Monday, May 31, 2010

May Special Leave Rundown

There were four grants of special leave on Friday:

Miller v Miller [2009] WASCA 199

This case raises the issue of the - so called - illegality defence to a claim in negligence. The plaintiff was injured in a car crash, in circumstances where she knew that the car in which she was travelling had been stolen and that the driver had been drinking and did not hold a driver’s licence. She brought a claim in negligence against the driver. The Full Court of Western Australia held that the defendant did not owe a duty of care to the plaintiff by virtue of the fact that the parties were each involved in a joint criminal enterprise.

Commissioner of State Revenue v TEC Desert Pty Ltd [2009] WASCA 128

The issue in this case is whether the sale of unsevered fixtures to land attracts stamp duty as a ‘sale, transfer or conveyance of an interest in land’. The case considers the nature of a person’s proprietary right to fixtures when the person has no proprietary interest in the fee simple (at least for the purposes of stamp duty). This is a case that is bound to be a favourite for first year Property Law lecturers.

British American Tobacco Australia Services Ltd v Laurie [2009] NSWCA 414

This litigation arises out of a claim against a tobacco company in negligence claiming it breached its duty of care because it knew that the smoking of its tobacco products could cause lung cancer and failed to warn the plaintiff. The plaintiff claims that British American Tobacco destroyed files relevant to the claim. This is an appeal from a decision of a judge of the Dust Diseases Tribunal refusing to recuse himself for apprehended bias. British American Tobacco say that an apprehension of bias arises because the Judge had previously made comments that could be perceived as a predetermination of the issue, when giving judgment in other proceedings on an interlocutory application raising similar allegations of file destruction against British American Tobacco.

SZJSS v Minister for Immigration and Citizenship [2009] FCA 1577

Another case on what constitutes jurisdictional error in immigration decisions. In this case the Tribunal gave no weight to certain evidence because the applicant had solicited that evidence themself. The Federal Court found that this amounted to jurisdictional error and quashed the Tribunal’s decision.

Notable cases for which special leave was not given

Does any one remember the High Court decision in Bruce Burrell v The Queen [2008] HCA 34 where the High Court allowed an appeal from the Supreme Court of NSW? In that case the Supreme Court had tried to reopen a case upon which it had delivered judgment because there had been serious factual errors in the judgment. The High Court held that it had no power to do this, and so set aside the new decision but also set aside the old decision given the factual inaccuracies, and sent the case back to the Supreme Court for determination. Well, the Supreme Court did so, in Burrell v Regina [2009] NSWCCA 163 and dismissed the appeals. The High Court refused special leave from that decision on Friday, finally putting the 1997 kidnapping and presumed murder of Kerry Whelen to rest.

Wednesday, May 26, 2010

New HCA Judgments

Four new judgments were handed down today. We'll have the summaries up soon but for now:

Minister for Immigration and Citizenship v SZMDS [2010] HCA 16

A Pakistani national sought a protection Visa in Australia claiming he feared persecution in Pakistan by virtue of his homosexuality. The Tribunal rejected the application. He sought judicial review of that decision on the ground that "the Tribunal's conclusion that [he] was not a homosexual was based squarely on an illogical process of reasoning". The Court allowed the appeal against the Federal Court and affirmed the Tribunal’s decision to deny the Visa. There is considerable discussion of the concept of jurisdictional error and the degree to which irrational or (Wednesbury) unreasonableness may result in a jurisdictional error.
[UPDATE 25/2/10: A lamp post summary of the case can now be found here.]

The Queen v LK; The Queen v RK [2010] HCA 17

This case raises the fault elements necessary to prove the offence of conspiracy to deal with money that is proceeds of crime under the Criminal Code 1995 (Cth). The case also raised the interesting issue of whether legislation allowing appeals against a directed verdict of acquittal can apply to indictable Commonwealth offences, without contravening the Constitutional protection of trial by jury under s 80 of the Constitution. This required determination of whether the finality of an acquittal is a fundamental aspect of a jury trial. The Chief Justice (with whom the rest of the Court agreed) found that it is not.

Ansari v The Queen; Ansari v The Queen [2010] HCA 18One ground of appeal in this case was the same as that raised in The Queen v LK (above) in relation to the elements of conspiracy to deal with money that is proceeds of crime. That ground was dismissed on the grounds set out in LK. In addition the appellants argued a more technical argument that if the argument in LK failed, the charges are “bad in law” because there is an “inconsistency inherent in proving that an accused conspirator intended that a circumstance will exist (a physical element of the offence that is the object of the conspiracy) and intended that, at that time, he or she would be reckless as to the existence of that circumstance”. This appeal was also dismissed.

John Alexander's Clubs Pty Limited v White City Tennis Club Limited; Walker Corporation Pty Limited v White City Tennis Club Limited [2010] HCA 19This case provides a discussion of the circumstances in which a fiduciary duty will exist between parties to a joint venture. The Court allowed the appeal from the Full Court which had found a constructive trust over land by virtue of a fiduciary relationship. The Court also discussed the status of an unregistered mortgage over that land had the constructive trust been found to exist.

Friday, May 21, 2010

The High Tribunal of Australia

In Wednesday's hearing of Kostas v HIA Insurance Services ([2010] HCATrans 121), Justin Gleeson SC fell into a faux pas that you can only get away with when your surname is Gleeson:

MR GLEESON: Thirdly, in relation to implicit decisions, could I refer the Tribunal to Custom Credit v Commercial Tribunal?

FRENCH CJ: You are not confusing us with a tribunal, I hope.

MR GLEESON: I apologise, your Honour.

HAYNE J: Good luck, Mr Gleeson.

MR GLEESON: Your Honours are still listening to my reply thus far, so I am doing well, I think.

[Heydon J must have been biting his tongue, see here (point 3)]

Thursday, May 20, 2010

Leave refused in Forbes v The Queen

In the March Special Leave applications, the leave application in Forbes v The Queen [2009] ACTCA 10 was referred to the Full Court by French CJ and Crennan J. The accused was convicted of rape, almost exclusively on DNA evidence. The appeal therefore raised the issue of whether a person can be convicted on DNA evidence alone.

The Application was heard on Tuesday and the Court unanimously refused leave to appeal. After hearing from counsel French CJ said ([2010] HCATrans 120):

At trial in this matter the parties acquiesced in the statistical conclusions drawn from evidence relating to DNA profiles being expressed qualitatively rather than quantitatively. More particularly, they acquiesced in the expression of the statistical conclusions drawn from analysis of material taken from the complainant’s clothing being compared with the applicant’s DNA profile as comprising “strong” or “extremely strong” evidence in support of the contention that the applicant was the source of the material taken from the complainant’s clothing without the jury being told that the particular conclusions made by the witness in the case had yielded a figure of greater than one in 10 billion.

It was open to the jury to conclude from the evidence that was led at trial that the applicant was guilty beyond reasonable doubt. In light of the way the parties conducted the trial this is not, in our opinion, a suitable case to consider the larger question which the applicant seeks to agitate. It is the opinion of all of us that special leave should be refused.

Looking at the transcript of argument one matter jumped to my mind even before coming across the Court’s decision: the outcome may have been different had counsel approached the issue differently.

Counsel of Forbes, Hastings QC, seemed to put the argument (in some articulations) that DNA evidence, without more, cannot lead to a safe verdict of guilty. That is, says the Hastings, there must be a substratum of established fact which the DNA evidence supports, because it cannot establish a fact (or guilt) by itself.

The problem with this argument is that the Court is often loath to make such a general rule that DNA evidence can never convict. If for no other reason (and I’m sure its not), it may require revisitation to the principle whenever technology improves and may thereby attract a treacherous consideration of what level of statistical certainty is necessary for proof beyond reasonable doubt.

I think it is a good rule of appellate advocacy to try not to offer rules of general application, but to proffer articulations of rules that can be restricted to specific instances. If the Court wants to take it further it can, but that should be the fallback position for counsel, not the primary argument.

As an example (which was eluded to in arguendo), a better argument might be: given the sample which was the subject of the evidence, the ACT database of DNA samples against which the sample was tested was not sufficiently large to render the expert evidence sufficient to convict without other facts.

Or even better: even if it could be sufficient, the jury was not advised of this difficulty and ought to have been, in the circumstances, to weigh the evidence properly.

Ultimately though, this appeal was difficult for appellant counsel because of earlier concessions (or at least failures to complain) about the way evidence was to be presented and used, by counsel at trial. In my experience, I have come across a few trials where an accused has been convicted predominantly or exclusively on DNA evidence. In those cases too there could be no such ground of appeal because of the way defence counsel presented its case at trial.

Hopefully, defence lawyers will be wise to the issue in the future. Perhaps we will see the matter back before the Court before long.

Commissioner of Taxation v Bamford

Commissioner of Taxation v Bamford; Bamford v Commissioner of Taxation [2010] HCA 10


Majority: Unanimous (French CJ, Gummow, Hayne, Heydon and Crennan JJ).

Decision: Appeals dismissed.

In order to determine what is ‘Income of the trust estate’, as it appears in s 97 of the Income Tax Assessment Act 1936 (Cth), consideration is to be had to the general law of trusts, which includes reference to the Trust Deed and any exercise of discretion by the trustee.

The phrase ‘that share of the net income of the trust estate’, as it appears in s 97, means the proportion of the net income to which the beneficiary becomes entitled rather than the dollar amount which the beneficiary is able to demand from the trustee.

The Issues in the Case

The respondents were the beneficiaries of a discretionary trust (“the Trust”).

The respondents disputed two assessments made by the Commissioner in financial years 2000 and 2002 under s 97 of the Income Tax Assessment Act 1936 (Cth), which states:

(1) Where “a beneficiary of a trust estate ... is presently entitled to a share of the income of the trust estate”:
(a) the assessable income of the beneficiary shall include:
(i) so much of that share of the net income of the trust estate as is attributable to a period when the beneficiary was a resident

This appeal raised the issue of the meanings of “income of the trust estate” and “that share” for the purposes of that section.

Income of the Trust Estate


The trust deed of the Trust entitled the trustee to treat any receipt as being “on income or capital account”. In 2002 the trust made a capital gain on a property sale. Pursuant to the deed, the trustee declared that the gain was income and distributed it equally to the beneficiaries.

The issue for the Court was whether this amount was “income of the trust estate”. The Court had to determine whether to apply the ‘tax law’ definition of income or the ‘trust law’ definition. Put simply, if the tax law approach were taken, the determination by the trustee that the gain was income would not be relevant, and the gain would not be considered in the calculation of the income. Whereas under trust law, the trust deed and, accordingly, the determination by the trustee would be relevant to determining whether the receipt was income.


The Court found that, as a matter of statutory construction, the general law of Trusts applies to determining what is ‘income of the trust estate’. Accordingly the capital gain became income of the trust estate upon the trustee declaring it income.

The Court said that s 97 employs terminology which “bespeaks” the general law of trusts. That is, the first sentence of sub-s (1) refers to “income” rather than “net income”, the latter being defined in the legislation, the former being a matter for general law (at [37]). Also, the section refers to “a trust estate” and “a beneficiary”, both of which are not defined in the legislation (at [38]). Finally, the use of the phrase “presently entitled to a share of the income” refers the reader to trust law concepts of beneficiary entitlement (at [39]). Accordingly, the Court considered that the Parliament intended the general law of trusts to apply to the definition.

That Share


In 2000 the trustee declared that the net income of the Trust would be distributed to the beneficiaries in particular amounts with the balance paid to the Church of Scientology. As it turned out, the trust did not have sufficient net income, so that the beneficiaries did not receive their total amount and there was no balance for the Church. Subsequently, certain deductions made by the trustee in calculating the net income were disallowed and so the trust found itself with more net income, which was not distributed to beneficiaries.

The Commissioner argued that, pursuant to s 97, the beneficiaries should be taxed on the increase in the net income which arose from the disallowance of the deductions, in the same proportion in which they received the income that was actually distributed. The respondents argued that they should only be taxed on the amount to which they are presently entitled to receive from the trust.

The question for the Court was whether the phrase “that share” attracted the so called ‘proportionate approach’ or the ‘quantum approach’. The former approach calculates the relevant amount by virtue of the proportion to which the beneficiary is entitled, and the latter takes the relevant amount to be the amount, or quantum, of money to which the beneficiary is actually entitled.


The Court adopted, without addition, the reasoning of Sundberg J in Zeta Force Pty Ltd v Comm of Tax (1998) 84 FCR 70, that the phrase “that share” related to a proportion rather than a specific amount (at [46]).

In that case Sundberg J identified that ‘that share’ relates not to the phrase “income” but to the phrase “net income” which is defined in the Act to mean taxable income rather than distributable income. His Honour said:

The words 'that share' in par (a)(i) refer back to the word 'share' in the expression 'a share of the income of the trust estate', and indicate that the same share is to be applied to an income amount calculated according to a different formula (taxable income as opposed to distributable income). Since the income amount may differ according to which formula is applied, the natural meaning to give to 'share' where it appears for the second time is 'proportion' rather than 'part' or 'portion'. When Parliament wanted to convey the latter meaning, as it did in ss 99 and 99A, it used the word 'part'.


The issues in this case have been plaguing Tax lawyers for some time and it is relieving to have them determined by the High Court. The view held by the Commissioner, that s 97 did not relate to the trust law definition of income was contrary to the view of many practitioners in this area (and intermediate courts) and so the Commissioner pursued this case as a test case.

However, the outcome doesn’t display a clear win to the tax payer or the tax collector except insofar as clever lawyers and accountants are able to structure trusts to best minimise tax liability. On this, the Court said:

both sides in argument on the present appeals accepted that whichever of the competing constructions of Div 6 were accepted examples could readily be given of apparent unfairness in the resulting administration of the legislation…

What is interesting is that the Commissioner withdrew an argument during the hearing of the appeal that the income be interpreted as including “statutory income”. Their Honour’s weren’t pleased ([2010] HCATrans 38):

MR GLEESON: Your Honours, we have provided the Court with two documents which seek to clarify the matter I put yesterday.

HEYDON J: But they are a complete retraction of what you said in the last 15 minutes yesterday.

MR GLEESON: Your Honour, to the extent what I said in that period overstated the Commissioner’s position, I seek to withdraw it. I apologise. The fault is mine, not the Commissioner’s.

HEYDON J: Mr Gleeson, if the Court had known on 2 November 2009, I think it was, that those things were going to be said, there would have been a very strong argument against granting special leave to appeal. Why should not special leave be revoked now?

Wednesday, May 19, 2010

New HCA Judgments

Two new judgments were published today. The decisions were largely unanimous except that Heydon J, again, put his two bobs worth in on both decisions. We'll have the summaries up soon but for now:

Republic of Croatia v Snedden [2010] HCA 14

The Court allowed an appeal from the federal Court and ordered the extradition of Daniel Sneddon, AKA alleged war criminal Captain Dragan. Croatian Courts treat service in the Croatian armed forces as a mitigating factor in its criminal law. Of Course, Sneddon, having served in the Serbian forces, would not be afforded this benefit. Sneddon argued that this meant that on return to Croatia, he would be “punished, detained or restricted in his ... personal liberty, by reason of his ... political opinions” according to the Extradition Act 1988 (Cth). The Court found that the absence of the mitigating factor was not sufficient to support an objection to extradition under the Act.

As I have posted about in the past, the High Court handed down judgment in this matter some time ago, but had reserved its reasons until today. Following that judgment Sneddon went AWOL and eluded the AFP for some time. It’s interesting that this was handed down just after Sneddon was finally brought into custody.

E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15

This Case related to the Trade Mark of Barefoot, which was registered by Gallo and sought to be used by Lion Nathon. The Court allowed the appeal from the Federal Court where Gallo’s Trade Mark had been removed from the register for “non-use”. The principal issue in the case is what constitutes “use” under the Trade Marks Act 1995 (Cth) but there are also some interesting subsidiary issues such as what constitutes an “authorised user” of a Trade Mark.

Also, check out the neat images in the Austlii version (at [8] and [12]). I wonder if there will come a time when the Court embeds video or audio to a judgment, say on a copyright claim.

Thursday, May 13, 2010

Snedden Caught!

I posted a while ago on the disappearance of alleged war criminal Captain Dragan, following his failed High Court attempt to avoid extradition. Well, apparently, he was captured this morning. 

Late last year Sneddon lost a defamation claim which he had brought against Nationwide News. Snedden lodged an appeal but while he was MIA (camping in the forest), Nationwide News took the opportunity to apply to have his appeal struck out. They got a temporary stay

Looks like he'll have trouble following through with that appeal now but it’ll be a race to see whether Nationwide News can enforce their costs orders against him before he’s shipped back to Croatia.

Tuesday, May 11, 2010

New US Supreme Court Nominee, Elena Kagan

In case you haven't heard yet, US President Obama has announced his nomination for the successor of Justice Stevens on the US Supreme Court as Elena Kagan. She is the current (and first female) Solicitor General of the United States. As I recall she was a favourite, back when Sotomayor was appointed so it's probably not much of a surprise for US legal analysts.

I'll be following the confirmation hearings on SCOTUSBlog and VC.

Thursday, May 6, 2010

Where did Brookfield Multiplex go?

In my April Special Leave Rundown, I remarked on the conspicuous absence of International Litigation Funding Partners v Brookfield Multiplex Ltd [2009] FCAFC 182 which had been listed in the special leave applications list but was pulled out at some point. That case found that class actions funded by litigation funding agreements come within the definition of Managed Investment Schemes under the Corporations Act 2001 (Cth) and need to be registered as such (along with other regulatory requirements). Following that decision ASIC announced that it would give a temporary amnesty for such arrangements given how unexpected the finding was.

The mystery of the case’s absence from the leave applications the other week might now be solved by the fact that the Federal Government recently announced proposed legislative changes that will reverse the Full Court's decision and, presumably therefore, allow the litigation to proceed without the need for registration.

[UPDATE: Papers are reporting that the litigation has (or is about to be) settled.]

Monday, May 3, 2010

Amaca Pty Ltd v Ellis

Amaca Pty Ltd v Ellis; The State of South Australia v Ellis; Millennium Inorganic Chemicals Ltd v Ellis [2010] HCA 5 (3 March 2010)


Majority: French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ

Decision: Appeal allowed.

The respondent died of lung cancer. He was a smoker and exposed to asbestos in the course of his employment. No definitive cause of the respondent’s lung cancer was determined (scientifically or medically). The Court found that it could not be established that it was more probable than not that the asbestos was the cause of the respondent's lung cancer; ‘because no more was established than that, although exposure to asbestos may have been a cause of his cancer, it was not a probable cause.’ (at [14]). Accordingly, causation was not made out and therefore the claim must fail.


The respondent Paul Steven Cotton died from lung cancer in 2002. He had smoked on average 15 to 20 cigarettes a day for more than 26 years before he was diagnosed with lung cancer. In the employ of the Engineering and Water Supply Department of the State of South Australia (1975-1978) and then Millennium Inorganic Chemicals Ltd (1990-2002), the respondent was exposed to ‘respirable asbestos fibres’. The existence of duty and breach were not in issue. The principle issue was causation; “but for” the respondent’s exposure to asbestos would he have contracted lung cancer? The respondent sought to establish that asbestos caused or contributed to the lung cancer.

Epidemiological evidence

At trial epidemiological evidence was put forward by four experts with extensive expertise in asbestos related diseases. The evidence of each collectively was that ‘many sufferers of lung cancer had smoked tobacco, a few had been exposed to asbestos; some of those who had been exposed to asbestos had also smoked; some had been neither smokers nor exposed to asbestos.’ (at [20]) Calculation of the risk involved the formulation of ‘relative risk’: the differentiation between the risk of the suffering from the disease if exposed to smoking, asbestos or both, in contrast to those not exposed to these risk factors. The evidence before the Court in first instance was that in addition to smoking and asbestos having a measurable risk factor of contracting lung cancer, both smoking and asbestos exposure together has ‘a synergistic effect’: being that the risk of lung cancer from smoking and exposure to asbestos is greater than the addition of the risk of smoking to the risk associated with asbestos exposure. (at [21])

While there were differences between each of the experts as to the exact quantifiable probable cause of the respondents cancer, collectively they provided that the risk of lung cancer was far greater from smoking than from exposure to lung cancer [asbestos]. None of the four witnesses discerned the probability that the respondent’s cancer was caused by asbestos exposure to be greater than 23% irrespective of his smoking. Each gave a figure of 67% or greater that the respondent’s cancer was a result of his smoking alone. (at [30])


The Court found that the respondent’s exposure to asbestos which may have caused his cancer was insufficient to satisfy that the exposure more probably than not was the causative factor in his lung cancer. The respondent’s assertion that smoking and asbestos exposure ‘must work together’ was unsupported by the expert evidence given at trial.

It may be accepted (at least for the purposes of debate) that the synergistic or multiplicative effect suggests that in some cases the two carcinogens will have contributed to the development of an individual patient's cancer. But the proposition which the plaintiff advanced was an absolute proposition of universal application: smoking and asbestos must work together and they must have worked together in this case. That proposition was not established. (at [54])

The respondent’s dissection of the possible cause of his lung cancer as either solely smoking or the synthesis of smoking and asbestos to the exclusion of other possible causes, could not be accepted. While such a dissection resulted from epidemiological evidence that most people who contract lung cancer were smokers and the second highest incidence of lung cancer resulted from both a culmination of smoking and exposure to asbestos, does not reduce the cause of lung cancer to two definitive causal explanations. Without further evidence, there is insufficient basis to establish a causal connection between the respondent’s asbestos exposure and his lung cancer. The respondent's reliance on the evidence that smoking and exposure to asbestos is more dangerous than either in isolation is insufficient to establish causation. (at [55-57])

The categorisation by the respondent of smoking and asbestos as ‘most dangerous’ - in the sense that asbestos was more likely to be the cause of the cancer - was not supported by the evidence. Of the expert witnesses, none measured the likelihood of the cancer being caused by asbestos (solely or in combination with smoking) to be greater than 23%. The likelihood of smoking being the sole cause was high, up to 92%. Therefore the ‘quantitative comparison of risk’ of smoking in combination with asbestos as ‘most dangerous’ was not supported by the evidence. (at [59]) It is more probable than not that smoking was the cause of the respondent’s cancer. Furthermore exposure to asbestos, whether alone or in conjunction with smoking was low and fails to satisfy that it is more probable than not that the respondent’s cancer was caused by asbestos exposure. (at [64])


Ellis provides an example where the prevailing test for causation, provides for what may be viewed as an unfavourable outcome. In this case, duty and breach were not in contention. However, due to the complicated and inconclusive nature of the medical and scientific knowledge in the area, a casual relationship could not be established. It would appear that Epidemiological evidence is difficult even unlikely, on its own, to be sufficient to establish causation.

Ellis emphasises the difficulty in establishing causation in circumstances where the damage was the result of 2 or more independent possible sources each capable of resulting in the damage independently. Similar difficulty ensues where the damage was the result of two or more separate causes which act synergistically. This poses the question of whether the test of causation should be lowered. This is a complicated issue, which I will not endeavour to tackle here. It is worthwhile however to note that this case is likely to encourage discussion.

The Court did not appear to be interested in reassessing causation in Ellis. Admittedly the question was not asked, but the Court gave no inclination in their joint judgement that they would consider a reassessment. Their Honours concluded with a brief justification of an apparent paradox in their decision. The fact that the Court felt the need/desire to do so is interesting as is their explanation itself. I have therefore reproduced it here (at [69-70]):

A paradoxical result?

It was submitted that the conclusion that causation was not established in this case entailed a paradox. If consideration of the results of the population studies described in evidence in this matter does not permit the inference that Mr Cotton's cancer was caused or contributed to by exposure to asbestos, no claim by an individual in Mr Cotton's position could succeed. And yet, the argument continued, the population studies showed that exposure to asbestos was a cause of cancer in some cases. How then could it be right to reach a result that entailed the corollary that all individual claims would fail?

The answer to the question can be expressed in several different ways. All depend upon the basic and unpalatable fact that no scientific or medical examination can now say, with certainty, what caused Mr Cotton's cancer or lung cancer in any other particular case. As explained at the outset of these reasons, despite this uncertainty, the courts must, and do, "reduce to legal certainty [a question] to which no other conclusive answer can be given". The courts do that by asking whether it is more probable than not that X was a cause of Y. Saying only that exposure to asbestos may have been a cause of Mr Cotton's cancer is not a sufficient basis for attributing legal responsibility. Observing that a small percentage of cases of cancer were probably caused by exposure to asbestos does not identify whether an individual is one of that group. And given the small size of the percentage, the observation does not, without more, support the drawing of an inference in a particular case. The paradox, if there be one, arises from the limits of knowledge about what causes cancer.
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