Cashflow is the ‘Lifeblood’ of the Construction Industry: Has the High Court Applied a Tourniquet? Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd

By Matthew Bell

Southern Han Case Page

The December solstice of 2016 was celebrated in diverse ways around the world. At Stonehenge, druids and pagans greeted the mid-winter dawn. In Australia, construction lawyers were digesting the first High Court judgment on the Building and Construction Industry Security of Payment Act 1999 (NSW): Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd [2016] HCA 52.

The Court (Kiefel, Bell, Gageler, Keane and Gordon JJ in joint judgment) confirmed that the existence of a Reference Date under a Construction Contract is a precondition to the making of a valid Payment Claim (the capitalised terms are defined under the Act — more on that shortly). In doing so, the Court overturned the decision of the NSW Court of Appeal ([2015] NSWCA 288), effectively restoring the declaration by Ball J at trial ([2015] NSWSC 502) that the adjudicator had no jurisdiction to make a determination under the Act on a purported payment claim.

Ball J’s conclusion rested upon his Honour’s interpretation of the contract used here (AS4000-1997, a widely-used, construct-only form of construction contract) as having exhausted its capacity to generate ‘Reference Dates’ (which trigger the right to make a payment claim under the Act). This was based on alternate hypotheses: either the contract had been terminated for repudiation, or (if the contract remained on foot) the ‘show cause’ procedure then in effect suspended the right to claim payment.

The judgment is on a narrow point, but has wider significance. This is because the NSW Act has, as was noted by Senior Counsel for the appellants, Continue reading

RP v The Queen

The High Court has allowed an appeal against a decision of the New South Wales Court of Criminal Appeal on the presumption of lack of criminal responsibility by offenders under 14 years of age. The appellant was 11 to 12 years old when he allegedly sexually abused his younger brother on two occasions. A child offender under 14 years old is presumed to not be responsible for his or her crimes, though this presumption can be rebutted by evidence that the offender was aware that the conduct was seriously wrong, as distinct from an act of ‘mere naughtiness or mischief’ (see NSWCCA at [34]). The NSWCCA unanimously upheld the trial judge’s ruling that the presumption was rebutted by evidence that the appellant Continue reading

News: French Court averaged 50 substantive judgments per year

The High Court’s 2015/2016 annual report states (as every annual report has for the past decade) that:

the numbers of Full Court hearings and decisions in 2015–16 were comparable with averages for both during the past 10 years.

However, as noted here last year, the number of published judgments in 2014 (49) and 2015 (53)  were among the fifteen lowest in the High Court’s history. With three judgments released today, 2016 equals 2015’s number of published judgments.

As previously noted, counting High Court judgments is not straightforward, because of changing practices in judgment publication (notably past courts’ willingness to issue lengthy substantive judgments on special leave applications.) The judgments published by the High Court typically include some minor judgements – single judge decisions and interlocutory rulings – that seemingly reflect publishing preferences in individual judges. This year, there were four such judgments, leaving 49 substantive judgments in 2016, one more than each of the last two years. The final counts of substantive judgments for the French Court are: Continue reading

ElecNet (Aust) Pty Ltd (as Trustee for the Electrical Industry Severance Scheme) v Commissioner of Taxation

The High Court has dismissed an appeal against a decision of the Full Federal Court on the meaning of ‘unit trusts’ for tax purposes. The appellant is the trustee of the Electrical Industry Severance Scheme Trust (the ‘EISS trust’), which protects redundancy or insolvency pay entitlements of employees in the electrical trades industry by requiring employers to pay money into a fund, from which payments could be made to employees following termination of their employment. The appellant sought a ruling from the respondent that the EISS trust was a unit trust for the purposes of div 6C of the Income Tax Assessment Act 1936 (Cth), and the Commissioner ruled that it was not a unit trust. While div 6C does not define ‘unit trust’ it does define ‘unit, in relation to a prescribed trust estate, includes a beneficial interest, however described, in any of the income or property of the trust estate’. On appeal to the Federal Court, Davies J held that the EISS trust was a Continue reading

Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd

Matthew Bell, ‘Cashflow is the “Lifeblood” of the Construction Industry: Has the High Court Applied a Torniquet? Southen Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd‘ (23 December 2016).

The High Court has allowed an appeal against a decision of the New South Wales Court of Appeal on jurisdictional error in the context of a building commission adjudication over a construction contract and ‘reference date’ requirements. Following the collapse of a building agreement between the parties, an adjudicator ordered the appellant company to make payments to the respondent builder in recognition of progress on the works. Section 8(1) of the Building and Construction Industry Security of Payment Act 1999 (NSW) provides that ‘[o]n and from each reference date under a construction contract’, Continue reading

News: Three new special leave grants round off 2016

Just when it seemed that 2016 couldn’t get any worse, the High Court’s website went out of action last weekend from late Friday afternoon until mid-Sunday. The High Court has not provided any explanation to date of the outage, either over the weekend – the Court presently does not use social media tools that would suit such notice – or since. That means that Australians (other than those who happened to be at the High Court’s Sydney or Canberra registries on Friday morning) had to wait until Monday afternoon to discover what special leave applications were granted or dismissed in the Court’s last oral hearings for the year. Applications addressed in those hearings include three matters of broad public interest: an appeal by The Age newspaper concerning an order that journalists reveal their sources to a defamation matter; a dispute in Nauru’s Supreme Court concerning its jurisdiction to hear appeals in refugee matters; and challenges to ICAC findings holding that developers committed corrupt conduct by allegedly concealing the involvement of Eddie Obeid in their proposals.

As it turns out, leave was not granted in any of those matters. Rather, yesterday afternoon, the Court’s  website revealed that three different applications were granted at the oral hearings (the only three grants in December.) The three matters that will be heard by the Kiefel Court next year are: Continue reading

News: High Court forms must now include the Queen’s name

The  High Court Amendment (2016 Measures No. 2) Rules 2016 were published on December 6th this year and took effect on December 9th. The amendments, presumably the final ones from the French Court, include new forms for arrest warrants, committal warrants, subpoenas and writs. For the first time since 2004, those forms must include the following words:

ELIZABETH THE SECOND, by the Grace of God Queen of Australia and Her other Realms and Territories, Head of the Commonwealth

These are the exact same words that were once required by the 2004 rules’ predecessor. As noted here, these amendments were prompted by a question from Senator Rod Culleton to Attorney-General Brandis, who pointed out that the previous version of the rules did not require that such forms comply with  s. 33 of the High Court of Australia Act 1979:

All writs, commissions and process issued from the High Court shall be:
(a) in the name of the Queen…

Even if Senator Culleton’s election is held to have been invalid by the Court of Disputed Returns, he will have had an impact on the statute book and the High Court that is rare indeed for a minor party Senator.

Roll Up, Roll Up … for A Transformational Journey into the Australian Constitution!

By Martin Clark

David Foster Wallace’s journey into voter apathy in the United States following John McCain’s 2000 Presidential campaign around the country led him to this profound insight:

it’s hard to get good answers to why Young Voters are so uninterested in politics. This is probably because it’s next to impossible to get someone to think hard about why he’s [sic] not interested in something. The boredom itself preempts the inquiry; the fact of the feeling’s enough.

Picking over the political ‘upsets’ that fixed the attention of the Anglophone western world in 2016 — the Brexit referendum and the election of Donald J Trump to the Presidency of the United States — plenty of commentators read these as ‘anti-establishment’ political movements. Voters in the UK and the US sought to vent their frustration at ‘political elites’. Formerly uninterested in politics or bored with politicians, these voters suddenly thought ‘hard’ and did the ‘next to impossible’: got out to vote in support of the movement or candidate promising to rock the establishment to its core … and in both instances there is already plenty of evidence showing a ‘betrayal’ is not far off.

What could any of this have to do with Australia’s High Court? Half a world away, the centrepiece of our legal establishment enjoys an extremely high public confidence rating. Unlike the Supreme Court of the United States (or even, given the recent Brexit, cases the United Kingdom Supreme Court), the High Court is firmly insulated against politics. Its cases, reasoning and appointments are always (said to be) about questions of law and legal expertise, not politics. This year’s cases on voting procedures, parliamentary retirement entitlements, and senate eligibility remind us that even when the Court touches on the overtly political, it is guided — as it (says it) must be — by legalism. (Certainly, that hasn’t stopped it from being the stage for often dramatic political protests (here and here).)

But really, what is all this preamble about boredom and the ‘establishment’, politics and legalism in aid of? Well, the Constitution Education Fund Australia has just announced a new journey: a major new interactive multimedia exhibit about the Constitution which will be installed in the High Court itself. Continue reading

The High Court on Sentencing Domestic Violence: Kilic v The Queen

By Tamara Hamilton-Noy

Kilic Case Page

In Victoria in 2014, there were 32 victims of family and domestic violence-related homicide (5 per million persons) and 1,321 victims of family and domestic violence-related sexual assault offences (23 victims per 100,000 persons). There were seven times as many female victims as male victims in Victoria of family and domestic violence-related sexual assault.

On 27 July 2014 a young woman drove up to the home of 22 year old Yavaz Kilic with a group of friends. She had been in a relationship with Kilic and was 12 weeks pregnant to him. The relationship was later described as having been controlling and ruled by his paranoia. Kilic had commenced using drugs at the age of 13 and had had a period of homelessness at 18 years of age. He had worked previously as a labourer. He had previous convictions for weapons related charges, but no violence related priors. As of 27 July 2014 he was reported to have been using ice for several days.

The woman and her friend, Mr B, went to get out of the car at which time Kilic ran across the road in an aggressive manner, holding a samurai sword above his shoulders and pointing it at Mr B. He shoved the sword through the open window towards the steering wheel and yelled at the people in the car, including yelling at the young woman, “You’re just a fucking slut”.

Mr B followed Kilic into his front yard and Kilic filled a bottle of water and swung the sword at it, stating ‘This would take some cunt’s head off’. Mr B followed Kilic into the house and hid the sword inside the house. While Mr B went to the bathroom, Kilic went Continue reading

News: French CJ’s last words

Quote

In Wednesday’s ACCC v Flight Centre Travel Group Limited [2016] HCA 49, concerning whether Flight Centre breached competition laws by seeking a deal with some airlines not to undercut its prices, French CJ’s separate judgment concludes:

In my opinion, Flight Centre was not in competition, in any relevant market, with the airlines for which it sold tickets. Its proposals with respect to the pricing practices of its principals were not proposals offered by it as their competitor but as their agent. I would dismiss the appeal with costs.

These are very likely French CJ’s last words in a court judgment. He did participate in a second judgment on Wednesday, seconds after the ACCC one, but that was a joint judgment with (as is often the case) Kiefel, Bell & Keane JJ, and (as is always the case) no indication of who wrote it. (Austlii’s earliest judgment by French J appears to be this one.) As French CJ has no more reserved judgments (having stopped hearing cases in early October), his only possible remaining judgments would be chambers or special leave matters. His remaining duties on the Court until his resignation on 29th January next year will be almost entirely administrative or ceremonial.

Wednesday’s ACCC judgment was unusual for the outgoing Chief Justice in another respect. Continue reading

New South Wales Aboriginal Land Council v Minister Administering the Crown Lands Act

The High Court has dismissed an appeal against a decision of the New South Wales Court of Appeal on a land rights claim over a former prison. Under s 36(1) of the Aboriginal Land Rights Act 1983 (NSW), Crown lands that may be subject to a land rights claim must not be lawfully ‘occupied’. After Berrima Gaol was decommissioned in 2011, the Crown Lands Minister rejected the appellant’s claim over the land on the basis that while the prison was no longer operating, the land and buildings were still occupied by Corrective Services NSW which guarded and maintained them, and used the site for working visits by community service order workers. The NSWCA held that the land was still occupied on the basis of regular use by the community service order workers, that no statutory authorisation was necessary for that occupation to be lawful, Continue reading

Australian Competition and Consumer Commission v Flight Centre Travel Group Ltd

The High Court has allowed an appeal against a decision of the Full Federal Court on the applicability of competition law to the airline booking industry. Flight Centre and several airlines reached an agreement under which the airlines would not offer fare prices directly to potential passengers that were lower than the prices offered by Flight Centre. The ACCC alleged that this constituted a breach of ss 45 and 45A of the Competition and Consumer Act 2010 (Cth). The trial judge agreed that the airlines and Flight Centre were in competition in a market to supply booking services to consumers and distribution services to airlines, and that the arrangements aimed to set a floor under the price of flights offered for sale and thus maintained or controlled the price of Flight Centre’s booking services. The FCAFC found in favour of Flight Centre, holding that there was no separate market for booking or distribution services (see at [168]), that Flight Centre operated within the market Continue reading

News: An Interruption in the Court of Disputed Returns

This week, the United Kingdom’s and Australia’s apex courts each held hearings that touch on recent votes in each country. The UK Supreme Court’s Brexit case (on whether triggering the UK’s exit from the EU is a matter for parliament or just the executive) is broadcast live on the Court’s website. The High Court’s Culleton hearing (where the Court of Disputed Returns will determine whether the WA One Nation Senator was disqualified by a since annulled conviction for larceny) can now be viewed on the Court’s AV archive, albeit not live. One difference that seemingly follows from this is that the video record of the Court may be incomplete. A possible example is an incident at the hearing described in The Guardian as follows:

The high court hearing into Rodney Culleton’s eligibility as a senator was interrupted by a One Nation member who labelled it a “star chamber” and “kangaroo court” after Culleton lost a bid for an adjournment. The dramatic interjection was made by member John Wilson, without Culleton’s knowledge. The senator’s chief of staff, Margaret Menzel, then remarked “he’s right” and his wife Ioanna Culleton said “at least someone has the guts to stand up [and say it]” as Wilson was asked to leave the court room.

I have been unable to locate this incident on the video recording of the hearing that appeared on the High Court’s website yesterday afternoon. Interestingly, though, there appears to be an unexplained, and unsignposted, break in the recording just after the 36 minute mark, immediately after Kiefel J says the words ‘We will now proceed to hear the substantive argument.’ You can see it most clearly by watching Keane J’s hands.

As noted in an earlier post, interruptions in apex court proceedings, usually as a form of political protest, are nothing new. However, video recording of hearings is a recent phenomenon in the High Court. If it is correct that the interruption and other events described in the media indeed occurred in the above break, then it appears that the Court may have an unannounced policy to remove these events from thevideo  record.  Continue reading

Simic v New South Wales Land and Housing Corporation

The High Court has allowed an appeal against a decision of the New South Wales Court of Appeal on the construction of a bank guarantee contract. The appellant is the guarantor of a building company that tendered for a building contract from the respondent housing corporation. As part of that contract, the appellant provided security in the form of a bank guarantee contract, authorising the transfer of approximately $140,000 to the respondent if requested by the respondent. The contract was prepared with multiple errors, including mistakes in the name of the respondent corporation and its ABN, causing the bank to refuse to pay the amount when the respondent made the request. The NSWCA held that while the principle of strict compliance with the terms of the contract was a requirement of performance rather than construction, the principle of autonomy (that letters of credit and guarantees should be construed independently from the underlying agreements that lead to their creation) must form part of the process of construction. The Continue reading

The Queen v Kilic

The High Court has allowed an appeal against a decision of the Victorian Court of Appeal on sentencing guidelines and ‘manifestly excessive’ sentences. The respondent pleaded guilty to intentionally causing serious injury after he doused his partner in petrol and set her alight. The offence carried a maximum penalty of 20 years, and the sentencing judge sentenced the respondent to 15 years imprisonment. The VSCA held that the sentence significantly exceeded those previously given for convictions that involved more horrific assaults and where defendants did not show remorse, were young, or made an early guilty plea (as had all occurred here), and reduced it to 10 years and 10 months imprisonment. Appealing the VSCA decision to the High Court, the Crown contended that the original sentence cannot be manifestly excessive if it falls into the ‘worst case’ category for the offending, and that the VSCA erred in its approach to evaluating ‘current sentencing practices’ as applied by the sentencing judge.

The Court (Bell, Gageler, Keane, Nettle and Gordon JJ) unanimously allowed the Crown’s appeal, holding that the Court of Appeal erred in its approach to ‘current sentencing practices’ when it held that the differences between the sentencing judge’s conclusions and those in other cases warranted the conclusion that the sentencing judge imposed a manifestly excessive sentence.

The Court first held that the VSCA erred in describing the offence as falling within the ‘worst category’ of cases of intentionally causing serious injury. Given that the ‘worst category’ means an instance of an offence which warrants the Continue reading