Brief February 2018 by The Law Society of Western Australia

VOLUME 45 | NUMBER 1 | FEBRUARY 2018

New Year, New Opportunities Celebrating the profession and looking ahead to 2018

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Volume 45 | Number 1 | February 2018

CONTENTS

ARTICLES 06 08

End of Year Celebration at Lamont's Bishops House

Welcome to the Profession

Policy as a Mandatory Relevant Consideration: A Reflection on Jacob v Save Beeliar Wetlands (Inc) (2016) 50 WAR 313

Vicarious liability in tort - a search for policy, principle or justification Certification of class actions: a ‘solution’ in search of a problem?

Caveats: Risks to practitioners

Mock trial coaching

DISCLAIMER: The views and opinions expressed in Brief and the claims made in advertisements published within it, are not to be taken as those of, or as being endorsed by the Law Society of Western Australia (Inc.) or the Brief Editorial Committee. No responsibility whatsoever is accepted by the Society, or the Editorial Committee for any opinion, information or advertisement contained in or conveyed by Brief. COPYRIGHT: Readers are advised that the materials that appear in Brief Journal are copyright protected. Copyright is retained by the author. Readers wanting to cite from or reference articles in Brief Journal should reference as follows: (Month and Year) Brief Magazine (Perth: The Law Society of Western Australia) at page __). Readers wanting to reproduce a substantial part of any article in Brief Journal should obtain permission from individual authors. If an author’s name is not provided, or if readers are not able to locate an author’s contact details, readers should contact the Law Society of Western Australia (Inc.). The trade mark BRIEF is the subject of registered trade mark 1253722 and is owned by the Law Society of Western Australia (Inc). Trade mark 1253722 is registered for Western Australia. Published monthly (except January) Advertising enquiries to Manager Marketing and Communications: Madeleine McErlain Tel: (08) 9324 8650 | Email: mmcerlain@lawsocietywa.asn.au Communications and Media Officer: Andrew MacNiven Communications and Design Officer: Charles McDonald RRP $16.00 incl GST. Printed by Scott Print Cover Photos: The Scene Team

Editor: Jason MacLaurin Editorial Committee: Gregory Boyle, Thomas Camp, Dr Rebecca Collins, The Hon John McKechnie QC, Alain Musikanth, Fiona Poh, Dr Pat Saraceni, Robert Sceales, Verginia Serdev-Patterson, Eu-Min Teng

When undue influence becomes elder abuse - the Public Trustee’s intervention in predeath property dispositions

Proofreader: Ingrid Briggs Brief is the official journal of the Law Society of Western Australia Level 4, 160 St Georges Tce Perth WA 6000 Phone: (08) 9324 8600 | Fax: (08) 9324 8699 Email: brief@lawsocietywa.asn.au | Web: lawsocietywa.asn.au ISSN 0312 5831 Submission of articles: Contributions to Brief are always welcome. For details, contact brief@lawsocietywa.asn.au

REGULARS

President: Hayley Cormann

02 President's Report

46 Law Council Update

Senior Vice President: Greg McIntyre SC

04 Editor's Opinion

47 Pam Sawyer

Immediate Past President: Alain Musikanth

40 Drover's Dog

48 Professional Announcements

44 Family Law Case Notes

49 Classifieds

45 Ex Juris: Travel tales from the legal profession

49 New Members 50 Events Calendar

Junior Vice President & Treasurer: Jocelyne Boujos Ordinary Members: Brahma Dharmananda SC, Elisabeth Edwards, Catherine Fletcher, Emma Griffiths, Karina Hafford, Eric Heenan, Fiona Low, Marshall McKenna, Denis McLeod, Jodie Moffat, Nicholas van Hattem, Paula Wilkinson Junior Members: Zoe Bush, Sarah O’Brien-Smith, Brooke Sojan Country Member: Kerstin Stringer Chief Executive Officer: David Price

PRESIDENT'S REPORT Hayley Cormann President, the Law Society of Western Australia

Welcome to the first edition of Brief for 2018, and my first President’s Report. I would like to again pay tribute to my predecessor, Alain Musikanth. Alain has made an outstanding contribution to our Society and much has been achieved under his dedicated leadership over this past year. There is no doubt Alain will continue to make a valuable contribution in his role as Immediate Past President. Secondly, I am pleased to have welcomed our 2018 Council at our first meeting in January, and I look forward to working with the team this year. There are a number of key areas the Society will focus on during 2018, and which I look forward to contributing to and steering this year.

Gender diversity and advancement of women in the profession Diversity and Inclusion In March 2016, Diversity and Inclusion was adopted as one of the Society’s major strategic campaigns, with a particular focus on the progression of women in the profession. The Society remains committed to this strategic campaign, and continues to progress measures to promote inclusion and diversity within our profession. I look forward to updating on these things throughout the year. Flexible Work Practices The challenges faced by women in particular, when seeking to combine work outside the home (let alone career progression) with the raising of a family often seem insurmountable. It puts many in our profession under significant pressure, with both goals often completely at odds, and to continue with employment outside the home, and raising a family, can be a daily conflict of seemingly incompatible interests. All quite frequently combined with chronic sleep deprivation! During those periods, it is essential to reach out to employers, friends and mentors for assistance. One of the important factors identified in

02 | BRIEF FEBRUARY 2018

industries and professions over and again is the concept of flexible work practices, and more recently, the concept that they should not be limited in availability and acceptance to women caring for young families. Indeed, it is important for the Society and other leaders of our profession to ensure the culture created in our workplaces is not one of paying lip service to the recognition of the need for flexible work practices, but that we are in fact, driving the change to attract, retain and progress those in the industry who take advantage of flexible working arrangements, regardless of their circumstances. From the top down, both senior men and women need to work on eliminating the perception that flexibility and senior roles are incompatible and that only women want/need access to flexible work arrangements. I have worked part-time and flexibly for nearly half a decade. While I am lucky to remain in a supportive firm, there are many in our profession, and many who have already made a decision to leave it, who do not have the same experience. Our profession’s leadership must remain committed to achieving a culture conducive to unlocking the potential of, and the value in retaining, talented and senior women in the Western Australian legal profession. I intend to work effectively with stakeholders and decision-makers on practical solutions to some of these challenges faced on a regular basis.

Uniform law for the profession Another area close to my heart is the need to take Western Australia forward in the nationalisation of our profession, to achieve uniformity around a cohesive set of rules and regulations for how the Australian legal profession be best run. I observed the medical profession achieve the benefits available through national uniformity which commenced in October 2010. This was achieved with significant input and contribution on behalf of Western Australia and its medical practitioners and community in the lead up to the commencement of the

national scheme, and since that time. In the Australian legal services market, with uniformity presently between Victoria and New South Wales having been achieved in 2015, three-quarters of Australian lawyers already operate under the national scheme. In 2014, the Society first recommended to the then State Attorney General that the Uniform Law should be adopted as a law of Western Australia, save that the Society identified a number of important factors to be accounted for in ensuring the comfort of the Western Australian legal profession and community in ‘signing’ up. The factors identified then remain relevant today with important variations or exceptions to the inclusion of WA in the national scheme being articulated as including: •

the entrenchment of a WA representative on the national Legal Services Council;

•

appropriate agreed procedures between the States to ensure no amendments or changes can be effected to the legislation in Victoria without our Parliament’s assent;

•

the continuation of a local regulatory body run by representatives of the profession, and, independent of government; and

•

the maintenance of a series of aspects of the WA legal costs regime, including for example, a legal costs committee with the power to determine costs scales, and the power of courts to make special costs orders.

Any resources required to make these changes should also be taken into consideration. There will need to be careful planning on how changes set out in the relevant legislation should best be implemented to ensure that the new systems are implemented as efficiently as possible. In each of the above areas, I look forward to working constructively with the State Government and other key stakeholders to achieve the best possible outcomes for Western Australia.

Access to justice Law Access and Pro Bono The Society, as the sole member of Law Access, looks forward to a continued close working relationship in 2018. Law Access provides invaluable services to the community, as a ‘clearing house’, matching applications for pro bono legal assistance from individuals and not-for-profit organisations to lawyers and firms. The success of organisations like Law Access, and the increased opportunities for our community to access legal assistance, depend on the tireless commitment of our profession to the hundreds of thousands of pro bono hours given to the sector. In 2017, lawyers provided 420,195.2 hours of pro bono legal services.1 In addition to the huge investment made by the WA legal services market to access to justice and pro bono practice, the Society was delighted to see the commitment of the WA government demonstrated in its announcement of a $100,000 grant on 12 December 2017 to assist with the ongoing operational costs of Law Access.

Legal education

and delivered by high quality and diverse speakers, via a diverse set of delivery models. I will update you further on our progress in these areas throughout 2018. Law Summer School 2018 I am delighted that the Society will again present Law Summer School, our flagship legal education conference, on 23 February 2018. The programme boasts an impressive line-up incorporating a wide variety of interests and content relevant to our profession. This includes: •

an opening panel discussion contemplating the greatest challenges for our legal system in the next five years, chaired by the Hon Robert French AC;

•

a concurrent panel session on the challenges surrounding domestic violence and how well our system deals with it, chaired by the Hon Justice Joe McGrath; and

•

a final keynote plenary address and ‘fireside chat’ with Diane Smith-Gander on ‘lessons for the profession from corporate Australia: leadership and strategy’.

CPD review

WA profession, incorporating an eminent guest speaker. Fundraising proceeds from the gala will go towards a charity with details to be announced soon. For now, please mark it in your diaries.

Contact the society 2017 was a particularly notable year, in which we marked the Society’s 90th year anniversary, and under Alain’s stewardship, we saw a great number of achievements and developments for our membership. Our membership nine decades ago comprised just 75 town and 21 country members. In 2017/18 we have a membership of nearly 4,000, and growing, with many of our organisation’s core objectives having remained consistent over that period. Our strategic priorities remain focused on strong and effective advocacy, high value services and organisational excellence. We invite engagement and input from you in a variety of ways including through the significant number of committees of the Society, regular survey of our membership, and both informal and formal occasions when feedback can be provided to us.

In 2017, the Society adopted a new Strategic Plan, with one of the strategies in it to review the future of our CPD model against ‘best practice’ models, to determine the best fit to meet our members’ needs sustainably and effectively.

Law Summer School 2018 Friday, 23 February 2018

The Society engaged an external consultant to undertake the review, which involved consideration of national and global CPD trends to determine best practice, national and international benchmarking, Society documents, together with interviews and meetings with Councillors and Executive, coconvenors of the Education Committee, and senior management and programmes team members. The overall findings include that the Society’s CPD programme is a high quality model that compares well in terms of the quality and diversity of the delivery models, speakers and content, to programmes run by other law societies in Australia and internationally. Just prior to Christmas, Council received a number of recommendations out of the review, which it resolved to implement over the next 18 months. Those recommendations are designed to ensure we achieve a financially sustainable model to deliver CPD in the future, incorporating flexibility and accessibility of CPD, relevant to differing practice areas and law reform,

Join us at the Law Summer School for an exciting day of thought-provoking knowledge and discussions. 6 CPD Points & Over 30 Top Legal Minds. View the full programme at lawsocietywa.asn.au

Collegiality and celebration Finally, I look forward to continuing the opportunities for the broad depth and breadth of our membership, and wider profession, to come together regularly in 2018 to work towards common goals through a collegiate, informed, diverse and social network. As mentioned, we look forward to an extraordinary calendar of events, kicking off with Law Summer School, a variety of activities during Law Week commencing Monday, 14 May 2018 and our biennial Gala Dinner, on 4 August 2018. The night will be an unmissable occasion for the

Please do not hesitate to contact me (president@lawsocietywa.asn.au), any other member of the Executive or our Chief Executive Officer (dprice@ lawsocietywa.asn.au) directly, to share with us your ideas and feedback. I wish you the very best for a successful 2018, and I look forward to working on your behalf to further advance the interests of our members and the legal community in Western Australia. NOTES: 1 10th Annual Performance Report of the National Pro Bono Aspirational Target, Australian Pro Bono Centre, October 2017.

EDITOR'S OPINION Jason MacLaurin Barrister, Francis Burt Chambers, Editor, Brief Journal

Brief welcomes readers to its first edition for the New Year, hoping you had an enjoyable and relaxing holiday season, with best wishes for a successful 2018. Best wishes are especially extended to the Society’s new President Hayley Cormann and to all those who work at and with, the Society (with thanks also to Immediate Past President Alain Musikanth). As a kick-off edition for 2018, this Brief is in subtle disguise, given it comes out in February. Sadly, the Editor had to scrap plans for a ‘Hottest 100 Legal Events’ list for fear of provoking civic outrage depending upon when it was compiled. A focus of the Society in 2018 will be national uniformity in the profession. January is an occasion where the profession generally comes together as one, speaking with a clear, uniform and full-throated voice: “I will be checking my emails at times throughout this period, however if the matter is urgent…” The cunning use of ambiguous language means the actual purpose of said checking is undefined – and could just as likely mean checking for emails from a ski instructor, personal sommelier, airline seat upgrade auction, or Sportsbet. It is not only lawyers who take it easy and really only turn up for work around late January and February – see, for example, the English cricket team.1 Courts and highbrow universities in England are currently in ‘Hilary Term’, which follows Michaelmas Term. The Hilary Term is named after St Hilary of Poitiers, Hilary being a Latin expression for ‘cheerful’ and ‘joyful’. Hilary Term generally runs from January to late March or early April, though it is possible that if you asked the US President, he may say that the Hilary Term should be at least 15 to 20 years, without parole. An item caught the eye about big predictions for lawyers in 2018, one of which was: “Lawyers won’t lose their jobs – but their roles will be reimagined.”2 The term reimagined may cause some disquiet. Hopefully, it isn’t applied in the sense of “don’t let the door hit you on your reimagining” or “we wish you the best of luck in your future reimagining”.

04 | BRIEF FEBRUARY 2018

And, the editor has traumatic recollections of his beloved Melbourne Demons frequently “reimagining” a 30+ point half time lead. Another cause of anxiety is that Rob Zombie’s3 2007 version of Halloween was described as a “reimagining” of John Carpenter’s classic 1978 Halloween. And Nicholas Cage’s4 2006 The Wicker Man was similarly described in relation to the 1973 Edward Woodward version. Nevertheless, the reimagining process for lawyers is apparently a positive one, where technology relieves lawyers of some legal functions, but strengthens a lawyer’s indispensable role as a trusted advisor, rather than purely a source of legal expertise (the advisor’s role being based upon strategic advice, counsel, and judgment). Although, it is worth recalling from 2001: A Space Odyssey5 who was inside, and who was stuck outside the spaceship trying to give sound and strategic advice and counsel, based upon judgment, to open the pod bay doors. The use of the phrase ‘reimagining’ in the law could have benefits. It might be gentler than other alternatives for a Court to say “I think you should reimagine your last submission” (although not so much if one is asked to reimagine the last eight submissions or the whole proceedings). And, no one wants to hear a client say “I think you should reimagine your account”. January 2018 did provide one of the most lackluster Court performances – and appalling reaction to criticism of it, outside the Court – in living memory. Though, perhaps the Australian public will ultimately forgive Bernard Tomic. They are certainly less likely to forgive any legal practitioner who walks out of Court saying to a disgruntled client that I'll be off counting my millions and why don’t they try to do what I did. Notably, there was another widely panned Australian Court performance, in December last year, being Sia’s concert at the Melbourne Tennis Centre.6 According to the report, the Adelaide singer’s avantgarde performance involved her standing at the back of the stage for the show with her trademark wig covering her face, and

only speaking at the very end. I am told though by some senior criminal lawyers that, back in the day, that could actually be an effective strategy when representing one of multiple co-accused. There were many significant legal events, after last December’s edition, including the appointment of a Western Australian Federal Attorney-General, the Hon Christian Porter MP, and a number of judicial appointments. Brief will have more about these in forthcoming editions. Brief extends its congratulations the Hon Christian Porter MP, to Justice Katrina Banks-Smith and Craig Colvin SC on their appointments as Judges of the Federal Court of Australia, and to Dr Christopher Kendall on his appointment to the Federal Circuit Court of Australia. Congratulations are also extended to Hylton Quail, Kathleen Glancy and Fiona Vernon upon their appointments as Judges of the District Court. This edition of Brief contains leading international negotiation instructor Dr Claudia Winkler’s presentation at the Society’s ‘The Great Legal Negotiator’ seminar. Lewis Chiat examines ‘When undue influence becomes elder abuse’, Adam Sharpe reflects on Jacob v Save Beeliar Wetlands and Anthony Davis discusses ‘Caveats: Risks to practitioners’. And please look out for and feel free to make submissions to our regular ‘Ex Juris’ travel article and Drover’s Dog. NOTES: 1

2 3 4 5 6

World Wrestling Entertainment aficionados also know that the The Undertaker customarily makes a surprising re-appearance in February – just in time for the big build up to WrestleMania. The main difference here with the English cricket team is that the Undertaker is not 0-4 at the time. ‘4 Big Predictions for Lawyers in 2018’, The College of Law website. Didn’t the director’s name itself ring enough alarm bells? Didn’t Nicholas Cage’s casting itself ring enough alarm bells? This year being the movie’s 50th Anniversary – please, please, no one attempt to reimagine it. ‘Avant-garde triumph or worst concert ever? Sia’s first Australian show polarises and confuses fans’, Herald Sun, 1 December 2017.

Brief welcomes your thoughts and feedback. Send all letters to the editor to brief@lawsocietywa.asn.au

KBE UPDATE/MARKET SNAPSHOT

The WA market is gathering momentum and we believe 2018 will be the strongest year our client base has experienced in business for many years. KBE is pleased to announce that we have two senior Consultants joining our team in the first quarter of 2018. One Consultant is commencing in February and we are finalising discussions with the other – a very exciting time for KBE and WA in general as the market continues to bounce back. Siemone Neutgens will be assisting Chris to manage our growing team. This is aligned with the role Siemone played in her last long-term position, where she built, led and managed a boutique recruitment firm in New Zealand for 10+ years. NEW PRACTICE GROUPS/MERGER OPPORTUNITIES We are working with a number of highly regarded law firms across all tiers to secure high calibre Partners and teams, with a view to either establishing new or further building their existing teams. Our clients include leading boutique practices through to the largest national/international firms. We are interested in speaking with Senior Partners and teams who are confident in their ability to bring across some form of transportable fee. In the alternative, we would be pleased to speak with Senior Lawyers who can demonstrate an ability to build a client base through leveraging established networks, with a range of opportunities across the following practice groups: Banking and Finance, Construction, Corporate/M&A, Family, Litigation, Property/Leasing, Tax, Wills & Estate Planning and Workplace Relations.

SALARIED/EQUITY PARTNERSHIP OPPORTUNITIES PARTNER – COMMERCIAL LAW – Boutique WA firm. A recently established two Partner practice seeks a third Partner to assist in rapidly building up the firm. With three lawyers in total and an annual fee base of $2m – $2.5m, the Partner is seeking a senior lawyer with a fee base of $200k+ to better service their existing client/ referral networks and drive business development activities with a vision to grow into a medium sized law firm. PARTNER – CORPORATE/EQUITY CAPITAL MARKETS – National firm. KBE Human Capital is working exclusively with a key client to secure a Corporate Partner to inherit/lead an established practice, with a strong focus on IPO’s and Equity Capital Markets. This national firm has experienced rapid and sustained growth with arguably the best leadership team in Western Australia. The successful candidate will be a lateral hire Partner or quality Senior Associate/ Special Counsel, who is keen to work closely with the firm’s Senior Partners to further build the practice through leveraging their combined client networks and existing deal flow.

PARTNER – HEAD OF FAMILY LAW – Full service firm. A leading suburban law firm seeks a senior lawyer to join as the Head of Practice in building and leading the Family Law team. The firm attracts a significant volume of high quality work with a loyal referral base of accountants and financial planners, and no fee base is required to take on this leadership position. Innovative Partnership that continues to experience growth in both revenue and profit. PARTNER – PROPERTY – Inherit a $500k+ fee base. KBE Human Capital has been briefed exclusively to secure an experienced and driven Property Law Partner or suitably qualified SA/ SC for a mid-tier firm. Our client is a large and well regarded WA firm with a strong and robust reputation across Commercial Law, Litigation and Insolvency. With several of the firm’s most Senior Partners experiencing surplus work flow and as part of the firm’s strategic plan, the group now seeks an established Senior Property Lawyer to move directly into a Partnership role. You will have a $250k+ transportable fee base to add to the circa $500k in existing fees that will be transferred to you. The culture of this firm is collegiate, transparent and meritocratic, with equity available depending on the size of your transportable practice. Partner – WORKPLACE RELATIONS – National firm. Leadership role within a national firm to replace a retiring Partner. Lead the strategic development of the practice and oversee a small team, advising listed and large private companies. Transportable fee base of $150k+ required.

2 YEARS’ PAE TO SENIOR ASSOCIATE/SPECIAL COUNSEL BANKING AND FINANCE LAWYERS for two toptier firms. KBE Human Capital is working with several leading Banking and Finance teams to secure B&F Lawyers with 3-7 years’ PAE. With opportunities at both national and international firms, the successful candidates will have experience from top-tier/international firms dealing with complex transactions, with an interest in mining and energy project financing across Australia and various emerging markets. CORPORATE LAWYERS for three international firms. 2-4 years’ PAE and 4-9 years’ PAE to join three of Perth’s leading Corporate/M&A teams. These client facing roles will provide the successful candidates with high levels of responsibility and extensive client contact. You will be comfortable advising senior stakeholders and dealing with board, company secretaries, inhouse counsel, regulatory bodies and managing a significant deal flow. ENVIRONMENT AND PLANNING LAWYER for national firm. This is a new opportunity for an Environment and Planning Lawyer to join a national firm in their growing E&P practice. The firm boasts a strong reputation and provides legal advice on all aspects of E&P matters. Working within an established and knowledgeable team comprising both senior and junior lawyers, the successful candidate will have 3-6 years’ PAE with previous experience across aspects of: land compensation claims, environmental impact

Chris Bates

Siemone Neutgens

Managing Director

Principal Consultant

M: 0411 645 984 E: chris@kbehc.com.au

M: 0403 383 326 E: siemone@kbehc.com.au

and contamination issues, E&P policy, local government work and related litigation. FAMILY LAWYERS. KBE Human Capital is currently working on multiple exclusive briefs. We are interested in speaking with family law practitioners with 3+ years’ PAE. Our clients include leading national, full service WA firms and long established boutique firms who are looking to add high calibre lawyers to their teams. INSURANCE LAWYER with Workers’ Compensation Focus. One of Australia’s best regarded specialist national insurance teams is seeking a junior to mid-level lawyer to join the Perth practice. The successful lawyer will have 4-6+ years’ PAE and work primarily across Workers’ Compensation matters, with the opportunity to gain exposure to professional indemnity, product liability and public liability. The successful lawyer will join as 2IC to a highly regarded Partner. JUNIOR LEGAL COUNSEL – Corporate/M&A for ASX200 company. 2-6 years’ PAE. KBE Human Capital has been exclusively briefed by this well known, rapidly growing ASX200 company to source a junior to mid-level Corporate/M&A Lawyer. You will work directly with a number of Senior Legal Counsel on all Corporate and acquisition related matters, in a company that is looking to acquire several high profile businesses in 2018. The successful candidate will have experience advising across corporate/ASIC/ASX compliance issues with strong exposure to the Corporations Act. LITIGATION LAWYERS for national and international top-tier firms. Opportunities for junior and mid level Litigation Lawyers to join progressive national/international firms. Both teams are seeking lawyers with 2-6 years’ PAE and experience in mining Litigation and a strong interest in international arbitration. PRACTICE MANAGER for CBD firm. This is an outstanding opportunity for an experienced Practice Manager to join a long-established and highly respected WA firm with a strong reputation in the Perth market. This is a key position, reporting directly to the Managing Partner, with full responsibility for a diverse range of tasks. The Managing Partner is seeking a professional with experience in developing and managing financial modelling/plans, managing HR issues at the highest level, and overseeing the entire Corporate Services team. WORKPLACE RELATIONS LAWYERS to join high profile national firms. Two of Australia’s best regarded Employment/WPR practices are seeking lawyers with 2-6 years’ PAE to join their growing teams. Working with exceptional Partners who are renowned for investing time into mentoring and training their junior lawyers, you will advise a suite of ASX listed companies across the full spectrum of Employment, IR and OH&S matters. Please contact Chris Bates or Siemone Neutgens to discuss the above positions, or for comprehensive advice on the opportunities available throughout our client base in the first half of 2018.

KBE Human Capital P: 08 6467 7889 A: 1322 Hay Street, West Perth 6005 W: kbehumancapital.com.au

LAW SOCIETY EVENT

End of Year Celebration at Lamont's Bishops House

On Thursday, 7 December 2017, members of the Society, judiciary and other special guests gathered at the picturesque Lamont’s Bishops House, in the heart of Perth, for our End of Year Celebration. Guests enjoyed a very pleasant evening amid the gardens, sampling delicious canapés and refreshments. The conversation flowed easily, with Society members – from young lawyers to distinguished leaders in the profession – chatting amiably and making new connections. There was a relaxed and convivial atmosphere as guests celebrated a

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successful year and looked forward to the holiday season. 2017 Society President Alain Musikanth thanked members for their support during a busy and interesting year, which included the Society’s 90th anniversary celebrations. The Society congratulates the three lucky winners who took home our door prizes on the night: a Fitbit Activity Tracker, a gift hamper filled with delicious food and beverages, and a bottle of vintage wine. Thank you to our generous sponsors, Premium Sponsor Vero and Supporting Sponsor Incito Wealth. Look out for more fantastic social events from the Society throughout 2018!

With thanks to our sponsors

Premium Sponsor

Supporting Sponsor

Photos:

Sam Gray; Alain Musikanth , President – Law Society; Barbara Lim, Havilah Legal

Christopher MacCarthy; Sarah Russell, Francis Burt Chambers; Nick Rodda, O’Sullivan Davies

David Kiel, Havilah Legal; Murray Thornhill, HHG Legal Group: Lauren Wickham, HHG Legal Group; Jordan Hurley, HHG Legal Group; Craig Gregson, Havilah Legal; Barbara Lim, Havilah Legal

The Hon Justice John Chaney, Supreme Court of Western Australia; Sharan Gill, Law Mutual (WA); Jocelyne Boujos, Treasurer – Law Society; Áine Whelan, Law Society; The Hon Tony Siopis, Federal Court of Australia

Maria Madigan; Matthew Noonan-Crowe, Valenti Lawyers; Josie Thompson, Solomon Brothers; Matthew Plint, PricewaterhouseCoopers

Alain Musikanth, President - Law Society; David Price, CEO – Law Society; Hayley Cormann, Senior Vice President – Law Society; Catherine Fletcher, Councillor – Law Society

The Hon Wayne Martin AC, Chief Justice of Western Australia; Tim Kavenagh, Kavenagh Legal; Greg McIntyre SC, Vice President – Law Society; Paul Evans, Quinn Emanuel Urquhart and Sullivan

Sam Hagdorn, Mills Oakley; Kate Banasik, Mills Oakley; Lucy Pye, Mills Oakley

Vicarious liability in tort a search for policy, principle or justification By The Hon Susan Kiefel AC Chief Justice of Australia Vicarious liability is something of an anomaly in the law of torts. It requires A to pay B because C has injured B, where A was not personally at fault. Nevertheless, it has been with us for a long time and is not peculiar to the common law. It is also imposed by courts of civil law systems. This commonality of approach may not merely reflect a shared source in Roman law. It may suggest that the idea of an employer being liable for the tortious acts of employees has seemed reasonable, if not compelling, to judges. This might explain the course taken by the German courts. Although the German Civil Code (“the BGB”) based the liability of persons such as employers for third parties in fault, the courts managed to evade these provisions in favour of this form of liability1. Recent attempts by some common law courts to explain vicarious liability point to the difficulty which still attends the question of the rationale for this form of liability. In addressing the question it may be useful to separate out the various methods of explaining or justifying rules which are employed by the courts: policy, which often has a socio-legal base and states a general objective; legal principle, which has emerged from the case law and may be applied generally to determine liability; tests, which state requirements for liability and are also useful to both justify and limit it; and reasons given for the imposition of liability in a particular case which are in the nature of a justification. It has not been suggested that the early cases contain any express statement of the policy of the law, although an enthusiasm for the imposition of liability on masters for the acts of their servants may be detected. It may have its roots in unexpressed social policy. In attempting to identify a justification for its imposition in a particular case the courts have resorted to fictions, maxims and ingenious rationales. In Hollis v Vabu Pty Ltd2 it was said that while some rationales may be persuasive to some degree, “given the diversity of conduct

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involved, probably none can be accepted, by itself, as completely satisfactory for all cases”. No single, unifying or general principle has therefore emerged. In the Prince Alfred College case3 it was conceded that “[t]he identification of a general principle for vicarious liability has… eluded the common law for a long time”. It might also be thought that the extension, over time, of liability to flagrantly unauthorised acts, and to more complex circumstances of wrongful conduct within employment, makes the development of any general principle even more difficult. This state of affairs persisted for some centuries. By the beginning of the 20th century the courts had shown no real inclination to identify the real basis for the liability. Some academic writers did. The reasons they gave were largely economic: recourse to solvent defendants and the efficient distribution of loss. More recently some common law courts appear to have accepted these objectives as reasons for the rule, but not as legal policy. It may be as well then to go back to

where it seems to have started.

Some historical background – Holt CJ Sir Frederick Pollock is said to have coined the term “vicarious liability” in his correspondence with Oliver Wendell Holmes in 18884. A liability of this kind in English law is of much earlier origin and is generally attributed to the judgments of Lord Holt CJ in the late 17th century. According to Wigmore5, apart from some cases of the old strict liability (such as a householder’s liability for the escape of a fire started by a servant in the house), the test applied in cases in the 16th and 17th centuries was one of command or consent. The master’s command excused the servant. Wigmore says it was when it was sought to limit this rule by requiring that the master must have commanded the very act complained of, that the form of the rule began to change under Holt CJ. The reaction was, in effect, to extend the rule. It has been suggested by more than one scholar that Holt CJ was inspired

in the approach he took by Roman law. Holdsworth thought it likely that he was influenced by a combination of Roman law and the medieval principle that masters are liable for their households, including the actions of their servants6. This was also a time of growth in shipping and commercial enterprise and Holt CJ regularly dealt with the admiralty law and law merchant, each of which contained elements of a liability of this kind. Holt CJ’s judgments do not provide a clear basis in policy or in principle for this new rule as to a master’s liability. The reasons he gives vary. Wigmore7 said of these many justifications that “very often the judicial mind gave up the troublesome task of accurately expressing a reason, and, quite content with the policy of the rule, took refuge, when it came to naming a reason, in a fiction or other form of words”. Another academic writer8 said that “the force and generality of the Chief Justice’s language indicate the tendency he had to impose liability on employers”. In Sir Robert Wayland’s case9, Holt CJ said that “the master at his peril ought to take care what servant he employs”. The idea of being careless in the choice of a servant is thought to derive from Roman law, where shipowners, innkeepers and stable keepers were vicariously liable for damage or theft by their servants on the assumption that the master must have been in some sense at fault for choosing that servant10. This reason no longer has currency. It seems somewhat inconsistent with a rule of liability which is not fault-based. It is an assumption, or fiction, since “no amount of care in the choice of one’s servant” could exonerate the master11. Moreover, it is difficult to explain the distinction which the law makes (though perhaps not as clearly now) between employees and independent contractors, both of whom are “selected” by the employer and principal respectively. Nevertheless, traces of the idea of carelessness in the choice of one’s servant can be seen as late as the early 20th century. In George Whitechurch Ltd v Cavanagh12, Lord Roberston regarded it to be relevant that the “innocent third party” had “no voice” in the selection of employee. In Boson v Sandford13, liability appears to have been imposed by Holt CJ on the basis of some implied indemnity from the master (“the master ‘undertakes’ for the servant’s care”). Other cases show that he was simply willing to identify the servant with the master or to impute the consequences of a servant’s neglect to him. He said that an action lay against an employer where his servants ran their

cart into another cart causing wine to spill; or ran the cart over a boy injuring him; or where a blacksmith’s employee injured a horse in the course of shoeing. The reason given for all these examples was that “whoever employs another is answerable for him and undertakes for his care to all that should make use of him”14. It was suggested by Dr Thomas Baty, writing in 1916, that many of the cases decided by Holt CJ could have been determined without resort to this form of liability15. In Hern v Nichols16, for example, a merchant sold silk through an agent who misrepresented its quality. Holt CJ held that it is “more reasonable that he that employs and puts a trust and confidence in the deceiver should be a loser than a stranger”. The point Baty makes is that the purchaser was sold silk inferior to what the seller had represented, and the purchaser could therefore have brought an action on a contractual warranty. The case was inextricably bound up with contract. Dr Baty observed that many of the statements made by Holt CJ were pure dicta. What he found puzzling was how they acquired the force of law between about 1698 and 1725, as they appear to have done17.

A shift in approach Towards the end of the 18th century there was something of a shift in approach. Bacon, in his Abridgement, said that the master was answerable for the acts of his servant because the law permitted the master to “delegate the power of acting for him to another”18. This period in the development of the liability is said to have been marked by the judgments of Lord Kenyon, although his language was not uniform either19 In Ellis v Turner20 he said that the maxim “respondeat superior” applied and the defendants were responsible for the acts of their servant “in those things that respect his duty under them”. Baty21 clearly disapproved of the employment of maxims such as “respondeat superior”. He said they might “roll trippingly off the tongue”, but “they are not arguments”. In Darling Island Stevedoring and Lighterage Co Ltd v Long22, Fullagar J said that maxims such as “respondeat superior” do not really explain vicarious liability. He thought the doctrine was adopted “as a matter of policy which did not really need to be juristically rationalised, but might perhaps be justified (however illogically) as an extension of the notion of agency”. Lord Reid23 described the other maxim which was sometimes used, “he who acts through another does the act himself” (qui 10 | BRIEF FEBRUARY 2018

facit per alium facit per se), as merely a “fictional explanation” of vicarious liability. In Bugge v Brown24, Isaacs J acknowledged that vicarious liability does not depend “merely on the question of authority, express or implied” but rather on the view that it is “more just to make the person who has entrusted his servant with the power of acting in his business responsible”. Similarly, Dixon J was later to say25 that although vicarious liability was “commonly regarded as part of the law of agency”, agency principles did not go as far as it did — to hold the principal generally liable for unauthorised acts committed by an agent. More recent decisions in Australia and the United Kingdom have observed that, although vicarious liability was traditionally regarded as part of the law of agency, terms such as “agent” have often been used as “statements of conclusion that mark the limits to which vicarious liability is extended” rather than the true explanation of why vicarious liability should be imposed26. In any event, agency-based explanations would not now seem useful to explain the contemporary scope of vicarious liability which may now extend to wrongdoing which constitutes a flagrant breach of the conditions of employment or even intentional wrongdoing, which are the current concerns of the courts.

Control The fact of an employer’s control was also resorted to as an explanation for imposing vicarious liability. On this view the employer was assumed to be able to control the employee’s work, and direct the employee about what to do and how to do it. Similar notions can be found in German and French law27. Professor Atiyah28 noted that the notion of control had been treated as some justification for imposing vicarious liability. He further noted that the fact of control had been used to explain for whom an employer was liable and why. But a test which places emphasis on control speaks of other times when control may have been a reality. In Stevens v Brodribb Sawmilling Company Pty Ltd, it was explained that it was based on different social conditions, in which a person engaging another person to perform work could and did exercise closer and more direct supervision than is possible today, whereas such conditions have since largely disappeared with advances in science and technology29. It has given way to a broader assessment of the totality of the relationship between

the parties. Nevertheless the ability to exercise control may have its place in particular cases. It is just that it cannot provide the basis for a general principle.

“In the course of employment” Wigmore understood the cases decided in the period when Lord Kenyon was influential to be the precursors to the test of “in the course of employment”. From the early 19th century the general test is phrased in the cases as “scope” or “course” of employment and later, and more particularly, “in furtherance of and within the scope of the business with which he was trusted”30. The test remains with us today as a criterion of liability31, but it has its limitations and is sometimes difficult in its application. In any event it is neither a statement of policy nor a principle. It has been clung to for some time though, perhaps in the hope that a principle would emerge.

Employer’s benefit Lord Brougham32 stated the rule of liability partly on the basis of causation (“by employing him I set the whole thing in motion”) and benefit (“being done for my benefit … I am responsible for the consequences of doing it”). Glanville Williams was not persuaded that the fact that the employer benefited from the employee’s conduct generally, could provide a basis for liability. He pointed out that such a proposition was “impossibly wide” in the context of a society based on the division of labour, in which all persons are constantly receiving benefit from the work of others33. In Sweeney v Boylan Nominees Pty Ltd34, it was said that the fact that some employers profit or benefit from the relevant enterprise is insufficient itself to explain vicarious liability. Since Lloyd v Grace, Smith & Co35 it has not been necessary to show that the servant’s wrongful act was undertaken in pursuance of the master’s interests36. Nonetheless, the fact that, generally speaking, an enterprise benefits from the acts of an employee is accorded importance by some common law courts today.

Early 20th century analysis While the various “rationales” given over the years may be capable of providing explanations in particular cases, they did not articulate the policy reasons behind vicarious liability. It may however

be discerned that underlying these explanations is a concern to ensure compensation to the victim and a sense that the master who empowered the servant ought to bear the cost. As earlier mentioned, at the beginning of the 20th century the question of the real basis for vicarious liability received the attention of some academic writers37. Amongst the first attempts to explain it were a text by Dr Baty, to whom I have referred, and a paper by Harold J Laski. They were published in the same year, 1916. Dr Baty was a legal scholar. He did not hold back in his assessment of the then modern doctrine of vicarious liability: “Unknown to the classical jurisprudence of Rome, unfamiliar to the mediaeval jurisprudence of England, it has attained its luxuriant growth through carelessness and false analogy, and it cannot but operate to check enterprise and to penalize commerce.”38 He identified nine reasons which had been given for the rule of liability in the case law and was critical of all of them. In the end he concluded that the real

reason for vicarious liability was simply that employers were considered to have deep pockets. Glanville Williams shared this view39. Laski was a British political theorist and economist and a confidante of O W Holmes Jr and Frankfurter J. He reasoned that the rationale for vicarious liability was public policy and that the employer is held liable “because in a social distribution of profit and loss, the balance of least disturbance seems thereby best to be obtained”40. He saw employers’ liability and workers’ compensation as similar in character and as reflecting the view that “the needs of the modern state” require the burden of injury to be “charged to the expenses of production”, that is to say the employer who will pass the cost onto the community in the form of increased prices41. Some judges are more frank than others about the search for a solvent defendant able to pay compensation. Willes J42 was prepared to say that “there ought to be a remedy against some person capable of paying damages”. Courts in the United Kingdom regard it as a reason why it is fair and just to impose liability43. The other considerations are: that the tort

will have been committed as a result of activity being taken by the employee on behalf of the employer; the employee’s activity is likely to be part of the business activity of the employer; the employer by employing the employee to carry on the activity will have created the risk of the tort committed by the employee; and the employee will, to a greater or lesser degree, have been under the control of the employer. It can hardly be denied that vicarious liability serves to distribute loss. Professor Atiyah argued44, in similar vein to Laski, that liability can be distributed over a large section of the community and over time due to insurance because most employers are now corporations. A contrary argument45 is that insurance follows liability and cannot be used to create or justify it. In Scott v Davis46, Hayne J acknowledged that whether one speaks of the search for a deep pocket defendant or of loss distribution, it is clear that “considerations of insurance and the relative capacity of employers and employees to pay damages have had a significant influence on the development of vicarious liability, even if they may not provide a unifying or sufficient justification for the rules that have developed”.

Enterprise-created risk and loss distribution There are echoes of Laski’s views in recent Canadian jurisprudence. The employer in Bazley v Curry47 was a children’s foundation which conducted residential care facilities. The Supreme Court held it liable for the acts of an employee who was a paedophile. McLachlin J reasoned that employers are able to spread such losses through insurance or higher prices, thereby minimising the “dislocative effect of the tort within society”48. The other reason given for imposing vicarious liability related to the risk created by the enterprise. Her Honour suggested that where the employee’s conduct is “closely tied” to a risk that the employer’s enterprise has placed in the community, the employer may justly be held vicariously liable for it49. This is reminiscent of Sir Frederick Pollock’s idea that responsibility could be based on a business being a dangerous enterprise50. Since the 1990s, French law similarly shifted its focus towards a recognition that an enterprise should bear the risks created by its activities51. In State of New South Wales v Lepore52 Gummow and Hayne JJ suggested that analysis by reference to risk gave no significance to three facts important in that case: the conduct complained of was intentional conduct; it directly contravened the contract of employment and was contrary to the very core of the task for which the employee was

12 | BRIEF FEBRUARY 2018

employed; and the employee would not be deterred from engaging in the conduct by the criminal law. Moreover, they pointed out, reference to risk focuses on how the employee carried out the wrong and may therefore deflect attention from the necessary enquiry as to whether the wrong was done in the course of employment53. It was not said in Bazley v Curry that the creation of risk and distribution of loss were to be understood as policy considerations, although one might have thought loss distribution could qualify as such. The two major policy considerations which were identified as underlying vicarious liability were the provision of an adequate and just remedy and deterrence of future harm54. One can hardly deny that the former is a worthy aim, though perhaps not a complete explanation of why the employer has to pay. In relation to the second major policy consideration, it was explained in Bazley v Curry that the imposition of vicarious liability on employers may encourage employers to take steps to reduce risks they have introduced into the community, and therefore to reduce the risk of future harm. The factors of risk creation and loss distribution appear to have been put forward as justifications for these policies. There was a further, important qualification to risk creation as a reason for liability. It was that the employee’s conduct must be “closely tied” to the risk55.

Fair and just – closeness of connection In some recent decisions, the courts of the United Kingdom have focused upon the closeness of the connection between the employment and the wrongful conduct. In Lister v Hesley Hall Ltd56, which had a similar factual context to Bazley v Curry, the House of Lords said that the basis for imposing vicarious liability was that it was “fair and just” to do so. This was to be determined by reference to the connection between the nature of the employment and the tort of the employee. The question was whether the torts “were so closely connected with his employment that it would be fair and just to hold the employers vicariously liable”. In the more recent decision of Mohamud v Wm Morrison Supermarkets Plc57, which concerned an unauthorised criminal act of a different kind, it was said that it was necessary to address two enquiries in order to determine liability. The first asks what functions or “field of activities” have been entrusted by the employer to the employee. This enquiry is to be approached broadly. The second is whether there is a sufficient connection between the position for which he was employed and his wrongful conduct “to make it right for the employer to be held liable under the principle of social justice which goes back to Holt”. The only real criterion for liability then becomes closeness of connection. Mohamud’s case draws attention to

the extent of the connection which is necessary for liability. In that case the employee serving at the sales counter of a petrol station responded aggressively to a request from a customer and demanded that he leave. When the customer did so the employee followed him to his car and physically attacked him, twice. It was held that the employee’s conduct in answering the customer’s request was within the field of activities assigned to him. It was held that there was a sufficient connection to the employment because there was an unbroken sequence of events when the employee followed upon what he had said to the customer. It would seem that a causal or temporal connection might suffice.

Concluding observations Bazley v Curry and the English cases to which I have referred may be seen to have largely accepted the general propositions that a remedy should be provided in most cases and that compensation should be paid by the employer. If this is so, their views may not be so different from those attributed to Holt CJ. Indeed the reference to Mohamud’s case to Holt CJ and the “principle of social justice” which, inferentially, informed his thinking may be taken to confirm that this is so. Even so, it is not asserted by any common law court that the liability is absolute. In each of these cases the courts say that they require a sufficiently close connection between the tortious act and the employment. Connection then is a requirement for liability and serves as its only real limit. It also provides some justification for the imposition of liability. It would appear to have a much broader scope for the imposition of liability than the test of scope or course of employment. In two cases following Bazley v Curry58, which concerned similar kinds of wrongful conduct, the enquiry might be said to have been directed to the connection between the wrongful act and the employment but it did so by identifying particular features of the employment and the position in which the employee had been placed by his employment vis-à-vis the children. This is not to say that the provision of an opportunity for the wrongful acts was thought to be sufficient. What was considered to be crucial was the position of the authority, power, trust or intimacy that was provided to the employee. The approach has elements of the older ideas of empowerment and authority derived from notions of agency. It would appear to be capable of applying consistently with the

test of course of employment. Of course these are merely justifications, not principles. They are intended to persuade the parties and the reader that there is a rational basis for imposing liability. And they are devised for a particular kind of case; it is to be seen whether they are capable of applying more generally. A clear basis which might explain the imposition of vicarious liability continues to elude us, although it would seem that it eludes some common law courts more than others. It may be that the policy behind it is as simple as Baty and Laski say and that similar social ideals motivated Holt CJ. Even so, since it is not accepted by any common law court that the liability is absolute, there is a need for a guiding principle. It may be taken from what was said in the majority judgment in the Prince Alfred College case that hope has not been lost that a principle of general application might yet be found. The majority clearly display that special quality of common law judges about the development of principle: optimism. NOTES:

T Baty, Vicarious Liability: A Short History of the Liability of Employers, Principals, Partners, Associations and Trade-Union Members with a Chapter on the Law of Scotland and Foreign States (Clarendon Press, 1916), at 7.

Darling Island Stevedoring and Lighterage Co Ltd v Long (1957) 97 CLR 36 at 56-57; [1957] HCA 26.

Staveley Iron & Chemical Co Ltd v Jones [1956] AC 627 at 643.

Bugge v Brown (1919) 26 CLR 110 at 116-117; [1919] HCA 5.

Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Company of Australia Ltd (1931) 46 CLR 41 at 49; [1931] HCA 53.

Sweeney v Boylan Nominees Pty Limited (2006) 226 CLR 161 at 169 [19] (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ); [2006] HCA 19; Scott v Davis (2000) 204 CLR 333 at 339 [4] (Gleeson CJ), 423 [268] (Gummow J); [2000] HCA 52; Launchbury v Morgans [1973] AC 127 at 135 (Lord Wilberforce).

Paula Giliker, Vicarious Liability in Tort: A Comparative Perspective (Cambridge University Press, 2010), at 5859.

P S Atiyah, Vicarious Liability in the Law of Torts (Butterworths 1967), at 15.

Stevens v Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16 at 28-29 (Mason J); [1986] HCA 1; Hollis v Vabu (2001) 207 CLR 21 at 40-41 [43]-[44] (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ).

John H Wigmore, "Responsibility for Tortious Acts: Its History – II” (1894) 7 Harvard Law Review 383 at 401402.

Prince Alfred College v ADC (2016) 258 CLR 134 at 148 [40], 159-60 [81] (French CJ, Kiefel, Bell, Keane and Nettle JJ).

Duncan v Findlater (1839) 6 Cl & F 894 at 910; 7 ER 934 at 940.

Glanville Williams, "Vicarious Liability and the Master’s Indemnity” (1957) 20 Modern Law Review 220 at 230.

Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161 at 167 [13] (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ).

Lloyd v Grace, Smith & Co [1912] AC 716.

See Prince Alfred College v ADC (2016) 258 CLR 134 at 150 [48] (French CJ, Kiefel, Bell, Keane and Nettle JJ).

Paula Giliker, Vicarious Liability in Tort: A Comparative Perspective (Cambridge University Press, 2010) 232.

Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at 37-38 [35]; [2001] HCA 44.

Prince Alfred College Inc v ADC (2016) 258 CLR 134 at 149 [44] (French CJ, Kiefel, Bell, Keane and Nettle JJ); [2016] HCA 37.

Robert Stevens, Torts and Rights (Oxford University Press, 2007), at 257.

Glanville Williams "Vicarious Liability: Theory of the Master or of the Servant?" (1956) 72 Law Quarterly Review 522 at 524.

John H Wigmore, "Responsibility for Tortious Acts: Its History – II" (1894) 7 Harvard Law Review 383 at 391392.

Glanville Williams, "Vicarious liability and the Master’s Indemnity” (1957) 20 Modern Law Review 220 at 232.

William Holdsworth, A History of English Law, vol 8 (1st ed, 1925) at 475.

Harold Laski, "The Basis of Vicarious Liability” (1916) 26 Yale Law Journal 105 at 111-112.

Ibid at 126-127.

John H Wigmore, "Responsibility for Tortious Acts: Its History – II" (1894) 7 Harvard Law Review 383 at 398.

Limpus v London General Omnibus Co (1862) 1 H & C 526 at 539; 158 ER 993 at 998.

Various Claimants v Catholic Church Welfare Society [2013] 2 AC 1 at [35].

P S Atiyah, Vicarious Liability in the Law of Torts (Butterworths 1967), at 23.

Robert Flannigan, "Enterprise Control: The ServantIndependent Contractor Distinction” (1987) 37 University of Toronto Law Journal 25 at 35.

(1707) 3 Salk 234; 91 ER 797.

The Institutes of Justinian, Book IV, Title V (trans J B Moyle, Clarendon Press, 5th ed, 1913).

Oliver Wendell Holmes, "Agency" (1891) 5 Harvard Law Review 1 at 21.

[1902] AC 117 at 137.

(1689) 2 Salk 440; 91 ER 382.

Jones v Hart (1703) Holt KB 642; 90 ER 1255.

(1708) 1 Salk 289; 91 ER 256.

Mathew Bacon, A New Abridgement of the Law, vol 3 (1st ed 1740), at 560.

John H Wigmore, "Responsibility for Tortious Acts: Its History – II" (1894) 7 Harvard Law Review 383 at 398.

(1800) 8 TR 531; 101 ER 1529.

Scott v Davis (2000) 204 CLR 333 at 436 [300].

Bazley v Curry [1999] 2 SCR 534.

Ibid at 554 [31].

Ibid at 548-549 [22].

Frederick Pollock, Essays in Jurisprudence and Ethics (MacMillan and Co, 1882), at 128.

Paula Giliker, Vicarious Liability in Tort: A comparative perspective (Cambridge University Press 2010), 238.

State of New South Wales v Lepore (2003) 212 CLR 511 at 587 [218].

at 589 [223].

Bazley v Curry [1999] 2 SCR 534 at 552-553 [29].

Ibid at 548-549 [22].

Lister v Hesley Hall Ltd [2002] 1 AC 215 at 230 [28] (Lord Steyn).

Mohamud v Wm Morrison Supermarkets Plc [2016] AC 677 at 693 [44]-[45].

Jacobi v Griffiths [1999] 2 SCR 570; EB v Order of the Oblates of Mary Immaculate (British Columbia) [2005] 3 SCR 45.

Certification of class actions: a ‘solution’ in search of a problem? By The Hon Justice Michael Lee Federal Court of Australia Introduction The programme identified my talk as being on the topic of “Multiplicity of class actions: a Judge’s perspective on managing competing claims and assessing proposed settlements”. At the risk of engaging in conduct that suggests a want of reasonable grounds in forecasting the nature of my talk, I am not going to address the settlement aspect of this topic at all (but rather refer you to my recent paper, “Varying Funding Agreements and Freedom of Contract: Some Observations” which can be found at http://www.fedcourt.gov.au/newsand-events/8-june-2017) and I will only address the topic of competing claims briefly in my final remarks. What I propose to do is to deal with a more current question, which is tangentially connected to the rise of multiple class actions, but is a matter of some present importance. It is the issue of whether there should be a threshold criterion for commencing class actions, being a pre-commencement hearing to consider and then determine whether certain conditions have been met. This proposal can be more simply described as whether or not a certification regime should be introduced. The reason why this is a matter of current discussion is that in December 2016, the Victorian Attorney-General asked the Victorian Law Reform Commission (VLRC) to report on a number of issues with respect to group proceedings conducted pursuant to the Supreme Court Act 1986 (Vic). The stated reason for the reference was to ascertain whether reform was necessary to ensure that litigants, who seek to enforce their rights using the services of litigation funders and/or through group proceedings, are not exposed to unfair risks or disproportionate cost burdens. A discussion paper was distributed by the VLRC, which raised for comment a number of issues, including the possible merit of a certification regime.1 For obvious reasons, even proposed or possible developments with regard to class actions in Victoria are of potential

This article is adapted from a paper presented to the Commercial Law Association Seminar ‘Class Actions – Different Perspectives’ dated Friday, 20 October 2017 significance to those involved with other class action regimes throughout the Commonwealth – in particular, Part IVA of the Federal Court of Australia Act 1976 (Cth) (FCAA) which is the foundational Australian representative proceeding regime upon which the cognate New South Wales, Victorian and Queensland legislative schemes have been based. It is readily appreciated that the broad consistency of the federal and various state schemes is an enormous benefit – allowing each court charged with case managing and hearing class actions to draw upon the accumulated experience reflected in decisions made by other courts on largely identical provisions – no doubt it would only be for compelling reasons that the matchless blessing of near uniformity would be abandoned. But, in the end, this is for others to judge. I stress that what follows are my personal views. Although they do not, in any way, reflect the views of the Federal Court, they are the views of someone who was briefed in most of the largest representative proceedings over the last decade and has been required to give detailed consideration to the structure of representative proceedings and has been involved, in one way or another, with the cases that have given rise to a number of the procedural developments in class actions in recent years.

The Present Position It is appropriate to start by a short excursus on the present position.

Part IVA, unlike its North American equivalents, does not contain a certification requirement. The suggestion that such a certification criterion be adopted is neither novel nor new. The Australian Law Reform Commission in its report, Grouped Proceedings in the Federal Court (Report No. 46, 1988) (ALRC Report), recommended that the FCAA not include a certification requirement and noted: In class actions in the United States and Quebec, the preliminary matter of the form of the proceedings has often been more complex and taken more time that the hearing of the substantive issues. Because the court’s discretion is involved, appeals are frequent, leading to delays and further expense. These expenses are wasteful and would discourage use of the procedure. There is no need to go to the expense of a special hearing to determine that the requirements have been complied with as long as the respondent has a right to challenge the validity of the procedure at any time. 2 In summary, the ALRC Report reflected the considered view that adequate protection of group members would be achieved by the Court giving effect to its supervisory and protective role as to group members, which is reflected by aspects of the class action mechanism, including opt-out provisions, mandatory notice requirements and the ability, in certain circumstances, to remove representative applicants.

The ALRC rejected a certification procedure in definitive terms and concluded that it saw “no value in imposing an additional costly procedure, with a strong risk of appeals involving further delay and expense, which will not achieve the aims of protecting parties or ensuring efficiency”.3 Importantly, this rejection must been seen in the broader context of the work conducted by the ALRC and it progeny, Part IVA (as enacted). In broadly implementing the ALRC’s recommendations, a deliberate legislative choice was made to adopt a new form of proceeding. As was recognised in Wong v Silkfeld Pty Ltd (1999) 199 CLR 255, the purpose of the enactment of Part IVA was not to narrow access to the new regime and that the “threshold requirements” of commencing a proceeding were required to be construed accordingly.4 The narrow and technical requirements of the preexisting rules developed in Chancery were swept away and the new scheme was to be construed to give effect to this statutory purpose. Any proper examination of Part IVA practice and procedure (the detailed understanding of which is a starting point for any suggestion of reform) must take account of the central objects of Part IVA, which is to allow: a. access to justice for all persons whose claims are in respect of or arise out of the same, similar or related circumstances and which give rise to a substantial common issue of law or fact (s 33C(1)); b. a reduction in litigation expense, per claim, by the aggregation of claims and the absence of resources thrown away in individually contacting and contracting with each group member; c. a means for the efficient resolution of a very large number of claims; and d. the provision of a private mechanism for regulatory enforcement of the rights of the persons in the position of group members that is efficient, effective and appropriately adapted to the practical environment in which the choses in action have accrued. A textual analysis of Part IVA demonstrates how these policy ends are served: in essence, all that is required for a Part IVA proceeding to pass through the threshold, in effect, is that there be a substantial issue of law or fact arising in similar circumstances, common to a group membership which comprises seven or more persons: s 33C(1). Section 33H complements this provision by facilitating the assessment of whether 18 | BRIEF FEBRUARY 2018

a representative proceeding satisfies the requirements of s 33C(1). As can be seen (as has been said many times) the “gateway” requirements to Part IVA are undemanding; so undemanding that Part IVA requires only that a representative party surmount these s 33C criteria and have a sufficient interest to afford standing to bring the action; this is true even if the representative party subsequently ceases to have a claim against the respondent: s 33D. Consistently with this structure, it is unnecessary for consent to be obtained from a group member for a person to be included as a member of the class: s 33E. Quite disparate claims may be involved as it is unnecessary that claims of group members be the same as the claim of the applicant – simply that such claims give rise to commonality in at least one not insubstantial respect. Given no consent is required to be obtained from a group member and little might be known of the details of individual group member claims, it is unsurprising that specific protections were afforded to group members. These protections are threefold: a right to opt out, a right that must be provided by the Court (s 33J); the group member’s right to make an application seeking substitution or related orders in the event of inadequate representation (s 33T); and the right to be notified in certain circumstances, for example, proposed settlement, want of prosecution or the proposed withdrawal of an applicant (s 33Y). Importantly, no provision requires group members to make any application or do anything with their claim against their will or oblige them to take any active step prior to an initial trial. Moreover, and critically for present purposes, in addition to these specific protections for group members, another more general safeguard exists – this is s 33N. Section 33N(1) provides as follows: (1) The Court may, on application by the respondent or of its own motion, order that a proceeding no longer continue under this Part where it is satisfied that it is in the interests of justice to do so because: (a) the costs that would be incurred if the proceeding were to continue as a representative proceeding are likely to exceed the costs that would be incurred if each group member conducted a separate proceeding; or (b) all the relief sought can be obtained by means of

a proceeding other than a representative proceeding under this Part; or (c) the representative proceeding will not provide an efficient and effective means of dealing with the claims of group members; or (d) it is otherwise inappropriate that the claims be pursued by means of a representative proceeding. Importantly, the point of departure for this safeguard is that a properly constituted representative proceeding, passing through the s 33C and s 333H “gateway” provisions, is before the Court. A common misstep for those inexperienced in class actions, at least initially, was seeking to invoke s 33N when the real complaint was a want of compliance with s 33C (which meant there was no class action properly before the Court, allowing the representative aspects of the proceeding to be struck out or dismissed). Constitution and continuation are two distinct matters that must be kept quite separate – a distinction elided in ‘informal consultations’ referred to in part of the VLRC consultation paper.5 Together with ss 33L and 33M, s 33N is one of three sections of Part IVA that provide for “declassing” orders. They all provide discretions but they arise in different ways. Unlike s 33L6 and s 33M7, the question posed by s 33N is whether the interests of justice require that the proceeding not continue under Part IVA because of the existence of one or other of the circumstances listed in ss 33N(1)(a)-(c) or the Court is satisfied that it is otherwise inappropriate for the claims to be pursued as a representative proceeding under Part IVA: s 33N(1)(d). Four matters can be immediately observed about s 33N(1): (a) first, the section is part of an integrated scheme; its role is partly as a safeguard against inapt or maladroit use of the class action regime in circumstances where that scheme allows class actions to be commenced without the constraints of consent or permission of group members or the Court; (b) secondly, the discretion to be exercised is a statutory discretion which requires formation of one or other particular opinions or judgments of the type referred to in Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194.8 At first glance, the discretion created in the opening words of the section may be thought to be a discretion limited

only by subject matter because the controlling discretionary opinion incorporates a concept of some breadth, viz. “the interests of justice”. This would be an error, however, as consideration of this broad evaluative concept only arises if it is established that some or all of the circumstances described in ss 33N(1)(a)-(d) are present; (c) thirdly, the applicant does not bear an onus of demonstrating that the interests of justice favour a representative proceeding either at the time of commencement of the proceeding or at the time of the s 33N application: Bright v Femcare Ltd (2002) 195 ALR 5749; (d) fourthly, the inquiry is whether the Court is satisfied that it is in the interests of justice to order the discontinuance of the proceeding under Pt IVA because of the existence of one or other of the circumstances listed or the Court is satisfied that it is otherwise inappropriate for the claims to be pursued as a representative proceeding. The policy choice was to adopt a scheme providing ease of commencement, tempered by a discretionary ‘control’ mechanism. The colourfully expressed criticism of one North American commentator (quoted by the VLRC in its consultation paper)10 seems to proceed from the fundamental misunderstanding that there is no measure of court control imbedded in Part IVA. A sophisticated textual and contextual analysis reveals the scheme has inbuilt protections and

balances. Most importantly, the proof of the pudding is in the eating: it works. Returning to the topic of certification, what then are the arguments for law reform of what appears to have been a remarkably successful example of law reform?

Outline of arguments in favour of a certification requirement in Part IVA In March 2014, a report entitled Ripe for Reform: Improving the Australian Class Action Regime (Report) was released by King & Wood Mallesons, a firm of solicitors very experienced in acting in class actions. The Report was prepared for the US Chamber Institute for Legal Reform (a body, which according to its website, “advocates for civil justice reform to curb excessive litigation in both the US and abroad”),11 and proposed reforms to Part IVA. The Report argues that the ALRC’s basis for recommending the exclusion of a certification regime in Part IVA has not been borne out by experience. The Report contends: The decision not to include a class certification process has failed the test of time. The introduction of such a procedure would reduce costs, reduce the risk of inappropriate actions and safeguard the interests of group members and respondents.12 In making this argument, the Report further asserts that: There is real value in having a structured and formal occasion on which the class action is subject

to scrutiny, such as is provided by the U.S. certification system…. In assessing certification, U.S. federal courts exercise a high degree of oversight at an early initial stage of the proceeding to ensure that it progresses efficiently going forward.13 The Report also argues that “the proliferation of interlocutory applications” has, to a large extent, been the product of deficiencies in the drafting of pleadings by representative applicants and that such multitude of applications would be unnecessary if an early certification hearing was required.14 Similarly, it suggests that the current regime permits a class representative to commence a speculative case which barely meets the requirements of Part IVA, “in the hope that their case will be improved or supplemented at the discovery stage”.15 These concerns as to interlocutory disputation have followed others. In P Dawson Nominees Pty Ltd v Multiplex Ltd (2007) 242 ALR 111, Finkelstein J stated that: Experience of class actions suggests that the absence of a certification process is itself the cause of numerous interlocutory applications with resultant expense and delay.16 Similarly, Professor Rachael Mulheron has written that: Of all the significant class action regimes around the world, Australia’s federal class action opted for the path of ‘no certification’...As an experiment, it has been singularly unsuccessful. Litigation under Pt IVA has been mired in numerous 19

interlocutory applications about issues that could better have been addressed at a certification hearing… The omission of a certification hearing has hardly achieved the costefficient and streamlined process that the ALRC hoped for when it recommended against certification. 17 Leaving aside the perceived benefit in reducing interlocutory disputation (Reduction of Disputation Argument), the VLRC has summarised the other principal argument as to the benefit to be achieved from a certification process. This reflects one of the comments made noted above, being the “low threshold for commencing a class action” which has, according to some, resulted in class actions that are not suited to the class action mechanism proceeding. This is said to have caused little cohesion or commonality among claims of class members with an increase in costs and delays, and that any savings in time and cost by allowing such class actions to continue are illusory. For this reason it is said that an early certification hearing will assist in ensuring that claims which are not apt to be maintained are addressed with celerity at an early certification hearing (Suitability Argument). I deal with both of these arguments below.

An Assessment of the Perceived Problem Reduction of Disputation Argument Let me commence my consideration of this contention by repeating something that I said in the first paragraph of a recent judgment (Dillon v RBS Group (Australia) Pty Ltd [2017] FCA 896): Part IVA… has reached its silver anniversary. Born in controversy, in its turbulent infancy procedural disputation was its almost constant companion. As it matured, and the more the adjectival law and the lore of Part IVA developed, the disputation lessened. Despite this, procedural arguments still recur; indeed, they are often the same arguments in different guises…. The suggestion that the introduction of a certification regime would filter out litigation not suited to class actions, and would avoid unnecessary costs as a consequence of so-called ‘satellite litigation’ and numerous interlocutory applications has been advanced and repeated by academic commentators.18 Leaving aside the special topic of competing class actions (to which I will return below) these concerns do not

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accord with my personal experience, nor does it seem they reflect the empirical data, when properly analysed. The concerns raised by Professor Mulheron (referred to above and by the VLRC), regarding the prevalence of interlocutory disputes in Australian class action litigation, were published in 2007.19 This was once a justifiable criticism, but the courts, over the last decade and a half, have quelled a range of disputes not only in terms of the practice and procedure of Part IVA, but also how aspects of the substantive law intersect with Part IVA. This law and lore, to which I made reference in Dillon v RBS, means that areas of controversy such as: the true nature of a ‘claim’; closed classes; the scope of the power in s 33ZF; the ability to ‘convert’ inter partes proceedings into class actions; group member discovery prior to an initial trial; the proper relationship between individual claims and common issues; the power of the Court to make common fund orders; whether group members must have claims against each respondent; the appropriate time and method for identifying common issues; and whether group members can be ‘shut out’ of participating in a judgment (in the event they do not register pursuant to a deadline imposed in a registration notice), have all been resolved. At the very least, the cases have attenuated the scope of disputation, with remaining issues to be worked out incrementally on a case by case basis. This reflects an approach once observed to be the genius of the common law. In my experience, the bulk of so-called early ‘satellite litigation’ which arose at the beginning of cases (at the time certification would take place), and which was the subject of much criticism, revolved around the question of whether or not closed classes were permissible under the Federal Court’s class actions regime in Part IVA. That question was resolved by the Full Court of the Federal Court (French, Lindgren and Jacobson JJ) in Multiplex Funds Management Ltd v P Dawson Nominees Pty Ltd (2007) 164 FCR 275, a decision handed down in December 2007. The issue simply went away to be replaced by another agitated in the same litigation – the managed investment scheme problem, which was then also simply resolved by regulatory intervention. Although, occasionally, some arguments do recur in different guises (particularly relating to the nature of the claims made in class actions), the now established case law of Part IVA allows such arguments to be resolved by the application, adaptation or extension of

the reasoning and principles explained in those cases. In its consultation paper, the VLRC has identified20 that certification will not do anything to address the many interlocutory disputes that are an incident of complex litigation which would not be addressed in a certification hearing. What is relevant for present purposes is the type of interlocutory disputation that is apt to be the subject of argument at the proposed certification stage. The best guide as to the prevalence and reality of a problem requiring resolution is assessing how often there is interlocutory disputation directed to the question of whether a class action ought to continue as a representative proceeding and how successful these attacks have been. As explained above, a respondent (or the Court on its own motion) may seek an order under s 33N that a proceeding no longer continues as a group proceeding. The respondent or Court-initiated ‘declassing’ process has three important advantages: first, it is invoked only where there is a perceived problem (hence avoiding costs being spent in cases where there is no issue); secondly, it can occur at different stages, and hence can be adapted to deal with problems which may arise or become evident at differing stages of the proceeding; and thirdly, its scope transcends ‘problems’ with the proceeding and can be invoked after an initial trial as a case management tool to provide for the most effective mechanism of determining the individual claims of group members after all common issues (and issues of commonality) have been resolved. The empirical data suggests that only 28.4% of the group proceedings issued in the Federal Court between 1992 and 2009 were subject to formal applications for declassing.21 It appears that very few of these were related to ‘declassing’ after an initial trial (given the very rare examples where cases have proceeded to secondary and tertiary stages of decisionmaking). The low rate of challenge, however, does not mean that respondents are deterred from making legitimate declassing applications. In the same period, only 19.1% of applications were successful,22 which accounts for about 5% of all class actions. Given these rates of success, a conclusion is available to be drawn that many of the applications made may not have been soundly based. Moreover, in addition to an overall low rate of success, importantly, the data demonstrates a diminishing success rate over time: from a high-water mark

of a 40% success rate in the first five years, to a position where no applications were successful in the period 2004 to 2009. I have not done a detailed search and there may be some more, but I am personally aware of only four or so successful challenges in the Federal Court since23 and one in the Supreme Court of Victoria24; I am also aware of number of challenges that were raised but, on mature reflection, not pursued. Irrespective of the precise numbers, it is less a flood than a trickle and (at least on my anecdotal observation), a diminishing trickle at that. The conclusion seems obvious: in the ‘turbulent infancy’ respondents tested (with some evident success) the metes and bonds of the declassing power but, over time, those boundaries became clearer. Allied to this is the education of lawyers for the applicants whose experience has presumably assisted them in refining both case selection and class definition. The notion there is some significant problem does not seem to be justified on the facts. There is much to be said for the view that the blunt instrument of legislative change in introducing a certification regime would unsettle a landscape that has become largely settled and potentially herald a new form of costly and time-consuming interlocutory disputation that will retard the progress of determining on the merits what are largely properly constituted claims that ought to continue as representative proceedings. This would be an outcome which is hard to reconcile with the policy informing case management imperatives in Part VB of the Act (and cognate provisions) which require primacy be given to the just resolution of disputes as quickly, inexpensively and efficiently as possible.

serially between parties to a number of individual proceedings. The fact that individual issues may then also need to be determined is neither here nor there. They would always have to be determined in any counterfactual proceeding. Moreover, the lack of secondary trials in even small class actions demonstrates the way the resolution, or pending resolution, of common issues, can spur non-curial quelling of disputes. In any event, the s 33N safeguard exists if (atypically) there is a bespoke problem.

Conclusion The only circumstance where I consider a Court-initiated formal or informal certification may have merit is where two competing open class proceedings have been commenced and, even then, debate should include whether there is any need to add to case management powers which already exist. In any event, this is a large topic and any consideration should only follow detailed consideration of the decision of Beach J in McKay Super Solutions Pty Ltd (Trustee) v Bellamy’s Australia Ltd [2017] FCA 947 (18 August 2017) and the comments of Foster J (noting that it was inappropriate to impose a ‘one size fits all’ approach to Part IVA proceedings, and that permitting two proceedings to run in parallel in that matter had not resulted in undue cost, confusion or delay) in Cantor v Audi Australia Pty Ltd (No 2) [2017] FCA 1042 (1 September 2017) at [74]-[75]. It follows from the above that to this interested bystander, the introduction of a one size fits all pre-commencement certification hearing seems likely to: •

impose significant and unnecessary costs on those vast majority of group proceedings which are appropriately constituted;

•

delay the progress of the resolution of substantive disputes; and

•

encourage a new world of adjectival disputation and a potential return to the ‘satellite litigation’ that characterised the early years of the class actions regime as different boundaries are explored.

Suitability Argument Given that in approximately 95% of cases25 (with the percentage increasing) the class action procedure has been selected without controversy (or where controversy has apparently been unjustified), the suggestion that the undemanding “gateway” provisions have often resulted in class actions that are unsuitable is difficult to justify. The further notion that little commonality among claims of class members in some cases has increased costs and that there are no savings in time and cost is similarly difficult to understand. Intuitively, even in small class actions, the determination of common issues (and issues of commonality) can be done cost effectively. It is hardly going to be cheaper for the issue to be resolved

of nurse; for fear of finding something worse”. NOTES 1

Victorian Law Reform Commission, Access to Justice – Litigation Funding and Group Proceedings, Consultation Paper (July 2017).

At 63 [146].

Ibid at 63-4 [147].

At 267 [28].

See at [6.60].

Which is enlivened when it appears likely that there are fewer than seven group members.

Which is enlivened when it appears that if judgment were to be given, the cost to the respondent of identifying the group members and distributing to them the amounts ordered to be paid would be excessive.

In Coal & Allied at 204-5 [19], Gleeson CJ, Gaudron and Hayne JJ observed that “’Discretion’ is a notion that “signifies a number of different legal concepts”. In general terms, it refers to a decision-making process in which “no one [consideration] and no combination of [considerations] is necessarily determinative of the result”. Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made. The latitude may be considerable as, for example, where the relevant considerations are confined only by the subject matter and object of the legislation which confers the discretion. On the other hand, it may be quite narrow where, for example, the decision-maker is required to make a particular decision if he or she forms a particular opinion or value judgment”. (footnotes omitted)

At 601 [128] per Kiefel J.

At [6.31] – “At least one country – Australia – has apparently devised a class procedure that does not require court certification of the class. It is difficult to believe, however, that a group action can be maintained on any basis other than pure opt-in without some measure of court control. The risks of sloppy class definition are too great, including fundamental conflicts of interest and indeterminate res judicata consequences. The risks of indifferent or incompetent representation both by named class member parties and by class counsel are too great”: Edward H Cooper, ‘Class Action Advice in the Form of Questions’ (2001) 11 Duke Journal of Comparative and International Law 215, 231-2.

<https://au.linkedin.com/company/ instituteforlegalreform>.

Report at 1.

Ibid at 5.

Ibid at 6.

Ibid at 7.

At 116 [18].

Rachael Mulheron, ‘Justice Enhanced: Framing an OptOut Class Action for England’ (2007) 70 Modern Law Review 550, 568.

Vince Morabito and Jane Caruana, ‘Can Class Action Regimes Operate Satisfactorily without a Certification Device? Empirical Insights from the Federal Court of Australia’ (2013) 61 American Journal of Comparative Law 579; John Emmerig and Michael Legg, ‘Twenty Five Years of Australian Class Actions – Time for Reform’ (2017) 36 Civil Justice Quarterly 164, 169.

Rachael Mulheron, ‘Justice Enhanced: Framing an OptOut Class Action for England’ (2007) 70 Modern Law Review 550.

At [6.37].

Ibid, 597.

Meaden v Bell Potter Securities Ltd (No 2) (2012) 291 ALR 482 (Edmonds J); Larsson v WealthSure Pty Ltd [2013] FCA 926 (Buchanan J) (although, properly analysed, this was a s 33C problem); Carr v Commins Hendriks Pty Ltd [2016] FCA 1282 (Rares J); Pampered Paws Connection Pty Ltd v Pets Paradise Franchising (Qld) Pty Ltd (No 11) [2013] FCA 241 (Mansfield J) (at a later time in the proceeding).

A S v Minister for Immigration & Ors (Ruling No 7) [2017] VSC 137 (J Forrest J).

If these concerns were realised, the result might be described, with some understatement, as a suboptimal outcome. To those eager to tinker with a system which might not be perfect, but which seems to be working, despite imperfection, it may be useful to recall the sage words of Hilaire Belloc who famously said: “always keep a-hold

When undue influence becomes elder abuse - the Public Trustee’s intervention in pre-death property dispositions By Lewis Chiat Senior Legal Officer, Public Trustee (Western Australia)

History Mental health law generally has been slow to evolve. In the United Kingdom in 1886 legislation was passed enacting the Idiots Act. This was replaced in 1913 by the Mental Deficiency Act. In addition to people whose moral corruption could not be corrected, the Act defined three levels of mental deficiency: •

“idiots” who needed protection from themselves;

•

“imbeciles” from whom society needed protection; and

•

“the feeble minded” - those with the lightest impairment who needed constant training and supervision in order to function in society.

The Mental Deficiency Act allowed authorities to detain the mentally impaired and to intern them in homes or so-called colonies. Over 65,000 were interned in Britain and a similar number in the United States, although the USA also instituted mass sterilisation of the mentally impaired which the British did not. The United States had a similar, though not identical, classification of the mentally impaired which was heavily influenced by the advent of IQ tests. “Idiots" were those with IQs lower than 25. “Imbeciles” had IQs lower than 50 but the term “feebleminded” which was used in Britain was replaced by another term coined in 1920 by psychologist Henry Goddard. Those with IQs with 51-70 would henceforth be known as “Morons”. All of these terms were eventually deemed to be derogatory (as they undoubtedly are) and removed from professional lexicons by the early 1970s along with

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the general change in society’s attitude toward the intellectually disabled, as they are called today. Similarly, the development of specific legislation for older citizens has been slow to evolve. In America only in 1965 was the Older Americans Act passed by the United States Congress and signed into law by President Lyndon Johnson. In Britain today there is no specific aged care legislation. Similarly, in Australia this branch of law is evolving. While there is legislation dealing with age discrimination and legislation dealing with aged care, pensions and the like, the rights of older Australians are encompassed only within general statutes, such as the Guardianship and Administration Act 1990 in WA and its equivalents in other States.

Guardianship and Administration There is a presumption in Western Australia that every person is presumed to be capable of looking after his or her own health and safety, making reasonable judgments in respect of matters relating to his or her person, managing his or her own affairs and making reasonable judgments in respect of matters relating to his or her estate until the contrary is proved to the satisfaction of the State Administrative Tribunal. If a person is found to be incapable of looking after his or her own health and safety or making reasonable judgments in respect of matters relating to his or her person, then a guardian can be appointed. If they are found to be incapable of managing their own affairs in respect of matters relating to their estate, an

administrator is appointed. There are of course many people who, although incapable, do not come to the attention of the State Administrative Tribunal. Often, these people have executed enduring powers of attorney or have the assistance of responsible family members or friends who provide them with the required assistance and are able therefore to function without the intervention of the Tribunal. At present in Western Australia, there are 6,870 people whose estates are under administration. Of those, 3,934 [as at 23 October 2017] are under the administration of the Public Trustee either in plenary or limited form.

Plenary Administration A plenary administrator has full powers of management of the represented personâ&#x20AC;&#x2122;s estate. In terms of section 4 of the Guardianship and Administration Act, the Tribunal is directed to seeking to find less restrictive methods of management of the personâ&#x20AC;&#x2122;s estate than guardianship or administration orders. In addition, a plenary guardian or administrator should not be appointed if a limited guardian would be sufficient. Similarly, an order appointing a limited guardian or an administrator must be in terms which, in the opinion of the Tribunal, impose in the circumstances the least restrictions possible on the personâ&#x20AC;&#x2122;s freedom of decision and action. The Public Trustee will be appointed if a person requires assistance in relation to the management of his or her estate and there is a conflict between family members such that the appointment

of one or other of them might be inappropriate. The Public Trustee will also be appointed if there is no willing or suitable family member or trusted friend to accept the appointment or the circumstances justify the appointment of an independent agency. Those appointments are made by the State Administrative Tribunal after an application is made to it. Appointments will be made for up to 5 years. Anyone can bring an application. The application is now made online with the help of a ‘wizard’.

What happens when an application is made? Often the State Administrative Tribunal might contact the Public Trustee and request that a representative of the Public Trustee attend the forthcoming hearing. Alternatively the first time the Public Trustee might learn of his appointment is when notified by the Tribunal that an appointment has been made. The Public Trustee will allocate a trust manager to oversee the management of the represented person’s estate and may at the same time refer the matter to the legal section for consideration by the Principal Legal Officer who may then allocate the file to a legal officer.

Unconscionable conduct and the elderly In 2000 the principles in relation to unconscionable conduct were considered by Justice Owen in the matter of Collins v May1. His Honour usefully sets out [at paragraphs 52 to 62 of his judgment] the legal principles in relation to determining mental capacity in cases of this type. He noted that the onus of establishing that the contracting party was mentally incapable when the contract was entered into lies on the person seeking to set aside the transaction: In the Estate of Daniel Doll2. The extent or degree of unsoundness of mind that must be established depends upon the nature of the transaction under scrutiny. In Gibbons v Wright3 the High Court said “the mental capacity required by the law in respect of any instrument is relative to the particular transaction which is being effected by means of the instrument.” In the case of Collins v May the transaction was set aside because the 24 | BRIEF FEBRUARY 2018

court found that at the time of signing the transfers the plaintiff lacked the capacity to understand the terms and effect of the documents. In the matter of Lampropoulos v Kolnik4 Justice Simmonds dismissed the plaintiff’s claim to enforce the agreement she claimed she had concluded with the defendant to purchase his property in Ormsby Terrace, Mandurah. Here the defendant (who had passed away by the time of trial) was a retired school principal who was working as a crosswalk attendant at the time of the dealings. He was 78 years of age but the court accepted the medical evidence that he was already at that time exhibiting signs of the onset of Alzheimer’s disease. The plaintiff was a real estate agent. She identified that he was the owner of an undeveloped block of land. She visited him at his home in Perth in the company of her father. They presented him with an option to purchase the block for $300,000 and paid him $300 as an option fee. When she sought to exercise the option the defendant’s friend had become aware of the transaction and refused to settle the transaction. The defendant (at trial she was the executor of the defendant’s estate) successfully made out her defence that the contract was voidable on the basis of unconscionability and lack of capacity on the part of the defendant and had been properly voided. Unlike the common law where the onus is on the person seeking to set aside the transaction it is different if an administrator can avail himself or herself of the provisions of section 82 of the Guardianship and Administration Act. Section 82(1) of the Act provides: Subject to subsection 2 where a person within 2 months before being declared under section 64 (1) to be a person in need of an administrator of his estate has entered into a disposition of any property (including a gift) or taken on lease, mortgaged, charged, or purchased any property or agreed to do so, the State Administrative Tribunal may on the application of the administrator of that person’s estate and on notice to such persons as the Tribunal may direct, set aside the transaction and make such consequential orders as it thinks fit for the purpose of adjusting the position or rights of the parties and other persons. Such application can only be brought within two years of the day of the completion of the transaction or in the case of a lease must be brought before

the expiry of the lease. In the case of a transaction that is not a gift, it is a good defence to an application if the other party acted in good faith and without notice of any incapacity to which the represented person was then subject, and the consideration for the disposition was adequate, or in the case of a purchase not excessive or in the case of a lease taken the rent is not excessive.

Some occasions when the Public Trustee has intervened Ms A The Public Trustee was appointed to act in the case of Ms A. At the time Ms A resided alone in her house in a suburb of Perth. Ms A was elderly at the time. Ms A’s house was on a large block but was old and needed attention. A family member introduced her to an associate Mr X who looked to purchase and renovate old homes and resell them. He entered into an option agreement with her. He paid her $10.00 in return for which she gave him an option to purchase her property for $80,000. She moved to a nursing home and he took occupation of the home. Although he was not the owner he commenced undertaking repairs to the home. Settlement was only to occur some months down the track, no doubt at about the time the property was ready to be sold. She was not represented at any time during this process. The matter came to the attention of the Tribunal when a dispute arose between Mr X and the local authority in relation to the building work he was carrying out. It referred the matter to the Tribunal which in turn asked the Public Advocate to investigate. The Public Trustee was appointed soon afterwards. We immediately obtained a sworn valuation of the property which indicated that even in its dilapidated state the value of the property was more than double what Mr X had agreed to pay Ms A. Proceedings were commenced in the Supreme Court to set aside the transaction on the basis of unconscionable conduct. The matter was initially defended by Mr X in person although Mr X withdrew his opposition to the action. Mr B Mr B was a widower who resided in Perth. In addition to his main residence he also owned an investment property in a neighbouring suburb. A few weeks before the Public Trustee was appointed as his administrator Mr B entered into an

agreement to sell his property to a much younger female friend for less than half of its market value. In this case the Public Trustee was fortunate that the transaction had been entered into within two months of the Public Trustee becoming his administrator. In the circumstances the Public Trustee was able to rely on the provisions of section 82 of the Guardianship and Administration Act.

hearing when the intended represented person was presenting very coherent evidence to the tribunal. It was only when he recounted that he was aware that he had been followed from Perth to a neighbouring town because he was able to see as well behind him, when he was driving, as he was in front of him, that doubts were confirmed as to his lack of capacity.

who had regular ongoing contact with her father. She took him to church every Sunday and visited him regularly. Most of the other children lived in the Eastern States. He had said at the time that he transferred the property to his daughter that he had done so because previously she had fallen on hard times and was the only one of his children who did not own her own house.

In the case of Mr B his friend withdrew her initial opposition to the proceedings shortly after it was programmed to a hearing.

If you consider that it is necessary to apply for administration orders make sure that you have the requisite medical evidence in this regard see S v State Administrative Tribunal & Ors [No.2].5

It was difficult in those circumstances to establish that his decision was not rational. Further given his other financial circumstances it seemed that the only people who would benefit if the Public Trustee successfully engaged in litigation were his other children rather than the represented person.

Ms C In this matter a grandson was the administrator of his elderly grandmother’s estate. She owned a valuable property in Perth. He decided that the property should be sold which he did for a multi-million dollar price. He then used those funds to buy 3 properties in his grandmother’s name - as joint tenants with him and his two siblings. Initially the Public Trustee took action on behalf of the grandmother but she died while the matter was pending. She did however have a son, the uncle of the grandchildren who was the big loser in these transactions. Fortunately he obtained competent legal representation and recovered his half share of the value of the property.

How to proceed if you have concerns In order to establish that the transaction is susceptible to be set aside it will be incumbent upon the party alleging this to obtain the necessary evidence of incapacity. This may be difficult because it is not always apparent that a person is in need of an administrator or lacks capacity. I recall being present at a

It’s important to bear in mind however that the Public Trustee will not always act to set aside a transaction. Consideration will always be given to the purpose of the disposition, the size of the represented person’s estate, the recipient of the benefit, and generally whether the represented person is otherwise able to be adequately provided for from his or her assets and the relationship that the represented person enjoys with the donee. In a number of matters in which I have been involved the decision taken by the Public Trustee was not to institute any action. In a number of cases we find upon our appointment that a represented person has donated his or her home to one of his or her children. In addition to the discontent this often causes among other children this can have serious effects on the represented person’s entitlement to receive a Centrelink pension and the calculation of the assets test used to determine the daily nursing home care fee. However in one case the recipient of the largesse was the only one of the represented person’s seven children

In a similar case we opted not to take action because we knew that the represented person had left the property to that child in her will. Even if the transaction was set aside and the property reverted to the represented person’s estate the property would probably end up with that daughter in any event.

The way forward I consider that section 82 of the Guardianship and Administration Act should be amended so that transactions entered into more than 2 months before the making of an administration order are covered. At a minimum I consider that transactions entered into within 6 months of an administration order being made should be able to be set aside by the State Administrative Tribunal if appropriate. NOTES: 1 2 3 4 5

[2000] WASC 29 [1881] 7 VLR (IP & M) 70 (1954 -1955) 91 CLR 423 at 438 [2010] WASC 193 [2012] WASC 306

Shearn HR Legal - Human Resource + Recruitment is proud to announce its 20th Anniversary in 2018, having first opened the doors on 16 February 1998 and still going strong! It has been a pleasure working with the legal fraternity, locally and afar, over all these wonderful years and it is our aim to continue doing so, for many years to come. Please call or email for a confidential discussion about your most important asset, you or your firm, for your legal career needs and requirements. Julianna Shearn B.Juris.,LL.B. Director 0401 001 888 julianna@shearnhrlegal.com.au

Suite 4, 5 Colin Street, West Perth WA 6005 T (08) 9322 3300 F (08) 9322 3355 www.shearnhrlegal.com.au

Welcome to the Profession On Thursday, 23 November 2017, the Society hosted the Welcome to the Profession Breakfast for new legal practitioners, supported by our Young Lawyers Committee. The event, held at the Parmelia Hilton in Perth, featured a keynote presentation from the Hon Robert French AC, former Chief Justice of the High Court of Australia and Chancellor Elect of The University of Western Australia. Over 130 attendees, including newly admitted practitioners, managing partners and other guests, enjoyed a delicious breakfast in a relaxed, welcoming atmosphere. The Hon Robert French AC delivered a very insightful and at times amusing address. Mr French noted that every young practitioner (and the not-so-young) will occasionally make mistakes: If a mistake is made it is important to face up to it and not to cover it up. The occasional failure can be character building. I was no stranger to mistakes. I recall on one occasion appearing in Chambers before a Judge seeking directions on a testator’s family maintenance case. I was acting for the widower of the deceased. She had cut him out of her will, apparently on the basis that he was both a philanderer and a drunk.

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Appearing before Justice Hale, in his private Chambers, I was confronted by the Judge’s question – ‘How do I know she is dead?’ Although I had exhibited the will to the relevant affidavit, I had not exhibited the death certificate. I stammered out something about having her will. The Judge replied instantly – “Well there are people who have my will and although I have one foot in the grave I am not dead yet.” The only possible response followed – “May I have an adjournment of the application, Your Honour?” Mr French said there were many opportunities that had presented themselves throughout his career, of which he could not have conceived when first starting out as a lawyer: If there is a single observation to come out of that background it is – be open to thinking about change

and reactive to change. You may have a comfort zone of developed expertise. However, societal change, including legal change, may dissolve that comfort zone. An area of practice which once seemed secure may suddenly cease to exist. Related to that is the advice that even though you may be a specialist in practice, you should be a generalist at heart. There are few if any areas of specialisation in the law that do not intersect with most other areas of the law. Mr French concluded by saying: The law offers to you, the new generation of lawyers, the same pleasures that it has offered to me but in different ways. You should enjoy it to the full, but also enjoy the rest of the world, much of which is occupied by some quite interesting non-lawyers. New practitioners took the opportunity to have group photographs taken with colleagues from their respective firms. Thank you to everyone who attended the Welcome to the Profession Breakfast. We wish the new practitioners the very best as they embark upon their legal careers. Our thanks to Premium Sponsor The College of Law Western Australia.

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Policy as a Mandatory Relevant Consideration: A Reflection on Jacob v Save Beeliar Wetlands (Inc) (2016) 50 WAR 313 By Adam Sharpe Barrister, Francis Burt Chambers

In late 2015, an application for judicial review was commenced in the Supreme Court of Western Australia to challenge the environmental approval of a flagship project of the Barnett Government – the proposed extension of the Roe Highway from the Kwinana Freeway to the Port of Fremantle. The proposal involved taking the Roe Highway through an environmentally-sensitive area known as the Beeliar Wetlands. At first instance, the application for judicial review succeeded on the basis that the Environmental Protection Authority failed to have regard to its own policies when recommending that the Environment Minister approve the project. On appeal, the WA Court of Appeal held that the EPA’s policies were not mandatory relevant considerations and so any failure to consider them could not invalidate the environmental approval. These two decisions provide an ideal setting in which to address the question of when policy will be a mandatory relevant consideration.

Introduction Two recent decisions concerning a flagship project of the Barnett Government – the proposed extension of the Roe Highway from the Kwinana Freeway to the Port of Fremantle – provide an ideal context for addressing an important question of administrative law: When, if ever, will policy be a mandatory relevant consideration for a decision-maker? This paper will first consider the use of policy in government decision-making and then analyse why this important question was resolved with opposing results in these two cases.

The meaning of ‘policy’ Policy can be broadly defined as principles stated by the Executive which are intended to guide governmental decision-making. The particular category

of policy which is the focus of this paper is policy which is adopted by a decision-maker or agency to guide the exercise of its decision-making powers. For convenience, this type of policy will be referred to in this paper as ‘agency policy’. That category of policy is to be distinguished from high-level Executive policy which sets the priorities of government. The distinction can be illustrated by reference to the Roe 8 proposal. As a matter of high-level government policy, it was a policy of the Barnett Government to implement the Roe 8 proposal. From the perspective of the environmental approval of the Roe 8 proposal, there were policies of the Environmental Protection Authority (EPA) concerning the assessment of the environmental impacts of a proposal which were relevant to the EPA’s assessment of the Roe 8 proposal.

It is the latter policies which fall within the meaning of ‘agency policy’.1

Use of agency policy in government decision-making The adoption of agency policy raises many issues.2 This paper examines the following four issues: 1. Why make agency policy? 2. What is the status of agency policy? 3. How should a decision-maker use agency policy to guide decisionmaking? 4. What are the consequences of not considering agency policy? This paper is primarily concerned with the fourth issue. It was this issue which led Martin CJ to conclude that the

environmental approval of the proposed extension of the Roe Highway was invalid in Save Beeliar Wetlands (Inc) v Jacob.3 This conclusion was overturned by the Court of Appeal in Jacob v Save Beeliar Wetlands (Inc).4

Why make agency policy? A key reason why the Executive government makes agency policy is to seek to ensure consistency of decisionmaking. Consistency is an important aim because it is a fundamental tenet of administrative justice that like cases should be treated alike. Agency policy can assist with consistency across decision-makers. For example, in the administration of welfare payments, there are decisions which must be made by a large number of different decisionmakers in respect of a far greater number of affected persons. Agency policy can assist with lessening or removing differences which might arise in decisionmaking between different government officials as a result of the personal views or approaches of those officials. Agency policy can also assist the same decision-maker to make decisions consistently over time. Therefore, a decision made in 2012 by a particular body is more likely to be made in the same way in 2017 if that body is guided by agency policy. Justice Brennan eloquently expressed the consistency benefits of agency policy in Re Drake and Minister for Immigration and Ethnic Affairs (No 2) in the following terms:5 “Decision-making is facilitated by the guidance given by an adopted policy, and the integrity of decision-making in particular cases is the better assured if decisions can be tested against such a policy. By diminishing the importance of individual predilection, an adopted policy can diminish the inconsistencies which might otherwise appear in a series of decisions, and enhance the sense of satisfaction with the fairness and continuity of the administrative process.’ Another potential benefit of agency policy is efficiency. Decisions may be made more quickly if a policy has established a process for decision-making and identified factors for consideration (provided this is done in conformity with statutory requirements). Efficiency may also be enhanced because applicants have greater guidance regarding how to frame applications for consideration by decision-makers and so those

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applications can be processed more rapidly. Finally, policy in technical or specialised fields can be formulated with the benefit of the input of experts. An agency policy which is formulated by drawing upon the learning of subject-matter experts allows for the pooling of knowledge. It should lead to better decisions than would be made by an individual decision-maker who does not possess the knowledge of all those who contribute to the policy.

The status of agency policy The legal status of agency policy is different from the legal status of legislation. This flows from the different source of authority for the making of legislation. Broadly, legislation is made by the Parliament or in the exercise of delegated legislative power while agency policy is made in the exercise of executive power. Legislation has the force of law but agency policy generally does not. Agency policy should be distinguished from delegated legislation, namely legislation made in the exercise of delegated legislative power. In Western Australia, delegated legislation is typically referred to as “subsidiary legislation”, which is defined in s 5 of the Interpretation Act 1984 (WA) as: “any proclamation, regulation, rule, local law, by-law, order, notice, rule of court, local or region planning scheme, resolution, or other instrument, made under any written law and having legislative effect”. For present purposes, the key words in this definition are “having legislative effect”. Like policy, delegated legislation is generally made by the Executive but, unlike policy, delegated legislation has the force of law. Legislation, including subsidiary legislation, is binding upon decisionmakers because it has the force of law. In contrast, policy does not bind but only guides decision-makers.

How should a decision-maker use agency policy when making a decision? There is a tension between the need for consistency in decision-making and the requirement for each decision to reflect the merits of the individual case. A decision-maker who applies a policy without considering the particular circumstances of a case can be said to have made no decision at all. Policy

must therefore guide decision-making but cannot be applied inflexibly. A decision which is made as the result of the inflexible application of policy is liable to be set aside on judicial review as an invalid decision. In the case of Falc v State Planning Commission,6 the Town Planning Tribunal refused an application for subdivision. The relevant policy was to the effect that land zoned “Special Rural” which met certain criteria should be given subdivision approval. The Tribunal held that the land that was the subject of the application was ripe for subdivision but refused subdivision approval because the land was zoned “General Farming”. The WA Supreme Court held that this decision was invalid on the basis that the policy had been applied inflexibly by refusing subdivision of land which was ripe for subdivision solely on the basis of its zoning.7

What are the consequences of not considering agency policy? Falc shows that a decision may be invalid where a decision-maker rigidly

Photograph by Gnangarra...commons.wikimedia.org

adheres to agency policy but what are the consequences of not considering policy? It is clear that policy does not bind decision-makers. Does it follow that policy may be ignored without legal consequences? That is, if there is an agency policy which is relevant to a particular decision, is a decision made without regard to that policy invalid because of a decision-maker’s failure to consider it? Two cases concerning the environmental approval of the proposal to extend the Roe Highway provide an opportunity to reflect upon the consequences of not considering relevant agency policy.

The Roe 8 extension In late 2015, an application for judicial review was commenced to challenge the environmental approval of the proposed extension of the Roe Highway from the Kwinana Freeway to the Port of Fremantle. The project was proposed by Main Roads and was for the purpose of improving road freight transport access from the Port of Fremantle to, in particular, industrial areas in the east of the Perth metropolitan area.

The proposal, known as Roe Highway Stage 8 (or “Roe 8”), involved extending the Roe Highway through an environmentally-sensitive area known as the Beeliar Wetlands. An earlier proposal for Roe Highway Stage 8 had led the EPA to publish Bulletin 1088 in February 2003, which was titled “Environmental values associated with the alignment of Roe Highway (Stage 8)”. That document contained the following: “This report provides advice on the key environmental values that would be impacted by construction of a highway within the alignment of Roe Highway Stage 8. The area within and adjacent to the alignment where it bisects Beeliar Regional Park is considered to be of high conservation value and significance due to the ecological linkages it provides and the wetland, vegetation, faunal, ecological, aboriginal and social values that are represented. In addition to directly impacting on the wetland, vegetation and faunal values, the construction and operation of a highway through the area will also lead to further

severance of these ecological linkages, reducing the area’s viability and long-term management.” Section 38 of the Environmental Protection Act 1986 (WA) (EP Act) has the effect of requiring a decision-making authority to refer to the EPA any proposal which is likely, if implemented, to have a significant effect on the environment. The Roe 8 proposal therefore required environmental assessment under the EP Act. The Roe 8 proposal was referred to the EPA on 20 April 2009.8 As the Chief Justice found:9 “On 13 May 2009 the EPA determined that it would assess the Proposal, and that the level of assessment would be that of a Public Environmental Review (PER), with a review period of six weeks. A PER is the most detailed and intensive level of assessment utilised by the EPA and, as its description implies, involves the provision of an opportunity for public review and for submissions to be provided to the EPA by the public.”

Section 41 of the EP Act has the effect of preventing a decision-making authority from implementing a proposal which the EPA has determined that it will assess until the proposal is granted environmental approval by the Environment Minister.

EPA report On 10 September 2013, the EPA provided its report on the outcome of the assessment of the Roe 8 proposal to the Minister in accordance with section 44 of the EP Act (EPA Report). The report was made public on 13 September 2013. The EPA Report found that the proponent (Main Roads) had “sought to apply innovative planning and design measures” and had “avoided or minimised impacts on wetlands, native vegetation and native fauna” through a number of measures.10 The EPA Report then noted that there would be the following residual impacts:11 •

clearing of 97.8 ha of native vegetation including 5.4ha of Beeliar Regional Park and 7 ha of Bush Forever site 244;

•

loss of 78 ha of foraging habitat and 2.5 ha of potential nesting habitat for the Carnaby’s Black Cockatoo and the Forest Red-tailed Black Cockatoo;

•

clearing of 6.8 ha of wetlands including wetlands protected under the Environmental Protection (Swan Coastal Plan Lakes) Policy 1992 and Conservation Category Wetlands; and

•

fragmentation of wetlands and fauna habitat.

Critically for the purposes of the application for judicial review, the EPA Report included the following: “The EPA considers the above residual impacts to be significant and they would therefore need to be counterbalanced through the provision of environmental offsets.”12 The EPA was satisfied that the offsets proposed by the proponent did in fact “satisfactorily counterbalance the significant residual impacts”.13 The EPA Report recommended that the Minister approve the Roe 8 proposal subject to conditions. On 2 July 2015, the Minister for the Environment published Ministerial Statement 1008, which gave environmental approval for Roe 8.

Application for judicial review In or about September 2015, an application for judicial review was commenced in the Supreme Court of Western Australia in respect of the EPA Report and the Minister’s approval. The application was brought by Save Beeliar Wetlands Inc and a second applicant. The active respondents to the application were the Honourable Albert Jacob MLA as Minister for the Environment, the EPA and the Attorney General for Western Australia, who intervened in the proceeding. The respondents conceded the standing of the second applicant and so the question of the standing of Save Beeliar Wetlands Inc fell away.14 The application, which was heard on 30 November 2015 by Martin CJ, relied upon a number of grounds. Chief Justice Martin delivered his judgment on 16 December 2015, allowing the application on one ground and dismissing the remaining grounds. The ground on which the application succeeded was that the EPA had failed to consider its own policies which, being mandatory relevant considerations, had to be considered by the EPA in order for its report to be lawful. The respondents accepted that the invalidity of EPA Report would lead to the invalidity of the Minister’s environmental approval and so the Minister’s approval was also invalid.15

EPA policies The Chief Justice identified three EPA policies which were in force at the time that the EPA Report was given to the Minister which were of particular relevance to the environmental assessment of the Roe 8 proposal. Excerpts of the three policies are set out below. His Honour interpreted those policies as stating that where the EPA concluded that a proposal:16 “would result in a significant residual impact to critical environmental assets after all efforts to mitigate those impacts on site have been exhausted, then: (a)

(b)

the EPA would not consider the provision of environmental offsets to be an appropriate means of rendering such a proposal environmentally acceptable; and there would be a presumption that the EPA would recommend to the Minister that the proposal not be implemented.”

This policy position had particular

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significance to the Roe 8 proposal because the Beeliar Wetlands contained environmental assets which were classed as ‘critical’ and the EPA Report found that there would be significant residual impacts upon those assets from the implementation of the Roe 8 proposal. The EPA Report concluded by recommending that the Roe 8 proposal be approved subject to conditions which included the provision of environmental offsets.

Position Statement No 9 The first of the three EPA policies identified by the Chief Justice was a January 2006 publication by the EPA titled Environmental Offsets – Position Statement No. 9. The Chief Justice quoted section 4 of the Position Statement including the following paragraph:17 “Therefore, when the issue is before the EPA, there is a presumption against recommending approval for proposals that are likely to have significant adverse impacts to ‘critical assets’. The EPA does not consider it appropriate to validate or endorse the use of environmental offsets where projects are predicted to have significant impact to the following…” The Chief Justice continued:18 “There follows a list of various types of environmental asset which are, by clear implication, to be taken to be ‘critical assets’. That list includes the following items relevant to the Proposal for Roe Highway Stage 8: • Regional parks; • Bush Forever reserves; • Declared Threatened Fauna; • Environmental Protection Policy wetlands; and • Conservation Category Wetlands.”

Guidance Statement No 19 The second EPA policy was published in September 2008 and titled Guidance for the Assessment of Environmental Factors – Environmental Offsets – Biodiversity No. 19. That policy stated that it was to be read in conjunction with Position Statement 9. A key passage quoted from the policy by the Chief Justice was in section 3.1 of Guidance Statement No 19:19 “Significant adverse impacts to assets

Where there are significant adverse impacts to ‘critical’ assets, the EPA will assess the proposal or scheme through EIA. The EPA, in providing its advice to the Minister, will adopt a presumption against recommending approvals of proposals or schemes where significant adverse environmental impacts affect ‘critical’ assets.”

Environmental Protection Bulletin No 1 The third EPA policy, Environmental Protection Bulletin No 1 – Environmental Offsets – Biodiversity, was also published in September 2008. The Chief Justice quoted a definition of ‘environmental offsets’ from the Bulletin which included the following:20 “Environmental offsets are a package of activities undertaken to counter adverse environmental impacts arising from a development. Offsets are the ‘last line of defence’ and are considered after all steps have been taken to minimise impacts resulting from a development. Offsets aim to ensure that any adverse impacts from development are counter-balanced by an environmental gain somewhere else.” The Chief Justice also quoted the following passage from the Bulletin:21 “Offsets should only be considered after all efforts to avoid and minimise environmental impacts have been made and significant environmental impacts still remain. Major development proposals or schemes that have significant environmental impacts, particularly on ‘critical’ and ‘high’ value assets, will usually trigger the EPA’s environmental impact assessment process. ‘Critical’ assets are the most important environmental assets in the State and are listed in EPA Position Statement No 9 ... The EPA advises the Minister for the Environment on whether a project should be approved or not. In providing its advice to the Minister, the EPA adopts a presumption against recommending approval of proposed projects where significant adverse environmental impacts affect ‘critical’ assets. The EPA determines on a case-by-case basis how significant an impact is and this in turn influences the decision to assess the project through the environmental impact assessment process and its

recommendations to the Minister including advice on the adequacy of proposed offsets.”

Key findings regarding the EPA policies The Chief Justice carefully reviewed the EPA Report and found that it proceeded on the basis that the significant adverse impacts to critical assets which would result from the Roe 8 proposal being implemented needed to be counterbalanced by environmental offsets.22 The Chief Justice found that this reasoning was contrary to the policy position stated by the three policies identified above. On the Chief Justice’s understanding of the policies, the application of the stated policy position would have meant that there was presumption that the Roe 8 proposal would be refused. It would not be consistent with the policies for environmental offsets to render such a proposal environmentally acceptable. Critically, the Chief Justice also found that the EPA Report made no reference to the policy position enunciated by the three policies.23 The Chief Justice found that the minutes of meetings of the EPA at which the Roe 8 proposal was considered did not, with the exception of one meeting in April 2010,24 make reference to the policy position which his Honour found was established by the three published policies referred to above. Moreover, on the Chief Justice’s interpretation of the policies, the EPA Report was “fundamentally inconsistent with, and indeed contrary to” the policies.25 This led the Chief Justice to conclude that the EPA had not taken these three policies into account when preparing its report.26 This squarely raised the issue of whether those policies were mandatory relevant considerations. If they were, the failure to consider them could lead to the conclusion that the EPA Report was invalid.

Mandatory relevant considerations and Peko-Wallsend The leading statement of principle regarding judicial review for failure to take into account a relevant consideration is that of Mason J in Minister for Aboriginal Affairs v Peko-Wallsend.27 In truncated form, the statement is as follows: “(a) The ground of failure to take into account a relevant consideration can only be made out if a decision-maker fails to take into account a consideration which

he is bound to take into account in making that decision… (b) What factors a decision-maker is bound to consider in making the decision is determined by construction of the statute conferring the discretion. If the statute expressly states the considerations to be taken into account, it will often be necessary for the court to decide whether those enumerated factors are exhaustive or merely inclusive. If the relevant factors - and in this context I use this expression to refer to the factors which the decision-maker is bound to consider - are not expressly stated, they must be determined by implication from the subject-matter, scope and purpose of the Act… (c) Not every consideration that a decision-maker is bound to take into account but fails to take into account will justify the court setting aside the impugned decision and ordering that the discretion be re-exercised according to law. A factor might be so insignificant that the failure to take it into account could not have materially affected the decision”.

A free-standing principle that policy is a mandatory relevant consideration? Before Martin CJ turned to PekoWallsend, his Honour reviewed previous cases concerning the issue of whether relevant policy is a mandatory relevant consideration. The Chief Justice identified three decisions of the Federal Court which support the existence of a freestanding principle that relevant policy is a mandatory relevant consideration.28 In Gerah Imports Pty Ltd v Minister for Industry, Technology and Commerce,29 Davies J said:30 “Even if non-statutory rules do not, of themselves, have binding effect, the failure of a decision-maker to have regard to them or his failure to interpret them correctly may amount to an error of law justifying an order of judicial review.” Subsequently, Wilcox J in Nikac v Minister for Immigration and Ethnic Affairs31 cited Gerah with approval and then said:32 “Counsel for Mr Sorensen argue that the failure of the Minister to have regard to this policy vitiated 31

the Minister’s decision. I think that this submission is correct. Although a non-statutory policy is not binding upon a decision-maker, in the sense that he or she may decide in the particular case not to act in accordance with that policy, a policy applicable to the case is always a relevant consideration in the making of a decision.” Then in BHP Direct Reduced Iron Pty Ltd v CEO, Australian Customs Service,33 Carr J said:34 “I think that it can readily be implied into s 273 [of the Customs Act 1901 (Cth)] that if the executive arm of government formulated a policy for the making of determinations under that section, then the respondent was bound to take into account such factors as that policy indicated were material to such a decision.” Justice Carr went on to expressly agree with the statement of principle of Wilcox J set out above. The Chief Justice then referred to the decision of Minister for Immigration, Local Government and Ethnic Affairs v Gray,35 in which a majority of the Full Court of the Federal Court held that the Administrative Appeals Tribunal was bound to consider relevant policies of the decision-maker whose decision was being reviewed. The Chief Justice noted that the majority left open whether the decision-maker was required to consider those policies.36 In Gray, French and Drummond JJ said:37 “the existence and content of lawful policy may properly be regarded as a relevant factor which, because it is properly contemplated by the legislature, must be taken into account by the Tribunal. In the case of the power to deport non-citizens convicted of criminal offences, the existence and content of a lawful criminal deportation policy is a matter the Tribunal is bound to take into account and to give such weight as it thinks proper having regard to all the circumstances of the case.” The Chief Justice also identified two previous decisions of single Justices of the Supreme Court of Western Australia which supported the existence of a principle that relevant policy is always a mandatory relevant consideration, namely Clive Elliott Jennings & Co Pty Ltd v Western Australian Planning Commission38 and Tah Land Pty Ltd v Western Australian Planning Commission.39 Despite these authorities, the Chief Justice cast doubt upon the existence 32 | BRIEF FEBRUARY 2018

of the principle which they appear to support, stating:40 “I hold a considerable reservation as to whether there is a general legal principle of universal application to the effect that a decision-maker is bound to take account of any relevant policy which he or she has formulated as a condition of the valid exercise of jurisdiction.” The Chief Justice determined that he was able to resolve the case by the application of what his Honour “respectfully describe[d] as the more orthodox approach enunciated by Mason J in Peko-Wallsend”.41 That is, the Chief Justice analysed whether the EPA had an obligation to take its policies into account which arose from the subject matter, scope and purpose of the EP Act.

assessment’, assessment criteria, and environmental protection policies.” The Chief Justice reasoned that when the EPA published policies pursuant to those express powers, it is likely that participants in the process of environmental impact assessment would rely on those policies in deciding whether and how to engage in the process of environmental impact assessment.46 If the EPA was not required to take its policies into account, then participants in the process would be misled and the processes would be likely to miscarry.47 As a result, the Chief Justice concluded that the legislature should be presumed to have intended that the EPA would consider its policies when conducting an environmental impact assessment.48

Not legitimate expectation The Chief Justice’s analysis of the EP Act Specifically, the Chief Justice sought to construe Part IV of the EP Act, in the context of the Act as a whole, to discern whether there was an implication that EPA was required to consider its own policies when undertaking an environmental impact assessment.42 The Chief Justice conducted a detailed review of the Act in carrying out this task and determined that there was such an implication. At the risk of oversimplification, it was the need for procedural fairness to be afforded to participants in the process of environmental impact assessment which guided his Honour to this conclusion.43 The Chief Justice identified that Part IV of the EP Act:44 “expressly contemplates that a proponent may be required to undertake an environmental review and that members of the public may be invited to provide submissions in relation to that review. However, pt IV does not specify the administrative procedures, assessment criteria or policies which a proponent would need to know in order to undertake an effective environmental review, and which interested parties or members of the public would need to know in order to provide meaningful submissions for the consideration of the EPA.” In addition, the Chief Justice observed:45 “various provisions of the Act expressly empower the EPA to promulgate administrative procedures ‘for the purpose of establishing the principles and practices of environmental impact

For completeness, it should be observed that the Chief Justice made express reference to the doctrine of legitimate expectation but did not rely upon it in reaching the above conclusion. The Chief Justice identified authority for the proposition that policy may give rise to a legitimate expectation about the nature of decision-making processes.49 However, the Chief Justice noted that “these decisions were made at a time when notions of legitimate expectation played a greater role in Australian administrative law than is currently the case.”50 Moreover, the applicants had not sought judicial review on the ground of denial of procedural fairness.51 It followed that the doctrine of legitimate expectation was not squarely raised in the proceedings before the Chief Justice.

The Chief Justice’s disposition of the judicial review application The Chief Justice therefore applied the approach in Peko-Wallsend to reach the conclusion that the subject-matter, scope and purpose of the EP Act required the EPA to take its own policies into account when conducting an environmental impact assessment. The Chief Justice found that the EPA had not done so. Finally, the Chief Justice considered whether the failure to consider these policies was sufficiently significant to have materially affected the EPA’s decision. His Honour’s conclusion that the policy was “a matter of the utmost significance” 52 to the EPA’s assessment of the Roe 8 proposal led to the result that the EPA Report and the Minister’s decision relying upon it were invalid.53

Appeal to the Court of Appeal The Minister, the EPA and Commissioner for Main Roads commenced an appeal in the WA Court of Appeal. The appeal was heard on 2 May 2016 and judgment was delivered on 15 July 2016,54 President McLure delivering the lead judgment of the Court with Buss and Newnes JJA concurring.55 The Court of Appeal held that the EPA policies were not mandatory relevant considerations but also disagreed with the Chief Justice’s interpretation of the policies. The appeal was unanimously allowed.

EPA policies were not mandatory relevant considerations Like the Chief Justice, the President referred to Peko-Wallsend in her review of the law of relevant considerations.56 The President’s reasoning diverged from the Chief Justice on the issue of whether the EPA policies were, by statutory implication, mandatory relevant considerations. The President concluded that the express provisions of the EP Act left “no room for an implication that the Policies, or any of them, are mandatory relevant considerations” in the EPA’s assessment of the Roe 8 proposal.57 The President held that there were “a number of aspects of the legislative scheme in the [EP Act] compelling that conclusion.”58 The “first and most important” of these was Part III of the EP Act which concerns “approved policies”.59 Policies which have the status

of “approved policies” under Part III of the EP Act are given the force of law by s 33(1) of the Act. The President identified that the “approved policies” are “express relevant considerations”.60 Given that Part III of the EP Act established a “lengthy, tortuous process” for formulation and adoption of approved policies, the President held that the legislature could not have intended that the EPA could make policies which did not follow the Part III process which the EPA was impliedly required to take into account.61 None of the policies identified by the Chief Justice were “approved policies” and therefore they were not mandatory relevant considerations. Secondly, the President held that the structure of the decision-making process under the EP Act was inconsistent with the implication that all relevant EPA policies were mandatory relevant considerations. Specifically, the President said that an assessment report by the EPA is “a long way short of any final decision on the proposal in issue” because the Minister had obligations to consult and consider appeals after receiving the EPA Report before making a final decision regarding environmental approval. This process “strongly weighed” against a statutory implication that the EPA’s policies were mandatory relevant considerations at the EPA report stage.62 The President identified other indications from the statute which were against the implication found by the Chief Justice. The President referred to s 44(2) of the

EP Act which specified matters the EPA is obliged to set out in its assessment report. The express identification of these mandatory relevant considerations militated against the implication of other mandatory relevant considerations.63 Further, the President held that the “nature and role” of the EPA was significant. In producing its report, the EPA acted as an “independent expert body” which was “performing an expert evaluative and advisory function, not exercising a discretionary power”.64 Finally, the President observed that in the absence of a Ministerial direction, s 40(2) (b) of the EP Act gives the EPA “sole control of the form, content, timing and procedure” of any environmental review it is required to produce. That provision, together with s 122 of the EP Act, was the source of the EPA’s power to give the “very detailed guidance” which the EPA provided to those “involved or interested in” the assessment process.65 The President therefore concluded that EPA policies (unless approved policies under Part III of the EP Act) were not mandatory relevant considerations for the EPA when carrying out an assessment and allowed the appeal.

The Court of Appeal’s interpretation of the policies Although the Court of Appeal allowed the appeal on the basis that no implication could be drawn from the EP Act to the effect that the EPA policies were a 33

mandatory relevant consideration, the Court of Appeal (or at least McLure P and Buss JA66) appeared to disagree with the Chief Justice’s interpretation of the three policies. As set out above, the three policies had been found by the Chief Justice to establish a policy position that where the EPA concluded following environmental assessment that a project:67 “would result in a significant residual impact to critical environmental assets after all efforts to mitigate those impacts on site have been exhausted, then: (a) the EPA would not consider the provision of environmental offsets to be an appropriate means of rendering such a proposal environmentally acceptable; and (b) there would be a presumption that the EPA would recommend to the Minister that the proposal not be implemented.” President McLure quoted the following “tests” from Position Statement 9:68 “Test 3 - are residual environmental impacts expected to have a significant adverse impact on critical or high value assets? Test 4 - do residual impacts remain significant but not so significant that the activity is likely to be found environmentally unacceptable (including in a cumulative impacts context)?” The President found that:69 “The approach in these two questions is in tension with the rigidity of the other quoted statements [which had led the Chief Justice to his interpretation of the policies] but is entirely consistent with the other policies. Guidance Statement 19 and EPA Bulletin 1, both published in September 2008 (the 2008 Policies), also refer to offsets in relation to critical assets.” The President therefore disagreed that the policy position established by the three policies included the proposition that the EPA would not consider the provision of environmental offsets in cases where a proposal would result in significant residual impacts to critical environmental assets. Given that the issue of principal concern for this paper is when policies will be a mandatory relevant consideration, the proper interpretation of those EPA policies need not be considered further.

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The outcome in the Court of Appeal The active respondent in the Court of Appeal, Save Beeliar Wetlands (Inc) filed a notice of contention raising additional grounds on which it said the primary judge’s decision should be upheld. Each of these grounds was rejected by the Court of Appeal. While it is not necessary for the purposes of this paper to consider those grounds, it is noteworthy that in the course of dismissing those grounds, McLure P reached the conclusion that a review of the entirety of the EPA process of environmental impact assessment of the Roe 8 proposal revealed that the EPA had in fact taken the three policies into account.70 The result was that the appeal was allowed. The consequence of this was that the EPA Report was valid and so therefore was the Minister’s environmental approval of the Roe 8 project.

Application for special leave refused There was an application for special leave to appeal to the High Court from the decision of the Court of Appeal. The application for special leave was refused following a hearing on 16 December 2016.71 The legal issue argued on the application for special leave concerned legal unreasonableness and arose from the notice of contention filed by Save Beeliar Wetlands (Inc) in the Court of Appeal. There was no argument concerning the issue of whether EPA policies were mandatory relevant considerations on a proper construction of the EP Act.

Current status of Roe 8 Although the environmental approval of Roe 8 was ultimately held to be valid, the then Labor Opposition had adopted a policy that it would not proceed with the Roe 8 proposal if it were elected on 11 March 2017. Labor won the election on 11 March 2017 and so the Roe 8 extension is not being implemented.72

Conclusion Both the Chief Justice and the Court of Appeal applied the framework established by Peko-Wallsend in determining whether relevant policy was a mandatory relevant consideration for the EPA when conducting environmental impact assessments. In both cases, it was accepted that there was no express statutory requirement and so it was necessary to consider whether an

implication arose from the subject-matter, scope and purpose of the Act. The difference between the Chief Justice and the Court of Appeal concerned the proper construction of the EP Act and its subjectmatter, scope and purpose. The idea that policy published by a government agency to guide its decisionmaking must be considered by that agency when making decisions has an intuitive appeal. It is an incident of good public administration that relevant policy will be considered by a decision-maker. From an Australian administrative law perspective, however, it seems difficult to argue for a free-standing principle that such policy should be a mandatory relevant consideration. To be consistent with the framework established by Peko-Wallsend, it would seem that the conclusion that policy is a mandatory relevant consideration will need to rest on an express legislative statement to that effect or be “determined by implication from the subject-matter, scope and purpose of the Act” on a statute by statute basis. It should be acknowledged that the three Federal Court decisions referred to by Martin CJ were decided after Peko-Wallsend. Indeed, in Nikac, which was decided only two years after Peko-Wallsend, Wilcox J expressly refers to Mason J’s judgment in PekoWallsend shortly after stating that “a policy applicable to the case is always a relevant consideration in the making of a decision”. With respect, it must be the case that a statute could expressly provide that any Executive policy formulated in respect of the Act was not a mandatory relevant consideration. However, there might be room for the development of a presumption that relevant agency policy is a mandatory relevant consideration as a refinement of Peko-Wallsend. This presumption could be grounded in the procedural fairness-type considerations identified by the Chief Justice. Such a presumption would bear some resemblance to (and may gain some support from) the principle that the requirement to afford natural justice is only excluded by clear statutory language. The development of such a presumption in the near-term in the Western Australian courts appears to be largely foreclosed by the decision of the Court of Appeal. That decision applies Peko-Wallsend in an orthodox manner and without any suggestion that relevant agency policy might be in any special category when it comes to the ascertainment of mandatory relevant considerations. If such a

development is to occur in the near-term, it is likely to be in another jurisdiction. The decision of the Court of Appeal settles for Western Australian law the question of whether EPA policies (except for policies made under Part III of the EP Act) are mandatory relevant considerations for the EPA when conducting environmental impact assessments with a resounding ‘No’. It does leave open the possibility that relevant agency policy may be implied to be a mandatory relevant consideration in other Acts. Of course, where a statute makes it express that policy is a mandatory relevant consideration, then a decisionmaker must consider the policy. There are two examples concerning the State Administrative Tribunal (SAT) where such a requirement to consider policy is expressly stated. Section 28 of the State Administrative Tribunal Act 2004 (WA) provides that the responsible Minister may certify that a Gazetted policy was in effect at the time of a relevant decision and, if the original decision-maker had regard to the policy, then the Tribunal must have regard to that policy when conducting its review. As regards the SAT’s planning review jurisdiction, s 241(1)(a) of the Planning and Development Act 2005 provides that the Tribunal must have due regard to any State planning policy which may affect the subject matter of the application. In the absence of such an express statement, the question of whether relevant policy is a mandatory relevant consideration will need to be determined on a statute by statute basis by reference to the subject-matter, scope and purpose of the statute. Given that conclusion, it will continue to be prudent for decision-makers to seek to identify and refer to relevant agency policy when making decisions. This will be especially

(1994) 50 FCR 189, 206.

[2002] WASCA 276, [24]-[26].

[2009] WASC 196.

[2015] WASC 482, [151].

[2015] WASC 482, [152].

See, for example, [2015] WASC 482, [146], [168], [181].

[2015] WASC 482, [165].

The legal issues arising from the use of policy in Executive decision-making is the subject of Chapter 11 of the text by Creyke, McMillan and Smyth, Control of Government Action, which is now in its fourth edition.

[2015] WASC 482, [166] (footnotes omitted).

[2015] WASC 482, [185].

[2015] WASC 482, [186].

[2015] WASC 482.

[2015] WASC 482, [187].

(2016) 50 WAR 313.

(1979) 2 ALD 634, 640.

(1991) 5 WAR 522.

Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648; Century Metals and Mining NL v Yeomans (1989) 40 FCR 564, 592 (Fisher, Wilcox and Spender JJ).

(1991) 5 WAR 522, 529-530.

[2015] WASC 482, [145].

[2015] WASC 482, [71].

[2015] WASC 482, [145].

[2015] WASC 482, [72].

[2015] WASC 482, [205].

Environmental Protection Authority, Roe Highway Extension, Report 1489 (September 2013), iii.

[2015] WASC 482, [211].

Environmental Protection Authority, Roe Highway Extension, Report 1489 (September 2013), iv-v.

Jacob v Save Beeliar Wetlands (2016) 50 WAR 313.

Environmental Protection Authority, Roe Highway Extension, Report 1489 (September 2013), v.

Justice of Appeal Buss agreed generally but Newnes JA specifically referred to the matters set out at [55][60] of McLure P’s reasons as the basis on which his Honour agreed that none of the EPA policies is a mandatory relevant consideration.

(2016) 50 WAR 313, [50].

[2015] WASC 482, [11].

(2016) 50 WAR 313, [54].

[2015] WASC 482, [105].

(2016) 50 WAR 313, [55].

[2015] WASC 482, [2].

(2016) 50 WAR 313, [55].

[2015] WASC 482, [49].

(2016) 50 WAR 313, [55].

[2015] WASC 482, [50].

[2015] WASC 482, [62] (footnote omitted).

[2015] WASC 482, [69].

[2015] WASC 482, [70].

(2016) 50 WAR 313, [56]. Chief Justice Martin had considered Part III of the Act but found it to be consistent with the implication that his Honour identified: [2015] WASC 482, [167].

See, for example, [2015] WASC 482, [88].

[2015] WASC 482, [96].

The Chief Justice observed that this meeting was “more than three years before the EPA considered and resolved upon the outcome of its assessment” and further that “only two of the five members of the EPA present at the meeting on 29 April 2010 were present at the meeting on 18 July 2013 when the EPA resolved to recommend that the Proposal may be implemented”: [2015] WASC 482, [190].

(2016) 50 WAR 313, [57]. As with Part III of the Act, Martin CJ had also considered the appeals process provided in the EP Act and found this was consistent with the implication that his Honour identified: [2015] WASC 482, [175]-[176], [182], [185](f)-(g).

(2016) 50 WAR 313, [58].

(2016) 50 WAR 313, [59].

(2016) 50 WAR 313, [60].

It may be that Newnes JA was seeking to avoid being taken to agree to this different interpretation of the policies by stating that his Honour agreed that the appeal should be upheld but then referring specifically to paragraphs [55]-[60] of her Honour’s judgment, which concerned statutory interpretation of the EP Act.

important when the decision made does not accord with that policy. NOTES: 1

I am grateful to Mr Ian Weldon for his observations on an earlier draft of this paper regarding the meaning of the term ‘policy’ in this context.

[2015] WASC 482, [191].

[2015] WASC 482, [201].

(1986) 162 CLR 24, 39-40.

[2015] WASC 482, [137]-[139].

[2015] WASC 482, [2].

(1987) 17 FCR 1.

(2016) 50 WAR 313, [18].

(1987) 17 FCR 1, 15.

(2016) 50 WAR 313, [19]. See also [76].

(1988) 20 FCR 65.

(2016) 50 WAR 313, [79]-[82].

(1988) 20 FCR 65, 81.

(1998) 55 ALD 665.

Save Beeliar Wetlands (Inc) v The Hon Albert Jacob MLA [2016] HCATrans 313 (16 December 2016).

(1998) 55 ALD 665, 682.

(1994) 50 FCR 189.

[2015] WASC 482, [140].

See Main Roads Western Australia, Roe Highway Extension – Roe 8 <https://project.mainroads.wa.gov. au/roe8/Pages/default.aspx>, accessed 7 January 2018.

Caveats Risks to practitioners

By Anthony Davis Senior Associate, Tottle Partners

Introduction – scope of paper This paper is not a comprehensive review of the law regarding caveats. The scope is rather to focus on a recent decision of the State Administrative Tribunal which dealt with the improper lodgement of a caveat and to discuss issues related to the proper lodging of caveats.

Legal Profession Complaints Committee v Retnam VR 88/2017 – SAT decision – application for disciplinary action by the legal profession complaints committee – heard 20 July 2017

The plaintiff’s lawyers informed the practitioner that there would be an application for special leave to appeal to the High Court. On hearing of this, the claims officer representing the client responded by email asking the practitioner: “could you give me some idea of the process involved to put a caveat on [the plaintiff’s] property? I need to start thinking about options for recovering costs from her now…” The plaintiff owned a residential property. She also owned another residential property as tenant in common with another person.

The State Administrative Tribunal has recently heard an application by the Legal Profession Complaints Committee for disciplinary action against a practitioner for improperly lodging a caveat.

The practitioner initially responded by email saying:

The decision and the facts of the case constitute a salutary reminder of the sometimes difficult decisions a practitioner has to make about the lodging of a caveat.

There then followed a process (outlined in more detail in the SAT decision) which essentially went as follows.

Facts The practitioner was acting for an insurer (client). Ms O (plaintiff) started proceedings against the client for alleged breaches of common law duty of care and various statutory duties as well as an alleged breach of an employment contract related to stress. At the trial, judgement was delivered against the plaintiff – the claims were dismissed. There was an order that the plaintiff pay the client’s costs. The plaintiff lodged an appeal and the appeal was dismissed. Again the court ordered the plaintiff to pay the client’s costs of the appeal. The client’s legal costs were in the region of $273,000.

“No problems about putting a caveat on her property – we just do that with the judgement we have.”

a. As well as giving the client advice about the special leave application, the practitioner also indicated that steps were being taken to put caveats on the plaintiff’s properties. b. The practitioner asked a senior associate in the firm to provide assistance in relation to the caveats. c. The senior associate did some investigation, including speaking to an officer at Landgate. d. The senior associate prepared a file note which addressed some issues related to the possibility of lodging a caveat on the basis of the judgement orders of the court. e. In broad summary the conclusion reached was that the judgement orders did not give rise to a caveatable interest in the properties. f. The specific question was whether

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the judgement orders were capable of constituting a charge against the properties. If yes, then a charge was a sufficient interest in the land to support a caveat. g. However if no, then there was no other interest to support a caveat. h. The senior associate found some historical statutory basis for a judgement order being able to be used as a charge sufficient to support a caveat. But more recent judicial authority indicated that the historical basis no longer applied, and led to the conclusion that there was no legal basis for a caveat to be lodged. i. The senior associate’s file note stated that: “…even if a caveat was lodged, and if the plaintiff were to challenge its validity in the Supreme Court, a court would likely find that [the client] did not have a caveatable interest.” j. Notwithstanding this, and despite some discussion during which the senior associate reiterated the view that a caveat could not be supported by the judgement orders, the practitioner instructed the senior associate to proceed with the lodgement of caveats. k. Before they were lodged, a letter (settled by the practitioner) was sent to the client. The letter included the following statements: “…Historically, judgements could be registered under s.19 Imperial Judgements Act 1838 (“the Act”) and by virtue of s.13 of the Act operate as a charge against the land. A caveat could then be lodged by the caveator claiming an equitable charge against the land. However, there is now authority that a judgement may not be [sic] the Act is inconsistent with the execution scheme under the TLA. In Bank of Western Australia v Connell & Connell

(Supreme Court Library No 960433) Owen J found that s.13 of the Act had no application to the Torrens system land. The authority therefore suggests that a charge by virtue of a judgement that has been registered pursuant to s.19 of the Act is not a caveatable interest under the TLA. Further, the Act has been repealed by the Court’s [sic] Legislation and Repeals Act 2004 which came into effect on 1 May 2005. It is therefore no longer possible to enter a judgement pursuant to s.19 of the Act in order to protect a charge by caveat by virtue of s.19 of the Act. The Landgate manual has also warned judgement creditors to consider the effect of the Connell decision and the implications of lodging a caveat without reasonable cause: clause 4.1.8 Landgate Manual. Thus, a caveat may be lodged but if the plaintiff disputes the validity of the caveats there is a risk that a court may find that the [client] does not have a caveatable interest and order that the caveats be removed. There is also a risk in that event that a court may make a compensation order against the [client] for lodging a caveat without reasonable cause: Section 140 TLA”

Subsequently and after the plaintiff’s application for special leave to appeal was listed for hearing, the caveats were lodged, signed by the practitioner and supported by statutory declarations by the client’s claims officer. The caveats referred to the judgement orders and the statutory declarations referred to the client’s intention to enforce the judgement orders. The plaintiff’s special leave application was refused and eventually a settlement was reached regarding costs. It appears that the plaintiff was not aware of the caveats being lodged. The settlement amount was paid and it was only later that the caveats were withdrawn. The circumstances relating to withdrawal of the caveats are not totally clear from the SAT decision. However it appears that at some point the Complaints Committee investigated the matter and indicated to the practitioner that the caveats had been lodged in the absence of a caveatable interest to support them.

apology for lodging the caveats on the client’s behalf without there being a caveatable interest. The practitioner’s firm implemented internal training regarding the procedures for lodging caveats. The practitioner apparently accepted the finding of professional misconduct. The practitioner was fined and ordered to pay costs.

Using a caveat as a “strategic step” It is not difficult to feel sympathy towards the practitioner. It is not unusual for lawyers to be approached by clients with a request, or even a demand, that a caveat be lodged against property owned by the other party to a dispute. Sometimes the desire to lodge a caveat against another person’s land is intended (by the client) to do no more than “sound a warning” or “show that I’m serious” or to “make life more difficult for them”.

It appears the practitioner accepted advice in this regard and readily took steps to remove the caveats and to accept responsibility for the costs of removal.

The client may have little appreciation of the true nature of a caveat or of the technical legal basis on which a caveat may be validly lodged.

The practitioner also made a written

Rather, the client may be aware only of the 37

effectiveness that a caveat can often have in preventing another person dealing with land and hence engendering some level of cooperation from another person in order to have the caveat removed. The client may have little interest in hearing that there is not a sufficient legal basis to lodge a caveat, and indeed may criticise the lawyer or seek to pressure the lawyer to proceed anyway. What we will do in the remainder of this paper is to summarise (by way of a refresher) what is required for the valid lodgement of a caveat and then further discuss potential adverse consequences of improperly lodging a caveat.

What is required for the valid lodgement of a caveat – caveatable interest The term “caveat” derives from the Latin word meaning “let him beware”. A caveat is a notice of warning that appears on a certificate of title for a parcel of land. In Western Australia the statutory basis for lodging a caveat can be found in section 137 of the Transfer of Land Act 1893. That section provides that any person claiming “any estate or interest in land” may register a caveat in respect of the relevant parcel. The Transfer of Land Act does not provide express guidance on what constitutes an “estate or interest in land” that is capable of supporting a caveat. A caveat by and of itself does not:

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a. create an estate or interest in land; or b. amount to an encumbrance against the land (Forster v Finance Corp of Australia Ltd [1980] VR 63). (In what follows we will use the term “interest” to encompass also the term “estate”.) The interests capable of supporting a caveat are many and varied. These interests do not lend themselves to being characterised by reference to a single definitive set of criteria. Perhaps the only general statements of practical use when considering what constitute caveatable interests are these: a. a legal or equitable proprietary interest in land is capable of supporting a caveat; and b. a mere personal or contractual right will not be sufficient to support a caveat. Beyond the above broad statements, a practitioner seeking further guidance must look to specific examples of what interests Courts have held will be capable of supporting a caveat.

Adverse consequences of improperly lodging a caveat Compensation for caveat lodged without reasonable cause Section 140 of the Transfer of Land Act provides that a person who lodges a caveat without reasonable cause is liable

to pay any person who consequently sustains damage such compensation as the Court deems just. Unlike equivalent provisions in other Australian jurisdictions, s140 does not appear to extend to compensation for damage caused by the unreasonable maintenance of a caveat: see Hooke v Holland [1984] WAR 16. A claimant under s140 must establish that: a. a caveat has been lodged; b. the caveat was lodged without reasonable cause; and c. the claimant has sustained damage as a result of the caveat having been lodged without reasonable cause: Brogue Tableau Pty Ltd v Binningup Nominees [2007] WASCA 179 [71]. The test for determining whether a caveat is lodged without reasonable cause is to ask whether the caveator held an honest belief on reasonable grounds that they had a caveatable interest: Binningup Nominees. Even negligent legal advice may provide a caveator with reasonable grounds for an honest belief that they had a caveatable interest: Binningup Nominees. A solicitor who advises their client that they do not have a caveatable interest but that they may lodge a caveat as a “bargaining chip” may be exposing their client to liability to pay compensation under s 140. The question of whether a solicitor may

be ordered to pay compensation under s140 where they have contributed to a caveat being lodged without reasonable cause is yet to be determined: Binningup Nominees. The New Zealand Court of Appeal has held that solicitors and other agents may be rendered liable for the payment of compensation under the New Zealand equivalent of s140: see Gordon v Treadwell Stacey Smith [1996] 3 NZLR 281. Costs orders against solicitors for improper lodgement of caveats In at least two cases, the Supreme Court of Victoria has ordered costs against solicitors who have contributed to the improper lodgement of a caveat. These cases provide an indication of the Court’s expectations of solicitors in relation to the lodgement of caveats.

Pearl Lingerie Australia Pty Ltd v TGY Pty Ltd; Pearl Lingerie Australia Pty Ltd v John Giarratana [2012] VSC 451 In this case, the plaintiff sought an indemnity costs order against the defendant’s solicitors in relation to the lodgement and defence of a caveat (TGY caveat). The Court had ordered the removal of the TGY caveat because it was not supported by any caveatable interest. The defendant’s solicitors had lodged the TGY caveat on 30 July 2012. The TGY caveat claimed an “estate in fee simple” over the whole of the plaintiff’s property pursuant to an “implied, resulting or constructive trust”. At the hearing of the plaintiff’s application for the removal of the TGY caveat on 30 August 2012, the defendant submitted that its claim of an implied, resulting or constructive trust was supported by a joint venture agreement between the parties and associated dealings between them. The Court found that even if the joint venture agreement was enforceable (which was doubtful) it did not give the defendant any interest in the plaintiff’s property. The defendant’s solicitor ultimately conceded this point at the hearing. He was also unable to identify any basis for an implied, resulting or constructive trust or any other caveatable interest in the material relied upon by the defendant. During the course of oral submissions, it became apparent that the defendant’s solicitors did not have possession of the documents said to support the TGY caveat until midday on 29 August 2012. Indeed, the solicitor appearing on behalf of the defendant told the Court that he

had proceeded to defend lodgement of the TGY caveat without having read those documents. The Court held that the statements made by the defendant’s solicitor at the hearing supported findings that: a. when the proceedings were heard on 30 August 2012, the solicitor was unfamiliar with the documents upon which his client relied to support the TGY caveat; and b. the defendant’s solicitors prepared and lodged the TGY caveat in circumstances where they could not have formed a professional view that TGY had a caveatable interest in the plaintiff’s property. The Court found that the conduct of the defendant’s solicitors in preparing, lodging and defending the TGY caveat was in wilful disregard of known facts and law which, in all the circumstances, constituted a serious dereliction of duty and justified an indemnity costs order being made against the solicitors personally. The Court ordered that the defendant and the defendant’s solicitors jointly and severally pay the plaintiff’s costs. It also indicated that, due to the nature and seriousness of its findings, it would forward a copy of its reasons to the Victorian Legal Services Commissioner.

Gatto Corporate Solutions Pty Ltd v Lorraine Joan Mountney [2016] VSC 752 This case concerned applications made by both the plaintiff and the first defendant for orders that the plaintiff’s former solicitor, Mr Nelson, be liable for some or all of the first defendant’s costs of the proceeding. The first defendant’s costs were largely incurred in support of a summons to remove a caveat. The Court had found (and the plaintiff had conceded) that the plaintiff had no caveatable interest in the first defendant’s property and had ordered the removal of the caveat. The plaintiff’s director, Mr Swords, filed an affidavit in which he stated that he had instructed Mr Nelson to lodge the caveat on the basis of Mr Nelson’s advice that there was a proper basis for doing so. In a responsive affidavit, Mr Nelson stated that: a. he had taken instructions from Mr Swords that the plaintiff had an equitable interest in the property pursuant to an implied, resulting or constructive trust;

b. Mr Swords’ instructions were to the effect that the plaintiff had funded significant improvements to the first defendant’s property and that there had been discussions between Mr Swords and the first defendant’s husband; c. based on those instructions, he had advised Mr Swords that there was a basis to lodge the caveat; and d. “[o]nly Mr Swords of the Plaintiff knew the facts upon which he based his instructions to me to lodge the caveat”. Mr Swords swore a further affidavit in reply in which he said that: a. he was not a lawyer and did not have the capacity to assess whether the plaintiff had a caveatable interest in the property; and b. he never instructed Mr Nelson that the plaintiff had funded improvements to the first defendant’s property or that he had any discussions with any representative of the first defendant which he thought might support a caveat. The Court held that, regardless of whose evidence was to be believed, Mr Nelson should be jointly and severally liable with the plaintiff for part of the first defendant’s costs. In doing so, the Court found that Mr Nelson must have lodged the caveat on the basis of Mr Sword’s [sic] instructions alone, in circumstances where there was no documentary corroboration of the expenditure alleged to have been made with respect to the property, or of any alleged agreement between the plaintiff and the first defendant with respect to the plaintiff having an interest in the property. Taking Mr Nelson’s case at its highest and best, there has been a dereliction of duty on his part [18]. The Court held that, while Mr Nelson’s conduct “was not quite so egregious” as that of the solicitors in Pearl Lingerie, “it is incumbent upon a solicitor to do more than simply rely upon the oral instructions of his client.” Both this case and Pearl Lingerie indicate that, before lodging a caveat, a solicitor should satisfy himself or herself that his or her client has a caveatable interest on the basis of something more than his or her client’s oral instructions. NOTES: 1

Detailed summaries of specific case examples can be found in the Stephen Colbran and Sheryl Jackson's text entitled 'Caveat' and also in the LexisNexis® 'Practical Guidance Property' series.

DROVER'S DOG Your Dog recently returned from visiting the Pup in London, for a so-called White Christmas, and is relishing the heat of Perth. Your Dog has never been as cold in his life. The Pup insisted on taking the Dog for early morning cycle rides in Richmond Park, clad in a couple of t-shirts, beanie and helmet. Candidly, the Dog thought he would freeze to death. At -6°C wind and chill factor one’s peripheral vision closes down, made even more terrifying at the thought one of the Queen’s skittish red deer would spring across the road and impale an antler in the Dog’s side. The only bright spot would be then to barbecue the deer in Robin Hood style as a means of retribution. To keep his brain working in such intense cold your Dog forlornly recited the several verses of Mulga Bill’s Bicycle: Twas Mulga Bill, from Eaglehawk, that caught the cycling craze; He turned away the good old horse that served him many days; He dressed himself in cycling clothes, resplendent to be seen; He hurried off to town and bought a shining new machine; And as he wheeled it through the door, with air of lordly pride, The grinning shop assistant said, "Excuse me, can you ride? The ongoing debate in the press about bicycles, the lawlessness of cyclists, their arrogance and the like causes the Dog some amusement as he reflects on the heyday of cycling in the 1890s, when the safety bicycle, propelled by gears and a chain drive in place of the direct drive penny farthing, flooded markets in the UK and in the USA. Just imagine the heated letters to the editor of The Times! Quite why lycra causes offence is not clear – your Dog has always thought lycra-clad female cyclists look smashing. Unfortunately, they do not seem to think the same of him! Perhaps that is the answer – the sex of the wearer determines suitability. Having avoided death on icy roads,

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the Dog decided to make some improvements to the Pup’s kennel, and so set off, more warmly clad, to B&Q, the UK’s answer to Bunnings. The Dog reckons a dog could curl up on one of the shelves at Bunnings, and sit there for a year or more before an assistant might wander down the lane noting the goods out of stock labels. What a surprise it would be to bark “Woof”! B&Q is not much different, while the lanes at Homebase have the same reassuring isolation as those of its parent. Back at the kennel the Pup had locked every opening, so the Dog unlocked it. Bedlam ensued as high pitched sirens wailed and lights flashed. Sounded like Escape from Alcatraz. Mrs Dog was having kittens. Thinking that the siren would run out of steam, the Dog set about unloading his purchases. Unexpectedly the “bee bah” of multiple police cars overrode the sirens. No helicopter, which was as well. The Dog found himself looking at 10 or 12 of Her Majesty’s armed guards wearing flak jackets aiming a few rifles, bazookas and the like at the Dog’s rather neat tummy. This was not a time to bare one’s teeth, growl and stand one’s ground. With his paws in the air and wagging his

tail furiously the Dog explained that he was the thief for whom they might be searching, and would soon return to Orstralia. As usual the Dog had mislaid his dog licence, so that created yet more suspicion. Fortunately, by wagging his tail and congratulating the gendarmes on recent wins at curling, tennis, cricket and rugby, the Dog was warned, and promised not to do it again. As you would expect, the Dog needed a couple of large bowls of gin and tonic to calm his nerves. Sitting in front of a bowl of fillet steak offcuts outside The Treasury your Dog took to reading The Black Economy Taskforce Consultation Report, which is heavy going. 54 items for consideration and consultation with a likely proliferation in legislation, regulation, administrative reports and the like. The Dog wonders where it will stop. The Dog has heard it said that the income tax legislation in 1915 or so comprised less than 200 sections of legislation, written in English. It now seems the income tax legislation alone, rewritten in “principles based plain English”, exceeds 4000 pages. Perhaps it is time to get away from principles based drafting! The alternative is to get rid of income tax!

The Dog still hangs on to the concepts advanced by Lord Atkin in Liversidge v Anderson, where he criticized the majority for being “more executive-minded than the executive”, and went on to say: In England, amidst the clash of arms, the laws are not silent. They may be changed, but they speak the same language in war as in peace. It has always been one of the pillars of freedom, one of the principles of liberty for which on recent authority we are now fighting, that the judges are no respecters of persons, and stand between the subject and any attempted encroachments on his liberty by the executive, alert to see that any coercive action is justified in law. I know of only one authority which might justify the suggested method of construction. "When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean, neither more nor less." "The question is," said Alice, "whether you can make words mean so many different things." "The question is," said Humpty Dumpty, "which is to be the master, that's

all." After all this long discussion the question is whether the words "If a man has" can mean "If a man thinks he has". I have an opinion that they cannot and the case should be decided accordingly. Your Dog has enjoyed reading what the High Court had to say in the dogfight as to the origin of various species of dog. Interestingly, some commentators suggested that the Court would arrive at a ‘political’ decision, presumably enabling the intruders to remain in office, snouts embedded in the trough! It goes to show how important it is to mark one’s territory! Section 44(i) operates to render "incapable of being chosen or of sitting" persons who have the status of subject or citizen of a foreign power. Whether a person has the status of foreign subject or citizen is determined by the law of the foreign power in question. Proof of a candidate's knowledge of his or her foreign citizenship status (or of facts that might put a candidate on inquiry as to the possibility that he or she is a foreign citizen) is not necessary to bring about the disqualifying operation of s 44(i).

A person who, at the time that he or she nominates for election, retains the status of subject or citizen of a foreign power will be disqualified by reason of s 44(i), except where the operation of the foreign law is contrary to the constitutional imperative that an Australian citizen not be irremediably prevented by foreign law from participation in representative government. Where it can be demonstrated that the person has taken all steps that are reasonably required by the foreign law to renounce his or her citizenship and within his or her power, the constitutional imperative is engaged. Your Dog, as a follower of rugby, a game of rough and tumble, the odd kick to the head, ear biting and punching, has noticed that Kiwis from Aotearoa have “flett eksints”, and to a man support “the Blecks”. It is with some curiosity that the Dog wonders how the New Zealand Heading Dog, a breed originating there, had no knowledge of its antecedents.

Send your submissions to the Dog via brief@lawsocietywa.asn.au

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Mock trial coaching By Amelia Ikin Law student at UWA

During 2017, I had the privilege of coaching three of the 127 teams in the Mock Trial Competition. As an enthusiastic participant in the Competition during my final years of high school, I was excited to return to my school to assist the younger students. Having the experience of being a student in the Competition gave me an interesting perspective and assisted me in understanding what is desired in a coach. Although watching the trial without being able to participate was difficult at first, seeing the students grow and improve made this absolutely worthwhile. Throughout my year of coaching, I have learnt many things which can be useful for first-time coaches: 1. Work with the teacher and school, they will be your best point of contact to ensure your time as a coach is efficient and beneficial. From everything from gaining a Working With Children Check to organising meeting times, the school is grateful for your assistance and will ensure you are prepared for coaching. 2. Guide the students but don’t do the work for them. Although it can be tempting to take over writing an

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opening or closing address, this will be detrimental to the team in the long run. 3. Assist the students in learning from mistakes, while also congratulating them on things they did well. This can be achieved through having a chat or writing an email to the team after each trial. 4. Ensure that all students, not just the barristers and solicitor, are aware of the trial theory. As a coach watching the trial, the worst thing that can happen is a witness saying something entirely contradictory to their barrister. This can be prevented through spending one meeting pretrial on case theory, focusing on the main points the team hopes to prove. 5. Court room etiquette is something the students have no experience in and as reinforced by many of the judges, is a vital element of the Competition. Ensure that time is spent teaching participants the order of a trial, when to stand or sit down and common things to avoid in the courtroom.

Overall, the greatest lesson I have learnt through being a coach is how rewarding it is to watch your students learn from mistakes and show confidence in the courtroom. Seeing our youngest team, the Year 10’s, get into the top four teams of the Competition was an incredible effort and reinforces the fact that hard work often prevails over trial experience. Undoubtedly, the highlight of coaching was when our closing barrister was asked a difficult question which we had not discussed a response to. Without breaking a sweat, she began her answer with, “With respect your Honour” and then gave a concise response which was fully consistent with the team’s case theory. At that point, all the hours put in as a coach were worth it. Being a coach in the Mock Trial Competition is an excellent experience and I would thoroughly advise excompetitors, current students and law graduates to participate in 2018.

FAMILY LAW CASE NOTES Robert Glade-Wright Former barrister and accredited family law specialist

Financial agreements – Fiancée (and as wife) wins appeal to the High Court In Thorne & Kennedy [2017] HCA 49 (8 November 2017) the High Court allowed with costs Ms Thorne’s appeal against a decision of the Full Court of the Family Court of Australia. In a joint judgment Kiefel CJ, Bell, Gageler, Keane and Edelman JJ (Nettle and Gordon JJ giving separate reasons) said (at [1]-[2]): “This appeal concerns … a prenuptial agreement and a postnuptial agreement which replaced it … between a wealthy property developer … and his fiancée … The parties met online on a website for potential brides and they were soon engaged. In the words of the primary judge, Ms Thorne came to Australia leaving behind ‘her life and minimal possessions ... If the relationship ended, she would have nothing. No job, no visa, no home, no place, no community’ … The pre-nuptial agreement was signed, at the insistence of Mr Kennedy, very shortly before the wedding … [where] Ms Thorne was given emphatic independent legal advice that the agreement was ‘entirely inappropriate’ and that Ms Thorne should not sign it. One of the issues before the primary judge, Judge Demack, was whether the agreements were voidable for duress, undue influence or unconscionable conduct. The primary judge found that Ms Thorne’s circumstances led her to believe that she had no choice, and was powerless, to act in any way other than to sign the pre-nuptial agreement. Her Honour held that the post-nuptial agreement was signed while the same circumstances continued, with the exception of the time pressure. The agreements were both set aside for duress, although the primary judge used that label interchangeably with undue influence, which is a better

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characterisation of her findings. The Full Court of the Family Court of Australia … allowed an appeal … concluding that the agreements had not been vitiated by duress, undue influence, or unconscionable conduct [saying at [167] that the wife’s ‘real difficulty’ was that she had received independent legal advice]. … [T] he findings and conclusion of the primary judge should not have been disturbed. The agreements were voidable due to both undue influence and unconscionable conduct.” After a discussion of case law as to duress ([26]-[29]), undue influence ([30][36]) and unconscionable conduct ([37][40]), the majority said (at [60]): “ … [S]ome of the factors which may have prominence include … (i) whether the agreement was offered on a basis that it was not subject to negotiation; (ii) the emotional circumstances in which the agreement was entered including any explicit or implicit threat to end a marriage or to end an engagement … (iii) whether there was any time for careful reflection; (iv) the nature of the parties’ relationship; (v) the relative financial positions of the parties; and (vi) the independent advice that was received and whether there was time to reflect on that advice.”

Children – Court’s approval no longer required for Stage 2 treatment of Gender Dysphoria if child can give informed consent or the parents responsible authorise it In Re: Kelvin [2017] FamCAFC 258 (30 November 2017) a full bench of the Full Court (Thackray, Strickland, AinslieWallace, Ryan & Murphy JJ) heard a case stated by Watts J as to an application by the father concerning the administration of “Stage 2” medical treatment for Gender Dysphoria for his then 16 year old child (“Kelvin”) who was born female but “transitioned socially as a transgender person” from Year 8 ([27]). The Court said at [6] that Gender Dysphoria was “the

distress experienced by a person due to incongruence between their gender identity and their sex assigned at birth”. The child’s father sought the Court’s sanction for the commencement of Stage 2 treatment in accordance with Re: Jamie [2013] FamCAFC 110. The Full Court held in that case that the court’s approval under s 67ZC FLA was not required in respect of “Stage 1” treatment (“puberty blocking treatment”) but that Stage 2 treatment (“gender affirming hormone treatment”) involving the use of oestrogen or testosterone with irreversible effects would require the court’s approval. Thackray, Strickland & Murphy JJ at [35]-[41] described Kelvin’s experience of Gender Dysphoria since he was nine; his anxiety and self-harming; his distress from experiencing female puberty due to not undergoing Stage 1 treatment; the improvement in his mental health since “taking steps towards a medical transition”; his parents support; the necessity of Stage 2 treatment for his future wellbeing and his wish (at 17) to commence such treatment. Their Honours (at [51]) observed that between 2013 and 2017 the Family Court had “dealt with 63 cases involving applications for Stage 2 or Stage 3 treatment for Gender Dysphoria” and that “[i]n 62 of those cases the outcome ha[d] allowed treatment”.

Robert Glade-Wright is the founder, principal author and editor of The Family Law Book, a one-volume, looseleaf and online subscription service. thefamilylawbook.com.au. He is assisted by accredited family law specialist Craig Nicol.

Northern Lights, Mount Kirkjufell, Iceland

Ex Juris Travel tales from the legal profession What's not to like about the home of the original geyser and where the most famous attraction, the blue lagoon is in fact the effluent from a nearby geothermal power plant. If your tastes run to puffin or whale, this is the place for you or you can eat a reproduction of the meal enjoyed by Ronald Reagan and Mikhail Gorbachev during the summer of 1986, during their historic summit in Reykjavik. Seriously, Iceland is well worth a visit and only a three hour flight from London, Heathrow. The scenery is wild and for most of the year, the Northern Lights are visible. Several years ago, a lawyer joined a photography course that circumnavigated the island over a fortnight. Lawyers with the taste for the offbeat can visit the Westman Islands, half destroyed by volcanic eruption in 1973. The "golden triangle” of the south west opens up spectacular scenery including

the waterfall Gulfoss and is easily accessible by car or tour. For something unusual, visit the Grimur Karlsson Boat Museum in Reykjanes, home to a collection of model fishing boats all made by retired local skipper, Grimur Karlsson. Although Iceland has a very low crime rate, many Nordic noir authors are active: Arnaldur Indriðason (Reykjavik Nights) and Yrsa Sigurðardóttir (Last Rituals, My Soul to Take). Enjoy walking through Reykjavik, the imposing Hallgrímskirkja

and identifying some of the places from the books. Iceland is also home to the world's first parliament, unless you count the Faroe Islands who also claim the world's first parliament. If you are looking for the Northern Lights, (Aurora Borealis) best to go in the darker months when of course you are more likely to encounter snow.

Tell us about your favourite (or not so favourite) destinations and why you travel there. Please send your contributions to brief@lawsocietywa.asn.au

Law Council Update

Vital the rule of law is upheld despite warring words Ensuring the rule of law is respected and maintained is vital to the strength of Australia’s legal system, the Law Council of Australia has reiterated. The national peak body, representing the legal profession, today backed colleagues at the Law Institute of Victoria in defending the rule of law, particularly the independence of the judiciary. Law Council of Australia President, Morry Bailes, said recent attacks on Victorian judges were not useful and eroded public confidence in the judiciary. “The Law Council shares the views of the Law Institute of Victoria. There is no place for political attacks on the judiciary undermining the independence of judges and magistrates,” Mr Bailes said. “It is understood that in our free society informed comment on judicial decisions is part of normal discourse, but politicised criticism undermines the foundations of the democratic system which must be closely guarded by all, especially those in government.

proceeding, or their legal representative, from having access to sensitive national security. While the Law Council held procedural fairness concerns about such measures, it noted that should they occur a special advocate regime should be created. The special advocate regime will allow each state and territory to have a panel of security-cleared barristers and solicitors who could participate in closed material procedures where the subject of a control order has sensitive information withheld from them and their legal representative. The President of the Law Council of Australia, Fiona McLeod SC, said the special advocate regime was a significant legal safeguard and one that strengthened the rule of law in Australia. “There is no doubt that being placed under a control order is a very serious step,” Ms McLeod said. “Control orders can involve substantial restrictions of a person’s liberty without the standard process of arrest, charge, prosecution and determination of guilt beyond a reasonable doubt.

“Judges and magistrates are experts in the law and to ensure the separation of powers must be allowed to perform their duty without interference and unwarranted criticism.”

“A special advocate regime will enhance procedural fairness for the controlee where secret evidence is allowed in control order proceedings without the affected person, or their legal representative, knowing its content.

The Law Council hopes all Australians understand the value of an independent judiciary and the importance of upholding the rule of law in legal decision making.

“Individuals should always be entitled to challenge the evidence tendered against them, this is a core principle of the rule of law.

Government move allowing security cleared lawyers in counterterrorism control orders welcomed The Law Council has commended the Australian Government for creating a ‘special advocate’ regime that would allow security-cleared lawyers to represent individuals that are subject to specific counter-terrorism control orders. The details of the special advocate regime are included in the National Security Information (Criminal and Civil Proceedings) Amendment Regulations 2017 made public today. The current control order scheme may prevent the subject of a control order

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“With national security, we must always aim to strike the right balance between protecting the community while defending the fundamental legal safeguards that underpin our democracy – in order to ensure there are no unintended consequences. “With these changes, we believe a better balance has been struck,” Ms McLeod said. The Regulations outline the administrative arrangements for the special advocate regime, including: •

the requirements that must be satisfied to be appointed by the court as a special advocate.

•

matters in relation to remuneration,

disclosure of interest, conflicts of interest, and immunity from legal action.

Australia takes a leap forward on human rights with the passing of marriage equality bill Australia takes a leap forward on human rights with the passing of marriage equality bill The Law Council of Australia has congratulated the Australian Parliament for passing a historic bill legalising marriage equality and enshrining a fundamental human right. “This is a tremendous day not just for LGBTQI Australians, but for Australian human rights and Australian justice,” said Law Council President, Fiona McLeod SC. “Freedom from discrimination is a fundamental human right. Discrimination on arbitrary grounds, including sexual orientation, is contrary to Australia’s international human rights obligations. “Today Parliament has delivered on the emphatic decision of the Australian people and helped embed this crucial right for LGBTQI Australians.” Ms McLeod thanked the many parliamentarians who had met with the Law Council over the course of the national debate. “We are extremely grateful for the constructive meetings and engagement we have had with a broad range of parliamentarians, from government ministers, shadow ministers, backbenchers and the crossbench,” Ms McLeod said. “It was the Law Council's view that the marriage equality bill presented to Parliament already struck the right balance between protecting the right to religious freedom and the right to be free from discrimination. “We are grateful that Parliament has formed the same view and we are pleased today that Australia has removed discrimination from the Marriage Act. “We have taken a great leap forward for Australian human rights and for that we should all be proud,” Ms McLeod said.

Professional Announcements Career moves and changes in the profession

Katrina Kerl

Alessandra Cavicchia

Calverley Johnston Family Lawyers Calverley Johnston Family Lawyers is pleased to announce the appointment of Katrina Kerl as Associate, as of 1 January 2018. Katrina has been a member of the Calverley Johnston Team since November 2016. We are also pleased to announce that Alessandra Cavicchia has joined our team as a Solicitor. Alessandra joined the firm at the end of November 2017. She has almost four years post-admission experience across leading law firms in Melbourne and Perth.

The University of Notre Dame Australia Professor Joan Squelch has been appointed the Dean of the School of Law at The University of Notre Dame Australia in Fremantle. Since joining the Law School in 2013, Professor Squelch has undertaken the roles Joan Squelch of Assistant Dean of Teaching and Learning and Chair of Schools of Law Research Committee. Professor Squelch currently lectures in Constitutional Law, Administrative Law and Legal History. She also supervises Masters and Doctoral students.

Joan’s areas of research interest include education and the law, school governance, workplace bullying and legal education. Joan recently co-edited and co-authored the book Higher Education and the Law published by The Federation Press. She is an internationally published author of book chapters and peer reviewed journal articles. As a highly qualified, experienced and passionate educator, Joan has a keen interest in legal education and in continuously seeking ways to ensure law students have a positive student experience, and that students receive the very best legal education that prepares them for the workplace and life-long learning.

West Family Lawyers As of 4 December 2017, the family law team of Mark Cheveralls and Natalie Dimmock (previously at Douglas Cheveralls Lawyers) are delighted to announce that they have commenced practice at a new firm, West Family Lawyers, located at 510A Hay Street Subiaco. The website address is westfamilylawyers.com.au.

Albert Wolff Chambers Albert Wolff Chambers is pleased to announce the 20th anniversary of the appointment of Tom Percy as Queen's Counsel, as of 17 December 2017.

We can assure your clients that their cat will be looked after and rehomed if they are left behind if a bequest is

48 | BRIEF FEBRUARY 2018

Ann Spencer

Kott Gunning Lawyers Kott Gunning is delighted to announce two promotions effective from 1 January 2018. The Insurance and Risk team has promoted Henrik Eklund to Senior Associate and Ann Spencer has been promoted to Senior Associate in the Commercial Dispute Resolution team. Both lawyers joined the firm in 2014 and their promotions follow a series of promotions across three practice groups in July 2017, representing the next generation of leadership and capability at the firm. Henrik Eklund practises predominantly in insurance and risk for insurers, self-insurers, corporations and other commercial entities in a variety of industries. Ann Spencer acts for corporate entities of all sizes, liquidators, associations, individuals (including on a pro-bono basis), not-for-profit organisations and local governments. She also assists our Wills and Estates team with contested estates litigation. Partner Tom Darbyshire said “as an independent 99 year old Western Australian law firm, we are proud to recognise Henrik and Ann’s dedication and commitment to our clients, the firm and the community”.

Tom Percy

Bequests Help Save Cats’ Lives As a charity, Cat Haven relies heavily on the kind donations and bequests of West Australians. We are WA’s premier cat welfare organisation, accepting over 6500 cats a year and rehoming as many as possible.

Henrik Eklund

made to Cat Haven. By suggesting and guiding your clients on how to bequeath a gift, you will also be providing much needed support for the homeless cats of Perth. For more information or a brochure, go to www.cathaven.com.au or call Chandra Woodley on 9442 3600.

Please Donate, Adopt Foster, Bequeath, Volunteer

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FEBRUARY–JUNE 2018

CONTINUING PROFESSIONAL DEVELOPMENT CALENDAR FEBRUARY 2018 Tuesday, 13 February 2.00pm – 5.30pm Sucession law and secret offspring - current issues

Thursday, 15 February 9.00am – 12.15pm Current issues in Employment Law

Tuesday, 27 February 1.00pm – 2.00pm How to avoid becoming a target for claims (Webinar)

Wednesday, 14 February 9.30am – 11.30am At the Heart of Success: current workplace gender diversity initiatives driving change

Friday, 16 February 1.00pm – 2.00pm Ethics on Friday: ethical dilemmas for Family Lawyers

Wednesday, 28 February 10.00am – 12.00pm Supervision: obligations and risks

Wednesday, 21 February 5.00pm – 6.30pm Migration Law Update Part 1

MARCH 2018 Thursday, 1 March 4.30pm – 6.00pm Defamation and injurious falsehood Thursday, 8 March 1.00pm – 2.00pm Online legal research skills including accessing free resources (Webinar) Tuesday, 13 March 9.00am – 10.30am Using encryption: ensuring only those who you want to see it, are the only ones who can see it! Wednesday, 14 March 12.00pm – 2.00pm The challenges of ethical decision-making for in-house counsel

Wednesday, 14 March 4.00pm – 6.00pm “Nobody told me there’d be days like these!” - Stress, pressure, & ethical decisionmaking in the practice of law Thursday, 15 March 9.00am – 1.30pm Beware the Ides of March - the dark arts of costs Tuesday, 20 March 9.00am – 12.30pm Current Issues in Environmental Law Tuesday, 20 March 4.30pm – 6.00pm Insolvency: Safe harbour & ipso facto reforms Wednesday, 21 March 1.00pm – 2.00pm Drafting guidelines for effective correspondence (Webinar)

50 | BRIEF FEBRUARY 2018

Wednesday, 21 March 5.30pm – 7.00pm A view from the bench Thursday, 22 March 8.30am – 1.00pm Maximising your billable hour through managing your time and building resilience Thursday, 22 March 4.00pm – 5.00pm Expert Evidence: instructions, privilege and waiver of privilege Friday, 23 March 8.30am – 4.30pm Mindfulness: the powerful weapon for dealing with distressed clients Monday, 26 March 4.00pm – 5.00pm Unbundling of legal services

MARCH 2018 CONTINUED Tuesday, 27 March 9.00am – 10.00am Third party dispute finance in the resources sector

Tuesday, 27 March 4.00pm – 5.00pm Joint Form of General Conditions for the Sale of Land in Western Australia - 2018 update

Wednesday, 28 March 9.30am – 11.00am Migration Law Update Part 2

Thursday, 31 May 3.00pm – 5.00pm QPS Accreditation Workshop 1

Thursday, 7 June 3.00pm – 5.00pm QPS Accreditation Workshop 2

Appearing in SAT

When there’s a knock on the door…how to respond to an unannounced visit from the ATO or ASIC

Thursday, 29 March 1.00pm – 2.00pm Conflicts of interest (Webinar)

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Caveats Advocate’s Immunity Drafting settlement offers and deeds Ethics on Friday: Misleading Conduct

Strata Reform: dispute resolution changes and reforms to protection of purchasers

The impact of culture on ethical behaviour

Please note All new online CPD seminars will be available for purchase and completion during the month of March 2018 to meet your CPD requirements by 31st March 2018.

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March 2018 Membership Event Friday, 9 February YLC Beach Volleyball Tournament

April 2018 Membership Events Commencing early April Pilates – Six week course Date to be confirmed Society Club Cocktail Party Date to be confirmed Sole Practitioner and Small Firm Forum Date to be confirmed YLC Inter Profession Networking Cocktail Event

May 2018 Membership Events Monday, 14 May Law Week Breakfast and the 2018 Attorney General’s Community Service Law Awards Tuesday, 15 May Walk for Justice Wednesday, 16 May Law Week Panel Presentation hosted by the Law Society’s Young Lawyers Committee Friday, 18 May Law Week Cocktail Party and 2018 Lawyer of the Year Awards

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