Proctor : September 2019
52 PROCTOR | September 2019 High Court and Federal Court casenotes WITH ANDREW YUILE AND DAN STAR QC High Court Administrative law – migration – detention pending removal – special case – drawing of inferences Plaintiff M47/2018 v Minister for Home Affairs  HCA 17 (orders 13 February 2019; reasons 12 June 2019) concerned whether ss189 and 196 of the Migration Act 1958 (Cth) gave authority to the Commonwealth to detain the plaintiff for what he alleged would be an indefinite period. Section 189 of the Act requires an officer who knows or suspects a person to be an unlawful non-citizen to detain that person. Section 196 of the Act requires unlawful non-citizens to be detained under s189 until they are removed or deported from Australia. Section 198 requires that unlawful non-citizens be removed “as soon as reasonably practicable” if the non-citizen is a detainee and an application for a visa has been refused and finally determined. The plaintiff was an unlawful non-citizen who had been in detention since 2010. He had used several names with overseas officials and had also made visa applications in Australia using different names, nationalities and other personal details. His accounts of his background were inconsistent. He admitted that some applications contained false details. He also did not cooperate with Australian officials who were trying to establish his identity and nationality. The plaintiff, who argued that he was stateless, commenced proceedings in the High Court arguing that his detention was unlawful because the mandate to detain in ss189 and 196 is suspended where removal from Australia is not practicable at all or in the foreseeable future. In the alternative, the plaintiff claimed that the provisions exceeded the legislative power of the Commonwealth. The parties did not agree, for the special case, that there was no real prospect of deporting the plaintiff from Australia in the foreseeable future. The plaintiff submitted, however, that inferences to that effect could be drawn. The plaintiff agreed that if none of the inferences he argued for could be drawn, the questions in the special case did not arise. The court unanimously held that the necessary inferences could not be drawn, because it could not be assumed that it was beyond the plaintiff’s power to provide further information concerning his identity, and that might alter his prospects of removal. It followed that there was no factual basis to question the lawfulness of the plaintiff’s detention. Kiefel CJ, Keane, Nettle and Edelman JJ jointly; Bell, Gageler and Gordon JJ jointly concurring. Answers to questions stated in the special case given. Trade practices law – consumer protection – unconscionable conduct Australian Securities and Investments Commission v Kobelt  HCA 18 (12 June 2019) concerned the meaning of “unconscionability” in s12CB(1) of the Australian Securities and Investments Commission Act 2001 (Cth). That section provides that a person must not, in trade or commerce and in connection with the supply of financial services, engage in unconscionable conduct. The respondent operated a general store in Mintabie, South Australia, selling goods including food, fuel and second-hand cars. Almost all of his customers were resident in two remote Aboriginal communities. The respondent provided credit through a system known as ‘book-up’, where customers provided the respondent with a debit card linked to a bank account into which wages or Centrelink benefits were paid (with their PIN). The respondent provided goods and was authorised to withdraw funds as they arrived from customers’ accounts to reduce customers’ debt. 50% was applied to debt and 50% was made available for customer use. Customers had little practical opportunity to access the funds themselves. The respondent also exercised a degree of discretion over what was bought from the store, especially when customer funds were low, and enabled purchases through other stores nearby. The only issue was whether the respondents’ actions under this system were unconscionable. The primary judge found that they were, because the respondent “had chosen to maintain a system which, while it provided some benefits to his Anangu customers, took advantage of their poverty and lack of financial literacy to tie them to dependence on his store”. The Full Court allowed an appeal. The Full Court held that the customers were vulnerable under the system, but the respondent’s actions were not unconscionable given customers’ understanding of the system, their voluntary entering into the contracts, actions that customers could take, and that the respondent had not acted dishonestly or had exerted undue influence on his customers. There was also anthropological evidence suggesting some benefits to customers culturally under the book-up system. A majority of the High Court dismissed an appeal. Although customers under the book-up system were more vulnerable, no feature of the respondent’s conduct exploited or otherwise took advantage of their vulnerability. The basic elements of the system were understood and accepted. The acceptance of the system reflected cultural matters, not lack of financial literacy. Kiefel CJ, Bell J jointly; Gageler J and Keane J each separately concurring; Nettle and Gordon JJ jointly dissenting; Edelman J separately dissenting. Appeal from the Full Federal Court dismissed. Trusts and corporate law – external administrators – receivers – trustee company – rights of indemnity – trust assets In Carter Holt Harvey Woodproducts Pty Ltd v Commonwealth  HCA 20 (19 June 2019), the High Court considered whether property held on trust by a corporate trustee operating a trading trust was property of the company when insolvent, and the creditor priorities in respect of that property. Amerind Pty Ltd carried on a business solely in its capacity as trustee of a trust. After being unable to settle demands for payment from a bank, receivers were appointed and the company was wound up. The trust assets were realised and the bank’s demands satisfied. At issue in this case were the priorities applicable to realised surplus funds. The respondent claimed it was entitled to payment for benefits of Amerind’s employees in priority to other creditors, under ss433, 555 and 556(1)(e) of the Corporations Act 2001 (Cth). Those provisions allow, amongst other things, for payment of certain employee benefits to be paid in priority out of property of the company coming into the receiver’s hands, or property comprised in or subject to a circulating security interest. As a trustee, Amerind did not itself own the assets of the trust, but did have a right to be indemnified out of the trust assets. Questions arose as to whether the right of indemnity could be assets of the trust, and whether the property held on trust by Amerind could itself be property of the company for the purposes of s433(3). The trial judge said that the assets held on trust were not part of the assets of the company, meaning that the employees would not get priority. The Court of Appeal reversed that decision, finding that the right to be indemnified out of the trust assets was property of the company. It also found that the trust assets were themselves assets of the company. The High Court held that, “the ‘property of the company’ that is available for the payment of creditors includes so much of the trust assets as the company is entitled, in exercise of the company’s right of indemnity as trustee, to apply in satisfaction of the claims of trust creditors.” But proceeds from an exercise of the right of exoneration may be applied only in satisfaction of trust liabilities to which the right relates. Kiefel CJ, Keane and Edelman JJ jointly; Bell, Gageler and Nettle JJ jointly concurring; Gordon J separately concurring. Appeal from the Court of Appeal (Vic.) dismissed.