. 44 There is no doubt that, in this case, the proposed elevation to the position of Site Supervisor was a genuinely promotional position. There is no case directly in point. While there are factors that support an interpretation in favour of the applicant, there are also factors that suggest that duress was not applied. • It was common ground that the applicant wanted the Site Supervisor position at the ADC Weston site and that the respondent was aware of this desire. • The applicant said that when he told Landscape Direct representatives that he did not believe in AWAs, he was referring to concerns that he had about AWAs at a general and a specific level . • At a general level, the applicant explained in evidence his support for the trade union movement; he took the view that AWAs served to reduce that power, and ultimately, remove power from workers collectively to influence the conditions under which they are employed. While the applicant did not provide this or any other explanation for the position he took on AWAs to the respondent, no enquiry was made by Landscape Direct as to the precise nature of his objection to AWAs in principle. • When the applicant commenced employment with Landscape Direct, he was aware that his position was covered by an award, and this factor was of some importance to him. • At the specific level, the form of the proposed AWA presented to him appeared to indicate less pay than he had been receiving in an acting capacity. • The applicant said that feelings of intimidation and nervousness, and a desire not to upset his employer prevented him from giving any detailed explanation of his objection to AWAs. The applicant explained that Mr Trethewey made him nervous, and that he hesitated before telling Mr Trethewey that he did not believe in AWAs because of that nervousness and a desire to avoid confrontation. • As Burnie Port and Canturi make clear, the existence of a prior relationship may influence an assessment of whether duress has been applied in connection with an AWA. The question then becomes: given that the applicant and the respondent had a substantial prior relationship, did this relevantly affect the process of permanently filling the Site Supervisor's position at the ADC Weston site? One factor that may suggest that duress has been applied is the disappointment of a legitimate expectation if an employee does not sign an AWA. Arguably, an expectation of permanent promotion was initially generated in the applicant's mind from his acting appointment to the higher position. While the applicant understood that he was only acting in the Site Supervisor position, he had the impression that his role as Site Supervisor would be permanent arrangement, subject to a trial period. It is certainly clear that his performance in the acting position was considered to be excellent, and that what intervened to prevent the applicant's ascension to permanency was the refusal to sign an AWA. • The company had a preference to fill higher level jobs by internal promotion, where it could. There had been some practice of internal promotions. In that context, and with the vacancy in question having occurred before the announcement of the AWA policy, it is said that the applicant had a reasonable expectation that if he performed well he would get the job on a permanent basis. That expectation having already arisen, for the respondent to inject the further proposition that the applicant would only get the position if he entered an AWA might be considered unfair. • It is possible to interpret this background as evidence of a settled arrangement for the applicant to have the position permanently if he performed his work in the trial period in a satisfactory manner. Following the expiration of a reasonable trial period, the applicant's freedom of choice about entering into the AWA was not the same as that of somebody coming to employment with the respondent for the first time. This could simply be a case of an employee who held a philosophical view about the trade union movement, and an employer who held a different view, and in that context, both parties --- entirely by free choice --- choose not to proceed as the employer wished. The respondent did not do anything to the applicant tending to make him sign, nor did the respondent do anything to 'pressure' the applicant into signing. Significantly, the respondent gave the applicant a choice between two jobs to return to after finishing as acting Site Supervisor. In short, the proposal equated to presenting a choice between the applicant having the promotion (and the associated advantages) if he signed the AWA, or not getting that promotion if he did not. His relative position was not reduced in that, if he did not get a permanent promotion, he could continue acting in that position until someone else filled it. 46 It is not necessarily the case that the applicant had as much right to the promotion as the bus drivers in Canturi had a right to the more lucrative and congenial work. The employees in Canturi had a longstanding expectation, whereas the applicant in the present case could hardly have had that. In short, the applicant had no legal right to the promotion and the evidence does not suggest that he was given any settled expectation of such. It is this element of expectation that both Canturi and the series of Schanka decisions seem to turn upon. 47 The applicant had been warned, and was fully aware, that if he did not sign the AWA he would remain in his substantive position as a Groundsman, that the Site Supervisor's position would not be available to him, and that the position would be advertised internally. A practical choice was open to the applicant: he could have simply continued in his permanent job, and as such, on one view, no real change, and therefore no detriment, occurred to the applicant. 48 Even though the applicant felt threatened when Mr Batchelor informed him that if he did not sign the AWA the respondent would have to advertise the position internally, that is not sufficient to amount to the respondent's applying duress. The applicant was approached several times and given the opportunity to rethink his position, and take up the offer of promotion governed by an AWA. It was common ground that the applicant was aware of this choice for some time. 49 The respondent continued the applicant on his higher duties allowance, despite his rejection of an AWA. It was not altering the applicant's position, which was only a temporary one but rather altering its own intentions, by seeking an AWA as a condition of a permanent novation of the contract of employment, if the applicant were to be permanently promoted. Having the applicant 'act' in the position was an intrinsically temporary arrangement. The respondent did not threaten the applicant that that temporary arrangement would end unless he signed an AWA. Such temporary arrangement was always going to be terminated by the permanent appointment of somebody --- whether it was the applicant or someone else --- to the position. The respondent did not say, 'if you want to continue in your acting position you had better enter into an AWA'. 51 After the respondent received its final advice from the ACT and Region Chamber of Commerce and Industry, and arrived at a point where it could formally announce its general policy, it promptly did so. The notice announcing the policy indicates that the respondent was concerned not to disturb any existing employee at any level. That is, it appears that the company had implicitly accepted and recognised, no doubt on advice, that unfairness might result from requiring existing, permanent employees to enter into an AWA. The result was that the applicant 'fell between the cracks', as it were. While this is unfortunate, it does not, in my opinion, constitute the application of duress to him by the respondent. 52 The relative shortness of the period the applicant acted in the higher job before the respondent announced its new policy about AWAs tells against the legitimacy and reasonableness of any expectation that the applicant may have had. The respondent did not keep the applicant acting in the Site Supervisor position for any very extended time after the AWA question had arisen, only to agitate the issue after such a time that the applicant might reasonably have thought that the issue had gone away and that his employer had acquiesced in his wishes. The case for the applicant might possibly be different if he had been permanently in the position, and had, for example, permanently adjusted his personal expenditure in reliance on a particular salary level. However, there is no suggestion that any such thing occurred. 53 The parties were at all times in Canberra and its suburbs. They used a common language of 'acting appointments' and 'higher duties allowance'. Such language was very likely drawn from the realm of statutory appointments of people to public offices. In the private sector sphere of employment law, based upon contracts of employment (overlain or modified by statutory and award/registered industrial agreement provisions), such language is metaphorical. As a matter of contract law, a 'promotion' means a variation or novation of an existing contract of employment whereby the employee undertakes to serve the employer in a different and higher-paid capacity, normally without loss of accrued benefits from the pre-existing contract of employment. 54 In the present case, as to the 'acting' arrangements, the applicant and the respondent are to be taken to have agreed to vary their initial contract whereby the applicant had served simply as a Groundsman. Under the contract as varied, he agreed to perform work in a 'higher', that is, better-paid and more highly or broadly skilled and responsible, capacity on a temporary basis until such time as a decision should be made by the respondent as to the permanent arrangements for the performance of that work. There was no suggestion that any award provision impeded such a revised, temporary, contractual arrangement. 55 As a matter of legal right, all that the applicant had was what the contractual arrangements afforded him, and there was no suggestion that the respondent had applied any pressure that might have impaired or restricted the applicant's enjoyment of such contractual rights as he had. The absence of any firm, express or implied representation to him as to his future and permanent (in the sense of indefinitely continuing) employment at the higher level, makes it difficult to suggest that the respondent's change of policy about AWAs carried with it the application of any pressure on the applicant. 56 For a person to be constrained or influenced by economic or other circumstances that it is fair to see as pressure does not necessarily imply that some other person has applied that pressure. Many a would-be employee who is of markedly less bargaining strength than the employer 'offered' a job on condition of acceptance of an AWA may well be regarded, as a matter of ordinary language and reality, as having the AWA imposed on him or her. In such a case the employee is under pressure in connection with the AWA, but it is not the employer who has applied it. There is therefore no question of the employer having 'applied duress' to the employee. If a person does not 'apply' pressure in connection with an AWA, that person cannot have 'applied duress' within the meaning of s 170WG(1) of the Act. 57 The conclusion I reach here is that neither the respondent nor any of its agents themselves applied any pressure to the applicant. 58 The timing of relevant events is important. At the point when the respondent notified to its staff, including the applicant, its policy that appointments to promotional positions would only be made upon the appointee entering into an AWA, it seems to me that the applicant had acquired neither any right nor legitimate expectation (of a kind that s 170WG should be regarded as rendering protected) engendered by the respondent that the promotional position in question would be his. 59 It was argued for the applicant that he had such an expectation: that it had been intimated to him that, should he prove able, while 'acting' in the higher job, to do it, the job would be his. However, this does not survive analysis. The respondent announced its policy on 10 February 2004, only 3 weeks after the applicant started performing the higher duties. He could then have had no reasonable sense of grievance if, for example, a better qualified person had then presented and been chosen for the post, nor if the respondent had decided to reorganise the work so that the higher paid job no longer existed. Thus, the best that that can be said is that, subject to good performance, he had been led to expect that he had a strong chance of obtaining the job on a permanent basis, unless the respondent embarked on some policy that would indicate a different outcome. That does not, in my view, amount to such a legitimate expectation of the kind contended for by the applicant and engendered by the conduct of the respondent. 60 Had there been a firm and express policy of the respondent to promote internally and purely on merit, shown, for example, to have operated as an inducement to the applicant to begin work with the respondent or to upgrade his qualifications by part-time study to enhance his career prospects, and to remain in the respondent's employment, the position might perhaps have been different. An indication that reliance on such an inducement would be disappointed if an AWA were not entered into --- in the sense of diminishing his bargaining position --- might be said to amount to the application of pressure. Such pressure might amount to 'duress'. 61 The statutory concept proscribed is the application of duress , not the application of pressure. The word 'duress', in the context, implies an element of conduct that merits disapproval. The introduction of the regimen of AWAs enabling the contracting out of awards and the like was aimed at allowing a freer, but not unrestrained, operation of market forces. What might call for the curial disapproval necessary to have a particular form of pressure recognised as duress, apart from its tendency to affect the decision of the subject party to make an AWA or not, is to be judged against that concept. 62 Thus, merely to remind an employee of his or her weak economic position or of the economic consequences of not entering into an AWA is, of itself, unlikely to constitute the application of duress. Advocacy of a projected contract such as an AWA may produce a sensation of pressure in the person to whom it is directed, but duress requires something more. In my view, the added component appears when something is done, threatened or proposed which would alter the operation of market forces adversely to the person subjected to the act, threat or proposal if the offered AWA is not accepted. Thus, in the Canturi case, the consequence for the bus drivers was to make their work much less congenial. They were punished for their stance. By contrast, in Burnie Port , despite the bleak employment climate in the district, there was no diminution or threat of diminution of the position of the offerees if they did not accept the AWA offered. 63 In the present case, on and after 10 February 2004 when the employer commenced its new and generally applicable policy as to new appointments, the applicant is likely to have understood this as relating to new permanent appointments. He knew then that he did not have a permanent appointment to the Site Supervisor position. From that time on, he could only have had a reasonable expectation that, at best, he would secure such permanent appointment if he both did well while acting in the higher job (which he certainly did) and if he were prepared to enter into an AWA. Before February 2004 nothing had occurred which he had relied upon that could reasonably be said to give him an established expectation of anything. 64 When the time came for the respondent to make the new, permanent position to the Site Supervisor job and the offer of it was made to the applicant conditionally upon his signing an AWA, nothing was done or threatened to him in relation to the pre-existing status quo. In particular, to point out to him the consequence of not signing the AWA did not amount to any threat to his position: the observation merely reminded him of his legal position and his position as to reasonable expectations. The respondent did not apply duress to him. 65 As to the alleged 15.8 percent drop in salary, I accept the evidence for the respondent that, if that were so, it was an error and, if it had been brought to Mr Batchelor's attention, he would have adjusted the remuneration. The respondent's practice and intention was not to reduce pre-existing remuneration for employees who would enter into AWAs but to preserve the same general level and, in case of doubt, to err on the side of slight generosity. Flexibility of deployment rather than immediate cost-cutting at the expense of existing employees, seems to have been the respondent's goal. There was no intention to force the applicant onto a lower remuneration for the same work. There will be no order as to costs: see s 347 of the Act. I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick.

australian workplace agreement ('awa') duress entry into awa to obtain or maintain promotion ' duress ', ' in connection with ' industrial law words and phrases

He says that he presses both his original application to the Court filed on 30 January 2007 and his amended application filed on 3 April 2007. 2 The order sought in the initial application was that an intended "Special Leave to Appeal Application be removed into the High Court list. " This was a reference to an intended application dated 9 September 2005 for special leave to appeal to the High Court from three judgments of individual judges of the New South Wales Supreme Court; a judgment of Giles JA of 29 August 2005, a judgment of Campbell J of 8 July 2005 and a judgment of White J of 22 April 2005. 3 The grounds of the application were said to be "Unconscionable Conduct, and Perverting the Course of Justice as referenced in the Applicant's Statutory Declaration ... attached. " The statutory declaration is 246 paragraphs long and encloses various documents. 4 It seems that the background to what has been a great amount of litigation is that Mr Caldar's mother, the late Mrs Rachel Gittoes, had two sons, Mr Caldar and Allan Ramon Gittoes. Mrs Gittoes died on 27 April 2001. She left a will dated 21 July 1967 which, in the events that had happened, relevantly directed her trustee to sell and convert into money all her real and personal property, and to divide the same and to hold any unconverted property in trust for her two sons as tenants in common in equal shares. I have made this decision because Russell has taken care of me in my house, at some trouble and expense to himself, and in return I feel I should do this for him to help him in later life. I declare I have made this decision of my own free will, and have not been influenced by any person. Yours faithfully. 7 The Public Trustee of New South Wales, the respondent to the intended application for special leave to appeal, was granted letters of administration of the estate of Mrs Gittoes with the will annexed on 20 May 2002, the surviving appointed executor named in the will having renounced his position. The Public Trustee proceeded to carry out the wishes of the testator as they were expressed in the will made nearly 30 years before the letter. This involved, among other things, selling the house in which, as at the date of Mrs Gittoes' death, Mr Caldar was living; his mother was by that time residing in a nursing home. The funds obtained by conversion of Mrs Gittoes' property into money were duly divided. The Public Trustee still holds a considerable amount of money in trust for Mr Caldar and has sought to pay it to him but he declines to have it. 8 There has been a deal of litigation in which, in substance, Mr Caldar has sought to have effect given to his mother's wishes as expressed in the letter. He has formed the view that the Public Trustee has behaved wrongly, indeed with grave impropriety, and that there is much amiss in this regard in the state of public administration in New South Wales. He has had no success in the Supreme Court. 9 The amended application in this Court seeks orders that the Public Trustee, whom Mr Caldar had joined as a second respondent in his original application to this Court, should be removed as a party and that he should have "default judgment" on his claim that "his Special Leave to Appeal Application be removed into the High Court list. " He asks, "alternatively," although really as preliminary matters, that I should disqualify myself from further hearing his case in this Court and that the case be referred to a Full Court. I declined these preliminary applications. 10 Ms Carlsund, the first respondent, was at all material times the Deputy Registrar of the New South Wales Registry of the High Court of Australia. She indicated her intention to abide by any order of this Court save as to costs. 11 There had been previous efforts by Mr Caldar to have his grievances ventilated in the High Court. He filed an application for special leave to appeal in matter S436/2003 in which he sought special leave to appeal against a decision of the New South Wales Court of Appeal but ultimately, on 1 April 2004, discontinued that application. Two days before such discontinuance he filed another application for special leave to appeal (S109/2004) against a decision of the New South Wales Court of Appeal and named the Public Trustee of New South Wales as the respondent. He failed to file application books as directed and the application for special leave to appeal was deemed to be abandoned pursuant to the High Court Rules. 12 On 1 February 2005 Mr Caldar filed a summons seeking reinstatement of that application for special leave to appeal. However, on 16 March 2005 Gummow J dismissed that summons. 13 There apparently followed extensive correspondence between Mr Caldar and officers of the Court in relation to Mr Caldar's wish to file another application for special leave to appeal. Having regard to the complexity of the background and the legally unhelpful nature of the documentation then before me, I indicated that it would be of great assistance to the Court if the Public Trustee would act as a contradictor to enable me to appreciate and sort out the issues. Reluctantly the Public Trustee agreed so to act but now wishes to have the matter go no further. 15 The Public Trustee has moved the Court for orders that Mr Caldar's application be dismissed pursuant to O 20 r 2 of the Federal Court Rules and that, except in relation to its ability to have costs orders for the proceedings to date, that it "be removed as a party to the proceedings. " Order 20 r 2 provides relevantly that the Court may stay or dismiss or dismiss generally a proceeding or any claim for relief in a proceeding where it appears that no reasonable cause of action is disclosed. 16 The grounds asserted by Mr Caldar for relief against Ms Carlsund are many and various but I think they can be fairly summarised as being that she has denied the applicant natural justice; that she has behaved with impropriety and has exceeded her authority by purporting to shut the applicant out of the High Court although she is not a Justice of that Court; and that she has behaved in bad faith. Nothing in the materials put before the Court would indicate that there is any arguable basis for any of these claims. 17 It is also the position that, in seeking to apply the rules of court of the High Court to documents sought to be filed by an applicant which sought an exercise or purported to seek an exercise of the judicial power of the Court, a registrar, or deputy registrar as the case may be, is exercising the judicial power of the Court on its behalf and as such is acting judicially and not administratively: see, for example, Croker v Deputy Registrar of the High Court of Australia [2003] FCA 34 ; Gunter v Doogan [2003] FCA 667. 18 It follows that, in substance, Mr Caldar is seeking to have this Court call into question an exercise of the judicial power of the High Court. It is not open to this Court to do that. 19 The proceeding is doomed to failure. Accordingly, the application of 30 January 2007 and the amended application of 6 March 2007 will be dismissed with costs. 20 The respondent Public Trustee will be entitled to be paid its costs of the proceedings from funds retained by the Public Trustee in the estate of Rachel Isabell Gittoes on a trustee basis to the extent that its costs are not otherwise satisfied by the costs order I have just made. 21 I will direct that a copy of the transcript of today's proceedings be provided to the applicant without charge. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick.

federal court procedure and evidence summary disposal and stay of proceedings high court and federal court

The motion is brought pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth), and O 20 r 5 and O 11 r 16 of the Federal Court Rules 1979 (Cth) ("the Rules"). 2 When the matter came on for hearing before me, Mr Walsh handed up a draft statement of claim setting out the bases on which he brought the application. I have considered the application and the draft statement of claim. I am not persuaded that this Court has jurisdiction in relation to the matter because the statement of claim appears to be based in contract. Accordingly, neither the application nor the draft statement of claim discloses a federal element which would give this court jurisdiction to deal with the matter. 3 In addition, there were several fundamental problems with Mr Walsh's draft statement of claim. Although it is important to bear in mind the difficulties which a litigant in person may have in placing proper pleadings before the Court, the draft statement of claim is not framed in a way which complies with the requirements of the Rules, nor does it appear to set out any intelligible cause of action known to the law. The relief sought in this matter is not relief which this Court, in any event, would have power or jurisdiction to grant. Nor would such relief be granted in the terms in which it is currently sought. The draft statement of claim is not clear, and alleges matters which are extremely indeterminate and vague. It is difficult to make any sense of the pleadings in order to ascertain any nexus between the pleadings and the relief which is sought. 4 Accordingly, it seems to me that the application in this matter should be struck out on the basis that it is bound to fail and has no reasonable prospect of success. I also think that, so far as the form of the draft statement of claim is concerned, it does not properly raise any legal matter over which this Court can exercise jurisdiction. Having regard to the impossibility, in a practical sense, of responding to these allegations, I do not think the draft statement of claim improves the position in this case. 5 I have also had regard to the detailed judgment delivered in the proceedings previously brought by Mr Walsh where Buchanan J examined a statement of claim in relation to similar facts, albeit based on different causes of action, and ordered that it be struck out and the proceedings dismissed (see Walsh v University of Technology, Sydney [2007] FCA 880). In that decision, his Honour examined carefully the relevant authorities concerning the dismissal of proceedings, the adequacy of a statement of claim as a proper proceeding, and the necessary elements of a claim under the Trade Practices Act 1974 (Cth). There is no need to recite those principles here. While his Honour held in that case that the Court had jurisdiction because Mr Walsh had pleaded the Trade Practices Act 1974 (Cth), in the present case, and apparently as a consequence of his Honour's earlier decision, the draft statement of claim has been amended to exclude that claim with the result that it fails to incorporate a federal element, and as a consequence this Court has no jurisdiction. 6 Accordingly, I order that the proceedings brought by Mr Walsh be dismissed with costs. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.

motion for summary dismissal statement of claim discloses no federal element practice and procedure

The proceedings have been fixed for hearing on 27 July 2007. On the last occasion the matter was before the Court, namely, 8 June 2007, an application was made by the applicant for leave to administer certain identified interrogatories. The application for leave to administer those interrogatories was fixed for hearing today. 4 Interrogatories should be drawn so as to admit answers which are not evasive albeit truthful. 5 Interrogatories cannot be used as a means of obtaining the evidence of the other party or the names of his witnesses and normally cannot be used to seek the identity of persons. 6 Interrogatories may be directed to facts directly in issue and also other facts from which those facts may be inferred. 7 Interrogatories must be answered on knowledge, information and belief. 8 A person interrogated is bound to answer according to his own knowledge and also according to the knowledge of those for whose knowledge he is responsible. Accordingly, a party interrogated must answer interrogatories by reference to the party's knowledge or the party's acquired knowledge which arises from information provided which leads to a belief. 9 If a party has no knowledge or no information capable of leading to the formation of a belief, the party must say so. If the party states that he has no information capable of leading to the formation of a belief in circumstances where he has information but does not accept it, then he must state the reasons why he is unable to form a belief or has not formed a belief. 10 Corporate parties such as the respondent in this case are required to verify answers to interrogatories through the mouth of the person with the most proximate knowledge of the facts and matters upon which interrogation is made. That person is bound before verifying the answers to the interrogatories to ensure that the company, that is to say, he or she on behalf of the company, has made detailed inquiries of all servants and agents to enable the best possible answers to be given to the interrogatories in question. One matter which was not pressed in the result was the question of the meaning of the word 'employees' which the applicant had proposed to use, it being suggested by the respondent that it may not understand what was meant by the use of the word 'employees'. The second matter relied upon was that the interrogatories which were originally proposed sought the identity of particular employees of the respondent, which was plainly impermissible. Whilst it was suggested that the interrogatories should be disallowed on the basis that they constituted a fishing exercise I have some difficulty with the categorisation of the interrogatories proposed in that way in the circumstances of this case. 12 After consideration of the arguments that were advanced the applicant came back to the Court after a short adjournment with a proposed reformulation of the interrogatories which it desired to administer. Those interrogatories have themselves been the subject of some debate and alteration has been made to them to reflect the wishes of the applicant in the light of the observations of the respondent in relation to the reformulation. 13 Each interrogatory in its revised form included sub-questions (iii) and (iv) which were directed at imposing upon the respondent a guessing exercise and not directed at the provision of matters of belief as required by the principles which I have earlier summarised. It is impermissible that those sub-questions be allowed. 14 As to the remaining interrogatories, identified as 1(i) and 1(ii) and 2(i) and 2(ii), they are in my opinion proper interrogatories to be administered in the circumstances of this case. 15 Whilst on the last occasion the respondent urged the view that it was not a party that could be burdened with an obligation to answer interrogatories in matters of this nature, that argument is no longer pressed and plainly rightly so. In the light of the judgment of Mason CJ and Toohey J in Environment Protection Authority v Caltex Refining Co. Pty. Limited [1993] HCA 74 ; (1993) 178 CLR 477 at 504-505 it is clear that in proceedings for the contravention of an Act such as the Workplace Relations Act , where there are contraventions alleged of civil remedy provisions, a corporate respondent is not entitled to claim any privilege against exposure to a civil penalty. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.

principles relating to the administration of interrogatories practice and procedure

One has been filed by the applicant, the other by the third respondent. The applicant seeks leave to file a second further amended statement of claim in the form provided to the Court on 24 June 2008. The third respondent seeks orders dismissing the proceeding as against him and that the applicant pay his costs on an indemnity basis. 2 It is necessary to briefly outline the general background and the applicant's case against the third respondent. 3 The applicant is the owner of property at Airlie Beach, Queensland, which incorporates a marina known as the Abel Point Marina. Between 2002 and 2006, the applicant enlarged the Marina. The expansion proceeded in three stages, and on 24 December 2004, the applicant and the first respondent executed a contract ("the Contract") for the design and construction of the second and third stages of the expansion. The second respondent was the sole director of the first respondent. The third respondent provided contract based accounting services to the Sea-Slip Marina Group (which included the first respondent) and was also an officer of the first respondent. At various stages during the expansion of the Marina the first respondent was required to engage subcontractors to perform work on the expansion project. 4 In May 2005, the superintendent (Mr Matthew Palmer of MH Palmer Consulting Engineers Pty Ltd) was notified of the existence of a new subcontractor, Sea Slip Manufacturing Pty Ltd ("SSM"). The applicant alleges that SSM was solely controlled by the second respondent. 5 SSM is not a party to the proceedings. 6 The applicant alleges that during the course of the expansion of the Marina, the first respondent was required to submit a number of progress claims to the applicant. Between August 2005 and December 2005, the first respondent submitted four progress claims, each of which was accompanied by a statement to the effect that all product claims in the particular progress claim had been fabricated and assembled by SSM, and was the unencumbered property of the first respondent. Each of the four statements accompanying the progress claims was signed by the third respondent. 7 The applicant alleges that each of the statements amounted to a representation (the " SSM Representations") on behalf of the first respondent that the product the subject of the relevant progress claim was not the subject of any outstanding claims by subcontractors and that the product the subject of the relevant progress claim was the unencumbered property of the first respondent. 8 The applicant alleges in para 34 of its further amended statement of claim that the SSM Representations were misleading and deceptive in that (relevantly) all or some of the subcontractors who had supplied the first respondent with the product the subject of each of the progress claims had not been paid by the first respondent for that product. It was also misleading and deceptive because subcontractors who supplied the product in each of the progress claims in respect of which a claim was made under were entitled to exercise a lien and/or rights under a "Romalpa" (retention of title) clause over that product. 9 The applicant also alleges that had it been aware of any or all of these matters, it would have terminated the Contract. The applicant goes on to allege that had the Contract been terminated, the expansion of the Marina would have been undertaken at a cost substantially less than the cost actually incurred by the applicant. Relying upon the truth and accuracy of progress claims 7, 8, 9 and 10, and on the truth and accuracy of the documentary evidence provided with them by the first respondent in the documents signed by the third respondent, the applicant did not require the first respondent to provide a statutory declaration in support of the information contained in the progress claims. As a result of the conduct pleaded in paragraphs 35A - 35C, above, the Applicant has suffered loss and damage. Had the Contract been terminated at this time, the Project would have been completed at a cost substantially less than the cost incurred to date by the Applicant. 13 After some prevarication, the applicant ultimately adhered to the case as originally formulated, namely, that had the Contract been terminated the expansion project could have been completed more cheaply than it in fact had been and this constituted a compensable loss. However it sought to add, in the second further amended statement of claim, loss or damage of a different character, namely legal expenses the applicant has incurred as a result of litigation attending the performance of the Contract, being litigation by and against the first and second respondents. 14 It is now necessary to consider whether the applicant's case against the third respondent (including the proposed amendments) enjoys no reasonable prospects of success, and whether the Court should refuse to grant leave to the applicant to amend its further amended statement of claim and strike out the applicant's claim against the third respondent. 15 The third respondent has applied under s 31A of the Federal Court of Australia Act 1976 (Cth) for summary judgment in respect of the claim made against him. Section 31A commenced operation on 1 December 2005. Experience shows that there are cases which appear to be almost bound to fail yet they succeed. Obviously, where there is a contested application under s 31A , both parties will be present to explain their case, but not in the context of a trial. The procedure envisaged by s 31A is summary. The concept of a party having "no reasonable prospect of successfully prosecuting a proceeding" has some similarity to the test at common law for determining whether a jury properly instructed could reach a verdict for the plaintiff. The principle upon which the section is based is that it is for the jury to decide all questions of fact, and therefore to determine which witnesses should be believed in case of a conflict of testimony. But there must be a real issue of fact to be decided, and if the evidence is all one way, so that only one conclusion can be said to be reasonable, there is no function left for the jury to perform, so that the court may properly take the matter into its own hands as being a matter of law , and direct a verdict to be entered in accordance with the only evidence which is really presented in the case. And, one must be mindful that in Hocking (1945) at 487, Dixon J said that, in effect, every judge who had heard the matter (through four trials, two Full Court appeals and, to that point, the appeal to the High Court) would have formed the view that the plaintiff should have failed had they been able to decide the facts, yet the Privy Council restored the second jury verdict in her favour and so concluded the litigation. This raises a very real question, as to what reasonable prospects are for present purposes. As soon as the evidence may have such an ambivalent character prior to a final determination, I am of opinion that then, as a matter of law, at that point there are reasonable prospects of success within the meaning of s 31A. Unless only one conclusion can be said to be reasonable, the moving party will not have discharged its onus to enliven the discretion to authorise a summary termination of the proceedings which s 31A envisages. In moving the second reading of the bill introducing s 31A (the Migration Litigation Reform Bill 2005) the Attorney-General said that it strengthened ... "the power of the courts to deal with unmeritorious matters by broadening the grounds on which federal courts can summarily dispose of unsustainable cases". In Jefferson Ford , Rares J (at [73]) merely noted that the parties accepted both before the primary judge and the Full Court that the test to be applied under s 31A of the FCA was that which his Honour had earlier stated in Boston Commercial at [45]. 18 It is unnecessary for me to enter the debate of what precisely is the appropriate way of applying s 31A given that, as will become apparent in the following reasons, it is plain that the applicant has no reasonable prospect of successfully prosecuting the proceeding against the third respondent. Claims for payment shall include the value of the work carried out by the Contractor in the performance of the Contract to that time, together with all amounts then otherwise due to the Contractor arising out of the Contract. 21 I can accept, for present purposes, that the third respondent's allegedly false statement constitutes misleading and deceptive conduct for the purposes of the Trade Practices Act 1974 (Cth). The difficulty with the pleading is what follows, namely, that had the applicant been aware of the true position, it would have set in train a series of events that could have ultimately resulted in the termination of the Contract. Putting the matter at a high level of generality, the applicant contends that had it not been for the misleading and deceptive conduct of the third respondent, the applicant would have ultimately been entitled to terminate the Contract and the failure of the applicant to terminate the Contract has lead it to suffer loss or damage. 22 At this point it is important to note the circumstances in which the applicant, under the Contract, can serve a notice to "show cause" on the first respondent. The effect of clause 44.2 is that the applicant can provide written notice to show cause in circumstances where the first respondent has committed a substantial breach of contract, for example where the first respondent has provided "a statutory declaration or documentary evidence which contains a statement that is untrue". However, where the first respondent fails to provide a statutory declaration or documentary evidence that a subcontractor has been paid, the remedy available to the applicant is that provided in clause 44.3, namely, the withholding of payment to the first respondent. A default of this type does not, on my reading of the Contract, entitle the applicant to serve written notice to show cause (the first step on the path towards the termination of the Contract). As I see it, it merely entitles the applicant to withhold payment to the first respondent. 23 The applicant's case is based on an erroneous construction of the Contract, namely, that it would be entitled to serve written notice to show cause (the first step on the path towards termination of the Contract) where the first respondent had failed to provide documentation evidencing payment of its subcontractors. 24 The pleaded claim against the third respondent, as formulated in the second further amended statement of claim, is not a model of clarity. It appears to elide a contractual obligation to provide a statutory declaration with the concomitant obligation to state facts truthfully, with the alleged failure to reveal the true state of affairs about the non-payment of subcontractors and what the applicant would have done had the true facts being known. 25 In understanding the substance of the claim, para 35C of the proposed second further amended statement of claim appears to be central. The paragraph commences with an assumption, namely, that had the applicant been aware of the matters set out in para 34 (i.e. that the SSM Representations were false) it would have acted in particular way. Specifically, it is asserted in para 35C(a) that the applicant (presumably with that awareness or knowledge) would have insisted that the contractor, the first respondent, provide the applicant with a statutory declaration or proper documentary evidence that the contractor had complied with its obligations under clause 43.2 of the Contract. The obligation under clause 43.2 is to provide a statutory declaration declaring that subcontractors had been paid. Paragraph 35C(a) might, on one view, involve a contention that the applicant would have sought a statutory declaration or proper documentary evidence about whether, as a matter of fact, the first respondent had complied with its obligation to provide a statutory declaration that subcontractors had been paid. However, the pleading does not allege the source of any contractual obligation on the first respondent to provide a statutory declaration or proper documentary evidence about whether it had complied with its obligation to comply with clause 43.2. 26 The better view is that the applicant is alleging in subparagraph 35C(a) that the applicant would have required the first respondent to provide a statutory declaration declaring that subcontractors had been paid which may have revealed, on the facts as alleged, that the subcontractors had not been paid, being the facts of which the applicant is assumed to have been aware. But as far as I can discern that allegation leads nowhere unless, implicit in the allegation, is that the statutory declaration would have been false. However, no allegation is made (and it is difficult to see how it could be made) that on the hypothesis that the applicant was aware of the non-payment of subcontractors and requested a statutory declaration as contemplated by clause 43.2, that the first respondent (or the second respondent on its behalf) would swear a false declaration. 27 I now turn to para 35C(b), which is probably the more important paragraph given that it appears to allege that clause 43.2 imposes an obligation on the first respondent to pay its subcontractors. However, it imposes no such obligation expressly. Arguably, it impliedly imposes such an obligation. If so, a failure to pay subcontractors in breach of that implied obligation would result in non-compliance with the express obligation in clause 43.2 of the Contract to provide a statutory declaration that all subcontractors had been paid, either because no statutory declaration to that effect could be furnished or because a statutory declaration would be furnished that said that they had not been paid. Either way, non-compliance with clause 43.2 expressly confers on the contractor a right to withhold payment that had been the subject of a claim for payment under clause 42.1. 28 Paragraph 35C(c) alleges certain consequences which, for present purposes, can be assumed. However paragraphs 35C(d) and 35C(e) contain what, in my opinion, is an unsustainable step in the logical chain embodied in the pleading. It is that the failure to comply with clause 43.2 of the Contract (accepting for the moment, it entails an implied obligation to pay subcontractors) might arguably constitute a substantial breach of the Contract that would have enabled the applicant to provide the first respondent with a written notice to show cause and, in due course, terminate the Contract. It is true that the instances of substantial breaches in clauses 44.2 (a) to (h) of the Contract are not exhaustive having regard to the prefatory words "substantial breaches include but are not limited to ..." at the beginning of sub-clause 44.2. However, the fact that, insofar as clause 43 is concerned, the only substantial breach is identified as knowingly providing a statutory declaration or documentary evidence that contains a statement that is untrue, clearly suggests that any other non-compliance of clause 43 is not a substantial breach. This, in my opinion, is put beyond doubt by the scheme of clause 43 which contains its own remedy, namely withholding of payment to the contractor who does not provide a statutory declaration that subcontractors have been paid and, if there is implied contractual requirement to pay them, withholding payment to the contractor who has not paid subcontractors. In my opinion, the applicant's case against the third respondent enjoys no reasonable prospects of success. 29 However, even accepting in the applicant's favour that the proceeding analysis is not correct, the presently pleaded claim against the third respondent in my opinion enjoys no reasonable prospects of success for another reason. I accept that this analysis does not bear upon the claim sought to be made for legal expenses. I am prepared to assume, although I very much doubt, that the applicant could establish the necessary causal connection between the impugned conduct of the third respondent (making the SSM Representations) and the loss said to flow from the failure to inform the contractor of the true state of affairs that would have led, so it is said, to the termination of the Contract and the consequential loss of the benefit of getting the work done by new contractor more cheaply (or, for that matter, avoiding the legal disputes which resulted in the claimed legal expenses). I add, parenthetically, that evidence on behalf of the applicant as to what it would have done is essentially self-serving and of little weight: Dominelli Ford (Hurstville) Pty Ltd v Karmot Auto Spares Pty Ltd [1992] FCA 550 ; (1992) 38 FCR 471 at 483; Hanave Pty Ltd v Lfot Pty Ltd (formerly Jagar Projects Pty Ltd) and Ors [1999] FCA 357 ; (1999) 43 IPR 545 at 557. 30 It is sufficiently likely that the applicant has not sustained any loss of the type presently pleaded as a result of the third respondent's conduct such that s 31A is engaged. At a directions hearing during the early stages of this matter, I raised with the parties the possibility of preparing a report in relation to any loss that that may have been suffered by the applicant. An expert report was prepared by Manda Trautwein of VMC Global Pty Ltd (on instructions from the solicitor for the applicant) in relation to the damage suffered in respect of the various claims made by the applicant against the respondents. Although the expert report prepared by Ms Trautwein covers the various claims made by the applicant against all the respondents, it is necessary only to canvass, in the context of these reasons, Ms Trautwein's analysis in respect of the applicant's claim against the third respondent. 31 The gravamen of the applicant's claim against the third respondent (the "SSM claim") has already been discussed. It is unnecessary to repeat it, save as to say the loss claimed by the applicant is the difference between what was actually incurred by the applicant in completing the project and the cost it would have incurred had it terminated the Contract and engaged an alternate contractor to complete the project. 32 Ms Trautwein prepared draft reports in March 2008 and April 2008. In the April 2008 report, which was admitted into evidence, Ms Trautwein concluded that, in the context of the SSM claim, the applicant suffered no loss. She came to this conclusion based on the report of Mr Chris Marais (a quantity surveyor and director of Rider Levett Bucknall Qld Ltd) who himself had prepared a report for Ms Trautwein. Mr Marais was engaged to provide an opinion of revised and alternative costs, costs of works completed and costs to complete the works at different stages. Based on the Mr Marais's report, Ms Trautwein calculated that the applicant suffered no loss given that the cost incurred by the applicant in completing the project was less than the cost the applicant would have incurred had the Contract been terminated and an alternate contractor been engaged to complete the project at that time. In June 2008, Ms Trautwein prepared another draft report but I rejected its tender by the applicant. The April 2008 report, together with the report of Mr Marais, sustain, in my opinion, the conclusion that the applicant has no reasonable prospects of successfully prosecuting its presently pleaded claim against the third respondent for damages. 33 I now consider whether I should award costs in favour of the third respondent and if so, whether they should be awarded an indemnity basis. Ordinarily, costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order: Ruddock v Vardalis (No 2) (2002) 115 FCR 229 at 235. As a general principle, costs are awarded on a party-party basis unless there are special or unusual circumstances. Some of the broad classes of circumstances in which the exercise of discretion to award indemnity costs may be appropriate are referred to by Sheppard J in Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 232-234. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the Court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs. Where summary judgment is given in all or part of a proceeding, then a conclusion that at least one of the grounds contemplated by Sheppard J in Colgate-Palmolive will ordinarily be open or at least arguable. In Cirillo v Consolidated Press Property Ltd (formerly known as Citicorp Australia Limited) (No 2) [2007] FCA 179 , Finn J summarily dismissed an application against the various respondents. The applicant may well have been badly advised. This though provides no excuse for so imposing upon the respondents. At various directions hearings after the commencement of the proceedings I voiced my reservations about the applicant's claim against the third respondent, as did counsel for the third respondent. Misleading and deceptive conduct per se takes you nowhere if it's a damages claim. Perhaps what I should do, subject to anything Mr Hubbard wishes to say, is to allow you to answer any requests for particulars, and that just might give you occasion to reflect on the case more generally, and really pin down what the cause of action is. Well, can I just say this, your Honour. We will prove damage by calling an expert to say what a reasonable price for the works that have been done is, and if that price is less than what we've paid. I must say my clear impression from the discussion we had on the last occasion is that there may be and obviously I can only say may be, I haven't either heard you or understood fully the case that you're seeking to raise nor the defences that might be mounted against you, but there may be some, what I might describe as fundamental flaws in the case that your client wishes to advance. I can't, obviously, dictate that but I was concerned that the matter might just proceed on with time and expense being incurred but anyway it's ultimately not a matter for me. It's a matter for the other parties. Thank you. I'll stand the matter down and call the next matter. In these circumstances the third respondent is entitled to his costs and, in my opinion, on an indemnity basis. 39 The application against the third respondent is dismissed with costs. Those costs are to be paid on an indemnity basis. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.

application to amend statement of claim application to dismiss the proceedings as against the third respondent whether applicant's claim against third respondent has reasonable prospects of success whether costs should be awarded on an indemnity basis procedure

The applicants rely on two affidavits of their solicitor, Andrew Sullivan, respectively sworn on 15 June and 13 August 2009, and numerous affidavits of service. The applicants began the proceeding by an application and a statement of claim filed on 2 April 2009. An amended statement of claim and an amended application were filed on 22 May and 19 June 2009 respectively. At the relevant time, the fourth respondent, Steven Matthew Apperly, was allegedly a director and secretary of the first respondent, Residential Investments Australia Pty Ltd. Also, at the relevant time, the fifth respondent, Lawrence Edwin Bowtell, was a director of Residential Investments and a director and secretary of the second and third respondents, namely, 122-136 Mason Street Pty Ltd and Riverdale Industries Pty Ltd. Messrs Apperly and Bowtell have both filed appearances. Mr Apperly has filed a Defence dated 12 June 2009. Mr Bowtell has filed a Defence dated 18 June 2009. The applicants plead breach of contract against Mason Street and Riverdale Industries in respect of a property development at Newport in Victoria, known as "Park Waters". The applicants allegedly entered into contracts with these companies for the sale of land, and agent agreements pursuant to which Mason Street and Riverdale Industries were to engage a builder to build on the land. Also, according to the applicants' pleading, the applicants entered into a deed of undertaking with Mason Street and Riverdale Industries, in accordance with which the two respondent companies agreed to advance certain monies to the applicants. The applicants allege that Mason Street and Riverdale Industries are in breach of the undertaking because they "failed to advance to each applicant sufficient funds to meet until the Date of Completion ... interest on the loan made to each applicant by the relevant Bank to enable construction of the Dwelling in each case, which amount of interest has been paid by each applicant to each relevant Bank in each case". The applicants plead loss and damage, which is particularised. The applicants also claim that Residential Investments has engaged in misleading and deceptive conduct contrary to s 52 of the Trade Practices Act 1974 (Cth); and that Messrs Apperly and Bowtell are jointly liable for the contravention pursuant to s 75B of that Act "because they aided, abetted and/or were knowingly concerned in the contravention". The applicants plead loss and damage, but this is not particularised. The misleading and deceptive conduct is said to have been constituted by misrepresentations that: Mr Sullivan's first affidavit, the various affidavits of service on the court file and the court file establish that: None of the respondent companies has filed an appearance or defence. None appeared at the hearing of the application today. None of the respondent companies has attended any duly listed directions hearing. At the hearing of the motion, Mr Sullivan, who appeared for the applicants, informed the court that he had recently spoken with the legal representatives of Messrs Apperly and Bowtell about the hearing of the motion this day. Instead, on the face of the statement of claim, there must be a claim for the relief sought and the court must have jurisdiction to grant that relief: see Arthur v Vaupotic Investments Pty Ltd [2005] FCA 433 at [3] per Heerey J; Diesel SPA v Hwang [2005] FCA 1619 at [2] per Tamberlin J; Wu v Avin Operations Pty Ltd [2006] FCA 36 at [57] per Kenny J; and HIT Entertainment Ltd v Lodin [2006] FCA 722 at [5] - [6] per Stone J. Having read the statement of claim, I find that these conditions are satisfied. O 35A r 3 is, nonetheless, discretionary and the circumstances attending the application must be taken into account. In some circumstances, although not here, it is appropriate to exercise some caution before granting relief: see Universal City Studios LLLP v Hoey t/as DVD Kingdom (2006) 232 ALR 525 at 527 [10] per Sackville J. Four months have passed since the applicants began proceedings in the court against the three corporate respondents, all of whom have been duly served with the initiating documents, the court's orders, this motion and accompanying affidavit, as well as various other documents: see Corporations Act 2001 s 109X. None of them has taken any step to acknowledge the applicants have applied to this court for relief in respect of their claims against it. None has entered an appearance or filed a defence. None has attended a directions hearing. None has complied with the court's orders in so far as they affect it. If it matters, this has occurred at the same time as Mr Bowtell is apparently a director of the three companies concerned. Having regard to matters discussed above, I am satisfied that Residential Investment, Mason Street and Riverdale Industries are in default for the purposes of O 35A r 3(2). I am also satisfied that, on the face of the amended statement of claim, the applicants appear entitled to the relief sought against them; and that the court has power to grant the relief. This history indicates these companies are either unable or unprepared to co-operate in having the applicants' claims for relief brought to trial within an acceptable period in an acceptable way or otherwise having the matter resolved in accordance with the legal regime that governs in this country. Their uncooperative conduct is productive of unnecessary delay and expense. It is prejudicial to the administration of justice. Whilst an order of the kind the applicants seek should not lightly be made, in this case, there is no countervailing consideration greater than those to which I have referred. Accordingly, the applicants have made out an entitlement to enter judgment in default. I would direct that the applicants file proposed minutes of order. In respect of its contractual claim, this should state the total sum for which judgment should be entered. This will comprise the principal sum that is sought in the statement of claim and an amount of interest, the calculation of which is to be disclosed. No evidence has been given concerning the costs that the applicants have incurred in relation to the present proceeding. I would afford the applicants an opportunity to file such evidence, particularly as to a reasonable estimate of party-party costs. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny.

default judgment respondent had not entered an appearance or filed a defence respondent in default judgment given. practice and procedure

Guylian sells a variety of chocolate products but is particularly well renowned for its sea shell range of chocolates --- or "Perles d'Océan" --- comprising 11 novelty marine life shapes each filled with a hazelnut praline centre and created by a blend of white, milk and dark Belgian chocolate, which gives the chocolate a marbled appearance. The sea shell range includes different types of shells and shell-fish, a prawn and a seahorse shape. Guylian has obtained international registration of its chocolate seahorse shape as a trade mark pursuant to the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks 1989 (the Madrid Protocol), to which Australia became a party on 11 July 2001. The seahorse shape is depicted below: Fig. 1 --- Seahorse shape as depicted in Guylian's Application No. 936483 (see [4] below). Fig. 2 --- View of the two sides (profiles) of the seahorse shape. The Madrid Protocol was adopted on 27 June 1989 and provides a streamlined process for the registration and protection of trade marks in multiple countries by filing a single international application with the International Bureau of the World Intellectual Property Organisation (via the intermediary of the relevant trade make office in an applicant's home state). The Trade Marks Act 1995 (Cth) (the Act) and Trade Marks Regulations 1995 (Cth) (the Regulations) incorporate provisions for the making of international registration applications in Australia and the extension of protection to Australia for registered international trade marks applied for in another member state: see s 189A of the Act and Pt 17A of the Regulations. The latter are accommodated by Pt 17A , Div 3 of the Regulations which provide a process for the registration of what is termed an "International Registration designating Australia", or "IRDA". An IRDA is "a request, made under ... the Protocol, for extension to Australia of the protection resulting from the international registration of a trade mark". Essentially the same examination and opposition procedures apply to an IRDA as to ordinary applications for registration of a trade mark under the Act. Where an IRDA is made the priority date of the IRDA (if accepted) will generally be the date of filing of the original international application in the relevant member state: see regs 17A.4 and 17A.15 of the Regulations. Following international registration of its seahorse shape in Benelux, Guylian sought protection of the shape mark in Australia. (Belgium, Luxembourg and the Netherlands which form the Benelux union are treated as one member state under the Madrid Protocol. ) Application for protection was made by way of an IRDA transmitted to the Australian Registrar of Trade Marks on 16 October 2002 (Application No. 936483). Application No. 936483 sought protection of the seahorse shape as a three dimensional shape mark in respect of goods in class 30 as identified in the Regulations, specifically pralines and chocolate. Based on the international registration in Benelux, the priority date sought for Application No. 936483 was 16 April 2002 (the priority date). This proceeding is an appeal from a decision of the delegate of the Registrar of Trade Marks made on 31 May 2007 to refuse registration of Application No. 936483. The delegate refused to register the seahorse shape mark on the basis that it was not capable of distinguishing Guylian's goods within the meaning of s 41(5) of the Act. Guylian appeals the decision pursuant to s 35 of the Act, which applies to decisions of the Registrar made under Pt 17A , Div 3 of the Regulations: see reg 17A.26(1). The Regulations in substance mirror ss 27 to 44 of the Act, which cater for the application for registration of an ordinary domestic trade mark in Australia. (Emphasis added. Sections 39 to 44 of the Act apply to an IRDA, with appropriate modifications so that the "reference in those sections (i) to an application for the registration of a trade mark were a reference to the IRDA, and (ii) to an applicant were a reference to the holder of an IRDA": reg 17A.28(2). In the Registrar's view, s 41(2) of the Act provided a ground for rejecting Guylian's application. It is the only ground the Registrar considered was a basis to reject the application. (3) In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons. (4) Then, if the Registrar is still unable to decide the question, the following provisions apply. Whether a trade mark is "capable of distinguishing" goods from those sold by other traders is to be determined by reference to subss 41(3)-(6). As Branson J said in Blount Inc v Registrar of Trade Marks [1998] FCA 440 ; (1998) 83 FCR 50 ( Blount ) at 56, subss 41(3)-(6) are "designed to control the process by which the Registrar is to reach a conclusion as to whether the trade mark for which registration is sought is capable of distinguishing the applicant's goods". Subsection 41(5) will apply if the Registrar finds that the trade mark "is to some extent inherently adapted to distinguish the ... goods ... from the goods ... of other persons but is unable to decide, on that basis alone, that the trade make is capable of so distinguishing the ... goods". By contrast, subs 41(6) will apply if the Registrar finds that the trade mark "is not to any extent inherently adapted to distinguish". (e) After taking those matters into account, the trade mark is "taken to be capable of distinguishing the applicant's goods ... from the goods ... of other persons" only if the Registrar is "satisfied" that the trade mark in fact does or will so distinguish the goods: par 41(5)(b). If the Registrar is not so satisfied, then the trade mark is taken not to be capable of distinguishing (see par 41(5)(c)), a ground for rejecting the IRDA will thereby exist and the Registrar is then required to reject the IRDA: reg 17A.24(3). (f) In the alternative scenario that the Registrar finds that the trade mark is not to any extent inherently adapted to distinguish (subs 41(6)), then the trade mark is taken not to be capable of distinguishing the goods unless the applicant "establishes" that, because of the extent to which the applicant has used the trade mark prior to the relevant filing date of the application, the trade mark does in fact distinguish the goods as being those of the applicant: pars 41(6)(a) and (b). Prior to the commencement of the Act on 1 January 1996, "shape" trade marks were not capable of registration under Australian trade mark legislation: see Trade Marks Act 1955 (Cth) (the 1955 Act). However they are now recognised in the current Act. In hearing an appeal pursuant to s 35, the Court exercises its original jurisdiction and conducts a hearing de novo. It is to determine on the merits the same question that was before the Registrar --- namely, whether or not the trade mark should be accepted --- and in doing so, it is to apply the same legal criteria that the Registrar is required to adopt under the Act. The Registrar's decision is not to be presumed correct but the Court is entitled to have regard to the Registrar's opinion as that of a skilled and experienced person in the field of trade mark registrations: Woolworths [1999] FCAFC 1020 ; 93 FCR 365 at [33] (French J). The first is whether the "presumption of registrability", as it has come to be known, applies when the relevant ground to refuse registration is s 41(2), having regard to the interrelation of s 33 and s 41(3)-(6). Assuming the presumption does apply, the second issue concerns the proper standard of proof. Relying on the Full Court decision in Lomas v Winton Shire Council [2002] FCAFC 413 ; (2003) AIPC 91-839 ( Lomas ), Guylian says that the Court should only refuse registration if it satisfied that the mark should clearly not be registered. Dealing firstly with the issue of onus, it is now well understood that s 33 of the Act had the effect of reversing the previous position on onus under the 1955 Act. Whereas under that Act an applicant had to satisfy the Registrar that there were no grounds to object to registration, the position now is that an application must be registered, unless the Registrar is satisfied that there is a ground for rejecting it: see s 33 and reg 17A.24; see also the discussion by French J in Woolworths [1999] FCAFC 1020 ; 93 FCR 365 at [15] and [20]-[24]. An applicant is thus said to have the benefit of a "presumption of registrability" under the Act. In other words, a mark will be presumed registrable unless the Registrar is satisfied, on the balance of probabilities, that a ground to reject it exists. In Blount 83 FCR at 58C, Branson J took the view that the question under s 41(2) whether a mark is capable of distinguishing is "governed entirely" by subss 41(3)---(6). Accordingly, her Honour considered that it is not the case, as might be expected from the terms of s 33, that the Registrar must accept an application if he or she is uncertain whether the mark is capable of distinguishing an applicant's goods. Her Honour's analysis of s 41 has been followed in a number of cases, including Ocean Spray Cranberries Inc v Registrar of Trade Marks [2000] FCA 177 ; (2000) 47 IPR 579 ( Ocean Spray ) and Austereo Pty Ltd v DMG Radio (Australia) Pty Ltd [2004] FCA 968 ; (2004) 61 IPR 257 ( Austereo ). In Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 , the Full Court considered an application for registration of a shape mark where the only ground of possible rejection was s 41(2). The applicant adduced no evidence of use of the mark and did not rely on either s 41(5) or (6). As a result the case turned on the sole question whether the mark was inherently adapted to distinguish the applicant's goods under s 41(3). The application must be accepted unless the court is satisfied that it has not been made in accordance with the Act or that there are grounds for rejecting it. If the matter is in doubt then the application should be accepted. The possibility of refusal after a contested opposition with evidence and closer scrutiny remains open. The acceptance stage is not the time for detailed adversarial examination of the application that might be involved in an opposition: Registrar of Trade Marks v Woolworths at FCR 377 .... Acceptance for registration involves an initial screening process albeit it requires the application of statutory criteria and evaluative judgments by the Registrar and the Registrar's delegates. (Emphasis added. It enjoys the benefit of the presumption of registrability mandated by s 33. To the extent that critical criteria upon which registration might be rejected are in doubt, the application should be accepted. Section 41(3) requires the Registrar to "take into account" the extent to which a mark is inherently adapted to distinguish in deciding whether or not it is "capable of distinguishing" the applicant's goods. Section 41(4) then directs the decision-maker to subs 41(5) and subs 41(6), if they are "still unable to decide the question". Section 41(5) will be applicable if there is a finding that the mark is to some extent inherently adapted, but the Registrar is "unable to decide, on that basis alone, that the mark is capable of ... distinguishing". Accordingly, where there remains some doubt after considering s 41(3) about a mark's capability to distinguish, rather than resolving that doubt in favour of an applicant (by operation of a presumption), the statute expressly directs the decision-maker to consider the criteria in subs 41(5) or subs 41(6) (whichever is applicable). Reconciling s 41(4) and Branson J's decision in Blount , with the presumption and French J's decision in Kenman Kandy , is not entirely free from difficulty. The matter is further complicated by the fact that the onus is reversed under s 41(5) (the Registrar must be "satisfied" that the mark does or will distinguish) and s 41(6) (the applicant must "establish" that the mark does distinguish). In its submissions, the Registrar accepts that the presumption applies in relation to s 41(3), but says that the use of the term "satisfied" in s 41(5) suggests that the presumption no longer applies once the inquiry moves to s 41(5). I agree. Sections 41(3)-(6) contemplate that there are degrees to which a mark might be inherently adapted to distinguish: see Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 at [82] (Lindgren J); Austereo [2004] FCA 968 ; 61 IPR 257 at [35] (Finn J). The ultimate question under s 41(3) is whether the mark is inherently adapted to a sufficient degree to conclude that it is "capable of distinguishing". In my view, the effect of the presumption of registrability on s 41(3) is that, in considering whether a mark is capable of distinguishing by reason of the "inherently adapted" criteria, it should be presumed that the mark is sufficiently adapted unless the Registrar is satisfied otherwise on the balance of probabilities. If the Registrar is otherwise satisfied, then he or she will be "unable to decide the question" (see s 41(4)) whether the mark is capable of distinguishing on the basis of any inherent adaptation alone, and must then proceed to consider s 41(5) or (6). Under those provisions, the presumption no longer has any operation, as the applicant is then required to either "satisfy" the Registrar (s 41(5)), or "establish" (s 41(6)), that the relevant criteria set out therein is met. As Branson J said in Blount 83 FCR at 56, referring to Rejfek v McElroy [1965] HCA 46 ; (1965) 112 CLR 517 at 521, a test of satisfaction requires the Registrar to "be persuaded of the matter according to the balance of probabilities". In reliance on Lomas [2002] FCAFC 413 ; (2003) AIPC 91-839 , Guylian contends that the proper standard to be applied on an appeal under 35 of the Act in respect of a refusal to register is that the refusal should be upheld only if the Court is satisfied that the mark should clearly not be registered. Lomas was an appeal from a single judge's decision to uphold an opposition to registration. The presence of s 195(2) [which imposes a leave requirement for appeals from a single judge decision] suggests that a parallel should be drawn with the scheme of appeals in opposition proceedings under the Patents Act 1990 (Cth). On that basis, on appeal under s 56 , the Court should consider whether the trade mark should clearly not be registered. Only if so satisfied should the Court decide to uphold an opposition. In Austereo , Finn J considered that he ought "as a matter of comity" apply the Lomas standard as adopted by Bennett J in Torpedoes . In Kowa , Lander J expressed some doubt about the point but considered he was bound by Lomas and the Full Court decision in Woolworths [1999] FCAFC 1020 ; 93 FCR 365. Gyles J has on two occasions expressed a different view: see Clinique Laboratories v Luxury Skincare Brands Pty Ltd [2003] FCA 1517 ; (2003) 61 IPR 130 at [132] and Pfizer Products Inc v Karam [2006] FCA 1663 ; (2006) 70 IPR 599 at [6] - [26] ( Pfizer ). His Honour considered the higher Lomas standard in some detail in Pfizer . Whether a ground of opposition has been "established" is a conventional concept requiring no particular elucidation. In my opinion, there is no basis upon which the section can be read as "the extent (if any) to which any ground on which the application was opposed has been clearly established", particularly where that implication changes the practical operation of the section by imposing a special high onus of proof. It is also worth noting that the construction favoured in Torpedoes is not rooted in the words of the section at all. The precise finding in that case was that the opposition "should be upheld only if the court is satisfied that the trade mark should clearly not be registered": at [22]. With all respect, that test is not to be found in the statute. I cannot find anything in the structure or content of other provisions of the 1995 Act that would point to reading s 55 other than according to its ordinary meaning. Trade marks and patents are different species of intellectual property and have a different history. A general desire for uniformity cannot control construction of the statute governing each. There is no binding Full Court authority. I cannot find any instance where a single judge has actually applied the higher standard. In my opinion, in this case, comity does not demand that I depart from my view as to the meaning of the statute. It sought to rely on the decision, and those that have followed it, but it acknowledged that other decisions run counter to it. In my view, there is nothing in the relevant provisions that supports the imposition of a higher standard, even at the acceptance stage. The "presumption of registrability" arises from s 33 of the Act: Woolworths [1999] FCAFC 1020 ; 93 FCR 365 at [24] ; Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 at [50] . Section 33 does not speak of being "clearly satisfied"; it mandates acceptance of an application unless the Registrar " is satisfied that ... there are grounds for rejecting it". On this point, I prefer the views expressed by Gyles J and in particular his Honour's observations that an acceptance that there is a presumption of registrability "says nothing as to the standard of proof" and does not import a higher threshold than the conventional balance of probabilities: see Pfizer [2006] FCA 1663 ; (2006) 70 IPR 599 at [18] . The presumption as it is gives effect to the general position under the Act that an applicant is not required to establish an absence of grounds to refuse or object to registration. It should also be noted that in both Woolworths [1999] FCAFC 1020 ; 93 FCR 365 and Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 (both acceptance stage cases) there is no suggestion that any special higher standard was applicable. In any event, for the reasons I have given at [16]-[21], there can be no question of any special higher standard in respect of s 41(5) or (6), because those provisions place the onus on the applicant. In my view s 41(3) must be considered with the presumption in mind as I have explained at [21]. (The name "Guylian" is a conjoining of the names of the husband and wife co-founders of the Guylian business, Guy and Liliane Foubert. ) Its sea shell chocolate products are sold in boxes of various sizes and configurations, which in each case include an assortment of sea shell and other marine shapes, including the seahorse shape. Guylian has been marketing and selling its sea shell range, including the seahorse shape, in Australia since 1980 and over time that particular range has become Guylian's top confectionary brand. Guylian's chocolate seahorse shape has been designed with the typical features of a real seahorse in mind. For comparison, I set out below Webster's representation alongside Guylian's chocolate seahorse shape: Fig. 3 --- Seahorse as depicted by Webster's Dictionary. Fig. 4 --- Guylian's seahorse shape. Guylian contends that its shape is a "fanciful stylised" representation of a seahorse, which "depart[s] radically from the shape of seahorses found in nature". It was further put that the backwards curl of the tail gives the shape an overall "S" like configuration, absent in the case of a real seahorse. Guylian provided a photograph of a real seahorse which demonstrates the elongate nature of the creature and the way in which the tail is used (going forward) to take hold of stationary objects (plant life, for example) as a way of anchoring itself. 5 --- A seahorse using tail as an anchor. On the other hand, plainly reminiscent of a real seahorse, Guylian's "seahorse like shape" (as Guylian describes it) has a long snout, a head and neck suggestive of a horse, a prehensile tail and an upright posture. Positioned alongside other sea shell chocolates the seahorse shape is unmistakably a representation of a seahorse, albeit one with some fanciful or exaggerated features. Guylian does not sell the seahorse shaped chocolate on its own but as part of Guylian's sea shell collection. In evidence were six of the boxes Guylian sells containing the sea shell chocolates. All of the boxes depicted in the materials follow similar themes, including a prominent use of the "Guylian" trade mark, clear cellophane windows, and pictures of the sea shell shapes, sometimes individually but often in combinations, usually including the seahorse shape but not always. As referred to earlier, the sea shell range, containing the seahorse shape, has been sold in Australia for almost 30 years. Guylian markets and sells the sea shell range on a considerable scale throughout Australia, through supermarkets (Coles, Safeway/Woolworths, K-Mart, Target and Big W), department stores (for example, Myer and David Jones), specialty confectionary outlets, duty free shops, wholesalers in city and country areas and non-traditional outlets such as Five Star gourmet (in Crows Nest, NSW), Airport Fine Foods, Chocolate Affair, Neat 'N Sweet, Price Line stores, Harris Scarfe Supermarkets, Metro Supermarkets, Ambarvale Supermarkets and City Convenience stores. Internationally, the seahorse shape is sold as part of the sea shell range in 114 countries. As at April 2004, typical retail prices for the chocolates in Australia were: Type of box Price Exclusive assortments (325g) $16.70 Gourmet assortments (225g) $13.25 Seahorse shaped box (small) (125g) $12.49 Seahorse shaped box (large) (375g) $31.50 To demonstrate the strength of the seahorse shape's presence in the Australian market, Guylian provided, on a confidential basis, annual sales and marketing expenditure figures in respect of the period 1988 to 2003/2004 for its sea shell range. In order to preserve the confidentiality of these figures, I will not refer to specific sums, except to say that they are very large and in the order of tens of millions in respect of retail sales in Australia between 1988 and 2004 and millions in respect of marketing and advertising in Australia over a similar period. The seahorse shaped boxes referred to at [35(e)] above were released in Australia in 1999. Since 1999, Guylian has been actively involved in sponsoring and promoting a marine conservation research project, entitled "Project Seahorse", established by biologists to research and protect seahorse habitats around the world. According to a press release tendered by Guylian, its involvement with the project began after it had been "looking for an international communication vehicle that would distinguish [it] from the rest, give a very good and positive feel to our consumers and make the world a better place". It has sought to do this largely by making financial commitments to the project, donating over $1 million, and by engaging in various public relations exercises, often involving its sea shell chocolates, to raise general awareness of the project's cause. Examples of advertising and promotion initiatives include articles in "The Examiner" (Tasmania, 2 May 2001), "The Sunday Mail" (Queensland, 6 May 2001) and "New Idea" magazine, each describing the project and displaying pictures of either Guylian's seahorse shape or seahorse shaped chocolate boxes. To anticipate matters, Guylian contends that its use of the seahorse shape, specifically its use in the various packaging, marketing and advertising material described above (including its association with Project Seahorse), along with its long and successful presence in the Australian chocolate market as a prominent part of the sea shell range, demonstrates that the seahorse shape is in fact capable of distinguishing Guylian's chocolate and praline goods from those of other rival traders. To support this, Guylian tendered evidence from a market survey, which ACNielsen was commissioned to conduct in October 2004. According to the evidence of ACNielsen's Manager, Customised Research, Mr Lyndell Rouzaire, ACNielsen is Australia's largest market research organisation and provides, among other things, a "customised research service" which involves "quantitative and qualitative studies that generate information and insights into consumers' attitudes and purchasing behaviour, customer satisfaction, brand awareness and advertising effectiveness". The survey was a national, online survey directed at a representative sample of people who use the internet aged 18 years and over. It involved one main and two subsidiary questions. Respondents to the survey were asked to view a picture of the seahorse shape and were asked: "Looking at the below image, do you associate this shape with any brand or manufacturer? " Permissible answers were either "Yes" or "No". If the answer was "Yes", respondents were asked to then specify the brand or manufacturer. As such, positive responses given were unprompted, in that no cues or clues as to possible brands were provided. Respondents were then also asked how often they purchased either "Boxed Chocolates" or "Chocolate Bars". There were 1496 respondents to the survey. Expressed as a percentage, the overall results were: (a) Respondent associated Guylian with the seahorse shape 40.6% (b) Respondent associated another brand or manufacturer with the seahorse shape 13.3% (c) Respondent did not associate the seahorse shape with any brand or manufacturer (or respondents said "Yes" to question one but "don't know" when asked to specify the brand) 46.1% Out of all the brands and manufacturers listed by respondents, the top six in percentage terms were: (a) Guylian 40.6% (b) Lindt Chocolates 1.7% (c) Cadbury 0.8% (d) Darrell Lea 0.4% (e) Nestle/Nestle Chocolates 0.3% (f) Ferrero 0.3% Guylian sought assistance from an expert in the field of market research and market strategy, Mr William Callaghan. Mr Callaghan has 15 years teaching and over 10 years experience in industry in these fields, with particular expertise in "statistical analysis and interpretation of [market research] data for the purposes of understanding the perceptions and behaviour of consumers". He was asked to analyse the ACNielesen survey results and provide an opinion and conclusion regarding the level of recognition of the seahorse shape, as surveyed. According to Mr Callaghan, "brand recognition" as it is known in the field of marketing is "the ability of a consumer to confirm prior exposure to [a] brand when presented with one of the brand's identity elements (for example, the brand name, logo or other symbol, product or package shape or appearance, a colour or colour scheme ...)". As high levels of accurate recognition of a brand are critical for traders, brand recognition is commonly tested and measured in market research, often using visual images as a prompt as in the case of the ACNielsen survey. Two preliminary matters dealt with by Mr Callaghan are worthy of note. First, the survey was conducted online and accordingly the sample of respondents most directly represented the Australian population with online access to the internet, rather than the broader Australian population. Mr Callaghan considered that ACNielsen's sample methodology --- which involves the application of weighting factors to each age/sex group in both metropolitan and non-metropolitan areas and thereby "as far as possible, ensures that composition of the sample by age, sex and locality is closely, but never exactly, in line with the real distribution of the online population" --- did not impose any significant limitation on the utility of the survey data, because in his opinion "the online population represents the views of a substantial part of the Australian population". Second, given that respondents were shown a two dimensional image of the seahorse shape, Mr Callaghan considered it "likely" that many of the associations reported by respondents were based on a recognition of the overall image --- including for example its colour and any perception of texture --- rather than solely the shape of the object depicted in the image. While he would expect the shape to be a "major" component driving recognition, it is likely it would not be the sole component. In addition it is likely, and common in market research surveys, that respondents who answered "No" did in fact associate the image with a brand or manufacturer but answered negatively because they could not name them. (b) The strength of association between the image and Guylian (40.6%) is "very high", as compared to other brands and manufacturers. In Mr Callaghan's experience, when more than 10% of a broad population make a specific association, the association may be regarded as very high (although there are no defined industry standards in this particular product category that would necessarily dictate such a conclusion). (c) The different results as between Guylian and each other main brand/manufacturer identified (see table at [44] above) are statistically very significant. In only very general terms, Mr Callaghan explained how the application of a statistical test called the "z-test" to the data enables one to make conclusions about the probability that the differences between the recognition of Guylian on the one hand, and any of the non-Guylian brands on the other, arises by chance or because there is a real quantitative difference between the groups of results. In this case, the "z-test" demonstrates that, in respect of each of the five main rival brands identified, the probability that the difference between those results (0.3% --- 1.7%) and the Guylian result (40.6%) arises by chance is less than 1%. In other words, the differences are real differences and one can "very confidently" conclude that the image is strongly associated with Guylian and not with other brands. (d) As the test was "unprompted" the results demonstrate not only a high frequency of association between the image and Guylian but "a high level of accurate, unaided recall of the Guylian brand name". This, Mr Callaghan said, should be noted because in the real world consumers would encounter the seahorse shape in combination with other identifying features of the Guylian products (for example, the Guylian brand name and specific packaging features). The Registrar did not adduce any evidence to contradict or otherwise challenge Mr Callaghan's analysis or conclusions. However, as discussed below, the Registrar took issue with Guylian's ultimate contention that the level of association between the image and Guylian should lead to a conclusion that the seahorse shape has in fact become capable of distinguishing Guylian's goods from those of others, in the sense required by the Act. The Registrar sought to demonstrate that other traders already sell chocolates in shapes similar to Guylian's sea shell range, and in particular, the seahorse shape. Among the evidence were printouts from several websites displaying for sale shell, starfish, seahorse, turtle, crab, sharks, lobsters, fish and octopus shapes. The websites had been identified by the original examiner of the application, Mr Magers, by Google searches performed in December 2002 and April and June 2004 during the course of his examination. From their internet address, each of the websites appeared to be American. The Registrar did not provide any further explanation of their source and there was no evidence that the products displayed on the websites were available for purchase in Australia. Guylian relied on the evidence of Mr Gary Adler, Managing Director of "The Chocolate Box" chain of stores, a popular chain with eight shops in and around Melbourne. The Registrar adduced evidence, much more recently acquired, of boxed sea shell and seahorse shaped chocolates sold by other traders in Australia, similar or in some cases the same as Guylian's range. Each of these chocolate boxes was purchased in May or June 2008, well after the priority date (16 April 2002). This raises a question about the acceptable use of this evidence. It is clear that the relevant date for assessing whether a trade mark is capable of distinguishing the goods for which it is used is the priority date: Austereo [2004] FCA 968 ; 61 IPR 257 at [30] . The parties both accepted that evidence of use by Guylian of the seahorse shape after the priority date is relevant for the purposes of s 41(5) of the Act, because it is open to draw rational inferences from such evidence as to whether the shape in fact had the required capacity to distinguish as at the priority date. That proposition was accepted by Finn J in Austereo , where his Honour referred to Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505 and Burchett J's reference to actual events as being "capable of illuminating the probabilities already inherent in [a prior] situation". Although differing as to the weight such evidence should be given, the parties also appeared to accept more generally that evidence of events taking place after the priority date, whether that be the applicant's use of the mark itself or use of other similar or otherwise relevant shapes by rival traders, may be relevant to whether the seahorse shape is capable of distinguishing Guylian's goods. This was an appropriate course to take. In my view, evidence of what other traders were selling prior to, at or subsequent to the priority date has the ability to rationally affect, albeit with varying degrees of weight, the conclusion one might reach about the extent to which a mark is inherently adapted to distinguish under s 41(3) of the Act. In the absence of evidence of improper motive, however, it seems to me logical and appropriate that post priority date events should, where appropriate, be taken into account by decision makers in exercise of the "evaluative judgment" (see French J in Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 at [47] ) required under s 41(3). Mr Adler gave evidence that in about the mid-1990s, the Chocolate Box store started selling its own brand of sea shell chocolates and ceased selling Guylian's. It is not clear from his evidence however whether the Chocolate Box's product included a seahorse shape. In fact, there was no direct evidence from either Guylian or the Registrar that, as at the priority date, 16 April 2002, any other traders were selling seahorse shaped chocolates in Australia. I was asked by the Registrar to infer that such a shape did exist in the Australian marketplace as at 16 April 2002, taking into account (a) Mr Adler's evidence that other sea shell shapes were sold on and from the mid-1990s, and (b) the ACNielsen survey evidence, which showed that in 2004 almost a quarter of those survey respondents who associated the seahorse image with a particular manufacturer, associated it with someone other than Guylian. However, on the relatively limited and imprecise evidence available, I am not prepared to draw such an inference. Given that the Registrar performed relevant searches in 2002 and 2004 which did not reveal any instances of seahorse shaped chocolates in the Australian market (other than Guylian's), I am not satisfied that that shape was being sold by others at that time. With other traders already using the seahorse shape, "or shapes very similar to it", the delegate was satisfied "that [the] shape is not prima facie capable of distinguishing" Guylian's goods and she therefore turned to consider s 41(5). By this, the delegate meant that she was not able to decide whether the trade mark is capable of distinguishing the goods on the basis of s 41(3) alone. As to s 41(5), the Registrar's delegate formed the view that the evidence of Guylian's use of an image of the seahorse shape on its packaging did not demonstrate that the shape has been used as a trade mark. Rather, the images on Guylian's boxes have more obviously functioned as an illustration of the contents of the box, rather than as a marker of the origin of the chocolate goods. Similarly, the delegate found that the seahorse shaped boxes have not functioned or been recognised as a trade mark, because the shape of the box is overwhelmed by the "Guylian" trademark and only approximates the seahorse shape in any event. With regard to the survey evidence, the delegate considered that, although Guylian has a "strong presence in the market" under the "Guylian" name, the seahorse shape itself is not capable of doing the work of distinguishing the goods from the goods of other traders, because over half the survey respondents (ie the majority) did not even associate the shape with Guylian. Unless I am satisfied on the balance of probabilities that the seahorse shape is not at all, or is not to a sufficient degree, inherently adapted to distinguish, then the shape should proceed to registration as a trade mark. Is the seahorse shape inherently adapted to distinguish Guylian's goods --- s 41(3) of the Act? The question whether a trade mark is inherently adapted to distinguish is directed at the nature of the trade mark itself and is not concerned with the mark's capability to distinguish arising from its actual or intended use: Burger King Corporation v Registrar of Trade Marks (The Whopper case) [1973] HCA 15 ; (1973) 128 CLR 417 ( Burger King ) at 424; Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 at [83] (Lindgren J). A trade mark that is inherently adapted to distinguish goods is one that can "do the job of distinguishing without first educating the public that it is a trade mark": British Sugar plc v James Robertson & Sons Ltd [1996] RPC 281 ( British Sugar ) at 306 (Jacob J); see also Austereo [2004] FCA 968 ; 61 IPR 257 at [48] (Finn J). Indeed, those matters must be taken into account. The application of this test, as French J observed at [49], is "largely a matter of evaluative judgment within the broad principles laid down by [the] authorities". The reference to "likelihood" by Kitto J in Clark was described by Gibbs J in Burger King 128 CLR at 425 as a reference to whether another trader "might", without improper motive, want to use the mark in relation to his or her goods: see also Time Warner Entertainment Company LP v Stepsam Investments Pty Ltd [2003] FCA 1502 ; (2003) 134 FCR 51 at [33] (Wilcox J). In Kenman Kandy , the appellant had sought registration of its "bug" shaped confectionary as a three dimensional shape mark. Although capable of description as a "bug" (and indeed described that way in the appellant's application for registration), the Full Court accepted that the trade mark was a concocted, imaginary shape, constituted quite simply by a circular centre with two recesses (possibly eyes) and three projections on each of the two sides of the centre (possibly legs). Indeed, were it not for the description given by the appellants, it might as easily be seen as some extra-terrestrial object or space equipment such as a modified lunar landing module. Registration of the bug shape as a trade mark would not give the appellant a monopoly over all bug or insect shapes --- only this particular shape and any substantially identical or deceptively similar shape. Assuming that to be so, it is speculative, absent evidence, to draw conclusions about that number and whether the particular arrangement has any significant impact upon the access of other traders to the use of insect like shapes as trade marks. In that connection it is necessary to bear in mind that this trade mark is still at the registration stage. It enjoys the benefit of the presumption of registrability mandated by s 33. To the extent that critical criteria upon which registration might be rejected are in doubt, the application should be accepted. It is referred to by Guylian as a seahorse and would not be mistaken for any other animal. Although it has some level of "stylisation or abstraction" (the stockier torso and the backwards curling tail), these relatively minor differences, it said, do not have any significant impact on the ordinary association or signification that the shape establishes in the mind of the observer. In other words the concept is negative not positive. When regard is had to the fact that (a) chocolate confectionary is manufactured in a wide variety of novelty shapes, including animals, (b) other manufacturers have been selling chocolates in the shape of sea shells and other marine life since well prior to the priority date (16 April 2002), and (c) other manufacturers are currently selling chocolates in the shape of a seahorse that is the same or very similar to Guylian's, the Court should be satisfied, on the Clark test, that the shape in suit is one that, as at the priority date, other traders might think of and want to use in a manner which would infringe a registered trade mark granted in respect of it. The Registrar also referred to the survey evidence, which indicated that almost a quarter of the respondents who associated the image of the shape with a manufacturer, associated it with someone other than Guylian. On that basis, having regard also to the evidence that others were selling sea shell shaped chocolates as at the priority date, the Registrar asked the Court to infer that similar seahorse shapes were already in fact being sold at the priority date, or that at the very least other traders might have wanted to use a similar seahorse shape as part of a novelty sea shell range. Relying in particular on French J's judgment in Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 , Guylian contends that the mere fact the seahorse shape is based on an existing creature and cannot be said to be wholly concocted (as compared to the "bug" shape in Kenman Kandy ), should not automatically lead to a conclusion that the shape is inherently unadapted to distinguish. To say that a shape cannot ever pass the test of being "inherently adapted to distinguish" would be to read into the statute a limitation not warranted by its terms. In considering pre-1995 cases, generalisations must not be drawn based on the narrower range of signs to which those cases related. Such generalisations might not give effect to the legislative intent that from 1995 "shapes" were to be capable of registration as trade marks. In this case, while the seahorse shape is based on a well known marine creature, the creature is capable of depiction in a variety of ways, only one of which is the particular seahorse shape Guylian has chosen to adopt. Other traders, it said, are free to depict a seahorse in a way that is different to the particular shape Guylian uses and there is no reason why another trader might legitimately wish to use the same shape as Guylian's or one closely resembling it. As examples, Guylian said that other traders would remain free to adopt shapes recognisable as or reminiscent of a seahorse which, however, might not sit in profile (as does Guylian's) or which do not employ the same proportions as Guylian's. In any event, Guylian emphasised that no other traders had in fact sought to use a seahorse shape for chocolates, prior to Guylian's promotion of the shape over the last 20 years. Further, the seahorse shape, Guylian said, is not like a laudatory or descriptive word, which other traders might legitimately wish to use to describe the character or quality of their goods. Nor is it like a colour that might be used to denote a particular meaning (eg danger) or serve a particular function (eg heat absorbing black). Guylian contends that there is no evidence that seahorse shapes were being used as at the priority date and the evidence of use of the shape or similar shapes in 2008 (see [53]) should be given no weight at all, because the six years between the priority date and 2008 was too great that the inferences sought by the Registrar --- namely, that other traders as at April 2002 were using, or might wish to use, the shape or a similar shape --- could not reliably be drawn. To the contrary, Guylian contends that the safer inference is that the seahorse shapes on the market in Australia in 2008 (aside from the two with forward curling tails) are simply examples of traders copying Guylian's product, rather than using the shape in the ordinary course of their business, being "actuated only by proper motives", for the signification which it ordinarily possesses. Further, Guylian said, the better evidence for assessing the likelihood that other traders were using or might wish to use a similar shape to Guylian's are the Google searches performed by the Registrar in December 2002 and April 2004, purporting to show the types of shapes on the market as at those dates and, by extension, the priority date. These searches did not reveal any evidence of the use of a chocolate seahorse shape in Australia as at the priority date, other than by Guylian. The Registrar submits that any trader using a seahorse shape simply to denote a seahorse should, in the absence of evidence to the contrary, be considered to be acting with proper motives for the purposes of the Clark test. The Registrar referred to both Philmac Pty Ltd v Registrar of Trade Marks [2002] FCA 1551 ; (2002) 126 FCR 525 at [51] and [53], where Mansfield J referred to the "concept of a properly motivated trader" as including the use of a mark to denote a meaning that the mark might ordinarily possess, and Clarke 111 CLR at 517, where Kitto J identified an improper motive on the part of a rival trader as a "desire to get for themselves a benefit" from the applicant's reputation. Here, said the Registrar, there was no evidence at all, including any witness evidence, that traders now using a seahorse shape are acting with improper motives, for example to assert a connection between their goods and Guylian. There is also no evidence that Guylian has in any way objected to, or sought to restrain, the use by other traders of any similar seahorse shapes. The Act permits the registration of shapes as trade marks and, just as with words, there are likely to be many shapes that invoke ordinary connotations, which nevertheless are capable of distinguishing when regard is had to the class of goods for which the shape mark is to be registered and the extent to which the shape is otherwise distinctive in appearance. Both parties proceeded in this case on the basis that a trade mark may be the whole of the shape of the goods which the mark is intended to distinguish (cf the discussion by Lindgren J in Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494). It was not contended that the seahorse shape, being the entire shape of one of Guylian's chocolate pieces, is incapable thereby of constituting a "trade mark" for the purposes of s 17. The ultimate question on the issue of inherent adaptation is whether a sign --- in this case, a shape --- possesses any ordinary significations and, if it does, whether or not other traders might think of the shape and want to use it for those ordinary significations in a manner which would infringe a registered mark in respect of the sign. In cases where a shape depicts a known object or concept (cf. wholly concocted or ambiguous shapes), and is therefore likely to signify the same to most if not all consumers, then a subsidiary question is whether the shape is nevertheless sufficiently distinctive or unique so that other traders wishing to represent the same or a similar concept will remain free to do so without infringing the mark, that is, without requiring use of the same shape or one substantially identical or deceptively similar. An important consideration in all of this is the nature of the goods for which the shape mark is to be used. As I said, both parties understood the relevant questions to be as I have stated them. However, Guylian, in reference to Stone J in Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 at [145] , invited the Court to accept that the seahorse shape "does not have any significations or associations that invite confusion in the eyes of consumers, or would preclude use by others whose goods have similar characteristics or qualities or connections with relevant areas". I do not agree. The shape is clearly a seahorse. It is dissimilar to the shape confronted by the Court in Kenman Kandy , as it conveys a particular meaning and is not entirely imaginary. Though the evidence about the appearance of real seahorses was minimal, I accept that the seahorse shape has some features that distinguish it from a seahorse existing in nature. It is relatively stocky and the tail is curled up all the way backwards, giving it an overall "S" shape. The evidence, minimal as it was, is that seahorses are fairly elongate and their tails extend out downwards and forwards, rather than curled up behind. I note however that Webster's describes the tail as prehensile and so it is to be expected that they have the ability to curl up generally, although I am prepared to accept for the purposes of Guylian's application that it would be unusual for the curling to occur behind the spine. Guylian has also chosen to depict the seahorse in profile with a relatively thick middle section, so that the overall shape appears as two opposite side profiles joined together. Putting the tail to one side, I agree that there will be ways to depict a seahorse other than that chosen by Guylian. However, the ultimate question I must consider is whether there is a likelihood that other traders, acting with proper motives, will think of the shape and wish to use the same shape or one substantially identical or deceptively similar. In my view, it is quite possible that as at the priority date other traders might want to depict a seahorse, along with starfish, crabs, prawns for example, in a way that is similar enough to cause potential confusion in the minds of consumers. The evidence is that sea shell shaped chocolates were being sold by others from at least the mid 1990s. With other traders already selling sea shell chocolates, it seems to me reasonable to expect that, as at the priority date, other traders might wish to make chocolates in the shape of a seahorse, as well as other marine creatures. In any event, I think I can take judicial notice of the fact that confectionary manufacturers, here chocolate manufacturers, tend to make chocolates in a variety of novelty shapes, in particular shapes representing animals (cf. the similar approach taken by Lindgren J in Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 at [86] ). I give some weight to the fact that in 2004, two years after the priority date, there were various American traders selling chocolate moulds for a large range of marine animals (lobsters, starfish, prawns), including a seahorse. On the other hand, I note the lack of evidence of any seahorse shapes being sold in Australia as at the priority date, except by Guylian. The examiner's Google searches (performed in 2002 and 2004) did not reveal any examples of seahorse shapes being sold in Australia at that time. It might be thought that that fact, together with the fact that Guylian had been selling its seahorse shape in Australia for a long time (since the 1980s), would diminish the likelihood that, as at 2002, other legitimately motivated traders might in the ordinary course of their business wish to sell seahorse chocolate shapes. However, the absence of other seahorses on the market does not in my view mean it was unlikely that others may in the future wish to depict that particular sea creature. These are cases of degree and I must make an evaluative judgment after giving due weight to the assessment made by the Registrar's delegate. The degree of likelihood in this case I think turns very much on the extent to which this particular seahorse shape is distinctive or unique. As Kitto J said in Clark , "[t]he interests of strangers and of the public are ... bound up with the whole question" of whether a mark is inherently adapted to distinguish: see Clark 111 CLR at 514. As best as possible, an assessment should be made as to the ability of other traders to depict a seahorse in a way that would not infringe the mark in suit, if it were registered. In my view, while the shape has some distinctive features, I am satisfied that it is not so unique or imaginative that other traders, using a seahorse shape for its ordinary signification, will be able to avoid potentially infringing the mark if it were registered. Accordingly, I am satisfied that it is to some degree inherently adapted to distinguish, but not sufficiently so to decide the matter under s 41(3), for the following reasons. First, there is a danger that first impressions will be sidelined when an analysis of a shape's individual components or features is undertaken. In this case, the immediate impression one has of the mark in suit is of an ordinary seahorse. I would not expect most ordinary consumers to know that the tails of seahorses do not curl backwards, only forwards. I think most would know that seahorses have a tail and expect that they curl up in some direction. Accepting that the tail and the stocky appearance might, to a studious observer, appear unusual, I consider on balance that the average consumer would see it as a relatively ordinary representation of a seahorse. The possibility for confusion therefore between Guylian's shape and any other seahorse shapes is, I think, a real one. Second, the evidence of other seahorse shapes now on the market tend to confirm rather than deny the likelihood that other traders wishing to depict a seahorse may have some difficulty in avoiding infringement proceedings. Guylian said that the seahorse shapes sold by Royalle and Duc d'O (depicted below and referred to at [53(c)] above) are examples of shapes that would not infringe: Fig. 6 --- Royalle's seahorse shape. Fig. 7 --- Duc d'O's seahorse shape. In my view these are not so significantly different from Guylian's shape that there is no room for confusion in the eyes of the public or an infringing of the mark if it were registered. Given the exclusivity of the rights that would be granted to Guylian upon registration, it is difficult to see how other traders will know where to draw the line. Third, this is not a case where the shape in suit is "entirely concocted" and thereby lacks "the associations that would lead to confusion": see Stone J in Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 at [162] . The shape does have an ordinary association and the association is one that other traders might wish to draw upon. Given the mark sought to be registered is simply the three dimensional shape itself, without any other stipulation as to its use, the application for registration must be assessed on the basis that it would give Guylian a monopoly over that shape as the entire shape of one of its chocolate pieces. There is therefore a higher potential for other traders who wish to use a similar shape to do so in a manner that would infringe that monopoly. In other words, infringement might occur simply by the selling of a similar shaped chocolate, even where the shape does not feature significantly on, for example, the packaging of the product. Related to this is a submission the Registrar made regarding the type of "use" contemplated by the test in Clark . It would be wrong, said the Registrar, to construe the test as being whether or not other traders might wish to use the mark or a similar mark "in an infringing way", in other words as a trade mark for themselves. Instead, the test should be understood as whether other traders might wish to use the mark or one resembling it for the sake of the signification of the mark itself and not necessarily to denote trade origin. However, in Clark Kitto J quite clearly referred to use "in any manner which would infringe a registered trade mark granted in respect of [the relevant word or shape]. " I agree with Lindgren J in Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 at [95] that the Clark test does not go so far that any kind of innocent use at all, including innocent non-trademark use, would necessarily deprive a shape of being inherently adapted to distinguish. However, in a case where the mark is simply the three dimensional shape of the good itself, it is more difficult to see how the distinction made by the Registrar is a relevant one. Both parties proceeded on the basis that simply selling the same or a deceptively similar shaped chocolate would be an infringing use of the mark. It certainly was not suggested that the same shape might be sold by another trader but in some manner that would avoid infringement. Given the scope of the application for registration, the monopoly granted would be over the shape generally and use of the shape as a chocolate would be a manner of use that would be likely to infringe for the purpose of the Clark test. Fourth, while I have taken into account the more recent evidence of similar sea shell and seahorse chocolate products (six years after the priority date), I have done so mainly for the purpose of considering the extent to which other representations of seahorses might be considered "substantially identical with, or deceptively similar to," the seahorse shape (see [79] above). However, in addition, the recent evidence seems to me to lend further support to the view I take that, as at the priority date, other traders might have wished in the future to adopt the same shape or one closely resembling it. I accept that as at 2008 the use by others of the same sea shells and, in some cases the same seahorse, is likely to be attributable to a large extent to the promotion of those shapes by Guylian over a long period of time. However, it seems to me that a tendency for competition in the manufacturing of sea shell/marine creature chocolates was already evident at the priority date. I do not consider that the sale by others in 2008 of similar seahorse shapes can, on the evidence, be considered illegitimately or improperly motivated for the purposes of the Clark test, and therefore disregarded. There is no evidence that the other traders, in selling a seahorse shape, have sought to assert a connection between their chocolates and Guylian. To the contrary, each of the other traders' seahorse shapes is contained in a chocolate box which clearly identifies the relevant manufacturer (eg. Darrell Lea). There is also no evidence that Guylian has in any way protested about these rival sales. I accept that one reason, if not the main reason, that these traders have included a seahorse shape in their range of sea shell chocolates is to compete with Guylian's long standing shape. However, competition should not readily be considered improper, particularly in circumstances where the shape in suit bears an ordinary signification and is not so distinctive as to stand out in the minds of consumers, at least without first educating them to recognise the shape as a trade mark. Accordingly, I am satisfied that, viewed as at the priority date, there is some degree of likelihood that other traders acting with proper motives would want in the future to use the same seahorse shape or one substantially identical or deceptively similar. Accordingly, I am satisfied that the shape is to some extent inherently adapted to distinguish, but not to the degree required by s 41(3). Does or will the seahorse shape distinguish Guylian's goods --- s 41(5)? Section 41(5) involves a balancing exercise. With a view to deciding whether the mark does or will distinguish the goods as being Guylian's, the Court is required to consider, in combination, two specific matters: (1) the extent to which the mark is inherently adapted to distinguish, and (2) the use, or intended use, of the mark by Guylian (cf. Kitto J's approach in Clark 111 CLR at 513). The Registrar, and on this appeal the Court, must be "satisfied" that the mark does or will distinguish the goods as being Guylian's: pars 41(5)(b) and (c). It is a balancing exercise in that, for example, a mark that is inherently adapted only to a small degree is thereby likely to require greater evidence that it has been (or will be) used in such a way as to distinguish the relevant goods: see, eg, the approaches of Bennett J in Unilever Australia Ltd v Societe Des Produits Nestlé SA [2006] FCA 782 ; (2006) 154 FCR 165 ( Nestle ) at [57] and Wilcox J in Time Warner Entertainment Company LP v Stepsam Investments Pty Ltd [2003] FCA 1502 ; (2003) 134 FCR 51 at [42] . Section 41(5) permits the registration of trade marks that are not, by their inherent qualities, sufficiently adapted to distinguish, but which have as at the priority date in fact acquired a capability to distinguish the relevant goods: see Austereo [2004] FCA 968 ; 61 IPR 257 ; see also Clark 111 CLR at 515; British Sugar [1996] RPC 281 at 306; Nestle [2006] FCA 782 ; 154 FCR 165 at [29] . In other words, s 41(5) recognises that marks which are insufficiently inherently adapted to distinguish may nevertheless by their use have become distinctive in the minds of consumers so that they will be able to "do the job of distinguishing" the applicant's goods, that is, they will in fact serve as a badge or an indicator of origin. Accordingly, under s 41(5) an applicant relying on use prior to the priority date will need to point to evidence that the mark has been used as a trade mark , so as to have acquired the requisite capability to distinguish the applicant's goods: see, in the context of s 41(6), Woolworths Ltd v BP Plc (No 2) [2006] FCAFC 132 ; (2006) 154 FCR 97 at [72] and [77] ( BP (No 2) ); Ocean Spray [2000] FCA 177 ; 47 IPR 579 at [38] - [41] , in particular [40]. By reference to its annual retail sale figures and marketing expenditure (see [39] above), Guylian emphasises that its sales, advertising and promotion of the sea shell range with the seahorse shape has been not only significant in scope but continuous over a long period of time. It refers to its promotional material, including its chocolate box packaging, and placed particular reliance on its seahorse shaped boxes, which it commenced selling in 1999, together with their related point of sale display units. It points also to its relationship with the Project Seahorse initiative and some of the advertising exposure that the initiative has provided. Certainly, the absence of evidence of promotion and use is likely to assume significance where distinctiveness resulting from use is in issue. Particular reference was made to the survey responses being "unprompted" (ie respondents were not, for example, provided with brand names and asked to choose between them), as well as the fact that the Registrar did not, whether by cross examination or opposing expert evidence, controvert any of Mr Callaghan's evidence, most notably his conclusions (1) that consumers' association of the shape with Guylian was of a "very high level", and (2) the strength of the association with Guylian, when compared to associations made with other brands, was statistically "very significant". In the absence of evidence from the Registrar, Guylian says, any attack on Mr Callaghan's conclusions should be given no weight. The illogicality can be seen from an example: no matter how much use a manufacturer made of the word "Soap" as a purported trade mark for soap the word would not be distinctive of his goods. ... I do not consider that the evidence filed to support the registration was anywhere near enough to support the conclusion that when the mark was registered, it was distinctive. Yes it had been used for about 5 years in conjunction with Silver Spoon, but it was not proved that the public regarded it as a trade mark --- a reliable badge of trade origin --- on its own. While the shape of goods might distinguish the goods as goods , the shape will not necessarily distinguish the goods as originating from one trade source rather than another. In this case, says the Registrar, the shape has been used not as a badge of origin but rather as simply one of the chocolate shapes out of a number of sea shell/marine shapes that Guylian sells and markets as one collection. Where Guylian uses the shape on its packaging and promotional material, it is more often than not displayed alongside the other sea shell shapes. It is not given such a prominence as to educate the public that it is being used as a trade mark. Rather, it is used in a descriptive or informative manner, identifying to the public examples of the novelty shapes included in Guylian's sea shell chocolate range. With reference to Austereo [2004] FCA 968 ; 61 IPR 257 at [53] , the Registrar says that one should take into account the extent to which the mark applied for has been used in conjunction with any other distinctive marks. Here, there are two: (1) the "Guylian" trade mark (see [34]), and (2) the letter "G", which Guylian uses as a logo on each of its chocolate pieces. The image of the seahorse shape on Guylian's packaging, it said, is overwhelmed by the use of the highly distinctive "Guylian" trademark, which serves as the true indicator of origin. Similarly, the "G" logo, appearing on each chocolate piece and the pictures of the chocolates on the boxes, plays a dominant role in indicating the origin of the goods, particularly when they are out of the box. The Registrar makes two main submissions about the survey evidence. First, it says the results fail to establish that consumers see the seahorse shape as a badge of origin. It referred to BP (No 2) [2006] FCAFC 132 ; 154 FCR 97 and British Sugar [1996] RPC 281 , where surveys indicating 85% and 60% recognition of the mark in suit nevertheless failed to demonstrate distinctiveness. Those cases, it said, show that there is a difference between mere association and the perception of a sign as a trade mark. Evidence of an association between a sign and a manufacturer, even a high one, will not necessarily mean that consumers rely on the sign to identify the origin of the goods. Here, the survey question tested association and no more. It did not test whether consumers have in fact come to perceive and understand the seahorse shape as a trade mark, by, for example, asking whether or not respondents believed that the shape belonged to one particular manufacturer and, if so, whether they could identify the manufacturer. Secondly, the Registrar relied on the survey results themselves, referring to the fact that (1) less than half of the respondents associated the shape with Guylian (or, putting it the other way, over half did not associate it with Guylian) and, (2) of those that did associate it with a particular manufacturer, approximately 25% associated it with someone other than Guylian. While the degree of association with an applicant's goods may in itself be relevant to the overall assessment whether the mark has acquired a capacity to distinguish, the results here, said the Registar, are manifestly insufficient so as to be satisfied that the shape alone distinguishes Guylian's goods in the minds of the chocolate buying public. (Respondents were shown four ice cream products and asked if they recognised them). Is that enough to give it a "distinctive character" within the meaning of Art.3(3)? For what has not been proved is that any member of the public would rely upon the appearance alone to identify the goods. They recognise it but do not treat it as a trade mark. The trick works like this. The manufacturer sells and advertises his product widely and under a well-known trade mark. After some while the product appearance becomes well-known. He then says the appearance alone will serve as a trade mark, even though he himself never relied on the appearance alone to designate origin and would not dare to do so. He then gets registration of the shape alone. Now he is in a position to stop other parties, using their own word trade marks, from selling the product, even though no-one is deceived or misled. It is a system about trade marks, badges of trade origin. For that reason I think that in the case of marks consisting of product shapes it is not enough to prove the public recognises them as the product of a particular manufacturer. It must be proved that consumers regard the shape alone as a badge of trade origin in the sense that they would rely upon that shape alone as an indication of trade origin, particularly to buy the goods. If that cannot be proved, then the shape is not properly a trade mark, it does not have a "distinctive character" for the purposes of trade mark law. In BP (No 2) [2006] FCAFC 132 ; 154 FCR 97 , the Full Court of the Federal Court held that BP Plc (BP) had failed to establish pursuant to s 41(6) that it had used a particular shade of green as a trade mark, either by itself or as the predominant colour in its branding. Two aspects of their Honour's reasoning are instructive. First, the Court took into account survey evidence indicating, on a weighted basis, that 85% of respondents identified BP when they were asked to look at a picture of a building (a service station) which was coloured substantially in green and were asked to describe what they saw. Green had been one of BP's company colours since at least 1956. After 1989 it had been used as the predominant colour with yellow. In particular, in circumstances where there were only a few oil companies, where all have used colour historically to distinguish themselves, where BP has been the only company before 1995 to use green in that way, it is hardly surprising that people shown this stimulus would associate the green service station with BP service stations which have been coloured with a predominant green and accompanying yellow. That association does not lead to the conclusion that the use of colour from 1989 has included use, as a trade mark, of either green alone, or green as the predominant colour accompanied by any other colour. The mere fact that consumers associate green with BP does not, in our view, satisfy the test of distinctiveness required by s 41(6). Evidence of promotion and use does not, without more, demonstrate distinctiveness: see Blount Incv Registrar of Trade Marks at [61G], citing with approval Jacob J in British Sugar Plc v James Robertson & Sons Ltd at 286 and 302; and Koninklijbe Philips Electronics NV v Remington Products Australia Pty Ltd (200) FCR 90 ... at [13]. It is necessary for BP to establish that the association is referable to the use of the mark as a trade mark. The learned authors of Kerly's Law of Trade Marks and Trade Names (14th ed, Maxwell Ltd, UK, 2005, at [8---025]) state, albeit in the European context, that to establish distinctiveness through use the proprietor must have done something in its use to identify the sign as being a trade mark; the use of a sign, without more, does not necessarily create the perception that the products originate from a particular trade source : compare Unilever Plc's Trade Mark Applications [2003] RPC 35 at [31]. (Emphasis added. However, their Honours' observation that associations must be "referable to the use of the mark as a trade mark" is apt to describe the problem confronting Guylian in this case. The survey evidence here plainly shows an association between the seahorse shape and Guylian. This is no doubt due in large part to the substantial sales of Guylian's sea shell chocolates with the seahorse shape over a considerable period of time. However, even assuming that the association in this case is strong enough, the anterior question is whether the association is referable to Guylian having used the shape as a trade mark. In other words, is the fact that a relatively large proportion of consumers may think of Guylian when they see the shape a consequence of Guylian having educated the public to recognise it as a badge of origin. When the evidence of use is considered as a whole, I am not satisfied that Guylian has done so, for the following reasons. First, my impression is that the seahorse shape (or, more correctly, an image of the shape) is used on Guylian's packaging to attract consumers and provide an example of the box's contents. It is by no means the only shape that features on Guylian's packaging. Many of the other sea shell shapes are displayed with equal prominence and on the back of most boxes, almost all of the shapes are shown, some sitting inside a picture of the box and others outside. As an example, the white tin box referred to at [35(a)] (see Annex A) shows the seahorse shape with two others on the front in a triangular arrangement, positioned closely to the words "44 Finest Belgian Chocolate Sea Shells". Eight of the other "Sea Shells" are displayed across the four sides of the box and all of the shapes shown are the same size and colour. On these boxes, the seahorse shape does not in my view function as a trade mark. It is not used in any sense to identify Guylian but to illustrate some examples of the elegance of the chocolates and the contents of the box more generally. The sales sheets, brochures and website extract tendered by Guylian confirm this. Putting to one side the seahorse shaped boxes, the marketing materials contain similar examples of the seahorse shape being used in combination (and sometimes not at all) with the other marine shapes to promote and illustrate Guylian's sea shell range. The evidence is that other traders were selling sea shell chocolates for some time before the priority date. In that context, it does not seem to me likely that consumers would conceive of the seahorse shape on Guylian's boxes as a trade mark, so much as simply an example of the novelty shapes that Guylian manufactures. I also note that there is a lack of precision in the evidence as to the timing, duration and location of much of the packaging, advertising and point of sale material. Most of the evidence (in particular, the sales sheets, magazine catalogues and website extract) appeared to be quite recent, in the two to three years leading up to the priority date and beyond. Absent, for example, was any evidence about how the seahorse shape had been used between the time it entered the market in 1980 and the end of the 1990s. It is not at all clear what use, in a trade mark sense, was made of the seahorse shape by Guylian over that period. Secondly, I agree with the Registrar's submission that the "Guylian" trade mark printed on Guylian's packaging has the effect of diluting any trade mark significance that might otherwise attach to the seahorse shape. On all of the boxes, the "Guylian" trade mark is prominently displayed and acts as the key, distinctive identifier of the products. In addition to the "Guylian" trade mark, Guylian engraves a stylised letter "G" into each piece of chocolate. The "G" itself appears to be a registered trade mark, as recorded on the back of Guylian's boxes, and its function is described in Guylian's marketing material: "Every Guylian chocolate creation bears the letter "G", indicating the outstanding quality and consumer assurance that it is a genuine Guylian praline". I also observe that the images of the various shapes pictured on Guylian's boxes, including the seahorse shape, clearly reveal the "G" logo and the shapes appear to be orientated in almost all cases so that the "G" is upright and readable. In my view, the presence of these other distinctive marks makes it difficult to conclude that the seahorse shape has by itself become distinctive of Guylian's products. Put another way, it is likely that any distinctiveness the shape has acquired is attributable to its use alongside the traditional Guylian trade marks, rather than as a trade mark itself. I accept, as Guylian contends, that a sign may be registrable as a trade mark even though it is used together with other trade marks. However, where an application for registration relies on use the question is whether the particular sign for which registration is sought has itself been used as a trade mark so as to become capable of distinguishing the relevant goods. Each case turns on its own facts and here my impression of the packaging and promotional material as a whole is that it is the "Guylian" trademark, together with the "G" logo", that does the work of distinguishing the goods, not the seahorse shape. It is unclear from the application whether the shape applied for includes the "G" logo. Counsel informed the Court that Guylian sought registration of the shape only, without the "G". Assuming that is the position, however, it does not detract from the fact that the "G" logo, in all of the evidence of use, is used on the chocolate pieces including the seahorse shape. When they are viewed out of their box, the "G" logo plays a particularly important role in distinguishing Guylian's goods from others. Thirdly, I have taken into account Guylian's use of seahorse shaped boxes. These to some extent show a trade mark use of the shape, with the box approximating an outline of the shape and displaying an enlarged image of the seahorse across the entire front side of the box. The shape of the boxes is unique and has some ability to catch the eye, particularly when they are presented in rows in an upright position on Guylian's display stands. However, once again, both the "Guylian" trade mark and the "G" trade mark feature significantly on the front of the boxes, which diminishes the trade mark significance the image of the seahorse shape might otherwise have. With the larger image of the seahorse shape on the box (see [35(e)] and Annex E), the engraved "G" is particularly dominant and one's eye is drawn to it, as well as the "Guylian" trade mark positioned closely by. I also think it relevant that the seahorse shaped boxes have only been on the Australian market since 1999, that is, only 3 years prior to the priority date. Beyond the sales figures provided, the extent to which the boxes have actually been used in Australia is unclear. Mrs Krefting-Foubert's evidence is that brochures regarding the seahorse shaped boxes "were distributed widely to retailers and the products depicted in them were offered for sale in Australia during the period 2000 to 2002". It is not clear precisely how "widely" the boxes have been sold. Based on the typical retail prices (see [38]) and annual total sales amounts for the seahorse shaped boxes (see [39]), it would appear that only a comparatively small amount of each of the small and large boxes have been sold in Australia between 1999 and 2003, assuming equal sales of the two sizes. The actual number and sales value are confidential. The retail brochures state that the boxes are "Only available as limited edition --- Christmas". It thus appears that the seahorse shaped boxes have been sold on a fairly limited basis prior to the priority date, and this must be taken into account in assessing the impact their use might have on consumers. Guylian's association with Project Seahorse has an obvious ability to promote Guylian's products, in particular the seahorse shape. The mere combination of the name, "Project Seahorse", with the existing Guylian reputation for marine shaped chocolates focuses one's attention on the Guylian seahorse chocolate shape. However, while the Project and its promotional material might be capable of founding a mental association between Guylian and the seahorse shape, I am not satisfied that the evidence reveals a use of the shape by Guylian as a trade mark. The seahorse shape does not feature in two of the five advertisements tendered (The Sunday Mail and the New Idea advertisements), although the seahorse shaped box appears in photographs in the advertisements. In most of the advertisements, it is the "Guylian" trade mark that is used alongside the "Project Seahorse" emblem. It seems to me that the paramount purpose of the advertisements is to promote, by offering chocolate prizes, the cause of Project Seahorse, usefully employing the Guylian seahorse shape to assist in that promotion. Undoubtedly, this serves to enhance recognition of the seahorse shape amongst the public. However, the purpose of the seahorse shape appearing in them is not to identify Guylian's goods; this is achieved by the "Guylian" trade mark and the text that describes the Project and Guylian's partnership with it. Overall, when one has regard to the totality of the use evidence, I think that the seahorse shaped boxes and the partnership with Project Seahorse, which is of relatively recent origin, do not establish that the shape has acquired the requisite degree of distinctiveness by reason of its use as a trade mark. Finally, I have had regard to the survey evidence, and the expert evidence of Mr Callaghan, which indicates that a significant proportion of the survey respondents were able to identify Guylian when they were shown the seahorse shape. However I am of the view that this association on the whole is likely to be referable to Guylian's sale of the sea shell and seahorse shaped chocolates, over a long period of time, under the banner of the distinctive "Guylian" and "G" trade marks, rather than to the shape itself being used as a trade mark. The cases confirm that association evidence on its own does not prove distinctiveness; the evidence must establish that the public has been educated to understand the sign as an identifier of the origin of the goods: see BP (No 2) [2006] FCAFC 132 ; 154 FCR 97 and Unilever [2003] RPC 35. The Full Court's observations to this effect in BP (No 2) are just as relevant to a consideration of use under s 41(5) as they are to s 41(6). In essence, the survey in this case tested respondents' ability to recognise a shape and associate it with a manufacturer or brand. It tested "brand recognition", as Mr Callaghan suggested; "the ability of a consumer to confirm prior exposure to a brand when presented with one of the brand's identity elements". When regard is had to the way the shape has been used, the survey results do not in my view confirm that consumers actually understand the shape as an indicator of the origin of the goods. The results plainly show a large degree of public recognition of the shape, but as Jacob J said in Unilever [2003] RPC 35 at 662: "[W]hat has not been proved is that any member of the public would rely upon the appearance alone to identify the goods. They recognise it but do not treat it as a trade mark". In any event, I agree with the Registrar's submission that the results tend to confirm the view I have already come to that the shape has not been used as a trade mark, because almost half the respondents were in fact unable to identify the shape with any particular brand or manufacturer. Two other matters should be noted about the survey results. Out of those respondents who did associate the shape with a particular brand or manufacturer, almost a quarter believed it was manufactured by someone other than Guylian. Further, Mr Callaghan also attributed the association to more than just the shape itself. He said it was likely that many associations would have been based on recognition of the overall image and not simply its shape, for example colour and a perception of the texture of the object. I agree with the Registrar's submission that the marbled appearance on the surface of the shape is also likely to have contributed. As Guylian seeks registration of the shape alone, it must be able to demonstrate that the shape, regardless of its colour for example, has become distinctive of its goods. This is important, because it is the shape alone over which Guylian seeks a monopoly. In the circumstances as described by Mr Callaghan, it seems to me that the probative value of the association evidence is to some extent diminished by the way many of the respondents are likely to have made their association. Guylian did not seek to rely on any other circumstances as permitted under s 41(5)(iii) of the Act. It follows from s 41(5)(c) therefore that the seahorse shape is taken not to be capable of distinguishing Guylian's goods from the goods of other persons and should not be registered. I shall therefore dismiss the application. At the conclusion of the hearing, the Registrar suggested that the parties should be heard on the question of costs once my reasons were delivered. As I understood it, this was on the basis that there may be grounds for costs to be awarded other than in accordance with the ordinary rule, particularly if the applicant were successful. In the event, the applicant has not been successful and I propose to order that the applicant pay the respondent's costs, subject to any submissions the parties may wish to make. I certify that the preceding one hundred and two (102) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. --- Front view of white tin box. 9 --- Front view of gold box. Fig. 10 --- Back view of gold box. 11 --- Front view of red box. Fig. 12 --- Back view of red box. 13 --- Front and side view of small gold box. Fig. 14 --- Back view of small gold box. 15 --- Front view of seahorse shaped box. Fig. 16 --- Side view of seahorse shaped box. Fig. 17 --- Back view of seahorse shaped box.

shape marks whether mark inherently adapted to distinguish three dimensional seahorse shaped confectionary use of trade mark whether use distinguishes goods as those of applicant for registration. presumption of registrability whether applies where ground of refusal of registration is s 41(2) standard of proof on appeal under s 35 whether refusal to register should be upheld only if court satisfied that mark should clearly not be registered. trade marks trade marks

The Tribunal dismissed the appellant's application for review of a decision of the Minister's delegate to refuse the appellant the grant of a Protection (Class XA) visa under the Act . 2 The appellant is a citizen of Bangladesh who arrived in Australia on 10 December 2005 and applied for a protection visa on 21 December 2005 on the footing that he claimed to hold a well-founded fear of persecution by reason of his homosexuality. The appellant claimed by his statutory declaration (AB94) in support of his visa application that he is the youngest of seven children and comes from a religious Muslim family. He claimed to be always attracted to persons of his own sex and described the evolution of his sexual orientation. He claimed to have been ostracised by his family. He claimed that his family attributed the death of his parents to the stress associated with the appellant's conduct. He claimed to hold a fear that should he return to Bangladesh police in that country would not help him and would threaten him. He claimed that his family had cut him off and that he was "terrified to return to Bangladesh" (AB94, AB95). 3 The appellant placed submissions before the Department of Immigration and Multicultural and Indigenous Affairs in support of and elaboration upon these claims by letter dated 3 February 2006 from Parish Patience Immigration Lawyers (AB124-AB149) which attached a range of documents. The Tribunal in undertaking its review conducted a hearing and on Thursday, 29 June 2006 the Tribunal wrote to the appellant's representative inviting the appellant to comment on nine particular topics (AB487-AB490) to which the appellant's representatives responded on 1 August 2006 (AB494-AB502). 4 The Tribunal reached these conclusions. 5 At AB527, the Tribunal concluded that it was not satisfied as to the accuracy of the appellant's claims to be a homosexual. The Tribunal considered that the account given by him of his claimed homosexual activities and particular relationships in Bangladesh, Malaysia, Singapore and Australia contained a number of "significant inconsistencies and improbabilities". It is not necessary in these reasons to isolate, as Federal Magistrate Nicholls did, the details of each topic said to reflect inconsistent treatment. However, the topics included evidence given to the Tribunal as compared with evidence given in the course of a departmental interview concerning a contended sexual relationship the appellant claimed to have had with a Bangladeshi friend both in Bangladesh and Malaysia. Although the explanation put forward by the appellant's adviser in response to the s 424A letter put the apparent inconsistency on the basis of "understandable confusion" on the part of the appellant particularly having regard to the name of a Singapore student with whom the appellant had had a relationship and the name of a Bangladeshi person with whom the appellant claimed to be living in Australia, the Tribunal was simply not persuaded by that explanation. 6 The Tribunal identified what it described as "significant inconsistencies" relating to a claimed sexual relationship in Singapore between the appellant and a Chinese student nicknamed "Cork" and events surrounding the apparent discovery of that relationship by a man named "Russell" and subsequent attempts by Russell to extort money from the appellant against the background of threats of disclosure of the appellant's sexuality to his parents. A further matter concerned a contended homosexual relationship between the appellant and a man the appellant met upon his arrival in Australia. The Tribunal analysed all the evidence given by the appellant to the Tribunal in support of his claims, statements made by the appellant in his protection visa application and statements made in a lengthy submission by the appellant's adviser to the Tribunal received by the Tribunal on 9 February 2006. The Tribunal compared that material with the evidence of the witness (the person with whom the appellant claimed to have a homosexual relationship in Australia) called before the Tribunal by the appellant. Arising out of that analysis, the Tribunal concluded that there were matters of inconsistency which reflected upon the plausibility of the appellant's explanation. The Tribunal was concerned that the claim to this relationship which was said to be symptomatic of the appellant's sexual orientation, central to the claim to a well-founded fear of persecution "did not sit well with the absence of any reference to such a significant relationship in his protection application or in the lengthy submission from his adviser received by the Tribunal on 9 February 2006". The Tribunal concluded that it could "not be satisfied as to the truth of the Applicant's claims" concerning the contended relationship. 7 The Tribunal dealt with the factual foundation for the appellant's claims of threats of harm giving rise to his contended well-founded fear of persecution. The Tribunal noted the appellant's claims concerning the hostility of his family, the contention that they had made "false cases" against him in Bangladesh and that they had "told his friends in Singapore to beat him up". The Tribunal concluded that "if the family's hostility genuinely had taken on this additional and dramatic form, such a highly relevant fact for the Applicant's case would [not] have been omitted from his detailed protection application or other submissions prior to the hearing". The Tribunal was not satisfied as to the "plausibility" of his claims at the hearing in relation to this matter. The Tribunal concluded that aspects of the appellant's claims concerning threats by his family were inaccurate which raised doubts about the general accuracy of the appellant's claims concerning the harm he claimed to fear. 8 The Tribunal also expressed concerns about inconsistencies relating to financial support from his family, whether he had been cut off by his family, his working background and sources of finance from a friend in Malaysia. The Tribunal addressed the submissions made by the appellant's adviser of 2 August 2006. The Tribunal was not persuaded by the explanations put forward by the adviser as to the apparent inconsistencies identified by the Tribunal in its s 424A letter. The Tribunal ultimately concluded that it could not be satisfied that the appellant is homosexual in orientation or that he has had engaged in homosexual relationships in the countries as claimed. Nor could the Tribunal be satisfied that news of the appellant's sexual orientation caused the death of the appellant's parents or that the remaining members of the appellant's family became and remained antagonistic towards him and wished to do him harm either because of the death of his parents said to be attributable to discovery of the truth of the appellant's sexual orientation or by reason of the appellant's sexual orientation itself. The Tribunal was not satisfied that a real chance existed that the appellant would suffer "persecutory harm" in Bangladesh because of his sexual orientation. These findings and underlying reasons are identified at AB527-AB531 arising out of the analysis of the appellant's claims and the evidence relating to those claims discussed at AB513-AB527. 9 Before the Federal Magistrates Court the appellant initially relied upon grounds set out in an application filed on 31 August 2006. The appellant filed an amended application before the Federal Magistrates Court on 29 March 2007 which asserted a constructive failure on the part of the Tribunal to exercise its jurisdictional task of review. The appellant contended that the Tribunal had failed to make findings as to the preferred evidence and simply noted inconsistencies between the evidence of the appellant and the evidence given by the witness. Further, the Tribunal was said to have constructively failed to discharge its review function in that it gave no consideration as to whether the witness may have had a reason to be untruthful. Secondly, the appellant contended that the Tribunal had engaged in jurisdictional error by relying upon apparent inconsistencies as "necessarily connoting dishonesty". Thirdly, the appellant contended for jurisdictional error on the part of the Tribunal in concluding that the appellant was giving untruthful evidence in relation to his sexual relationship with a man in Singapore. Finally, the appellant contended for jurisdictional error on the part of the Tribunal in reaching conclusions about inconsistency in evidence given by the appellant concerning aspects of the evidence relating to the man called "Russell" and the photographs taken by Russell of the appellant engaged in sexual activity with another male. 10 The Federal Magistrate dealt with each of these four contentions and concluded that each of the inconsistencies complained of were matters open to the Tribunal. Federal Magistrate Nicholls identified the integers comprising the appellant's claim to a well-founded fear of persecution and examined the Tribunal's treatment of those integers. The Federal Magistrate identified the topics giving rise to the contended inconsistencies and improbabilities in the accounts given to the Tribunal, as described by the Tribunal. Federal Magistrate Nicholls isolated each of the contentions giving rise to contended threats of harm and the way in which the appellant's evidence evolved along the continuum of the protection visa application itself, the supporting statutory declaration, the oral evidence at the hearing and written submissions put to the Tribunal. Federal Magistrate Nicholls concluded that the Tribunal had analysed each of the claims and the factual foundation for each claim made by the appellant and reached findings concerning each claim, which were open to the Tribunal. 11 On 28 December 2007, the appellant filed a notice of appeal before this Court in which the appellant relies upon ten grounds of appeal. The Federal Magistrates Court "failed to find error of law, jurisdictional error, or [a denial of] procedural fairness and [a right to] relief under s 39B of the Judiciary Act 1903 ". 2. Federal Magistrate Nicholls "dismissed the case without considering the legal and factual errors contained in the decision of the [Tribunal]". 3. Federal Magistrate Nicholls made "a legal, factual and jurisdictional error in not applying the principles laid down by the Full Court of the Federal Court in Randhawa v Minister for Immigration, Local Government and Ethnic Affairs (1994) 52 FCR 437". 4. Federal Magistrate Nicholls failed to "take consideration that the Tribunal decision was unjust and was made without taking into account the full gravity of my circumstances and consequences of the claim". 5. The Tribunal emphasised "some irrelevant question at the oral evidence [the hearing] and ignored my political background that put my life in risk. In doing so the Tribunal may be said to have ignored relevant material, relied upon irrelevant material and/or made findings which were erroneous or mistaken". 6. The appellant was denied "procedural fairness" in the same way that procedural fairness was denied in Muin v Refugee Review Tribunal [2002] HCA 30 ; (2002) 190 ALR 601. 7. Federal Magistrate Nicholls did not consider the appellant's amended application for relief. 8. The Tribunal, in reaching its decision, did not take into account "certain relevant considerations or 'integers' central to the applicant's claim" and thus failed to carry out its statutory review function. The matters the Tribunal did not consider were the "immense and intimidating pressure from family members because of [the appellant's] homosexuality" and the appellant's claim that "his family members [would] kill him if he returns to Bangladesh". 9. The Tribunal applied the wrong test by "requiring independent evidence of the fact [asserted by the appellant]" before the Tribunal would accept the claim made by the appellant and thus placed "[a] high onus of proof on the applicant and [failed] to give the applicant the benefit of the doubt"; and the Tribunal applied the wrong test by failing to "look at the claim as a whole to determine whether the claim so considered [amounted] to persecution". 12 The first ground simply represents a conclusionary statement without any content. If ground 1 is intended to reflect the result or conclusion arising out of other failures, ground 1 is simply reliant upon the content of the other grounds of appeal. Ground 2 has two limbs. The first is a contention that Federal Magistrate Nicholls failed to consider legal errors contained in the Tribunal's decision and failed to deal with factual errors. The appellant has not identified any factual errors in the Tribunal's decision unless, of course, the contention really is that the conclusions reached as to implausibility and inaccuracy in the factual claims made by the appellant, derived from the analysis undertaken by the Tribunal mentioned earlier, influenced by the identified inconsistencies, are in error . In that event, the ground seems to suggest merits review. To the extent that the appellant relies upon legal errors made by the Tribunal in reaching its decision, no legal errors are identified. To the extent that the remaining grounds contend for the application of the wrong test, the failure to take particular matters into account etc, the content of the remaining grounds of appeal might be seen as a subset of ground 2. 13 In Randhawa , the Full Court of the Federal Court (Black CJ, Beaumont and Whitlam JJ) considered Article 1A(2) of the United Nations Convention Relating to the Status of Refugees as amended by the 1967 Protocol Relating to the Status of Refugees, the term "refugee" and the meaning and application of the phrase, a person who "owing to well-founded fear of being persecuted ... is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country". The Court concluded that although the Convention definition of refugee does not refer to parts or regions of a country, that circumstance does not provide any warrant for construing the definition so that it would give refugee status to those who although having a well-founded fear of persecution in their home region, could nevertheless avail themselves of the real protection of their country of nationality elsewhere within that country (see: p 440G to p 441A). In this case, the question before the Tribunal was whether it could be satisfied that the appellant held a well-founded fear of persecution for a Convention reason having regard to the appellant's identified claims of persecution derived from his contended sexual orientation. That sexual orientation was said to be demonstrated by reference to the examples of the relationships he claimed to have had with identified participants in the nominated countries. Those relationships and that sexual orientation was then said to have resulted in consequences for him within his family and to give rise to concerns as to how he would be treated by Bangladeshi authorities, particularly the police, having regard to the appellant's contentions that gay men are subjected to ill treatment by Bangladeshi police. 14 The central matter was the assessment by the Tribunal of all the evidence before it and whether it could be satisfied that the evidence was plausible, accurate and truthful. The Tribunal concluded that it was not satisfied of those matters. No question arose as to whether the appellant might be able to safely relocate elsewhere within his home country as a means of avoiding a demonstrated well-founded fear of persecution or harm. The Tribunal was simply not satisfied that the appellant held a well-founded fear of persecution for a Convention reason, as contended. 15 By ground 4, the appellant says that Federal Magistrate Nicholls failed to recognise that the Tribunal's decision was unjust and made without the Tribunal taking account of the "full gravity" of the appellant's circumstances. The reference to the decision of the Tribunal being unjust is not supported by any elaboration. If the ground is intended to be an analogue for a contention that the Tribunal was not entitled to rely upon the inconsistencies isolated in the Tribunal's reasons, the conclusions reached by the Tribunal were open to it arising out of its evaluation of the material and the weight that it elected to place upon the particular matters identified in its reasons. As to the question of the "full gravity" of the appellant's circumstances, it is plain from the detailed analysis undertaken by the Tribunal and the conclusions recorded in its reasons for decision that each of the factual claims made by the appellant were considered and weighed in the balance having regard to all the material put before it. That material included the protection visa application, the statutory declaration in support of the application, material submitted in writing by the appellant's advisers, the oral evidence and material specifically in response to the s 424A letter from the Tribunal to the appellant. If the contention really is that the Tribunal did not conclude that the appellant held a well-founded fear of persecution as claimed, the contention is a complaint about the merits. In effect, the appellant asks, why did the Tribunal not accept my claim to a well-founded fear of persecution? 16 By ground 5, the appellant says that the Tribunal asked itself an irrelevant question and ignored the appellant's political background in reaching its decision. As counsel for the Minister notes, there is no transcript before this Court concerning the hearing. The decision record setting out the analysis and reasoning of the Tribunal, its conclusions and ultimately its operative decision reflects an analysis of documents and material put to the Tribunal, versions of facts and evidence given, going to the content of the claims. The reasons do not reflect any inquiry into irrelevant matters or reliance upon irrelevant matters along the path to the Tribunal's decision. As to the elements of ground 5 which are directed to the Tribunal's failure to take into account the appellant's political background, the visa application does not place reliance upon any contended political background on the part of the appellant as a basis for a well-founded fear of persecution. Nor is there any such contention in the statutory declaration, the oral evidence or other material put to the Tribunal. Thus, there was no obligation upon the Tribunal to take any such matter into account. 17 In Muin v Refugee Review Tribunal , the High Court (Gleeson CJ, Gaudron, McHugh and Kirby JJ; Hayne J dissenting) concluded that the appellant, an Indonesian national of Chinese ethnicity had been denied procedural fairness in relation to a submission sent by the Secretary of the Department of Immigration and Multicultural Affairs to the Tribunal. The appellant applicant for a protection visa ought to have been provided with an opportunity by the Tribunal to deal with and respond to matters contained in the submission. In this case, there is no reference by the appellant to any document or other material relied upon by the Tribunal which was not brought to the appellant's attention. Accordingly, the reference to Muin in ground 6 and the contention that by reference to the principles in Muin the appellant "strongly believe(s) that there is a lack of procedural fairness in my case", seems entirely misplaced. 18 By ground 7, the appellant contends that Federal Magistrate Nicholls did not consider the appellant's amended application. It is plain from the reading of the reasons published by Federal Magistrate Nicholls that each element of the appellant's amended application before the Federal Magistrates Court Australia was fully taken into account. 19 By ground 8, the appellant contends that the Tribunal did not consider the "integers" central to the appellant's claim thus failing to discharge the review function. The two essential integers identified are the "intimidating pressure" from the appellant's family members due to the appellant's homosexuality and the contention that the appellant's family members would kill him if he returned to Bangladesh. It is clear from the reasons of the Tribunal that the contention of pressure brought to bear by family members and the notion that family members might harm the appellant by reason of the appellant's sexual orientation were expressly addressed. There is little point in quoting the specific paragraphs of the Tribunal's reasons as to these matters. However, the question of the hostility of the appellant's family, the contention that they had lodged false cases against him and that family members had encouraged the appellant's friends in Singapore to "beat him up" is expressly dealt with at AB529 and AB530 beginning with the reciting of aspects of these claims at the second paragraph under the heading Threats of harm (being the fourth paragraph on AB529). 20 As to the contention that the Tribunal applied the wrong legal test by requiring independent evidence of relevant facts before it would accept a claim made by the appellant, it is plain that the Tribunal examined the totality of the evidence before it, put to the Tribunal in the manner previously described, and then reached a decision firstly as to whether it could be satisfied of the claims made by the appellant and secondly, whether the appellant held a well-founded fear of persecution for a Convention reason. The test applied by the Tribunal was whether it could be so satisfied. The Tribunal did not start from the position that it would not accept any evidence given by the appellant or contentions made by the appellant unless every aspect of the claim was corroborated by independent evidence. The Tribunal determined that it could not be satisfied that the appellant held a well-founded fear of persecution for a Convention reason because it could not be satisfied, as a result of the forensic analysis of material going to each claim, that the appellant's evidence was plausible, accurate and truthful. In other words, the analysis of the material revealed inconsistencies identified by the Tribunal which it regarded as significant and which led it to form a view that the version of the facts put forward by the appellant was implausible or improbable. Thus the claims were rejected. 21 In the final ground, the appellant also contends that the Tribunal failed to look at the claims made by the appellant in their totality to determine whether it could be satisfied that the appellant held a well-founded fear of persecution. The appellant says in effect (although it was not put this way as the appellant was self-represented) that the segmentation of each claim and conclusions reached about each separate claim failed to give proper emphasis to the aggregated burden of the total claim. However, it is plain from the Tribunal's reasons that the entirety of the appellant's claim based on all of its constituent integers or elements was dealt with. The central matter was whether the Tribunal could be satisfied that the claims made by the appellant were truthful, plausible and acceptable. Once the Tribunal was unsatisfied about those matters, the Tribunal could not reach the relevant state of satisfaction as to a well-founded fear of persecution for a Convention reason. That conclusion was open to the Tribunal. 22 Accordingly, the contention that Federal Magistrate Nicholls fell into error by failing to find jurisdictional error on the part of the Tribunal for the reasons asserted by the appellant, necessarily fails. 23 The appeal must be dismissed with costs. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.

consideration of an appeal from the federal magistrates court of australia migration

2 On 27 November 2008 I made an order approving the settlement and associated orders. These are the reasons why I made those orders. By reason of the definition of the group members in the form of amended application, these 30 clients were not group members, leaving 86 clients who fell within the definition. 6 ASIC officers contacted with 85 of the 86 investors or members of their families or their professional representatives. The one investor outstanding was a trust of which two of Masu's directors were the trustees. In Masu's records, the client in that case was identified as "Martin Speiser and Suren Pather as trustee for the Masu Trust". 7 Following service of opt out notices, 49 group members opted out. That left the applicant and 36 group members --- a total of 37 individuals (86 minus 49). 8 The evidence showed that 83 of the 86 group members reached a private settlement with Masu. On a confidential basis, Masu's solicitors advised ASIC of the identity of those 83. Particulars of them were checked against the client list of 86 names and they were all found to be within that list. The 49 group members who opted out were within the 83 clients who had settled. 10 It did not appear likely to me that there were fewer than seven group members. 11 Only 49 group members opted out, thereby clearly ceasing to be group members. 12 I did not need to decide whether there are other ways in which a person can cease to be a group member, and if so what those other ways might be. The only other way that might be suggested to be relevant here was that persons ceased to be group members because the fact of the settlements somehow signified that they no longer satisfied the definition of "group members" in the originating process. 13 The definition of the group members included as an element that they "suffered loss". The terms of the settlements between Masu and the 83 group members were not in evidence. I did not infer that the terms of the settlements established that the 83 group members had not suffered loss as at the relevant time --- the time of commencement of the proceeding. 14 It was therefore my view that s 33L was not enlivened. 15 Even if, contrary to my view just expressed, the number of group members had fallen below seven, the proceeding did not thereupon automatically cease to be a proceeding under Pt IVA. Since I did not make an order under s33L, the proceeding continued to be a proceeding under that Part and it was appropriate that I entertain the motion for approval of the settlement. 16 If I had thought that s 33L was enlivened, I would have ordered that the proceeding continue under Pt IVA and then approved the settlement. It would have served no useful purpose to order that it no longer continue under that Part (see [17]ff below). Messrs Speiser and Pather are represented by solicitors who have indicated that their clients have no objection to the matter proceeding to settlement with the two individuals as discussed below. 18 I will not relate the detail of the settlement in these reasons because it was an aspect of the settlement that its terms be kept confidential. I made an order that the affidavit material disclosing those terms be kept in sealed envelopes in the Court file, not to be opened except by order of a judge. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

representative proceeding under pt iva of the federal court of australia act 1976 (cth) application for court's approval under s 33v of settlement of the proceeding 86 group members of whom 49 gave opt out notices, leaving applicant and 36 group members (total 37) 83 group members, including the 49, settled with respondent, leaving three who had not terms of the settlement with the 83 not disclosed by the evidence whether it was likely that there were fewer than seven group members remaining so that s 33l of the act was activated one element of group definition was that member "suffered loss" as a result of respondent's conduct whether that condition was no longer satisfied in relation to the 83. held: (1) mere fact of settlements on unknown terms did not signify that the group members who had settled with respondent had not suffered loss; (2) in any event, in absence of order to contrary, proceeding remained a proceeding under pt iva and it was appropriate to entertain motion for approval of settlement practice and procedure

2 The respondent filed a notice of appearance and by that notice submitted to any order of the Court save as to costs. Notwithstanding that, and at my request, the Australian Government Solicitor has taken some trouble in this matter to assist Mr Cram in seeking to recover from the Tribunal the documents which he believes ought to have been returned to him and has attended before this Court on at least three occasions. I have sought to explain to Mr Cram on more than one of those occasions that his application does not appear to disclose a reasonable cause of action. Notwithstanding that, Mr Cram has not been willing to bring this proceeding to an end. 3 A notice of motion has now been filed by the respondent for the proceeding to be dismissed pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) on the basis that the applicant has no reasonable prospect of successfully prosecuting the proceeding. The motion is listed for hearing today. 4 Mr Cram has today objected to my sitting and has suggested that his application should be heard by the Full Court because of the position of Downes J who both holds a commission on this Court and is the President of the Administrative Appeals Tribunal. As no decision of Downes J is the subject matter of the application, I do not accept that the Court is not properly constituted to exercise the original jurisdiction of the Court. 5 Mr Cram has also sought to file in Court a notice of objection to competency, in which objection is taken to my personal competency, and a notice of appeal against decisions made by me. No final orders have, at this stage, been made by me in this matter. I advised Mr Cram that he would need to take these notices to the Registry if he wished to take any further steps in respect of them. Further, Mr Cram has made allegations of abuse of power by me and suggested that I am acting in collusion with the respondent to damage his position. I do not accept the validity of the accusations made by Mr Cram. I am not willing for those or any reasons to disqualify myself from further dealing with this matter. 6 The above matters raised by Mr Cram are no answer to the respondent's motion. Mr Cram has advanced no other arguments in opposition to the order sought on the respondent's motion. 7 I am satisfied that the application in this matter does not disclose a reasonable cause of action. Moreover the documents that Mr Cram wished to recover from the Tribunal have now, as I am satisfied, been returned to him. The proceeding is therefore dismissed pursuant to s 31A of the Federal Court of Australia Act on the basis that the applicant has no reasonable prospect of successfully prosecuting the proceeding. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

application purportedly for an order of review against administrative appeals tribunal for failure to return documents motion to dismiss proceeding on basis no reasonable prospect of success held: proceeding dismissed as no reasonable prospect of successfully prosecuting the proceeding practice & procedure

In late March 2009, Ms Stoddart was served with a summons requiring her to appear before Mr Boulton, an Australian Crime Commission examiner, to give evidence about her husband's business activities. Ms Stoddart appeared before Mr Boulton on 3 April 2009 and refused to answer any questions. She did so claiming that she was protected by a common law privilege or immunity against her incriminating her husband. Mr Boulton did not accept Ms Stoddart's claim to this privilege, ruling that if spousal privilege did exist at common law, the provisions of the Australian Crime Commission Act 2002 (Cth) had abrogated it. As a consequence, Ms Stoddart has now sought: (1) A declaration in this Court that the common law privilege or immunity against spousal incrimination has not been abrogated by the Australian Crime Commission Act 2002 (Cth); and (2) An injunction restraining the Examiner of the Australian Crime Commission from questioning her in relation to matters concerning Ewan Alisdair James Stoddart. DOES SPOUSAL PRIVILEGE EXIST AT COMMON LAW? First, in Callanan v B [2005] 1 Qd R 348 (" B "), the Queensland Court of Appeal unanimously held that spousal privilege existed at common law: see McMurdo JA at [1], McPherson JA at [8] and Jerrard JA at [22]. That decision involved a refusal by a spouse to answer questions asked in the course of a crime investigation being conducted under the Crime and Misconduct Act 2001 (Qld) ('the Qld Act'). In their decisions, McPherson and Jerrard JJA relied extensively on an article by Mr D Lusty entitled " Is there a common law privilege against spousal incrimination? " (2004) 27 UNSWLJ 1. Secondly, in S v Boulton [2006] FCAFC 99 ; (2006) 151 FCR 364 (" S "), a Full Court of this Court came to the same conclusion: see Black CJ at [16] to [28], Jacobsen J at [75] to [99] and Greenwood J at [171]. While the central issue in S was whether spousal privilege extended to a de facto spouse, the Full Court had to determine, as a necessary first step, whether spousal privilege existed at all. At first instance in S ((2005) [2005] FCA 821 ; 155 A Crim R 152) , Kiefel J considered she should follow the decision in B as a matter of judicial comity (at [31] and [32]), even though her Honour was of the view that the common law did not recognise the concept of spousal privilege: see at [25]. In his decision in S , Black CJ examined the difficulties identified by Kiefel J with the existence of spousal privilege: see at [17] to [22]. In particular, his Honour noted the comments made by Kiefel J about the confusion created by statements that had related compellability to privilege: see at [20]. Furthermore, he noted the historical difficulty with the existence of a spousal privilege when the earlier common law rules relating to spousal incompetence and non-compellability meant that it would almost never have arisen for consideration: see at [19]. Ultimately, the Chief Justice concluded that B should be followed: see at [25] and [28]. Jacobson J, with whom Greenwood J agreed, traced the historical evolution of the notions of competence, compellability and privilege and concluded that the common law did recognise a spousal incrimination privilege: see at [99]. Jacobson J noted the uncertainty surrounding the notions of compellability and privilege raised by Kiefel J (at [93]) but respectfully disagreed with her Honour as to what flowed from the proposition that a wife was not compellable as a witness: see at [98]. Jacobson J relied particularly on the decision of Barley J in R v Inhabitants of All Saints Worcester [1817] EngR 404 ; (1817) 105 ER 1215 and concluded that spousal privilege was related to non-compellability: see [91]. It should, perhaps, be noted that Kiefel J had doubted the correctness of this decision: see the reasons of Kiefel J at [15]. In addition to these two appeal court decisions, it is worth mentioning that in Stoten v Sage [2005] FCA 935 ; (2005) 144 FCR 487 (" Stoten "), Dowsett J essentially took the same approach as Kiefel J in S . While his Honour doubted the existence of such a common law privilege independent of statute, for reasons of judicial comity, he decided he should follow the decision in B : see Stoten at [6] and [14]. Since the resolution of this issue was a necessary part of the decision in S and, therefore, part of the ratio decidendi , I consider I am bound to follow the Full Court's decision in that case. Even if I were not so bound, I would not be so bold as to ignore the principle of judicial comity in relation to the decision in B , when, as I have noted above, five judges of this Court have recently followed it. It follows that I should hold that spousal privilege or immunity does exist at common law. HAS SPOUSAL PRIVILEGE BEEN ABROGATED BY SECTION 30 OF THE ACC ACT? At this point, it is convenient to note that Ms Martin acknowledged that these views of Black CJ in S were obita dictum and the other two judges in that case, also in obita dicta , took the opposite point of view. Jacobsen J reviewed various authorities ( S at [140] to [156]), including the Full Court decision in A v Boulton [2004] FCAFC 101 ; (2004) 136 FCR 420 (" A ") (particularly the decision of Kenny J) and the decision of Dowsett J in Stoten . His Honour then concluded ( S at [152] to [156]) that the general and unqualified obligation to answer questions expressed in s 30(2) of the Act, considered in the context of the character and purpose of the legislation, its legislative history and the Explanatory Memorandum on the 2002 amendments to the Act, was sufficient to abrogate spousal privilege. For his part, Greenwood J agreed generally with the reasons of Jacobsen J ( S at [170]) and concluded ( S at [173]) that s 30 of the Act had the effect of excluding the operation of spousal privilege. While Ms Martin submitted that Greenwood J did not provide any reasons for his conclusion at [173], I reject that submission because I consider his Honour, at [170], clearly adopted the reasons of Jacobsen J on this issue. Ms Martin also relied on B to the extent that the Queensland Court of Appeal held that the Qld Act did not abrogate the privilege against spousal incrimination. Ms Martin submitted that the Act and the Qld Act are essentially synonymous for present purposes, as both abrogate self-incrimination privilege and make no mention of spousal privilege. On this aspect, Mr Cooke QC submitted that the decision in B was distinguishable for two main reasons. First, while it was held in B that, on a plain reading of the relevant section of the Qld Act that purported to prevent a person refusing to answer a question on the grounds of privilege (s 190(2)(b)), it may be inferred that the intention of Parliament was to abrogate all forms of privilege (except legal professional privilege), the Dictionary meaning of the word 'privilege' in the Qld Act used the word 'means' (instead of 'includes') and specifically mentioned only two forms of privilege: self-incrimination and legal professional. On this issue, McMurdo JA agreed with McPherson JA (at [1]) and Jerrard JA came to a similar conclusion: see at [23]. Secondly, Mr Cooke QC submitted that the Qld Act was in fact quite different to the Act. In particular, s 194(1)(a) of the Qld Act excused a witness from answering questions in circumstances where that witness had a 'reasonable excuse' for refusing to answer. So, he submitted, unlike s 30 of the Act, the Qld Act did not impose upon a witness an unqualified obligation to answer questions. He submitted this difference was significant in discerning a legislative intention to exclude the common law privilege by necessary implication. Mr Cooke QC also submitted that, because of the 'reasonable excuse' defence, even if the confusion surrounding the definition of 'privilege' had not arisen, there would have been stronger grounds for the argument that the Qld Act did not abrogate the privilege against spousal incrimination, than there were available in relation to the Act. On this issue, Mr Cooke QC also submitted that the Full Court's decision in A emphasised the unqualified obligation to answer questions established by s 30(2) of the Act. What seemed to be at the heart of Ms Martin's submissions was that spousal privilege was a separate and distinct privilege from self-incrimination privilege and, consequently, on basic principle, the legislature could not abrogate the common law spousal privilege unless it did so by express provision or necessary implication. It followed that since s 30 made no express provision to abrogate spousal privilege, in order for it to be abrogated by necessary implication there would need to be evidence of a clear and unmistakable intention on the part of the legislature (see HKSAR v Lee Ming Tee [2001] HKCFA 17 ; (2001) 4 HKCFAR 133 at [55] ). Furthermore, Ms Martin submitted that the express reference to self-incrimination privilege and the associated protections in s 30(4) and s 30(5) of the Act highlighted the fact that Parliament was only concerned to abrogate that type of privilege while leaving others untouched. If the person who is incriminated by the answer has no privilege, save the limited use immunity for which the Act proscribes, why should someone who is not incriminated be outside the reach of the otherwise general obligation to answer what you are asking? That is the nub of it for me. In particular, whether spousal privilege is derived from self-incrimination privilege, or is a separate and distinct type of privilege based, as Ms Martin submits, on the unity of the family, the ultimate purpose of both is to prevent the husband (in this case) being incriminated. If this is so, it would be perverse, in my view, for the legislature to abrogate the husband's privilege against self-incrimination in s 30 of the Act, such that he must answer and thereby incriminate himself directly by his own words, and yet, to keep in place his wife's privilege not to incriminate him (not herself) indirectly by her words. Furthermore, as Mr Cooke QC pointed out, it would be somewhat surprising if the ends of marital and family harmony were to be given a higher level of protection under the Act, than the perseveration of personal liberty. Having reached this conclusion, it necessarily follows that I do not consider that Ms Stoddart is entitled to the declaration and injunction she has sought. I therefore order that this application be dismissed with costs.

statutory examination statutory requirement that examinee answer questions whether common law recognises privilege against spousal incrimination whether the statutory requirement amounts to an abrogation of the privilege australian crime commission act 2002 (cth), s 30 statutory examination statutory requirement that examinee answer questions whether common law recognises privilege against spousal incrimination whether the statutory requirement amounts to an abrogation of the privilege australian crime commission act 2002 (cth), s 30 statutory examination statutory requirement that examinee answer questions whether common law recognises privilege against spousal incrimination whether the statutory requirement amounts to an abrogation of the privilege australian crime commission act 2002 (cth), s 30 evidence administrative law criminal law

At the time an extraordinary general meeting (EGM) of members of the company had been requisitioned by disaffected shareholders seeking the removal of the existing board of directors. The shareholders commenced proceedings in this Court on 26 September 2007 challenging the rights issue. They sought interlocutory injunctive relief to restrain the allotment of shares pursuant to any acceptances pending the EGM. The EGM has been fixed by the directors for 22 October 2007 which is the last date upon which it could have been fixed after the notices requisitioning it. 2 The claim for an interlocutory injunction was argued on 3 October 2007 and an order refusing it was made on 4 October 2007. What follows are the reasons for that decision. At the end of 2006 its subsidiaries were three companies, PharmAust Manufacturing Pty Ltd (PharmAust Manufacturing), Epichem Pty Ltd (Epichem) and Mimotopes Pty Ltd (Mimotopes). On 9 February 2007 Mimotopes was sold to a US based company, Commonwealth Biotechnologies Inc (CBI), for consideration of 2.15 million shares representing a 39.5% interest in the latter company. Dr D'Sylva, who was the CEO of CBI, became the managing director of Pharmaust. 4 The applicant, Chimaera Capital Limited (Chimaera), is the parent entity of the Chimaera Group of companies. 5 In October 2006 Chimaera Capital Markets Pty Ltd (CCM) entered into an agreement with Pharmaust to underwrite an offer which Pharmaust subsequently made to eligible shareholders under a share purchase plan involving the issue of $1,250,000 in shares. There was also a conjunctional placement of up to $1,250,000 worth of shares on a pari passu basis to the share purchase plan at the Relevant Issue Price. When the agreement was entered into the issued share capital of Pharmaust was approximately 85 million fully paid ordinary shares. Following completion of the share purchase plan it increased to about 118 million issued shares. 6 On 22 February 2007 the Pharmaust board sought a letter of support from the Chimaera Group evidently with a view to ensuring that an unqualified audit opinion could be provided for the period to 31 December 2006. This led to what Mr Catalano described as an "Engagement Agreement" between Pharmaust and CCM. The agreement which was set out on CCM letterhead was signed by directors of CCM (Mr Ian Pattison) and Pharmaust (Dr D'Sylva). The document confirmed Pharmaust's engagement of CCM as its exclusive corporate adviser. Signed international supply agreement with Bristol Pharma Australia, a subsidiary of top 10 Indian pharmaceutical group IPCA - for the supply of low cost paracetamol and ibuprofen to the Australian and New Zealand analgesics markets. The balance sheet as at 31 December 2006 showed net assets of $7,653,413, the bulk of which was represented by property, plant and equipment valued at $6,735,310. Accumulated losses as at 31 December 2006 were $18,799,784. Cash as at 31 December 2006 was $462,010. 10 The cash position of the company was poor and getting worse in July 2007. At that time Dr D'Sylva proposed a convertible note issue in favour of a US-based financier, Platinum Partners (Platinum). Draft documentation for the proposed issue was prepared in the form of a Convertible Note Subscription Agreement and a Deed of Charge in favour of an unspecified Platinum related entity. Each of the convertible notes was to have a principal or face value of $1 but would be issued at a discount of 12%. He asked Mr Owen to review the proposed documentation for the convertible note issue. He told him that Pharmaust would run out of cash in August and that a rights issue which was to have taken place a month or so earlier had not been initiated by management. The Platinum deal was the only alternative then available to the company. At that time the company had secured finance from the National Australia Bank (the NAB) by way of a facility in the amount of about $1,350,000. The facility was due to expire at the end of July. Under the convertible note proposal the funds raised from Platinum would be used to discharge the NAB facility. 12 On 19 July 2007 and prior to the discussion between Messrs McLarty and Owen, Pharmaust had issued a notice of meeting to be held on 20 August 2007 to retrospectively approve a placement of 8,250,000 shares to Centre Court Asset Management which had been made without shareholder approval in April 2007. By obtaining ratification from shareholders under ASX Listing Rule 7.4 to the issue which had occurred, the company would obtain relevant approval for the purposes of ASX Listing Rule 7.1 and thereby refresh its board's capacity to make future issues of securities up to a 15% threshold. The issue to CAMOFI Master LDC had been done under an agreement to raise $825,000 and to underwrite a proposed pro rata non-renounceable rights issue of shares and options by the company. Mr Owen was of the view that the proposed further placement of 15% of issued capital would only provide a stop gap. Given the share price of the company at the time it was likely to raise only about $620,000 before costs. 13 On reviewing the documentation for the proposed convertible notes issue, Mr Owen formed the opinion that it would provide Platinum with a large number of convertible notes to be converted at an indeterminate price based upon the company's market price at an unknown point in the future. If the entire NAB facility were paid out of the proceeds a little over $1 million would remain after the costs of the issue and the payment of creditors. In light of Pharmaust's cash requirements, unless it were to sell company assets, it would be obliged to go back to the capital market for additional capital in less than six months and, in his opinion, would be beholden to Platinum in so doing. 14 Mr Owen told Mr McLarty that the likely outcome of the convertible note issue would be to deliver to Platinum, within the short to medium term, control of Pharmaust together with CBI. CBI had cash reserves but they could not be accessed by Pharmaust. Mr McLarty had come to the same view as had Mr Best. Mr Best told Mr Owen that he was intending to resign as a director and had been intending to resign for several months before their discussion. 15 Prior to August 2007, Mr Catalano of Chimaera had had discussions with Dr D'Sylva about a number of funding proposals. Chimaera offered to underwrite capital raisings by Pharmaust for varying amounts depending upon the purpose for which the proceeds of the capital raisings were intended. A number of proposals were put forward in respect of the proposed acquisition by Pharmaust of various assets. Some of these capital raising plans would have involved the issue of shares. As Pharmaust did not proceed with the acquisition none of the offers was accepted. Chimaera did offer to underwrite a substantial raising of approximately $15 million in respect of Pharmaust's execution of its business plan, especially plans relating to its generic pharmaceuticals strategy. 16 Mr Catalano said he had been informed by Dr D'Sylva that about nine months ago he had reached an in principle agreement with secured note holders in a company called Chemeq under which Pharmaust would acquire Chemeq's factory. Dr D'Sylva had negotiated with Platinum to obtain necessary funding for the purchase and part of that funding package would have involved the issue of shares to raise capital for Pharmaust. Ultimately, however, the note holders could not sell and following the appointment of a receiver to Chemeq the in principle agreement lapsed in June or July 2007. 17 On 31 July 2007 CCM had written to Pharmaust setting out indicative terms for a $1 million working capital facility for Pharmaust. This also was a convertible note proposal. The proceeds were to be used for the ongoing registration and commercialisation of generic drugs by the company under the terms of its distribution agreement with Actavis Group. The maturity date was to be 15 August 2008. It was also a requirement of the proposal that CCM be entitled to appoint at least two directors to the board of Pharmaust. Mr Owen read this as a requirement that Chimaera would assume board control of the company. 18 Mr Owen discussed the CCM proposal with Mr McLarty and came to the view that a $1 million capital raising was not going to be sufficient. According to Mr Owen they did not think it appropriate to provide a shareholder with board control together with the exclusive authority to determine the nature and terms of future capital raisings. In any event given that the NAB held a first ranking charge over all of the assets of Pharmaust, the company was not in a position to comply with the requirements of the proposal. 19 On the morning of the meeting of 2 August 2007, a further proposal was made by CCM to Pharmaust under which it would be prepared to provide a working capital funding line of $500,000. The security proposed was a second ranked fixed and floating charge and a first ranked mortgage over land at Welshpool. Conditions included appointment of CCM as exclusive corporate advisor and underwriter to Pharmaust with respect to the provision of corporate finance services, completion of satisfactory due diligence and CCM retaining the exclusive right for a period of not less than 12 months to appoint at least two directors to the board of the borrower. Again Mr Owen seems to have regarded this proposal as passing board control to the Chimaera Group. 20 The Platinum proposal was considered by the Pharmaust board on 2 August 2007. Dr D'Sylva as managing director chaired the meeting. The minutes of the meeting recorded Mr McLarty's expression of serious concern about the funding proposal from Platinum and his view that he did not feel it was a proposal that he could accept. He then proposed that the board appoint Mr Owen as a non-executive director with immediate effect. He and Mr Best voted in favour of the resolution. Dr D'Sylva voted against it but the resolution was passed. Mr Owen then joined the meeting. Dr Best then tendered his resignation with immediate effect. 21 The reconstituted board then considered the Platinum funding proposal. It was opposed by Messrs McLarty and Owen. According to the minutes Mr McLarty said that if Dr D'Sylva were of the view that the proposal was in the best interests of shareholders he would vote for the proposal if Dr D'Sylva resigned. Dr D'Sylva said that would not be possible as it was a condition of the proposal that he remain managing director of the company. Mr McLarty then proposed that Dr D'Sylva stand down as managing director voluntarily, failing which a resolution would be put to the board removing him as managing director. Dr D'Sylva said that if the Platinum proposal were not accepted he would have concerns about the solvency of the company and would resign as managing director and as a director. Such a course of action would impact on the ability of the company to present itself as a part of a consolidated entity involving CBI as that was based in part upon his appointment as chief executive officer of CBI as well as managing director of Pharmaust. Dr D'Sylva then tendered his resignation as managing director and as a director of the company and his resignation was accepted. 22 Mr Owen described the priority issues for the board following the meeting of 2 August 2007 as the maintenance or renegotiation of the NAB secured facility and the provision of interim working capital as the company did not have sufficient funds to meet the following week's payroll obligations. Mr McLarty advanced a sum of $50,000 on an unsecured basis to meet the payroll of the company. Neither Mr Owen nor Mr McLarty had seen the Engagement Agreement of 22 February 2007 between CCM and Pharmaust until 3 August 2007 when a copy was sent to Mr McLarty by the company secretary, Mr Asthana. 23 On 7 August 2007 Mr Owen met with the NAB. At the time he had formed the view that the most likely way to obtain working capital would be by a placement which could raise approximately $620,000. He anticipated that the placement could be effected after the proposed EGM of 20 August 2007. At the time most of the major shareholders had lodged proxies in favour of the resolution or at the discretion of Dr D'Sylva. Mr Owen had begun to consider parties interested in taking a placement. On 7 August 2007 he met with the NAB and explained that he believed the company would continue to service the facility out of the proceeds of a placement and would have to settle on a long term strategy in relation to its debt position in the very near future. He was told that the matter would be referred to the NAB's Credit Review Committee. 24 By August 2007 Mr Catalano had become concerned about Pharmaust's liabilities. He said his group had lost confidence in its board and management at the time of the placement of shares to Centrecourt. Although he referred in his evidence to the views of the Chimaera Group, I take this to be a reference to his own views. He said the Group's position was that the placement of the shares to Centrecourt had not been properly considered in the context of Pharmaust's long term strategy as communicated to shareholders and the market generally. Indeed the Chimaera Group had not become aware of the Centrecourt placement until it was made. This, he said, was one of the reasons why they lost confidence in Pharmaust's board. 25 Other shareholders had concerns about Pharmaust. One of those was Jonathan Remta, an investment banking consultant who, in a former capacity as a stockbroker, had been involved in the start up of Pharmaust. He had assisted with its commencement as a company listed on the ASX. He had arranged for a significant capital raising for Pharmaust and also had many of his clients and those of other stockbroking colleagues acquire shares in the company. He is a director and shareholder in Tolleshunt Pty Ltd which he described in his affidavit as the Remta family company. It is a current shareholder of Pharmaust. He described Pharmaust's share price performance as languishing. Its shares, he said, had dramatically decreased from 2006 levels of around 20 cents to a current value of 3.5 cents with a relatively small volume of shares traded. He had had prior dealings with Mr McLarty. His father Peter Remta had also had dealings with Mr McLarty and with Dr D'Sylva as a result of a former position he held as chairman of Wytomic Ltd, now known as Sultan Corporation Limited. Dr D'Sylva had made capital funding contributions to Sultan Corporation Limited. 26 Jonathan Remta said that about three months ago, in or about June or July 2007, he had a conversation with Brian John, a shareholder who was a former stockbroking client. Their conversation concerned Pharmaust's performance in the preceding 12 months. About five or six weeks ago he was approached by Mr John and another shareholder, Mr Darcy on behalf of shareholders who held shares in their own right or through their superannuation funds. They expressed concerns about the board of Pharmaust given the dramatic decreases in share value of the company. Jonathan Remta was told that these concerns were prompted by the announcement of Dr D'Sylva's resignation coupled with the falling share price and what the shareholders saw as Pharmaust's poor performance over the past 12 months. He contacted Dr D'Sylva. He then heard about the Platinum funding proposal which had been rejected. He was concerned about Dr D'Sylva's resignation as he regarded him as the only member of the board with expertise in biotechnology and pharmaceuticals. Dr D'Sylva was also the managing director of CBI. Another shareholder, Owen Coote, also contacted Jonathan Remta and expressed concern about the future management of Pharmaust. 27 Jonathan Remta approached his father, Peter, and communicated the shareholders' concerns about the future direction of Pharmaust. He asked his father to assist him to sort out the problem. Peter Remta familiarised himself with the operations of Pharmaust and spoke to a number of shareholders about their concerns in relation to it and its current board of directors. 28 By 16 August 2007 it became apparent to Mr Owen that the EGM might not proceed as he had anticipated. Proxies previously lodged directed to vote at the discretion of the chairman were superseded by new proxies in favour of Peter or Jonathan Remta. On 17 August 2007 he became aware that Chimaera intended to oppose the motion. At that time he was also informed that the NAB wanted the company's directors to meet with the Credit Review Committee on 22 August 2007. 29 At the EGM held on 20 August 2007 a majority of shareholders voted against the passing of the proposed resolution, mostly by lodgment of proxies. Peter and Jonathan Remta attended the meeting holding many proxies. The resolution was defeated on a show of hands. The Chimaera Group also voted against the proposed resolution at the general meeting. 30 On 21 August 2007 Peter and Jonathan Remta met with Mr McLarty and Mr Owen to discuss a further funding proposal for Pharmaust. The meeting had been arranged by Jonathan Remta. At the meeting he put a proposal through his company, Kobold Pty Ltd (Kobold). (b) Satisfactory arrangements be made by the new board with the NAB for the existing overdraft facility to be extended for at least 60 days. (c) If an extension of the NAB facility could not be negotiated, Kobold would arrange an alternative source of finance to pay out that facility and ensure the continued solvency of Pharmaust. (d) The application of the proceeds of the loan being agreed on by the new board. (e) The loan being secured by an unregistered mortgage over the Welshpool property of Pharmaust postponed in priority to the security held by the NAB. (f) Kobold, with the new board of directors, would use its influence to have shareholders of Pharmaust agree to the ultimate conversion of the loan to shares in the capital of Pharmaust. (g) No action would be taken by shareholders led by Kobold against the present and former directors and officers of Pharmaust. (h) Subject to the conditions being met, the proceeds of the loan would be made available to Pharmaust by a payment of $100,000 by 25 August 2007 and the balance by 31 August 2007. (i) The provisions of the proposal would remain confidential in all respects until accepted by Pharmaust. Jonathan Remta said he explained to Mr McLarty that the funding proposal had the backing of the shareholders because it was being made through a company associated with him. The Pharmaust board did not respond to the funding proposal. 31 On the same day, 21 August 2007, Mr McLarty and Mr Owen met with a Mr Vassileff with whom they had commenced discussions earlier that month. They reached an oral agreement with him that he would provide up to $300,000 in working capital and would refinance the NAB facility on the same terms as currently with the NAB. The working capital and current hire purchase facilities under the NAB facility would be repaid out of the proceeds of a rights issue to be instituted at the earliest possible opportunity. Mr Owen said in his evidence that the proposal from Mr Vassileff addressed the immediate capital requirements of Pharmaust and the issue of the NAB facility and it was not conditioned upon the control of the company passing to the financier. On 22 August 2007 he met with Mr Rohan Brown at the NAB and explained the Vassileff proposal. Mr Brown said that if it were an immediate proposal it would be acceptable but otherwise the NAB was concerned at Pharmaust's financial position and the bank's exposure. 32 On 23 August 2007 the Kobold offer was withdrawn. Mr Henry Gulev, who had knowledge of the wholesale and retail pharmaceutical market, agreed to accept an appointment to fill the vacancy on the board. On 23 August 2007 Pharmaust received a letter of offer from Mr Vassileff. Mr Owen sent him a letter of acceptance on the same day after obtaining the consent of the NAB. 33 The offer from Mr Vassileff was made by him as trustee for the Pitch Investment Trust and by Silktree Investments Pty Ltd as trustee for the Vassileff Superannuation Fund. The letter proposed that the Vassileff interests would take an assignment of the debt owed by Pharmaust to the NAB and would advance up to an additional $300,000 at the lender's discretion to the company on 24 August 2007 as additional working capital of the company "... on the strict proviso that the Company expeditiously instigate and complete the "rights issue"" referred to later in the letter. Under the proposed arrangements it was confirmed that Pharmaust currently owed the NAB $1,350,000 under a loan facility and $155,000 under hire purchase loan facilities. 34 In the meantime on 20 and 21 August 2007 shareholders' notices issued requisitioning an EGM to remove the directors and to appoint a new board comprising Peter Remta, Brian John and Owen Coote. The first notice was issued by Graham James Darcy and Lynne Christine Darcy. A similar notice with like resolutions was issued by Owen Coote, Brian John and associated parties. It is common ground that the shareholders requisitioning the EGM held about 15% of the issued shares. The Darcy group shareholders' notice was faxed to Pharmaust on 22 August 2007 and the Coote and John shareholders' notice was provided to Pharmaust on 27 August 2007. 35 On 29 August 2007 Pharmaust announced to the ASX that it had negotiated and accepted a facility with an undisclosed lender (Vassileff) which provided Pharmaust with up to $300,000 of working capital on conditions, including a condition that Pharmaust instigate a rights issue to repay the capital. 36 On 30 August 2007 the Darcys wrote to the board of Pharmaust expressing their grave concerns about the management, future direction and financial position of the company and the apparent risk that the company would become insolvent. They posed a number of questions for answer by the board. They noted that the company was running at a loss or "burn rate" of $150,000 per month which losses were being met by loans and capital raisings without addressing underlying operational problems. They observed that this could only postpone insolvency and that the problem appeared to lie with the core business of the company. Management did not seem to be addressing the issues. They asked how the company proposed to reduce "cash burn" and return to profitability. They also asked how the company proposed to meet claims from Dr D'Sylva and others exceeding $500,000 in total. They noted that the current price of the company's shares was less than one third of the price 12 months previously. Any issue of new shares at that price or at a discount could only further depress the share price. This would be detrimental to the shareholders, even if they were able to participate in the rights issue, since the overall market capitalisation of the company would not have changed. However that was only possible because Dr D'Sylva was managing director of both companies. As this was no longer the situation it appeared that Pharmaust would not be able to consolidate its accounts with CBI in the future. They sought answers to their questions within 24 hours. 37 On 31 August 2007 Mr McLarty signed a Preliminary Final Report for Pharmaust for the year ended 30 June 2007. The Report was lodged with the ASX. It showed a loss from ordinary activities after income tax expenses of $6,575,000. Accumulated losses were $17,825,000 against issued capital of $24,387,000 and reserves of $3,446,000, leaving a total equity of $10,007,000. Cash at the end of the financial year was $3,254,000. Net tangible assets per share were shown as 9.2 cents. 38 On 11 September 2007 Jonathan Remta wrote to Pharmaust on behalf of Kobold offering to arrange the underwriting should Pharmaust decide to proceed with the rights issue foreshadowed in the announcement of its financing by Mr Vassileff. In addition, this underwriting would be acceptable to and supported by many of the shareholders, even if they did not necessarily take up their rights or participate in the underwriting of the rights issue. Would you please advise me of the details of the intended underwriting so that I can provide you with a proposal on at least similar or better terms for Pharmaust Limited, and would also enable the shareholders to have some say in the proposed issue and underwriting. I can also arrange some short term finance should the company have liquidity problems. The proposed announcement said that Pharmaust was to undertake a rights entitlement issue. It had settled the terms of the issue as a one for one entitlement at 3 cents per share to raise approximately $3,550,618. The announcement stated that the company currently had few cash reserves and was operating upon a limited working capital facility that had been put in place recently in conjunction with the refinancing of its expired and fully drawn credit facility with the NAB. The proposed announcement dealt with pricing of the issue. Ultimately, the Directors desire for maximum take- up, as well as the imperative that the Issue be fully underwritten, left the Board with the unenviable decision to price the Issue at the lower end of the range it had considered. In proceeding with Cardrona there would be potential exposure for investment in the company from outside Western Australia which could only be beneficial. An additional benefit would be that any shortfall from the issue would be managed by an independent party unrelated to the company especially given the issue of a potential shift in control of the company. The underwriting agreement would give Cardrona discretion over the placement of the shortfall but the board had negotiated that all requests for shortfall received from shareholders would be forwarded to Cardrona for consideration in conjunction with requirements from sub-underwriters. The proposed timetable involved lodgment of the prospectus with ASIC on 11 September 2007, notice to shareholders on 13 September 2007, opening date and despatch of prospectus to shareholders on 22 September 2007, closing date of offers on 9 October 2007 and shares quoted on a deferred settlement basis on 10 October 2007. Allotment and despatch of holding statements was proposed for 12 October 2007. 41 Prior to the board's decision to proceed with the rights issue, Mr Owen prepared a briefing paper which, he said, represented his considered view on the capital raising. He said in the paper that the board currently required about $110,000 per month to continue its operations. That figure was based upon a "stand-still" premise, that is no expenditure to be made in an effort to develop the company's business towards break even. Complicating the situation was the fact that the company's current directors were subject to requisition notices calling for an EGM to have them removed. These circumstances, he said, required the board to act conservatively in the raising of further capital for the future operations of the company until that foreshadowed motion was determined. On that basis the company had instructed its general manager to prepare a budget reflecting that position. 42 Mr Owen pointed out in his briefing paper that Pharmaust's ability to raise capital by way of a placement or convertible security was blocked by the vote at the EGM held on 20 August 2007. That situation and the need to secure further funds to support refinancing of the NAB facility, ie the Vassileff proposal, left the directors with little option but to commit to a raising by way of a rights issue. That decision was confirmed in the conditions of the Vassileff offer and loan agreement. The company was then bound by that agreement. He described as a favourable consequence the fact that shareholders would be afforded a pro rata right to participate in the further capitalisation of the company at a price representing a very large discount to the level at which all of them would have entered on to the register. Although that was not necessarily a happy outcome of itself given that the D'Sylva era led to the disastrous drop in value, the first major effort of the board would be to give current shareholders the first opportunity to continue to invest at that price rather than external parties. Funding the Company to "stand-still" was not considered an appropriate option as to simply continue to make a loss could not contribute to improvement in the shareholder's position. 2. Any items of a capital nature or funds for additional business development should be of a very conservative nature. 3. While a budget that took the company to a break-even point was preferable, the timeframe for the budget should ideally be no longer than six months. 4. Attention should be given to products or opportunities into which money had already been invested and which required continued funding to meet regulatory or market deadlines and which would be lost or significantly impaired if stalled. 5. No new projects, products or initiatives should be commenced. 6. Current costs and overheads should be kept to minimum levels. The share price was falling and without any further progress or developments could well go lower by the time additional capital needed to be raised. This could significantly prejudice shareholders if future funds had to be raised at a price lower than that contemplated. There was difficulty in seeking to raise capital over the December/January period. There was difficulty in funding the business in the interim period of September through January to support its development. 44 Mr Owen considered the possibility of realising some of the company's current assets. They represented a holding in CBI of approximately 40% and land and buildings at 71 Division Street, Welshpool. There was also the business of Pharmaust Manufacturing which in reality could represent two assets, being the manufacturing business and TGA/Generic registrations that might represent value to another manufacturing entity. The other asset was the subsidiary Epichem. The CBI shareholding was in escrow until November. Some inquiries had been made by US based contacts and the suggestion was there appeared little value in the company despite a market capitalisation of about US$20 million. Realising that asset could present considerable difficulties even at a heavily discounted price. The land and improvements at Division Street would represent a net value of between $1.5 million and $2 million after payout of the NAB/Vassileff mortgage. The problem was that the land had an integral role in the company's manufacturing business. A three month notice period would be required under the terms of the Vassileff facility to liquidate it. As to the company's business there was very little else to add save that there had been three or four inquiries received which had been followed up and which were at varying, though early stages. The business of Epichem would be far more readily realised, but it really only represented around $200,000 to $300,000 worth of value. There were some potential purchasers and these were being explored. 45 Mr Owen suggested that it would be imprudent for the board to base its capital raising expectations upon significant or sufficient funds becoming available from the sale of assets before early in 2008. To set a target sum of capital that would simply support the company through to November would be to risk significant detriment to the company and the ability of any board to begin to restore or increase shareholder value at any time in the next six months. 46 In discussing the underwriting arrangements he recommended that allocation of the shortfall to existing shareholders be limited to a pro rata allocation given the circumstances that the company and the board found itself in, vis a vis, the requisition notices. It may be noted that the prospectus lodged did not contain any provision for pro rata allocation to existing shareholders. 47 Messrs McLarty and Gulev expressed their agreement with Mr Owen's paper. 48 The company intended to lodge the prospectus on 12 September 2007. A final due diligence committee had been scheduled for 2.30pm that afternoon to be attended by representatives of the proposed underwriter. At about noon, however, the company received the letter of 11 September 2007 from Kobold to which reference has been made already. Discussion of the letter ensued between the Pharmaust board members and Mr Owen wrote detailed notes about that discussion. According to those notes it was not received at Pharmaust's Division Street offices until 10.40am on 12 September 2007 and then sent to Mr McLarty's office by fax just before midday. 49 Mr Owen's notes of the board's discussion on 12 September 2007 reflected concerns that Kobold was in possession of confidential information which had not been made available to the public. A rights issue had been flagged to the market and was announced as a condition of the Vassileff refinancing transaction but no information concerning the size, terms or underwriting of the issue had been made public. His notes suggested that he and the other directors regarded the proposal as a tactical measure on the part of Kobold rather than a genuine proposition. The detail provided was scant. While the board had received advice from solicitors that it should explore all reasonable alternatives, the notes recorded concerns about the uncertainty of engaging in discussions with Kobold. Given the length of time that the board had already invested in negotiating a suitable underwriting with Cardrona Capital, very considerable time could be wasted in pursuing an alternative, possibly in vain, at the expense of the Underwriting Agreement that was scheduled to be signed in a matter of a couple of hours. There was little room for doubt in the Board's view that these "shareholders ... and their associates" would be some of the parties who have acted to defeat the resolution at the recent EGM, issued 2 requisitions on the Board and formed part of the "group" that had propagated the first Kobold proposal. In short the group of disaffected shareholders that have sought to assume control of the Company. 50 Pharmaust lodged its prospectus for the rights issue with ASIC on that day, 12 September 2007. It also posted an announcement with the ASX in relation to the rights issue stating that it would be a 1:1 entitlement issue at 3 cents per share to raise approximately $3,550,618. It stated that Pharmaust proposed to enter into an underwriting agreement with Cardrona. The announcement noted that the share price had fallen by around 300% over the last 12 months. It set out an indicative timetable for the rights issue. On 13 September 2007 a new issue announcement was filed by Pharmaust with ASX quoting the number of shares issued or to be issued at 118,353,939. 51 A number of other things happened on 13 September 2007. The Darcys issued a notice on that day to Pharmaust stating that as it had failed to call and arrange to hold the EGM of members requested by them under s 249D of the Corporations Act 2001 (Cth) (the Act) by their notice dated 21 August 2007 they proposed calling and arranging to hold that EGM on 10 October 2007. They requested a copy of the Register of Members to be immediately provided to them. On the same day they sent a notice to Pharmaust proposing as a special resolution, in accordance with s 491(1) of the Act, that the company be wound up voluntarily and that Mr Christopher Williamson be appointed as liquidator. 52 According to Mr Owen, service of the Darcy notice disrupted the finalisation of documentation with Mr Vassileff. On 20 September 2007, during a telephone conversation between Mr Owen and Mr Brown of the NAB, Mr Brown informed Mr Owen that as a result of the notice served by Mr and Mrs Darcy and the threats to the rights issue in the event that the agreed financing with Mr Vassileff did not proceed, the NAB would be likely to put the company into immediate default. The Vassileff documentation was finalised on 25 September 2007. 53 The shareholder requisitioned EGM has been fixed for 22 October 2007. A notice was posted on the ASX website on 14 September 2007. Lodgment of prospectus 12 September 2007. 2. Notice to shareholders 14 September 2007. 3. "Ex" date 17 September 2007. 4. Record date for determining shareholder entitlements 21 September 2007. 5. Opening date and despatch of prospectus to shareholders 25 September 2007. 6. Closing date for offers 10 October 2007. 7. Share quoted on a deferred settlement basis 11 October 2007. 8. Allotment and despatch and holding statements 18 October 2007. 54 On 18 September 2007 Pharmaust made an announcement to the ASX entitled "Retraction and Update on Company". It referred to an announcement made on 14 September 2007 enclosing a notice of meeting prepared by the Darcys to convene a meeting to be held on 10 October 2007. The Notice was not lodged, or authorised by the Company, and the Company confirms that shareholders of the Company should disregard the Notice. The Company is receiving ongoing legal advice in relation to the requisition and will act in accordance with that advice and the Corporations Act . He made an offer to Messrs McLarty and Owen on behalf of Chimaera to provide bridging finance to Pharmaust to enable it to continue trading until the outcome of the anticipated EGM. He and Mr Pattison asked a number of questions of Messrs McLarty and Owen in order to better understand the specific financial needs of Pharmaust, particularly its cash needs over the next six month period. He suggested that a significant offer of finance would place Pharmaust in a position to better manage the existing secured bank debt facility with the NAB. During the course of the meeting the funding limit that was proposed to be included in the offer of finance was increased to the amount finally included in an offer made on 18 September 2007. 56 On 18 September 2007, CCM sent a letter to Mr Owen, signed by Mr Catalano, offering a secured loan in an initial sum of $500,000 with additional draw downs of $250,000 to a maximum of $1,200,000. The maturity date would be not later than 31 March 2008 but the facility would be "On Demand". The proposed security was a negative pledge and a second ranking fixed and floating charge over the assets of the company. The repayment was to come from the sale of non-core assets of the company or a rights issue undertaken to Chimaera's satisfaction and as part of the execution of what was referred to as the Chimaera plan. Conditions precedent to the proposal included postponement of the non-renounceable rights issue announced on 13 September 2007 at no penalty to the company. In addition the board of directors of the company and its related entities were to be limited to either Simon Owen or Bryant McLarty and at least two directors to be nominated by Chimaera. Chimaera would also reserve a veto right with respect to the appointment of further directors. According to Mr Catalano the offer of finance elicited no response. It was refreshed on 20 September 2007, but again no response came. 57 In Mr Owen's affidavit he made the point, essentially by way of argument, that each of the shareholders represented by Jonathan Remta would have a right to take up shares and would accordingly suffer no dilution. He denied that any shortfall was to be allotted to people with existing relationships with the present directors. The allotments would be carried out by the underwriter. Although the rights issue would result in shares being issued at a low price all shareholders would have the opportunity to purchase shares at that price and accordingly no shareholder would receive a preferential entitlement at a discount to the price of shares to be acquired by existing shareholders. 58 Exchange of lawyers' letters followed and on 26 September 2007 Chimaera instituted the present proceedings. She sent a copy of Peter Remta's affidavit without its annexures to Messrs Darcy, Coote, Jonathan Remta and Paul D'Sylva. She asked each of them if they agreed with the contents of the affidavit and whether they intended to vote to remove Messrs McLarty, Owen and Gulev as directors. She attached a draft letter into which she asked them to insert the necessary information and to edit it to ensure that it accurately reflected their position in relation to the contents of Peter Remta's affidavit. On 24 September 2007 she received a letter from Mr Darcy confirming that he and the shareholders he represented intended to vote to replace the existing directors. He also sent her three confirmations signed by shareholders he represents confirming that they intended to vote in that way. She received a similar letter from Mr Coote on 25 September 2007 and from Dr D'Sylva on the same day. Jonathan Remta sent her a letter on 26 September 2007. 62 The material so put before the Court was indirect and has not been tested. Nevertheless it is sufficient, for the purposes of these interlocutory proceedings, to support an inference that there is a reasonable prospect that some 46% of the shareholders would vote for the removal of the board. 63 Chimaera submitted that there is a serious issue to be tried in relation to whether the rights issue is beyond the powers of the directors because, in the circumstances, they are caretaker directors, and that the issue is being undertaken for the improper purpose of preserving the position of the directors in breach of s 181 and contrary to the interests of the company's shareholders as a whole or oppressive or unfairly prejudicial to Chimaera and other aggrieved shareholders. An injunction pursuant to s 233(1)(i) and/or 1324 of the Act and/or the accrued jurisdiction of the Federal Court restraining the respondents and their agents and officers from undertaking or proceeding with the Rights Issue until the First Respondent has convened in a general meeting to vote upon the continuation of the Second, Third and Fourth Respondents as directors of the First Respondent or until further order of this Court. 3. Such other order or orders as to the court seems fit. 4. Costs. (b) Hastily undertake a 1:1 rights issue at an all time historically low price likely to dilute significantly the voting power of Chimaera and other disaffected shareholders and which would be fully complete by the date orchestrated by the directors for the EGM. (c) Decline or disregard other funding proposals that could have provided funding, at least until the EGM if not beyond, without the same dilution of the shareholding or discounting of the share price. (d) Ignore obligations to a subsidiary of Chimaera and reach agreement with an underwriter to the rights issue who was entirely unknown to the shareholders but in whom the directors had vested the discretion to allocate share entitlements not taken up on the rights issue. (b) They had made plain to the directors that they did not enjoy the confidence of the shareholders. (c) They had taken formal measures to give notice of an intention to replace the directors and required Pharmaust to call a meeting for that purpose. It was not contested and appears to have been accepted at the hearing that the aggrieved shareholders represent about 46% of the total shareholding in the company. It was pointed out by Chimaera that the aggrieved shareholders were the same shareholders who successively voted against the resolution proposed at the EGM on 20 August 2007 to approve and ratify a private placement of shares. 69 The announcement by Pharmaust to the ASX that it was proceeding with a 1:1 rights issue was made on 29 August 2007. The detail was embodied in an announcement and comprehensive prospectus dated 12 September 2007 which was posted on the ASX website on 14 September 2007. The prospectus disclosed that an underwriter had been obtained and that any shares not taken up through the entitlement would be allocated at the discretion of the underwriter. Chimaera submitted that the aggrieved shareholders had no relationship with the underwriter and knew nothing about it. In contrast, the directors of Pharmaust had developed some commercial relationship with the underwriter leading to at least the underwriting agreement. 70 Chimaera referred to the Engagement Agreement made between its subsidiary and Pharmaust under which its subsidiary was entitled to be given the first opportunity to provide underwriting services in the event of a rights issue. The arrangement between Pharmaust and Cardrona was said to have been made in breach of that agreement. Chimaera also referred to the various alternative offers of financial accommodation which had been presented to Pharmaust and which did not involve the same dilution of shareholding as the proposed rights issue. Those proposals were either declined or ignored by Pharmaust in favour of the rights issue "... vesting the unknown underwriter with the discretion for the allocation of shares not taken up". Chimaera referred to the Kobold offer to underwrite the rights issue in order to ensure the aggrieved shareholders' control of Pharmaust would not be diluted by current shareholders not taking up the rights issue. Had that offer been accepted the current shareholders would have controlled the allocation of shares not taken up. The directors of Pharmaust failed to accept that offer and chose to engage "an underwriter not associated with the aggrieved shareholders". Chimaera submitted that the concerns of the aggrieved shareholders are also held in the context of the rights issue providing for shares at an all time historically low cost. It pointed to the timing of the requisition to shareholders' meeting which was fixed by the directors on 22 October 2007, the last day on which, pursuant to s 249D(5) of the Act, the meeting could have been held. 71 Chimaera made particular submissions in relation to the serious questions which it said were to be tried in relation to the rights issue. These related to the power of the directors having regard to their alleged "caretaker" status, whether the rights issue was undertaken for the improper purpose of preserving their positions and whether it was contrary to the interests of Pharmaust's shareholders as a whole or oppressive or unfairly prejudicial to Chimaera and other aggrieved shareholders. The genesis of all the matters was the board meeting on 2 August 2007. Dr D'Sylva had attempted to "force through at a directors' meeting" a convertible note issue that would have seen a potentially significant dilution of shareholders and a change of control in favour of his nominated funder, ie Platinum. This, it was said, was rightly rejected by the directors. Dr D'Sylva resigned as managing director as a result, and also as a director. He was said to have done this with the consciousness that his resignation would destabilise the company by reason of deconsolidation of CBI's financial position with the company. The cash position of the company was critical. It was under review by its bankers. Its facilities were expiring and it had insufficient cash to pay its wages. 73 The EGM convened for 20 August 2007 was called to refresh the company's lawful power to place shares comprising up to 15% of its issued capital. Up until the time immediately prior to the meeting the directors had no reason to believe the resolution would not be passed. Its rejection placed the company in an immediate cash crisis. Inadequate as to amount. 2. Conditional on the existing board agreeing to a change in control of the company. Further, the offer made on behalf of Chimaera was inadequate as to amount and impossible to accept because it required as a condition a first ranking charge. They said that they acted responsibly to secure interim funding and to resolve the position of the NAB. As early as 20 August 2007 the company foreshadowed that it would have to undertake a rights issue. Having agreed to Vassileff's funding, the company was obliged to proceed with the rights issue. To not proceed with the rights issue or for the injunction to be granted, it was said, would constitute an event of default under the loan agreement and the charge and potentially would be an event of default under the underwriting agreement. 75 The directors also referred to the delay in bringing the application. They pointed out that Chimaera waited until the prospectus and supplementary prospectus were despatched to shareholders. The form of the order contained in the original claim for interlocutory relief did not address that circumstance. They would appear to suggest that when shareholders subscribe under the rights issue the company would be prevented from allotting shares pursuant to cl 1.6 of the prospectus nor seek their listing. To do this, it was said, would place the company in breach of the Act and the Listing Rules. The prospectus constituted an offer to shareholders capable of being accepted. 76 It was submitted that Chimaera was in reality seeking an order that the directors withdraw the prospectus. It is not apparent from the papers that notice of the application had been given to ASIC. No head of power was identified pursuant to which the Court could order the withdrawal of the prospectus. 77 Pharmaust and its directors did not accept, for the purposes of the proceedings generally, that a caretaker directors' doctrine applies in Australian company law, although they accepted that there is an arguable question about it having regard to some of the authorities. 78 In relation to the form of the rights issue, Pharmaust and the directors referred to the Takeover Panel's Guidance Note No 17 which was said to illustrate that it cannot be assumed, as Chimaera assumes, that the engagement of a professional underwriter is intended in some way to lead to a change in control. Pharmaust and the directors submitted that the essence of the rights issue is that rational shareholders would have a reasonable and equal opportunity to participate in the benefits which flow from it. If they chose not to participate then the placement of the shortfall would be undertaken by independent professionals. The suggestion that the underwriter was not known to the shareholders emphasised its independence. 79 On the balance of convenience Pharmaust and the directors submitted that the company has existing secured facilities which authorise a secured lender to appoint a receiver or administrator. The secured lender is not a shareholder and is not using the financing agreement as a de facto means of obtaining control of the company. The court was said to be obliged to consider the interests of third parties, namely employees, creditors and shareholders as a whole. 80 A submission was also made that the arrangement between the shareholders could be in breach of s 606 of the Act by reason of their arrangement or understanding to vote for the removal of the directors. (2) A person who is involved in a contravention of subsection (1) contravenes this subsection. The two considerations are interdependent. Thus an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even. A more doubtful claim (which nevertheless raises "a serious question to be tried") may still attract interlocutory relief if there is a marked balance of convenience in favour of it. In Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63 ; (2001) 208 CLR 199, Gummow and Hayne JJ (Gaudron J concurring) pointed to the necessity to identify the legal or equitable rights which are to be determined at trial and in respect of which final relief is sought which may or may not be injunctive in nature. There is no inflexible rule. It may depend upon the nature of the dispute. For example, if there is little room for argument about the legal basis of a plaintiff's case, and the dispute is about the facts, a court may be persuaded easily, at an interlocutory stage, that there is sufficient evidence to show, prima facie, an entitlement to final relief. The court may then move on to discretionary considerations, including the balance of convenience. The first was that the directors were acting beyond power in making the rights issue because they were caretaker directors pending the outcome of the EGM requisitioned by the aggrieved shareholders. The second was that they were in breach of their duty under s 181 of the Act in making the rights issue for an improper purpose. The third was that they were acting contrary to the interests of the shareholders as a whole or in a way that was oppressive or unfairly prejudicial to Chimaera and other shareholders. 86 Company directors properly appointed have the powers conferred on them by the constitution of the company and by the Act. In the exercise of those powers they are subject to constraints and obligations deriving from the constitution and the Act and from the common law. The term "caretaker" is a metaphorical adjective. It should not be allowed to obscure legal analysis of powers and duties, the proper application of which will vary according to the circumstances. 87 The directors have power to effect rights issues. That was not in dispute. The exercise of that power is constrained by their statutory and fiduciary obligations. The fact that one of them derived a benefit from the resolution did not invalidate it if passed in good faith. If the purpose of the resolution had been simply to alter voting powers, then it would have been invalid. 88 The position of directors issuing shares where their own board positions may be at stake was considered by the Privy Council in Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821. The Privy Council held that it was unconstitutional for directors to use fiduciary powers over shares in the company for the purpose of destroying an existing majority or creating a new majority. In that case the directors' primary object had been to alter the majority shareholding. They had improperly exercised their powers and the allotment was invalid. To do so is to interfere with that element of the company's constitution which is separate from and set against their powers. Having ascertained, on a fair view, the nature of this power, and having defined as can best be done in the light of modern conditions the, or some, limits within which it may be exercised, it is then necessary for the court, if a particular exercise of it is challenged, to examine the substantial purpose for which it was exercised, and to reach a conclusion whether that purpose was proper or not. In doing so it will necessarily give credit to the bona fide opinion of the directors, if such is found to exist, and will respect their judgment as to matters of management; having done this, the ultimate conclusion has to be as to the side of a fairly broad line on which the case falls. It requested certain directors of North Flinders resign and be replaced by Paringa's nominees to give it control of the board. The board decided instead to make a takeover offer for Paringa and for another company financing the offers by a rights issue. Paringa requisitioned an extraordinary general meeting of North Flinders with a view to the replacement of certain members of the board. The meeting was scheduled for the last day permitted by the Code. Paringa instituted proceedings challenging the takeover offer and rights issue decisions on the basis they had been made for improper purposes. It obtained interlocutory injunctions restraining the offers and the issue pending the outcome of the proceeding. The trial judge also ordered that the extraordinary general meeting be adjourned to 57 days after discharge of the injunctions and that no other business be transacted at the meeting. The appeal was against that latter order. The question whether interlocutory injunctive relief was rightly granted in respect of the rights issues and the takeover offer did not fall for decision. That power is exercised, of course, by means of a general meeting of the shareholders. A reasonable period of time is permitted after requisition to enable the meeting to be arranged, that is to say, to put in place the mechanism whereby the shareholders can exercise their power. The directors are, of course, free to exercise their powers during that interval, but the reality is that from the time a meeting is requisitioned for the purpose of replacing them, especially where it is requisitioned by a controlling shareholder, they are caretaker directors. If they choose to make use of the interval to circumvent the known wishes of the controlling shareholder who seeks to replace them, they cannot complain, in my view, if circumstances supervene to prevent them from so doing. It may be that in such circumstances the pursuit of a rights issue will be scrutinised closely with a view to determining whether it is made for the improper purpose of simply protecting the directors' position by creating a new majority prior to the requisitioned meeting. That does not require the adjectival metaphor "caretaker" to be attached to the directors in such a circumstance. It simply requires an analysis of their powers, duties and purposes. 90 Owen J considered the decision of the Full Court of the Supreme Court of South Australia in Woonda Nominees Pty Ltd v Chng (2000) 34 ACSR 558. After referring to the judgment of King CJ and the passage quoted above and also the decision of Giles J in Utilicorp NZ Inc v Power New Zealand Ltd (1997) 8 NZCLC 261,465, his Honour referred to the submission that he should find "... that there is no principle of caretaker directors in Australian law" (at 568). The use of an adjectival metaphor does not define a doctrine and can best be regarded as a shorthand reference to the kinds of duties that may constrain the exercise of directors' powers in particular situations including circumstances in which an extraordinary general meeting for the removal of directors has been requisitioned. In my opinion, however, it should be treated with great caution. Such usages which are taxonomical or descriptive, rather than conveying principle or doctrine, have arisen in other areas of the law: see eg the discussion of the term "discretionary trust" in Chief Commissioner of Stamp Duties (NSW) v Buckle [1998] HCA 4 ; (1998) 192 CLR 226 at [8] . 92 In Austin RP, Ford HAJ and Ramsay IM, Company Directors Principles of Law and Corporate Governance (LexisNexis, Butterworths, Australia, 2005) at 2.55, the learned authors observed that if there is a principle of caretaker directors it may be thought essential to confine its operation to situations where there is a high degree of certainty that the directors would be removed at the general meeting of the company. Otherwise any such principle could be used by disaffected minority shareholders to disrupt the management of companies. 93 I would not be prepared to rest upon the very uncertain proposition of a "doctrine" of caretaker directors, a conclusion that there is a seriously arguable question, simply because of the requisitioned EGM, the directors lacked power to embark upon the rights issue. I do not regard such an absolute proposition as being of sufficient strength to warrant the grant of injunctive relief. I regard the existence of such a "doctrine" as highly questionable. What I do not regard as questionable is that, in the circumstances in which an EGM has been requisitioned and with a reasonable prospect that the directors may be removed, a rights issue to protect their position would be made for an improper purpose and would, subject to balance of convenience considerations, attract injunctive relief. In so saying I accept that my views both of the law and of the facts are provisional at this interlocutory stage. 94 The question whether there is a serious question to be tried in this case, in my opinion, reduces substantially to the question whether the directors have acted for improper purposes in entering into the agreement that they had with Mr Vassileff and his associated interests and in proceeding with the rights issue. 95 In my opinion, on the material presently before the Court, which may be incomplete and has not been tested by cross-examination, I cannot be satisfied that there is a sufficiently arguable case of improper purpose to justify the grant of interlocutory relief. The history of the matter outlined earlier in these reasons discloses dissatisfaction on the part of a significant body of shareholders with the current board of directors. It also discloses a board which has endeavoured to find a solution to the pressing difficulties facing the company in both the short and the long term. The two most pressing issues have been the need to discharge or renegotiate the NAB facility and to obtain ongoing working capital. 96 The matters to which Chimaera points are not sufficiently indicative of an improper purpose on the part of the directors to enable me to conclude that there is a case of any strength against them. It may be that there is an arguable case, but not a case that I would describe as "seriously arguable". And even if it is, it is not so strong as to justify the grant of interlocutory relief having regard to the disruption to the rights issue and third party interests that could occur. The evidence does not point to any persuasive conclusion that acceptance of the Vassileff proposal was anything other than a bona fide judgment of what was in the company's best interests. It dealt with the NAB facility problem and also with the requirement for ongoing working capital. It did not solve the long term issues which undoubtedly face the company, but it was open to the directors to conclude that none of the other alternatives would resolve those issues as well. Of course the aggrieved shareholders could take the view that a change in board membership was necessary to bring about the kind of change in direction which they regarded as essential to the company's future. However the evidence does not enable the conclusion to be drawn, about the effect on the company's interests one way or the other, of a change in membership of the board. 97 The Kobold "offer" to make underwriting arrangements which was advanced by Jonathan Remta was done for "strategic purposes". It was done by a party who was opposed to the rights issue proceeding. The non-acceptance of that very generally expressed offer was not indicative of an improper purpose on the part of the existing directors. Nor would I put any weight on their failure to use the services of the Chimaera subsidiary under the Engagement Agreement. The content and legal effect of the agreement was debatable. If there has been a breach then the company will have its remedy. However the directors were entitled to take the view that the Chimaera subsidiary was hardly an independent party in relation to the services which it offered. 98 There was nothing in the choice of underwriter by the directors to support an inference that the underwriter would not be independent. The evidence does not disclose any basis upon which it could be inferred with any confidence by the directors or any reasonable observer, that the rights issue will actually lead to a new majority of shareholders. 99 The timing of the EGM which effectively allows the rights issue to proceed does not of itself support the proposition that the rights issue was for an improper purpose protective of the directors. That might be so if it was clear that the rights issue would lead to a changed majority. That is not at all clear. 100 The rights issues prices the shares at historically low levels. However the board papers proffer a reasonable explanation for that pricing, namely to maximise the chance that the necessary funds will be raised. 101 The balance of convenience assessment discloses factors on both sides of the argument. The existing shareholders may face dilution of their shares. But evidence about the value of the shares based on the market share of the company was simply inadequate to allow any conclusions to be drawn from it even for the purposes of these proceedings. There is nothing to suggest that shareholders will not have an opportunity to seek shortfall allotments under the underwriting. In fact given the recent history of the company its existing shareholders may have the greatest interest in so doing. 102 If the allotment of shares pursuant to the rights issue is effectively blocked pending the EGM, there will be effects on third parties and a delay in raising the necessary funding for the company. Moreover it is not clear that the company's legal obligations to parties subscribing for the rights issue would in any way be altered pending the final relief pursued by Chimaera. No doubt further interlocutory orders would be sought to maintain some sort of status quo pending the final relief sought. 103 In my opinion, while it may be said that there is an arguable case raised against the directors, I regard it, on the materials before the Court, as a weak case. Having regard to the weakness of the case the balance of convenience is not sufficiently weighted in favour of Chimaera or disaffected shareholders to justify the grant of the interlocutory relief which is sought. I certify that the preceding one hundred and four (104) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.

directors' powers and duties extraordinary general meeting requisitioned for removal of directors rights issue authorised by directors claim for interlocutory injunctive relief to restrain allotment on rights issue alleged improper purpose alleged oppressive conduct whether serious question to be tried balance of convenience whether a caretaker director doctrine applicable whether doctrine exists whether evidence sufficient to raise seriously arguable case of improper purpose on part of directors seriously arguable case not made out claim for interlocutory relief dismissed corporations

The factual matrix is one of some complexity. The amended statement of claim the subject of a strike out application by Mr George, the thirteenth respondent, extends to 180 pages. After the hearing of the application, leave was granted to amend the amended statement of claim. The Commission now proposes a further amended statement of claim that extends to over 200 pages ('the pleading'). While apparently accepting that some of the proposed amendments overcome specific matters of concern, Mr George maintains his application to strike out the pleading. While Mr George brings the application, it will be relevant to other respondents. 2 I will deal with those parts of the pleading that relate to Mr George and to which attention was drawn by counsel to the extent necessary to deal with the alleged defects. Broadly, the pleading alleges contraventions of the Act by a group said to consist of over 100 corporate members ('the APP Group'). Four of those alleged members are named and joined as respondents in the proceeding, namely APP Australia and the tenth to twelfth respondents. Allegations against Mr George are as principal and accessory. What I set out does not represent the detail of the pleading but is sufficient, as a broad summary, to raise the context of the complaints by Mr George. Those complaints include a complaint as to the form of the pleading, which used a "group device" to describe the activities of a number of groups defined in the pleading. Those groups are said to have engaged in conduct in contravention of the Act. Further, Mr George raises questions as to the content of the pleading in so far as it draws conclusions and contains insufficient material facts. The APP Group is defined in paragraph 1.5 of the pleading to mean the tenth to twelfth respondents, APP Australia and the companies which participated in the operations defined in paragraph 1.14. Paragraph 1.14 defines "business operations of the APP Group" as the operations pleaded at paragraphs 29 to 32. That section of the pleading is headed "Business operations of the APP Group". In summary, the business is said to be of vertically integrated pulp and paper producers and producers of manufactured pulp and a range of paper products at mills in and outside of Indonesia. In the circumstances, the internal operation of the companies in the APP Group gave rise to a relationship of agency whereby the corporate entity and its servants and agents who conducted the business of the APP Group in Australia, being APP Australia, did so on behalf of and with the authority of the tenth to twelfth respondents. These include the "April Group" and the "AAA Club". The April Group is defined in paragraph 1.10 to mean the first to fifth respondents and the companies which participated in the operations pleaded. Some but not all of the attenders of the AAA Meetings are identified in the pleading. 8 The allegations are that Mr George, ' on behalf of the members of the APP Group ' engaged in dialogue with the second respondent as representative of the April Group and with representatives of two other groups as to the prices at which they supplied folio and cut-size paper in the Australian Paper Market. The AAA Club members were said to have formed an arrangement or understanding between themselves, including within the April Group the second to fifth respondents and members of other groups, to set prices for the supply of folio and cut-size paper products to customers in each of the geographic markets in which members of that Group supplied those products ('the AAA Club Agreement'). 9 A series of allegations are made as to the operation of the AAA Club and the activities of its members without all of the underlying material facts. That direction, consent or agreement was originally said to have been within the authority of APP Australia and the tenth to twelfth respondents "as the case may be" (paragraph 50B of the amended statement of claim). Mr George is said to have engaged in that conduct on behalf of the APP Group, including each of APP Australia and the tenth to twelfth respondents. 11 Further allegations are made as to meetings of the AAA Club members pursuant to the AAA Club Agreement, attended by each of the April Group participants by an unknown representative. After one such meeting in December 2000 each of those persons is alleged to have determined or given directions as to prices for the supply by their respective group of folio and cut-size paper in markets including the Australian Paper Market so as to maintain average prices in accordance with their "Target Prices" arranged at the meeting. Mr George points out that the APP Group is defined in a way that does not permit him to ascertain which entities are or are not in the group. The allegations in the pleading are directed to the activities of the group rather than to the activities of the individual members. Those allegations are elements of the allegations of accessorial liability in alleged contraventions of the Act by APP Australia and the tenth to twelfth respondents and of the allegations as a principal contravenor. Mr George is said to be the agent of the APP Group and his conduct is said to be that of APP Australia and of the tenth to twelfth respondents. 13 The APP Group controlled and supervised APP Australia, the actions of which were said to be stipulated, directed and determined by the APP Group. The action of named individuals, including Mr George, are then said to be the actions of the APP Group, where only four out of more than 100 corporate entities are specified. The use of the APP Group device masks, Mr George says, the amorphous and ill-defined nature of the group. 14 The pleading links the APP Group to the tenth to twelfth respondents who are said to carry on business in Australia. This, according to Mr George, is for the purpose of enabling the Commission to take advantage of s 5 of the Act and extend the ambit of the case to extra-territorial conduct. However, it is only by the complexity of the pleading and the linkage through the APP Group and, by that means, to companies incorporated in Australia, that the tenth to twelfth respondents which are incorporated outside Australia are said to carry on business in this country. 15 Mr George points out that it is clear from the pleading that not every member of the APP Group carries out each of the actions referred to as, for example, they are located in different countries and some are distributors of others. It is, he submits, not clear which members of the group are said to carry out which actions and which members take direction as alleged from a centralised management structure. If each member of the APP Group acted on behalf of the other members it is necessary, he says, to know the identity of those other members. He contends that the pleading should specify the composition of the APP Group in order to be able to determine the prices in relevant markets as charged by each of the entities and whether each or any such price was one "determined" by or the subject of directions by Mr George. The crux of this part of Mr George's complaint is that, where the pleading makes the allegations against Mr George, he is entitled to know what the APP Group comprises. Mr George says that the pleaded structure is so amorphous and the detail of it so minimal that he is unable to plead to it. 17 Mr George submits that the essence of this allegation in the pleading is not a relationship between him and specified companies as well as unknown companies, where the relationship between Mr George and the specified companies may be sufficient to give rise to the alleged contraventions. This, he says, is a case where the relationship is said to be between Mr George and the APP Group as a single entity, where the entity is made up of over 100 corporate entities, largely unknown. 18 The Commission points to the allegation in paragraph 50B that the representatives of the APP Group went, with the authority of, at the direction of, and with the consent and agreement of the APP Group including named respondents, to the relevant meetings. Mr George did not attend the meetings but is alleged to have been involved in fixing the prices pursuant to the resolutions of the meetings. The group included the specified four members. Through their membership of the group, those corporate respondents are liable. Mr George is then said to be accessorially liable, through APP Australia, for the actions of that company and the APP Group as a whole. He is also said to be directly liable as an individual involved in the supply of paper products by the APP Group in Australia. 21 The pleading describes a group comprising a number of members. Four of those members are specifically identified. Mr George accepts that a properly pleaded case that APP Australia and the tenth or twelfth respondents did certain things for which Mr George was accessorially liable would not be exceptionable. His objection centres around the Group device. He seeks to strike out all references to the group. The practical effect of this is to strike out the whole pleading. 22 The membership of the class of persons who are members of the April Group are identified by reference to their participation in activities. The activities are, in turn, defined as activities of the April Group. The definition is circular. 23 It is, however, permissible to plead that a person, as a member of a group, engaged in conduct with other identified members of the group even if all of the members are not identified. The pleading is sufficient if the conduct is linked to the identified parties. The pleading may be sufficient if the conduct is sufficiently identified, whether or not all of the parties to the conduct are identified, so that the person against whom the allegation is made knows the material facts constituting the conduct to enable that party to respond to the allegation. The pleading is insufficient if it alleges conduct or participation by unnamed parties where there are no material facts to identify the conduct alleged to enable a responsive pleading. It is necessary for the responsive party to understand sufficiently the case being made against that party. 24 The Commission submits that it is arguable that, as in a case of criminal conspiracy, a person may be liable under s 45 of the Act for conspiring with persons unknown. Similarly, it is arguable that a person may be liable for having an understanding restricted to the conduct to be pursued by one of the parties without any element of mutual obligation so far as the other party or parties to the understanding are concerned ( Morphett Arms Hotel Pty Ltd v Trade Practices Commission (1980) 30 ALR 88; Trade Practices Commission v Email Limited (1980) 43 FCR 383). The Commission also says that a meeting of minds does not require the identity of the other party or parties to be known, as long as there is sufficient material from which it can be inferred that Mr George had a meeting of minds with another person. 25 The Commission submits that, where it can prove conduct which contravenes the Act and the evidence gives rise to an inescapable inference that there was an arrangement and understanding made and implemented by a process of groups coming together, there is no rule of pleading that denies to the Commission a trial of that case. The Commission relies upon its right to adduce facts which, unless contradicted, generate inferences that the activities complained of were engaged in on behalf of members of a group, some of whom have been joined as respondents. 26 It is not to the point, the Commission says, that there are allegations in the pleading that Mr George conspired with certain named persons and persons unknown, based upon acts and conversations in which he was not a participant. There may, it submits, still be a finding of common purpose as alleged. The nature of the pleading reflects the nature of the case alleged, "a clandestine compact". 27 The Commission says that the pleading states that the Commission can prove that there was a series of meetings over the period stipulated. For some meetings it can identify the individual who represented APP and it can identify the prices agreed. It can prove, by fact or by inference, that Mr George, in Australia, was aware of the meetings, provided input to those meetings and implemented the prices agreed. 28 If the device of identification of the parties by reference to a group is used, that does not mean that the pleading is automatically deficient. If, however, that device masks the absence of sufficient material facts to describe the conduct said to have been engaged in, it will not save a defective pleading. 29 The pleading concerns allegations of price fixing cartel conduct. The Commission contends that the use of the group device is no artifice but derives from the manner in which Mr George and other members of the alleged groups (including the April Group and the APP Group) conducted their commercial affairs. The Commission relies in part on evidence of the usage by Mr George of terms such as "April" and "APP" in a context that substantiates a group identity. The Commission also contends that the concept of groups was central and essential to the commercial activities in which Mr George was engaged on behalf of the APP Group. Consequently, it submits, he must be well able to discern the case against him in this regard. 30 A key basis of Mr George's attack on the pleading is that it does not identify all of the members of the APP Group. That alone does not render the pleading unarguable or liable to be struck out. I do not see that the pleading of a group with some members identified is, of itself, objectionable. As the argument developed, Mr George agreed that one would not necessarily have to name every member of the group. Mr George narrowed the complaint to the aspects of the pleading that alleged that he took directions from members of the APP Group when those persons were not identified and made him both a member of the group who took direction and part of the directing mind and will of the group. 31 In Houghton v Arms [2006] HCA 59 ; (2006) 225 CLR 553, the High Court referred to Hamilton v Whitehead [1988] HCA 65 ; (1988) 166 CLR 121 where the High Court rejected the submission that a person who subsumes his personality in a company cannot be guilty both as a principal offender in his corporate persona and as an accessory as an individual ( Houghton at [45]). Mr George relied on a number of authorities that would argue against this proposition. However, in relying on this proposition, the pleading cannot be said to be unarguable so that, to the extent that it alleges liability both as the principal and as accessory, it should be struck out. 32 The fact that all members of the relevant groups are not identified does not render the pleading liable to be struck out. The conduct is sufficiently identified and linked to the relevant parties to the extent that they are known. I am not satisfied that the use of the "group device", the manner of pleading the actions by reference to a group, means that Mr George cannot understand and meet the case made against him. The pleading in paragraphs 29 to 33 alleges that the APP Group carried on certain business operations. The conduct of the APP Group's business operations were alleged to be under the direction of the APP Group. The APP Group is alleged to have controlled and supervised the day to day management of APP Australia and the operating procedures under which it carried on business activities. It is then alleged that the internal operation of the APP Group gave rise to a relationship of agency such that APP Australia conducted the business of the APP Group on behalf of and with the authority of the tenth to twelfth respondents. APP Australia was the agent of each of the other members of the APP Group. 34 Broadly, the Commission alleges that AAA Club meetings occurred for the purpose of coordinating prices in various markets, including but not limited to Australia. At some meetings the attenders have been identified. Some of the meetings were attended by the fourteenth respondent who was a servant or agent of APP Australia. APP Australia then implemented the agreed prices. Accepting that the Commission cannot identify all of the members of the group and that the pleading alleges directions by unidentified members, the Commission relies upon Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 3 All ER 918. The Commission says that Meridian stands for the proposition that the process of determining whether a particular individual's act or knowledge is attributable to a corporation is complex and is based on all of the evidence. The Commission emphasises that this is established by the evidence, not the pleading. 35 The Commission submits that a pleading of a conclusion is not necessarily objectionable; a pleading alleging agency is not objectionable ( Kernel Holdings Pty Ltd v Rothmans of Pall Mall Ltd [1991] FCA 557 per French J at 7). It submits that the pleading represents a reasonable articulation of the case which is sought to be tried. A conclusion of agency will depend on the evidence to be adduced. 36 The Commission submits that an allegation that action was taken by an unknown servant or agent is not liable to be struck out, nor does the fact that the pleading does not specify the person who appointed the agent. The Commission cited various authorities for these propositions. In those circumstances, the Commission submits, it cannot be said that the allegations cannot amount to the conspiracy alleged and the claim should not be struck out ( Adsteam Building Industries Pty Limited v The Queensland Cement and Lime Company Limited (No 4) [1985] 1 Qd R 127 per McPherson J at 133). 37 Mr George contends that the cases relied on by the Commission are not apposite. However, he has not established that the absence of identification is sufficient to cause that part of the pleading to be struck out. 38 From subsequent submissions, it would seem that Mr George does not complain about the lack of specificity of the pleading of agency. He does, however, contend that there are insufficient material facts in relation to the allegations of the tenth to twelfth respondents carrying on business in varying parts of Australia. 39 The pleading of agency is not liable to be struck out despite the matters raised by Mr George. His assertion of insufficient material facts is dealt with below. Mr George submits that the pleading impermissibly consists of conclusions and fails to plead material facts. In relation to paragraph 41A of the pleading as an example, Mr George complains that matters are pleaded as particulars rather than material facts, although he does not say that he does not understand the matters alleged. 41 As was said by Sackville J in Seven Network v News Ltd [2003] FCA 388 at [21] material facts, not conclusions, must be pleaded with a sufficient degree of specificity, having regard to the subject matter, to convey to the opposite party the case that party has to meet. His Honour observed that it must be apparent on the face of the document that the facts pleaded if proved would establish the cause of action relied on. An example given by Sackville J at [22] was that a mere assertion that an agreement contained a provision that had the purpose or effect of substantially lessening competition is not a proper pleading. It is not suggested by the Commission and it would not cure the pleading if Mr George could request further particulars ( Australian Wool Innovation Ltd v Newkirk (2005) ATPR 42-053 at [20]-[25]; Shelton v National Roads & Motorists Assn Ltd (2004) 51 ACSR 278 at [18]-[22]). The pleading of a conclusion without underlying material facts is liable to be struck out ( Australian Wool Innovation, Shelton ). 42 As was observed by Young J in Cadence Asset Management Pty Ltd v Concept Sports Ltd (2006) 58 ACSR 435 at [35]---[37] a cause of action can be pleaded at different levels of generality depending on the nature of the case and the subject matter and most pleadings set forth the material facts at a level which involves some element of conclusion. However, broad conclusions asserted at such a high level of generality that the opposite party cannot understand the case he or she has to meet are not sufficient. 43 In anticipation of a claim by the Commission that the complexity of the case and the fact that the Commission cannot identify in proper fashion the precise case it hopes to make out until after discovery, Mr George maintains that it is necessary properly to plead the case ( Gold Coast City Council v Pioneer Concrete (Qld) Pty Ltd (1998) 157 ALR 135 at 154 per Drummond J). A badly pleaded case cannot, Mr George submits, be allowed to stand in the hope that the gaps and deficiencies will be remedied by subpoenas and discovery. He submits that a right to seek particulars is no answer and, in any event, the Commission has apparently provided such particulars as it can provide. He submits that if that is not the case, the Commission should provide such available particulars and, if there are none, the offending paragraphs and then the entire pleading should be struck out. The Commission has included as a particular, a reservation of a right to supplement the particulars after discovery. 44 Mr George says that it is simply not sufficient to plead that a company is "carrying on business". He relies on what was said by Merkel J in Bray v F Hoffman---La Roche Ltd [2002] FCA 243 ; (2002) 118 FCR 1 at [62] to the effect that carrying on business is a question of fact that may be affected by agency, location and control by another party. There is a difference between a subsidiary carrying on its own business or whether it is carrying on the business of the parent company. At [72] his Honour observed that, where there is an integrated global enterprise, a subsidiary which is subjected to the exercise of control or influence of the parent should be viewed as carrying on business in Australia as agent of the parent. Justice Merkel emphasised the different factors that would be relevant to a determination of whether the relevant activities are those of the agent or those of the parent. While Mr George says that each of the material facts should be pleaded, it is apparent from the discussion in Bray that the whole of the evidence must be considered in order to come to a conclusion. 45 As was pointed out by McPherson J in Adsteam (at 133) direct evidence in a case of conspiracy is rarely available to the person alleging it. Proof generally rests on inference deduced from acts done in pursuance of the apparent common purpose. His Honour observed that this may mean that evidence of the actual making of the agreement cannot be provided but what can be given are particulars of the acts relied upon to justify the inferences sought to be drawn. 46 The Commission asserts that it has pleaded sufficient specific acts on the part of Mr George. He can respond to allegations that identify conduct in which he engaged together with the tenth to twelfth respondents. The pleading now specifies a greater degree of specificity so far as Mr George's alleged conduct is concerned. The Commission contends that Mr George should be able to respond to those allegations to the extent that they relate to his actions, whether or not all of the other participants in the activity are identified. 47 The Commission accepts that parts of the pleading state conclusions and are of a general nature. It submits that such pleading may still define the issues and inform the respondents of the case they have to meet. In the present case, the Commission says that a level of generality is appropriate and that a conclusion may also be a pleading of a material fact ( Kernel Holdings per French J; State of Queensland v Pioneer Concrete [2003] FCA 1454 ; (1999) ATPR 41-961 per Drummond J). It submits that this, like Pioneer , is a case in which it is unnecessary to strike out a conclusionary pleading. It is not, the Commission submits, a question whether the facts pleaded are sufficient in themselves to give rise to a cause of action but whether it would be open on the pleadings to prove the facts at the trial which would constitute a cause of action (Pancontinental Mining Pty Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405 per Beaumont J at 414). The Commission submits that it has pleaded the overt acts of the alleged conspirators and the conclusion. The Commission says that, taken together, this leads to the conclusion that there was an arrangement or understanding which contained a provision of the type impugned. 48 Central to the Commission's submissions is the principle that in a modern form of pleading some generality and the pleading of conclusions are allowable. Further, the Commission submits that in claims of conspiracy sought to be proved by inference from acts done in pursuance of the apparent common purpose, it may be appropriate to defer the provision of particulars until after appropriate discovery or not require them where they are within the knowledge of the respondent ( Stanley v Layne Christenson & Co [2006] WASCA 56 per Wheeler J [50]). It may also be appropriate simply to require the Commission to put on its evidence. 49 It is relevant that this is a complex case, alleging cartel behaviour. This necessarily involves pleading conduct the effect of which is known and some of the alleged participants identified, but where information cannot be provided until after discovery and subpoenas. I do not consider that the Commission has impermissibly pleaded conclusions, although some conclusions are present in the pleading. The pleading sets out, with sufficient clarity, the case against Mr George. The same applies to other specific paragraphs referred to by Mr George. The concern expressed was not really as to the form of the pleading, which may not be susceptible to a strike out, but as to the lack of real detail. He fears that the Commission will attempt to fill the gaps in the case by the process of rolling discovery and subpoenas. Mr George is not alleged to have been present at any of the AAA Club meetings. He is not alleged to have been present when the alleged arrangements were made and understandings arrived at. His alleged knowledge and actions in contemplation of the arrangement or understanding must, therefore, be based on inferences. Mr George complains that there are no material facts pleaded from which those inferences are invited to be drawn. He wants those facts, matters and circumstances to be included formally in the pleading and not provided as particulars, as offered by the Commission. 51 Counsel for Mr George freely acknowledged that the gravamen of his complaint was that the Commission would use the form of pleading and the reservation of the right to add more "particulars" to engage in a process of subpoenas and discovery, involving substantial time and money, in order to pursue a case that the Commission does not know exists. He submits that the Commission should be limited to the present pleading. The Commission accepts that it cannot allege conclusions and then use the processes of discovery and subpoenas to find the information to support those conclusions. 52 This pleading is sufficiently complex and it is not unusual for such facts, matters and circumstances, which may be described as material facts, to be provided by way of particulars. In a pleading of this complexity and length, that alone is not sufficient to strike out the pleading. A formal provision of particulars binds the Commission so that there is no prejudice to Mr George in receiving the information in that form. In declining to strike out the pleading on this basis, I take note of the objections. They can be dealt with and the limits of the pleading can be taken into account if discovery and subpoenas are sought. The sufficiency of the pleading can be reassessed, if necessary, after these steps are taken or after evidence is filed. It is not alleged that Mr George was present at AAA Club meetings or that he was actively involved in the arrangements or understandings there achieved. No material facts are provided of that knowledge. Similarly, it is alleged that conduct engaged in by Mr George was in contemplation of actions of AAA Club members, without any material facts. Mr George submits that the facts, matters and circumstances from which the alleged knowledge is to be inferred must be provided. If it is said that he had some knowledge after the event of the alleged arrangements or understandings that cannot, he submits, without more, constitute a contravention by him of the Act, either as a principal or as an accessory or, as pleaded in paragraph 195F, make him party to a conspiracy to contravene s 45(2)(a)(ii) or s 45(2)(b)(ii) of the Act. 54 In answer to Mr George's assertion that the pleading of knowledge on the part of Mr George does not comply with the principles of Yorke v Lucas [1985] HCA 65 ; (1985) 158 CLR 661, the Commission relies on Giorgianni v R [1985] HCA 29 ; (1985) 156 CLR 473 and contends that the pleading of the allegations of aiding, abetting, counselling and procuring the making of the alleged agreement complies with the principles applicable to accessorial conduct in Giorgianni . 55 Generally, as to conduct alleged on the part of Mr George, the pleading seems to contain typographical errors or relate to conduct by others. Mr George seeks orders that permit the amendment of the pleading to correct any errors. He submits that it should not occur by way of particulars, bearing in mind that it identifies the conduct said to amount to a contravention of the Act. 56 The basis of the attack on the pleading is that Mr George cannot identify from it the case made against him and cannot make a responsive pleading. A pleading is required to be sufficient to enable Mr George to know the nature of the case being made against him. If, assuming the facts pleaded have been established, it is apparent that the Commission case cannot succeed, the pleading is liable to be struck out. Where this is not apparent or where the Commission's case is not able to be identified from the pleading, it would be appropriate to strike it out. 57 From a reading of the pleading, I am able to discern the case against Mr George. The Commission has provided a diagrammatic representation of its case by reference to the paragraphs of the pleading. While that is a separate document in the nature of an aide-memoire, it confirms the structure of the pleading and the links between the paragraphs. To the extent that this document and the way the case was described by the Commission during argument, confines or clarifies the case, Mr George has the benefit of that explanation in a forensic sense. Those matters could be more formally confined if he thought it appropriate. They do not substitute for the pleading but support the understanding of the case gleaned from the pleading itself. 58 I do not propose to strike out a pleading in a case of this complexity because material facts are pleaded as particulars. The case to be met is not rendered unclear because the pleading has been framed in this way. The Commission has also, in the pleading, corrected a number of typographical errors in the amended statement of claim. However, that paragraph has been amended in the pleading. With the amendment, paragraph 50B.2 is susceptible of a response by Mr George. 63 Mr George did not attend the AAA Meetings. However, it is alleged that each person who did, did so with his consent or agreement. To the extent that the paragraph alleges matters without reference to Mr George, if he does not know whether or not the allegation is true or false, he can plead to it as a non-admission. 64 The Commission has amended a number of paragraphs of the pleading to clarify the involvement and alleged conduct of Mr George. Since those amendments have been proposed, some of his specific concerns have been met. Mr George says that the pleading should include all particulars, including those requested and answered. That, in my opinion, imposes an undue burden on the applicant. Further, it is impractical to require a complete amended pleading each time that a request for particulars is made and answered. It is by no means uncommon to deal with necessary particulars in correspondence. It may be the case that, at the appropriate time, they should be incorporated in a final amended pleading. The parties accept that the effect of paragraphs 177 and 179 in this part of the pleading is to bring conduct occurring outside Australia within the reach of the Act by the operation of s 6(2)(b) of the Act. Mr George contends that s 6(2)(b) does not give the Act extra-territorial operation. He relies upon authority such as R v Australian Industrial Court; ex parte CLM Holdings Pty Ltd [1977] HCA 6 ; (1977) 136 CLR 235 at 234---235 and Zhu v The Treasurer of New South Wales [2004] HCA 56 ; (2004) 218 CLR 530 at [96] in support of that proposition. He submits that s 6(2)(b) provides wider constitutional support for the Act but does not operate to bring conduct carried on outside Australia within the ambit of the Act. 66 The Commission contends that there is authority to support the proposition that s 6(2) does extend the application of the principal provisions of the Act to corporations while they are engaged in overseas trade and commerce ( CLM Holdings at 244; Seamen's Union of Australia v Utah Development Co [1978] HCA 46 ; (1978) 144 CLR 120 at 136---137; Meyer Heine Pty Ltd v China Navigation Co Ltd [1966] HCA 11 ; (1966) 115 CLR 10 per Menzies J at 38). It submits that, with the changing times and more experience with cartels, the High Court may adopt an "effects test" to competition law jurisdiction. The Commission's submission is that this is a novel question in an area of law that is still developing. It accepts that cases and texts relied upon by Mr George, such as Zhu contain dicta and comment in support of his position but submits that there is no binding authority on the point. The Commission concedes that the dicta in Zhu is contrary to its case on the application of s 6 of the Act. However, it points out that the point has not been fully argued and that there is authority, including what it describes as a powerful dissenting opinion in the High Court to supports its contention. 67 The Commission says that full and extensive argument on the effect of s 6 of the Act is necessary to determine the question. That, in turn, will be affected by findings of fact made at trial. Strike out procedures should not stultify the development of the law. The question is an important one and should be determined in the ordinary course to enable the law to be determined, if necessary on appeal, in the context where the factual issues are also determined. 69 As was observed in Johnson Tiles at [50] , it is inappropriate to decide such a question on hypothetical facts, or as a separate question, where the answer would not determine the proceedings or mean that Mr George or any other respondent would be removed as a party to the proceedings. I accept that the question has not been fully considered and answered. It is not appropriate to strike out these paragraphs as manifestly bad or fatally flawed or unarguable. Such particulars as have been and will be provided outside the pleading can be incorporated into a further amended pleading at the appropriate time. The matter is complex as is not unexpected in a case of the type as advanced by the Commission. It has already been amended following the hearing of the strike out application in response to matters raised by Mr George. Rather than engage in a further paragraph by paragraph analysis of the pleading, it may be appropriate to require the Commission to file its evidence before requiring the respondents to file their defences. I will hear from the parties as to that possible course. I will hear from the parties as to the appropriate order for costs. I certify that the preceding seventy one (71) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett.

amended and further amended statement of claim subject of strike out application by thirteenth respondent conduct sufficiently identified and linked to relevant parties case against respondent sufficiently clear pleading of conclusions and material facts whether particulars must be included as part of pleading complex pleading question of extra-territorial operation of s 6(2) of trade practices act 1974 (cth) should be determined in ordinary course practice and procedure

On 9 September 2005 the Applicant entered into an agreement with Australian Health Management Group Limited ('AHM'). That company was registered as a company limited by guarantee on 21 December 1988. 2 The Applicant is a friendly society within the meaning of s 16C(1) of the Life Insurance Act 1995 (Cth) ('the Act'). It is also a jointly regulated friendly society within the meaning of s 16ZB(2) of the Act. The constitution of the Applicant provides for the Applicant to provide health and welfare benefits and other benefits to members of the Applicant. 3 A person becomes a member upon that person becoming a benefit fund member under clause 6.3 of the constitution. 5 The Applicant has three benefit funds, namely, a Health Benefits Fund, a Funeral Benefit Fund and a Blue Chip Endowment Assurance Fund. Its Health Benefits Fund had some 1611 members as at 30 June 2005 but because some memberships were family memberships the overall number of persons in the fund as at 30 June 2005 was 2807. The net assets of the Applicant's Health Benefits Fund were $1.991 million as at 30 June 2005. 6 AHM on the other hand, had a health fund which, as at 30 June 2005, had 233,392 members with net assets of $123.369 million. It may be readily inferred from the foregoing that the latter fund is, from an administration point of view, more economic than the Applicant's fund. A number of factors led to the conclusion that it was in the best interests of members of the Applicant's fund that the business of that fund should be transferred to AHM. 7 These included: (a) the Applicant's fund had an ongoing difficulty in meeting capital adequacy ratios required of it by the Private Health Insurance Administration Council ('PHIAC') and had been obliged to obtain financial support from the Applicant's management fund; (b) the Applicant's fund had an ageing membership and had not attracted any new younger members for some time; (c) the Applicant's fund's fixed costs contributed to higher management charges than currently existed with many other health funds; (d) the Applicant's fund only offered a limited range of tables to its members; and (e) the Applicant's fund did not have facilities which have become commonplace among other health funds which if introduced into the Applicant's fund would require substantial capital investment. 8 On 18 August 2005 the Applicant resolved to transfer the business of its Health Benefits Fund to AHM and on 9 September 2005 an agreement was entered into between the Applicant and AHM for the sale of that fund. Under clause 4.1 of the agreement, the price payable was to be the value of the net assets of the relevant fund as at the date of completion and a mechanism was put in place for the determination of that amount. 9 Under clause 5 of the agreement, provision was made for the price for the fund to be applied in two ways. Firstly, 50% was to be paid to the Applicant to be credited to its Management Fund and secondly, 50% was to be applied by way of the provision of additional benefits to continuing members of the Applicant's fund in accordance with schedule 4 to the agreement. Schedule 4 provided for the proceeds of the account in which the moneys were to be invested to be applied for the benefit of the members of the Applicant's Health Benefits Fund in the form of lower premiums until 31 December 2008 or until such time as the balance in the relevant account fell below $100,000, whichever should first occur, whereupon the balance in the account was to be returned to AHM for its own use and benefit. 10 The agreement did not expressly deal with the manner in which the Applicant was to deal with that one half of the purchase price which was to be credited to its Management Fund. The Applicant's Management Fund was established and maintained in accordance with clause 10 of its constitution. The proposal was that the one half of the purchase price credited to the Management Fund would work for the benefit of members of the Health Benefits Fund in this way. It was contemplated that a new benefits fund would be established which would provide an investment bond for each member of the Applicant's Health Benefits Fund. It was contemplated that this fund would be accessible to members of the Applicant's Health Benefits Fund after the expiration of three years from its establishment through to ten years after its establishment and, if not earlier withdrawn, the benefit of the individual members' entitlements under the new benefit fund would be paid out to them at the expiration of the ten year period. 11 The Act contains a somewhat unusual s 16ZC which permits modifications to be made to the Act by the regulations made under s 253 of the Act. Under schedule 6 to the Life Insurance Regulations 1995 (Cth) ('the Regulations') further modifications were made to the Act in relation to jointly regulated friendly societies. By virtue of these amendments no part of the Applicant's health insurance business was capable of being transferred to another organisation except under a scheme confirmed by the Court (see s 190(1A)). 12 Part 9 of the Act entitled 'Transfers and amalgamations of life insurance business' applies to the transfer of the Applicant's Health Benefits Fund to AHM. The relevant statutory provisions for present purposes are ss 189 to 194 of the Act. Apart from the modification to s 190 to which I have referred, further modifications were made to ss 191(2)(a) and 193 of the Act by schedule 6 to the Regulations. 13 The sections in question require an Applicant for confirmation of a scheme to give a copy of the scheme and any actuarial report on which the scheme is based to the Australian Prudential Regulation Authority ('APRA'), PHIAC and the Minister for Health and Aging. By letter dated 22 March 2006, which bears the stamped date 23 March 2006, APRA approved a summary of the Scheme, advised its requirements in respect of publication of Notice of intention to apply for confirmation of the Scheme and approved the form of the Notice of intention to apply for confirmation of the Scheme for advertisement purposes. Those rules related to the investment of one-half of the purchase price which was to be paid to the Applicant's Management Fund under clause 5.1(a) of the agreement. 16 By an application filed in Court on 2 March 2006, the Applicant sought confirmation of the Scheme, a copy of which was annexed and marked "A" to the application. Whilst the application was filed on 2 March 2006, the formal application of the Applicant for confirmation of the scheme was not made until today. The Applicant, as a company affected by the scheme, was entitled to bring the application in accordance with ss 193(1) , (2) and (4) of the Act, and APRA, PHIAC and the Minister for Health and Ageing are entitled to be heard on the application. 17 When the matter was called for hearing earlier today, the Minister did not appear. However, appearances were announced for APRA and PHIAC. APRA advises that it has examined the scheme, obtained satisfactory answers where clarification has been sought and supports the application. PHIAC is of the view that the transfer of the Applicant's health insurance business is in the best interests of the contributors to the Applicant's Health Benefits Fund and will not disadvantage the contributors to the health benefits fund of AHM. 18 The Act provides for the publication in the Gazette and in newspapers of Notice of intention on the part of the Applicant to make the application. APRA's requirement was that, not only should there be publication in the Gazette , but also in The Australian newspaper and the Sydney Morning Herald newspaper. I am satisfied that due notice of intention to make the application was published as required. 19 The Act also requires an approved summary of the Scheme to be given to every affected member of the Applicant's Health Benefits Fund. I am satisfied that this requirement was complied with when a summary approved by APRA was sent to the affected members. Under s 191(4) of the Act, affected members were entitled to be provided with a copy of the Scheme free of charge in the event that they requested same. The evidence of Ms Nai is that nine members requested a copy of the scheme. She handed a copy to one such member and posted, by express post, copies to the other eight members. 20 The form of the Scheme so provided was as indicated in exhibit A33 which was marginally different from that attached as annexure A to the application as filed. Two actuaries have expressed opinions about the scheme. The current financial statements indicate that AHM is financially sound and this is supported by your auditor. In my opinion the interests of the benefit funds (other than the HFIB fund) will not be diminished by the transfer. I have reviewed the financial position of AHM and, assuming the audited financial statements and AHM's actuarial assessments are sound, I regard AHM as being in a sound financial position. The extremely small size means there is a much greater risk of significant adverse experience than would be expected in a much larger organisation. Larger organisations exhibit less volatile claims experience. They also gain the greater security that comes with being part of a larger fund. I understand that the costs incurred for the transfer will be charged to the health fund and net assets will be assets after these charges. Half of these net assets will be applied in the form of a contribution discount and the other half will be passed to Acorn Prudential Ltd and placed in a new benefit fund for ex Acorn Prudential Ltd health fund members. Each member will receive the same benefit entitlement. The members are I believe advantaged by the transfer. Hence none of these members will be disadvantaged by the transfer. Given the involvement of APRA in the process which has lead to the hearing today, the absence of any requirement on the part of APRA for an independent actuary to make a written report on the scheme in accordance with s 192(1) of the Act, the position taken by APRA and PHIAC in relation to the application and the lack of any opposition from any affected member along with the support for the scheme by AHM, I am of the view that an order for confirmation of a scheme should be made. 26 The approved summary of the Scheme is to be found in exhibit A34. Those members who requested a copy of the scheme were provided with a copy of the document which is exhibit A33. Whilst APRA, PHIAC and the Minister had copies of the agreement made 9 September 2005 and the benefit fund rules proposed in respect of the new benefit fund to be established with one-half of the purchase price at all material times, nevertheless copies of the agreement and of those rules were never made available to the members requesting a copy of the Scheme in accordance with s 191(4) of the Act. 27 In the light of the judgment of Katz J in The Application of Royal & Sun Alliance Life Assurance Limited [2000] FCA 1259 at [7] - [12] and the decision of Emmett J in Re Armstrong Jones Life Assurance Limited (1997) 74 FCR 160 at 163, I am satisfied that the application for confirmation of the scheme made today is competent, even though the formal application was filed on 2 March 2006 and notwithstanding the provisions of s 191(2) of the Act and the relevant provisions of the Regulations. My only concern has been as to whether the Scheme, the confirmation of which has been sought, sufficiently sets out the terms of the agreement under which the proposed transfer is to be carried out. 28 On one construction, s 190(3)(a) of the Act would require the Scheme to set out verbatim all of the provisions of the relevant agreement. The contrary construction, for which senior counsel for the Applicant contends, is that the section will be complied with if the salient terms of the agreement referable to the transfer are set out in the Scheme. When one has regard to the fact that the agreement, amongst other things, deals with the administration in the future of the Applicant's Funeral Fund, I am inclined to accept the submission of senior counsel for the Applicant that the construction for which he contends is correct. 29 Notwithstanding my satisfaction that the Scheme contained in exhibit A33 satisfies the requirements of s 190(3) of the Act, I think that confirmation of that scheme should be subject to two modifications, namely the attachment of a copy of the agreement made 9 September 2005, which is exhibit A6, and also a copy of the approval of benefit fund rules of APRA dated 13 April 2006 and the schedule thereto, which is part of exhibit A40. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.

application for transfer of a health benefits fund conducted by a jointly regulated friendly society confirmation of scheme under the life insurance act health

His Honour dismissed a claim that the respondent had contravened s 52 of the Trade Practices Act 1974 (Cth) ("the Act "). On 13 September 2005 the Acting Chief Justice ordered, pursuant to s 25(1A) of the Federal Court of Australia Act 1976 (Cth), that the appeal should be heard and determined by a single Judge. He was employed by the respondent between 15 May 2000 and 31 December 2002. He was employed initially to undertake a research project in the respondent's Department of Anatomy and Cell Biology. Subsequently the appellant commenced work on another project within the Department. 3 The department forms part of the University's Faculty of Medicine, Dentistry and Health Sciences. In April 2002 the appellant had a conversation with Professor Angus, the then Deputy Dean of the Faculty and Head of the Department of Pharmacology. The appellant wished to pursue a further research project relating to diabetes. It involved the study of the effect of diabetes on blood vessels. The appellant spoke to Professor Angus because Professor Angus's approval was needed for the project to proceed. Although the appellant had secured the agreement of a pharmaceutical corporation --- The Pharmacia Corporation - to fund the research, the appellant needed laboratory space within the university and access to some expensive equipment and to human muscle tissue from the legs of diabetes patients. The appellant alleged that, at a meeting on 18 April 2002 and at various other times between then and December 2002, Professor Angus represented to him that the respondent had the necessary equipment to perform the proposed experiments ("the equipment representations") and that, subject to certain amendments to a proposed agreement between the appellant, the respondent and the pharmaceutical corporation, the respondent would proceed with the project and provide the equipment and human tissue necessary for its conduct ("the project representations"). Professor Angus denied making such representations. The learned Magistrate found that the alleged representations had not been made. Its availability depended on Dr Lew's willingness to provide it for use by the appellant. It is highly likely that Professor Angus did say to [the appellant] that there was equipment available but that Dr Lew's permission would be needed. Professor Angus would not have promised to make the equipment available because he could not give that promise. He could only discuss it as a potential source of equipment and I find that that is what he did. Professor Angus did not make a promise about the equipment. --- Yes, he said that he had colleagues he could approach and source the tissue from them. In fact, it is a correct statement if it is qualified by saying that the tissue could be supplied if the colleagues were prepared to provide the tissue, the patients consented and ethics approval was obtained. It is not the same as a promise to supply the tissue. It suggests that [the appellant's] statement that Professor Angus promised to supply tissue is [the appellant's] interpretation of what occurred, not his recollection of the actual statement. It was not for him to make the decision about supplying the tissue. This could only be done with the permission of patients and the cooperation of the surgeons conducting operations. Professor Angus was well aware of this. [The appellant's] evidence was that he showed the research proposal to Professor Angus at the meeting on 18 April 2002, but did not leave it with him. It is most unlikely, even assuming that Professor Angus had noted the number of tissue samples needed from looking at the proposal, that Professor Angus would have said there and then that he could arrange for their supply. Professor Angus was not in a position to make any promises. The proposal was at an early stage. The terms of agreement with Pharmacia had to be negotiated. Professor Angus was not given the opportunity to study the proposal. It is improbable that any promise was made. However, no challenge to his findings relating to those other representations are made on this appeal. The principal ground relied on was cast in negative terms. It was that the Federal Magistrate had erred in failing to find that the equipment representations and the project representations had been made by the respondent. It was contended that these failures were against the evidence and the weight of the evidence and were not reasonably open on the evidence. The other two grounds which were pressed alleged error on the part of the Federal Magistrate in his application of ss 51A , 52 and 53B of the Act . Each of these grounds can only succeed, as counsel for the appellant properly conceded, if the Magistrate erred in finding that the representations had not been made. 8 The respondent has filed a notice of contention. The respondent contends that the Federal Magistrate did not deal with the question of whether the appellant relied on any of the alleged representations and submitted that, had he done so, he should have upheld the respondent's defence on the additional ground that there was no evidence of any reliance on such reprsentations by the appellant to his detriment. The respondent further contends that there was no evidence to support the Magistrate's finding that, had the representations been made, the appellant would have suffered loss, calculated by reference to what he would have earned had he commenced employment with an alternative employer on 1 January 2003 rather than 15 April 2003. It was submitted that the Magistrate had ignored documentary evidence which he says supports the claim that the representations had been made at other times as well in the period between May and December 2002. That list identifies the equipment which it is said was necessary in order to conduct the diabetes research project. Professor Angus acknowledged receiving the list. • A letter dated 21 May 2002 from Professor Angus to Professor Frank Larkins, the Deputy Vice Chancellor, Research of the respondent. In that letter Professor Angus recorded that he had been approached by the appellant in relation to the proposed research project, referred to the proposed contract and funding arrangements and advised that he supported "this potential research contract ...". The appellant says that the letter contained an unqualified and unconditional representation that the project had Professor Angus's full support. • A note taken by Professor Angus about a meeting he had with the appellant on 16 August 2002. The note contained a passage stating that "only minor equipment $5,000 would be purchased. " This notation is said to be consistent with the alleged representation that all the other equipment contained in the list provided to Professor Angus in April 2002 was available and that its availability was not subject to the prior approval of Dr Lew. • A passage in an affidavit, sworn in the proceeding by Professor Angus on 13 August 2004, in which he deals with the 16 August 2002 meeting. • A memorandum from the appellant to a university officer, dated 26 August 2002 and endorsed by Professor Angus, advising that, if the appellant were to leave the university, the research money provided by the pharmaceutical company would not be allocated to faculties "and only minor equipment will be purchased in <$5,000 values. " This is said to be an unqualified representation that the necessary equipment was available because there was no reference to the need to obtain Dr Lew's consent. • An email dated 19 December 2002 from Professor Angus to the appellant in which Professor Angus "confirms [his] previous conversation with [the appellant] that I am unwilling to sign the contract and scope of work on the grounds that I will not be able to guarantee that I can provide either the equipment or access to human tissues as set out in the project. " The appellant contends that this email should be read as if the words "any longer" appeared after the word "unwilling". It is submitted that, if the email is so read, it confirms the existence of a prior representation that the equipment would be available. • What is described by the appellant as a "self serving" letter from Professor Angus to Professor Larkins dated 16 January 2003. The letter explained Professor Angus's reasons for refusing to sign the research contract. In that letter Professor Angus advised Professor Larkins that he had approached Dr Lew seeking his agreement for the appellant to use Dr Lew's equipment and that, on 17 December 2002, Dr Lew had said that he would not share the equipment. This meant that new equipment would have to be purchased if the project were to proceed. Professor Angus also said that it had become clear to him, following a discussion with the appellant on 13 December 2002, that he (Professor Angus) would have to organise the collection of tissue with surgeons because the appellant had "no existing collaboration with a clinician. That representation was that all necessary equipment, save for some minor items costing less than $5,000, was available for use in the appellant's proposed project. This, it was contended, was a representation of present fact which was false. Alternatively, it was a representation as to future fact which was unreasonably made and was misleading. He says that the Magistrate's findings in para [67] of his reasons relate to the equipment representations and not the alleged representation that the equipment would be provided. He further complains that there is no finding in his Honour's reasons as to the alleged representation that it would proceed with the diabetes project. 13 The appellant contends that the evidence supported the conclusion that the equipment representations had been made. Attention was also drawn to his evidence that he might have said that he would discuss the possible sourcing of human tissue with the surgeons. • Notes taken by Professor Angus of a meeting with the appellant on 19 July 2002 which contain further reference to surgeons and other potential sources of human tissue. • A statement by Professor Angus in his affidavit that he told the appellant on 13 December 2002 "that [he] had not taken any steps to get access to the necessary human tissue. " This, it was said, was inconsistent with Professor Angus's evidence at trial that he had never offered to source the tissue. • The contents of Professor Angus's email to the appellant on 19 December 2002 which is quoted above at [9]. The statements in the email are said to be inconsistent with the alleged earlier promise to take active steps to source tissue. • The observation by Professor Angus, in his letter to Professor Larkins dated 16 January 2003, that Dr Lew's refusal to provide a myograph was "not in itself a road block" to the project proceeding. It is said that such a statement starkly contradicts the Federal Magistrate's finding that the provision of the equipment necessary to carry out the diabetes project was always subject to the qualification that Dr Lew would agree to provide that equipment. • Professor Angus's letter to Professor Larkins dated 16 January 2003. The appellant relies on the fact that Professor Angus, in that letter, did not assert that he could not get the tissue. Rather Professor Angus complains that he would need to take a primary role in obtaining it, which, he implies, he did not wish to do. It is said that, notwithstanding the fact that particulars subjoined to the paragraphs of the statement of claim in which the making of the respective representations was alleged referred to conversations and correspondence in the period between April and December 2002, the appellant's case at trial was conducted on the footing that both representations had been made by Professor Angus during the meeting on 18 April 2002. 15 The respondent further contends that, in any event, the material relied on by the appellant does not provide evidence of the making of any representations of the kind alleged. 16 The respondent pressed the point, raised in its notice of contention, that there was no evidence that the appellant had relied on any alleged representations to his detriment and that the assessment of damages which was undertaken by the Federal Magistrate was mistaken and that, even if it were found that one or both the representations had been made, no compensable damage resulted. It alleges that the respondent "represented to the [appellant] that it had the necessary equipment available to perform the experiments set out in the research proposal ..." The particulars subjoined to that paragraph assert that the equipment representations "were made orally and in writing by Professor James Angus ... in conversations and correspondence with the [appellant] in or about May through December 2002. No application to amend the wording of para 17 of the statement of claim was made at trial. 19 Notwithstanding the form of the pleadings, the appellant's case at trial was opened to the Federal Magistrate on the basis that both representations had been made by Professor Angus in his discussion with the appellant on 18 April 2002. Although some reference was made in the opening to some of the subsequent exchanges between them, it was not contended that further or additional representations were made on those occasions. In April 2002 the [appellant] approached Professor James Angus of the university with a view to obtaining approval to conduct the research which was the subject of the diabetes project. At this point Professor Angus is provided with a document which had been prepared by the [appellant] which I'll ultimately tender in evidence ... and has extensive discussions with Professor Angus about the project and in the course of that meeting Professor Angus says to the [appellant] (1) that the respondent would support the project. (2) that the respondent had the required equipment necessary to carry out the project. I interrelate there at the same time the [appellant] had also provided to Professor Angus a list of the scientific equipment that he would require to carry out the research. Thirdly and importantly Professor Angus had access to the necessary human tissue samples necessary to carry out the project and would procure those samples for the applicant. Relying on those representations the applicant proceeds to put in place the contract with Pharmacia. As a result of the misleading and deceptive conduct the [appellant] has suffered loss and damage. • It was not part of the appellant's case that Professor Angus had said that the project would proceed. What he had said was that he would "support" the project. • No clear distinction was drawn between the equipment representations and the project representations. 21 In his final address counsel for the appellant asserted that Professor Angus had "made two crucial representations. The first was that he could source the tissue and the second was that the university had the equipment necessary to carry out the research. " He went on to stress that it was these representations that had led the appellant to continue negotiations with the respondent and the pharmaceutical company in the latter part of 2002 rather than proceeding with negotiations to take the project to another institution. 22 The case presented by the appellant at trial was narrower than that pleaded. It invited the Federal Magistrate to make findings as to whether Professor Angus had told the respondent, on 18 April 2002, that the university had the necessary equipment available for use by the appellant and that Professor Angus had also told the appellant that he (Professor Angus) had access to the human tissue samples which were needed to carry out the project and would procure those samples for the appellant. 23 There was an unfortunate lack of precision in the way in which the appellant's case was presented at trial. The equipment representation as it was opened was that the university had the equipment which would be needed by the appellant to conduct his research. There appears to be no dispute that this was an accurate statement. Apart from a few small and relatively inexpensive items, the equipment was held by the university and was in the custody of Dr Lew. Critically, however, no mention was made of the equipment being available despite the way in which the equipment representation was defined in para 16 of the statement of claim. Once it had been established that the equipment was physically present within the university, the next (and more critical) question was whether it would be available for use by the appellant. It was alleged that one of the project representations was that the equipment would be made available. To this extent the two representations, relied on at trial, overlapped. In these circumstances it is hardly surprising that the Federal Magistrate dealt with them together. In my view this is what he did in para [67] of his reasons (set out above at [4]). Although he found in terms that it was highly likely that Professor Angus told the appellant "that there was equipment available " it is implicit in that finding that the university held the necessary equipment. The Federal Magistrate, therefore, did deal with the equipment representations. He then went on to find that Professor Angus had qualified his statement about the availability of the equipment by saying that Dr Lew's permission would be needed before a decision could be made as to its availability for use in the appellant's project. The Magistrate thereby dealt with that part of the project representations relating to the equipment. 24 The Federal Magistrate dealt with the project representations, insofar as they related to the appellant's contention that Professor Angus had promised to procure the human tissue samples, in his reasons at paras [69] --- [72] (set out above at [5]). He found that it was improbable that any such promise was made at the meeting on 18 April 2002 and explained his reasons for coming to this conclusion. No unqualified promise could have been made at the time of the meeting given that the only way of obtaining the tissue required the cooperation of surgeons and patients and the approval of an ethics committee. None of this could occur until Professor Angus was seized of the full details of the proposed project. These were not supplied to him on 18 April 2002. 25 The remaining representation (forming part of the project representations) which the appellant complains was not dealt with by the Federal Magistrate was an alleged representation by Professor Angus, on 18 April 2002, that the respondent would proceed with the Diabetes Project. The Federal Magistrate did not, in his reasons deal with this alleged representation. This is hardly surprising given that it formed no part of the appellant's case at trial. The case was opened and concluded on the basis that Professor Angus had gone no further than expressing his "support" for the proposed project. 26 It is not open to the appellant, on this appeal, effectively to advance a case that was not run at trial. This is so, even if the case which it is now sought to run can be supported by reference to particulars contained in the statement of claim. He is bound by the way in which his application was prosecuted at trial: see Water Board v Moustakas [1988] HCA 12 ; (1988) 180 CLR 491 at 497. It cannot, fairly, be asserted that the Federal Magistrate fell into error by failing to deal with aspects of the appellant's pleaded case which were not presented at trial. 27 In any event, I do not consider that the appellant's claim that representations were made on occasions other than the 18 April 2002 meeting can be sustained. I have examined each of the documents relied on by the appellant (listed above at [9] and [13]) and the evidence relating to those documents. At best for the appellant, some of them may, arguably, contain statements which might be said to be consistent with the appellant's allegation that the relevant representations were made at the meeting on 18 April 2002. None of them contained evidence of any separate representations of the kind alleged being made at other times. The Federal Magistrate did not overlook this material. Most of it is referred to in his reasons at paras 18ff. He was not invited to find that any of this material evidenced the making of either of the representations at other times and he did not do so. 28 In my view the Federal Magistrate did not err. It was open to him, on the evidence and the case presented to him, to conclude, as he did, that the alleged representations had not been made by Professor Angus on 18 April 2002. 29 In these circumstances it is not necessary to pursue the other two grounds pressed by the appellant on this appeal or the issues raised by the respondent in its notice of contention. 30 The appeal should be dismissed with costs. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY.

appeal from decision of federal magistrate misleading or deceptive conduct representations as to employment appellant sought approval from a delegate of the respondent to conduct a research project dispute of fact whether representations made by the respondent in respect of the research project whether federal magistrate erred in failing to find that the representations had been made aspects of appellant's pleaded case on appeal not raised at trial no appellable error in federal magistrate's decision trade practices

The respondent to the appeal is the Secretary, Department of Education, Employment and Workplace Relations. The appeal is brought under s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act"). The appeal under that section is limited to an appeal on a question of law. The decision of the Tribunal dealt with the applicant's entitlement to a newstart allowance under the Social Security Act 1991 (Cth) ("the Act"). The applicant received a newstart allowance from on or about 19 September 1997 to 4 May 2006. The payment of the allowance was cancelled on 4 May 2006 on the ground that the applicant was not unemployed and therefore he was not entitled to receive the allowance. A debt was raised against him for the payments he had received during the above period. Following a reconsideration of that issue, the debt was calculated at $74,835.71 in respect of the period from 24 July 1998 to 4 May 2006. On 24 August 2006, the applicant lodged a new claim for a newstart allowance pursuant to the Act. That claim was rejected. The decision to reject that claim was reconsidered, but the decision was affirmed. The applicant requested a review of the above decisions. On the review, the decisions were affirmed by an authorised review officer. The applicant then applied to the Social Security Appeals Tribunal ("SSAT") for a review of the decisions. The SSAT decided that the applicant was unemployed within the meaning of that term in s 593(1) of the Act during the period from 24 July 1998 to the date of its decision on 3 July 2007. The SSAT set aside all of the decisions under review and remitted the matters back to Centrelink to consider whether the applicant was otherwise qualified for a newstart allowance during all or any part of the period from 24 July 1998 to 3 July 2007. On 6 August 2007, the respondent applied to the Tribunal for review of the decision of the SSAT. The Tribunal decided to set aside the decision under review and, in lieu of that decision, the Tribunal decided that the applicant was not entitled to a newstart allowance during the period 1 July 2001 to 31 December 2005 and that the amount of the newstart allowance paid to him during that period is a debt due by him to the Commonwealth. In short, the basis of the Tribunal's decision was that the applicant's activities of buying, repairing and selling cars meant that he was not unemployed within the meaning of that term in s 593(1) of the Act. The Tribunal also decided that the decision to cancel the payment of the newstart allowance with effect from 4 May 2006 should be remitted to the respondent for reconsideration in accordance with the Tribunal's reasons, and that the decision to refuse the application for the newstart allowance lodged on 24 August 2006 should also be remitted to the respondent for reconsideration in accordance with its reasons. In order to understand the nature of the applicant's appeal, it is necessary to identify the key issues addressed by the Tribunal and its conclusions in relation to those issues. The first issue before the Tribunal was whether the applicant was "unemployed" within the meaning of that term in s 593(1) of the Act between 24 July 1998 and 4 May 2006. The Tribunal found that the intensity or level of the applicant's activities for the period from 1 July 2001 to 31 December 2005 was such that he was not "unemployed" within the meaning of that term in s 593(1) of the Act. The second issue was whether there were reasons to treat the applicant as unemployed notwithstanding that he had undertaken paid work. The Tribunal decided that there were no reasons within s 595(1) of the Act to treat the applicant as unemployed. The third issue was whether the applicant failed to satisfy the activity test within s 601(1) of the Act. The Tribunal rejected the contention that the applicant did not satisfy the activity test. The fourth issue was whether the applicant was erroneously exempted from the activity test for the periods from 14 November 1997 to 4 August 2000 and from 7 February 2000 to 7 August 2002. The Tribunal found that there was no basis for a conclusion that the applicant was erroneously exempted from the activity test during the said periods. The fifth issue was whether the newstart allowance was correctly cancelled with effect from 4 May 2006. As I understand the Tribunal's reasons, it found that the applicant was unemployed as at 4 May 2006, but could not determine if he satisfied the activity test at that time. The sixth issue was whether the debt should be waived or written off. The Tribunal concluded that there was no reason to write off all or part of the debt under s 1236(1A) of the Act, or to exercise the discretion to waive the debt under s 1237AAD of the Act. The seventh issue was whether the applicant's application for a newstart allowance lodged on 24 August 2006 was correctly rejected. Again, the Tribunal was satisfied that the applicant was unemployed as at 24 August 2006, but it could not be satisfied of the other necessary matters, including whether the applicant met the activity test. The applicant appeared before me in person. His notice of appeal identified eleven alleged questions of law. All but one of his alleged questions of law relate to the first issue. The eleventh alleged question of law relates to the sixth issue. On 30 April 2009, the applicant filed written submissions consisting of 112 pages. I will refer to this document as the applicant's written submissions. The respondent filed an outline of submissions consisting of 17 pages and the applicant filed written submissions in reply consisting of four pages. On 18 May 2009, which was two days before the date fixed for the hearing of the appeal, the applicant issued a notice of motion in which he sought an order giving him leave to amend his notice of appeal to add further questions of law. Such leave is necessary: Federal Court Rules O 53 r 3(4). The notice of motion was supported by an affidavit sworn by the applicant in which he alleged errors of law not stated in the notice of appeal. The notice of motion and affidavit of the applicant did not expressly articulate the questions of law that the applicant wished to raise in addition to those in his notice of appeal. Doing the best I can, the applicant appears to be seeking leave to raise three matters not in his notice of appeal. Each of the three matters relate to the first issue before the Tribunal. First, the applicant alleges that, in considering the level or intensity of his vehicle-related activities (a concept I explain below), the Tribunal failed to take into account what he called "hard" evidence suggesting that his activities were not at such a level or intensity as to justify a finding that he was not unemployed within the meaning of that word in s 593(1) of the Act. The applicant alleges that this evidence was "objective" evidence and it was not affected by whether his estimates of time were accepted. The evidence consisted of evidence of transactions on the applicant's American Express account as shown in his American Express statements. The applicant alleges that almost all of his purchases of paint and new parts were made on his American Express account and that the record of such transactions gave the best indication of the level or intensity of his vehicle-related activities. This particular matter is referred to in the applicant's written submissions (see, for example, pages 15-17 and pages 66-82) and was the subject of his oral submissions. Secondly, the applicant alleges that the Tribunal erred in the weight it accorded to advertisements the applicant placed in The Advertiser and the Trading Post for the sale of motor vehicles because the Tribunal double-counted the advertisements. In other words, some of the advertisements put before the Tribunal were in fact copies of the advertisements already before the Tribunal. Thirdly, the applicant alleges that the Tribunal erred in its analysis of the applicant's purchase of parts and materials. I will deal with these three matters after I have examined the eleven alleged questions of law in the applicant's notice of appeal. None of the three matters raise a question of law and none of them support a conclusion that the Tribunal has committed an error of law. The applicant's application for leave to amend his notice of appeal must be refused. He referred to the decision of Graham J in Secretary, Department of Employment and Workplace Relations v Joss [2006] FCA 884 ; (2006) 152 FCR 541. One of the principles the Tribunal formulated was that the question of whether a person is unemployed is a question of fact and degree, and regard should be had to the intensity with which the person applies himself or herself to particular work or a particular enterprise. There is no doubt that the question of whether a person is unemployed is essentially one of fact and degree to be decided having regard to the relevant principles: McAuliffe v Secretary, Department of Social Security [1992] FCA 483 ; (1992) 28 ALD 609. It was not suggested on the appeal that the Tribunal had applied the wrong legal test. The applicant purchased damaged cars at auction and then repaired them for his own use. He later conceived the idea of developing a small part-time business to make some extra money by buying damaged cars, repairing them and then reselling them at a profit. The Tribunal referred to the steps taken by the applicant from December 2000 onwards which, the respondent contended, were consistent with the applicant operating a business. There was detailed evidence before the Tribunal in relation to the acquisition and disposal of various vehicles during the period from 24 July 1998 to 4 May 2006. In his case before the Tribunal, the applicant distinguished between cars registered in his name for his personal use which were his property, cars registered in Ms Jolanta Kucmierz's name (a friend of the applicant), which were her property and which were either for her personal use or for their joint use, and, finally, cars purchased for the applicant's admitted business as a sole trader, which he said were his property. The Tribunal rejected such a distinction. It is apparent from Mr Skarzynski's evidence that he regularly purchased damaged cars, and then repaired them and onsold them, often within a comparatively short time of the repairs being completed. Many of the cars were purchased by him and onsold by him, after being registered in his name. In some cases vehicles were used by him for his personal use, but then sold after a relatively short period. I find that those vehicles nevertheless formed part of his business, and should not be excluded from my determination of his employment activity by characterising such vehicles as personal vehicles. In a significant number of other cases, the cars were purchased with funds provided by Ms Kucmierz, and after being repaired by Mr Skarzynski, they were registered in her name and sold, again usually within a short time of being registered, and after she had used them in the meantime. Some vehicles that had been purchased with the intention of using them for a joint holiday were sold after they had been so used. It is apparent that Mr Skarzynski and Ms Kucmierz intended, if possible, to resell the vehicles at a profit. Mr Skarzynski was actively involved in selecting, purchasing, repairing and selling the vehicles registered in Ms Kucmierz's name. I find that these combined activities constituted the carrying on by Mr Skarzynski of a business activity, which comprised the whole of the purchases and sales of the vehicles in question, whether they were ultimately used by him or Ms Kucmierz for personal purposes, or registered in his name or in her name. I accept that this was the position, but he could only achieve this by taking steps to select, purchase, repair and resell suitable vehicles at a profit. He admitted that he intended to make a profit. The purpose for which he used the resulting profit does not alter the character of his activities. I find that those activities constitute employment activities for the purposes of determining whether he was unemployed within the meaning of s 593(1) of the SS Act, especially as those activities were taking place at the same times as similar activities in relation to vehicles which Mr Skarzynski admitted were business activities, albeit on what he asserted to be a 'hobby' scale. The Tribunal said that, in case it was wrong, it was satisfied that the relationship was a joint venture. The Tribunal explained its reasons for reaching that conclusion, but it is not necessary for me to set out those reasons. The Tribunal set out a table reflecting information provided by counsel for the respondent which showed the number of vehicle purchases and sales and probable purchases and sales for the financial years ended 30 June 1998 to 30 June 2007. In determining the inferences or conclusions which should be drawn from this information, the Tribunal said that it took into account the following: Some vehicles were purchased for parts only. Some vehicles were found after purchase to be not worth repairing and were on-sold without any work being done on them. Some of the "vehicles" were trailers rather than cars. Some vehicles are still owned by the applicant. Some vehicles were purchased by the applicant for others and those vehicles were excluded. The Tribunal then assessed the activity which would have been associated with the purchases, repair work and sales. It noted that the time involved in those activities would have varied from one vehicle to another. The applicant had put before the Tribunal a lengthy document which he said represented his "side of the story". The document became exhibit R2 before the Tribunal. The Tribunal rejected the applicant's evidence (including his assertions in exhibit R2) as to the amount of time he spent on the purchase, repair and sale of vehicles. Whilst he sought to justify the false information he provided in connection with the two dealings with HomeStart Finance to which I have referred above on the basis that he needed funds to pay down his credit cards, and on the basis that his behaviour was little different from people obtaining mortgages through 'Lo Doc' loan applications, the fact is that he was deliberately untruthful in those dealings. He also included incorrect information in a report form sent to Centrelink in 2006, in which he falsely reported that he had worked for 6 hours (exhibit A1, T42, page 988). Those matters indicate a propensity to act dishonestly in order to achieve a financial advantage or to avoid a detriment. Further, the total number of vehicles which Mr Skarzynski and Ms Kucmierz acquired during the relevant period has emerged progressively as a result of the continuing inquiries made by the Secretary; Mr Skarzynski did not at first, even in exhibit R2, disclose particulars of all of the transactions that are potentially relevant to the extent of his activities. I consider that his evidence as to the time he spent on the activities related to the vehicles in question was unconvincing and unreliable, and find that in his evidence and in exhibit R2, he significantly under-estimated the time he spent on those activities. There is no reliable evidence before me on that issue in view of my assessment of Mr Skarzynski's evidence. The Tribunal said that, in the absence of credible evidence of the time actually spent on the relevant activities, the number of vehicles purchased, repaired and sold (subject to the matters identified in [23]-[24] above), and the activities normally associated therewith provided "an appropriate basis for assessing the intensity of his business activities". In reaching this conclusion, I take into account that (in addition to the numbers of vehicles acquired and sold during that period), some fifteen loans were made to him by Ms Kucmierz. Further, the evidence as to Mr Skarzynski's purchases of parts and materials indicates a more intense level of activity during the period to which I have referred, even if (as Mr Skarzynski states) those purchases are reduced by 50% so as to be confined to those effected by him. I refer in this regard to the summary in exhibit R2 at pages 31-35, and I note that the records there summarised are not complete, because they do not include purchases made in cash. I have also taken into account that during the above period, Mr Skarzynski also sold or endeavoured to sell parts from vehicles which he had purchased for their parts. I am satisfied that the level of Mr Skarzynski's activities went beyond what could fairly be described as a hobby or small scale business, designed as a supplement rather than as an alternative to wages, as Mr Skarzynski contends. The Tribunal addressed an assertion by the respondent that the applicant had a business relationship with a Michael Stockton during the relevant period and that that meant he was not "unemployed". Mr Skarzynski addressed each of these matters in exhibit R2. In particular, he explained his reasons for obtaining an Australian Business Number and registering for GST, for registering the business name ' Autocare Port Adelaide ', for listing that name in the telephone directory, for obtaining a telephone connection for premises at Aberdeen Street, Port Adelaide, for using those premises after he had purchased certain damaged vehicles, and for arranging for electricity to be provided to the premises. He also explained that for a number of years prior to the relevant period, and also during the relevant period, he had allowed Ms Kucmierz and Michael Stockton to use his American Express card, and he explained the arrangements he had with them for them to pay what they owed for purchases made by them with the card. I found some of Mr Skarzynski's explanations as to the above matters somewhat bizarre, but am not persuaded that the above matters in themselves prove that he had ceased to be unemployed (except for the period to which I have referred above), and I find it unnecessary to make any further findings in relation to those issues. It held that there was equity in the applicant's house and it could not be said that it would not be cost-effective for recovery action to be taken. I also take into account that he has a back condition that restricts his capacity for work. However, in matters where debts are raised for over-payment of benefits paid under the SS Act, the recipients of the benefits are frequently in difficult financial circumstances, and have health issues that are often more serious or of a more incapacitating nature than Mr Skarzynski's condition. I do not think that these matters constitute special circumstances, or that this is an appropriate case for the exercise of the discretion conferred by s 1237AAD of the SS Act. The relevant principles are well established and I refer to Brown v The Repatriation Commission [1985] FCA 194 ; (1985) 7 FCR 302 ; TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation [1988] FCA 119 ; (1988) 82 ALR 175 ; Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232 ; (2003) 38 AAR 55 ; Hussain v Minister for Foreign Affairs & Anor [2008] FCAFC 128 ; (2008) 169 FCR 241. The difference between a question of fact and a question of law has also been discussed in the authorities. Again, although there are sometimes difficulties in applying the relevant principles, they are well established and I refer to Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280; Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36 ; (1995-1996) 186 CLR 389. In the applicant's notice of appeal, the alleged questions of law and the grounds of appeal appear as one matter. I will, for convenience, refer to each matter as a ground. In some grounds where a finding of the Tribunal is identified, it is alleged that no reasonable person could have made the finding. That is not a ground upon which a finding of fact may be challenged. I have read those grounds as involving an allegation that there was no evidence to support a finding. This may be an allegation of a question of law. On analysis, many of the grounds of appeal involve challenges to findings of fact made by the Tribunal. In those cases where it is arguable a question of law is raised, the ground must be rejected because there is no error of law by the Tribunal. I have considered the applicant's written and oral submissions. I will not summarise all of them. Many of them discuss matters of fact. The applicant asks this Court to make findings of fact. For example, although it is difficult to compartmentalise the applicant's submissions, in his written submissions the first twenty pages deal with alleged errors of law and the balance of the submissions deals with the factual findings the applicant asks this Court to make. One of the pre-conditions for this Court to exercise the power to make findings of fact is that there be an error or errors of law. There are no errors of law in this case. The Tribunal found that the applicant's evidence was unconvincing and unreliable and that, in his evidence and exhibit R2, he significantly under-estimated the time he spent on the vehicle-related activities. The first ground is that, in connection with those findings, the Tribunal failed to comply with s 43(2B) of the AAT Act. These provisions have been considered in the authorities. The question whether the Tribunal has complied with s 43(2B) in a particular case is, I think, a question of law: Civil Aviation Safety Authority v Central Aviation Pty Ltd [2009] FCA 49 ; (2009) 253 ALR 263 at 271-273 [30] - [37] per Perram J. The question whether a failure by the Tribunal to comply with s 43(2B) is an error of law which vitiates the Tribunal's decision is not, as far as I can see, clearly answered by the authorities: Repatriation Commission v O'Brien [1985] HCA 10 ; (1985) 155 CLR 422 at 445-446 per Brennan J; Comcare Australia v Lees (1997) 151 ALR 647 at 658-659 per Finkelstein J; TelePacific Pty Ltd v Federal Commissioner of Taxation (2005) 58 ATR 441 at 451 per Sackville J; Lang v Comcare (2007) 44 AAR 370. The answer to the question may turn on an examination of the effect of the particular failure on the Tribunal's decision. I do not need to determine the question in this case because I have decided that the Tribunal did not fail to comply with s 43(2B). Since writing these reasons, I note that the Full Court of this Court held in Civil Aviation Safety Authority v Central Aviation Pty Limited [2009] FCAFC 137 that a failure by the Tribunal to comply with s 43(2) of the AAT Act is an error of law. However, the Court also held that a failure to comply with s 43(2) did not inevitably lead to an order setting aside the decision. Whether the decision is set aside will depend on the facts and circumstances of the individual case and the exercise of the discretion conferred by s 44(5) of the AAT Act. The obligation in s 43(2B) relates to the Tribunal's "findings on material questions of fact". On one view, the material question of fact on the particular issue of whether the applicant was unemployed within s 593(1) was the level or intensity of the applicant's vehicle-related activities judged by reference to the amount of time and effort he expended on those activities. The Tribunal made its decision with respect to that matter by drawing inferences from evidence it accepted. On one view, the Tribunal's conclusion that the applicant's evidence on this topic was unreliable was no more than the rejection of an item of evidence which might otherwise have assisted it in making its finding on a material question of fact. On this view, the Tribunal's conclusion on the reliability or otherwise of the applicant's evidence was not a finding on a material question of fact. Without pausing to discuss some of the issues which arise, I refer to Xu v Minister for Immigration and Multicultural Affairs [1999] FCA 1741 ; (1999) 95 FCR 425 ; Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323. I will not take such an approach because it seems to me that, in a case of this nature the better view is that the question of what is a finding on a material question of fact depends very much on the nature and circumstances of the decision. That was the approach taken by Stone J in Lang v Comcare (2007) 44 AAR 370. In this case, the applicant's evidence as to the time he spent on his vehicle-related activities was an important consideration in terms of a decision as to whether he was unemployed within the meaning of the term in s 593(1) of the Act. He was the only witness before the Tribunal who could and did give direct evidence on the issue. I do not think there is any doubt the Tribunal set out in its reasons its findings on material questions of fact relevant to the applicant's evidence of the time and effort he expended on vehicle-related activities. I refer to the passage in the Tribunal's reasons set out above (at [26]). The applicant's real complaint seems to be that the Tribunal's reasons did not contain a reference to the evidence or other material on which the findings were based. In summary, that evidence or other material was as follows: The applicant was deliberately untruthful in two dealings he had with HomeStart Finance, and he also included incorrect information in a report form sent to Centrelink. The dealings with HomeStart Finance involved the applicant signing forms in fictitious names and the preparation of fictitious pay-slips. The incorrect information in a report to Centrelink involved the applicant falsely reporting that he worked for six hours. The Tribunal found that those matters indicated "a propensity to act dishonestly in order to achieve a financial advantage or to avoid a detriment". The total number of vehicles which the applicant and Ms Kucmierz acquired from 24 July 1998 until 4 May 2006 emerged progressively as a result of enquiries made by the respondent, and the applicant did not at first, even in exhibit R2, disclose particulars of the transactions that were potentially relevant to the extent of his activities. Those matters are referred to in the same passage which contains the Tribunal's findings. Ground one raises a question of law, but the applicant's allegation that the Tribunal failed to comply with s 43(2B) of the AAT Act is not made out. In so far as there was an obligation on the Tribunal, aside from s 43(2B) of the AAT Act, to explain its reasons for rejecting evidence not directly contradicted by other evidence (see Suters v Australian Postal Corporation (1992) 28 ALD 320) , the Tribunal complied with that obligation. As part of ground one, the applicant submitted that the matters the Tribunal relied on could not justify the finding it made. First, he contended that because his dishonesty did not occur in his claim for the newstart allowance, or in the course of his evidence to the Tribunal, it should have been ignored. That contention is incorrect and his dishonesty was a matter the Tribunal was entitled to take into account. Secondly, he contended that the Tribunal erred in concluding that the total number of vehicles "emerged progressively". However, that is a challenge to a finding of fact and cannot be characterised as an error of law having regard to the fact that there was evidence upon which the Tribunal could make that finding. It is said by the applicant that an important part of the applicant's vehicle-related activities was the repair work carried out by the applicant himself. The first limb of the second ground is that there was no challenge to the applicant's evidence in this respect and that therefore the Tribunal's finding was made in breach of the rules of procedural fairness. The second limb of the second ground is that the Tribunal's finding that the applicant had underestimated the time he spent on vehicle-related activities was not based on any evidence. In so far as it is alleged that there was a breach of the rules of procedural fairness, that allegation must be rejected. The applicant's submissions in exhibit R2 indicate that he was aware that the time he spent on vehicle-related activities, including the repairs he did himself, was an issue. Furthermore, the issue was clearly raised with the applicant in cross-examination and was raised by the respondent in her oral submissions. I refer to the transcript for 17 October 2008 at page 41 and the transcript for 24 October 2008 at page 20. In so far as the complaint is that there was no evidence to support the Tribunal's finding, that must be rejected for the reasons given in relation to ground one. The third ground is that there was no probative material to support a finding that the applicant had significantly underestimated the time he spent on vehicle-related activities. This ground must be rejected for the same reasons given in relation to grounds one and two. The fourth ground is that the Tribunal was biased and had prejudged the applicant's evidence based on dishonest conduct by him in the past. This ground must be rejected. The Tribunal was entitled to rely on what it called a propensity "to act dishonestly in order to achieve a financial advantage or to avoid a detriment" and the fact that it did so does not indicate bias or prejudgment on its part. This finding was said to be so unreasonable that no reasonable person could make it. The Tribunal's finding was based on the following grounds: The applicant regularly purchased damaged cars and then repaired them and onsold them, often within a comparatively short time of the repairs being completed. Many of the cars were purchased by him and onsold by him, after being registered in his name. In some cases, vehicles was used by him for his personal use, but then sold after a relatively short period. In other cases, the cars were purchased with funds provided by Ms Kucmierz, and after being repaired by the applicant, they were registered in her name and sold, again usually within a short time of being registered, and after she had used them in the meantime. Some vehicles which had been purchased with the intention of using them for a joint holiday were sold after they had been so used. The applicant and Ms Kucmierz intended, if possible, to resell the vehicles at a profit. The applicant was actively involved in selecting, purchasing, repairing and selling the vehicles in Ms Kucmierz's name. Even accepting that the applicant's work on vehicles that he and Ms Kucmierz owned and that were used by them for their own personal use was carried out to minimise the high cost to them of owning a vehicle, the applicant could only achieve this by taking steps to select, purchase, repair and resell suitable vehicles at a profit and he admitted that he intended to make a profit. The purpose for which the applicant used the resulting profit did not alter the character of his activities. The Tribunal took the view that these findings or conclusions led in turn to the conclusion that all the vehicle-related activities carried out by the applicant constituted "employment activities" for the purpose of determining whether the applicant was "unemployed" within the meaning of that term in s 593(1) of the Act. In my opinion, there is no error in the reasoning of the Tribunal, let alone an error of law. The Tribunal was entitled to take into account what actually happened to the vehicles. It was entitled to take into account the applicant's intention (and that of Ms Kucmierz) in relation to vehicles allegedly purchased for personal use. It was entitled to proceed on the basis that the purpose for which a profit resulting from the purchase, repair and sale of a vehicle was to be used by the applicant did not alter the character of his activities. The applicant modified his challenge to the Tribunal's findings in his written submissions (page 84) and in his oral submissions. He accepted that it was not an error for the Tribunal to take into account some of his activities in connection with vehicles purchased for personal use, but that it was an error for it to take into account other activities. He drew a distinction between repairs, which he conceded it was appropriate for the Tribunal to take into account, and activities that a "normal" person purchasing a vehicle for personal use would engage in. As to the latter category, he submitted that the time spent on such activities should not have been taken into account. In the latter category, he placed attendance at auctions and other activities related to the purchase of a vehicle. I reject this submission. For the reasons previously given, there was no error associated with the Tribunal's findings. In truth, the applicant's attack is one directed to factual findings made by the Tribunal. The sixth ground of appeal is that the two findings are contradictory and thus the Tribunal's approach was illogical. In my opinion, this represents a challenge to findings of fact made by the Tribunal. In any event, the factual findings can be reconciled. The applicant was doing the repairs to minimise the high costs of owning a vehicle, but, in addition, he intended to make a profit on the resale of the vehicles. The latter finding was open to the Tribunal and is sufficient to justify the approach taken by it. In connection with that finding, the Tribunal said that the applicant admitted that he intended to make a profit. The seventh ground is that the applicant never made such an admission. This ground does not raise an error of law. In any event, as the transcript in the supplementary appeal papers shows, there was evidence to support the Tribunal's conclusion. The eighth ground is that this finding is so unreasonable that no reasonable person could make it. I have concluded that the other grounds of appeal must be rejected. The question which lies behind the finding challenged in ground eight is, as the authorities indicate, a question of fact and degree. In my opinion, it was clearly open to the Tribunal to reach the conclusion it did and this ground does not raise a question of law. The ninth ground is that the finding referred to in ground one is erroneous and that, as a result, the finding referred to in ground eight is erroneous. I have rejected grounds one and eight and, accordingly, this ground must be rejected. The tenth ground is that they are erroneous in view of the errors identified in grounds one to nine. I have rejected grounds one to nine and, accordingly, this ground must be rejected. The eleventh ground is that that finding was contrary to the evidence and that the finding should have been that there was no equity in the applicant's house. It followed, so the applicant submitted, that a finding should have been made that it would not be cost-effective for the Commonwealth to take action to recover the debt within s 1236(1A) of the Act. There was evidence to support the finding of the Tribunal and, in those circumstances, this ground does not raise a question of law. None of the three matters set out in the notice of motion and affidavit raise a question of law. I refer to my earlier summary of the three matters (at [12]-[14]). As to the first matter, that matter, on the face of it, is a challenge to a finding of fact. It cannot be characterised as an error of law on the basis that the Tribunal failed to have regard to the "hard" or objective evidence because the Tribunal did have regard to the evidence and I refer to the passage in the Tribunal's reasons set out in [27] above. Furthermore, the evidence was before the Tribunal and I refer to exhibit R2 at pages 31-35 where there is an extensive reference to the transactions on the applicant's American Express account and submissions as to the conclusions about the intensity or level of the applicant's activities which could be drawn therefrom. I note, for example, that the applicant set out tables showing purchases of paint from 1999 to 2005. As to the second matter, that does not raise an error, let alone an error of law. Even if it did, while that may have led to an error of fact, it did not constitute an error of law. As to the third matter, there is no reason to think the Tribunal erred in its analysis of parts and materials. Even if it did, there is nothing to suggest that such an error was an error of law. The matter related to the power in s 595(1) to treat a person as being unemployed in certain circumstances. Such a conclusion would be inconsistent with the authorities to which I have referred above, and with other authorities to the same effect, where the tribunal has concluded that the fact that relevant activities have not resulted in a profit does not mean that a person was unemployed. I have read the Tribunal's reasons carefully. I accept the respondent's contention that, when the Tribunal's reasons are considered as a whole, there is no error of law involved in the Tribunal's approach to the exercise of the power in s 595(1) of the Act. The Tribunal took into account the relevant considerations including the fact that it did not appear that the applicant's activities resulted in "any substantial profit or remuneration". The latter fact was not, in the Tribunal's opinion, sufficient of itself to justify an exercise of the discretion in the applicant's favour. That was an approach which was open to the Tribunal and one which did not involve error. I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

appeal from decision of administrative appeals tribunal rejecting applicant's claim to newstart allowance under social security act 1991 (cth) where tribunal found that applicant was not unemployed for purposes of s 593(1) of social security act 1991 (cth) where applicant purchased, repaired and then sold motor vehicles at a profit where tribunal rejected applicant's evidence as to time he spent on vehicle-related activities whether tribunal committed error of law by failing to set out findings on material questions of fact or by failing to refer to evidence or other material which supported its findings as required by s 43(2b) of the administrative appeals act 1975 (cth) whether tribunal committed error of law by denying applicant procedural fairness or because there was no probative material to support its findings of fact or because it was biased in taking into account the applicant's previous acts of dishonesty administrative law

I will take the Earlier Reasons as read and will use the abbreviated forms of reference that I used in them. At [372]-[375] of the Earlier Reasons I invited submissions as to the issue whether the questions raised were questions of law and as to costs. The parties do not seek to argue that the questions considered in the Earlier Reasons were other than questions of law. I am content to proceed accordingly. However, they say that there is an aspect of Contention 2.11 that remains unresolved. ASIC's Notice of Contention in so far as it related to Contention 2.11 was addressed at [318]-[319], [335]-[342] and [356]-[363] of the Earlier Reasons. Question (2) in ASIC's Notice of Contention was set out at [318] of the Earlier Reasons. Apparently it was framed by reference to the terms in which the Tribunal had expressed itself. As a result, the Earlier Reasons, in so far as they addressed Question 2, have left unresolved a certain question touching Contention 2.11 that divides the parties. The parties join in asking me to resolve that question. Initially, however, they differed as to the mechanism and as to the result. ASIC initially submitted that the preferable course was not that a new question be posed and answered, but that the Court provide supplementary reasons for rejecting certain submissions made by Mr Gould. ASIC submitted, however, that if there was a "need to answer a further question", that question should be in a form different from that proposed by Mr Gould. It is not the role of the Court to provide an advisory opinion. Initially ASIC did not seek to amend its Notice of Contention. Mr Gould did not seek to amend either his Further Amended Supplementary Notice of Appeal in the Appeal Proceeding or his Amended Application in the Review Proceeding. I caused the proceedings to be relisted on 5 August 2009. In order to show the utility of an answer to Question 2A, I will first refer to the background. The Trinbay DOCA did specify circumstances in which that DOCA was to terminate. Clause 18.1 of that DOCA provided that it should terminate on the "Termination Date". That expression was defined in cl 1.1 of the DOCA to be the date on which the first of three possible events occurred. Those three events reflected paras (a), (b) and (c) of s 445C set out above. In substance, they were: the making of an order by the Court under s 445D; the passing of a resolution by the creditors terminating the DOCA at a meeting of creditors convened under s 445F; and the day 30 days after the making of a Final Distribution by the DOCA administrator. The expression "Final Distribution" was defined in cl 1.1 of the DOCA, when read with cl 9.1, to be the first and final payment of a dividend to the creditors who were admitted to proof under cl 12 of the DOCA, out of the property described in cl 9.1 remaining after payment of the costs of the administration. As at 2 April 2003, Mr Gould was of the opinion that the DOCA administration had "concluded". In my opinion, upon the proper construction of the Trinbay DOCA there could not be a first and final dividend payment by Mr Gould to the Participating Creditors without an actual payment of money by him to them. Mr Gould appears to have shared this view when (on 6 February 2008) he made the statements set out in the preceding paragraph in his written statement of evidence in the proceeding before the AAT, although later in that written statement of evidence he referred to a possibility of "a final distribution (of nil)". Two cases relied on by Mr Gould are distinguishable. They are Barclay Mowlem v Tesrol Walsh Bay [2004] NSWSC 1232 and Commissioner of Taxation v Ryan (1998) 82 FCR 345 ( Ryan) . Neither concerned a payment of a final dividend to creditors. Mr Gould's submissions did not refer to the decision of the High Court on appeal in Ryan which, if anything, is unfavourable to his argument (see Commissioner of Taxation of the Commonwealth of Australia v Ryan [2000] HCA 4 ; (2000) 201 CLR 109). The intention to be found in the Trinbay DOCA is that in the absence of an actual payment, it would be a matter for the creditors, or for the Court upon application by a person referred to in s 445D(2), whether the DOCA was to terminate. But even if, as Mr Gould contends, there could be a first and final dividend payment by him to creditors of "nil", as at 2 April 2003 that had not occurred, and there was no suggestion in Mr Gould's evidence before the AAT that it was ever going to occur. On any reckoning, there would have to be a communication from Mr Gould to creditors if there was to be a dividend payment of "nil" by him to them. Clause 3 of the prescribed provisions was set out at [315], and the relevant parts of it repeated at [336], of the Earlier Reasons. Clause 3 distinguishes between continuing to carry on Trinbay's business and implementing the DOCA. The former is a reference to Trinbay's business prior to execution of the DOCA. On the evidence before the AAT, the business of Trinbay was the staging of theatrical productions. Mr Gould accepted that it was not practicable to carry on that business for lack of funds available to Trinbay. Mr Gould had not been "carrying on the business" of Trinbay by considering the prospects of litigation or pursuing litigation funders. In doing so he had been attempting to implement the DOCA (see the next paragraph). On the proper construction of the DOCA, implementation of the DOCA required the defence of legal proceedings brought against Trinbay and Musical Entertainment AG (MEAG) in proceeding number 2192 of 2000 in the Supreme Court of New South Wales by Kerry Jewel and Elyse Jewel, and the pursuit of a cross-claim against them, and, as well, the institution of legal proceedings against Peter Rodgers for breach of fiduciary duty to Trinbay and/or MEAG as a result of his failure to account for moneys received by him from MEAG "for the First Production of Pan" (see cll 3.1-3.7 of the Trinbay DOCA). Pursuit of these matters constituted the purpose of the DOCA. I do not accept a submission made by Mr Gould that terminating the DOCA would be implementing it for the purposes of cl 3 of the prescribed provisions. The terms of Mr Gould's letter dated 2 April 2003 to the ATO (set out at [12] above) show that Mr Gould had determined that it was no longer practicable to implement the DOCA for lack of litigation funding. As at 2 April 2003, the date of Mr Gould's letter to the ATO, there had been no payment of a Final Distribution or decision to pay a Final Distribution. On the contrary, there was a determination by Mr Gould, recorded in that letter, that the DOCA administration had concluded and that it was likely that Trinbay would be struck off. This meant that as at that date Mr Gould had determined that it was no longer practicable either to carry on Trinbay's business or to implement the DOCA within the meaning of cl 3 of the prescribed provisions. Accordingly, on 2 April 2003 the obligation to summon a meeting of creditors provided for in cl 3 of the prescribed provisions for the purpose of their passing a resolution under s 445C(b) of the Law was enlivened. ASIC accepts that it will be necessary for the AAT to consider whether Mr Gould changed his mind after 2 April 2003 and, if so, what the effect of his change of mind was. The parties will be directed to attempt to agree upon, and will be directed to bring in, short minutes of orders. They should include a statement of the questions of law and my answers to them as indicated in the Earlier Reasons and these reasons. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

whether administrator of deed of company arrangement (doca) obliged to convene meeting of creditors construction of cl 3 of the prescribed provisions of schedule 8a to the corporations regulations meaning of expression "no longer practicable ... either to continue to carry on the business of the company or to implement this deed" meaning of "final distribution" as used in doca corporations

The Episodes relevantly reported on a "mentoring program" for women, the Wildly Wealthy Women Millionaire Mentoring Program ('the Mentoring Program'). The creators of the Mentoring Program are Dymphna Boholt and Sandra Forster, the six and seventh respondents. The Mentoring Program is promoted on a website (<www.wildlywealthywomen.com>) ('the Website') by the eighth respondent ('Universal'). 2 The Episodes described Ms Boholt and Ms Forster (together, 'the women') as ' self proclaimed wildly wealthy women on a mission to make other women filthy rich ' through participation in the Mentoring Program. Viewers were exhorted to log onto the Website '[f] or your chance to learn how to be a property millionaire '. In recognition of the possibility that the Mentoring Program was ' too good to be true ', Today Tonight ' introduced [Ms Boholt and Ms Forster] to a couple of everyday Australians ' and promised to follow the scheme's progress ' to see if they actually become wildly wealthy women '. 3 For the purposes of this judgment, the first respondent shall be referred to as 'Seven Network', the second to fifth respondents shall be referred to as 'the Seven Licensees' and jointly those parties shall be referred to as 'Seven'. At issue is whether the Seven Licensees have contravened the Trade Practices Act 1974 (Cth) ('the Act') in the course of broadcasting the Episodes and whether the Seven Network is liable for any such contravention. The Australian Competition and Consumer Commission ('the Commission') alleges that in the course of broadcasting the Episodes, the Seven Licensees contravened s 52 of the Act by making, or adopting as their own, misleading and deceptive representations concerning Ms Boholt, Ms Forster and the Mentoring Program. The Commission, Ms Boholt, Ms Forster and Universal have agreed on a form of order to dispose of the proceedings as between those parties. The parties agreed to defer the making of those orders until the determination of the proceedings against the other respondents. 4 The Seven Licensees deny making any misleading or deceptive representations. They say that the Episodes merely report the claims of Ms Boholt and Ms Forster. The intention, it is said, was to broadcast a series of reports whereby those claims would be tested. That testing did not eventuate by reason of the Commission's intervention. The Seven Licensees further submit that, even if misleading and deceptive representations were made, s 65A of the Act provides them with a complete defence. The Commission asserts that the effect of the contract, arrangement or understanding between Seven Network on behalf of the Seven Licensees (or between the second respondent on behalf of itself and the Seven Licensees) and the women is to except the Seven Licensees from the exemption from liability for a contravention of s 52 of the Act provided by s 65A of the Act. 5 No contravention of the Act is alleged against Seven Network. Seven Network is the holding company of the Seven Licensees. An injunction is sought against Seven Network on the basis that it is alleged to have entered the contract, arrangement or understanding with Ms Boholt and Ms Forster to broadcast the Episodes on behalf of the Seven Licensees. Seven submits that, as neither contravention of the Act nor accessorial liability is alleged against Seven Network, Seven Network cannot be the subject of any claim for relief and proceedings against it should be summarily dismissed. • Were the representations (if any) made by the Seven Licensees misleading and deceptive? • Does s 65A of the Act exempt the Seven Licensees from liability for contravention of s 52 of the Act? • Should an injunction be granted against Seven Network? That involves taking account of content and presentation and also the circumstances in which the Episodes were broadcast ( Johnson & Johnson Pacific Pty Limited v Unilever Australia Limited (No 2) (2006) 70 IPR 574 at [16]). The question for the Court is whether reasonably minded viewers would take from the Episodes the representations which are alleged ( Campomar Sociedad, Limitada v Nike International Limited [2000] HCA 12 ; (2000) 202 CLR 45). There is no dispute that viewers would be unlikely to engage in a detailed analysis of textual or linguistic nuances. The question is one of the overall impression of each Episode. The transcript of the Episodes is reproduced for the purposes of the reasons for judgment only. It's a one year program to teach them the skills of making big money, a mentoring program called 'Wildly Wealthy Women', and we'll see if the two ladies behind the program can live up to their promises over the next 12 months. We've just listed that one. In eight months she's bought more than $1 million worth of property with no money whatsoever. Only the motivated need apply. What really matters is their commitment to achieve, their commitment to make a difference in their lives. If that sounds a lot think again. They say they can turn anyone into a millionaire even those with no money. It's just knowing how to do it. They get the course for free and will be featured in their upcoming book. Well we'll be following the scheme's progress to let you know. (2) Participants in the Mentoring Program would become wealthy through investing in property even if they had no money at the time at which they commenced to participate in the Mentoring Program or to implement the strategies taught in the Mentoring Program ('the second representation'). (3) Participants in the Mentoring Program would become millionaires through investing in property ('the third representation'). (4) Ms Boholt owned in excess of 60 properties ('the fourth representation'). (5) Ms Forster had purchased over $1,000,000 worth of property using none of her own money ('the fifth representation'). (6) Ms Forster was a millionaire ('the sixth representation'). It is not in dispute that a corporation may contravene s 52 for disseminating erroneous information supplied by a third party ( Butcher v Lachlan Elder Realty Pty Limited [2004] HCA 60 ; (2004) 218 CLR 592 at [113] per McHugh J). Relevant to determining whether a contravention of s 52 has occurred, one important factor is whether the corporation has assumed responsibility for or adopted or endorsed the information so that it would be reasonable for a recipient to rely on the confirmation. If the corporation makes it apparent that it is not the source of the information and that it expressly or impliedly disclaims any belief in its truth or falsity and is merely passing on the information for what it is worth, the corporation does not contravene s 52. Another factor is whether the corporation expressly or implicitly disclaims personal responsibility or a belief in the truth or falsity of the information ( Butcher at [115] per McHugh J). If there were such a disclaimer, the corporation does not contravene s 52. This will not, however, apply where statements of fact are made by the corporation itself. 12 It is not sufficient that the statements reported the opinions of Ms Boholt and Ms Forster which did not accord with the facts. There must be something referable to the Seven Licensees' conduct ' which is likely to lead a reader into error ' ( Australian Ocean Line at 586-7 per Toohey J). An example given by Toohey J in Australian Ocean Line at 587 was a statement suggesting that the criticisms attributed to or made by others were well-founded or a statement apparently containing the opinion of the broadcaster about the subject matter. Each such statement goes beyond the mere reporting of opinions by others and contains a representation by the broadcaster. 13 The Commission accepts that the mere broadcast or publication of a statement or opinion of Ms Boholt or Ms Forster which does not involve an endorsement, approval or adoption by the Seven Licensees does not constitute conduct in contravention of s 52 of the Act merely because that statement or opinion is erroneous ( Global Sportsman PL v Mirror Newspapers Limited (1984) 2 FCR 82 at 89---90). Adoption does not necessarily occur by the mere publication or broadcast of a statement ( Global Sportsman at 90). 14 The Commission submits that the first episode goes beyond the mere reporting of the statements or opinions of Ms Boholt and Ms Forster. The episode conveys, the Commission says, an assessment by the Seven Licensees that Ms Boholt and Ms Forster are wealthy and that participants in the Mentoring Program will likewise become wealthy ( Australian Ocean Line at 587 per Toohey J). That assessment is said to be evidenced by the making of statements by the compere and by the reporter to suggest that the statements and opinions of Ms Boholt and Ms Forster are accurate or well-founded. If the statements of the compere and reporter, in the context of the Episodes as a whole, constitute a making by them of the alleged representations, those representations would be taken to have been made by the Seven Licensees when the Episodes were broadcast. • '[Ms Boholt and Ms Forster] are self proclaimed wildly wealthy women on a mission to make other women filthy rich too '. • ' through shrewd investment in real estate the pair have become millionaires, their secrets to be revealed in a mentoring program called Wildly Wealthy Women'. • '[Ms Boholt] is an accountant turned property guru '. • '[Ms Boholt] now owns more than 60 properties all around Australia '. • ' the knowledgeable pair '. • ' The nine month program costs nearly $3,000. If that sounds a lot think again. They say they can turn anyone into a millionaire even those with no money '. • ' for your chance to learn how to be a property millionaire log onto [the Website]'. • ' In eight months [Ms Forster's] bought more than one million dollars worth of property with no money whatsoever ' (the fifth representation). • ' the pair have become millionaires ' (the sixth representation'). 17 The Seven Licensees, in response, accuse the Commission of ignoring the text and context of the first episode. They rely heavily on the "note of reservation" said to be inherent in the compere's introductory and concluding remarks. The compere's promise to follow the Mentoring Program's progress and ' see if the two ladies behind the program can live up to their promises ' (emphasis added) is said to contradict any impression of judgment, assessment, approval or adoption of the reported facts by the Seven Licensees. 18 Consistent with that submission, the Seven Licensees emphasise the fact that Ms Boholt and Ms Forster are initially referred to by the reporter as ' self-proclaimed ' "wildly wealthy women". The Seven Licensees acknowledge that the reporter makes statements about Ms Boholt's property ownership and Ms Forster's wealth. However, in a context where the women's "self-proclaimed" status is acknowledged, they submit that it was unnecessary for every statement to contain prefatory averments such as ' they claim '. The fourth, fifth and sixth representations fall into this category. The Commission characterises the Mentoring Program representations as representations as to "future matters" (s 51A of the Act). For example, Ms Forster stated: ' I was able to create millions within a year and I'm going to show other people how to do it '. Ms Boholt stated ' I do have that financial freedom, I do have that time freedom to be able to do what I want, when I want '. 21 The reporter commented on the statements of the women and made statements herself. Although the reporter introduced Ms Boholt and Ms Forster as ' self-proclaimed ' "wildly wealthy women", there is no real dispute that, in isolation, she made representations as to the financial status of Ms Boholt and Ms Forster. For example, the reporter did not state "Ms Boholt claims to own more than 60 properties all around Australia". However, the Seven Licensees assert that, in context, it is clear that the statements made by the reporter were sourced from the women and that the reporter did no more than report their claims about themselves and their financial acumen. While the Commission accepts that in some contexts it will not be necessary for a reporter to preface every statement with "they claim", it submits that here the disclaimer was necessary to negate a 'real and not remote chance or possibility ' ( Global Sportsman at 87) that the viewer might regard the statement as a fact the reporter and broadcaster knew to be true rather than a mere claim by the women. 23 In my view, there is no doubt that the reporter herself made unqualified representations that could be characterised as excessive and admiring. I do not accept that the reasonable viewer would consider that the reporter was in any way engaged in a critique of the women's status as millionaires or that there was a mere reporting of the women's claim to have achieved that status. According to the reporter, the women are a "knowledgeable pair". Ms Boholt is a "property guru". Their success is to be attributed to "shrewd investment". These statements convey assessment, endorsement, adoption and promotion by the reporter of the women's status as wildly wealthy women as fact. While there is initial reference to the women as "self-proclaimed", that initial reference is overwhelmed by later statements which convey an impression of presentation of the Wildly Wealthy Women representations as matters to be taken as fact. Those facts are not attributed by the reporter to the women themselves. Viewed in context, the statements of the reporter do more than merely convey claims, opinions or facts advanced by Ms Boholt and Ms Forster. The reporter adopts and makes the fourth, fifth and sixth representations. 24 There remains to be considered the effect of the statements made by the compere on the representations of the reporter. It's a one year program to teach them the skills of making big money, a mentoring program called 'Wildly Wealthy Women', and we'll see if the two ladies behind the program can live up to their promises over the next 12 months. Well we'll be following the scheme's progress to let you know. It says that the bookends did no more than ' dangle a carrot out for the viewers ' and that, properly construed, the bookends amount to an encouragement to viewers to watch further items on Today Tonight involving the Mentoring Program. That is said to be insufficient to "modify" the earlier conduct of the reporter ( Butcher at [152] per McHugh J). 27 The reasonable viewer does not have access to a transcript. The degree of analysis to which the Court was taken is not one which would commonly be conducted by viewers of the program. Relevant to the determination of whether the Seven Licensees made the Wildly Wealthy Women representations is the effect on the compere's disclaimer on the representations of the reporter. The question is whether the compere's comments change the overall impression of the first episode, which includes the effect of the representations made by the reporter, such that the reasonable viewer would not consider the fourth, fifth and sixth representations to have been made by the Seven Licensees. Does the compere's disclaimer leave the viewer with the impression that the Seven Licensees have dissociated themselves from the reporter's representation? 28 The Commission submits that the disclaimer and disassociation by the compere are insufficient to counteract the effect of the Wildly Wealthy Women representations by the reporter or to make it clear that the Seven Licensees were not adopting them. The disclaimer, the Commission submits, extends only to the Mentoring Program representations and does not affect or relate to the Wildly Wealthy Women representations made by the reporter. 29 The Seven Licensees submit that such a separation is artificial. They say that, even if the expressed limitation applies to the Mentoring Program only, that program and the Wildly Wealthy Women representations are inextricably linked; the Mentoring Program is based on the assurances of Ms Boholt's and Ms Forster's success. 30 Viewing the first episode as a whole, the Seven Licensees embraced and advanced the proposition that Ms Boholt and Ms Forster were millionaires and had achieved that status through investing in property. Those propositions were adopted and stated as fact by the reporter. In context, what was "put up for examination" by the compere was whether others could achieve millionaire status by participation in the Mentoring Program. There was no suggestion by the compere, express or implicit, that the women's status as millionaires or as owners of property was questioned or would be examined or investigated in subsequent programs. There was no suggestion that the truth of those matters, as asserted by the reporter, would be the subject of further inquiry or should be the subject of such inquiry. 31 As a matter of overall impression, the scepticism injected by the compere does not overcome the strength of the representations made by the reporter. The disclaimer did not detract from the Wildly Wealthy Women representations. When the first episode is viewed as a whole, the ordinary and reasonable viewer would consider those representations to have been made by the Seven Licensees. 32 The fourth, fifth and sixth representations were made by the Seven Licensees. A prominent example is Ms Boholt's claim that '[a] nyone can be a millionaire within a year if she really focuses on it and that's what we're going to help them do '. 34 While some of the reporter's statements as to the Mentoring Program are expressly attributed to Ms Boholt and Ms Forster (' they say they can turn anyone into a millionaire '), the tone and comments of the reporter are akin to what might be expected had she been engaged for the specific purpose of herself promoting the Mentoring Program. For example, the reporter promises that the "secrets" of the women will be revealed in the Mentoring Program. She exhorts viewers to log onto the Website ' for your chance to learn how to be a property millionaire '. 35 It is arguable that the reporter made the Mentoring Program representations, in the sense that she endorsed and approved the women's claims that women who participated in the Mentoring Program would themselves become millionaires. However, as with the Wildly Wealthy Women representations, in order to determine whether the Seven Licensees made those representations, the effect of the statements made by the compere must be considered. What must be considered is whether the disclaimer applied to the Mentoring Program representations. The Commission's submissions significantly understate the effect of the compere. The "disclaimer" or "bookends" of the compere make it clear that the Seven Licensees were not themselves representing that participants in the Mentoring Program would become wealthy or millionaires through investing in property. Those claims were made by the women. Viewed as a whole, the representation made by the Seven Licensees in the first episode was that the women's claims as to the Mentoring Program would be tested. I accept that the note of caution and disassociation of the compere made it clear that the Seven Licensees were not themselves conveying acceptability of the Mentoring Program. 37 The Seven Licensees did not make the first, second or third representations in the first episode. Those representations were made by Ms Boholt and Ms Forster. Well, we've introduced them to a couple of everyday Australians to find out whether it can actually be done. More than 5,000 women who are not surprisingly desperate to make their first million in property. And that's what we're trying to achieve for all of the women in the program. A lucky seven women have been chosen from thousands to get the program for free. How do you feel? You know I look at these people and three or four years ago that was me. You know, they've got no money, they really want to make it happen but they've got no idea how to make it happen. Property spruiker, Henry Kaye the biggest offender, accused of causing ordinary Australians to lose millions. Dymphna, an accountant, and Sandy, a prosperity coach, say they've created their own success and wealth from next to nothing and plan to teach other women to do the same. I've never won anything in my life so this is my big thing. So a property millionaire, yeah, yeah. Well, over the next 9 months, we'll be closely watching them to see if they actually become wildly wealth [y] women. We'll let you know how they go. It's only money. So I'll have a go. Go for broke. Simone Cunningham reporting. (2) Participants in the Mentoring Program would become wealthy through investing in property even if they had no money at the time at which they commenced to participate in the Mentoring Program or to implement the strategies taught in the Mentoring Program ('the eighth representation'). (3) Participants in the Mentoring Program would become millionaires through investing in property ('the ninth representation'). (4) Ms Forster had made millions of dollars through investing in property ('the tenth representation'). Property spruiker Henry Kaye, the biggest offender, accused of causing ordinary Australians to lose millions'. Well, over the next 9 months, we'll be closely watching them to see if they actually become wildly wealth [y] women. We'll let you know how they go . Although the reporter states that the women "say" that they have created their own success, the overall impression of the second episode again conveys the meaning that the women have created their own wealth. As with the first episode, the Wildly Wealthy Women representation is unqualified and constitutes a representation by the compere that the representation is true. The statement is not attributed to the women. The statement conveys adoption and promotion by the compere of the women's status as wildly wealthy women as fact. The compere therefore adopts and makes the tenth representation. Subsequent statements asking ' so, is it really that easy? ', in context, relate to the Mentoring Program representations only. The subject matter of the women's success and the success of the Mentoring Program are separated by the compere. The tenor of the second episode is consistent with the first episode: the women's achievements are to be taken as fact while the Mentoring Program is to be tested. 43 The compere, at the conclusion of the second episode, simply says ' good on them '. Even if that falls short of adoption, it is hardly an attempt to disassociate the Seven Licensees from the Wildly Wealthy Women representation made earlier in the first and second episodes. 44 Any other expression of incredulity or questioning by the reporter or compere is linked to the Mentoring Program and whether other women as participants can become ' property millionaires '. At all times, that investigation is not of the Wildly Wealthy Women representation. Indeed, the commentary and questioning convey an assumption that this representation is true and questions whether or not others will achieve the same status. 45 The Seven Licensees represented that the women had made millions of dollars through investing in property. Any disclaimer did not detract from the Wildly Wealthy Women representation. It follows that the tenth representation was made. The compere injects a note of incredulity at the commencement of the second episode. Despite some adoption of the Mentoring Program representations by the reporter during the second episode, the reporter qualifies her comments and questions the outcome of the Mentoring Program. Her final statement is ' we'll be clearly watching them to see... '. The overall impression is a distancing from the Mentoring Program representations. When the compere's statements are taken into account: ' they believe '; ' so, is it really that easy ? '; the overall impression is that the Seven Licensees are distancing themselves from the Mentoring Program representations. They do not make or adopt them. 47 The reporter and compere do not adopt the predicted success of the Mentoring Program without qualification. The qualification makes it clear that any asserted success of the Mentoring Program is made by the women alone. 48 The Seven Licensees did not make the seventh, eighth and ninth representations in the second episode. WERE THE REPRESENTATIONS MADE BY THE SEVEN LICENSEES MISLEADING AND DECEPTIVE? On 4 October 2006, Ms Boholt and Ms Forster each swore affidavits attesting to the falsity of the Wildly Wealthy Women representations. Ms Forster swore a further affidavit on 11 October 2006. The timing of the affidavits was explained by the timing of the settlement. The Seven Licensees did not demonstrate prejudice resulting from the timing of those affidavits. 50 The Seven Licensees did not seek to cross-examine Ms Boholt or Ms Forster or seek to lead any evidence to prove the truth of any of the representations. It follows that the fourth representation was misleading and deceptive. As discussed below, while the term "millionaire" may have a range of meanings, the phrase "over $1,000,000 worth of property" can reasonably be expected to mean just that. Even if the claim was not the purchase price of $1,000,000 worth of property but its current value, Ms Forster's evidence is that as at 31 October 2003 she did not have any legal or other interest in real property. 54 The Seven Licensees did not attempt to establish that the fifth representation was true. Ms Forster's evidence is to the contrary. I am satisfied that the fifth representation was false. That representation was misleading and deceptive. That expression may mean different things: for example, the fact that a person is said to be a "millionaire" does not necessarily equate to a representation that that person has a net worth exceeding $1,000,000. However, irrespective of the range of meanings that could be given to the expression, Ms Forster could not be described as "a millionaire". The Seven Licensees did not by evidence or submission attempt to establish that the sixth representation was true. The evidence of Ms Forster as to her financial position at the relevant time is to the contrary. Her income for the financial year ending 30 June 2004 was about $60,000 and her debts were at least $8,000. A substantial portion of those monies were apparently generated after 31 October 2003. 57 As at 30 January 2004, the date of the second episode, Ms Forster held about $10,000 - $60,000 in cash in her cheque account. Her position as to personal assets and liabilities (including real property) was otherwise the same as the first episode. 58 I am satisfied that the sixth representation was false. That representation was misleading and deceptive. As outlined in detail above, the evidence shows that not only did Ms Forster have no legal or other interest in real property but also that she could not be described as a "millionaire". The Seven Licensees did not attempt to establish that the tenth representation was true. Ms Forster's evidence is to the contrary. I am satisfied that the tenth representation was false. That representation was misleading and deceptive. DOES SECTION 65A OF THE ACT PROVIDE AN EXEMPTION FROM LIABILITY? At that time, Howard Gipps was the producer of Today Tonight. Ms Birmingham contacted Mr Gipps by telephone on behalf of Ms Forster and Ms Boholt shortly after 9 October 2003. She described a proposal for stories to be broadcast on Today Tonight about the Mentoring Program. His response relevantly stated ' all of that is fine and agreed...looks like a total of 6 stories '. Mr Gipps also raised a number of questions about the Mentoring Program in his response, which were answered by Ms Birmingham in a further email sent at 6:12 pm. Mr Gipps, in turn, replied by email at 6:25 pm and stated ' looks pretty good '. Further to those emails, Ms Birmingham sent Mr Gipps another email attaching a draft letter. She exhibits to her affidavit an unsigned version of that faxed document. And out of this 150 women how they will be selecting 7 women to be the focus of an international book being written on their journeys...............an offer to all Australian women to register on line at www.wildlywealthywomen.com or contact (? ) yet to be decided . Where 150 women from all over Australia have come together to achieve one common goal. The story content may change to evolve with the success & stories of the women participating. The only goods or services said to be the subject of the arrangement were the services of Ms Boholt and Ms Forster and not the services of Seven Network or the Seven Licensees. The Commission does not contend that the arrangement extended to the broadcast of precise statements or the specific representations complained of. The arrangement did, however, extend to the general content of the Episodes and to the subject matter in some detail. That is not disputed by Seven. There is no suggestion that there was any payment made by Seven Network or the Seven Licensees to Ms Boholt or Ms Forster as part of the arrangement. Section 65A provides a general exemption from liability under s 52 of the Act. However, there is a statutory exception to the general exemption. If s 65A(1)(a) or (b) apply, that exemption is not available. Relevant to this matter, the exception is provided for in s 65A(1)(a)(vi)(A). If that subparagraph applies, the Seven Licensees remain liable. 69 There is a qualification to the rule in Vines , namely that where one has an exception (of whatever type) to an exception (of whatever type), the onus of proof lies on the person who asserts the exception to the exception (the Glendarroch [1894] P 226 at 231, applied by the High Court in Shipping Corporation of India Limited v Gamlen Chemical Co (Australasia) Proprietary Limited [1980] HCA 51 ; (1980) 147 CLR 142 at 168). Accordingly, the Commission has the burden of establishing that the exception in s 65A(1)(a) to the general exemption in s 65A(1) applies. • The broadcasts the subject of these proceedings are "prescribed publications of matter" for the purposes of the section, as defined in s 65A(2). • The publications were of matter in connection with the supply or possible supply of goods or services or promotion of that supply within paragraph (a), specifically s 65A(1)(a)(i) and (iii). • The goods or services the subject of the publications were not "relevant goods or services". Accordingly, subparagraph (a)(v) has no application. • The condition in subparagraph (a)(vi)(B) has no application. • The publication was not of an advertisement, so paragraph (b) does not apply. It follows that s 65A does not apply to Seven Network. The Commission contends that Seven Network purported to assess the credibility of the women and the Mentoring Program and embraced and adopted those claims, thereby making the claims itself. However, there is no evidence of the publication of any matter by Seven Network and there is no allegation that it engaged in misleading or deceptive conduct. • Must the prescribed information provider be shown to have a commercial interest in the subject matter of the publication for the exception to the exemption in s 65A to apply? In a response to a request for particulars, the Commission confirmed that its case was that there was a contract, arrangement or understanding as to the content of the broadcast in a general sense but not to make the representations alleged to be misleading or deceptive. The Commission's case is that the arrangement was ' as to the content in a general sense ', of the Episodes. The Commission says that the detail in the arrangement was sufficient to amount to a publication of matter within s 65A(1)(a). 75 Seven submits that the contract, arrangement or understanding must be one to publish the actual matter which would otherwise attract the statutory prohibition upon misleading or deceptive conduct. It points out that almost every publication or report will invariably involve at least some "arrangement or understanding" with persons which "in a general sense" is in connection with the subject matter of the publication. Seven contends that, if a bare agreement to be interviewed or an agreement to be interviewed on a given topic was to attract the exception to the exemption, s 65A would not fulfil the purpose of its inclusion as outlined in the Second Reading Speech on the introduction of s 65A into the Act ('the Second Reading Speech'). The purpose was described by the High Court in Butcher (at [114] per McHugh J) as operating to exclude media providers, such as television stations, from liability for misleading or deceptive conduct within the meaning of s 52 ' in relation to editorial stories and news '. It does not specify the publication of "statements" or "representations". "Matter" is a term of broad description; it may, for example, mean the substance of a discourse (Macquarie Dictionary Revised Third Edition). • The publication may be made " pursuant to " a contract, arrangement or understanding which does not necessarily denote that the matter the subject of the publication be the subject of that arrangement. It may be "according to" or "conformable with" the arrangement (Macquarie Dictionary Revised Third Edition). • The publication may be made on behalf of the third person and not pursuant to a contract, arrangement or understanding with that person. • Paragraph (a) refers to the publication of matter in connection with, relevantly, the supply of services. Subparagraph (vi) does not mirror that the publication be "of matter" or refer back to the "publication of matter" in paragraph (a). Once there is a publication of matter in connection with the services, all that is required by subparagraph (vi) is that the publication itself be made on behalf of or pursuant to an arrangement with the third person. • Paragraph (a) concerns the "matter", the subject of the publication. Subparagraph (vi) concerns the source of the publication, not the subject of the publication. Where the subject of the publication is provided for, the section specifies it: "publication of matter" in paragraph (a) and "publication of an advertisement" in paragraph (b). It is not necessary or appropriate to read into that provision the words "of matter". Subparagraph (vi) does not operate to require that the matter be the subject of the contract, arrangement or understanding between the prescribed information provider and the third person. It is sufficient for the publication to be in connection with the supply of goods or services pursuant to an arrangement with persons who supply goods or services of that kind; it does not have to extend to the actual words spoken in the broadcast. It is the publication that is made on behalf of the third person or pursuant to a contract, arrangement or understanding with that third person. This construction does not do violence to the language of the section nor is it contrary to the purpose of its inclusion into the Act. The alternative construction advanced by Seven requires reading into subparagraph (vi) words that are not there ("of matter") and ignoring the effect of words that are there ("on behalf of"). 78 Further, a prescribed information provider is not liable for conduct or representations that contravene the sections of Part V of the Act unless it adopts that conduct or the representations. It is reasonable to exempt a broadcaster for liability in relation to the publication of news items. In those circumstances there would not normally be a contract, arrangement or understanding with the person supplying the goods or services the subject of the broadcast or publication. However, a broadcaster may also enter into an arrangement with a person to broadcast the goods or services supplied by that person. For the broadcaster to engage in conduct in contravention of s 52, that conduct involves more than merely broadcasting the misleading representation. The broadcaster must, in effect, adopt that representation. In those circumstances, the broadcaster is still provided with the protection envisaged by s 65A. There is, however, no good reason for immunity from liability where a broadcaster enters into a contract or arrangement with a third party to publish matter concerning the third party's goods or services where the broadcaster engages in or adopts the misleading representation or conduct. 79 In Advanced Hair Studio Pty Ltd v TVN Enterprises Ltd (1987) 18 FCR 1 at 11 French J expressed the view that the reference in paragraph (a) to "a publication of matter" ' suggests that what is of importance is the content and not the general nature of the material in question '. That observation was referred to by Wilcox J in Sun Earth Homes Pty Limited v Australian Broadcasting Corporation (1993) 45 FCR 265 at 280. However, French J was not concerned with subparagraph (vi) and was not referring to the subject of an agreement between the prescribed information provider and a third person. His Honour did not expand upon the distinction between and the dividing line between what may constitute "conduct" and "general nature". 80 In the present case, the arrangement concerned more than just the subject of the broadcast or its general nature. It extended to detail of the content, albeit not to the specific representations. For the reasons discussed above, the arrangement to publish the matter in s 65A need not extend to the specific representations made. It is sufficient that the arrangement extends only to the content of the publication in a general sense. An example of such goods or services would be Seven's own programs. It is not suggested that statements in a program which might stimulate viewers to watch future episodes of that program, are sufficient to constitute advertising to which s 65A(1)(b) would apply. Seven contends that the reference in subparagraph (vi) to "goods or services of that kind" refers to the "relevant goods and services" of subparagraph (v) and not to the goods and services the subject of the publication referred to in subparagraphs (1)(a)(i) and (iii). The information provider is liable for a contravention of s 52 where the publication relates to the supply of its own services, such as the promotion of future programmes ( Horwitz Grahame Books Pty Ltd v Performance Publications Pty Limited (1987) 8 IR 25). Seven submits that, if the services in subparagraph (a)(vi)(A) may be goods or services of a third person, s 65A(1)(b) would be otiose because an advertisement would meet the description of being a publication pursuant to a contract, arrangement or understanding with a person who supplies the goods or services the subject of the publication. Such an interpretation would, it is submitted, be contrary to the proper construction of statutes. Seven says that the limitation of paragraph (a) to self-advertisements would also be consistent with views expressed generally about paragraph (a): that it deals with advertisements published by the information provider for its own products, while paragraph (b) deals with advertisements published by the information provider for the products of others (see Heydon, JD Trade Practices Law Vol 2 at 12.1030). However, counsel were not able to point to any authority or commentary that specifically examined the construction of subparagraph (vi) and, in particular, (vi)(A). 86 In Sun Earth at 282, Wilcox J described matter that would fall within paragraph (a) as matter concerning the applicants, published in connection with the supply of goods or services of the applicants. His Honour did not direct his observations to the argument raised here by Seven, that the supply of goods or services "of that kind" was limited to goods and services of the kind supplied by the prescribed information provider. It is worth noting however that intuitively Wilcox J considered goods or services "of that kind" as not so restricted. In Bond v Barry [2007] FCA 1484 , French J at [41]---[42] did not read subparagraph (vi)(A) as restricted to "relevant goods or services". However, it does not seem that his Honour was directed to that possible construction. 87 The Second Reading Speech described the purpose of the new section. It was concerned with inhibition of activities relating to the provision of ' news and other information '. These provisions ensure that information providers are not exempt from the consumer protection provisions of the Trade Practices Act in respect of the provision of information where they have what might be regarded as a commercial interest in the content of the information. That includes self-advertisements and third party advertisements. The Second Reading Speech does provide some assistance in ascertaining the intended scope of the subject matter of the contract arrangement or understanding. It indicates that goods or services "of that kind" are the goods or services the subject of the publication. It is not apparent from the Second Reading Speech that the intention was to restrict the goods and services to goods or services of the kind supplied by the prescribed information provider. The subject is not directly addressed. Therefore, nothing is added by having, as an alternative to subparagraph (a)(v), provision for publication pursuant to an agreement with a third person who supplies "relevant goods or services". • (vi) does not include a reference to the prescribed information provider and applies to the goods or services themselves. • (v) and (vi) are alternatives: If (vi) is read in the absence of (v), "goods or services of that kind" would refer to the goods or services of the kind to be supplied, described in paragraph (a). • The introductory words of paragraph (a) are "a publication of matter in connection with", inter alia, the supply of services. There are then two alternative circumstances provided for in subparagraphs (v) and (vi) of paragraph (a). Subparagraph (v) expands on the characterisation of the goods or services. Subparagraph (vi) expands on the characterisation of the person on whose behalf or with whom there is a contract, arrangement or understanding to publish the matters in connection with subparagraphs (a)(i) to (iv). • If paragraph (a) were intended to refer to goods or services and interests in land that were of the "relevant" kind only, the draughtsman could have made that clear within subparagraphs (a)(i) to (iv) or in (vi). • If it were intended to limit the goods or services in (vi) to "relevant goods or services", it would have been unnecessary to structure the section in the way that it is structured. For example, the section could simply have provided in subparagraph (v) for an exemption for "a publication of matter in connection with the supply or possible supply of relevant goods or services". • "Relevant goods or services" are defined in subsection (3). That definition is by reference to ' a prescribed information provider '. It is not defined to apply to any third person. • The contrary indication is that, if the goods or services or interests in land in (vi) are not limited to those of the "relevant" kind, that is, those of the kind supplied, sold or granted by the prescribed information provider, the subject matter of paragraph (b) would be included within subparagraph (a)(vi). The intention as reflected in the Second Reading Speech was to exclude from that exemption publications where a "commercial interest" was involved. That includes advertising the information provider's own goods, services or interests in land (or those of a related body corporate). The exception does not apply only to self-advertising but also to the publication of an advertisement (s 65A(1)(b)). Where that advertisement is that of a third party, the prescribed information provider would not have a commercial interest in the content of the advertisement but would normally receive revenue from its placement. 91 The sale of goods or services and interests in land are commercial subject matter, but where they are published on behalf of a third party or pursuant to an agreement with a third party, they are in a similar category to third party advertisements. Third party advertisements are designated as exceptions to the exemption. If the limitation suggested by Seven applied, so that (a) only concerned goods, services or interests in land of a kind supplied by the prescribed information provider, that would leave a "gap", where the publication concerned the sale or supply of commercial subject matter but was made on behalf of the third person or pursuant to an agreement that could not be described as "an advertisement". To that extent, the construction opposed by Seven is consistent with the framework and intention of s 65A. The publication of news and other such information would in the ordinary course remain subject to the exemption. 92 The drafting of the section is not a model of clarity. It is necessary to consider not only the words themselves but also the whole of the section and its evident purpose, as well as the intention of Parliament as explained in the Second Reading Speech. The construction advanced by the Commission is consistent with the way in which the section is drafted and with the Second Reading Speech and is logically supported by context and intention. In my opinion, the goods, services and interests in land "of that kind" are not limited to the "relevant goods or services" in relation to the prescribed information provider. Those words refer to the goods, services and interests in land that are the subject matter of the publication. This serves to limit the exception. It does not apply where a publication is made in connection with the supply of goods or services or sale of interests in land generally but only where the publication is made on behalf of or pursuant to an agreement with the person who actually sells or supplies the subject matter. 93 Subparagraph (v) provides for an exception to the exemption where the publication is in connection with services provided by the information provider by reason of the definition of "relevant goods or services" in subsection (3), that is, self-advertising. However, that paragraph (a) is not only concerned with self-advertising. 94 Subparagraph (vi) applies to the supply of services by a third person and that subparagraph (vi) provides that there is an exception to the exemption where there is a publication of matter in connection with the supply or possible supply of services where the publication was made on behalf of or pursuant to an agreement with a third person who supplies those goods or services. Must Seven have a commercial interest in the publication of matter? According to the Second Reading Speech, s 65A was introduced to overcome the suggestion that newspaper publishers and television publishers may be taken to have contravened s 52 if the newspaper contains inaccurate information. The section was said to operate to exempt the media and other persons who engage in businesses of providing information from the operation of the provisions of Division 1 of Part V of the Act which could inhibit activities relating to the provision of "news and other information". In such cases, information providers must take the same responsibility for the accuracy of information as any other person who publishes information in trade or commerce. This can occur, for example, where a newspaper has agreed to publish a "news" item about a product in exchange for the product supplier taking out paid advertising in that publication. A general commercial interest in publishing or promoting successful programs or programs which attract viewers is not a relevant commercial interest for the purposes of s 65A ( Advanced Hair Studio at 10-11 per French J; Horwitz at 29 per Wilcox J). 98 In Lovatt v Consolidated Magazines Pty Ltd (1988) 12 IPR 261 at 273 Wilcox J, in considering subparagraph (a)(v), expressed the view that s 65A was intended ' to exclude the application of the specified provisions of the Act to ordinary items of news and comment but to continue to subject the information provider to those provisions in connection with any items directly promoting the supply of its own goods or services or the disposal by it of interests in land '. In other words, in boosting its own business, the provider was subject to s 52. His Honour did not make reference to subparagraph (vi). 99 Section 65A(1)(a) concerns the supply of goods or services or the sale or grant of an interest in land. Accepting that the general interest of a prescribed information provider in expanding circulation, attracting the information-consuming public and providing quality and interesting information is not relevantly a commercial interest, the subject matter of paragraph (a) does, in the ordinary course, contain a commercial element. Section 65A excludes from the exemption publications where the information provider has a commercial interest in the content. However, the submission that the only exception to the exemption is where the broadcaster has a commercial interest in the content of the broadcast does not sit well with s 65A(1)(b). Section 65A(1)(b) excepts from the exemption third party advertising generally. A broadcaster may have a similar commercial interest in a third party advertisement as in a contract arrangement or understanding with a third person to publish in connection with that person's supply or promotion of the third person's goods or services. In both cases the broadcaster may have a commercial interest in the publication. In neither case does the broadcaster have a commercial interest in the content. If it were necessary to have a commercial interest under s 65A(1)(a)(vi) or s 65A(1)(b) , it would be in the publication. 100 However, in the present case, the Commission does not suggest that Seven has any commercial interest in either the publication or the content. If the Commission were required to establish that a commercial interest was necessary for the exception to apply, it has failed to do so. If that were the case, Seven would have the benefit of the exemption. 101 In Sun Earth at 281, Wilcox J considered the proposition that the purpose of s 65A is to protect prescribed information providers acting as such. His Honour repeated his view that the "commercial interest" in the content of the information sufficient to come within the exception to the exemption afforded by the section, is satisfied if the information promotes the business or services of the information provider or because the information provider has some direct commercial relationship with a third party. That is encompassed by subparagraphs (a)(v) and (vi). 102 Justice Wilcox also considered a submission that, where a party itself creates the information which it supplies, which is expressly designed to advise consumers as to how they should deal with suppliers of goods or services, the supplier should be bound by s 52 of the Act. Justice Wilcox accepted that the fact that the program in question, "The Investigators", was more than a program providing news and comment. However, his Honour held that that was insufficient to deny the protection of s 65A. However, his Honour affirmed the need for the publication to come within the categories of paragraphs (a) or (b). He said that there was no warrant to introduce additional exceptions by reference to what might be regarded as a "commercial interest" (at 282). 103 Section 65A does not, in terms, require that for the exception to apply there must be a commercial interest. To the extent that commercial interests of the kind referred to in the Second Reading Speech are specifically referred to, they are dealt with in subparagraphs (1)(a)(v) and (1)(b). However, the section also includes subparagraph (1)(a)(vi). That provides for an exception for not only a contract but also an arrangement or understanding. The publication may be made not only pursuant to a contract, arrangement or understanding with the third person but also on behalf of a third person. These may not import or impart a commercial interest. 104 I agree with Wilcox J. The exceptions are as provided for in paragraphs (a) and (b) of s 65A(1). It is not necessary for Seven to have a commercial interest in the goods or services the subject of the Episodes or in the publication itself for the exception from liability to apply. Accordingly, s 65A does not provide a defence to the Commission's claim against the Seven Licensees. The Seven Licensees are therefore liable under s 52 of the Act for the misleading and deceptive representations made by them. SHOULD AN INJUNCTION BE GRANTED AGAINST SEVEN NETWORK? It is not appropriate for an order of the Court to be framed in terms which leave it for subjective assessment as to whether a broadcast representation is misleading or deceptive or likely to mislead or deceive. There are no allegations made in the statement of claim that Seven Network has contravened the Act or is accessorially liable for any contravention by the Seven Licensees. Further, there is no evidence that Seven Network has the power to compel the Seven Licensees to comply with such orders. The Seven Licensees themselves have obligations pursuant to the Broadcasting Services Act 1992 (Cth). There is no suggestion that, if an order is made against the Seven Licensees, they would fail to comply with it. 109 The Commission submits that, whether or not it appears to the Court that Seven intended to engage in conduct in contravention of the Act or to broadcast the representations found to be in contravention of the Act, orders should be made as against Seven Network and the Seven Licensees on "public policy grounds". It relies on ICI v Trade Practices Commission (1992) 38 FCR 248 at 255---257 per Lockhart J. However, his Honour observed that it is relevant to consider questions of repetition of conduct and whether the conduct has occurred before or whether imminent substantial damage is likely. While Lockhart J was of the view that absence of any one or more of these elements is not fatal to the grant of an injunction under s 80 of the Act, none of those elements have been established by the Commission. No basis for the orders against Seven Network has been made out other than the asserted "public policy". No basis has been established as to why the declaratory relief sought is insufficient to protect the public, particularly in circumstances where the Seven Licensees did not make the Mentoring Program representation. 110 No basis has been established for the injunctive relief sought against the Seven Network. SHOULD AN INJUNCTION BE GRANTED AGAINST THE SEVEN LICENSEES? I am prepared to make orders pursuant to s 80 of the Act permanently restraining the Seven Licensees from making or causing to be made in any form the Wildly Wealthy Women representations or any representations to substantially the same effect. 112 The Episodes were broadcast in October 2003 and January 2004. At no stage have the Seven Licensees indicated that they intend to broadcast further episodes relating to the Mentoring Program. There is no evidence that they are likely to do so. The Seven Licensees did not make the Mentoring Program representations. I see no sufficient reason to grant injunctive relief sought against the Seven Licensees in relation to the Mentoring Program representations. The Commission submits that, in circumstances where Seven has contested its liability for contravention of s 52 , the making the declarations is necessary to put beyond doubt that findings of contravention have been made. The Commission says that the findings are important for general deterrence. 114 I have found that the Seven Licensees have contravened s 52 of the Act in respect of the Wildly Wealthy Women representations. In the circumstances, I consider it appropriate to make the declaratory orders sought. 115 The Commission also seeks non-punitive orders against the Seven Licensees pursuant to s 86C(1) of the Act requiring the Seven Licensees to broadcast on their Today Tonight Program a segment of not less than five minutes duration (and to publish on their websites), information on the declaratory relief granted and to provide information on the financial risks associated with investments in property ('the segment'). The Commission submits non-punitive orders are appropriate in circumstances where the Episodes were structured to promote continued interest in the segment and the Mentoring Program. Seven submits that the non-punitive orders sought would "lack utility, and serve no useful purpose", given that any publication would be taking place at least three years after the events in question. 116 Given the time that has elapsed since the Episodes were broadcast and the fact that the women and the eighth respondent are themselves subject to consent orders, I do not consider it appropriate to require the Seven Licensees to publish the segment. Seven will be aware of the consequence of these proceedings and the declaration to be made. There is no suggestion that Seven requires further action to ensure that it appreciates its obligations under the Act. The Commission and the sixth to eighth respondents have agreed on a form of consent orders. A copy of those orders in the form consented to comprises Annexure A to this judgment. 118 The parties have asked that I reserve costs, including any special orders as to costs arising out of the settlement between the Commission and the sixth to eighth respondents including the timing of filing of affidavits of Ms Boholt and Ms Forster, and I do so. I certify that the preceding one hundred and eighteen (118) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. A declaration that the Seventh Respondent, by participating in the preparation and broadcasting of the 31 October 2003 broadcast, containing the representations referred to in paragraph 1.4 and 1.5 above with knowledge that those representations were likely to mislead or deceive, was directly, or indirectly, knowingly concerned in, or party to, the contraventions of the Act by each of the Second, Third, Fourth and Fifth Respondents set out in paragraph 1 of the Application within the meaning of section 75B of the Act . 3. A declaration that the Seventh Respondent, by participating in the preparation and publication of the Wildly Wealthy Women Website Representations with knowledge that the representations were misleading or deceptive or likely to mislead or deceive; was directly, or indirectly, knowingly concerned in, or party to, the contraventions of the Act by the Eighth Respondent set out in paragraph 5 within the meaning of section 75B of the Act . An order that the Sixth, Seventh and Eighth Respondents pay the Applicant's costs of and incidental to these proceedings as against them in the agreed amount of $10,000 within 28 days of the date of this order.

whether statements made in course of broadcast were misleading or deceptive in breach of s 52 of trade practices act 1974 (cth) certain statements found to be misleading and deceptive other representations subject to disclaimer or not adopted whether exemption from liability for contravention of act in s 65a of act applies prescribed information provider whether contract, arrangement or understanding made must extend to actual representations made or only to general content arrangement need not extend to specific representations made whether supply of goods or services in s 65a(1)(a)(vi)(a) refers to goods or services in connection with which the publication was made (s 65a(1)(a)) or the "relevant goods or services" in s 65a(1)(a)(v) s 65a(1)(a)(vi)(a) applies to goods or services in connection with which the publication was made whether prescribed information provider must have a commercial interest in the subject matter of the publication for the exemption to apply no commercial interest in goods or services the subject matter of the broadcast required injunction not appropriate as against first respondent trade practices

His Application was filed on 6 October 2005. This was followed by an Amended Application filed 17 January 2006 and a Further Amended Application filed 16 March 2006. The proceedings are concerned with work said to have been performed by detainees in that Centre. 2 Under s 235(3) of the Migration Act 1958 (Cth) ('the Act') it is an offence for an unlawful non-citizen to perform work in Australia whether for reward or otherwise. Section 235(4B) of the Act makes an offence against s 235(3) a strict liability offence and under s 235(5) the relevant penalty is a fine not exceeding $10,000. 3 Section 235(6) of the Act provides for the making of regulations which will have the effect of taking 'work in prescribed circumstances' outside the proscription upon unlawful non ---citizens performing work in Australia. 4 By virtue of the Migration Amendment Regulations 2006 (No. 6 By a Notice of Motion filed 20 October 2005 the fifth respondent sought an order that the Applicant's claim against him be dismissed pursuant to Order 20 rule 2 of the Federal Court Rules ('the Rules') on the basis that the Applicant's claim as against the Fifth Respondent disclosed no reasonable cause of action, was frivolous and was an abuse of the process of the Court. 7 In a judgment delivered by me on 22 March 2006 ( Hussein v Secretary of the Department of Immigration and Multicultural and Indigenous Affairs [2006] FCA 286) in respect of the said Notice of Motion it was held that the case was not a proper one for summary dismissal in respect of the applicant's prayer for relief contained in paragraph 4 of the Further Amended Application. An order pursuant to s.39B of the Judiciary Act and in the nature of mandamus requiring the Fifth Respondent to consider according to law whether the applicant's allegations made on 9 September 2005 should be investigated. Whilst there may be serious doubt as to the standing of the Applicant to seek relief against the First, Second, Third and Fourth Respondents, there is at least an arguable case available to the Applicant for standing in relation to his claims against the Fifth Respondent given that he is the complainant whose request for investigation of alleged offences was made to the Fifth Respondent. S E J Prince of counsel appeared pro bono for the applicant as he did in the proceedings which led to my earlier judgment. The first and second respondents were represented by G R Kennett of counsel. The third respondent was represented by R P L Lancaster and J S Emmett of counsel and the fourth respondent by A K Panna of counsel. Whilst the fifth respondent was not a party to any of the motions Mr N M Wood, solicitor from the Australian Government Solicitor's office, sought leave to appear before me on the hearing of the motions, specifically for the purpose of drawing the Court's attention to a possible application which the fifth respondent may see fit to bring hereafter to have certain matters removed from the Second Further Amended Statement of Claim to which reference will be made shortly. 11 The applicant's original Statement of Claim was filed 6 October 2005. This was superseded by an (Amended) Statement of Claim filed 17 January 2006 and a later Further (Amended) Statement of Claim filed 16 March 2006. 12 Following the delivery of my earlier reasons for judgment on 22 March 2006, the matter came before me for further directions on 20 April 2006. Any proposed amendments to the Application and/or Statement of Claim be notified to the respondents no later than 4.00 pm on Friday 12 May 2006. Be that as it may, the order was the subject of some misunderstanding and a Second Further (Amended) Statement of Claim was in fact filed on 12 May 2006. 14 For the purposes of dealing with the several Notices of Motion and Objections to Competency to which reference has been made the parties have invited me to proceed on the basis that the Second Further (Amended) Statement of Claim had been duly filed on 12 May 2006. 15 In relation to the position of the First Respondent Mr Kennett has indicated that, were it to be found that the Commonwealth of Australia owed the applicant a relevant duty of care then the Commonwealth, as a model litigant, would not object to being joined as a party to the proceedings in the place of the Secretary, should a submission that the Secretary was not a proper party be accepted (see per Finn J in S v Secretary, Department of Immigration and Multicultural and Indigenous Affairs ('S') [2005] FCA 549 ; (2005) 143 FCR 217 at [209] ). 16 Notices pursuant to s 78B of the Judiciary Act 1903 (Cth) were served on the Attorneys-General on or about 26 June 2006. Those from whom responses had been received prior to the commencement of the hearing did not indicate that they desired to be heard on the hearing of any of the Motions or Objections to Competency. 17 On the hearing of the Motions an affidavit of the applicant affirmed 6 February 2006 was read, further evidence in chief was elicited, by leave, from the applicant who was then cross-examined by counsel for the fourth respondent followed by a brief re-examination. 18 The evidence was that the applicant has been in detention at the Villawood Immigration Detention Centre for the last two years. Initially he was located in 'Stage One'. After about four months he was moved to 'Stage Three' where he was located for about seven or eight months. Since then he has been located in 'Stage Two'. 19 When he was located in Stage One the applicant performed work. This included heating food which he served to other detainees, cooking bacon and eggs for detainees on Saturdays and cooking food on a barbeque for detainees, which had been obtained from the Stage Two kitchen, once a fortnight. 20 When the applicant moved to Stage Three he ceased to undertake any work. The applicant says that when located in Stage One he worked for about three or four hours a day spending about an hour on breakfast duties, about an hour and a half on lunch duties and an hour and a half on dinner duties. About three or four times a week he also was engaged in distributing supper over a period of about a half an hour to 45 minutes. 21 The applicant says that, when in Stage One, he worked in the manner indicated under a reward system which earned him 70 merit points a week from the third respondent. He signed for them and utilised them by trading them for phone cards and/or cigarettes and/or, on occasions, goods such as coca cola. 22 Since the commencement of Regulation 5.32A on 1 March 2006, the applicant has resumed working at the detention centre. He says that he now looks after the computer centre. 23 Section 189 of the Act makes provision for the detention of unlawful non-citizens. 25 Section 208 of the Act empowers the Minister to determine in writing a daily amount for the maintenance of a non-citizen detained at a specified place in a specified period. Such amount must be no more than the cost to the Commonwealth of detaining a person at that place in that period. Under s 209 of the Act non-citizens who are detained are liable to pay to the Commonwealth the costs of their detention. Such costs include the daily maintenance amount for each day of the non-citizen's detention. 26 The Act does not specify what is required for 'the maintenance of a non-citizen' who has been detained. 27 The applicant claims to have been ignorant of the proscription on unlawful non-citizens performing work in Australia whether for reward or otherwise under s 235(3) of the Act until he was moved from Stage One to Stage Three. As a result of this, as a detainee I have no choice but to endure unskilled unmotivated workers preparing poorly cooked and poor quality meals; I have to live (sic) facilities that are dirty and unhygienic with dirty toilets, unclean kitchens, unkempt yards and the list goes. The amount detainees are required to pay when they leave Villawood is approximately $130 per day. I am not prepared to engage in detention work for roughly $ 1 per hour maintaining the premises, preparing or serving food, cleaning the building and maintaining computer centre and then be required to pay for my keep when I leave. It provides both an important outlet for willing participants and gives some recognition to those who choose to get involved. All basic services are expected to be maintained without the help of voluntary participants. The scheme has been put in place for the benefit of detainees not the contractors. My understanding is that it is quite popular. 1 2005-06'. Chapter 3 of the report was headed ' 3. The Detention Services Contract '. 32 The report focuses upon a Detention Services Contract between the Department and 'GSL', presumably a reference to the third respondent, which was apparently entered into in or about September 2003 (see paragraphs 3.3 and 3.33). In Figure 3.1 headed 'Structure of the Contract' the Australian National Audit Office provides a table which includes a reference to Schedule 3 to the contract with the heading 'The Standards and Performance Measures'. The standards are described as outcome standards that relate to the quality of care and quality of life expected in immigration detention facilities in Australia. Schedule 3 states that the standards must be met in all circumstances except where it is demonstrated that the security and good order of the immigration detention facility would otherwise be compromised. Duty of Care is an example of an element of detention services for which there is shared responsibility. These included references to 'Schedule 2 --- Clause 4.1.2' and 'Schedule 3 Immigration Detention Standard --- 1.3.1'. The ANAO found that the Immigration Detention Standards and Performance Measures, which are to inform the Services Provider of the service delivery requirements, identify only the broad requirement of meeting day-to-day needs of detainees without specifying actual responsibilities and accountabilities. However, DIMIA's own, separate determination of day-to-day needs is then used in the assessment of Services Provider performance. The ANAO acknowledge the establishment, in February 2005, of a quarterly committee involving representatives from DIMIA, GSL and the subcontractors to review performance and improve communication between all parties. However, some inferences as to its terms may be drawn from the terms of the Australian National Audit Office's report. 38 Annexures 'A' to 'F' to the applicant's affidavit affirmed 6 February 2006 provide evidence of the merit points reward system which was in place at the Villawood Immigration Detention Centre prior to the making of Regulation 5.32A of the Migration Regulations on 1 March 2006. These documents include a 'Kitchen Duties Roster' effective 30 July 2005, an 'Active Account Balance' record in respect of merit points as at 14 December 2005, a 'Merit Points Summary' as at 11 October 2005 and 11 December 2005 recording the names and in most cases signatures of detainees. The summary records 'Total Hours Worked' by each detainee and 'Amount to be paid' against each detainee's name. There follows a notation of the 'Types of Phone Cards Required' and 'Types of Cigarettes Required' and also a column dealing with 'Shop Order'. It can be seen that apart from the prayer for general relief the applicant seeks, in effect, a mandatory injunction against the first and second respondents requiring the adoption of a new policy in respect of the handling of complaints by detainees and the supervision of the performance of detention services contractors. At all material times, the Applicant was an unlawful non-citizen within the meaning of the Migration Act 1958 . At all material times, the applicant was detained by officers of the First Respondent including the Second Respondent and employees or officers of the Third Respondent pursuant to the Migration Act 1958 . At all material times the First Respondent was responsible for the administration and operation of the Department of Immigration and Multicultural and Indigenous Affairs and was charged with obligations under the Migration Act . At all material times, the Second Respondent had responsibility for the detention of the applicant and the exercise of authorised functions under the Migration Act in respect of the applicant. The Second Respondent exercised control over the Villawood Immigration Detention Centre in the State of New South Wales (Villawood IDC) on behalf of the First Respondent and the Commonwealth and was empowered to give directions to the Third and Fourth Respondents. The first and second respondent also failed to ensure that the detainees including me are provided with the proper quality of food and services within the detention. I, Motahar Hussein, the applicant in this proceeding. I am living in the detention for more than one year. The circumstances within the detention are grossly affected by the maladministration, and the detainees, including myself are the sufferers of those circumstances. It is clear to me that everything within the detention centre is infected or contaminated by some kind of unlawfulness and or unfairness. The atmosphere in the detention centre is harassing, intimidating, distressing, humiliating and troubling because of many factors. One of such factors is that GSL and DNCA illegally use detainees for detention work and pay them very little. This is having a significantly negative effect on the quality of service which GSL and DNCA are required to provide to the detainees and consequently adversely affecting my rights within the detention. The detainees work lackadaisically as they are not paid enough. As per my knowledge, in the detention centre GSL and DNCA are using many detainees for the detention work and they are rewarded in the shape of phone cards, cigarettes etc. I was not prepared to raise this issue with either GSL, DNCA or DIMIA officers as I knew that it would not yield any benefit while I myself witnessed several times that local DIMIA officers which includes DIMIA Manager Mr Richard Battersby, DIMIA officers Judy Heleney, Joe and many other DIMIA officers witnessing detainees engaged in detention work going in front of their eyes. It was surprising that these officers did not take any initiative to check whether the detainees are working for reward or not. ... I did not rule out the possibility that the local DIMIA administration is merely following the orders or instructions from the higher authorities and possibly from the Minister herself. Although, this possibility did not diminish my negative view about the character of local DIMIA officers, I considered that it is their legal responsibility to refuse to follow any unlawful order or instruction by the higher authorities. Nevertheless, these were my strong suspicions based on my common sense. 44 It is not the function of a court of justice to enforce or give effect to moral obligations which do not carry with them legal or equitable rights (per Lord Macnaghten in Blackburn, Low & Co v Vigors (1887) XII App Cas 531 at 543; see also The Waterside Workers' Federation of Australia v J W Alexander Limited [1918] HCA 56 ; (1918) 25 CLR 434 at 464). Accordingly, it would not be open to the Court to order a mandatory injunction against the first and second respondents in the terms proposed in paragraph 3 of the Further Amended Application or in any other terms which were directed at requiring the adoption of a new policy in respect of the handling of complaints by detainees and the supervision of the performance of detention services contractors. 45 The claims made by the applicant against the first and second respondents are manifestly groundless. Pursuit of them would be futile. 46 In the evidence of which mention has been made one finds the Australian National Audit Office's reference to the Department's duty of care commitments being met through the engagement of a competent services provider within the framework of relevant legislation, comprehensive contractual obligations, the Immigration Detention Standards and associated performance measures. Mention has also been made of the allegation of the applicant that he has had to endure poorly cooked and poor quality meals, to live in dirty and unhygienic facilities with dirty toilets, unclean kitchens and unkempt yards. In paragraph 8c of the Second Further (Amended) Statement of Claim the applicant has alleged that the first respondent failed to 'perform his duty of care consequently allowing the detainees to fall into the criminal activity'; in paragraph 9b he alleges that the second respondent failed 'to perform his duty of care towards detainees by failing to discourage and/or stop them from falling into criminal activity', and, in paragraph 10 he alleges that the first and second respondents failed to ensure that detainees including the applicant were provided with 'the proper quality of food and services within the detention'. 47 However, no facts have been pleaded or particulars provided sufficient to enable the Court to find an identifiable duty of care which could be said to have been breached and which may confer on the applicant a right to relief (cf S at [205] where it was conceded by the Commonwealth that it was under a non-delegable duty of care in respect of the mental health of detainees, see also [213]-[215]). 1]) . A defendant's liability in negligence relates to the damage which the plaintiff has actually suffered, and to no other: The "Wagon Mound" [No. 1] ; Sutherland Shire Council v Heyman . A defendant's liability for that damage arises from an act done or an omission made by the defendant (the relevant act or omission) which is a cause of the damage suffered: Chapman v. Hearse . However, an omission cannot be said to be a cause of damage unless the defendant was under a duty to act to avoid or prevent the damage and the omission is a breach of that duty: East Suffolk Rivers Catchment Board v. Kent ; Jaensch v. Coffey ; Sutherland Shire Council v. Heyman . A defendant's liability for damage does not extend to damage caused by the relevant act or omission unless the possibility of causing that damage or damage of the same kind was reasonably foreseeable at the time when the relevant act was done or the relevant omission made: Bolton v. Stone; Hughes v. Lord Advocate; Mount Isa Mines Ltd. v. Pusey; Jaensch v. Coffey. 4. A defendant is liable if, and because, a reasonable person in the defendant's position foreseeing the possibility of causing the damage suffered or damage of the same kind would not have done the relevant act or made the relevant omission: Blyth v. Birmingham Waterworks Co. ; Heaven v Pender; Donoghue v Stevenson; Fardon v. Harcourt-Rivington ; Bolton v. Stone . That is the foundation not only of every duty of care in torts of negligence but of the standard of care required to discharge the duty: Vaughan v. Menlove . The standard of care is fixed by reference to the steps which the hypothetical reasonable person would take to avoid or prevent the possibility of the occurrence of the foreseeable damage: Glasgow Corporation v. Muir ; Wyong Shire Council v. Shirt ; Jaensch v. Coffey . A legal duty does not always arise when the facts show that the kind of damage suffered by the plaintiff was reasonably foreseeable by the defendant. Elements in addition to reasonable foreseeability of damage are required to give rise to a duty of care to avoid or prevent damage other than physical damage to the person or to the property of the plaintiff; similarly, additional elements are required where the act or omission of the defendant amounts to a representation to the plaintiff on which the plaintiff relies in doing an act or abstaining from action whereby the relevant damage is caused: Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. ; Shaddock & Associates Pty. Ltd. v. Parramatta City Council [No. 1] ; Mutual Life & Citizens' Assurance Co. Ltd. v. Evatt ; Jaensch v. Coffey ; San Sebastian Pty. Ltd. v. The Minister . Again, there may be special features of the circumstances in which the relationship between the plaintiff and the defendant exists which preclude the arising of a duty of care or modify the standard of care otherwise required to discharge the duty: Rootes v. Shelton; Insurance Commissioner v. Joyce; Cook v. Cook. Whether that be so or not, the available evidence does not lay a foundation for a case that the first respondent, the second respondent and/or the Commonwealth has been under a statutory or common law duty of care to the applicant which has been breached and in which breach the applicant has a sufficient special interest which would entitle him to relief against the first respondent, the second respondent and/or the Commonwealth should such a special interest be required (cf S at [205]. See also [213]-[215]). 49 The relief sought by the applicant against the first and second respondents did not relevantly involve any immediate legal rights, duties or liabilities of any person or body. Nor did it seek to challenge the validity of any legislation by reference to the Constitution . No justicable issue arises. Accordingly, there was no 'matter' to attract the Court's jurisdiction (see Thorpe v Commonwealth of Australia (No 3) [1997] HCA 21 ; (1997) 144 ALR 677 at 682 per Kirby J. See also Re McBain; ex parte Catholic Bishops Conference [2002] HCA 16 ; (2002) 209 CLR 372 at [3] - [7] , [61]-[68] and [244]). 50 In the foregoing circumstances, I am of the opinion that the proceedings should be dismissed generally as against the first and second respondents. Furthermore, no occasion has arisen for an order substituting the Commonwealth for the Secretary of the Department as the first respondent. 51 I do not accept the applicant's submission that the power of the Court under Order 20 rule 2 does not permit the Court to dismiss proceedings as against a party where disparate claims are made against numerous respondents. A declaration that it is unlawful for the third and fourth respondent to employ or engage the detainees into detention work for reward in the disguise of merit points and/or meaningful activities. An order prohibiting the third and fourth respondents from continuing, engaging, appointing and or assigning any detainee either directly or indirectly for any work or activity with or without reward or favour in detention. At all material times the Third Respondent operated the day to day management of the Villawood IDC for reward and employed officers and agents who undertook work in the furtherance of the management of the Villawood IDC. At all material times the Fourth Defendant operated the kitchen facilities at the Villawood IDC for reward. The third and fourth respondents are engaged in crime by continuing, engaging and involving by illegally employing the detainees into detention work contrary to section 235 ss(3), (5) of the Migration Act 1958 . The third and the fourth respondents also failed in performing their duty of care by failing to stop and discourage the detainees from illegally working and from falling into crime. The third and the fourth respondents have failed in performing their duty of care by failing to provide the proper quality of food and services by engaging low paid, inadequately skilled unmotivated detainees into detention work. The applicant makes the claims in paragraphs 16 to 32 below in the accrued jurisdiction of this Honourable Court. In or about August 2004 the applicant purported to enter into a contract for services with the Third Respondent (" the Contract "). The applicant inquired as to how he could obtain phone cards to make phone calls. Ms Laga invited him to apply to work in the Kitchen to make "money" so he could obtain phone cards, and directed him to put his request for work in writing. It was a term of the Contract that the applicant would provide work in return for payment of value ("merit points"), namely 1 unit redeemable to the value of approximately $1dollars' value for certain items sold by the Third respondent (for example 10 merit points would allow the purchase of a $10 phone card from the Third Respondent). The applicant was given 70 merit points per week conditional upon him providing the Services. The applicant repeats paragraph 11 above and further says that the Contract was void for illegality and as against the public interest. Further, and in the alternative, the contract was contrary to s117 , 118 and 119 of the Industrial Relations Act 1996 (NSW) and so void for illegality and as against the public interest. From about August 2004 to December 2004 the applicant performed services for the Third Respondent and also for the benefit of the Fourth Respondent (" the Services "). The Services were provided at the request of the Third Respondent. In the alternative, the services were provided with the knowledge of the Third Respondent and the Third Respondent accepted the services. Further and in the alternative, the Services were provided at the request of the Fourth Respondent. Further and in the alternative, the Services were provided with the knowledge of the Fourth Respondent and the Fourth Respondent accepted the services. The Third and Fourth Respondents knew, or ought reasonably to have known, that the applicant provided his services on the basis that he would receive reward for the Services. The performance of work by the applicant was in the interests of the Third and Fourth Respondents and they obtained the value of the work performed by him for the purposes of their contractual arrangements with each other and with the First Respondent and or the Commonwealth. The Services enriched and were of value to the Third Respondent. Further and in the alternative, the Services enriched and were of value to the Fourth Respondent. The Third Respondent has failed to provide reasonable remuneration for the Services and it would be unjust and inequitable to allow it to retain the enrichment or benefit of the value of the Services. The Fourth Respondent has failed to provide reasonable remuneration for the Services and it would unjust and inequitable to allow it to retain the enrichment or benefit of the value of the Services. The applicant claims from the Third and or the Fourth Respondents a fair and reasonable sum of money in quantum meruit for the Services. It would seem to me that this submission is without substance. If there were otherwise an entitlement to a declaration there would be no reason why the Court could not make a declaration in respect of a past illegality as opposed to a present one. The Minister's statement apparently encouraged the GSL and DNCA against the law of the land and they are still using detainees by paying reward against the clear will of the Parliament expressed in section 235 of the Migration Act 1958 . In other words, GSL and DNCA are aiding and abetting crime in the detention centre by the apparent sanction of the Minister and her Department. An obligation to pay fair and just compensation for a benefit which has been accepted will only arise in a case where there is no applicable genuine agreement or where such an agreement is frustrated, avoided or unenforceable. (See also Trimis v Mina [1999] NSWCA 140 at [54] . The third respondent submits that there was no such agreement. The fourth respondent submits that there was such an agreement and it was fully performed thus denying any entitlement in the applicant to make a quantum meruit claim. 59 The applicant submits that the applicable genuine agreement is one which was unenforceable because it was directed at the applicant doing something which s 235(3) of the Act forbade. 60 Alternatively, it was submitted that it was void for illegality being in contravention of ss 117 , 118 and 119 of the Industrial Relations Act 1996 (NSW) (' Industrial Relations Act '). Those provisions are concerned with the manner in which remuneration due to an employee within the meaning of that Act should be paid. In my opinion those sections have no present relevance. One could hardly describe the applicant as an 'employee' within the meaning of the Industrial Relations Act . He was not a person employed in an industry within the meaning of s 7 of that Act nor was he a person taken to be an employee, being a person described in Schedule 1 to that Act. But these propositions do not lead to the conclusion that a person who participated in the making or execution of such an agreement ... never has a curial remedy. A court that finds that an agreement ... has an unlawful purpose has merely set the stage for a further inquiry: are the circumstances surrounding the agreement such that the court should deny a relevant remedy to the party seeking the assistance of the court? But it is subject to exceptions which allow relief to be granted despite the presence of illegality. First, the courts will not refuse relief where the claimant was ignorant or mistaken as to the factual circumstances which render an agreement or arrangement illegal. Leaving aside cases where the statute makes rights arising out of the transaction unenforceable in all circumstances, such a sanction can only be justified if two conditions are met. It is not in accord with contemporaneous notions of justice that the penalty for breaching a law or frustrating its policy should be disproportionate to the seriousness of the breach. The seriousness of the illegality must be judged by reference to the statute whose terms or policy is contravened. It cannot be assessed in a vacuum. The statute must always be the reference point for determining the seriousness of the illegality; otherwise the courts would embark on an assessment of moral turpitude independently of and potentially in conflict with the assessment made by the legislation. In most cases, the statute will provide some guidance, express or inferred, as to the policy of the legislature in respect of a transaction that contravenes the statute or its purpose. It is this policy that must guide the courts in determining, consistent with their duty not to condone or encourage breaches of the statute, what the consequences of the illegality will be. Thus, the statute may disclose an intention, explicitly or implicitly, that a transaction contrary to its terms or its policy should be unenforceable. On the other hand, the statute may inferentially disclose an intention that the only sanctions for breach of the statute or its policy are to be those specifically provided for in the legislation. 68 If the contract is void for illegality and unenforceable in circumstances where it is directed at the performance of an illegal act I cannot see how, consistent with the maxim to which reference has been made, the applicant could recover on a quantum meruit claim for work performed by him which retained its illegal character. Moral culpability is irrelevant. 69 No claims are made against the third and/or fourth respondents in the Further Amended Application founded upon quantum meruit. In the circumstances all that is required is that paragraphs 15 to 32 inclusive of the Second Further (Amended) Statement of Claim should be struck out. 70 This conclusion renders it unnecessary to consider whether the quantum meruit claim could properly have survived as being one within the accrued jurisdiction of the Court after the dismissal of the claims made by the applicant against the first and second respondents. Accrued jurisdiction can only arise where the single controversy which is the "matter" is one which is within the jurisdiction conferred upon the Court. If no federal jurisdiction is properly invoked then there can be no accrued jurisdiction: Carlton & United Breweries Ltd v Castlemaine Tooheys Ltd [1986] HCA 38 ; (1986) 161 CLR 543 and Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2000] FCA 1572 ; (2000) 104 FCR 564 at 598 per French J. His Honour cites the decision of a Full Court of this Court in Westpac Banking Corporation v Paterson [1999] FCA 1609 ; (1999) 95 FCR 59 at 62 in support of this view. That was a case where a cross-claim, not being colourable, attracted federal jurisdiction where it asserted a claim founded on Commonwealth legislation. But Westpac Banking Corporation seems rather to be a case where the cross-claim was such that the Court had authority to proceed to hear and determine the issue involved, and thus the non-federal part of the controversy, and not a case where the Court was first required to decide whether it had jurisdiction to hear and determine any federal claim at all. 73 This brings me to a consideration of the claims for relief made by the applicant against the third and fourth respondents as contained in the Further Amended Application. The question is one of standing. For an applicant such as Mr Hussein to have standing may require a connection between the applicant's interests and the relief sought. As a general rule the Court will not recognise busybodies who interfere in things that do not concern them. 74 In my opinion the circumstances of the applicant when he was in Stage One were such that the Court would not grant him any relief. His position would be not unlike that of the driver of a getaway car seeking declaratory relief to the effect that the person who converted the bank robber's shotgun into a sawn-off shotgun for use by him in robbing the bank engaged in unlawful activity. However, as at the date of the institution of the proceedings his circumstances had changed and it could be argued that he was entitled to relief in respect of the work said to have been performed by other detainees in contravention of s 235(3) of the Act under contracts or arrangements to which the applicant says that the third and/or fourth respondents were parties. 75 In my opinion the applicant has sufficient standing to seek declaratory relief against the third and fourth respondents in respect of such employment or engagement of detainees within the Villawood Immigration Detention Centre to perform work (see Phelps v Western Mining Corp Limited (1978) 20 ALR 183 at 189-190 and Truth About Motorways Pty Limited v Macquarie Infrastructure Investment Management Limited [2000] HCA 11 ; (2000) 200 CLR 591 at [2] , [93] and [162]). 76 On a summary dismissal application it would be inappropriate to find that the applicant in this case lacked a special interest which may be required for his claims to succeed. The nature and subject matter of the litigation will dictate what amounts to a special interest. In determining whether there is a special interest it is necessary to have regard to the exigencies of modern life as occasion requires (see Bateman's Bay Local Aboriginal Land Council v The Aboriginal Community Benefit Fund Pty Limited [1998] HCA 49 ; (1998) 194 CLR 247 at [46] , [50] and [52]). 78 In the foregoing circumstances I would decline to order that the applicant's claims against the third and fourth respondents be summarily dismissed. However, as indicated earlier paragraphs 15 --- 32 of the Second Further (Amended) Statement of Claim should be struck out. 79 Given the dismissal of the claims against the first and second respondents and the striking out of the quantum meruit claims against the third and fourth respondents, consideration should be given to the utility of retaining any part of what remains in the Second Further (Amended) Statement of Claim in its present form, but this is a matter on which the applicant and the third, fourth and fifth respondents should be heard. The preferred course may be to allow the applicant to replead his case against those respondents. 80 Costs should follow the event. Even though the third and fourth respondents have not succeeded in obtaining all the relief sought by them, they have achieved substantial success.

summary dismissal detainee at migration detention centre seeking relief in respect of work performed contrary to s 235(3) of the migration act by fellow detainees and relief against the centre's managers for quantum meruit in respect of work performed by him in contravention of s 235(3) ex turpi causa non oritur actio. practice and procedure

The third ground was abandoned at the hearing. The two remaining grounds are first that this Court has no jurisdiction because there is no "matter" for the purposes of s 1337B of the Corporations Act 2001 (Cth) ("the Act"), s 21 of the Federal Court of Australia Act 1976 (Cth) and s 39B of the Judiciary Act 1903 (Cth) and second that the action should be stayed in the Court's inherent jurisdiction as it is an abuse of process. The proposed letter is in terms that Owston has contravened the law because it did not, when offering to sell the shares, lodge a prospectus with ASIC. The proposed advertisement was in substance to the same effect as the proposed letter. It is not a civil penalty provision, although contravention of this section is an offence. Relief is available under s 1325 in the event of a contravention of s 727, but only to a person who has suffered or is likely to suffer loss and damage. ASIC could, in that circumstance, make an application for relief under s 1325 on behalf of an "injured person": s 1325(3). No relief is sought under s 1324 of the Act. None of the investors who are alleged to have bought shares from Owston are party to this action. ASIC seeks a declaration in relation to a number of alleged contraventions of s 727 by Owston as well as an order that Owston publicise this Court's finding of the contraventions, if any, and inform all other investors alleged to have bought shares from Owston that they may have a claim against Owston. Owston submits that the proposed orders are, in substance, an attempt to promote further litigation against it under the imprimatur of this Court's order, which it says is not the function of an order of this court, nor is it the function of s 1324B which is solely remedial. Accordingly, this Court's original jurisdiction to grant the relief sought by ASIC is found in either s 1337B of the Act or s 39B of the Judiciary Act 1903 (Cth). The question is whether this proceeding involves a "matter" within the meaning of those provisions. Owston submits that in order for a " matter " to exist for the purposes of s 39B(1A) of the Judiciary Act , there must be a controversy as to some immediate right, duty or liability to be established by the Court's determination: Re: Judiciary and Navigation Acts (1921) 29 CLR 257 at 265; Direct Factory Outlets Pty Ltd v Westfield Management Ltd [2003] FCA 1095 ; (2003) 132 FCR 428. Owston submits that on ASIC's case, no liability will be established on the part of Owston should ASIC be successful and points to the fact that ASIC does not seek recovery of damages in a representative capacity for shareholders, nor does the pleaded contravention give rise to a civil penalty. It claims that the relief sought is an advisory opinion on a purported contravention of the Act and does not quell any controversy between the parties. Here, Owston relies upon Bass v Permanent Trustee Co Ltd [1999] HCA 9 ; (1999) 161 ALR 399 and Re McBain; Ex parte Australian Catholic Bishops Conference [2002] HCA 16 ; (2002) 209 CLR 372 at [61] - [62] per Gaudron and Gummow JJ. The majority of the members of the High Court in Re: Judiciary and Navigation Acts explained that "a matter under the judicature provisions of the Constitution must involve some right or privilege or protection given by law, or the prevention, redress or punishment of some act inhibited by law" (at 266). Owston contends that in light of the statutory scheme there is no right, privilege or protection given to ASIC which is sought to be enforced, nor is the relief sought in the nature of preventative relief, or redress, or a punishment. Owston accepts that declaratory relief is often given on the motion of a regulator, but it says that usually a declaration is only granted in conjunction with substantive relief which is in its nature either protective such as by the grant of injunctive relief or corrective advertising orders or alternatively a punishment by awarding, for example, civil penalties. It contends that a bare declaration will be made only in rare circumstances, absent other relief that gives effect to a right or obligation. Ainsworth v Criminal Justice Commission (109) was such a case. But a declaration cannot be made if it "will produce no foreseeable consequences for the parties". (110) That is not simply a matter of discretion. Rather, a declaration that produces no foreseeable consequences is so divorced from the administration of the law as not to involve a matter for the purposes of Ch III of the Constitution . And as it is not a matter for those purposes, it cannot engage the judicial power of the Commonwealth. (See Ainsworth v Criminal Justice Commission [1992] HCA 10 ; (1992) 175 CLR 564 at 582, per Mason CJ, Dawson, Toohey and Gaudron JJ). It is correct as Owston points out that ASIC could have but has not written to, those investors and expressed its opinion that Owston has contravened the Act. Accordingly Owston submits that there is not any real consequence to the orders sought when the investors know the alleged fact, and in any event ASIC could have told them of its opinion as to the alleged fact without recourse to the Court. Owston says that the only additional effect of the orders sought is to gain the imprimatur of a declaration made by this Court, where some of the parties with respect to whom the declaration is made are not present. Taken together Owston submits that the declarations are advisory in effect and that the proposed publications order is equally so amounting to advice that the recipient may have a claim. It follows, submits Owston that the orders sought, by their nature, will not quell a controversy but rather the purpose of the orders is to create controversy. Owston submits that the s 1324B order is not consequential on the declarations sought and that in terms it can only be consequential on a finding of a breach of the Act. It says that here the order sought is relevantly disconnected from the breach with no sufficient nexus, citing ASIC v McDougall (2006) 57 ACSR 175 at [69]. It says that it is not a remedy in the true sense for the alleged wrong, but amounts, in effect, to advice from ASIC, with the Court's endorsement, to the shareholders concerned. It says that a final determination between the parties of an issue that has no practical consequence between those parties does not convert a hypothetical question into a "matter", otherwise all hypothetical questions would be a "matter" once a contradictor was found. Owston submits that no final determination or resolution of the alleged contravention will take place without additional factual findings and determinations of issues of law and that accordingly, the Court is being asked to consider a hypothetical situation where its decision will produce no foreseeable consequences for the parties as to which it relies upon Forster v Jododex Australia Pty Ltd [1972] HCA 61 ; (1972) 127 CLR 421 ; Australian Institute of Private Detectives Ltd v Privacy Commissioner [2004] FCA 1440 ; (2004) 139 FCR 394. Further Owston contends that the relief sought pursuant to section 1324B of the Act, will not, if granted, provide a guarantee that no future proceedings will be commenced in relation to the same issues and facts, because there is no indication as to how many, if any, shareholders might choose to commence proceedings resulting in the inefficient and unjust administration of justice. Accordingly, it contends, there will be no final resolution of the issue of the alleged contravention of s 727(1) of the Act. This uncertainty, Owston submits, not only burdens it with a liability for additional costs, but forces it to consider evidentiary issues in the immediate proceedings that it would not be required to carry out in the usual course. Owston also contends that there is potential for inconsistent findings in the future litigation; at both fact and law. Litigation funder IMF (Australia) Ltd ("IMF") and the liquidator of Firepower Holdings Group Limited have communicated with its shareholders in relation to potential claim against Owston and other defendants to the action commenced by ASIC. Owston says that IMF's conduct, in writing to Firepower Holdings Group Limited's shareholders to inform them that they may have a potential cause of action against Owston and/or the other defendants, coupled with the nature of the relief sought by ASIC, effectively results in shareholders being encouraged to commence future proceedings against Owston. Accordingly, Owston says, there is a real possibility that will be required to re-litigate the issues in dispute in these proceedings. I do not accept Owston's submissions. In my opinion, the present proceedings fall within the majority's several alternative descriptions of "matter" in Re: Judiciary and Navigation Acts. They concern the rights and protections conferred by s 727 of the Act as well as the redress available under ss 1324B and 1337B of the Act and under s 21 of the Federal Court Act and s 39B(1A) of the Judiciary Act for contraventions of s 727 of the Act. Re: Judiciary and Navigation Acts is not authority for the proposition that for a "matter" to exist, a claim of civil penalty or for recovery of damages or some relief which undoes the wrong must be present, or that somehow the proceedings must ensure finality of litigation by ensuring that there is no real possibility that another plaintiff will commence proceedings in relation to some or all of the issues in the proceedings. Nor is it authority to support a contention that bare declaratory relief which does not meet or aid one of those ends will not ordinarily be granted. Involved in this proceeding is at least the question of the right of investors to receive a prospectus under the provisions of the Act and the corresponding duty of Owston to provide one. Owston is liable to the declaratory relief sought. These are sufficient. Section 21 of the Federal Court Act also contradicts that submission. It expressly provides that declaratory relief may be granted "whether or not any consequential relief is or could be claimed". In any event ASIC is seeking consequential orders under s 1324B of the Act. In Direct Factory Outlets Pty Ltd v Westfield Management Ltd , there were questions as to whether the applicant had a sufficient interest to bring the proceedings and whether there was utility in the declarations sought. It was said that the applicant had no personal right or interest that it sought to assert or protect in the proceedings, and that any interest it had was purely commercial. By contrast, in this case ASIC as the corporate regulator is charged with enforcement of the Act and has a public interest in pursuing this action against Owston. Bass v Permanent Trustee Co Ltd does not assist Owston. There is nothing hypothetical or advisory about the present proceedings. They involve the corporate regulator alleging various actual breaches of the law. The defendants deny those breaches. The result will quell that real controversy between them and will finally determine, subject only to any appeals, ASIC's allegations of breaches of s 727 of the Act and whether declarations of contraventions should be made together with consequential relief under s 1324B. Owston also cites Australian Institute of Private Detectives Ltd v Privacy Commissioner [2004] FCA 1440 ; (2004) 139 FCR 394. However in that case the applicant sought declarations "independently of any specific factual allegations" [29] which went "merely to future events or circumstances" which would not quell any existing controversy between the parties to the proceedings [31] and which was, in effect, seeking an advisory opinion [32]. A Full Court of this Court has expressed doubt as to whether an application for a declaration as to the legality of proposed future conduct involves a "matter" within the meaning of ss 75 , 76 and 77 of the Constitution of the Commonwealth: IMF (Australia) Ltd v Sons of Gwalia Ltd (Administrator appointed) [2005] FCAFC 75 ; (2005) 143 FCR 274 per Moore and Emmett at [16], [67] and [68]; (cf IMF (Australia) Ltd v Sons of Gwalia (Administrator Appointed) (2004) 211 ALR 231 per then French J at [43]. That, however, is not this case. In the present proceedings, by contrast, ASIC has made quite specific factual allegations concerning past events so that the court's decision will quell the controversy between it and Owston. Australian Institute of Private Detectives is not authority for the proposition that declarations must quell all controversies about an issue that might arise between a defendant and persons who are not parties to the litigation and who might sue that defendant about the same or similar issues. Forster v Jododex Australia Pty Ltd [1972] HCA 61 ; (1972) 127 CLR 421 was cited by Owston in support of the proposition that the Court may not be "forced to consider a hypothetical situation where its decision will produce no foreseeable consequences for the parties". Jododex is not authority for such a proposition. Rather, this formulation reflects the language of the joint judgment in Ainsworth at p 582 adopting what had been said in University of New South Wales v Moorhouse [1975] HCA 26 ; (1975) 133 CLR 1 at 10 as to a hypothetical question and in Gardner v Dairy Industry Authority (NSW) (1977) 52 ALJR 180 at 188, as to "foreseeable consequences". It is also the formulation adopted by Gaudron J in Truth About Motorways at [52]. Gibbs J at 435 in Jododex said that the jurisdiction to make a declaration is a very wide one. Jododex is, as was also approved by the majority judgment in Ainsworth, authority, at 437, that the power of superior courts to grant declaratory relief is discretionary which "it is neither possible nor desirable to fetter ... by laying down rules as to the manner of its exercise". In any event, the issues in these proceedings are not hypothetical. Further, there will be foreseeable consequences here, as the plaintiff will, as a regulator, have obtained a declaration of the court expressing public disapproval of a breach of the law and orders to provide information under s 1324B may also follow from the declarations. The jurisdiction to grant declaratory relief is wide. In JN Taylor Holdings Ltd (in liq) v Bond (1993) 59 SASR 432 at 435-436 there is a useful collection of relevant authority to that effect. It is not necessary that the plaintiff have a cause of action against the defendant: Guaranty Trust Company of New York v Hannay and Co [1915] 2 KB 536. A statement by Lord Sterndale MR in Hanson v Radcliffe Urban District Council [1922] 2 Ch 490 at 507, quoted by Gibbs J in Forster v Jododex at 435, appeared to confine the otherwise unlimited character of the jurisdiction to cases involving "a question of defining the rights of two parties". As was pointed out, however, by Street CJ in Johnco Nominees Pty Ltd v Albury-Wodonga (NSW) Corporation [1977] 1 NSWLR 43 at 51, that statement was made "at a time when the declaratory jurisdiction had not achieved the full development manifested in the last 20 or 30 years. " By 1970 the Privy Council could say in Rediffusion (Hong Kong) Ltd v Attorney-General of Hong Kong [1970] AC 1136 at 1158 that to exclude the jurisdiction it must appear "that the questions were purely abstract questions the answers to which were incapable of affecting any existing or future legal rights of the plaintiffs" [emphasis mine]. In Johnco Nominees Pty Ltd v Albury-Wodonga (NSW) Corporation (above), Street CJ (at 53) repudiated the notion of jurisdictional cut-off points in relation to declaratory relief. In my opinion there is no jurisdictional limit. The court's power to grant such relief is "only limited by its own discretion" ( Hanson v Radcliffe at 507), and the boundaries of judicial power: Ainsworth v Criminal Justice Commission [1992] HCA 10 ; (1992) 175 CLR 564 at 581-582. The making of such a declaration does not simply record the outcome of enforcement proceedings; it may also be an appropriate way of marking the court's disapproval of the contravening conduct. It was there held that the Court has power under s 21 of the Federal Court of Australia Act to make a declaration of right in proceedings for injunctive relief brought under s 80 of the Trade Practices Act 1974 (Cth) irrespective of whether injunctive relief is granted or not: Sheppard J at p 98 (Foster J agreeing at p 106); Hill J at 110. The making of declaratory orders in such cases without the grant of injunctive relief in litigation brought under the general law to enforce public rights is not an uncommon course. It has never been suggested that no power exists to grant such declaratory relief merely because the consequence of a declaration is to declare the existence of a wrong. The declaration that an offence has been committed is the concomitant of the non-existence of a right. Semantically, it may be said to be the declaration of a negative right. It is appropriate, in my view, to refer to it as a declaration of right. When before the New South Wales Court of Appeal Hutley JA, with whom Reynolds and Samuels JJA agreed, declined to uphold the grant of declarations observing that they were "little more than prefatory averments to the grant of an injunction". That observation was expressly rejected by Gibbs CJ and by implication also by the rest of the High Court which declined to grant injunctive relief but considered it appropriate to make declarations in the terms made by Helsham CJ in Eq at first instance but limited to certain properties. The declarations were to the effect that there was a "scheme" that involved the creation of "interests" within s 76 of the Companies Act 1961 (NSW) and that Div 5 of Part IV had been breached. Here Owston says that there is no real consequence to the declaratory orders sought as it does not vindicate any right provided for by the Act or require Owston to do anything, or undo any harm or provide compensation. It is no more, Owston says, than a stepping stone or a hook for orders pursuant to s 1324B. This is, in substance, to adopt the approach of the New South Wales Court of Appeal in Australian Softwood Forests which was disapproved by the High Court. In Australian Softwood Forests Pty Ltd v Attorney-General (NSW) [1981] HCA 49 ; (1981) 148 CLR 121 , the High Court expressly disagreed with the Court of Appeal of New South Wales, which had declined to grant a declaration with respect to contravention of the 'prescribed interests' provisions of the Companies Act 1961 (NSW). Gibbs CJ remarked that it was proper to grant a declaration in that case although it had been agreed that an injunction was not an appropriate remedy (at 125). He observed that, while a declaration will not ordinarily be made that a defendant has committed a crime, there is jurisdiction to do so in a proper case. In his Honour's view, older cases which discouraged a statutory authority from commencing proceedings for declaratory relief are no longer applicable, in view of the changed social climate, and the Court will now grant declaratory relief at the suit of the statutory authority which exists to regulate an industry, in an appropriate case: at 214. In his Honour's view, the fact that the subject matter of the declaration is of public interest is an important consideration in favour of the granting of declaratory relief, even though the order may be of only slight utility: at 213. In that case the Court declined to make a declaratory order, because (inter alia) the declaration would affect investors who were not parties to the proceedings. That consideration is not present here. The approach taken in the Federal Court is very similar: Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc [1993] FCA 83 ; (1993) 113 ALR 257. It is appropriate for the Court to take these matters into account in the exercise of its discretion to grant or refuse such relief. In particular his Honour agreed with the views expressed by their Honours that when declarations are sought by a public authority such as ASIC then the declaration should be made if it is in the public interest to do so (at [39]). Gray J in ASIC v West (2008) 100 SASR 496 at [203] adopted the same approach to the grant of declaratory relief in favour of ASIC. More recently a bare declaration was granted by Finkelstein J in Australian Securities and Investments Commission v HLP Financial Planning (Aust) Pty Ltd [2007] FCA 1868 ; (2007) 164 FCR 487. The Court declared that the "scheme" in question was an unregistered managed investment scheme in contravention of s 601ED(5) of the Act. Many people put money into the scheme. They are entitled to know that the scheme was illegal and that is one reason why the HLP group was wound up. The declaration will not enable the investors to recover their money. But at least it will inform them what they had got themselves into. I am satisfied that these proceedings constitute relevantly a "matter" which enlivens the Court's jurisdiction. The plaintiff, as the public regulatory agency charged with enforcing the Act, has a real interest in raising the questions to be litigated in the current proceedings. It is not a hypothetical case but involves real questions of fact and law between the corporate regulator and Owston as the appropriate contradictor. The courts have for a considerable period consistently concluded that it is appropriate for ASIC to take civil proceedings for declaratory relief in respect of past events, even if there is no risk of repetition, where the outcome may establish that the conduct complained of was wrongful and thereby mark the court's and the community's disapproval of it and may deter other wrongdoers. I have referred to a number of these authorities. This is so, on the authorities, whether or not there is a cause of action against the defendant, and whether or not other relief is sought. Further, s 21 of the Federal Court Act provides, as I observed earlier, that a "suit is not open to objection on the ground that a declaratory order only is sought". It also informs those affected, for example investors, as to what occurred as a matter of law: ASIC v HLP Financial Planning. Were it necessary, and in my opinion it is not, any possible doubt over the court's jurisdiction is removed by the obvious relation between the declarations that the plaintiff seeks and the injunctive relief sought under s 1324B. It also has power by virtue of O20 r 5 of the Federal Court Rules to stay proceedings which are an abuse of the process of the Court. Proceedings will be an abuse of process if, regardless of the propriety of the person bringing the proceedings, they may be converted into instruments of injustice or unfairness, or are vexatious or oppressive: Walton v Gardiner (1993) 177 CLR 378 at 393 per Mason CJ, Deane and Dawson JJ. Owston makes the following submissions to support its conclusion that these proceedings are an abuse of process and should be permanently stayed. First, the relief sought is without utility. The investors are well aware that they may have a claim against Owston. A litigation funder has expressed an interest in funding the investors to bring proceedings. The declarations and publication orders will serve no purpose. To the extent that it may be suggested by ASIC that the orders will provide information or comfort to investors as to their prospects of success against Owston, that suggestion tends to prove Owston's submission. The orders sought are advisory. Further, it is manifestly oppressive to Owston to face proceedings of that nature. Second, there is a real risk of the same facts being re-litigated. That is plainly oppressive to Owston. Owston should not be exposed to two (or possibly more) trials of the same issue, particularly given the nature of the relief sought in this action. As non-parties the investors are not bound by any findings in Owston's favour: Ann Street Mezzanine Pty Limited (in liq) v Beck (2009) 225 ALR 324 at [26] and [32] per Finkelstein J. Owston's primary submission is that it will not be bound in later proceedings by a finding of fact or law, other than the latter's precedential value that is made against its interests in this action. Although unable to bring proceedings which amount to a collateral attack on the result in these proceedings, Owston submits it is entitled to defend itself from attack by re-litigating issues decided against its interest. (Hon K Handley " Res Judicata: General Principles and Recent Developments " (1999) 18 Aust Bar Review 214 at 220 and the authority cited). That findings made in these proceedings are not binding in any later proceedings brought by any investors is consistent, it says, with the structure of the Act. It observes that ASIC can bring, but has not brought, representative proceedings under s 1325(3) of the Act provided certain condition are met. It also points to the fact that under s 1317F certain findings of breach of a civil penalty provision are binding on the defendants. The legislature has decided that only findings in civil penalty proceedings are binding, and not findings in other proceedings brought by ASIC. Owston acknowledges that these submissions "may not be unquestionably right". Third, where the relief sought in these proceedings is calculated to encourage re-litigation of the issues this will likely bring the administration of justice into disrepute. The possibility of re-litigation according to Owston is not a mere risk but rather is the very purpose of these proceedings. It is not the function of this Court, or proper exercise of a power under the Act, to promote litigation. Fourth, in the event of the issues in these proceedings being re-litigated there is the obvious potential for inconsistent findings. That is a possibility to be avoided, not encouraged. These proceedings are calculated to promote the re-litigation of the same issues in which inconsistent findings are possible. Fifth, the process in any subsequent proceedings is likely to become inherently unfair to Owston. It is likely that Owston's case and evidence will be fully disclosed, in open Court, and its witnesses cross-examined in this action. That fact will confer on the investors and any litigation funder an usual advantage over Owston. Sixth, there is the obvious and unjust cost to Owston of twice being required to defend proceedings that raise many of the same issues. For these reasons Owston submits that it is prima facie oppressive that Owston will be required to twice litigate the same issues, in circumstances where the effect of the first proceedings is only to encourage the second proceedings, the investors are already well aware of their potential claim against Owston and the relief is thus inutile. The reasons I have expressed on the jurisdictional question are broadly apposite to this alternative ground. ASIC has a real interest in seeking the declaratory relief which it does as well as the remedy under s 1324B. That is sufficient in itself to dispose of Owston's contentions. It is not to the point that there is a real possibility that other persons, such as investors, who are not parties to the present proceeding will or might commence future proceedings against Owston and might claim damages for contraventions similar to those alleged in this proceeding by ASIC. It is premature to raise a prospective issue estoppel. Should circumstances arise in the future for such a plea to be considered then that is the time to raise the point. At the moment it is a bridge too far. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.

whether proceeding involves a "matter" ch iii of the constitution of the commonwealth s 39b(1a) judiciary act 1903 (cth) s 21 federal court of australia act 1976 (cth) corporations act 2001 (cth) s 1337b(1). jurisdiction federal court original jurisdiction of declaratory relief whether a "matter" arising under laws of the (commonwealth) parliament s 39b(1a) of the judiciary act 1976 whether a civil "matter" arising under the corporations legislation s 1337b(1) of the corporations act 2001 (cth) s 21 federal court of australia act 1976 (cth). declarations of contravention of s 727 corporations act 2001 (cth) whether amounting to advisory opinion of court or resolution of hypothetical dispute whether bare declaratory relief available to australian securities and investments commission. where real possibility of other proceedings by investors whether likelihood of re-litigation of issues whether administration of justice will be brought into disrepute potential for inconsistent findings whether oppressive to relevant defendant. constitutional law courts and judges practice and procedure abuse of process

The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs (as the Minister was then known) to refuse to grant Protection (Class XA) visas to the appellants. The appellants, who are husband (SZKMS) and wife (SZKMT), are citizens of Sri Lanka who arrived in Australia on 10 September 2006. On 17 October 2006 the appellants lodged an application for a protection visa with the Department of Immigration and Multicultural and Indigenous Affairs (as it was then known). A delegate of the first respondent refused the application for protection visas on 27 November 2006. On 1 December 2006 the appellants applied to the Tribunal for a review of that decision. Both appellants made claims under the Refugees Convention. The appellant husband claimed a well-founded fear of persecution because of his political opinions. He claimed that as a member of the National Youth Front, being the student wing of the United National Party (UNP), he had worked for a Cabinet Minister, the Prime Minister, and a local politician. He claimed that throughout this period he received threats to stop working for the UNP, including being beaten and having a gun put in his mouth. On the night of local elections the appellant husband claimed that while he was at the politician's house, political opponents entered the appellant husband's home whilst his then fiancée (SZKMT), mother and aunt were at home. They destroyed some items, asked where the appellant husband was and, when the appellant wife who was then his fiancée refused to answer, they mistreated her and threatened to kill her. The appellant husband claimed that shortly thereafter he made a complaint to the police and he and his then fiancée moved to his sister's house in Kandy. He claimed to have been beaten and have his life threatened by supporters of the People's Liberation Front (Janatha Vimukthi Peramuna (JVP)) when standing at a bus stop with his fiancée in Kandy. When he returned to Columbo he was dragged into a car, had a gun pointed at him and warned that if he continued in politics he would "definitely" be killed. The appellant husband claimed that as a result of his fear he became sick and he and the appellant wife moved to her aunt's house in Ganemulla before leaving for Australia. He feared that if he returned to Sri Lanka he would be killed by his "political enemies". The appellant wife also claimed she had a well-founded fear of persecution. She said that at the end of January 2006 she moved into live with the appellant husband at his house in Attidiya, Columbo. In mid-February she was taken by her husband to the mayor's house for a dinner where her husband and the mayor discussed the upcoming local elections to be held on 30 March 2006. She said that in mid-March one morning she saw a lot of people gathered around their house. When she went outside people started to laugh at her. She said she was embarrassed to see her name and humiliating things about her character were spray painted on the walls. She said that the words meant that her husband had used her to get votes for the party by "sending me with the politicians". She said, "I cannot explain how embarrassing and humiliating it was, I walked out there. " She said that the next day people pointed at her and were talking about her. She said that during the home invasion referred to in the appellant husband's claims, she was asked where the appellant husband was and was threatened that if she told the police about the attack they would rape and kill her. Further, she witnessed the beating of her husband at a bus stop in Kandy and, as a result, she was constantly fearful. The appellant wife claimed that after the husband told her he had been kidnapped and his life threatened, she took him to her aunt's place. She realised both their lives were in danger so they decided to move to Australia. She fears that they will both be killed should they return to Sri Lanka. The Tribunal accepted that the appellants were citizens of Sri Lanka. The Tribunal accepted that the appellant husband was a member of the National Youth Front of the UNP. The Tribunal gave no weight to that involvement because of the appellant husband's evidence that not all UNP supporters face harm in Sri Lanka and because the appellant husband consistently claimed that the harm he faced, and still faces, was specifically based on his work undertaken directly on behalf of UNP politicians rather than merely his affiliation with the UNP. The Tribunal also gave no weight to independent country evidence provided by the appellant in relation to harm caused to members of the National Youth Front. The Tribunal found that the appellants were not credible witnesses because the appellants could not provide any evidence to support their claims. The Tribunal found the appellants' reasons for the lack of such information "unimpressive and evasive", and concluded that the appellants' claims of persecution were fabricated. The Tribunal also found that the claims in relation to the home invasion lacked credibility. The Tribunal concluded by finding that, on the evidence, the appellant husband had no ongoing interest in politics in Sri Lanka and that neither appellant had any significant relationship with the UNP. On 12 April 2007 the appellants applied to the Federal Magistrates Court for a review of the Tribunal's decision. The appellants claimed that the Tribunal committed jurisdictional error because it misunderstood the test of well-founded fear of persecution; breached s 424A of the Migration Act 1958 (Cth) (the Act) by not informing the appellants that they failed to provide documentary evidence in support of their claims; and based its decision on hypothetical questions and situations, particularly in relation to the alleged home invasion. In written submissions, the appellants also claimed that the Tribunal failed to consider the claim that the wife appellant was threatened with rape and murder. Her Honour described ground 1 as "a disagreement with the finding of the Tribunal that the Applicant husband has ' any genuine, ongoing interest in politics in Sri Lanka . '" Her Honour found that the Tribunal was not satisfied that the appellants held a well-founded fear of persecution because of their failure to provide evidence and the Tribunal's finding that they lacked credibility, which were findings open to the Tribunal on the evidence and the material before it. Her Honour also noted that the Tribunal informed the appellants of its concern regarding the lack of evidence and had adjourned the hearing to allow for the presentation of further evidence. In relation to the second ground, her Honour noted that the Tribunal informed the appellant on several occasions that it required further evidence from the appellants to support their claims. Her Honour said there was no obligation on the Tribunal to require particular documentary evidence from the appellants. Her Honour found there was no obligation to raise the issue of a lack of evidence in the Tribunal's letter sent pursuant to s 424A as it was part of the Tribunal's thought processes and not "information": SZBYR v Minister for Immigration and Citizenship [2007] HCA 26. The Federal Magistrate held that the Tribunal conducted a fair hearing under the Act and based its findings on the evidence before it. Her Honour found that the "hypothetical questions" referred to by the appellants merely represented the Tribunal's thought processes. Lastly, the Federal Magistrate held that the appellants' claims that the appellant wife was threatened had been properly considered by the Tribunal. However, it was not satisfied that the home invasion was linked to the appellant husband's political involvement. Therefore, her Honour noted that the Tribunal could not find the appellant wife had a well- founded fear of persecution relating to a Convention reason arising from those threats. On 21 August 2007 the appellant filed a notice of appeal to this Court. Three grounds were raised. First, that the Federal Magistrate erred in not finding the Tribunal came to the wrong conclusion on the evidence. Secondly, that the Federal Magistrate erred in law "by reading into the s 424 (sic) letter her own version. " Thirdly, that the Federal Magistrate erred in not finding the Tribunal based its decision on hypothetical issues. On 25 January 2008 the appellants filed a further amended notice of appeal in which the appellants abandoned their original grounds of appeal. The Tribunal failed to make findings on material questions of fact in accordance with the Tribunal's obligations under s 430(c) of the Act. The material questions of fact said to be overlooked are particularised. 2. The Tribunal failed to consider critical integers of the applicant's claim. 3. The Tribunal breached s 425 of the Act in that its invitation to appear before the Tribunal was, in the circumstances of the case, "a hollow shell or empty gesture". 4. The Tribunal erred in finding that the appellants' claims were "fabricated" without first addressing all the appellants' claims. They also sought leave to adduce further evidence on the appeal, namely, the transcript of the hearing before the Tribunal on 18 January and 14 February 2007. The first respondent opposed the application to amend the notice of appeal on the ground that the proposed amendments raised grounds of appeal which were not grounds relied on by the appellants in their application for review before her Honour. The proposed grounds of appeal do raise issues which were not relied on for the relief sought in the Federal Magistrates Court. Moreover, the further amended notice of appeal abandons all of the grounds which were relied upon by the appellants before the Federal Magistrate. The result would be, if leave were given to allow the further amended notice of appeal to stand as the grounds of appeal, that this Court would be called upon to consider for the first time an application for judicial review of the Tribunal's decision based upon these new grounds. It would mean that the Appeal Court would be determining issues of fact and considering arguments for itself without the benefit of the opinion of the Court from which the appeal is brought. Such a course is self-evidently unsatisfactory. No explanation has been given for the failure to raise these grounds before the Federal Magistrate, save that the appellants were unrepresented before her Honour. It was also put that the first respondent would suffer no prejudice. It may be accepted that a person who is unrepresented on an application for judicial review is at a disadvantage. Such persons find it difficult to understand the limits of the inquiry on an application for judicial review. Moreover, they often find it difficult to articulate the grounds which might give rise to a successful application. The concept of jurisdictional error is not easy for unrepresented parties to understand. However, that being said, being unrepresented on the application cannot, by itself, be enough to permit the unrepresented party to raise grounds which were not raised in the Federal Magistrates Court. Nor is the fact that the Minister will not suffer any prejudice enough. Parliament has given the Federal Magistrates Court jurisdiction in relation to applications of this kind to the exclusion of this Court: s 476A of the Act. All of the issues which are sought to be ventilated should be addressed at the trial in that Court. Parliament has provided for a right of appeal to this Court and in matters of this kind the appellate jurisdiction of this Court may be exercised by a single Judge: s 25(1AA) of the Federal Court of Australia Act 1976 (Cth). Indeed, that is the case on this appeal. The High Court has made it plain that, ordinarily, a party is confined in its grounds of appeal to matters which have been raised in the Court below. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case has been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so. If it were not so the main arena for the settlement of disputes would move from the court of first instances to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish. If a party is entitled to raise issues for the first time on appeal, the appeal court will become de facto the primary court. That is undesirable. It is particularly undesirable where the appellate jurisdiction of the Court is being exercised by a single judge and any right of appeal from that single judge is to the High Court. If a party is entitled to raise an issue for the first time on appeal in this Court, the High Court will be burdened by applications for leave to appeal from judges sitting alone who have not had their decision reviewed. That must be particularly undesirable from the High Court's point of view. Moreover, to allow new grounds of appeal is to defeat the purpose of the legislation which requires that judicial review of a decision of the Refugee Review Tribunal to be within solely the jurisdiction of the Federal Magistrates Court. If new grounds are advanced on appeal, it effectively means that the jurisdiction is being exercised by this Court. Of course, appeals of this kind are particularly sensitive: Iyer v Minister for Immigration and Multicultural Affairs [2000] FCA 1788. It is particularly important to the party seeking refugee status that that party's claim be considered by the Tribunal in accordance with law. That said, however, it seems to me that it is necessary to protect the integrity of the appellate jurisdiction that parties be bound by the way in which they conducted their application for judicial review before the Federal Magistrates Court: H v Minister for Immigration and Multicultural Affairs [2000] FCA 1348 ; (2000) 63 ALD 43. However, the Full Court of this Court has recognised that a residual discretion resides in this Court to allow a party to advance a ground of appeal not advanced before the Court from which the appeal is brought where it is in the interests of justice to do so: Iyer [2000] FCA 1788. In Gomez v Minister for Immigration and Multicultural Affairs [2002] FCAFC 105 ; (2002) 190 ALR 543 , the Full Court adopted the test propounded by the High Court in appeals to that Court in Metwally v University of Wollongong [1985] HCA 28 ; 60 ALR 68 at 71 that a party is bound by the conduct of the party's case in the Court below except in "the most exceptional circumstances". In VUAX v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 158 , the Court said that leave to argue a ground of appeal not raised before the trial judge should only be granted "if it is expedient in the interests of justice to do so. " After referring to the dicta in Coulton v Holcombe [1986] HCA 33 ; 162 CLR 1 , the Court said that the Court may grant leave if the point which has not been raised in the Court below has merit and there is no real prejudice to the respondent in permitting the point to be ventilated. Rarely will the Minister in an appeal to this Court from a migration judgment of the Federal Magistrates Court be able to point to any prejudice of the conventional kind. That cannot be a reason to allow a party to raise issues not raised in the Court below. Departure from the proper role of appeal in the court system is not simply a discretionary procedural decision. Furthermore, in public law matters like this, it can always be said that no actual prejudice apart from costs is suffered by the respondent compared with the prejudice to the appellant. It can easily be overlooked that there is a significant public interest in the timely and effective disposal of litigation. This aspect has particular force in this area of public law, where delays in dealing with applications for protection visas are obviously to be avoided if possible. In the present case, there was no bona fide ground of appeal from the primary decision and the litigation should have ended at that point more than 7 months ago. There are other public interests, however, to which regard should be had. There are good reasons why this Court should not be made de facto the Court of original jurisdiction when sitting on appeal. Otherwise its role as an intermediate Court of Appeal will be undermined. The High Court should not be burdened by applications for leave to appeal from decisions of this Court which have not been reviewed. The respondent conceded that I needed to consider whether any of the grounds had any merit before determining whether or not I should allow the application to amend. The concession was rightly made having regard to the decisions of this Court and, in particular, VUAX [2004] FCAFC 158. Adopting that procedure, however, means that in every case where there is an application to raise a ground not previously raised in the Court below, the party seeking to have the ground agitated will by reason of the application itself require the Court to consider the ground. It is a curious result when the Court would otherwise discourage such applications but a result which arises because the Court's overriding duty is to do justice. The reason for the power to allow a party to raise a ground on appeal for the first time is to do justice. The appellants contended in their written submissions that the thrust of grounds 1, 2 and 4 is that there was a failure by the Tribunal to consider all integers of the appellants' claims as contained in their written statements and their evidence at the Tribunal. Ground 1 identified what was said to be material questions of fact about which there were said to be a statutory obligation to make findings. But the written submissions did not identify the integers of the appellants' claims which were not considered by the Tribunal. I attempted to elicit from the appellants' counsel what claim it was that the Tribunal had failed to address but I was unable to obtain a direct answer as to the particular claim which the appellants made which was not addressed. The appellants' counsel sometimes contended that the appellant wife's claim of fear of persecution arose out of her political opinion and sometimes contended that her persecution arose out of her membership of a social group, being women who go with politicians for the purposes of securing votes. At different stages he withdrew both contentions but, at other stages, renewed them. In the end result, in my opinion, neither claim was before the Tribunal. The only claims on a reading of the appellants' documentary evidence and oral evidence was a claim that she feared persecution by reason of an imputed political opinion, being that of her husband's and a claim that she was a member of a particular social group, namely, the appellant husband's family. The appellants' counsel sought to support his submission that the appellant wife had other claims which had not been considered by referring to the transcript of the hearing of the Tribunal on 18 January 2007 and 14 February 2007. That necessitated a further application by the appellants to adduce further evidence on the appeal. The Court has power to receive further evidence on appeal: s 27 of the Federal Court of Australia Act 1976 . The transcript was not relevant in the grounds relied on in the application made to the Federal Magistrate. It would only be relevant if, of course, leave were given to the appellants to amend their grounds of appeal in accordance with the further amended notice of appeal and further leave be given to allow the appellants to raise issues not raised in the Federal Magistrates Court. The first respondent opposed the tender of the transcript on the ground that it would not be relevant if I were to rule that the notice of appeal should not be allowed to be amended. The appellants' application therefore to adduce further evidence depends upon the appellants succeeding on their application to amend the notice of appeal. I will have regard to the transcript to determine whether there is evidence to support the submission that the appellant wife's claims were not considered. The Tribunal conducted a hearing on 18 January 2007 at which both appellants gave evidence. During the appellant wife's evidence she said that she did not know much about politics in the context of her being present at the dinner with the mayor prior to the 30 March 2006 election. She was unable to say who had won that election on 30 March 2006. She was asked about the episode in mid-March 2006 when she had said that humiliating things were spray painted on the walls of their house. It was contended that her answers to these questions suggested that she might have been acquiescing in the proposition that she was a person who went with politicians. It was contended that that was evidence of her involvement in politics. I didn't say anything, I was scared, I didn't want to just because though [A] is involved politics and they have said he has said all the stuff I always looked out for him I didn't really get involved with him, you know just to encourage him. They wanted to know because anyway he had got threatened at that time and I forgot to tell you just before the elections as well they had written some stuff on the walls and spray painted that [A] is using me to go out with politicians and you know. M: And he was using you, your husband? AW: Yes. M: He was using you to go out with politicians? AW: Yes, in very bad language. It was so humiliating too for me to go outside even. Because it was a small area at Dehiwala so everyone knows what's happening around. I think it is clear from her evidence that she was not acquiescing in the proposition that she went with politicians but agreeing with the Tribunal that that was what was painted on the walls of their house. That seems to me to be clear by her last answer where she talks about "very bad language. " That is also consistent with her written complaint to the Tribunal which I think makes it quite clear that she was humiliated by what she said were false claims made about her. I think it is clear on reading her evidence before the Tribunal on 18 January 2007 that she was not making a claim that she held political opinions or was interested in politics such that she feared persecution. On 18 January 2007 the Tribunal hearing was adjourned to allow the appellants to comment on relevant material. On 23 January 2007 the appellants were sent a letter from the Tribunal pursuant to s 424A inviting them to comment on certain aspects of evidence given at the hearing and explaining that the information was relevant as it went to the plausibility of the appellants' claims. On 5 February 2007 the appellants sent a response to the Tribunal. The hearing resumed on 14 February 2007. The appellant wife again gave evidence at the resumed hearing. It was that a parliamentary election or presidential election it's known by everyone, it was just a normal local council election so I was not quite interested. Even if it was presidential election after the votes were there, after two or three days I would know who had won and who is the president. I was not quite interested about politics I know my situation is totally different to his. He is into politics and I am not so after I was with him I experienced a lot of situations where I saw him getting beaten up and I was mistreated which the way I was brought up I was not I have never experienced it and you know because I was with grandmother and you know I experienced a lot of stuff and my parents are not being with me. And so I get really close to him and I don't want anything happening to him or us, so we decided to stay there as long as we can but later on I told my mum and that's why we decided to come here. She disavowed any knowledge of politics. Nor did it arise, as her counsel contended, as part of a particular social group, being women who go with politicians for the purposes of securing vote. In those circumstances, her claim to be a refugee depended on her husband establishing that he had a well-founded fear of persecution because of his political opinions. Insofar therefore as it is contended that the Tribunal failed to consider an integer of the appellant wife's claim, that contention must be rejected. For completeness, it would be appropriate to consider that aspect in ground 1 which complains about the failure by the Tribunal to make findings on material questions of fact "in accordance with s 430(c) of the Act. In Minister for Immigration v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 , McHugh, Gummow and Hayne JJ said at [68]-[69] that the obligation on the Tribunal is to set out in its written statement its findings on what it considered to be material questions of fact. Grounds 2 and 4 address, as was contended by the appellants, the issue as to whether the Tribunal considered all integers of the appellants' claim. It follows, therefore, that grounds 1, 2 and 4 which claim that the Tribunal failed to consider integers of the appellants' claims and, in particular, the appellant wife's claims, could not succeed. Ground 3 complains of the Tribunal's failure to comply with s 425 of the Act. Whilst the ground complains that the Tribunal's invitation was a "hollow shell or empty gesture", the ground does not identify in what way it is said that the Tribunal failed to comply with s 425. 56 However, in the appellants' written submissions, it was put that the Tribunal reached its decision by reference to an issue other than that considered dispositive by the delegate, which was that the appellant husband had no significant relationship with the UNP in circumstances where the Tribunal failed to notify the appellant of that possibility which led the appellant to believe that his support and affiliation with the UNP "would not be questioned". There are a number of difficulties with this ground. First, the premise upon which it is based is not made out. There was no finding made by the delegate that the appellant husband was a member of the UNP. There was an observation that that was his claim. The delegate did not, on the delegate's reasoning, need to make a finding of that kind. Secondly, the appellants were put on notice that their involvement in politics was a live issue. In the letter written by the Tribunal to the appellants on 23 January 2007 pursuant to s 424A, the appellants were told that on the state of the evidence before the Tribunal "[t]his could lead the Tribunal to doubt that the household, including [SZKMS], is involved in politics in the manner or to the degree claimed. " That letter clearly put the appellants on notice that the degree of their involvement in politics was a matter under consideration which needed to be addressed by the appellants. The appellants had an opportunity to address that issue both in response to the s 424A letter and when the hearing before the Tribunal resumed on 14 February 2007. The proposed ground of appeal is without merit. That would be enough to deal with the proposed grounds of appeal. However, in their counsel's written submissions, counsel raised even further issues. It was submitted that the Tribunal erred in failing to address the question of relocation. Next, it was submitted that the Tribunal erred by misconstruing the test of persecution. Lastly, it was said that any lack of corroboration of the appellants' evidence did not support the Tribunal's findings where there is no obligation in law to adduce corroborative evidence. It would probably be enough to deal with these further submissions by observing that they do not address either the grounds of appeal in the existing notice of appeal or any of the proposed grounds of appeal in the further amended notice of appeal. However, for completeness, I shall address the matters briefly. There was no need to consider the question of relocation because a finding was made that the appellants had not established that they had a well-founded fear of persecution. The question of relocation would only have arisen if a contrary finding had been made. The Tribunal did not err by inquiring into whether the appellant had suffered "sustained or systemic" harm in circumstances where it found that the appellant had suffered no harm. It did not thereby misconstrue the test of persecution. Lastly, the Tribunal did not purport to suggest that corroboration was required as a matter of law. It simply found that there was no corroborative evidence in circumstances where such evidence should have been available. The application to amend the notice of appeal is rejected because the proposed grounds of appeal were not grounds upon which the appellants relied in their application for judicial review before the Federal Magistrates Court and each of the grounds lack merit. The application to adduce further evidence is refused because leave to amend the notice of appeal has been refused and, in those circumstances, the proposed evidence is not relevant to any of the existing grounds of appeal. It follows from my refusal to allow the appellants to amend their notice of appeal that the grounds of appeal identified in the existing notice of appeal must be considered. It is, as the Federal Magistrate rightly pointed out, no more than a claim to have the Court perform a merits review of the Tribunal's finding. Her Honour dealt extensively with this ground in her reasons. An application for a judicial review of an administrative decision does not give rise to a merits review of the decision: Attorney-General (NSW) v Quin [1990] HCA 21 ; (1990) 170 CLR 1 at 35. The purpose of the review is to determine whether the Tribunal has exercised its power in accordance with its obligations and, in particular, without jurisdictional error. The Federal Magistrates Court and this Court has limited jurisdiction to determine whether the Tribunal has made jurisdictional error. If no jurisdictional error is shown, then the Tribunal's decision cannot be quashed. It is not entirely clear what is meant by the second ground of appeal. Her Honour said in her reasons that there was no obligation on the Tribunal to require the Tribunal to write to the applicant pursuant to the provisions of s 424A requiring particular documentary evidence to be adduced. That clearly was right. She also said that if the Tribunal was of the opinion that there was a lack of evidence before the Tribunal, that was not information for the purposes of s 424A. That also is clearly right. The second ground must be dismissed. It is also not entirely clear what is meant by the third ground, although an examination of her Honour's reasons does assist. It was put to her Honour as part of the third ground in support of the application for judicial review that the Tribunal had erred in questioning why it was that the appellant husband was not subject to further attacks after the home invasion. The Federal Magistrate rejected the argument that such an approach amounted to a consideration of a hypothetical situation or hypothetical issues. The Tribunal gave consideration to the issue which it identified in considering whether or not the appellant husband's account was credible. It was not a hypothetical issue but it was a reason in the Tribunal's opinion why the appellant husband's account could not be accepted. In my opinion, none of the grounds of appeal have been made out and the appeal must be dismissed. The appellants must pay the respondent's costs.

where new grounds sought to be raised on appeal not argued before the federal magistrate where if a party was entitled to raise issues for the first time on appeal, the appeal court will become de facto the primary court whether enough that a party is unrepresented or that the minister will not suffer any prejudice whether in the interests of justice to allow grounds of appeal not advanced before the federal magistrates court whether any of the proposed grounds had any merit application to amend rejected. where husband and wife appellants whether tribunal failed to consider an integer of the appellant wife's claim whether tribunal failed to comply with s 425 whether question of relocation should have been considered appeals dismissed. practice and procedure migration

The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs to refuse the grant of a protection visa to the appellant. 2 The appellant is a citizen of the People's Republic of China ('China'). He arrived in Australia on 27 January 2005 on a tourist visa. On 18 February 2005 he applied for a protection visa. A delegate of the Minister rejected the application on 9 March 2005. An appeal to the Tribunal was lodged on 12 April 2005. The appellant claimed to have a well-founded fear of persecution because he was a Falun Gong practitioner. He claimed that the Chinese authorities had fined his employer and threatened to dismiss him from his employment. The police came to the appellant's home and told the appellant that he would be imprisoned if he practised Falun Gong again and he was forced to declare that he was separated from Falun Gong. The appellant also asserted that one of his colleagues had been imprisoned. 3 The Tribunal sent the appellant a letter dated 15 June 2005 inviting him to attend a hearing scheduled on 12 July 2005. In its decision, the Tribunal stated that no response was received to the invitation, that the letter was not returned unclaimed and that the appellant did not provide a telephone contact number. As the appellant did not appear at the hearing, the Tribunal proceeded to make a decision pursuant to s 426A of the Migration Act 1958 (Cth) ('the Act'). Due to the lack of details and the inability of the Tribunal to test the appellant's claims, the Tribunal held that it was unable to establish relevant facts sufficient for it to be satisfied that Australia owed protection obligations to the appellant. The Tribunal was not satisfied that the appellant's claims were true and was not satisfied that the appellant had a well-founded fear of persecution for a Convention-related reason. 4 The Federal Magistrate, in considering the Tribunal's decision in light of the claims made by the appellant, found that the Tribunal was entitled to proceed under s 426A of the Act. In relation to the grounds that asserted a failure to comply with procedures mandated by the Act, including ss 425 to 425A , the Federal Magistrate found that these grounds could not be established. Her Honour considered there had been no contravention of s 424A(1) of the Act. The information regarding the appellant's circumstances were not a reason or part of a reason for the decision and the Tribunal's conclusion that the material was inadequate was not information under s 424A(1) of the Act. Her Honour held that no jurisdictional error was apparent on the materials and dismissed the application. Procedures that were required by the Migration Regulation to be observed in connection with the making of that decision were not observed. The Tribunal did not constitute any further hearing or consideration of the matter. I meet the refugee criteria. In substance, they appear to raise the same issues that were raised before the learned Federal Magistrate. 6 When the matter was called on for hearing before this court this afternoon, there was no appearance on the part of the appellant. The matter was stood down for half an hour in order to ensure that he could attend if for some reason he was delayed. No arguments are advanced in support of the appeal. In my view the decision of the learned Federal Magistrate does not bespeak error. On the contrary, her Honour, in my view, was perfectly correct in holding that no jurisdictional error on the part of the Tribunal was made out. 7 The order of the court will be that the appeal be dismissed with costs.

no point of principle migration

5 BARM was incorporated in Australia on 4 September 1995. From incorporation until October 1996, the directors of BARM were Messrs Donald Charles Priest, Glendon Michael Stotter, Peter Charles Lucas, Dennis Charles Lear and Alan Jones Gallagher. 6 BARM was the manager of nine relevant projects, collectively known as the 'Budplans' (and referred to below as 'Budplans' or 'Budplan Projects'), that established syndicates for the stated purpose of commercialising products (which in most cases were tea tree oil based products) developed through research and development. 7 Prescribed interests in each of the Budplans were offered pursuant to a prospectus which purported to constitute investors as participants or proprietors of the relevant Budplan business. 11 All participants in the Budplans, except for one, chose to finance their participation by way of a loan from PGF. 12 The loans by PGF were limited recourse. The loan funds were advanced by PGF to the borrower by PGF delivering to BARM and to the relevant researcher bills of exchange, that were immediately endorsed back to PGF and cancelled, as part of a 'round robin' transaction described in more detail below. 14 None of these differences is material to the issues raised in these proceedings. The procedures, documentation and arrangements that were developed for the first of the Budplans, which was Budplan Personal Syndicate ('BPS'), were adopted and replicated, subject to minor variations, for each subsequent Budplan project. For this reason, both parties agree that BPS may he treated as representative of all the Budplans for the purpose of these proceedings, in particular, as to the means adopted for the payment of 'management fees' to BARM on which the issues in these proceedings turn. 15 In the course of its submission, BARM noted that in Howland-Rose and Ors v Federal Commissioner of Taxation [2002] FCA 246 ; (2002) 118 FCR 61 , Conti J dealt with the tax position of four participants in BPS, in what amounted to a test case for BPS and the subsequent Budplans. His Honour held that the participants were not entitled to allowable deductions under s 51(1) of the Income Tax Assessment Act 1936 (Cth) ('ITAA 1936 ' ) in respect of the 'management fees' or 'research fees' paid by them. A review of his Honour's reasons does not indicate than any issue arose in that case as to the quantum of the outgoings claimed to be incurred; only their characterisation in terms of the section of the statute. 18 The Prospectus stated that a participant could borrow from PGF the amounts payable for the first and second years to BARM in respect of 'management fees' and ATTORI in respect of 'research fees', being in total $12,000 for each of those years per syndicate participation. 19 Where a participant applied for a loan from PGF, he or she did so by indicating this on the Application Form and the participant's obligations to BARM and ATTORI under the Syndicate Deed were conditional on PGF accepting the application for loan. 20 As noted in [11] above, all participants in BPS except for one, requested a loan from PGF to fund the payment of fees due to BARM and ATTORI under the Syndicate Deed. The time of derivation of the 'management fee' paid by the one participant in BPS who did not borrow from PGF is not in issue in these proceedings. 21 Relevantly for present purposes, the agreed means by which the participants were to discharge their obligation to pay to BARM the 'management fees' at issue in these proceedings was through the loan made by PGF. The 'Business' is essentially the development and commercialisation of products and product packages relating to acne treatment, oral hygiene and hospital and antiseptic products using tea tree oil. 10%), to BARM as a 'prepaid fee' in consideration for BARM undertaking the duties and obligations set out in clause 7 of the Syndicate Deed. 25 Clause 7.4 of the Syndicate Deed set out BARM's obligations as manager of the syndicate. BARM's primary role was to investigate and pursue the commercialisation of the research results to produce income. 26 In addition to the 'management fee' of $2,400 per syndicate participation referred to above, BARM was entitled to a further 'fee' of 25% of the gross income of the business and, in the event of any sale of the research results, 50% of the gross proceeds of sale of the research results. 28 Clause 2.2 of the Trust Deed provides that each applicant appoints BARM to 'establish and conduct [the applicant's] Business by carrying out the Manager's functions, covenants and duties ...'. The term 'Business' has the same meaning as in the Syndicate Deed. The obligations of BARM as manager are set out in clauses 21, 22, 23 and 26 of the Trust Deed. 29 Clause 3.3 of the Trust Deed provides that the 'Business' is deemed to commence on the date BARM accepts each participant's application under the Prospectus. Each advance was required to be made on the same day that those fees were payable by the participant to BARM and ATTORI. 31 In the case of a single Syndicate participation, the amount of the loan was $24,000 in two instalments of $12,000 each. Interest was payable at the rate of 17% per annum reducing to 15% per annum for the first year if the borrower was not in default and thereafter reducing to 8.57% per annum if the borrower was not in default. The borrower was required to pay interest of $150 on execution and thereafter monthly in advance for the first two years (i.e. $3,000) and principal of $250 per month for the first 2 years (i.e. $6,000). 32 The balance of the principal amount of the loan ('reduced principal sum'), being $18,000 out of the total advance of $24,000, was only repayable during the 15 year term out of the 'Net Amount'. Under clause 7.1, there is a limit on the borrower's liability in respect of the 'reduced principal sum'. In other words, the loan was limited recourse as to 75% of the principal sum. 34 The differences between the Loan Agreement and the Alternative Loan Agreement are not material for present purposes. The facility was limited to $600,000 and the agreement provided that FSI would accept the obligations of payer under bills of exchange on the basis that PGF returned the bills to FSI no later than 1 hour before the time of negotiation of the bill. 36 From April 1996 onwards, PGF drew bills for each of the various Budplans to effect the loans. The bill settlements were attended by authorised signatories for PGF, FSI and BARM and were supervised by St Malo Australia Limited. At the bill settlements, PGF drew bills in favour of BARM having a term of 1 day that were accepted by FSI, endorsed by BARM in favour of PGF and then cancelled. The drawing, acceptance, endorsement and cancellation of the bills occurred within minutes. PGF and BARM, being subsidiaries of the same holding company, had the same authorised signatories who attended and signed the bills of exchange on behalf of each company. 37 It is common ground that these 'round robin' transactions involved BARM making a deposit with PGF equal to the face amount of each bill delivered to it by PGF. What is in dispute are the terms on which the deposit was made. This arises because there was no written deposit agreement between BARM and PGF until March 1998 (at which time, written deposit agreements for all the Budplans were executed). 39 The Commissioner submitted that BARM's submission in [38] above, should be rejected because there is no evidence to support a finding of an implied agreement between BARM and PGF containing such terms. 40 The issue of the terms of the deposit made by BARM with PGF and the competing submissions of the parties are dealt with more fully in [52]-[65] below. 41 Counsel for BARM provided a diagram of the payment flows that are contemplated by the transaction documents, which is reproduced below. 42 The Budplan Projects were not profitable in the relevant years. Accordingly, participants were not obliged to, and did not, repay the limited recourse portion of the loan (i.e. approximately 75% of the principal sum advanced). Consequently, BARM's position is that it did not have a right to call on the deposits beyond the amounts repaid by participants, being the recourse amount of approximately 25% plus interest thereon: see [38] above. (c) From the figure referred to in paragraph (b) above, there was deducted the amount of $12,168,470 in respect of the 'management fees' for the Budplan Projects returned as income in prior years, comprising $1,672,618 for the 1996 year and $10,495,854 for the 1997 year. (d) The amount resulting from the above calculation was $24,669,973. 47 In the 1996 year and each of the years of income, the amount returned as assessable income in respect of 'management fees' for the Budplan Projects (other than the Melaleuca Biotics Budplan) was based on the face amount of the bills of exchange delivered to BARM by PGF on account of 'management fees' payable by participants in those Budplans with no allowance being made for the fact that the recourse portion of that amount was only $11,083,564. 49 It is unclear to what extent the amounts of interest income referred to in [47] above, are referable to interest derived by BARM on the deposits with PGF, although it did not exceed the amounts stated in [48] above. The calculations of the assessable income derived by BARM set out in [50] below have assumed, against BARM, that none of the amounts of interest referred to in [48] above relate to the deposit with PGF. 51 The purpose of the 'audit adjustment' of $6,336,420 in BARM's income tax return for the 1998 year was to ensure that BARM returned as assessable income in that year an amount of $24,669,973 in respect of management fees from the Budplans for the 1998 year. Accordingly, BARM's case is that if it succeeds in relation to Issue 1, the amount of $6,336,420 should not be included in its assessable income for the 1998 year because it will relate to management fees not derived by it as income in that year. 53 BARM contends that there existed an agreement or understanding between BARM and PGF as to the amounts that BARM put on deposit with PGF as a consequence of BARM's endorsement of the relevant bills of exchange in favour of PGF. Moreover, the acts and conduct of BARM and PGF evidence that there was an agreement that PGF would advance loans to participants by drawing bills of exchange in favour of BARM on the basis that BARM would endorse the bills delivered to it by PGF back to PGF, by way of a deposit by BARM with PGF. 54 BARM contends that there is no evidence that supports a proposition that such a deposit was repayable on demand. Dennis Lear was appointed Managing Director of BARM and Group Financial Director for the Main Camp Tea Tree Oil Group. (b) Dennis Lear conceived from the inception of financing arrangements for the Budplans in February 1996 that BARM would receive amounts referable to its obligations under the management agreements and put those on deposit with PGF and would only receive for its own benefit, the amounts repaid by participants to PGF. (c) This conception formed the basis of negotiations with the then proposed financier First Sydney Capital Limited and a related entity, FSI, that ultimately became the financier. The contemporaneous correspondence initiated by Dennis Lear and fellow director Peter Lucas, of February and March 1996 demonstrates that this is so. B&M will receive $60,000 as management fees ($1,200 X 50) and will deposit $60,000 with P&GF at interest. (f) This proposal then formed the basis of discussions at a board meeting for ATTORI held on 20 March 1996. Present at that board meeting were all of the directors of ATTORI, BARM and PGF. The Chairman reported his understanding that most Participants would want to take advantage of the funding option to be provided by Project & General Finance Pty Limited in accordance with the documents in the Prospectus; and further that Project & General Finance Pty Limited had intended to arrange a facility with its banker, but this had not been forthcoming because of the 15 year term and the fact that the only source from which the facility could be recouped is the Participant's business of and income generated from the research undertaking. The Directors noted that other options for raising and investing funds were considered including an arrangement with Bank of New York, and none had been approved for the same reasons of term and repayment. Project & General Finance Pty Limited requires that the Company deposit all of its available funds with Project & General Finance Pty Limited. The Chairman advised the Directors that as the Company had no readily available alternative source of funding at this time, for the Company to proceed with the Project and the research, the subject of the Prospectus, the Company had no alternative but to proceed on the basis of the Project & General Finance Pty Limited requirement and it would be necessary for the Company funds to be placed on deposit with Project & General Finance Pty Limited. After further discussion and having regard to the matters already noted the Directors concluded that the deposit with Project & General Finance Pty Limited of funds not immediately required for research and/or working capital is in the best interest of the Company. The first Bill would be for the amount of up to $540,000 and would be drawn on the account of Project and General and payable to ATTORI. It would be accepted by First Sydney Investments, and endorsed by Attori in favour of Project and General. At this point the loop then closes and the Bill is cancelled. The second Bill will be drawn for an amount not exceeding $60,000 with the same parties as the first Bill, with the exception that ATTORI is replaced by Business and Research Management Limited as the endorser. 1 to satisfy the amounts payable by them to ATTORI and BARM. Bills of exchange made payable to ATTORI will be drawn by Project and General and accepted by FSI. The bills will then be endorsed by ATTORI in favour of Project and General by way of deposit by ATTORI with Project and General. Following this the bills will be cancelled. Project and General will also draw bills made payable to BARM which will be accepted by FSI. We will use the same procedure for these bills as for the bills payable to ATTORI. All the funds lent by Project and General are to come back on deposit with Project and General. As the facility limit will be $600,000 we will need to draw bills in batches having a face amount of less than $600,000 and repeat the process until the full amount to be paid to ATTORI and BARM has been paid. ' He said: 'Yes. (k) Thereafter, Dennis Lear continued to conduct the affairs of BARM on the basis of the funding arrangements agreed with FSI in February and March 1996. Donald Priest was not privy to the above conversation and was not involved in the financing of the Budplans. Only Allan Gallagher had an objection to the proposal that was to be a written agreement imposing legal restrictions on PGF. (ii) On 29 April 1996 Dennis Lear provided fellow director Allan Gallagher with a breakdown of draw downs to be made by BARM from the deposit with PGF so as to pay Monpro, a promoter of BPS. (iii) On 3 May 1996, Dennis Lear wrote to Allan Gallagher to convey the breakdown of how the amounts received by PGF from participants on account of the recourse portion of the loans should be distributed to BARM and ATTORI. This will leave Project & General Finance Pty Limited with a profit on these loans comprising interest margin of $80 per participation. (v) On 7 June 1996, Dennis Lear provided the promoter of Company Budplan No 2 a diagrammatical representation of the cashflows for that Budplan. (vi) On 9 September 1996, Dennis Lear provided Peter Lucas, director of BARM, PGF, ATTORI and SMA (SMA being appointed on 4 July 1996 as the entity responsible for the collection and processing of receivables and administration of the bill settlements), with a diagrammatical representation of the cash flows for the first two Budplans. Significantly, the diagram represented that cash flows to BARM from PGF were to be taken as a percentage of the repayments by participants and those cashflows to BARM would form the basis for the estimated tax liability. (vii) On 24 September 1996, Dennis Lear provided John Mathie, Chief Financial Officer of the Main Camp group, with the appropriate wording of notes for the financial statements that recognised the limited recourse nature of the loans to participants. The amount of non-current receivables at 30 June 1996, whose recoverability is dependent upon the projects achieving a sufficient level of profitability through the operation of the relevant commercial projects or the commercial development of the Budplan Projects at or above their book value, is $ (insert amount). As with any business venture, there is a risk of these various projects not being commercially successful. In respect of the projects managed by related companies of this company, the directors are satisfied that the matters required to be attended to, so as to provide the projects with the opportunity for future commercial success, are being carried out. Accordingly, at the date of these accounts, the directors have no reason to believe that the projects will not be commercially successful. If conditions occur in future periods whereby the directors consider that it is probable that the full amount of these receivables will not be recovered, an adjustment will be made to the carrying value of these assets. That is, at each bill settlement, PGF drew bills in favour of BARM with a tenor of one day, that were accepted by FSI, endorsed by BARM in favour of PGF, and then cancelled. This occurred within minutes and involved signatories that were authorised to sign on behalf of both BARM and PGF and were often directors of both BARM and PGF. The bills themselves were drafted in a manner that provided for endorsement by BARM in favour of PGF. (m) Further, it is not in contest in these proceedings that, based on the financial position of PGF, the limited recourse portions of the loans (as reflected in the face value of the bills) were not realisable. That is, PGF did not have the funds to make the limited recourse portion available to BARM as its asset position was insufficient to meet any call by BARM on the deposit beyond the recourse amount. (n) This was a matter that the directors of BARM were acutely aware of and formed the basis of communications between the directors of BARM and PGF responsible for the funding arrangements, Lear and Lucas, in September 1996 as to the projected cash flows for the group arising from the loans to participants. (o) It was also a matter that was reflected in the working papers of John Mathie, Chief Financial Officer of Mainstar One Holdings Pty Limited, that formed the basis for the audited accounts of BARM, ATTORI and PGF. That is, John Mathie compiled working papers for BARM and PGF from April 1996 on the basis that BARM and ATTORI were only entitled to drawdown the recourse portion of the loans to participants plus interest on those amounts, notwithstanding that in some cases the recourse amounts exceeded by a relatively minor amount the amounts actually repaid by participants. (p) The audited financial statements of BARM, PGF and their holding company Mainstar One Holdings also recognised that their receivables were affected by the terms of the loan agreements between PGF and participants. The recoverability of these receivables is dependent upon the future commercial success of certain business and collaborative research and development projects that are managed by the Company. As outlined in Note 5, the ultimate commercial success of these projects cannot presently be determined with an acceptable degree of reliability, and therefore the recoverability of these receivables may be in doubt. The limited recourse portion of these loans is repayable only out of the participants' share of the business earnings of the ventures. The deposits relate to research fees, farm fees and management fees earned by these entities pursuant to a number of prescribed interest undertakings, whereby the participants in these undertakings have been financed by the company. Under the loan agreements approximately 75% of the principal is repayable out of the participant's share of the business earnings of these ventures. The deposits relate to research fees, ,farm fees and management fees earned by these entities pursuant to a number of prescribed interest undertakings, whereby the participants in these undertakings have been financed by the company. Under the loan agreements approximately 75% of the principal is repayable out of the participant's share of the business earnings of these ventures. Indeed the Commissioner's evidence is supportive of the proposition that if the deposit was not made by BARM, no further loans could be advanced by PGF. 57 The authorities support the proposition that an agreement may be implied from the acts and conduct of the parties even where the strictures of offer and acceptance cannot be strictly proven: see Brogden v Metropolitan Railway (1877) 2 AC 666 at 672, 678, 679, 686, 689, 698; Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 B.P.R 11,110 at 11,117; Pobjie Agencies v Vinidex Tubemakers (2000) Aust Contract R 90-112 at [21]-[32]; see also Vroon v Foster's Brewing Group Ltd [1994] 2 VR 32 at 67. 58 In the present case, it is clear that Dennis Lear proposed that the deposit made by BARM with PGF (both of which were wholly owned subsidiaries of Mainstar One Holdings), be subject to the same agreement as that which applied to ATTORI and PGF from April 1996. None of the directors of either company, with the exception of Allan Gallagher, opposed the proposal. Allan Gallagher's objection was to there being a written agreement (see [55(k)(i)] above). Thereafter, the acts and conduct of BARM and PGF were consistent with the existence of a deposit agreement on the terms referred to above. It was not consistent with a proposition that the deposit was repayable on demand, particularly when the notes to BARM's financial statements for the 1997 (and 1998) financial year are considered. 60 Specifically, he made the submissions set out in [61] --- [64] below. 61 The question of whether a contract was entered into or, if so, what the terms of that contract were, is not resolved by inadmissible assertions as to subjective beliefs, intentions or desires. Questions of formation of contract are dealt with on the objective theory of contract. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. It is not self-evident what the terms of such an agreement would have been had there been any negotiation. (b) Athough Mr Lear proposed a deposit agreement (with unidentified terms), Mr Gallagher did not want to impose any 'legal restrictions as to how it uses its money'. 63 The reliance on Integrated Computer Services Pty Ltd is misplaced. Nevertheless, a contract may be inferred from the acts and conduct of parties as well as or in the absence of their words. (Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523). The question in this class of case is whether the conduct of the parties, viewed in the light of the surrounding circumstances, shows a tacit understanding or agreement. The conduct of the parties, however, must be capable of proving all the essential elements of an express contract (cf Baltimore & Ohio Railway Co v US [1923] USSC 85 ; (1923) 261 US 592 ; Fincke v US (1982) 675 F 2d 289). To the extent that one is left to seek to imply terms from conduct (rather than from the express words of a written contract) one is faced with the hurdle that the parties evidently turned their minds to, and rejected, entering into a written contract. The best inference to be drawn from the rejection of entering into a written contract was that the parties could not agree to the essential terms of the contract (and thus did not reach any concluding agreement). It was not until 6 March 1998 that there was a consensus as to the terms of the deposit agreements. They were the essential terms of any such contract and the parties' conduct proved as much. (2) even if the amount to be recognised as income in respect of the 'management fees' is the amount provided for in clause 4.5 --- 4.6 of the Syndicate Deed, it is only derived as income as and when BARM received payments of interest and repayments of principal on the deposit with PGF. 67 While BARM's submissions put these alternatives in the order they appear in [66] above, counsel for BARM made it clear that alternative (2) was at the forefront of his argument. On the other hand, they can be viewed as being two sides of the same coin. 69 BARM submitted that an amount received by a taxpayer in consideration of, or as reward for, services is income according to ordinary concepts and, therefore, assessable under s 25(1) of the ITAA 1936 (in the case of the 1997 year) of s 6-5 of the Income Tax Assessment Act 1997 (Cth) ('the ITAA 1997') (in the case of the 1998 year) when derived. 70 The 'management fees' expressed to be payable to BARM under each contract between BARM and a participant will only be income in their gross amount if they can be said to be the true consideration, or reward, for the services to be performed by BARM. 72 When regard is paid to the entire transaction to which BARM was party, it will be seen that, in substance, the reward for the services to be performed by BARM to participants in BPS was not the payment of the 'management fee' provided for in clauses 4.5 --- 4.6 of the Syndicate Deed but rather the payments made by PGF to BARM in payment of interest and repayments of principal of the deposit, funded by payments of interest and repayments of principal by participants under their loan agreements with PGF. The same can be said for all the other Budplans. 73 This is not to disregard the legal relationships created by the Syndicate Deed or to tax by economic equivalence. Rather it is to avoid taking a blinkered view of the transaction entered into by BARM, and to recognise the reality of the transaction which was that BARM would only ever be paid for the management services that it would perform if participants made payments to PGF under their respective loan agreements. 74 Accordingly, the only amount which is assessable as ordinary income in respect of the 'management fees' is the amount which was received by BARM from PGF by way of payments of interest and repayments of principal on the deposit with PGF. 76 BARM submitted that the assessable income of BARM for the 1997 and 1998 years of income included gross or ordinary income derived from all sources (see [69] above). 77 As an alternative to the submission under the previous heading, it is submitted that if the management fees are to be recognised as income in their gross amount, they were only derived as income as and when BARM received payments of interest and repayments of principal on the deposit with PGF. 78 Central to the concept of derivation is the proposition that there must be a gain in the sense of an amount which has 'come home' to the taxpayer, i.e. it is available for the taxpayer's separate use, benefit and disposal: Federal Commissioner of Taxation v Montgomery [1999] HCA 34 ; (1999) 198 CLR 639 at [65] and [117]-[118]; Commissioner of Taxes (SA) v Executor Trustee and Agency Co of South Australia (' Carden ') [1938] HCA 69 ; (1938) 63 CLR 108 at 155; Arthur Murray (NSW) Pty Ltd v Federal Commissioner of Taxation [1965] HCA 58 ; (1965) 114 CLR 314 at 318; Eisner v Macomber [1919] USSC 118 ; (1920) 252 US 189 at 207 applied in Montgomery at [117]. That is, receipt of itself is not sufficient to constitute a gain or an amount as income derived: Arthur Murray at 318. 79 In order to determine whether a receipt has come home the enquiry is focused upon the general understanding among practical business people as to whether the receipt has come home for the separate use, benefit and disposal of the taxpayer: Arthur Murray at 318; Montgomery at [117]. 80 That enquiry proceeds by reference to the 'realities' that affect the taxpayer's separate use, benefit and disposal of the receipt rather than merely the legal form of, or legal entitlements arising from, the receipt itself: Permanent Trustee Co of New South Wales v Federal Commissioner of Taxation (' Prior ') (1940) 6 ATD 5 at 13. 81 A receipt will not come home where the amount received is affected by a legal or equitable restriction affecting the separate use, benefit or enjoyment of the recipient: Arthur Murray at 318; Barratt v Federal Commissioner of Taxation [1992] FCA 271 ; (1992) 36 FCR 222 at 231; RW Parsons, Income Taxation in Australia : Principles of Income, Deductibility and Tax Accounting , Law Book Company, Sydney (1985) at [11.49]. For example, where the receipt is affected by a constructive trust (see, MacFarlane v Federal Commissioner of Taxation (1986) 13 FCR 356) or where the recipient is not the beneficial object of the receipt (see The Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 424). 83 This is illustrated by the approach to income recognition in the area of insurance. It is accepted that, in an appropriate case, the aggregate of insurance premiums received by an insurer in a year of income does not give a substantially correct reflex of that insurer's income because of the contingencies affecting those premiums: see Sun Insurance Office v Clark (1912) AC 443 at 452-4, 456 and 460, 461, approved in Ballarat Brewing and Carden . 84 In the present case, the means by which BARM was to be paid the ''management fees' was by the delivery of bills by PGF but due to the requirement of the 'round robin' arrangements previously agreed by BARM and PGF, it could not and did not enjoy the separate use, benefit and enjoyment of those bills. The bills were required to be returned by BARM to PGF by way of a deposit and, as a consequence of the terms of the deposit agreement referred to at para 42 above, amount in respect of the 'management fees' would come home to BARM until BARM received from PGF payments of interest and repayments of principal on the deposit with PGF. 85 Accordingly, it cannot be said that BARM derived the 'management fees' as income when either the contracts between BARM and participants were entered into which provided for payment of the 'management fees' or when the 'round robin' transactions occurred to effect payment of those 'management fees'. 87 Underlying the Commissioner's submissions is the premise, which is not put in issue by BARM, that BARM is an accruals basis taxpayer, and that the accruals method would give 'a substantially correct reflex of [BARM's] income': cf. Carden . 88 As an accruals basis taxpayer, BARM derived amounts as income at such time or times as debts became due to it, even through such amounts may not yet have been paid. Trading debts due but not yet paid must be included in arriving at the balance of profits or gains. ... The word "derived" is the equivalent of "arising" or "accruing". 90 The consequence is that BARM derived income represented by the management fees payable pursuant to the Syndicate Deeds (subject to the operation of the ' Arthur Murray principle' discussed below) at the time at which the management fees became due to it by Participants; so understood, neither the time at which the payment obligation was discharged, nor the mode by which the payment obligation was discharged, were matters which affected the derivation by BARM of the income represented by the management fees. 91 Nor did the use to which the bills of exchange were put by BARM affect the derivation by it of income represented by the management fees: see G.P. International Pipecoaters . 92 While the Commissioner's primary submission is that the mode of discharge of payment of the management fees is irrelevant to the issue of derivation by BARM, the mode of discharge adopted (utilising bills of exchange) had the consequence that payments in the amounts shown on the bills of exchange (i.e. full payment of the management fees instalments) are to be taken as having been made to BARM on the dates on which the bills of exchange were delivered to it: Howland-Rose at [128] --- [130]; Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 ; (2004) 218 CLR 471 at [44] --- [47]. 94 The present state of authority recognises only a very limited class of cases in that payments may be actually received by a taxpayer, but only derived as income at later points in time. The relevant class of cases are those coming within the principle recognised in Arthur Murray . 95 It is not disputed here that, to the extent that BARM received management fees in one year that related in part to the provision by it of management services in the next year, the principle recognised in Arthur Murray would apply to defer the derivation of that part of the management fees until the later year, when the services in connection with those management fees were actually performed. Indeed, that is how it returned the income represented by the management fees. 97 Unlike Arthur Murray , the foundation for this broader proposition does not relate to the time of performance by BARM of the management services. 99 The first of those arrangements resulted in BARM agreeing to perform management activities which constituted the provision of services in the ordinary course of the business that it carried on and that resulted in the Participants discharging their payment obligations to it. 100 The taxation consequences of performance of those income earning activities were independent of the consequences of what BARM did with the consideration that it received from Participants. 101 The High Court noted in G.P. The relevant question is not the character of the expenditure by SECWA A receipt may be income in the hands of a payee whether or not it is expenditure of a capital nature by the payer. Nor is the relevant question the nature of the expenditure made by the taxpayer in the construction of the plant. A taxpayer may apply income in the acquisition of a capital asset or, conversely, apply a capital receipt to discharge a liability of a non-capital nature. As Cozens-Hardy MR observed in Hudson's Bay Co v Stevens: '... if the money is otherwise liable to income tax it cannot escape taxation by reason of its being applied to a capital purpose'. And thus a receipt may be income although the recipient is bound to apply it for the purpose of discharging a capital liability: Mersey Docks v Lucas [(1883) 8 App Cas 891, at 904, 909-910; Commissioners of Inland Revenue v Corporation of London (as Conservators of Epping Forest) [(1953) 34 TC 293, at 329]. The Commissioner and the taxpayer both treated the cost of constructing the plant as capital expenditure, but the question is not whether that was an expenditure of capital nor whether the plant was used for the purpose of producing assessable income so that depreciation of the plant was deductible under s 54 of the Act. The relevant question is whether the receipt of the establishment costs was income in the taxpayer's hands. It is necessary to keep that question steadily in mind and not to confuse the character of the receipt with the nature of the asset acquired by application of the moneys received. The appellant's argument was, in substance, that the plant was a capital asset, that the moneys expended in its construction were an expenditure of a capital nature by the taxpayer and that, as those moneys were received for the purpose of expenditure on the construction of the plant, their receipt was a receipt of capital. The first two steps may be accepted but the final step assumes that, when money is received for the purpose of its being expended by the recipient, the. character of the receipt is necessarily determined by the character of its proposed expenditure by the recipient. That assumption is erroneous and, even if the establishment costs were received for the purpose of expenditure on the construction of the plant, it does not necessarily follow that their receipt was a receipt of capital. Before turning to the character of the receipt, it is desirable first to consider the means by which the character of expenditure may be determined. 103 The Commissioner submitted that it is a fundamental defect in BARM's argument that it impermissibly seeks to make derivation of the income amount (the debt/payment in respect of management services) dependent upon the capacity to recover the capital asset arising from investment of the income (the debt owing by PGF). Apart from the illogicality of the contended dependence, it is relevant to note that even if there had been an impediment to recovery of the debt on income account, that would not lead to the result that it would not have been derived as income. Accordingly, statutory prohibitions against recovery of fees for medical services pursuant to s 35(2) of the Medical Practitioners Act 1938 (NSW) were only impediments to enforcement that did not lead to the result that taxpayers assessable on an accruals basis had not derived the fees as income. Generally speaking, that doctrine has been relied on to seek re-characterisation of a receipt or outgoing where there is more than one way to achieve the desired economic result and the taxpayer chooses the way which is the most tax effective. Anti-avoidance provisions aside, the courts have consistently rejected the doctrine of taxation by reference to economic equivalence, that is, by reference to the ways in which the transaction could or might have been done, as an aid to characterisation. No doubt the taxpayer might have taken the amount of $62,309.546 which it paid to MMBW and instead of paying it to MMBW under the Principal Assumption Agreement have invested it in Commonwealth Bonds maturing at or about the same time as its debentures were to mature. If it had done that it would have derived income which it might then have applied in satisfaction of most, if not all, of its liabilities to debenture holders. Similarly, it might have invested the same amount as it paid to MMBW on more speculative investments and it might then have obtained returns greater than the amount necessary to pay the debenture holders. Examination of those other transactions does not reveal whether or when the taxpayer derived income as a result of the making of the Principal Assumption Agreement. In particular, the characterisation of the gains or receipts obtained in accordance with hypothetical transactions of the kind described is of little, if any, assistance in characterising the nature of the benefits identified as flowing from the making of the Principal Assumption Agreement. On the other hand, if they were treated as received by Federal, his Honour thought that they were received by Federal just as much as compensation for the contraction of the contract to supply coke as if the payee had been the parent rather than the subsidiary. One may have some sympathy with an approach of this kind. However, in taxation matters, the court is obliged to have regard to the actual facts and not to their equivalents. In cases where it is appropriate the court may apply a statutory provision such as s 260 to get rid of a contract, agreement or arrangement and deal with the case in disregard of that element, but, where there is no statutory warrant for doing so, the court cannot disregard certain of the facts or re-arrange the facts or decide the case according to its view of the substance of the matter. It is not legitimate to disregard the separateness of different corporate entities or to decide liability to tax upon the basis of the substantial economic or business character of what was done. That is equally impermissible. While not directly in point, it has a resonance with the alternative argument that was put to the High Court in Investment Merchant Finance Corporation Ltd v Federal Commissioner of Taxation [1971] HCA 35 ; (1971) 125 CLR 249 where the assessment in question was sought to be upheld on the footing that the transaction, as a whole , was the carrying out of a profit-making scheme for the purposes of s 26(a) of the ITAA 1936, and that, in determining the profit derived from the scheme, the dividend received should be brought into account rather than being treated as itself, assessable income in accordance with s 44 of the ITAA 1936: in particular, see Menzies J at 262. That alternative argument was rejected by all members of the Court. 106 Of course, there will be cases where the Parliament mandates such treatment. The example that comes most readily to mind is the consolidation regime in Part III --- 90 of the ITAA 1997. 107 Alternative (1), rather than avoiding a 'blinkered' view of the transaction as submitted by BARM, does just that by requiring a 'closing of the eyes' to the separate transactions that took place. Contentions that alternative (1) recognises the reality of the transaction, as a whole, elides what that involves --- conflation of separate, albeit financially dependent, transactions, and taxation by reference to the end economic result. Like taxation by reference to economic equivalence, it must be rejected. 108 The argument underlying alternative (2) involves the deferral of derivation of income represented by the management fees to the time BARM receives payments of interest and repayments of principal on the deposit with PGF. For an accruals basis taxpayer, the point of derivation of such income would normally be, as the Commissioner contended, when the management fees fell due, subject of course to the principle that comes out of Arthur Murray that, even if received, there will be no derivation until the receipt is earned. As indicated in [95] above, that latter principle was observed in the way in which BARM returned the income represented by the management fees. 109 The argument for deferral to the time BARM receives payments of interest and repayments of principal on the deposit with PGF is said to '... look to realities' to use the words of Rich J in Prior at 13. What it effectively asserts is that BARM should be treated as a cash basis taxpayer in respect of such income and then only for the amount of money received. Reliance for this argument is placed on the process of reasoning in Arthur Murray , albeit for a very different principle, Prior and Barratt . I deal with each of these cases below. 110 What this argument ignores is that BARM received the consideration for its management services when the bills of exchange were delivered to it. In other words, if it is to be treated as a cash basis taxpayer in respect of such income, it is the time of delivery of the bills of exchange that is the point of derivation. But there was no such valuation in evidence. Equally, there was evidence before me going to the quantum of funds held by the accommodation party at the time of each bill transaction which might lead one to accept that the value of the bills was equal to their face amounts. But again, there was no such valuation in evidence. BARM carries the onus of proving that the assessments are excessive: s 14ZZO of the Taxation Administration Act . On the issue of the money value of the bills at the relevant times, it has not discharged that onus. It is not for me, particularly in the face of the competing evidence outlined above, to speculate what that value might be. 111 However, I am not persuaded that BARM should be treated as a cash basis taxpayer in respect of such income; certainly not by reference to the authorities upon which BARM relied. It is to those authorities that I now turn. 112 Whatever else it might support, nothing was said in Arthur Murray which supports the argument underlying alternative (2). Arthur Murray was a case stated by Barwick CJ in five pending appeals from decisions of the Board of Review. The facts relevant to the only question that had to be formally answered were few and simple. What the case describes as basic courses of tuition available consisted of 5, 15 or 30 hours of private tuition to be taken by appointment within a year, though some students contracted for a course of 1,200 hours' tuition to be taken at any time during the student's lifetime. Payment for a course of lessons was often made in advance, either in the form of a lump sum or by instalments, a variable discount being allowed for immediate payment. For example, the fee for a lifetime course of 1,200 hours was [sterling]3,300, reducible to [sterling]3,000 for immediate payment. The student was given no contractual right to a refund in the event of his not completing the course--indeed the form of contract in general use denied any such right--though in practice refunds were sometimes given. In the company's books, fees were credited immediately upon their being received to an account styled "Unearned deposits--Untaught Lessons Account", and from that account amounts corresponding with lessons taught were periodically transferred to the credit of an account styled "Earned Tuition Account". The company made up its income tax returns on the footing that fees received in advance of tuition formed no part of its assessable income at the moment of receipt, but became such as and when earned by the giving of the lessons. The Commissioner, on the other hand, made the relevant assessments upon the view that fees received in advance of tuition possessed the character of assessable income in the company's hands from the moment of receipt, so that in respect of a given year of income there was no need to distinguish between fees for which lessons had been given during the year and fees for which at the end of the year the lessons still remained to be given. The question to be decided is, in effect, whether on the facts as stated it is open to the Justice hearing the appeals to uphold the Commissioner's view. On the contrary, if the statement accords with ordinary business concepts in the community--and we are bound by the case stated to accept that it does--it applies the provisions of the Act according to their true meaning. The word "gains" is not here used in the sense of the net profits of the business, for the topic under discussion is assessable income, that is to say gross income. But neither is it synonymous with "receipts". It refers to amounts which have not only been received but have "come home" to the taxpayer; and that must surely involve, if the word "income" is to convey the notion it expresses in the practical affairs of business life, not only that the amounts received are unaffected by legal restrictions, as by reason of a trust or charge in favour of the payer--not only that they have been received beneficially--but that the situation has been reached in which they may properly be counted as gains completely made, so that there is neither legal nor business unsoundness in regarding them without qualification as income derived. It is true that in a case like the present the circumstances of the receipt do not prevent the amount received from becoming immediately the beneficial property of the company; for the fact that it has been paid in advance is not enough to affect it with any trust or charge, or to place any legal impediment in the way of the recipient's dealing with it as he will. But those circumstances nevertheless make it surely necessary, as a matter of business good sense, that the recipient should treat each amount of fees received but not yet earned as subject to the contingency that the whole or some part of it may have in effect to be paid back, even if only as damages, should the agreed quid pro quo not be rendered in due course. The possibility of having to make such a payment back (we speak, of course, in practical terms) is an inherent characteristic of the receipt itself. In our opinion it would be out of accord with the realities of the situation to hold, while the possibility remains, that the amount received has the quality of income derived by the company. 117 In my view, there is no process of reasoning in, or principle coming out of, Arthur Murray which supports the argument underlying alternative (2). And this would be the case whether BARM is an accruals basis or cash basis taxpayer, assuming of course that the principle coming out of Arthur Murray applies equally to both. While Arthur Murray concerned an accruals basis taxpayer, there seems to be no reason why the principle does not equally apply to a cash basis taxpayer. 118 Prior concerned a cash basis taxpayer who, during his lifetime, was a member of a partnership which was dissolved by a deed. His sole co-partner had borrowed money from him on his private account and the deceased had lent money to the partnership. (2) [sterling]1,073 interest, said to be the deceased's half share of the interest owing to him by the partnership at the time. By the deed, he undertook a personal liability to the deceased for the amount and secured it over a certain property already mortgaged, for part of the sum. The property was actually worth only [sterling]3,295 and by reason of his financial position the co-partner was unable to pay even the arrears of interest included in the sum and no payment had ever been made in respect of the sum. 119 The Commissioner contended that the interest referred to represented interest derived by the deceased during the account period ended 30 June 1932 but capitalised by means of the deed dated the 13 August 1932 affecting the dissolution of the partnership. Under the deed, the interest had been carried to the capital account. 120 The question before the court was whether the taxable income of the deceased for the year ended 30 June 1933 included an amount of [sterling]2,097 or any part, and if so, what part of that sum. 121 The [sterling]2,097 was arrived at by deducting from the total of the amounts shown above, [sterling]2,535, a sum of [sterling]438 that the taxpayer had returned as income in previous years. 122 All members of the Court held that the [sterling]2,097 was not income within the meaning of the ITAA 1936 for the year in question. But here the facts show that the deceased got nothing except a new obligation to pay in exchange for an existing obligation to pay. He was no nearer getting his money or of transferring it into anything of any value. His debtor could neither pay nor secure payment of the debt to him except by charging it on property already heavily mortgaged and quite incapable of producing a surplus out of which the amount representing interest could be paid. To see whether income has been derived one must look to realities. Usually payment of interest by cheque involves a receipt of income but payment by a valueless cheque does not. "For income tax purposes receivability without receipt is nothing. " Law of Income Tax (Sir Houldsworth Shaw & Baker), p 111. You do not transform interest into an accretion of capital by writing out words on a piece of paper. There must be some reality behind them. Some accretion of value to corpus. The facts in this case show that there was not "an actually realised or realisable profit": Cross v. London & Provincial Trust Ltd [[1938] 1 KB 792 at 798. All that happened in this case was to change a forlorn hope of interest into a still more forlorn hope of capital. In my opinion income was not derived even if the sums for interest included in the Commissioner's [sterling]2,097 were really due and not as the taxpayers claim only in part due owing to error. 124 Barratt was concerned with whether an accruals basis of tax accounting was appropriate for a partnership of medical practitioners carrying on a pathology practice where the partnership required the use of large and expensive equipment and laboratory, courier and clerical services which were provided by service entities associated with the partners. A Full Court of this Court held that it was and dismissed the taxpayer's appeal. The principal judgment was given by Gummow J with whom Northrop and Drummond JJ agreed but, with respect, it does not shine any light on the appropriateness of the principle put forward by BARM that is alternative (2). 125 Expert accounting evidence was called by BARM in support of the argument underlying alternative (2) from Professor Robert Walker, the Professor of Accounting in the Faculty of Economics and Business at the University of Sydney. The Commissioner relied on expert accounting evidence from Mr Wayne Lonergan to deny the appropriateness of any financial accounting treatment consistent with the argument underlying alternative (2). With respect to both experts, I did not find their evidence provided me with any constructive assistance in resolving the issues raised by BARM's arguments. That is, as I understand the evidence, how BARM returned the income represented by the management fees. Even if BARM were to be taxed on the management fee income as a cash basis taxpayer, and as indicated in [111] above, I do not think such a basis is appropriate, that would only defer derivation to the date of delivery of the bills of exchange or, in the case of fees which related to the provision of services in a year of income after the year in which the fees were received, consistent with the principle that comes out of Arthur Murray , in the year of income in which these services were provided. 127 Moreover, in the absence of evidence that the money value of the bills at the time of delivery to BARM was less than their face value, no deferral would also result in a reduction in the quantum of the amount derived. 128 BARM's position in relation to Issue 1 cannot be sustained; and it follows that its position in relation to Issue 2 must also fail. 129 The application must be dismissed with the costs. I certify that the preceding one hundred and twenty-nine (129) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds.

management fee income discharged by bills of exchange issue as to appropriate basis of accounting for same for income tax purposes issue as to measurement of amount of income derived whether related limited recourse loans impacted measure of income derived no evidence as to money value of bills. income tax

Ox Operations seeks an order that the statutory demand be set aside pursuant to s 459H of the Corporations Act 2001 (Cth) ("the Act "). The application is made under s 459G of the Act . 2 LMPD submitted that the application to set aside the statutory demand should be dismissed. First, on the basis that the review is of no utility and, secondly, if that is not so, then because Ox Operations had failed to satisfy the Court that there is a genuine dispute in relation to the debt the subject of the statutory demand. REVIEW OF NO UTILITY? Its deemed insolvency arises because it failed to comply with the statutory demand within the time required, as extended by the Registrar. The time for compliance with the statutory demand expired at 4.00pm on 13 December 2007. An application to extend the time for compliance until after 4.00pm on 13 December 2007 was not made and determined prior to that time. 4 There is a substantial body of authority in the Federal Court and other Australian Courts that the Court has no power to extend the time for compliance after it has expired: Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd (2007) 63 ACSR 300 and G&J Gears Australia Pty Ltd v Brobo Group Pty Ltd (2006) 229 ALR 638 at [46] to [52] and the authorities referred to therein. 5 In Aussie Vic Plant Hire , the Court of Appeal of the Supreme Court of Victoria considered that body of authority. Chernov JA considered that the policy of Pt 5.4 of the Act and the mischief which s 459F(2)(a)(i) seeks to abrogate makes it implicit that the Court is not empowered to extend the time for compliance with a statutory demand after the period has expired. His Honour considered that Pt 5.4 of the Act is a code which provides a strict and self executing regime: [84]-[97]. Maxwell P and Neave JA disagreed: [28] to [77]. Nettle and Ashley JJA, the remaining members of the Court of Appeal, concluded that as a matter of statutory construction of the Act and, in particular s 459F(2)(a)(i) of the Act , read with s 70 , an application to extend time for compliance with a statutory demand may be made under s 459F(2)(a)(i) after the time for compliance has expired: [118]-[124] and [183]-[187]. However, their Honours did not the permit the time for compliance with the statutory demand to be extended after the period had expired on the basis that the view, that the Court has no power to extend the time for compliance after it has expired, had existed for more than 10 years and one could not say "positively that it was wrong and productive of inconvenience": [123]. The High Court granted special leave to appeal. The appeal was heard on 6 February 2008 and the decision reserved. 6 Consistent with the approach adopted by Nettle and Ashley JJA, I would not permit the time for Ox Operations to comply with the statutory demand to be extended. The period has expired. On that basis, the application for review has no utility and should be dismissed. 7 However, in order to deal with all issues and to avoid unnecessary costs, in the event that the High Court considers that s 459F(2)(a)(i) of the Act (whether read alone or in conjunction with other provision of the Act ) enables a Court to extend the time for compliance with a statutory demand after it has expired, I propose to deal with the merits of Ox Operations application to set aside LMPD's statutory demand pursuant to ss 459G and 459H of the Act . It is a hearing de novo: s 35A(6) of the Federal Court of Australia Act 1976 (Cth); Mazukov v University of Tasmania [2004] FCAFC 159 at [22] to [27] and Martin v Commonwealth Bank of Australia (2001) 217 ALR 634 at [6] and [12]. In the present case, the Court must be satisfied that there is a genuine dispute between Ox Operations and LMPD about the existence or amount of the debt to which the demand relates: s 459H(1)(a) of the Act . For a genuine dispute to exist, the dispute must "be bona fide and truly exist in fact". The grounds for alleging the existence of a dispute must be "real and not spurious, hypothetical, illusory or misconceived": Spencer Constructions Pty Ltd v G&M Aldridge Pty Ltd [1997] FCA 681 ; (1997) 76 FCR 452 at 464. 10 The Court's role is to determine whether a genuine dispute exists. That issue is determined at the time the Court hears the application: Andi-Co Australia Pty Ltd v Meyers [2004] FCA 1358 at [16] . The manner in which the Court approaches the task is also not in dispute. The Court does not resolve contested questions of fact. The Court does not determine where the merits lie in any contest: Kortz Ltd v Data Acquisition Pty Ltd [2006] FCA 1722 ; (2006) 155 FCR 556 at [40] . The Court determines whether the supporting affidavits filed and served by Ox Operations depose to facts from which the Court is able to conclude that a genuine dispute exists. As Young J said in John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 14 ACSR 250 at 253, something between mere assertion and the proof of the existence of the disputed debt is required. The Landmark Group included Philidor Pty Ltd, Landmark Realty (Vic) Pty Ltd, Landmark Trading Pty Ltd, Landmark Homes (Aust) Pty Ltd, Landmark Constructions (Aust) Pty Ltd, AssetBuild Finance Pty Ltd, Ox Administration Pty Ltd ("Ox Administration"), LMPD and Ox Operations. LMPD is in liquidation. 12 The liquidator of LMPD submits Ox Operations is indebted to LMPD in the sum of $544,574.60 ("the debt"). On or about 30 May 2007, a statutory demand for payment of the debt was served on Ox Operations ("the statutory demand"). The debt is said to comprise loans made by LMPD to Ox Operations from 17 March 2006 to 18 September 2006. The liquidator contends the debt is recorded in documents (including LMPD's business records) which came into his possession after his appointment as liquidator of LMPD. 13 The liquidator relies principally on three types of documents as evidencing the existence of the debt. First, a document produced from LMPD's MYOB accounting computer software system entitled "General Ledger [Detail]" for the period from 1 March 2006 to 18 September 2006. Pages 22 to 24 of the general ledger records account number 2-3560 entitled "Loan --- Ox Operations Pty Ltd". That general ledger is said to record a debt of $598,815.27 owing by Ox Operations to LMPD. 14 Secondly, a document produced by Ox Operations (in response to a notice to produce documents evidencing payments to LMPD between 1 February 2004 and 13 September 2006) entitled "Account Transactions [Accrual]" for the periods 1 April 2000 to 31 March 2005 and 1 April 2005 to 18 April 2007. (Ex PV5) And thirdly, bank statements issued by the National Australia Bank Limited for a cheque account in the name of LPMD together with corresponding cheque butts which correspond to the entries listed in the General Ledger: [Ex PV2 and PV3]. 15 As the liquidator of LMPD submitted, the starting point is s 1305 of the Act . Section 1305(1) is a facilitative provision which has been given a broad interpretation: Valoutin Pty Ltd v Furst (1998) 154 ALR 119 at 128. First, it is one of the financial records (being a type of book) that LMPD was required to keep under the Act : see s 286 of the Act . Secondly, the contents of that document are admissible and prima facie evidence of the matter stated and recorded in it --- that Ox Operations was indebted to LMPD in the sum of $598,815.27. The difference between the amount disclosed in the general ledger and the statutory demand is explained by the fact that the liquidator of LMPD included in the statutory demand only $554,574.60. Ox Operations contends that it has done so. It sought to rely on two grounds. I will deal with each ground in turn. Ox Operations submitted that LMPD was in fact the treasurer of the Landmark Group and acted as a conduit to transfer moneys between group members and to pay the trade creditors of the Group. Any moneys it received and then provided to Ox Operations were funds held by it on trust or as agent for other members of the Landmark Group for other members of the Landmark Group which had paid money to LMPD to pay out to third parties (the "trust argument"). In my capacity as a director of each of the entities in the Landmark Group ... between 1 February 2001 to 13 September 2006, and pursuant to an arrangement , monies were paid to [LMPD] by myself, Chris Garris, Philador, Homes, Realty, Assetbuild and Constructions ("the monies") ("the arrangement") which are quantified in paragraph 11 below. 7. These monies were transferred and or paid into the LMPD bank account for the sole purpose to on-lend to other companies and persons who are ... involved in the Landmark Group ... Included in those payments was the moneys paid to [LMPD] for the benefit of Ox [Operations} in the sum of $554,574.60. At the date of swearing this my affidavit all the monies actually paid to [LMPD] for the benefit of the Landmark Group ... has been applied to the Landmark Group. 8. It was a term of this arrangement between the Landmark Group ... that the above ... payments into [LMPD] were to be held by [LMPD] to be paid out to the recipients of that money previously paid into [LMPD] as and when they required such payments. Such monies were not to be used for any other purpose than that for which is referred to above and were to be held by [LMPD] in trust until such payments to other members of the Landmark Group were effected. I say that Ox [Operations] denies that it is indebted to LMPD in the sum of $554,574.64 or at all as [LMPD] did not advance any of its own monies to Ox [Operations]. The only monies which were paid to Ox [Operations] by [LMPD] were in fact monies entrusted to [LMPD] by other members of the Landmark Group ..., together with myself and Chris Garris to only be used for such purposes . The majority of monies, which total to $1,343,912.62 were provided by myself in the amount of $88,304.77, Philador in the amount of $51,500.00, Homes in the amount of $108,500.00, Realty in the amount of $982,607.95, Asset Build in the amount of $46,500.00, Construction in the amount of $61,500.00 and Chris Garris in the amount of $5,000.00. 12. It is incorrect to say that there are any monies due and payable by Ox [Operations] to [LMPD]. Any liability that Ox [Operations] has in relation to the amount claimed is to other members of the Landmark Group ... together with myself and Chris Garris. First, none of the affidavits filed for and on behalf of Ox Operations displace the prima facie position established by the contents of the general ledger. On the contrary, the affidavits support the prima facie position. So much is made clear by para [7] of Mr Grezos' affidavit of 16 June 2007 when he stated that the monies received by LMPD were " transferred and or paid into the LMPD bank account for the sole purpose to on-lend to other companies and persons who are involved in the Landmark Group . " In other words, the transaction was a loan. That is what the financial records of LMPD record and upon which the statutory demand is based. 24 Secondly, none of the affidavits rise higher than mere assertion about the existence of a so called "arrangement" which is inconsistent with or contrary to the existence of the loan as recorded in the general ledger. Not only are the terms of the arrangement not disclosed but the Court is unable to discern who were the parties to such arrangement and when it was entered into. 25 Thirdly, the books of LMPD do not support the contention that LMPD was acting as trustee or agent and provided the funds on behalf of a number of identified entities and persons. For example, the bank statements for LMPD's bank account do not support that contention. The bank account was a mixed account. It operated as a trading overdraft account. The bank statements reveal that, even if the so called trust arrangement existed, of the payments made to Ox Operations totalling $521,548.23, the maximum amount that could have been a loan or advance from an entity other than LMPD was $265,138.95. The balance of $256,409.28 ($521,548.23 less $265,138.95) was directly sourced not from another entity or individual but from funds received by LMPD on a monthly basis and deposited directly into LMPD's bank account from a source outside the Landmark Group. The funds were monthly GST refunds from the Australian Taxation Office. The refunds were the result of GST paid by LMPD to Crema (Vic) Pty Ltd which had been contracted by LMPD to construct a building in Lonsdale Street, Melbourne. 26 Fourthly, the evidence of Mr Tolya Rayzman, an employee of Harold Sztainbok & Co Pty Ltd Mr Wallace's firm, was that monies were advanced to Ox Operations by LMPD and that he instructed the bookkeeper to place all of the intra group transactions into " appropriate loan accounts" . Mr Rayzman's evidence was not that the loan accounts did not exist but that he would use the entries in the loan accounts to determine who would be repaid when " Ox [Operations] refinanced its activities" . The only entity listed in the general ledger as requiring " repayment" when Ox [Operations] refinanced its activities" was LMPD. 27 Finally, in response to a notice to produce " [t]he documents evidencing payments to [LMPD] between 1 February 2004 to 13 September 2006 ", Ox Operations produced to LMPD an incomplete ledger for LMPD. That general ledger recorded the various payments to LMPD as loans rather than payments received as trustee or subject to some other arrangement. 28 Ox Operations' written submissions referred to Walsh v Salzer Constructions Pty Ltd [2000] VSCA 228 as support for the proposition that the fact that a company acts as a treasurer for other entities within the same group does not by itself give rise to a debtor --- creditor relationship. So much may be accepted. But that is not the only relevant fact in this application. The more significant fact is the existence of the prima facie position reflected in the general ledger of LMPD --- a loan to Ox Operations. The decision may be put to one side. 29 For those reasons, I do not accept that the first ground of challenge raises a genuine dispute. 31 LMPD submitted that the Second Ground of Challenge was not available to Ox Operations by reason of the principles in Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452 at 459-460 as explained in Hansmar Investments Pty Ltd v Perpetual Trustee Co Ltd (2007) 61 ACSR 321 at 326. LMPD submitted that the second ground of challenge was not " raised expressly, by necessary inference, or by a reasonably available inference " in the affidavit of Mr Grezos sworn on 16 June 2007 ("the First Grezos Affidavit") and filed in support of the application to set aside the statutory demand: Hansmar at [28]. 32 In my view, the Second Ground of Challenge was not " raised expressly, by necessary inference, or by a reasonably available inference " in the First Grezos Affidavit. The basis of the First Grezos Affidavit was that (1) monies were transferred and or paid into the LMPD bank account; (2) for the sole purpose to on-lend to other companies and persons who are involved in the Landmark Group and (3) included in those payments was the moneys paid to LMPD for the benefit of Ox Operations in the sum of $554,575.60. Neither the supporting affidavit nor the documents annexed to it raise the suggestion that the payments were not made to LMPD but to another entity. The second ground of challenge is not available to Ox Operations. 33 If I was wrong to conclude that the second ground of challenge was not available to Ox Operations, I am nonetheless of the view that the second ground of challenge does not raise a genuine dispute. Four categories of payments recorded in the general ledger were said by Ox Operations to demonstrate that the general ledger could not be relied upon as accurate thereby establishing, consistent with the principles set out above (see [9] and [10]), the existence of a genuine dispute. 34 The first category were payments recorded in the general ledger of LMPD as being a loan to Ox Operations where the source documents (the cheque butts or the bank statements or both) do not refer to "Ox Operations" but "Ox" (for example, folios 19, 38 and 40 of Ex "PV2"). At least two companies in the Landmark Group contained the word "Ox" --- Ox Operations, Ox Administration. Ox Operations contended that there were insufficient facts or material before the Court to enable the Court to ascertain which of the Ox entities was the beneficiary of the payment. In my view, Ox Operations' claim is misconceived. Ox Operations bore the onus of displacing the prima facie position of indebtedness. It failed to do so. Mr Grezos, the principal of Ox Operations and the Landmark Group, informed the Court that he was not responsible for the making of entries in LMPD's books of account, he had little independent recollection about what the individual payments recorded in the general ledger relate [par 5 of 01.02.08] and that he could not say with any certainty which of Ox Operations, Ox Administration and Ox Group Pty Ltd received the benefit of the payments. Even if Mr Grezos had little independent recollection of those matters, he could have at least explained the role played by each of the Ox entities or instructed an accountant to undertake the task of identifying that the beneficiary of one or more of the payments was not Ox Operations. And to the extent that there was evidence filed about the entries in the general ledger, that evidence does not assist Ox Operations. As noted earlier, the evidence of Mr Tolya Rayzman, an employee of Harold Sztainbok & Co Pty Ltd, was that he instructed the bookkeeper to place all of the intra group transactions into " appropriate loan accounts" . Other than mere assertion or speculation, there is nothing to suggest that transactions placed into the loan account in the name of Ox Operations in LMPD's general ledger was anything other than appropriate. 35 The second category of payments are those dated prior to incorporation of Ox Operations on 7 April 2006. Pre-incorporation expenses are common. The cost of them is often borne by the entity that is subsequently incorporated. This fact either alone or in conjunction with the other matters raised by Ox Operations does not satisfy me that there is a genuine dispute. 36 The third category of payments are those where the cheque butt refers to 'Ox Holdings' or 'Ox Capital' (for example, folios 39, 41 and 45 of Ex "PV2"). Again, this fact either alone or in conjunction with the other matters raised by Ox Operations does not satisfy me that there is a genuine dispute. It is by no means clear whether there is an entity known as 'Ox Capital'. There is nothing to evidence the relationship between Ox Operations or any other 'Ox' entity. In my view, other than mere assertion or speculation, there is nothing to suggest that transactions placed into the loan account in the name of Ox Operations in LMPD's general ledger in the manner described above (see [33]) was anything other than appropriate. If consistent with the principles for setting aside a statutory demand, Ox Operations was to seek to dispute that allocation, more was required. 37 Finally, there is a bundle of payments where the source documents (the cheque butts) do not refer to "Ox Operations" but to an individual's name and, in some cases, the word "wages" is referred to (for example, folios 51 and 52 of Ex "PV2". This category of complaint fails for the same reason as the complaints made in relation to categories 1 and 3. 38 In the circumstances, the Court cannot be satisfied that there is a genuine dispute between Ox Operations and LMPD about the existence or amount of the debt to which the demand relates. I would therefore dismiss the notice of motion dated 11 December 2007 and order the plaintiff to pay the defendant's costs of the proceeding, to be taxed in default of agreement. The files and notes of Paul Vartelas acting as the liquidator of Ox Capital Pty Ltd (in liquidation) ACN 109 029 165 and National Pacific Securities Pty Ltd (in liquidation) ACN 105 407 841. 40 Counsel for LMPD made an oral application to set aside para [2] of the notice to produce. I granted that application. What follows are my reasons for doing so. 41 Order 33 r 12(1) of the Federal Court Rules provides that where a party to a proceeding serves on another party a notice requiring the party served to produce at any trial or hearing in the proceedings, any document for the purpose of evidence and the document is in the possession, custody or power of the party served, the party served shall, unless the Court otherwise orders, produce the document without the need for any subpoena for production. 42 As has been said many times, a notice under O 33 r 12 has the same coercive effect as a subpoena for production. Compliance is mandatory unless the Court otherwise orders: Potts v Dennis Jones & Co Pty Ltd (No. 2) (1995) 58 FCR 61 at 70. Similarly, the considerations which apply to the setting aside of a subpoena are equally applicable to a notice to produce: Jefferson Ford Pty Ltd v Ford Motor Company of Australia Pty Ltd [2007] VSC 450 and Crown Joinery Pty Ltd v Lyleho Pty Ltd [2007] VSC 214. The grounds on which a notice to produce may be set include that it is too wide, oppressive or fishing. The issues in the case and the possible relevance of the document or documents to those issues are obviously relevant in deciding whether the notice is fishing: Seven Network Ltd v News Ltd (No 11) [2006] FCA 174 at [6] . 43 Paragraph [2] of the Notice was far from clear. During the course of argument, it became apparent that Ox Operations sought production of documents relating to work undertaken by Comlaw, a firm of solicitors. (The documents were said to concern the payments listed at folios 17, 55 and 56 of Ex "PV2"). Ox Operations sought production of the documents to demonstrate that Ox Operations was not indebted to LMPD in respect of the sums identified in those folios. I set aside par [2] of the Notice to Produce. The documents relate to the Second Ground of Challenge, a ground which is not available to Ox Operations for the reasons set out earlier (see [32]). I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon.

review of registrar's decision dismissing application to set aside statutory demand under s 459h of the corporations act 2001 (cth) whether review of no utility on basis of deemed insolvency arising from non-compliance with demand within statutory time limit consideration of alternative bases for review whether there was a genuine dispute about the existence of the debt whether monies the subject of transfer held on trust whether company accounts otherwise sufficient to establish existence of a plausible claim whether notice to produce should be set aside under order 33 r 12(1) of the federal court rules where documents called upon relate to a ground of review which is not available. statutory demand practice and procedure

Seawater will be desalinated and piped some 85 km to Melbourne. 2 On 31 December 2007 the Victorian Department of Sustainability and Environment referred the Project to the Federal Minister for the Environment, Heritage and the Arts under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the EPBC Act). Under s 68 of that Act a person proposing to take an "action" which may have a significant impact on any of the matters of national environmental significance specified in Pt 3 of Ch 2 must "refer" the action to the Federal Minister. The Minister then decides whether the action needs Federal approval because of its potential impact on those matters. If so, the Minister will designate it under s 75(1) as a "controlled action". At the same time the Minister identifies the specific provisions of Pt 3 which are applicable (the "controlling provisions"). The Minister must then decide under s 87 which of a number of approaches must be used for the assessment of the relevant impacts. After that assessment is completed the Minister may approve the taking of the action (s 133). 3 The referral by the Victorian Department (the Referral) described the Project and its potential impacts but expressly excluded from the Referral certain works, referred to in the present case as "the Preliminary Works". The Preliminary Works are preliminary investigation works which are to be undertaken to obtain information for the purpose of project design, location and environmental assessment. Amongst other things, information obtained from such investigations will be essential for those tendering for the construction of the Project. I shall refer to these decisions collectively as "the s 75 Decision". 8 The s 75 Decision made it clear that the Preliminary Works were excluded. The delegate stated that the Preliminary Works "are excluded from the scope of this referral and do not require approval under the EPBC Act". The State of Victoria should be restrained from carrying them out unless and until it obtains approval under Pt 9 of the EPBC Act. A reverse osmosis Desalination Plant located on the Bass Coast near Wonthaggi. This will include intake and outlet tunnels extending underground and under the seabed from the site and connecting to submerged structures constructed on and above the seabed in the offshore environment. The plant will use reverse osmosis technology and is planned to initially provide up to 150 GL per year of water, but to allow for expansion to 200 GL per year. It is likely to occupy a site area of approximately 30 to 40 ha once constructed. 2. A Transfer Pipeline which will transfer the desalinated water to the Melbourne supply system. This will be around 85 km in length (refer Attachments 2, 3 and 4). 3. Providing a Power Supply in the order of 90 MW of power to the plant for (150 GL), and the purchase of renewable energy to offset the energy used by the plant during operation. Three broad sets of options are potentially available for the provision of an adequate and reliable power supply to the project: • establishing new 220 kV, 132 kV or 66 kV transmission lines from optional connection points to the north, east or west of the region. • establishing a new gas fired power station at or near the Desalination Plant or a remote location. • hybrid options combining wind power backed up by gas fired power station or transmission lines to ensure reliability of supply. Potential sites and routes as well as technology options (eg different types of transmission poles, undergrounding cables) will be investigated and evaluated during the EES process, and the preferred and any feasible alternatives will be put forward in the exhibited EES. These works and activities have been excluded from the scope of the Victorian EES process. The information collected by these preliminary investigations will be essential for project design decisions such as refining the final location and design of the Desalination Plant, including the seawater intake and outlet structures, and will inform environmental assessments including the likely nature, volume and management options for the pre-treatment plant sludge. These activities are unlikely to have any significant environmental effects, including on matters of National environmental significance, and need to be commenced prior to the completion of any environmental assessment process. Any environmental investigations required to achieve State consents for these activities will be undertaken separately. 13 The Referral, along with an invitation for public submissions, was published on the Federal Department's website. A total of 67 submissions were received. Some expressed concern about the level of greenhouse gas emissions potentially resulting from the operation of the desalination plant and its consequential contribution to climate change. This aspect is no longer attacked by the applicant. 15 Following the applicant's request for reasons under the AD(JR) Act, the delegate on 6 March 2008 provided written reasons for the s 75 Decision. The preliminary works required to inform the final design, location and environmental assessment of the desalination plant and associated infrastructure, including the seawater intake and outlet structures, are not part of the referred action. The proposed preliminary works include terrestrial geotechnical drilling and sampling, the installation of pipelines and offshore marine structures for seawater intake and discharge; and the installation and operation of one or more pre-treatment and/or desalination pilot plants up to a maximum aggregate capacity of 6 megalitres per day. In the view of the Department of Sustainability and Environment, the proposed preliminary works are unlikely to have any significant environmental effects on matters of national environmental significance. I found that activities associated with the operation of the desalination plant, including transport of materials and the consumption of fossil fuels to produce electricity, will contribute to greenhouse gas emissions currently produced by Australia. 54. I found that contributions from the proposed desalination plant operations are likely to be relatively minor compared to total Australian greenhouse gas emissions. I further found that the Australian contribution to current annual greenhouse gas emissions, though relatively large on a per capita basis, is only one amongst many contributions that are made by all other industrialised nations. 55. I found that, while there is a relationship between the amount of carbon dioxide in the atmosphere and warming of the atmosphere, the climate system is complex. I found that a possible link between the additional greenhouse gases arising from the proposed action and a measurable or identifiable increase in global atmospheric temperature is speculative and unlikely to be identifiable. I found that linkages between specific additional greenhouse gas emissions and potential adverse impacts on matters protects by Part 3 of the EPBC Act are uncertain and conjectural only. In the present case the relevant matters were considered to be "Wetlands of International importance" (ss 16 and 17B) and "Listed threatened species and communities" (ss 18 and 18A). 17 The respondents say, correctly in my opinion, that the alleged Preliminary Works decision was not a decision at all. The Preliminary Works did not form part of the "action" the Victorian Department "referred" to the Federal Minister. They were expressly excluded form the Referral. They were not the "subject of (the) proposal referred to the Minister". 18 In stating that the Preliminary Works "are excluded from the scope of this referral decision and do not require approval under the EPBC Act" the delegate was simply recording a fact, namely that the Preliminary Works had been excluded. In this context, the two parts of the sentence separated by "and" are linked. The meaning conveyed is that the Preliminary Works do not require approval because they are excluded from the Referral. There is no expression of opinion on the environmental merits of the Preliminary Works. 19 The term "decision" itself is not defined in the AD(JR) Act, although s 3(2) gives examples of different kinds of conduct which are to be treated as "the making of a decision" for the purposes of the Act. To be reviewable under the AD(JR) Act a decision will generally need to be "final or operative and determinative" and not just a "step along the way", and "substantive" rather than "procedural": Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 337. However, more fundamentally, there must be a decision, that is to say "the act of deciding; determination (of a question of doubt)": Macquarie Dictionary. 2. to adjust or settle (anything in dispute or doubt). In the present case, the delegate made no such choice and decided nothing in relation to the Preliminary Works. She had no power under s 75(1) to do so. 21 The s 75 Decision did not amount to "de facto approval" of the Preliminary Works; quite the contrary. If a person who has not referred an action and obtained the approval of the Federal Minister does anything which results in significant impact on the matter of national environmental significance in question, Pt 3 of the EPBC Act provides criminal sanctions. In the present case the relevant provisions of Pt 3 are ss 17B (wetlands) and 18A (threatened species). Thus a person who takes action which may result in a significant impact on the matters covered by Pt 3 without referring the action runs the risk of such criminal sanctions. Further, the Minister or an "interested person" may apply to the Federal Court for an injunction to restrain such actions: s 475. The question of greenhouse gas emissions was not such a matter. In any event, the delegate did give consideration to it (see [15] above). 24 The applicant sought to tender two reports by a company called Brett Lane & Associates Pty Ltd dated December 2002 and February 2003. These were exhibited to an affidavit by Mr John Wright, the vice-president of the applicant. The author of the report did not swear an affidavit, indeed was not identified unless the assumption can be made that it was a Mr Brett Lane. The report was thus hearsay and not admissible: Evidence Act 1995 (Cth) s 59. 25 In any event, the reports appear to deal with the likely effects on flora and fauna of a proposed wind farm near Wonthaggi and would seem not to be relevant to present issues. 26 The State of Victoria had filed affidavits from a number of experts. However, once objection was taken and upheld to the admission of the Brett Lane reports, senior counsel for the State of Victoria did not read those affidavits into evidence. There being no evidence, the application for an injunction must be dismissed. Since claims raised in the application other than those dealt with above were abandoned by the applicant, and those which were argued have been rejected, there must be judgment for the respondents. 28 As to costs, I will direct that the respondents may file and serve any written submissions they wish to make within seven days, and the applicant may file and serve any submissions in response within seven days thereafter. The question of costs will be decided on the papers. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.

proposed desalination plant application for review of alleged decision that certain preliminary works did not require approval under the environment protection and biodiversity conservation act 1999 (cth) whether there was a decision in regard to preliminary works excluded from referral to federal minister whether the making of that alleged decision was beyond the power of the federal minister whether failure to consider potential greenhouse gas emissions and impact on matters of national environmental significance administrative law

The bankrupt presented a debtors petition on 16 October 2006. The moneys are said to have been lent to the proposed defendants upon terms that the loans would be repaid by them upon the sale of an asset, a motel, by a company in which the borrowers had an interest. The asset has been sold. Some interest has been repaid by the borrowers but the principal and other interest moneys remain outstanding. 2 Leave is sought in terms of Annexure 'MLM-01' of the affidavit of Margaret Laurelle McNamara, and that exhibit attaches an application and statement of claim. By para 9 of the affidavit, the deponent identifies that there are questions of fact which are inseparable from the claim to be made against the first respondent. Submissions have been made this morning that there is a common substratum of fact and there are questions of fact and law which are heavily interrelated. The application for leave is not opposed by the trustee of the estate of the bankrupt. The trustee has confirmed by letter to the solicitors for the applicant that no objection is taken to the grant of leave. 3 Accordingly, I propose to give leave in terms of the application, that is, leave pursuant s 58(3)(b) of the Bankruptcy Act 1966 (Cth) to commence proceedings against the respondent in terms of Exhibit 'MLM-01' to the affidavit of Margaret Laurelle McNamara filed with the application. No orders as to costs are sought. I certify that the preceding three (3) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.

application for leave pursuant to s 58(3)(b) of the bankruptcy act 1966 (cth) to commence proceedings bankruptcy

The first respondent, Veda Advantage Information Services and Solutions Limited (Veda), was at all material times a "credit reporting agency" and carried on a "credit reporting business" within the meaning of the Privacy Act 1988 (Cth) (Privacy Act). (Veda has had different names in the past, namely, Credit Reference Association of New South Wales Limited, then Credit Reference Association of Australia Limited, then Credit Reference Limited, then Credit Advantage Limited, then Baycorp Advantage Business Information Services Limited. However, I will refer to it as "Veda" regardless of the point in time in question. ) Section 11A of the Privacy Act defines a "credit reporting agency" as a corporation that carries on a credit reporting business. Section 6 defines a "corporation" as, relevantly, a trading or financial corporation formed within the limits of Australia. The definition of "credit reporting business" appears at [18] below. In its defence (see [114] below) Veda raised a constitutional issue, as a result of which notices under s 78B of the Judiciary Act 1903 (Cth) were given to the Attorneys-General of the Commonwealth and the States and Territories. Only the Attorney-General for New South Wales sought to intervene. On 13 June 2007 I ordered that he be added as second respondent. Veda's business centred on its operation of a computerised database. That database recorded information concerning the creditworthiness of individuals. Veda's customers were credit providers. Credit providers have an obvious interest in obtaining information touching the creditworthiness of persons who seek credit from them. As subscribers to Veda's system, they: electronically entered creditworthiness data concerning individuals to whom they had provided credit, directly into Veda's database for the benefit of other subscribers; and extracted electronically directly from Veda's database for their own benefit creditworthiness data that had been entered into it by other subscribers concerning individuals to whom the latter had provided credit. On the negligence claim, each applicant complains, in substance, that Veda supplied to one or more of its subscribers inaccurate information concerning the creditworthiness of that applicant, as a result of which he or she suffered loss or damage by being refused credit or losing the opportunity of obtaining credit on more favourable terms. On the defamation claim, the complaint is that Veda published to one or more of its subscribers material, whether accurate or inaccurate, that conveyed imputations defamatory of the applicant. The nine proceedings involved some common issues, but the detailed facts were unique to each case. The hearing was limited to the issue of liability, and consequently so are these reasons. This Court's jurisdiction was attracted by reason of the presence of claims under s 52 of the Trade Practices Act 1974 (Cth) (TP Act). The claims in defamation and negligence were within the "accrued" jurisdiction of the Court. They have continued to be within the Court's jurisdiction notwithstanding that the claims under s 52 are no longer pressed: see s 65A of the TP Act and my judgment in Bailey v Veda Advantage Information Services and Solutions Ltd (No. 2) [2008] FCA 730. Both the applicants and Veda relied on provisions of that Act as relevant to the claims in defamation and negligence. However, the applicants did not sue Veda on a cause of action on the statute, that is to say, for breach of an actionable statutory duty said to be owed to them by Veda. The parties agreed that Reprint 6 of that Act (reprinted on 20 January 2005) was the applicable version. The Privacy Amendment Act 1990 (No 116 1990), which commenced on 24 September 1991, inserted new ss 18A and 18B into Pt III , and a new Pt IIIA (ss 18C to 18V ) headed "Credit Reporting". The Privacy Amendment (Private Sector) Act 2000 (No 155 of 2000) inserted the heading "Division 5 --- Credit Information" before ss 18A and 18B. The office of Privacy Commissioner is established by Pt IV of the Privacy Act . Subsection (3) of s 18A requires the Commissioner, in preparing the code of conduct, to have regard to: the "Information Privacy Principles" and the provisions of Part IIIA ; the "National Privacy Principles" and the provisions of Part IIIAA ; and "the likely costs" to credit reporting agencies and credit providers of complying with the Code of Conduct. Pursuant to s 18A , the Commissioner issued a Credit Reporting Code of Conduct in 1991 (Code). It became fully operational in February 1992. The Code supplements the provisions of Pt IIIA. Part 1 of the Code deals with "Credit reporting agencies" and Pt 2 with "Credit providers". Section 18B provides that a credit reporting agency or credit provider must not do an act, or engage in a practice, that breaches the Code. Accordingly, a breach of the Code is a contravention of s 18B. It is convenient now to address the definitions of some of the expressions used in ss 18A and 18B. They are also used throughout Pt IIIA discussed below. Sections 6(1) and 11A of the Privacy Act define "credit reporting agency" for the purposes of that Act as a "corporation that carries on a credit reporting business". The term therefore encompasses a computerised database of the kind that is maintained by Veda. It is not in dispute that at all material times Veda was a corporation that carried on a credit reporting business and was therefore a credit reporting agency. It will be noted that the definition of "credit reporting business" is not limited by reference to the form in which the credit information is to be provided to other persons. It therefore embraces the provision of that information by the granting of access to a database containing the information. The granting by Veda of access to its database to credit providers who subscribe to its system forms the basis of the claims made in these proceedings. The Privacy Act therefore distinguishes between "credit" and "commercial credit", the former being a loan for consumer purposes and the latter being a loan of any other kind. It therefore seems appropriate to refer to an individual to whom "credit" has been provided as a "consumer", although the Privacy Act does not use that term. It follows from the definition of "credit" that credit does not mean a loan sought or obtained by a corporation, or a loan sought or obtained by an individual from an entity other than a credit provider, or a loan sought or obtained by an individual (a natural person) from a credit provider but for commercial purposes. Although the Privacy Act is concerned with consumer credit, this does not mean that the provision of commercial credit is irrelevant to these proceedings. In particular, some of the defaults that were entered in Veda's database in respect of some of the applicants were defaults under commercial credit arrangements (see [70] ff below). The expression "loan" is defined in s 6(1) to mean a contract, arrangement or understanding under which a person is permitted to defer payment of a debt, or to incur a debt and defer its payment. The definition also identifies particular forms of transaction that are included within the term "loan". Sections 6(1) and 11B define "credit provider". Paragraph (b) was relevant to the remaining seven applicants. The Code elaborates on subpara (b)(i) of s 18E(1) by stating that a credit reporting agency recording an enquiry made by a credit provider in connection with an application for credit may include, within the record of the enquiry, a general indication of the nature of the credit being sought. Veda's database recorded enquiries made by credit providers in connection with applications to them for consumer credit or commercial credit by the applicants. Section 18E(2) provides that a credit reporting agency must not include in an individual's credit information file personal information relating to, relevantly at para (f), the individual's lifestyle, character or reputation. Certain aspects of the effect of the provisions of s 18E in the circumstances of the present cases are noteworthy. First, the obligation that s 18E(1) imposes on the credit reporting agency is absolute, even though the credit reporting agency will not ordinarily know the facts of the dealings between the credit provider and the consumer (hence, the "primary" obligation imposed on the credit provider by s 18E(8)). Second, under s 18E(1) the relevant time is the time when the credit provider enters the personal information in Veda's database. Under subpara (b)(vi), for example, at that time the personal information must be information that is a record of (consumer) credit that was provided by the credit provider to the individual in respect of which, as at that time, the individual is at least sixty days overdue in making a payment and the credit provider has taken "steps" to recover the whole or any part of the amount of the credit. In the ordinary course, the credit reporting agency will have no way of knowing whether these conditions are satisfied. Third, under subpara (b)(x), at the time of listing, the information must be a record of an opinion then held by the credit provider who entered the information in Veda's database that the individual has, in the circumstances specified in the information entered, committed a "serious credit infringement" as defined in s 6(1) (see the definition of "serious credit infringement" set out at [31] above). In the ordinary course, the credit reporting agency will have no way of knowing whether the credit provider did hold the opinion described in s 18E(1)(b)(x). Fourth, under para (ba), at the time of listing, the personal information must be a record of an overdue payment by the individual as guarantor under a guarantee given against a default by a borrower in repaying all or any part of an amount of consumer credit obtained by the borrower from a credit provider, and all four of the circumstances identified in subparas (i)-(iv) of para (ba) must be satisfied. These include the lapse of sixty days since the day on which the credit provider gave the guarantor notice of the consumer's default and the taking by the credit provider of other steps to recover the amount of the overdue payment from the guarantor. Again, in the ordinary course the credit reporting agency will have no way of knowing if these conditions are satisfied. It is important to recall s 6(1)'s definition of "personal information" (see [12] above). It refers to information whether true or not. The reference to the "information" in the opening words of paras (b) and (ba) of s 18E(1) is a reference back to the "personal information" mentioned in the chapeau to that subsection. The word "record" in paras (b) and (ba) does not, therefore, imply correctness. Accordingly, what paras (b) and (ba) except from the general prohibition in s 18E(1) is information, true or false, that satisfies a description in those paragraphs. That is to say, paras (b) and (ba) are directed to kinds, classes or categories of information, whether the actual information is true or false. Section 18E(1) prohibited Veda from including in its database kinds of information falling outside the kinds described in, relevantly, subpara (b)(vi) and (b)(x) and para (ba) of that subsection. If information, even information that proved to be false, was of those kinds, s 18E(1) did not prohibit Veda from including it in its database. This construction of s 18E(1) is consistent with Veda's lack of means of knowledge of the true facts and with the more extensive obligation imposed on credit providers by s 18E(8) referred to above. It is also consistent with the nature of the obligations respectively imposed on credit reporting agencies and credit providers by ss 18F, 18G and 18J referred to below. It is an interesting question whether cl 1.3(a) would also be enlivened if it appeared to a credit reporting agency that the credit provider may be prohibited from giving it the information by s 18E(8)(b) or (c). Clause 1.3(b) is concerned with information already included in a credit information file that appears to the credit reporting agency not to be of a kind permitted to be included, and is therefore referable to the obligation imposed directly on the credit reporting agency by s 18E(1) (see [28]---[40] above). Clause 1.4 (discussed at [58] below) expressly addresses the inaccuracy of information in the special circumstances described in that clause. Section 18F(1) provides that a credit reporting agency must delete from an individual's credit information file maintained by the agency any personal information of a kind referred to in, relevantly, s 18E(1)(b), within one month after the end of the maximum permissible period for the keeping of personal information of that kind. Subsection (2) of s 18F defines the "maximum permissible period". For s 18E(1)(b)(vi) information, the period is five years, for s 18E(1)(b)(x) information it is seven years, and for s 18E(1)(ba) information it is five years. The commencement date varies according to the category. Subsection (3) of s 18F obliges a credit provider who has given information to a credit reporting agency that an individual is overdue in making a payment in respect of credit provided by the credit provider, "as soon as practicable" to inform the agency once the individual has ceased to be overdue in making the payment or contends that he or she is not overdue in making it. On being so informed, the credit reporting agency must include in the individual's credit information file a note to that effect: subs (4). Subsection (5) of s 18F provides that where a credit provider ceases to be a current credit provider in relation to an individual, the credit provider must, as soon as practicable, give notice of that cessation to any credit reporting agency that was previously informed that the credit provider was a current credit provider in relation to the individual. Clearly, what are "reasonable steps" of the kind referred to in para (a) will depend on all the circumstances, including the respective roles played by credit provider and credit reporting agency. It is not necessary that Veda send a record or information to its subscribing credit providers before it can be said to have supplied them with a credit report. By reference to the definition of "record" as being, inter alia, a database, if Veda "prepares" its database or information and grants access to it to its subscribers, it is in control or possession of a "credit report". Veda does "prepare" the record (database) or information in question. The record or information that an accessing credit provider obtains is not simply that which another credit provider fed into the database. It is a body of data supplied by credit providers (virtually always in the plural) which Veda's computer system has combined and arranged in a composite report. The data will have been entered by subscribers, but Veda, through its computer system, will have composed the data into a new form. Section 18H is directed to ensuring that an individual can obtain access to a credit information file or a credit report concerning him or her. A credit reporting agency in possession or control of such a file must take reasonable steps to ensure that the individual can obtain access to it (s 18H(1)). Similarly, s 18H(2) requires a credit provider or a credit reporting agency that is in possession or control of such a credit report containing personal information concerning an individual to take all reasonable steps to ensure that the individual can obtain access to the report. Richard George Symes, a director of DR Capital, gave evidence in support of the applicants' claims. Section 18J is directed to ensuring that credit information files and credit reports are amended to reflect the true position as known. Section 18K imposes limits on disclosure of personal information by credit reporting agencies. Paragraph (a) refers to an application for consumer credit. In that case the prior consent of the individual to disclosure is not required. Paragraph (b) refers to an application for commercial credit. In that case the individual's prior consent to disclosure is required, and subs (1A) of s 18K provides that the individual's consent must be in writing unless a certain exception applies. To be distinguished from s 18K(1) is s 18E(8)(c) referred to at [33] above. One effect of s 18E(8) is that a credit provider must not list a default, whether a consumer default or a commercial default, unless the conditions set out in that subsection are met. One of these is that the credit provider informed the individual, before obtaining information from him or her that, relevantly, a default might be listed with a credit reporting agency. No doubt a desirable precaution would be to obtain the individual's signed acknowledgment and consent. Apparently this practice is followed by some credit providers. Section 18K(1) , on the other hand, is concerned with disclosure by credit reporting agencies, and requires, as one alternative, the individual's specific consent to a disclosure to a credit provider to whom the individual has applied for commercial credit. Subsection (2) of s 18K prohibits a credit reference agency from disclosing personal information where, generally speaking, the credit reporting agency would be prohibited by s 18E from including the information in the individual's credit information file, or would be required by s 18F to delete it from that file. Subsection (4) of s 18K provides that a credit reporting agency that intentionally contravenes, relevantly, subs (1) or (2) of s 18K , is guilty of an offence punishable, on conviction, by a fine not exceeding $150,000. Section 18M provides that if a credit provider refuses an application by an individual for credit and the refusal is based wholly or partly on information derived from a credit report relating to that individual that a credit reporting agency has supplied, the credit provider must give the individual a written notice stating that the application has been refused; that the refusal was so based; the name and address of the credit reporting agency; and that the individual has a right under the Privacy Act to obtain access to his or her credit information file maintained by the credit reporting agency. (2) A credit reporting agency or credit provider that intentionally contravenes subsection (1) is guilty of an offence punishable, on conviction, by a fine not exceeding $75,000. On its face, this provision is to be contrasted with the qualified obligations imposed on the credit reporting agencies by ss 18E(1) and 18G discussed above. However, the provision raises a question of whether information contained in an extract from Veda's database is false or misleading where the enquiring credit provider, being also a subscriber to Veda's system, understands the information to be, and it is in fact, an accurate reproduction of information that had been fed into that database by other subscribing credit providers. Contravention of s 18R(1) is an offence only if that subsection is contravened intentionally. In the present cases, Veda became aware that listed particulars of defaults may have been inaccurate as a result of challenges made to their accuracy by the individuals concerned or by DR Capital on their behalf. The gravamen of the applicants' complaint is not that Veda did not respond appropriately or with sufficient speed to the challenges. Their complaint is in respect of the listing of the defaults at all. In any event, any tardiness on the part of Veda would assume relevance only in relation to an inaccurate listing. It remains to refer to the "Information Privacy Principles" and the "National Privacy Principles". The Information Privacy Principles are the privacy principles numbered 1 to 11 set out in s 14 of the Privacy Act . I will not set them out here. Section 13 provides, relevantly, that for the purposes of the Privacy Act , an act or practice is an interference with the privacy of an individual if the act or practice, in the case of an act or practice engaged in by, relevantly a credit reporting agency or credit provider, breaches an Information Privacy Principle in relation to personal information that relates to the individual. The National Privacy Principles are set out in Schedule 3 to the Privacy Act . They impose obligations on "organisations". Section 6C of the Privacy Act defines an "organisation" to mean relevantly, a body corporate that is not a small business operator, a registered political party, an agency, a State or Territory authority or a prescribed instrumentality of a State or Territory. The expression "agency" is defined in s 6 and does not include either a credit reporting agency or a credit provider. The National Privacy Principles therefore apply to Veda: it is an organisation and is not within the exclusion. I will not set out the National Privacy Principles here. Part V (ss 36 --- 70B ) of the Privacy Act is headed "Investigations". Section 36 , the first section in Div 1 (ss 36 --- 51 ) in Pt V , provides, relevantly, that, subject to exceptions, an individual may complain to the Commissioner about an act or practice that may be an interference with the privacy of the individual. Clause 3.2 of the Code provides that where a credit reporting agency is unable to resolve a dispute, it must immediately inform the individual concerned of this fact and of the fact that the individual may complain to the Commissioner. (1B) A determination of the Commissioner under subsection (1) is not binding or conclusive between any of the parties to the determination. Section 55A provides for proceedings in this Court or the Federal Magistrates Court of Australia to enforce a determination. The section provides in subs (1) for the persons who may commence proceedings for an order to enforce a determination. They include the complainant and, if the determination was made under s 52 , the Commissioner. (3) The court may, if it thinks fit, grant an interim injunction pending the determination of the proceedings. (4) The court is not to require a person, as a condition of granting an interim injunction, to give an undertaking as to damages. (5) The court is to deal by way of a hearing de novo with the question whether the respondent has engaged in conduct that constitutes an interference with the privacy of the complainant. The provisions are relevant, however, to Veda's contention that the common law did not impose on Veda a duty of care in respect of the accuracy of default listings (see [374] ff below). They are not used in the Privacy Act . They refer to a default in relation to the provision of (consumer) credit on the one hand and commercial credit on the other (see [23] above). For convenience, I will also use the expressions "consumer default" and "commercial default". Veda frequently submitted in relation to a listed commercial default that the Privacy Act had no application. Veda was pleased to draw attention to the fact that the listed defaults in relation to Dale, McGary and Shields were not consumer defaults but were commercial defaults, with the consequence, so Veda submitted, that the Privacy Act , and, in particular, s 18E(1)(b)(vi) and (x) and (ba) had no application. With respect, this way of describing the position was apt to mislead. I gave a detailed account of s 18E at [28]ff. It was not disputed that Veda was a credit reporting agency to which that section applied. I set out the definition of "personal information" at [12] above. The expression is not defined by reference to "credit", the definition of which (as consumer credit) I set out at [21] above. I set out the definition of "credit information file" at [30] above and the definition of "credit reporting business" at [18] above. The notion of a "credit information file" is central to the operation of s 18E. I will return to that concept below. Section 18E(1) prohibits a credit reporting agency, such as Veda, from including personal information in an individual's credit information file unless the information satisfies para (a), (b), (ba), (c) or (d) of s 18E(1). Subparagraphs (vi) and (x) of para (b) of s 18E(1) and para (ba) of that subsection are all dependent, in various ways, on the notion of "credit". As noted at [20] above, the word "credit" standing alone in the Privacy Act means consumer credit. This is why, by way of reminder, I have sometimes written "(consumer) credit" in these Reasons. Section 18E(1) prohibits a credit reporting agency from including particulars of commercial defaults in an individual's "credit information file", not because of any failure to give a notice or to take recovery steps, but because commercial defaults do not fall within any of the classes of (consumer) credit information referred to in s 18E(1) at all. In a sense it is true that a default in relation to commercial credit does not have to "satisfy" the constraints referred to in subparas (vi) and (x) of para (b) or in para (ba) of s 18E(1) because those provisions refer only to (consumer) credit. However, those provisions identify information which a credit reporting agency is permitted to include in an individual's credit information file, and commercial defaults lie entirely outside the scope of such information. Thus, while it is beside the point for the applicants to complain that the "requirements" of those provisions are not met in relation to a commercial default, it is also wrong to assume that this means that commercial defaults may be recorded in a credit information file regardless of those requirements. It would be possible for me to spend some time discussing what is the "credit information file" of each of the applicants in the context of Veda's electronic database, and the question whether, in contravention of s 18E , Veda included commercial defaults in that credit information file (as distinct from in any "commercial credit information file" that may have existed relating to the same applicant). But on the assumption that Veda contravened s 18E , the question arises where that leads. The applicants do not sue for breach of statutory duty. The gravamen of their defamation claims is that the listed default conveyed the defamatory imputations concerning them that are identified in their respective TFASCs. The gravamen of their claims in negligence is that the listed default was inaccurate. Moreover, even if Veda contravened s 18E by including commercial defaults in the applicant's (consumer) credit information files, I do not know that the applicants would be any worse off than they would have been if Veda had included the identical commercial defaults in "commercial credit information files" that were accessed by enquiring credit providers at the same time as they accessed the (consumer) credit information files. For the above reasons, I do not find it necessary to explore the question whether Veda contravened s 18E by including commercial defaults in (consumer) credit information files that it maintained in respect of the applicants. That is not the pleaded case and it is doubtful that a different pleading of the case would have improved the position of the applicants in the present respect. Before moving from the present issue, I should note, in fairness to Veda, that business records of Veda that are in evidence demonstrate that Veda is well aware of the present distinction. Our database contains more than 14 million consumer and 2.8 million commercial credit files. It includes records on the credit activity of Australian individuals, companies and businesses. The exception is Mr Taylor's proceeding in which it is a second further amended statement of claim. The purist would object, but I will use TFASC to include a reference to Mr Taylor's final pleading also. The TFASCs exhibit a common structure of which that in Mr Dale's proceeding will serve as an example. The following account of Mr Dale's TFASC is of its allegations, not of facts found by me. Numerals in square brackets in bold below are the numbers of paragraphs in Mr Dale's TFASC. Veda is a trading corporation incorporated under the Corporations Act 2001 (Cth) and carries on a credit reporting business within the meaning of the Privacy Act [ 2 ]. Veda published of and concerning Mr Dale information in certain credit reports, which included the words and figures or, in the alternative, the information set out in Schedule A to the TFASC, [3] . It showed that Bartercard Ltd Qld (Bartercard) listed a "Clearout (Watched)" default on 20 March 2000, showing an "amount" of $1174. Since the "Latest Date" is also 20 March 2000, we know that Bartercard did not update the listed default. In the case of Dale, Fisher, Marker, Shields and Strange, there was also a Schedule B to the TFASC. In the cases of Adams, McGary, Taylor and Tyndall, there was only a Schedule A. As will be seen below, the Schedules B were also extracts of information recorded in the relevant credit information files. Each Schedule B was identical to the Schedule A annexed to the same TFASC but for one difference: the Schedule B had an additional final line which recorded that the debt in question had a "Status" of "Paid" or "Settled" as at a specified "Status Date". As appears at [96] below, in Mr Dale's case the additional line gave a Status of Paid as at a Status Date of 20 June 2003. Where a TFASC had both Schedules A and B annexed, the TFASC alleged that the material complained of in Schedule A had been published to one or more enquiring credit providers prior to the recording of the payment and that the material complained of in Schedule B had been published to one or more credit providers after the recording of the payment or settlement. The meanings of expressions that were used in the credit information files were to be found in an "Internet User Guide" that Veda provided to its subscribers (Guide). The Guide instructed subscribing credit providers as to the "codes" by which various types of defaults were to be listed and, it follows, by which the listed defaults were to be understood. The expression "Clearout (Watched)" was listed in the Guide under the heading "Commercial Credit Default Report Types". skip or clearout. There must be reasonable efforts made to contact the debtor in person or in writing. You can list a clearout immediately, you do not have to wait the 60 days as long as efforts have been made to prove the debtor is a confirmed missing debtor. It is convenient to note that the expression "Payment Default" was also listed under the heading "Individual Consumer Credit Default Report Types" in the Guide and was defined there in the same way. The Individual Consumer Credit Default Type that was comparable to "Clearout (Watched)" was "Serious Credit Infringement (Confirmed Clearouts only)". a skip or clearout. There must be reasonable efforts made to contact the debtor in person or in writing. You can list a SCI [Serious Credit Infringement] immediately, you do not have to wait 60 days as long as efforts have been to prove the debtor is a confirmed missing debtor. Apparently the author of the Guide considered that in all circumstances, the inability, after efforts, of a credit provider to contact a consumer after he or she had left his or her last address known to the credit provider, would satisfy that definition of "serious credit infringement". There was no Indivdual Consumer Credit Default Type comparable to "Repossession Loss (after sale)". The terms "Paid" and "Settled" are defined in the Guide under the heading "Default Status Types" as follows: Paid A defaulted account, which has been paid in full and is now closed. Settled A defaulted account, which was in default, and a lesser amount has been agreed upon by both parties to be paid as full and final payment. I will use the term "enquiring credit providers" to refer to subscribing credit providers who recorded an applicant's application for consumer or commercial credit in that applicant's credit information file. Of course, all six alleged publications of the matter complained of in Schedule A post-dated the date of the listing of "Clearout (Watched)" by Bartercard on 20 March 2000. I will use the expression "listing credit provider" to refer to a subscribing credit provider, such as Bartercard in Mr Dale's case, that listed a default. The matter referred to in Schedule A conveyed the following imputations each of which was defamatory of Mr Dale: That the applicant refused to pay to a creditor a debt of $1,174.00 which he was legally obliged to pay before 20 March 2000. That the applicant had since before 20 March 2000 been unable to pay his debts. The applicant is a credit risk by reason of his continuing failure since 2004 to pay a creditor a debt of $1,174.00 which he is legally obliged to pay despite being sent a written notice by the creditor requesting payment. The applicant had engaged in fraudulently evading his obligations to pay his debts. The applicant is reasonable [sic --- reasonably] suspected by a creditor of fraudulently evading his obligation to pay his debts. The applicant is a serious credit risk. That the applicant has taken advantage of his change of address in order to evade his obligations to pay his debts. That the applicant is reasonably suspected by a creditor of taking advantage of his change of address to evade his obligations to pay his debts. (b) The companies were subscribers of the respondent enabling the companies to have access to its " Business Information Services" products and services including its internet data base. (c) The respondent published to its subscribers an " internet user guide" to enable users to access credit information files including credit information files concerning the applicant. The respondent also conducted training seminars using its internet user guides to train subscribers and users, inter alia, how to access and use credit information files and how to interpret the information on these files and how to provide information to be recorded on those files. (d) Persons accessing the information were required to use operator identification codes, which would be provided to them by the respondent. Once listed with Baycorp Advantage - Business Information Services, the default will remain in file for five years. Once listed with Baycorp Advantage- Business Information Services, the default will remain in file for five years. The only subsection to which the personal information "clearout (watched)" could be authorised is under s.18E(1)(b)(x) which is that the information is a record of "the opinion of a credit provider that the individual has in the circumstances specified, committed a serious credit infringement". . (b) That the applicant only paid to a creditor the debt of $1,174.00 on or about 20 June 2003 which he had been legally obliged to pay since before 20 March 2000 when the non payment of the debt was made the subject of a credit report about the applicant. (c) That between March and June 2003 the applicant had been unable to pay his debts. (d) That the applicant is a credit risk by reason of the circumstance of his failure to pay a creditor until or about 20 June 2003 a debt of $1,174.00 which he was legally obliged to pay to the creditor before 20 March 2000. (e) The applicant had engaged in fraudulently evading his obligations to pay his debts. (h) That the applicant has taken advantage of his change of address in order to evade his obligations to pay his debts. (i) That the applicant is reasonably suspected by a creditor of taking advantage of his change of address to evade his obligations to pay his debts. Imputations (e)---(i) were conveyed with the aid of extrinsic facts known to those persons. Mr Dale repeats the particulars of extrinsic facts in para 4 of the TFASC set out at [94] above. Paragraphs 7 and 7A are referable to the way in which information was entered in Veda's database and extracted from it. In all cases it was entered electronically directly by subscribers and extracted electronically directly by them. In some cases, however, it was extracted by the credit provider's computer and not viewed on a screen or otherwise by a human being, but immediately acted upon by reason of a program in the credit provider's own computer. In his affidavit, Adam John Champion, a Solutions Consultant employed by Veda, used the term "System-to-System" to refer to this process. In such cases, where the credit report was adverse, depending on the enquiring subscriber's computer program, the individual's application for credit was automatically rejected, and the rejection letter automatically produced and sent to him or her. Veda's argument was that in these circumstances there was no publication to a human mind and that for this reason one of the essential aspects of the element of publication in the cause of action in defamation was absent. The applicants accept that communication to a human mind is necessary but submit that it should be inferred from all the evidence that such communication took place (I address the present issue in relation to the respective applicants at [154] ff below). Paragraph 7 of the TFASC addresses the System-to-System situation. In other cases, while an operator employed by the enquiring subscriber viewed on the computer screen information extracted from Veda's database, it might be that only a "File Summary" rather than the entirety of the information referred to in Schedules A and B was read. Paragraph 7A of the TFASC addresses this possibility. Paragraphs 7 and 7A of Mr Dale's TFASC are as follows: To the extent, which is not admitted, that it may be found that notwithstanding the information published to the recipients referred [to] in paragraph 3 and 5 it was not read or not read in its entirety by an individual on behalf of the recipients but was interpreted or assessed by a computer which computer recommended any application for credit be declined, the information referred [to] in Schedules A and B conveyed the following imputations. (ii) He drew a cheque for more then $100 which was twice presented and dishonoured. (iii) He was the subject of a court judgment against him. (iv) He was the subject of a bankruptcy order. (v) He was reasonably suspected by a creditor of fraudulently evading his obligations to pay his debts. The File Summary secondly referred to as being part of the "Risk OnLine Individual Display" is the File Summary described in the respondent's "Internet User Guide" and which in version 5.2 dated August 2005 is at page 30. The applicant claims damages being the additional financial cost incurred by him in obtaining credit, financial loans as a result of the publication, the cost and damage sustained as a result of delays in obtaining credit, finance and loans as a result of the publication of the credit reports. (b) The failure of the respondent to correct the credit report in the matter complained of when requested to do so. (ii) Lead to the refusal of an application by the applicant for finance or a loan which, had the information been accurate, may have been approved. (iii) Lead to an application for finance or a loan by the applicant ... being approved at additional financial cost to the applicant than would have been the case if the information had been accurate. Negligently and in breach of its duty, Veda included in the credit reports it published about Mr Dale inaccurate material that was likely to damage him [10] . According to the particulars provided, it was erroneous to show him as "Clearout (Watched)" or to record that he had defaulted in paying a debt of $1,175 [sic --- $1,174] to a creditor. Veda failed to take any steps or any reasonable steps to check the accuracy of the matter in Schedules A and B or whether that matter as contained in the credit reports concerning Mr Dale or the credit information file concerning him held by Veda was in accordance with or in contravention of the Privacy Act . Veda should have implemented a pre-acceptance checklist to be completed by each subscriber before it was permitted to add an alleged default to Veda's database, which checklist should have required the subscriber to indicate that each of the required steps had been taken necessary to show that the requirements of the Privacy Act and the Internet User Guide had been met. Further, Veda did not have any or any adequate measures in place to ensure that every person (principal, servant or agent) who was authorised or permitted to add, update or amend information relating to a person's creditworthiness in Veda's database had been adequately trained in and was competent to apply the correct criteria that had to be satisfied before negative default information could properly be included in Veda's database for future inclusion in its credit reports. Finally, by reason of Veda's negligence and breach of duty, Mr Dale suffered loss and damage "and/or lost the chance of obtaining credit on more favourable terms" [11] . Mr Dale repeats the particulars of Special and Aggravated Damages set out at [106] above. (Letters in square brackets in bold again refer to paragraphs of the defence. ) Veda carries on a credit reporting business within the meaning of the Privacy Act and is, by reason of that fact, a credit reporting agency within the meaning of that Act by reason of s 11A of that Act [ (a) ]. Veda admits that the words set out in Schedules A and B to the TFASC appear in electronic form (as part of a larger body of material referring to Mr Dale) on a computer database maintained by Veda. Veda says that to its knowledge its subscribers, being credit providers within the meaning of the Privacy Act , commonly access such material electronically by computer in such a way that the material, including the matter complained of in paras 3 and 5 of the TFASC, may never be read by or conveyed to the attention of any person. Veda does not admit that it "published" the matter complained of [ (b) ]. Veda raises a number of defences under s 14 and s 14B of the Limitation Act 1969 (NSW) (Limitation Act). For example, in answer to para 4 of the TFASC, Veda says that imputations (c), (g) and (h) having first been pleaded on 24 March 2006, are statute barred by s 14 of that Act in relation to the publications pleaded in paras 3(a) --- (d) of the TFASC [ (c) ]. Other Limitation Act defences are raised in answer to the following paragraphs of the TFASC: Para No. The defence denies that any of the matters complained of are capable of conveying the imputations alleged or that any of the imputations alleged are capable of being defamatory of Mr Dale. Both of these defences are pleaded in relation to the matter complained of in paras 3, 5, 7 and 7A of the TFASC [ (d), (g), (h), (i) ]. The defence pleads a substantial defence based on provisions of the Privacy Act . I have summarised the provisions of that Act above and will discuss them further below. First, the defence says that by reason of the provisions of the Privacy Act and the Code, the State and Territory laws, in so far as they purport to provide or create a cause of action in defamation or negligence against Veda, are inconsistent with the Privacy Act and the Code, and are invalid to the extent of that inconsistency by reason of s 109 of the Constitution [ (v)(i) ]. In so far as Mr Dale relies on any cause of action or matter of defence arising from the common law, that common law is modified by and subject to the provisions of the Privacy Act and the Code [ (v)(ii)] . By reason of those matters, Mr Dale has no valid action at law in damages for defamation or negligent breach of duty of care or breach of a statutory duty [ w ]. Veda has complied with the provisions of the Privacy Act and the Code and is therefore not liable to Mr Dale on any of the causes of action pleaded in his TFASC [( x) ]. In so far as it is found (which is denied) that the matter complained of was published in New South Wales, Victoria, South Australia, Western Australia or the territories of the Australian Capital Territory or the Northern Territory, the matter complained of was published on an occasion of qualified privilege [ (y) ]. In so far as it is found (which is denied) that the matter complained of was published in Queensland or Tasmania, the publication was made in good faith for the protection of the interests of Veda or of some other person, or, alternatively, the publication was made in good faith in answer to an enquiry made of Veda relating to a subject as to which the enquirer had or was believed on reasonable grounds by Veda to have an interest in knowing the truth or, alternatively, the publication was made in good faith for the purpose of giving information to the enquirer with respect to some subject as to which the enquirer had or was believed on reasonable grounds by the person making the publication to have such an interest in knowing the truth as to make Veda's conduct in making the publication reasonable under the circumstances [( z) ]. As particulars, Veda states that it relies upon qualified privilege at common law and under s 22 of the Defamation Act 1974 (NSW) (Defamation Act) in so far as it is found that publication took place in New South Wales. Finally, Veda did not know that the publication in question contained the defamatory material alleged by Mr Dale, or that that material was likely to be defamatory of him, such lack of knowledge was not due to negligence on Veda's part, and as a result Veda is not liable to Mr Dale [ (bb) ]. As noted at [85] above, as in Mr Dale's proceeding, there were Schedules A and B to the TFASC in the proceedings brought by Fisher, Marker, Shields and Strange, but only a Schedule A in those brought by Adams, McGary, Taylor and Tyndall. Each of the TFASCs alleges that Veda published particulars of a listed default concerning the relevant applicant, being the words and figures that are set out in the Schedule or Schedules to the TFASC. Particulars of publication to enquiring credit providers are given and defamatory imputations are pleaded with accompanying particulars of extrinsic facts relied on. As in Mr Dale's TFASC, special damages are alleged in general terms in the form of a refusal of an application for credit or approval of such an application at increased financial cost to the applicant. Unfortunately, as in the case of Mr Dale's TFASC, Schedule A to the TFASC of Mr McGary and Ms Shields also erroneously headed the material complained of "Consumer Default" rather than "Commercial Default" as recorded in their credit information files. Each TFASC contains two paragraphs generally similar to paras 7 and 7A in the Dale proceeding (see [102] ff above). Veda's defence in each of the other eight proceedings raises defences generally similar to those summarised at [107]---[121] above in respect of the Dale proceeding. The evidence shows that it is by far the largest consumer credit reporting agency in Australia. Its only real competitor, Dun and Bradstreet, is very small by comparison. Veda holds approximately 14.5 million credit information files in respect of individuals, and it holds these files in respect of approximately 98 percent of the "individual credit active population". Approximately 1.2 million credit information files are accessed per month or, expressed in another way, 40,000 per day during a 30 day month, 40,000 per day. For the year ended 30 June 2005, Veda's "Business Information Services" revenue was $122,456,000. No practicable method was suggested by which Veda could itself verify the correctness of the information before it is fed into its database by credit providers. Veda has to rely on its subscribers for the correctness of the listing of defaults. However, the evidence shows: The applicants suggest further steps that they say Veda could and should have taken in order to reduce the risk of error by listing credit providers. I discuss those suggested further steps when dealing with the claims in negligence at [420] ff below. Each applicant, pursuant s 18H of the Privacy Act , authorised DR Capital in writing to exercise the applicant's statutory right of access under that section. As noted earlier, DR Capital was itself a subscriber to Veda's system. By accessing Veda's database, it obtained a printout of an "Individual Consumer and Commercial Report" (ICCR) in respect of each applicant. The ICCRs relating to all applicants were similarly structured and contained the same kinds of data. The headings in the ICCRs included "Summary Information" under which was listed, inter alia, the number of defaults listed in the ICCR; "Commercial Defaults", "Consumer Defaults"; "Consumer Credit Applications", "Commercial Credit Enquiries", and "Consumer Authorised Agent Enquiries". The ICCRs had a "current date" which was the date of the most recent "Consumer Authorised Agent Enquiry" made by DR Capital. By way of example, the ICCR relating to Mr Dale shows that he made a total of eight applications for credit or commercial credit, all of which were dated after the entry of "Clearout (Watched)" by Bartercard on 20 March 2000. The first six were recorded under the heading "Consumer Credit Applications". The remaining two were recorded under the heading "Commercial Credit Enquiries". Mr Dale's testimony showed that some were successful and others not. The defendant has no knowledge about how the report was actually obtained or by whom. The defendant believes that of several methods of access used by subscribers, the report was obtained by the method accessing the Baycorp Advantage Business Information Services online database by an individual using the internet. The evidence of Mr Symes was of his dealings with credit providers and with Veda pursuant to the authorities given to DR Capital by the applicants. The exceptional applicant was Mr Fisher. He did not attend the hearing, and neither his affidavit nor that of Mr Symes filed in his proceeding was read. One aspect of Ms Barbour's evidence is noteworthy. Consumers are advised by Call Centre staff to put any request that Veda investigate an entry on their credit file in writing. Such requests are received by the Call Centre by facsimile transmission, mail and email. Once such a request is received a File Amendment Request record is created on PAS. This involves Call Centre personnel recording on PAS a summary of the request from the consumer and steps taken to investigate the request. The original hard copy of the request from the consumer is retained by Veda for 12 months. After 12 months the hard copy of the request is disposed by Veda utilising security shredding bins. She said that the PAS records consumers' requests for amendment of their credit information file, and the sending of a copy of their credit information file to them. The PAS was the source of much of the evidence to which I will have occasion to refer on the issue of the accuracy of the information concerning the applicants that Veda made available to enquiring credit providers. However, I accept the obvious: a listed default might well cause, or contribute to causing, a credit provider who read that information to assess the individual as a poor credit risk and to refuse him or her credit or to offer him or her credit on more onerous terms than would otherwise have been the case. The facts throw up the following questions affecting both the claims in defamation and in negligence: Since subscribing credit providers enter information directly by electronic means into Veda's database on the basis that, as the fact is, other subscribing credit providers extract the information directly and by electronic means from the database, can it be said that for the purposes of the law of defamation and of negligence, it is Veda who is supplying to the latter credit providers the information that they obtain? For the purposes of the claim in defamation, the question is whether it is Veda that is "publishing" the matter complained of. For the purposes of the claim in negligence the question is whether it is Veda that is making the representations complained of. It does not necessarily answer these questions that within the terms and for the purposes of Privacy Act , Veda is giving a credit report to enquiring credit provider (see [48] above). As noted earlier, in the case of credit providers that are large organisations, the data that is extracted by the credit provider directly and by electronic means is dealt with according to a computer program with the result that the application for credit is rejected by the operation of that program and not by the intervention of any human mind. Even the letter from the credit provider to the applicant informing him or her of the rejection is electronically generated. In these circumstances, the question arises whether there is independent evidence that any defamatory imputation reached a human mind within the office of the enquiring credit provider. Having regard to the fact that Veda provides its database into which, as is known to its subscribing credit providers, they can enter and extract data directly and by electronic means, and the Privacy Act 's allocation of responsibilities as between credit providers and credit reference agencies, does Veda owe a duty of care to applicants for credit in relation to the accuracy of the data? On the assumption that information in an adverse credit report has been taken into account by an enquiring credit provider which in fact refused the individual's application for credit, does this, without more, establish that the adverse report caused loss or damage to the individual? For example, questions arise as to the interest rates and other terms available from the particular credit provider and from other credit providers at the time, the individual's capacity to pay, and so on. He was not required for cross-examination. The following account is based on his affidavit. Automated or "System-to-System" access involves the computer system of a credit provider (a) obtaining data from Veda's credit information files by the use of a particular "channel" and (b) using "decisioning software" to analyse the data obtained with other data already held on the credit provider's computer relating to the individual, to generate a decision on the individual's application for credit. The evidence is that large organisations such as banks use System-to-System access. By "Operator Requested" access, on the other hand, Mr Champion referred to a process by which an operator within the enquiring credit provider's office manually requests a copy of a credit information file from Veda's database. He explained that the request may be made and met via a website enquiry (the website being accessible only to Veda's subscribers) or via certain methods of access using "DataLink Mainframe" and "DataLink PC". He said that Operator Requested access will usually result in the operator viewing the credit information file, whereas System-to-System access does not do so. On the basis of this evidence of the "usual", I find that in all cases of Operator Requested access, on the balance of probabilities and in the absence of evidence to the contrary, there was a reading of the matter complained of within the office of the enquiring credit provider. Mr Champion said that in relation to the System-to-System method, it was up to the subscriber how information obtained from the Veda database and sitting in the enquiring credit provider's computer system was accessed, and, in particular, whether it was ever viewed by a human being. Even though no-one may view the information at the outset, that is, when it is first downloaded onto the enquiring credit provider's computer system, someone employed by the enquiring credit provider may do so later, but Veda has no way of knowing whether or not this ever happens. In his affidavit Mr Champion described the different automated System-to-System access channels used by subscribing credit providers in the period between 1999 and 2005. I need not discuss the detail of these channels. I infer that in all cases of System-to-System access, on the balance of probabilities and in the absence to the contrary, the matter complained of was not read within the office of the enquiring credit provider. Mr Champion reviewed the methods of access used by the enquiring credit providers in accessing the credit information files of the nine applicants. In the result, he prepared a table which was annexed to his affidavit. A copy is annexed to these Reasons for Judgment. I will refer to this document as "Mr Champion's Annexure". As can be seen, Mr Champion's Annexure discloses in relation to each applicant which accessings of the database by enquiring credit providers were "System-to-System" and which were "Operator Requested". The cases of Mr Dale and Ms Shields call for special comment. In the case of Mr Dale, the default listing lodged by Bartercard on 20 March 2000 resulted in the creation of a new credit information file. On 2 January 2001, that new file was combined with the earlier one. The accessings by Direct Mortgage Solutions on 19 October 2000, "American Exp New Accts NSW" on 24 November 2000 and 27 November 2000, and Citibank Limited on 25 November 2000 all occurred prior to the merger and related to the earlier file. In those cases the file accessed did not contain the default listed by Bartercard on 20 March 2000 that marked the creation of the second file. Also in relation to Mr Dale, Mr Champion has not been able to locate any record of accesses by Westpac Card Services on 1 July 2004 or by Optus Communications on 1 October 2004 referred to in Mr Dale's TFASC. In relation to Ms Shields, Mr Champion states that he has not been able to locate any record of accesses by Liberty Financial on 16 November 2004, Community First Credit Union on 8 December 2004, or Mortgage House Penrith on 10 March 2005, as referred to in Ms Shields's TFASC. The applicants did not dispute, in relation to all System-to-System accesses referred to in Mr Champion's Annexure, that it is necessary for them to prove, for the purposes of their claims in defamation, that the matter complained of came to a human mind within the office of the enquiring credit provider referred to in the instances of publication identified in the TFASC, and that this is not established by the mere record of the System-to-System access itself. Accordingly, for this purpose the applicants call upon aspects of their own testimony and documents that were produced on subpoena by enquiring credit providers. Veda submits that it was not the publisher of the matter complained of. It submits that it was in the situation of an internet service provider which permits a third party to post information using its server about which it has no knowledge at the times of posting and disclosure. Veda emphasises it did not itself review or edit the defaults listed on its database. Veda relied upon subscribing credit providers to comply with the Privacy Act . Ms Barbour described Veda's role as "reactive" not proactive, that is to say, Veda becomes active only after a complaint has been made. Similarly, Mr Janssens said that the extent of Veda's pre-reporting role related to: the training of subscribers; the provision of the Guide to them on the internet; the terms of the subscription agreement that they enter into with Veda; and some face to face discussion between them and staff of Veda. He explained that if it came to the notice of Veda staff that a bank or other credit provider was not abiding by the conditions, the staff would follow that up to see if there was a flaw in the particular subscriber's processes or systems. The applicants, however, contend that Veda is liable independently of any such awareness and independently of the making of any complaint relating to the listing of a default. Veda relies on a series of authorities that were concerned with internet service providers: Bunt v Tilley [2006] EWHC 407 ; [2006] 3 All ER 336 ; Godfrey v Demon Internet Ltd [2001] QB 201; Cubby, Inc v CompuServe Inc 776 F. Supp. 135 (1991); Urbanchich v Drummoyne Municipal Council (1991) Aust Torts Reports p81-127. I do not accept Veda's submission for reasons which can be stated briefly. Veda knew that particulars of defaults were being listed in its database and were being included in credit reports in terms that Veda had devised and promoted to its subscribers. While Veda did not know that the matter complained of in any particular case was being listed and was later included in a credit report, it knew that matter of that kind was constantly being entered into its database by listing credit providers and supplied from the database in credit reports to enquiring credit providers. The very purpose of the database was to record information of the kind referred to in the Guide. The Guide invited subscribers to enter such types of default as "Payment Default", "Clearout (Watched)", "Dishonoured Cheque", "Judgment Debt Outstanding", "Repossession Loss (after sale)" and "Scheme of Arrangement". Accompanied by their meanings given in the Guide, the terms told against the individual's being a good credit risk. Veda invited its subscribers to list and to extract matters of precisely the kind of which the applicants complain, and Veda acquiesced in their doing so. By its conduct it published to enquiring subscribers such information as they extracted from the database. It "published" that information for the purposes of the defamation claim. In reaching this conclusion I have not found it necessary to embark on a consideration of the question of whether the listed defaults were in fact defamatory. (b) Publication to whom? As noted earlier, Mr Champion's Annexure sets out his analysis of the means by which various credit providers to whom the applicants applied for credit accessed the database. As can be seen, the vast majority were "System-to-System". This is consistent with the evidence of Mr Patsan who estimated that about 90% of enquiries of the database were System-to-System. He said that the banks and large corporations would make thousands of enquiries a day whereas hundreds of small finance companies or small businesses offering commercial credit would access the database only, say, once a week. Numerically only 10% of enquiring credit providers, in Mr Patsan's estimation, were responsible for well over 90% of all System-to-System enquiries. The applicants concede that in their defamation claims they must prove that the relevant credit report was read by an individual, ie, that it reached a human mind, at the office of the enquiring credit provider. Where Veda's database was accessed System-to-System, the applicants ask me to infer from evidence given by themselves and documents produced by enquiring credit providers on subpoena, that some individual within the enquiring credit provider's office read the particulars of the default. Veda, on the other hand, submits that it is only in the cases marked "Operator Requested" in Mr Champion's Annexure that there was publication to an individual. In these cases, Mr Champion said that access "would normally involve the full credit information file being displayed on the screen and able to be viewed by the operator". In their submissions the applicants accept that in a case where the enquiring credit provider's operator looked only at the " file summary " [original emphasis], he or she would see only the word " default " [original emphasis]. The word "default" alone is not in any case the matter complained of. However, in all Operator Requested accesses, I infer that the full credit information file was displayed in the absence of evidence to the contrary. Veda objected to that evidence. I admitted it, subject to relevance, only as evidence of the fact of the conversations having taken place and of the communication of a refusal, and not as evidence of the facts asserted in the conversation as to the credit provider's reason for refusal: see Evidence Act 1995 (Cth) s 59(1). Senior counsel for the applicants also made it clear that he was relying upon such conversations as evidence only of the making of the applications for credit and of their being declined. The objection, my ruling and senior counsel's acknowledgment were not necessarily repeated every time evidence of the kind mentioned was led, but they were understood to apply in each case. In the accounts of the individual cases given below, I shall refer to the objection, the ruling and the acknowledgment compendiously as the "Hearsay Ruling". I turn now to the nine individual proceedings. In each case there was admitted into evidence an ICCR relating to the particular applicant obtained from the Veda database by his or her authorised agent, DR Capital. In each case, the matter complained of, as pleaded in Schedule A or Schedule B, as the case may be, to the TFASC, accorded verbatim with the ICCR. Accordingly, the various accounts I give below of the matters complained of in the Schedules are also accounts of information recorded in the credit information files concerning the respective applicants. Schedule A reflected a "Consumer Default" in the ICCR relating to Ms Adams. This was that Ms Adams and a co-borrower had entered into a loan contract with "Trendwest South Pacific Fin" (Trendwest) and had made a "Payment Default". Trendwest had recorded this in her credit information file on 30 June 2004. The "Original Amount" was $12,733.00 which was paid by 1 October 2004. The evidence reveals the names "Trendwest Resorts South Pacific Ltd" and "Trendwest South Pacific Finance Pty Ltd". I will use "Trendwest" to refer to either one and to both companies. Trendwest was Australia's largest time share provider. Its business was that of selling holiday credits at or arising out of promotional seminars. Both are, of course, after 1 October 2004, and a person reading the full credit information file on either of those dates would have read that Trendwest had been paid by that date. According to Mr Champion's Annexure, both ANZ and Macquarie accessed Ms Adams's credit information by the System-to-System method. Accordingly, publication of the matter complained of to a human mind is not proved unless there is other evidence of it. In her oral evidence Ms Adams said that the ANZ entry of 21 March 2005 represented an application that she made to the ANZ Bank at Coolum for a loan of $10,000 to $15,000 for home renovations. She already had a loan or mortgage to the ANZ Bank. She said that someone from ANZ Bank, Coolum Branch, whose name she could not remember, advised her by telephone that her application was unsuccessful. She was not given a reason. Ms Adams submits that because there was no additional credit enquiry or application recorded by ANZ, this suggests that the information Ms Stroller gave Ms Adams was information which had been manually recorded into the ANZ system or documentation after Ms Adams made her enquiry to ANZ on 21 March 2005, implying that this must have been read. Veda submits that there is no basis for drawing such an inference. The ICCR in evidence was dated 2 June 2005, and it is unclear when the alleged conversation occurred --- indeed, it might have been after that date. Be this as it may, the Hearsay Ruling applies. If Ms Adams wished to prove that Ms Stroller read the default as listed, she should have called Ms Stroller as a witness. In relation to Ms Adams's application to Macquarie, Ms Adams gave no admitted evidence in her affidavit. In oral evidence, she said that she thought that her broker, Stephen Andrews, said that an application that he had made on her behalf had proved unsuccessful because "there was a default on [her] credit" with Trendwest. Assuming that Ms Adams's evidence related to the Macquarie application, the Hearsay Ruling applies. Indeed, Ms Adams's testimony in relation to Macquarie is second-hand hearsay. A difficulty has arisen. For example, where there is a copy of the credit report in the subpoenaed party's file. In fact Macquarie produced documents on subpoena relating to Ms Adams. These included an ICCR dated 4 May 2005 showing the Trendwest default and a copy of a letter dated the next day, 5 May 2005, from Macquarie to Ms Adams advising her that her application had been declined as it did not meet Macquarie's "current credit criteria". As if this were not enough, there is also a file note dated 5 May 2005 linking the ICCR and the rejection letter by referring to the Trendwest default and recording an officer's recommendation of "Decline". The inference seems irresistible that the officer read the listed default. The problem is that neither party referred to this particular evidence in their submissions. If Ms Adams's defamation claim were to go further, I would have given the parties the opportunity to make submissions in relation to this evidence. In the result, but subject always to what is said in the preceding paragraph, there would be no admissible evidence before the Court that the matter complained of by Ms Adams in Schedule A to her TFASC was published to any human mind, and for this reason alone her claim in defamation could not succeed. The relevant adverse entry was a "Commercial Default" entered by Bartercard on 20 March 2000, "Clearout (Watched)". The entry recorded Bartercard as having been paid on or by 20 June 2003. The first six enquiries involved in the publications pleaded in Mr Dale's TFASC were dated from 19 October 2000 to 19 June 2003 and therefore pre-dated Veda's record of payment, whereas the last two enquiries post-dated this record. Mr Champion's Annexure shows that all except two of the accesses were System-to-System. The exceptions are Direct Mortgage Solutions on 19 October 2000 which Mr Champion classified "No Record of Access Found", and SE Rentals Pty Ltd (SE Rentals) on 19 June 2003 which he designated "Operator Requested". As noted at [146], in his affidavit Mr Champion explained why the listing by Bartercard on 20 March 2000 would not have been disclosed in response to the enquiries made by Direct Mortgage Solutions on 19 October 2000, American Express on 24 and 27 November 2000, and Citibank on 25 November 2000. Even if, as Mr Dale submits, Direct Mortgage Solutions was not one of the larger organisations that have computer systems that reject applications automatically, so that the likelihood is that its access was Operator Requested, nonetheless Mr Champion's uncontradicted evidence referred to at [146] above, shows that no one at Direct Mortgage Solutions would have seen the "Clearout (Watched)" annotation. This is supported by an Individual Consumer Report and an Individual Credit Report, both printed on 19 October 2000 and produced on subpoena by Direct Mortgage Solutions, both of which show zero defaults. In relation to the matter complained of in Schedule A and in light of Mr Champion's evidence, I need concern myself only with the enquiries made by S.E. Rentals on 19 June 2003 and Citibank on 2 January 2001. Mr Dale gave no (admitted) affidavit evidence concerning his applications for credit or their rejection. I turn now to the enquiry of the database made by SE Rentals on 19 June 2003. Mr Dale said that he believed that the SE Rentals loan appears to have been approved. He said that he thought it related to the lease of a photocopier. Mr Patsan gave evidence of how the SE Rentals loan "would" have proceeded. He explained that SE Rentals "would be a loan broker or loan originator", and that BankWest was the credit provider. He said that SE Rentals "would" have made the enquiry of the database. Documents in evidence, signed on 8 July 2003, a date shortly after Bartercard was paid, show that the applicant for the credit was Sareena Enterprises Pty Ltd (Sareena) and that Mr Dale was a guarantor. Mr Dale signed on behalf of Sareena (as a director) and also as guarantor. The documents show that the finance was in respect of the leasing by Sareena of a Minolta CF 3102 colour printer and an electronic guillotine from Bank of Western Australia Ltd (BankWest) as owner. Mr Patsan speculated as to steps that BankWest "would" have followed. For example, he suggested that the high interest charged by BankWest to Mr Dale could have been attributable to the "Clearout (Watched)" notification. But he also said "I'm just assuming from here", apparently in reference to documents shown to him in relation to a loan application made to SE Rentals. I do not give any weight to any of Mr Patsan's evidence of what would have happened within SE Rentals or BankWest. We simply do not know the processes followed by them in relation to this particular application because no one from them was called. Additionally, it is unclear exactly what Mr Dale was told --- he said that he made further investigations or "checked it out. " In any event, Mr Dale's evidence is hearsay as evidence of the reading by the salesman or salesmen. I should make it clear that I accept Mr Dale's testimony that it was in the course of the SE Rentals transaction that he learnt of the Bartercard listing and that he then promptly paid out Bartercard. The SE Rentals enquiry was made on 19 June 2003 and he paid Bartercard the outstanding amount on or by 20 June 2003. Notwithstanding the above, SE Rentals was an Operator Requested enquiry, and Mr Champion stated in his affidavit that in such a case "normally" the full credit file is displayed on the enquiring credit provider's screen. I infer that there was a reading of the full credit information file by an operator at SE Rentals, who read the "Clearout (Watched)" listing by Bartercard. Mr Dale made no submission on the Citibank Limited enquiry of 2 January 2001, beyond stating that Mr Champion's annexure stated "System-to-System", and gave no oral evidence directed to showing that the "Clearout (Watched)" listing had been read at Citibank. I turn now to the matter complained of in Schedule B that was allegedly published to "Optus Commun Aust NSW" on 24 June 2003 and to "CBFC Rentals Pty Limited" on 10 November 2003. According to Mr Champion's Annexure, both accesses were System-to-System. Mr Dale said that he applied to Optus "to get a phone and pay it off over 24 months" and that he applied to CBFC in connection with the lease of a car. Beyond saying that the Optus application was declined and the CBFC application was successful, Mr Dale's evidence did not advance his case on the question of publication to a human mind. Indeed, in relation to the Optus application, he stated that he was not given a reason for the rejection of his application. Mr Dale made no submissions on the CBFC enquiry. In the result, I find that the only alleged publication which was a communication to a human mind in an enquiring credit provider's office was that relating to SE Rentals. Otherwise, Mr Dale's claim in defamation cannot succeed. Schedule A refers to a "Loan Contract" with "ST GEORGE BK AUTOMOTIVE FIN" which listed "Clearout (Watched)" on 5 October 2001 in respect of an amount of $28,942. The same credit provider was referred to as having originally made the same listing, "Clearout (Watched)", on 15 September 2001 in an amount of only $2,539. Schedule B was the same as Schedule A but for the addition of a line recording a "Status" of "Paid" as at a "Status Date" of 24 June 2004. That is, the amount of the account was paid and the account closed on or by 24 June 2004. The exception was the access by AAPT Ltd on 10 December 2003 which was Operator Requested. Mr Fisher did not give evidence and Mr Symes's affidavit relating to him was not read. There is therefore no evidence other than documentary evidence relating to applications for credit made by Mr Fisher. Pursuant to subpoena, Optus produced a series of computer screen printouts. They were all headed "Consumer Application 8986-FISHER EDDIE Mr (Declined) 107". It is apparent from the screen printouts that this application consisted of a vertical menu on the left-hand side and a main form area on the right-hand side. A series of tabbed controls, or tabs, appeared across the top of the main form area. In its submission, Veda referred to these tabs as "subject bars. " They had the following headings: "General", "Personal", "Address", ""Employment", ""Action Log", "Bureau File" and "Notes". Optus produced computer screen printouts of the information appearing under each tab. Two text-boxes appear under the "Bureau File" tab. The first is headed "Categories", and the second is headed "Category Details". Each has a vertical scroll-bar on the right hand side. The "Category" text box contains a list of items relating to the applicant, including among others "Summary", "Name", "Personal", "Address", "Employment" and "Default". Selecting one of these items brings up corresponding information in the "Category Details" box. Optus did not produce a printout of the information appearing in the Category Details box when the item "Default" is selected. Relevantly, however, Optus produced two screen printouts of the Category Details for the "Summary" item. The first of these lists "1 unpaid default(s)" and "1 unpaid default(s) in last 6 month". The second shows three items in sequence: "1 total unpaid default(s)"; "2,539 dollars of total unpaid default(s)"; and "24 month(s) since last unpaid default". I infer that what appeared on the computer screen referred to the entry in the database on 15 September 2001 by St George Bank which showed an original amount of $2,539. It appears that the information quoted is read by clicking on a subject bar on the screen, so it is not clear that anyone at the time actually read the screens which have now been printed out for the purpose of producing documents in answer to a subpoena. In the absence of any witness from Optus, I do not infer that some person there read the "Clearout (Watched)" listing in relation to Mr Fisher; or even the information listed on Optus's database as to Mr Fisher's defaults. In the result, apart from the alleged publication of the matter complained of in Schedule A to AAPT Ltd on 10 December 2003, I am not satisfied that either the matter complained of in Schedule A or the matter complained of in Schedule B was published to any human mind at the office of any of the enquiring credit providers. I infer that the material complained of in Schedule A was read by some employee of AAPT Ltd as part of the full credit information file displayed on the computer screen there, on or about 10 December 2003. Schedule A refers to a "Consumer Default", being a "Payment Default" listed on 19 December 2002. The "Original Amount" is $186.00 and the "Original Subscriber" is "AAPT Credit". The "Latest Amount" (as at 29 July 2004) is $166.00 and the "Latest Subscriber" is "AAPT Ltd". Schedule B is the same as Schedule A except for a notation of "Paid" as at a Status Date of 30 September 2004. Mr Marker pleads twenty six publications of which twelve relate to Schedule A and fourteen to Schedule B. Mr Champion's Annexure omits Schedule A's Ford Credit Australia NSW of 12 April 2003. This was added to the pleading after Mr Champion made his affidavit, as is acknowledged in Mr Marker's submissions. Mr Champion's Annexure lists eighteen accesses as System-to-System and seven as Operator Requested. The Hearsay Ruling applies. Moreover, the ICCR in Mr Marker's case does not disclose any enquiry of the database in June 2004. The enquiries on either side of June 2004 are enquiries made in April and September 2004. In relation to some of the alleged publications, Mr Marker had no recollection, and in relation to others he said only that his application for credit was granted or refused. That's the only way that I do remember it. I don't remember the --- you know --- until I see it, the date and what I actually went for the loan for. He said that he had a conversation with "Joanne" (he could not remember her second name), the manager of the Flying Horse Credit Union at St Kilda Road Melbourne. Apparently Mr Marker did so himself. Mr Marker also gave evidence touching on his applications to Radio Rentals, Heritage BS Info Centre, Flying Horse Credit Union on 29 October 2004, Flying Horse Credit Union on 30 December 2004 and Capital Motor Dealer, Toyota Financial Services and Citi Finance, of which I need discuss only the last three. Mr Marker's evidence in relation to the others does not advance his case on communication to an employee within the credit provider's office. I turn next to the documents that various credit providers produced on subpoena. Mr Marker served a subpoena on Capital Finance Australia Ltd trading as "Capital Motor Dealer NSW". This related to the recorded access by Capital Motor Dealer NSW on 10 December 2004. In response, the addressee produced an internal credit report relating to Mr Marker. It was not entirely in the form of the ICCR that DR Capital obtained relating to Mr Marker, however substantial parts of it were identical to the comparable parts of the ICCR in evidence. I infer that those parts of the internal credit report came from Veda's database. The ICCR in evidence and the internal credit report produced on subpoena both show that "Capital Motor Dealer NSW" accessed the database on 10 December 2004 in connection with a proposed "Chattel Mortgage" for $10,292. The internal credit report sets out the Consumer Default listed by AAPT relating to Mr Marker in the same form as in the ICCR. Importantly, however, it does not record the notation on 30 September 2004 stating "Paid". It also sets out particulars of "Consumer Credit Applications" in the same form as in the ICCR, the latest one in the internal credit report being that made by Mr Marker to Capital Motor Dealer NSW itself on 10 December 2004. The odds of recording an adverse with Credit Advantage within 12-24 months of a Credit Advantage enquiry is 19:1. Credit Advantage uses reasonable efforts to ensure that samples are statistically valid, and that proven methods are used to develop scores. However, a score is only additional information on which to base a decision. A score is not a replacement for any other information, or for your decision making policies and procedures. Accordingly, Credit Advantage does not accept liability for any lending decision you make using a score. This is based on analysis of the association of all data with future adverse outcomes. The use of the word "unpaid" confirms that what was read did not include the "Paid" notation referred to at [196] above. I infer that in December 2004 an employee of Capital Motor Dealer NSW read the ICCR Consumer Default listing that had been effected by AAPT Credit on 19 December 2002 for $186 and updated on 29 July 2004 for $166. I do not infer that any employee read the notation of "Paid" that had been entered on 30 September 2004. Therefore it is not established that any employee of Capital Motor Dealer read the matter complained of in Schedule B. The ICCR in evidence shows that on 10 December 2004 Toyota Financial Services accessed the database, entering into it the fact that Mr Marker had applied for credit of $17,277 in respect of an "Account Type" called "Terms". Mr Champion classified this access as System-to-System. Mr Marker served a subpoena on "Toyota Financial Services" relating to its enquiry of his credit information file. A series of computer screen printouts was produced in response. Of particular relevance are the printouts of a window entitled "Bureau Data". Within this window, one of the printouts sets out the AAPT "Consumer Default" in the same terms as in the ICCR. Further screen printouts relating to this window also set out "Consumer Credit Applications", that is to say, accesses or enquiries made by credit providers to which Mr Marker had applied for credit. These entries also accorded with those in the ICCR. A separate entry in a different window under a heading "Application Bureau Results" showed Mr Marker as having one unpaid default. I have no doubt that an employee of Toyota Financial Services read the particulars of the AAPT "Payment Default" on the screen. On one of the screen printouts there is a box with a note typed into it by somebody in relation to the default "To AAPT original date 19/12/02 for $186, latest amount is $166 as of 29/7/04". Clearly, an employee of Toyota Financial Services typed this from Mr Marker's credit information file. Mr Marker served a subpoena on "City Group Pty Ltd" trading as "Citi Financial Services". This related to the access on 10 January 2005 which Mr Champion classified as System-to-System. The addressee produced, relevantly, a single page which contained a summary of the "Original" and "Latest" AAPT listed default of $186 and $166 respectively. The single page is dated 11 January 2005. There is handwriting on it stating "CM states paid off. Was double billed". I infer that "CM" means "customer" or otherwise refers to Mr Marker. I also infer from this note that an employee of Citi Financial in January 2005 read the AAPT listed Consumer Default in the data extracted by Citi Financial from Mr Marker's credit information file. I also infer in the case of all other Operator Requested accesses that some employee of the enquiring credit provider read the matter complained of in Schedule A or Schedule B, as the case may be, by viewing it on the computer screen. In the result, it is proved that the matters complained of in Schedules A and B respectively were communicated to human minds at all of the respective enquiring credit providers as pleaded, with the exception of the alleged publication of the matter complained of in Schedule B to Capital Motor Dealer on 10 December 2004. It particularises a "Repossession Loss (After sale of the item)" entered by "GECOMM DF QLD DF 1040" on 30 July 2004. The amount specified was $16,582. It gives a "Status" of "Settled" as at a "Status Date" of 1 October 2004. Schedule A lists as the original subscriber GECOMM DF QLD DF 1040; but as the latest subscribed GECOMM DJ QLD DF 1040. From the ICCR, I think that the former is correct. I will refer to the listing credit provider as "GE". Although Schedule A to the TFASC is headed "Consumer Default", in the ICCR in evidence, the default was recorded as a "Commercial Default". According to Mr Champion's Annexure, the first four were all System-to-System accesses. Mr McGary makes submissions in support of only the first four publications and I will ignore the last two. There is no admitted affidavit evidence of Mr McGary relevant to the present issue. DR Capital obtained an ICCR relating to Mr McGary on 6 September 2005 which is in evidence. DR Capital had previously obtained an ICCR relating to Mr McGary on 6 April 2005. Under the heading "Consumer Credit Applications", the ICCR recorded that on 10 May 2005 "NAB New Business" (NAB) entered the fact that Mr McGary was applying for credit under a "Continuing Credit Contract" to the extent of $5,000. In oral evidence Mr McGary said that this related to a written application he made for a credit card. There is in evidence a letter dated 11 May 2005 from NAB to Mr McGary advising him that his then recent application for a credit card had been declined and that the decision had been based wholly or in part on the information contained in a report from Baycorp Advantage Business Information Services. The letter advised how Mr McGary might follow up the matter with Baycorp if he wished to obtain access to his credit information file. Having regard to Mr Champion's evidence in relation to the nature of System-to-System access, I do not infer that any human being at NAB read the particulars of the recorded Consumer Default. The evidence is that it is common for banks and other large organisations to use System-to-System access, according to which their computer system decides the fate of the application for credit, as a result of which a letter is generated to the applicant advising him or her of the result. No relevant evidence was led in relation to the other alleged publications. I do not accept the applicant's submission that an approval indicates that a credit information file was viewed. An "Accept" result like a "Decline" result was automated in the case of banks and large organisations. The evidence does not establish that the data obtained by any of the four enquiring credit providers relating to Mr McGary was communicated to a human mind. Mr McGary's claim in defamation therefore cannot succeed. Schedule A is wrongly headed "Consumer Defaults". I say "wrongly" because in the ICCRs in evidence the default is listed as a "Commercial Default". DR Capital obtained an ICCR (the "primary ICCR" --- see below for other ICCRs in evidence relating to Ms Shields under the name "Dianne Malloch") on 31 August 2005, having earlier obtained one on 17 March 2005. The primary ICCR, and therefore Schedule A, particularised the default as a "Payment Default" recorded by FORD CREDIT NSW on 9 March 2001. The amount shown was $16,598. The "Account Type" was shown as "Leasing" and the "Association Code" as "Guarantor". According to Mr Champion's Annexure, there were two accesses to the database by Technology Leasing Ltd NSW on 19 May 2005, one System-to-System and the other Operator Requested. According to Mr Champion's Annexure, of the remaining accesses, those by Cumberland Newspapers NSW, CMS Asset Solutions and QPF Finance were Operator Requested, whereas those by National Australia Bank, St George Bank and GE Capital (on 7 and 13 April 2004) were System-to-System. There is no admitted affidavit evidence of Ms Shields relevant to the reading of the Payment Default listing by any employee of any of the credit providers. In relation to the National Australia Bank, the primary ICCR showed that on 24 December 2001 National Australia Bank accessed the database in connection with an application for credit on a real estate mortgage to the extent of $200,000. In her oral evidence Ms Shields explained that she had borrowed money from a solicitor over a period of time and that the solicitor had put her into contact with a man named "Richard" at Eagle Finance who assisted her to make an application to National Australia Bank. She said that Richard told her that her application had been refused because of a default notified by Ford Credit. The Hearsay Ruling applies. The primary ICCR showed that on 22 January 2002 St George Bank accessed the database in connection with an application by Ms Shields for credit to the extent of $300,000 on a real estate mortgage. Ms Shields gave evidence that Richard of Eagle Finance made the application on her behalf and told her that it was declined "because of a default by Ford". The Hearsay Ruling applies. In relation to GE Capital, the primary ICCR showed an access on 7 April 2004 and a second access six days later on 13 April 2004, both in respect of an application for finance of $203,000 on the security of a real estate mortgage. Ms Shields said that she applied to GE Capital through a finance broker named Paul Mylotis to whom she was recommended by her accountant. She said that the earlier application was for a refinancing of the mortgage over her house as the solicitor had not yet been repaid. She said that Mr Mylotis told her that because of the Ford Credit default, she would have to pay a certain, higher, interest rate. The Hearsay Ruling applies. As evidence of the reason that moved GE Capital and of GE Capital's imposition of a certain interest rate, Ms Shields's evidence of what Mr Mylotis told her was second-hand hearsay. She said that a couple of weeks later GE Capital approved her application. In relation to the GE Capital application of 13 April 2004, Ms Shields said that that application was for a loan to enable her to acquire equipment for her business, and that she applied for the finance by way of her "home loan". She said that this application, also arranged by Mr Mylotis, was also approved. Ms Shields said that she used the funds obtained from GE Capital to pay out her indebtedness to Ford Credit. Ms Shields submits that because her application to GE Capital was approved, I should infer that someone at GE Capital read her credit information file including the Payment Default that had been listed by Ford Credit. Ms Shields said that in fact she used the funds provided by GE Capital (I assume the $203,000 for which she said she applied), inter alia, to pay out the sum (approximately $16,598) that she owed to Ford Credit. But did she inform GE Capital this was a purpose of her borrowing? If she had done so, this would have interested GE Capital in ascertaining if Ford Credit had listed a default on her credit information file. The admitted evidence does not reveal an answer to the question. Apparently her disclosed purpose was simply to pay off the loan from the solicitor. I do not infer, from the mere fact of approval of the loan, that someone at GE Capital read the particulars of the default listed by Ford Credit. As in the case of all applicants, Ms Shields did not call any witness from any credit provider. The primary ICCR showed that on 19 August 2002 Cumberland Newspapers made a "Commercial Credit Enquiry" of the database in connection with a 30 day account. It will be recalled that this was an "Operator Requested" access. Ms Shields testified that she wanted to do some advertising in the local newspaper of which, apparently, Cumberland Newspapers was the publisher, and it insisted that she pay up front. She said that she was told that the reason was her "Credit Record" or "Credit History". The Hearsay Ruling applies. Cumberland Newspapers was subpoenaed but did not produce a credit report. The primary ICCR also recorded that on 28 April 2005 "CMS Asset Solutions" accessed the database in connection with an application by Ms Shields for credit relating to "Leasing". In oral evidence Ms Shields said that the application to CMS Asset Solutions was for the financing or leasing of a piece of equipment for her business. She said that her application was refused and that someone called "Jim" at CMS Asset Solutions told her that it was refused "because of Baycorp". The Hearsay Ruling applies. The primary ICCR showed that on 17 May 2005 "QPF Finance" accessed the database in connection with an application for commercial credit in connection with a lease. The "Association Code" is shown as "Guarantor". In oral evidence Ms Shields again said that she was looked after by "Jim" who told her that her application to QPF Finance failed "because of Baycorp". The Hearsay Ruling applies. Subpoenas to produce documents were issued on behalf of Ms Shields to both CMS Solutions and QPF Finance. In cross examination, Ms Shields was confronted with documentary evidence that both CMS Asset Solutions and QPF Finance had in fact approved of her applications to them, contrary to evidence she gave in her examination in chief. There are in evidence several ICCRs relating to Ms Shields, some in the name of Dianne Malloch. Mr Champion's affidavit mentions this and the fact that the two credit information files contained cross-references to one another. In a Malloch ICCR of 17 May 2005 produced by QPF Finance in response to a subpoena, the "RSL Com" default is mentioned, but it is not mentioned in the Shields ICCR of 17 May 2005 or in the primary ICCR (of 31 August 2005). CMS Asset Solutions produced no credit report. A handwritten working sheet dated 23 May 2005 was produced on subpoena by QPF Finance. That was six days after its accessing of Ms Shield's credit information file on 17 May 2005. It related to an application by Baby Boomers Face & Body Clinic Pty Ltd and showed "Dianne Maureen Malloch" against "Directors/Guarantors". The sheet noted that there were three defaults that were "Settled/Paid (explanation attached)". The only other documents produced by QPF Finance were a number of ICCRs and Company Reports, all sourced from Veda. These are a Company Report relating to Baby Boomers Face & Body Clinic Pty Ltd and two ICCRs relating to Ms Shields (one in the name of Malloch) dated 17 May 2005 and another such Company Report and two ICCRs dated 3 March 2006. The three dated 3 March 2006 can be disregarded since they post-date the handwritten sheet and therefore could not have contained the "explanation attached". The Company Report dated 17 May 2005 shows no defaults. The Malloch ICCR dated 17 May 2005 shows one default and the Shields ICCR dated 17 May 2005 shows two defaults --- a total of three defaults. The Ford Credit default is one of the two listed on the Shields ICCR of 17 May 2005. I infer that the Company Report and the two ICCRs dated 17 May 2005 contained the "explanation attached" referred to in the handwritten working sheet dated 23 May 2005, and that the writer of the working sheet read the details of the listed Ford Credit default. As it turns out, since the access by QPF Finance was Operator Requested, I would in any event have inferred that the credit information file relating to Ms Shields was viewed in full on the screen at QPF Finance. Finally, the primary ICCR showed that on 19 May 2005 "Technology Leasing Ltd NSW" accessed the database in connection with an application by Ms Shields for finance for "Commercial Rental". Against "Association Code" appeared the word "Guarantor". Ms Shields gave oral evidence that that application was made by someone on her behalf and she thought that that person was "Jim". She said that the person told her that her application was "refused because of Baycorp". The Hearsay Ruling applies. The result in the proceeding brought by Ms Shields is as follows: I infer that in the cases of the accesses by Cumberland Newspapers NSW, CMS Asset Solutions, QPF Finance, and one of the two accesses by Technology Leasing NSW on 19 May 2005, the matter complained of was read by an employee of the enquiring credit provider. However, in the cases of the accesses by National Australia Bank, St George Bank, GE Capital (two) and the other (one) of the two accesses by Technology Leasing Ltd on 19 May 2005, it is not proved that the access involved a reading of the details of the default listed by Ford Credit by any one at the enquiring credit provider. Accordingly, Ms Shields's claim in defamation cannot succeed in respect of the latter group. Schedule A quoted a Consumer Default. This was a "Clearout (Watched)" listing made by "CITY FIN LCS BRWNPLNS/SNYBNK" on 2 June 2003. The amount shown was $573. As at 11 February 2004 the amount shown was $445. Mr Champion's Annexure does not address the publication to Queensland Police c/u Ltd; Loans by Phone or the Bill Rescue entry of 9 May 2005, perhaps because they were introduced by way of amendment made to the pleading after he had performed his analysis. According to Mr Champion's Annexure, all forms of access were System-to-System except that of Bill Rescue Pty Ltd on 16 March 2005, which was Operator Requested. There is no admitted affidavit evidence of Mr Strange relevant to the issue of the reading of the matter complained of by any employee of any of the credit providers to whom publication was alleged. Such oral evidence as Mr Strange gave that might be said to be relevant to the issue of publication to a human mind was the subject of the Hearsay Ruling. Mr Strange relies on documents produced on subpoena by Esanda Finance Corporation Ltd (Esanda). The subpoena referred to documents relevant to an application for finance made by Mr Strange in or about January 2005. No doubt that date is attributable to the date of 13 January 2005 in para (a) in Schedule A (see [251] above). One of the credit reports produced was dated 9 May 2005 and the other 23 October 2006. There is no credit report on or around 13 January 2005. Veda has suggested that the two credit reports may have been erroneously inserted among the documents produced by Esanda. They are both dated after the Esanda enquiry of 13 January 2005. There is also produced an Esanda 'Credit Application and Assessment Report' prepared on 20 April 2006. Of particular interest is a manually entered note at the bottom, dated 13 January 2005, which states that there are "4 unpaid defaults with City Finance" and a "poor credit history" --- although there is no mention of a "Clearout (Watched)". Mr Strange gave no oral evidence relating to the Esanda application. I am not satisfied that the material complained of in Schedule A was published to Esanda Dealership on 13 January 2005 as pleaded. I am therefore not satisfied that any one at Esanda Dealership read the "Clearout (Watched)" entry. Bill Rescue Pty Ltd did not produce any credit report for 16 March 2005, although it produced other documents which were not admitted into evidence. According to Mr Champion's Annexure, however, the access to the database by Bill Rescue Pty Ltd on 16 March 2005 was Operator Requested. In the absence of evidence to the contrary, I infer that an operator at Bill Rescue Pty Ltd's office read the matter complained of on the computer screen. Loans by Phone Pty Ltd produced documents in response to a wide ranging subpoena served by Mr Strange. The documents contained a handwritten note "Client applied on the 2/3/2005. This application was declined on 4/3/2005. Please find attached relevant information. Regards Natasha". Under "Credit History" the document records "Defaults: Northpower 2000 --- Paid, Startover 2003 --- Paying Off. " I infer that the "relevant information" is a document attached headed "Baycorp Advantage Individual Credit Enquiry. " Although the words "serious credit infringement" appear, the words "Clearout (Watched)" do not. In relation to the first two alleged publications of the matter complained of in Schedule B, namely, those to GEFCA Branch Channel and ANZ Banking Group GRP OPS Tech, there is no documentary evidence to be considered. Both were System-to-System accesses. I am not satisfied that the matter complained of in Schedule B was read by any person in the office of either one of those enquiring credit providers. In relation to the alleged publication on 20 July 2005 of the matter complained of in Schedule B to "International Acceptances", International Acceptance Pty Limited produced documents pursuant to a subpoena served on it by Mr Strange. They included a document dated 20 July 2005 headed "Consumer Report for International Acceptance interpreted with Lynx from data provided by Baycorp Advantage". This included a reference to the $445 default in question, but no notation of "Clearout (Watched)". Neither an "Australia Personal Loan Verification Form", nor a "Letter of Offer" provided by International Acceptance noted this. Having regard to Mr Champion's evidence concerning System-to-System access, I do not infer that anyone at International Acceptance Pty Limited read the entry of "Clearout (Watched)" relating to Mr Strange. The only publications to a human mind that are proved in Mr Strange's case are the publications to Loans by Phone Pty Ltd on or about 3 March 2005 and Bill Rescue on or about 16 March 2005. Otherwise Mr Strange's claim in defamation cannot succeed. Alliance Factoring was shown as the "Original Subscriber" on 27 May 2002. The "Latest Subscriber", also of 27 May 2002 was shown as "BA Collections Factoring". The Original Amount and the Latest Amount were both $795.00. The "Original Reason" stated was "Clearout watched", but the "Latest Reason" listed simply a "Clear Out. There is no admitted affidavit evidence by Mr Taylor relevant to the reading by a person employed by a credit provider of the matter complained of. In oral evidence Mr Taylor said that the entry concerning St George Bank related to an over-the-phone application for a credit card. He said that a lady at St George Bank, whose name he could not remember, told him over the telephone that his application for the credit card had been refused because he had a "default listing on [his] CRA". The Hearsay Ruling applies. Similarly, Mr Taylor gave evidence that he applied on 14 January 2004 to Telstra for a home phone and on 21 January 2004 for a mobile telephone. He said in relation to the latter that he filled in an application form at the Rockdale office of Telstra where a sales representative made a telephone call and then told him that his application was declined because of a credit rating on his file. The Hearsay Ruling applies. Mr Taylor did not give any additional evidence in relation to the application on 14 January 2004. In the result I am not satisfied that any person at any of the three credit providers referred to in the allegations of publication read the matter complained of in Schedule A. Accordingly, for this reason alone Mr Taylor's claim in defamation cannot succeed. The matter complained of in it was the listing by "ALLIANCE FACTORING 8" of a "Payment Default" on 13 September 2002 in respect of an amount of $316. Vic. According to Mr Chapman's Annexure all of the remaining four accesses were System-to-System. There is no admitted affidavit evidence relevant to anyone at any of the four credit providers having read the matter complained of in Schedule A. Mr Tyndall's written submissions refer, in relation to (b) above, to certain oral evidence that Mr Tyndall gave but that oral evidence related to an application related to (d) above (National Australia Bank). That evidence was no more than that his application had been declined. Mr Tyndall gave oral evidence in relation to the 15 November 2002 "Westpac Nat Telemark Vic" enquiry and the 12 June 2003 "WPAC/Challenge/Bank Melb P/L" enquiry. In relation to the former he said that he applied over the telephone for a personal loan at the Personal Loans Centre of the Westpac Banking Corporation, and after being "put on hold" was told that his application had been declined due to a "credit risk" or "credit default". Mr Tyndall said that he asked the Bank's representative to reconsider but she said that there was a number on the screen that she could not override. The Hearsay Ruling applies. Similarly, Mr Tyndall gave evidence that he telephoned the Westpac Personal Loans Centre on or about 12 June 2003 thinking that since some "twelve months" had passed, the adverse entry may have lost its significance. However, he said that he was again told that his application had been declined due to "credit risk" or "credit default", with a reference number that could not be overridden. Again, the Hearsay Ruling applies. Mr Tyndall gave no oral evidence pertinent to the issue whether the matter complained of came to the mind of an employee at ANZ Bankcards (his written submissions merely note that the access was System-to-System). In the result, I am not satisfied that the matter complained of in Schedule A was published to any employee of any of the credit providers to whom the TFASC alleges it was published. For this reason alone, Mr Tyndall's claim in defamation cannot succeed. 2. 3. The applicants submit that publication by Veda was not made on an occasion of qualified privilege. They rely on Macintosh v Dun [1908] UKPCHCA 3 ; (1908) 6 CLR 303 ; [1908] AC 390. Veda submits that Macintosh v Dun was wrongly decided and should not be followed. In Bashford v Information Australia (Newsletters) Pty Ltd [2004] HCA 5 ; (2004) 218 CLR 366 ( Bashford ), Gleeson CJ, Hayne and Heydon JJ said in a joint judgment that the principles to be applied in determining whether an occasion of publication was one of qualified privilege are well known. Their Honours referred to Toogood v Spyring (1834) 1 Cr M & R 181 (149 ER 1044) and Adam v Ward [1917] AC 309. In such cases, the occasion prevents the inference of malice, which the law draws from unauthorized communications, and affords a qualified defence depending upon the absence of actual malice. If fairly warranted by any reasonable occasion or exigency, and honestly made, such communications are protected for the common convenience and welfare of society ; and the law has not restricted the right to make them within any narrow limits. This reciprocity is essential. There was in evidence a copy of Veda's standard application to become a subscriber, including the conditions of subscription. If a firm or company applying to become a subscriber was a credit provider, it was required to identify the type of credit provided and the credit terms allowed. If the applicant was not a credit provider, it was required to state its reasons for wishing to subscribe. In the present case, it was not suggested that the pleaded publications were to any entities other than credit providers. Whenever Veda supplied a credit report by permitting a subscriber to access the database, it did so pursuant to a contractual obligation implied from the terms of the subscription contract and the payment of fees by subscribers to Veda. In the absence of authority constraining me, I would find that: Victor Edwards, Senior Lecturer in the School of Banking at the University of New South Wales provided a report purporting to lay a foundation for the second last finding, but I disallowed it for reasons (not relevance) that I gave at the time. However, I have no hesitation in so finding and, as I indicated at the time, I did not understand senior counsel for the applicants to submit that I should not do so. If Veda were omitted from the arrangement, it could easily be seen that the arrangement was one between a large number of credit providers who were mutually assisting each other's legitimate interests by exchanging information through a computer database. The question arises why the position relating to qualified privilege should be any different from that which it would be if, without the interposition of Veda, the subscribing credit providers were constituted simply as a mutual society of credit providers which maintained the database under the control of an elected committee (see [313] below). I turn now to Macintosh v Dun [1908] UKPCHCA 3 ; (1908) 6 CLR 303 ; [1908] AC 390. In Macintosh v Dun the plaintiffs carried on business in Sydney as general hardware merchants. The defendants were a firm that carried on the business of a trade protection society or mercantile agency under the name "R G Dun and Company". The defendants' business was that of obtaining information with regard to the commercial and financial standing and position of persons, firms or companies trading in New South Wales or elsewhere, and communicating that information confidentially to its subscribers in response to specific and confidential enquiries made by them. The form of the enquiry was a standard form of "Subscriber's Ticket" provided by the defendants to the subscribers, filled in by the subscribers and addressed to the defendants. In response to an application in that form, the defendants supplied reports in relation to the plaintiffs, who sued them for damages as a result of alleged libel. At trial, Cohen J held that the occasion was not privileged. The judgment of the Full Court of the Supreme Court of New South Wales on appeal ((1905) 5 S.R. (NSW) 708) was delivered by Pring J. His Honour thought it obvious that it was for the common convenience and welfare of the trading community that a trader should be able to make enquiries with respect to the financial standing of another with whom he was dealing or about to deal, and that the answers to such enquiries, if given honestly and bona fide , should not subject the giver to an action for defamation (at 717). To say that an enquiry respecting the character of a servant is made on a privileged occasion, and that one respecting the character of a merchant with whom another is dealing is not, is to lose sight of a principle of law which regulates privileged occasions. The principle is that the law on such occasions repels the inference of malice. The reference is to the contract between the defendants and subscribers. That argument comes to this, that the higher the duty the less the protection. In separate judgments, Griffith CJ, Barton J and O'Connor J expressed agreement with Pring J's judgment in the Supreme Court. On appeal, the Privy Council ([1908] AC 390 at 400) referred to the facts that: Their Lordships identified "the real question" as being whether it was "in the interests of the community" and "for the welfare of society" that the protection that the law gave to communications made in legitimate self-defence or from a bona fide sense of duty "should be extended to communications made from motives of self-interest by persons who trade for profit in the characters of other people" (at 400). It may be extorted from the person whose character is in question through fear of misrepresentation or misconstruction if he remains silent. It may be gathered from gossip. It may be picked up from discharged servants. It may be betrayed by disloyal employees. It is only right that those who engage in such a business, touching so closely very dangerous ground, should take the consequences if they overstep the law. In Watt v Longsdon [1930] 1 KB 130 at 148, Scrutton LJ said that the decision "must not be relied on too strongly" in the light of the decision of the House of Lords in London Association for Protection of Trade v Greenlands Ltd [1916] 2 AC 15 ( Greenlands ). In Greenlands the House distinguished Macintosh v Dun . The case concerned the London Association for the Protection of Trade (Association) which had over 6,000 members who paid an annual subscription. A member (Kydd) applied to the Association on a form provided by it for information on the commercial standing of a trading company (Greenlands) with which Kydd proposed to deal. The secretary to the Association (Hadwen) applied to a commercial agent and debt collector (Wilmshurst) at Hereford where Greenlands carried on business for such information. Having obtained the information from Wilmshurst, Hadwen passed it onto Kydd. Greenlands sued Wilmshurst, the Association and Hadwen for libel. A jury returned verdicts against all three defendants, finding express malice against Wilmshurst. The Association and Hadwen appealed. The Court of Appeal ordered a new trial as against them. On the further appeal to the House of Lords, Greenlands consented to have the judgment against the Association set aside because it transpired that it was an unincorporated association. The House of Lords upheld Hadwen's defence of qualified privilege. Their Lordships saw the circumstances as being in substance an enquiry made by Kydd of Wilmshurst through the agency of Hadwen. Accordingly, just as such an enquiry by Kydd of Wilmshurst would have attracted qualified privilege, so did the enquiry through the agency of Hadwen. Their Lordships distinguished Macintosh v Dun . Various points of distinction were mentioned: The point of distinction that seems to be common to their Lordships' speeches is that in Greenlands the Association was an unincorporated not-for-profit association who business was carried on by a committee, which did not operate solely from motives of pecuniary gain, and Hadwen did not act as agent of the Association but as agent of Kydd. Their Lordships emphasised that whether qualified privilege was attracted depended on a close scrutiny of all the circumstances of the individual case. The present cases share some features with both Macintosh v Dun and Greenlands . Like the defendants in Macintosh v Dun : Veda is motivated by the desire for pecuniary gain; Veda is not itself in the business of providing credit but is in the different business of collecting and providing, for reward to itself, creditworthiness information sought by credit providers. In Australia, Macintosh v Dun was distinguished in Howe and McColough v Lees [1910] HCA 67 ; (1910) 11 CLR 361. That was a case of an association of stock salesmen who carried on business in the Bendigo sale-yards, and who, by the rules of the association, had contracted to inform the association's secretary of any person's failure to settle for stock purchased within a stipulated period. The plaintiff, a grazier and stock dealer, sued a firm that had reported him to the secretary who had informed the other members accordingly. The High Court held (4:1) that the occasion was privileged. Macintosh v Dun was distinguished as turning on its own facts. Griffith CJ said (at 371) that the Privy Council had not professed to lay down any new rule, and had thought that the communication complained of was not to be seen as having been made in answer to an enquiry but as information volunteered. The Chief Justice also thought that their Lordships had considered the contract in Macintosh v Dun as "contrary to public policy" (at 371). Barton J agreed with the Chief Justice. O'Connor J also distinguished Macintosh v Dun as turning on the special circumstances under which it was claimed the privilege arose (at 373). His Honour characterised Macintosh v Dun as a case concerning an individual, association or corporation "that makes a business of collecting information about traders' credit and selling it for reward to other traders" (at 373). O'Connor J saw the real ground of the decision as residing in Lord Macnaghten's reference to "the interest of the community" and "the welfare of society" (see [295] above). The evidence shows that Veda was incorporated on 12 December 1967 under the name "Credit Reference Association of New South Wales Limited", as a company limited by guarantee. It has had several changes of name (see [2] above). Until the 1990s it was an unlisted non-profit public company, but it then ceased to be a non-profit entity and also became a company limited by shares and guarantee. As at November 1995 it members were all credit providers. Although the memorandum and articles of association in evidence did not limit the membership to credit providers, I infer from their names that the signatories were in fact all credit providers. Veda's name was then "Credit Reference Association of Australia Limited". Documents relating to the application for membership made by the Commonwealth Trading Bank of Australia in 1979 are in evidence. Paragraphs 3-6 of the form of application read as follows: I/We shall supply the Association from time to time particulars of all persons trading with me/us in accordance with Schedule A printed overleaf. I/We shall treat all information supplied by the Association in strict confidence and will not divulge it to any other person nor will I/we seek to obtain information from the Association on behalf of another person. I/We acknowledge that the Association does not guarantee the accuracy of any information supplied to me/us and shall not be liable for any claim loss or damage suffered by me/us resulting from any information supplied. In the event of a breach of any of the forgoing conditions the Association will not be under obligation to supply me/us with further information at any time. Senior counsel for Veda informed the Court that Veda "demutualised and became a public company in the late 1990s". He submits that it would be "incongruous" and would be "the sort of thing that brings the common law into disrepute" if such a change in formal status could cause Veda to lose the defence of qualified privilege. The evidence of the "demutualisation" was unsatisfactory. I do not know what changes were made to Veda's constitution. If all the evidence were in, it might reveal that there was originally a prohibition extraneous to Veda's constitution on the distribution of profits to members which was removed upon demutualisation in the 1990s. The memorandum and articles in evidence contain no such prohibition. The evidence is useful, however, for what it suggests rather than for what it proves. Assume a not-for-profit mutual association which changes by adopting Veda's current structure and practice. Credit providers who become subscribers are still contractually bound to list defaulters for the benefit of all other subscribing credit providers. Why, it may be asked rhetorically, should qualified privilege be denied to the public company that, admittedly for profit to itself, facilitates the exchange? I return now to Bashford (see [279] above). In Bashford , the publisher of a trade newsletter was sued for defamation. The High Court held (5:2) that the occasion was one of qualified privilege. The reciprocity of duty or interest necessary to attract the defence existed because only persons responsible for occupational health and safety subscribed to the newsletter and it covered only that subject. The majority rejected a submission that qualified privilege was displaced because the newsletter was published for profit. Their Honours acknowledged that in Macintosh v Dun , the fact that the mercantile agency was in the business of providing information for profit appeared to have been an important consideration leading to denial of the defence of qualified privilege. However, they thought it would be wrong to isolate the element of profit and to conclude that its presence will necessarily always deny the availability of the defence. While these further considerations were seen as following from the existence of the profit motive, they were considerations critical to the conclusion that the occasion was not privileged. Similarly, their Honours considered that the Privy Council did not hold that the voluntary assumption of obligation (whether by contract or otherwise) was necessarily inconsistent with the existence of mutual duty or interest. In Macintosh information which included private or confidential material gathered from and about third parties was being conveyed; in Howe & McColough , information about a transaction to which the maker of the statement was a party was passed on. In Macintosh , the fear was that inappropriate methods would be used to assemble the information; in Howe & McColough , the person who made the communication already possessed relevant knowledge. Following their discussion of Macintosh v Dun , Bashford and the uniform Defamation Act 2005 , the learned authors: Trindade, Cane and Lunney, The Law of Torts in Australia (4 th Ed, OUP, 2007) have no hesitation in saying that "[t]he communications of credit agencies to their client will therefore now be regarded as being covered by this category of qualified privilege" (at [7.7.4.1.1] p 394). I agree: and consider that s 30(5) reflected, rather than changed, the law in this respect. In any event it is my opinion that Macintosh v Dun is distinguishable from the circumstances of the present cases. It is right to emphasise, as later authorities have done, that the business of the defendants in Macintosh v Dun was one of gathering or collecting information from a range of undisclosed sources. A reading of the creditworthiness reports issued by the defendants (at 5 SR (NSW) 708 at 709-712) bears this out. They were wide ranging and did not identify the sources relied on. Underlying the Privy Council's judgment is the view that it was dangerous to protect "communications made from motives of self-interest by persons who trade for profit in the characters of other people" (at 400). The circumstances of the present cases are vastly different. The subscribers are a closed group of credit providers who have legitimate business interests to be served by their receipt of the personal information touching the seekers of credit that is contained in their credit information files. The credit providers are both the providers and the recipients of the information. The sources of the information are in all cases clearly identified. The Privacy Act protects the individual in the ways described earlier. Moreover, the "convenience of the community" and "welfare of society" must be identified in the circumstances of the time. Macintosh v Dun was concerned with Sydney in 1903. It is difficult to resist the impression that those firms dealing or likely to deal with the plaintiffs were part of a small commercial society and that the defendants would have obtained their information from such sources as they thought reliable within that society. The present case is concerned with the credit seeking population of Australia and the world of electronic communications. Individuals seeking credit are anonymous and the vast majority of credit providers are, generally speaking, not known to each other. The only means by which they can satisfy their legitimate interest in obtaining information as to the creditworthiness of seekers of credit is by a computer database of the very kind that Veda maintains. What I have said is not, of course, intended to mean that the credit information industry should be unregulated. It is, however, to make the point that the convenience of the community and welfare of society at the present time make demands and allowances that are quite different from those appropriate to Sydney in 1903. For the above reasons, I would hold that Macintosh v Dun does not stand in the way of Veda's defence of qualified privilege, and hold that all of the credit reports given by Veda in relation to the applicants were published on occasions of qualified privilege. In their submissions the applicants accept, citing authorities, that the statutory defence of qualified protection of interests, on which Veda has pleaded in relation to any publication in Queensland or Tasmania, is informed by the common law defence of qualified privilege. They emphasise that in order to be protectable, an "interest" must go beyond mere curiosity and must be in fact an interest of the kind to which the rules governing qualified privilege at common law refer, and which I have addressed above. The applicants submit that, for these reasons, the defences under s 16(1) of the Defamation Act 1889 (Qld) do not assist Veda. By parity of reasoning, my conclusion is that the statutory defence of qualified protection of interests, like that of qualified privilege, succeeds. For these reason, all of the claims in defamation fail. 4. Veda's submissions on its Limitation Act defences are set out in tabular form in Schedule B to its submissions. This comprises 16 pages in which Veda refers to the numerous imputations in the nine proceedings, the dates when they were first pleaded, and the Limitation Act provision said to operate in relation to each of them. Except to the extent mentioned below, I have decided not to address Veda's Limitation Act submissions (see [372] below). I turn now to consider the limitation legislation. Up to 17 February 2003 the six-year limitation period under s 14 of the Limitation Act applied to defamation actions. By the Defamation Amendment Act 2002 (NSW) (No 136 of 2002), s 4 , Sched 2.2[1], a new s 14B relating specifically to actions in defamation was inserted into the Limitation Act . In the Limitation Annexure, the section is referred to as " s 14B(2003) " and I will also use that expression. (3) An action on a cause of action to which this section applies is not maintainable if brought after the expiration of one year running from the date on which the defamatory matter was published. of 2003, dated 14 February 2003 pp 1588-9. The effect of s 14B(2003) is that a one-year limitation period applied where publication occurred after 17 February 2003 (and up to 31 December 2005 --- see below), unless the circumstances fell within subs (2), in which case the old six-year limitation period continued to apply. A post-17 February 2003 cause of action can fall within subs (2) only if there is at least one publication of "the same, or substantially the same" matter before 17 February 2003 which is sued on in the same proceeding. A later version of section 14B commenced on 1 January 2006. The s 14B(2006) provision can be said to have entrenched the one-year limitation period that had been introduced by s 14B(2003) but without the latter's subs (2) qualification (although the transitional provision appearing in Schedule 5.2[7] to the Defamation Act 2005 (NSW) allows for some savings). Importantly, s 14B(2006) has no application to these proceedings because none of the pleaded publications post-dated 1 January 2006. Veda submits that where an applicant has pleaded both Schedules A and B (Dale, Fisher, Marker, Shields and Strange) the addition of the single line about the payment or settlement of the debt to the matter complained of in Schedule A makes the matter complained of in Schedule B a substantially different matter. Veda submits that this change in substance is reflected in the content of the different imputations which the applicants plead are conveyed by the respective Schedules. Veda submits that, given that the applicants' case is that the alleged recipient was a credit provider assessing the creditworthiness of the applicant, it was a matter of substance that a debt in respect of which the default had been listed, had been paid or settled. The applicants refer to Baldry v Jackson [1976] 2 NSWLR 415 at 419 per Samuels JA, O 13 r 3A of the Federal Court Rules , and Vintage Developments Pty Ltd v GHD Pty Limited (No 2) [2006] FCA 1437 ( Vintage ). The applicants submit: Where the limitation period of one year applies any pleaded imputation after 16 December 2005 is within time, and in the case of Mr McGary, any publication after 25 January 2006 . All publications are of substantially the same matter. All causes of action pleaded in defamation are publications within the twelve month period prior to the commencement of the proceedings or they come within the savings provision under s 14B(2) of the Limitation Act . In reply, Veda submits that O 13 r 3A does not avail the applicants because that rule does not override O 13 r 2(3) which makes clear that an amendment out of time will be permitted under O 13 r 7(a) only if the Court grants leave. According to the submission, the Court will grant leave only if sub-rule 7(a) is satisfied and the Court thinks it just to grant leave. According to Veda, the applicants must apply for leave to amend their pleadings, because on the occasion when the TFASCs were handed up in Court Veda reserved its rights in the present respect. The applicants agree that on that occasion Veda's position was reserved. Veda submits that Vintage is distinguishable because the application in that case was an application to amend the capacity in which a party sued under O 13 r 2(6). However, Veda submits that O 13 r 2(6) is also subject to O 13 r 2(3)'s requirement of leave where the limitation period has expired, and that the correctness of Vintage is doubtful because the parties did not refer Her Honour to O 13 r 2(3). The parties' submissions raised two issues for decision. The first relates to the construction and application of s 14B(2003). The second relates to the construction and application of O 13 rr 2 and 3A of the Federal Court Rules . Both issues were argued by reference to general principles, and I will decide them accordingly, leaving it to the parties to apply my decision to the nine individual proceedings. In conformity with this provision s 14B(2003) of the Defamation Amendment Act 2002 (NSW) speaks of the accrual of a cause of action based on the publication of defamatory matter. The date of publication is the date of accrual of the cause of action but a single publication gives rise to as many causes of action as there are defamatory imputations that arise from the matter published. As can be seen from the Limitation Annexure, in many instances the allegation is of publication after the commencement s 14B(2003) on 17 February 2003. An action on any such cause of action is not maintainable if brought after the expiration of one year running from the date of publication unless subs (2) of s 14B(2003) operates. I set out subs (2) of s 14B(2003) at [333] above. That is to say, the later publication informs the reader that as at the date specified as the Status Date, the debt in respect of which the default had been listed had been paid or settled. In my opinion, in these circumstances the matters that have been published on the two occasions are "the same, or substantially the same, matter". Of course, there is a difference, but I do not think this prevents the two matters complained of from being "substantially the same". The pleaded imputations are generally similar for the matter complained of in Schedule A and the matter complained of in Schedule B. Of course, the imputations said to arise from the latter take into account the fact of payment or settlement. There is, of course, a difference as between a reading of the credit information file the day before the date on which the fact of payment or settlement was recorded and a reading of it the day after that date. But an enquiring credit provider reading it the day before would take into account the possibility that the debt claimed to be owing to the listing credit provider will yet be paid or settled, even imminently, and a credit provider reading it the day after will take into account the fact that the claimed debt was outstanding without payment or settlement for the same length of time as that which was taken into account by a credit provider who read it the day before. The difference is that the credit provider reading the matter the day before may take into account the possibility that the claimed debt may never be paid or settled, and will assess as extremely unlikely the possibility that the claimed debt will in fact be paid or settled within a day or two. The later reader, on the other hand, will enjoy all the benefits of hindsight and will know that the claimed debt was in fact paid or settled by the "Status Date" specified. Paragraph (b) of subs (2) of s 14B(2003) speaks of the "matter" that was published. While I do not think that the two published matters under consideration are to be compared only quantitatively, it is difficult to accept that the addition of a single line which converts what was previously a future possibility into a past fact renders the two matters not substantially the same. In terms of the purpose of the Limitation Act , Veda was not disadvantaged. It was already being sued on the publication of matter extracted from a credit information file maintained by it, and the effect of the addition of the later publication was to add a further line of data extracted from the same credit information file. In the result, in my view s 14B(2003) does not apply to causes of action based on the publication of defamatory matter that accrued after the commencement of that section on 17 February 2003, where the only difference between that defamatory matter and the defamatory matter published before 17 February 2003 on which the relevant applicant sues Veda in the same proceeding, is the addition of the line of data referring to payment or settlement. This idea can be traced back to Weldon v Neal (1887) 19 QBD 394 ; and see the annotations to O 13 r 2 in Practice & Procedure High Court and Federal Court of Australia at [40,455.15]. Subsection (2B) was introduced into s 59 of the FCA Act on 23 June 1994. The amendments substituted a new subrule (3) of rule 2 and added new subrules (4), (5), (6) and (7) to that rule. Subrule (3) provides that where an application to the Court for leave to make the amendment mentioned in subrules (4), (5), (6) or para (7)(a) is made after any relevant period of limitation current at the date of commencement of the proceeding has expired, the Court may, nevertheless, grant such leave in the circumstances mentioned in that subrule if it thinks it is just to do so. The question is whether that new foundation in law "arises out of the same facts or substantially the same facts" as those already pleaded to support an existing claim for relief by the party applying for leave to make the amendment. Clearly, para (a) of subrule (7) of O 13 r 2 raises a question of comparison generally similar to that raised by s 14B(2003) discussed above. In s 14B(2003) of the Defamation Amendment Act 2002 (NSW) the concept is one of publications on separate occasions of "the same, or substantially the same, matter", and in O 13 r 2(7)(a) it is "arising out of the same facts or substantially the same facts". A preliminary question raised by this provision concerns the meaning of "document" in rule 3A. For example, if leave is given to amend a second further amended statement of claim or to file a TFASC, and what happens in either case is that in fact a TFASC is filed, is the filing of that TFASC an "amendment" of the second further amended statement of claim? If so does the amendment take place on the date on which the second further amended statement of claim was filed or the date on which the original statement of claim was filed? I do not intend to address these questions which were not debated. The parties seem to have been at cross purposes. The applicants simply insisted that all amendments that have been made took effect on the date on which the proceeding was commenced which, both parties seem to have accepted, was the date of the filing of the original statement of claim. Veda, however, insisted that r 3A is not applicable unless the applicants have first applied for leave to amend under r 2. I accept Veda's submission in this respect. But it seems that the applicants agree. Rule 3 provides for the circumstances in which a party may, without leave, amend any pleading, and it is not suggested that that rule applied here. It was necessary for the applicants to seek leave to amend under O 13 r 2. If s 14B(2003) had applied, the terms of O 13 r 2 and the exercise of the Court's discretion would have risen for consideration. Veda reserved its position at the time of the filing of the TFASCs in Court and it would have been necessary to examine whether that was the occasion when the supposedly new causes of action were introduced. Vintage does not assist one way or the other. In that case the applicants moved under O 13 r 2 for leave to amend, and regard was had to subrules (3) and (6) of that rule and to rule 3A. With respect, Bennett J correctly observed (at [20]) that the effect of rule 3A(1)(b) was that if the Court did not otherwise order when granting leave to amend under O 13 r 2, the amendment would take effect when the document the subject of the amendment was first filed. Rule 3A is a default provision. When dealing with an application under rule 3 for leave to amend, the Court must bear in mind that unless it orders otherwise, rule 3A will have effect. Since I have decided that s 14B(2003) did not apply, I need say nothing further in relation to O 13 r 2 and 3A of the Federal Court Rules . I propose to say nothing further of Veda's limitation defences because I have decided to dismiss the proceedings on other grounds. A particular reason not to discuss the limitation defences further is that it would be necessary to consider the various times at which the pleaded imputations were introduced (see [329] above), yet I have not embarked on a consideration of the disputed question as to whether all of the pleaded imputations arise (see [277] above). Did Veda commit a breach of any duty of care it owed to the applicants in relation to the accuracy of the credit reports concerning them that caused those credit reports to be inaccurate? 1. Did Veda owe a duty of care to the applicants in relation to the accuracy of the credit reports? I set out at [104] above the facts and circumstances from which, according to Mr Dale's TFASC, the alleged duty of care arose. Unfortunately, the TFASCs do not specify what the alleged duty of care is. The pleadings are that Veda owed to each applicant "a duty of care in publishing the matter" in Schedule A or Schedules A and B, as the case may be, to enquiring credit providers identified in the TFASC. The allegation of breach is that "[n]egligently and in breach of that duty, [Veda] included in the credit reports it published about the applicant inaccurate material that was likely to be damaging to the applicant" (my emphasis). It is not sensible to enquire generally and without qualification whether Veda owed the applicants "a duty of care". It may well be that it owed them a duty to exercise reasonable care to ensure that its computer system was operating correctly, that is to say, correctly recording and giving out the information that was entered into the database by listing credit providers. Again, Veda may have owed the applicants a duty to exercise reasonable care to ensure that data could be extracted only by subscribers. Yet again Veda may have owed a duty to take reasonable care to ensure that the format of the ICCRs, the headings used in them and the classification of data under those headings did not distort the listed defaults. None of these duties of care, however, would serve the applicants who wish to establish that Veda is liable for the accuracy of the data that was made available by the listing credit providers. It is appropriate that I state at once my conclusion: if Veda owed any duty of care to the applicants, it was the antithesis of the duty which the applicants propound. Far from a duty concerned with the accuracy of the particulars of the defaults that the listing credit providers wish to enter, if Veda owed the applicants any duty of care at all it was a duty directed to ensuring that its database accurately reflected and passed on to enquiring credit providers the very particulars of default which the listing credit providers wished to enter in the database. A broad duty to take reasonable steps to ensure that the applicants did not suffer economic loss is untenable. The Privacy Act contemplates that credit reporting agencies will include in an individual's credit information file information of a kind referred to in s 18E(1)(b)(vi) -(x) and (ba) set out at [28] above (including, it will be recalled the opinion of a credit provider that the individual has, in the circumstances specified, committed "a serious credit infringement"). The Privacy Act also contemplates that a credit reporting agency will disclose information contained in an individual's credit information file to credit providers: s 18K of the Privacy Act . The Privacy Act accepts the lawfulness of credit reporting businesses and, if it so happens, the causing of economic harm to the seekers of credit by the carrying on of such a business. (For present purposes I will assume that a denial of credit by any particular enquiring credit provider will necessarily cause the individual economic harm, but I do not in fact accept that this is so). The applicants do not submit that Veda was subject to the broad duty of care that I have described. To adapt the words of Lord Steyn (with whom the rest of the House of Lords agreed) in Williams And Another v Natural Life Health Foods Ltd [1998] 1 WLR 830 at 857, the role of the law of tort is to fill gaps where other remedies are not available. In determining whether the relationship is so close that the duty of care arises, attention is to be paid to the particular connections between the parties. ... There is no simple formula which can mask the necessity for examination of the particular facts. Veda responded to the applicants' submissions based on the passage from OzEcom set out at [379] above. I therefore turn now to the five elements summarised at [380] above. 1. As also indicated earlier, the assumption may not be warranted. The question whether an applicant actually did suffer economic loss as a result of a particular inaccurate credit report would arise at the damages stage of these proceedings. It must be emphasised that foreseeability of economic loss is only the beginning of the enquiry as to whether a duty of care exists: see, for example, Sullivan v Moody [2001] HCA 59 ; (2001) 207 CLR 562 at [42] . The method of posing the foreseeability question is not free of difficulty. I have expressed it as relating to the foreseeability of economic harm arising from the provision of an inaccurate credit report to an enquiring credit provider. However, an alternative is to express it as the foreseeability of economic harm arising from a failure by Veda to take certain steps by way of training or warning or monitoring subscribers with a view to ensuring that they enter only accurate data into the database. I am prepared to assume that it was foreseeable that in the case of some listing credit providers there would be some steps in the nature of training, warning or monitoring that might prevent an inaccurate listing of a default which was likely to cause an individual economic loss. Much would depend on the extent, persistence and intensity of the training, warning and monitoring, and on the particular credit provider's desire to cooperate. I should make it clear that the extent, persistence and intensity of the training, warning and monitoring may need to be very great indeed. It may even require Veda to assume the role of a day to day enforcement authority with a presence in the credit provider's business establishment, in order to exclude the possibility of inaccurate listings. 2. Section 18H of the Privacy Act gave them a right of access to their file and s 18J entitled them to have Veda make appropriate corrections, deletions or additions to ensure that information in their file was accurate, up-to-date, complete and not misleading, or, if Veda did not do so, to have it include a statement in their credit information file. Section 18M of the Privacy Act provides that if a credit provider refuses an application by an individual for credit and the refusal is based wholly or in part on information derived from a credit report relating to the individual, the credit provider must notify the individual of the reason for the refusal and the name and address of the credit reporting agency that gave the credit provider the credit report. As well, the notification must inform the individual of his or her right under the Privacy Act to obtain access to the credit information file. Once the individual receives that notification, the way is opened up for him or her to request an alteration by the credit reporting agency under s 18J. Understandably, the Privacy Act does not require the credit provider to accept the correctness of the individual's allegations: the individual's allegations may be unsupported and the listing may be correct. The Privacy Act affords the individual the opportunity of complaining to the Privacy Commissioner who may make a determination of the kind referred to at [66] above. Apart from the provisions of the Privacy Act to which I have referred, I would have characterised the applicants as vulnerable. However, I think that the Privacy Act removes their vulnerability. The Privacy Act establishes a régime that acknowledges that the role of the credit reporting agency is nothing more than a recorder, and that any dispute is between the individual and the listing credit provider. It is not possible for an individual to be refused credit based wholly or in part on information derived from a credit report without the régime being activated. Vis-a-vis the credit reporting agency, the individual is not in a vulnerable position. 3. Assumption of responsibility coupled with known reliance. Veda did not assume any responsibility to the applicants. Its contractual responsibilities were to its subscribers. Prior to the accessing of the database by an enquiring credit provider, Veda had no knowledge of the applicant, of the listing of the default, or of the applicant's application for credit. It did not acquire such knowledge when the database was accessed by the enquiring credit provider because the access was electronic, no operator employed by Veda was involved, and, as Veda submits, its role was "blind and passive". 4. The terms of any relevant contract bearing on the supposed duty of care. Veda is in a contractual relationship with each subscriber. In this submission Veda does not specify "the kind of checks on the subscribers" to which it refers. Nor does Veda explain how a breach of contract would arise. The "checks" suggested by the applicants to which the submission refers are mandatory steps or fields or bars built into the subscriber's computer program so that until completed by an operator, the system would not allow a default to be listed in Veda's database. The applicants submit that Veda should have insisted on the incorporation of such checks from the very beginning. In that situation no question of a breach of contract would arise because the terms of the contract entered into at the outset by a subscriber would include provision for the checks. For these reasons I do not accept Veda's present submission. 5. The provisions reflect an allocation of responsibilities as between credit providers and credit reporting agencies. The responsibility for the accuracy of content is imposed on the credit providers. The reason for this is obvious: it is they, rather than the credit reporting agencies, who know the true facts and supply the information to be recorded in an individual's credit information file. As noted at [39] ff, s 18E(1) does impose a primary responsibility on a credit reporting agency as to the kinds of personal information allowed to be included in credit information files, but responsibility for the accuracy of the information furnished in relation to any particular individual is placed on the credit provider. The credit reporting agency must, however, make a correction once the credit provider has informed it that one is called for. The provisions of the Privacy Act that illustrate the allocation of obligations to which I have referred are illustrated by ss 18E(2) , (8); 18F (3), (4), (5); 18J and 18M (1). Perhaps more important than the individual provisions mentioned is the assumption that underlies Part IIIA which is that the credit reporting agency is merely the recipient and distributor of information provided to it by credit providers. The Code is, if anything, more explicit in relation to the allocation of responsibilities. As noted at [15], Part 1 of the Code deals with "Credit reporting agencies". Paragraph 1.2 provides that in order to ensure that personal information included in credit information files and credit reports is "accurate, up-to-date, complete and not misleading" (words taken from s 18J(1) of the Privacy Act ), a credit reporting agency must issue to credit providers or other persons supplying it with personal information detailed instructions on the types of personal information permitted to be given to a credit reporting agency. There is no suggestion that the credit reporting agency must go further by intruding into the credit provider's business with a view to ensuring the accuracy of the information supplied. Paragraph 1.3 of the Code is different. It provides that where " it appears to the credit reporting agency that the information being supplied by the credit provider may not be permitted to be included in a credit information file" (my emphasis), the credit reporting agency must refuse to accept the information and notify the credit provider, in writing, that its inclusion may be in breach of s 18E of the Privacy Act . The credit reporting agency's role is reactive. The succeeding paragraphs, 1.4 and 1.5, reinforce this reactive role. They operate where a credit reporting agency becomes aware of certain problems touching information that has been supplied to it by a credit provider . Paragraph 1.4, in particular, deals with a situation where a credit reporting agency becomes aware that such information relating to an overdue payment or a serious credit infringement may be inaccurate. There is no suggestion that the credit reporting agency bears any kind of responsibility for the accuracy of the information at the outset. Part 2 of the Code imposes on credit providers more onerous and direct obligations relating to the accuracy of information recorded in credit information files. I turn now to the common law context. Veda submits that the general law background to Part IIIA of the Privacy Act also tells against the imposition of a duty of care of the kind that the applicants must establish. Veda refers to the law relating to defamation and to statements by the High Court in Sullivan v Moody and Tame v New South Wales [2002] HCA 35 ; (2002) 211 CLR 317 , generally to the effect that a duty of care will not be recognised where its recognition would render the common law incoherent. In particular, Veda relies on the defence of qualified privilege claims in defamation --- a defence that is made available in the public interest. The defence is made available by the common law when a credit reporting agency provides an inaccurate credit report to a credit provider. It is argued that it would be destructive of that defence if the same common law were to impose a duty of care on the credit reporting agency as the foundation for a liability in negligence. Sullivan v Moody was concerned with notifications by various categories of professional persons to the authorities of suspicions on reasonable grounds that certain offences had been committed against children. Certain medical practitioners and social workers employed by the South Australian Department of Community Welfare issued reports to the authorities that certain children had been sexually abused. The fathers of the children alleged that as a result of negligent examination, diagnosis and reporting by those professional persons, they, the fathers, had suffered shock, distress, psychiatric injury and resultant personal and financial loss. The High Court held that it would be inconsistent with the proper and effective discharge of the professional or statutory responsibilities of those involved in investigating and reporting upon alleged sexual abuse, for them to be subjected to a legal duty to take care to protect persons who were suspected of being the sources of the harm. Their Honours emphasised (at [42]) that foreseeability of harm to the fathers was not sufficient to ground a duty of care. Nonetheless, that does not mean that novel cases are to be decided by reference only to some intuitive sense of what is "fair" or "unfair". There are cases, and this is one, where to find a duty of care would so cut across other legal principles as to impair their proper application and thus lead to the conclusion that there is no duty of care of the kind asserted. The core of the complaint by each appellant is that he was injured as a result of what he, and others, were told. At once, then, it can be seen that there is an intersection with the law of defamation which resolves the competing interests of the parties through well-developed principles about privilege and the like. To apply the law of negligence in the present case would resolve that competition on an altogether different basis [cf Spring v Guardian Assurance Plc [1994] UKHL 7 ; [1995] 2 AC 296]. It would allow recovery of damages for publishing statements to the discredit of a person where the law of defamation would not. Considering whether the persons who reported their suspicions about each appellant owed that appellant a duty of care must begin from the recognition that those who made the report had other responsibilities. A duty of the kind alleged should not be found if that duty would not be compatible with other duties which the respondents owed. There is no duty imposed by the Privacy Act on Veda to engage in its credit reporting business. Notwithstanding this difference, in my view Sullivan v Moody gives guidance in the circumstances of the present cases. The passage from Sullivan v Moody quoted above is not expressed to depend on the imposition of the reporting duty by statute, or on the "professional" responsibilities of the medical practitioner and social workers. Rather, the passage addresses the relationship between the imposition of a duty of care and the existence of the defence of qualified privilege. Once I have held that even an inaccurate defamatory credit report issued by Veda does not expose it to liability for defamation by reason of the defence of qualified privilege, it would introduce incoherence in the common law to impose a duty of care. Veda would, contrary to the convenience of the community and welfare of society that give rise to the defence, be inhibited in passing on the creditworthiness information in its database to those who have a legitimate interest in receiving it. Tame v New South Wales is the second case relied on by Veda. Ms Tame was the driver of a car that was involved in a traffic accident. She had a nil blood alcohol level, but when completing a report on the accident, a police officer mistakenly recorded that her blood alcohol level was 0.14. While the error was subsequently noticed and corrected, a copy of the uncorrected report was provided to the insurer which was handling Ms Tame's claim against the nominal defendant in respect of the accident. The insurer nevertheless admitted liability. Some time after the accident Ms Tame's solicitor told her about the entry concerning her blood alcohol level in the police report that had been given to the insurer. The police confirmed that the entry was wrong and they apologised. The insurer confirmed that liability for the accident was admitted. Nonetheless, Ms Tame became obsessed with the mistake that the police had made and ultimately developed a psychiatric disorder. She sued the State, claiming that it was vicariously liable for the negligence of the police officer. The High Court held that the police officer had not owed a duty to take reasonable care to avoid psychiatric injury to Ms Tame. At [28], Gleeson CJ stated (citations omitted): ... as in Sullivan v Moody , this is a case where the appellant claims to have been injured in consequence of what others were told about her. There is the same intersection with the law of defamation, and the same need to preserve legal coherence ... In the events that occurred, Mrs Tame's reputation was not harmed. But suppose it had been. Then the law would have engaged in an exercise of balancing the rights and responsibilities of Mrs Tame and Acting Sergeant Beardsley by reference to considerations many of which would be rendered irrelevant by the application of the law of negligence. Thus, in this case as in Sullivan v Moody , "there is an intersection with the law of defamation which resolves the competing interests of the parties through well-developed principles about privilege and the like" ... And as in Sullivan v Moody , "[t]o apply the law of negligence in the present case would resolve that competition on an altogether different basis". At the very least, the law of negligence with respect to psychiatric injury ought not be extended in a disconformity with other areas of the law. There is no doubt that the publication of the P4 report to the insurer defamed her. She could have sued for damages for defamation. If successful, she could have recovered all the damages in that action that she sought in the present action including damages for her psychiatric illness. In determining whether Acting Sergeant Beardsley owed a duty of care to Mrs Tame, it is proper to take into account --- quite apart from the issue of reasonable foreseeability --- that the law of defamation appears a more appropriate medium for dealing with the facts of her case than the law of negligently inflicted nervous shock. Her action arises out of a communication to a third party, her concern is with her reputation and the law of defamation has various defences that reconcile the competing interests of the parties more appropriately than the law of negligence. This Court has already taken the view that, independently of policy issues relevant to the interests of the parties and persons like them, the need for the law to be coherent is a relevant factor in determining whether a duty exists. In Sullivan v Moody , ... the Court said that coherence in the law was a relevant factor in determining whether a duty of care existed. In Sullivan , the Court held that officers of the Department of Community Welfare owed no duty of care to a person affected by a communication made as the result of investigating, under a statutory power, a sexual assault allegation. The facts of this case might conceivably have given rise to actions in negligent misstatement (if that action is not confined to claims for economic loss) and defamation. That these causes of action may also be available on the facts of the case, and would then be governed by special rules affected by policy considerations, is relevant to the question whether the appellant should recover damages for "nervous shock" on the basis of those facts. The necessary relationship in that connexion must needs be more specific. Like Sullivan v Moody , Tame v New South Wales is unlike the present cases in that it was concerned with duties imposed by statute on persons who perform certain functions in the interests of the public or of a cross-section of it (for a recent illustration from the United Kingdom see Jain v Trent Strategic Health Authority [2009] 2 WLR 248). However, I think that the approach taken in Tame v New South Wales is applicable. The defence of qualified privilege is made available because it is seen to be required in the public interest. It would introduce an incoherence in the law to impose a duty of care on Veda directed to the accuracy of its credit reports to enquiring credit providers. 2. Did Veda commit a breach of any duty of care it owed to the applicants in relation to the accuracy of the credit reports concerning them that caused those credit reports to be inaccurate? Since I have held that Veda did not owe the applicants a duty of care in relation to the correctness of the credit reports concerning them, this question does not arise. However, against the possibility that I may be wrong, I will address certain issues that the present question raises. (b) Were the respective credit reports inaccurate? (c) If so, was that inaccuracy in each of the nine cases caused by Veda's failure to do that which the duty supposedly incumbent on it required? I will consider only the first two of these questions. (a) What was Veda required to do in order to discharge its supposed duty of care? Accepting that Veda was not in a position to know whether the data entered in the database by its subscribers was accurate, the applicants submit that Veda should have taken various steps directed to ensuring that its subscribers themselves entered only accurate information. In particular, the applicants submit that Veda should have insisted on a "checklist" involving several mandatory steps or mandatory fields to be attended to by the computer operator in the listing credit provider's office. The applicants do not submit that Veda, rather than the listing credit providers, should have listed defaults. Veda would still have to depend on subscribers for the correctness of the default data supplied. In my view Veda's supposed duty of care did not require it to introduce and insist upon the checklist procedure suggested by the applicants. The applicants relied on evidence given by their expert witness, Kosta Patsan that Veda could have introduced a "checklist". In substance, Mr Patsan's suggestion was that the operator in the credit provider's office would be required to respond to a number of mandatory queries which would bring home to that person the seriousness of listing a default. For example, the operator would be required to enter the date of the initial default and the date of a warning letter, and to respond to the question whether the individual had entered into an arrangement with the credit provider. Mr Patsan said that the checklist would serve three purposes which he identified in his report as follows: Ensures that the subscriber user need[ed] to enter information (& thus ascertained the information), before entering it into ... the Veda database The dates entered would be cross checked automatically against the date of entry, to ensure that the correct number of days had elapsed before a default could be listed Provide Veda with an audit record of information from the subscriber, indicating to Veda from the subscriber that the dates were correct and thus the requirements for listing were met. On the face of his report, Mr Patsan's suggestion does not deal with the more than eighty-five percent of data entries that are totally automated, that is to say, do not involve an operator at all. When this was put to him in cross-examination, he said that when he wrote his report he had had computer-to-computer listings as well as manual listings in mind. It became clear, however, that Mr Patsan had not considered the fundamental and costly restructuring of both the business and computer systems that would be required if a manual element were to be injected into the fully automated default listing procedures used by banks and other large organisations at present. The applicants' case, however, is that Veda should have insisted on a checklist procedure from the outset. It misconceives the applicants' present submission to characterise it as a submission that Veda should have insisted on the injection of a checklist procedure into a fully automated system that was already up and running. Rather, the submission is that Veda should not have countenanced a fully automated system without a manually operated checklist in the first place. In one way or another, the applicants' case in the present respect was that Veda had a duty to ensure that its subscribing credit providers' business systems were such as to ensure that the listing credit providers complied with the Privacy Act by making only accurate listings of defaults. In my view Veda was not subject to such a duty. The Privacy Act demonstrates the dichotomy to which I referred earlier. No doubt credit providers might fail to comply with the Privacy Act or with the Code, but in the light of that dichotomy I do not think the law imposes a duty on Veda to take steps with a view to reducing the number of inaccurate listings, any more than that it imposed a duty on subscribers to take steps with a view to ensuring that Veda complied with requirements that the Privacy Act or the Code imposed on it. This absence of the suggested duty to insist that subscribing credit providers adopt a checklist procedure derives from the scheme of the Privacy Act , but is also supported by the following consideration of the facts as to the inutility of the suggested procedure. Mr Janssens described in his affidavit the manual and automated systems of entering defaults into Veda's database. He said that in the period from 1 July 2000 to 30 June 2007 more than eighty-five percent of defaults were reported via automated systems, the remainder being entered manually by an operator via the web-based system. Mr Janssens described the automated systems for listing of defaults as a System-to-System default loading process which is used by, for example, large banks. the account is more than 60 days in arrears, is for more than $100 and the relevant notices have been sent) are automatically extracted and the relevant data required by the Veda's system from the credit provider is transmitted to Veda's system... It involves no human interaction or involvement. He said that it would be impossible to make the change while maintaining the automated system and that it would require a major restructuring with the co-operation of the credit providers. While Mr Janssens gave detailed evidence of the problems associated with making the change, I do not think that this answers the applicants' suggestion. Their argument is that the checklist should have formed part of the credit providers' systems from the outset . Consideration of any "change" is thus otiose. However, evidence given by Mr Allison does answer Mr Patsan's suggestion. Mr Allison said that automated systems for the listing of defaults already contain checks of the general kind that Mr Patsan advocated. He said that the banks, for example, build their computer systems so that the default data must satisfy all of the required conditions in order to be electronically transmitted, System-to-System, to the Veda database. He said that in these circumstances, and having regard to the great volume of data flowing, it would achieve nothing to require an operator to tick a box to the effect that the conditions had been satisfied. It picks up those accounts that are in arrears for more than 60 days and for which a notice had been sent out. So there is actually not a human being involved in the process of reporting the default. But any problem exists at an earlier stage in the credit provider's system. A requirement that the operator tick "boxes" can only be as reliable as the previous observance of correct procedures by someone else. Having regard to human error, laziness or perversity at the underlying (pre-operator) level, I am not persuaded that an operator checklist is a reasonable precaution or deterrent on which Veda should have insisted. I am certainly not persuaded on the evidence that a checklist for an operator to work through would have led to the non-occurrence of any of the listings of defaults in the cases of the applicants. The applicants have not suggested any reasonable, practicable and effective steps that Veda might have taken to the end of eliminating or reducing inaccuracy in default listings. This also confirms the absence of the relevant duty of care incumbent on Veda. (b) Were the respective credit reports inaccurate? The applicants did not call any witnesses from any of the listing credit providers with a view to their giving evidence establishing the incorrectness of their listing of a default. Nor did Veda call any such witness with a view to establishing the correctness of a listing. The applicants bear the onus of proving that a listing was inaccurate as alleged in their TFASCs. They rely on their own evidence and on certain documents that were produced by credit providers in response to subpoenas issued by them. In order to determine whether listed defaults were inaccurate, it is necessary to know the meaning of the expressions by which the defaults were described. The defaults were listed by subscribers and were to be read by subscribers. The primary source of their meanings was the Guide. In addition, I think that inquiring credit providers would understand the listing of the defaults to imply that any applicable provisions of the Privacy Act has been complied with. Subscribing credit providers were part of the credit industry and can be taken to have been familiar with s 18E , the Code and the Guide. They listed defaults and read those that had been listed against that shared background. Of relevance to the nine cases are three classes of default: "Payment Default" (Adams, Fisher, Marker, Shields, Tyndall); "Clearout (Watched)" (Dale, Strange, Taylor) and "Repossession Loss (after sale)" (McGary). I set out the Guide's definitions of these terms at [87] ff above. I do not think that any additional significance is drawn to either of the "clearout" classes of default from para (c) of the Privacy Act 's definition of "serious credit infringement" (see [31] above). Where the person was shown as a guarantor (McGary, Shields), para (ba) of s 18E(1) (set out at [28] above) was an additional source of meaning. That is to say, where the listing showed that the individual's alleged liability was that of a guarantor, it would be understood that para (ba)'s conditions of the giving of notice to the guarantor of the borrower's default, the lapse of 60 days after the giving of that notice, and the taking of steps by the credit provider for recovery of the overdue payment from the guarantor, had been satisfied. I will not address questions of inaccuracy as to the amount entered, except in those cases where it occupied attention in submissions. The listing occurred on 30 June 2004. The amount shown was $12,733.00. There was a "Status" of "Paid" as at 1 October 2004. The credit provider that listed Ms Adams's default was "TRENDWEST SOUTH PACIFIC FIN", which is Trendwest South Pacific Finance Pty Ltd (Trendwest). Ms Adams said that her dealings with Trendwest arose out of a time share arrangement to which she (or she and her partner, Allan Warren) subscribed. She said that in 2002 she attended an evening seminar in Brisbane when the time share arrangement was explained to her and she "eventually" signed up. She said she recalled that there was a cooling off period of some ten days. She agreed that she and Mr Warren entered into the arrangement as a "considered" decision. Ms Adams said that her payments were approximately $200 per month. (It appears that they were in fact $236.23 per month. ) Ms Adams said that the arrangement did not live up to the representations that had been made at the seminar, in that she was continually told that accommodation that she sought was not available. She said that she met with a representative of Trendwest some time in early 2004 at the Trendwest office in Brisbane and told him that she was dissatisfied and had decided to cease payment. In cross-examination Ms Adams conceded that her understanding at that time was that she had an obligation to continue making the monthly payments. She did not seek legal advice in relation to her decision and did not attempt, through legal proceedings, to have her obligations terminated The man at Trendwest told her something about selling her shares as the way out for her and she told him that she would need time to be able to do that. Ultimately, Ms Adams forfeited her shares. In cross-examination Ms Adams accepted that she had signed a Contract and Mortgage with Trendwest on 17 April 2003. She said that she may have been wrong as in the evidence she had given as to the date of the seminar. There is in evidence a letter dated 9 June 2004 from Trendwest to Ms Adams advising her that her account was $1,353.08 in arrears and required immediate attention. The letter advised that unless the default was rectified within seven (7) days from the date of the letter, Trendwest would exercise its rights under the contract and would like list the default with Veda and that this would have an adverse effect on any future application Ms Adams might make throughout Australia and New Zealand, including any application she might make "for telecommunications". Ms Adams was fairly sure she received that letter and conceded that she appreciated its meaning. She said that she felt she was liable to make the payments if she received the promised services, but she was not prepared to pay if this was not the case, as she had explained to Trendwest. There is in evidence a further letter dated 17 June 2004 from Trendwest to Ms Adams and Mr Warren asserting that the balance owed by them was "168 days delinquent with a past due contract balance of $1,477.38". The letter demanded payment of that amount and threatened that if it was not received or if the addressees did not contact Trendwest and make satisfactory payment arrangements by 24 June 2004, Trendwest would have little option but to record a payment default with Veda. The period of 168 days, or some five and a half months, is consistent with Ms Adams having ceased her payments in January 2004. Ms Adams said she recalled telephoning Trendwest in June 2004, but could not recall the exact date, to say that she would not pay. She said that there were a few letters she received from Trendwest, and that she probably contacted the Trendwest office in response to Trendwest's the letter of 17 June 2004. There is in evidence a further letter dated 15 July 2004 from Trendwest to Ms Adams and Mr Warren. Ms Adams said she remembered receiving it. This letter referred to a "Contract and Mortgage dated April 17, 2003" and asserted that she and Mr Warren were in default, having failed to pay the regularly monthly instalments of $236.23. The letter pointed out that interest at the rate of 14.9 percent per annum calculated on a daily basis was accruing on the balance, and that the balance of principal plus interest as at 15 July 2004 was $12,804.77, in addition to which there was a Late payment and Demand Notice charge of $20. The letter advised that Ms Adams and Mr Warren could remedy the default by paying Trendwest $12,824.77. The letter advised that if payment of that amount was not made within 30 days of the date of the letter, Trendwest would commence enforcement proceedings, including forfeiture of "the mortgaged goods". These were said to be the "Holiday Credits" that Ms Adams and Mr Warren had purchased in "WorldMark South Pacific Club". Finally, the letter advised that if the recipients were unsure about its meaning, they should seek independent legal advice. Ms Adams said she may have had a couple of telephone conversations with Trendwest and always asked for the same person whose name she had forgotten. She said that she told him that she was not going to pay for something that Trendwest had promised she would get but did not receive. In fact she said that she did have one lot of accommodation in 2002 at "Golden Beach, which is local" and a second one, the date of which she had forgotten, also at "the same place, Golden Beach, local". She said that she was "primarily asking for Bali because that is where [she] was doing business" but Trendwest did not meet her request. Ms Adams submits that the payment default of $12,733.00 that was listed on 30 June 2004 represented either a sum that was not owing or a sum for which no demand had been made. As discussed above, the only demands which had been made were for the sums of $1,353.08 and $1,477.38 in the letters of 9 and 17 June 2004 respectively. Ms Adams also submits that her evidence demonstrates that it was wrong to enter "Paid" on her credit report as at 1 October 2004. She additionally submits that the making of this entry was an acknowledgment by Trendwest that nothing was owing; not that some amount that had been owing had been paid. Ms Adams further submits that if there was to be a listing at all, it should have been that of "Default Challenge" because there was a dispute about the sum owing. Ms Adams contends that if the checklist procedure recommended by Mr Patsan had been adopted (see [423] ff above), "Default Challenge" would have been the listing rather than "Payment Default". More generally, Ms Adams submits that the checklist would have focussed attention on s 18E(1)(b)(vi)(B) of the Privacy Act (set out at [28] above) and on the fact (as submitted) that Trendwest had not "taken steps to recover the whole or any part of the amount of credit (including any amounts of interest) outstanding". In Ms Adams's submission, such steps would have included the sale of her holiday credits. Her submission that, within the meaning of this section, she was not overdue in paying a sum of $12,733, seems to be derived from this proposition. Veda submits that the inference is open that the listing was updated to "Paid" following Trendwest's selling "Holiday Credits" forfeited in accordance with Trendwest's letter of 15 July 2004. Contrary to Ms Adams's submission, therefore, Veda submits that "Paid" does not signify an acceptance by Trendwest that nothing had been owing. I accept that Ms Adams's was attempting to give a true account to the best of her recollection, although her recollection of dates and sequences had faded somewhat. The question whether the listing on 30 June 2004 was inaccurate raises questions which can only be resolved finally in litigation between Ms Adams and Trendwest. In Ms Adams's case, as in the others, the evidence gives only a partial picture. It is clear that Trendwest's letters of 9 and 17 June 2004 referred to "arrears" and a "past due contract balance" of $1,353.08 and $1,477.38 respectively. The letter of 15 July 2004 referred to "monthly instalments" of $236.23 and there is no reason to question this amount. The non-payment of $236.23 for five to six months could well give the amounts of $1,353.08 and $1,477.38, particularly if interest and/or other charges are included. The Contract and Mortgage dated April 17, 2003 referred to in Trendwest's letter of 15 July 2004 are not in evidence. For all I know, the contractual arrangement may have been that upon default, the balance of principal and interest fell due, as implied in Trendwest's letter of 15 July 2004. Ms Adams acknowledged that she ceased paying Trendwest in about January 2004. It may be that under the contract between her and her partner and Trendwest, this default led to $12,733.00 of principal and interest being owed by 30 June 2004. Ms Adams had evinced an intention no longer to be bound by her contract with Trendwest. The question is whether, because of Trendwest's failure to make the accommodation in Bali that she sought available to her when she wanted it, there was a breach or wrongful repudiation by Trendwest that entitled Ms Adams to put an end to her contractual obligations to Trendwest. On the state of the evidence, I simply do not know. The terms of the contract between Ms Adams and Trendwest, including the nature of Trendwest's obligations, are not proved. In relation to the meaning of "Payment Default" discussed at [ 88 ]---[ 89 ] above, Ms Adams's account was apparently 60 days or more overdue and the letters of 9 and 17 June 2004 appear to have satisfied the Guide's requirement that notice be sent. At least, they are not shown not to have done so. Trendwest was apparently entitled to list a "Payment Default" as defined in the Guide. In relation to the question whether s 18E(1)(b)(vi)(B) of the Privacy Act , discussed above at [28] was satisfied, in my view the sending of the letters dated 9 and 16 June 2004 was the taking of "steps to recover" the whole or any part of the amount of credit... outstanding". I see no reason to construe "steps" as referring, for example, only to the institution of some legal or other official recovery proceeding. As subscribers viewing Ms Adams's credit information file would have known, the listing of the amount of $12,733.00 did not imply that that was the amount of the "overdue payment" or "the amount outstanding" of which the debtor had been given written notice. In the Guide, the amount to be entered is referred to as "the amount owed in whole dollars only". The Guide states that the amount may be changed on an updating "if the debt increases from e.g. $1,000-$2,000, and the change can be verified". The status of an account may be updated, for instance to show that a default has been paid. The word "Paid" signifies that a "defaulted account" had been paid in full and was now closed. Payment might be made by the creditor's crediting the amount of the proceeds of sale of a security. I am not satisfied, in the absence from the evidence of the documents establishing the obligations of Trendwest, that it had breached or repudiated its contractual obligations so that Ms Adams was entitled to put an end to hers. It is not shown that the "Payment Default" listing was inaccurate and, indeed, on the evidence before the Court it was probably correct. The amount shown was $1174. According to Schedule B to Mr Dale's TFASC, on or by 20 June 2003 that amount had been "Paid". This was a commercial default listing. Since the listed default was a commercial default, s 18E(1) of the Privacy Act did not apply. Nor did the Code. The concept of a "serious credit infringement" was similarly irrelevant. The meaning of "Clearout (Watched)" is to be defined from the Guide alone. This class of Commercial Credit Default Report Type was a "confirmed missing debtor eg skip or clearout" whom there had been reasonable efforts made to contact in person or in writing. It is important, then, to bear in mind that the question is whether Mr Dale has proved that as at 20 March 2000 the criteria contained in this definition from the Guide were not satisfied. In his affidavit, Mr Dale explained that the Bartercard system involved "members" who supplied goods or services or both that were paid for by other members in "Bartercard dollars"; in substance in goods or services or both provided by the other members. He stated that Bartercard took a ten percent fee on all transactions and that it charged a fee for the maintenance of the account, even if it was not used. In his affidavit Mr Dale said that prior to March 2000 and up until 23 October 2003, he "operated a Bartercard on a regular basis", incurred interest and fees even while he was "defaulted", and was never advised of the listing. In a letter dated 20 June 2003 from Bartercard to Mr Dale, Bartercard confirmed that Mr Dale's account was "closed in full and final satisfaction on 20/06/2003 with no further payments required". The letter advised that Mr Dale had "held an active Bartercard account" between August 2000 and December 2001. It should be noted, however, that this was a reference to a new and later account that Mr Dale had established with Bartercard (see [475]---[480] below). In a letter dated 27 October 2003 to DR Capital, Mr Dale's authorised agent, Bartercard explained why it was unable to comply with DR Capital's request made on behalf of Mr Dale that the default be "removed". Bartercard confirmed, however, that the default listing had been updated to "Paid" as at 20 June 2003 when Mr Dale had paid the amount owing. In oral testimony Mr Dale said that he had become a member of the Bartercard "community" when he was operating a Spit Roast catering business in Brisbane and that later he added his "surroundpix.com.au" business to the Bartercard directory. He explained that through the Bartercard directory other members were enabled to use his services as a result of which he would earn Bartercard "credit points", which he, in turn, would be entitled to use in acquiring goods or services from other members. In 1999 Mr Dale progressively relocated from Brisbane to Sydney over a period of some six months. He moved out of the Spit Roast catering business and relocated the Surroundpix business to Sydney. Mr Dale said that he told his Bartercard account manager in Brisbane that he needed "a bit of a breather" from enquiries from Bartercard about the development of his business, while he focused more on the Surroundpix business which would be running from Sydney. His evidence was that he told his Bartercard account manager "I'm going to Sydney... just give me two months and we'll have another chat when I'm all geared up again". Mr Dale said that over the six month period he was travelling between Sydney and Brisbane. He said he eventually sold the Spit Road catering business to his "partner". He said that the name of one of the Bartercard staff to whom he spoke (at the end of 1999) was "Mena". Mr Dale said that Bartercard usually communicated with him by phone and sometimes by email, and that they would send promotional materials by fax. He said that when he moved to Sydney, he continued to receive faxes from Bartercard. He said that "eventually" he re-established contact with Bartercard, which, he said, "seemed a little surprised about" his having relocated to Sydney, "so [he] said 'okay, well, you know, this is where I am and this is what we're doing'". Mr Dale said that it was at this point that he gave them his address in Sydney This evidence, including his use of the word "eventually", suggests an absence of contact apart from the receipt of faxes. Mr Dale said while he was in Sydney he continued to receive from Bartercard statements showing his credit point entitlement and still had his card, but that Bartercard was not procuring any business for him, and he added that he "went to a few people but nothing ever eventuated from that". He said that the statements gave notification of accumulating fees in dollars, but that he did not receive a demand for payment. Mr Dale said that as at the date of the listing on 20 March 2000, he was still "operating with" Bartercard and receiving telephone calls from its representatives, but none of them told him of the "Clearout (Watched)" listing. There are in evidence numerous "tax invoice/statements" issued monthly by Bartercard to Mr Dale. They are dated from 31 March 2000 to 31 July 2003, and are all addressed to Mr Dale at 64 Parramatta Road Glebe NSW 2037. I infer that as at 31 March 2000, Bartercard had Mr Dale's Glebe address. The Bartercard letter dated 20 June 2003 to Mr Dale referred to earlier, however, was addressed to him at 4/48 Washington Street Bexley NSW 2207. There is in evidence a chain of correspondence between Mr Dale and Bartercard, all of which post-dates the listing on 20 March 2000. The first is a fax dated 29 May 2000 from Mr Dale on a letterhead of "Shane Dale --- Interactive Design" at 64 Parramatta Road, Glebe, to John Johnson of Bartercard, asking Bartercard to "reactivate" his Bartercard account and undertaking to send "the outstanding amount of $151.11" to Bartercard's Parramatta office "upon confirmation of this fax". He said, however, that his account would "need to be settled with incoming funds from John Serafino, approx $1500 barter" which should "bring [his] account in order". His letter also said that he would like to meet with the addressee to discuss the current business with which (Mr Dale) was involved, which was "Australia's largest internet real estate advertising agency --- surroundpix" of which he was the managing director. The word "reactivate" suggests that Mr Dale did not regard his Bartercard account as being active as at 29 May 2000. We are delighted to have you back as a member and look forward to working with you to create new opportunities for your business. This new account marked a new point of departure in Mr Dale's dealings with Bartercard. The terms of Bartercard's letter suggest that prior to this, Bartercard had ceased to regard Mr Dale as a member. On 9 January 2001 Bartercard wrote to Mr Dale at 64 Parramatta Road Glebe requesting payment of an "amount due" of $98.19. On 31 January 2001 Bartercard wrote to him advising him that it intended to cancel his membership, effective seven days from the date of the letter, and said that this step might result "in a default lodgement with the Credit Reference Association of Australia (CRAA)". It will be recalled that Mr Dale had already been listed "Clearout (Watched)" by Bartercard ten months earlier on 20 March 2000, but in respect of his earlier account. It is important not to overlook the fact that the listing on 20 March 2000 was in respect of that earlier account. On 3 December 2001 Bartercard wrote a letter of demand for payment of certain cash transaction fees, and directing Mr Dale to trade out of his "Trade Debt" on pain of its becoming payable in cash. On 6 March 2002 Bartercard wrote to him referring to the letter of 3 December 2001, demanding payment of the balance outstanding of $1,399.08, and stating that his "credit rating [would] be adversely affected by notification to the CRAA" if he did not pay within seven days. The critical date is 20 March 2000, and the critical question is whether Mr Dale has proved that as that date, it was inaccurate to record in his credit information file that he was a confirmed missing debtor of Bartercard in the sense defined by the Guide. Veda points out that contrary to Mr Dale's submissions, Mr Dale did not say that he informed Bartercard of his new address. The highest that Mr Dale's evidence goes is his telephone conversation with his account manager, referred to above at [474] in which he requested a "breather" for two months. The statements of account in evidence date from 31 March 2000. Veda submits that there is no evidence that Bartercard was aware of Mr Dale's Sydney address prior to the listing on 20 March 2000. As noted above at [475], Mr Dale himself said that he eventually renewed his association with Bartercard and that they appeared surprised about his location in Sydney. Veda submits that this reaction was not one to be expected if Bartercard had previously been given Mr Dale's new address in Sydney, and that it can be inferred that Veda was not aware of his Sydney address prior to the contact. Mr Dale said that he was doing business at 64 Parramatta Road Glebe "probably from December, 99 and onwards". It seems that Mr Dale left his Brisbane address in December 1999 without giving Bartercard his new address at 64 Parramatta Road Glebe, although he did tell Bartercard in a general way that he was moving to Sydney and Bartercard had the Glebe address by 30 March 2000. There is no evidence, as distinct from assertion after the fact, of what attempts, if any, Bartercard made to contact Mr Dale between December 1999 and 20 March 2000. Mr Dale gave evidence that he maintained at least one telephone number during the move, and remained in telephone and fax contact with Bartercard . In his affidavit he said: "My phone numbers, email and fax numbers remained the same". In cross-examination, however, he conceded that some did not remain the same, and it seems that ultimately his evidence was that only one remained the same, although he asserted that Bartercard could have contacted him. In response to a letter from DR Capital, Bartercard asserted that it had sent proper notices of default to Mr Dale but there had been no response from him, and that Bartercard had attempted to contact him by telephone but that the telephone number was disconnected and mail sent to him had been returned. I do not have confidence in Mr Dale's evidence that he was contactable by Bartercard from December 1999 when he moved to Sydney to 20 March 2000 when the listing was made. Mr Dale submits that "there can be no basis" for a submission by Veda that he owed $1174. I do not understand why not. Mr Dale has not proved that he did not owe that amount. In the state of the evidence, and in particular in the absence of any testimony from an officer of Bartercard or contemporaneous documents from Bartercard in the period from December 1999 to 20 March 2000, I am not satisfied that Bartercard did not make reasonable but unsuccessful efforts to contact Mr Dale in person or in writing in that period and did not confirm that he was a missing debtor. Accordingly, I am not persuaded think that it was inaccurate for Bartercard to have listed Mr Dale as "Clearout (Watched)" on 20 March 2000. Veda notes that it is not entirely clear whether Mr Fisher's claim is pressed. I understand that it is not pressed, but in any event I find that the "Payment Default" listed by ST GEORGE BK AUTOMOTIVE FIN on 15 September 2001 is not shown to have been inaccurate. The amount shown was $186.00. The listing showed a "Latest Date" of 29 July 2004 and a "Latest Amount" of $166. Schedule B to Mr Marker's TFASC showed a status of "Paid" on or by 30 September 2004. The default was a Consumer Default. Mr Marker submits that on his evidence, which he submits was not seriously challenged, the listed debt was not owed to AAPT, or at the very least that there was a dispute over it. Mr Marker submits that in these circumstances s 18E(1)(b)(vi) of the Privacy Act prohibited the inclusion of that personal information in his credit report. Section 18E is concerned with the inclusion of personal information in an individual's credit information file, not in a credit report relating to the individual. In the present circumstances, however, the credit reports obtained by subscribers will inevitably contain the personal information that is included in the credit information file. Therefore I put the distinction to one side for present purposes. Veda submits in relation to this claim that there is no evidence that Mr Marker was not listed after 60 days of being overdue. This point also seems to go to the requirements of s 18E(1)(b)(vi). Section 18E(1)(b) does not prohibit a credit reporting agency from including personal information that proves to be inaccurate in a credit information file relating to an individual. As I said at [34] ff above, I construe s 18E(1)(b) (and (ba)) as relating to kinds or types or classes of information. Moreover, para (b) (and para (ba)) identify the kinds of personal information that may be included in a person's credit information file. In any event, the correct starting point for dealing with the issue of inaccuracy is to ask what meaning the listing by AAPT would have conveyed to its readership of enquiring credit providers; and the second question is whether assessed according to that meaning, the listing was inaccurate. In relation to the first question, the source of the meaning of "Payment Default" was the Guide. The relevance of s 18E(1)(b)(vi) is triggered when one asks whether the very fact of the listing would have signified to other subscribers that the "Payment Default" also satisfied the requirements of that provision. I think that subscribers would understand that it did. In this way, the statutory provision contributes to the meaning of the listing. In relation to the second question, in his affidavit Mr Marker said that it was in around June 2004 during one of his unsuccessful applications for finance that he was told that he had a debt with AAPT. He said that he telephoned AAPT about the debt and subsequently paid it. It was paid on 30 September 2004. In oral evidence Mr Marker said that in 2002 when he was living with his partner in Tamworth, he was approached by representatives of AAPT who persuaded him to switch his telephone service from Telstra to AAPT. He said that the representatives told him that they would arrange for his disconnection from Telstra's service, and he entered into a contract with AAPT. However, a month later he received a bill from AAPT which was identical to a bill that he received at about the same time from Telstra. Both bills recorded the same calls. This gave rise to a dispute between Mr Marker and AAPT. He said he telephoned AAPT's head office and complained and said that he would not pay. He told AAPT that he no longer wished to be connected through AAPT because it had done the wrong thing by him. Within the next month or two he received a letter of final demand from AAPT so he telephoned again complaining about the double billing. He said that he paid Telstra its bill, and that he received no further bills from AAPT, but remained connected with Telstra from which he continued to receive bills. Mr Marker said that the letter of final demand called for payment of $186. He said that he paid the amount claimed, not because he believed he owed it, but simply to get rid of the default noted on his credit information file. Mr Marker said that he could not recall with any precision when he paid AAPT, although earlier in his examination in chief he had stated that he made the payment about nine months before the debt was listed as "paid" on 30 September 2004. This evidence is at variance with Mr Marker's affidavit evidence that he became aware of the debt around June 2004. The "9 months" evidence suggests that he would have needed to pay it by January 2004. The letter (dated 26 May 2005) from the Portfolio Management Group, which had taken over the handling of the debt from AAPT, states that the debt had in fact been paid on 30 September 2004, although the listing was not updated to show this until some 8 months later, on 26 May 2005. Mr Marker said that with the assistance of Mr Symes of DR Capital, he attempted, after he paid AAPT, to have the "Payment Default" listing removed. On 6 September 2005, DR Capital wrote to Veda asserting that the original listing by AAPT had been "without cause" and requesting removal of it. Veda contacted AAPT which responded to the effect that it could not "verify" the details relating to the listing of the default. Veda removed the listing on 12 September 2005. The uncontradicted evidence of Mr Marker is that it was part of the original contractual arrangement between him and the representatives of AAPT that they (that is, in effect, AAPT) would cause him to be disconnected from Telstra's service. I infer that this undertaking to disconnect him was a condition of his contract with AAPT becoming operative: he would not have wished to take the service from both Telstra and AAPT, and I accept Mr Marker's evidence that the representatives of AAPT, rather than Mr Marker himself, undertook to arrange for cancellation of the Telstra service. On my view of the evidence, Mr Marker did not incur a liability to AAPT and so there was no account that was "overdue" at all, and hence no Payment Default. In the result, I accept that it is established that the listing by AAPT was inaccurate (Veda removed it within six days of its becoming aware of the incorrectness and verifying the position with AAPT). This was a commercial default listing. The amount shown was $16,582. As at 1 October 2004, a "Status" of "Settled" was shown. Accordingly, the period during which the alleged debt was listed as outstanding was less than three months. I set out the meaning given in the Guide of "Repossession Loss (after sale)" at [88] above. I will treat the words "of the item" as surplusage that does not affect that meaning. Mr McGary made two affidavits. His affidavit dated 27 February 2008 stated that on 19 July 2004, GE Commercial Corporation (Australia) Pty Ltd (GE), commenced a proceeding against Cycleogical Brisbane City Pty Ltd (Cycleogical), a company with which Mr McGary was associated (he was a shareholder and director), and Mr McGary, in the Magistrates Court of Queensland. The claim was in respect of a Retail Bailment Agreement into which Cycleogical had entered on 11 September 2002 with GE to provide finance for the purchase of stock and in respect of which Mr McGary had given a guarantee. The sum claimed was $15,365.50 plus interest and costs, amounting to a total of $16,581.92. This figure appears to correspond with the sum listed as Mr McGary's default. According to his affidavit, on or about 10 August 2004, Mr McGary filed a notice of intention to defend. On or about 1 October 2004 he settled with GE. As noted below, a deed of settlement appears to have been concluded no earlier than 13 October 2004. In his affidavit dated 14 December 2007, Mr McGary said that GE had claimed some $16,800, but that Cycleogical had disputed this figure, alleging that only around $10,000 was owed. Mr McGary said that to the best of his memory GE never contacted him directly and advised him that he was liable as director, and that GE did not directly or indirectly demand payment from him as director. The Retail Bailment Agreement is not in evidence. In oral evidence, Mr McGary maintained that GE did not make a demand on him for payment pursuant to the guarantee, until it filed its statement of claim. Pursuant to a request by him, Mr McGary received on or about 13 September 2004 a copy of his credit information file from Veda. There is in evidence a copy of a Settlement Deed entered into on or about 13 October 2004, between GE, Cycleogical, Mr McGary and Cycleogical Broadbeach Pty Ltd, by which Cycleogical agreed to pay GE an amount that was less than the sum claimed in the Magistrates Court proceeding. The Settlement Deed stated that upon payment, the proceeding commenced by GE would be discontinued. Mr McGary submits that the evidence shows that GE did not comply with s 18E(1)(b)(ba) [sic --- 18E(1)(ba)] of the Privacy Act because GE did not give him notice of Cycleogical's default that gave rise to his own liability. However, that provision is beside the point because s 18E(1)(ba) applies only in relation to consumer credit, and the credit obtained by the borrower, Cycleogical, from GE was commercial credit. Again, it is important to note that in his TFASC, Mr McGary's allegation is that the listing was inaccurate. Has he proved that it was inaccurate for GE to represent on 30 July 2004 that after the sale of goods, he was indebted to GE for $16,582? There was no dispute that Mr McGary guaranteed the obligations that Cycleogical had to GE; that Cycleogical owed GE at least $10,000; and that Mr McGary knew that if Cycleogical failed to pay, he was liable to do so and that GE would look to him for the amount outstanding. He also knew that that amount had been owing for "months" and that it had not been paid by the time Cycleogical commenced legal proceedings in July 2004. By that time, GE had repossessed some of the stock. There was a dispute about the amount of the debt --- as noted above, GE commenced a proceeding for $16,581.92; elsewhere in his oral evidence, Mr McGary stated that GE had made a demand on Cycleogical for $15,000, but not for the $10,000 that Cycleogical claimed it owed; and that for this reason neither he nor Cycleogical felt they had an obligation to pay the $10,000. The dispute was ultimately resolved with Cycleogical agreeing to pay GE an amount approximately half way between what GE claimed and what Cycleogical conceded. There is in evidence the course of correspondence between Mr Symes of DR Capital on behalf of Mr McGary and Veda, and of telephone communications between Veda and GE. DR Capital, on behalf of Mr McGary, requested removal of the listing on the ground that a "prescribed notice" had not first been issued to Mr McGary, but as already noted, such a contention misses the point since this was a Commercial Default. When Veda contacted GE, GE's response recorded was, according to Veda's PAS note, "a/c is correctly made". Veda wrote to Mr Symes informing him of the result of Veda's investigation, and there is no evidence that either DR Capital or Mr McGary disputed the outcome. It is not proved that the listing in Mr McGary's case was inaccurate. So far as the evidence goes, it may be that Mr McGary was indebted to GE for $16,582 after the repossession and sale of Cycleogical's goods. Mr McGary's submissions, that no demand was ever made on him as guarantor and that the proceedings were resolved for a lesser sum than that in respect of which the default was listed do not persuade me against this conclusion. The amount shown was $16,598. The "Association Code" stated was "Guarantor" and the "Account Type" stated was "Leasing". Schedule B to the TFASC showed a "Status" of "Settled" as at 19 July 2004. This was a Commercial Default listing. Ms Shields gave affidavit evidence that she had been a co-director, with her husband at the time, of a company called Richgrove Holdings Pty Ltd (Richgrove), and had acted as guarantor on applications for finance made by that company. She was co-guarantor with her then husband and co-director, Mr Malloch, in respect of a debt to Ford Credit, which she said was incurred by Richgrove to enable it to acquire a motor vehicle. The full name of the credit provider is Ford Credit Australia Limited, but I am referring to it simply as "Ford Credit". The document containing the Finance Lease in relation to the vehicle and the Guarantee by Ms Shields is in evidence. It is dated 23 May 1997. The lessee is Richgrove. The document includes a declaration co-signed by Ms Shields that the vehicle was being hired wholly or predominately for business purposes. Mr Symes's affidavit and its annexures showed that on 20 October 2000 Ford Credit wrote to Ms Shields advising that Richgrove had overdue payments up to 23 September 2000 of $962.14 and default charges of $111.98, making a total of $1,074.12. The letter asserted that Ms Shields was liable as guarantor if Richgrove could not pay, and advised that if payment was not made within seven days, Ford Credit might, inter alia, notify a credit reporting agency of the overdue payment. Also on 20 October 2000 Ford Credit wrote to Richgrove advising it of the same details of overdue payments and default charges, and giving the same warning concerning notification to a credit reporting agency. Ms Shields knew that her husband (and co-director and co-guarantor) had invited Ford Credit to repossess the car and that he was paying Ford Credit afterwards. On 23 January 2001 Ford Credit wrote to Ms Shields referring to a "repossession" on 19 January 2001 and advising that initial indications showed that a loss would eventuate after the sale of the vehicle. The letter invited Ms Shields to contact the writer to discuss a suitable repayment schedule and stated that it enclosed an "Asset & Liability Statement and Income & Expenditure Forms" for her to complete and return. The letter advised that Ford Credit intended to list the default on Ms Shields's personal file with Veda. On 8 March 2001 Ford Credit wrote to Ms Shields advising that the vehicle had been sold for $21,800 and that the net proceeds of $21,002.50 had been credited to her account, leaving a deficiency of $16,598.06 for which she remained responsible. The letter advised that Ford Credit had lodged a default listing with Veda and transferred the file to Ford Credit's Loan Recovery Department with a recommendation that legal proceedings be commenced unless a mutually agreeable arrangement to pay the shortfall was made and kept. It will be recalled that the listing took place on 9 March 2001 in an amount of $16,598. Ms Shields said that it was the letter of 8 March 2001 that first acquainted her with that figure. The earlier letter of 20 October 2000 had mentioned only $1074.12. The default was listed only one day after the letter of 8 March 2001 and specified the amount of $16,598. As previously observed, the amount mentioned in a listing does not have to be the amount (such as an instalment) in respect of which there was a default. It is not established that as at 8 March 2001 (or 9 March 2001) the amount that Ms Shields would have been liable to pay to clear the account was not $16,598.06. There was an exchange of correspondence between Mr Symes of DR Capital on behalf of Ms Shields and Ford Credit containing assertions and counter-assertions which are not evidence of the facts asserted. In March 2005 Ms Shields authorised DR Capital to represent her. After correspondence with Ford Credit, in which Ford Credit maintained that all required letters were sent to Ms Shields, DR Capital wrote to Veda on 1 September 2005 contending that the default had been listed without cause. The letter complained of a failure by Ford Credit to give to Ms Shields the notice referred to in s 18E(1)(ba)(iii) and (iv) of the Privacy Act and para 2.7 of the Code. In addition the letter alleged breach by Ford Credit of s 18E(8) of the Privacy Act . The letter requested Veda to remove the listing. However, the letter misconceived the position for reasons that I gave at [494] ff above in relation to Mr Marker, and at [509] ff in relation to Mr McGary. The provision allows a credit reporting agency to record, by way of exception to the general prohibition, information of the kind relating to consumer credit. In her oral evidence Ms Shields said that she could not recall seeing the letter dated 20 October 2000 from Ford Credit addressed to her at her residential address. She gave similar evidence in relation to the letters dated 23 January 2001 and 8 March 2001 as well as the letter dated 20 October 2000 to Richgrove, although in some cases she went so far as to deny having seen the letters at all. Ms Shields explained this by saying that her husband had been taking her mail, as she discovered when she ceased to receive her bank statements. She said that she did remember telephoning Ford Credit and saying "We're in trouble and we can't afford to pay". Ms Shields said that she did not dispute that she was liable as guarantor and she accepted that Richgrove's default in paying the leasing charges began in October 2000 (there is an obvious slip or error in the transcript's reference to 2002 at T179.34). She also accepted that the vehicle was repossessed in January 2001 and that there was a loss on the sale by Ford Credit which gave rise to a liability on her part as guarantor. She also agreed that ultimately she did pay the money or a portion of it on 19 July 2004. Ultimately, there is no dispute that Ms Shields owed the money or that it was outstanding for a period well in excess of sixty days. Her complaint is that she did not receive the relevant notices from Ford Credit; but this complaint cannot properly be directed at Ford Credit (and even less so, Veda) given her explanation that her husband/co-director/co-guarantor was taking her mail. She does not dispute that Ford Credit sent the notices to her at her residential address. Ms Shields also suggested that Ford Credit had refused to speak with her when she attempted to contact it, but I agree with Veda that this evidence is at odds with Ford Credit's attempts to contact Ms Shields. She said that she always knew that there were monies outstanding and owed to Ford Credit and she accepted in the witness box that Ford Credit had been attempting to contact her. She said that she had attempted six to eight times to contact Ford Credit in relation to "money" and "the vehicle that had broken down". I also agree that there were significant issues of credibility surrounding Ms Shields's evidence. She gave evidence in chief that an application for credit to CMS Asset Solutions and an application for credit to QPF Finance had each been refused but she conceded in cross-examination that that evidence had been untrue. There may have been some problem with the mail as between Ms Shields and her husband but I am not satisfied that she did not receive the letters from Ford Credit. Even if I am mistaken about this, it is of limited consequence. The notice requirement in s 18E(1)(ba) is not relevant to this commercial default. The Guarantee, by cl 3, stated that Ms Shields's liability was not impaired, released or discharged by the absence of any notice to her. Ms Shields has not led evidence inconsistent with the correctness of the listing. It is not established that the listing by Ford Credit on 9 March 2001 of a Payment Default with an amount shown of $16,598 was inaccurate as alleged in Ms Shields's TFASC. Schedule A shows that "CITY FIN LCS BRWNPLNS/SNYBNK" (City Finance) recorded on 2 June 2003 a "Clearout (Watched)" default showing an amount of $573.00. According to Schedule A, as at 11 February 2004 the amount had changed to $445. Schedule B showed that as at 6 April 2005 the "Status" was "Settled". Apparently "City Finance" was a business name of Start Over Finance Pty Ltd, and I will refer to the listing credit provider as "Start Over". In his affidavit of 19 December 2007, Mr Strange said that in or around July 2002 he took out a short term loan with Start Over. The loan contract between Mr Strange and Start Over is in evidence. It provided for 36 weekly repayments, amounting to a total loan repayment period of 252 days. The first payment was due on 24 July 2002, and in oral evidence Mr Strange acknowledged that the loan was due to be repaid fully by around March 2003. In his affidavit, Mr Strange said that he did not default on payment until he encountered marital problems and lost his job, and said that even then, he continued to maintain some form of payment toward the loan. In oral evidence, he said that those events occurred "probably about February 2003", and that he had arranged with Start Over to make the minimum payments as best he could and try to make up the arrears. In about November or December of 2002 Mr Strange moved house within Crestmead, Queensland. In oral evidence he said that he telephoned Start Over, informing them of the move and giving them his new telephone number. He said that he "would assume that [the conversation] would have been November/December of [2002]". Mr Strange said in his affidavit and oral evidence that in or around February 2004 he moved interstate, living temporarily with his parents in Armidale NSW, but that his residential mailing address remained the same address in Queensland. He said that he saw no reason to notify Start Over of the change in his place of residence because the mail (addressed to him at Crestmead) was being forwarded to him at his parents' house and he always received it. He said that his mobile telephone number had not changed at any time. Mr Strange said in his examination in chief that he continued to make payments during this time. He accepted in cross-examination that he defaulted on payments of his loan, and that as at February 2004 he had been in default since March 2003, insofar as he had not paid back the full amount by that date. Mr Strange said that between his relocation within Crestmead in November/December 2002 and February 2004 he had telephone conversations with Start Over concerning some missed payments. He placed those telephone conversations in around early 2004. Mr Strange said that in about February 2004 he received a telephone call from Start Over on his mobile telephone in relation to making a payment on the loan, in which he said the Start Over representative was accusing him of breaching a verbal agreement arising from his previous telephone conversations with Start Over. He refused to give Start Over his parents' address. He said that the telephone conversation became rather heated. He said that his view was that he should not give Start Over his parents' address because he was not residing there permanently. He said in his affidavit that that was the only contact he had with Start Over before it listed "Clearout (Watched)". That listing, however, occurred on 2 June 2003, some eight months before the alleged telephone conversation. Taken to this part of his affidavit in cross-examination, Mr Strange said that it was not correct, then that it was correct, then that he received the telephone call some time after the listing. In Mr Strange's case as in others senior counsel for Veda took the applicant to assertions that were made in replies to letters written by Mr Symes of DR Capital on the applicant's behalf, with a view to showing that the applicant had not, through Mr Symes, denied certain assertions made against his or her interests. In the present case, Start Over's solicitor asserted in correspondence with Mr Symes that his client's instructions were that it had sent Mr Strange several notices to his Crestmead address of its intention to list his default with Veda, none of which notices were returned. I found Mr Strange's evidence in cross-examination unsatisfactory. He repeatedly argued with the cross-examiner and demonstrated an unwillingness to confront and answer the questions that were put to him. He conceded that he received "several telephone calls" from Start Over yet wished to say he was "not necessarily" in default when he instructed Mr Symes to make an offer on his behalf in settlement of "any outstanding debt". He also said that once he learned that Start Over had listed him as a defaulter, he "was less than obliging to repay them". In or about early 2007 Mr Strange obtained from "Baycorp Collections" a copy of a computer printout from its file relating to him. His home number is disconnected, he was very rude to our employee last week. We have a postal address for him, I have yet to check if he is still at his home. He has had all relevant notices. Final Notice sent to him on 23/09/2002. His postal address is [a GPO Box]. Mr Strange said that his home telephone number at that time was not connected, but that his mobile telephone was working. He said he did not receive a letter dated 23 September 2002 from Start Over --- a reference to the letter referred to in the above extract. In his affidavit dated 19 February 2008, he asserted that he was never given any written notice of the intention of Start Over Finance to list him as a default. In his oral evidence, Mr Strange said he could not recall receiving notice from Start Over threatening to list him with Veda (then the Credit Reference Association of Australia) if he failed to pay. Veda's internal records in relation to Mr Strange were very detailed. Unless otherwise indicated, the information referred to in the following eleven paragraphs is based on those records. DR Capital, on behalf of Mr Strange, wrote to Veda on 1 September 2005, alleging that the default had been listed without cause and without the requisite notice being provided. This letter was in evidence. Veda consequently contacted Start Over which replied that the consumer had not been able to be located and that the entry was correct and should remain. On 27 November 2006 Veda received directly from Mr Strange a letter disputing the listing on the basis that Start Over had his current address. Veda again contacted Start Over which confirmed that at the time of the listing mail was being returned, and that the clearout listing was correct and should remain. Veda advised Mr Strange that the listing would remain. On 15 March 2007 Mr Strange took up the matter with "ISS Customer Relations" within Veda. Mr Strange advised that Start Over's Clearout (Watched) listing was incorrect and that he had never received any notice from Start Over. He said that he was providing a letter sent by Start Over to Veda, in which (according to the PAS file note) Start Over advised that the listing should be deleted to resolve the matter. This letter itself is not in evidence. Veda made further investigations with Start Over, which then informed Veda that it "could not substantiate the Clearout... unable to provide copy of the returned mail envelopes". As a result, Mr Strange's credit information file was amended to a "Payment Default" rather than "Clearout (Watched)". Veda advised Mr Strange of this on 16 March 2007, telling him it was unable to delete the listing. Veda said that as the account was 60 days in arrears, "the listing will remain on the file as a payment default". On 13 April 2007 Mr Strange contacted Veda and advised that the amount set out in the listing was incorrect. Veda received a statement from Start Over's solicitor that the amount that was sixty days overdue at the time of the listing was only $390.65. A PAS file note seems to accept that this was correct. The amount was amended to $390 accordingly, and Veda advised Mr Strange of the amendment. Veda submits that the amount listed need not be the amount recoverable at law, and refers to para 55C (pp 355-356) of the Code. That paragraph states, relevantly: "The amount to be reported will not necessarily be the amount recoverable at law, which may be affected by other contingencies not foreseen at the time of reporting". There is no suggestion in Mr Strange's case, however, that it was because of contingencies not foreseen at the time of reporting that the erroneous amounts were recorded. I am currently seeking legal advice in regards to joining a class action taken by GMP Legal in the Federal Court of Australia against Veda Advantage. Veda's record states that the note was placed on Mr Strange's credit information file. In cross-examination Mr Symes agreed that the first sentence of his letter was untrue in that neither Start Over nor its solicitors had instructed or requested Veda to remove the listed default. Notwithstanding Mr Symes's concession, I note that there is an entry on Mr Strange's PAS file that Start Over had written requesting that the default be removed. He advised to delete the df as they had conversation with Mr Strange and made it clear that if the matter can be dealt with by the lifting of the default, consumer will sign whatever document either we or you reasonably request him to sign to say that there will be no further action of any sort against his client, City Finance Franchising Pty. On 15 May 2007 Mr Strange contacted Veda indicating that he was not happy with the responses Veda had given him and he asked that his matter be sent to Veda's legal team. On 29 May 2007 Veda sent to Mr Strange the legal team's reply to his further complaints. On 30 May 2007 Mr Strange sent three emails to Veda responding to Veda's correspondence of 29 May. Mr Strange asserted that the listing of "Payment Default" was in error and contrary to a letter sent by Start Over to Veda. On 8 June 2007 Veda's notes state that it wrote to Mr Strange indicating that there was insufficient evidence to establish that error; and, indeed, that Start Over had provided information substantiating the "Payment Default" listing. Veda acknowledged that Start Over had indeed requested the removal of the default, stating "when City Finance requested the removal of the default listing from your file we advised them this could only occur if the default itself had been listed in error, that is, if they had reported an account that was not in arrears at the time of listing. We asked them to give us details about any error that was made. " Veda's PAS notes go on to state that no such details had been provided by Start Over. Veda invited Mr Strange to provide it with any further information that might establish that the listing was an error, and it referred him to the office of the Privacy Commissioner. The evidence establishes that Mr Strange borrowed from Start Over in or around July 2002; that from March 2003 he was in default; that as at 2 June 2003 he had left his place of work; that he changed addresses within Crestmead, Queensland; that in or about February 2004 he moved, at least temporarily, to Armidale in New South Wales; and that he refused when requested by Start Over to provide it with his address there. The critical time is 2 June 2003, the date of the listing by Start Over. Mr Strange was changing addresses in 2002 and 2004. I do not have confidence in him as a person who would be diligent in ensuring that Start Over always had his up to date address. It is not enough for a creditor to have a telephone number, facsimile number or email address. Knowing the physical whereabouts of the debtor is important for recovery purposes. It is not established that by 2 June 2003 Start Over had not confirmed that Mr Strange was a missing debtor, notwithstanding reasonable efforts to contact him in person or in writing. It is not shown to have been inaccurate for the Clearout (Watched) listing to have been made on 2 June 2003. However, I accept that it was inaccurate for the amount of $573 (and later $445) to be shown. The Original Amount (and the Latest Amount) should have been only $390. It shows that on 27 May 2002 BA Collections Factoring entered a Consumer Default of "Clearout Watched", showing an amount of $795.00. The question arises whether this listing was different from the Individual Consumer Credit Default Type "Clearout (Watched)". The entry shows against "Latest Reason" simply the two words "Clear Out". There is no such Individual Consumer Credit Default Type in the Guide. The entry also shows that as at 8 January 2003 the amount had been "Paid". There are two Commercial Credit Default Report Types in the Guide: "Clearout (Watched)" and "Clearout (Not Watched)". There is also an "Individual Consumer Credit Default Report Type" "Serious Credit Infringement (Confirmed Clearouts only)". In my opinion the listings "Clearout watched" and "Clear Out" told enquiring credit providers that as at 27 May 2002 Mr Taylor had cleared out from his address and had been unable to be contacted by BA Collections Factoring, notwithstanding reasonable efforts on its part. Therefore I do not think that "Clear Out" or "Clearout (watched)" bore a meaning significantly different from "Clearout (Watched)". I note that the ICCR in respect of Mr Taylor that is in evidence, from which no doubt Schedule A was derived, listed "Clearout (Watched)" as a Consumer Default by Mr Taylor. The present issue, therefore, is simply whether Mr Taylor has proved that it was inaccurate to record as at 27 May 2002 that BA Collections Factoring had properly satisfied itself that he was a missing debtor. In his affidavit Mr Taylor said that on or around 7 June 2000 he drew three cheques on the ANZ Bank (ANZ) which he understood were presented on 9 June 2000 but not met for insufficient funds in the account. He said that ANZ charged him dishonour fees for an ANZ Savings Account that was overdrawn. Mr Taylor said he did not recall being notified by ANZ that he owed it money. At the time he was living in Queensland. According to Mr Taylor's affidavit in or around August 2000 he relocated to Sydney. On or around 28 November 2002 he applied to St George Bank for a credit card and his application was declined. On or around 9 December 2002 he requested a copy of his credit information file from Veda and received a copy which revealed that he owed ANZ $795.00. On around 2 February 2003 he contacted Alliance Factoring which had acquired the debt from ANZ. On or around 21 July 2003 he paid the debt in full in a sum of $871.28. After making the payment he obtained from Veda on 28 July 2003 a copy of his credit information file which showed a double listing of his debt of $795.00 to Alliance Factoring. On 8 January 2003 Alliance Factoring 3 listed a payment default in the sum of $836.00. The listing was amended by Alliance Factoring 3 on 9 January 2003 and reported the amount overdue as $836.00 due to a clearout. Finally on 30 September 2004 he received a copy of his credit report which showed the amount as paid. Mr Taylor states that if he had known that there was a debt owing to ANZ which was sold to Alliance Factoring, he would have notified Alliance Factoring of his change of address. In oral evidence Mr Taylor said that the overdrawn account was a savings account. He said that he left Queensland and returned to New South Wales to live and went into a branch of ANZ and told it of his new address in Sydney. Mr Taylor produced two sheets being statements of account issued by ANZ to him in relation to an ANZ "Access Cheque" Account in his name, one for the period 21 August 2000 to 21 September 2000 and the other for the period 21 September 2000 to 11 October 2000. There is no reason to infer that the ANZ Access Cheque account was different from the "savings" account to which Mr Taylor referred. Whereas the former shows his Queensland address, the latter shows his Sydney address in the suburb of Cremorne. Both show debit balances. Mr Taylor said that he had obtained these documents from ANZ some time in about 2005. Mr Taylor said that when he drew the cheques, he did not have a facility enabling him to overdraw. He said that his belief was that a customer was not entitled to overdraw on a savings account. On 28 April 2005 Mr Taylor obtained from ANZ a copy of the terms and conditions that had governed his ANZ Access Cheque Account from the time he opened it in 1999. The terms and conditions provide that ANZ does not agree to provide any credit in respect of the account without prior written agreement, and that the customer must not overdraw unless such a credit facility is in place. However, if the customer requests ANZ to allow a withdrawal or payment that would overdraw the account, the request is an offer made by the customer to ANZ for credit equal to the overdrawn amount, and ANZ is not obliged to accept the offer, but may in its discretion do so, by allowing the individual withdrawal or payment to be made. There is provision for the charging of interest in that situation. If ANZ accepts the customer's offer, an independent "credit contract" comes into being. In cross-examination Mr Taylor agreed that he knew in 2000 that his ANZ Access Cheque account was one on which he could draw cheques but he emphasised that he did not have an overdraft facility in place. He said that he did not know of any practice among banks allowing customers to overdraw accounts in the absence of an overdraft facility. He also said that he had not signed any documents pursuant to the Privacy Act about the disclosure of information or giving an authority to another party to make inquiries. However, Mr Taylor conceded that when he was speaking to Mr Symes of DR Capital in November 2004, he was aware that the debt to the ANZ had been incurred in 2000. Importantly, DR Capital's initial letter written on behalf of Mr Taylor to Alliance Factoring on 10 November 2004 said that due to the extremely short time frame in which he had had to move back to Sydney, Mr Taylor had not had time to leave a forwarding address and that he had not been in a state of mind to do so due to illness. The letter also asserted that Mr Taylor had believed at the time that there was no need to notify ANZ of the change of address since "he had no loans or credit cards at the time". Mr Taylor agreed that this letter was written by Mr Symes based on instructions that he (Mr Taylor) had given to him. In cross-examination, however, Mr Taylor said that at the time of instructing DR Capital he had forgotten that he had in fact told ANZ of his forwarding address. He said that it was only when Alliance Factoring told him it had taken an assignment of the debt from ANZ and he saw the ANZ bank statements that he saw to his surprise that he must have notified ANZ of his forwarding address after all. Mr Taylor said that he could not remember actually receiving the bank statements at his Cremorne address and could not recall whether the bank statements came to him at that address. He suggested that his lack of recall might be attributable to his state of ill health at the time. He could not now say whether or not he had read the statements. However, he insisted that he was not aware that he owed ANZ $706.35 until he first received a copy of his credit information file. He said that that was when he learned that Alliance Factoring had acquired the debt from ANZ. As mentioned above, this was in December 2002. Mr Taylor agreed that according to the letter that Mr Symes wrote on his behalf to Alliance Factoring, he had known of the debt to ANZ from December 2002 until it was paid on 14 January 2004. DR Capital wrote to Veda on 1 September 2005 requesting that the "Clear Out" listing be removed because Mr Taylor had not been supplied with the required notice, and because the default had been listed without cause. Veda's PAS notes reveal that Veda contacted Alliance Factoring on 29 September 2005 to investigate DR Capital's claim. Alliance Factoring requested Veda to remove the listing after if had spoken to Mr Taylor, and Veda did so. (Mr Allison testified that if a subscriber tells Veda that a listing is in error, Veda automatically removes it at a charge of $25 to the subscriber. ) Veda submits that the fact that Alliance Factoring requested the removal does not itself establish the listing was incorrect. Mr Taylor drew three cheques on his ANZ account on 9 June 2000 which placed the account into overdraft. He moved to Sydney two months later and then did not receive any notices requesting payment. He accepted that he had an obligation to pay ANZ and that the debt was outstanding for over a year. The question which arises for decision is whether it was inaccurate to record on 27 May 2002 that Mr Taylor had cleared out. Do the bank statements establish that ANZ had his correct address as at 27 May 2002? Veda submits that "common experience is that documents presently issued by banks are usually updated with the current details". There is, however, no evidence of this practice before the Court; and if the two statements were indeed issued contemporaneously in 2005, it seems curious that the bank would update one and not the other. I think that Mr Taylor has proved that it would have been inaccurate for the listings "Clearout watched" and "Clear Out" to be made on 27 May 2002. According to the ICCR in evidence relating to Mr Taylor, the listing was in fact "Clearout (Watched)". It was also inaccurate for that class of default to have been listed on 27 May 2002. It refers to ALLIANCE FACTORING 8 having, on 13 September 2002, listed a "Payment Default". The amount shown was $316. According to Schedule A, the debt was paid on or by 27 September 2002. Accordingly, it was listed as unpaid for only some 14 days. Mr Tyndall gave oral evidence that in 1999 he was living at an address in Queanbeyan, where there was a Telstra telephone account in his name. He subsequently moved to an address at Griffith in the Australian Capital Territory, where he lived with some friends. At the time of moving he telephoned Telstra giving his account number and providing Telstra with his new Griffith address to which he requested that all correspondence be forwarded. He stated that he gave money to his flat mate in Queanbeyan who was to pay any outstanding amounts. When he moved into the house at Griffith, ACT there was already a telephone there connected to Telstra, and he phoned Telstra requesting that his name be added to the account as a user, "basically, a resident of the house". At Griffith, Mr Tyndall and his friends received telephone bills from Telstra regularly but Mr Tyndall said he did not receive any bills there in relation to his former Queanbeyan address. Subsequently he moved to an address at Bruce, also in the ACT. He moved in there with a friend and with his girlfriend. As before, he notified Telstra of his new address The telephone there was in his name, while the others were listed as residents. When living at the Bruce address, Mr Tyndall received a reminder or telephone bill in relation to the Griffith address. He said that the reminder said "this is your old bill, please pay that and here's your new one". He said that he and his friends divided it up and that he paid it by the due date which he thought was "September". This testimony is not clear in view of the fact that Mr Tyndall referred to two bills --- an old one and a new one. In his oral evidence he said that he rang Telstra and said "Thanks very much, I'll pay it". This suggests that this was a somewhat unusual payment arrangement and therefore that he was referring in his earlier evidence to paying the old bill. Mr Tyndall received shortly afterwards a letter on a black and white letterhead from "Alliance Factoring and Baycorp" asserting that he owed $300 odd for a telephone. He said he thought it must have been for "our previous address"; that is, in Griffith, for which he had already made arrangements to pay Telstra. He said that he and his housemates looked at the bill for that address and thought they would pay it at its due date, and they did so. Later when he was going through receipts relating to the house, he noticed that there was still a Telstra bill. He said that he telephoned Telstra to confirm that he had paid that bill, and said "that now clears [the Griffith address]", and Telstra agreed. He said that he then noticed that the numbers and amounts on it were "different" so he telephoned the number up the top there", which, I assume, was the number of Alliance Factoring. He said he told the person to whom he spoke that he did not know what the bill was for, and that the person told him that the outstanding amount was for a Queanbeyan telephone. The person told him that Alliance Factoring had taken it over from Telstra. Mr Tyndall said that he paid the bill to Alliance Factoring two to three weeks after his initial conversation with the person there. In fact, in a letter to DR Capital dated 8 December 2004, Alliance Factoring notes that he paid it on 26 September 2002. Mr Tyndall said that prior to moving to the Bruce address he had never been called upon to pay any sum in relation to the Queanbeyan address. There is evidence that Alliance Factoring was a wholly owned subsidiary of Veda and that it provided a court enforceable undertaking to the Australian Competition and Consumer Commission on 17 August 2005, later varied on 27 February 2007, concerning its debt collection practices and procedures in attempting to collect debts it purchased from Telstra in 2002 and 2003. The evidence is irrelevant to the issue of accuracy or inaccuracy of a particular default listing. DR Capital wrote to Veda on 2 December 2004 and 1 September 2005 requesting that the default be removed on the basis that Mr Tyndall had not been given due notice and that the default had been listed without cause. The letter of 2 December 2004 stated that the notice regarding the debt was received on 25 August 2002 but the default was listed on 13 September; and that therefore the 30 day notice period specified in the Code had not lapsed. Veda's PAS notes state that on or shortly before 28 September 2005 Veda contacted Alliance Factoring which requested that Veda remove the listing as it had been listed just after correspondence had issued. The "Payment Default" listing was then removed by Veda. The evidence suggests, however, that the listing on 13 September 2002 was correct. Mr Tyndall said that he received a notice from Alliance Factoring about the debt in August 2002. No doubt that was the letter on the black and white letterhead which Mr Tyndall said claimed "$300 odd" for a phone. Although the letter was not produced, Mr Tyndall accepted that it was dated 13 August 2002 and threatened that if the amount of $316 was not paid within fourteen days of that date, the default might be listed with Veda. Mr Tyndall stated that he received the letter on 25 August 2002, a date he recalled because of its proximity to an Australian Rules Football Grand Final. Unfortunately, Mr Tyndall made an incorrect assumption that the letter related to another debt. He accepted that the amount claimed was owing and that when he paid it on 26 September 2002, it had been outstanding for two years. Accordingly, he accepted that at the time of the listing only some 14 days earlier, he was at least 60 days overdue in paying it: see s 18E(1)(b)(vi)(A) of the Privacy Act . I am not persuaded, in the absence of compelling evidence either way, that Telstra and Alliance Factoring had not by then taken steps to recover the sum of $316 by sending to Mr Tyndall statements of account and letters of demand. Indeed, I accept Veda's submission that the condition laid down in s 18E(1)(b)(vi)(B) of the Privacy Act was also satisfied: see [578] and [584] above. It is not shown to have been inaccurate for Alliance Factoring to have listed the "Payment Default" on 13 September 2002 in respect of the amount of $316. Inaccuracy is not established, however, in the cases of Ms Adams, Mr Dale, Mr Fisher, Mr McGary, Ms Shields, Mr Strange (except as to the amount) and Mr Tyndall. This is an additional reason why the claims in negligence by those seven applicants fail. That subparagraph is directed to the alleged constitutional invalidity of, relevantly, s 9 of the Defamation Act 1974 . The cause of action in defamation arises under that section, although the section invokes terms and concepts that had developed as part of the common law. As noted at [3] above, Veda gave to the Attorneys-General of the Commonwealth, the States and the Territories notice under s 78B of the Judiciary Act of a matter arising under the Constitution or involving its interpretation, as a result of which the Attorney-General for the State of New South Wales sought leave to intervene and was added as second respondent. Although the Notice of Motion did not state the ground relied on, apparently it was the alleged s 109 inconsistency. One day of the hearing was set aside to deal with the issue of constitutional invalidity the subject of the s 78B notice and of the motion. On that day counsel appeared for the Attorney-General for New South Wales to contest Veda's submissions. The parties are agreed that I ought not to decide the constitutional question unless I first find that a cause of action under the Defamation Act has been made out. The theoretical availability of such a cause of action does not in itself result in inconsistency for the purposes of s 109: see State of Victoria v Commonwealth [1937] HCA 82 ; (1937) 58 CLR 618. Since I have decided to dismiss all nine proceedings including the claims of defamation, on other grounds stated above, I will say nothing further on the present issue. I certify that the preceding five hundred and ninety-six (596) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

credit reporting agency's reports to credit providers reports allegedly defamatory of applicants in respect of their creditworthiness allegation that they were refused credit by credit providers who relied on erroneous credit reports respondent's computerised database credit providers who subscribe (respondent's customers) enter information in the database electronically and extract information from it electronically, in each case without respondent's intervention whether respondent credit reporting agency communicated to subscribing credit provider the information that that credit provider extracted electronically in some cases credit provider's computer rejects application for credit automatically upon receipt of adverse credit report essential to cause of action in defamation that the defamatory publication be published to a human mind whether publication to a human mind proved qualified privilege whether credit reports of credit reporting agency attracted defence of qualified privilege. credit reporting agency's reports to credit providers allegation that applicants refused credit by credit providers who relied on erroneous credit reports respondent's computerised database credit providers who subscribe (respondent's customers) enter information into the system electronically and extract information from it electronically, in each case without respondent's intervention whether respondent credit reporting agency communicated to subscribing credit provider the information that that credit provider extracted electronically in some cases credit provider's computer rejects application for credit automatically upon receipt of adverse credit report whether credit reporting agency owed a duty of care to persons seeking credit to ensure that information stored in database was accurate if so, whether breach of duty established. defamation negligence

They seek orders that those three persons cease to be parties to the proceedings and that the Register of Native Title Claims be amended in accordance with that order. Pastor Collins is deceased. The basis of the application so far as concerns Mr Little and Mr Murray is that they have refused to cooperate with the applicants and have evinced an intention to no longer act in a representative capacity. 2 Section 66B of the Native Title Act 1993 (Cth) ('the NTA') provides for a procedure for replacement of 'the applicant' . 4 The second note to s 61(1) refers to s 251B as stating what it means for a person or persons to be authorised by all of the persons in the native title claim group. That section refers to persons in a native title claim group authorising a 'person or persons' to make a native title determination application by a traditional process of decision-making or, where there is no such process, an agreed process. 5 Section 66B(1) provides that one or more members of the native title claim group, who are authorised to do so, may apply to the Court for an order replacing the 'current applicant' on two grounds: either that the current applicant is no longer authorised by the claim group, or the current applicant has exceeded the authority given by the claim group, to make the application and to deal with matters arising in relation to it. By subs (2) the Court may make the order if it is so satisfied. 6 In the present case there has been no meeting revoking the authority of Mr Little or Mr Murray or authorising the making of an application under s 66B. The application for the first order is brought pursuant to O 6 r 9(b) of the Federal Court Rules , which provides that the Court may on application by any party or of its own motion order that a party cease to be a party where they have ceased to be a proper or necessary party. 7 Neither Mr Little nor Mr Murray appeared on the hearing of the application. The material will show that since early 2003 neither Mr Little nor Mr Murray have attended any meeting of the applicant group concerning the conduct of the native title claim, despite invitations and requests to do so. In mid-2003 they supported an unsuccessful application to strike out this application. It was then alleged that the applicant group could not act together. They have said that they would not instruct the Gurang Land Council, as the other members of the applicant group did and thereafter they have dealt with the group through the then representative body, Queensland South Representive Body. Mr Murray says that he has attended only one meeting since the claim was lodged. He has not attended any others because he did not have confidence in the Gurang Land Council nor that the claim could be progressed. The material also discloses that, save for Mr Little's participation at a few points, neither he nor Mr Murray have participated in any negotiations for indigenous land use agreements, as a result of which many benefits have been lost to the claim group. I put the relevance of this evidence to the questions arising under O 6 r 9 to one side for present purposes. The conduct of the two in connexion with these proceedings permits a conclusion that they are neither a proper nor necessary party to them. An order could be made under O 6 r 9 unless its application is denied by the NTA. 8 The State of Queensland made no submissions as to the merits of the application, but was supportive of an approach which permitted the rules of Court to operate with respect to the proceedings. The submissions identified the central argument which might be raised against such an approach as one based upon the notion of the 'applicant' referred to in the NTA, and in particular, ss 61 and 251B and the 'current applicant' referred to in s 66B, as having an indivisible character. This might be seen to follow from the requirement of s 61(2)(c) , that the persons authorised are jointly 'the applicant' . It is that entity which has been authorised it might be contended. The authority is not directed to individuals as applicants and an approach which views them in that way is inconsistent with the NTA. It would follow that orders concerning the persons making up "the applicant" could not be made. 9 The question as to the nature of "the applicant" for the purposes of the NTA has been raised in other proceedings. In Butchulla People v State of Queensland [2006] FCA 1063 I considered that the purpose of s 61 was to provide for the representation of the claim group by persons having a common interest (at [38] and following). Section 61(2)(c) , in its reference to persons being jointly 'the applicant' , does not create a legal entity itself capable of suing. The requirement that persons making up the applicant act together, does not imply that their ability to continue to act was dependant upon each other person authorised also continuing in that capacity. The continuance of authorisation must depend upon the terms of the authorisation, a matter upon which the NTA did not speak. Section 251B recognises that, in some cases, proper authorisation may require the use of traditional customs and laws. Beyond that, the NTA does not contain any reference to the terms upon which persons may be authorised. The interest of each member was identical and those authorised are representative of the entire claim group. 10 In the Butchulla People [2006] FCA 1063 application, the method of authorisation was agreed upon, in the absence of any identified traditional laws or customs. It involved the resolution of those present at the meeting following upon a motion put, a process undertaken in modern meeting procedures. In those circumstances I held that the presumptions usually applied to personal appointments could operate, which is to say that their authorisation is intended to continue until revoked and whilst they are willing and able to act in their representative capacity. I should add that the question as to the terms of authorisation in any given case is one of fact and the presumption may yield to other indicia of the intention of those authorising. This might arise where traditional customs, inconsistent with modern assumptions, are applied. In the present case the authorisation meetings of 19 and 20 October 1999 and 4 and 5 November 1999 followed a contemporary process of decision-making. 11 I was influenced to the view expressed in the Butchulla People's application by reference to the evident purpose of the provisions of the NTA and because that view did not cut across any purpose or the operation of its provisions. The requirement of the NTA, that persons authorised act together, is not a term or condition of appointment, but a statutory requirement having as its purpose the efficient prosecution of claims. A view that the inability of one to continue to act should not affect the authorisation of the others is consistent with the nature of the rights to native title determination. The authorisation is personal to them and continues until revoked or whilst they are willing or able to act. Sections 66B(1) and 64 (5), dealing with replacement and appointment respectively, should be read in a way consistent with this approach. The reference to the ' current applicant ' being no longer authorised would be taken to refer only to those persons whose authority has in fact been revoked. This may not be all persons comprising ' the applicant '. The ' new applicant ' referred to in s 64(5) is each person who is authorised to make up the applicant when a change is made to one or more of them. The evidence that the subsection requires about their authorisation would be satisfied by those persons not newly appointed referring to their prior authorisation and the fact that it has not been revoked. For administrative convenience and clarity, their authorisation might also be ratified at the same meeting which authorises the new appointment or appointments, but this is not necessary. A contrary approach would mean that 'the applicant' in native title claim proceedings would cease to exist if it transpired that just one of the persons making up 'the applicant' was not a member of the claim group or died and involve the considerable expense of undertaking another authorisation meeting of the entire group. I note that the decision in the Butchulla People's application has been followed by Spender J in Doolan v Native Title Registrar [2007] FCA 192. 13 The approach which I consider to be open does not limit the grounds for the effective removal of a person to those in s 66B(1), rather it gives effect to the basis upon which authorisation was originally made. It should not be inferred that it was intended that s 66B(1) be the only means by which the constitution of the applicant in proceedings before the Court can be altered. As the State of Queensland pointed out in its submissions, that provision provides a right in persons to apply to the Court in circumstances where they are not a party to the proceedings and O 6 r 9 is not available to them. 14 Once it is accepted that the references in the NTA to 'the applicant' do not prevent the authorisation of persons as applicant being viewed individually, there is no reason why O 6 r 9 should not have operation. As Spender J pointed out in Doolan [2007] FCA at [62] applications for determination of native title are applications in the Federal Court, to be dealt with under the Federal Court of Australia Act 1976 (Cth) and the Federal Court Rules , unless otherwise stated. In Central West Goldfields People v State of Western Australia [2003] FCA 467 , Carr J exercised the discretion given by O 6 r 9 and in doing so rejected the contention that the person in question was not a party to the application because she was only one of the persons who are jointly the applicant. In his Honour's view she was also a party within the meaning of O 6 r 3 because she is named as one of the eight joint applicants who seek relief. 15 The second order sought was said to be of particular importance to the State of Queensland. In its submissions it expressed concern at the prospect that the Register of Native Title Claims could not be amended to reflect changes ordered by the Court. The future act regime of the NTA depends upon the identification of the representatives of the claimant group in order that procedural rights can be accorded. 16 The Register is established by s 185. It is required to contain all the information set out in s 186(1) and this includes 'the name and address of the applicant' . Clearly enough this must refer to all the persons who together are the applicant. Section 66B(4) provides that the Registrar must amend the Register to reflect an order made under that section. The Register must be amended in the other circumstances identified in s 190, such as where a claim is amended, a claim is determined or withdrawn or where additional information is provided. The State of Queensland apprehends that there is some doubt concerning the ability to have the Register amended in circumstances other than those for which express provision is made. If the Register could not be amended, in a case such as this, there would be an inconsistency between the Register and the parties named in the proceedings before the Court. Moreover it would be inaccurate to maintain the name of a person on the Register where they are unable or unwilling to continue to act as applicant and where they can no longer be taken to be authorised. Such a result would be contrary to the clear purpose of the Register and the need that it be correct. The answer to the view, which some may hold, is that a power of amendment or correction is necessarily implied in such a circumstance. This follows from the requirement of s 186(1) as to what must be contained in the Register. It must reflect the true state of affairs as to those persons who comprise the applicant and their contact details. In circumstances where there is no doubt about the capacity of a person to continue to act, such as in the case of death, the Registrar might feel confident about the removal of a name. In other, more contentious, cases it may be necessary for the Court to order the amendment of the Register after a hearing, with or without a declaration as to the right of persons to continue to be an applicant. A declaration could be made in these proceedings, as reflecting the foundation for the consequential order under O 6 r 9, but it would not appear to be necessary. 17 The authorisation of each of the three persons referred to above was made upon the basis that they were able, and wished, to act in the capacity as a representative of the claim group for the purpose of advancing the application towards a determination of the native title rights and interests claimed. Pastor Collins cannot now act and the other two persons have shown that they are unwilling to do so. It follows that they are no longer a person authorised as applicant and an order under O 6 r 9 is justified. The Register should be amended accordingly. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel.

person named as "the applicant" unable or unwilling to act whether continue to be authorised whether proper or necessary party to the proceedings o 6 r 9 fcr whether inconsistent with native title act 1993 (cth) whether register of native title claims can be amended to remove names of persons as applicant apart from s 66b purpose of register native title

(c) The respondent engaged in misleading and deceptive conduct prior to the alteration of the terms and conditions of the applicant's contract of employment contrary to the provisions of sections 52 and/or 53B of the Trade Practices Act 1974 (Cth) ['the TP Act'] or s 42 of the Fair Trading Act 1987 (NSW) ['the FT Act']. He grew up in Wollongong. After he left school, Mr Nikolich obtained employment with the Commonwealth Bank of Australia, ending up as a Business-Superannuation Consultant for the Australian Capital Territory and Southern New South Wales. 4 In May 2000, Mr Nikolich accepted an offer of employment in the Canberra office of Were Holdings Limited. This company subsequently changed its name to Goldman Sachs JB Were Services Pty Limited. It is the present respondent. I will use the abbreviation 'GSJBWS' to refer to the company under either name. 5 When he accepted the offer of employment, Mr Nikolich was provided with several GSJBWS documents, including one called 'Working With Us' ('WWU'). This 119 page document sets out information about GSJBWS and contains a number of provisions which are argued by the applicant's counsel, Ms K Nomchong and Ms K Edwards, to constitute conditions of employment binding on both the relevant employee and GSJBWS. It will be necessary for me, later on, to refer to some of these provisions. 6 At the request of a human resources officer of GSJBWS, Mr Nikolich signed and returned a copy of the letter containing his offer of employment. The letter included at least some of the terms of his employment and contained an acknowledgment that will be referred to later. Mr Nikolich was not asked to sign a copy of WWU. 7 Mr Nikolich commenced employment with GSJBWS on 15 May 2000. He was then classified as an Associate Investment Adviser. On 1 July 2001, he was upgraded to the position of Investment Adviser. This position is also sometimes called a 'Private Client Adviser'. In this role, he was required to provide investment advice to existing clients and to develop new client relationships. 8 Both as an Associate Investment Adviser and an Investment Adviser, Mr Nikolich reported to the manager of GSJBWS's Canberra branch. Initially, this was Colin MacKenzie. However, in March 2001, Roderick Sutherland, another Canberra Investment Adviser, was appointed also to be the Canberra branch manager and, therefore, Mr Nikolich's immediate supervisor. 9 As an Investment Adviser, Mr Nikolich received a base salary of $81,495 per annum. He was entitled, in addition, to incentive payments calculated by reference to the nature and extent of the fees he earned for his employer. Investment Advisers often received incentive payments that dwarfed their base salaries. 10 When he commenced with GSJBWS, Mr Nikolich was given a list of clients for whose business he was responsible. Other names were given to him from time to time. He himself added names. Mr Nikolich said he actively cultivated all the clients on the list and sought to recruit others. In the financial year 1 July 2001 to 30 June 2002, his total remuneration (base salary and incentive payments) was $161,178. The paper was entitled Establishment of a partnership approach to client management within the Canberra Office . It seems the partnership concept had been brought to Australia from the United States. Mr Sutherland announced that he and two other Canberra financial advisers, Stephen Johnston and Lee Scott, would 'trial a partnership approach to client management'. He said 'all clients and revenues will be pooled under a newly formed "RSL" adviser code, with the remuneration structure reflecting each partner's level of experience and capacity to contribute to the future growth of the partnership'. One of the 'questions' was: 'What if a member of the team wants to leave the partnership'. As I see it, a partnership is similar to a marriage in that it is a long-term commitment where, once established, partners cannot opt in and out on a whim. I would urge anyone contemplating entering into a partnership to carefully consider the extent and duration of the commitment involved. He said he understood from Mr Sutherland's presentation that he would be able to increase his earnings: 'by reason of the exchange of information, the ability to rely on other members of the team for assistance in administering my portfolios and being able to obtain assistance in conducting transactions about which I previously was unable to participate in. I noted that if a partnership had been established and one of the partners left then the clientele of that team member would be redistributed amongst the existing members of the partnership team. It was certainly an attractive proposition to me that I would be able to obtain a number of additional clients by reason of participation in a partnership team. The three advisers decided to form a team named 'DKN'. They drafted a business plan for the team which was 'based to some degree on the materials contained in Mr Sutherland's presentation document' and, in particular, the RSL team business plan. 20 The DKN business plan was intended to operate from 1 July 2002. The document identified advantages of a team approach, both for clients and the team members. Among the claimed advantages was that clients will 'have access to a greater range of skills and services' and 'will be able to deal with a secondary adviser if their key adviser is unavailable'. 21 The draft business plan contained performance targets for the first three years of its operation. The targets included revenue targets that commenced by exceeding the total of the three partners' current year projected revenues. The first year's revenue projection ($1,900,000) was then split amongst the three partners as follows: Dal Bon 39.90%, Keogh 33.24% and Nikolich 26.85%. This split was reflected in a net earnings projection for each partner; in Mr Nikolich's case $181,956. As I understand the situation, that would be his total income, including his base salary. It was projected that both revenue and earnings would increase by about 16% over the three year period. That would have brought Mr Nikolich's income to about $211,000 per year. 22 The business plan set out the primary and secondary roles of each team member. Under the team arrangement, if a team member decides to exit the partnership, then all clients will remain within the team structure with subsequent revenue to be split 50:50. They showed the draft document to him. Mr Sutherland emphasised that formation of the partnership was a serious step that ought to be considered carefully; however, he raised no objection to the terms of the document. In particular, Mr Nikolich said, Mr Sutherland did not indicate that the 'exit strategies' paragraph was contrary to GSJBWS policy or suggest that a retiring team member's clients might not remain with the team. 24 In his affidavit, Mr Sutherland agreed he was shown the draft business plan. He said he 'glanced at' it and handed it back. He did not keep a copy of the business plan. He said he did not recall that the draft business plan contained information about the agreed revenue split between the team members. I was not required to approve or endorse the plan because it was merely an internal working document for the members of the team. I have referred in paragraphs 10 and 11 of this Affidavit to my purpose in including this wording in the Team RSL paper. When forming a team, the expectation was that the team would remain working together. Accordingly, the intention of this section was to state that, with certain exceptions, if a member of the team left the team, that person would not have the right to retain the clients serviced by the team. This is because, based on my understanding of GSJBW policy and practice, when an adviser leaves the firm, the clients previously serviced by that adviser remain clients of the firm and it is the responsibility of the Manager of the relevant office to reallocate those clients to other advisers at his discretion. Clients are clients of GSJBW and do not "belong" to individual advisers. In particular, clients sign engagement agreements with the firm, not with the advisers individually. The purpose of my asking them to think about drawing up a business plan was to demonstrate the seriousness of their intention to form a team rather than the specific document itself. 29 Mr Nikolich also mentioned a later meeting, in April 2002, between the three DKN team members, on the one hand, and David Evans and Chris Voigt on the other. At that time Mr Evans and Mr Voigt were, respectively, Managing Director-Retail for New South Wales and for Victoria. The meeting was on the occasion of a regular performance review of the Canberra employees. At no time during that meeting did Mr Evans or Mr Voight indicate to me or anyone else in the team whilst I was present that any of the paragraphs or provisions of the Business Plan were contrary to the Respondent's policy. In particular, nothing was said to us to the effect that the paragraph entitled "Exit Strategies" would not be honoured in the event that one of the team members left the partnership. He said he did this with Mr Voigt - or possibly Paul Heath, who was then Manager, New South Wales Private Clients, he could not remember which man. He recalled going through the team targets and goals. 31 Mr Nikolich accepted, in his evidence, that neither Mr Sutherland or Mr Evans said anything that indicated he considered the business plan to be a binding document. 32 The DKN partnership commenced to operate on 1 July 2002. Mr Nikolich gave evidence that the clients of each team member were notified of the change and advised to contact an alternative team member if their usual adviser was unavailable. He said each team member took all available opportunities to introduce their clients to the other team members. The team members shared information, became familiar with each other's client portfolio and looked after each other's clients during the other's absences from work. According to Mr Nikolich, the team system worked well. However, in the financial year to 30 June 2003, Mr Nikolich's total earnings (base salary plus incentive payments) were less than in the previous year, being only $96,650. 33 It should be noted that receipts in a particular year may understate actual earnings for that year. It was the practice of GSJBWS to hold back, until the following quarter, 50% of any incentive payment that was earned by an adviser in a particular quarter. Her announcement precipitated a number of meetings between Mr Nikolich, Mr Keogh and Mr Sutherland about client allocation. Mr Nikolich and Mr Keogh believed their team was entitled to retain all Ms Dal Bon's clients. However, they recognised that, with only two people, they would be unable to provide proper service to all the people on the combined list. Accordingly, they proposed --- and, Mr Nikolich said, Mr Sutherland agreed --- that they transfer 250 relatively inactive family groups to a GSJBWS on-line service, Were@Call, or to more junior staff members, reducing the DKN client base to about 600 family groups. The transfer was apparently not to include any clients in the five categories that generated the most revenue: gold, A clients, options, funds under management and marginal lending. 35 At a later meeting, Mr Nikolich said, Mr Sutherland suggested the transfer of more family groups; he and Mr Keogh agreed. 36 Mr Nikolich said that, after this later meeting, Mr Sutherland prepared a list of clients to be transferred and distributed it to all advisers within the office. Arrangements were made to forward letters to all affected clients. However, according to Mr Nikolich, Mr Johnston (a member of team RSL) was unhappy about the situation and, on 9 June 2003, approached Mr Sutherland about it. Mr Sutherland denied he was approached by Mr Johnston, but he did say he was 'approached by other advisers in the Canberra office who ... told me that they were concerned that Peter Nikolich and Mark Keogh were going to try to corral all of the clients that Gabrielle Dal Bon had dealt with'. Mr Sutherland also agreed that, on 10 June 2003, he told Mr Nikolich he had changed his mind, that there would be a reallocation of all Ms Dal Bon's clients and he would let Mr Nikolich know which ones he could keep. Mr Sutherland directed that letters to clients not be sent at that stage. 37 Shortly afterwards, Mr Sutherland announced a reallocation. According to Mr Nikolich, it included transfer to Mr Scott (Mr Sutherland's partner in team RSL) of a large proportion of Ms Dal Bon's clients, including some high revenue generating clients. It is common ground that Mr Nikolich protested to Mr Sutherland about this reallocation and claimed Mr Sutherland had gone back on his word. 38 The terms of the protest conversation are in dispute. On Mr Nikolich's account of the matter, the conversation was acrimonious; Mr Sutherland made a number of critical and offensive comments, including telling Mr Nikolich he was 'disgusted' with his 'greed', that he was 'lazy' and 'whingeing'. Mr Nikolich claimed in evidence that he felt Mr Sutherland had a conflict of interest, being both the person allocating clients and a member of team RSL, and that he suggested Mr Sutherland appoint an independent person to mediate the dispute over allocation. 39 Mr Nikolich said in his affidavit that he thought Mr Sutherland was breaching the team DKN business plan. How does that work? [Although the matter was not picked up at the trial, the reference to 'Team RSL' may have been an error for team DKN. 41 Mr Sutherland denied most of the specifics of Mr Nikolich's account, but it is clear the relationship between the two men was fractured that day. Mr Sutherland said he had no recollection of Mr Nikolich suggesting a mediator; in any event, no mediator was appointed. 42 The last four paragraphs are written as if there was only one conversation on these matters. However, there may have been multiple conversations, within a short space of time, dealing with the matters I have set out. 43 Mr Sutherland subsequently told Mr Nikolich and Mr Keogh that he was allocating to them 40 out of the 120 'gold' and 'A' clients that were on the DKN client list; he listed all 120 clients in order of their fee-generating value, and put a line under every third name; he then invited Mr Nikolich and Mr Keogh to select one name out of each group of three. Mr Nikolich and Mr Keogh reluctantly did this. Mr Sutherland then allocated the remainder of the 'gold' and 'A' clients to other financial advisers. For each client given to one of the individual advisers, he allocated three clients to the RSL team, no doubt on the basis that it included three members. 44 In his affidavit, Mr Nikolich described the aftermath to Mr Sutherland's decision. He said that, from the date of the reallocation decision, 'Mr Sutherland's attitude toward me was intimidating and threatening. He was belligerent and aggressive'. He said he felt 'angered and betrayed, bullied, discriminated against and was beginning to feel very stressed both at work and at home'. On 25 June 2003, they telephoned him from outside the GSJBWS office. Subject to one qualification, it is common ground between Mr Nikolich and Mr Heath --- Mr Keogh did not give evidence --- that the conversation substantially accorded with a file note made by Mr Heath that day. They were calling from outside the office, and indicated they were reluctant and nervous about calling. After 4 weeks of negotiating to what they felt was the right solution, Rod had indicated early this week that he had drawn a line under every third client, and said choose 1. I made it clear that I did not want to interfere with Rod's right to run the office, and that I would not offer an opinion without asking Rod his point of view. The first was from Ms Dal Bon, who was 'concerned that the 1:3 allocation policy would "rip apart" the remainder of the team, and that the clients would not want to be allocated this way'. Ms Dal Bon 'wanted the existing relationships between her clients and Mark/Peter recognised, and that "due process" was followed'. 48 The other file note relates to a further call from Mr Keogh. He said he did not have an answer to what he wanted me to do. I told Mark that he was entitled to speak about his concerns, as long as he understood that Rod ran the office, and he needed, in the end, to accept Rods decision. I said the firm would always ensure he was treated fairly despite raising concerns as long as he was sensible, and worked with Rod to ensure the relationship was good. I raised my concerns again that relationships had been formed with clients and that the current allocation policy of 1 from every 3 clients caused us to have to choose between these relationships. I mentioned that many clients were already expecting to deal with either Peter or myself and that I would also hope that they would prefer to do so. I also asked for an explanation as to the sudden change in his allocation policy. Rod listened to what we had to say, he explained that the change in policy was simply as a result of him changing his mind overnight and as such he has decided to stick to his current allocation policy. He feels that this is the fairest way to hand out clients to advisers within this office. In my view still not necessarily the fairest way or most ideal result for some clients. Rod did say that any client that raises the concern that they wish to deal specifically with either Peter or myself will be re-allocated after this concern has been aired to Rod. My view on the matter is that unfortunately reason has not won the day which is disappointing however we did decide before going ahead with talking with you, that we would accept any decision as final and we have to accept that. If you think that any issue needs to be raised as a result of our discussions with you please feel free to do so as everything is now out in the open, otherwise I guess it is a closed matter. Mr Nikolich took no action in relation to it. 51 After receipt of the email, Mr Heath telephoned Mr Sutherland. Mr Sutherland told him that 'the issue has now been sorted out'. We will always support you however you must not shut down the staff. 53 Mr Nikolich gave evidence of a meeting on 8 July 2003, at which Mr Sutherland announced the distribution of the new client lists and said, 'if I become aware of any adviser having had previous contact with clients without my authorisation there will be trouble'. The client's request for a meeting had been arranged approximately one week prior to the meeting on 8 July and at the time of my meeting, he had not been allocated to an adviser. I have an association with this client, having conducted business on a variety of occasions in Ms Dal Bon's absence during the year. 57 Shortly after this date, Mr Keogh told Mr Nikolich that he had decided to withdraw from team DKN. He explained: 'With the reallocation there is a lack of quality clients'. Whilst I continued to do my work, I avoided having any contact with him. These issues have caused me a significant degree of angst. He included a complaint that Dianne Grunbaum, the assistant attached to team DKN, had been transferred to team RSL, giving that team two assistants for three advisers and leaving only one assistant, who was new to GSJBWS, to service four advisers, including Mr Nikolich and Mr Keogh. This appeared to aggravate Rod considerably and resulted in the allocation/retention of approximately 40 of 120 "A" clients (total 350 family groups) and being forced to choose one of every three "A" clients to be shared between us. This represented 11% of the total GSD client base. The majority of the remaining quality "A" clients were allocated to the RSL team and primarily to Lee Scott who has gained considerably in direct brokerage and FUM clients. After assuring us on several occasions he would not benefit personally, Rod has quarantined numerous valuable clients for himself and will also benefit from a majority share of business written of those clients transferred to RSL. This is notwithstanding that the RSL client base is considerably larger than DKN and that RSL had culled significantly during the year and would not allow DKN to proceed with a similar exercise to reduce our client numbers. This comment was aimed at Mark and myself and delivered by Rod turning and looking directly at us. I personally viewed this act as extremely intimidating and threatening. At this time, I was asked about a client who at the time of conducting an interview on 8 July, had not been allocated to an adviser. I confirmed my association with this client having conducted business on a variety of occasions in Gabrielle's absence during the year. The discussion had become quite heated at the suggestion of my attempt to poach this client. During this discussion, I disclosed to Rod I felt I had been harshly dealt with given the poor quality of my existing client base and sought his managerial direction as to my future as I had made personal and financial decisions based on our business plan. I highlighted that since the revised allocation of DKN clients, I had been forced to reassess my family's future and decided to relocate as existing premises were no longer affordable. Rod responded to this by suggesting he was not responsible for my financial situation as he was not my father and suggested that if I had problems at home, I shouldn't bring those problems to work. I confirmed my problems were not at home but with his decision and his conduct. The individual needs to have a relationship of trust and confidence". Unfortunately, my trust and confidence in Rod is non-existent. She read it and noted it was accompanied by a copy of the team DKN business plan. She immediately telephoned Mr Nikolich and arrangements were made to speak at a time when Mr Nikolich was out of the office. Subsequently, she had a long conversation with him in which he amplified his complaints. I asked what did he mean by "action taken". He said he wants something done and he doesn't want his position to be jeopardised. He wants management to view his decision and based on what he has said he believes there is a case for discrimination and intimidation. He believes that by saying to HR that he is intimidated that something should be done. Peter said that intertwined there was one situation here, they are not separate items. He said that he doesn't feel that Rod has treated him appropriately. The environment is not conducive to allow him to do his job appropriately and that management have done nothing about it. I explained the process of the complaint and asked in relation to this particular complaint what he felt needed to be done. I acknowledged that he was obviously feeling unhappy and felt strongly about his treatment and that it was important the way he was feeling and we needed to work through this. I explained the complaint process. He said that all of the estates get sent through the office and were quarantined by RSL. They received the benefit of those estates. He felt that his personal characteristics had been thrown into question by Rod which he felt was inappropriate and felt like he was victimised and harassed as a result. It was a demographic thing, he is not scared to do the work but Gabby and Mark went to do most of the business development activities. Peter indicated that the whole reason the DKN team had actually been put together in the first place was that they felt that the RSL team was gaining too much control. She called him two days later to see how he was. You could see the whites of his eyes, he's never seen anyone this out of control before and never seen Rod acting like this before. She did speak to Mr Evans and Mr Heath. 64 In late August 2003, Ms Jowett spoke to Trish Barber, an investment adviser in the Canberra office, about another matter. In the course of that conversation, Ms Barber said 'Rod was a nice person but there had been a lack of trust in the office'; '[h]e's a good business writer but just not a good manager'. 65 At about the same time, Ms Jowett contacted Mr Sutherland. She told him she had received a letter from Mr Nikolich and invited him to come to Sydney to discuss it. 66 Mr Sutherland attended the Sydney office on 27 August 2003. Ms Jowett showed him the letter, which Mr Sutherland had not previously seen. 67 Apparently, Mr Sutherland took some time to consider the letter. He made notes on a copy of it. That copy is in evidence in this case (exhibit E). It contains, at the end, a note summarising the allocation of Ms Dal Bon's clients, confirming what is set out above. The note does not disclose any reasoning process undertaken by Mr Sutherland or any investigation by him of the needs of particular clients or the extent of past contact between any of them and particular financial advisers. 68 Ms Jowett then had a conversation with Mr Sutherland. Once again, she made a file note of the conversation. According to that note, Mr Sutherland denied most of Mr Nikolich's substantive allegations but he agreed he had referred to 'greed of advisers' at one meeting. He also agreed that 'morale was bad'. 69 Mr Heath was then called in. He confirmed that the transparency and consistency of decision making [sic: 'lack of'? ] had caused a loss of trust and confidence in his management style and he needed to consider his position carefully. During September 2003, she apparently did speak to Mr Nikolich by telephone on several occasions. During one conversation, Mr Nikolich says, he asked Ms Jowett to 'provide written confirmation of what you are doing to investigate my complaint' and referred to GSJBWS's grievance policy document. To me, time was of the essence and my conversations with Mr. [sic] Jowett were frustrating in that the investigation was taking so long and, in the meantime, I was left in the office with Rod Sutherland as my direct superior. I felt that nothing was being done in a timely way to fix up what was, to me, a clear case of injustice. Apparently, that was the end of the proposed apology. 72 In early October 2003, Ms Jowett asked Mr Nikolich to come to Sydney for a meeting with herself and Mr Heath. The meeting was held on 15 October. Once again, Ms Jowett made a file note of the conversation. It appears the conversation opened by Ms Jowett and Mr Heath telling Mr Nikolich that Mr Sutherland was 'stepping aside' from his role as Canberra manager. However, they learned Mr Nikolich already knew that. During the course of the conversation Mr Nikolich raised a new complaint, about the circumstances under which Mr Sutherland had taken over dealings with a client in Mr Nikolich's list, one Alan Barter. According to Ms Jowett's file note, Mr Nikolich said a discussion between Mr Keogh and Mr Barter indicated 'that Alan had some awareness that Rod was going to step aside and that Rod had manipulated Alan to move across to be a client of Rod and was no longer dealing with Peter'. Mr Nikolich presented a letter setting out details of his complaint. 73 There was also discussion about the original complaints. However, neither Ms Jowett nor Mr Heath stated any conclusions about their validity. Instead, there was discussion about Mr Nikolich's position. He hadn't been feeling well and he felt that one of the options that the firm could do was enable him to take some time off. We proceeded to advise Peter that he was welcome to take time. He could either take time as holidays in which he should do that sooner rather than later. If he felt that he needed to take time and felt it was a health issue then we would require a doctors certificate and for him to go to see his local doctor to take that time off. Again we encouraged him to do that and offered that if he needed help addressing his client situations or presentations so he could take some leave that we would provide some assistance on that front. He did not respond on that issue. Explained this was a confidential [counselling service], that are outside and separate to the organisation, for him to actually take advantage of. The reallocation of clients had taken most of the quality clients away from me. Moreover, I did not have the collegiate support that I had had in the Team and with the hostile environment caused by Mr Sutherland; the workplace became extremely stressful for me. Mr Sutherland denied any wrongdoing. Mr Bontempelli thought that representation was a matter for the client to decide but 'in result of the complications surrounding the communication around the transaction it would be appropriate for Rod to split some of that brokerage'. 76 Mr Nikolich sent to Ms Jowett a tape of some conversations between Mr Sutherland and Mr Barter which, he contended, would confirm his complaint. Ms Jowett did not listen to the tape. She said she sent it to Adelaide, where there was an appropriate machine for listening to it. She said: 'Someone attempted to listen to it, and, yes, as far as I'm aware, did'. Ms Jowett had no transcript or, it seems, any definitive report about the content of the tape, but she volunteered the comment that 'the conversations referred to by Peter I don't believe were on that tape'. She did not report that belief to Mr Nikolich. 77 Ms Jowett had a lengthy telephone conversation with Mr Keogh on 8 November 2003 about the Barter complaint. Mr Keogh was not happy about what Mr Sutherland had done. Alan had actually made some requests for Mark to investigate some Afic Rights. He asked Alan to send him some of the paperwork which Alan proceeded to do. Said that to Rod, Rod received the form, took action and actually booked the stock and received the brokerage for that particular transaction. Rod did not provide any assistance in terms of keeping him posted with where he was at with the account. Now Mark as a consequence is extremely frustrated and his trust in any discussions that he may have had with Rod in the future is now lost. 79 Sometime in November 2003, Ms Jowett telephoned Mr Nikolich in order to advise him of the outcome of his complaint. Whilst we acknowledged that it had been a difficult time for him, we have taken action. He said "What else are you going to do" and I explained to him that under the circumstances we felt that the situation had been addressed in the most appropriate way. Also that a combination of Rod moving from the role and the new manager in the Canberra office being appointed, and the instructions that had been clearly given to Rod, were the most appropriate course of action in this point in time. He asked for that to be done asap and couldn't again express his disbelief that the issues had been swept under the carpet and I again explained to him that we had not swept them under the carpet and reconfirmed the action that had been taken. He had given no further information or feedback around these issues. Following my review of the issues you have raised, I acknowledge that an apparent lack of transparency and failure by Rod to clearly communicate his decisions regarding the allocation of client accounts has contributed to the issues you have raised in your complaints concerning your relationship with Rod. However, I confirm that it was necessary and appropriate for Rod in his position as the Canberra Manager to make decisions regarding the operations of the Canberra office. Rod's decisions regarding the allocation of client accounts following the resignation of Gabrielle Dal Bon were appropriate having regard to the needs of the firm's clients and the operations of the Canberra office. Although, I accept that you have felt distressed and upset on occasions as a result of the issues giving rise to your complaints, I am satisfied that Rod has not attempted to intimidate you or cause you stress during his discussions with you about the allocation of client accounts. Dorian Bontempelli has subsequently been appointed to the role of Canberra Manager. Following my investigation, I have found no evidence to support your claim that the confidential complaint made by you against Rod has been discussed by him with any clients or that Barter's decision to transfer its account to Mark was related in any way to your complaint against Rod. Mr Nikolich received a copy of the letter on 18 December 2003. He immediately asked Ms Jowett to refer his complaint to Mr Evans and Dianne Jacobs, Group Manager, Human Resources. 82 Ms Jowett spoke to Ms Jacobs, who was her immediate supervisor, and asked her to contact Mr Nikolich. She gave Ms Jacobs copies of the relevant documents. 83 Ms Jacobs did not give evidence in this case. However, the documentary evidence includes her file note of a meeting on 17 March 2004 attended by Mr Nikolich, Mr Evans and herself. Key points were around the allocation of clients. He said he felt his job was under threat. He went on to say that it was a testing time. "I was off my rocker. I won't go there now" (he look [sic] as if he would cry). He felt his complaint was being ignored. David replied that sometimes actions are taken that it may not be obvious as to why. Peter's concerns were a substantial part, but not the only reason, why Rod stepped down. He sought counselling and was referred to his doctor. He was put on medication. He "was suicidal". He said he could not face going to work, but his doctor wanted him to return to work in a month so he could "face the reality of returning to work. " He said he is on medication during the day, sleeping pills at night to get through the highs and lows of the day. He feels isolated and not supported. David then said that "to say this has not been treated seriously (PH and HR Sydney) is not the case. " The feedback given by Peter to Paul has been considered and formed a real part of the decision regarding Rod not continuing in the role of manager. Dianne pointed out that it was handled in the way it was to help Peter retain confidentiality and dignity. Mr Evans and Ms Jacobs suggested he reduce his working hours and spend more time with his family. Mr Evans promised to give thought to a method of subsidising Mr Nikolich to enable him to do this. 85 On 29 March 2004, Mr Evans wrote to Mr Nikolich offering a minimum bonus payment of $100,000 for the six months to 30 September 2004. This payment was to be a one-off gesture and to be made by instalments on 30 April, 30 July and 30 October 2004. The offer was made against the background that Mr Evans had ascertained that Mr Nikolich 'is on target to make $192,000 for the year'. However, Mr Evans explained in evidence that the effect of the offer was that Mr Nikolich would have been guaranteed about $140,000 ($100,000 plus half his annual base salary) for the six months. 86 It is not clear that Mr Nikolich understood the offer in this way. Counsel for the applicant drew attention to the second paragraph in Mr Nikolich's letter, of 13 May 2004, in which he responded, rejecting the offer. As such, I currently anticipate that the proposed guarantee arrangement would be of little, if any value to me. These losses are ongoing whilst others within the Canberra office continue to benefit from their actions. Obviously, I would suggest that any such transfer be supervised by a mediator to ensure appropriate and suitable relationships are transferred. Alternatively, some other proactive method of JB Were increasing my annual brokerage/fee revenue by this amount would need to be considered. He arranged a further meeting for 22 June 2004. At the meeting, Mr Evans and Ms Jacobs discussed with Mr Nikolich the state of his health and his ability to resume work. As far as Goldman Sachs JBWere is concerned, these matters are now closed and no further offers of assistance will be made. We are concerned about the health issues that you have raised, so I have asked Dianne Jacobs to write to you separately regarding your health and your capacity and fitness for work. Although he was continuing to receive psychological counselling, Mr Nikolich resumed work on Monday, 5 January 2004. He continued to work until 6 August 2004, when he again went on sick leave. He remained on sick leave until 31 August 2004, when his sick leave entitlement ran out. Mr Nikolich then was paid salary for two weeks and had two week's leave without pay, from 16 September to 1 October 2004. Mr Nikolich then used accrued annual leave until 30 November 2004, when this leave ran out. From 1 December to 6 December 2004, Mr Nikolich was on leave without pay. In all, if it matters --- the applicant's counsel say it does --- Mr Nikolich's total period of leave without pay was less than three weeks. 91 In July 2004, Ms Jowett arranged for a psychological assessment of Mr Nikolich by Thomas O'Neill, a clinical psychologist. In September 2004, she also contacted Dr Stephen Jamieson, Mr Nikolich's treating general practitioner. Ms Jowett also had frequent contact with Mr Nikolich himself, concerning his health and leave entitlements. However, she left GSJBWS on 26 November 2004. She was succeeded as Human Resources Manager in GSJBWS's Sydney office by Paula Ward. 92 Ms Ward deposed that, as Mr Nikolich had used up all his leave by 1 December 2004 and GSJBWS had not heard from him, he was expected to attend for work on that day. He did not do so. Accordingly, Ms Ward sent him an express letter asking for information, as a matter of urgency, 'whether you are intending to return to work to resume your normal duties and responsibilities'. 93 Mr Nikolich responded through a firm of solicitors, Harmers Workplace Lawyers ('Harmers'). At this time we are currently finalising our instructions from Mr Nikolich and expect to respond more fully shortly but are currently advised that if Mr Nikolich were to return to work such would have adverse consequences for his health. On 7 December 2004, she wrote to Mr Nikolich. In those circumstances, Goldman Sachs JBWere regards your employment with Goldman Sachs JBWere as having terminated. For this purpose, Goldman Sachs JBWere will treat the termination of your employment as having taken effect on Monday, 6 December 2004. After a change of solicitors, the Application was amended to include the other causes of action, mentioned in para 2 above. 96 In the 2004-05 financial year, Mr Nikolich received from GSJBWS a total sum of $22,928. Counsel told me they had agreed that none of the reports' authors would be cross-examined. I expressed concern that it might be difficult, without cross-examination, to resolve any significant differences of expert opinion, but I agreed to defer further discussion of that matter until I had read the reports. Having now done so, I accept that cross-examination is not essential. The differences between the experts are differences in professional judgments. They do not need oral elucidation. I will attempt to summarise the views of each of the six experts. He has seen Mr Nikolich on numerous occasions since 1 December 2003. He presented in a most distressed state and related to me a 6-month history of work-place conflict. The latter was of such a degree that his career, not just with his firm, but in the industry as a whole, was compromised. This had had a very serious effect on his mental state, on his marriage and family life. I was very concerned about his mental state at the time and Mr Nikolich accepted to start anti-depressant medication immediately. In early 2005, Dr Jamieson referred Mr Nikolich to Dr Fatma Lowden, a Canberra psychiatrist, who took over responsibility for Mr Nikolich's medication. However, Dr Jamieson continued to see Mr Nikolich from time to time. He reported in April 2005 that 'his mood remains low'. Dr Jamieson related Mr Nikolich's condition entirely to his conflicts at work. He said that 'Mr Nikolich's feeling of injustice and fears that his career would be destroyed were foremost in the development of his clinical disorder'. Dr Jamieson did not think Mr Nikolich was fit to return to work, either with GSJBWS or 'anywhere else in his field for the moment'. 100 In a supplementary report dated 4 April 2006, Dr Jamieson detailed Mr Nikolich's medication. He noted that, since the earlier report, Mr Nikolich's marriage had failed, having 'a major detrimental effect on his health'. He thought Mr Nikolich, at that time, was 'unfit for any professional duties'. He also thought Mr Nikolich 'is unlikely to improve in the short to medium term'. On the other hand his intelligence, his psychological insight and his ability to hold a relationship are his strengths which should be taken into account in his prognostic evaluation. This needs to be monitored over the next six to twelve months to clarify this diagnosis. In terms of differential diagnosis I considered organic mood disorder, personality disorder and dysthymia. He did not require hospitalisation. I plan to talk to his wife with his consent in the future for further information if necessary. Thank you for organising investigations for him, which revealed no major abnormality. I discussed with him a trial of mood stabilizer for the future in case his bipolar symptoms are present but I asked him to cease the sleeping tablets and instead I initiated quetiapine 25mg po nocte for his insomnia and some of the mild paranoid thinking. I also initiated psychotherapy to improve his self-esteem, to deal with interpersonal issues and for anger management. This report was prepared after interviewing Mr Nikolich on eight different occasions. Dr Lowden gave the cause of the condition as 'betrayal of trust and lack of respect, difficulty in conflict resolution at the workplace and a hostile work environment'. He was asked to see Mr Nikolich by Pamela Coward and Associates, Mr Nikolich's present solicitors. Dr Lucas saw Mr Nikolich on 20 April 2005 and reported on 14 June 2005. The report set out an extensive history. That history included complaints by Mr Nikolich about the manner in which GSJBWS had handled his concerns about Mr Sutherland's conduct. He spoke to the officer mentioned above. He began taking Lovan. The officer said the firm did not know how to handle the situation and that procedure may not have been followed. Mr Nikolich became more frustrated and went deeper into depression. He had to face colleagues involved in the problem. Mr Nikolich has some obsessive-compulsive traits but these do not amount to a disorder. They are likely to have been an advantage during his employment, considering the nature of his duties and responsibilities. Further, in his present mental state he is probably unfit to return to work of a similar type with another firm. He remains depressed, anxious, has insomnia and concentration is poor. He obviously has a number of skills in the financial area but while depressed and anxious will have difficulty performing at his previous level. As mentioned, a return to his previous firm will not be possible. He saw Mr Nikolich on 9 July 2004, at the request of Ms Jowett. In a report dated that day, Mr O'Neill set out a history that was consistent with Mr Nikolich's evidence in this case. He detailed Mr Nikolich's results in relation to three assessments: Personality Assessment Inventory, Beck Depression Inventory 2 nd edition and Beck Anxiety Inventory. He met criteria for a Major Depressive Episode by December 2003 and these symptoms definitely interfered with his ability to function both at work and home. He began to receive some therapeutic benefits after commencing antidepressant medication, although continued to report ongoing symptoms of depression that were not as severe as those in the latter part of 2003. Although there was exaggeration noted on personality testing, my overall impression was that he still does have signs of a low-grade depression consistent with a Dysthymic Disorder. This level of depression is also complicated by his conviction that he has been unfairly treated by Mr. Sutherland and his team and also in general by Goldman Sachs and Were. He is also highly sensitive about how his concerns are being dealt with within the organisation and his perception that Mr. Sutherland has been able to get away with some unacceptable unprofessional behaviour. As noted in my report, he wants a resolve to his concerns to include financial remuneration/compensation, attempts to break up Mr. Sutherland's team and reallocation of Ms Dolbann's original clients by an outside mediator. I believe that Mr. Nikolich is fit for normal duties and responsibilities and would be more motivated at work if he perceived that attempts were being made by Goldman Sachs and Were to support his requests for a resolve. I consider these to be industrial issues and are not issues that require clinical attention per se. He reported to me that his psychological well being in the future will be contingent on the outcome of his negotiations with Goldman Sachs and Were. I do not believe any psychological treatment could assist with this process apart from perhaps reviewing the reasonableness of his requests with a counsellor of his own choice. He has had a positive response to his medication and I would suggest ongoing treatment with this. He saw Mr Nikolich on two occasions, at the request of solicitors then acting for GSJBWS or its insurer. 108 Dr Synnott first saw Mr Nikolich on 24 October 2005. On that occasion, he took a history, less extensive than that taken by some others but also consistent with Mr Nikolich's evidence. The history included complaints about the manner in which GSJBWS had handled his concerns about Mr Sutherland's conduct. 109 Dr Synnott thought the symptoms described by Mr Nikolich met the diagnostic criteria of a major depressive disorder. However, he said it should not automatically be assumed that Mr Nikolich had a significant psychiatric impairment or was precluded from returning to work. There is no psychiatric incapacity to work. The 'prognosis should be good --- assuming there is some reasonable industrial solution'. 111 Dr Synnott saw Mr Nikolich again on 31 March 2006. In a report dated 7 April 2006, he brought the history up to date but thought there had been no significant change in Mr Nikolich's psychological status. 112 However, Dr Synnott expressed concern at what he called 'a considerable shift in the "mindset" of Mr Nikolich'. However, at the consultation on 31 March 2006 that was no longer his position --- he is now of the opinion that he is currently incapable of any employment or participating fully in his usual life roles and activities, even if there is satisfaction in the courts. However, what has changed in the five months since I first saw him is that he now has a different mindset regarding his capabilities (in employment and other life roles) --- this may prove to be a self-fulfilling and self-perpetuating prophecy. It does not augur well for the future. He said he is psychiatrically incapable of participating in any kind of employment and, in my opinion, his mindset will prove this to be a self-fulfilling and self-perpetuating prophecy'. He saw Mr Nikolich on two occasions, at the request of solicitors acting for GSJBWS or its insurer. 115 The first interview was on 6 September 2005. Dr Samuell took an extensive history on this occasion. Once again, the history included complaints about the way in which GSJBWS had dealt with his concerns about Mr Sutherland. 116 Dr Samuell thought Mr Nikolich's psychological state had been 'unnecessarily medicalised'. In worrying about incremental changes to his income, he now faces the prospect of having no income. His distress about this is understandable. This is because Mr Nikolich's difficulties should be better understood within the framework of a rigid premorbid personality decompensating in the face of challenges. As such, the remedy for Mr Nikolich's distress is to obtain perspective about his circumstances and begin the process of finding alternative employment. He needs to abandon the sick roll and relinquish his abnormal illness behaviour. It is unlikely that medication will have any meaningful impact on him. He is not behaving in an adaptive manner and is further entrenching himself in the sick role'. 118 Dr Samuell saw Mr Nikolich again on 6 April 2006. By this time, he had read the reports of Dr Jamieson, Dr Lowden, Dr Lucas and Mr O'Neill. These reports caused him somewhat to modify his earlier view. In a report dated 10 April 2006, he said there 'is no doubt that Mr Nikolich was deeply unhappy and angry about the workplace circumstances'; nonetheless, he thought there remains 'some considerable doubt about whether he was in fact mentally ill'. In answer to a specific question as to whether Mr Nikolich was 'currently suffering any medical condition', Dr Samuell said that he 'did not make a psychiatric diagnosis'. I am not in a position to validate the factual basis of his history. Mr Nikolich responded to the perceived circumstances in a highly personalised and rigid manner. It was my view that his response was maladaptive, and that he lacked the internal resources to reconcile the circumstances. Therefore, I think that if Mr Nikolich did suffer from a medical condition, it was likely to be a product of the external circumstances and his personality. However, some important matters are in issue. Before turning to the parties' submissions, it is appropriate to make some findings about them. 121 In reaching my conclusions, I have given some weight to the applicant's reliance upon the principles enunciated in Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298. The three persons named by counsel (Ms Jacobs, Mr Bontempelli and Mr Keogh) are apparently all still employed by GSJBWS. However, I do not think it makes much difference, in relation to most issues, whether or not a Jones v Dunkel approach is taken. 122 It is difficult to see that Ms Jacobs could have assisted in relation to any contentious issue in the case. She participated in the recommendation to Mr Heath to terminate Mr Nikolich's employment. However, it was Mr Heath who took the termination decision and he gave evidence about his reasons for that decision. 123 Mr Bontempelli could have dealt with the atmosphere in the Canberra office after early June 2003 and, as counsel suggested, Mr Sutherland's conduct towards Mr Nikolich. The same comment may be made about the other people who were in the Canberra office at that time, none of whom were called. Jones v Dunkel principles apply to the respondent's failure to call any of these people. However, it must be said, there was no real question about these matters. 124 Mr Keogh's absence from the witness box is more significant. Mr Keogh was involved in most, if not all, of the June 2003 conversations between Mr Nikolich and Mr Sutherland. He would have been in a position to corroborate Mr Sutherland's denial of having used abusive and bullying language during those conversations. It is not adequate for the respondent's counsel, Mr A Coleman, to argue, as he does, that there 'was no need to call Mr Keogh' as he 'had clearly stated his position with respect to the Dal Bon client re-allocation in his email to Mr Heath dated 26 June 2003'. So he had, reluctantly accepting the finality of Mr Sutherland's reallocation. However, that says nothing about Mr Sutherland's conduct towards Mr Nikolich. 125 It is true, as Mr Coleman submitted, that the applicant was free to call Mr Keogh. However, this was not a real option if, as I understand, Mr Keogh is still employed by GSJBWS. 126 Particularly in relation to Mr Keogh, it is appropriate to apply Jones v Dunkel principles, adversely to GSJBWS. I do so. However, my conclusion that I should prefer the evidence of Mr Nikolich to Mr Sutherland, where it is necessary to choose between them, rests more upon the evidence about events in 2003 and my assessment of the two men, rather than the failure of the respondent to call Mr Keogh. My impression, as he gave his evidence, was that he was an honest and straight-forward person, but one who was deeply troubled by what he was recounting. Mr Nikolich obviously has a strong sense of injustice about the way he was treated by GSJBWS. This sense may have led him to draw some unjustified inferences about people's motives and conduct. However, I have no hesitation in accepting his account of factual matters, including the substance of the conversations he had with Mr Sutherland and his descriptions of Mr Sutherland's demeanour and attitude towards him. I do so the more readily because I was not impressed with Mr Sutherland. Although Mr Sutherland answered most of the questions put to him in cross-examination in a succinct and direct way, he exhibited a tendency to prevaricate in relation to important issues. If you don't understand the question please ask me?---Okay. They said to you, what you are doing directly contravenes the Team DKN business plan, didn't they?---They mentioned it, yes. I pointed out the business plan item confirming this and Rod doesn't recall having seen this previously. I said I'd seen a business plan. Ms Nomchong then read to him Ms Jowett's file note. So did she show you a document or didn't she?---She didn't show me a document. First, I find it inconceivable that, if Ms Jowett did not show Mr Sutherland the business plan, about which she was questioning him, he would have failed to ask to see it. Second, the file note does not suggest that Mr Sutherland told Ms Jowett that he had seen a business plan, but not the particular business plan she said she showed him. There is no suggestion there was ever more than one team DKN business plan. 132 Having regard to Mr Sutherland's concession, in evidence in this case, that he had seen the team DKN business plan, it seems to me the only available conclusion is that he sought to mislead Ms Jowett. 133 During her cross-examination, Ms Nomchong asked Mr Sutherland about his decision to stand down as Canberra office manager. He said it was his choice to do so; there were a number of reasons but poor performance was not one of them; neither was Mr Nikolich's complaint; when Mr Heath and Mr Voigt asked him to consider stepping down, they merely said 'they were looking at management change within the Canberra office'. [Ms Nomchong incorrectly referred to Mr Evans, rather than Mr Heath, in her question but Mr Sutherland was in no doubt about the meeting under reference. He said he and Mr Voigt told Mr Sutherland they had 'serious issues about the low morale in the Canberra office', that 'a lot of people had expressed dissatisfaction with his managerial style' and that he and Mr Voigt had 'serious concerns about whether or not he should continue in the role'. Mr Heath specifically denied they had said only that they were 'looking at management change in Canberra'. 135 The evidence of Mr Heath on this issue is more probable than that of Mr Sutherland. If there was no problem in the Canberra office, why would Mr Heath and Mr Voigt wish to change managers? I can only conclude that Mr Sutherland was willing to mislead the Court about the reason for his standing down as manager. 136 Further, in relation to credibility, as he gave his evidence, it seemed to me Mr Sutherland exhibited a lack of sensitivity to the complaints of Mr Nikolich and Mr Keogh that is consistent with Mr Nikolich's version of the relevant conversations. For example, Mr Sutherland said in evidence he had not thought the fact that Mr Nikolich and Mr Keogh had taken their complaint to a higher authority (Mr Heath) meant the complaint was a serious one. He agreed that, after he learned Mr Nikolich and Mr Keogh had complained to Mr Heath, he did not talk to them about, or try to resolve, their concerns. Although he was manager of the Canberra office, and Mr Nikolich's immediate supervisor, he took no steps, at any stage, to re-establish an amicable working relationship with him; even though, as he told Ms Nomchong, he observed Mr Nikolich to be anxious, stressed and avoiding him. My agreement does not depend upon my accepting any contentious evidence. It arises irresistibly from the evidence of GSJBWS's own witnesses, especially Ms Jowett, Mr Heath and Mr Evans, and contemporaneous letters and file notes. 138 There is an inherent conflict of interest in a system under which an office manager has the task of allocating clients amongst financial advisers, of whom he himself is one. On several occasions in their evidence, Mr Sutherland, Mr Heath and Mr Evans repeated the mantra that clients are clients of the firm, not of particular financial advisers. In a legal sense, that is true; the client contracts with the firm, not the adviser; fees are charged by the firm, not by the adviser. However, advisers have a considerable financial interest in the number and identity of the clients that are allocated to them. The incentive system employed by GSJBWS meant that, as Mr Sutherland agreed, 'the ability to service [a] client is a very valuable right'. It should, therefore, have been obvious to GSJBWS's senior officers that it was essential to develop and enforce a client-allocation protocol which left no room for the office manager to favour himself or his own team, or be perceived to be doing so. A suitable protocol could have taken any of a number of forms. However, there was no protocol in place in the Canberra office in 2003. 139 Mr Evans and Mr Heath knew there was no protocol in place. Accordingly, they should have been particularly sensitive to any complaint, whether justified or not, that the office manager had abused his power of allocation. Yet they seemingly failed to comprehend --- they certainly failed to act upon - Mr Nikolich's complaint that this is what had happened in relation to the reallocation of Ms Dal Bon's clients. I am not able to make a finding about (i). The only relevant evidence is that of Mr Sutherland, in whose evidence I have little confidence. However, I accept that allegation (i) may have been incorrect. It does not matter. My present point is that these were all serious allegations warranting investigation, yet there was no effective investigation. 142 It might have been thought that a letter such as that of 28 July 2003 would have resulted in a senior person immediately travelling to Canberra and conducting a series of one-to-one meetings with members of the Canberra staff. This would not have been a large task. There were only about a dozen people employed in Canberra. Mr Coleman suggested it would have been difficult for Ms Jowett to conduct confidential meetings in the Canberra office. However, if Ms Jowett had not wished to conduct meetings in the Canberra office, she surely could have arranged a room elsewhere in the city. Everybody in the office would have known meetings were being held, but they all must anyway have known of the conflict between Mr Sutherland and Mr Nikolich. 143 Mr Coleman also argued that Ms Jowett knew Mr Heath was discussing with Mr Sutherland the possibility of Mr Sutherland stepping down as Canberra manager. He said: 'Ms Jowett thought that if Mr Sutherland stepped down from his role, this may resolve the Applicant's grievance'. However, Mr Sutherland's removal as manager would not have reversed the allegedly unfair reallocation decision. It would have remained necessary for Ms Jowett to investigate that decision and, if it was wrong, take action to rectify the position. In any event, it was not reasonable for Ms Jowett to delay for three months, while Mr Sutherland considered his position. 144 Lest it be thought that my criticisms on this matter are too severe, I mention that their essence was accepted by Mr Evans. At the close of his cross-examination, I asked Mr Evans about his reaction when he first saw Mr Nikolich's letter, on his return from sabbatical leave in August 2003. I did leave it to Mr Heath at the time. You're absolutely right, sir, that we do place a lot of emphasis on integrity of the manager. What happens in client allocations is if an adviser knows and has a relationship with that client that may be looked after by another client adviser in the office, that when that client adviser leaves for smoothness of the relationship that it goes to one of those other or the adviser that has the existing relationship. If they ring up X, they also know that if X is away to ask for Y or Z?---Absolutely, your Honour. You don't run into the psychological problems that undoubtedly have occurred here?---I totally agree with you, sir. Instead, Ms Jowett allowed nearly a month to elapse before she even showed the letter to Mr Sutherland. At no stage did she interview Mr Keogh or Ms Grunbaum, who were both named in Mr Nikolich's letter, nor any of the other Canberra financial advisers. More than two months after receiving Mr Nikolich's letter of 28 July, and without having taken any meaningful action to establish the truth or otherwise of his allegations, Ms Jowett invited Mr Nikolich to attend a meeting in Sydney with herself and Mr Heath. However, it is apparent from Ms Jowett's file note that this meeting did not address the concerns he had raised in his letter; rather it developed into a counselling session about Mr Nikolich's stress. Instead of responding to a plea for justice, Ms Jowett and Mr Heath, no doubt with good intentions, treated him as the problem. This response was inappropriate. 146 After that meeting, a further six weeks was allowed to elapse before Ms Jowett formally responded to Mr Nikolich's complaint. Even then, she missed the main point of his complaint. She failed to deal with his allegations of abuse of power, except by the bland statement that Mr Sutherland's allocation decisions 'were appropriate having regard to the needs of the firm's clients', a matter about which she had made no inquiry. Although Ms Jowett knew Mr Nikolich was relying --- rightly or wrongly --- on the exit strategies paragraph in the DKN team business plan, she made no reference to the plan at all. If she had thought it was inapplicable to the situation that had arisen on Ms Dal Bon's departure, it would have been helpful for her to explain why that was so. 147 Mr Nikolich was understandably dissatisfied with this response. He asked that his complaint be referred to Mr Evans and Ms Jacobs. However, they were even less active in ascertaining the merit of his complaints; they seem to have made no investigation at all. Instead, and once again no doubt with good intentions, they set about counselling Mr Nikolich; once again, he was treated as the problem. Although he knew of Mr Keogh's email of 26 June 2003 reluctantly accepting the finality of Mr Sutherland's reallocation decisions, Mr Nikolich took no immediate action to dissociate himself from Mr Keogh's position or to inform Mr Heath that he continued to press a complaint against Mr Sutherland. He did not do this for over a month, until he sent the letter of 28 July 2003. This delay possibly set the tempo for Ms Jowett's subsequent dilatory conduct. 149 There was a delay of a couple of weeks in Mr Nikolich receiving Ms Jowett's letter of 1 December 2003. Mr Nikolich may have contributed to this delay by failing promptly to notify a change of address. 150 Mr Nikolich's delays were unfortunate. However, it is only fair to note that Mr Nikolich was suffering stress at both these times, as was well known to the relevant GSJBWS employees. 151 It might be thought Mr Nikolich was unwise to refuse the offer Mr Evans made in his letter of 29 March 2004. Perhaps he was; that rather depends upon the precise meaning of Mr Evans' letter. However, Mr Nikolich thought the offer did not provide a just result; that was a judgment he was entitled to make. 152 In some of the file-notes, there is an implied criticism of Mr Nikolich for having failed to indicate how he wished GSJBWS to handle his complaint. I do not think this is a fair criticism. Mr Nikolich was not an expert in the handling of complaints of this type. So far as I am aware, he had had no previous relevant experience. He made his complaint to the appropriate human resources officer. He was entitled to expect she would know what to do, without advice from him. Moreover, Mr Nikolich was neither impartial or objective. He recognised this himself, in speaking of his stress and emotional reaction to what he perceived to be the injustice to which he had been subjected. Those experts agree the disability arises out of the events which are the subject of this proceeding. However, there is some difference between them, in their descriptions of the disability and assessments of its severity and effects. 154 Dr Jamieson was concerned about Mr Nikolich's condition when he first saw him, on 1 December 2003. He detected symptoms of 'a major depressive disorder'. He continued to see Mr Nikolich regularly and remained concerned about his condition. I bear in mind that Dr Jamieson is not a specialist psychiatrist; however, I would not disregard the opinion, on a matter like this, of a general practitioner who has frequently seen the patient. 155 Dr Lowden and Dr Synnott, both specialist psychiatrists, thought Mr Nikolich was suffering a major depressive disorder; Dr Lucas accepted he had done so at one stage, and remained depressed, anxious and suffered from insomnia and poor concentration. Mr O'Neill diagnosed a low grade depression. 156 Only Dr Sammuell failed to report a medical or psychological condition; although it is fair to point out that he specifically stated that he had not made a psychiatric diagnosis. Even so, Dr Samuell referred to Mr Nikolich's personality characteristics as 'maladaptive'. 157 It seems to me the preferable view is that expressed by Dr Lowden, the treating psychiatrist. Her opinion is fully supported by Dr Synnott, substantially supported by Dr Lucas and Mr O'Neill and consistent with Dr Jamieson's observations. Dr Sammuell has not had prolonged exposure to Mr Nikolich. 158 It follows that I find Mr Nikolich has suffered, and perhaps continues to suffer, a major depressive disorder flowing from the events the subject of this proceeding. In accordance with the overwhelming view of the experts, it would be inadvisable for him to return to employment by GSJBWS. However, it seems he can return to work in the finance industry. This will not be easy for him to do. Mr Nikolich is obviously disillusioned about the culture of the finance industry. However, as several of the experts pointed out, a major aspect of his current problem is his feeling of injustice. If that problem is resolved, and a job is available, he probably can return to the industry, although probably not immediately in a full-time capacity. Section 170CK(2) provided that --- except as provided by subs (3) or subs (4) - an employer must not terminate an employee's employment for any one or more of nine specified reasons, or for reasons that include any one or more of those nine reasons. However, Mr Coleman relies on s 170CK(3), the 'inherent requirement' provision. It purported to overrule a prevention by subs (2) of a matter referred to in subs (2)(f) from being a reason for terminating the particular employment. But subs (2) did not prevent a particular matter being a reason for the termination; it simply commanded employers not to terminate for any of the proscribed reasons. Nonetheless, the intention behind subs (3) is plain; subs (2)(f) is not to apply in any case in which the reason for termination, being a reason that would otherwise fall within subs 2(f), is based on the inherent requirements of the particular position. 162 Section 170CP of the WR Act permitted an employee to make an application to this Court in respect of any alleged contravention of s 170CK of the WR Act by his or her employer. It enables the allegation to stand as sufficient proof of the fact unless the employer proves otherwise: R v Hush; Ex parte Devanny [1932] HCA 64 ; (1932) 48 CLR 487 at 507. He said: '[w]hilst Mr Heath made a decision to write to [Mr Nikolich] informing him that his employment had terminated, it is clear that [Mr Nikolich's] employment terminated as a consequence of him abandoning his employment'. Mr Coleman said the test of whether a termination of employment is at the initiative of the employer is whether 'the action of the employer is the principal contributing factor which leads to the termination of the employment relationship'. He cited Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship. As at 1 December 2004, Ms Ward regarded Mr Nikolich as a continuing employee of GSJBWS. That is why she wrote to him asking for information as to whether he intended to return to work and resume his normal duties. The response from Harmers did not constitute a termination of employment by Mr Nikolich or an abandonment by him of his employment. On the contrary, the letter assumed the employment relationship was continuing but stated that Mr Nikolich was currently unable to return to work for health reasons. The solicitors said they were currently finalising their instructions and expected 'to respond more fully shortly'; in other words, it was Mr Nikolich's wish to maintain the existing situation pending further advice. 166 In the light of this letter, Mr Heath took a decision to notify Mr Nikolich that he regarded his employment as terminated. It was this notification that brought the employment relationship to an end. 167 The applicant has made out the first ingredient of each of his s 170CK claims. The only thing that is clear is that reg 30C was intended to be an exhaustive statement of what constituted a 'temporary absence from work' for the purposes of s 170CK(2)(a) of the WR Act. If a particular absence does not fall within the reg 30C definition, s 170CK(2)(a) has no application to it, even if, in ordinary language, it would be regarded as a temporary absence from work. 170 Although Mr Nikolich provided medical certificates covering most of his periods of absence from work, between 6 August 2004 and 7 December 2004, it is clear that neither of the alternatives identified in subreg (1) was satisfied in this case. In that situation, subreg (2) becomes critical. It is the statutory equivalent of the principle set down in Finch v Sayers [1976] 2 NSWLR 540 at 558'. At that reference, Wootten J held there is little room for the operation of the doctrine of frustration in relation to a modern contract of employment. I do not, with respect, think the citation assists the interpretation of reg 30C. 172 Counsel for the applicant also argued that the word 'duration', in reg 30C(2)(a) and (b), does not have the effect of requiring that the employee be on sick leave throughout the whole of the absence or absences. However, that is a difficult argument to sustain. The ordinary meaning of the word 'duration' is given in the Macquarie Dictionary as: '1. continuance in time. 2. the length of time anything continues. ' The Australian Oxford Dictionary offers a similar definition. Although such an interpretation is a rigorous one, incompatible with employees assisting their employers, for example by taking part of the time as annual leave, it seems to me clear that the intention behind subreg (2) is that the employee must have been on paid sick leave throughout the whole of the relevant absence or absences from work. It is certainly not enough that the employee was on paid sick leave at the time of the termination. At least unless the absence from work has exceeded three months, or a total of three months, so that reg 30C(2) would apply, the absence will only be a 'temporary absence from work', within s 170CK(2)(a), if the employee has complied with either para (a) or para (b) of reg 30C(1). A similar comment may be made about counsel's second alternative. 175 I think the respondent's construction of reg 30C is correct. It is consistent with the view adopted by Marshall J in Sallehpour v Frontier Software Pty Ltd [2005] FCA 247 ; 139 IR 457 at [45] . He thought subreg (1) had the effect of making a 'temporary absence from work', within the meaning of s 170CK(2)(a), conditional upon compliance with one or other of the preconditions set out in that subregulation i.e. para (a) or para (b). However, subreg (2) made that provision unavailable in either of the situations mentioned in that subregulation: the employee's absence, or total absences, exceeded three months and the employee was not on paid sick leave throughout the whole of the absence or absences. In other words, it was always necessary to satisfy the requirements of subreg (1), but subreg (2) limited the situations in which satisfaction of subreg (1) was available. 176 In the present case, the requirements of subreg (1) of reg 30C were not satisfied. Even if they had been, subreg (2) made subreg (1) unavailable. Mr Nikolich was absent from work for more than three months immediately before the termination of his employment, and was not on paid sick leave for the whole of the absence. During part of that time, he was on annual leave; during another part, he was on leave without pay. Consequently, he did not satisfy the proviso to para (a) of subreg (2). Similarly, although his absences within a 12 month period exceeded three months, he was not on paid sick leave for the duration of the absences, but only part of that duration. Consequently, he did not satisfy the proviso to para (b) of subreg (2). 177 Although Mr Nikolich's absence from work between 6 August 2004 and 7 December 2004, was a 'temporary absence from work' in ordinary parlance, it was not a 'temporary absence from work because of illness or injury within the meaning of the regulations '. (Emphasis added. ) It follows that the claim under s 170CK(2)(a) or the WR Act must fail. The list is derived from various international Conventions designed to protect employees against discriminatory treatment. Most of the items in this list have no possible application to this case, but counsel for the applicant relies on the reference to 'mental disability'. The first issue then, having regard to the 'reverse onus' provisions of s 170CQ of the WR Act, is whether the Court is satisfied, on the balance of probabilities, that GSJBWS did not terminate Mr Nikolich's employment wholly or partly because of his actual or supposed mental disability. 179 In para 28 of his Second Amended Statement of Claim, the applicant alleged the respondent terminated his employment 'for a prohibited reason'. In answer, the respondent denied it terminated the applicant's employment at all. Accordingly, although it was not specifically so pleaded, I will take this plea as an assertion of its reason for doing so. 181 The decision to send Mr Nikolich the termination letter of 7 December 2004 was taken by Mr Heath, on the recommendation of Ms Ward and Ms Jacobs. Ms Ward gave evidence that she spoke to Ms Jacobs after reading the letter from Harmers, dated 6 December 2004. She thought that, as the solicitors had given 'no indication as to when he will be returning to work, if at all', GSJBWS could send a letter to Mr Nikolich 'stating that we consider his employment to have been terminated'. Ms Jacobs agreed but said Ms Ward should speak to Mr Heath and let him decide. Ms Ward said she then spoke to Mr Heath. He agreed with the recommendation. So Ms Ward sent the letter of 7 December 2004. Ms Ward's accounts of the relevant conversations contain no reference to mental disability, although she quoted, to Ms Jacobs and Mr Heath, Harmers' statement that a return to work 'would have adverse consequences for [Mr Nikolich's] health'. We did not have a timeframe for him to return to work. However, Mr Heath dealt with the termination decision in his first affidavit. He said Ms Ward spoke to him and attributed to Ms Jacobs a recommendation 'that we should write to Peter stating that we consider his employment to have terminated'. He agreed with this recommendation. Mr Heath said the decision to send the letter was ultimately his. Is that your evidence?---I recall seeing the letter. Did I do that prior to the decision, I can't recall. Is that right?---Yes. Would that be fair?---That was one of the reasons. He said that, if it is found that the respondent terminated Mr Nikolich's employment, this was because of his 'failure to attend work and properly communicate with the Respondent about his medical condition and expected return date'. Mr Coleman added that the applicant's failure to do these things 'were not a consequence of his disability' and, anyway, according to the latest report held by GSJBWS (that of Mr O'Neill of 9 July 2004), he was fit for work. 186 Despite this fitness for work, Mr Coleman said, Harmers had indicated the applicant would not be returning to work in the foreseeable future. He contended the situation was similar to that in Sallehpour . 187 There are similarities between the facts of this case and those in Sallehpour . In both cases, the employee was absent from work for a long time before the termination, during which time the employer expressed concern about the employee's medical condition, offered support in relation to that condition and experienced some frustration in obtaining meaningful information about the employee's medical condition and date of likely return to work. However, a major difference between the two cases is that, in Sallehpour, the person who made the termination decision gave evidence, which Marshall J accepted, 'that Mr Sallehpour's mental health was not a reason for the termination'. In the present case, the decision-maker, Mr Heath, said one of his reasons was that Mr Nikolich 'had been off work with psychological symptoms' that he thought 'rendered him unable to perform his duties'; in other words, one of his reasons was that Mr Nikolich had a mental disability rendering him unfit for work. 188 If an employer terminates an employee's employment for a proscribed reason, I do not think it matters whether the reason is factually correct. Section 170CK(2)(f) is intended to constrain discriminatory conduct. It is just as objectionable for persons to act in a discriminatory way on the basis of perceived facts as true facts. It may also be just as detrimental to the person being discriminated against. 189 However, in case I am wrong about this, I indicate that, notwithstanding Mr Coleman's contrary submission, I think Mr Heath's perception of unfitness was correct. Mr O'Neill's report was dated 9 July 2004; it was five months old at the date of termination. During that five months, Mr Nikolich had been allowed to be absent on sick leave for three weeks and, for another five weeks, on either full pay or without pay. During this time, Mr Nikolich had continued to see Dr Jamieson, who had, from time to time, certified him unfit for work. Mr O'Neill had qualified his opinion that 'Mr Nikolich is fit for normal duties and responsibilities', notwithstanding that he still had 'signs of a low-grade depression consistent with a Dysthymic Disorder', by saying he 'would be more motivated at work if he perceived that attempts were being made by [GSJBWS] to support his requests for a resolve' of the 'industrial issues'. As Mr Heath was aware, nothing had been done by GSJBWS in that connection between 9 July 2004 and 7 December 2004. 190 In view of Mr Heath's last answer, in the section of cross-examination set out in para 184 above, I must conclude that GSJBWS has not made out a defence to Mr Nikolich's claim that his employment was terminated for the reason of mental illness. 191 This brings me to Mr Coleman's alternative submission about s 170CK(2)(f). He says it does not apply in the present case because of subs (3); the reason for termination was 'based on the inherent requirements of the particular position concerned'. 193 It will be recalled that Mr Heath told Ms Nomchong in cross-examination that one of the reasons for his decision to terminate Mr Nikolich's employment was 'because he had been off work with psychological symptoms' that he thought 'rendered him unable to perform his duties'. Although counsel for the applicant were able to rely on this answer to defeat any claim that the reasons for termination did not include Mr Nikolich's mental illness, they confront the problem that Mr Heath's asserted reason related the mental illness to Mr Nikolich's inability to perform his duties. And this inability had been at the heart of Ms Ward's thinking. 194 I have been troubled about the relationship between s 170CK(2)(f) and s 170CK(3). Some of the proscribed employee attributes will rarely, if ever, give rise to an 'inherent requirement' issue; for example, race, colour, national extraction and social origin. These attributes are all immutable, as are some of the other attributes listed in para (f), that are more likely to give rise to an inherent requirement issue. However, some other attributes (family responsibilities, pregnancy, physical disability, mental disability) may only be temporary. I thought a too-ready acceptance that a temporary attribute enlivens s 170CK(3) might lead to an erosion of the protection that s 170CK(2) was designed to ensure. I had in mind the case of an employee who has a physical disability that requires hospital treatment and a short absence from work. I was concerned by the possibility that s 170CK(3) might permit termination for the reason of physical disability, on the basis that the employee will be unable to perform his or her usual duties during the period of hospitalisation and recuperation. However, I have been persuaded by Mr Coleman that this concern is unwarranted. In such a case, a medical certificate would be available; this would bring the case within reg 30C(1)(a) of the regulations. Unless the employee's absence from work exceeded three months, s 170CK(2)(a) would have been available to the employee. If the absence exceeded three months, s 170CK(2)(a) would still have been available, provided the employee was on paid sick leave throughout the absence. 195 In Qantas Airways Limited v Christie [1998] HCA 18 ; (1998) 193 CLR 280 at 305, McHugh J drew a distinction between the inherent requirements of a position and the inherent requirements of the tasks that the position-holder has to perform. His Honour referred to a definition of the word 'inherent' adopted in a report of a Commission of Inquiry of the International Labour Organisation. He thought that definition ought to be applied to s 170DF(2) of the Industrial Relations Act 1988 (Cth), an Act that metamorphasised into the WR Act. In the ILO report, 'inherent' was interpreted to mean 'existing in something as a permanent attribute or quality; forming an element, especially an essential element, of something; intrinsic, essential'. McHugh J commented 'that which is essential to the performance of a particular position must be regarded as an inherent requirement of that position'. 196 It is a permanent, essential requirement of the position of financial adviser --- or, indeed, almost any position --- that the employee attend for work and carry out the duties attached to the position. Where the effect of a reason mentioned in s 170CK(2)(f) is that the employee cannot attend for work during usual hours, and carry out the duties attached to the position, I think subs (3) applies, to save the reason from being one proscribed by subs (2). 197 This was the approach taken in Laz . Moore J found the employee's employment had been terminated for reason of her family responsibilities; her employer was unhappy about the fact that, on certain days, she left work between 5.30pm and 6pm in order to pick up her son from day care. If given prior notice, the employee could arrange for someone else to pick up the child; if she had no notice, she had no alternative but to go herself. The employer defended a claim under s 170CP relating to an alleged contravention under s 170CK of the WR Act on the basis that it was an 'inherent requirement' of the employee's position, as personal assistant to the managing director, that she be able to work, without prior notice, later than 5.30pm. However, Moore J found there was no evidence that: (1) there had been work that should have been done by the employee, as holder of the relevant position, after 5.30pm and was not done by her on the day in question; (2) that any failure had a consequence of substance; or, (3) that advance notice could not have been given that later work was required. 198 The information before Mr Heath on 7 December 2004 was that provided on the previous day by Mr Nikolich's solicitors, Harmers. They had stated their current instructions were 'that if Mr Nikolich were to return to work such would have adverse consequences for his health'; in other words, he was unfit for work and would not be returning immediately. It is true, as counsel for Mr Nikolich emphasised, that the letter was not intended as a final response to Ms Ward's letter to Mr Nikolich of 1 December 2004. Harmers said they expected 'to respond more fully shortly'. Still, it contained a clear statement that Mr Nikolich was not presently able to fulfil the inherent requirements of his position. 199 Counsel for Mr Nikolich argued that Mr Heath 'jumped the gun'; Mr Nikolich was not ignoring Ms Ward's letter of 1 December 2004; Mr Heath could, and should, have waited for a fuller response to that letter. Counsel also said, that, if Mr Heath had made further inquiries, he would have discovered that Mr Nikolich's health was improving. I understand those submissions, but the fairness of Mr Heath's decision is not a matter I have to determine. The only question for me is whether Mr Heath's decision to terminate Mr Nikolich's employment on the ground of mental illness was based upon the inherent requirements of the position concerned. I think it clearly was. Consequently, I must conclude that s 170CK(3) applies to exclude the application of s 170CK(2) to the termination of Mr Nikolich's employment. 200 The unlawful termination of employment claim must be rejected. The applicant pleaded the adoption of the business plan 'constituted an alteration of the express terms of the contract [of employment] as from July 2002'. The respondent also denied the particular items of conduct or acquiescence relied on by the applicant. 203 I do not accept Mr Sutherland's assertion that he only 'glanced' at the DKN business plan. I think he would have read it in full and noted the 'exit strategies' paragraph. In any event the 'exit strategies' paragraph was not dissimilar to the paragraph in the RSL partnership agreement entitled 'What if a member of the team wants to leave the partnership? ' that was held up as an example of partnership agreements. I also note that Mr Evans agreed he and Mr Voigt went through the business plan with Mr Nikolich during the April 2003 performance review. Although Mr Evans had no recollection of the 'exit strategies' paragraph, the probability is that he read it at that time. However, I do not think it follows that the paragraph was thereby incorporated into Mr Nikolich's employment contract. 204 The evidence suggests it was routine practice for GSJBWS financial advisers to prepare, from time to time, a business plan setting out their objectives and their proposed strategy for realising those objectives. It was routine practice for such plans to be discussed with, and approved by, the adviser's immediate supervisor and, perhaps, also with higher officers conducting performance reviews. I think it is correct to say, with Mr Coleman, that the preparation of a business plan was something undertaken by a financial adviser pursuant to his or her contract of employment but was not ordinarily thought to be something incorporated into the contract of employment. It would, for example, be startling if GSJBWS brought an action for damages against an adviser who had failed to achieve the revenue projections set out in an approved business plan. 205 The team DKN business plan was different from an individual's business plan. It governed the activities of three financial advisers, not just one of them. Also it set out the terms of the partnership that the three team members had agreed to enter. As between the three partners, it may have been contractually binding. But that does not mean it was contractually binding as between the team members, or any one of them, and GSJBWS. 206 One of the matters agreed between the team members was the manner in which they would divide the income derived by the team. If effect was to be given to that agreement, it was necessary that details of it be made known to those within GSJBWS who were responsible for calculating and making incentive payments. Although there is no evidence about the matter, I assume the necessary information and authorisation was given by DKN team members to GSJBWS's financial department. However, that was a mechanical matter; the agreement as to distribution did not affect the total incentive payments to be made by GSJBWS or make it necessary for the business plan to be explicitly agreed by an appropriate GSJBWS officer. 207 The 'exit strategies' paragraph is different. It purports to deal with the situation that would arise if any of the three partners left the partnership. Mr Sutherland expressed the view, and counsel for GSJBWS argued, that the paragraph only applied if the exiting partner remained in the employment of GSJBWS. I see no justification for reading down the wide terms of the paragraph in this way but, for present purposes, that does not matter. Upon any view, the paragraph purported to control the exercise of the office manager's reallocation discretion; it therefore limited GSJBWS's rights. It does not matter whether the limitation occurred only when the exiting partner remained with GSJBWS or in all cases. 208 When persons enter into an agreement between themselves that will have the effect of limiting the rights of another person, they need to obtain the express agreement of that other person, if the limitation is to be binding on that person. It is not enough for the other person to become aware of the content of the agreement and make no objection to it. 209 I appreciate that an agreement for a variation of a contract of employment may be made orally, and even with a minimum of formality. It may be implied from conduct. See Commonwealth of Australia v Crothall Hospital Services (Aust) Ltd (1981) 36 ALR 567 at 576. However, there must be something that expresses an intention to vary the contract, as distinct from acting pursuant to the contract. In the present case, the contract of employment was constituted by a letter of offer, setting out the terms of employment, that was issued by GSJBWS' Human Resources Services Manager in Melbourne, which letter was, at her request, signed and returned by Mr Nikolich; together, perhaps, with other documents referred to in that letter. In those circumstances, one would have expected any agreement to vary the contract of employment to have been enshrined in writing, or at least be covered by an explicit oral statement. Yet, as Mr Nikolich concedes, neither Mr Sutherland, Mr Evans or Mr Voigt said anything, at any time, that indicated the speaker considered the business plan, or the exit strategies paragraph, to be binding on GSJBWS or that it would constitute a variation of the contract of employment. Leaving aside any question of the authority of any of those men to vary the terms of Mr Nikolich's contract of employment, none of them expressly did so. None of them promised that GSJBWS would abide by the exit strategies paragraph. Their knowledge of that paragraph, and the obvious expectation of the team DKN members that it would be followed in the event of a departure from the partnership, is relevant to the reasonableness of the conduct of Mr Sutherland, and other officers, when Ms Dal Bon resigned. However, GSJBWS was not contractually bound by the paragraph. 210 Counsel for the applicant emphasised that the notion of creating partnerships was something introduced by GSJBWS, not by the DKN team members. The justification for the notion was that it would lead to better service of clients --- a matter that was of critical importance to GSJBWS. Moreover, Mr Heath said in evidence that the purpose of a business plan was to demonstrate how the adviser or advisers intended to service clients. Accordingly, counsel argued, the creation of the DKN business plan was something done for the benefit of GSJBWS; upon approval of that plan by the appropriate GSJBWS officer or officers, it should therefore be treated as binding on GSJBWS, in the sense of being incorporated into the contracts of employment of the team members. 211 I appreciate the force of the argument. However, it does not affect my view that the creation and approval of the team DKN business plan was something done by the relevant people in the course of their employment, pursuant to their respective contracts of employment, and not something done by way of a variation of anyone's contract of employment. 212 The first breach of contract claim must be rejected. If you have any queries at any time about which memoranda and instructions apply to you, you should raise that question with me or with Colin. The titles are indicative of the content of each chapter. The 'code of conduct' chapter (12 pages) lays down numerous rules to be followed by employees. Some of those rules are relied on in this case by counsel for the applicant. I will mention four of them. If you are involved in any financial, political or civic activities you are free to exercise your individual rights, but should avoid any conflict of interest between your outside activities and your position within the firm. It is within the context of our culture that all people within the JBWere team will work together to prevent any unwelcome, uninvited and unwanted conduct which makes another team member feel offended, humiliated or intimidated in any work related situation and where that reaction is reasonable in the circumstances. It is a reflection of the person, the firm and our client service attitude. Further information may be obtained by Human Resources. It means we are open and honest, and we honour our obligations and commitments to each other, our clients, the people we do business with and the community. Always remember that you are a representative of the firm, therefore you cannot advise friends or social contacts without a proper authority. Why is this bothering me? Is it really an issue? What are the implications for clients, the firm and other JBWere team members? Is it my responsibility? Am I responsible or is someone else responsible for resolving the issue? What will happen if I do not act? What is the ethical concern? Is there a legal obligation? What are my values? What are the firm's values? Whom can I ask for advice? My associates, my manager, Human Resources? Am I being true to myself? Is my action consistent with my basic values? With JBWere shared values? Would I make the same decision if it concerned my family and friends? It is divided into eight sections: 'Support for Career Management', 'Support for Ideas and Innovation', 'Support for Personal Time', 'Support for Heath and Well-being', 'Support for Community Involvement', 'Support for Families', 'Support for Parents' and 'Support for Personal Issues'. Each of these sections sets out employees' entitlements in relation to the relevant area of support. In some cases, the entitlement is stated in absolute terms, sometimes conditionally. The language is generally promissory: 'we will ...'. The section on personal time contains provisions about leave that are routinely covered by formal contracts of employment or industrial awards; for example, annual leave, long service leave, overtime payments in lieu of public holidays. Prevention is the most effective health and safety principle. Through a shared responsibility, co-operation and support from all people, we will realise our health and safety objectives and create a safe work environment for ourselves and our team. Each member of the team has a duty to take the care for their own health and safety and of other team members affected by their actions. In fulfilling this responsibility, the firm has a duty to provide and maintain, so far as is practicable, a working environment that is safe and without risk to health. Some people who can do this are: Dianne Jacobs , Gina Jowett , Judith O'Leary or Paula Ward . Such discussions are welcome as the firm has been built on the principle that it is a team with common interests and ideals. This interest extends beyond the range of career and business issues to more personal concerns. We are committed to make sure that anyone who makes a genuine complaint will be able to discuss the concern confidentially, will be supported by the firm and is not penalised in any way. There are also promises about career benefits (education fees, study leave, fees for professional memberships), life insurance, financial products and services, overtime payments, meal allowances and the like. 221 There is an issue between the parties as to the contractual significance of WWU. Mr Coleman explained that suggestion in a supplementary written submission by saying that WWU was 'simply a manifestation of the Respondent's right to issue lawful and reasonable directions to its employees (including the Applicant), and the corresponding obligation of employees to comply with such directions'. However, the document did more than set out directions to employees. It contained numerous provisions that purported to be promises made by GSJBWS or that purported to grant specific entitlements to employees. Many of these provisions related to matters that one would normally expect to find covered by a contract of employment. If the document does not bind GSJBWS at all, those of its provisions that constitute promises by GSJBWS, or which purport to confer entitlements, are misleading, a cruel hoax; moreover, employees to whom the document was issued have no enforceable right in respect of numerous matters that are routine employee entitlements. 224 At an earlier point of time, Mr Coleman put a submission that fell short of the position taken in his client's defence. He simply said that 'the whole of the document, when read in context', cannot be imported into the employment contract. 225 In support of that submission, Mr Coleman referred to a so-called concession in para 157 of the applicant's written submissions 'that he did not sign the totality of this document upon the commencement of his employment'. I do not find that concession in para 157, but the statement seems to be true. What actually happened is not entirely clear. In his first affidavit, Mr Nikolich said he signed and returned a copy of the letter offering him the position. He did not deal with WWU. To this end, the Respondent updated and circulated that document in order to ensure that Investment Advisers complied with relevant legal compliance requirements in relation to, for example, financial services, occupational health and safety and discrimination legislation. I took note of the fact that the document states, "each person at JBWere is responsible for ensuring that the highest standards of compliance are maintained" ... That is, the consequences for not complying with the policies and procedures could result in the termination of my contract of employment. I also recall that when I started work with the Respondent I was required to sign off on the version of the document applicable at that time on the basis that I would continue to be bound by that document as amended from time to time. When you say the Working With Us document was a document in that form or similar form?---It was in a similar form but bound. Mr Coleman did not return to it in cross-examination. 228 Mr Nikolich's evidence establishes that he was given a copy of WWU at the same time as he received the letter of offer of employment. He regarded WWU as binding on him, as one of the 'office memoranda and instructions' with which he was expected to comply. He also apparently thought it bound GSJBWS as 'an express term of my contract of employment as it contained policies and procedures regarding important matters of legal compliance'. 229 For such relevance as it may have, I note the respondent's main witnesses all thought WWU was a binding document. Mr Evans said he had been familiar with WWU since 2000, that 'employees and managers alike between 2000 and 2004 were expected to comply with the policies and procedures in the terms set down' in WWU and that they might be disciplined, even terminated, if they did not. Mr Evans asserted he would have been careful to ensure he managed his subordinates in accordance with the document and that those who reported to him did likewise. 230 Mr Sutherland agreed he was 'required to comply with the policies and procedures contained in' WWU. 231 Ms Jowett was well aware of WWU. She said it contained policies 'with which Goldman Sachs was expected to comply and with which its employees were expected to comply'. Mr Heath spoke to like effect. We take an active personal interest in all our people and will make every effort to guide and direct your career aspirations towards a successful goal. There is no reason why the whole of the document would constitute implied terms of the contract. In that case, a Full Court by majority (North and Mansfield JJ; Lindgren J dissenting), confirmed a decision by Weinberg J ( McCormick v Riverwood International (Australia) Pty Ltd [1999] FCA 1640 ; 167 ALR 689) that a document called 'Human Resources Policies and Procedures Manual' bound the employer so as to entitle an ex-employee to redundancy benefits. Weinberg J had upheld the applicant's case on two bases: incorporation by reference and an implied term of the contract of employment. 235 There appears to have been no disagreement amongst the members of the Full Court concerning the relevant principles for determining whether the terms of the document were incorporated in the contract of employment; the point of difference between the majority judges and Lindgren J related to the application of those principles. 236 At [80], North J noted Weinberg J's finding that 'virtually every document' in the manual 'provides a benefit of some sort to that company's employees. No burden of any kind is imposed, except upon the employer'. It must rest on the premise that the contract was made in good faith with the object of at least potential mutual benefit by due performance. In the case of a disputed clause in a commercial agreement 'the essential question is what would reasonable business people in the position of the parties have taken the clause to mean': Schenker & Co (Aust) Pty Ltd v Maplas Equipment and Services Pty Ltd [1990] VR 834 at 840 per McGarvie J. They comprise the terms expressed by the parties as well as terms which it must be inferred were intended though not expressed. The law may infer such an intention from the nature and context of the transaction. The difference between inferred terms based on actual intention, and implied terms based on presumed intention is not always easy to discern. The nature of that subject matter is as relevant to the determination of the intention of the parties as the other elements of the term, namely, to whom the term relates and in what way the term relates to the parties. In other words, the expression of the term involves a composite concept. There is no reason to isolate one element of the concept as irrelevant to the process of determining the meaning of the term as a whole. To do so would ignore the plain wording of the term which includes all its elements. Consequently, it is both permissible and necessary to examine the provisions contained in the manual in order to ascertain the intentions of the parties. On the interpretation contended for by Riverwood, the major purpose of the Manual, which was to require Riverwood to extend certain employment conditions to the employee, would be irrelevant to the particular employment contract in which the reference to the Manual was found. A purported agreement which leaves the content of the agreement entirely at the discretion of one party is not contractual in nature. Any alteration or addition to the company policies and practices could only achieve binding contractual effect if there was separate agreement to such alterations or additions, either by way of variation of the existing agreement or by way of entering into a new agreement. 244 There is little advantage in my setting out the considerations, peculiar to the particular set of policies, that induced Mansfield J to agree with Weinberg J's conclusion. Its power to change its policies, or to introduce new policies, from time to time would be constrained by an implied term that it would act with due regard for the purposes of the contract of employment ... so it could not act capriciously, and arguably could not act unfairly towards the respondent ... It might also be a power which, by implication, must be exercised reasonably having regard to the nature of the contract and the entitlements which exist under it. In the present case, the relevant term of the employment agreement was that GSJBWS 'will expect' Mr Nikolich to 'comply as applicable' with presently-existing and future 'office memoranda and instructions'. There is not much difference between the wording of the two terms. Also, in both cases, the relevant secondary document clearly purported to impose obligations on the employer, some, at least, of which are obligations customarily found in employment contracts and which would otherwise be absent from the employment contract. Accordingly, it seems to me that the approach taken in Riverwood has application to this case. 247 Despite Mr Coleman's contrary submission, it is difficult to accept that the parties did not intend, at least, that the obligations customarily found in employment contracts would be contractually binding. It surely cannot be without significance that WWU was sent to Mr Nikolich at the same time as the letter of offer of employment and that he was required to familiarise himself with its terms. WWU was in his possession at the time he accepted the offer of employment. I think the explicit promises made in WWU by GSJBWS should be regarded as express terms of Mr Nikolich's contract of employment; the real issue between the parties is whether GSJBWS has incurred any contractually binding obligation as a result of the provisions concerning behavioural standards such as those noted in paras 213-219 above. 248 This issue should be resolved in the applicant's favour. It is clear that GSJBWS was concerned to insist that all its employees (including Mr Nikolich: see the term of his employment contract set out in para 213 above) would comply with those behavioural standards, which it trumpeted as reflecting the firm's values and culture. It provided mechanisms in WWU for resolving problems, including satisfaction of grievances. It made promises about supporting staff, including (relevantly) 'anyone who makes a genuine complaint'. Particularly as the document appears to impose legal obligations on GSJBWS in relation to other matters, I see no reason to doubt that it also does so in relation to those provisions of the document that contain express promises about behavioural standards. The document must be read fairly and reasonably; that means GSJBWS must be accorded some discretion as to how it will deal with any particular management problem. However, I accept that the respondent may be held liable in breach of contract where it can be shown that, on no view of its conduct, has it responded to a problem or a complaint in the manner promised or assumed in a particular WWU provision. The question, then, is whether this has been shown in this case. 249 Counsel for the applicant argued breaches by GSJBWS of four obligations expressly or impliedly cast upon it by WWU. I will examine each of them separately. Counsel went on to refer to evidence that team RSL earned $125,511 in the financial year 2003-04 from the fees of the Dal Bon clients that were reallocated to it in June 2003 by Mr Sutherland. This represented 26.76% of the entire commission earnings from Ms Dal Bon's former clients for that year. Under the terms of the agreement in operation between the RSL team members, Mr Sutherland was entitled to 36% of the team's earnings. So his personal share, for 2003-04, in the fees earned by team RSL for servicing Ms Dal Bon's former clients was $45,184. It was a matter which was raised in his written complaint on 28 July 2003. Notwithstanding the fact that these matters were squarely raised with the Respondent, no steps were taken at any time to investigate whether a proper allocation had taken place. The scribblings of Mr. Sutherland as to the way in which he conducted the reallocation does not represent an independent assessment of the allocation. What should have been done was for an independent person to investigate the validity of the Applicant's complaint that the Team DKN Business Plan had been approved and should therefore have been complied with in relation to the reallocation of clients and/or an independent person to oversee the distribution of clients giving prominence and due consideration to the claims then being made to Mr. Keogh and the Applicant of their ability to service the clients and their right to do so given the work that they had put in during the operation of Team DKN. The overriding principle in this regard is that the clients are clients of the firm and they do not belong to individual investment advisers. In her cross-examination of Mr Heath, Ms Nomchong sought to relate para 15 of his affidavit to this conversation. The first is the specific interests and requirements of the clients involved. Do you see that?---Yes. She said she felt there was a difference in the expectations how the clients would be handled, so she was talking about client interests. You'd agree with that?---No, my interpretation of what Ms Dal Bon [was talking about] is a difference in expectations between the remaining members of Team DKN and Rod and what was happening. Didn't she also say to you that she wanted the existing relationships between her clients and Mark and Peter recognised?---That's right. So she was concerned about the existing recognition of that relationship which had been built up over a year. Now, the second issue that you say should be looked at is the dynamics of the relevant office and team, including which advisers have the capability or capacity to deal with clients. Now, you would agree with me that Ms Dal Bon was telling you that Mr Keogh and Mr Nikolich had already built up a relationship with clients. Is that right?---Yes. And thirdly you say the last matter to be involved or to be taken into account is whether any other investment advisers had dealt with the clients in the past?---Yes. Ms Dal Bon was raising with you that that's exactly what had happened over the past year?---Yes. So when you spoke to Rod Sutherland on 26 June ... you didn't raise with him the matters that had been brought to your attention by Ms Dal Bon, did you?---I don't recall specifically whether I raised them in the detail that she did. That statement is correct. It may be added there was also no evidence that Ms Jowett, or anyone else outside the Canberra office, addressed their mind to the factors identified by Mr Heath. As a result, the consequential financial loss from the revenue generated by those clients flows directly from that breach. One submission was that Mr Sutherland had no conflict of interest because some other financial advisers (including both Mr Nikolich and Mr Keogh) each made more out of Ms Dal Bon's former clients in 2003-04 than did Mr Sutherland. The statement is factually correct. However, it is irrelevant. The question whether a decision-maker has a conflict of interest has to be determined on a logical basis, considering the situation that existed at the time of the person's decision; it is immaterial how events worked out. Mr Sutherland did have a conflict of interest; that fact should have been recognised both by himself and his superiors. 258 Mr Coleman made much of the fact that it would have been impossible for Mr Nikolich and Mr Keogh to service all the Dal Bon clients; some would have had to be reallocated elsewhere. Mr Nikolich conceded this; but his point was that he and Mr Keogh should have been allowed to decide which clients would be culled from the team list. In making their decision on that matter, they would no doubt have taken into account how much revenue was derived from particular clients; but they also could have taken into account the extent and nature of their relationship with particular clients. The right to make decisions as to the clients to be culled from the list was a valuable right, in relation to which Mr Sutherland had a conflict of interest. 259 Mr Coleman is on sounder ground in relation to two other submissions concerning conflict of interest. First, he pointed out the applicant has not pleaded the existence of a contractual term concerning conflict of evidence. Second, he noted that the conflict of interest clause in WWU (para 214 above) is directed to a 'situation where personal interests may conflict with the interests of the firm or its clients'. I am prepared to hold that WWU casts legally-enforceable obligations onto GSJBWS, in relation to the subject matters with which it deals. However, there is no legitimate basis for the Court to extend the terms of the subject matters so as to take in situations that are not covered. The relevant sentence does not cover a conflict of interest between one GSJBWS employee, who has to make a management decision, and another GSJBWS employee. 260 I agree with counsel for the applicant that the relevant sentence is wide enough to have required Mr Sutherland to avoid a conflict between his personal interests, as a potential recipient of reallocated clients, and the interests of the clients themselves. However, this is not the conflict of interest situation relied on in this case. No doubt for that reason, no evidence was put before the Court as to the effect on the clients of Mr Sutherland's reallocation decision. 261 I conclude that the conflict of interest clause in WWU does not, in this case, give rise to an entitlement to damages. That does not mean that conflict of interest is irrelevant to the case; the existence of a conflict of interest situation, and GSJBWS's recognition of the importance of 'integrity' and avoiding conflict of interest situations, provide an important backdrop to other alleged breaches. The relevant passage commences with a promise by GSJBWS to 'take every practicable step to provide and maintain a safe and healthy work environment for all people'. The passage goes on to talk about prevention being the most effective health and safety principle, shared responsibility, co-operation and support and every member of the team having a duty to take care for their own health and safety and that of other team members affected by their actions. The passage goes on to acknowledge that GSJBWS 'has a duty to provide and maintain, so far as is practicable, a working environment that is safe and without risk to health'. 263 It has not been suggested that the references in this document to 'health and safety' are confined to physical health and safety or that 'risk' excludes psychological risk. 264 In paras 92-100 of their written submissions, counsel for the applicant argued that GSJBWS had obligations to the applicant, pursuant to both the 'Health and Safety' subsection of WWU and the terms of the Occupational Health and Safety Act 1989 (ACT) ('the ACT Act'). Counsel said both sources of obligation required GSJBWS 'to undertake risk identification, risk assessment and risk management for the avoidance of injury (either mental or physical) to any of its employees. 266 First, Mr Coleman pointed out that the applicant's Second Amended Statement of Claim contains no reference to the ACT Act. No breach of that Act was pleaded. Consequently, he said, the ACT Act must be disregarded. I agree. 267 Second, Mr Coleman submitted that the applicant failed to plead any claim with respect to breaching obligations pursuant to the 'Health and Safety' subsection of WWU. I do not agree. The submission overlooks para 8A of the Second Amended Statement of Claim, set out at para 221 above. 268 The term of the contract of employment alleged in para 8A necessarily includes a promise by the respondent that it would not, by its servants or agents, treat the applicant in such a way as to conflict with its promises to 'take every practicable step to provide and maintain a safe and healthy work environment' and to 'provide and maintain, so far as is practicable, a working environment that is safe and without risk to health'. The question is whether GSJBWS complied with these obligations. 269 It is desirable also to note some specific allegations in the Second Amended Statement of Claim. In para 18 the applicant pleaded that, in June and July 2003, he and Mr Sutherland had a number of altercations resulting from the Dal Bon client reallocation 'which resulted in the Applicant suffering anxiety and stress'. In para 18B he referred to Mr Sutherland being 'aggressive, intimidating and threatening' towards him. In paras 19 --- 25 the applicant made allegations about his 'resultant medical disability', which he described as 'work related stress and depression'. 270 Paragraph 34 contained an allegation that, by reason of the matters pleaded in paras 16 to 18H (the whole list of grievances), 'the Respondent breached the said express and implied terms of the contract of employment'. 271 When these paragraphs of the pleadings are taken into account, it is plain that the applicant squarely raised the question whether GSJBWS complied with the obligations set out in the 'Health and Safety' subsection of WWU. 272 Counsel for the applicant focused their submissions about health and safety on Ms Jowett's conduct. Although Ms. Jowett stated that it was her view that she had complied with the health and safety policy of the Respondent, Ms. Jowett's explanation of the steps that she took in relation to risk identification, risk assessment and risk management displayed that in fact no such steps had been taken. Risk identification was thought by Ms. Jowett to be about providing EAP or employee assistance program counselling. Ms. Jowett said risk identification also involved protocols training, although she could not specify the dates upon which that training had happened and whether or not the Applicant or Mr. Sutherland had attended such training. However, it is apparent from those answers that Ms. Jowett had no idea as to what was required in terms of the identification of an occupational health and safety risk. The matter was still being investigated so I suppose during the course of that it was a matter of identifying what the risk actually was, and any point during that period. However, when cross-examined as to the actual times that Mr. Voigt and Mr. Heath had visited the Canberra Office following the Applicant's complaint, Ms. Jowett could provide no information other than an attendance on one occasion on 18 August 2003. The references support counsel's statements. 274 I have some difficulty with counsel's subdivision of GSJBWS's responsibility into risk identification, risk assessment and risk management. Although these steps may be inherent in the overall obligation undertaken by GSJBWS in WWU, the document nowhere mentions them. Despite the fact that Ms. Jowett had been put on notice of potentially injurious conduct by Mr. Sutherland and the effect that it was having on the Applicant, no steps at all were taken which would satisfy the relevant occupational health and safety procedures laid down in a "Working with Us" document. Mr Heath also soon became aware of this. Both people knew Mr Nikolich was continuing to work in a small office managed by a person with whom he had come into serious conflict, whose actions Mr Nikolich had found 'extremely intimidating and threatening' and with whom he was no longer on speaking terms. It ought to have been obvious to both Ms Jowett and Mr Heath that it was necessary urgently to investigate and resolve the issues raised by Mr Nikolich, to reverse any inappropriate decision that had been made by Mr Sutherland, to take action to effect a reconciliation between the two men and/or, if it was appropriate, to terminate Mr Sutherland's supervision of Mr Nikolich's activities. An employer who took seriously its obligation to 'take every practicable step to provide and maintain a safe and healthy work environment' would have done this. GSJBWS did not. 276 I find the applicant has established a breach of the WWU health and safety obligations. Items (i) and (ii) are directed to actions of Mr Sutherland, for whose conduct in the course of his employment GSJBWS is vicariously liable. Item (iii) relates to the inactivity of Ms Jowett and Mr Heath, mentioned above. 278 The respondent's response to this aspect of the applicant's case was to press me to prefer Mr Sutherland's denials to Mr Nikolich's assertions about the content of their conversations. For the reasons I have set out, I am unable to do this. I accept the evidence of Mr Nikolich in relation to the conversations between himself and Mr Sutherland; also his evidence about Mr Sutherland's demeanour and attitude towards him. Not only do I prefer Mr Nikolich to Mr Sutherland, as a witness of truth; I also take into account the fact that Mr Nikolich's evidence is similar to the tenor of his contemporaneous complaints to Ms Jowett and the failure of the respondent to call any of the other Canberra office employees, all of whom must have observed the state of the relationship between Mr Sutherland and Mr Nikolich after the reallocation decision. 279 People react in different ways to a particular problem. Some people are able to brush off aggressive or offensive behaviour. Mr Keogh may be one of them. It is apparent from his conversation with Mr Heath on 25 June 2003 that he was deeply unhappy about Mr Sutherland's reallocation decision. He felt targeted: 'the team was being penalised', 'felt that Rod's decision was personal'. However, he seems to have swallowed his disappointment and anger and got on with the job; not without difficulty, as appears from the file note of Mr Keogh's conversation with Mr Jowett on 8 November 2003 about the Barter account. However, the fact that Mr Keogh managed to cope with Mr Sutherland's behaviour does not derogate from the fact that the behaviour was intimidatory and demeaning and foreseeably might cause psychological damage to another person. It was behaviour inconsistent with GSJBWS's promise to 'take every practicable step to provide and maintain a safe and healthy work environment'. It was also inconsistent with the statement, in the sub-section of WWU relating to harassment, about GSJBWS's asserted 'culture and "family" approach' meaning that 'each person is able to work positively and is treated with respect and courtesy'. I read that statement as an express promise that employees will be so treated by GSJBWS itself, and those within the company for whom it is responsible. However, if such a promise is not expressly made, it is at least implied. 280 There is also an express promise that 'all people within the JBWere team will work together to prevent any unwelcome, uninvited and unwanted conduct which makes another team member' (surely including a financial adviser) 'feel offended, humiliated or intimidated in any work related situation and where that reaction is reasonable in the circumstances'. As office manager, Mr Sutherland arguably had more onerous responsibilities in this regard than other employees. But his conduct broke that promise. 281 The issues concerning harassment, directly related to Mr Sutherland's conduct, overlap other issues of health and safety, raised also by the conduct of Ms Jowett, Mr Heath and others. No doubt that was exacerbated by the fact that no one in the Respondent's management team or Human Resources area took any steps to intervene to determine the veracity of the Applicant's complaint, other than by asking Mr Sutherland himself. The onset of the Applicant's psychological symptoms and the development of those symptoms over time occurred as a direct result of the Respondent's breach in this regard. Counsel for the applicant contended this subsection had contractual significance and obliged GSJBWS to conduct a timely investigation of the matters raised in Mr Nikolich's letter of 28 July 2003. In response, Mr. Sutherland wrote down on a piece of paper the way in which he had distributed Ms. Dal Bon's clients and, apparently, Ms. Jowett was satisfied with his explanation. Amongst other things, Ms. Jowett stated that she had formed the view that the allocation of Ms. Dal Bon's clients was "appropriate" and belittled the Applicant's psychological symptoms as simply feelings of being "distressed and upset on occasions". However, during crossexamination, most of the alleged recommendations were procedures that had already been in place (eg visits by retail senior management) or simply untrue. His response was more general. As stated above, once the complaint was formally made by the Applicant to Human Resources by his letter dated 28 July 2003, an investigation was commenced. Ms Jowett of Human Resources telephoned the Applicant almost immediately upon receipt of the letter and then commenced investigations by notifying her superiors including Mr Heath who was, at that time, responsible for the Canberra Office in the absence of Mr Evans on sabbatical leave. Following the additional complaints by the Applicant with respect to the Barter account, these complaints were also investigated. In December 2003, Ms Jowett provided the Applicant with a letter outlining the outcome of her investigation. Because the Applicant was not satisfied with the outcomes and conclusions drawn by Ms Jowett, the matter was escalated to Ms Jacobs and Mr Evans who made various offers to the Applicant in an attempt to resolve his concerns. The investigation culminated in March 2004 with, in essence, a rejection of the complaints made by the Applicant. It will be obvious that I accept the detailed criticisms of that handling made by counsel for the applicant. The facts stated by Mr Coleman in response are not untrue but they do not meet the criticism made by his opponents. 286 I think the real question in relation to this claim is whether WWU casts on GSJBWS a legally enforceable obligation to conduct an adequate and timely investigation into an employee's complaint. 287 The relevant subsection of WWU says: 'The door is wide open at all times for people to discuss any issue' with, amongst others, Human Resources. Discussions are said to be welcome 'as the firm has been built on the principle that it is a team with common interests and ideals'. The document goes on to invite contact with Human Resources by anyone who has a complaint or grievance. There is then a promise: 'We are committed to make sure that anyone who makes a genuine complaint will be able to discuss the concern confidentially, will be supported by the firm and is not penalised in any way'. 288 There is no doubt that the complaints made in Mr Nikolich's letter of 28 July 2003 were genuine. Consequently, as it seems to me, they were covered by GSJBWS's promise. Mr Nikolich was able to discuss his concerns confidentially; there can be no complaint about that aspect of GSJBWS's conduct. However, the promise of support necessarily includes, at least, an implied promise to carry out an adequate and timely investigation into the merit of any complaint or grievance, and to endeavour to achieve a result that will resolve the problem and accord with GSJBWS's culture of each member of the team being 'able to work positively and productively', and be 'treated with respect and courtesy'. That did not happen in this case. The result was to exacerbate the stress that Mr Nikolich was already suffering as a result of Mr Sutherland's conduct. 289 I conclude that GSJBWS breached its contract with Mr Nikolich in respect of provisions in WWU concerning health and safety, harassment and the grievance procedures. I will deal later with the issue of quantum of damages for those breaches. Both claims concern the likely application of the 'exit strategies' paragraph in the team DKN business plan in the event of a departure by one of the three members of the team. First, the applicant says that the respondent, in trade or commerce, engaged in conduct that was misleading or deceptive or likely to mislead or deceive, contrary to s 52 of the TP Act or s 42 of the FT Act. Second, the applicant relies on s 53B of the TP Act. However, I have reached the conclusion that I need not resolve those disputes; even if one or both the claims could be established, they would not result in recovery of any damages. 292 In order to explain that conclusion, it is necessary to refer to the case pleaded by the applicant. Paragraph 36 of the Second Amended Statement of Claim sets out representations said to have been made by the respondent, which representations are said (in para 39) to be misleading and deceptive or likely to mislead or deceive. What flows from the representations? 295 In para 43 of his Second Amended Statement of Claim, the applicant alleged that, acting in reliance on the representations and the respondent's conduct, he entered into 'the new terms of the contract of employment, being the formation of Team DKN and the adoption of the business plan'. I will treat this paragraph as alleging that, whether or not there were 'new terms of the contract of employment', but for the misleading conduct the applicant would not have joined team DKN or agreed to the business plan. Assume that to be so; did the applicant sustain loss because, misled by GSJBWS, he in fact joined team DKN and agreed to the business plan? 296 No such loss has been demonstrated. Mr Nikolich's earnings, during the year of operation of the DKN partnership (2002-03), were less than in the previous (or subsequent) year. However, no attempt was made to relate this reduction to the fact of the partnership which, Mr Nikolich said, worked well. 297 Mr Nikolich's complaint is that GSJBWS failed to honour the understanding set out in the 'exit strategies' paragraph of the team DKN business plan. Undoubtedly, that failure adversely affected his income. However, that is not a loss or damage consequential upon the misleading conduct. 298 A person's entitlement to damages for contravention of s 52 or s 53B of the TP Act is governed by s 82(1) of the TP Act. 299 The fundamental principle of s 82(1) of the TP Act was explained by the High Court in Gates v City Mutual Life Assurance Society Limited [1986] HCA 3 ; (1986) 160 CLR 1. The appellant in that case had applied to the respondent for the addition to his superannuation policy, and the insertion in his life policy, of a total disability clause. He was misled by the respondent's agent as to the circumstances under which the total disability benefit would be payable, but there was no evidence that the total disability clause was not worth what he paid for it. 300 The appellant sustained an injury which resulted in incapacity to carry on his usual occupation. He sued for damages, inter alia , for contravention of s 52 and s 53(g) of the TP Act. The claim was based on what the appellant would have received if the circumstances under which the total disability clause operated were as stated by the agent. 52 and 53 are analogous to actions in tort and the remedy in damages provided by s. 82(1) appears to adopt the measure of damages applicable in an action in tort. That sub-section refers to loss or damage by the conduct of another that contravened a provision of Pt IV or Pt V; it therefore looks to the loss or damage flowing from the offending act of the other person. The acts referred to in ss. 52 and 53 do not include the breach of a contract, and in awarding damages under s. 82 for a breach of either of those sections, no question can arise of damages for loss of a bargain. The contractual measure of damages is therefore inappropriate in such a case. Two established measures of damages, those applicable in contract and tort respectively, compete for acceptance. In contract, damages are awarded with the object of placing the plaintiff in the position in which he would have been had the contract been performed - he is entitled to damages for loss of bargain (expectation loss) and damage suffered, including expenditure incurred, in reliance on the contract (reliance loss). In tort, on the other hand, damages are awarded with the object of placing the plaintiff in the position in which he would have been had the tort not been committed (similar to reliance loss). Such conduct is similar both in character and effect to tortious conduct, particularly fraudulent misrepresentation and negligent misstatement. However, neither authority nor principle offer support for adopting this approach. In all the cases in which a plaintiff has sought to recover damages on the footing that a representation amounts to a collateral contract, a fraudulent misrepresentation or a negligent misstatement, damages for expectation loss have only been awarded when the representation amounted to a collateral contract. Neither the fact that the representation induces entry into a contract nor the fact that it is a statement of the benefits to which the plaintiff will be entitled under that contract is enough to justify compensation for expectation loss. In these later cases, some members of the Court have argued the undesirability of tying the interpretation of s 82 too firmly to concepts such as the measure of damages in tort or in contract. However, nothing has been said against the distinction made in Gates between a loss caused by the misleading conduct (commonly a misrepresentation) and loss caused by disappointment of an expectation generated by the misleading conduct. The Court has concluded that in most cases the measure of damages in tort is the appropriate guide in determining an award of damages under s 82. However, in assessing damages under s 82, courts are not bound to choose between the measure of damages in deceit or other torts or contract. In Marks v GIO Australia Holdings Ltd , the Court said that the central issue under s 82 is to establish a causal connection between the loss claimed and the contravening conduct. Once such a connection is found to exist, nothing in s 82 suggests that the recoverable amount should be limited by drawing an analogy with contract, tort or equitable remedies although they will usually be of great assistance. This loss was not caused by Mr Sutherland's alleged misleading conduct in conveying to Mr Nikolich (and Mr Keogh) that he would regard himself as bound by the 'exit strategies' paragraph in the team DKN business plan; it was a loss caused by his failure to act in accordance with the expectation he thereby generated. There is no evidence that Mr Nikolich would have embarked on a more profitable course had he not been led to believe the exit strategies would be honoured. Conceptually, the position is similar to that in Gates . The principle there enunciated means the present TP Act claims must fail. The same statement must be made about the FT Act claim. The relevant terms of that Act are indistinguishable from those of the TP Act. 307 For the sake of completeness, I mention that, when pressed in argument about this issue, Ms Nomchong said that, as a result of what Mr Sutherland had said, Mr Nikolich entered into the team DKN business plan, and thereby put himself to trouble in servicing Ms Dal Bon's clients when she was overseas. No doubt that is factually correct. But loss of that nature was not pleaded. No evidence was led to show that Mr Nikolich was financially disadvantaged by the responsibility he had undertaken in the business plan. I have found breaches of three sub-sections in that document: 'Health and Safety', 'Harassment' and 'Concerns or Grievances'. It is neither possible nor necessary to separate the effects of the separate breaches. However it is necessary immediately to consider a submission made by Mr Coleman that Mr Nikolich's psychological problems, and consequential loss of income, were not caused by any such breaches, but rather by his disappointment at the substance of Mr Sutherland's decision concerning reallocation of Ms Dal Bon's clients; a decision which I have held not to represent a breach of GSJBWS's contract with Mr Nikolich. To the extent that Mr Nikolich's psychological disability stemmed from the reallocation decision, rather than behaviour (of Mr Sutherland, Ms Jowett etc) that constituted a breach or breaches of WWU, it is not compensable in this proceeding. 309 Undoubtedly, Mr Nikolich was disappointed and distressed by Mr Sutherland's reallocation decision. However, the expert evidence suggests that his psychological problems stemmed more from the way he was treated than from the decision itself. 310 The first expert to see Mr Nikolich was Dr Jamieson, on 1 December 2003. He reported that Mr Nikolich 'presented in a most distressed state and related to me a 6-month history of workplace conflict': see para 98 above. Dr Jamieson found 'symptoms of a major depressive disorder, ie depressed mood, poor self-esteem, an extremely poor view of his future, a great sense of failure and withdrawal'. His later reports also relate Mr Nikolich's problems to his conflicts at work. There is no suggestion that the reallocation decision, in itself, caused the psychological disability diagnosed by Dr Jamieson. 311 Dr Lowden's assessment is to similar effect. It will be recalled that, in her report of 13 March 2006, she identified the cause of Mr Nikolich's major depressive disorder as 'betrayal of trust and lack of respect, difficulty in conflict resolution at the workplace and lack of respect'. 312 I put great weight on the opinions of Drs Jamieson and Lowden; they have seen Mr Nikolich on many occasions and have been responsible for his medical treatment. However, they are not alone in distinguishing between the effect of Mr Sutherland's reallocation decision and the effect of the manner of treatment of Mr Nikolich. 313 Dr Synnott and Dr Samuell related Mr Nikolich's problems to the workplace without making any distinction between the reallocation decision and Mr Nikolich's treatment by Mr Sutherland and others. 314 Assessing the expert evidence as a whole, I do not think it supports the respondent's theory that Mr Nikolich's psychological problems were, and are, the result, only or primarily, of the reallocation decision made by Mr Sutherland. I think the better view is that they stem more from the aftermath of that decision, in the way Mr Nikolich was treated by Mr Sutherland and the failure of Ms Jowett and others to give him proper support in handling his problems with Mr Sutherland. Certainly that seems to be the view of Dr Jamieson and Dr Lowden, the two experts who know him best. I conclude, therefore, that the breaches of the three relevant sub-sections of WWU caused the psychological damage which I summarised in [98]-[119] and [153]-[158] above. This included a major depressive disorder. 315 In Baltic Shipping Company v Dillon (1993)176 CLR 344, the High Court considered the recoverability of damages for what Mason CJ called 'disappointment and distress' at the defendants' breach of contracts. The members of the Court unanimously held that, ordinarily, such damages are not recoverable. They applied a long-standing rule often associated with the decision of the House of Lords in Addis v Gramophone Co Ltd [1909] AC 488; although the rule goes back much earlier, at least to Hamlin v Great Northern Railway Co (1856) 1 H&N 408; 156 ER 1261. 316 However, in Dillon , all members of the High Court recognized exceptions to the rule. All the Justices upheld an award of damages to the respondent, which was intended to compensate her for disappointment and distress at the appellants' breach of contract in respect of a pleasure cruise. Their Honours did so because the 'very object' of the contract was to provide enjoyment and relaxation: see per Mason CJ at 365; Brennan J at 371-372; Deane and Dawson JJ at 382; Gaudron J at 387 and McHugh J at 394. 317 The present case does not concern a pleasure cruise. However, it is strongly arguable that it comes within the principle applied in Dillon . The purpose of the relevant sub-sections of WWU was to provide assurance to existing and prospective GSJBWS employees concerning the manner in which they would be treated in their workplace and, in particular, about the support they would be offered by their employer. The 'very object' was to provide peace of mind. It was foreseeable that, if the employer's promises were broken in relation to a particular employee, that employee might suffer distress. Such a promise is expressed or implied in many contracts the object of which is to provide a service or facility conducive to peace of mind, tranquility of environment or ease of living and damages have been awarded accordingly. The case clearly comes within another exception to the Addis rule. Subject to one matter, it follows that Mr Nikolich is entitled to recover damages in respect of the mental distress he suffered, including the psychiatric illness itself, consequentially upon the respondent's breaches of the contractual obligations it undertook in WWU. 320 The qualification to which I referred is that Mr Coleman argued that damages for psychiatric injury are not recoverable because, even if foreseeable, they are too remote: such damages would not have been within the contemplation of the parties at the time of making the contract of employment. However, I think that the difference is a real one which results in a significant narrowing of liability. The word "contemplation" seems to be used in Koufos in the sense of "thoughtful consideration" or perhaps "having in view in the future". It emphasises that, if the parties had thought about the matter, they would really have considered that the result had at least a "serious possibility" of occurring. He went on to explain what he meant by a 'serious possibility'. The parties need not contemplate the degree or extent of the loss or damage suffered ... Nor need they contemplate the precise details of the events giving rise to the loss. It is sufficient that they contemplate the kind or type of loss or damage suffered. Clearly the level must not be so high that the parties are required to contemplate the very loss in question or the precise manner of its occurrence. Nor must it be so low that any loss or damage, no matter how unusual in nature or occurrence, would fall within the classification. Of those cases, the one that comes closest to the present one is Rowe v McCartney [1976] 2 NSWLR 72, a majority decision of the New South Wales Court of Appeal (Moffitt P, Samuels JA; Glass JA dissenting). The plaintiff in that case was the owner of a car. After discussion with a friend, the plaintiff allowed him to drive the car, on the basis that he would be careful. She accompanied him as a passenger. While the friend was driving, the car ran off the road and hit a telegraph pole; the driver was rendered quadriplegic. The plaintiff was awarded damages against the driver in respect of her physical injuries but the trial judge held she was not entitled to recover damages in respect of a depressive neurosis caused by a feeling of guilt at having allowed the friend to drive. The damage to the plaintiff would not have occurred but for the impact, which in turn would not have occurred but for the defendant's negligence. However its only connection with the impact has no rational basis. The sole connection was made illogically and contrary to that which one would expect from a reasonable mind. The damage fell into the class where its sole connection with the negligent act was irrational reasoning in relation to, but external to, the negligent act. The harm which she sustained as a result of the events which happened was the onset of a complex or obsessive feeling of guilt or remorse which manifested itself symptomatically in a depressive illness. No doubt the feeling of guilt was a neurotic reaction to the circumstances, and was thus a mental illness. But I do not consider it to be an adequate answer to the present problem merely to seize upon that description, and allot the plaintiff's damage, without more, to the category of foreseeable harm. I do not see anything in Mount Isa Mines Ltd v Pusey [1970] HCA 60 ; (1970) 125 CLR 383, for example, which compels such a step; indeed, Windeyer J's reasoning tends the other way. Certainly, if the infliction of a feeling of guilt was foreseeable, as the infliction of emotional shock was in Mount Isa Mines Ltd v Pusey then the nature of the sequential symptoms would not be determinative; it would not matter what kind of psychiatric disability followed. But the question here, of course, is whether that initial injury was indeed foreseeable. The trial judge further found that a reasonable employer in the circumstances ought to have foreseen that a fellow employee seeing another employee suffering from such gruesome burning injuries might well suffer some psychological reaction of more than a transient kind. He did not find that the specific psychological reaction which as he thought was the direct result of the respondent having seen Kuskopf's injuries was foreseeable by the appellant. However, he took the view that to establish liability it was enough that the employer ought to have foreseen the possibility of an employee suffering an injury within the broad category of injury of which the respondent's condition was a particular manifestation. 328 The Chief Justice went on (at 390) to refer to evidence that the particular injury of the respondent 'was a rare consequence or reaction to follow emotional excitement or stress'. He thought that did not matter: 'it is sufficient that the class of injury as distinct from the particular injury ought to be foreseen as a possible consequence of particular conduct in order to establish liability for damages for the particular injury'. 329 Rowe v McCartney and Mount Isa Mines v Pusey are decisions about foreseeability in tort. However, they raise the same problem, in relation to specificity of the foreseeable damage, as occurs in relation to remoteness of damages for breach of contract. The cases each make the point that it is not necessary that the particular damage could have been foreseen (or would have been contemplated); it was sufficient that damage of that general type was foreseeable (or in contemplation). 330 In the present case, as I have pointed out, the relevant contractual obligations are intended to provide peace of mind to existing and prospective GSJBWS employees. It must be taken to have been within the contemplation of the parties that, if the obligations were not fulfilled, the particular employee to whom the obligations were owed might become upset, stressed and disturbed. It is notorious that stress and disturbance of mind may lead to a psychological disability. It may be unusual for disturbance of mind to lead to a psychological condition as severe as that suffered by Mr Nikolich; there is no evidence on the point. However, that is a statement about the extent of the injury, not its type. This is not a case, as in Rowe v McCartney , of a mental disability arising out of irrational guilt feelings that had only a tenuous connection with the plaintiff's cause of action. This is a case of a mental disability that was a particularly severe manifestation of the very type of detriment that the WWU promises were designed to prevent. 331 I reject the argument that the psychological injury suffered by Mr Nikolich was too remote to sound in damages. 333 During the three completed financial years in which he was working for GSJBWS as an Investment Adviser (2001-02; 2002-03 and 2003-04), Mr Nikolich earned a total of $455,3131; an average of $151,771 per year. In the year 2004-05, he earned $22,923. He has been unemployed throughout the current financial year. 334 I accept that it has not yet been possible for Mr Nikolich to resume employment. Accordingly, he should be compensated for his loss of income during the whole of the period until now. That course is appropriate since damages for lost income are subject to tax in the hands of the recipient: see Cheshire and Fifoot, Law of Contract, 8 th Australian ed, LexisNexis Butterworths, 1966 at [23.29]. 336 Upon my reading of the experts' reports, it ought to be possible for Mr Nikolich to resume work relatively soon after resolution of this case. The experts' reports strongly suggest that the non-resolution of Mr Nikolich's claims against GSJBWS has been a major hindrance to his feeling able to return to work. I, therefore, hope that Mr Nikolich will now endeavour to put this experience behind him and search for work with a new employer. However, having been unemployed for two years, work may not be easy for him to find; and it may be necessary for him to commence part-time. Accordingly, I think it is appropriate to allow something for loss of future earnings. 337 In assessing loss of future earnings, I will assume that Mr Nikolich's new employment will be within the finance industry and that he will ultimately be able to command a salary equivalent to his average earnings with GSJBWS. These assumptions may not be borne out; however, I do not have evidence that would entitle me to make assumptions less favourable to the respondent. 338 If I were to assume that it will take Mr Nikolich six months to find a new job and that, thereafter, he will work only part-time for six months, it would be appropriate to allow a figure for future loss of earnings of about three-quarters of one years' loss of income; that is, $113,828. However, allowance would have to be made for the fact that his earnings would be subject to income tax, whereas this aspect of his damages award will not. Also, he would receive the money sooner than if he earned salary throughout the period. In order to cover those factors, I would reduce the loss of future earnings award to $80,000. 339 There is a further complication. It will be open to the respondent to appeal against this judgment. That is its right and I do not seek to inhibit exercise of that right. However, in calculating damages, I have to take account of the possibility of such an appeal, with a consequential further delay, probably of about six months, in resolution of the case and, therefore, the date at which it is realistic to expect that Mr Nikolich will feel able seriously to search for work. I refer again to the medical reports that suggest a lack of resolution of his grievance has hindered the applicant's ability to recover and thus be fit for work. I think I should allow for the possibility that recovery will be further delayed by an appeal by adding a further $50,000 to my assessment of damages for loss of future income, but adding a proviso to my orders that this is not to be payable if the respondent does not file a notice of appeal and satisfies the judgment within 28 days. 340 The course I propose is unusual. I emphasise that it is not taken to inhibit an appeal, or to punish the respondent for an unsuccessful appeal (if that is what it should turn out to be), but merely to prevent Mr Nikolich being compensated on a basis that turns out to be false. 341 Assessment of general damages is necessarily a matter of judgment. Mr Nikolich was extremely distressed and disturbed by the way in which he was treated by GSJBWS's employees. This caused him to suffer a mental illness from which he has yet to fully recover. His psychological condition appears to have been a major factor in the break-up of his marriage and separation from his children. It must have adversely affected his professional reputation. On the other hand, as I read the expert evidence, there is no reason to suppose that Mr Nikolich's psychological disability will be permanent. Although it may take him some time to do so, there is every prospect that he eventually will obtain employment and return to normal life. 342 In my judgment, the figure of $80,000 is an appropriate assessment of general damages. 345 The respondent will be ordered to pay the applicant's costs. I certify that the preceding three hundred and forty-five (345) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox.

claim for breach of contract of employment applicant was employed by respondent as a client financial adviser nature of conduct of respondent's office manager in connection with reallocation of clients following resignation of another adviser with whom applicant was working in a partnership team conduct of respondent's employees in relation to complaint made by applicant whether applicant suffered a major depressive disorder as a result of conduct of respondent's employees, including the office manager whether that conduct constituted a breach of applicant's contract of employment whether damages are recoverable in respect of the distress and mental illness suffered by applicant assessment of damages. whether applicant's employment was terminated by employer whether termination was for a prohibited reason application to the case of the statutory definition of temporary absence from work whether termination on ground of mental disability whether the reason was based on the inherent requirements of the applicant's particular position. whether damages are recoverable, assuming misleading conduct by employer. employment workplace relations trade practices

2 The application was initially made pursuant to s 436B(2) of the Corporations Act 2001 (Cth) ('the Act'). Although that subsection contemplates that a liquidator of a company may appoint himself or herself as administrator of the company (in liquidation) under the section with the leave of the Court, the present application for leave is made on the footing that the proposed administrators are in partnership with the liquidators and are, thus, partners of an officer of the corporation for the purposes of Division 14 of Part 5.3A , s 448C(1)(g). 3 Accordingly, leave from the prohibition contained in s 448C(1) is required to act as administrators. On 16 March 2006, Dowsett J made orders that the company be wound up in insolvency under the provisions of the Act and that Messrs Lane and Peldan be appointed liquidators for the purposes of the winding-up. The day-to-day administration of the liquidation of the company is being undertaken by Jason Bettles and Susan Carter. 4 On 3 May 2006, the liquidators prepared a report to creditors for the purposes of a meeting held on 18 May 2006. The liquidators have formed the view that the company is insolvent. The major asset of the company is a dealership agreement with Telstra whereby the company has been appointed to maintain the telephone systems of business customers of Telstra on the Gold Coast. 5 Upon liquidation of the company, Telstra enjoys a right under the contract to terminate the agreement but has chosen not to do so in order to allow creditors an opportunity to consider a proposed Deed of Company Arrangement by which the directors of the company would provide a fund of $100,000.00, plus external administration costs, to the trustees of the deed to enable unsecured creditors to receive a dividend in respect of claims reflected in the proofs of debt lodged with the liquidators. 6 An amount owed to the directors, Martin Holland and Averil Holland of $280,000.00 would be subordinated to the non-priority, unsecured creditors, which, at the date of the report of 3 May 2006, constituted $659,503.00, which also reflects the total deficiency in resources as compared with the available assets. 7 Mr Lane has sworn an affidavit dated 23 June 2006 and filed on 27 June 2006 in which he deposes to a belief, on the part of the liquidators, that it is in the interests of creditors for the proposed administrators to be appointed. 8 The liquidators say that Telstra has advised that it is willing to allow the creditors to consider the proposed deed of company arrangement. However, if no proposal is to be put forward, or should the proposal be rejected, then Telstra would immediately terminate the agreement. If the Telstra agreement is terminated there is then little value in the business as a going concern, and, consequently, there is little prospect of a sale as a going concern. 9 If the deed of company arrangement is accepted the day-to-day management will be handed back to the director. If the deed is rejected, day-to-day management will revert to the liquidators. 10 At the meeting of creditors on 18 May 2006 Mr Bettles outlined the proposal for the deed of company arrangement. Creditors raised no objection to the appointment of administrators. The administrators will assume the control of the company's business property and affairs pursuant to s 437A of the Act, form their own opinion pursuant to s 438A of the Act of whether it would be in the interests of the directors of the company to execute a deed of company arrangement, and convene a meeting to enable the creditors to resolve, pursuant to s 439C , whether the company should execute the proposed deed of company arrangement. 11 The liquidators believe that the company can trade profitably without the burden of unsecured debt and that it is likely that the creditors will receive a higher return or dividend than they would receive in the event that the company remains in liquidation. In making these observations in relation to the factual matters and the principles governing leave, I have been referred to and have had regard to the decisions of Dean-Willcocks v Yeshiva Properties Number 1 Pty Ltd (Provisional Liquidator Appointed) & Ors 48 ACSR 525; Skafcorp Ltd (Administrator Appointed) & Anor v Jarol Pty Ltd & Ors 44 ACSR 138; and Re Chilia Properties Pty Ltd (Administrator Appointed) 23 ACSR 548. 12 Accordingly, I will make orders in terms of paragraphs 1 and 2 of the application, as amended, to reflect that the application is made pursuant to s 448C(1) of the Act.

corporations application by liquidators to appoint administrators application for leave pursuant to s 448c(1) of the corporations act 2001 (cth). s 436b(2) , division 14, part 5.3a , s 448c(1)(g) , s 437a , s 438a and s 439c insolvency corporations act 2001 (cth)