Carter Newell's 12 Cases of Christmas 2021

Dec 2021 | Litigation & Dispute Resolution

On the twelfth day of Christmas, the Qld Parliament gave to me, affidavits sworn and witnessed electronically…

Although not a case, the recent passing of the Justice and Other Legislation Amendment Act 2021 (Qld) cannot go unmentioned as it brings the practice of litigation into the 21st Century. The legislation, which has not yet been proclaimed into force, will make permanent some of the provisions introduced in response to COVID-19. In particular, it amends the Oaths Act 1867 to enable the electronic signing and witnessing of affidavits and statutory declarations. Further, unlike the temporary provisions introduced in response to COVID-19, this legislation will also permit electronic signing of affidavits in person. Accordingly, the deponent and witness could sign an affidavit on an iPad or similar device using a stylus. There is no doubt from our experiences over the last 12 months that embracing the electronic making and swearing of affidavits will lead to numerous efficiencies in the conduct of litigation, as well as saving trees!

The Litigation & Dispute Resolution Team at Carter Newell wish you a happy and safe festive season, and all the best for 2022.

On the eleventh day of Christmas, the High Court gave to me, legislative alteration of rights under state agreements validity…

The High Court in Mineralogy Pty Ltd v Western Australia [2021] HCA 30 / Palmer v Western Australia [2021] HCA 31 considered the validity of the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Amendment Act 2020 (WA) (Amending Act). Mineralogy Pty Ltd (Mineralogy), a company controlled by Clive Palmer, and its subsidiary International Minerals Pty Ltd (IM), entered into an agreement with the state of Western Australia which provided that the State would assist the establishment and approval of projects proposed by Mineralogy for mining and dealing with iron ore in the Pilbara region. The agreement was implemented by the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (WA). The agreement contained an arbitration clause whereby disputes in relation to the agreement were to be settled by arbitration under the Commercial Arbitration Act 2012 (WA).

A number of disputes in relation to alleged breaches of the agreement by the State were referred to arbitration and two arbitral awards were made in favour of Mineralogy and IM. Under one arbitral award, it was determined that Mineralogy and IM were not barred from suing the State for damages. The dispute as to the State’s liability for damages was referred to arbitration, however the Amending Act was subsequently passed and, amongst other things, it nullified the effect of the arbitral awards, terminated the arbitration agreement, and stated that the State was not liable for any damages in relation to disputes arising out of the agreement.

The plaintiffs unsuccessfully challenged the validity of the Amending Act. Relevantly, the Court held that:

  1. a statute which alters substantive rights (even if the subject of a pending or concluded arbitration) does not involve an exercise of judicial power or an interference with judicial power contrary to the Constitution;

  1. the institutional integrity of a court as an independent and impartial tribunal cannot readily be threatened by a mere alteration of substantive legal rights; and

  1. there was no operative limitation on the scope of the legislative power of the Parliament of Western Australia arising from reference to the 'rule of law'.

On the tenth day of Christmas, the High Court gave to me, clarification of employment casually…

The High Court in WorkPac Pty Ltd v Rossato & Ors [2021] HCA 23 overturned a decision of the Full Federal Court and provided clarification regarding casual employment in Australia. The respondent employee, who had undertaken six consecutive casual employment contracts with the appellant, claimed he was a permanent employee and requested payment of various leave entitlements. The Full Federal Court had found that the respondent was not a casual employee, and was therefore entitled to the claimed leave. 

Although the Fair Work Act 2009 (Cth) was amended between filing of the appeal and its hearing, and inserted a definition of “casual employee”, the High Court’s decision remains relevant to certain employees, and the overall principles are likely to have broader application.

The High Court considered whether the respondent was a casual employee, and held that this was ultimately a matter of statutory interpretation of the Fair Work Act 2009 . It was accepted that a casual employee refers to an employee who has no "firm advance commitment as to the duration of the employee's employment or the days (or hours) the employee will work." The plurality emphasised the primacy of the contractual terms and held that a reasonable expectation of continuing employment is simply not a firm advance commitment. In this regard, it was held that the search for the existence or otherwise of a "firm advance commitment" must be for enforceable terms, and not unenforceable expectations or understandings that might be said to reflect the manner in which the parties performed their agreement. The Court did however leave open the possibility that mutual undertakings could be inferred from conduct and may take effect as contractual variations. 

On the ninth day of Christmas the Full Federal Court gave to me, clarification on statutory set-off claims in insolvency…

In Morton as Liquidator of MJ Woodman Electrical Contractors Pty Ltd v Metal Manufacturers Pty Limited [2021] FCAFC 228, the Full Federal Court has confirmed that statutory set off, under s553C(1) of the Corporations Act 2001, is not available against a liquidator’s claim for recovery of an unfair preference claim under s588FA.

The case considered an agreed set of facts involving a defendant creditor who had received payments from an insolvent company during the relation back period. The liquidator sought to recover this as a preference, and the creditor sought to fully set-off the alleged preference against a second debt which was owed to the defendant by the insolvent company. 

The Court examined the history of the provisions and the different purposes of the law of set-off in insolvency and the law of preferences. The Court recognised that a payment made to a creditor within the relevant period when the company is insolvent does not have the effect of a preference if the circumstances are that there was a countervailing payment or a release of liability by the creditor. However, this did not extend to allowing a set-off of a debt against a preference payment. Primarily this came down to there being a lack of mutuality between the ongoing indebtedness of the insolvent company to the creditor and the liability of the creditor to disgorge the preference payment, including as a consequence of the different interest in which the company owes money to the creditor and in which the company receives money from the preferred creditor (as a payee pursuant to court order in an action brought by the liquidator in the execution of her or his duty to gather in the estate of the insolvent company).

On the eighth day of Christmas, the Victorian Supreme Court gave to me, egregious breaches of the paramount duty… 

Justice Dixon in Bolitho v Banksia Securities Ltd (No 18) [2021] VSC 666 ordered a litigation funder and five lawyers to pay damages of nearly $12 million plus indemnity costs to a group whom they had represented in a proceeding that was settled for $64 million. Justice Dixon found that the litigation funder and lawyers, including a prominent silk, had committed egregious breaches of their professional duties by, amongst other things, reverse engineering $5.2 million in costs, backdating costs agreements and invoices, and misleading an expert costs lawyer into authoring a report that concluded legal fees were legitimate, which resulted in court approval of the funder’s claim of $19.3 million for costs and commission. Two barristers agreed to their names being removed from the Roll, whilst two solicitors were ordered to show cause as to whether they remained fit and proper to practice. The funder has since gone into administration. 

On the seventh day of Christmas, the WA Court of Appeal held unanimously, 'time is not of the essence' is not presumed generally…

The Court of Appeal in Chevron (TAPL) Pty Ltd v Pilbara Iron Company (Services) Pty Ltd [2021] WASCA 193 had to determine a single question of construction of a price review clause in a long-term gas supply contract: does failure, in giving notice to initiate a price review, to comply with a time stipulation mean that the attempt to invoke the price review clause is ineffectual? The clause provided that either party may initiate a price review by issuing the other side 'a notice which complies with Clause 14.4 (Price Review Notice) not more than 120 days nor less than 90 days prior to a Price Review Date'.

The Court of Appeal overturned the first instance judgment and upheld the sellers’ construction - namely that the time period in the clause was essential, such that a notice given outside that period was ineffectual. This was despite the fact that the agreement did not expressly state that time was of the essence. The Court of Appeal reviewed the authorities in considerable detail and rejected, for a number of reasons, the respondent’s submission that there was a presumption that time is not of the essence in all cases involving a time stipulation in machinery-type provisions for determining price adjustments. In particular, the Court did not consider that such a presumption fits with the modern approach to construction of contracts.

On the sixth day of Christmas, the NSW Court of Appeal gave clarity, to the last remaining question re Chorley…

The Court of Appeal in Spencer v Coshott [2021] NSWCA 235 considered whether the primary judge erred in denying the applicant costs for professional fees charged to him by an incorporated legal practice, of which the applicant was the sole director and shareholder. This case followed a decision in Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29, where the High Court abolished the application of the Chorley exception in Australia (which exception permitted a self-represented litigant with the benefit of a costs order, who happens to be a solicitor, to recover professional costs of acting in litigation).

The plurality in Bell Lawyers left open the possibility that the abolition of the Chorley exception did not extend to circumstances where an applicant claimed costs for professional fees charged to them by an incorporated legal practice of which the applicant was the sole director and shareholder. Spencer v Coshott had to consider this precise scenario. The Court of Appeal held that the primary judge had erred in determining that the applicant was not entitled to recover professional costs for work undertaken by himself as principal or by the incorporated legal practice. The Court of Appeal cited the plurality in Bell Lawyers to support its decision that the existing law, which recognises the separate legal personality of the incorporated legal practice, is to be applied until the legislature intervenes or consideration of the legislation dictates a different result. The Court of Appeal considered it fundamental to its decision that the applicant had entered into a binding costs agreement with the incorporated legal practice in relation to the proceedings the subject of the costs order being considered.

On the fifth day of Christmas, the OAIC gave to me, a decision on Uber’s breach of privacy…  

The Office of the Australian Information Commissioner (OAIC) in Commissioner Initiated Investigation into Uber Technologies, Inc. & Uber B.V. (Privacy) [2021] AICmr 34 determined that Uber Technologies Inc and Uber B.V had breached several Australian Privacy Principles (APP) as a result of a 2016 cyber attack which compromised the data of 1.2 million Australians. The OAIC determined that Uber had breached APPs 1.2, 11.1 and 11.2 by failing to comply with the APPs generally, failing to take reasonable steps to protect information against unauthorised access, and failing to destroy or de-identify information. 

The OAIC made declarations that Uber must prepare policies and programs, and engage an independent expert to review those policies. The independent expert was required to author reports on the policies and programs, including their implementation, to be provided to the OAIC. The OAIC also made a declaration that the independent expert would conduct a review 30 months after the OAIC’s determination and required Uber to implement any recommendations within 6 months after the report following that review. 

(See Carter Newell article, 'No penalty for Uber’s data breach affecting 1.2 million Australians', published August 2021 by clicking here).

On the fourth day of Christmas, the NSW Supreme Court gave to me, COVID-19 public health orders’ validity… 

Beech-Jones CJ in Kassam v Hazzard; Henry v Hazzard [2021] NSWSC 1320 considered the validity of orders made by the NSW Health Minister under section 7(2) of the Public Health Act 2010 (NSW) in response to the COVID-19 outbreak. The orders prevented authorised workers from leaving an affected area of concern that they resided in, and prevented some people from working in the construction, aged care and education sectors unless they had been vaccinated. The judgment concerned two proceedings. The plaintiffs in both proceedings contended that the orders were invalid on the basis that they affected fundamental rights and freedoms, such as the right to bodily integrity. The plaintiffs in the first proceeding also argued that section 7 of the Public Health Act 2010 (NSW) was rendered invalid by section 51(xxiiiA) of the Constitution as it amounts to civil conscription in relation to medical services. 

The Supreme Court dismissed both proceedings. In doing so, Beech-Jones CJ recognised that “the Court’s only function is to determine the legal validity of the impugned orders which includes considering whether it has been shown that no Minister acting reasonably could have considered them necessary to deal with the identified risk to public health and its possible consequences”. His Honour found that the orders curtailed freedom of movement rather than interfering with a person’s right to bodily autonomy as the orders did not authorise involuntary vaccinations. Beech-Jones CJ determined that curtailing the free movement of persons to and at work was the very type of restrictions that the Public Health Act 2010 (NSW) clearly authorised, and that the principal of legality did not justify the reading down of section 7(2) to preclude limitations on that freedom. Beech-Jones CJ also determined that the order was not an unreasonable exercise of power because the differentiation between individuals on the basis of vaccination status was not arbitrary. The constitutional ground failed because the orders do not impose any form of civil conscription and section 51(xxiiiA) is concerned with the legislative power of the Commonwealth and not of the States. On 8 December 2021, the New South Wales Court of Appeal refused leave to appeal on most grounds, and in respect of the proper construction of the relevant section, upheld the decision of Beech-Jones CJ, finding that it was “inconceivable” that the legislature would not have intended to afford the Minister the maximum flexibility possible to address risks to public health which could be severe, fast-moving and wide-ranging. 

On the third day of Christmas, the Federal Circuit Court gave to me, a battle over canine custody… 

In Davenport v Davenport (No.2) [2020] FCCA 2766, the Federal Circuit Court considered a dispute between separated partners over their pet dog. The wife purchased a dog and had it registered in her own name prior to the marriage. During property proceedings, the wife deposed that she wished to keep the dog. The husband made an application for interim orders for shared custody of the dog. In the judgment, Justice Tonkin reminded us that, although pets are part of the family, at law they are considered a chattel. Further, there is no provision under the Family Law Act 1975 (Cth) and ‘no specific legislation that deals with issues such as the “custody” of a pet whether that be a dog, cat, bird, lizard, fish or any of the wonderful creatures that we share the planet with that would empower a Court to make orders for shared custody of a pet’

On the second day of Christmas, the High Court confirmed for me, the breadth of a publisher’s defamation liability…

In Fairfax Media Publications Pty Ltd v Voller; Nationwide News Pty Limited v Voller; Australian News Channel Pty Ltd v Voller [2021] HCA 27, the High Court upheld the decisions of the primary judge and NSW Court of Appeal on a separate question, finding that Fairfax Media Publications Pty Ltd, Nationwide News Pty Ltd and Australian News Channel Pty Ltd were publishers of defamatory posts made by third parties on the news companies’ Facebook pages. The focus of the High Court’s decision was on the meaning of “publication” in the law of defamation, with the majority confirming the breadth and strictness of this term of art. The news companies argued that their passive role in the publication was insufficient to make them publishers, and that to be a publisher they must have intended to communicate the matter complained of. The majority (comprising Chief Justice Kiefel, and Justices Keane and Gleeson) found that a person who has been instrumental in, or contributes to any extent, the publication of defamatory matter is a publisher. All that is required is a voluntary act of participation in its communication – in other words it was merely the defendant's act of participation in, or facilitation of, publication which must be intentional. The joint judgment of Justices Gordon and Gageler, agreeing with the majority, stated: “the appellants' attempt to portray themselves as passive and unwitting victims of Facebook's functionality has an air of unreality. Having taken action to secure the commercial benefit of the Facebook functionality, the appellants bear the legal consequences”. The NSW Supreme Court is yet to determine the balance of the claim. 

On the first day of Christmas, the Federal Court gave to me, a decision regarding a Minister’s climate change duty...

Justice Bromberg of the Federal Court, in Sharma by her litigation representative Sister Marie Brigid Arthur v Minister for the Environment [2021] FCA 560, found that the Federal Minister for the Environment owed the applicants and other Australian children a duty to take reasonable care when exercising her powers under section 130 and 133 of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) to approve or refuse the extension of a coal mine. In addition to seeking a declaration, the applicants sought an injunction to restrain the apprehended breach of that duty. This decision focussed on 'Scope 3' emissions from the burning of the coal (of around 100 Mt of CO2). Justice Bromberg found that the Minister owed a duty to take reasonable care in the exercise of her statutory powers not to cause children residing in Australia harm arising from the extraction of coal and the consequent emission of carbon dioxide into the atmosphere. His Honour considered that it was reasonably foreseeable by a person in the Minister’s position that, by reason of the extension, each of the children would be exposed to a risk of death or other personal injury. Justice Bromberg also took account of the Minister’s control over the potential harm, the extent of vulnerability of the children to that harm, and the extent to which the children relied upon the Minister to avoid the potential harm. His Honour did not, however, grant an injunction. The Minister has appealed the decision. The Full Federal Court heard the Minister’s appeal on 18-20 October 2021 and judgment has been reserved.