Declarations by consent (or not opposed)
(e) Declarations will not usually be made when the only material before the court is the consent of the parties: BMI Ltd v Federated Clerks Union of Australia (1983) 51 ALR 401 at 412. However, a different position may apply where the regulator has presented evidence and submissions in support of the declaratory relief sought: Australian Securities and Investments Commission v Fuelbanc Australia Ltd (2007) 162 FCR 174 at [61]. ([136])
(f) The grant of declaratory relief is dependent on there being "a proper contradictor, that is to say, someone presently existing who has a true interest to oppose the declaration sought": Russian Commercial & Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 at 448; Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 437; Corporate Affairs Commission (NSW) v Transphere Pty Ltd (1988) 15 NSWLR 596 at 605. ([137])
(g) A "proper contradictor" requires the existence of a contradictor, as a party joined to the proceeding; it does not require that the party actually opposes the declarations sought: ACCC v Willesee Healthcare Pty Ltd (No 2) [2011] FCA 752 at [44]; cf. ACCC v MSY Technology Pty Ltd (No 2) [2011] FCA 382. ([138])
(h) However, a declaration should be made unless there are proper grounds to the contrary, subject to the proviso that a "legitimate and powerful" factor against the grant would be the possibility of embarrassment in a practical sense to a non-party: Corporate Affairs Commission (NSW) v Transphere Pty Ltd (1988) 15 NSWLR 596 at 608. ([139])
(i) Further, the fact that the defendants consent to the declarations is a "powerful reason" in favour of granting contravention declarations, particularly where they are well aware of what matters are in their interests and what matters are not: Australian Securities and Investments Commission v Varsity Lodge Pty Ltd (2007) 65 ACSR 400 at [27][29]. ([140])
75 At the hearing before me, ASIC drew my attention to the decision of Australian Competition and Consumer Commission v MSY Technology Pty Ltd (No 2) (2011) 279 ALR 609 at first instance in which Perram J declined to make declarations which had been agreed between the applicant/regulator and the respondents. Perram J was asked to grant the relief which had been agreed between the parties upon the basis of a Statement of Agreed Facts alone. His Honour considered and discussed the notion prevalent in some of the relevant authorities that declarations of right should not be made on the basis of submissions alone. His Honour held that, although there was no principle of general application to that effect, the Court would usually require that the declarations sought be supported by evidence. His Honour went on to further hold that, having regard to the terms of s 191 of the Evidence Act 1995 (Cth), a statement of agreed facts would usually suffice. His Honour also held that declarations of right should not be made in the absence of a contradictor.
76 His Honour took the view that a "contradictor" for this purpose was a party in respect of whom there could be a meaningful res judicata (at [37] (p 618)). His Honour concluded that, although he doubted the correctness of the decision, he was bound by the Full Court decision in BMI Ltd v Federated Clerks Union of Australia (NSW) Branch (1983) 51 ALR 401 to hold that the Court should not make declarations of right by consent in the absence of an actual contest as to whether the declarations should be made.
77 At [43]-[44] (pp 619-620), his Honour said:
43 In any event, this case involves public rights. The commission is a regulator and it seeks vindication of the public's right not to be misled. The principle reason the commission desires, understandably, to have the declarations made is to serve that purpose and to educate. These are public matters. For that reason, I do not think that I can distinguish BMI.
Conclusions in summary:
(a) The suggested principles that declaration should only be made on evidence is dubious in origin, insubstantial in its persuasive content and is not required either by Forster or BMI.
(b) To the extent that Allergy Pathway suggests that BMI propounds such a rule it is, with respect, plainly wrong because it overlooks the fact that the court in BMI had evidence before it and did not decline the declarations on the basis suggested.
(c) In any event, the rule, even if it exists, is overcome by s 191 of the Evidence Act in the present case.
(d) This court is bound by Forster not to make declarations without a contradictor.
(e) As a matter of correct legal doctrine a contradictor will be present when all proper defendants have been joined and so are bound to the result. They will not cease to be contradictors merely because they consent to the proposed declarations.
(f) BMI has, as its ratio decidendi, the contrary proposition which binds me.
44 In those circumstances, I conclude that I should not make the declarations which are sought.
78 In Australian Competition and Consumer Commission v Willesee Healthcare Pty Ltd (No 2) [2011] FCA 752, Dodds-Streeton J distinguished Australian Competition and Consumer Commission v MSY Technology Pty Ltd (No 2). In particular, at [30]-[32], her Honour said (referring to the judgment of Perram J):
30 His Honour nevertheless concluded that the majority view in BMI was probably incorrect and acknowledged that, contrary to his understanding of BMI, a large number of declarations by consent had in fact been made by this court.
31 Perram J concluded at [43]:
(d) this court is bound by Forster not to make declarations without a contradictor;
(e) as a matter of correct legal doctrine a contradictor will be present when all proper defendants have been joined and so are bound to the result. They will not cease to be contradictors merely because they consent to the proposed declarations;
(f) BMI has, as its ratio decidendi, the contrary proposition which binds me.
32 While in my view his Honour's conclusions in sub-paragraphs 43(d) and (e) are correct, I am not, with respect, persuaded that the ratio of BMI is such as to preclude single judges of this court from making declarations involving a public right in the absence of a contradictor who contests that relief.
79 Her Honour went on to hold, at [41]-[44]:
41 In my opinion, while the majority in BMI characterised a proper contradictor as a party who contested the question, their discussion of that issue was expressly within the context of an application under s 108 of the C&A Act and the peculiar features of the case before them. On my reading of their Honours' reasons, they did not purport to enunciate absolute requirements for a proper contradictor generally applicable in all contexts. Further, the absence of a proper contradictor (as defined) was but one of a number of factors which the majority proceeded to consider as relevant to the exercise of their discretion. Their Honours noted that the absence of a contradictor who contested the relief sought had a particular impact on some other relevant factors, but it did not appear to be, in itself, decisive. Their Honours' comprehensive analysis of a number of other relevant factors suggests the contrary.
42 As the joint submissions stated:
77. The true ratio in BMI Ltd is that, as a matter of discretion, the Court was not persuaded to grant the declaratory relief because of a stated concern that such an order could give a misleading impression in relation to activities of parties not before the Court. This (merely) reflects an exercise of discretion in the circumstances of that case. The majority judgment neither states nor purports to state a more general principle of the type identified by Perram J.
78. Further, and in any event, the matters causing concern which presented in BMI Ltd do not present in the circumstances of the present case. Those matters, identified above, that persuaded the Court in BMI Ltd to exercise its discretion to not make the declaration there sought by the applicant are not present in this controversy.
43 For the above reasons, in my opinion, the BMI majority's requirement for a contradictor contesting the relief sought may be confined to declarations sought under the particular legislation relevant in that case and, moreover, was but one of a number of factors relevant to the exercise of the discretion.
44 Consequently, I considered that in the present case, the requirement for a proper contradictor was satisfied despite the absence of any contest, and it was both permissible and appropriate to make the relevant declarations by consent.
80 The ACCC appealed Perram J's decision in Australian Competition and Consumer Commission v MSY Technology Pty Ltd (No 2) to the Full Court of this Court. The decision of the Full Court was handed down on 19 April 2012 (Australian Competition and Consumer Commission v MSY Technology Pty Ltd [2012] FCAFC 56).
81 At [34], the Full Court held that Perram J had not been bound to refuse to grant the declaratory relief sought in ACCC v MSY Technology Pty Ltd (No 2) on the basis of an absence of a proper contradictor. The Full Court held that the matter had always involved the exercise of a judicial discretion. On appeal, the Full Court made the consent declarations which the parties had sought from Perram J.
82 The reasoning of the Full Court may be summarised as follows:
(a) Under s 21 of the Federal Court of Australia Act 1976 (Cth), this Court has power to grant declaratory relief in all cases where jurisdiction has been conferred upon it, whether or not any consequential relief is or could be claimed. It also has an inherent power to grant such relief (at [8]-[9]).
(b) In Russian Commercial & Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 at 448, Lord Dunedin explained that, in general, one of the requirements which an applicant for a declaration of right must satisfy is that there be a proper contradictor. His Lordship said that a proper contradictor is "… someone presently existing who has a true interest to oppose the declaration sought" (at [12]).
(c) This statement was approved by Gibbs J (as he then was) in Forster v Jododex Australia Pty Limited (1972) 127 CLR 421 at 437-438 (at [12]).
(d) There is a difference between having a true interest (that is to say, a real and genuine interest) to oppose the grant of declaratory relief and, having that interest, choosing whether or not actually to oppose the grant of that relief (at [14]).
(e) When proper regard is paid to the judgment of Dawson J in Oil Basins Limited v Commonwealth of Australia (1993) 178 CLR 643 at 648-650 and the judgment of French J (as he then was) in IMF (Australia) Ltd v Sons of Gwalia Ltd (Administrator Appointed) (2004) 211 ALR 231 at [47] (p 244), there is no requirement that all defendants in the action in which the declaration is sought must actually oppose the plaintiff. In IMF (Australia) Ltd v Sons of Gwalia Ltd (Administrator Appointed) at [47] (p 244), French J said:
The requirement of a proper contradictor in a declaratory context is not merely to ensure that the court will be provided with all materials but also that absent a contradictor there is no person to be bound by the relief sought: Acs v Anderson [1975] 1 NSWLR 212 at 215 per Hutley JA citing P W Young, Declaratory Orders, 1st ed, Butterworths, Sydney, 1975, p 210. A proper contradictor, for jurisdictional purposes, in my opinion cannot be confined to the class of party who comes to court ready to oppose the relief sought. There may be a case in which a party, whether a private person or body or a statutory regulator, expresses opposition to, and an intention to oppose, a proposed course of action by another party on the basis that it is in breach of some contractual or statutory prohibition. The party opposing the conduct may however decide for any one or more of a variety of reasons not to contest declaratory proceedings about the lawfulness of the proposed conduct. So the declaration may be made by consent or may be uncontested. This does not mean that the court lacks jurisdiction or power to grant the declaration in such a case. The proceedings will have resolved a pre-existing controversy. A more difficult question arises where a party with an interest in opposing a particular course of conduct refuses to say whether it will take any action in respect of that conduct. Such a party may be said to be one which, notwithstanding its silence, has an interest in opposing the proposed conduct.
(at [14]-[18]).
(f) To the extent that the majority judgment of Keely and Beaumont JJ in BMI Ltd suggests that the absence of actual opposition by an interested party to the declaratory relief sought means that there is no proper contradictor and that this disentitles the applicant to a grant of declaratory relief, it evidences a misunderstanding of the explanation given by Lord Dunedin in Russian Commercial & Industrial Bank v British Bank for Foreign Trade Ltd which was approved by Gibbs J in Forster v Jododex Australia Pty Limited and should not be followed. The correct position is that stated by Dawson J in Oil Basins Limited v Commonwealth of Australia and by French J in IMF (Australia) Ltd v Sons of Gwalia Ltd (Administrator Appointed) (at [30]).
83 In the present case, there is before me a very detailed and specific adumbration of ASIC's contentions as to the findings of fact which I should make. These proposed findings are not challenged by either Camelot or Mr King. In addition, I have before me a substantial body of evidence which I am satisfied amply supports ASIC's contentions in respect of the relevant facts. There is, therefore, no difficulty in satisfying any requirement that declarations of right ought not be made in the absence of evidence.
84 It seems to me that, in the present case, both Camelot and Mr King had and continue to have a real and genuine interest in opposing the declaratory relief which was originally sought by ASIC. Indeed, the declarations set out in the Consent Orders are not as broadly framed as those which had been initially claimed by ASIC. I infer that the declarations set out in the Consent Orders have been narrowed from those originally sought by ASIC as a result of negotiations among the parties and the very real opposition to those declarations conveyed by Mr King to ASIC. In any event, in light of the evidence tendered by ASIC, Camelot has decided neither to consent to nor to oppose the making of those declarations and Mr King has agreed to those declarations being made. Thus, in the case of Camelot, the making of the declarations set out in the Consent Orders is uncontested and, in the case of Mr King, the making of those declarations is agreed. Camelot and Mr King no doubt have their reasons for adopting the stance which they have. Nonetheless, the Consent Orders resolve a genuine pre-existing controversy and both Camelot and Mr King remain proper contradictors in respect of ASIC's claim that those declarations should be made.
85 For all of the above reasons, I am of the view that this is an appropriate case for the making of declarations at the suit of the relevant regulator (ASIC) and I propose to make the declarations and orders substantially in the form agreed between ASIC and Mr King in the Consent Orders. In the circumstances, the agreed injunctions as between ASIC and Mr King are, in my view, also completely justified.
86 The only orders which affect Camelot itself are Orders 14, 15 and 16 in the Consent Orders.
87 The first of those orders is an injunction which prohibits both Camelot and Mr King from soliciting investors in options trading. On the material before me, as I have already said, that injunction should be granted, whether or not Camelot consents to it.
88 Both of Orders 15 and 16 are for the benefit of Camelot and in no way constitute any detriment to it.
89 For all of the above reasons, I will make the declarations and orders in terms substantially as agreed between ASIC and Mr King as recorded in the Consent Orders.
I certify that the preceding eighty-nine (89) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster.