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Volume 42 | Number 10 | November 2015

THE IMPORTANCE OF LGBTIQ INCLUSIVENESS IN LAW FIRMS


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Contents

GO DIGITAL!

Volume 42 | Number 10 | November 2015

Take me with you.

24

10 02

President's Report

Elizabeth Needham

35

What rights does a beneficiary have to challenge decisions of a trustee?

03

Your voice at work

Peter MacMillan

04

Editor's Opinion

40

Lawyer on the Street

Julian Sher

41

2015 Social Justice Opportunities Evening

06

The Law Society's Indigenous Legal Issues Committee

Ahshiba Sultana

08

Nominations for 2016 Council

42

Book Review: Everything you Need to Know About the Referendum to Recognise Indigenous Australians

10

Coming to Australia: Cross border and Australian Income Tax Complexities with a focus on dual residence and DTAs and those from China, Singapore and Hong Kong - Part 1

Review by Lisa McAnearney

43

Book Review: Intellectual Property: Text and Essential Cases

Review by Jason MacLauri

Professor Nolan Sharkey FCA

44

Young Lawyers Case Notes

16

Welcome to the Honourable Justice Tottle

The Honourable Justice Tottle

46

Family Law Case Notes

47

Thomas Hurley Case Notes

18

Ethical Considerations in Expert Evidence

Matthew Howard SC and Abigail Davies

48

Law Council Update Pam Sawyer

24

FEATURE The importance of LGBTIQ inclusiveness in law firms

49

50

Professional Announcements

50

Classifieds

Jeremy Rich and Jake Lowther

51

New Members

28

Welcome to the Honourable Justice Fiannaca

52

Events Calendar

The Honourable Justice Fiannaca

30

Without Prejudice Negotiation: Sometimes a pious but ineffectual wish

Nathan Landis

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. Readers wanting to cite from or reference articles in Brief Journal should reference as follows: (Month and Year) Brief Magazine (Perth: 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 Eleanor Jackson Manager - Business Development Tel: (08) 9324 8639 Email: ejackson@lawsocietywa.asn.au Manager Marketing & Communications Moira McKechnie Communications and Design Officer Brett Syme RRP $15.00 incl GST. Printed by Scott Print

EDITOR Julian Sher

PRESIDENT Elizabeth Needham

EDITORIAL COMMITTEE Ronald Bower, Gregory Boyle, Andrew Cameron, Rebecca Collins, Robert French, Dr Eric Heenan, Rebecca Lee, Jason MacLaurin, Alain Musikanth, Maureen O'Connell, Tom Porter, Pat Saraceni, Julian Sher, Moira Taylor, Lorilee Yu

SENIOR VICE PRESIDENT Alain Musikanth

PROOFREADERS David Garnsworthy, Ann Kay, Andrew MacNiven Brief is the official journal of THE LAW SOCIETY OF WESTERN AUSTRALIA Level 4, 160 St Georges Tce Perth WA 6000 Tel: (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 further details, please contact communicationsofficer@lawsocietywa.asn.au

VICE PRESIDENT Hayley Cormann TREASURER Marie Botsis ORDINARY MEMBERS Alison Aldrich, Tara Connolly, Hayley Cormann, Brahma Dharmananda SC, Nathan Ebbs, Adam Ebell, Nicholas Ellery, Catherine Fletcher, Greg McIntyre SC, Marshall McKenna, Denis McLeod COUNTRY MEMBER Georgia Pickering JUNIOR MEMBERS Emma Cavanagh, Ray Christensen, Rosie Hill IMMEDIATE PAST PRESIDENT Konrad de Kerloy EXECUTIVE DIRECTOR David Price

01


report

President's Report Elizabeth Needham, President, The Law Society of Western Australia 2016 COUNCIL ELECTION VOTING I would like to begin this month's President's Report with a reminder to members about the upcoming elections of the Council of the Society. The election of the 2016 Council will be conducted electronically by CorpVote Independent Voting Services. On Tuesday, 10 November 2015 the ballot will be provided to eligible members by email together with instructions on how to vote. The ballot will close on the election date of Tuesday, 24 November 2015. I encourage all eligible members to make their voice heard by voting in the Council election. It is vitally important that the Council continues to be representative of the Society's membership and helps the Society live up to its goal of being the voice of the legal profession in Western Australia. DIVERSITY AND EQUALITY CHARTER One of our current strategic campaigns is diversity and wellbeing in the profession. This edition of Brief includes an article by Jeremy Rich and Jake Lowther about their experiences of being 'out in the law' and the importance of LGBTIQ inclusiveness for law firms. October's Society Club also highlighted the subject of LGBTIQ diversity within the legal profession. Members may be aware that the Society has endorsed and adopted the Law Council of Australia's Diversity and Equality Charter (Charter). The Charter states that the legal profession is committed to promoting diversity, equality, respect and inclusion consistent with the principles of justice, integrity, equity and the pursuit of excellence upon which the profession is founded. There is a published list of those members and entities in the legal profession who have adopted the Charter. It is an important step in publicly acknowledging the need for and embracing diversity and equality in our profession. I encourage legal practitioners and legal practices to formally adopt the Charter. INDIGENOUS LEGAL ISSUES COMMITTEE – LETTER TO THE ATTORNEY GENERAL At the September meeting, the Council of

02 | Brief November 2015

the Society approved a draft letter to the Attorney General regarding Indigenous issues. By way of background, in September 2015, the Indigenous Legal Issues Committee (then known as the Aboriginal Lawyers Committee) and members of the Executive met with the Hon Michael Mischin MLC, Attorney General of Western Australia, at a lunch meeting of the Executive. The Attorney General invited a letter from the Society in due course detailing the various issues discussed at the meeting. The Indigenous Legal Issues Committee has drafted a detailed letter to the Attorney General. The letter addresses a range of issues applauding the government for some strategies and policies whilst asking for further information or consideration of others. The latter included justice reinvestment strategies, funding for legal services, mandatory sentencing, remote communities and the closure of the Kalgoorlie-Boulder Community Court. ACCREDITATION COMMITTEE – FAMILY LAW PRACTITIONERS' ASSOCIATION ACCREDITATION ACTIVITIES The Council has also approved a letter to the President of the Family Law Practitioners' Association of Western Australia (FLPA). The letter addresses an issue raised by the Society's Accreditation Committee (Committee). Members of the Society who hold accreditation in family law are required to undertake 10 hours of approved activities each year, which may or may not need to be in addition to their other CPD requirements. Approved activities are allocated points by the Committee. The activities must be of sufficient rigour and substance to warrant the allocation of points. The Society has suggested that it is desirable that as much advance notice as possible is given to prospective attendees regarding events, so that it is clear in advance if an event will attract points. This would also assist the Committee by reducing the number of individual members requesting retrospective approval of events.

CODE OF ETHICAL CONDUCT AND STATEMENT OF ETHICAL PRINCIPLES The Society's Ethics Committee (Committee) was asked to determine whether the Society should adopt a code of ethics or code of conduct. The view of the Committee was that a statement of ethical principles in a concise form would have appropriate educative force. The Committee was also of the view that the Legal Profession Conduct Rules 2010 should be established as the Society's Code of Ethical Conduct. The Council has adopted the Legal Profession Conduct Rules 2010, as amended from time to time, as a 'Code of Ethical Conduct'. The Law Society of New South Wales' 'Statement of Ethics' has also been adopted as a 'Summary of Ethical Principles'. The Statement of Ethical Principles will be published on the Society's website in due course. STRATEGIC CAMPAIGNS UPDATE The Council recently received an update on the progress of the Society's two strategic campaigns for 2015/16, professional practice, and wellbeing, diversity and gender bias. Teams within the Society's staff have developed strategies and gathered resources for the benefit of members, including those that are now available to access on the Society's website. Both campaigns are significant in both importance to the profession and in the work needed to develop and implement them. Some of the work towards these campaigns I have referred to in this month's report and the Society looks forward to providing more detail in the coming months. END OF YEAR DRINKS – SAVE THE DATE I invite you to celebrate with colleagues and fellow Society members as 2015 draws to a close with our End of Year Drinks so please be sure to keep the evening of Wednesday, 2 December free. The festivities begin at 5.30pm at The Flour Factory on Queen Street, Perth. I look forward to seeing you there.


your voice at work

Your voice at work A snapshot of recent Society initiatives THE LAW SOCIETY OF WESTERN AUSTRALIA IS CONCERNED BY THE CRIMINAL CODE AMENDMENT (PREVENTION OF LAWFUL ACTIVITY) BILL The Law Society of Western Australia is concerned by the Criminal Code Amendment (Prevention of Lawful Activity) Bill, which is currently being debated in Parliament. The Bill is too general and may erode fundamental aspects of our criminal justice system, which protects our entire community. The Law Society believes that the criminal offences in this Bill are too broad. All laws should be drafted so that they are clear to the public, the police and the courts. The Law Society President, Elizabeth Needham said, "The community needs to understand the laws in order to abide by them." The Law Society is also very concerned about the reversal of the onus of proof. The bedrock of our successful criminal justice system has been for the State, with their significant resources, to prove beyond reasonable doubt that a crime has been committed. "These laws will place too much discretion in the hands of the police and prosecutors, especially combined with the reversal of the onus proof and it's not fair on anybody when the public have to second-guess how the police may enforce such very broad criminal laws," Mrs Needham said. The Law Society calls on the Government to withdraw the Bill and refer it through to the parliamentary Committee process for proper scrutiny. LAW SOCIETY STRATEGIC CAMPAIGNS UPDATE In February 2015, the Council and senior managers of the Law Society met for a strategic planning workshop. The principal aim of the session was to identify and confirm topics for strategic campaigns. At that workshop two strategic campaigns were chosen for 2015/16: •

Professional practice; and

Wellbeing and mental health/ retention/gender bias.

A significant milestone which brings together the strategic campaigns into a

single entry point for members is the new Society website which was launched at this year's AGM. Some of the work that has been done under each campaign to make the website a more useful resource is detailed below:

Lawyers of Western Australia's 2014 20th Anniversary Review of the 1994 Chief Justice's Gender Bias Taskforce Report and the Law Council of Australia's National Attrition and Retention Survey study of the legal profession.

Professional practice

Useful and interesting articles from the Law Society's LawCare WA service are also now featured prominently on the website. Members may be aware that LawCare WA constitutes a range of initiatives by the Law Society to support mental health and wellbeing. LawCare WA includes professional, confidential and free counselling and information services to support members. As part of the service, members can access up to three free counselling sessions and a range of online information resources.

Law Society staff continue to review the resources related to professional practice that are provided by the Law Society. Research has been conducted into the work being done in the professional practice field by other Law Societies around Australia. This has resulted in additions or changes to Law Society resources, such as the Law Society Costs Kit and the Ethical and Practice Guidelines. The website now includes professional practice material, which has been divided into various sections. Relevant resources, including Brief articles published over the past five years, can now be accessed through the website. The professional practice material has been divided into five categories: Ethics and Professional Conduct, Costs, Complaints, Accreditation and Setting up and Running a Law Practice. These materials fall under the overarching heading of Professional Practice Support. As well as Law Society resources, guidelines and Brief articles, members will also find hyperlinks to useful information from external sources, such as the Legal Profession Complaints Committee and Legal Costs Committee. The website also features specialised pages for the benefit of various legal circles, including Country Lawyers, Indigenous Lawyers, In-house and Government Lawyers, Sole Practitioners and Small Firms, Women Lawyers and Young Lawyers. These pages provide tailored information relevant to these sections of the legal profession. Wellbeing and mental health/retention/ gender bias A review of current Law Society resources, guidelines and case studies covering the topics of wellbeing and mental health, retention and gender bias has also been undertaken.

Beneficial resources from LawCare WA are highlighted on a number of pages of the website. Members will find that the website now features multiple pages dedicated to health and wellbeing, which cover topics such as Life, Family and Relationships, Living Healthy, Financial Wellbeing and Work and Career. Work has also commenced on a template to be used to collect case study information from legal professionals and firms across the topics of wellbeing and mental health, retention and gender bias. It is hoped that these case studies will provide useful insights and strategies for practitioners who encounter similar scenarios or problems in the course of their professional and personal lives.

Coming Vacancy General Manager Advocacy • Be part of a positive and supportive senior management team • Drive policy and advocacy for the peak legal professional body in Western Australia • Perth CBD location For more information please see page 39 of this edition of Brief or visit lawsocietywa.asn.au

Materials reviewed include the Women

03


editor's opinion

"Everything has an appointed season"1 Julian Sher, Barrister, Francis Burt Chambers, Editor, Brief Journal As I approach the final months of my tenure as the editor of this esteemed journal, I once again, remarkably, encounter the November surprise – as I did at almost the same time last year and the year before. How can a surprise occur more than once, you may ask? I don't know, but it does. It may have something to do with the annual onset of a new season. Each year, at about this time, it dawns on me that the current year has almost run its course. This year is no exception to that surprising seasonal realisation. This year the catalyst was my sudden exposure to a glittering display of Christmas merchandise, while trailing supportively behind my wife through the branch of a well-known department store. Where did the year go? In the case of Brief, it has been a very active year indeed. It seems just the other day that I eased myself into the editor's chair, but that was actually in January. I have caused myself extra work, of course, by placing my personal stamp on my editorial contribution and introducing an editor's opinion page to engage more proactively with the readership. In the same vein, Brief continued to seek out an eclectic mixture of interesting feature articles, reflecting the diversity of interests and practice areas of our profession. Particular initiatives I hope will survive, include the Lawyer on the Street column and the WA case notes from members of the Society's Young Lawyers Committee. A current initiative of the Law Society is the adoption of the Diversity and Equality Charter of the Law Council of Australia. I am also aware that the Society's Council is considering the adoption of an Ethics Charter, similar to those already adopted in New South Wales and Victoria. Often, such initiatives face the criticism that they represent yet more red tape, symptomatic of a "tick the box" mentality. Nothing could be further from the truth. Red tape and blinkered vision undoubtedly exist. But these phenomena should not detract from the intrinsic importance, as a change mechanism, of stating and subscribing to our core

04 | Brief November 2015

values as a profession. Like society in general, the membership of the legal profession today is more diverse than ever before – and dare I say – more accepting of diversity, than it was even 20 or 30 years ago. Unfortunately, despite substantial progress, the need for the legal profession to take the lead in subscribing to the core values articulated in the Charter remains. The preamble to the Charter says: "The Australian legal profession is committed to promoting diversity, equality, respect and inclusion consistent with the principles … on which the profession is founded." The critical point to take from this language is that the core principles of the legal profession – justice, integrity, equity and the pursuit of excellence – are meaningless, unless we practice what we preach in our own personal interactions with our professional colleagues and people in general. This applies as much to instances of bullying a junior lawyer, as it does to making disparaging remarks about someone's sexuality, religion, ethnicity or disability. Regrettably, these or similar habits still surface, reflecting a degree of prejudice having no relationship to the victim's innate ability or merit. To quote the Charter, our job is to "create and foster equality … for all individuals to realise their maximum potential regardless of difference". All of us should set aside a few minutes to read the Charter and engage in some self-reflection on its substance. This month's issue features the first part of an article by Professor Nolan Sharkey, engagingly entitled Coming to Australia, on the complexities of the treatment of cross-border taxation – a topic that has received a good deal of publicity in the news media of late. It will be compulsory reading for those advising international investors and those contemplating residence in Australia. Marking the occasions of their appointment, we publish the welcome speeches of the two latest appointments to the Supreme

Court, their Honours Justices Tottle and Fiannaca. With the assistance of Abigail Davies, Matthew Howard has graciously updated his previous Law Society paper on the important topic of Ethical Considerations in Expert Evidence. Nathan Landis, also of Francis Burt Chambers, has this month given us a fresh insight into without prejudice negotiations, under the engaging title Without Prejudice Negotiation: Sometimes a pious but ineffective wish. To complete the trifecta of featured contributions this month from Francis Burt Chambers, we include Dr Peter MacMillan's article on the important evergreen topic on the rights of a beneficiary to challenge decisions of a trustee. Like the television offer of free steak knives, there is always more. Our regular Meet the Committee column this month features the Indigenous Legal Issues Committee. This month we have two book reviews. The first by Lisa McAnearny, of a book called Everything you need to know about the Referendum to Recognise Indigenous Australians. The second is by Jason McLaurin (also of Francis Burt Chambers) on Intellectual Property. Then we have other regular features including Lawyer on the Street, YLC Case Notes and Ahshiba Sultana's report on the 2015 Social Justice Opportunities Evening. I have said this before, but I will say it again. There is more than enough for everyone's taste in this issue. I extend my warmest thanks to all our contributors. I make my usual plea for new contributions. NOTES 1.

Ecclesiastes 3:1.

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


Latest Opportunities - November 2015 As 2015 draws to a close, activity in the Perth legal market remains steady, with many employers still looking to fill key positions before the end of the year, and many candidates looking to secure new positions now, for a New Year start. We currently have a number of exceptional job opportunities and quality legal candidates registered. Contact us today for a confidential discussion about your career options, or for assistance with your strategic legal staffing requirements. Please find below a selection of our latest job opportunities for November.

Property Lawyer

Senior Associate/Special Counsel

2-5 years PAE

Workplace Relations

This prestigious firm is regularly recognised as one of Australia’s top legal employers. Led by expert partners, the firm’s well established Real Estate team is expanding and seeks a Property specialist to provide advice and support across every aspect of major real estate deals, property development and infrastructure projects throughout Perth and regional WA.

This successful and growing firm has an exciting new requirement for a senior Workplace Relations lawyer, with proven expertise in health & safety matters, to support the growth and development of their specialist team.

Acting for a diverse range of global and Australian clients, you’ll be responsible for due diligence work, the preparation of advices and review and drafting of commercial agreements and contracts. There will be regular mentoring from talented partners and senior lawyers and a commitment to your professional development.

Working with a leading partner, you will have immediate responsibility for supporting the firms existing client base, which includes established companies in construction, resources and other key industry sectors, but will also play a crucial role in the growth and development of the practice. You will be directly responsible for advising clients on OH&S and general employment issues, strategy, will manage safety incidents, fatality issues and all dispute resolution and advocacy.

You’ll require 2-3 years PAE with a specialist team or firm, strong technical expertise in property law and the ability to operate with minimal supervision. Ideal career move for an ambitious and motivated practitioner, looking to seriously progress their career with this growing team.

Outstanding communication skills and the ability to build long term client relationships will be key, as you will regularly participate in client training, education, networking and business development activities. You’ll require at least 5 years PAE in workplace relations, and demonstrated safety expertise. Top opportunities for long term career progression.

Energy & Resources Lawyer

Commercial Litigator

3-5 years PAE

4-5 years PAE

With high quality clients on board and a substantial amount of incoming project work, this prominent top tier immediately requires a high-calibre Solicitor to play a key role on major resources projects.

Currently experiencing an exciting new growth phase, this leading Perth based firm requires a talented mid level Litigator to join their successful Dispute Resolution practice.

Acting for a range of local and international resources, construction, government and financial services clients, your primary role will be to provide support and assistance on major mineral, energy, construction or infrastructure projects. You’ll provide advice on the Mining Act, commercial agreements, native title and aboriginal heritage issues and will draft, review and negotiate commercial agreements, contracts and project documents. You’ll require 3 years PAE with a top tier resources or major projects practice, a demonstrated working knowledge of the Mining Act and superior commercial drafting and negotiation skills. Fantastic opportunity to do a diverse range of top tier work, take a lead role in the development and expansion of this practice and progress your career.

Acting for medium to large public companies, company directors and executives, you will be immediately engaged on complex corporate and commercial litigation matters in the superior courts. Working with down to earth partners, who will contribute to your development, there will also be regular collaboration with colleagues on larger disputes and opportunity to manage your own tasks or run some smaller matters autonomously. You will be involved in the active management of litigation strategy, negotiation processes and overall building of client relationships. At least 4 years PAE, a strong academic record and background working on complex commercial disputes with a top tier, or leading second tier practice will ensure your success. With a friendly, social culture, competitive remuneration and bonus structure and consistent workflow, this role is well worth considering.

Stacey Back Director p

m

e

www.

.au


meet a committee

The Law Society's Indigenous Legal Issues Committee

From left: Tammy Solonec; Nikki Forrest; Abbey Shillingford; Matthew Hansen; The Hon Michael Mischin MLC, Attorney General; Krista McMeeken; Former President Matthew Keogh; Laura Vincent; Micah Kickett; Lucinda Robinson; and Alain Musikanth, Senior Vice President of the Law Society.

The Indigenous Legal Issues Committee currently comprises three lawyers and three law students, including Tammy Solonec, Krista McMeeken, Nikki Forrest, Laura Vincent, Micah Kickett, and Lucinda Robinson. The Committee has recently opened membership to non-Indigenous Law Society members in order to increase its capacity given the current prominence of Indigenous legal issues. The Committee has joined with representatives from the Society's Human Rights and Equal Opportunity Committee, Criminal Law Committee and Access to Justice Committee to lead a strategic campaign within the Law Society in relation to justice reinvestment and incarceration rates. The Committee supported the finalisation of the Law Society's inaugural Reconciliation Action Plan (RAP) which was launched in July 2015, and will continue to consult with the RAP Working Group. The Law Society Mentoring Programme for Indigenous law students is currently in its fifth year. The Committee is working to develop its relationships with each of the universities in order to ensure the success of this valuable programme.

06 | Brief November 2015

The Mentoring Programme includes Aboriginal and Torres Strait Islander students in any year of their law degree. The Committee continues to work closely with the Francis Burt Legal Education Programme (FBLEP) to provide input and advice in relation to programmes and initiatives being developed by the FBLEP. This includes the Know Your Rights project which involves the development of a smartphone friendly social media resource for Aboriginal young people to raise awareness of their legal rights and responsibilities. The Committee continues to develop relationships with key stakeholders. The Executive and representatives of the Committee have met with the Attorney General to discuss issues relating to the high incarceration rates of Indigenous peoples, mandatory sentencing and justice reinvestment; and the leader of the Opposition, Mark McGowan, to discuss these issues. The Committee has met with Ken Wyatt AM MP to discuss constitutional recognition and Indigenous peoples and the law more broadly. The Committee has also maintained its commitment to communicating on issues of importance to Aboriginal and Torres Strait Islander peoples by providing

a submission to the Law Council of Australia in relation to the proposed amendments to the Racial Discrimination Act; providing a submission to the Joint Select Committee on Aboriginal Constitutional Recognition at the public hearing on the constitutional recognition of Indigenous peoples; providing a submission to the United Nations Universal Periodic Review Shadow Report 2015 Indigenous Specific Responses; and consulting on Senate Inquiry – Access to Legal Assistance Services, the submission regarding the Aboriginal Heritage Amendment Bill 2014 and the review of the Native Title Act 1993. The Committee welcomes members with an interest in Indigenous affairs to submit an expression of interest to join and have the opportunity to contribute to its important work. The committee featured in this article is one of more than 40 active committees of the Society whose work covers a range of substantive law and generic areas of interest. For further information regarding the Society's committees please visit lawsocietywa.asn.au/committees


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Nominations for 2016 Council Elected Unopposed Elizabeth Needham President (one year term)

Brooke Sojan Country Member (two year term)

President from mid August 2015, Senior Vice President January to August 2015, Vice President in 2014, Treasurer in 2013, on Council since 2012 and a member since 1994. I seek election to continue to give back to the profession that I value and am committed to ensuring the voice of the profession is heard.

I currently work for Legal Aid in the Pilbara office and was admitted to practice in December 2013. I am a member of the Young Lawyers Committee and the County Practitioners Committee. I practice predominantly criminal law, as well as some family law.

Over the years I have served on many subcommittees and various ad hoc committees, and have been actively involved in writing submissions, reviewing policies of the Society and in the creation and supporting of programmes of the Society such as the Mentoring scheme.

Working within the remote communities of the Pilbara region I experience firsthand some of the challenges facing our socially and economically disadvantaged population including our Indigenous population such as access to justice and facilities. I feel I would be able to make a valuable contribution to Council given my unique perspective as a young female country lawyer.

Positions to be Elected Vice Presidents - Two to be elected for a one year term Hayley Cormann

Alain Musikanth

Nick van Hattem

I am a commercial litigation lawyer at Clayton Utz, where I have practised for nearly a decade. I have served 4 consecutive years on Council, with the last 12 moths on Executive, initially as Treasurer and now a Vice President.

I am a barrister practising from Francis Burt Chambers in commercial litigation with more than 20 years in the legal profession, and currently Senior Vice President of the Law Society and Convenor of the Society’s Professional Standards Scheme Committee.

I seek election as Vice President to help make the Society more collegiate, compassionate and convivial.

I seek re-election to Council as an Executive member as I believe I have the background and experience to continue to make a positive contribution to our profession through Council, and I remain focussed on, among other goals, building support and exploring strategies to retain talented senior women in our profession.

Having served on Council and various Society committees over the years, I hope to continue contributing both to the enhancement of the Society’s reputation and to its capacity to serve as an effective advocate for the benefit of all members.

Collegiality – Let’s collaborate more with groups like CLA, FLPA, CLCA (and others). Compassion – Let’s do more to support access to Justice and better reflect the generosity of members. I’d seek to discuss whether proceeds from the Society’s education programme could go to the community legal sector. Conviviality – I’ve got the enthusiasm to bring back some fun activities (like the footy match beloved by Hylton Quail). I’ve previously served on Society Committees, and four years on Council. I am the Convenor of the Piddington Society.

Ordinary Members - Six to be elected for a two year term Ordinary Member

Ordinary Member

Ordinary Member

Marie Botsis

Jocelyne Boujos

John Butler

This year, I will complete my first term on Council and am currently serving as Treasurer. I am also a member of the Law Society's Property Law Committee and was a former chair of the Young Lawyers Committee. I have experience with other not for profit boards, where I have developed skills in governance and risk management, along with being a member of the Australian Institute of Company Directors.

I am a principal of Sceales & Company and have practised in commercial and taxation law for over 25 years advising various clients including Indigenous charitable trusts and the Law Society. I have had a long involvement with professional education including lecturing in Master of Tax and Articles Training programmes. I am on the taxation committees of the Law Council and the Law Society, and, am a trustee of the Graduate Women Education Trust.

I have practised as a lawyer for well over 40 years. My wide experience includes, employed government lawyer, employed lawyer in small country practice, partner in national firm, senior partner in suburban firm, currently principal of my own firm.

I will bring to the Council a diversity of experience which will enable me to make a valuable contribution to the management of the Law Society.

I am familiar with the challenges facing lawyers and believe that I am able to make a substantial contribution to the Society at this stage in my career.

Ordinary Member

Ordinary Member

Ordinary Member

Ray Christensen

David Cox

Cinzia Donald

I have worked in the legal industry for over 14 years, working up from junior clerk to office manager of a boutique firm while studying my law degree, and was ultimately admitted in 2012. Accordingly, I bring a unique perspective to the position of Junior Council Member.

As a partner of Jackson McDonald, Chair of the Law Reform Commission of Western Australia and with a range of other leadership roles within the community, I am well placed to understand the diverse needs of the profession and the challenges that the profession is facing in these uncertain and changing times.

I am a senior litigator at Bennett + Co and practise in the superior Courts of Western Australia in various civil litigation disputes.

My key aims as a Councillor going forward are to better serve mid-career lawyers and to further develop the Law Society’s initiatives concerning professional excellence, mental health and gender equality.

I have just completed my first one-year term as Junior Council Member. If re-elected, I will continue to assist the Law Society to offer CPD seminars of relevance to young practitioners and to uphold the high standards expected of young practitioners of our profession.

08 | Brief November 2015

I hope to use this insight to ensure that the Society provides a strong voice for the profession as a whole but still remains relevant to the needs of its individual members.

Over the last 40 years, I have practised predominantly in Family Law, Wills & Estates, Claims on Estates and Business & Estate Planning.

I am nominating for the role of Council member as I am keen to represent and advance the interests of all Law Society members on key issues we are facing in the areas of law reform, access to justice and the rule of law. I also have a particular interest in encouraging the advancement of women in the legal profession and the role women lawyers play in promoting interests of women in the wider Western Australian community.


Ordinary Member

Ordinary Member

Ordinary Member

Nathan Ebbs

Adam Ebell

Joelle Hervic

Having had the opportunity in the last two years to be a member of the Law Society Council and of the Professional Indemnity Insurance Management and Professional Standards Scheme Committees, I look forward to continuing to work with the Law Society Council to build and strengthen the legal profession in Western Australia in 2016/17.

I have been an active member of Council for four years. My most recent involvement includes serving as one of the inaugural directors of Law Access Ltd and on the Education Committee.

I am currently a senior lawyer at the Department of Transport and am in a position to make a substantial contribution to the Council. I practised in the US for a number of years including in top tier law firms and at the World Bank.

Ordinary Member

Ordinary Member

Ordinary Member

Rebecca Lee

Aaron Mcdonald

Denis McLeod

This former Editor of Brief, after being on the committee for 13 years and as Editor for 3, would like to take the next step onto Council.

If elected as Councillor I would focus on members’ needs and promoting access to justice.

I am acutely conscious of the professional, business and personal pressures faced by Society members, and that their interests need to be protected by a strong and active professional association.

Rebecca Lee has been a barrister at Francis Burt Chambers for 12 years, practicing in commercial litigation, construction law and resolution of taxation disputes. She has a Bachelor of Science (pure mathematics), as well as her Bachelor and Master of Laws from The University of Western Australia. Ms Lee was admitted to practice in February 1994. She has also been the President of Australian Women Lawyers and the Women Lawyers of WA.

I hope to continue my advocacy on behalf of government lawyers and the junior profession as an Ordinary Member. As a State Prosecutor, I am passionate about criminal law and access to justice.

The Society does important work promoting access to justice, but more can be done to put less fortunate on a better footing. This can be achieved by making the Productivity Commission’s Access to Justice Report recommendations a reality. I have contributed to the Society since 2006. I have written for Brief and served on the Young Lawyers Committee. I presently serve on the Access to Justice and Courts Committees. I run my own small practice and have a strong commitment to pro bono work.

I have substantial legal experience in Australia which includes establishing and operating my own law firm. I have an LL.B from the University of NSW, a JD and LL.M, graduating with Dean’s List Honors, Magna Cum Laude and Order of the Coif.

As a Council member, I would continue to emphasise the Society’s role as advocate and protector of its members’ interests, and as the voice of the legal profession in WA. I have been an active member of the Law Society for 40+ years, being at all times a member or convenor of one or more Committees, and have been a Council member since 2006.

Junior Members - Three to be elected for a one year term Ordinary Member

Junior Member

Junior Member

Sue Thomson

Saran Bavich

Alex Biddulph

I have worked in sole practice for 10 years and then in medium firms here in Perth since 2008. I am accredited as a Family Law Specialist (since 2005) and as a Nationally Accredited Mediator (since 2014).

After four years at Gadens I recently moved to Minter Ellison as a dispute resolution lawyer. I have enjoyed developing my technical and advocacy skills and hope to assist in developing those skill sets within other junior lawyers, under the guide of the Law Society.

In my short time in practice I have spent time at both an international firm and as an in-house lawyer, mainly practising in the front end banking space.

Early in my career I was an Honorary Lecturer at Monash University teaching legal professional practice, and am looking now to expand my involvement in law to address issues of current community concerns like domestic violence and how these impact upon the delivery of legal services.

I have been a committee member of IWIRC for two years, which is extremely rewarding and through which I have developed great friendships, interpersonal and networking skills, which I can bring to the Society.

Junior Member

Junior Member

Junior Member

Ray Christensen

Sophie Ecker

Jodie Moffat

I have worked in the legal industry for over 14 years, working up from junior clerk to office manager of a boutique firm while studying my law degree, and was ultimately admitted in 2012. Accordingly, I bring a unique perspective to the position of Junior Council Member.

Sophie was admitted to practice on 6 October 2011 and practices in the area of personal injury law. She enjoys working in the legal community and contributing to ever-improving our society.

I entered the study and practice of law after working in diverse professions, travelling extensively, marrying and having children.

I have just completed my first one-year term as Junior Council Member. If re-elected, I will continue to assist the Law Society to offer CPD seminars of relevance to young practitioners and to uphold the high standards expected of young practitioners of our profession.

I am passionate about mental health and wellness and through the Society hope to make a positive contribution in this area.

Sophie is enthusiastic and extremely organised and will be a fair and representative member of the 2016 Council. Sophie sees being a part of the 2016 Council as a way she can give to the WA community she loves so much.

I am currently the Deputy Convenor of the Young Lawyers Committee and I am passionate about tackling the issues of diversity and mental health in the legal workplace. I wish to run for Council to use my experience and passion to drive a discussion and promote ideas for wellbeing in the legal community.

My experience to date in life and law has developed in me the capacity to endure and thrive, skills which I would bring to Council, along with my evolving experience as a mature aged junior solicitor.

Junior Member Alex Noonan As a recent graduate I understand the challenges that face junior practitioners when starting legal practice.

Have your say

During my time with the YLC I have assisted in initiatives to support junior practitioners in the areas of professional development and career evolution, including volunteering at the Law Society’s Advocacy Weekend, and promoting YLC CPD events.

Ballot papers will be electronically transmitted by CorpVote Independent Voting Services to members eligible to vote on Tuesday, 10 November 2015. The ballot will close on the election date of 24 November 2015.

If elected as a Junior Member of the Law Society Council I will strive to make the Law Society even more engaging to junior practitioners, provide a fresh perspective to issues facing the legal community, and collaborate with senior practitioners to give junior practitioners a strong voice.

09


Coming to Australia: Cross border and Australian Income Tax Complexities with a focus on dual residence and DTAs and those from China, Singapore and Hong Kong - Part 1 Professor Nolan Sharkey FCA

INTRODUCTION

Barrister, Francis Burt Chambers

The purpose of this article is to illustrate the interaction of tax rules in different jurisdictions when a person who generally lives overseas comes to work in Australia. The area is complex and increasingly more relevant in Australia with the larger number of people moving to and from Australia for work and personal reasons.

Winthrop Professor of Law, UWA Professorial Fellow in Tax, Atax, UNSW W Address presented at the 48th Western Australia State Convention 13 – 14 August 2015 Pullman Resort, Bunker Bay3 – 14 August 2015 Pullman Resort, Bunker Bay

10 | Brief November 2015

The article will be specifically focussed on people from mainland China, Hong Kong and Singapore. These jurisdictions have been selected because of their significant interpersonal interactions with Australia as well as the differences in their tax regimes that allow for greater technical analysis.

Hong Kong and Singapore present tax regimes with similar common law roots to Australia but that are notable for being low rate and having narrow tax bases. The 'low tax' side of these jurisdictions means that people from them will be acutely concerned about the increase in taxation working in Australia may entail. The most significant contrast between the two jurisdictions is that Singapore and Australia have a double tax agreement (DTA) whereas Hong Kong does not. This distinction makes the consideration of both countries valuable. China presents a jurisdiction with a number of challenges when discussing international tax issues. Most notably the


scope of its laws remains uncertain due to a lack of rule of law and the vagueness of its statutes in many areas. In addition it is a country where administrative practice may depart significantly from the law. At the same time, China conceptually presents a high tax and a sophisticated tax law with a worldwide jurisdiction. It also has an extensive range of DTAs, including with all the jurisdictions considered in this article. A final notable aspect of the foreign states considered in this article is that many people will be involved in all of them as well as Australia. This can create very complex income tax questions. THE RELEVANT AREAS OF LAW The core areas of law that are relevant to the type of analysis conducted in this article are not too many but become complex in their detail and interactions. They are: 1. The individual residence rules of the states being considered as well as Australia. 2. Any specialist residence concessions provided at law in each country. 3. The double tax agreement allocation of taxing rights provisions for service income, passive income and business income in the relevant DTAs. 4. The DTA dual residence tie-breaker rules. 5. The jurisdictional claim for residents in each country. 6. The corporate residence rule in each country. It can be seen that when the relevant areas of law in the different countries are considered, there are a very large number of possibilities in relation to different scenarios and dealing with international tax matters becomes a sophisticated task. The illustration This article will focus on an individual who goes to Australia from each of the relevant jurisdictions. They will be assumed to be deriving employment income and to be employed by a company formed in their 'home country'. I will use the term 'home country' to refer to their original country even though in some of the analysis, they will now have made a new home in Australia. The scenarios will consider both when the employer company is an independent employer and when it is the business entity of the individual under consideration. The individual will also be assumed to have some passive income (rent) from their home country and

from a non-specified low tax (or no tax) jurisdiction. It follows from the above that the types of income under consideration can be summarised as: 1. Australian wage income; 2. Home country wage income; 3. Home country passive income (assumed to be rent); 4. Low tax jurisdiction passive income; and 5. Company business profits sourced in the home county and sourced in the low tax jurisdiction. The Australian domestic law The Australian domestic law traditionally turns on the two critical concepts of residence and source. Therefore the big questions in these types of scenario that would need to be answered are whether the person is a tax resident of Australia and, if not, is the relevant income sourced in Australia. This picture was changed with the introduction of the temporary residence rules in 2006.1 It is also complicated by DTAs and dual residence. Australia's individual residence rule has four prongs. The 'ordinarily resides' test, the half year of income test, the domicile test and the Commonwealth superannuation test.2 Of these, the first two are the most relevant to people coming to Australia from their home country. The other two tests are not likely to apply as these people are not likely to be domiciled in Australia and they are not likely to be involved with the relevant commonwealth superannuation fund. The latter being because they are not likely to be part of the Australian public service. The half year of income test has three elements. First the person must be in Australia for half the income year and second, if they are, they will not be residents if their usual place of abode is outside Australia and (third) they do not intend to take up residence. It follows that the test will simply not apply to short term visitors who are not in Australia for six months of the income year. For those who are, the focus of the analysis will be on identifying a usual place of abode. In addition, anyone who intends to take up residence will be resident under this test even if they have a usual place of abode outside Australia. Practically determining whether a person intends to take up residence may be difficult in certain circumstances. However, if a person has made assertions to others that they intend to stay in Australia and they are on a visa that is designed to open the door to permanent residence, it is likely that they

will be shown to be intending to take up residence. In these cases, the usual abode analysis will not be necessary. If a person is not intending to take up residence and has been in Australia for more than six months, it will need to be assessed whether they have a usual place of abode outside Australia. Decisions around this idea have been unclear. Arguably, the question is simply one of whether they lived somewhere before they came to Australia. This would cover most people other than those who have been engaged in extended international travel prior to coming to Australia. It is debatable whether they need to be actually maintaining a house or apartment outside Australia while in Australia. However, this would certainly make a stronger case for a usual place of abode in their home country. A core practical issue around the situations where a person would need to consider this point is that they would be highly likely to be found to be ordinarily residing in Australia by the time they fall into this situation. The Australian Taxation Office has used six months as a litmus test for whether a person ordinarily resides in Australia.3 Thus, a person debating the issue of whether they have a usual abode outside Australia may well ordinarily reside in Australia. That said, being ordinarily resident is not a simple question of time. It is a common sense issue of whether a person is actually living in Australia as opposed to touring or visiting Australia. It follows that depending on life style and connections, a person may be resident in Australia in a period of less than six months. In addition they may not be resident even though they are in Australia for more than six months. For example, if they are backpacking around the country, the latter is likely to be the case. From the above, it can be seen that a person who is away from their home country and in Australia for a period of six months or more has a good chance of being a resident under the ordinarily resides test. If they are not, they will be caught by the half year of income test unless they can show a usual place of abode outside of Australia. Ultimately, the vast majority of people who come to work in Australia for periods of around six months or more are likely to be resident under the domestic law. This is particularly the case when one is considering people who have come to work in Australia in a stable location. Within the context of Australia's wide ranging residence rules, the temporary residence rules stand out as making a significant difference to these individuals. The temporary residence rules are contained in subdivision 768-R of the 11


Income Tax Assessment Act (ITAA) 1997 and came into effect on 1 July 2006. They provide that a temporary resident is exempted from taxation4 on nonAustralian-source income5 other than particular categories. In addition, such individuals are also exempt from taxation on capital gains that foreign residents would be exempt from.6 The foreignsource income that is not exempt from tax for temporary residents is effectively employment remuneration.7 In addition, temporary residents are effectively excluded from liability under Australia's controlled foreign company (CFC) and non-resident trust regimes.8 Finally, payments of interest made by these individuals to non-residents are treated as if the payments were made by a nonresident.9 From the foregoing, it can be concluded that a temporary resident is effectively taxed in the same way as a nonresident except that they are taxed on their worldwide employment income. Consequently, they are exempted from tax on their foreign-source passive and business income. A temporary resident is any person who holds a temporary visa other than some particular categories of person, including those on types of humanitarian visas and those with a (permanent) resident spouse.10 It can be seen that many of the people who come to Australia simply from their home countries for work and business will be temporary residents for tax purposes. This is because they will be temporary residents for visa purposes and this, ultimately, is the decisive point. Tax temporary residence continues as long as the person does not obtain a permanent visa which may be a considerable period of time. Other than migrants, it would be expected that most people who have come to Australia would be temporary residents. In addition, many of those who intend to be migrants (or are effectively migrants) will also be temporary residents during the interim period while they remain on temporary visas. The introduction of the temporary residence regime in 2006, marked a fundamental change to taxation of people who have come to work in Australia. To many, the question of residence is not particularly relevant as they are not taxed on their foreign source income as temporary residents. However, residence remains an important issue in relation to the more complex issue that we shall turn to later. The Chinese law The focus of this article is on people coming to Australia from their home country. It follows that when a person 12 | Brief November 2015

comes from China, the relevant law is that which may tax them or impact their taxation when they are in Australia. Under China's Individual Income Tax Law (IIT), resident individuals are taxed on their worldwide income. Chinese tax residents are also entitled to the benefit of China's DTA with Australia. It follows that the primary areas of concern with China's income tax in this analysis are when an individual will be a resident of China and when they might stop being a resident through spending time in Australia. The first article of the IIT puts forward the basic position at law: Article 1 Individual income tax shall be levied in accordance with the provisions of this Law by individuals who have domicile in China, or though without domicile but have resided for one year or more in China on their income derived from sources within and outside China. Individuals who are neither domiciled nor resident in China, or who are not domiciled and reside for less than one year in China, shall pay individual income tax in accordance with this Law on income derived from sources within China. Most English language commentary on the law focusses on people going to China and therefore not on the 'domicile' aspect of the above article. Here the focus must be on the domicile aspect. Thus, it can be seen that Chinese individuals in Australia will still be taxable on their worldwide income in China if they are domiciled in China. Interpreting 'domicile' for these purposes needs to be done with caution. First, the word 'domicile' is merely a translation of the Chinese term and may not have the implications it has in English. The official Chinese term is ' '. While this may serve as a translation of 'domicile', it also simply means 'reside', 'inhabit' or 'dwelling place'. So it may simply mean 'resides' as much as it means 'domicile'. This distinction may often be of little importance but in tax law, it can be critical. For example, in Australian tax law, a person may become resident because they are domiciled in Australia. This shows that it is a distinct concept in Australia. It would be unsafe to grant the Chinese term such refined distinctions. The second reason for caution in Chinese interpretation is that administrative interpretation may present a different conception of the rule to be applied in China. The starting point for such an investigation is the regulations issued by the State Council. Article 2 of the implementing regulation to the IIT provides the following information:

For the purpose of the First Paragraph of Article 1 of the Tax Law, the term "individuals who have domicile in China" means individuals who by reason of their permanent registered address, family or economic interests, habitually reside in China. This information, while minimal, suggests that the meaning, in the view of the State Council at least, of ' ' is closer to the common law concept of 'ordinarily resides' than to the specific conception of 'domicile' used in common law. However, the information that is presented in this regulation creates new areas of confusion in relation to 'habitual residing' which is contrasted with 'residing' in common law. Another Chinese announcement11 that may be relevant is Guo Shui Fa [2009] No 121. This stated that for a Chinese citizen to be considered an 'Overseas Chinese', they will need to have foreign resident status in a foreign country and have resided there for two years. Alternatively, they will be able to claim this status if they have resided overseas for five years. The notice was not aimed at the issue of domicile for purposes of Article 1 but it may provide guidance on the thinking of the authorities in China. What is clear from the Chinese law is that there is ample scope for persons in Australia who have come from China to remain within the Chinese tax jurisdiction and taxable on their worldwide income. Depending on the interpretation that is taken of 'domicile', they may remain in the Chinese net for a very long time as long as they still have an intention to live in China. If Guo Shui Fa [2009] No 121 is taken as guidance, they would stay within the Chinese jurisdiction for 5 years unless they have taken up residence in Australia. Residence in this sense must sensibly mean permanent residence. Clearly as long as they have a home and economic and family connections in China, they will fall within the scope of the implementing regulation. A final issue in relation to this is that many Chinese people working overseas may not be declaring their foreign source income in China and may not be aware that they fall within the law. This is primarily the result of the poor tax administration in China and poor public awareness of tax law. The interesting aspect of this is whether a person's status as a resident or not under Chinese law is impacted by how they are dealing with their tax affairs. It is submitted that it is not. Rather, it is a question of fact whether they are residents or not. Singapore law Singapore's taxation of resident


individuals has been so curtailed that it in many ways runs a territorial tax system. Historically, Singapore applied a remittance basis of taxation in relation to non-Singapore-source income. However, while the remittance rule remains in Singapore's tax law, it has been effectively curtailed for individuals. Since 2004, the Singapore Income Tax Act (ITA) has ensured that all foreignsource income of individuals remitted to Singapore is exempt from tax as long as the exemption is beneficial to the taxpayer.12 If it is not beneficial, a taxpayer may, instead, have the amount assessed and claim a foreign tax credit. Specified income, i.e. branch profits, dividends and service income, derived by individuals through partnerships is also largely exempt subject to particular conditions.13

DTAs has resulted in the development of a residence concept for these purposes. However, Hong Kong has no DTA with Australia. Therefore people who originate in Hong Kong who are working in Australia have no greater tax connection to Hong Kong than people who do not originate in Hong Kong. They will simply be taxed on any income that falls within Hong Kong's narrow tax base and this will be largely income that has a Hong Kong source.

It is apparent that the issue of whether or not a person is actually resident for Singapore tax purposes is of minimal relevance to most individuals. However, Singapore retains a residence test for individuals in its tax law. The ITA defines a resident individual in two ways.14 The first is through an 'ordinary residence' concept similar to that used in Australia. The other is that a person who is in Singapore for more than half the relevant year is a resident.

2. the dependent personal services income article;

DOUBLE TAX AGREEMENTS The two relevant DTAs for this analysis are the China – Australia DTA and the Singapore Australia DTA. The relevant articles for our purposes are: 1. the dual resident tie breaker article;

3. the business profits article; and 4. the rent (income from property) article. The relevant part of the tie breaker article (Article 4(3)) in the China DTA is:

In the context of people with a Singapore home country who are in Australia, it is therefore possible that they will remain residents of Singapore if they can be said to reside there ordinarily. This implication is most relevant in relation to the Singapore – Australia DTA. Under common law, a person who maintains a home in a country will be highly likely to reside in that country. Hong Kong Hong Kong differs from Singapore in that it is more formally a territorial tax regime. It also traditionally had few DTAs although this is changing and the emergence of its

3. Where by reason of the preceding provisions of this Article a person, being an individual, is a resident of both Contracting States, then the status of the person shall be determined in accordance with the following rules: (a) the person shall be deemed to be a resident solely of the Contracting State in which a permanent home is available to the person; (b) if a permanent home is available to the person in both Contracting States, or in neither of them, the person shall be deemed to be a resident solely

of the Contracting State with which the person's economic and personal relations are the closer. 4. Where by reason of the provisions of paragraph (1) a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident solely of the Contracting State in which its place of effective management or head office is situated. However, where such a person has its place of effective management in a Contracting State

and its head office in the other Contracting State, the person shall be deemed to be a resident solely of that other State.

The important part of the individual tiebreaker for this analysis is that it is based upon a permanent home in the first instance. Such a home is simply available accommodation. For non-individuals, the decisive test is the place of effective management. The relevant part of the dependent personal services article is as follows: 1. ‌ salaries, wages and other similar remuneration derived by an individual who is a resident of a Contracting State in respect of an employment shall be taxable only in that Contracting State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived from that exercise may be taxed in that other state. 2. Notwithstanding the provisions of paragraph (1), remuneration derived by a resident of a Contracting State in respect

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of an employment exercised in the other Contracting State shall be taxable only in the firstmentioned State if: (a) the recipient is present in the other Contracting State for a period or periods not exceeding in the aggregate 183 days in any consecutive period of 12 months; (b) the remuneration is paid by, or on behalf of, an employer who is not a resident of that other state; and (c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in that other state. What is important is that under this article, the non-resident state can only tax the employment income if it is: 1. exercised in the source state; and 2. either the person is present for more than 183 days or the employment is relates to a source state employer or PE. The relevant part of the business profits

article(7(1)) is as follows: 1. The profits of an enterprise of a Contracting State shall be taxable only in that state unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other state but only so much of them as is attributable to that permanent establishment.

to consider the situations in light of the China-Australia text provided above. NOTES 1.

Explored in detail below.

2.

S6(1) ITAA 1936 – definition of resident.

3.

TR 98/17.

4.

Strictly, the relevant excluded income is nonassessable, non-exempt income in the terminology of Australian taxation. It is not taxable in any way.

5.

Income Tax Assessment Act (ITAA) 1997, sec. 768-910.

6.

ibid., at secs. 768-915.

7.

ibid., at secs. 768-910(3). The reference to Division 86 covers personal service income derived through an entity that would generally be deemed to be the income of an individual.

8.

ibid., at secs. 768-960 and 768-970.

The core principle here is that business profits of a resident of one state can only be taxed in a third state if they are attributable to a PE therein.

9.

ibid., at secs. 768-980.

10.

ibid., at sec. 995-1, with the definition of temporary resident and its references.

11.

There is debate as to the status and scope of announcements in China.

12.

Income Tax Act, sec. 13(7A).

In terms of rent the relevant article is 6(1):

13.

ibid., at sec. 13(8).

14.

ibid., at sec. 2.

Income from real property may be taxed in the Contracting State in which the real property is situated.

Stay tuned for part two of this article to feature in an upcoming edition of Brief.

The article therefore limits source country taxation of rents to those that relate to real estate in the source country. The Singapore-Australia DTA is materially different from the China-Australia DTA but for the purposes of this analysis the provisions are close enough in both DTAs

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Welcome to the Honourable Justice Tottle Transcript of speech by the Honourable Justice Tottle Monday, 10 August 2015 The Supreme Court of Western Australia

Thank you, Chief Justice. Your Honours, ladies and gentlemen, family and friends, thank you for attending this sitting to mark my appointment to the Court. I am particularly honoured by the presence of the Chief Justice of the High Court of Australia and by the presence of Judges and retired Judges before whom I have had the pleasure of appearing over many years.

can determine one's career. Certainly, that has been true in my case. In April 1986, when I left London for Perth, I had little idea of what lay ahead. Would I suffer the fate experienced by many hapless English batsmen at the WACA? Would I be battered by bouncers and out for a duck and go home defeated, or would I be able to dig in and make a score?

My appointment follows the recent retirements from this Court of the Honourable John McKechnie QC and the Honourable Eric Heenan QC, and I am pleased that they are present today, and I wish to acknowledge their distinguished service to the Court over many years.

Unlike many English cricketers over the years, luck was on my side. I survived, and I had the good luck to work with the energetic, talented and enthusiastic lawyers who were the partners and staff of Robinson Cox. I could not have hoped for a better welcome to the profession than that which I received from all of my colleagues at Robinson Cox, nor for a more solid foundation to my career in this State.

Mr Donaldson, Mr Keogh and Mr Davies, I am most grateful for your very generous and flattering remarks. I have some idea of the sources of your information and perhaps I should be grateful also for what you have not said. The people, and in particular the legal profession, in Western Australia have been very good to me. This is an opportunity to acknowledge publicly the debts of gratitude that I owe to many. Of course, this is an impossible task, precisely the kind of task which in my former life as a solicitor I would have briefed counsel to undertake. I will start with those important people without whom I would not be here. They are the clients who entrusted their affairs to me and for whom it was my privilege to act over the past 29 years. I am touched by the presence of those clients, or now former clients, many of whom are firm friends, who have taken the time to attend this sitting, particularly those who have travelled from interstate. As has been noted, I have a particular interest in law and medicine and I am pleased that representatives of the Medical Board and representatives of one of the country's medical defence organisations are in Court, so that I may thank them personally for the opportunities that they have afforded to me to work in this challenging area. I turn now to the profession. Like it or not, sometimes luck rather than planning 16 | Brief November 2015

The strong bonds I formed in my early days in practice in Western Australia have endured to this day. I spent a very happy nine years at the firm and was pleased to be able to participate in a minor way in its transition into the national firm Clayton Utz. I acknowledge and thank my former Robinson Cox and Clayton Utz colleagues. Over the last 20 years I have had the privilege and pleasure of working with many excellent people. I say a heartfelt thanks to all of those with whom I have worked. I include not just my partners and the lawyers but each and every secretary, outside clerk, receptionist, articled clerk, vacation clerk and librarian. The fact that I cannot mention you all by name does not diminish my deep sense of gratitude to you for your support and friendship. There are four people whose contribution to my career has been such that I wish to mention them by name. The first is Justice Neil McKerracher of the Federal Court. His Honour was one of my supervising partners when I first joined Robinson Cox. I worked closely with him at the firm, and that relationship continued when he joined the Bar. His Honour's energy and appetite for hard work are legendary. Although the most industrious person I know, he has always

given his time freely to me to talk through difficult issues. As I have contemplated my appointment to the Court, he has provided much insightful guidance as to what lies ahead. The second is Michelle Kershaw. In 1995 Michelle made the brave decision to leave the security of Clayton Utz and to join me when I set up the practice in my own name. Michelle's friendship and advice were invaluable. I am delighted that our friendship has stood the test of time. The third is Stephen Penrose. We were partners for 18 years and no-one could have wished for a more steadfast partner. Among the many things I will miss is his ability to analyse complex legal problems by analogy to the tale of the Little Red Hen. The fourth is Yin Fang, the most indefatigably cheerful lawyer I have known. As partners, we worked on many cases together and, as counsel, I was the beneficiary of Yin's disciplined and careful approach to preparation. Yin's good humour and friendship made the tough times bearable and the good times great. I have enjoyed the support and friendship of many members of the profession, for which I will have lasting gratitude. I have been overwhelmed by the congratulations and good wishes I have received. I have one particular reflection on practice in this State which I would like to share. It echoes some of the observations made by his Honour, the Chief Justice. The profession is fortunate to have an independent Bar which grows stronger and is a vital resource. There is another important respect in which the profession here is fortunate - namely, its long tradition of solicitor advocates appearing in the Courts. For me, it was one of the attractions of practising as a solicitor in this jurisdiction. The seemingly inexorable move towards increased specialisation at an early stage in young lawyers' careers threatens this tradition. The Law Society is to be commended on the excellent advocacy training programmes it offers. I encourage young solicitors to take up


these and other avenues for advocacy training and to seek out opportunities to appear in Court. In making these observations my aim is not to encourage work away from the Bar but to encourage junior lawyers to develop their forensic and analytical

from England. I am delighted that my sister, Anne, is here and that she will be able to provide a first-hand account of this sitting. Words cannot adequately express my thanks to my parents for the love and support they have provided to enable me to get to this point in my

"I could not have hoped for a better welcome to the profession than that which I received from all of my colleagues at Robinson Cox, nor for a more solid foundation to my career in this State." skills by appearance in suitable cases. Solicitors with advocacy experience will complement a strong Bar. Their instructions will reflect their enhanced skills. I turn now to my family. Achieving a balance between professional and family life is not easy as a lawyer. Try as we do, it is hard to avoid working long hours. It is a source of great joy to me that I can share this occasion with my children, Simon, Felicity, Sebastian, and Simon's wife, Kate. I am very proud of each of you and all that you have achieved. My parents, Peggy and John, have been unable to make the journey

career. I hope that the pride which I know they feel in this appointment will be some small recompense for that love and support. To my wife, Eibhlin, I will say only this: Eibhlin, your love has sustained me and you light up my life every day. I look forward to sharing this next stage of my life with you. I have been made very welcome by my new colleagues on the Court. Your Honours, I look forward to working alongside you as a member of the Court. I doubt whether there has been a day in my career when I have not learned

something new about the law or had a new insight into recurring problems. I am sure that this learning process will continue and that the learning curve will be steep. I am greatly honoured by my appointment to the Court. I hope that by diligence and hard work I will justify the confidence that the State of Western Australia has placed in me. Thank you.

17


Ethical Considerations in Expert Evidence Matthew Howard SC and Abigail Davies1 Barristers, Francis Burt Chambers

In modern civil litigation with ... detailed expert testimony and witness statements, where evidence in chief is marshalled outside the courtroom, the integrity of the litigation process depends to a great degree upon lawyers adhering to proper standards ... The rights of parties depend upon lawyers on both sides performing their duties to the court assiduously2. 1. This paper is organised as follows: 1.1 what is expert evidence? 1.2 expert evidence under the Evidence Act 1995 (Cth) (Commonwealth Act) and in the 18 | Brief November 2015

Federal Court; 1.3 expert evidence under the Evidence Act 1906 (WA) (State Act) and the Supreme Court; and 1.4 the proper role of lawyers with expert evidence. WHAT IS EXPERT EVIDENCE? 2. Expert evidence is admissible evidence given by an expert. Admissible evidence given by an expert is a type of opinion evidence. 3. In Western Australia the circumstances in which expert

evidence may be called depends upon the particular Court or Tribunal. For example: 3.1 in the Federal Court the Commonwealth Act applies; 3.2 in the Supreme Court the State Act, in combination with the common law, applies; and 3.3 the State Administrative Tribunal is not bound by the rules of evidence (nor the State Act); instead the Tribunal is to act according to equity, good conscience and the substantial


merits of the case without regard to technicalities and legal forms3. THE COMMONWEALTH ACT AND THE FEDERAL COURT 4. If an opinion is relevant, that is, it could rationally affect the assessment of the probability of the existence of a fact in issue4, then s76(1) of the Commonwealth Act prohibits the admission of an opinion to prove the existence of a fact about the existence of which the opinion was expressed - unless it falls within one of the exceptions in Part 3.3 of the Commonwealth Act. 5. Two examples of opinions that are not admissible unless an exception applies are given in Part 3.3: 5.1 where a plaintiff sues her doctor for negligent performance of a surgical operation, the plaintiff's neighbour who has had the same operation, cannot give evidence of his opinion that the doctor has not performed the operation as well as his own; and

10. The Court held that Dr Basden's evidence was not admissible9. 11. The plurality10 noted that the estimate or calculation which Dr Basden had made was for the somewhat limited purpose of allowing him to opine as to the protective measures which ought to have been adopted by Dasreef11. 12. Notwithstanding that, the trial judge had used Dr Basden's evidence to make a finding as to the amount of respirable silica to which Mr Hawchar had been exposed12. 13. The plurality was at pains to emphasise that s79(1) is a statutory provision to be construed. Their Honours said:

5.2 where a plaintiff considers that electrical work that the defendant, an electrician, has done for her is unsatisfactory, the plaintiff cannot give evidence of her opinion that the defendant does not have the necessary skills to do the electrical work. 6. The main exception in Part 3.3 is s79(1) which provides that:

If a person has specialised knowledge based on the person's training, study or experience, the opinion rule does not apply to evidence of an opinion of that person that is wholly or substantially based on that knowledge.

The admissibility of opinion evidence is to be determined by application of the requirements of the Evidence Act rather than by any attempt to parse and analyse particular statements in decided cases divorced from the context in which those statements were made.13

14. In order to be admissible under s79(1), the plurality said14 the evidence must satisfy two criteria:

7. The leading authority on s79(1) is Dasreef Pty Ltd v Hawchar5. Previously, the NSW Court of Appeal decision of Makita (Australia) Pty Ltd v Sprowles6 probably answered that description. 8. In Dasreef, Mr Hawchar sued his former employer, Dasreef Pty Ltd, for exposing him to unsafe levels of silica dust while working as a stonemason, which led to his contracting silicosis. 9. The issue on appeal to the High Court was the admissibility of parts of the opinion of a Dr Basden. In the course of his evidence, Dr Basden made statements to the effect that the amount of respirable silica in Mr Hawchar's breathing zone

tendering his evidence to demonstrate first that Dr Basden had specialised knowledge based on his training, study or experience that permitted him to measure or estimate the amount of respirable silica to which a worker undertaking the relevant work would be exposed in the conditions in which the worker was undertaking the work. Secondly, it would have been necessary for the party tendering the evidence to demonstrate that the opinion which Dr Basden expressed about Mr Hawchar's exposure was wholly or substantially based on that knowledge.

would have been 500 or 1000 times greater than the permissible levels of exposure7. The question was whether there was admissible evidence at the trial that Mr Hawchar was, indeed, exposed to dust concentrations at least 1000 times greater than the permissible limit8.

The first is that the witness who gives the evidence 'has specialised knowledge based on the person's training, study or experience'; the second is that the opinion expressed in evidence by the witness 'is wholly or substantially based on that knowledge'. The complaint ... made ... was that Dr Basden did not express an opinion about the numerical or quantitative level of exposure to respirable silica encountered by Mr Hawchar in working for Dasreef that was an opinion based on any specialised knowledge Dr Basden had that was based on his training, study or experience.

And so, the plurality said15:

In order for Dr Basden to proffer an admissible opinion about the numerical or quantitative level of Mr Hawchar's exposure to silica dust it would have been necessary for the party

15. The plurality concluded16 that Dr Barsden, a chemist and engineer, had not given evidence that his training, study or experience permitted him to provide anything more than what he called a 'ballpark' figure estimating the amount of respirable silica dust to which a worker using an angle grinder would be exposed. Indeed Dr Basden pointed out that he had seen the use of an angle grinder in the way Mr Hawchar had used it only once before. He gave no evidence that he had on any occasion measured directly or inferentially the amount of respirable dust to which such an operator was or would be exposed. As such any numerical opinion expressed by Dr Basden could not be said to satisfy s79(1) and was not admissible. 16. The case is a salutary reminder that the parties, and the Judge, need always to be mindful of the particular issue to which the opinion evidence is going and whether there is a proper basis for its admission on that particular issue. 17. Division 23.2 of the Federal Court Rules addresses the circumstances in which parties may call expert witnesses at trial. 18. The Federal Court Rules17 define an 'expert' as:

… a person has specialised knowledge based on the person's training, study or experience.

And 'expert evidence' as:

… evidence of an expert that is based wholly or substantially on the expert's specialised knowledge.

19. The Federal Court revised its Guidelines for expert witnesses in 19


201318. The new Guidelines are not intended to address all aspects of an expert witness' duties, but are intended to facilitate the admission of opinion evidence, and to assist experts to understand in general terms what the Court expects of them. 20. The Guidelines are also intended to assist individual expert witnesses to avoid the criticism that is sometimes made (whether rightly or wrongly) that they lack objectivity, or have coloured their evidence in favour of the party calling them19. 21. The Guidelines deal with three principal matters. The first is the duty which the expert owes to the Court. The second is the way in which that expert evidence ought to be in presented. The third relates to expert conferences.

witness must ordinarily give a plain account of the actual perception of his or her senses, devoid of inference, evaluation, interpretation, belief or opinion. 25. However, the common law also recognises exceptions. The main exception is expert or opinion evidence that: 25.1

is relevant to a fact in issue;

25.2

amounts to an expression of expertise ie evidence that comes from an organised body of knowledge23; and

29. In this respect, it is worth noting s79C of the State Act, which enables the admission into evidence, as proof of their contents, hearsay statements of fact or opinion that are contained in documents, provided that certain conditions are satisfied.

25.3

is given by a witness who is qualified to give the opinion24, which can be established through study or experience25.

30. The Supreme Court Rules make separate provision for medical evidence in actions for personal injuries34 and for all other expert evidence35.

22. Relevant to ethical considerations, the Guidelines state that: 1.1 An expert witness has an overriding duty to assist the Court on matters relevant to the expert's area of expertise. 1.2 An expert witness is not an advocate for a party even when giving testimony that is necessarily evaluative rather than inferential. 1.3 An expert witness's paramount duty is to the Court and not to the person retaining the expert20. 2.2 At the end of the report, the expert should declare that "[the expert] has made all the inquiries which [the expert] believes are desirable and appropriate and that no matters of significance which [the expert] regards as relevant have, to [the expert's] knowledge, been withheld from the Court." 3.1 If experts retained by the parties meet at the direction of the Court, it would be improper for an expert to be given or to accept instructions not to reach agreement ... THE STATE ACT AND THE SUPREME COURT 23. The law concerning opinion evidence, as it applies in the Supreme Court of Western Australia, is not rooted in one place as is the case under the Commonwealth Act21. 24. Ordinarily, conclusions to be drawn from facts are for the court to make, and it is not for the witness to preempt that function22. Put simply, a 20 | Brief November 2015

which it is based must be proved by admissible evidence33.

26. In this respect, the distinction to be drawn between opinion evidence on the one hand and factual evidence derived from personal experience and observations over a lengthy period of time as drawn by McLure P for the Court in Birla Nifty v International Mining Industry Underwriters26. 27. It is also worth noting that: 27.1

an expert giving opinion evidence must provide the Court with sufficient information to enable the Court to evaluate the validity of the expert's opinion27; and

27.2

for the time being at least28, the primary facts upon which the opinion is based must be admissible29 and proved by admissible evidence30.

28. In Koushappis v Western Australia31 Roberts- Smith JA, with whom McLure and Buss JJA agreed, found32 that an expert's opinion was not admissible because it lacked the necessary evidentiary foundation as it was based on results which were not admissible. His Honour referred to this as the 'basis rule' which means that, if an expert opinion is to be admissible, the facts upon

31. For all other expert evidence, except with the leave of the Court or where all parties agree, no expert evidence may be adduced at the trial or hearing of a cause or matter unless the party seeking to adduce the evidence has applied to the Court to determine whether a direction should be given under this Rule and has complied with any direction given on the application36. 32. It may be noted that the Supreme Court Rules themselves do not make provision for any guidelines to be given to an expert in the Supreme Court. 33. Although not required, solicitors instructing experts regularly provide them with a copy of the Federal Court Guidelines. That seems a sensible and prudent practice to follow. 34. Further Common Form 80 of the Supreme Court Rules no longer contains the standard directions which went to the provision of an expert's report or its substance to the other side and also directed there to be conferral between the experts prior to the trial. Now the usual orders37 are as follows: 50. The parties have leave to adduce expert evidence at the trial. 51. By [date] the plaintiff provide the defendant with a copy of


the report or the substance of the evidence of any expert witness whose evidence is to be adduced by the plaintiff.

sign within seven (7) days of the conference a joint memorandum recording: 1. (a) the substance of all matters upon which they are agreed;

52. By [date] the defendant provide the plaintiff with a copy of the report or the substance of the evidence of any expert witness whose evidence is to be adduced by the defendant. 53. A copy of the report or the substance of the evidence of any expert witness shall include the name of the witness, the facts and matters relied upon to qualify him to give expert evidence, and shall identify the facts and other material upon which he bases his opinion. The witness must include in the report or in some other writing submitted to the Court before or when the evidence is formally tendered at trial a statement to the effect that the witness has made all inquiries which the witness believes are desirable and appropriate and that no matters of significance which the witness regards as relevant have, to the knowledge of the witness, been withheld from the Court. 54. By [date] if there are differences between the evidence of the respective expert witnesses, the parties shall arrange for a conference to be held between the expert witnesses in the absence of the solicitors, counsel and the parties for the purpose of narrowing or removing the differences.

OR

By [date] if there are differences between the evidence of the respective expert witnesses, the parties shall arrange for a conference to be held between the expert witnesses in the absence of the parties for the purpose of narrowing or removing the differences. Solicitors and/or counsel may attend at some stages of the conference, if required, but their role is strictly to facilitate and assist the experts to confer, particularly to: 1. (a) identify any point(s) of contention that the experts have not addressed; and 2. (b)  answer any questions that experts may have.

55. The experts shall be instructed by the parties to prepare and

2. (b) the points of differences which remain between the experts; and 3. (c)  a succinct statement of the position of each expert in relation to

each point of difference. The joint memorandum shall be filed and served by the solicitors for the plaintiff within seven (7) days of its execution.

35. Lastly it may be noted that:

Innovative approaches to expert evidence are encouraged, including the parties conferring with a view to agreeing some or all of the facts upon which the expert opinions are to be based and the questions to be addressed to the experts. Conferral of experts prior to trial is normally ordered. The taking of expert evidence concurrently at trial is to be considered38.

THE STATE ADMINISTRATIVE TRIBUNAL 36. To maximise the value of expert evidence, the Tribunal has developed standard procedures, set out in the pamphlet A guide for experts giving evidence in the State Administrative Tribunal, requiring experts to confer, to prepare joint reports, and to give evidence together. The document is similar to guides issued by other courts and tribunals in which expert evidence is frequently presented, such as the Federal Court of Australia and the NSW Land and Environment Court. THE ROLE OF THE LAWYER IN THE PREPARATION OF EXPERT EVIDENCE AND THE INDEPENDENCE OF THE EXPERT 37. It cannot be overstated that lawyers' primary and overriding duty is to the Court, and not to their clients. 38. The classical statement is that of Mason CJ in Giannarelli v Wraith (1988) 165 CLR 543 at 555-556: The peculiar feature of counsel's responsibility is that he owes a duty to the court as well as to his client. His duty to his client is subject to his overriding duty

to the court. In the performance of that overriding duty there is a strong element of public Interest ... The performance by counsel of his paramount duty to the court will require him to act in a variety of ways to the possible disadvantage of his client. ... The duty to the court is paramount and must be performed, even if the client gives instructions to the contrary. 39. Again it may be trite, but it cannot be forgotten that lawyers are required to perform a significant (and usually private) role in the administration of justice. Hence, in Carter v Northmore Hale Davy and Leake (1995) 183 CLR 121 at 127, Brennan J (as his Honour then was) said: Administration of the law is not the function of the courts alone. The law is administered more frequently and more directly by legal advisers than it is by judges. 40. The lawyer has three principal roles in an expert giving evidence. They are: 40.1

instructing the expert;

40.2

considering draft reports or evidence; and

40.3

preparing the expert to give evidence at the trial.

41. The proper role of the lawyer in the drafting and settling of an expert's report is not able to be expressed in neat principles capable of universal and, so, easy application. 42. The difficulties in laying down clear guidelines as to what is permissible and impermissible was well expressed, with respect, in the following statement by an experienced trial judge: It is impossible to lay down specific rules dealing with communications between the expert, on the one hand, and the company and those representing it, on the other: everything depends on the circumstances. The guiding principle must be that care should be taken to avoid any communication which may undermine, or appear to undermine, the independence of the expert39. 43. It is plain that a lawyer should not, in any way, seek to interfere with the expert expressing his or her opinion or complying with his or her obligations to the Court. The evidence given by an expert must be theirs alone and should not be a 21


collaborative effort, in the true sense of the word, with a party's lawyer or the party itself. 44. Some general principles apply equally to expert witnesses and lay witnesses; such as: Witnesses should not be coached or influenced. The evidence of witnesses should not be discussed in the presence of other witnesses as to the same facts ... The witness statement should be recorded in the language of the witness and confined to relevant matters...40 45. However, in our view, it would be imprudent, if not a breach of the lawyer's obligations, for a lawyer to simply instruct an expert and then have nothing to do with the production of the report until the expert signs it for its presentation to the Court. 46. In this regard, the observations by Lindgren J41 are helpful: Unfortunately, in the case of many of the experts' reports, little or no attempt seems to have been made to address in a systematic way the requirements for the admissibility of evidence of expert opinion. Counsel protested that, in order to ensure that the requirements of admissibility are met, lawyers would have to become involved in the writing of the reports of expert witnesses. ... Lawyers should be involved in the writing of reports by experts: not, of course, in relation to the substance of the reports (in particular, in arriving at the opinions to be expressed); but in relation to their form, in order to ensure that the legal tests of admissibility are addressed. 47. However, it may be argued that lawyers need to go further. This is because, simply put, experts are no more likely to always be correct in their opinion than any other human being. It is difficult to imagine, for example, that any person's formulation, or expression, of an opinion would not benefit from a critical reading or testing. A wellintentioned party who seeks only to have their case properly presented at its best, may be surprised to be told that there can be no discussion or critical analysis of their expert evidence by their own side. 48. It seems to us that it is entirely permissible for a lawyer who has 22 | Brief November 2015

engaged an expert to read an expert's report in draft very closely and to make, even extensive, remarks or observations concerning the draft. For example, it is hard to see how an expert's independence is compromised by the expert being asked to elucidate their reasoning further; explain the basis or bases of a certain conclusion; or to consider whether there is a conflict between different parts of his or her report. 49. Further, it is not uncommon for the expert to be giving evidence for the first time. Generally, experts are unfamiliar with working in an adversarial environment. Commonly, experts work in disciplines where they are not pitted against their colleagues in a way that lawyers, certainly in litigation, are each day. This is a most significant consideration. 50. The essential problem is captured neatly by the following: In short, a lawyer should never seek to persuade or pressure a retained expert to come to a particular conclusion. In dealings with an expert, it is prudent to always ensure that the expert clearly understands that their ethical obligation is to the court and not the party paying their bill. ... This is not to say that experts cannot be questioned about their reports by those who commission them, nor that such questioning may result in a change of opinion. Such a change must, however, arise from a considered re-appraisal of the objective facts42. 51. Part of the problem is that courts have, as is common, made general remarks in an attempt to set down principles which are to be observed in future, different cases. 52. An example of the judicial 'evil' which we are discussing may be seen by the typically colourful phrasing of Lord Denning MR who commented thus on an expert report prepared by two medical experts: ... their joint report suffers to my mind from the way it was prepared. It was the result of long conferences between the two professors and counsel in London and it was actually 'settled' by counsel. ... Whenever counsel 'settle' a document, we know how it goes. "We had better put this in", "We had better leave this out", and so forth43.

53. Another is the following: ... for generations judges have complained about the partiality of expert opinion witnesses ... Indeed many litigation lawyers can doubtless recall incidences of experts who say one thing in one case and a contradictory thing in another, each time to the supposed advantage of the party paying them44. 54. Lord Wilberforce was more restrained and, with respect, provided better guidance in Whitehouse v Jordon when it reached the House of Lords45 where his Lordship stated: While some degree of consultation between experts and legal advisers is entirely proper, it is necessary that expert evidence presented to the court should be and should be seen to be, the independent product of the expert, uninfluenced as to form or content by the exigencies of litigation. 55. An example of inappropriate conduct on the part of a lawyer and an expert is provided by Universal Music Pty Ltd v Sharman License Holdings Limited46. Professor Ross was called for some of the respondents. He had sent a draft copy of his report to the solicitors who had retained him. A solicitor had made handwritten comments on the report including on a key section. The solicitor had crossed out what the Professor had written and had suggested a substituted sentence. The Professor responded by email and said 'I was not aware of this, even after our testing. But if you say it is so, then fine by me'47. The solicitor's new handwritten sentence was incorporated into the Professor's final expert's report. The above was exposed in cross examination. 56. Wilcox J said of that expert evidence: I am forced to conclude that Professor Ross was prepared seriously to compromise his independence and intellectual integrity. After this evidence, I formed the view it might be unsafe to rely upon Professor Ross in relation to any controversial matter48. 57. Care must also be taken to ensure that contact between the expert and the party is kept on a proper basis. Failure to do so may lead to a perception (or the fact that) the expert lacks impartiality or objectivity. 58. That may arise where there are


extensive exchanges of views between the expert and the party. That has led a trial judge to say that the expert, by engaging in such discussions 'may come to be regarded, and regard himself, as part of a 'team'49. 59. Further, Brooking J made the following criticisms of the expert's report: 59.1

59.2

59.3

59.4

59.5

the expert was a participant in discussions as to what the client's ultimate commercial objective was50; there was a danger in the client having exploratory discussions with an expert, in that the client might be regarded as shopping for "a suitable expert"51 and that the client may come to regard the independent expert as "another member of a team which is being paid very large sums of money to achieve a certain result"52; the expert was engaged and having discussions with the client prior to the finalisation of the proposal on which the expert was to comment. Hence, Brooking J said that it was an "exaggeration, but only a slight one, to say that at times one gets the impression that [the client] and its advisors were there to report on the independent expert's proposal, instead of the independent expert being engaged to report on [the client's] proposal"53;

21.

Western Australian Evidence Law (LexisNexis Butterworths Australia, 2015), Kate Offer and David Field is a good place to start.

22.

Runjanjic and Kontinnen v R (1991) 56 SASR 114 at 120 per King CJ; noting that in Western Australia v Carlino [2014] WASC 404 Hall J was not satisfied that the battered wife theory was applicable to the factual situation in that case.

23.

Transport Publishling Co Pty Ltd v Literature Board of Review (1956) 99 CLR 111 [14]; Clark v Ryan (1960) 103 CLR 486, 491 Dixon CJ).

24.

Transport Publishing Co Pty Ltd v Literature Board of Review (1956) 99 CLR 111 [14].

25.

Weal v Bottom (1960) 40 ALJR 436; cf Clark v Ryan (1960) 108 CLR 486.

61. It may be seen that part of the problem identified by the trial judge in the Phosphate Co-Operative case was that there was no clear disclosure by the expert in the report of the communications which he had with the client and its advisors.

26.

[2014] WASCA 180; (2014) 47 WAR 522 at [70].

27.

Automasters Australia Pty Ltd v Bruness Pty Ltd [2004] WASCA 229 at [28] per Steytler J and the authorities cited therein.

28.

Note that in the Dasreef case, the plurality referred to the Law Reform Commission's interim report on evidence that concluded the common law rule did not exist. Their Honours said at [41] that whether this is correct need not be examined.  Heydon J, in contrast considered at [66] that there is 'no doubt' that this rule exists at common law.

CONCLUSION

29.

Pownall v Conlan Management Pty Ltd (1995) 12 WAR 370, 375-377 per Ipp J, with whom Malcolm CJ agreed.

The lawyer must never lose sight of their overriding duty to the Court when dealing with experts and their evidence. Equally, the lawyer must not lose sight of their obligation to ensure that an expert is expressing an independent opinion. As set out, the lawyer is required to be involved with the preparation of the expert's evidence, including ensuring that the expert is conducting him or herself appropriately. However, in doing so the lawyer must not exceed the proper bounds expressed. There will be times when complying with all of these requires careful thought and attention.

30.

Pownall v Conlan Management Pty Ltd (1995) 12 WAR 370, 387 per Anderson J; Koushappis v State of Western Australia [2007] WASCA 26 [55] per RobertsSmith JA with whom McLure and Buss JJA agreed.

31.

[2007] WASCA 26.

32.

ibid., at [55].

client55. The 'infanticide' of that first report was not disclosed56. 60. The Judge concluded that the pressure exerted on behalf of the client affected the report significantly and it did not represent "an independent exercise of judgment on the part of those concerned in its preparation"57.

NOTES

33.

ibid., at [47].

34.

Order 36A, rule 2.

35.

Order 36A, rule 3.

36.

Order 36A, subrule 3(2).

37.

Consolidated Practice Directions 2009 (last updated 9 June 2015), no 4.1.2.2: CMC List – Usual Orders <http:// www.supremecourt.wa.gov.au/G/general_division_ forms.aspx>

38.

Consolidated Practice Directions 2009 (last updated 9 June 2015), no 4.1.2: Case Management by Judges – the Commercial and Managed Cases (CMC List) <http:// www.supremecourt.wa.gov.au/G/general_division_ forms.aspx>.

39.

Phosphate Co-Operative Co of Australia Ltd v Shears (No. 3) [1989] VR 665 at 683 per Brooking J.

40.

WA Bar Association's Best Practice Guide 01/20092011 on Preparing Witness Statements For Use in Civil Cases: at [2.7]

41.

Harrington-Smith v Western Australia (No. 2) [2003] FCA 893; 130 FCR 424 at [18]-[19], emphasis as per the report. The observations were 'strongly' agreed with by Sackville J in Jango v Northern Territory. (No. 2) [2004] FCA 1004 at [9]-[10].

42.

"Expert Reports: The role of lawyers" (2006) 33(4) Brief 19 at 20, per Stephen Hall SC (as his Honour then was) - emphasis added.

1.

Barristers, Francis Burt Chambers; a version of this paper was presented in the Law Society's YLC Basics Series in October 2010.

2.

WA Bar Association's Best Practice Guide 01/20092011 on Preparing Witness Statements For Use in Civil Cases: Introduction at [3].

3.

s32(2) State Administrative Tribunal Act 2004 (WA).

4.

s55(1) Commonwealth Act.

5.

[2011] HCA 21; (2011) 243 CLR 588.

6.

(2001) 52 NSWLR 705.

43.

Whitehouse v Jordan [1980]1 All ER 650 at 655.

7.

above n 5, at [22].

44.

above n 5 at [56] per Heydon J.

the report did not disclose its preparation history. The Judge stated that a shareholder would not "think that this positive and seemingly detached report had such a long and troubled history having been produced under the supervision of [the client] and its advisors and owed so much to their exertions. The calm, reflective air of the report nowhere suggests its long period of gestation or the travail which accompanied its birth ... "54

8.

above n 5 at [25].

45.

Whitehouse v Jordan [1981]1 All ER 267 at 276.

9.

Ultimately, however, the plurality held at [10], [49] that, despite the wrongful reception of the evidence, the Court of Appeal should have dismissed Dasreef's appeal against the primary judge's findings that Dasreef was liable to Mr Hawchar for damages for negligently exposing him to dangerous levels of silica dust because there was no dispute that Mr Hawchar suffers from silicosis or that it was caused by exposure from silica dust over a period of six years from 1999 when he worked for Dasreef.

46.

[2005] 222 FCR 465.

47.

ibid., at [228].

48.

ibid., at [231].

49.

Phosphate Co-Operative Co of Australia v Shears (No. 3) [1989] VR 665 at 680 per Brooking J. His Honour went on to say at 681: I think it may be said to be notorious certainly one's own experience in commercial litigation supports the view- that the writing of independent experts' reports in company cases may be remunerated at a very high rate. There will often be a danger that the client ... will come to regard the independent expert as another member of a team which has been paid very large sums of money to achieve a certain result. The greatest circumspection is required in relation to this matter of making representations to an independent expert, not by way of correcting some error of fact, but by way of influencing his judgment on the established facts.

50.

ibid., at 680.

51.

ibid., at 680.

in this case a report, not a draft, was signed and delivered and then replaced by another, 'final' report after discussions with the

19.

10.

French CJ, Gummow, Hayne, Crennan, Kiefel, Bell JJ.

11.

above n 5 at [22].

12.

above n 5 [22].

13.

above n 5 [37].

14.

above n 5 at [32].

15.

above n 5 at [35]-[36].

16.

above n 5 at [39]-[40].

17.

In the Dictionary in Schedule 1 of the Federal Court Rules 2011.

18.

Practice Note, Case Management 7, Federal Court website (as at August 2015), < http://www.fedcourt. gov.au/law-and-practice/practice-documents/practicenotes>

52.

ibid., at 680.

53.

ibid., at 680.

54.

ibid., at 681.

ibid., Introduction, [3].

55.

ibid., at 681-682.

56.

ibid., at 681.

57.

ibid., at 684.

20.

In this respect, the expert finds him or herself in the same position as does a legal practitioner as per the paramount duties propounded in Giannarelli v Wraith (1988) 165 CLR 543 at 556 per Mason CJ: and also Afkos Industries Pty Ltd v Pullinger Stewart [2001] WASCA 372 at [32]-[33] per Murray J.

23


feature WHERE DO YOU WORK?

The importance of LGBTIQ inclusiveness in law firms

Jeremy: I am a lawyer at Allens. I am in my first year, having recently been admitted. Jake: I am a graduate at Ashurst and I was also recently admitted. HAVE YOU ALWAYS BEEN 'OUT' AT WORK? Jeremy: I have been 'out' to my family and friends since I turned eighteen. While it is not the first thing I mention in a conversation (usually!) I have always been open about being gay at all my jobs.

Jeremy Rich, Lawyer, Allens Jake Lowther, Lawyer, Ashurst

Allens and Ashurst recently announced their public support of marriage equality. We took the time to ask Jeremy Rich (a graduate and lawyer at Allens) and Jake Lowther (a graduate and lawyer at Ashurst) about their experience of being 'out in the law' and the importance of LGBTIQ inclusiveness for law firms.

24 | Brief November 2015

Jake: It took me a little longer than Jeremy, following several gap years in London. However I only started law when I returned, so I have always been 'out' in the legal profession. Similarly to Jeremy though, while I am open it tends not to be the first topic of conversation. IS BEING 'OUT' AT WORK IMPORTANT TO YOU? Jeremy: Being 'out' is extremely important for me. Being gay is part of who I am, and has very much shaped a lot of the experiences I have had in my life. If I were to have a partner, I would hope that this is something I could easily talk to people at work about, in just the same way I love hearing about my co-workersâ&#x20AC;&#x2122; partners and families.


I also think that LGBTIQ people benefit from having 'out' role models at their law firms. I am a member of Allens' LGBTIQ network, ALLin, which is co-chaired by two 'out' partners â&#x20AC;&#x201C; David Brewster and Rachel Nicolson â&#x20AC;&#x201C; who have spoken openly about their experiences being 'out' in the legal industry. Having two such successful partners head up our LGBTIQ committee is a great source of encouragement for me that you can be 'out' in the law and be successful. Jake: Nobody can be expected to perform at the high levels demanded of legal professionals if they do not feel comfortable at work. For me, a key aspect of feeling comfortable at work is to be 'out'. The ability to discuss something as simple as your weekend many people take for granted. However I can also appreciate that there is no 'one size fits all' approach. It is up to the individual to be 'out' in the law, but as a profession, we need to promote a culture of safety and inclusion for all, so that those who identify as LBGTIQ can feel comfortable enough to live and work openly. WHY DO YOU THINK LGBTIQ INCLUSION IS IMPORTANT TO LAW FIRMS? Jeremy: I think LGBTIQ inclusion is important for a number of reasons. I think particularly for lawyers, you cannot draw a neat distinction between your 'work life' and your 'personal life'. Many of us talk about our partners or dates at work; many people have pictures of their family at their desk. In my opinion, employees work at their best when they feel like

they are working in an environment where they will be supported. Additionally, and this something that I am not sure people always think about, many clients of law firms are leaders in terms of LGBTIQ inclusion and they expect the same from the firms who provide them with legal services. Conversations around LGBTIQ inclusion are a way of building a relationship with clients. Jake: Consistently we are hearing about the benefits of diversity and inclusion for the workplace. It drives innovation and growth, promotes problem solving, fosters creativity and typically leads to higher earnings. As Jeremy mentioned, much of this focus on diversity and inclusion is client-driven. Given the profession's comparatively high numbers of workers suffering from mental illnesses such as depression, it is vitally important that no additional burden be placed on lawyers. A lack of LGBTIQ inclusion is one such burden. AND JUST TO CLARIFY, WHAT DO YOU MEAN BY LGBTIQ? Jeremy: LGBTIQ stands for 'lesbian, gay, bisexual, transgender, intersex and queer/ questioning'. I know some people think that is a bit of a long acronym but I think it captures the diversity of sexualities and gender identities that exist in our society today (recognising that there are lots of terms that LGBTIQ does not include!) Personally, I identify as gay and queer. I think there is somewhat of a misconception that LGBTIQ is used only in the name of political

correctness. IS YOUR FIRM SUPPORTIVE OF LGBTIQ INCLUSION? Jeremy: Allens is very supportive of LGBTIQ inclusion. As previously mentioned, I am a member of Allens LGBTIQ network, ALLin. ALLin has quarterly national meetings to discuss all issues that could be relevant in the LGBTIQ space. ALLin also has a number of steering committees which focus on particular areas relevant to LGBTIQ inclusion (e.g. community engagement, training). ALLin is also responsible for coordinating Allens' submission to the Australian Workplace Equality Index which is run by Pride in Diversity. Allens were extremely happy to place 14th in the 2015 index (but we are also working hard to improve our position on the next survey). In addition, this year Allens officially announced its support for marriage equality. The ALLin network hosted Friday night drinks in each of our offices to celebrate this announcement, and we organised 'marriage equality' decorations to celebrate. One of our partners, who is an 'ally' member of ALLin, gave a speech emphasising the importance of the announcement and it was a really fantastic night for everyone. Jake: Ashurst is very supportive too, and also officially came out in support of marriage equality this year. Ashurst has established a 'Diversity and Inclusion Advisory Group',

25


feature which has developed key objectives to improve the workplace for those who identify as LGBTIQ: •

Raise awareness of issues relating to and affecting the LGBTIQ community within and outside the firm.

Increase the proportion of LGBTIQ staff (legal and business services) across the firm who feel able to be 'out' at work; ensure that all LGBTIQ staff, whether out or not, feel safe and respected and ensure that all other partners and staff act in a respectful and inclusive manner towards the LGBTIQ community; provide a safe forum for discussion and debate of relevant ideas and issues.

Provide a link with external LGBTIQ organisations in order to access best practice and new ideas.

In delivering on these objectives Ashurst launched its LGBTIQ network 'Spectrum' in Australia in May 2015. The firm is making a concerted effort to improve its offering as a firm to LGBTIQ employees, moving 43 places up the Workplace Equality Index in the UK. However Ashurst's chairman Ben Tidswell acknowledges that there is still much to be done. HAVE THINGS CHANGED SINCE YOU FIRST BECAME INTERESTED IN WORKING IN LAW? Jeremy: While I have not worked in corporate law for a very long time, in my view, there has been a huge shift in terms of law firm support for LGBTIQ inclusion. LGBTIQ inclusion was not something I heard a lot about when I completed vacation clerkships. However, this appears to be very much changing – an example is Allens endorsing marriage

26 | Brief November 2015

equality. Jake: Similarly to Jeremy, I only started full time employment in the legal profession recently. However I agree that there has been a seismic shift in attitudes and acknowledgment of LGBTIQ inclusion. In many ways, the modern legal profession has provided me with a safe haven from bigotry through its emphasis on equality before the law. However, this very theme evokes the 1993 film Philadelphia (Johnathon Demme), which of course focused on a lawyer suffering from AIDS who was dismissed from his employment at a conservative corporate law firm. It is a reminder of how different my experience of work and indeed life may have been only two decades ago. WHAT ARE SOME OF THE AREAS LAW FIRMS CAN FOCUS ON GOING INTO THE FUTURE? Jeremy: In my experience, law firms are full of a lot of very progressive thinkers who are supportive of LGBTIQ inclusion. However, I think it is important that people remember that this does not mean that homophobia does not exist, or there are not areas where law firms can improve. This year's Australian Workplace Equality Index (published by Pride in Diversity) found that 10% of gay men and almost the same percentage of lesbians stated that they expend a lot of energy hiding their sexuality within their immediate work environment (and these results only include organisations which make a

submission to Pride in Diversity). I think everyone has a role to play in ensuring that their workplace is one where people feel comfortable being 'out' and do not feel they need to expend energy hiding their sexuality or gender identity. In particular, I think law firms can continue to focus on all aspects of LGBTIQ inclusion. I think it is fantastic that there has recently been a lot of public consideration of people who identify as transgender or gender diverse. I think that there is a lot of scope for law firms to consider transgender inclusiveness both in their workplaces and in their dealings with clients. Jake: I agree with Jeremy, the legal profession can do more for those from across the LGBTIQ spectrum. I think Caitlyn Jenner has done excellent work in recent weeks in highlighting the struggles faced particularly by transgender and gender diverse persons to a wide audience. The legal profession now has a unique opportunity to be a leader in the recognition and inclusion of transgender and gender diverse persons. Many law firms have decisively got the ball rolling on the issue of LGBTIQ inclusion. However it will still take some years before the full effects are realised, and we need to keep up the momentum. Law firms need to promote these discussions both internally and externally, and take a leading role in eliminating 'unconscious bias' and in shaping a diverse, inclusive profession. However I am proud to be a member of a profession that continues to play an important role in promoting diversity and inclusion in the workplace.


Welcome to the Honourable Justice Fiannaca Transcript of speech by the Honourable Justice Fiannaca Monday, 31 August 2015 The Supreme Court of Western Australia

Thank you, Chief Justice. Your Honours, ladies and gentlemen, family and friends, it is very humbling to see so many of you attending this morning to mark my appointment to this Honourable Court. The presence of each of you means a great deal to me. I am particularly honoured by the presence of judges and former judges before whom I have appeared over the many years and other distinguished guests. Like Justice Tottle who was recently appointed, my appointment follows the retirements of the Honourable John McKechnie QC and the Honourable Eric Heenan QC and I am honoured that they are present here today. Chief Justice, thank you for your warm welcome to the Court. I am very grateful also for the welcome and assistance that I have received from other judges of the Court and from court staff over the last two weeks as I have begun the transition to my new place of employment. Mr Donaldson, Ms Needham and Mr Quinlan, thank you for your very kind words. Mr Donaldson, I am grateful to the government for the trust that it has placed in me. It is a great honour and I will work diligently to justify the trust that the government has placed in me in the years to come. I will reserve my judgment on your submission about my talents, particularly in respect of filmmaking, but I must say you make a very compelling argument about the a cappella singing, although I should point out that on that occasion there were in fact, I think, four accused who were guilty. Ms Needham, I have been very proud to be a member of the Law Society from the very outset. I have enjoyed the membership and I intend to continue my association with the Law Society as a judicial member. Its continuing professional development seminars and advocacy training courses, especially for young practitioners, make a significant contribution to the maintenance of proper standards in the legal community. Mr Quinlan, I regret that as a government lawyer I was not able to be a member of the Bar Association, but I have many friends who are there and I have come 28 | Brief November 2015

to know more during the time that I have been on the Legal Practice Board. I have enjoyed excellent relations with my colleagues at the independent bar, particularly those who practice criminal law. The fact that I do have good relations with them may explain why I have been kindly spared any suggestion that my appointment was intended to substantially reduce the length of homicide trials in this Court. On a statistical analysis, the odds may have seemed against this appointment. In the first place, the quota of judges who are keen Dockers supporters appeared to be well and truly filled, certainly by the time of the appointment of Justice Mitchell, an original member of the anchor crew, no less. Secondly, upon Justice Martino joining Justice Mazza on this bench, it seemed the quota of judges of Italian heritage might also be exhausted. However, to the best of my knowledge, and I think this has been suggested already, no judge has previously been appointed who played the piano accordion. Now, for those who may be thinking, "That was by design", let me say that putting up with quips of that kind for most of my accordion playing life helped build resilience and prepared me for appearances in the Court of Appeal which, of course, I will be doing my best to avoid in future. I am indebted to many people who have contributed to my life and my career, helping to pave the way to this achievement. I have thanked many of them personally and at other gatherings, but I do want to take the opportunity to acknowledge some of the leading cast today. First and foremost, I want to thank my beautiful wife, Julie, my friend and the love of my life for 35 years, for her patience and loving support throughout my career. We met in high school and yes, Mr Quinlan, part of the reason I decided to pursue law as a career rather than my other passion in filmmaking was that Julie chose to do an arts degree at the University of WA. It appears to have been a good choice.

I will always be grateful to my parents for the start they gave me in life. Although they met here, they were the quintessential Sicilian migrants who worked hard and made sacrifices so their children could have better opportunities. The work ethic and respect for others that they passed on are attributes that have served me well in my legal career so far, and that I hope to bring to my new role. It gives me a great sense of fulfilment that my mother is able to be here and enjoy this achievement with me. I wish that my father could have been here. He was at the small ceremony at this Court when I was appointed Senior Counsel some 10 years ago, and he was touched by the kindness and the down to earth nature of the judges who took time to speak with him on that occasion. I hope to emulate those judicial qualities. I thank also Julie's parents who have treated me as a son, and all my family for helping me to stay grounded. The jury box was easily filled. The extended family would constitute a jury panel for a 10 week trial. I want to acknowledge the teachers who contributed to my education. I think teachers are not often enough credited for the influence that they have on peoples' lives, especially the teachers I had at South Fremantle Senior High School, where they encouraged an appetite for intellectual challenges and a pursuit of social justice. It was a good grounding for the legal studies that followed and the commencement of my legal career at what was then the Crown Solicitor's Office, about which you have heard, and for that I have to thank the late Clyde LeBer Langoulant. I was sad to hear recently that he had passed away. He was then the Crown solicitor, and his deputy, Peter Panegyres, who has already been mentioned. Another accordion player, I should say. Peter is abroad at the moment and has sent his apologies. Crown Law, as it was known, was filled with extraordinary talent including some of the most formidable advocates in the state at that time. It produced many


judges of this Court and also the District Court, and it nurtured some wonderful legal careers for others. The influences on my career were many, but I want to acknowledge three mentors in particular who helped shape me as a Crown lawyer. They are the Honourable Michael Murray QC, the Honourable John McKechnie QC, who gave me the opportunity to join at the office of the DPP when it was formed, much to the disappointment of Mr Panegyres, and Her Honour Shauna Deane QC, with whom I worked on what was then, in the early nineties, the longest running criminal trial the state had seen. The kind tributes that I have received from colleagues at the DPP upon my appointment suggest that perhaps I have been able to pass on at least some of the learning I acquired, and I am pleased if that is the case. It has been a privilege and a pleasure to work with those colleagues and the support staff at the DPP for the last 23 years, and I thank all of them for their contributions. One never stops learning, and I can say honestly that my life has been enriched both professionally and personally by the juniors, the instructors, my fellow senior colleagues and everybody else with whom I have worked at the DPP I will miss the collegiality and the camaraderie of what was a second home for me. I hope that my appointment will encourage the view that a career in government service can be deeply satisfying and rewarding. I want to thank in particular my executive assistant, Margaret Fairey, and the Director's legal administrator, Yanina Boschini, both of whom have provided loyal and much valued assistance over the years, always with good cheer. I also thank the Director, Joe McGrath SC, for his friendship over the last five years and for his support of my role as Deputy Director. He leads an office which, in my view, is occupied by conscientious and highly skilled lawyers and support

staff who are dedicated to providing the state with a fair and just prosecution service, even when resources are somewhat stretched and the workload is increasing. I have the greatest respect for lawyers on both sides of the fence in the criminal justice system. By its very nature, dealing with the frailties and, at times, the worst excesses of human behaviour and dealing with the liberty of the accused, it is a particularly stressful area of law in which to practise. But because of its nature, it is important that lawyers of the highest calibre are encouraged to practise in criminal law and that Prosecution Offices and Legal Aid services are adequately resourced. The stresses that come with the job are tempered, in part by the collegiality that has been mentioned. For prosecutors, that collegiality extends across borders by the Australian Association of Crown Prosecutors and the International Association of Prosecutors that have been mentioned, and I would like to acknowledgement the encouragement and support that I have received for many years from Mark Tedeschi QC, who's the President of the AACP, and Sal Vasta, who is now his Honour Federal Circuit Judge Vasta, who has served on the executive of the IAP. I believe I will find a sense of collegiality among my colleagues on this bench. The Chief Justice has assured me of that. Most of whom I have appeared before in the past, some of whom I have worked with. One or two of whom, they may not remember, even tutored me when I was at university. They were very young back then. The DPP Revue has been mentioned. It is a feature of the DPP social calendar that has been very dear to me. It has brought much entertainment to colleagues both within and outside the Office, and indeed to judges who, on occasions, have attended. I was rather persuasive in being

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" ... my life has been enriched both professionally and personally ... I will miss the collegiality and the camaraderie of what was a second home for me." able to get people on stage or on film in the past. I expect I will need to approach with some delicacy the idea of a Supreme Court Revue. I would like to conclude with a favourite quote of mine from Francis Bacon: "Imagination was given to man to compensate him for what he is not; a sense of humour to console him for what he is." I don't know that I ever imagined being here. I do know there remains scope for the imagination while I dream of becoming an accomplished accordionist, but for now I intend to fulfil my judicial responsibilities conscientiously and to the best of my ability. And in doing so, I hope to maintain a sense of humour. Thank you all for coming.

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29


Without Prejudice Negotiation: Sometimes a pious but ineffectual wish Nathan Landis Barrister, Francis Burt Chambers

It needs to be recognized that the words "without prejudice" can mean quite different things. Normally they are the formula by which a party invokes privilege against subsequent tender in evidence of a communication. â&#x20AC;Ś. However the phrase is also commonly used (or misused) to convey a reservation of rights. Nowadays it is used in contracts as equivalent to a proviso. A party may say in a perfectly open situation "I am doing this entirely without prejudice to my rights to do that". Sometimes such a statement will be accurate. Other times the law will adjudge it to be a pious but ineffective wish.1

30 | Brief November 2015

THE "WITHOUT PREJUDICE" PRIVILEGE

name is different, what is sought to be protected is not.

The "without prejudice" privilege is a rule of evidence which excludes from evidence admissions or assertions made by parties in the course of negotiations to settle disputes which are the subject of litigation or which will become the subject of litigation if the dispute is not resolved.

The without prejudice privilege is one that can be traced back to least 17183 but has expanded considerably from those historical roots.4

Because of its nature and its scope, practitioners may also see it described as negotiation privilege in correspondence, submissions or judgments.2 Although the

The definitive articulation of the without prejudice privilege in Australia was set out by the High Court in Field v Commissioner for Railways: As a matter of policy the law has long excluded from evidence admissions by words or conduct


made by parties in the course of negotiations to settle litigation. The purpose is to enable parties engaged in an attempt to compromise litigation to communicate with one another freely and without the embarrassment which the liability of their communications to be put in evidence subsequently might impose upon them. The law relieves them of this embarrassment so that their negotiations to avoid litigation or to settle it may go on unhampered.5 The public policy justification has been explained by the House of Lords as being the desirability of encouraging parties to resolve their differences by settlement rather than litigate them to the finish.6 As can be seen from the cases referred to above, the bases for the existence of without prejudice privilege are the public interest in promoting the resolution of disputes by settlement7 and an express or implied agreement between the parties that their communications will be kept confidential.8 This second basis has been described as one of "doubtful legal respectability" in the United Kingdom9 but is nevertheless accepted in Australia, albeit as one with lesser force than the first.10 One critical question for a court determining these issues is where to draw the line between serving that interest and preventing a party to litigation from putting their case at its best. It is a question that will largely depend on the circumstances of a particular case. The extent of the protection of the privilege depends not so much upon the expectations of the parties (which are subjective in nature), but upon an objective analysis of what formed part of the negotiations for settlement of the dispute and what was reasonably incidental to those negotiations.11 It is a privilege that is not immutable and will yield if by maintaining it, would result in an abuse of the privilege.12 Resort may be had to without prejudice material by a Court for a variety of reasons when the justice of the case requires it.13 Some examples of this are dealt with below. Unlike many other forms of privilege, without prejudice privilege is joint in nature.14 The privilege extends not only between the parties to the negotiation (that is, preventing the use in evidence by one of the parties to the negotiation of admissions made by the other) but will operate to prevent disclosure to a third party without the agreement of the negotiating parties,15 even if the negotiations are successful.16

The privileged nature of material generated during the course of negotiations may be modified by the parties, either unilaterally at the outset of the negotiations (a Calderbank17 communication is an example of without prejudice privilege in a communication which may be unilaterally waived in the future by the sender) or by agreement either during or after the negotiations have concluded. STATUTORY RECOGNITION OF THE PRIVILEGE Although the common law governs negotiation privilege under the evidence laws of Western Australia, for proceedings in the federal jurisdiction, the position has been codified in the Evidence Act 1995 (Cth), although it reflects the position at common law that the privilege operates even where litigation has not yet commenced and extends to a dispute which would become the subject of litigation if it were not resolved.18 The provisions relating to negotiation privilege are found in s131 of the Evidence Act 1995 (Cth): (1) Evidence is not to be adduced of: (a) a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute; or (b) a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute. Section 131(1) gives effect to the policy of encouraging out-of-court settlements and ensuring the course of those negotiations are not adduced into evidence for the purpose of influencing the outcome on the primary matters in issue.19 It is in the public interest that negotiations to explore resolution of proceedings should not be inhibited by the risk of the contents of those negotiations influencing the court hearing the matter. It is equally in the public interest that negotiations should be conducted genuinely and realistically.20 A number of exclusions to the operation of section 131(1) are set out in subsection 131(2). Some of those arise in the context of common law exceptions discussed below. INDICIA FOR THE EXISTENCE OF WITHOUT PREJUDICE PRIVILEGE The three essential prerequisites for the

existence of the privilege are: (1) a dispute; (2) a genuine attempt to resolve the dispute; and (3) making admissions or assertions in so doing. A dispute The existence of a dispute is central to the privilege's application. It stands to reason that without a dispute, there is nothing to resolve. However it is not sufficient to merely have a dispute. It must be a dispute which is capable of resolution by compromise21 and over which litigation exists or is contemplated at the time of the relevant negotiation.22 The connection between a dispute and existing or contemplated litigation is not determined by temporal proximity (that is, there is no strict time limit for the negotiations to have occurred prior to litigation being commenced), but rather the Courts look to proximity to the subject matter of the dispute.23 It is sufficient if the negotiations did not result in a satisfactory resolution of the matters in dispute between the parties that the matter would need to be resolved by litigation.24 However it has been held to be insufficiently proximate for the parties to discuss matters which may ultimately have resulted in a dispute which would lead to litigation if not resolved.25 A genuine attempt to reach a settlement of the dispute The point here is that a document does not become privileged simply because the author has headed it "without prejudice" if on its proper reading does not have the character of an attempt to negotiate a settlement.26 An extreme example of this was a letter marked "without prejudice" whose contents were not an attempt to negotiate a settlement of a dispute, but contained threats serious enough that the Court found it constituted a contempt of court.27 Similarly, if a document is not headed "without prejudice" but its contents are, on a proper analysis, nevertheless a genuine attempt to reach a settlement of a dispute of the nature described above, then the Court will afford that document the protection of the privilege.28 In order to satisfy this criterion, an element of compromise must be present. An offer which requires nothing less than the whole of the relief claimed and costs is not a genuine attempt to reach a settlement.29 The analysis of whether documents constitute a genuine attempt to settle a 31


dispute is not always straightforward. A good example of the difficulties that may be encountered in this type of analysis can be seen in "opening shot" correspondence30, which contains no offer capable of acceptance but may simply sets out a broad initial proposal, a framework for resolving the dispute or even just expresses a willingness to enter into negotiations. In those cases, a careful analysis of the correspondence must be made to discern whether, objectively, the purpose of that correspondence was to initiate or explore the possibility of settlement of the dispute which had apparently arisen.31 Were it not the case that these "opening shot" letters formed part of the without prejudice correspondence, a party to a dispute could never safely make an initial offer in response to a claim.32 Of course, evidence must be adduced as to the content or circumstance of the communication to give rise to the claim.33 However there are limits to what may be considered to be an "opening shot". Where the correspondence foreshadows the possibility of future negotiations over a potential future dispute, it is unlikely that this will satisfy the criterion.34 A further complication can arise if there are multiple disputes between the parties. If statements are made in the course of without-prejudice negotiations that have no proper connection to the resolution of the dispute the subject of the negotiations but relate to another matter, those statements will not enjoy the protection of the privilege.35 A tenuous connection is insufficient.36 The practice point that arises here is to ensure that where there are multiple disputes between the parties and it is intended, at least by one of the parties, that a global settlement is sought, the correspondence should reflect that intention. Making assertions or admissions As originally framed, the privilege was confined to the making of admissions in the course of negotiations. In 1989, however the rule privilege was expanded to cover not only admissions, but assertions also.37 The privilege is not restricted to actual communications with the other party, but it includes internal communications if they formed part of the negotiations for the settlement of the action or were reasonably incidental thereto.38 Without prejudice privilege relates to communications and does not extend to physical facts observed during without prejudice negotiations.39 A difficult situation arises when a statement is made or reaction observed 32 | Brief November 2015

during a without prejudice negotiation which reveals objective facts which would otherwise have remained unknown to the other party or opens a train of inquiry leading to the discovery of facts which assist the other party's case. Having regard to the objective facts exception below, if evidence of those matters is sought to be led at trial, interesting admissibility arguments may arise.40

at trial, it was received by the Court over objection on the basis that it was a matter in no way connected with the merits of the case, and which was capable of being easily proved by other means.49 Other examples include the exercise of an option,50 severance of a joint tenancy51 and where the negotiations revealed title had been acknowledged by the claimants in a claim for adverse possession.52

Circumstances in which the privilege does not arise or its operation excluded

Concluded compromise agreements

As a general comment, there is a strong reluctance on the part of the courts to selectively excise statements from the protection of the privilege. As Robert Walker LJ stated "to dissect out identifiable admissions and withhold protection from the rest of without prejudice communications (except for a special reason) would not only create huge practical difficulties but would be contrary to the objective of giving protection to the parties".41 Nevertheless, some excluded categories can be discerned from the authorities. The more commons ones encountered in practice are discussed below. As with legal professional privilege, the ultimate question when issues of waiver or exclusion of without prejudice privilege are raised is whether there is an inconsistency in raising an issue but attempting at the same time to prevent a proper examination of the issue by maintaining the privilege.42 One theme which is consistent across these categories is that the privilege will be set aside where an injustice to one party will be occasioned if the evidence is excluded.43 Objective facts It is well-established that the protection of the privilege does not extend to objective facts which may be ascertained during the course of negotiations44 and which have no connection to the matters in issue which are in dispute between the parties.45 This exception has also been described as "objective facts having legal consequences"46 and pithily explained by Long Innes J in the following terms "A man, having eaten his cake, does not still have it, even though he professed to eat it without prejudice".47 An example falling into this category arose in Waldridge v Kennison,48 where the fact of handwriting on a document being the defendant's was revealed during a settlement negotiation. When that evidence was subsequently led

Arguments may arise over a concluded compromise agreement reached as a consequence of without prejudice negotiations. Those arguments could be in the nature of a claim for rectification, the reasonableness of the settlement or to enforce the terms of the agreement. Care should be taken in pleading causes of action such as rectification or whether the settlement is reasonable. Waiver can occur from the pleadings53 or the manner in which a case is run by the parties.54 Given the privilege is a joint one, additional issues arise with questions of waiver. While the position is fairly clear in cases where the negotiating parties are the parties to the proceedings,55 unilateral implied waiver can occur when the other party to the negotiations is not a party to the proceedings in which the without prejudice material is sought to be deployed.56 In the case of enforcement of the agreement's terms, the scope of this exception is generally confined to the terms of the concluded agreement, not the negotiations undertaken to reach that point which remain protected by the privilege.57 However, if the dispute concerns the reasonableness of the settlement, the other party will likely be entitled to inspect and adduce into evidence the without prejudice negotiations, 58 depending upon whether the negotiations are relied on.59 Parties seeking to commence claims of this nature should be aware that notwithstanding the claim may fail if the negotiation documents are not admitted into evidence, it is possible that the privilege may not yield.60 Delay Where the Court file shows a matter has been apparently dormant and a party seeks to dismiss the action for want of prosecution, the other party may rely on without prejudice communications as evidence that the parties have been negotiating to seek to resolve the dispute to explain the delay.61


Estoppel A clear statement which is made by one party to negotiations, and on which the other party is intended to act and does in fact act, may not be protected by the privilege and be admissible as giving rise to an estoppel.62 Misrepresentation, fraud or undue influence Without prejudice privilege cannot be deployed as a shield to protect statements made during without prejudice negotiations which contravene the statutory prohibition from engaging in misleading or deceptive conduct.63 The exception for statements made in contravention of the prohibition on engaging in conduct that is misleading or deceptive enshrined in s52 TPA and s18 ACL appears to have a similar rationale for the exception for estoppel. Central to both exceptions is detrimental reliance by one party on statements made by another in the course of the without prejudice negotiations. "Unambiguous impropriety" The "unambiguous impropriety" exception was first identified by Hoffmann LJ in Forster v Friedland: the value of the without prejudice rule would be seriously impaired if its protection could be removed [for] anything less than unambiguous impropriety. The rule is designed to encourage parties to express themselves freely and without inhibition.64 (emphasis added) The exception for "unambiguous impropriety" has been upheld in subsequent cases and further explained. In Unilever65, Robert Walker LJ stated that "one party may be allowed to give evidence of what the other said or wrote in without prejudice negotiations if the exclusion of the evidence would act as a cloak for perjury, blackmail or other "unambiguous impropriety" but that the exception of "unambiguous impropriety" "should only be applied in the clearest cases of misuse of a privileged occasion". The 'impropriety' contemplated is of a serious nature. Threats will satisfy the requirement, as in Forster v Friedland,66 however the threat needs to be clear. The interests of justice do not countenance that the privilege be used to permit a party to deceive a Court by shutting out evidence which would rebut matters which that party advances as correct.67 Inconsistency between admissions made during without prejudice negotiations and

evidence given or case pleaded will not be sufficient to displace the protection of the privilege in the absence of dishonesty.68 Criminal proceedings Given the public policy basis for without prejudice privilege being the settlement of disputes, there is an inherent contradiction to the application of the privilege to criminal proceedings.69 Although no decisions have squarely raised the point, there is a line of authority to suggest that without prejudice privilege cannot prevent a tribunal of fact from receiving evidence of criminal conduct.70 The position under the Evidence Act 1995 (Cth) is much clearer â&#x20AC;&#x201C; attempts to negotiate a settlement of a criminal proceeding or anticipated criminal proceeding are expressly excluded from the scope of the protection afforded by section 131(1) of that Act.71 Although some policies exist within the various Directors of Public Prosecution,72 there is no clear common law recognition of the without prejudice privilege in the criminal sphere. While this may give rise to fairness considerations on the part of an accused that admissions made will not be sought to be admitted, lawyers acting for the accused may find themselves arguing for the application of the without prejudice privilege to those admissions from first principles. To avoid subsequent embarrassment, parties who are seeking to resolve disputes which may have a criminal dimension to them with authorities who have criminal, or concurrent civil and criminal, jurisdiction (in particular Federal authorities such as the Australian Taxation Office and the Australian Securities & Investments Commission) should consider carefully what matters are put to those authorities on a without prejudice basis. THE AFFIDAVIT CLAIMING NEGOTIATION PRIVILEGE If without prejudice documents satisfy the relevance test prescribed by either case management directions or Court rules, the documents should be discovered, notwithstanding they may not be made available for inspection73 nor admissible in evidence.74 The without prejudice privilege is a purpose-based privilege.75 This means that when preparing the list of documents that are the subject to a claim of without prejudice privilege, a party will need to carefully consider the purpose for which each document included in that list was brought into

existence to ensure the indicia identified above are met. Practitioners should also bear in mind their professional responsibility to explain discovery obligations to their clients and the certificate required to be filed under Order 26 rule 16A of the Rules of the Supreme Court. The person objecting to producing a document on the basis of a privilege carries the onus to persuade the Court that the privilege is properly claimed.76 The general principle, at least where legal professional privilege is in issue, is that the party claiming the privilege has the onus to establish the facts on which the privilege is based.77 Mere assertion of the claim is not enough: what is required is exposure of facts from which an informed decision can be made as to whether the claim for privilege is supportable.78 O26 r12 of the Rules of the Supreme Court 1971 is relevant in these circumstances. Where the claim of privilege has been properly formulated in the affidavit of discovery, the party challenging the objection to production should adduce evidence that the claim is unfounded or mistaken.79 In the absence of such evidence, the effect of O26 r12(1) is that the claim is sustained, although the right of the Court to inspect documents the subject of a challenges is expressly preserved by O26 r12(2). Key practice points to note: As will be gleaned from the discussion above, not everything that passes between parties as part of negotiations is privileged. By adopting a defensible methodology for claiming without prejudice privilege in the discovery process, practitioners can maximise the prospect that their clients will not be drawn into time-consuming interlocutory disputes over challenges to claims for without prejudice privilege. An affidavit which contains a series of general assertions and conclusions (e.g. "without prejudice documents in the possession of [deponent or deponent's corporation]") and does not address the basis for which a claim is asserted will not be accepted by the Court as having met the onus.80 Although some explanation of the claim should be made, a detailed one is generally not required, and in some cases, that detailed explanation may result in a waiver.81 Unless there is a demonstrated requirement to list individually each of the documents comprising a bundle of correspondence of which a claim is made, the Court may permit the 33


discovery of documents subject to a claim for without prejudice privilege to be given by reference to a bundle.82 The person making the affidavit should have read the documents the subject of the claim for without prejudice privilege and state that fact in the affidavit. The person should indicate whether the document is confidential to the party claiming the privilege (this may also be relevant where the privilege is made in proceedings involving a stranger to the negotiations). CHALLENGES TO CLAIMS FOR WITHOUT PREJUDICE PRIVILEGE Unlike most claims for privilege (in the case of settlement negotiations between the parties), the parties to the litigation will have access to the documents the subject of the claim for without prejudice privilege. In those circumstances, the prospects must be good that meaningful conferral between the parties will result in challenges being resolved without the need to require judicial intervention. However, if conferral does not resolve the challenge and a ruling is required, if available, a judge other than the one trying the case should determine that challenge. This is because, having regard to the indicia identified above, the Court will usually need to inspect the documents together with the affidavit evidence filed to determine whether settlement negotiations were bona fide taking place as claimed by the party asserting the privilege. It is not controversial that the Court has this power.83 By recognising the principles underlying the without prejudice privilege and its limits, practitioners can be in a position to advise clients on steps that can be taken to properly protect the matters advanced during the course of settlement negotiations from subsequent reliance by other parties in Court proceedings. NOTES 1.

Alleyn v Thurecht [1983] 2 Qd R 706 at 718 per Thomas J (as his Honour then was).

2.

See for example Jumitogad Pty Ltd v Garraway (unreported decision of the Supreme Court of the Northern Territory delivered on 9 October 1998 by Kearney ACJ, Lib No BC9807743). This case is also commended as an illustration of how the term "without prejudice" can be misused.

9.

Barnetson v Framlington Group Ltd [2007] 1 WLR 2443 at [24] per Auld LJ.

53.

Most recently acknowledged in Teoh v Greenway (2015) 71 MVR 271 at [17] per Burns J.

Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11 at [95] per McLure J (as her Honour then was).

10.

54.

11.

Field v Commissioner for Railway (1957) 99 CLR 285 at 291–2 per Dixon CJ, Webb, Kitto and Taylor JJ.

Burg Design Pty Ltd v Wolki (1999) 162 ALR 639 at [15] per Burchett J.

55.

12.

Savings and Investment Bank Ltd v Fincken [2004] 1 WLR 667 at [62] per Rix LJ.

Somatra Ltd v Sinclair Roche & Temperley [2001] ANZ Conv R 193 at 195 per Clarke LJ.

56.

13.

Rush & Tompkins Ltd v Greater London Council [1989] AC 1280 at 1300 per Lord Griffiths.

Yokogawa Aust Pty Ltd & Ors v Alstom Power Ltd (2009) 262 ALR 738 at [96] per Duggan J.

57.

14.

Rodgers v Rodgers (1964) 114 CLR 608 at 614; Walker v Wilsher (1889) 23 QBD 335 at 337 per Lord Esher.

Austotel Management v Jamieson (1995) 57 FCR 411 at 419 per Burchett J.

58.

15.

Glengallan Investments Pty Ltd v Arthur Andersen [2002] 1 Qd R 233 at [32]–[37] per Williams JA.

Muller v Linsley & Mortimer [1996] PNLR 74 at 81 per Leggatt LJ.

59.

16.

Village/Nine Network Restaurants & Bars Pty Ltd v Mercantile Mutual Custodians Pty Ltd [2001] 1 Qd R 276 at [20] per Pincus JA.

Yokogawa Aust Pty Ltd & Ors v Alstom Power Ltd (2009) 262 ALR 738 at [108]-[109] per Duggan J.

60.

Schering Corp v Cipla Ltd [2005] FSR 25 at [21] per Laddie J.

17.

Calderbank v Calderbank [1975] 3 All ER 333.

61.

Walker v Wilsher (1889) 23 QBD 335.

18.

Brown v Commissioner of Taxation (2001) 187 ALR 714 at [172]–[174] per Emmett J.

62.

19.

Hoefler v Tomlinson (1995) 60 FCR 452 at 453 per Spender J.

Hodgkinson & Corby Ltd v Wards Mobility Services Ltd [1997] FSR 178 at 191 per Neuberger J; Tomlin v Standard Telephones & Cables Ltd [1969] 1 WLR 1378.

63.

20.

Silver Fox Co Pty Ltd (as Trustee for the Baker Family Trust) v Lenard's Pty Ltd (No 3) (2005) 214 ALR 621 at 624 per Mansfield J.

21.

Bradford & Bingley plc v Rashid [2006] 1 WLR 2066 at [81] per Lord Mance.

Quad Consulting Pty Ltd v David R Bleakley & Associates Pty Ltd (1990) 27 FCR 86 at 93 per Hill J, subsequently followed in Rosebanner Pty Ltd v EnergyAustralia (2009) 223 FLR 460 at [412] per Ward J (as her Honour then was).

64.

22.

Rodgers v Rodgers (1964) 114 CLR 608 at 614 per McTiernan, Taylor and Owen JJ.

[1992] CAT 1052 (unreported decision of the EWCA (Civ) delivered on 10 November 1992).

65.

23.

Barnetson v Framlington Group Ltd [2007] 1 WLR 2443 at [34] per Auld LJ.

[2000] 1 WLR 2436 at 2448-9, citing Fazil-Alizadeh v Nikbin [1993] CAT 205, delivered 25 February 1993.

66.

24.

Glengallan Investments Pty Ltd v Arthur Andersen [2002] 1 Qd R 233 at [29]–[31] per Williams JA.

[1992] CAT 1052, see in particular the blackmail cases referred to by Hoffmann LJ.

67.

25.

Glengallan Investments Pty Ltd v Arthur Andersen [2002] 1 Qd R 233 at [40] per Williams JA.

Pitts v Adney (1961) 78 WN (NSW) 886 at 889 per Walsh J.

68.

26.

Collins Thomson Pty Ltd (in liq) v Clayton [2002] NSWSC 366 at [12] per Austin J.

Savings and Investment Bank Ltd v Fincken [2004] 1 WLR 667 at [60] per Rix LJ.

69.

27.

Bhagat v Global Custodians Ltd [2002] NSWCA 160 at [28] and [51] per Spigelman CJ.

Latoudis v Casey (1990) 170 CLR 534 at 543 per Mason CJ and 568 per McHugh J.

70.

28.

Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11 at [91] per McLure J (as her Honour then was).

Davies v Nyland (1974) 10 SASR 76 at 91-92 per Wells J.

71.

Section 131(5)(b) Evidence Act 1995 (Cth).

72.

See for example Guideline 20 of the Prosecution Guidelines of Director of Public Prosecutions (NSW) (although in contrast see para 74 of the WA DPP Statement of Prosecution Policy and Guidelines 2005 which although in similar terms does not expressly provide for offers to be made by the defence on a without prejudice basis).

73.

Rabin v Mendoza & Co [1954] 1 WLR 271 at 273 per Denning LJ (as his Lordship then was).

74.

Direct Acceptance Corporation Ltd v Lord [1994] ANZ ConvR 78 at 80 per Giles J.

75.

Rush & Tompkins Ltd v. Greater London Council [1988] 1 All ER 549 at 554 per Balcombe, Slade and Stocker LJJ.

76.

Baulderstone Hornibrook Engineering Pty Ltd v Dare Sutton Clarke Pty Ltd [2000] SASC 78 at [14] per Burley J.

77.

Grant v Downs [1976] HCA 63 ; (1976) 135 CLR 674 at 689; Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority [2002] VSCA 59 ; (2002) 4 VR 332 at [11].

29.

Jones v Millward [2005] 1 Qd R 498 at 500 per Holmes J (as her Honour then was).

30.

Buckinghamshire County Council v Moran [1990] Ch 623 at 635 per Slade LJ.

31.

Trade Practices Commission v Arnotts Ltd (1989) 88 ALR 69 at 73–4 per Beaumont J.

32.

South Shropshire District Council v Amos [1987] 1 WLR 1271 at 1276-7 per Parker LJ, adopted in Australia by Lukies v Ripley (No 2) (1994) 35 NSWLR 283 at 290 per Young J (as his Honour then was).

33.

Shilkin v Taylor [2011] WASCA 255 at [62] per Newnes JA.

34.

Equuscorp Pty Ltd & Ors v Glengallan Investments Pty Ltd & Ors [2001] QSC 365 at 10 per Helman J.

35.

Field v Commissioner for Railway (1957) 99 CLR 285 at 293 per Dixon CJ, Webb, Kitto and Taylor JJ.

36.

GPI Leisure Corporation Ltd v Yuill (1997) 42 NSWLR 225 at 226 per Young J.

37.

Rush & Tompkins Ltd v Greater London Council [1989] AC 1280 at 1299–1300 per Lord Griffiths.

78.

38.

Yokogawa Australia Pty Ltd v Alstom Power Ltd (2009) 262 ALR 738 at [104]–[105] per Duggan J.

National Crime Authority v S (1991) 100 ALR 151 at 159–160.

79.

39.

Lock v Lock [1966] SASR 246 at 250 per Napier CJ, Chamberlain J and Walters AJ.

CTC Resources NL v Australian Stock Exchange Ltd (2000) 22 WAR 48 at [33]–[35] per Owen and Steyler JJ (as their Honours then were).

40.

AWA Ltd v Daniels (t/as Deloitte Haskins & Sells) (1992) 7 ACSR 463 at 468 per Rogers CJ in Comm Div.

80.

Barnes v Commissioner of Taxation (2007) 242 ALR 601 at [18]-[19].

41.

Unilever plc v Procter & Gamble Co [2000] 1 WLR 2436 at 2448-9 per Robert Walker LJ.

81.

42.

Yokogawa Aust Pty Ltd & Ors v Alstom Power Ltd (2009) 262 ALR 738 at [107] per Duggan J.

Great Atlantic Insurance Co v Home Insurance Co [1981] 1 WLR 529 at 537 per Templeman LJ (as his Lordship then was).

82.

43.

Alstom Power Ltd v Yokogawa Australia Pty Ltd & Ors (No 3) [2009] SASC 100 at [55] per Anderson J.

Baulderstone Hornibrook Engineering Pty Ltd v Dare Sutton Clarke Pty Ltd [2000] SASC 78 at [12] per Burley J.

44.

Field v Commissioner for Railway (1957) 99 CLR 285 at 292 per Dixon CJ, Webb, Kitto and Taylor JJ.

83.

45.

Dowell and Anor v Custombuilt Homes Pty Ltd [2004] WASCA 171 at [114] per Heenan J.

South Shropshire District Council v Amos [1987] 1 WLR 1271 at 1276-7 per Parker LJ; Yokogawa Aust Pty Ltd & Ors v Alstom Power Ltd (2009) 262 ALR 738 at [117][118] per Duggan J.

3.

Turton v Benson (1718) 24 ER 488.

4.

Oceanbulk Shipping and Trading v TMT Asia [2011] 1 AC 662 at [27] per Lord Clarke.

46.

Wilson v Kingsgate Mining Industries Pty Ltd [1973] 2 NSWLR 713 at 727 per Wootten J.

5.

(1957) 99 CLR 285 at 291–2 per Dixon CJ, Webb, Kitto and Taylor JJ.

47.

Hayne v Hirst (1927) 27 SR (NSW) 480 at 489.

6.

Rush & Tompkins Ltd v Greater London Council [1989] AC 1280 at 1299–1300 per Lord Griffiths.

48.

(1794) 170 ER 306.

49.

(1794) 170 ER 306 at 307 per Lord Kenyon.

7.

Rush & Tompkins Ltd v Greater London Council [1988] 3 All ER 737 at per Lord Griffiths.

50.

Tenstat Pty Ltd v Permanent Trustees Australia Ltd (1992) 28 NSWLR 625.

8.

Phiga Pty Ltd (ACN 002 297 056) & Ors v Roche & Ors [2011] FCA 240 at [86]; Cutts v Head [1984] 1 All ER 597; Rush & Tompkins Ltd v Greater London Council [1988] 3 All ER 737.

51.

McDowell v Hirschfield Lipson & Rumney [1992] 2 FLR 126.

52.

Ofulue v Bossert [2009] 1 AC 990.

34 | Brief November 2015


What rights does a beneficiary have to challenge decisions of a trustee? Peter MacMillan Barrister, Francis Burt Chambers 1. In the case of duties, a trustee is bound to carry the duty out, irrespective of his or her view as to such performance. With powers, a trustee is given a discretion as to whether they do the act or not. This paper considers the rights of a beneficiary to challenge a trustee's decision as to the exercise of a discretionary power. A beneficiary has the right to require a trustee to exercise his or her judgment whether to exercise the power or not. Where a power has been exercised, a trustee is to act fairly and honestly for the purpose for which the power was given, and not for any ulterior purpose, whether for the benefit of the trustee or otherwise: Cowan v Seargill [1985] Ch 270 at 288. 2. If a trustee has a duty to pay income from a trust fund to A, the direction is a duty. A failure so to do is a breach of trust and is actionable by A. If, however, the trustee has a mere power to apply the income for A's maintenance, and honestly decides to make no payment to A, a Court will not intervene: Gisborne v Gisborne (1877) 2 App Cas 300. A trustee commits a breach of trust if he or she fails to consider the question whether they should make the payment to A, (National Trustees Executors and Agency Co of Australasia Ltd v Federal Commission of Taxation (1923) 33 CLR 491 at 504), or if he or she refrains from making a payment because of some improper motive (Re Radnor's) Earl (Will Trusts (1890) 45 Ch D 402 at 413), or if they make the payment to A without considering whether he or she should do so or not (Wilson v Turner (1883) 22 Ch D 521). DISCRETIONARY TRUSTS 3. Such trusts are common: various wording is utilised as to the relevant discretion. ("in his or her absolute discretion" is favoured). In what circumstances is a beneficiary able to challenge a decision, taken

pursuant to such a trust provision, which confers on the trustee a wide discretion? 4. The term "discretionary trust" does not have a " â&#x20AC;Ś constant, fixed, normative meaning, in the absence of an applicable statutory definition. Commissioner of State Revenue v Serana Pty Ltd [2008] WASCA 82 at 122]; CPT Custodian Pty Ltd v Commissioner of State Revenue of the State of Victoria (2005) 224 CLR 98 at [15]. 5. A beneficiary of a so-called discretionary trust will has an equitable proprietary interest in the assets of the trust fund only if the provisions of the trust instrument create that result: CPT Custodian at [15]; SS "Maria Luisa" (No 2) at [60]; Serana at [124]. The object of a discretionary trust does not have a caveatable interest in trust land: Walter v Register of Titles [2003] VSCA 122 at [15], relying on R&I Bank of Western Australia v Anchorage Investments Pty Ltd (1992) 10 WAR 59 (not concerning a caveat). 6. A beneficiary has only a right to a due administration of the trust property in accordance with the trustee's duties: Serana at [139]. A discretionary trust, strictly socalled, of its nature, confers on the beneficiaries no more than a right of due administration: Kent v SS "Maria Luisa" (No 2) (2003) 130 FCR 12 at [59]. Elovalis v Elovalis [2008] WASCA 141 at [61]. Whether such interest goes beyond requiring due administration of the trust depends on whether the purpose(s) of the trust requires something more: Kan Lai Kwon v Pook Lok To Otto [2014] HKCFA 66 at [42]-[44]. 7. The right to require due administration apparently extends to a Court requiring a trustee to disclose trust documents notwithstanding that the object of the trust has no beneficial interest in trust assets. Schmidt v Rosewood

Trust Ltd [2003] 2 AC 709 at [51]. 8. Gummow J dealt with the distinction between general, special and hybrid powers for a trustee, and the distinction between fixed and discretionary trusts in Federal Commissioner of Taxation v Vegners (1989) 90 ALR 547 at 551-552: A fixed trust is used to describe a species of express trust where all the beneficiaries are ascertainable and their beneficial interest[s] are fixed, there being no discretion in the trustee or any other person to vary the group of beneficiaries or the quantum of their interests. The expression "discretionary trust" is used to identify another species of express trust, one where the entitlement of beneficiaries to income, or to corpus, or both, is not immediately ascertainable. Rather, the beneficiaries are selected from a nominated class by the trustee or some other person and this power may be exercisable once or from time to time. The power of selection is a special or hybrid power; a power exercisable in favour of any person including the donee of the power would be a general power and thus would be tantamount to ownership of the property concerned, whilst the objects of a special power would be limited to some class, and the objects of a hybrid power would be such that the donee might appoint to anyone except designated classes or groups. The trust will be "purely discretionary" where income and capital may be withheld altogether, but this would not be so where the donee of the power of selection had a discretion only as to the time or method of making payments to or for beneficiaries: see Scott on Trusts, 4th ed, s155. In this regard, the special or 35


hybrid power would be further classified, or sub-classified, as a trust power or a bare power within the meaning of those expressions as discussed by the House of Lords in Whishaw v Stephens [1970] AC 508 and McPhail v Doulton [1971] AC 424. However, some courts and commentators have used the expression 'discretionary trust' only to describe cases where the power involved is a trust power rather than a bare power: see, for example, Re Baden's Deed Trusts (No 2) [1973] Ch 9 at 26 and Hanbury & Maudsley, Modern Equity, 12th ed, 1985, p 199. It will be apparent that, unlike the division of trusts between purpose trusts and non-purpose trusts, and between express trusts, implied or resulting trusts and constructive trusts, and the classification of powers between general, special and hybrid powers, and between trust and bare powers, the usage of the term 'discretionary trust' is essentially descriptive rather than normative. The meaning of the term is primarily a matter of usage, not doctrine. The judgment was affirmed on appeal: Vegners v Federal Commissioner of Taxation (1991) 21 ATR 1347; cited with approval in Elovalis at [62]. 9. A trustee is bound to consider whether a power should be exercised, and to put him or herself in a position where they can make a rational decision on the matter. A non-fiduciary repository of a mere power is under no such duty. Re Hay's Settlement Trusts [1982] 1 WLR 202 at 208. 10. The right to require due administration of the trust " â&#x20AC;Ś includes a right to require the discretionary trustee to consider from time to time whether or not to exercise the discretionary powers conferred by the trust in his or her favour. Elovalis v Elovalis [2008] WASCA 141 at [50]. 11. Where a discretionary trust empowers the trustee to choose which beneficiaries or classes of beneficiaries should receive a benefit pursuant to the trust, a beneficiary who is not so favoured has no right to challenge that decision. Edge v Pensions Ombudsman [1998] 3 WLR 466; affirmed Edge v Pensions Ombudsman [2000] Ch 602 at 486; 36 | Brief November 2015

Elovalis at [51]. 12. That said, a trustee is not, notwithstanding a wide discretionary power conferred upon him or her by the trust deed, entitled to do as he or she likes with trust property. As Buss JA remarked in Elovalis (at [63]): Where the trust instrument confers on the trustee an "absolute and uncontrolled" discretion in relation to the exercise of a power, the Court will not compel the trustee to exercise it, but if the trustee proposes to exercise it, the Court will ensure that it is not exercised improperly or unreasonably. Further, where the power is combined with a trust or duty, the Court will enforce the proper and timely exercise of the power, but will not interfere with the trustee's discretion as to the particular time or manner of his or her bona fide exercise of it. 13. Vice-Chancellor Scott remarked in Edge (at 486-487): [With] ... A discretionary power to choose which beneficiaries, or which classes of beneficiaries, should be the recipients of trust benefits ... it is, in my opinion, meaningless to speak of a duty on the trustee to act impartially. Trustees, when exercising a discretionary power to choose, must of course not take into account irrelevant, irrational or improper factors. But, provided they avoid doing so, they are entitled to choose and to prefer some beneficiaries over others. 14. Vice-Chancellor Scott went on to remark that: The trustees are entitled to be partial. They are entitled to exclude some beneficiaries from particular benefits and to prefer others. If what is meant by 'undue partiality' is that the trustees have taken into account irrelevant or improper or irrational factors, their exercise of discretion may well be flawed. But is not flawed simply because someone else, whether or not a judge, regards their partiality as 'undue'. It is the trustee's discretion that is to be exercised. Except in a case in which the discretion has been surrendered to the Court, it is not for the judge to exercise the discretion. The judge may disagree with the manner in which the trustees

have exercised their discretion but, unless they can be seen to have taken into account irrelevant, improper or irrational factors, or unless their decision can be said to be one that no reasonable body of trustees properly directing themselves could have reached, the judge cannot interfere. In particular he cannot interfere simply on the ground that the partiality shown to the preferred beneficiaries was in his opinion undue. 15. So, irrespective of the breadth of discretion conferred on the trustee by the relevant trust deed, that discretion is to be exercised " â&#x20AC;Ś by reference to the objects and purposes of the Trust, having regard to the competing interests of the various potential beneficiaries of the Trust, and without taking into account improper, irrelevant or irrational considerations". Elovalis at [51]. In other words, a trustee is not to act mala fide or on the basis of a misconception of the nature of his or her discretion. 16. To describe someone as a fiduciary, without more, is 'meaningless'. Elovalis at [65]. Where a trust instrument provides the fiduciary's powers and duties, that instrument is to be examined to determine the nature and scope of that fiduciary's undertaking. Elovalis at [66]. Duties such as avoiding a conflict of interest, acting with reasonable prudence, and observing impartiality, may be limited by the terms of the trust document. Edge v Pensions Ombudsman [2000] Ch 602, 621, 627-630; Elovalis at [67]. In Re Beatty [1996] 1 WLR 1503 at 1506, Hoffmann J remarked:


matters which are relevant and excluding from consideration matters which are irrelevant. See Edge in relation to pension funds and Re Beatty in relation to private trusts. 18. Unless there are clear words to the contrary, a trustee's power cannot be exercised by a trustee in his or her own favour. Thus a trustee who is to exercise a power "in his or her absolute discretion" to invest trust monies, is not to lend the monies without security, or to advance monies to themselves. Metropolitan Gas Co v Federal Commission of Taxation (1932) 47 CLR 621 at 633; Wilson v Metro-Goldwyn & Mayer (1980) 18 NSWLR 730.

The rule that a trustee cannot profit from his trust would ordinarily exclude the trustees themselves from the ambit of the powers, but clause 12(c) of the will allows the trustees to exercise any power conferred by the will, notwithstanding that they may have a direct personal interest in the mode of its exercise. This arguably allows the trustees, subject to having proper regard to their overall fiduciary duties, to make gifts or payments to themselves. They have in fact paid themselves ÂŁ10,000 each in accordance with the express wish of Mrs Beatty that they should do so. Cited with approval in Elovalis at [68]. 17. As Buss JA remarked in Elovalis (at [70]): In summary: (a) The fact that a trustee is also a beneficiary does not preclude discretionary powers conferred on the trustee (including powers in relation to the distribution of income or capital) from being fiduciary in character. See Snell's Equity, 31st ed [9-01]. (b) Where the trustee is also a beneficiary and the trust instrument dispenses with the no conflict rule, the trustee may distribute income or capital to himself or herself provided the power is exercised properly; that is, in good faith and for the purposes for which the power was given (and not for any ulterior purposes) including giving proper consideration to

19. The High Court of Australia held in Elders Trustee and Executor Co Ltd v Higgins (1963) 113 CLR 426 that where a trustee carrying on a pastoral business had "the fullest powers and discretions as to the mode of conducting my said business â&#x20AC;Ś and otherwise in relation thereto as if the trustee were the absolute owner thereof", the trustee was not, as a matter of construction, relieved of his ordinary duty to exercise due care and diligence, in deciding whether to exercise an option to purchase neighbouring land. In other words, the extent of the discretion is always a matter of construction of the trustee instrument. Thus, where a trustee has a discretion to sell property in such manner and at such price as he or she thinks fit, the trustee should follow the principles settled in the decisions of (1917) 17 SR (NSW) 229 at 232-233; 34 WN (NSW) 229 at 235. 20. It is not necessary to show bad faith. Elovalis at [40]. It should be noted, however, that the term "bad faith", as used, in this context, has a wider meaning than fraud. It includes a refusal to recognize that a discretion exists (Re Smith [1971] 1 OR 584; 2 OR 541), a refusal to make an informed decision (Wilson v Turner (1883) 22 ChD 52), making a decision for an ulterior purpose (Re Panlings' Settlement Trust (No 1) [1964] Ch 303), taking into account irrelevant considerations (French v Davidson (1818) 3 Madd 396; 56 ER 550), or failing to take into account relevant considerations (Lock v Smith (1909) 9 CLR 773); Jacobs at [1609]. The breadth of "bad faith", in this context, appears, with respect, to have been misunderstood in Elovalis (see Elovalis at [20]).

21. Such discretion is to be exercised personally, and not, in effect, by someone else, in circumstances where the trustee effectively acts under the direction of that other. Elovalis at [51]. 22. The extent to which trustees exercising discretionary powers can be called upon to account for the exercise of those powers was considered in In re Londonderry's Settlement [1965] Ch 918, where it was held that trustees exercising a discretionary power " â&#x20AC;Ś are not bound to disclose to their beneficiaries the reasons actuating them in coming to a decision". Harman LJ explained why that is the case (at 928-929): This is a long-standing principle and rests largely I think on the view that nobody could be called upon to accept a trusteeship involving the exercise of a discretion unless, in the absence of bad faith, he were not liable to have his motives or his reasons called in question either by the beneficiaries or by the court. To this there is added a rider, namely, that if the trustees do give reasons, their soundness can be considered by the court. (Cited with approval in Edge at 487). 23. For this reason a beneficiary is not entitled to discovery of documents, private to a trustee, which evidence reasons for a decision: Re Londonderry's Settlement [1965] Ch 918. 24. Every case is to be assessed on the facts; in some cases it may be difficult to find the necessary evidence, either as to a failure to consider exercising the relevant power, or as to a decision the subject of complaint. Where this is the case, an inability to require reasons from the trustee may effectively preclude relief for a disaffected beneficiary. 25. In Queensland and Western Australia, the Court may, in effect, compel a trustee to state his or her reasons for failing to exercise, or for exercising a power. Anyone who directly or indirectly, has an interest, vested or contingent, in trust property, or who has a right of due administration of any trust, may call on the Court's assistance as to a failure to make a decision, or as to a decision of a trustee (s94 Trustees Act 1962 (WA)). 26. Once a trustee provides reasons, a 37


Western Australian Court may, on the cases, or on the basis of s94, consider the validity of such reasons, and if appropriate, may correct such decision. Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405 at 441-442. Procedure 27. The appropriate procedure to challenge an exercise of discretion by a trustee is by writ, unless there is no dispute of fact anticipated. REMOVAL OF A TRUSTEE 28. There are two sources of jurisdiction as to the removal of a trustee. One is s77 of the Trustees Act 1962 (WA) (the Act); the second is the inherent jurisdiction of the Court. Elovalis at [29]. Section 77: Trustees Act 1962 29. Section 77 of the Act is in the following terms: The court may, whenever it is expedient to appoint a new trustee or new trustees and it is inexpedient, difficult or impracticable so to do without the assistance of the court, make an order for the appointment of a new trustee or new trustees in either in substitution for, or in addition to, any existing trustee or trustees, or although there is no existing trustee. 30. The principal consideration in the exercise of this jurisdiction is the welfare of the beneficiaries, as opposed to the imposition of a sanction or punishment on a trustee for misconduct. McLaughlin v Prince [2002] WASC 274 at [14]; Smith v Smith [2006] WASC 166 at [3]-[4]; Elovalis at [30]. 31. This is reinforced by the terms of s77(2) of the Act, which provides a number of instances in which a new trustee may be appointed "without limiting the generality of subsection(1)". Such instances do not necessarily involve misconduct or bring discredit on the relevant trustee: Elovalis at [30]. 32. As Latham CJ remarked in Miller v Cameron (1936) 54 CLR 572 at 575: It has long been settled that, in determining whether or not it is proper to remove a trustee, the Court will regard the welfare of the beneficiaries as the dominant consideration (Letterstedt v Broers). Perhaps the principal element in the welfare of the 38 | Brief November 2015

beneficiaries is to be found in the safety of the trust estate. Accordingly, even though he has been guilty of no misconduct, if a trustee is in a position so impecunious that he would be subject to a particularly strong temptation to misapply the trust funds, the Court may properly remove him from his office as trustee. (Cited with approval in Elovalis at [31]). 33. This approach countenances the removal of a trustee on the basis of a propensity for that trustee to succumb to misconduct in the future, or on the basis that there is a lack of confidence in that trustee's appropriate further administration of the trust. Elovalis at [32]-[33]. 34. As O'Leary J remarked in Re Estate of Roberts (1983) 20 NTR 13 at 17, as to the Trustees Act (NT): Expedient here, I think, may be taken to mean 'contusive to advantage in general, or to a definite purpose; fit, proper, or suitable to the circumstances of the case'; OED, vol III, v 426. In the context of appointing a new trustee in substitution for an existing one, I take it to mean then conducive to, or fit or proper or suitable having regard to, 'the interests of the beneficiaries, to the security of the trust property and to an efficient and satisfactory execution of the trusts in a faithful and sound exercise of the powers conferred upon the trustee'. Cited with approval by White J in Porteous v Rinehart (1998) 19 WAR 495; Passingham v Sherborm (1846) 9 Bav 424; 50 ER 4076; Elovalis at [35]-[38]. 35. Murray J remarked in Smith with regard to the word 'expedient', as used in s77 of the Act, that: It has been held that in the context the word 'expedient' is one which carries the meaning that the action of appointment would be fit, or proper, or suitable, having regard to the interest of the beneficiaries, to the security of the trust property and to an efficient and satisfactory execution of the trusts and a faithful and sound exercise of the powers conferred upon the trustee. As I have said, the jurisdiction is a remedial one but it is a power which, because it interferes

with the appointments, by deed ordinarily, by the parties, will be exercised cautiously and only with the Court is satisfied that there is a clear need for the appointment to be made. (at [3]-[4]) 36. It has been held that such legislation does not give the Court power to remove a trustee who desires to continue in office. Re Hodson's Settlement (1851) 9 Hare 118; 68 ER 439; Re Blanchard (1861) 3 De G F & J 131; 45 ER 828; Re Combs (1884) 51 LT 45. That is the case unless, it has been said, there is no dispute as to the facts. Re Henderson [1940] Ch 764; Jacobs Law of Trusts in Australia (7th ed) [1585]. 37. This is unsatisfactory: it is for a Court to resolve disputes of fact. Titterton v Oates (1998) 143 FLR 467 at 475476. A trustee, notwithstanding his or her wish to continue, may be removed if there are circumstances such as breaches of trust, justifying this course. Pope v DRP Nominees Pty Ltd (1999) 74 SASR 78 at [37]; Benzija v Adriatic Fisheries Pty Ltd (1984) 37 SASR 545. 38. It may, of course, not be necessary for the Court to make findings of fact, notwithstanding a dispute of fact. The Court may conclude that it is inappropriate for the trustee to continue where that trustee has an interest in the outcome of the dispute. In other words, the proper administration of the trust is to be advanced by the appointment of an independent trustee. This was the approach adopted by Murray J in Smith v Smith [2006] WASC 166. Inherent jurisdiction of the Court 39. It has been said that where a trustee is able to continue and opposes being removed, recourse is to be had to the inherent jurisdiction. Jacobs at [1585]. This was not the approach taken in Elovalis; the better view appears to be that a trustee may be removed pursuant to the statutory powers even though he or she is able to continue and opposes being removed. 40. The Court, nonetheless, has an inherent jurisdiction to remove a trustee where the welfare of the beneficiaries and of the trust estate requires such removal. Letterstedt v Broers (1884) 9 App Cas 371; [1881-5] All ER Rep 882; Hunter v Hunter [1938] NZLR 520. The power will be strictly construed. Wernher v Boehm, (1890) 16 VLR 73; Equitable Group Ltd v Pendal Nominees Pty


Ltd (1984) 3 ACLC 546. Grounds for removal 41. Where a trustee has been guilty of misconduct, a Court will have no difficulty as to his or her removal. However, a trustee will not be removed for every mistake, neglect of duty, or inaccuracy; the acts or omissions should be such as to endanger trust property, show a want of honesty, show a want of proper capacity to execute the duties, or show a want of reasonable fidelity. Miller v Cameron (1936) 54 CLR 572; Jacobs at [1585]. With a discretionary trust, misuse of discretion, where it demonstrates an apparent inability to appreciate the nature of the relevant trust duties, and to execute them, may be a ground for removal: Elovalis at [52]. 42. Friction between a trustee and beneficiaries is generally not of itself a sufficient reason for removal. Quinton v Proctor [1998] 4 VR 469 at 475-476. Where, however, that hostility is accompanied by, or is based on, overcharges against the trust estate, or on the manner in which the trust has been administered, it is not to be disregarded. Letterstedt at 389. This is analogous to the removal of a trustee in bankruptcy: a breakdown in the relationship will often not be sufficient; where, however, the trustee has acted improperly and in breach of the Act, particularly for

there is no basis for removal: Lee v Young (1843) 2 Y & C Ch Cas 532; 63 ER 238. A trustee will not necessarily be removed as a result of a conflict of interest between duty and interest: Monty Financial Services Ltd v Delmo [1996] 1 VR 65. Even if all the beneficiaries wish removal, this, also, may not be sufficient: Re Brockbank [1948] Ch 206. If, however, the trustee is "antagonistic" to the trust, that may ground removal: Officer v Haines (1877) 3 VLR Eq 115. In each case, the outcome is what is best for the welfare of the trust estate: CravenSands v Koch (2000) 34 ACSR 341 at [204].

his or her own interests, removal is warranted. Boensch v Pascoe [2007] FCA 1977 at [90]-[91]. 43. As Lord Blackburn remarked in Letterstedt at (386), where the continuance of the trustee would be detrimental to the proper execution of the trust, the trustee is generally advised by counsel to resign; that advice is usually accepted (Jacobs at [1585]). 44. Trustees have been removed for breach of trust: Princess Ann of Hesse v Fields [1963] NSWR 998; where the trustee has commenced a rival business: Moore v McGlynn [1894] 1 IR 74; where the trustee refuses to act reasonably with cotrustees: Uvedale v Ettrick (1682) 2 Ch Cas 130; 22 ER 880; where the trustee resides permanently abroad: O'Reilly v Alderson (1849) 8 Hare 101; 68 ER 289; where the trustee is bankrupt: Miller v Cameron (1936) 54 CLR 572; where a trustee is not impartial: Re Whitehouse [1982] Qd R 196; Nicholls v Louisville Investments Pty Ltd (1991) 10 ACSR 723; and generally where the Court is satisfied that the trust property would not be safe in the trustee's hands or that the trust may not be properly administered in the interests of the beneficiaries: Hackett v Hackett [1922] NZLR 242. 45. However, where a trustee refuses to exercise a discretionary power, and there is no corrupt motive,

Procedure 46. Where misconduct is involved, proceedings should be by writ and not by originating summons. Re Henderson [1940] Ch 764; Re Combs (1884) 51 LT 45; Jacobs at [1586]. Where there is no dispute of fact, proceedings by originating summons may be appropriate. 47. Where a trustee is removed, his or her costs should not be paid from the estate; that trustee may be ordered to pay the costs of the action. A-G v Murdoch (1856) 2 K & J 571 at 573; 69 ER 910 at 911; Palairet v Carew (1863) 32 Beav 564; 55 ER 222; Jacobs at [1587].

Coming Vacancy General Manager Advocacy •

Be part of a positive and supportive senior management team

Drive policy and advocacy for the peak legal professional body in Western Australia

Perth CBD location

The Role

Key responsibilities include: • Leading a small team to development of the Society’s policy and advocacy priorities and making recommendations to the Council and Executive on issue assessment. • Developing and executing communication strategies for the above to internal and external stakeholders, including working with the relevant staff to develop campaigns to influence changes in government policy.

Reporting to the Executive Director and leading a small team of policy lawyers, this position is responsible for • Prioritising and preparing submissions and policy papers as the development and articulation of the Law Society of required to government and parliament. Western Australia’s policy and advocacy priorities to • Building and maintaining the Society’s relationships with peak influence public policy aligned to our purpose as the voice organisations in other sectors and counterparts in like-minded of the legal profession in Western Australia. organisations both in Western Australia and nationally.

NOTE: The role will become vacant in early 2016 when the current incumbent retires. The Society is seeking confidential expressions of interest from suitably qualified and experienced individuals who would like to be considered for the position and would be able to commence in the role in February 2016. The Law Society of Western Australia is an equal opportunity employer. For more information and to read the position description please visit lawsocietywa.asn.au

39


lawyer on the street

Lawyer on the Street Brooke Sojan Legal Aid WA

I am a Restricted Practitioner at Legal Aid WA, working out of the Pilbara office. I have always enjoyed advocacy and working at Legal Aid enables me to be face-to-face with clients and in court most days of the week. Since beginning at Legal Aid, I have had the opportunity to work in three of the WA offices (Midland, Perth and Pilbara), all with differing practices and in different regions. Each office has brought with it a variety of challenges, but has also enabled me to have a great deal of experiences and autonomy as a junior practitioner. I practise mainly in crime, but working in a regional office gives you the ability to become skilled in a variety of areas of law. Working with disadvantaged or marginalised clients can often present as a challenge in itself, however you can also gain a greater sense of accomplishment when you are able to assist clients and achieve good outcomes for them. Since joining the Young Lawyers Committee's Social and Sport Working Group in 2013, I have met lots of young lawyers and attended many YLC and Law Society events which have enhanced my networks and enabled me to meet other lawyers. I have also recently joined the YLC, which is a great opportunity to get involved in issues that young lawyers face as well as knowing who to call when you are 17 hours away from Perth! As a criminal lawyer, it is important to have a work-life balance, even if it is just making time to de-brief on your day. As a junior practitioner, you need to find out early on how to work this into your no doubt busy day.

Daniel Chan Sole Practitioner, CKG Legal

Associate, Jones Day

I am a Sole Practitioner trading under the name CKG Legal. I also serve on the Management Committee of SCALES Community Legal Centre.

I am an Associate in the Global Disputes team at Jones Day and my practice is focussed upon major project and construction disputes.

My experience prior to entering the legal profession has been integral to the success of my current practice, and indeed provided the catalyst for my entering the profession. My past work as, at various times, a personal trainer, restaurateur and online communicator allowed me to engage with people from all walks of life, many of whom it seemed would benefit from a plain-speaking, customerfocused approach to addressing their legal issues.

Suits, Boston Legal and Ally McBeal definitely all had an impact on why I initially chose to become, and have stayed, a lawyer. Aside from these inspirations, I am largely motivated by the fact that law gives you unlimited opportunities if you're prepared to work hard and embrace all aspects of the job.

I was admitted to practice in June 2011 and spent the following two-and-a-half years employed first in an established city-based law firm and then in a specialised criminal law practice. In late 2013, I moved into sole practice with a view to building a successful legal business. I practise in family, criminal and traffic law. In representing my clients, I am reminded time and again that any of us might be suddenly faced with the trauma of family breakdown or the effects of criminal activity. It is a great privilege to be a trusted advisor to my clients and to stand with them and their families as they face what is often the fight of their lives. As a Sole Practitioner, I have also had the opportunity to act as instructing solicitor on a wide range of matters. This has enabled me to build strong relationships with some of the profession's best practitioners and broadened my understanding of our profession. The benefits of being in sole practice are tempered by the very real stress of the buck stopping with me in regard to professional and business outcomes. My approach to handling stress involves following some strict personal rules. These include setting aside a period in each day to spend time with my family and friends. This most often sees me in the kitchen preparing, cooking and sharing meals, which, for me, is the very best way to clear my mind of the day's events. All in all, being in sole practice has been a very positive experience for me, and I look forward to the continuing challenges and opportunities of growing my practice.

40 | Brief November 2015

Katie Gothard-Leigh

I think law is a career in which it's easy to find growth if you are willing to take some risks and explore the different opportunities you are given. I have always enjoyed supplementing the purely commercial aspects of my job by getting involved in the social aspects of the firms at which I have worked; volunteering to do pro bono work; heading up committees; putting myself forward for secondments; and being willing to work in different areas and with new people. There are so many different ways in which you can explore different interests with a firm's support. I've found that, if a certain opportunity is missing, you can create it for yourself if you are willing to push for it. Law is an extremely demanding profession and finding balance between work and life outside of work is definitely a constant challenge, and I think there will be challenges in the future in managing work and family life. However, I'm encouraged by the effort and the attention that is being put into addressing these issues, and I am optimistic about the future. I try to make the most of my holidays and travel as much as possible. I also enjoy hobbies in which I can totally switch off from work â&#x20AC;&#x201C; so I play a lot of sports. For me, a really important part of maintaining balance is building up good relationships with your colleagues, and working hard when you need to so that you can make the most of your downtime. I've been lucky enough to make some great friends with the people with whom I work, which definitely makes it more enjoyable to come into the office every day.


2015 Social Justice Opportunities Evening Ahshiba Sultana Young Lawyers Committee The Law Society's Young Lawyers Committee's sixth annual Social Justice Opportunities Evening was held on 2 September 2015 at the Central Park Theaterette. A room full of eager young minds, including young lawyers, graduates, and law students took this unique opportunity to explore career and volunteer opportunities, specifically relevant to law, that are available within social justice and human rights focused organisations. Community Legal Centres formed a substantial portion of the local contingent, with speakers from the Employment Law Centre, Street Law Centre and Peel CLC. They were joined by speakers from a number of local NGOs; including Law Access, Women Lawyers of WA, Living Proud, Centrecare and the Central Desert Native Title Services. The speakers shared their own personal career path tales and truly interesting stories about the exciting work of their organisations. They also outlined the work of their organisations and the various opportunities they have available to young lawyers. The experiences of the speakers and the opportunities presented by representatives of CLCs and NGOs varied in form between volunteering, pro bono work, and fulltime employment; a diversity which

served to emphasise the abundance of opportunities for lawyers interested in this area. Following the formal presentations, all of the speakers and a collection of social justice and human rights focused organisations From left: Jennifer Solliss; Sophie Manera; Elisha Butt; Emma Cavanagh; Curtis Ward; and Courtney Furner. came together for networking source of information and inspiration drinks where speakers, representatives for young lawyers. The enthusiasm of and attendees were provided with the everyone present at the event highlighted opportunity to mingle and share advice, the passion and vibrancy with which enthusiasm and aspirations about using WA's legal profession engages with legal skills to promote human rights organisations focused on furthering and social justice within the community. human rights and social justice as well as During the networking part of the demonstrating the immense satisfaction evening, the room was electric! This is that can be brought to a career in the a unique careers night that gives a real law by using legal skills to promote insight into the experience of working human rights and social justice within the within the arena of human rights and community. social justice. The YLC and the Society would like to thank all the presenters and representatives who volunteered their time to make the evening a valuable

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41


book review

Book Review Everything you Need to Know About the Referendum to Recognise Indigenous Australians by Professors Megan Davis and George Williams Review by Lisa McAnearney, Associate to the Hon Justice Pritchard, Supreme Court of Western Australia

Knowledge of the history and current debate surrounding proposals for Indigenous constitutional recognition in the Commonwealth Constitution is essential for all Australians. It is likely that Australian electors will soon be asked to consider and vote on a law to amend the Constitution in a s128 referendum on this issue. Professors Megan Davis and George Williams have succeeded in presenting a clear and accessible narrative, complemented by references to major legal works, such as the commentary of Quick and Garran, the Constitutional Convention debates of the 1890s, and leading academic scholarship. The book is divided into seven chapters and covers broad subject matters including the historical origins of the Commonwealth Constitution, the 1967 referendum result, suggested constitutional amendments, and the conditions required for a successful referendum outcome. Central to the discussion is the legacy of the 1967 referendum and what the result did and did not achieve. Chapter Two addresses the public misunderstandings and the legal deficiencies of this amendment. Essentially, this moment of national unity served as a social and political catalyst for change, which remains to be fulfilled. Readers may be surprised to learn that Australia is the "only democratic nation in the world that has a Constitution with clauses that still authorise discrimination on the basis of race." The political framework and progress in formulating proposals for constitutional change are presented in Chapters Four and Five. The important role of parliamentary bodies, such as the Expert Panel on Recognising Aboriginal and Torres Strait Islander Peoples in the Constitution, and the Joint Select Committee on Constitutional Recognition of Aboriginal and Torres Strait Islander

42 | Brief November 2015

Peoples, are explained. The authors also note the Commonwealth Parliament has enacted â&#x20AC;&#x201C; and recently extended the operation of â&#x20AC;&#x201C; the Aboriginal and Torres Strait Islander Peoples Recognition Act 2013 (Cth) as an interim measure to demonstrate commitment to achieving Indigenous constitutional recognition. The specific form of words to implement Indigenous constitutional recognition lies at the heart of the current debate. Proposed options for reform are clearly and thoroughly outlined, and the authors identify five categories of focus: symbolic change, removing race based clauses, inserting a new power to make laws for Indigenous Australians, prohibiting racial discrimination and alternative changes. There appears to be general consensus that the Commonwealth Parliament's 'race power' in s51(xxvi) should be removed. This leads to the essential question of formulating the legislative power's replacement to allow the Commonwealth Parliament to continue to enact laws that are positive and beneficial to Indigenous Australians. The authors discuss the constitutional law options of a replacement Commonwealth legislative power in the form of either a 'subject matter' or 'persons' power, with support expressed for the latter. Directly linked to the issue of the form of power, is how to best ensure this power will not be used to adversely discriminate against Indigenous Australians. Should the replacement Commonwealth legislative power be expressly qualified, or should a separate 'racial non-discrimination clause' be inserted into the Constitution? Much political controversy has arisen, particularly from constitutional conservatives, regarding a racial non-discrimination clause, drafted as proposed s116A. According to the authors, public criticism of s116A is misplaced, as it would simply add to the five express constitutional rights

already enshrined in the Commonwealth Constitution. The constitutional law impact of this provision should be considered carefully in further consultations and revisions. Several other recently suggested constitutional law reforms are canvassed. For example, the authors discuss recommendations for the establishment of an Indigenous advisory body to the Commonwealth Parliament, for a 'Declaration of Recognition' to exist alongside the Constitution, and related matters such as aspirations for a treaty and Indigenous self-determination. Of particular benefit to readers, the "myths and misconceptions" surrounding the Indigenous constitutional recognition debate are debunked in Chapter Six. An argument that attacks the core foundation of the recognition movement suggests that Indigenous constitutional recognition would perpetuate raced based distinctions. The authors definitively refute the logic of this argument, by reasoning that such constitutional recognition is appropriate and necessary due to Indigenous Australians' unique historical and cultural position and connection "to the land upon which the nation has been founded". This piece of work offers a significant contribution to the public discourse on this national issue, for both the legal and wider community. With further Indigenous consultation and constitutional conventions anticipated to be held in the near future, together with the appointment of a Referendum Council, progress is promising. We must remain hopeful that meaningful constitutional recognition can be achieved for Indigenous Australians and for the nation.


book review

Book Review Intellectual Property: Text and Essential Cases, 5th edition by Rocque Reynolds, Natalie Stoianoff and Alpana Roy Review by Jason MacLaurin, Barrister, Francis Burt Chambers

In common with previous editions, this 5th edition of Intellectual Property: Text and Essential Cases seeks to "open your eyes to the way intellectual property is developed, marketed, managed and protected and the legal framework which supports this economy" while also presenting a comprehensive contemporary analysis of all major areas of intellectual property law. The familiar genus of "text and essential cases" often brings to mind a focus upon use by law students. However, the utility of this comprehensive work is not limited to that audience and will be of significant interest and assistance to all legal practitioners. The broad scope of the work is apparent from the topics it deals with being: •

Part 1 - Opening your Eyes to IP

Part 2 - Copyright and Neighbouring Rights

Part 3 - Patents, including a section on biotechnology patents

Part 4 - Passing Off, Trade Marks and Related Actions (which includes various common law, equitable, and statutory actions, including under the Competition and Consumer Act)

Part 5 - Designs, Plant Breeders' Rights, Circuit Layouts and Confidential Information.

While dealing with these topics in parts, there is a focus upon key "intellectual property themes" throughout the text, including the tension between intellectual property rights and the public interests of freedom of speech, public health and knowledge sharing. Another key theme that is explored are the implications of the digital and biotech age upon intellectual property law. A historical perspective is also provided at the outset of each topic.

The text provides a detailed analysis and commentary upon each topic covered in a logical and thorough way, with each chapter flowing naturally and cohesively into the next. In common with previous editions, the case extracts appear at the end of the chapter, rather than throughout the chapter. Extracts have been chosen, not only from cases that are the leading or authoritative statement of the legal point concerned, but from more recent cases because they, for instance, set out an excellent statement of legal principle or provides a convenient history or overview of the authoritative law. Indeed, the authors make it clear that the cases and text are to be used as 'spring boards' to consider additional case law whenever the opportunity for further research or enquiry arises. Many of the extracts also include, where appropriate, significant passages reciting the facts and evidence from a case, so as to facilitate a better understanding of the relevant technology concerned and the issues (as well as extracts setting out the history and overview of the authoritative law). A good example of this is an extract at the end of the section dealing with biotechnology patents and in particular the extract from the recent breast cancer gene biotechnology patent case D'Arcy v Myriad Genetics Inc [2014] FCAFC 115. The text also emphasises the international nature of intellectual property law, dealing with all relevant International Treaties, Conventions and Agreements, as well as addressing contemporary technological advances and the significance of the onset of the digital and biotech era. Law reform proposals and reports are also addressed.

In addition to addressing the principal Commonwealth legislation governing intellectual property law, the text also covers other relevant legislation, including the Competition and Consumer Act. There is also a separate section upon the ever-evolving area of confidential information, breach of confidence and invasion of privacy. This 5th edition includes discussion of significant High Court of Australia decisions since the last edition, such as the plain tobacco packaging case J T International SA v The Commonwealth (2012) 250 CLR 1, the Trade Marks Act 1995 (Cth) case Cantarella Brothers Pty Ltd v Modena Trading Pty Ltd [2014] HCA 48, and the biotechnology patent case Ampotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50. Cases decided since the last edition that are also discussed include the "Kookaburra case" EMI Songs Australia Pty Ltd v Larrikin Music Publishing Pty Ltd (2011) 191 FCR 444 and, as noted above, the breast cancer gene biotechnology patent case D'Arcy v Myriad Genetics Inc [2014] FCAFC 115. This edition also deals with the Australian Law Reform Commission's Final Report on Copyright and the Digital Economy, as well as numerous other developments in intellectual property law. The introduction states that this 5th edition contains a detailed analysis of the law of intellectual property as at 1 January 2015. This work is recommended for general practitioners looking for a comprehensive introduction into the area of intellectual property, but will also be of interest and utility to intellectual property practitioners.

43


case notes

Young Lawyers Case Notes – Compiled by volunteers coordinated by the Law Society's Young Lawyers Committee -

Absolute Analogue Inc v Sundance Resources Ltd [2015] WASCA 168

Watts v RHG Mortgage Corporation Ltd [2015] WASCA 139

Successful appeal to the Court of Appeal of the Supreme Court of Western Australia – Appeal on grounds of error of fact – Evidence did not support adverse credibility findings – Order for retrial before different judge

Banking & Finance – Consumer credit - Mortgage repossession – Suspension order

The appellants claimed the trial judge erred in holding that the respondent was not contractually obliged to issue 30 million options in the respondent to the second appellant, Mr Porter. As a result of adverse credibility findings the trial judge made against Mr Porter, the trial judge did not accept much of Mr Porter's uncorroborated evidence at trial. The appellants' appeal was to the effect that the trial judge's failure to accept Mr Porter's evidence was against the weight of the evidence and compelling inferences in the case. The appellants also challenged individual findings of fact. The appellants sought orders that the trial judge's decision be reversed. McLure P noted that the Court of Appeal was "left to speculate" ([93]) on what evidence was the source of one adverse credit finding because neither the judgment nor the respondent's closing submissions specifically identified the evidence the subject of that finding. After reviewing various findings of fact by the trial judge, McLure P, with whom Buss and Mazza JJA agreed, upheld the appeal, finding that the trial judge's adverse credibility findings were not supported by the evidence. The Court of Appeal set aside the trial judge's orders and ordered a retrial before a different judge. Author: Ray Christensen, Solicitor at Zilkens Lawyers and Member of the Young Lawyers Committee

44 | Brief November 2015

This case relates to four consumer loans entered into by Mr and Mrs Watts (the appellants) with RHG Mortgage Corporation Ltd (RHG). The loans were secured over two properties owned by the Mrs Watts (the first appellant) (the Properties). Following defaults on the loans, RHG applied to the Supreme Court for possession of the Properties. The appellants entered memoranda of appearance in the proceeding, but did not have legal representation. Master Sanderson entered summary judgment in favour of RHG, but in the first appellant's absence. The appellants applied to the Court for an order suspending the enforcement of this judgment. In a joint judgment, McLure P and Newnes JA held that it had the power to suspend enforcement of the judgment pursuant to s15 of the Civil Judgments Enforcement Act 2004 (WA); alternatively, to grant an interim stay of execution order pending appeal under its rules. The Court held that the general principles are not materially different for each application, which it broadly summarised as follows: (1) An applicant must show that special circumstances exist to justify a suspension order being made. This usually requires that the applicant show that the suspension order is necessary to either prevent their right of appeal being rendered nugatory, or to avoid practical difficulties in enforcing their rights should the appeal be granted. (2) Even if special circumstances exist, the application will fail unless the applicant satisfies the court that the appeal has reasonable prospects

of success and that the balance of convenience lies in its favour. The Court found that the appeal had reasonable prospects of success as it was reasonably arguable that there was a failure to accord procedural fairness the first appellant. It found that: (1) the first appellant was unrepresented and unfamiliar with the legal process; (2) the first appellant was the owner of the Properties; and (3) notwithstanding, the Master did not inquire at the hearing as to whether the first appellant believed she had a defence to the claim and whether she knew how to go about advancing it. Rather, the matter was heard in her absence. Their Honours also found that, whilst the first appellant had yet to make out the defence, there was a reasonable prospect that this defence would result in the mortgage being set aside. The Court found that the balance of convenience favoured the appellants as the security was sufficiently protected the respondent's interest. The Court also noted that the appellants stood to lose their home if the order was not granted. Accordingly, the Court found that special circumstances existed which justified a suspension of the enforcement of the summary judgment, and an order was made to this effect. Author anonymous

Evans v Collica [No 2] [2015] WADC 96 Banking and finance – Financial advice –- Misleading and deceptive conduct – Duty of care – Breach of fiduciary duty – Agency  The plaintiff alleged that she received financial advice from the defendant to the effect that investing $200,000


in a mortgage broking firm (the Firm) was a safe and good investment. The Firm collapsed shortly afterwards and it was alleged that the defendant was aware of the firm's substantial financial trouble. The plaintiff sought to recover the money, plus interest, pursuant on the basis that: (1) The oral advice given to her by the defendant was misleading or deceptive in breach of s18 of the Fair Trading Act 2010 (WA). (2) The defendant owed the plaintiff a duty of care, which the defendant breached. (3) There was a fiduciary relationship between the plaintiff and the defendant, and the defendant's actions breached that duty. Levy DCJ made the following findings in respect of each issue.

[the Firm] for a number of years and was owned money by him". The court also gave significant weight to the fact that the defendant was paid by commission and would only be remunerated if a contract was entered into. Second, his Honour went on to find that the defendant's conduct amounted to misleading or deceptive conduct. Third, Levy DCJ considered whether the representations were made in trade or commerce. Duty of care ([236] – [242]) The plaintiff alleged that the defendant had breached a duty of care owed to her. The court was satisfied that a duty of care did arise by reason of the fact that:

First, his Honour considered whether the defendant actually made the representations. In doing so, his Honour considered the plaintiff's credibility outweighed the defendant's credibility, and that there was overwhelming evidence to support the fact that the defendant was well aware of the Firm's financial difficulties. In considering the parties' credibility, the court described the plaintiff as being "unsophisticated in the ways of business and finance". In comparison, the defendant had a "long history of employment in banking and finance" and "had known the director of

Fiduciary duty and agency ([243] – [254]) Although there was never any formal agency agreement between the parties, Levy DCJ was satisfied that the defendant acted at all material times as the plaintiff's implied agent in negotiating loans with the director of the firm. Further, Levy DCJ acknowledged that a financier does not generally owe a duty of care to a lender. However, such duty was found on these circumstances because, among other things: •

the plaintiff relied significantly on the defendant's financial advice;

the defendant was anxious to recover the money;

the defendant was acting as a finance broker or agent;

the defendant gave the plaintiff advice in relation to matters that were within the scope of her professional expertise;

the defendant made misleading and deceptive representations to the plaintiff;

the defendant negotiated the lending arrangements; and

the defendant had attended meetings and telephone conversations with the plaintiff and her solicitor and the defendant referred to the plaintiff as her 'client'.

Misleading or deceptive conduct ([216] – [235]) Levy DCJ adopted a three-stage approach to this issue.

these circumstances.

the defendant knew that the plaintiff was relying upon her advice;

the plaintiff was vulnerable to a significant financial loss if the defendant acted carelessly; and

the defendant had assumed the responsibility to ensure that the proposed loan was documented and secure.

The court found that the defendant had breached this duty of care; in particular, due to the court's finding that a finance broker or agent, acting with reasonable skill care and diligence, would not have advised the plaintiff to advance money in

The defendant was found to have breached this duty to the plaintiff as her conduct in this case allowed her own personal interest to be promoted. Author: Blake Robinson, UWA student and paralegal at the Consumer Credit Legal Service (WA) Inc.

45


case notes

Family Law Case Notes Robert Glade-Wright, Former barrister and accredited family law specialist Property – Contributions found to be equal despite husband's post-separation earnings of $9 million In Trask & Westlake [2015] FamCAFC 160 (14 August 2015) a 13 year marriage in which the parties adopted traditional roles produced four children and an asset pool of $7 million. In the three years since separation the husband secured corporate employment in which he earned taxable income (including a $2.5m retrenchment payment) totalling $9 million. The parties' overall contributions were assessed by Aldridge J as equal, an adjustment of 10 percent being made in the wife's favour under s75(2). The Full Court (Thackray, Ryan & Murphy JJ) upheld that division on appeal by the husband, saying (at [6]): The foundation for his Honour's assessment that the parties' postseparation contributions were equal (and, thus, … equal overall) is … that the wife's significant indirect financial contributions and contribution to the welfare of the children were a 'direct non-financial contribution to the husband's ability to be employed (ultimately) by Company E and its associated benefits' and, in that respect, her contributions were a continuation of the roles … the parties had each undertaken in this … marriage … The husband's counsel ([12]) cited Gollings & Scott [2007] FamCA 397 where it was held that a party had "no further obligation" to "continue to accumulate assets" postseparation but is "in a sense free to do with his income as he please[s]", to "get on with his or her life independent of the other". The Full Court in the present case, however, said ([13]): That statement was made within a specific context, namely the consideration of whether particular funds should be 'added back' as against the husband. Nothing said by this Court in Gollings suggests that taking due account of those factors excludes consideration of contributions to property acquired by one party subsequent to separation. ( … ) In response to counsel's calculation of the percentage of the pool that the "the husband's post-separation cash injections" represented the Full Court said ([14]) that

46 | Brief November 2015

"[t]hat can be a useful measuring stick, but the assessment of contributions remains 'a matter of judgment and not of computation'" having regard to "the extremely important contributions made by the wife in maintaining a home as a single parent to four children dealing with the separation of their parents" which were "not susceptible to any such mathematical calculation". The Court added ([15]) that "the husband had arrived at his position with Company E by dint of his talents, dedication and hard work but also by … the contributions made by the wife across the years preceding that employment". Property – Informal agreement held relevant to s 79(2) but did not oust court's jurisdiction to make a property order In Graf-Salzmann & Graf [2015] FCWA 68 (21 August 2015) Walters J heard a property case involving a 24 year marriage between a Swiss couple who came to Australia in 2005 with two children, who were then 12 and 10. In 2004 the parties made an agreement which "divided their assets more or less equally between them" ([6]). The parties separated in 2010 after "the husband assaulted the wife and broke her leg" ([3]). At trial the children were adults. Neither party had assets when they married ([43]). They adopted traditional "breadwinner" and "homemaker" roles until migrating here where the wife worked in the parties' franchise business and cared for the children and the husband took a job in Switzerland in 2008, which required him to travel there. Walters J said (at [276]) that "the 2004 agreement … cannot exclude, impede or fetter the Court's power to make … orders [for] property settlement as it considers just and equitable" given ([277]) "that a court's jurisdiction to grant relief under s 79 can only be ousted by court order, or by a relevant, binding financial agreement [citing Woodcock [1997] FamCA 5 (FC)]". Walters J added ([282]-[284]) that the agreement and "such reliance as the parties may have placed upon it" are "relevant considerations for the Court to take into account when deciding whether it is … just and equitable to make orders for alteration of property interests [under] s79" but held that the court's jurisdiction under the section should be unfettered in this case. Found to be relevant ([282]-[284]) were

facts such as that the parties continued cohabiting after making the agreement; that the agreement only applied if both parties lived in Australia (the husband having returned to Switzerland); that despite the agreed division of assets "the parties' financial affairs were interwoven from shortly after their arrival in Australia"; that the agreement did not recognise s75(2) factors; and that since the agreement the husband had subjected the wife to violence (for which a Kennon adjustment was made). Children – Mother found to have "done little to actively promote" child's relationship with father – Order made for defined time In Spence & Greco [2015] FCCA 676 (19 June 2015) Judge Newbrun granted the father's application for "9 separate monthly occasions" of time with his 14 year old son in a case where since the child's birth in 2001 the child had spent irregular time with the father or none at all in circumstances where the mother's attitude was that "it would not be beneficial for the child to have a relationship with [him]". Judge Newbrun (at [28]-[30]) found that the mother "often ceased" the father's contact "after arguing with him". She persistently sought to use against the father an unsubstantiated allegation that he was continuing his previous use of marihuana. By 2008 the father was only able to see the child at school functions or at the child's weekend soccer games ([36]-[37]) and when the mother agreed that year to his spending time she limited it to three hours ([39]-[40]). The father eventually applied for a parenting order after initially being unable to afford the cost of proceedings. Judge Newbrun said (at [61]): The report writer asked the child what he thought his mother would say if he said he wanted to see his father. The child stated that his mother would probably point out that he has lots of male relatives and does not really need other men in his life. He later said he thought she would support his wish.

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


case notes

Thomas Hurley Case Notes Thomas Hurley, Barrister, Melbourne, For the Law Council of Australia and its Constituents FEDERAL COURT

Evidence

Administrative law

Use of information obtained in foreign examination

Certiorari – whether certiorari available to quash private arbitration – which decisions of Fair Work Commission are private arbitrations In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd [2015] FCAFC 123 (28 August 2015) a Full Court considered when certiorari will issue to quash decisions of Fair Work Australia as a statutory industrial body deciding disputes under industrial agreements as part of a private arbitration function. Consumer protection Safety – penalty In Director of Consumer Affairs Victoria v Alpha Flight Services Pty Ltd [2015] FCAFC 118 (26 August 2015) a Full Court reviewed the penalty imposed by the trial judge on Qantas and the company to which it had outsourced the supply of duty free goods distributed on Qantas flights – small fridge magnets – that were agreed to be have been banned from distribution within s118 of the Australian Consumer Law as a child hazard. Consumer protection Formaldehyde in hair straightening products In Australian Competition and Consumer Commission v Dateline Imports Pty Ltd [2015] FCAFC 114 (28 August 2015) a Full Court allowed in part an appeal against the finding of the primary judge that the respondent had not contravened ss52(1) and 53(a) of the Trade Practices Act 1974 (Cth) for having represented that its hair straightening products did not relevantly contain formaldehyde. Corporations Takeovers – powers of Takeovers Panel In Queensland North Australia Pty Ltd v Takeovers Panel (No 2) [2015] FCAFC 128 (4 September 2015) a Full Court doubted that the Takeovers Panel or its chair had power to make interim orders affecting a takeover outside the time limits provided without a finding the takeover was unacceptable under s675A of the Corporations Act 2001 (Cth).

In Binetter v BCI Finances Pty Limited (In Liq) [2015] FCAFC 122 (27 August 2015) a Full Court concluded the trial judge did not err in releasing the Commissioner from any obligation not to use information obtained on examination of persons in Israel under the Foreign Evidence Act 1994 (Cth) (as part of proceedings in the court against certain taxpayers) only for litigious purposes in respect of those taxpayers and not for non-litigious purposes or against other persons. HIGH COURT Constitutional law Judicial power – whether Act passed to reverse effect of High Court decision interferes with integrity of state court In Duncan v Independent Commission Against Corruption [2015] HCA 32 (9 September 2015) the High Court decided in April 2015 in ICAC v Cunneen [2015] HCA 14 that the definition of "corrupt conduct" that the ICAC was given jurisdiction to investigate by the ICAC Act 1988 (NSW) did not encompass conduct that did not compromise the conduct of public administration. In early 2015 D was seeking leave to appeal to the NSW Court of Appeal against a finding of a primary judge that a like report concerning him and others was likewise beyond the jurisdiction of ICAC as it did not relate to any compromise of public administration. In May 2015 the NSW parliament passed the ICAC (Validation) Act 2015 to introduce into the ICAC Act provisions intended to ensure the validity of ICAC's activities before April 2015. D amended his proceedings in the NSW Court of Appeal to challenge the effect of the amendments and this part of his proceedings was removed to the High Court. It was accepted that given Cunneen the ICAC report affecting D was affected at the time of publication by a misconstruction of the ICAC Act and affected by jurisdictional error. D contended the new provisions had failed to validate the invalid acts of ICAC and merely directed courts to treat invalid acts as valid in contravention of the principles in Kable v DPP (NSW) [1996] HCA 24 and also Kirk v Industrial Court (NSW) [2010] HCA 1. All members of the High Court rejected this contention holding

the amending legislation had amended the definition as a matter of substantive law and neither Kable nor Kirk was offended: French CJ, Kiefel, Bell & Keane JJ jointly; Gageler J; Nettle & Gordon JJ jointly. The Court observed that amendments to substantive law did not involve any interference with judicial power where that law was the subject of proceedings. Those parts of the proceedings in the Court of Appeal (NSW) that were removed to the High Court were dismissed. Evidence inferences – competing inferences In Fuller-Lyons v NSW [2015] HCA 31 (2 September 2015) the appellant was injured when, aged 8, he fell from a train. No one saw how he fell. The primary judge found the appellant became trapped between the door of the train before it left the station and found the railway negligent for failing to keep a proper look out. The primary judge rejected the submission that the appellant's juvenile brothers were involved. The appellant was awarded $1.5million. The finding on liability was reversed by the Court of Appeal (NSW). The appellant's appeal to the High Court was upheld in a joint judgment and the initial verdict restored: French CJ, Bell, Gageler, Keane & Nettle JJ. The High Court concluded the primary judge's findings were correct notwithstanding that other explanations could not be excluded. Appeal allowed. Patents Novelty – inventive step – prior art In AstraZeneca AB v Apotex Pty Ltd; AstraZeneca AB v Watson Pharma Pty Ltd; AstraZeneca AB v Ascent Pharma Pty Ltd [2015] HCA 30 (2 September 2015) the High Court considered how prior art was to be considered in determining by reference to s7 of the Patents Act 1952 (Cth) (as relevantly in force) whether an application for a pharmaceutical patent involved a novel or inventive step. Appeal dismissed: French CJ; Kiefel J; Gageler with Keane JJ; Nettle.

Thomas Hurley is a Victorian barrister, phone (03) 9225 7034, email tvhurley@vicbar.com.au. The full version of these judgments can be found at www.austlii.edu.au

47


law council update

LEGAL PROFESSION CONCERNED OVER AUSTRALIAN LAWYERS BANNED FROM PNG The Law Council of Australia is disturbed by reports that two Australian lawyers, Greg Egan and his junior counsel Terence Lambert, have been banned from entering Papua New Guinea. Law Council Executive member Morry Bailes said the ban is concerning as Mr Egan and Mr Lambert were representing the PNG National Fraud and AntiCorruption Directorate and the anticorruption agency, Taskforce Sweep, in cases relating to prominent PNG politicians. "I endorse the Australian Bar Association's statement today asserting that lawyers must be free to practise the law and represent their clients without fear of reprisal," Mr Bailes said. "The reported ban is a threat to the rule of law and transparency in the region, which are fundamental principles driving regional stability, growth and development. As such, it is vitally important that the legal profession remains independent and that the executive arm of government does not interfere with the administration of justice," Mr Bailes concluded. LEGAL PROFESSION CONGRATULATES AUSTRALIA'S FIRST INDIGENOUS SILK The Law Council of Australia and Australian Bar Association have warmly congratulated Anthony McAvoy SC on becoming the first ever Senior Counsel of Indigenous heritage. Mr McAvoy has been a pivotal member of the Law Council of Australia's Indigenous Legal Issues Committee since 2001. Law Council of Australia Presidentelect Stuart Clark AM said Mr McAvoy's appointment was richly deserved and gave recognition to an already distinguished legal career. "Mr McAvoy has been an invaluable contributor to the Law Council's work over a very long period of time," Mr Clark said. 48 | Brief November 2015

"His contributions to the Indigenous Legal Issues Committee â&#x20AC;&#x201C; which have included numerous appearances before Parliamentary Inquiries â&#x20AC;&#x201C; have been highly effective and wholly appreciated. "Long may he continue to contribute his knowledge and expertise to the Law Council and the nation," Mr Clark added. Australian Bar Association President Fiona McLeod SC said Mr McAvoy was an asset to the profession. "Mr McAvoy's deep commitment to Indigenous justice is widely known and respected," Ms McLeod said. "This commitment was rightly acknowledged when he won the inaugural National Indigenous Legal Professional of the Year Award in 2010. "On behalf of the Australian Bar Association, I warmly congratulate Mr McAvoy on his appointment as Senior Counsel. I am sure he will continue to make a valuable contribution to the legal profession long into the future," Ms McLeod concluded. LEGAL ASSISTANCE A VITAL PART OF GOVERNMENT'S $100 MILLION RESPONSE TO DOMESTIC VIOLENCE The Law Council of Australia has welcomed the release of the Women's Safety Package by the Federal Government today as a positive step in combatting violence against women. The $100 million package of measures aims to provide a safety net for at-risk women and children, including $15 million for legal services to those experiencing domestic violence. "The package announced today by the Federal Government is an extremely welcome step in addressing the critical national problem of domestic and family violence," Law Council President Mr Duncan McConnel said. "The Law Council supports a number of measures outlined in the package, including funding to improve frontline support and services, and the provision of education resources to help change community attitudes to violence and abuse.

"The high rate of Australian women and particularly Indigenous women and children experiencing family violence is unacceptable. One in six Australian women has experienced violence from a current or former partner, while Indigenous women are 34 times more likely to be hospitalised as a result of family violence," Mr McConnel said. The Law Council President also welcomed the announcement of $15 million in additional legal assistance funding, as part of the overall package. "If we are serious about assisting victims of domestic and family violence then we must be serious about ensuring they have access to justice. While substantially greater funding for legal assistance is needed to ensure access to justice can be achieved, this announcement is a step in the right direction," Mr McConnel said. "Federal Government funding for legal aid has been in decline for the better part of two decades. In 2017, the government has budgeted for another large reduction in Commonwealth funding, which will impact on disadvantaged Australians, including women fleeing domestic violence. "In 2013, $42 million was cut from legal assistance by the Commonwealth, of which $25.5 million was restored in 2015, once it became clear how deeply the cuts would affect frontline services. Each year, successive governments have been content to apply 'bandaid' solutions, while legal need rises and overall funding falls further behind. "The Law Council looks forward to discussing the vital issue of legal aid with the Federal Government as a key part of its strategy to put an end to domestic and family violence," Mr McConnel concluded. The Law Council of Australia recently formed a Domestic and Family Violence working group, which will now consider the measures in the package in further detail.


pam sawyer

49


announcements and classifieds

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events calendar

Events Calendar DATE

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LOCATION

NOVEMBER MEMBER EVENTS Friday, 6 November

Mixed Netball Competition

Matthews Netball Centre

Wednesday, 11 November

Sole Practitioner and Small Firm Forum

Rose and Crown Hotel, Guildford

NOVEMBER CPD SEMINARS Tuesday, 10 November

The use of trusts in effective estate planning

The Law Society of Western Australia

Tuesday, 10 November

Self Managed Super Funds as they relate to succession planning and estates

The Law Society of Western Australia

Wednesday, 11 November

Property Law Forum: session 1 - eConveyancing, what are the risks?

The Law Society of Western Australia

Wednesday, 11 November

Property Law Forum: session 2 - Commercial Tenancy (Retail Shops) Act, Residential Tenancy Act and case law update

The Law Society of Western Australia

Thursday, 12 November

The role of subpoenas in modern practice

The Law Society of Western Australia

Wednesday, 18 November

Security of tenure in housing for the elderly

The Law Society of Western Australia

Thursday, 19 November

Macquarie Business Insights Series: Managing your firmâ&#x20AC;&#x2122;s cash flow

Conference Room, 235 St Georges Tce

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YLC: practical tips for junior transactional lawyers

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Friday, 20 November

Ethics on Friday: more than just a mouthpiece

The Law Society of Western Australia

Tuesday, 24 November

Pre-action and non-party discovery

The Law Society of Western Australia

Wednesday, 25 November

Planning law for non-planning lawyers

The Law Society of Western Australia

Wednesday, 25 November

What you need to know about franchising

The Law Society of Western Australia

Thursday, 26 November

Personal injury law update

The Law Society of Western Australia

DECEMBER MEMBER EVENTS Wednesday, 2 December

End of Year Celebration

The Flour Factory

DECEMBER CPD SEMINARS Tuesday, 1 December

Strategies for being an effective supervisor

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Thursday, 3 December

The protection of business, domain names and trademarks

The Law Society of Western Australia

Wednesday, 9 December

Macquarie Business Insights Series: Stepping into the abyss - setting up a new practice

Conference Room, 235 St Georges Tce

Thursday, 10 December

YLC: a view from the bench

The Law Society of Western Australia

For all CPD-related enquiries please contact cpd@lawsocietywa.asn.au or (08) 9324 8614 For all membership-related enquiries please contact membership@lawsocietywa.asn.au or (08) 9324 8638 For all upcoming events and further information please visit lawsocietywa.asn.au 52 | Brief November 2015


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SENIOR ASSOCIATE

Work alongside a recently appointed Partner to grow their OH&S practice, within a leading Workplace Relations team. Have full autonomy with your matters and build relationships with the firm’s long established clients. Excellent career development prospects. Ref: BX/44487

New vacancy in an impressive and highly regarded construction team. Disputes focussed role, under two leading Partners. Candidates should have 5+ years of top tier construction experience. Fabulous opportunity to access high profile work for a diverse range of clients. Ref: 6B/15263

LAWYER

LAWYER

Newly created role for a lawyer with 2-4 years’ PAE with outstanding CBD based Workplace Relations team. Enjoy broad exposure to employee relations, industrial relations and occupational health & safety matters. Litigation experience essential. Plush, spacious, newly refurbished office. Ref: BX/45013

Front end Construction Lawyer sought for exciting new vacancy with leading national firm. Work with a market-leading Partner who has recently joined from a global firm. Applicants must have 3-7 years’ experience gained at a large national or international firm. Ref: BX/45014

The above roles are just a few examples of the many current opportunities Hudson Legal can assist you with.

For further information, please contact Coralyn Kurecki on 08 9323 0215 or Aoife Stapleton on 08 9323 0200 or email your CV to coralyn.kurecki@hudson.com or aoife.stapleton@hudson.com

Brief November 2015  
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