Dougherty, Terrence Anthony v Coate, Jennifer Anne & Anor Erskine, Donald James v Coate, Jennifer Anne

[1996] FCA 604

IN THE FEDERAL COURT OF AUSTRALIA                  )

VICTORIA DISTRICT REGISTRY  )

GENERAL DIVISION  )

No VG 50 of 1996

BETWEEN:TERRENCE ANTHONY DOUGHERTY

Appellant

AND:JENNIFER ANNE COATE and

AUSTRALIAN SECURITIES COMMISSION

Respondents

No VG 51 of 1996

BETWEEN:DONALD JAMES ERSKINE

Appellant

AND:JENNIFER ANNE COATE and

AUSTRALIAN SECURITIES COMMISSION

Respondents

COURT:Black CJ, Heerey J, Sundberg J

DATE:7 June 1996

PLACE:Melbourne

EX-TEMPORE REASONS FOR JUDGMENT

SUNDBERG J:   Two applications under the Administrative Decisions (Judicial Review) Act to review decisions of the first-named respondent (the magistrate) came before Jenkinson J. The impugned decisions were that in the absence of any further evidence to be called on behalf of the applicants, they be committed for trial in respect of charges under s.232 of the Corporations Law.  The grounds of each application were that the magistrate erred:

(a)in holding that a person could be guilty of a contravention of sub-ss.(2), (5) and (6) of that section ("the provisions"), irrespective of whether he had breached his fiduciary duties as a director of a corporation under the civil law;

(b)in holding that the obligations imposed upon a director by the provisions "are no different if the director is appointed as a nominee director";

(c)in failing to apply the proper tests for the discharge by a nominee director of the duties of his office for the purposes of the provisions;

(d)in holding that the obligations imposed upon a director by the provisions "are no different if the corporation is a joint venture company";

(e)in failing to apply the proper test for the discharge by a director of a joint venture company of the duties of his office for the purpose of the provisions;

(f)in holding that the existence of a deadlock amongst corporators is irrelevant to whether a director is guilty of a contravention of the provisions;

(g)in holding that the failure by the prosecution to call evidence from Messrs Wells and Finney did not result in a miscarriage of justice;

(h)in holding that lawful conduct of the applicant as a shareholder of Australian Quarry Holdings Pty Ltd ("AQH") in negotiating a shareholders' agreement is relevant to the question whether the applicant as a director of AQH contravened any of the provisions;

1. in failing to hold that upon the occurrence of the deadlock in the affairs of AQH, the acquisition of the Regal Quarry Site by interests associated with the applicant was in the interests of AQH as a whole, with the consequence that there was no contravention of the provisions.

Each applicant claimed an order quashing the magistrate's decision and an order that the matter be remitted to her for re-consideration.  Jenkinson J dismissed the applications under Order 20, rule 2(1)(b) of the Rules.  On appeal, the appellants accepted that the power to make an order for review in respect of committal proceedings is to be exercised only in exceptional circumstances: Australian Securities Commission v Burns (1995) 130 ALR 89, at p.92; Flanagan v Commissioner of Australian Federal Police (1996) 134 ALR 495, at p.528; Yates v Wilson (1989) 168 CLR 338, at p.339. In the last mentioned case the High Court held that this "fragmentation" principle applies to applications for review under the Administrative Decisions (Judicial Review) Act.

To bring themselves within the realm of exceptional circumstances, the appellants contended that the magistrate had made fundamental errors of law in her reasons, namely those in paragraphs (a) to (i) above.  We are prepared to accept that the points of law raised by the grounds are of public importance.  In Flanagan at p.529 the Full Court distinguished between two types of case. The court said:

(a)  First, there are claims for relief involving pure questions of law, emerging from a context of undisputed facts, especially questions the resolution of which may clarify the law for other cases ....

(b)  Secondly, there are claims based substantially on contentious matters of fact, including questions of mixed fact and law. 

Prima facie there is much to be said in favour of the court's, in the exercise of its discretion, hearing and determining claims of type (a), above, if they are brought forward at an appropriate time.  Where the facts are simple and few and the point is one of law, a claim may, as an exception to the fragmentation
principle, be entertained on an application for judicial review, even if it could affect the admissibility of evidence ....

Equally, the courts do not ordinarily entertain claims of type (b), above, because the fragmentation of the criminal process which is involved is not outweighed by any real benefit that might flow from the collateral resolution of the issue ....

In our view, the present cases fall squarely within type (b), even if some questions viewed in isolation might fall within type (a).

Jenkinson J dismissed the applications summarily.  He did not have the benefit of Flanagan, but his reasons for judgment show that he was well aware of the distinction drawn in that case.  His Honour, in effect, held that the case was of the type, namely Flanagan type (b), that is not reviewable.  He said he was "convinced that the discretion would, at the hearing, be exercised against review and that at this stage" he should make the order sought.

We are of the same opinion.  His Honour correctly dismissed the application under Order 20, rule 2(1)(b).  The appeals should be dismissed with costs.

BLACK CJ:   The order of the court is, therefore, that the appeals be dismissed with costs.  The court will now adjourn.

I certify that this and the preceding three pages are a true copy of the reasons for judgment of the Honourable Justice Sundberg

........ ........ ........ ........ ........ ........ .

Associate

15 July 1996

Counsel for the Appellants:  P A Dunn QC and G J Lyon

Solicitors for the Appellant in VG 50 of 1996:  Serafini & Hill

Solicitors for the Appellant in VG 51 of 1996:  Palmer Stevens & Rennick

Counsel for the Respondents:  L Lieder

Solicitor for the Respondents:  Commonwealth Director of Public Prosecutions

Date of Hearing:  7 June 1996

Place of Hearing:  Melbourne