Andrews & Ors v Australia and New Zealand Banking Group Limited

[2012] HCATrans 104

[2012] HCATrans 104

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne       No M4 of 2012

B e t w e e n -

JOHN ANDREWS

First Applicant

ANGELO JULIAN SALIBA

Second Applicant

GEOFFREY ALLAN FIELD

Third Applicant

and

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED (ACN 005 357 522)

Respondent

Application for removal

FRENCH CJ
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 11 MAY 2012, AT 9.32 AM

Copyright in the High Court of Australia

MR J.T. GLEESON, SC:   May it please the Court, I appear with MR J.A. WATSON, for the applicants.  (instructed by Maurice Blackburn Lawyers)

MR A.C. ARCHIBALD, QC:   May it please the Court, I appear with MR M.H. O’BRYAN, SC, for the respondent bank.  (instructed by Ashurst Australia)

FRENCH CJ:   Yes, Mr Gleeson.

MR GLEESON:   Your Honours will have observed that the legal ‑ ‑ ‑

CRENNAN J:   Just before you start, Mr Gleeson, Mr Archibald is right, is he not, when he in his written submissions has observed that the application to remove is limited to grounds 1 to 4 of the grounds of appeal?

MR GLEESON:   I did not know that was correct, your Honour.  I had better just check that, I am sorry.

CRENNAN J:   All right.

MR GLEESON:   On page 2 in order 1 what we had sought to remove was the current application in its totality which is before the Federal Court.  There is no doubt that the central legal point of abiding significance rests in grounds 1 to 4, and if we did obtain a removal application in respect to 1 to 4, there would be a separate question whether 5 to 6 sufficiently travel with 1 to 4 and will not unduly enlarge the ambit of the matter to justify bringing them up as well.  But 1 to 4 is the strength of our point and, as your Honours will have observed, the legal point really has three elements to it.  One is, has the equitable jurisdiction to relieve against penalties ceased to exist, which is the view that has been taken in New South Wales by Justice Allsop.

The second is the view of the trial judge that it does not cease to exist, but it has now conformed itself to a fairly narrow common law jurisdiction where it can only apply if there is (a) a contract and (b) a breach of a contract, and perhaps a third related question, irrespective of source of jurisdiction, do those two limitations now exist in the law of Australia?  The related question is the correctness in Australian law of the House of Lords decision in Export Credits which was touched upon in AMEV but has not been squarely considered by this Court.

CRENNAN J:   Does not the question come down to this, and I think it is relatively simple?  Whether it is a mistake or a fallacy to reason that equitable relief against penalties required a breach of condition, therefore relief in the context of a contract is only available if there is a breach of contract?

MR GLEESON:   Yes, that is the question and ‑ ‑ ‑

CRENNAN J:   That is the question.

MR GLEESON:   That is the question and it is as simple as that.  Undoubtedly, the jurisdiction in equity arose in a much broader context.  It arose before contract.  It arose irrespective of contract and it applied to breach of condition.  No doubt on the other side, as freedom of contract rose during the 19th century, one category of cases which were held not to be penalties was well established as those where there was a breach of contract and where the alleged penal clause was a genuine pre‑estimate of the damage arising from breach, and there is no doubt freedom of contract has had its significant work to do there.

What has happened, which is, we submit, the logical and historical fallacy is to say an element of a category of case which will not be subject to the doctrine, namely breach of contract, has been taken out of there and made an essential condition for the doctrine.  So that is the legal point.  Your Honours, practical opposition is put up against us which is really twofold.  First, we should try our luck in the Full Federal Court on these legal points, and secondly, perhaps their real opposition because they oppose leave on any grounds is we should simply go to trial in the Federal Court on the rest of our case.  And then at the end of a long trial, if anyone still has the appetite and the legal point is pursued it might make its way back to this Court in a couple of years time, and the Court can look at it then.

There are two obvious problems with those approaches.  The first, it is as close to a futility as possible for us to be arguing this legal point in the Full Federal Court.  We now have ‑ ‑ ‑

CRENNAN J:   There are three appellate decisions, are there not?

MR GLEESON:   Three, yes, and Farah v Say‑Dee is being applied faithfully by those intermediate appellate courts.  While the proposition, as Justice Allsop expressed it in Interstar – your Honours may have the decision of Interstar 257 ALR 292 ‑ the matter which he expressed as one which was significant but not for an intermediate appellate court to consider can really be picked up in a couple of places. At paragraph [112], he expressed some views about the importance of following the House of Lords decision in Export Credits.  Similarly, in paragraph ‑ ‑ ‑

FRENCH CJ:   Sorry, is Interstar in your bundle?

MR GLEESON:   We have given your Honours that separately, I am sorry.  Your Honours should have a separate ‑ ‑ ‑

FRENCH CJ:   Yes, thank you.

MR GLEESON:   At paragraph [112], his Honour was saying courts really should follow Interstar.  Paragraph [117] is the Farah v Say‑Dee self‑injunction that really, caution must be expressed in this area by lower courts.

Paragraph [134] is where his Honour says that although there is no binding authority from this Court there is dicta partly from a dissenting judge which taken together with other matters, including export credits, means the matter cannot be reopened below this Court, and finally, paragraphs [159] to [160] makes the same point.  Paragraph [160] is really the identification, we would submit correctly, that the issue is of very significant importance at a level of history and principle and only this Court can deal with it.

That is our answer to their first practical point.  Their second practical point is we should simply go to a final hearing on the rest of the case in the Federal Court.  I can tell your Honours what has occurred is that this particular class action is large.  It has 38,000 group members.  There are six other class actions ‑ ‑ ‑

FRENCH CJ:   There is an affidavit, I think, about this, is there not, by Mr Foale?

MR GLEESON:   Yes.  I read Mr Foale’s affidavit of 4 May simply to indicate the importance of this for the related proceedings.  In paragraph 3 there are six related actions raising essentially the same point.  In paragraph 6 they have 152,000 group members in them.  It is because of those reasons of very great scale that her Honour, we submit correctly, ordered some separate questions in the first place and that judgment was not appealed.

What we would envisage occurring is if the Court removed the matter and decided the point of principle, and if these fees, which I will call the over limit or the overdraw fees, are also capable of being penalties the same as the late payment fees, as her Honour has held, we will simply go to one final hearing where we will grapple with all the remaining questions.

FRENCH CJ:   It seems to me that the point of principle you assert is to be found in grounds 1 to 4.  Ground 5 looks rather argumentative.

MR GLEESON:   I do not need ground 5, your Honour.

FRENCH CJ:   And ground 6 raises other issues, does it not, factual issues?

MR GLEESON:   All ground 6 raised – and I will admit it candidly to your Honour ‑ it is a question whether it is a sufficient cousin to travel; it is not the lead point.  All it sought to raise was this, that when her Honour applied the breach of contract approach to the relevant clause – I might ask your Honours to go, for example, to one place where the clause is found, which is page 77, in paragraph 153.  The clause is set out, we do not agree to provide credit unless there is a prior agreement for an overdraft.  Then the next sentence her Honour has emphasised:

It is a condition of all ANZ accounts that you must not overdraw your account without prior arrangements being made –

What then hinges off that clause is ‑ if your Honours go over to page 79, paragraph 157 ‑ if you breach that clause and your account is overdrawn, they can terminate your facility.  Then at page 82 the fees which we call the penalty fees are attached to that event; namely, there being insufficient cleared funds in your account and whether the bank honours or dishonours, you get a fee.

Now, approached through the eyes of equity, our legal point is simply that here is a condition, it is clearly expressed as going to the heart of the contract and if the condition is breached you become exposed to the fee, and then equity would ask what is the purpose of that fee within this arrangement?  That is grounds 1 to 4.  Ground 6 is simply if the law were confined to having to find conditions which were promissory, did her Honour correctly treat mandatory language, I must not overdraw, as not being promissory?  But I accept it is not the driving point of the legal issue.

Your Honours, apart from that, they are the practical issues I wish to address.  In terms of the legal issues, I think our written document has identified why we submit that if this Court considered export credits it would find that it is not in fact authority for the grand narrowing of the law, that what has in fact happened is that the origin of the modern law, Dunlop, Lord Dunedin never, in fact, placed this limitation upon the doctrine.  It was a case where there was breach and there was liquidated damages and everything was expressed in that context, and that the language of condition that we see in these documents is apt to invoke the equitable doctrine.

CRENNAN J:   To have a removal, and I know you have addressed the exceptional case type issues, we would need to be assured that there were not going to be contests of fact that are going to somehow send it all off the rails.  And I notice that Mr Archibald’s written submissions have foreshadowed a notice of contention, which involves a complaint about excluded evidence.

MR GLEESON:   Well, your Honour, can I give your Honours some ‑ ‑ ‑

CRENNAN J:   I realise that this whole point has arisen in the context of a separate question.

MR GLEESON:   Yes, and can I give your Honour some assurance?  What Justice Gordon did which, with respect, was highly efficient, not only did she order the separate question, but she required the parties to agree upon the terms of the contractual documents and upon the circumstances of breach.  That is what produced the fees we have.  It then turned out from her judgment that, in fact, there were only about two or three variations on a theme within the 17 fees.  And so, although we have got 38,000 people, we have managed to produce a very tight confine of a couple of contractual documents and some agreed facts.  There are agreed facts about the application of the fee.

The evidence that Mr Archibald speaks about, which her Honour quite rightly rejected, was some evidence of the ANZ saying, we would like to tell you about some of the processes we put in place behind the scenes, and the evidence went to some things that they called a shadow limit.  It might be very informative and it might be useful at the final hearing when one comes to quantum, but what her Honour simply said was, if I am construing contracts and if I am applying a legal principle to them, those types of matters are simply irrelevant.

There is no doubt that in the in terrorem sense the bank says, if you ever get to the stage 2, which we will on some fees and we would like to get there on these fees as well, they are in a peculiar position.  They have made an admission that the fees are not a genuine pre‑estimate of damage.  Your Honours see that in the book at page 22, paragraph 3.  And this is part of her Honour’s thinking.  That is a very critical admission in paragraph 3:

ANZ accepted that in considering the law of penalties, the Exception Fees –

that is all of them –

did not constitute a genuine pre‑estimate of damage.

Now, one might think that once we know which fees go forward to stage 2, it will be a fairly confined task.  Apparently what they wish to do at stage 2, which is what has occurred in some of the American litigation, is try and

prepare evidence which reconstructs costs of their overall banking structure and then try and apportion some of that to this event.   Now, that exercise has basically failed in America because it is not sufficiently related to the condition.  So, in our submission, what her Honour has done is correctly ruled on evidence and, if those matters are of any relevance, that would be considered stage 2 ‑ ‑ ‑

FRENCH CJ:   Would it be open to the respondent if you succeeded on a removed application and appeal on grounds 1 to 4 to run the notice of contention on the remitter of the matter back to the Full Federal Court?

MR GLEESON:   They could do it in the Full Federal Court, yes, because the legal principle will have been established, and there is no intersection between the notice of contention and 1 to 4.  Your Honours, apart from that, I did not propose to weary you with the strength of our legal argument this morning.

FRENCH CJ:   Yes, all right, thank you, Mr Gleeson.  Yes, Mr Archibald.

MR ARCHIBALD:   There are three main points, if the Court pleases.  First, we say the decision of the primary judge, even if reversed, is not effectively final or decisive of the litigation.  Indeed, when one considers the issues involved in the litigation, the penalty point may at the end of the day be immaterial to the outcome of the litigation, and that being so, there is no occasion or reason for this Court to address the point sought to be raised on removal.

The Court will have seen from the materials that the applicants mount five independent and discreet bases of attack on the charging of exception fees, and the decision of the primary judge concerns but one aspect of one of those bases of attack, namely, the proposition that within the penalty bases of attack there is what is being called an extended component of the doctrine, which would allow the applicants to succeed absent breach of contract.  The position is that even if the applicants were to succeed on an appeal on the extended penalty doctrine, they may nevertheless fail on that ground at trial on the footing that the fees in question are not extravagant or excessive.

CRENNAN J:   It would nevertheless be a course which would – there would be, would there not, for the reasons that Mr Gleeson identified, good reasons for determining the scope of the relief against penalties, having regard to the scale of the action and the implications even in terms of questions of relevance?

MR ARCHIBALD:   Were the penalty ground to be the only ground or palpably the substantive ground of the proceeding, then other considerations might intrude, but the applicants insist that the other four bases of claim which they have pleaded are of merit and will be pursued.

CRENNAN J:   But her Honour obviously decided that the point was worth being determined in the context of a separate question, knowing that that obviously would not determine the whole action.

MR ARCHIBALD:   Yes, that is plainly so, but it is one thing for a primary judge in a case management environment to seek to address some of the points in relation to one of the bases of claim, but it is another thing entirely, in our submission, for the matter to be removed into this Court where the attendant impediment to the progress of the litigation to finality where all of the issues that will arise under the other causes of action will need to be addressed in any event.

FRENCH CJ:   I suppose you would be having that argument on the question of an application for leave to appeal in the Full Court, would you not?

MR ARCHIBALD:   If it is to be pursued, yes.  If it is to be pursued, but ‑ ‑ ‑

FRENCH CJ:   Yes, because an alternative scenario is you are off to the Full Court, you have an argument about leave to appeal, maybe leave is granted.  If leave is granted then obviously there is a – and the appeal, depending on its outcome there may be an application for special leave, so there are impediments to progress whichever way one goes, are there not?

MR ARCHIBALD:   It is matter, of course, for the applicants but if this removal application were to fail one might think that they would not pursue the application in the Federal Court.

FRENCH CJ:   It would just go straight to trial, you would say?

MR ARCHIBALD:   Yes, indeed.  May we make clear, immediately, that it is not our proposition that the extended penalty doctrine should be addressed at this stage by the Full Federal Court?  We say, if need be, if we find ourselves in the Full Federal Court, we would be submitting that there is no occasion for the Full Federal Court to grant leave and address this.

FRENCH CJ:   You would say wait until the end and see what happens?

MR ARCHIBALD:   Yes, because otherwise there will be multiple appeals in the Federal Court and the possibility of multiple occasions of the matter coming before this Court, which is highly undesirable, and should occur if it is all only where the point in question is decisive of the whole litigation.  That is the point of our citation to Bucknell on this point.  And, so, it may be the case that the applicants succeed at trial on any one or more or all of the other four bases of claim, in which event their failure on this point, on the penalty round of attack, will be immaterial to the outcome of the proceeding.

Moreover, one notes, as has perhaps been observed already in the course of our learned friend’s submissions, that there are two independent grounds which are sought to be the subject of the cause to be removed, and if both grounds are to come before this Court the Court might decide the appeal on the basis of the breach ground – the applicants might succeed on the breach ground – in which case this Court will never get to or need to get to the extended penalty doctrine point.  On that score, in our submission, this case is not a suitable vehicle for the raising of the point, particularly because it arises part way through the progress of the proceeding at trial level in the Federal Court.

The breach ground is advanced but it seems that no question of principle is said to be raised by it.  It seems not to be an independent ground for removal.  It likely would raise matters of some complexity.  My learned friend says a couple of documents are involved.  A couple are in fact 27 sets of terms and conditions, and various of the clauses of those terms and conditions need examination in order to resolve the questions which the primary judge decided, and at least in that respect if the matter were to go to the Full Federal Court the reasons of the Full Federal Court would likely be of benefit to this Court if those issues were ever to come before it.  On the removal ground, the Court would not have the benefit of any such reasons from the Court.  The second matter that we raise is that no prejudice or unfairness to the applicants would occur in the event that removal was not granted.

The primary, perhaps the only reason for the matter being addressed at this stage that is advanced by the applicants, seems to be that the determination of the point at this stage would conduce to overall efficiency in the conduct of the proceedings in the Federal Court at first instance.  The proposition seems to be that the proceeding would continue – if removal is not granted – on the footing that the penalty claim is available only for the late payment fees, and therefore the evidence as to excessiveness or extravagance would be confined to excessiveness or extravagance in respect of the late payment fees.  And, therefore, if an appeal were brought at the end of the proceeding, and it were to succeed, one would have to go back and do it all again.

That analysis is plainly flawed, in our submission, for the same point – essentially the same point – about excessiveness and extravagance and disproportionality arises in relation to each of the other four bases of claim.  We identified that point in our written submissions at paragraphs 21 and 22, page 191 of the application book, and those paragraphs set out the nature of the propositions in relation to each of the other four bases of claim at lines 20 to 27.  So on the footing that all of the other bases of claim are pursued and persisted in, the fact will be that the identical point that would arise in relation to the over limit fees on the penalty claim will be addressed, in any event, by the trial judge.

Now, just how the trial judge manages it is a matter for case management principles and her Honour will decide how and when that should occur.  But it is wrong to say, in our submission, that the proceeding would continue, absent removal and determination of the extended penalty point, without addressing the factual matters that bear upon extravagance and excessiveness in relation to the fees which her Honour has held are not capable of being penalties.  So it can and will be done once, and once only, and need not be revisited if an appeal were to be brought and were to succeed at the end of the case, if the point at the end of the case turned out to be of significance or importance to the outcome.  So there is no inefficiency in abstaining from removal and proceeding with the balance of the case, in the meantime.

The third point – perhaps before I go to that I should just say something about the numbers in the class.  The numbers in the class in this case and the numbers in the class in the other cases, which have recently been and only recently been instituted, if we are right in the proposition that the point sought to be raised is not vital to the determination of this proceeding, it does not become vital simply because there are ‑ ‑ ‑

CRENNAN J:   There are a large number of plaintiffs.

MR ARCHIBALD:   ‑ ‑ ‑numbers who are no doubt interested, but the point, as we have submitted, may fall away and become lacking in significance.  Similarly, if there is no inefficiency in determination of the points that arise in the balance of the case, without removal, there does not arise inefficiency simply again because of the numbers that are involved.  No doubt members of the classes are interested, but if the point is one which may fall away, their interest is only temporary and the circumstance of current interest, if there be current interest, affords no reason to remove the case at this stage.

The third point is that there is no occasion to review the penalty principles which are applicable in this case.  There is no difference of view shown amongst any intermediate Court of Appeal on the point that is applicable.  The applicants say three intermediate Courts of Appeal have spoken.  Well, they have spoken, they have spoken with one voice, and they have not, in our submission, said there needs to be a review of the penalty doctrine, but we cannot do it, only the High Court can do it.  The only observation is that if there is to be a review, it must occur in this Court – not that there should be a review – with one qualification which I am on the point of coming to.

The qualification is that the only area in respect of which it might be said that there is an occasion for review of the penalty doctrine is in respect of that part of the principles which apply, or may apply, in the case of termination of contract.  In the case in which moneys are payable in respect of termination, and the proposition is those moneys ought not be required to be paid because the imposition of the obligation is itself a penalty, that is the area in which some controversy exists, that is the area which was the subject of the Interstar litigation, and that was the ground upon which special leave to appeal to this Court was granted in the Interstar litigation.

CRENNAN J:   You have made the point in your written submissions that the context here is not termination.

MR ARCHIBALD:   Yes, it is common ground.  There never has been a dispute about this.  It is common ground that this is not a termination case, and the reason why special leave was given in the Interstar litigation, in our submission, was the termination point, and as it was put to the court in argument, the case involved the intersection between penalty principles and relief against forfeiture principles.  That point does not arise and cannot arise in this case.  That is the area where there is room for debate.  That is the area in which the primary judge in Interstar found in favour of a doctrine which applied, absent breach.  That was the foundation of the reasons of Sir William Deane in the AMEV litigation, which were the springboard for the decision of the primary judge in Interstar.  That was the foundation of IAC (Leasing).  That was the foundation of O’Dea.  That was the foundation in England of Campbell Discount, and so on.

CRENNAN J:   Just on that point, Mr Archibald, if you go to application book 26 and look at paragraph 16 of the trial judge’s decision, if you look at the first half of paragraph 16, skipping over a couple of sentences and the conclusion:

As a result, although the equitable jurisdiction was restricted to breach it extended to include matters expressed in the language of condition and defeasance, rather than in the language of an obligation capable of breach.

It might be put in the context of these facts, that reasoning there is affected by treating a breach of condition in the context of penalties – in context of conditional bonds, I should say – as meaning the same thing as a breach of contract, a breach of a promise, and accordingly that reasoning, although it

is not, as you point out, in the context of termination, may be argued to be subject to the fallacy that I identified earlier with Mr Gleeson.

MR ARCHIBALD:   Yes, your Honour, but the important point as we contend is that to the extent to which, if at all, there is any survival of notions of that kind, it is clearly from what we say is the settled course of authorities over the last century confined to the cases in which termination arises, penal bonds of course being medieval instruments which assumed importance and prominence before the principles of contract had really emerged.  Now, I do not want to go into the ‑ ‑ ‑

CRENNAN J:   My simple point is, I suppose, that the breach of condition in that setting does mean something different from a breach of contract where you have got assumpsit and a promise.

MR ARCHIBALD:   There is no doubt that is so, but none of that intrudes, as we submit, upon the circumstances of the modern law, the settled law, where contractors emerge, freedom of contract principles have been acknowledged and the role of the doctrine of penalty is an exception.  What our friends are seeking to do is to extend the doctrine in a way that has not hitherto existed.

CRENNAN J:   I suppose the other way of putting it is that equitable approach does not survive.

MR ARCHIBALD:   Well, yes, or it may survive in the way the primary judge has indicated.

CRENNAN J:   Or it may survive in the way the primary judge has indicated.

MR ARCHIBALD:   But none of that matters for our purposes.  If the Court pleases.

FRENCH CJ:   Thank you, Mr Archibald.  Yes, Mr Gleeson.

CRENNAN J:   What about Mr Archibald’s termination point, Mr Gleeson?

MR GLEESON:   Three answers to that.  Firstly, the expression of principle that we rely upon, for instance, Justice Story, which is set out at application book 34, paragraph 35, has no such limitation in it.  Secondly, we have given your Honours an example ‑ ‑ ‑

CRENNAN J:   It is a distinction from Interstar though, is it not?

MR GLEESON:   No doubt it is a distinction, but it really just gets to the more fundamental question which is:  if the original width of equity was that broad, has it been narrowed so that it only is concerned with two cases, one breach, and Mr Archibald says may be or may be not to termination orders that remain fundamentally attached to condition.

We have provided to your Honours a case we located overnight from the US Supreme Court in 1947 Priebe v United States, which is a case not in the area of termination and it is a case not in the area of breach.  In that respect, it is squarely in point for our argument.  It is a case where the penalty was attached to a condition being, I had to be ready with my eggs on a certain day even though the contractual day for delivery would not necessarily be that day but would be some day thereafter.  The majority held that that was subject to the doctrine of penalties, notwithstanding freedom of contract.  Your Honours see that on page 411 in the judgment of Justice Douglas.  In the final paragraph:

the law does not look with disfavour upon ‘liquidated damages’ provisions in contracts.  When they are fair and reasonable attempts to fix just compensation for . . . breach –

they serve a useful function, and so on.  The judgment went on over the page to indicate that in the present case this was a penalty, and in particular on page 413 at about point 3:

It might, as respondent suggests, have an in terrorem effect of encouraging prompt preparation for delivery . . . [It] was included not to make a fair estimate of damages to be suffered but to serve only as an added spur to performance.

CRENNAN J:   That gets back to securing performance a la conditional bonds.

MR GLEESON:   A la conditional bonds.  And the only basis of the dissent was whether the ordinary law of penalty applied in government contracts.  Justice Frankfurter, although he dissented on that question, gave a very strong endorsement of the equitable principle which your Honours would see on page 418.

So, the limitation of it to only breach and query termination is one, we submit, that is not consistent with equity’s purposes and that is part of the cental importance of the case to decide that.  Your Honour, the only other matter in reply was that we would submit that if the Court were to remove 1 to 4 and decide that legal point there is a sufficiently strong prospect of that producing a decisive result in the litigation to make it in the interests of justice.  If the Court upholds our point then the question of

breach is irrelevant and we simply go back to a final hearing.  If the Court were to reject our point the matter could continue in the Full Federal Court on grounds 5 and 6.

FRENCH CJ:   Some of that argument would have to be revisited if the matter is removed on the application for leave to appeal, would it not?

MR GLEESON:   Yes, and if we simply go to the Full Court – we have heard as loudly as we can what Mr Archibald will say and the argument will be they cannot deal with the main point, they can deal with the lesser point, and then, on special leave, we then have the same argument.

FRENCH CJ:   But you would have that argument if it were removed?

MR GLEESON:   If it were removed?

FRENCH CJ:   Yes.

MR GLEESON:   Yes, and that point can be addressed then.  That is what we wish to put, your Honours.

FRENCH CJ:   Yes, all right.  Thank you.  We will adjourn briefly to consider what course we should take.

AT 10.10 AM SHORT ADJOURNMENT

UPON RESUMING AT 10.19 AM:

FRENCH CJ:   Yes.  We are of the view that the application should be removed in relation to grounds 1 to 4.  The orders we propose to make will be as follows:

1.So much of the cause, being an application for leave to appeal and a proposed appeal which is now pending in the Full Court of the Federal Court of Australia, as concerns the question of the scope of the equitable jurisdiction to relieve against penalties and the question of whether a person can only be relieved against a penalty if it becomes payable for a breach of contract, is removed into this Court (Amended Draft Notice of Appeal, Grounds 1 to 4 inclusive). 

2.The costs of the removal application will be the costs in the proceeding. 

The matter will then go to the Registrar in Melbourne and obviously we will want the parties to be astute to confine the materials to those necessary to address the question of law which is removed.

MR GLEESON:   If your Honour please.

FRENCH CJ:   Of course the application is still before us.  We will adjourn briefly so the video link can be established for the next matter.

AT 10.20 AM THE MATTER WAS ADJOURNED