Dr Michelle Sharpe High Court judgments

DR MICHELLE SHARPE

BARRISTER – GENERAL COMMERCIAL, REAL PROPERTY, DISCIPLINARY AND REGULATORY LAW VICTORIAN BAR (03) 9225 8722 msharpe@vicbar.com.au

The full version of these judgments can be found at www.austlii.edu.au

High Court judgments

RES JUDICATA Foreign divorce

In Clayton v Bant [2020] HCA 44 (2 December 2020) the High Court was asked to determine whether Ms Clayton’s proceedings in the Family Court of Australia (Family Court) were precluded by a ruling made by the Personal Status Court of Dubai (Dubai Court) in divorce proceedings brought by Mr Bant.

Ms Clayton and Mr Bant (not their real names) were married for about five years and had a child. Ms Clayton is an Australian citizen and Mr Bant is a citizen of the United Arab Emirates (UAE). They were married in a Sharia court. Marriage under Personal Status Law of the UAE is a formal contract in which provision can be made for a husband to pay dowry to a wife. The written contract here provided for Mr Bant to pay Ms Clayton an “advanced” dowry of AED 100,000 and a “deferred” dowry of the same amount in the event of death or divorce. Mr Bant owns real and personal property in the UAE and many other parts of the world. Ms Clayton owns personal property in UAE. Both own real property in Australia. Ms Clayton left Mr Bant and returned to live in Australia with their child. When Ms Clayton commenced proceedings in the Family Court seeking parenting and, later, orders for property settlement pursuant to ss74 and 79 of the Family Law Act 1975 (Cth) (Family Law Act). Mr Bant commenced proceedings in the Dubai Court seeking a divorce. Mr Bant also sought orders for the extinguishment of all of Ms Clayton’s marital rights associated with the divorce in terms of alimony and the deferred dowry. Ms Clayton was notified of the Dubai proceedings but did not appear. The Dubai Court made a ruling in which Mr Bant was granted an “irrevocable fault-based divorce” dissolving the marriage (Dubai Ruling). The Dubai Ruling went on to order Ms Clayton to refund the advanced dowry and pay Mr Bant’s legal costs. In respect of the alimony and deferred dowry, the Dubai Court considered that “this subject is untimely”.

Mr Bant subsequently sought a permanent stay of the Family Court proceedings. At first instance, Mr Bant’s application was dismissed. Mr Bant successfully appealed that decision and the Full Court ordered a permanent stay. Ms Clayton then appealed and the High Court unanimously overturned the Full Court’s decision. Keifel CJ and Bell and Gageler JJ gave reasons for their decision in a joint judgment. Gordon and Edelman JJ each delievered separate judgments. Edelman J observed at [65] four separate rules of finality relevantly applied here. First, res judicata (Latin for “a thing decided”) or the doctrine of merger. The High Court noted at [66] that the doctrine is not just about the finality of litigation. It describes the extinguishment of an independent prior right.

That is, when the court order “replicates” the prior right with consequences, such as enforcement mechanisms, the prior right no longer has an independent existence, instead it has merged with the order. Second, cause of action or claim estoppel. If a judgment has finally resolved a conflict about a cause of action then the parties will be precluded from relitigating that cause of action. Third, issue estoppel. If it is necessary for the final resolution of a dispute to determine an ultimate issue of fact or law then the parties will be precluded from denying a state of fact or law inconsistent with that resolution. Finally, Anshun estoppel (or the extended principle in Henderson v Henderson (1843) 3 Hare 100). This rule was recognised in Henderson and Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. It is an extension of the second and third rules outlined above. The rule precludes a party from raising a cause of action or an issue in a new proceeding if it was so relevant to the subject matter of the previous, resolved, proceeding that it would have been unreasonable not to have raised it in that resolved procceding at the time. The High Court determined that the Dubai Ruling did not give rise to res judicata because the Dubai Ruling did not, and could not, determine Ms Clayton’s rights under the Family Law Act. As for estoppel (rules 2, 3 and 4) the High Court observed at [30] that Mr Bant bore the onus of proving it. The High Court considered that Mr Bant failed to prove (or at [31] “did not deign to prove”) that it was unreasonable for Ms Clayton to raise her Family Court claims in the Dubai Court (in order to establish an Anshun estoppel). But, more fundamentally, Mr Bant failed to prove substantial correspondence between between Ms Clayton’s Family Court claims and any right that might have been asserted by her and was finally determined in the Dubai Court. The High Court noted at [40] and [56] that the only rights that Ms Clayton could have legally put into issue in the Dubai Court was her entitlement to the deferred dowry and to her share in any real property in Dubai (the Dubai Court having no power to alter their interests in property outside the UAE). As Edelman J observed at [64], the proper characterisation of the Dubai Ruling was that the only claim it resolved was the dissolution of the marriage.

TRESPASS

Admissibility of evidence

In Roy v O’Neill [2020] HCA 45 (9 December 2020) the High Court was required to consider whether a police officer was trespassing on private property when he administered a breath test, the results of which were used in evidence against the appellant (Ms Roy).

A Domestic Violence Order (DVO) was issued against Ms Roy out of the Local Court of the Northern Territory of Australia. The purpose of the DVO was to protect Ms Roy’s partner, Mr Johnson. The DVO restrained Ms Roy from being in the company of Mr Johnson, or at a place where he lived, when she was consuming alcohol. Sometime after the DVO had been issued, Constable Elliott visited Mr Johnson’s home. At the time, the police in the Northern Territory were engaged in a “proactive policing” operation targeting domestic violence. Constable Elliott later gave evidence that he was concerned about Mr Johnson’s welfare. Mr Johnson lived in a unit in a public housing complex. Constable Elliott entered the complex from the footpath and walked along one of the pathways, shared by the units, to the door of Mr Johnson’s unit. Constable Elliott knocked on the flyscreen door and, looking in, saw Mr Johnson seated on the couch and Ms Roy lying on the floor. Constable Elliott called Ms Roy to the door. As Ms Roy approached the door, she displayed signs of intoxication. Constable Elliott required Ms Roy to provide a breath test and Ms Roy complied. The machine gave a positive reading for alcohol and the results were subsequently used against Ms Roy in proceedings against her for breaching the terms of the DVO.

At trial, evidence of the breath test result was objected to. Constable Elliott asserted that when he took the breath sample, he was exercising power under reg 6 of the Domestic and Family Violence Regulations (NT) (Regulations). Regulation 6 requires a defendant to comply with a reasonable direction

by a police officer to submit to a breath test. For the direction to be reasonable, it is not necessary for the officer to suspect that the defendant has consumed alcohol. But, importantly, the regulation does not authorise a police officer to enter private property. Section 126(2A) of the Police Administration Act (NT) (Act) though does authorise entry if the officer believes, on reasonable grounds, that a contravention has occurred. The trial judge found that neither the Regulations nor the Act gave Constable Elliott power to attend Mr Johnson’s home to check Ms Roy’s compliance with the DVO. The decision was overturned by the Court of Appeal of the Northern Territory. And the High Court, in a 3:2 split, upheld the Appeal Court’s decision.

Keifel CJ and Keane and Edelman JJ (the latter two justices in a joint judgment) considered that Constable Elliott was not a trespasser at the time that he administered the breath test. Their Honours noted at [11] and [66] that to lawfully enter private property permission to enter must first be given by the occupier. And that permission, their Honours observed, can be implied. Citing Halliday v Nevill (1984) 155 CLR 1, their Honours explained at [14] and [68] that a (revokable) licence to enter will be implied to walk on a path or driveway for the purpose of lawful communication, or delivery, to any person on the property if access is unobstructed and there is no notice, or other indication, that entry is prohibited. Their Honours considered that Constable Elliott lawfully entered onto the private premises because he used an unobstructed pathway to access the property for the lawful purpose of carrying out a welfare check. Keifel CJ at [19] also considered that when Constable Elliott saw Ms Roy in an intoxicated state, he had the requisite belief for the purposes of s126(2A) of the Act to remain on the property and require Ms Roy to provide a breath sample under reg 6 of the Regulations. But Keane and Edelman JJ at [93] thought it unnecessary to decide whether the Act or Regulations applied because it was an undisputed fact that Ms Roy had voluntarily provided a sample of her breath. Bell and Gageler JJ, in dissent, in a joint judgment redolent of the film “The Castle” opined, at [31] that “In the Australian way of thinking, a home is a sanctuary”. Their Honours recognised at [34] that the implied licence can be invoked by a police officer. But their Honours considered at [40] that a police officer exceeds the limits of that licence if the officer has any conditional or unconditional intention of ordering the occupier to do anything. Their Honours concluded that Constable Elliott was a trespasser because they considered that he intended to take a sample of Ms Roy’s breath when he entered onto the property and, as such, he had exceeded the limits of the implied licence.

CONSTITUTIONAL LAW

Section 92

In Palmer v Western Australia [2021] HCA 5 (24 February 2021) the High Court was required to consider whether the Quarantine (Closing the Border) Directions (WA) (Directions), which effectively closed the West Australian border from 5 April 2020, infringed s92 of the Constitution.

The Police Commissioner for Western Australia issued the Directions under s67 of the Emergency Management Act 2005 (WA) (the Act). Section 67 allows an authorised officer to (among other things) “direct or, by direction, prohibit, the movement of persons . . . into, out of or around an emergency area or any part of the emergency area” during a state of emergency for the purpose of “emergncy management”. A Minister may declare a state of emergency under s56 of the Act provided that the conditions enumerated under s56(2) are met. The Minister declared a state of emergency under the Act on 15 March 2020 (after the World Health Organisation declared COVID-19 a pandemic).

The challenge to the Directions was brought by Clive Palmer (Palmer) and Mineralogy Pty Ltd, a company of which Palmer is chairman and managing director (the plaintiffs). Palmer regularly travelled between WA and his home in Queensland for business purposes. Palmer applied for, and was denied, an exemption under the Directions. The plaintiffs subsequently brought proceedings in the original jurisdiction of the High Court, in May 2020, seeking a declaration that “either the authorising Act and/or the Directions are invalid, either wholly or in part . . . by reason of s92 of the Constitution”. Section 92 of the Constitution provides, relevantly,

“trade, commerce and intercourse among the States . . . shall be absolutely free”. The plaintiffs argued that the Directions imposed a burden on the freedom of intercourse among the Australian people by prohibiting cross-border movement of people. Alternatively, the plaintiffs argued that the freedom of trade and commerce guaranteed by s92 is contravened because the Directions imposed an effectively discriminatory burden with protectionist effect. The defendants (the State of Western Australia and the Police Commissioner) denied that either the Act or the Directions contravened s92 because, they argued, neither had the purpose of economically protecting Western Australia rather they had the legitimate purpose of (and were reasonably necessary to achieve) the protection of the population of Western Australia against risks arising from emergency situations.

No agreement could be reached between the parties on the facts necessary to determine the plaintiffs’ claim by the High Court. Accordingly, the High Court remitted the issue to the Federal Court of Australia for hearing and determination pursuant to s44 of the Judiciary Act 1903 (Cth). On 25 August 2020, Rangiah J of the Federal Court found that the facts pleaded by the defendants, in support of their argument that the Directions did not infringe s92, had been proved. Importantly, Rangiah J held that the risk to the health of the West Australia population was a function of two factors: the probability that COVID-19 would be imported into the population and the seriousness of the consequences if it was imported. Rangiah J concluded that, given the uncertainties about importation of the disease into Western Australia and the potentially serious consequences of the disease, “a precautionary approach should be taken to decision-making about the measures required for the protection of the community” (see [23]).

The High Court unanimously (but in separate reasons) rejected the plaintiffs challenge to the Directions. As Gageler observed at [83], “The riddle ‘riddle of s92’ lies in the question begged by the constitutional text: ‘absolutely free from what?’” Citing Cole v Whitfield (1988) 165 CLR 360 at 394 and 398, Gageler J notes at [85] that it has been authoritatively determined that trade and commerce among the states is guaranteed by s92 to be absolutely free from “discriminatory burdens of a protectionist kind”. As to what amounts to discrimination, in joint reasons, Keifel CJ and Keane J explain at [31], “Discrimination in a legal sense involves a comparison of relative equals by which one is treated unequally, or of unequals treated equally”.

The High Court was unanimous in finding that the Directions were discriminatory but did not infringe s92 because it was justified to protect the population of Western Australia from COVID-19. But where their Honours parted company was the test adopted to determine this justification. Kiefel CJ and Keane J and, in a separate judgment Edelman J, held that the proper test was the “structured proportionality test” – a rigid test involving three distinct steps (see [269][276]). Conversely, Gageler and Gordon JJ, in separate judgments, considered that the proper test for justification was “reasonable necessity”. The test involves an evaluative judgment as to the suitability and necessity of the legislation imposing the burden.

CLASS ACTIONS

Competing class actions

In Wigmans v AMP Limited & Ors [2021] HCA 7 (10 March 2021) the High Court was required to consider whether the Supreme Court of New South Wales had the power to choose between competing group proceedings as to which to allow to proceed on any basis other than on a “firstin-time” basis.

In April 2018, AMP executives gave testimony to the Financial Services Royal Commission to the effect that AMP had deliberately charged some of its clients fees for no service and that it had misled ASIC as to the extent of its conduct. Following this testimony, the value of AMP shares on the Australian Stock Exchange dropped sharply. Subsequently, and in quick succession, five separate open class representative proceedings were commenced on behalf of AMP shareholders who had

invested in AMP during the periods of time in which they allege the company should have disclosed the information, revealed at the Royal Commission, to ASIC. The first of these representative proceedings was brought by the applicant (Wigmans). The last two group proceedings commenced were brought by the second respondent (Kolotex) and the third respondent (Fernbrook). Kolotex and Fernbrook later consolidated their proceeding (the Kolotex/ Fernbrook proceeding).

The head plaintiffs for each group proceeding brought an application to permanently stay the other group proceedings. The primary judge ordered that all of the group proceedings, save for the Kolotex/Fernbrook proceeding, be permanently stayed. Ostensibly, the primary judge made this order pursuant to ss67 and 183 of the Civil Procedure Act 2005 (NSW) (CPA) (which respectively empowers the court to stay proceedings and empowers the court to make any order the court thinks necessary to ensure that justice is done) and the inherent power of the Supreme Court (which encompasses both powers). The primary judge approached the determination of the stay applications by an assessment of the potential benefits expected to flow to group members in each representative proceeding. The trial judge proceeded by reference to the case management principles contained in the “overriding purpose” provided in s56 of the CPA and adopted a “multifactorial analysis” of the kind endorsed by the Full Federal Court in Perera v GetSwift Ltd (2018) 263 FCR 92 at [195]. The eight factors, identified by the primary judge, as relevant to the determination of the stay applications included: the net hypothetical return to group members; the proposal for security for AMP’s costs; the nature and scope of the causes of action advanced; the size of the respective classes; the extent of any bookbuild (that is the process of joining a sufficient number of members with a sufficient claim value to make the funding of the group proceeding commercially viable); the experience of the legal practitioners and funders and the availability of resources; the state of progress of the proceedings; and the conduct of the representative plaintiffs to date. Applying these factors, the trial judge favoured the Kolotex/Fernbrook proceeding because of its superior proposal with respect to the provision of security for AMP’s costs and the proceeding was to be funded by the lawyers themselves on a “no win, no fee basis”.

Wigmans appealed unsuccessfully to the Court of Appeal of New South Wales. The Court of Appeal found no error in the primary judge’s reasons, although the Court considered that the determination of the stay applications ultimately turned on whether the ends of justice required such a remedy rather than case management principles.

Wigmans then appealed to the High Court. In a narrow 3:2 split Wigmans’ appeal failed. Kiefel CJ and Keane J (in the minority) did not consider that either the CPA or the Supreme Court’s inherent power to prevent abuse of its processes authorised the Supreme Court to chose between group proceedings. Their Honours also expressed the view at [15] that the Court’s “fundamental function as the independent arbiter of the merits the merits of the group members’ claims as between them and the defendant sits awkwardly with the assumption, without legislative direction, of a role whereby the Court makes a reputational investment in the choice of sponsor”. Their Honours stated at [43] that the courts below should have determined the stay applications by reference to the principle that it is prima facie vexatious to commence an action if an action is already pending in respect of the same controversy in whch the same relief is available. And, on that basis, given that the Wigmans proceeding was first in time, the Kolotex/ Fernbrook proceeding should have been stayed.

The majority (Gageler, Gordon and Edelman JJ) reached a very different conclusion. The majority considered at [73] that s67 of the CPA was a broad power, unconstrained by any particular criteria, other than having regard to the overriding purpose set out in s56. Similarly, the majority concluded at [94] that the common law does not support a first-in-time rule or presumption. Instead, the majority observed, multiple suits remain to be resolved by the exercise of the Court’s discretion informed by all the relevant circumstances and referred to the approach adopted in equity as illustrated in cases such as McHenry v Lewis (1822)

22 Ch D 397. Accordingly, the majority held at [118] that there was no error in the primary judge’s approach but noted that that this was not the only manner in which a court might have resolved the issue. It is convenient to note here that the majority, also expressed the view at [86] and [97] that the “first-in-time”, for which Wigams contended, would be “unworkable” and would lead to “an ‘ugly rush’ to the court door”.

ABUSE OF PROCESS

In Victoria International Container Terminal Limited v Lunt [2021] HCA 11 (7 April 2021) the High Court had to consider whether an applicant’s motive for commencing proceedings (and concealment of that motive) amounted to an abuse of process that necessitated a permanent stay of the proceeding.

The first respondent, Mr Lunt, was a member of the Maritime Union of Australia (MUA) for more than two decades before it merged with the Construction, Forestry, Mining and Energy Union to form the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU). While a member of the MUA, Mr Lunt was employed by the appellant until his dismissal. Mr Lunt commenced proceedings (the First Proceeding) in the Federal Court against the appellant claiming that the appellant had breached the Fair Work Act 2009 (Cth) by, among other things, breaching the Victoria International Container Operations Agreement 2016 (Enterprise Agreement). Mr Lunt later sought leave to amend the First Proceeding to seek an order quashing the Fair Work Commission’s (FWC) approval of the Enterprise Agreement on the grounds that the approval was beyond the jurisdiction of the FWC. Leave was refused and so Mr Lunt commenced a fresh proceeding (the Second Proceeding) seeking this relief.

The appellant brought an application for summary dismissal of the Second Proceeding on the basis that it was an abuse of process. The primary judge found that the MUA and CFMMEU were reluctant to bring proceedings in their own names because of the risk that they would be refused relief on discretionary grounds given that the MUA had acquiesced in the approval of the Enterprise Agreement by the FWC. The primary judge found that, for this reason, the CFMMEU had engaged Mr Lunt as the “front man” in both the First Proceeding and the Second Proceeding. The primary judge allowed the appellant’s application, and summarily dismissed the proceeding because, the primary judge concluded, Mr Lunt had brought the Second Proceeding not to vindicate his own right but rather for an “illegitimate and collateral purpose”. Mr Lunt subsequently apppealed, successfully, to the Full Court of the Federal Court. The Full Court reasoned that because Mr Lunt sought to obtain a result within the scope of the remedy sought in the Second Proceeding there was no impropriety of purpose and, as such, no abuse of process. The appellant subsequently appealed to the High Court and failed: the High Court unanimously upheld the Full Court’s decision.

Keifel CJ and Gageler, Keane and Gordon JJ (the majority) set out their reasons in a single judgment. Edelman J agreed with the majority and added a few observations of his own in his own judgment. The majority, at [23], drew a distinction between motive and purpose. The majority cited William v Spautz (1992) 174 CLR 509 at 526-527 in which the plurality (Mason CJ, Dawson, Toohey and McHugh JJ) said, among other things, that an abuse of process is “when the purpose of bringing proceedings is not to prosecute them to a conclusion but to use them as a means of obtaining some advantage for which they are not designed or some collateral advantage beyond what the law offers”. The majority noted at [24] that Mr Lunt’s desired result, quashing the Enterprise Agreement, fell squarely within the scope of the remedy sought in the Second Proceeding. And “That Mr Lunt did not desire the result for himself, or desired the CFMMEU to take the benefit, does not change this fact” (Edelman J makes the same observation at [39]). The majority also did not see that Mr Lunt’s lack of candour about his relationship with the the CFMMEU warranted a dismissal of the Second Proceeding. The majority considered at [27][30] that there was nothing

objectionable about the relationship and Mr Lunt was under no obligation to disclose it. And, in any event, the majority observed at [32] that the Court’s powers in relation to abuse of process are not concerned with punishing or deterring parties for their lack of candour. Instead, these powers are “exercised in order to protect the integrity of the court’s own processes”. Edelman J at [43] also considered that a permanent stay of the Second Proceeding was an inappropriate response to Mr Lunt’s lack of candour: If the Court’s discretion miscarried because of Mr Lunt’s concealment of his relationship with the CFMMEU then a new trial can be ordered. Edelman J noted that: “If the integrity of the court can be protected by remedies less drastic than a permanent stay of proceedings then there is no justification for a court to go further than necessary to protect its processes by denying a party the liberty of a fair hearing”.

CRIMINAL LAW

Conspiracy

The poets might claim that for those in love two hearts beat as one but, in Namoa v The Queen [2021] HCA 13 (14 April 2021) the High Court had to consider whether, for the purposes of a criminal conspiracy, a married couple are, legally, as one person.

Section 11.5(1) of the Criminal Code (Cth) (the Code) creates the statutory offence of conspiracy. Section 11.5(1) provides: ‘A person who conspires with another person to commit an offence punishable by imprisonment for more than 12 months, or by a fine of 200 penalty units or more, is guilty of the offence of conspiracy to commit that offence and is punishable as if the offence to which the conspiracy relates had been committed”.

The appellant was found guilty by a jury of conspiring to do acts in preparation for a terrorist act contrary to ss11.5(1) and 101.6(1) of the Code. Prior to the trial the appellant applied for a permanent stay. The appellant argued that she could not be found guilty of conspiracy under the Code because she and her co-conspirator were married. The appellant pointed to a common law rule that spouses alone cannot conspire and argued that this rule affects the meaning of “conspires” and “conspiracy” in s11 of the Code. The trial judge dismissed the appellant’s application. The appellant unsuccessfully appealed to the Court of Criminal Appeal of the Supreme Court of New South Wales. The Court of Appeal considered that the language of the Code was clear: a husband and wife are each a “person” and, as such, can be guilty of conspiring with each other within the meaning of s11.5 of the Code. The appellant was similarly disappointed in her appeal to the High Court. Gleeson J (with whom Gageler, Keane, Gordon, Edelman and Stewart JJ agreed) found at [9] that the Court of Appeal was right in reaching the conclusion that it did. Gleeson J observed at [11] that a “code is to be construed according to its natural meaning and without any presumption that its language was intended to do no more than restate the common law”. The appellant cited authorities from New Zealand, Canada and the United Kingdom in which the court recognised a common law rule that a husband and a wife, alone, cannot be convicted of conspiracy. Gleeson noted at [27] that Lord Denning MR, in Midland Bank Trust Co Ltd v Green [No 3] [1982] Ch 529 at 538, explained the existence of the rule to be a ramification of the doctrine of unity between husband and wife. And, at [24]-[25], Oliver J, in Midland at 521, considered that “the continued existence of the rule, in relation to the crime of conspiracy rests . . . not upon a supposed inability to agree as a result of some fictional unity, but upon public policy which, for the preservation of the sanctity of marriage [married author laughs out loud], accords an immunity from prosecution to spouses who have done no more than agree between themselves in circumstances which would lay them open, if unmarried to a charge of conspiracy”. But Gleeson J pointed out that in none of the cases, cited by the appellant, the Court was concerned with the meaning of the word “conspiracy”. Gleeson J drew upon the definition of “person” in the Code at [14] and extrinsic materials at [29]-[33] to conclude that s11.5(1) did not include a common law rule that a husband and wife cannot conspire. This extrinsic material included reports from various review committees which had declared the common law rule to be unhelpful, outdated and unacceptable to a modern society and recommended that the rule not be retained.