News: Three grants of leave

Last week’s special leave hearings broke a four-month drought in appeals granted special leave ‘on the papers’. There were three grants of leave announced, one on Wednesday (without a hearing) and one each on Friday’s two oral hearings in Brisbane and Sydney.

The three appeals that will now go to the High Court are:

  • Compton v Ramsay Health Care Australia Pty Ltd [2016] FCAFC 106, which concerns the circumstances when a person who a court previously held owed a debt and is now bankrupt can now argue that he didn’t owe the debt. In 2015, the NSW Supreme Court held that the respondent owed just under $10,000,000 [EDITED: see comments] to the applicant after guaranteeing a now bankrupt company’s debts, rejecting his argument that details of the debt were not attached to the papers he signed and that he wasn’t aware of them. After he went bankrupt and the applicant applied to sequester the debt (preserving it from the demands of other creditors), he submitted new financial evidence challenging whether the bankrupt company ever owed anything to the respondent. The Full Court of the Federal Court unanimously held that the trial judge should have opted to inquire into whether any debt was owed, even though the applicant never challenged the amount of the debt in the NSW Supreme Court.
  • Kennedy & Thorne [2016] FamCAFC 189, which examines the enforceability of binding financial agreements (colloquially known as ‘pre-nups’), where one party insists on the agreement as a pre-condition to marriage. The parties to a 2007 marriage differed in assets (none vs $18M),  Australian immigration status (a tourist visa vs Australian citizenship) and English fluency (little vs complete.) A week before they married, they signed an agreement prepared by the richer party’s solicitor, despite the poor party receiving independent legal advice that the agreement was ‘no good’ and (about a further agreement shortly after the marriage) ‘terrible’. Ruling after their 2011 separation and the richer spouse’s death in 2014, the Full Court of the Family Court overturned a trial judge’s finding that the agreement was the result of duress, holding that the trial judge failed to provide adequate reasons for the finding of duress and failed to make a finding of unlawful pressure (as opposed to a mere threat not to marry), instead holding that the agreement was binding on both parties.
  • Shop, Distributive & Allied Employees Association v ALDI Foods Pty Ltd [2016] FCAFC 161, concerns the process for approving a regional enterprise agreement with employees who are presently in a different region. After the majority of seventeen employees of Aldi who were offered roles in a new ‘region’ of the company’s operations (on the NSW/SA border) voted to approve an enterprise agreement and the agreement was approved by the Fair Work Commission, the union (which was not involved in the earlier agreement) challenged the agreement on three grounds. A majority of the Full Court of the Federal Court held that the agreement could not be approved because it failed a statutory requirement that ‘the agreement has been genuinely agreed to by the employees covered by the agreement’ – at the time of the vote, the new region had no employees. The same majority also held that the Commission failed to properly apply the requirement that the employees be ‘better off overall’, relying instead on a clause in the agreement that promised the employees equal (but not better) terms than the award. But the Court unanimously held that it could not invalidate the agreement because of a one-word deviation between the notice given to the employees and the required wording, because, to the extent that the different wording was important – something the three judges differed on –  the Commission’s failure to act on it was not a jurisdictional error.
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About Jeremy Gans

Jeremy Gans is a Professor in Melbourne Law School, where he researches and teaches across all aspects of the criminal justice system. He holds higher degrees in both law and criminology. In 2007, he was appointed as the Human Rights Adviser to the Victorian Parliament's Scrutiny of Acts and Regulations Committee.

16 thoughts on “News: Three grants of leave

  1. Transcript of Ramsay is interesting, in that the appellant was sent away at first because the grounds were ‘drafted with more passion than precision’, but nevertheless ‘You can tell that we are disposed to think that this is an appropriate case for the grant of special leave.’ The appellant returned an hour later with new grounds, the HCA opted to hear from the respondent and special leave was granted on the ‘grounds as reformulated’. Alas, the old grounds are unlikely to be published.

    • There is also the mystery of what ‘passion’ could have been felt by the corporate applicant over a $10,000 debt. I guess it was the principle of the thing – a guarantor always pays his (court adjudicated) debts.

      • I believe the debt was closer to $10,000,000 than $10,000, perhaps explaining the mystery!

  2. The transcript of Thorne & Kennedy suggests that the HCA will examine the entire question of when binding financial agreements can be set aside, including the possibility of lawful act duress, even when there has been independent legal advice. I imagine that family law practitioners will have to proceed with caution, and warnings to clients, in preparing and executing BFAs before the HCA rules:

    • That’s fascinating, Jeremy. I’ve always wanted more clarity on the law with regarding BFAs. The inequality of bargaining power between the parties seems to have been extreme: but is the independent legal advice enough to negative any potential duress?

        • Indeed. If genuinely independent legal advice is not enough to overcome the large disparity in financial power (pretty much a given with BFAs) and the pressure of feeling that you must sign the BFA for the wedding to go ahead (ditto), surely that would render BFAs mostly pointless?

          I’m no fan of them myself, but given parliament has seen fit to include them in Australian law, rendering them more or less pointless through interpretation strikes me as a move that should not be made.

          • I agree, though the counter-argument may be that parliament should have been clearer about that. (I haven’t checked the FamLA provisions, but I’m guessing that it didn’t expressly, comprehensively and exclusively spell out the grounds for voiding BFAs.)

  3. Normally,in civil cases a grant of special leave indicates that the applicant will be successful.This case,however,may be an exception,as the judges referred to a lack of clarity in the law as evident by this statement from Edelman J “The point is that the principles concerning duress, such as lawful act duress or such as the nature of a reasonable alternative, those principles are unclear and these circumstances may require a focus upon how those principles operate.”

    • I agree. Indeed, I’ve entirely given up the game of predicting HCA outcomes based on the fact that – or the terms on which – SL was granted.

      But here’s a question: what should family lawyers advise clients who want BFAs right now? ‘Maybe put off the wedding for six months…’?

  4. A check of the cases section of the High Court website shows timetables for the Ramsay Health Care case and SDEA & Aldi, but not Kennedy & Thorne.Does that mean it has been settled?

    • I don’t think you can assume that. It may just be that the registrar has not yet settled a timeline for Thorne & Kennedy or that for some other reason it hasn’t been added to the ‘current case’ list. The addition of cases to the current cases list at this early stage, before a hearing date has been fixed,is a relatively recent development and there are no public guidelines for when a case will be listed. If Thorne & Kennedy is settled, we will only learn about it at the next High Court Bulletin, unless a relevant transcript appears online, the media reports it or someone involved in the case leaves a comment.

      • By the way, one oddity of the registrar’s handling of family law cases is that the registrar does not provide a citation for the lower court decision in its lists of pending or granted applications, just the names of the parties. But the case is easier enough to identify from the names, via a search on Austlii. Maybe there’s some sort of obscure family law privacy issue in play here – there has always been an issue with putting family law judgments online, due to the dirty laundry issue and sometimes the kids – but such a concern is hardly furthered by keeping easily findable citations secret.

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