The High Court unanimously allowed a demurrer and dismissed a proceeding by the plaintiffs whereby the plaintiffs, Glencore International AG (‘Glencore’) sought to invoke the Court’s jurisdiction under s 75(iii) of the Constitution to compel the defendants, the Australian Taxation Office (‘ATO’) to return certain documents (the ‘Glencore documents’) to them and to restrain the defendants’ further use of them.

The Glencore documents were created for the sole or dominant purpose of legal advice to Glencore with respect to the corporate restructure of Australian entities within the Glencore group. The advice was provided by Appleby (Bermuda) Limited (“Appleby”), an incorporated law practice in Bermuda. The Managing Partner of Appleby said that the Glencore documents were amongst documents colloquially described as the “Paradise Papers” which were stolen from Appleby’s electronic file management systems and provided to the International Consortium of Investigative Journalists. Glencore said that the ATO had obtained copies of the Paradise Papers, asserted that the Glencore documents are subject to legal professional privilege and sought an injunction requiring the ATO to return them and to provide an undertaking that they would not be referred to or relied upon. The ATO did not accede to those requests. Instead it argued that there was no cause of action entitling Glencore to relief, or that they were required to retain and use the documents for the purposes of s 166 of the Income Tax Assessment Act 1936 (Cth) (‘ITAA36’), which provides that the Commissioner must make an assessment of the taxpayer’s returns from the taxpayer’s returns “and from any other information in the Commissioner’s possession.”

The High Court held at [5] that it was clear that the Glencore documents were the subject of legal professional privilege, and that documents which were subject to legal professional privilege were exempt from production by court process or statutory compulsion. However, a declaration to this effect would not assist Glencore, because once the documents were in the ATO’s possession, they could be used in connection with the statutory powers under the ITAA36. Glencore would have to identify a juridical basis for an injunction to restrain the ATO’s use.

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Wayne Jocic, ‘A tale of two townhouses and quantum meruit: Mann v Paterson Constructions Pty Ltd’ (16 October 2018)

A majority of the High Court has allowed an appeal from the Victorian Court of Appeal, holding that a builder was entitled to sue for restitution upon a quantum meruit in relation to a terminated building contract insofar as that stage of the contract was not completed, but otherwise, a quantum meruit could not be claimed where the stage of the contract was completed or where it was an oral variation governed by statutory notice requirements.

Facts

The appellants, the Manns, engaged the respondents, Paterson Constructions Pty Ltd (‘Paterson’) to construct two double-storey townhouses in Blackburn, Victoria and executed a contract which was expressed to be prepared in accordance with the Domestic Building Contracts Act 1995 (Vic). The contract provided for progress payments to be made at certain intervals specified in the Appendix of the contract. The Manns orally requested 42 variations to the townhouses during the period of construction (11 to Unit One and 31 in relation to Unit Two). Paterson carried out the variations and did not give written notice according to the process under the contract and s 38 of the Domestic Building Contracts Act for owner-initiated variations. At the time that Unit One was handed over, Paterson told the Manns that there was around $48,000 to be paid for the oral variations, and the Manns refused to pay.  Paterson then refused to continue carrying out construction until the variation amount was paid. In the event, the Manns alleged that Paterson had repudiated the contract, and said that they accepted the repudiation. Paterson denied that it repudiated the contract, but said that the Manns’ conduct was in itself repudiatory, and that it accepted the repudiation.

Paterson then commenced proceedings in the Victorian Civil and Administrative Tribunal (‘VCAT’) to recover damages for breach of contract or restitution on the basis of a quantum meruit. VCAT awarded a quantum meruit reflecting the fair value of the work conferred on the Manns. The Manns appealed to the Supreme Court of Victoria, which held that the builder was entitled to obtain a quantum meruit. A further appeal by the Manns to the Victorian Court of Appeal was dismissed. Continue reading →