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Owners Corporation 1 Plan No PS 707553K and Ors v Shangri-La Construction Pty Ltd (ACN 130 534 244) and Anor [2023] VCC 1473

CASE NOTE

Owners Corporation 1 Plan No PS 707553K and Ors v Shangri-La Construction Pty Ltd (ACN 130 534 244) and Anor [2023] VCC 1473 (24 August 2023)

County Court of Victoria

Judge McNamara

 

In Owners Corporation 1 Plan No PS 707553K and Ors v Shangri-La Construction Pty Ltd (ACN 130 534 244) and Anor [2023] VCC 1473 (24 August 2023), County Court of Victoria (Judge McNamara) was considering (for the first time) the State of Victoria’s subrogation right where an Owners Corporation claimed against a building company in respect of defective (combustible) cladding. In particular, the County Court was considering the liability of directors of such a building company and the “lack of knowledge or consent” defence.

 

Section 137F of the Building Act 1993 (Vic) (commencing on 19 November 2020) provides, so far as relevant, as follows:

 

137F Subrogation

(1) This section applies if, after the commencement of section 54 of

the Cladding Safety Victoria Act 2020, Cladding Safety Victoria

pays an amount to an owner of a building (the payee) by way of a

grant of financial assistance in relation to cladding rectification

work on the building.

(2) When the financial assistance is paid to the payee, the Crown is

subrogated to all the rights and remedies of the payee against

any person in relation to the installation or use of any non

compliant or non-conforming external wall cladding product, or

other building work, that required the cladding rectification work to

be undertaken.

(3) If a right or remedy to which the Crown is subrogated under this

section is exercisable against an entity that is not an individual, it

is enforceable jointly and severally against the entity and the

people who were its officers at the time the act or omission that

gave rise to the right or remedy occurred.

(4) If it is proved that an act or omission by an entity occurred without

the knowledge or consent of an officer of the entity, a right or

remedy is not enforceable as provided by subsection (3) against

the officer in relation to the act or omission.

(5) The Crown may exercise its rights and remedies under this

section in its own name or in the name of the payee.

(6) If the Crown brings proceedings under this section in the name of

the payee, the Crown must indemnify the payee against any costs

awarded against the payee in the proceedings.

(7) If, in exercising its rights and remedies under this section, the

Crown recovers more money than the amount of financial

assistance paid to the payee, the Crown must pay the difference

to the payee after deducting costs incurred to recover the money.

(8) The payment of an amount referred to in subsection (1) in relation

to cladding rectification work does not affect any right or remedy

of the Crown by virtue of subsection (2) to recover from a person

in relation to the installation or use of any non compliant or nonconforming

external wall cladding product, or other building work,

that required the cladding rectification work to be undertaken.

(9) A reference in this section to the rights of a payee includes any

right the payee may have under section 86 of the Sentencing Act

1991.

(9A) Despite the amendment of this section by section 54 of the

Cladding Safety Victoria Act 2020, any right of subrogation

conferred on the Crown under this section as in force immediately

before its amendment continues to have effect.

(10) In this section—

officer

(a) in relation to an entity that is a corporation—means an

officer of the corporation within the meaning of section 9

of the Corporations Act; or

(b) in relation to an entity that is neither an individual nor a

corporation—means an officer of the entity within the

meaning of section 9 of the Corporations Act.”

 

The key facts:

  1. On 24 November 2014, a fire broke out at the Lacrosse building, a 21 storey apartment tower in Caulfield, Victoria. The fire was largely due to the external (combustible) cladding..
  2. The Lacrosse building in Caulfield, Victoria, was constructed with Expanded Polystyrene Panels (EPS). (At the time that the Lacrosse building was designed, the Building Commissioned, since re-created as the VBA, did not preclude the use of EPS cladding systems. The current VBA Fact Sheet now records that, from 1 February 2021, the Minister of Planning has prohibited the use of EPS as external wall cladding note for this type of building.)
  3. The Design and Construct Contract was entered into around 13 December 2013. The design decision to use RMAX Orange Board, a brand of EPS cladding material, was made around June 2014. The occupancy permit was issued by the building surveyor on 8 September 2015.
  4. On 14 June 2017, the Grenfell 24 storey social housing block, due to external combustible cladding, resulted in 72 deaths.
  5. In 2020, the Victorian government, following the report of a Victorian Cladding Taskforce, introduced amendments into the Building Act 1993 (Vic), creating the Cladding Scheme, which came into operation on 19 November 2020).
  6. In 2019, the Owners Corporation commenced an action in VCAT against the Builder. In 2022, the State of Victoria was joined as an Applicant, and the director of the Builder was joined as a respondent. In addition, the VCAT action was struck out and referred to the County Court. When the action came on for hearing in the County Court, the only active parties were the State of Victoria (claiming pursuant to Section 137F) and the director. (The Builder was in liquidation.)
  7. The claim was made pursuant to the Domestic Building Contracts Act 1995 (Vic) Section 8 statutory warranties, on the grounds that the cladding was not non-combustible as required by the Building Code of Australia.
  8. The Builder’s director claimed, among other things, that he did not know that RMAX Orange Board was a non-compliant cladding board, accordingly, on a proper interpretation of Section 137(4)

 

His Honour said:

 

105 The evidence established, and it was not in dispute, that the use of RMAX

Orange Board – a form of EPS – was known to Mr Naqebullah, since he was in

charge of Shangri-La’s building operations. He knew that this material was being

employed, and he consented to it. Dr Wolff contended that the ss(4) defence

was available to Mr Naqebullah if he could be shown to have been ignorant of

what now seems to be known and accepted by everyone: namely, that the

“Alternative Solution” authorised or purportedly authorised by the building permit

for Stage 2 in its original or varied form, and approved in the fire engineering

briefs and report, did not achieve the performance requirements under the

Building Code of Australia 2010. Likewise, it was Mr Naqebullah’s case that, not

being aware of the unsuitability of EPS or external wall cladding, he was

unaware that the material used by Shangri-La under his direction was not

suitable material for external cladding, and that an apartment house clad by this

combustible cladding was not suitable for its purpose.

106 The State contended, and I did not understand Dr Wolff to deny, that the form of

ss(4), and, one may think, the fact that matters of knowledge and consent are

peculiarly within Mr Naqebullah’s knowledge and not within the knowledge of the

plaintiff owners or the State, meant that the burden of proof on this issue rested

with Mr Naqebullah.

107 Mr Naqebullah’s written and oral evidence was to the effect that he was at

relevant times in 2014 and 2015 ignorant that there was any problem with the

use of EPS, and he had his company employ it in construction because it was

“green-lighted” by the relevant building surveyor and by the fire engineer. He

said he was also influenced by what transpired at the design meeting in June

2014 where, as noted above, the discussion between the attendees was as to

the proper brand of EPS to use, and the consensus was that the product RMAX

Orange, the product which was in fact fitted, was the one to use. He said he was

also influenced by an email from the fire engineer indicating the suitability of

RMAX Orange by email dated 9 April 2014, albeit with respect to a different

development at 58 Queens Parade, Fitzroy (CB 5051).

108 Whilst a number of comments were made by Ms Crafti and Mr Chaile, and a

number of attacks in cross-examination were mounted as to these matters, it was

not squarely put to Mr Naqebullah that he was lying in so far as he had given

such evidence; nor could it be said that this evidence was other than probative

as to his level of knowledge at material times. In those circumstances, I accept

Mr Naqebullah’s evidence that he was unaware that EPS or RMAX Orange was

problematic or inappropriate in its use as external cladding on the building at

Hawthorn Road, and that he became aware as to this problematic nature only in

2016 or 2017.

109 The question then becomes whether the knowledge which Mr Naqebullah clearly

did possess, that EPS was being used as external cladding on the building at

Hawthorn Road, is sufficient to negative the defence he claims under ss(4) of

s137F without further proof that he knew that EPS was problematic and noncompliant

in that use.

….

113 Dr Wolff said that the subject matter of the “knowledge” or lack of knowledge

required for a consideration of the ss(4) defence was the relevant “act or

omission by an entity [viz Shangri-La]”. This, according to Dr Wolff, referred one

back to ss(2), identifying the act or omission which might impose liability on the

“entity”, in this case Shangri-La, as being “the installation or use of any noncompliant

or non-conforming external wall product … that required the cladding

rectification work to be undertaken”. He noted that the Act includes a definition

of cladding rectification work in s3 which is in the following terms:

“cladding rectification work means—

(a) building work in connection with, or otherwise related to, a product

or material that is, or could be, a non-compliant or non-conforming

external wall cladding product; or

(b) work of a type specified in a notice under section 185I of the Local

Government Act 1989”.

114 Dr Wolff said that this definition incorporated within itself a requirement that the

relevant material [here EPS] be “non-compliant or non-conforming”.

115 In a broad sense, Dr Wolff’s expatiation on the statutory provisions is plainly

correct. It does not, however, provide an answer to the question posed. As

previously noted, EPS is “non-compliant or non-conforming”. The textual

analysis leaves unanswered the question whether knowing that what is

admittedly a non-compliant or non-conforming material to be used amounts to

sufficient knowledge to exclude the ss(4) defence, whether one knows that the

material is non-compliant or non-conforming or not.

116 I referred the parties to a decision of the High Court of Australia in Yorke v Lucas

(1985) 158 CLR 661 (“Yorke’s case”). This case concerned the cause of action

for misleading or deceptive conduct, which at that time was constituted by s52 of

the Trade Practices Act 1974. Section 75B of that Act extended liability from a

corporation which has engaged in misleading or deceptive conduct to persons

who had aided, abetted, counselled or procured the contravention; induced the

contravention, whether by threats, promises or otherwise; or had “been in any

way, directly or indirectly, knowingly concerned in, or party to, the contravention”.

These provisions are now to be found in the Australian Consumer Law. The

counterpart of s52 of the Trade Practices Act is s18 of the Code.

117 Earlier High Court authority had established that a corporation which represented

to another person something which was misleading or deceptive was to be

regarded as having contravened s52 without any proof that the corporation knew

or ought to have known that what it represented was misleading or deceptive.

That is, the primary liability attaching to the corporation was absolute, in the

same way as the liability attaching to Shangri-La here – subject to the statutory

stay of proceeding – was strict and absolute in accordance with the warranties

implied by s8 of the Domestic Building Contracts Act.

118 Mr Lucas, a director of the relevant corporation, was found at trial not to be liable

as someone knowingly concerned in his company’s contravention because,

according to the summary in the joint judgment in the High Court of Mason ACJ,

Wilson, Deane and Dawson JJ:

“he [Mr Lucas] was insufficiently aware of the relevant facts for him to be

involved in the contravention within the meaning of ss75B and 82 of the

Act.” ((1985) 158 CLR 661, 665)

119 An appeal to the Full Court of the Federal Court against the dismissal of the

claim against Lucas was unsuccessful, and the matter then proceeded to the

High Court. The High Court affirmed the decisions below. According to the joint

judgment:

“A contravention of s.52 involves conduct which is misleading or

deceptive or likely to mislead or deceive and the conduct relied upon in

this case consisted of the making of false representations. Whilst Lucas

was aware of the representations – indeed they were made by him – he

had no knowledge of their falsity and could not for that reason be said to

have intentionally participated in the contravention.” ((1985) 158 CLR

661, 667−8)

120 Their Honours said later in their judgment:

“There can be no question that a person cannot be knowingly concerned

in a contravention unless he has knowledge of the essential facts

constituting the contravention.” ((1985) 158 CLR 661, 670)

121 Brennan J said:

“When the conduct constituting the contravention [of s52] is the making of

a false representation, it is immaterial that the corporation did not know

that the representation was false when it was made. The essential facts

to be established in sheeting home liability to a corporation under s.52

include the making of the representation and the falsity of the

representation but not the corporation’s knowledge of the falsity.” ((1985)

158 CLR 661, 675−6)

122 His Honour said:

“The operation of s.75B(a) in conjunction with s.52 may be incongruous,

for s.52 throws a strict liability on a corporation, but s.75B(a) does not

extend liability for a s.52 contravention to a person who procures the

corporation to engage in contravening conduct if that person is honestly

ignorant of the circumstances that give that conduct a contravening

character.” ((1985) 158 CLR 661, 677)

123 As to persons being knowingly concerned in the contravention, his Honour said

that he could not read the words “knowingly concerned in” as being the

equivalent of “unknowingly concerned in”. (Ibid)

124 Dr Wolff said in the course of his closing submission that “there were 1137 cases

decided” mentioning Yorke v Lucas “as of yesterday”: viz, 16 August 2023. He

continued:

“I have not gone through all of them, but when you read them, you always

see a reluctance by the various judicial authorities to accept something

that didn’t have some factual basis.” (T663, L26−30)

125 I have not read the 1,137 cases referred to by Dr Wolff.

….

137 The class of person who could be described as “officers” of the companies

involved in the construction of the buildings which required remediation is very

wide indeed. The Building Act “picks up” the definition of “officer” from the

Commonwealth Corporations Act. The concept of “officer” in that lengthy

definition specifically includes both company directors and secretaries as well as

persons who make “or participate in making decisions that affect the whole or a

substantial part of the business of the corporation”. It can therefore extend to

senior executives who do not hold positions on the board. We may consider that

in creating the defence established by ss(4) of s137F of the Building Act,

Parliament sought to immunise a number of obvious classes of “officers” from

liability. For instance:

(a) non-executive directors such as a building company’s solicitor or

accountant who sit on the board to bring their legal or accounting expertise

to the table;

(b) company secretaries who devote their time to office administration, keeping

or supervising accounts or accounting systems, payroll issues and so forth;

(c) executive directors or non-director executives involved in non-building

aspects of a company’s operations: for instance, a marketing manager or

someone devoted entirely to the raising of finance;

(d) executive directors or senior executives tasked to manage or supervise

particular projects which are not affected by the cladding issue.

138 There may be other obvious classes of officer whom Parliament intended to

exclude.

139 What remains when these obvious classes are excluded? The residuum, whom

on the face of it Parliament seemed to seek to subject to liability for the cladding

fiasco, would be directors and managers with building qualifications of one sort

or another, engaged in managing a building company’s building operation,

including in particular building projects where non-compliant cladding was used.

All of these “officers” could, one supposes, establish, as plausibly as Mr

Naqebullah has sought to do in this proceeding, that whilst they are and were

generally expert in building matters, they were not expert in fire engineering. The

market was using what are now seen as non-compliant combustible materials for

cladding (as testified by the figures quoted by Dr Wolff). They relied on the

expertise of fire engineers and relevant building surveyors. This line of defence

could generally be advanced, one would suppose, by the whole of this residual

class of persons, unless perhaps one or more of them was in fact a fire engineer

himself or herself.

140 The result of Dr Wolff’s proposed construction of the ss(4) defence is that officer

liability under s137F would be a mere brutum fulmen, which cannot be what

Parliament intended. A document described as “Specifications & Finishes

Schedule”, stamped by the relevant building surveyor as “APPROVED”, in the

“External” section referred at Line 1.3 to “Styro Foam Rendered” (CB 6918). On

the basis of the judgment of Flick J in Parker’s case and the considerations just

mentioned, I conclude that Mr Naqebullah’s “knowledge” of this cladding issue,

namely that RMAX was being used on the Hawthorn Road site, is sufficient to

exclude him from the benefit of the ss(4) defence. This construction of that

defence is the preferable one, because it advances the purposes of the Cladding

Safety Victoria Act 2020; whereas the construction advanced by Dr Wolff, for the

reasons explained, does not.

….

 

His Honour concluded that the Builder’s director “knowledge” of this cladding issue, namely that RMAX was being used on the Hawthorn Road site, is sufficient to exclude him from the benefit of the Section 137F(4) defence.

Building Legislation Amendment Bill 2023

The Victorian parliament is currently considering substantive amendments to the Building Act 1993 (Vic) , with consequential amendments to following Acts:

Domestic Building Contracts Act 1995 (Vic)

Building and Construction Industry Security of Payment Act 2002 (Vic)

Victorian Civil and Administrative Tribunal Act 1998 (Vic)

Owners Corporation Act 2006 (Vic)

Sale of Land Act 1962 (Vic)

Cladding Safety Victoria Act 2020 (Vic)

The substantive amendments to the Building Act 1993 (Vic) include:

  1. appointment of a State Building Surveyor
  2. appointment of a Building Monitor
  3. expand offences under the Building Act 1993 (Vic) to add a reference to a “binding determination that applies to the carrying out of that (building) work”
  4. Sections 41A-41B, 44A-44D: require a building manual to an Owners Corporation as a pre-condition to an Occupancy Permit, and require an Owners Corporation to keep and update the building manual in accordance with the regulations
  5. Section 169D: expand offence of carrying work where not a registered building practitioner
  6. Section 259AB: authorise sharing of information between relevant agencies

Citation: Planned Parenthood of Southern Pennsylvania et al. v. Casey, GOVERNOR OF PENNSYLVANIA, et al.

Editorial Note – Samantha Hodgson

Dissenting Opinion of the late Supreme Court Justice Antonin Scalia

The late Justice Antonin Scalia maintained the position that Roe v Wade fanned into life an issue that has inflamed our national politics in general, and has obscured with its smoke the selection of Justices to this Court in particular, ever since.” This Justice was against “the abortion-umpiring” business to which the Court was now accustomed. In 2020, June Medical Services, LLC v Russo (formerly Gee) brings to the Court the same argument that states and practitioners have had since Roe. The opinions of Justice Scalia give a different perspective to the decade long argument. His manner of thinking often contradicts that of his colleagues.

Continue Reading

Food and Drug Administration, et al. v. American College of Obstetricians and Gynaecologists, et al.

Editorial Note – Samantha Hodgson

 

Supreme Court Justice Amy Coney Barrett has taken part in her first abortion related case since her joining SCOTUS. Her decision formed part of the majority who provided little reason for their grant of the Governments application for stay. Chief Justice Roberts, concurring in the grant of application for stay, said that the question here was not whether the FDA imposed an undue burden on those seeking abortion medication, but whether the district court correctly ordered the FDA to lift the requirement for women to continue obtaining the drug mifepristone in person during the COVID-19 pandemic. Chief Justice Roberts said that the ruling of the majority was one that deferred to the view of experts.

Justice Sotomayor formed the dissenting opinion for which Justice Kagan joined. Justice Breyer would deny the application for stay. Justice Sotomayor argues that the government did not meet the exceptional standard of proof required to grant an application for stay and that the FDA did in fact place an undue burden on women seeking abortion medication during the COVID-19 Pandemic.

200615 – Judgement: Bostock v Clayton County, Georgia re discrimination in the workplace based on sexuality

Justice Gorsuch delivered the 6-3 majority judgment (Roberts CJ, and Ginsburg, Breyer, Sotomayor, and Kagan JJ joining, Alito J, Thomas J, Kavanaugh J dissenting) in Bostock v Clayton County, extending the protection of the Civil Rights Act of 1964 to gay and transgender discrimination. His Honour opened:

“Sometimes small gestures can have unexpected consequences. Major initiatives practically guarantee them. In our time, few pieces of federal legislation rank in significance with the Civil Rights Act of 1964. There, in Title VII, Congress outlawed discrimination in the workplace on the basis of race, color, religion, sex, or national origin. Today, we must decide whether an employer can fire someone simply for being homosexual or transgender. The answer is clear. An employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids. Those who adopted the Civil Rights Act might not have anticipated their work would lead to this particular result. Likely, they weren’t thinking about many of the Act’s consequences that have become apparent over the years, including its prohibition against discrimination on the basis of motherhood or its ban on the sexual harassment of male employees. But the limits of the drafters’ imagination supply no reason to ignore the law’s demands. When the express terms of a statute give us one answer and extratextual considerations suggest another, it’s no contest. Only the written word is the law, and all persons are entitled to its benefit.”

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Maggie Haney v USA Gymnastics, Inc. and Mark Busby

United States District Court – District of New Jersey

Case 3:21-cv-07213-AET-LHG

USA GYMNASTICS, INC. AND MARK BUSBY’S MOTION TO DISMISS

Maggie Haney v USA Gymnastics, Inc. and Mark Busby

United States District Court – District of New Jersey

Case 3:21-cv-07213-AET-LHG

 

On 29 March 2021, Maggie Haney filed a Complaint against USA Gymnastics, Inc. and Mark Busby, claiming the following:

Count I: for a declaratory judgment under the Sports Act that (in summary):

  1. USAG failed to give Haney adequate notice of the charges against her;
  2. USAG failed to establish timely hearing procedures that included reasonable discovery;
  3. USAG failed to identify witnesses for Haney in advance of the hearing;
  4. USAG failed to provide Haney copies of USAG’s investigative file;
  5. USAG failed to provide Haney copies of exhibits prior to presenting them at hearing;
  6. USAG failed to keep the hearing proceedings confidential;
  7. USAG failed to comply with the most lax evidentiary rules;
  8. Busby withheld exculpatory evidence from the hearing panel;
  9. Busby falsely instructed the hearing panel that Haney was not entitled to due process;
  10. the hearing panel was not impartial and was, in fact, biased.

Count II: for money damages under the Sports Act.

Count III: for Vacatur of the Arbitrator’s Award under the FAA.

 

On 2 August 2021, the defendants (USAG, and Busby) filed a Motion to Dismiss saying as follows:

  1. The Complaint should be dismissed in its entirety, with prejudice, for failing to state any claim upon which relief can be granted.
  2. The Complaint against Busby personally should be dismissed due to a lack of jurisdiction.
  3. Haney’s claim to vacate the arbitrator’s award is time-barred.
  4. Counts I and II must be dismissed because Haney has no private right of action under the Sports Act. The Sports Act expressly states that “no provision of this chapter shall create a private right of action”. The Sports Act mandates that challenges against NGB’s proceed through arbitration. Haney’s only remedy was to seek vacatur of the arbitrator’s award, but this is now time-barred.
  5. Count III is time barred. The Federal Arbitration Act requires a party seeking to vacate an arbitration award to serve notice on the adverse party within 3 months after the award is delivered. Here, the arbitrator’s award was dated 3 December 2020, Haney filed her Complaint on 29 March 2021, and did not serve it on USAG until 30 March 2021, and on Busby until 3 June 2021.
  6. The New Jersey District Court has no jurisdiction over Busby, a resident of Indiana.

 

The Motion to Dismiss is opposed by Haney, the parties are now to agree a Schedule to brief and present oral argument to the court.

WTE Co-generation and Visy Energy Pty Ltd v RCR Energy Pty Ltd and RCR Tomlinson Ltd [2013] VSC 314

In UCI v Alex Rasmussenvar linkvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = functionvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} (){documentvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} .location = link.getAttribute(‘href’);} &ampvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} ; Denmark NOC &SF, the Court of Arbitration for Sport wasvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} reviewing the Demark NOC and Sports Federationvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} ’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, duringvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 3rd quarter 2010, and (this was a disputed breach) on 28 Aprilvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 2011. In relation to the 28 April 2011 filingvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} failure, the breach had not been notified by UCI to Rasmussen within 14var link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only invar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} the event that the particular anti-doping rule violation had been caused by the departure itself. Thevar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} Tribunal reduced thevar linkvar link = documentvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} .getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

CH2M Hill v State of NSW [2012] NSWSC 963

In UCI v Alex Rasmussenvar linkvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = functionvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} (){documentvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} .location = link.getAttribute(‘href’);} &ampvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} ; Denmark NOC &SF, the Court of Arbitration for Sport wasvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} reviewing the Demark NOC and Sports Federationvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} ’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, duringvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 3rd quarter 2010, and (this was a disputed breach) on 28 Aprilvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 2011. In relation to the 28 April 2011 filing failure, the breach had not been notified by UCI to Rasmussen within 14var link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only invar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} the event that the particular anti-doping rule violation had been caused by the departure itself. Thevar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} Tribunal reduced thevar linkvar link = documentvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} .getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

Proposal to Reform Planning Scheme Zones in Victoria

In UCI v Alex Rasmussenvar linkvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = function(){documentvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} .location = link.getAttribute(‘href’);} &ampvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} ; Denmark NOC &SF, the Court of Arbitration for Sport wasvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} reviewing the Demark NOC and Sports Federationvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} ’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, duringvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 3rd quarter 2010, and (this was a disputed breach) on 28 Aprilvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 2011. In relation to the 28 April 2011 filing failure, the breach had not been notified by UCI to Rasmussen within 14var link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only invar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} the event that the particular anti-doping rule violation had been caused by the departure itself. Thevar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} Tribunal reduced thevar linkvar link = documentvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} .getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

Plenary Research Pty Ltd v Biosciences Research Centre Pty Ltd [2013] VSCA 217

In UCI v Alex Rasmussenvar linkvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = function(){documentvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} .location = link.getAttribute(‘href’);} &ampvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} ; Denmark NOC &SF, the Court of Arbitration for Sport wasvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} reviewing the Demark NOC and Sports Federation’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, duringvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 3rd quarter 2010, and (this was a disputed breach) on 28 Aprilvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 2011. In relation to the 28 April 2011 filing failure, the breach had not been notified by UCI to Rasmussen within 14var link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only invar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} the event that the particular anti-doping rule violation had been caused by the departure itself. Thevar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} Tribunal reduced thevar linkvar link = documentvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} .getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

Kutrovsky v. International Tennis Federation

In UCI v Alex Rasmussenvar linkvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = function(){documentvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} .location = link.getAttribute(‘href’);} &ampvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} ; Denmark NOC &SF, the Court of Arbitration for Sport wasvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} reviewing the Demark NOC and Sports Federation’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, duringvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 3rd quarter 2010, and (this was a disputed breach) on 28 April 2011. In relation to the 28 April 2011 filing failure, the breach had not been notified by UCI to Rasmussen within 14var link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only invar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} the event that the particular anti-doping rule violation had been caused by the departure itself. Thevar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} Tribunal reduced thevar linkvar link = documentvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} .getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

The Commercial Arbitration Act 2010 (NSW)

In UCI v Alex Rasmussenvar linkvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} &ampvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} ; Denmark NOC &SF, the Court of Arbitration for Sport wasvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} reviewing the Demark NOC and Sports Federation’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, duringvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 3rd quarter 2010, and (this was a disputed breach) on 28 April 2011. In relation to the 28 April 2011 filing failure, the breach had not been notified by UCI to Rasmussen within 14var link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only invar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} the event that the particular anti-doping rule violation had been caused by the departure itself. Thevar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} Tribunal reduced thevar linkvar link = documentvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} .getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

In Asian Pacific Building Corporation Pty Ltd v Aircon Duct Fabrication Pty Ltd & Ors [2010] VSC 300 (1 July 2010)

In UCI v Alex Rasmussenvar linkvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} &ampvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} ; Denmark NOC &SF, the Court of Arbitration for Sport wasvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} reviewing the Demark NOC and Sports Federation’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, duringvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 3rd quarter 2010, and (this was a disputed breach) on 28 April 2011. In relation to the 28 April 2011 filing failure, the breach had not been notified by UCI to Rasmussen within 14var link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only invar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} the event that the particular anti-doping rule violation had been caused by the departure itself. Thevar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} Tribunal reduced thevar linkvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

Biosciences Research Centre P/L v Plenary Research P/L

In UCI v Alex Rasmussenvar linkvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} & Denmark NOC &SF, the Court of Arbitration for Sport wasvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} reviewing the Demark NOC and Sports Federation’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, duringvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 3rd quarter 2010, and (this was a disputed breach) on 28 April 2011. In relation to the 28 April 2011 filing failure, the breach had not been notified by UCI to Rasmussen within 14var link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only invar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} the event that the particular anti-doping rule violation had been caused by the departure itself. Thevar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} Tribunal reduced thevar linkvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

Liao Hui v. International Weightlifting Federation (IWF)

In UCI v Alex Rasmussenvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} & Denmark NOC &SF, the Court of Arbitration for Sport wasvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} reviewing the Demark NOC and Sports Federation’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, duringvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 3rd quarter 2010, and (this was a disputed breach) on 28 April 2011. In relation to the 28 April 2011 filing failure, the breach had not been notified by UCI to Rasmussen within 14var link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only invar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} the event that the particular anti-doping rule violation had been caused by the departure itself. Thevar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} Tribunal reduced thevar linkvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

Judge Sparks Denies Lance an Injunction, but leaves door open

In UCI v Alex Rasmussenvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} & Denmark NOC &SF, the Court of Arbitration for Sport was reviewing the Demark NOC and Sports Federation’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, duringvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 3rd quarter 2010, and (this was a disputed breach) on 28 April 2011. In relation to the 28 April 2011 filing failure, the breach had not been notified by UCI to Rasmussen within 14var link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only invar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} the event that the particular anti-doping rule violation had been caused by the departure itself. Thevar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} Tribunal reduced thevar linkvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

Proportionate Liability Reforms

In UCI v Alex Rasmussenvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} & Denmark NOC &SF, the Court of Arbitration for Sport was reviewing the Demark NOC and Sports Federation’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, duringvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 3rd quarter 2010, and (this was a disputed breach) on 28 April 2011. In relation to the 28 April 2011 filing failure, the breach had not been notified by UCI to Rasmussen within 14var link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only invar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} the event that the particular anti-doping rule violation had been caused by the departure itself. Thevar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} Tribunal reduced thevar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

Frank Schleck tests positive – another contaminated supplement case?

In UCI v Alex Rasmussenvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} & Denmark NOC &SF, the Court of Arbitration for Sport was reviewing the Demark NOC and Sports Federation’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, duringvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 3rd quarter 2010, and (this was a disputed breach) on 28 April 2011. In relation to the 28 April 2011 filing failure, the breach had not been notified by UCI to Rasmussen within 14 days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only invar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} the event that the particular anti-doping rule violation had been caused by the departure itself. Thevar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} Tribunal reduced thevar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

Forrest v Australian Securities and Investments Commission [2012] HCA 39 (2 October 2012)

In UCI v Alex Rasmussenvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} & Denmark NOC &SF, the Court of Arbitration for Sport was reviewing the Demark NOC and Sports Federation’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, duringvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 3rd quarter 2010, and (this was a disputed breach) on 28 April 2011. In relation to the 28 April 2011 filing failure, the breach had not been notified by UCI to Rasmussen within 14 days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only invar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} the event that the particular anti-doping rule violation had been caused by the departure itself. Thevar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} Tribunal reduced the period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

Hong Kong Mediation Bill Bulletin

In UCI v Alex Rasmussenvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} & Denmark NOC &SF, the Court of Arbitration for Sport was reviewing the Demark NOC and Sports Federation’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, duringvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 3rd quarter 2010, and (this was a disputed breach) on 28 April 2011. In relation to the 28 April 2011 filing failure, the breach had not been notified by UCI to Rasmussen within 14 days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only in the event that the particular anti-doping rule violation had been caused by the departure itself. Thevar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} Tribunal reduced the period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

500 Burwood Highway Pty Ltd v Australian Unity Limited & anor [2012] VSC 596

In UCI v Alex Rasmussenvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} & Denmark NOC &SF, the Court of Arbitration for Sport was reviewing the Demark NOC and Sports Federation’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, duringvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} 3rd quarter 2010, and (this was a disputed breach) on 28 April 2011. In relation to the 28 April 2011 filing failure, the breach had not been notified by UCI to Rasmussen within 14 days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only in the event that the particular anti-doping rule violation had been caused by the departure itself. The Tribunal reduced the period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

UCI v Alex Rasmussen & Denmark NOC &SF

In UCI v Alex Rasmussenvar link = document.getElementById(‘link2736’);link.onclick = function(){document.location = link.getAttribute(‘href’);} & Denmark NOC &SF, the Court of Arbitration for Sport was reviewing the Demark NOC and Sports Federation’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, during 3rd quarter 2010, and (this was a disputed breach) on 28 April 2011. In relation to the 28 April 2011 filing failure, the breach had not been notified by UCI to Rasmussen within 14 days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only in the event that the particular anti-doping rule violation had been caused by the departure itself. The Tribunal reduced the period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

Middleton J Dismisses the Applications

Middleton J Dismisses the Applications

Essendon Football Club v Chief Executive Officer of the Australian Sports Anti-Doping Authority; James Albert Hird v Chief Executive Officer of the Australian Sports Anti-Doping Authority [2014] FCA 1019

On 19 September 2014, Federal Court Justice Middleton dismissed the EFC and Hird applications for  a declaration that “ the investigation conducted by ASADA … which was referred to as part of “Operation Cobia” … was ultra vires “,  and injunctions restraining ASADA from issuing any notice or relying on information obtained in the investigation, and a permanent injunction restraining ASADA from using any information from the investigation for any purpose under its Act. The joint investigation was, according to ASADA, was part of a wider investigation by ASADA under the Australian Sports Anti-Doping Authority Act 2006 (Cth) (‘the Act’) and Sch 1 (‘the NAD Scheme’) of the Australian Sports Anti-Doping Authority Regulations 2006 (Cth) (‘the Regulations’). EFC and Hird said that ASADA had no power to conduct the investigation in the way it was conducted (involving the use by ASADA of AFL “compulsory powers” and unauthorised disclosure of information), that the investigation was undertaken for improper purposes, and that ASADA breached its confidentiality obligations during the course of the investigation and in the provision to the AFL of an interim report.

See attached file titled “Middleton J Dismisses the Applications” for full analysis.

200618 – Judgement: Department of Homeland Security v Regents of the University of California et al

The US Supreme Court has ruled that the Department of Homeland Security (DHS) decision to rescind the Deferred Action for Childhood Arrivals (DACA) program is reviewable under the APA, that DHS’s decision to rescind DACA was arbitrary and capricious within the meaning of the Administrative Procedure Act (APA) in that the relevant decision was the decision made at the time (not later reasoning adopted to validate that decision), that the DHS rescission memorandum failed to consider important aspects of the problem before the agency thereby failing to supply the requisite “reasoned analysis”, and, for good measure, the decision-maker had failed to address whether there was “legitimate reliance” on the DACA Memorandum. Accordingly, the court ruled that the DHS Acting Secretary Duke’s rescission of DACA must be vacated. 

In 2012, DHS (during the Obama administration) announced DACA, a program that would allow young people who had entered the United States as children to apply for a 2 year for­bearance of removal, subject to renewal. Applicants had to be under age 31 in 2012, had continuously resided in the USA since 2007, were current stu­dents, had completed high school, or were honorably dis­charged veterans, had not been convicted of any serious crimes, and did not threaten national security or public safety. DHS said that individuals who met those criteria warranted favorable treatment under the immigration laws because they “lacked the intent to violate the law,” were “productive” contributors to society, and “know only this country as home.” Those granted such relief were also to be eligible for work authorization and various federal benefits.  Around 700,000 aliens applied. But in 2017, DHS (during the Trump administration), in a decision memorandum from DHS Acting Secretary Duke, Based solely on Attorney-General Sessions’ advice that the DACA program was unlawful, announced that DHS was terminating the DACA program. The termina­tion was challenged by multiple groups, principally on the grounds that Acting Secretary Dule violated the APA by failing to adequately address important factors bearing on her decision.

In November 2014, two years after DACA was promul­gated, DHS announced the Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) program, to expand DACA eligibility by removing the age cap, shifting the date-of-entry requirement from 2007 to 2010, and extending the deferred action and work authorization period to 3 years. That program would have authorized deferred action for up to 4.3 million parents whose children were U. S. citizens or lawful perma­nent residents. These parents were to enjoy the same for­bearance, work eligibility, and other benefits as DACA recipients. Before the DAPA Memorandum was implemented, however, 26 States, led by Texas, sued, arguing that DAPA violated the APA’s notice and comment require­ment, the Immigration and Nationality Act (INA), and the Executive’s duty under the Take Care Clause of the Consti­tution.

Then, in June 2017, following a change in Presidential administrations, DHS rescinded the DAPA Memorandum. In explaining that decision, DHS cited the preliminary in­junction and ongoing litigation in Texas, the fact that DAPA had never taken effect, and the new administration’s immigration enforcement priorities. Three months later, in September 2017, Attorney General Sessions wrote to DHS, advising that DHS should rescind DACA as well. In a rescission memorandum, DHS Acting Secretary Duke summarized the history of the DACA and DAPA programs, the Fifth Circuit opinion and ensuing affirmance, and the contents of the At­torney General’s letter, and concluded that the DACA program should be terminated.

In NAACP, in April 2018, the D. C. District Court granted partial summary judgment to the plaintiffs on their APA claim, holding that Acting Sec­retary Duke’s “conclusory statements were insufficient to explain the change in [the agency’s] view of DACA’s lawful­ness.” The District Court stayed its order for 90 days to permit DHS to “reissue a memoran­dum rescinding DACA, this time providing a fuller expla­nation for the determination that the program lacks statu­tory and constitutional authority.” In June 2018, DHS Secretary Nielsen, set out in a further decision memorandum, three reasons why, in Secretary Nielsen’s estimation, “the decision to rescind the DACA policy was, and remains, sound.” First, Secretary Nielsen said that, “as the Attorney General concluded, the DACA policy was contrary to law.” Second, the agency had “serious doubts about [DACA’s] legality” and, for law enforcement reasons, wanted to avoid “legally questiona­ble” policies. Third, Secretary Nielsen identified multiple policy reasons for rescinding DACA, including (1) the belief that any class-based immigration relief should come from Congress, not through executive non-enforcement, (2) DHS’s preference for exercising prosecutorial discretion on “a truly individualized, case-by-case basis”, and (3) the im­portance of “projecting a message” that immigration laws would be enforced. In her final paragraph, Secretary Nielsen acknowledged the “asserted reliance interests” in DACA’s continuation but concluded that they did not “out­weigh the questionable legality of the DACA policy and the other reasons” for the rescission discussed in her memoran­dum.

Chief Justice Roberts delivered the 5-4 majority judgment (Ginsburg, Breyer, Sotomayor, and Kagan JJ joining, Alito, Thomas, Gorsuch and Kavanaugh JJ dissenting). Hail the (real) Chief.

The dispute before the Court was not whether DHS could rescind DACA, all parties agree that it may, rather the substantive dispute was whether DHS had followed the required procedure within the meaning of the APA. The Chief Justice wrote:

The APA “sets forth the procedures by which federal agencies are accountable to the public and their actions subject to review by the courts.” …. It requires agencies to engage in “reasoned decisionmaking” …. and di­rects that agency actions be “set aside” if they are “arbi­trary” or “capricious,” …. Under this “narrow standard of review, . . . a court is not to substitute its judgment for that of the agency,” …. but instead to assess only whether the de­cision was “based on a consideration of the relevant factors and whether there has been a clear error of judgment,” …

The majority first concluded that DHS’ decision was reviewable under the APA:

The APA establishes a “basic presumption of judicial review [for] one ‘suffering legal wrong because of agency ac­tion….  That presumption can be rebutted by a showing that the relevant statute “preclude[s]” review,  …  or that the “agency action is committed to agency discretion by law,” …. The latter exception is at issue here…

The Government contends that a general non-enforcemen tpolicy is equivalent to the individual non-enforcement decision at issue in Chaney. In each case, the Government argues, the agency must balance factors peculiarly within its expertise, and does so in a manner akin to a criminal prosecutor. Building on that premise, the Government ar­gues that the rescission of a non-enforcement policy is no different—for purposes of reviewability—from the adoption of that policy. While the rescission may lead to increased enforcement, it does not, by itself, constitute a particular enforcement action. Applying this logic to the facts here, the Government submits that DACA is a non-enforcement policy and that its rescission is therefore unreviewable.

But we need not test this chain of reasoning because DACA is not simply a non-enforcement policy. For starters, the DACA Memorandum did not merely “refus[e] to insti­tute proceedings” against a particular entity or even a par­ticular class. …. Instead, it directed USCIS to “establish a clear and efficient process” for identifying individuals who met the enumerated criteria. …. Based on this directive, USCIS solicited applications from eligible aliens, instituted a standardized review process, and sent formal notices indicating whether the alien would receive the two-year forbearance. These proceedings are ef­fectively “adjudicat[ions].” ….. And the result of these adjudications—DHS’s decision to “grant deferred ac­tion,” …. is an “affirmative act of ap­proval,” the very opposite of a “refus[al] to act,” ….. In short, the DACA Memorandum does not announce a passive non-enforcement policy; it created a program for conferring affirmative immigration relief. The creation of that program—and its rescission—is an “ac­tion [that] provides a focus for judicial review.”….

The benefits attendant to deferred action provide further confirmation that DACA is more than simply a non-enforcement policy. As described above, by virtue of receiving deferred action, the 700,000 DACA recipients may request work authorization and are eligible for Social Secu­rity and Medicare. …. Unlike an agency’s re­fusal to take requested enforcement action, access to these types of benefits is an interest “courts often are called upon to protect.” ….

Because the DACA program is more than a non-enforce­ment policy, its rescission is subject to review under the APA.

The majority then concluded that the June 2018 DHS decision memorandum could not justify the September 2017 DHS decision (“It is a “foundational principle of administrative law” that judicial review of agency action is limited to “the grounds that the agency invoked when it took the action.”)

Finally, the majority concluded that the September 2017 DHS decision to rescind the DACA program was arbitrary and capricious within the meaning of the APA.

…. Duke did not appear to appreciate the full scope of her discretion, which picked up where the Attorney Gen­eral’s legal reasoning left off. ….

In short, the Attorney General neither addressed the for­bearance policy at the heart of DACA nor compelled DHS to abandon that policy. Thus, removing benefits eligibility while continuing forbearance remained squarely within the discretion of Acting Secretary Duke, who was responsible for “[e]stablishing national immigration enforcement poli­cies and priorities.” …. But Duke’s memo offers no reason for terminating forbearance. She instead treated the Attorney General’s conclusion re­garding the illegality of benefits as sufficient to rescind both benefits and forbearance, without explanation.

.… Even if it is illegal for DHS to extend work authori­zation and other benefits to DACA recipients, that conclu­sion supported only “disallow[ing]” benefits. …. It did “not cast doubt” on the legality of forbearance or upon DHS’s original reasons for extending forbearance to child­hood arrivals. Ibid. Thus, given DHS’s earlier judgment that forbearance is “especially justified” for “productive young people” who were brought here as children and “know only this country as home,” …. the DACA Memorandum could not be re­scinded in full “without any consideration whatsoever” of  a forbearance-only policy, ….

The Government acknowledges that “[d]eferred action coupled with the associated benefits are the two legs upon which the DACA policy stands.” ….. It insists, however, that “DHS was not required to consider whether DACA’s illegality could be addressed by separating” the two. Ibid. According to the Government, “It was not arbi­trary and capricious for DHS to view deferred action and its collateral benefits as importantly linked.” Ibid. Perhaps. But that response misses the point. The fact that there maybe a valid reason not to separate deferred action from ben­efits does not establish that DHS considered that option or that such consideration was unnecessary.

…. For its part, the Government does not contend that Duke considered potential reliance interests; it counters that she did not need to. In the Government’s view, shared by the lead dissent, DACA recipients have no “legally cognizable reliance interests” because the DACA Memorandum stated that the program “conferred no substantive rights” and pro­vided benefits only in two-year increments. Reply Brief 16–17; App. to Pet. for Cert. 125a. See also post, at 23–24 (opin­ion of THOMAS, J). But neither the Government nor the lead dissent cites any legal authority establishing that such fea­tures automatically preclude reliance interests, and we are not aware of any. These disclaimers are surely pertinent in considering the strength of any reliance interests, but that consideration must be undertaken by the agency in the first instance, subject to normal APA review. There was no such consideration in the Duke Memorandum.

Respondents and their amici assert that there was much for DHS to consider. They stress that, since 2012, DACA recipients have “enrolled in degree programs, embarked on careers, started businesses, purchased homes, and even married and had children, all in reliance” on the DACA pro­gram. …. The conse­quences of the rescission, respondents emphasize, would “radiate outward” to DACA recipients’ families, including their 200,000 U. S.-citizen children, to the schools where DACA recipients study and teach, and to the employers who have invested time and money in training them. …. (estimating that hiring and training replacements would cost employers $6.3 billion).

The majority concluded:

We do not decide whether DACA or its rescission are sound policies. “The wisdom” of those decisions “is none of our concern.” …. We address only whether the agency complied with the procedural re­quirement that it provide a reasoned explanation for its ac­tion. Here the agency failed to consider the conspicuous is­sues of whether to retain forbearance and what if anything to do about the hardship to DACA recipients. That dual failure raises doubts about whether the agency appreciated the scope of its discretion or exercised that discretion in a reasonable manner. The appropriate recourse is therefore to remand to DHS so that it may consider the problem anew …..

1-19-cv-02379 US House of Reps v Donald F McGahn II – Opinion Justice Jackson

In Committee on the Judiciary of the US House of Representatives v Donald F McGahn II , the Committee on the Judiciary of the US House of Representatives was seeking to enforce a Subpoena to Appear served on former White House Counsel, Don McGahn II, in the US District Court for the District of Columbia, before United States District Judge Ketanji Brown Jackson. The US Department of Justice (DOJ) opposed the order, arguing that the Judiciary Committee has no right to enforce its subpoenas against senior level presidential aides in federal court, that federal courts have no jurisdiction over such enforcement claims, and, critically, that such senior level presidential aides have absolute immunity from testifying where the President orders them not to do so. Judge Jackson rejected the DOJ arguments, and ordered Mr McGahn to testify.

The issues were articulated by Judge Jackson:

The merits legal issues that the instant dispute between the House Judiciary Committee and the Executive branch raises are straightforward. The Committee claims that it has issued a lawful subpoena to former White House Counsel Donald F. McGahn II …; that McGahn has refused to appear before the Committee to provide testimony as required …. ; and that “[t]here is no lawful basis for McGahn’s refusal to appear before the Judiciary Committee”…). For its part, DOJ asserts that, consistent with its understanding of the longstanding view of the Department’s Office of Legal Counsel, there is a lawful basis for McGahn’s defiance of the Committee’s valid subpoena: the President has ordered him not to. … DOJ asserts that current and former senior-level presidential aides have “absolute testimonial immunity” from compelled congressional process, as a matter of law; therefore, if the President invokes “executive privilege” over a current or former aides’ testimony—as he has done with respect to McGahn—that aide need not accede to the lawful demands of Congress. …

Judge Jackson wasn’t buying the DOJ arguments. Her Honour found as follows:


A. Federal Courts Have The Power To Adjudicate Subpoena-Related Disputes Between Congress And The Executive Branch

1. Federal Courts Routinely Exercise Subject-Matter Jurisdiction Over Subpoena-Enforcement Claims Under 28 U.S.C. § 1331

2. Separation-Of-Powers Principles Do Not Compel The Conclusion That This Court Lacks Subject-Matter Jurisdiction Over The Instant Dispute

a. The legal claim at issue here is not non-justiciable


b. The historical record indicates that the Judiciary has long entertained subpoena-enforcement actions concerning compelled congressional process

DOJ argued that: “centuries of historical practice” … plainly demonstrates that the U.S. Constitution does not contemplate that the federal courts have the power to exercise jurisdiction over subpoena-related disputes between the Congress and the Executive branch. Her Honour rejected that argument, referring to Watkins v. United States 354 U.S. 178 (1957), in which then US Supreme Court Chief Justice Earl Warren had set out a: detailed and remarkable story of the legislative power of inquiry as it existed in seventeenth century England, and in particular, of Parliament’s “broad and varied use of the contempt power” to enforce its own mandates, as well as its reservation unto itself of “absolute and plenary authority over . . . privileges[,]” Judge Jackson then noted Chief Justice Warren’s view in relation to the US courts:


… Fatefully, and importantly, the Houses of Parliament expressly decided that “judicial review of the exercise of the contempt power or the assertion of privilege” would be “precluded[,]” id. at 188. And apparently as a direct consequence of Parliament’s determination “that no court had jurisdiction to consider such questions[,]” the unreviewable contempt power that Parliament had claimed was, predictably, “abused.” … Significantly for present purposes, Chief Justice Warren takes care to emphasize that, “[i]n the early days of the United States, there lingered direct knowledge of the evil effects of absolute power[,]” id. at 192, and thus, “[f]rom the very outset the use of contempt power by the legislature was deemed subject to judicial review[,]” … This is a much different narrative about the historical understanding of the ability of the courts to entertain claims concerning the enforceability of a legislative subpoena than DOJ offers here…. Watkins also touched upon the fact that the Supreme Court had previously considered the competing interests of the Executive and the Legislature with respect to subpoenas pertaining to legislative investigations, and had suggested caution with respect to the merits of claims that the Congress had overstepped its bounds, given “the danger to effective and honest conduct of the Government if the legislature’s power to probe corruption in the executive branch were unduly hampered.” Id. at 194–95 (first citing McGrain, 273 U.S. at 194–95, and then Sinclair, 279 U.S. at 263). This, too, indicates that the Supreme Court’s primary concern about the exercise of judicial authority was that judges might be too aggressive concerning the remedies they ordered with respect to adjudicating challenges to compelled congressional process, not that the federal courts lacked the authority to even entertain such claims. Consequently, DOJ’s present suggestion that the history of our constitutional Republic simply does not contemplate that the other branches of government would enlist the Judiciary to resolve disputes over the scope of compelled congressional process in the context of legislative investigations—and thus that a federal court oversteps its bounds if it exercises subject-matter jurisdiction over a claim like the one the Judiciary Committee brings here …. seems inconsistent with Watkins’s clear assessment that the federal courts of the United States have always had to power to review legal claims with respect to subpoena-enforcement actions, and once again, it is well established that subject-matter jurisdiction generally turns on the legal claim being asserted regardless of who makes it. Indeed, the Watkins Court specifically noted that federal courts possess a “responsibility placed by the Constitution upon the judiciary to insure that the Congress does not unjustifiably encroach upon an individual’s right to privacy nor abridge his liberty of speech, press, religion or assembly[,]” id. at 198–99, while at the same time, they must take care to provide “ample scope . . . to the Congress as the sole constitutional depository of legislative power[,]” id. at 215; see also, e.g., id. at 216. And DOJ does not, and apparently cannot, explain why this constitutional duty disappears, or is neutralized, if the subpoena-related dispute arises between branches of government, rather than between Congress and an individual party who contends that the Legislature’s compelled congressional process is unlawful.

c. Traditional separation-of-powers principles do not support DOJ’s suggestion that the federal courts cannot resolve legal disputes between the other branches of government


B. House Committees Have The Power To Enforce Their Subpoenas In Federal Court When Executive Branch Officials Do Not Respond As Required


a. Defiance Of A Valid Subpoena Indisputably Qualifies As A Cognizable Injury In Fact, And In The Context Of Congressional Investigations, The Harm Is Significant And Substantial
b. The Constitution Itself Provides A Cause Of Action For A Thwarted House Committee To Proceed In Federal Court

c. There Is No Separation-Of-Powers Impediment To The Judiciary Committee’s Seeking To Vindicate Its Rights In Federal Court

2. The President Does Not Have The Power To Prevent His Aides From Responding To Legislative Subpoenas On The Basis Of Absolute Testimonial Immunity

a. Miers Squarely Rejects The Argument Senior-Level Presidential Aides Enjoy Absolute Testimonial Immunity
(Her Honour referred to the 2008 Federal Court decision in relation to former Clinton administration White Counsel Harriet Miers and Chief of Staff Joshua Bolten, Committee on Judiciary, U.S. House of Representatives v. Miers, 558 F. Supp. 2d 53 (D.D.C. 2008), The Clinton DOJ had made the same arguments then as were made by the Trump DOJ now. Judge Jackson: “The more things change, the more they are the same.” Judge Jackson noted that, in Miers, the District Court had considered each of the same arguments, and rejected each one in a lengthy opinion:

…. Most importantly, the Miers opinion also persuasively demonstrated that DOJ’s conception of the limited power of both Congress and the federal courts relative to the expansive authority of the President—which, purportedly, includes the power to shield himself and his aides from being questioned about any aspect of their present or former White House work—is not grounded in the Constitution or in any other federal law.

b. OLC’s Long-Held View That Senior-Level Presidential Aides Have Absolute Testimonial Immunity Is Neither Precedential Nor Persuasive
(Her Honour referred to, and rejected, the DOJ argument that senior level presidential aides have absolute testimonial immunity, dating back to the 1971 Memorandum from William H. Rehnquist, then Assistant Attorney General, Office of Legal Counsel, later US Supreme Court judge and then US Supreme Court Chief Justice, to John D. Ehrlichman, Nixon administration Assistant to the President for Domestic Affairs, Power of Congressional Committee to Compel Appearance or Testimony of “White House Staff”, saying:

it is certainly true that (DOJ’s Office of Legal Counsel) OLC has long been of the view that senior-level presidential aides have absolute testimonial immunity; indeed, as Miers indicates, the first recorded statement of the agency that specifically commits this view to writing was authored in 1971. See Mem. from William H. Rehnquist, Assistant Attorney General, Office of Legal Counsel, to John D. Ehrlichman, Assistant to the President for Domestic Affairs, Power of Congressional Committee to Compel Appearance or Testimony of “White House Staff” (Feb. 5, 1971) (“1971 Memorandum”). In that year, then-Assistant Attorney General William Rehnquist produced a memorandum on the point that maintained (without direct citation) that “[t]he President and his immediate advisers—that is, those who customarily meet with the President on a regular or frequent basis—should be deemed absolutely immune from testimonial compulsion by a congressional committee.” Id. at 7. This OLC memorandum further indicated that such persons “not only may not be examined with respect to their official duties, but they may not even be compelled to appear before a congressional committee.” Id. But, of course, as definitive as this statement of law sounds, OLC serves as legal counsel to the Executive branch, and “the Executive cannot be the judge of its own privilege[.]” Miers, 558 F. Supp. 2d at 106. Consequently, its statement of the law is “entitled to only as much weight as the force of [its] reasoning will support.” Id. at 104.

In this Court’s view, the persuasiveness of OLC opinion that senior-level presidential aides enjoy immunity from compelled congressional process turns on two familiar factors: the authority that is provided in support of this proposition, and the reasons that are provided for why the author reached this conclusion. With respect to the first consideration, it cannot be overstated that the 1971 Memorandum does not cite to a single case that stands for the asserted proposition, and the ten-plus subsequent statements by OLC that DOJ points to in support of this immunity simply reference back to the 1971 Memorandum without providing any court authority. It goes without saying that longevity alone does not transform an unsupported notion into law.

As for the logic behind the view, the original memorandum appears to reason by … analogy. It begins by recognizing the breadth of Congress’ power of inquiry, which admittedly “carries with it the power to compel the testimony of a witness.” 1971 Mem. at 1. And then as if providing the solution to a problem that it had not yet identified, the memo states that “if White House staff personnel are to be exempt from appearing or testifying before a congressional committee, it is because they have some special immunity or privilege not accorded others.” Id. at 1. The remainder of the 8-page document devotes itself to developing potential reasons for such a privilege. It suggests, for example, “a certain analogy to judicial proceedings[,]” in which a “distinction” is made “between a claim of absolute immunity from even being sworn in as a witness, and a right to claim privilege in answering certain questions in the course of one’s testimony as a witness.” Id. at 4.

Ultimately, the 1971 Memorandum pushes for the former, on the basis of a handful of historical examples in which former assistants to various Presidents blatantly refused to appear before Congress in response to a legislative subpoena. See id. at 5–6. At least one of these folks was apparently polite enough to write a letter to the committee that “grounded his refusal on the confidential nature of his relationship with the President.” Id. at 5. But others merely sent congressional subpoenas back with the simple statement that “[i]n each instance that President directed me, in view of my duties as his Assistant, not to appear before your subcommittee.” Id. at 5; see also id. at 6.

Tellingly, the 1971 Memorandum does not purport to suggest that the law already countenanced such behavior. Rather, the posture of the Memorandum appears to be a policy piece that provides its client with arguments for why it should be thus. Moreover, as Miers notes, Rehnquist admitted that “his conclusions [were] ‘tentative and sketchy,’” Miers, 558 F. Supp. 2d at 104 (quoting 1971 Mem.at 7), and in his later role as a Supreme Court Justice, he “apparently recanted those views[,]” id. In one especially candid moment in the text of the Memorandum, Rehnquist admits that the historical precedents for refusing a congressional subpoena “are obviously quite inconclusive” but that “[i]n a strictly tactical sense, the Executive Branch has a headstart in any controversy with the Legislative Branch, since the Legislative Branch wants something the Executive Branch has, and therefore the initiative lies with the former.” 1971 Mem. at 7. He continued: “[a]ll the Executive has to do is maintain the status quo and he prevails.” Id. It is not surprising that, per this initial internal effort to establish the ways in which certain White House staff could prevail in any conflict with Congress over their legally enforceable duty to appear for testimony when subpoenaed, OLC subsequently developed an entire series of statements, each of which references the 1971 Memorandum, but none of which specifically acknowledges that the initial basis for this conclusion was seemingly formed out of nothing.28

In fairness, over time, the initial take on absolute testimonial evolved. It appears that OLC’s subsequent statements in support of this proposition were beefed up with various other reasons for why one could plausibly assert that certain aides of the President should be absolutely immune from having to testify before Congress, which reasons largely invoke constitutional separation of powers concerns, including potential harassment of the aides (and thus, the President), the risk of disclosure of information covered by executive privilege, and the appearance that the Executive branch is subordinate to the Legislature. ….

But, unfortunately for DOJ, its mere recantation of these aspirational assertions does not make the proposition any more persuasive, and in fact, given the history of how OLC’s opinion has developed, it appears that an endorsement of the principles that OLC espouses would amount to adopting the absolute testimonial immunity for senior-level presidential aides by ipse dixit. Furthermore, because there are few, if any, well-formulated justifications for categorically excusing current and former senior-level presidential aides from responding to compelled congressional process, it would be difficult to do so consistent with existing case law, traditional norms of practice under our constitutional system of government, and common sense.

c. There Is No Principled Basis For Concluding That Senior-Level Presidential Aides Should Have Absolute Testimonial Immunity

Judge Jackson rejected the DOJ argument that, on principle, senior level presidential aides should have absolute testimonial Immunity. DOJ argued that, firstly the President has absolute testimonial immunity from congressional process, and secondly, as a derivative matter, so too must immediate advisers to the President, with whom the President meets on a regular or frequent basis, have such absolute testimonial immunity from congressional process. Her Honour rejected the first claim, agreeing with Miers assessment of United States v. Nixon, Clinton v. Jones, and Harlow v. Fitzgerald. Separately, Her Honour rejected the principled justifications argued by DOJ (including, that this was akin to immunity from civil damages for legislators, that absolute immunity would facilitate frank communications in the White House, that without absolute testimonial immunity government would grind to a halt, and that absolute testimonial immunity is consistent with the separation of powers doctrine). Her Honour concluded:

DOJ’s assertions about the chilling effect of compelled congressional process also imply that congressional questioning is needlessly intrusive and unwarranted, and that characterization drastically discounts the reasons why executive branch officials, including members of the President’s staff, are called to testify. As the Supreme Court has suggested on numerous occasions, Congress brings in witnesses not as punishment, but to provide the Legislature with the information that it needs to perform its critical legislative and oversight functions. Watkins, 354 U.S. at 187; McGrain, 273 U.S. at 17 ….

d. Concluding That Presidential Aides Enjoy Absolute Testimonial Immunity At The President’s Discretion Conflicts With Core Constitutional Norms

Her Honour said, in relation to the DOJ claim that it is the President who controls whether such aide provides any testimony whatsoever:


Finally, the Court turns to DOJ’s contention that, quite apart from the accepted ability of a President to invoke executive privilege to protect confidential information during the course of aides’ testimony before Congress, as a matter of law, it is the President who controls whether such aide provides any testimony whatsoever. During the motions hearing, DOJ’s counsel repeatedly emphasized that the power to invoke absolute testimonial immunity with respect to current and former senior-level aides belongs to the President…. (“[T]he President owns the privilege here. So he is the owner of Mr. McGahn’s absolute immunity from compulsion[.]”) … (“[T]he President owns the privilege as to former officials with the same vigor with which he owns it to current officials.”), …. (maintaining that immunity is “the President’s to assert”).) And when asked whether this power of the Executive is limited to such aides’ communications with Congress in particular, or also extends to preventing his aides from speaking to anyone else (e.g., the media) even after their departure from the White House, counsel indicated that while the Executive branch has “not taken a position on that,” it was “definitely not disclaiming that.” …. This single exchange—which brings to mind an Executive with the power to oversee and direct certain subordinates’ communications for the remainder of their natural life—highlights the startling and untenable implications of DOJ’s absolute testimonial immunity argument, and also amply demonstrates its incompatibility with our constitutional scheme. …. Stated simply, the primary takeaway from the past 250 years of recorded American history is that Presidents are not kings. See The Federalist No. 51 (James Madison); The Federalist No. 69 (Alexander Hamilton); 1 Alexis de Tocqueville, Democracy in America 115–18 (Harvey C. Mansfield & Delba Winthrop eds. & trans., Univ. of Chicago Press 2000) (1835). This means that they do not have subjects, bound by loyalty or blood, whose destiny they are entitled to control. Rather, in this land of liberty, it is indisputable that current and former employees of the White House work for the People of the United States, and that they take an oath to protect and defend the Constitution of the United States. Moreover, as citizens of the United States, current and former senior-level presidential aides have constitutional rights, including the right to free speech, and they retain these rights even after they have transitioned back into private life.

…. with the exception of the recognized restrictions on the ability of current and former public officials to disclose certain protected information, such officials (including senior-level presidential aides) still enjoy the full measure of freedom that the Constitution affords. Thus, DOJ’s present assertion that the absolute testimonial immunity that senior-level presidential aides possess is, ultimately, owned by the President, and can be invoked by the President to overcome the aides’ own will to testify, is a proposition that cannot be squared with core constitutional values, and for this reason alone, it cannot be sustained.

Judge Jackson concludes as follows:

…. The United States of America has a government of laws and not of men. The Constitution and federal law set the boundaries of what is acceptable conduct, and for this reason, as explained above, when there is a dispute between the Legislature and the Executive branch over what the law requires about the circumstances under which government officials must act, the Judiciary has the authority, and the responsibility, to decide the issue. Moreover, as relevant here, when the issue in dispute is whether a government official has the duty to respond to a subpoena that a duly authorized committee of the House of Representatives has issued pursuant to its Article I authority, the official’s defiance unquestionably inflicts a cognizable injury on Congress, and thereby, substantially harms the national interest as well. These injuries give rise to a right of a congressional committee to seek to vindicate its constitutionally conferred investigative power in the context of a civil action filed in court.

Notably, whether or not the law requires the recalcitrant official to release the testimonial information that the congressional committee requests is a separate question, and one that will depend in large part on whether the requested information is itself subject to withholding consistent with the law on the basis of a recognized privilege. But as far as the duty to appear is concerned, this Court holds that Executive branch officials are not absolutely immune from compulsory congressional process—no matter how many times the Executive branch has asserted as much over the years—even if the President expressly directs such officials’ non-compliance.

….. This result is unavoidable as a matter of basic constitutional law, as the Miers court recognized more than a decade ago. Today, this Court adds that this conclusion is inescapable precisely because compulsory appearance by dint of a subpoena is a legal construct, not a political one, and per the Constitution, no one is above the law. That is to say, however busy or essential a presidential aide might be, and whatever their proximity to sensitive domestic and national-security projects, the President does not have the power to excuse him or her from taking an action that the law requires. Fifty years of say so within the Executive branch does not change that fundamental truth. Nor is the power of the Executive unfairly or improperly diminished when the Judiciary mandates adherence to the law and thus refuses to recognize a veto-like discretionary power of the President to cancel his subordinates’ legal obligations. To the contrary, when a duly authorized committee of Congress issues a valid subpoena to a current or former Executive branch official, and thereafter, a federal court determines that the subpoenaed official does, as a matter of law, have a duty to respond notwithstanding any contrary order of the President, the venerated constitutional principles that animate the structure of our government and undergird our most vital democratic institutions are preserved.

Judge Jackson can really write. This an awesome judgment. DOJ has already filed an appeal, it will be fascinating to see how far up the issue goes. Interestingly, this subpoena was served in relation to the Mueller Report, no doubt principally in relation to the obstruction of justice conclusions by Robert Mueller. But we are nearly certain to see these principles come into play in relation to the current Ukraine-related impeachment process.

Armstrong’s lawyers get 20 days to amend the Complaint

In the US Federal Court , Texas Judge Sam Sparks has given Lance Armstrong’s lawyers 20 days to amend the Complaint  seeking a temporary restraining order against USADA, filed in Federal Court on 8 July 2012. The Judge, in accordance with the Federal Court Rules which require the Complaint to provide a “short and plain statement”, noted that the original Complaint was lengthy, 80 pages, and included “allegations” that were wholly irrelevant to Armstrong’s claims”.

(Original Complaint attached).

Lance Re-files in Federal Court

Lance Armstrong’s lawyers have re-filed an (amended) Complaint  seeking a temporary restraining order against USADA. The Judge had previously rejected the form of the Complaint (too long, 80 pages, containing “allegations” that were wholly irrelevant to Armstrong’s claims”), because it was not in accordance with the Federal Court Rules which require the Complaint to provide a “short and plain statement”. In substance Lance is trying to halt the process which requires him, next, to file an response to the USADA charges, leading to an initial hearing before a 3 member panel from the American Arbitration Association.

(The Amended Complaint will be attached when available.)

Lance’s Action Headed for Federal Court Determination

On 10 July 2012, Lance Armstrong’s lawyers re-filed the  (Amended) Complaint  seeking Orders as follows:

a.       An injunction staying the USADA requirement that by 14 July 2012 Lance elect to go to AAA arbitration or accept sanctions (this date was later extended, by agreement with USADA, for 30 days, to allow this Federal Court proceeding to be determined).

b.       A permanent injunction staying USADA from imposing sanctions (including disqualification of previous results) on the basis of the facts in the USADA charging letter.

c.        Declarations that USADA lacks jurisdiction to bring the charges asserted in the USADA charging letter.

d.       Damages against USADA.

e.        Costs.

 

The Amended Compliant is attached below.

 

Lance’s team makes multiple arguments in the Complaint, including:

  1. USADA’s procedures, designed primarily for cases where there have been positive results, do not afford Armstrong due process.
  2. Armstrong has not had a charging document that fairly tells him the claims that he must defend (not even when they occurred, which rules apply?).
  3. Armstrong has no guarantee of a hearing by the Tribunal with final say (the AAA panel is appealable to CAS, which need not decide to hold a hearing).
  4. Armstrong has no right to cross-examine his accusers (citing the Greg Lemond example, where Floyd Landis was refused the right to cross-examine, yet the Lemond statement was accepted).
  5. Armstrong has no right to an impartial arbitration panel (CAS members all appointed, limited term, paid, by USOC, incentivised therefore to side with USADA, very limited examples of athletes succeeding).
  6. Armstrong would have no right to exculpatory evidence, contrary to the legal position in a criminal trial.
  7. Armstrong would have no right to disclosure by USADA of witness agreements, contrary to the legal position in a criminal trial.
  8. Armstrong would have no right to disclosure by USADA of investigative witness statements, contrary to the legal position in a criminal trial.
  9. Armstrong would have no right to obtain full disclosure by USADA of laboratory analyses, nor impartial assessment whether the laboratory procedures are accurate (and the panel can be comfortably satisfied that any improper procedure did not cause an adverse finding).
  10. Under USADA’s procedures, Armstrong has no right of review by a USA court.
  11. The charges are outside the 8 year limitation period.
  12. USADA improperly induced witnesses, in violation of the WADA Code provisions (requiring reduction in ineligibility periods on this ground only after charges are brought and a period of ineligibility has been determined). Further, the offering of inducements violates federal law in relation to offering inducements for sworn testimony.
  13. The Review Board process, meant to be a check on abusive charging decisions, was circumvented, in USADA hand-picking the neutral experts, not providing the evidence supporting the charges to the Review Board, and having ex parte communications with the Review Board. The Review Board did not issue a considered evaluation. Armstrong was not given adequate notice of the charges or opportunity to respond.
  14. USADA is using information collected I the grand jury process.
  15. Lance having retired, USADA does not have jurisdiction, UCI does.

 

The key argument, it seems to me, is that USADA’s processes would deny Lance his right to due process under the Fifth Amendment, particularly relevant given that Lance is substantially (massively) affected by the outcome, and is in the extra-prone to injustice category of the “non-analytical positives” (athletes charged albeit that they have not had a positive test result against them.

 

Noting that USADA has not yet been required to respond, the arguments look (to me) strong in favour of Lance’s request for interim court intervention. If this assessment is right, we can expect a temporary stay, and Orders giving USADA the chance to respond, sometime before 12 August 2012 (within the 30 days agreed extension between Lance and USADA).

 

 

 

The legal arguments Lance v USADA

Lance v USADA – The Legal Arguments

In June 2012, USADA sent charging to Lance Armstrong (and others). Those letters were the first formal step in the anti-doping prosecution by USADA. This process raises big legal issues, partly, due to the athlete involved, but equally, this will be the most important case yet of the “non-analytical positives” (prosecution of an anti-doping violation in the absence of a failed test).

Background to the “Non-Analytical Positive” Cases:

Since the BALCO cases commencing in September 2004, the WADA Code, and all sports codes, have provided for the prosecution of athletes in the absence of an analytical positive test result. Michelle Collins was suspended for 8 years (USADA had sought a life ban) based on email evidence and blood and urine test results that evidenced a pattern of doping. Michelle Collins had never failed a drug test, and denied doping.

Interestingly, Michelle Collins had relied on her Fifth Amendment (due process) right against self-incrimination. The CAS Tribunal, however, agreed with USADA that this right did not apply outside criminal cases, and that it was open to CAS to draw an adverse inference against her. CAS repeated this approach for Chryste Gaines and Tim Montgomery.

CAS suspended Michelle Collins for 8 years, on the rationale that that BALCO athletes who admitted guilt, and cooperated by giving evidence against others, such as Kelli White, had been suspended for 2 years, BALCO athletes who admitted guilt, but would not cooperate by giving evidence against others, such as Alvin Harrison and Regina Jacobs, had been suspended for 4 years, Michelle Collins had not been shown by USADA to have “trafficked” or encouraged others, so a lifetime ban was not warranted, Michelle Collins’ failure to plead guilty warranted double the suspension of BALCO athletes who admitted guilt, but would not cooperate by giving evidence against others.

There have followed, in the USA, Chryste Gaines (2 years), Tim Montgomery (2 years), in Australia, Mark French (cyclist) and Sevi Marinov (weightlifting national coach) (drugs found in their rooms, both suspended at the initial 1 member CAS hearing, both then successful on appeal to the 3 member CAS), Olga Yegoreva and others (7 Russian athletes with manipulated samples) and Boevski  and others (3 Bulgarian weightlifter with manipulated samples) (all suspended where samples were manipulated, albeit no evidence that they had done the manipulating themselves), and others.

The key legal question has always been whether these non-analytical positive athletes should be entitled or not to the same Fifth Amendment due process protections afforded to any criminal defendant? or something less on the basis that they are contractually bound to the processes decided by the sports federations to which they belong?

Lance Armstrong is the latest in this line. He is looking like a defendant who may take the argument further than ever before.

Lance’s Federal Court Action

Lance, like always, was invited by USADA to put material before the USADA Review Board (an athlete protection mechanism designed to require USADA to establish a sufficient basis for the process to proceed to a hearing), contesting whether there was sufficient in the USADA charging letter to charge Lance. Lance’s response was that USADA had failed to disclose the proposed witnesses or their evidence, he was unable to know/answer the charges made against him, that USADA was treating the review board as a rubber stamp, effectively seeking to deny him the protection of that review board process, that USADA had obtained evidence wrongly, in trading concessions/reduced penalties, etc, (the “jailhouse snitch” argument), for evidence, and in obtaining evidence leaked from the now-discontinued grand jury process, that the only 2 identifiable claims against Armstrong (the Swiss lab tests from 2001 where the lab director had since denied the tests were sufficient to found a violation, and USADA providing, raw data only, no expert analysis, 2009/2010 blood test results, which showed no abnormality and had been published on Armstrong’s own website at the time as proof of the opposite) had no merit. In addition, Lance said, most of the material was outside the 8 year limitation period. USADA, conversely, said, in response, that it had ten-plus witnesses (without naming them, or setting out what they would say), who would say that Armstrong doped, trafficked, and participated in a conspiracy. The USADA Review Board decided in favour of USADA.

On 10 July 2012, Lance Armstrong’s lawyers filed an (Amended) Complaint before Judge Sam Sparks in the Federal Court, Texas Division, seeking an injunction staying the USADA requirement that Lance, within 3 days, elect to go to AAA arbitration or accept sanctions (this date was later extended, by agreement with USADA, for 30 days, to allow the Federal Court proceeding to be determined), a permanent injunction staying USADA from imposing sanctions (including disqualification of previous results) on the basis of the facts in the USADA charging letter, declarations that USADA lacked jurisdiction to bring the charges asserted in the USADA charging letter, plus damages against USADA and costs.

Lance’s team makes multiple arguments in the action:

  1. USADA’s procedures, designed primarily for cases where there have been positive results, do not afford Armstrong due process.
  2. Armstrong has not had a charging document that fairly tells him the claims that he must defend (not even when they occurred, which rules apply?).
  3. Armstrong has no guarantee of a hearing by the Tribunal with final say (the AAA panel is appealable to CAS, which need not decide to hold a hearing).
  4. Armstrong has no right to cross-examine his accusers (citing the Greg Lemond example, where Floyd Landis was refused the right to cross-examine, yet the Lemond statement was accepted).
  5. Armstrong has no right to an impartial arbitration panel (CAS members all appointed, limited term, paid, by USOC, incentivised therefore to side with USADA, very limited examples of athletes succeeding).
  6. Armstrong would have no right to exculpatory evidence, contrary to the legal position in a criminal trial.
  7. Armstrong would have no right to disclosure by USADA of witness agreements, contrary to the legal position in a criminal trial.
  8. Armstrong would have no right to disclosure by USADA of investigative witness statements, contrary to the legal position in a criminal trial.
  9. Armstrong would have no right to obtain full disclosure by USADA of laboratory analyses, nor impartial assessment whether the laboratory procedures are accurate (and the panel can be comfortably satisfied that any improper procedure did not cause an adverse finding).
  10. Under USADA’s procedures, Armstrong has no right of review by a USA court.
  11. The charges are outside the 8 year limitation period.
  12. USADA improperly induced witnesses, in violation of the WADA Code provisions (requiring reduction in ineligibility periods on this ground only after charges are brought and a period of ineligibility has been determined). Further, the offering of inducements violates federal law in relation to offering inducements for sworn testimony.
  13. The Review Board process, meant to be a check on abusive charging decisions, was circumvented, in USADA hand-picking the neutral experts, not providing the evidence supporting the charges to the Review Board, and having ex parte communications with the Review Board. The Review Board did not issue a considered evaluation. Armstrong was not given adequate notice of the charges or opportunity to respond.
  14. USADA is using information collected from the grand jury process.
  15. Lance having retired, USADA does not have jurisdiction, UCI does.

The substantive complaint by Lance Armstrong is that USADA’s processes deny him his Fifth Amendment right to due process. This argument has usually failed. But the circumstances here militate towards that due process right, maybe more so than in previous instances.

On 19 July 2012, USADA filed a Notice of Motion to Dismiss Lance Armstrong’s Action seeking an injunction to restrain the USADA anti-doping violation process. USADA’s key grounds:

  1. The Ted Stevens Olympic and Amateur Sports Act (“Sports  Act”) (a federal Act establishing arbitration as the exclusive forum for eligibility disputes in sports) pre-empts Armstrong’s claims.
  2. Armstrong has failed to exhaust his administrative remedies (a strong historical, factor relevant to the court’s discretion, against granting an injunction).
  3. Armstrong’s claims must be arbitrated (Lance, like all athletes, has regularly contracted to be bound by the arbitration process).
  4. Armstrong’s claims fail on the merits.

The USADA argument, on its face, is the traditional view, adopted by the courts in previous cases, (eg Mary Decker Slaney’s case), ie that Congress has determined, in clear terms, that USOC and USA Cycling are the bodies best able to deal with such disputes. Further, the courts have, consistently, required a person to exhaust their administrative remedies before seeking court intervention in relation to those processes. On this basis, USADA says, the Federal Court must dismiss, or at least stay, the court action pending the arbitration process.

The Federal Court action will be hard fought. Both sides raise valid arguments. Judge Sparks may or may not prefer the long-held view argued by USADA. Either way, we can expect to see the Judge’s ruling on this important legal argument, before 12 August 2012 (when the 30 day agreed USADA extension runs out), referred, by whoever loses, in the Appeals Circuit.

On balance, the due process argument seems to be at least worthy of better court examination, not to be dismissed simply because, right or wrong, that is what courts have always done previously. The difference, here, might be the enormous stature of Lance (not merely as an athlete, but as a cancer messiah), and the overdue court examination of the unusual position of the athletes charged on circumstantial evidence rather than a failed test.

John McMullan

26 July 2012

Lance (and UCI) further argues the USADA Jurisdiction

On 3 August 2012, Lance Armstrong’s legal team filed a response to USADA’s 19 July 2012 Motion to Dismiss.

 

USADA’s substantive arguments:

  1. The Ted Stevens Olympic and Amateur  Sports Act (“Sports  Act”) (an Act establishing arbitration as the exclusive forum for eligibility disputes in sports) pre-empts Armstrong’s claims.
  2. Armstrong has failed to exhaust his administrative remedies (a strong historical, factor relevant to the court’s discretion, against granting an injunction).
  3. Armstrong’s claims must be arbitrated (Lance, like all athletes, has regularly contracted to be bound by the arbitration process).
  4. Armstrong’s claims fail on the merits.

Armstrong’s key arguments in response:

1.        UCI, not USADA, has jurisdiction under the UCI Anti-Doping Rules (on which USADA relies in its charging letter) because:

a.       UCI collected the samples relied upon by USADA;

b.       UCI “discovered” the claimed violation (WADA Code, Article 15.3: “results management and hearings are the responsibility of and shall be governed by the procedural rules of the Anti-Doping Organization that initiated and directed Sample collection”).

c.        UCI has jurisdiction over Lance, as retired cyclist, as the organisation having jurisdiction at the time of claimed violations (pre- 13 August 2004, UCI’s anti-doping rules provided that they alone apply to international events, the charging letter refers to violations between 1996 and 2005, no specific conduct alleged after 13 August 2004);

d.       UCI asserts jurisdiction and has directed USADA not to proceed further. (In fact, UCI released a written statement on 7 August, following exhibiting its correspondence to USADA in this case on 6 August 2012 , confirming its direction to USADA, and publicly criticizing the due process aspects of USADA’s process in relation to Lance Armstrong and the 5 related respondents).

e.        UCI also has exclusive jurisdiction under the WADA Code

f.         USADA has no jurisdiction to bring a consolidated action against 6 people (There is no WADA Code violation for participating in an alleged doping conspiracy).

2.        The Sports Act applies only to amateur athletes, not Lance.

3.       Even if the Sports Act applied, it would not pre-empt this challenge, ie a common law and Fifth Amendment due process challenge (not an eligibility dispute).

4.      Armstrong should not have to go through the arbitration process, where that arbitration process is the subject of challenge over jurisdiction.

5.     Armstrong did not, in fact, agree to the arbitration process, saying:

a.       USADA has the burden of proving any agreement to arbitrate;

b.       USADA has not established any agreement to arbitrate (the USADA Protocol relied upon by USADA do not apply to Armstrong, his annual international licence are governed by the UCI Anti-Doping Rules);

c.        Armstrong’s membership of USA Triathlon has no relationship to the matters alleged in the charging letter.

 

USADA argue that the courts have traditionally taken the view, in previous cases (eg Mary Decker Slaney’s case), that Congress has determined, in clear terms, that USOC and USA Cycling are the bodies best able to deal with such disputes. The court, in Mary Decker Slaney’s case, had, in fact, veered away from a review of the validity of a drug test: “an endeavour (a court) cannot partake in”). Armstrong, in response, refers to the Tonia Harding case, and other cases, where the court had concluded that judicial intervention was warranted : “where the association has clearly breached its own rules, that breach will imminently result in serious and irreparable harm tp the plaintiff, and the plaintiff has exhausted all internal remedies”.

 

The USADA  jurisdiction argument took a dramatic twist over the weekend. UCI released a statement on Saturday (7 August), disputing that USADA has jurisdiction, and directing USADA to refer its files to UCI. Surprisingly, UCI went beyond this and expressly condemned USADA’s processes, on the basis of due process, in particular:

  1. 3 respondents banned for life, because they did not respond to USADA charging letter;
  2. USADA refused to provide UCI with evidence that the 3 respondents had received the USADA charging letter;
  3. no neutral review of the evidence relied upon by USADA;
  4. the 3 respondents banned for life were not given the evidence relied upon by USADA;
  5. the 2 respondents due to file a defence by 15 August 2012 have not been given the evidence relied upon by USADA;
  6. according to the World Anti-Doping Code and UCI’s Anti-Doping Rules that USADA claims to apply, the UCI is the authority having results management for this case.

 

A copy of the UCI statement is attached. The most damning (for USADA) part of the UCI statement:

 

For the UCI it is clear that USADA claims an authority that it does not have and uses procedures that violate basic principles of due process.

 

This action is listed for hearing on 10 August 2012 (before the 30 day agreed USADA extension runs out). Judge Sparks, of course, may or may not prefer the long-held view argued by USADA. Either way, we can expect to see an appeal from the Judge’s ruling on this important legal argument, referred by whoever loses, in the Appeals Circuit.

 

John McMullan

6 August 2012

Lance responds again to USADA’s jurisdiction arguments before the 10 August Hearing

The material is flying in real time between Lance Armstrong’s team and USADA. On 9 August 2012, Armstrong filed yet further material on the USADA/UCI jurisdiction argument, ahead of the Friday (10 August) hearing.

 Amstrong’s further response to USADA’s  jurisdiction arguments:

  1. USADA says that Armstrong, as a member of USA Cycling, falls under the United States Olympic Committee (USOC) authority, a jurisdiction over US cyclists separate and independent from any jurisdiction asserted by UCI. Armstrong says no, he held an international license, that required him to abide by the UCI ADR.
  2. Armstrong, as a member of USA Cycling, did not agree to be bound by the USADA Protocol. He absolutely did not agree to arbitrate   his constitutional and common law due process claims or his tortious interference with contract claim.
  3. USADA’ arguments fail:
    a.       USADA, in its charging letters, agrees that this matter is governed exclusively by the UCI ADR, not USA Cycling’s regulations or Protocol.b.       USADA’s new theory of independent or concurrent jurisdiction is wrong.c.        USADA’s argument that its Protocol and USA Cycling’s regulations take precedence over the UCI ADR is wrong.d.       USADA does not have authority to disregard UCI’s determination that it has exclusive jurisdiction over this matter.

    e.        USADA ignores that charges involve samples taken by UCI.

    f.         UCI has jurisdiction even if the charges did not involve UCI samples.

           g.     USADA ignores that UCI has exclusive jurisdiction over Armstrong as a retired cyclist.

 4.      USADA does not discharge its obligation to demonstrate the agreement to arbitrate.

 5.     USADA’s Sports Act argument ignores the Tonya Harding line of cases (ie that courts have jurisdiction to ensure that amateur organisations follow the applicable rules).

Armstrong has exhibited a (further) UCI letter dated 9 August 2012  to USADA (copy attached), saying (in part):

Please note that UCI works for clean cycling and is doing all it can to fight doping.  There is

no conflict of interest here as the UCI is the most interested party in that the sport of cycling

is as clean as possible.  UCI’s anti-doping programme is second to none and even WADA

has admitted that.

We also find it important that current cycling is clean and in this respect we regret that

USADA probably allowed riders that admitted doping to participate in the Tour de France,

even if the facts that they allegedly testified upon date from many years ago.

Anyway the protection of the rights of clean athletes does not justify that the rules of antidoping, including those on jurisdiction and fair trial, are not respected, on the contrary.

There is however a political problem in that anyone who questions some aspects of the fight

against doping or criticizes actions or statements  of WADA or another ADO or asks for

respect for the own rules is immediately depicted as lenient on doping or accused of

obstruction.

I just want to refer to UCI’s intention which is to submit the file for results management

assessment to a neutral body and with the respondents being given a copy of the file and

being able to have their say.  This is an open, neutral, transparent and fair way of dealing

with the case rather than USADA making the most serious public accusations and

condemnations while hiding the file….

 Armstrong also exhibits a UCI letter dated 9 August 2012  to WADA (copy attached).

 

 The hearing is on today, tomorrow … (10 August), well, real soon. Judge Sam Sparks, lucky you.

 

John McMullan

 

Lance Armstrong: The next of the non-analytical positive cases?

The attached letters between USADA and Lance Armstrong’s legal team are the first formal step in the anti-doping prosecution by USADA. The process will be, potentially, the most important case to date due to  the athlete involved, but equally, the most important to date “non-analytical positive” (prosecution of an anti-doping violation in the absence of a failed test).

Lance’s response to USADA’s charging letter, the initial step prior to the review board process (an athlete protection mechanism designed to require USADA to establish a sufficient basis for the process to proceed to a hearing) was generally as follows:
1. USADA fails to disclose the proposed witnesses or their evidence, Armstrong is unable to know/answer the charges made against him. USADA is treating the review board as a rubber stamp, effectively seeking to deny Armstrong the protection of that review board process.
2. USADA has obtained evidence wrongly, in trading concessions/reduced penalties, etc, (the “jailhouse snitch”argument), for evidence, and in obtaining evidence leaked from the now-discontinued grand jury process.
3. The only 2 identifiable claims against Armstrong (the Swiss lab tests from 2001 where the lab director has since denied the tests were sufficient to found a violation, and USADA providing, raw data only, no expert analysis, 2009/2010 blood test results, which show no abnormality and which were published on Armstrong’s own website at the time as proof of the opposite) have no merit.
4. Most of the material is outside the 8 year limitation period.

USADA, conversely, says that it has ten-plus witnesses, who will say that Armstrong doped, trafficked, and participated in a conspiracy.

The process is likely, in my view, to showcase the critical justice issues that are thrown up in this key area of “non-analytical positives”. The likelihood is that Lance will challenge, in the USA courts, the level of acceptable proof against an athlete charged on the basis of evidence, not including a failed test, and the USADA/Court of Arbitration for Sport regime generally.

About time.

John McMullan

Dr Bruce Malcolm Reid v Australian Football League

 

Doc Reid re-argues Lance’s Legal Argument – Time for the Courts to Intervene?

 

In Dr Bruce Malcolm Reid v Australian Football League, Supreme Court of Victoria, Proceeding No SCI 2013 04575, the universally respected Essendon Football Club doctor, Dr “Doc” Reid, is arguing for declarations and an injunction to restrain the AFL from hearing the disciplinary charges against him, and asking that such charges be heard by an independent arbiter.

 

The charges against Dr Reid are limited to that he:

 

  1.       “was part of the decision-making processes of the Club in respect of the development and implementation of a scientifically pioneering program relating to the administration of supplements to its players, knowing that:

 

(a)     the program was to push the legal limit;

 

(b)     the program involved innovative supplement practices and compounds;

 

(c)     the program involved the use of allegedly beneficial, if exotic, mysterious and unfamiliar compounds;

 

(d)     the program’s ftness strategy and use of supplements varied sharply from prior practices at the Club;

 

(e)     the program involved injecting players with an unprecedented frequency.”
(Particulars Paragraph 3)

 

  1.        “made no direct inquires of ASADA in relation to whether AOD-9604 was a prohibited substance”;
    (Particulars Paragraph 21(b))
  2.       was a person named in an Essendon protocol concerning the use of supplements circulated on 15 January 2012;
    (Particulars Paragraph 17)
  3.       failed to take adequate steps to ensure that the Protocol was properly implemented after becoming aware that substances had been administered that had not been approved.
    (Particulars Paragraph 32-35)

 

In Dr Reid’s case, on a careful reading of the charges, even if correct, (the charges are 100% contested), at worst it might be said that Dr Reid was not sufficiently interventionist.

 

There is zero suggestion in the charges (or anywhere else) that Dr Reid ever administered, or supported the use of administering, any performance enhancing drug. (In fact, Dr Reid’s letter dated 17 January 2012, and James Hird’s text message on 30 January 2012, suggest that Dr Reid positively opposed any such practice.)

 

Dr Reid makes the usual athlete/accused argument, ie that the sports establishment hearing structure is weighted against the athlete/accused, and that he is denied a fair hearing. The AFL runs the usual sports establishment defence, ie that it is simply a matter of contract, to which the athlete/accused previously committed, and that the sports establishment is the body best equipped to deal with such claims.

 

These arguments are particularly key given that Dr Reid is , like all of the category of athletes who have been charged with performing enhancing drugs charge , on the basis of evidence rather than a failed drug test (collectively called “non-analytical positives”), charged on as yet un-substantiated evidence. In their case, though the punishment in relation to the performing enhancing drug charges is no less than an athlete accused who fails a drug test, and though the mere fact of being charged will usually disrupt or end their sports career, and some instances, including Dr Reid, may have even worse consequences, the accused has none of the enduring protections of a criminal accused.

 

In substance, the non-analytical positive athlete/accused usually complains that they are being denied a fair hearing (in the USA, denied the Constitutional right to “due process”). There seems to be substantial strength in their complaints.

 

The Legal Arguments:

 

Dr Reid has previously made the following legal arguments to the AFL Commission in relation to the request for an independent arbiter to be appointed:

 

1.       The AFL Commission is not a body that is equipped to provide a fair hearing, for the following reasons:

 

a.        the complexity of the case, including (complex) legal issues;

 

b.       the case will be of lengthy duration;

 

c.        because of a and b, and because the Charge may affect Dr Reid’s professional reputation, the case therefore requires a full-time arbiter;

 

d.       reduced prospect of error and appeal if heard by an appropriately qualified person;

 

e.       less likelihood of interlocutory applications to the Supreme Court in the running of the case;

 

f.         issues of relevance and publicity in this case require a an arbiter less likely to be affected by extrinsic factors;

 

g.        Dr Reid’s legal case includes highly perjorative submissions about the AFL;

 

h.       A case involving a medical professional’s reputation is in a special category;

 

i.         Dr Reid cannot get a just hearing from the AFL Commission, after it has involved itself in the approval of the settlements with the other defendants.

 

2.       Bias, both actual and apprehended, on the part of the AFL Commission.

 

In this proceeding, Dr Reid asserts that the AFL Commission cannot hear the charges against him in an unbiased manner because of:

 

  1.        Conflict

 

a.        The charges raise factual matters already considered and determined by the AFL Commission.

 

b.       The determination of the charges raises questions about conduct by the AFL.

 

  1.       Comments

 

a.        “a most unfortunate matter”

 

b.       “it might be a lonely day” (for Dr Reid);

 

c.        “We can’t let – no matter how clever they were in disguising what they were doing, we can’t ever let a group of people take hold of a player group in the way that this group did. That must never happen again”

 

d.       “responsibility, I think, has not been easy to assign, but I think it has been reasonably assigned”

 

e.       “frankly, what happened [at Essendon] is probably the worst thing that has happened in a footy club”

 

The AFL has not yet delivered its arguments. We can guess that those arguments will include:

 

  1.        that athletes and support personnel sign up to the AFL rules, as a matter of contract they commit to the process set out in those rules;
  2.        that the AFL Commission is well-equipped to adjudicate on this type of matter, because of its experience and expertise in this area;
  3.       the courts are not well-equipped to deal with the particular issues relating to sports enhancing performance drugs.

 

USA Decisions on this Type of Claim:

 

These arguments were, in fact, recently re-run in the USA by perhaps our most famous non-analytical positive accused athlete, Lance Armstrong. On 23 August 2012, Judge Sam Sparks in the US District Court Western District of Texas (Austin) of the USA Federal Court, dismissed Lance Armstrong’s suit asking for an injunction to restrain USADA from proceeding against him. The Judge found:

 

  1.        Armstrong’s due process claims lacked merit.
  2.        The court lacked jurisdiction over Armstrong’s remaining claims, or alternatively declined to grant equitable relief.

 

Firstly, Judge Sparks concluded that the due process complaints lacked merit, and that Lance’s challenges were anticipating unfairness rather than Lance having been subject to actual unfairness. Lance’s specific due claims had included:

 

  1.       that he was not provided an adequate charging document;
  2.       that he had no guarantee of a hearing before CAS;
  3.       that he had no right cross-examine/confront witnesses against him;
  4.      that he had no right to an impartial panel;
  5.        that he had no right to disclosure of exculpatory evidence;
  6.        that he had no right to disclosure of cooperation agreements or inducements provided by USADA;
  7.       that he had no right to obtain investigative witness statements;
  8.       that he had no right to obtain full disclosure of laboratory analyses or an impartial assessment of their accuracy;
  9.      that  he had no right to judicial review of the arbitrators’ decision by a US court;

 

Judge Sparks concluded that each of these complaints were based on speculation of bias (rather than actual bias).

 

Judge Sparks said:

 

“Like the Supreme Court, this Court declines to assume either the pool of potential arbitrators, or the ultimate arbitral panel itself, will be unwilling or unable to render conscientious decision based on the evidence before it.”

 

Judge Sparks reasoned that Armstrong was not in danger of irreparable harm if the USADA jurisdiction issue, itself, was to be determined by the arbitrators. Further, any finding by the arbitration panel might, itself, be overturned by CAS. “In short,  any harm Armstrong might suffer is, at this point, entirely speculative.”

 

His Honour was further confirmed in his view in that Lance had not (as yet) exhausted the avenues open to him:

 

“Further, Armstrong has ample appellate avenues open to him, first to the Court of Arbitration for Sport … where he is entitled to de novo review, and then to the  courts of Switzerland, if he so elects.”

 

Judge Sparks, however, dismissed the suit without prejudice, saying that Lance could come back if and when things developed (ie if and when he was in fact subjected to actual unfairness rather than anticipated unfairness).

 

Secondly, Judge Sparks concluded that the Federal Court had no jurisdiction under the USA Federal Amateur Sports Act, requiring such proceedings to be referred to arbitration. His Honour noted that the Sports Act had (“whether or not this was a good choice is, of course, debatable”) determined that sports eligibility questions would be decided through arbitration rather than federal lawsuits.

 

His Honour referred to the Mary Decker Slaney case, noting that the court had said there:

 

“… when it comes to challenging the eligibility determination of the USOC, only a very specific claim will avoid the impediment to subject matter jurisdiction that (the Sports Act) poses”.

 

The Mary Decker Slaney court had quoted the Tonia Harding case, where an Oregon District Court had said:

 

“There the court cautioned that ….

 

…. courts should rightly hesitate before intervening in disciplinary hearings held by private associations …. Intervention is appropriate only in the most extraordinary circumstances, where the association has clearly breached its own rules, that breach will imminently result in serious and irreparable harm to the plaintiff, and the plaintiff has exhausted all remedies.

 

Yet, while carving out this limited exception to the preemption created by the Amateur Sports Act, the opinion forewarned that while examining whether internal rules had been complied with, the courts ‘should not intervene in the merits of the underlying dispute.

 

(emphasis added)

 

Finally, Judge Sparks determined that, even apart from his decision on jurisdiction, if he had found that he had such jurisdiction he would have declined an equitable remedy, firstly because, for the above reasons, Armstrong was not in danger of irreparable harm, secondly because , as a matter of international comity, the court declined to: “circumvent the longstanding system of international arbitration in Olympic sports by unilaterally enjoining that system’s operation”.

 

As events turned out, Lance Armstrong ultimately chose not to challenge the sports drug charges, and later again, publicly admitted that the charges were true.

 

Conclusions

 

There can be no doubt that this case is serious. Doc Reid is universally regarded as having a brilliant, long, respected, and personally loved, life in football, faces potential public shame, the potential loss of his medical licence, and an unhappy end to that long career.

 

Yet Doc Reid, in the legal system, must run the same legal arguments that ultimately failed Lance Armstrong.

 

The Supreme Court will now determine this crucially important issue.

 

Can’t wait.

 

 

 

Essendon FC v ASADA : James Hird v ASADA

Essendon FC v ASADA : James Hird v ASADA

 Australian Federal Court Challenge mirrors Lance Armstrong’s Challenge in the USA Courts:

On 27 June 2014, Justice John Middleton in the Australian Federal Court will set out a timetable to a hearing in the legal challenges by Essendon FC and James Hird against ASADA’s legal process. Essendon FC and James Hird ask for a declaration that “ the investigation conducted by ASADA … which was referred to as part of “Operation Cobia” … was ultra vires “,  and injunctions restraining ASADA from issuing any notice or relying on information obtained in the investigation, and a permanent injunction restraining ASADA from using any information from the investigation for any purpose under its Act.

The show cause letters sent by ASADA last week to Essendon FC players are the first formal step in the anti-doping prosecution by ASADA. The process will be, potentially, the most important Australian sports drug case to date due to  the athletes involved, but equally, the most important case to date in Australia of a “non-analytical positive” (prosecution of an anti-doping violation in the absence of a failed test).

We recently saw a very similar legal challenge ahead of the review board process reference by Lance Armstrong. Lance’s response to USADA’s charging letter to him, (the initial USA step prior to the review board process, as in Australia, an athlete protection mechanism designed to require USADA to establish a sufficient basis for the process to proceed to a hearing) had been generally as follows:
1. USADA had failed to disclose the proposed witnesses or their evidence, Armstrong was unable to know/answer the charges made against him. USADA is treating the review board as a rubber stamp, effectively seeking to deny Armstrong the protection of that review board process.
2. USADA had obtained evidence wrongly, in trading concessions/reduced penalties, etc, (the “jailhouse snitch” argument), for evidence, and in obtaining evidence leaked from the now-discontinued grand jury process.
3. The only 2 identifiable claims against Armstrong (the Swiss lab tests from 2001 where the lab director has since denied the tests were sufficient to found a violation, and USADA providing, raw data only, no expert analysis, 2009/2010 blood test results, which show no abnormality and which were published on Armstrong’s own website at the time as proof of the opposite) have no merit.
4. Most of the material was outside the 8 year limitation period.

USADA, conversely, had said that it had ten-plus witnesses, all who would say that Armstrong doped, trafficked, and participated in a conspiracy.

Lance’s legal challenge ultimately failed, not because, as USADA had argued, such cases are never to be reviewed by the courts, but rather because, in Lance’s case, his claims of unfairness were premature.

The Essendon/Hird challenges, equally, ask the Australian Federal Court to stop the process, saying that the investigation is not in accordance with the ASADA legislation. Unlike Lance, however, their challenge is attacking an existing process, not a future one.

This is getting interesting.

Background to the “Non-Analytical Positive” Cases:

 

Since the BALCO cases commencing in September 2004, the WADA Code, and all sports codes, have provided for the prosecution of athletes in the absence of an analytical positive test result. Michelle Collins was suspended for 8 years (USADA had sought a life ban) based on email evidence and blood and urine test results that evidenced a pattern of doping. Michelle Collins had never failed a drug test, and denied doping.

 

Interestingly, Michelle Collins had relied on her Fifth Amendment (due process) right against self-incrimination. The CAS Tribunal, however, agreed with USADA that this right did not apply outside criminal cases, and that it was open to CAS to draw an adverse inference against her. CAS repeated this approach for Chryste Gaines and Tim Montgomery.

 

CAS suspended Michelle Collins for 8 years, on the rationale that that BALCO athletes who admitted guilt, and cooperated by giving evidence against others, such as Kelli White, had been suspended for 2 years, BALCO athletes who admitted guilt, but would not cooperate by giving evidence against others, such as Alvin Harrison and Regina Jacobs, had been suspended for 4 years, Michelle Collins had not been shown by USADA to have “trafficked” or encouraged others, so a lifetime ban was not warranted, Michelle Collins’ failure to plead guilty warranted double the suspension of BALCO athletes who admitted guilt, but would not cooperate by giving evidence against others.

 

There have followed, in the USA, Chryste Gaines (2 years), Tim Montgomery (2 years), in Australia, Mark French (cyclist) and Sevi Marinov (weightlifting national coach) (drugs found in their rooms, both suspended at the initial 1 member CAS hearing, both then successful on appeal to the 3 member CAS), Olga Yegoreva and others (7 Russian athletes with manipulated samples) and Boevski  and others (3 Bulgarian weightlifter with manipulated samples) (all suspended where samples were manipulated, albeit no evidence that they had done the manipulating themselves), and others.

 

The key legal question has always been whether these non-analytical positive athletes should be entitled or not to the same Fifth Amendment due process protections afforded to any criminal defendant? or something less on the basis that they are contractually bound to the processes decided by the sports federations to which they belong?

Lance Armstrong was the latest in that line. He was looking like a defendant who might have taken the argument further than ever before. As it turned out, Lance decided against continuing. But the USA Federal Court did not rule out intervening if the right circumstances ever came along.

Lance’s USA Federal Court Action

 

Lance, like always, was invited by USADA to put material before the USADA Review Board (an athlete protection mechanism designed to require USADA to establish a sufficient basis for the process to proceed to a hearing), contesting whether there was sufficient in the USADA charging letter to charge Lance. Lance’s response was that USADA had failed to disclose the proposed witnesses or their evidence, he was unable to know/answer the charges made against him, that USADA was treating the review board as a rubber stamp, effectively seeking to deny him the protection of that review board process, that USADA had obtained evidence wrongly, in trading concessions/reduced penalties, etc, (the “jailhouse snitch” argument), for evidence, and in obtaining evidence leaked from the now-discontinued grand jury process, that the only 2 identifiable claims against Armstrong (the Swiss lab tests from 2001 where the lab director had since denied the tests were sufficient to found a violation, and USADA providing, raw data only, no expert analysis, 2009/2010 blood test results, which showed no abnormality and had been published on Armstrong’s own website at the time as proof of the opposite) had no merit. In addition, Lance said, most of the material was outside the 8 year limitation period. USADA, conversely, said, in response, that it had ten-plus witnesses (without naming them, or setting out what they would say), who would say that Armstrong doped, trafficked, and participated in a conspiracy. The USADA Review Board decided in favour of USADA.

 

On 10 July 2012, Lance Armstrong’s lawyers filed an (Amended) Complaint before Judge Sam Sparks in the Federal Court, Texas Division, seeking an injunction staying the USADA requirement that Lance, within 3 days, elect to go to AAA arbitration or accept sanctions (this date was later extended, by agreement with USADA, for 30 days, to allow the Federal Court proceeding to be determined), a permanent injunction staying USADA from imposing sanctions (including disqualification of previous results) on the basis of the facts in the USADA charging letter, declarations that USADA lacked jurisdiction to bring the charges asserted in the USADA charging letter, plus damages against USADA and costs.

 

Lance’s team made multiple arguments in the action:

  1. USADA’s procedures, designed primarily for cases where there have been positive results, did not afford Armstrong due process.
  2. Armstrong had not had a charging document that fairly told him the claims that he must defend (not even when they occurred, which rules apply?).
  3. Armstrong had no guarantee of a hearing by the Tribunal with final say (the AAA panel is appealable to CAS, which need not decide to hold a hearing).
  4. Armstrong had no right to cross-examine his accusers (citing the Greg Lemond example, where Floyd Landis was refused the right to cross-examine, yet the Lemond statement was accepted).
  5. Armstrong had no right to an impartial arbitration panel (CAS members all appointed, limited term, paid, by USOC, incentivised therefore to side with USADA, very limited examples of athletes succeeding).
  6. Armstrong would have no right to exculpatory evidence, contrary to the legal position in a criminal trial.
  7. Armstrong would have no right to disclosure by USADA of witness agreements, contrary to the legal position in a criminal trial.
  8. Armstrong would have no right to disclosure by USADA of investigative witness statements, contrary to the legal position in a criminal trial.
  9. Armstrong would have no right to obtain full disclosure by USADA of laboratory analyses, nor impartial assessment whether the laboratory procedures are accurate (and the panel can be comfortably satisfied that any improper procedure did not cause an adverse finding).
  10. Under USADA’s procedures, Armstrong had no right of review by a USA court.
  11. The charges were outside the 8 year limitation period.
  12. USADA had improperly induced witnesses, in violation of the WADA Code provisions (requiring reduction in ineligibility periods on this ground only after charges were brought and a period of ineligibility had been determined). Further, the offering of inducements violated federal law in relation to offering inducements for sworn testimony.
  13. The Review Board process, meant to be a check on abusive charging decisions, was circumvented, in USADA hand-picking the neutral experts, not providing the evidence supporting the charges to the Review Board, and having ex parte communications with the Review Board. The Review Board did not issue a considered evaluation. Armstrong was not given adequate notice of the charges or opportunity to respond.
  14. USADA was using information collected from the grand jury process.
  15. Lance having retired, USADA did not have jurisdiction, UCI did. 

The substantive complaint by Lance Armstrong was that USADA’s processes denied him his Fifth Amendment right to due process. This argument had usually failed. But the circumstances here militated towards that due process right, maybe more so than in previous instances.

 

On 19 July 2012, USADA filed a Notice of Motion to Dismiss Lance Armstrong’s Action seeking an injunction to restrain the USADA anti-doping violation process. USADA’s key grounds:

  1. The Ted Stevens Olympic and Amateur Sports Act (“Sports  Act”) (a federal Act establishing arbitration as the exclusive forum for eligibility disputes in sports) pre-empted Armstrong’s claims.
  2. Armstrong had failed to exhaust his administrative remedies (a strong historical, factor relevant to the court’s discretion, against granting an injunction).
  3. Armstrong’s claims must be arbitrated (Lance, like all athletes, had regularly contracted to be bound by the arbitration process).
  4. Armstrong’s claims failed on the merits. 

The USADA argument, on its face, was the traditional view, adopted by the USA courts in previous cases, (eg Mary Decker Slaney’s case), ie that Congress had determined, in clear terms, that USOC and USA Cycling were the bodies best able to deal with such disputes. Further, the courts had, consistently, required a person to exhaust their administrative remedies before seeking court intervention in relation to those processes. On this basis, USADA said, the Federal Court must dismiss, or at least stay, the court action pending the arbitration process.

 

It seemed, then, that the Federal Court action would be hard fought. Both sides raised valid arguments. On balance, the due process argument seemed to be at least worthy of better court examination, not to be dismissed simply because, right or wrong, that is what USA courts had always done previously. The difference, here, seemed, possibly, the enormous stature of Lance (not merely as an athlete, but as a cancer messiah), and the overdue court examination of the unusual position of the athletes charged on circumstantial evidence rather than a failed test.

 The USA Federal Court – Judge Sam Sparks

 On 23 August 2012, Judge Sam Sparks dismissed Lance Armstrong’s suit in the US District Court Western District of Texas (Austin) of the Federal Court, asking for an injunction to restrain USADA from proceeding against him . (The judgment is on this website.)

  The Judge found:

  1. Armstrong’s due process claims lacked merit.
  2. The court lacked jurisdiction over Armstrong’s remaining claims, or alternatively declined to grant equitable relief.

 The key issue for the Judge in finding the due process complaints lacked merit was that Lance’s challenges are anticipating unfairness rather than being subject to them now. Lance’s challenges were all based on speculation of bias (rather than actual bias).

  Judge Sparks said: “Like the Supreme Court, this Court declines to assume either the pool of potential arbitrators, or the ultimate arbitral panel itself, will be unwilling or unable to render conscientious decision based on the evidence before it. ….  Further, Armstrong has ample appellate avenues open to him, first to the Court of Arbitration for Sport … where he is entitled to de novo review, and then to the  courts of Switzerland, if he so elects.”

 The Judge, however, dismissed the suit without prejudice, ie Lance could come back if things develop. Further, Judge Sparks expressed some judicial (and welcome) views on the USADA processes. His Honour was critical of USADA’s process:

 “As the Court stated at the hearing, ….. the deficiency of USADA’s charging document is of serious constitutional concern. Indeed, but for two facts, the Court might be inclined to find USADA’s charging letter was a violation of due process, and to enjoin USADA from proceeding thereunder. First, it would likely of no practical effect: USADA could easily issue a more detailed charging letter, at which point Armstrong would presumably once again file suit, and the parties would be back in this exact same position some time later, only poorer for their legal fees. Second, and more important, USADA’s counsel represented to the Court that Armstrong will, in fact, receive detailed disclosures regarding USADA’s claims against him at a time reasonably before arbitration, in accordance with routine procedure. The Court takes counsel at his word. With the understanding that Armstrong has received all the process he is due at this time, and will receive adequate notification of the charges against him in time to prepare a defense, the Court rejects Armstrong’s …. challenge. …… ”

 Judge Sparks then concluded that the Federal Court had no jurisdiction. The Sports Act had (“whether or not this was a good choice is, of course, debatable”) determined that sports eligibility questions would be decided through arbitration rather than federal lawsuits.

 His Honour referred to the Mary Decker Slaney case, noting that the court had said: “… when it comes to challenging the eligibility determination of the USOC, only a very specific claim will avoid the impediment to subject matter jurisdiction that (the Sports Act) poses”.

 The Slaney court had quoted the Tonia Harding case, in the Oregon District Court as follows:

 “There the court cautioned that…… ‘courts should rightly hesitate before intervening in disciplinary hearings held by private associations …. Intervention is appropriate only in the most extraordinary circumstances, where the association has clearly breached its own rules, that breach will imminently result in serious and irreparable harm to the plaintiff, and the plaintiff has exhausted all remedies.’ Yet, while carving out this limited exception to the pre-emption created by the Amateur Sports Act, the opinion forewarned that while examining whether internal rules had been complied with, the courts ‘should not intervene in the merits of the underlying dispute.’ ”

 Judge Sparks held, ultimately, that:

  1. Armstrong was not in danger of irreparable harm. The USADA jurisdiction issue, itself, was to be determined by the arbitrators. Further, any finding by the arbitration panel might, itself, be overturned by CAS. “In short,  any harm Armstrong might suffer is, at this point, entirely speculative.
  2. Armstrong had not exhausted his internal remedies, namely the arbitration procedures in the USADA Protocol. Judge Sparks: “If the panel’s resolution is manifestly unjust and devoid of any reasonable legal basis, Armstrong may have a judicial remedy; but this court cannot act on the basis of a hypothetical injury.
  3. Armstrong’s agreement with USOC bound him contractually to submit his due process concerns, themselves, to the arbitration process. Finally, His Honour determined that, even apart from his decision on jurisdiction, if he did have such jurisdiction he would decline an equitable remedy, firstly because, for the above reasons, Armstrong was not in danger of irreparable harm, and secondly because , as a matter of international comity, the court declined to: “circumvent the longstanding system of international arbitration in Olympic sports by unilaterally enjoining that system’s operation”.

      Judge Sparks finished with a comment for USADA:

     “…. there are troubling aspects of this case, not least of which is USADA’s apparent single-minded determination to force Armstrong to arbitrate the charges against him, in direct conflict with UCI’s equally evident desire not to proceed against him….

     The events in USADA’s charging letter date back fourteen years, span a multitude of international competitions, and involve not only five non-citizens of the United States who were never licensed in this country, but also one of the most well-known figures in the history of cycling. As mystifying as USADA’s election to proceed at this date and in this manner may be, it is equally perplexing that these three national and international bodies are apparently unable to work together …..  

The Australian Federal Court – Justice John Middleton

So now we wait for Essendon FC and James Hird, to take on ASADA, before Justice John Middleton in the Australian Federal Court.

The process is likely, in my view, to showcase the critical justice issues that are thrown up in this key area of “non-analytical positives”. The likelihood is that Essendon FC and James Hird will challenge, in the Australian courts, the level of acceptable proof against an athlete charged on the basis of evidence, not including a failed test, and the ASADA/Court of Arbitration for Sport regime generally.

About time.

 John McMullan

Is there an Out for Sharapova? TBC….

Is there an Out for Sharapova? TBC….

She said she had been taking meldonium on medical grounds since 2006 and that she was unaware that it was placed on WADA’s Prohibited List in January 2016. The media recently speculated that Maria Sharapova may plead a range of mitigating circumstances, including a retrospective application of the Therapeutic Use Exemption (TUE). A TUE allows an athlete to use, for therapeutic purposes only, an otherwise prohibited substance.

– A Belleville, LL.B., LL.M

Glenvill Projects Pty Ltd v North Melbourne Pty Ltd & Taylor [2013] VSC 717

In Glenvill Projects Pty Ltd v North Melbourne Pty Ltd & Taylor [2013] VSC 717 (Vickery J), Justice Vickery (the Judge in Charge of the Supreme Court Technology, Engineering and Construction List) was considering a challenge to a decision of an expert appointed under an expert determination clause in a residential building contract.

His Honour referred to 500 Burwood Highway v Australian Unity & Ors in which His Honour had analysed the role of a contractually appointed expert, and the basis upon which an expert determination might be invalidated following judicial intervention. His Honour had said in 500 Burwood Highway:

…. there is no procedural code for expert determination, in contradistinction to arbitration. The activities of an expert are subject to little control by the court, save as to jurisdiction or departure from the mandate given. Unless the parties specify the procedure, the expert determines how he will proceed; it is rare for what might be perceived as procedural unfairness in an arbitration to give rise to a ground for challenge to the procedure adopted by an expert ….
For these reasons, unless required by the contract in question, the parties have no entitlement to insist that the expert adopt any particular procedure; or that the appointed expert seek their approval to the proposed determination; or that they are given any hearing or facility to provide input into the process. An expert is not obliged to afford to the parties procedural fairness in the manner required of a court or arbitration in a curial context. A certifying expert is not under an obligation to provide procedural fairness or natural justice in the absence of an express contractual provision, and there is none in the present case …. How the task is undertaken is in the hands of the expert, subject to anything to the contrary in the contract pursuant to which the appointment was made.
This result is in part the product of the contract and what is to be gleaned from it as to the intention of the parties. When the parties appoint an expert, they usually do so because they agree to place reliance on the expert’s skill and judgment. They implicitly agree to accept and be bound by the determination. In the usual case, provided the decision is arrived at honestly and in good faith, the parties will not be able to re-open it and will be bound by the result.
It is also in part the product of a particular body of expert experience, learning, skill and judgment which the parties wish to apply to the problem to be dealt with. This is to be applied in a manner which is untrammelled by procedural considerations, so that the specialist skills and insights of the expert can be freely applied to the issue.
Finally, considerations of commercial utility are likely to be relevant factors. Efficiency, the production of a speedy and authoritative outcome and the elimination of the expense of a more elaborate procedure, undoubtedly play a part in parties selecting the contractual process of expert determination.
Mistake or error in the process of the determination of the appointed expert will not invalidate a decision. However, if the expert asks the wrong question or misconceives the function of the appointment, the task required to be performed by the contract will not have been fulfilled. In this event, the determination will be exposed to being set aside.
Parties to a contract who, by the terms of that contract, agree to submit a question to an independent expert, are bound by the determination of that expert acting honestly and in good faith.

His Honour reasoned further in relation to the construction of the expert engagement contract:

An expert is appointed by contract to make an expert determination in respect of specific matters which may arise during the course of a commercial relationship. An expert, in making a determination, is not obligated to abide by the rules of procedural fairness in the manner required of a court or an arbitration in a curial context. The expert’s obligations with regard to procedural fairness, or natural justice …. , are defined by the content of the express contractual agreement between the parties comprised in the Expert Engagement Contract, which in this case includes the terms of the IAMA Rules.
The manner in which the task of making the determination in question is undertaken is in the hands of the expert, subject to anything to the contrary in the contract which governs the appointment of the expert and in the IAMA Rules.
The result which is arrived at by the expert – the determination, in this case – is thus ultimately the product of the contract in the full sense of the word, as properly construed in accordance with the usual approach to the construction of commercial contracts.
The approach was recently considered in ICM Investments Pty Ltd v San Miguel Corporation & Ors [No 2]). Where it was observed that the applicable principle is often stated in terms of a necessity to construe commercial agreements so as to accord with ‘business commonsense’ or ‘commercial reality’.
As Santow J said in Spunwill Pty Ltd v BAB Pty Ltd, in construing a written document, the object is to discover and give effect to the contractual obligations that reasonable persons in the position of the parties would objectively have intended the document’s language to create.
Further, the language used in the contract is generally assigned its natural and ordinary meaning, read in the light of the contract as a whole. Where it is ambiguous, surrounding circumstances may be taken into account in assigning the constructed meaning. The surrounding circumstances include the matrix of mutually known facts, and the background, object, context and commercial purpose of the transaction, in the objective sense of what reasonable persons in the position of the parties would have had in mind.
…. The commercial context in which a reference of disputes to an expert in a commercial contract is thus most relevant. The decision to refer disputes for determination by a contractually appointed expert will usually arise because the parties desire a particular body of expert experience, learning, skill and judgment to be applied to the resolution of defined issues which may arise in the course of the relationship and need to be dealt with. This problem-solving role is usually intended to be applied in a manner which is untrammelled by overly restrictive procedural considerations, so that the specialist skills and insights of the expert can be fully applied to the issues for resolution, in an expeditious and cost effective manner which is attended with an appropriate measure of ‘finality’.
This may give rise to the parties agreeing that they will abide by a decision which in hindsight appears to be ‘wrong’. In such circumstances, mistake or error in the process of the determination of the appointed expert will not invalidate a decision, as long as it is made in accordance with the terms of the agreement.
This is not to say that there are no parameters of fairness or that the determination will be unreviewable. For example, if the expert asks the wrong question or misconceives the function of the appointment, the task required to be performed by the contract will not have been fulfilled…..

In this case, His Honour ultimately concluded that the Expert had acted within the terms of his engagement in making the procedural determinations that he did.

Sugar Australia Pty Ltd v Southern Ocean Pty Ltd & Anor [2013] VSC 535 (15 October 2013)

In Sugar Australia Pty Ltd v Southern Ocean Pty Ltd & Anor [2013] VSC 535 (Vickery J), Justice Vickery, the Supreme Court of Victoria Judge in Charge of the Technology, Engineering and Construction List was invalid. His Honour discussed, in detail, earlier decisions of the courts in relation to jurisdictional error, concluding that it was open to a court in considering an application for judicial review to consider the findings of fact made by the adjudicator as to the validity of the Payment Claims in the circumstances of this case which include allegations of misleading conduct and fraud which are pressed by the applicant for relief by way of certiorari. His Honour said, at paragraphs 113-115:

113. For the purposes of s 18 of the Victorian Act,[67] it appears to me that the elements of the section which serve to confer jurisdiction on an adjudicator to make a valid determination under s 23, on the proper construction of the Act, do not permit the adjudicator to finally determine the validity of the adjudication application.[68] If there be any challenge to the jurisdiction assumed by the adjudicator it must finally determined on the basis of facts found by the Court on judicial review, in the course of determining whether a jurisdictional error has been exposed which calls for the exercise of the Court’s discretion to grant relief in the nature of certiorari and, if necessary, mandamus. The Court may grant relief on such relevant evidence as may be adduced before it, whether or not such evidence was before the adjudicator at first instance. Further, the Court may grant such relief without regard to any determination which may have been made on the issue of jurisdiction by the adjudicator. The Court is obliged to arrive at its own conclusion as to jurisdiction based on the law and on the facts as found by it.

114. This is not to say that an adjudicator should not make any findings of fact or rulings on law if a question of jurisdiction is raised in the course of determining an adjudication application. Clearly if an adjudicator is presented with material or submissions which bring into question the jurisdiction of the adjudicator, he or she should determine the question and give reasons for the findings of fact or rulings on law. If however the adjudicator’s decision on jurisdiction is challenged in Court on judicial review, the Court may deal with the matter afresh and receive additional evidence on the matter if the additional evidence is relevant to the determination of the question.

115. To the extent that anything inconsistent with this conclusion appears in paragraphs [115]-[116] of Grocon,[69] in the light of the later reasoning of the High Court in Kirk and of the New South Wales Court of Appeal which followed it in Chase Oyster Bar, I do not follow my earlier ruling.

Jotham Property Holdings Pty Ltd v Cooperative Builders Pty Ltd & ors [2013] VSC 552

In Jotham Property Holdings Pty Ltd v Cooperative Builders Pty Ltd & ors [2013] VSC 552 (Vickery J), Justice Vickery, the Supreme Court of Victoria Judge in Charge of the Technology, Engineering and Construction List, was considering whether an adjudication determination was invalid on the grounds that the particular payment claims were served multiple times, in breach of Section 14(8). His Honour held that the payment claim, the subject of the adjudication, had been the subject of an earlier payment claim. Pursuant to Section 14(8), a further payment claim may not be made for the same [progress payment] reference date under the construction contract. His Honour rejected the claimant’s argument that, pursuant to Section 14(9), if a previous payment claim had not been made, it could be claimed afresh pursuant to Section 14(9). His Honour concluded:

On a plain reading s 14(9) provides that, if another and earlier payment claim has been made, but the amount of that earlier claim has not been paid, the unpaid amount may be included in a later and different payment claim which covers different construction work or the supply of different goods and services, calculated by reference to a different reference date under the construction contract.

His Honour preferred this interpretation on the basis that this construction was consistent with Section 14(8), whereas the the claimant’s argument would render Section 14(8) otiose, and further that this construction of Section 14(8) and 14(9) was consistent with the purpose of the Act.

His Honour concluded that the payment claim was invalid.

Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSC 437 (Vickery J)

In Lysaght Building Solutions Pty Ltd  v Blanalko Pty Ltd, the Judge in Charge of the Supreme Court of Victoria Technology, Engineering and Construction List (Vickery J) was considering the dispute resolution provisions under a design and construct contract for the construction of a rail freight terminal, a container paved area and a locomotive workshop together with associated facilities in Penfield, South Australia (though the Contract was governed by the law of Victoria). The General Conditions of Contract incorporated Australian Standard form of contract, AS4300-1995.

 

Summary Judgment:

 

The Contractor asked for summary judgment in respect of three unpaid payment claims, for approximately $3.13 million. The Principal claimed damages for breach of contract, and claimed a number of waivers and estoppels against the Contractor. His Honour ordered that the argument as to the principles to be applied in respect of summary judgment be argued before the Court of Appeal. His Honour then applied those principles. At paragraph 19, His Honour said:

 

The Court of Appeal determined the following upon the present state of authority, which I adopt and apply in these reasons:[1]

(a)           the test for summary judgment under s 63 of the  Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a “real” as opposed to a “fanciful” chance of success;

(b)           the test is to be applied by reference to its own language and without paraphrase or comparison with the “hopeless” or “bound to fail test” essayed in General Steel;

(c)           it should be understood, however, that the test is to some degree a more liberal test than the “hopeless” or “bound to fail” test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;

(d)           at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.

Payment Claims:

 

His Honour then set out Clause 42.1 of the General Conditions of Contract (the standard form provision) and reviewed the facts surrounding the unpaid payment claims.

 

His Honour referred to a number of authorities to be followed where a progress payment certificate was not properly issued by the Superintendent under Clause 42.1. At paragraphs 29-31:

 

In Daysea v Pty Ld v Watpac Australia Pty Ltd (“Daysea”)[2] the Court of Appeal of the Supreme Court of Queensland considered the position under a contract which contained provisions very similar to clause 42.1 of the AS4300-1995 standard form.  In that case the Superintendent failed to issue a progress payment certificate within the stipulated 14 days after receipt of a claim, but did so before the expiry of the 28 day period for payment.  The Court of Appeal accepted that if the Superintendent under an AS4300-1995 failed to respond to a claim for payment under clause 42.1 within 14 days, even if it did respond shortly thereafter, the Principal was still obliged to pay the amount of the claim.  Williams JA observed that a strict approach to the construction of clause 42.1 should be adopted at least with respect to the provisions for payment, set off and deductions, and this was so because of the consequences which flow from the issuing of the certificate.  His Honour reasoned as follows:

Of more significance is the decision of Rolfe J in Algons Engineering Pty Ltd v Abigroup Contractors Pty Ltd (1997) 14 BCL 215. The clause in question there was in the same terms as clause 42.1 here. The learned Judge found that the certificate issued by the Principal’s Representative did not satisfy the requirements of paragraph (a) to paragraph (f) of paragraph [4]. In consequence he said that “the Payment Certificate failed to comply with various contractual obligations as to its contents and that, accordingly, it was not a valid notice”. His reasoning for so concluding is set out in the following passage:

“… the effect of a Payment Certificate is to require the recipient to pay the amount stated. Failure to do so could lead to summary judgment and there is no right to dispute the amounts payable until the dispute resolution procedures are activated. Accordingly, the recipient of the certificate is required to pay money during the course of the contract which, at the end of the day, it may be found it does not owe. The requirement to pay money may lead to financial difficulties for the payer, just as the failure to receive money during the course of the contract may cause financial difficulties to the payee. Also the payee may not be able, at the end of the day, to refund any overpayment. Considerations such as these lead me to the conclusion that a certificate must comply strictly with cl 42.1 if it is to have the consequences specified”.

That reasoning is in my view compelling. As all of the cases I have just referred to establish, the consequences of issuing a certificate are serious. The proprietor is bound to pay the amount of the certificate notwithstanding that the amount is provisional only and subsequently may be found to be incorrect. Notwithstanding such considerations the proprietor must pay the amount specified in the certificate and take the chance that any excess can be recovered subsequently. Similarly, the contractor is not entitled to payment of anything more than the amount specified in the certificate though it may well be less than the progress claim made. Even though it may ultimately be found that the contractor was entitled to more, the recovery of any such amount must await the determination of disputes at the end of the contract.

Because of the consequences which flow from the issuing of the certificate strict compliance with the provisions of clause 42.1 is required …[3]

[Emphasis added]

 

Daysea was applied by Byrne J in Southern Region Pty Ltd v State of Victoria (No 3) (“Southern Region”).[4]

 

It follows that a certificate purportedly issued under clause 42.1 which does not satisfy the formal requirements of theclause is ineffective and invalid, or as Byrne J said in Southern Region: “… it was as if no certificate had issued at all.” 

 

(emphasis added)

His Honour then considered the principles to be adopted where the Contractor failed to support the payment claim with evidence and any information required by the Superintendent. His Honour referred to  the NSW Court of Appeal decision in Brewarrina Shire Council v Beckhaus Civil Pty Ltd . In that decision, the majority concluded that under clause 42.1 of AS2124–1992 the obligation of the Superintendent to issue a payment certificate in relation to a progress claim was subject to the condition precedent that the contractor support that claim with evidence of the amount due to it and with such information as the Superintendent might reasonably require.

 

His Honour referred to the Victorian Court of Appeal decision in Aquatec-Maxcon Pty Ltd v Minson Nacap Pty Ltd . The Court of Appeal, in adopting Brewarrina, said:

 

The decision is a recent, and carefully considered, decision by the New South Wales Court of Appeal which, so far as we have been told and so far as we are aware, is the only decision which currently exists on this particular point of construction of this paragraph of the clause. The point was argued by counsel for the appellant before the trial judge, in the course of which counsel referred his Honour to evidence which showed, or suggested, that the superintendent had repeatedly been seeking substantiation for the “one line variation claims”, and submitted that where the contractor persisted – in the face of opposition and request for further information – in submitting “one line claims” there must come a point where clearly the Progress Claim as presented is entitled to be regarded by the superintendent as not a claim within the meaning of clause 42.1. His Honour requested of counsel whether he (ie counsel) was able to show to him any authority where such an approach had been adopted to a claim, ie “where the claim has been treated by the court as being invalid for noncompliance …”. Trial counsel for the appellant conceded that he was not able to refer his Honour to any authority on the point; and his Honour then indicated to trial counsel for the respondent that he would not “trouble him” about the criticisms made of the progress claims.

 

His Honour, noting further that Warren CJ in Kane Constructions Pty Ltd v Sopov, while expressing some reservations regarding the application of Brewarrina and Aquatec as to the timing issue in the matter before her, had concluded that she was bound by the adoption of Brewarrina in Acquatec at the very least, or to regard Brewarrina as highly persuasive, concluded:

 

Accordingly, pursuant to clause 42.1 of the AS4300-1995 standard form contract, a failure by the contractor to support a payment claim with evidence and any information required by the Superintendent means that the Superintendent is not be obliged to issue a payment certificate to certify the payment of a progress claim.

(emphasis added)

 

His Honour concluded that on the facts before him, the Principal had a “real” chance of success on the material presented in the application, and concluded that summary judgment should not be awarded to the Contractor.

 

Stay Application – Section 8 Commercial Arbitration Act 2011 (Vic):

 

His Honour then addressed a claim for a stay of the Supreme Court proceedings pursuant to Section 8 of the Commercial Arbitration Act 2011 (Vic), on the grounds that there was an arbitration clause (the provision was the standard form Clause 47 of AS4300-1995). His Honour noted the important change between the new Act and the 1984 superseded Act. At paragraphs 125-126, 143 :

 

The use of the imperative word “must” in s 8(1), rather than the permissive “may”, which was employed  in the superseded Commercial Arbitration Act 1984, removes the court’s discretion to refuse to grant a stay, and renders the provision mandatory.  The only reason a court can refuse to grant a stay is if the arbitration agreement is found to be “null, void, inoperative or incapable of being performed”.[5]  This means that if the requirements of the section are met the Court has no choice but to grant a stay of the proceeding before it and refer the matter to arbitration.[6]

 

This may result in some inefficiencies in case management in some cases, arising from the potential for litigation on the same project being conducted before different tribunals. Nevertheless the statutory meaning is clear.[7]

 

……. It follows that a Court before which an action is brought in a matter which is the subject of an arbitration agreement must, if a party so requests, not later than when submitting the party’s first statement on the substance of the dispute, refer the parties to arbitration.

 

(emphasis added)

Ultimately, His Honour decided that a stay should not be ordered in respect of certain parts of the claims, on the basis that the particular dispute was not, on the basis of other provisions of the Contract excluding a right of a party to institute proceedings to enforce payment under the Contract from the arbitration clause. In respect of the balance of the claims, His Honour ordered that those claims were to be referred to arbitration and ordered a stay.

 

 

 

 


[1]               Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd [2013] VSCA 158 [35].

[2]               Daysea v Pty Ld v Watpac Australia Pty Ltd (2001) 17 BCL 434.

[3]               Daysea Pty Ltd v Watpac Australia Pty Ltd (2001) 17 BCL 434, 439 [20]–[22].

[4]               Southern Region Pty Ltd v State of Victoria (No 3 ) (2002) 18 BCL 211.

[5]               D Jones, Commercial Arbitration in Australia (2nd ed, Lawbook Co., 2013) p 108.

[6] Although in the 2009 Consultation Draft Bill the provisions vested a discretionary power in the court  and more closely reflected s 53 of the Superseded Uniform Acts, following submissions from over 17 different organisations, the final Bill reflected s 8 of the Model Law.  The imperative “must” replaced the permissive “may” such that granting a stay is now mandatory unless the court finds that the arbitration agreement is “null, void, inoperative or incapable of being performed”. D Jones, Commercial Arbitration in Australia (2nd ed, Lawbook Co., 2013) p 110.

[7]               It has been noted that there will be situations that arise where matters are referred to arbitration as a consequence of the word “must” that would have been more efficiently conducted in court, for example, multi-party proceedings that will require arbitrations and potentially different findings of fact.  See: D Jones, Commercial Arbitration in Australia (2nd ed, Lawbook Co., 2013) p 111.

Oliviera v USADA

In Oliviera v USADA, the Court of Arbitration for Sport considered the cases surrounding reduction of the 2 year penalty where a cyclist was the subject of a positive test, due to a contaminated supplement. In the circumstances of the efforts taken by the cyclist to determine that the supplement contained no prohibited substances, and her elite but reasonably inexperienced status as a cyclist, with little formal training in relation to prohibited substances, and her early acceptance of a provisional suspension, the panel concluded that her suspension should be reduced from 2 years to 18 months, and the start date for the suspension should be the last date on which she had competed.

Altain Khuder LLC v IMC Mining Inc & IMC Mining Solutions Pty Ltd [2011] VSC 1

In Altain Khuder LLC v IMC Mining Inc & IMC Mining Solutions Pty Ltd [2011] VSC 1, the Victorian Court of Appeal (Croft J, His Honour is, himself, an experienced international arbitrator) considered the procedures and principles relating to resisting enforcement on the basis of the defences or grounds for resting enforcement under the International Arbitration Act 1974 (Cth) and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ( the “New York Convention”) 1958.

WADA & FIFA v. Cyprus Football Association (CFA), Carlos Marques & ors

In WADA & FIFA v. Cyprus Football Association (CFA), Carlos Marques & ors, the Court of Arbitration for Sport was considering several appeals. A coach had administered, openly, “supplements” to his soccer players, which later proved to be contaminated. Two players later tested positive for Oxymesterone. The 2 players sought reductions to their penalty on the basis of “no significant fault or negligence”. Those 2 players also assisted in the anti-doping process, and sought a penalty reduction in relation to that assistance. The coach was given a 4 year sanction for “administering” a prohibited substance. “Other players” were heard to have taken those supplements, but were not tested. WADA sought sanctions against those “other players”, on the basis of evidence rather than tests (ie non-analytical positives). The Panel concluded:

  1. The 2 players were not entitled to a reduction of sanction, in these circumstances, on the basis of “no significant fault or negligence”. The cases all require exceptional circumstances for this reduction (and, in this case, they had been “very negligent”).
  2. The 2 players were, however, entitled to a reduction of sanction, in these circumstances, on the basis that they had “assisted” in the anti-doping process.
  3. The coach’s 4 year sanction was confirmed.

WADA had not discharged its burden of proof to the comfortable satisfaction of the Panel, in relation to the “other players” (ie non-analytical positives).

Wen Tong v. International Judo Federation

In Wen Tong v. International Judo Federation the Court of Arbitration for Sport upheld an appeal by Wen Tong, a Chinese judoka and winner of the 78kg gold medal in judo at the Beijing Olympics, relating to a postive test for clenbuterol in July 2009, on the grounds that the process was flawed. The test occurred on 8 September 2009, following a gold medal win in the IJF World Championship in Rotterdam in August 2009. The International Judo Federation (IJF) was informed of the result on 14 September 2009, who informed the Chinese Judo Association (CJA), but it did not inform Ms Tong until 18 October 2009. On that day, the CJA advised Ms Tong of the positive test, but gave her no information as to the amount of clenbuterol, nor any documentation.

Further, Ms Tong was told that requesting her B sample to be tested could result in antagonising the IJF, a delayed start to any suspension, and an increase on any ban, and suggested that co-operation might help her towards a possible return in time for the London 20101 Olympics (not possible, in fact, if she received a sanction greater than 6 months). Ms Tong insisted on the B sample being tested. (In fact, this request was never sent by the CJA to the IJF, and ultimately, on 14 November 2009, Ms Tong was convinced by the CJA to withdraw the request. In fact, the CJA had already written, a day earlier, to the IJF, withdrawing the request for testing of the B sample.) On 25 November 2009, the IJF nevertheless tested the B sample, which tested positive.

In October 2009, Ms Tong had written a draft letter to the IJF, which she sent to the CJA, advising that the only way clenbuterol might have entered her system was through eating contaminated meat at an informal BBQ with friends at a restaurant. The CJA did not send this letter to the IJF.

On 4 April 2010, without advising Ms Tong, the IJF imposed a 2 year ban. (Without Ms Tong’s knowledge, the CJA had agreed with the proposed ban at the time.)

Ms Tong eventually heard of her ban, on the internet, on 9 May 2010. On 19 June 2010, the CJA provided some (incomplete) documentation in relation to documents surrounding her positive clenbuterol test, and the IJF letter notifying the CJA of the 2 year ban.

At the Court of Arbitration for Sport hearing, the IJF did not participate. Ms Tong argued:

  1. She did not knowingly ingest clenbuterol.
  2. The lab testing her A sample used a machine that had not been calibrated for over 18 months, in violation of ISL standards.
  3. She was not given any chance to be present/represented at the opening and testing of her B sample.
  4. (Ms Tong initially argued that the concentration of clenbuterol fell below the lab’s testing protocol. This argument was later withdrawn.)
  5. The IJF was guilty of repeated and serious failures to inform Ms Tong of her “essential procedural rights”. These failures were cumulatively so extreme as to invalidate the entire process (as per Varis v IBU and Tchachina v International Gymnastics Federation).
  6. Alternatively, Ms Tong acted with “No Fault or Negligence”, or alternatively with “No Significant Fault or Negligence”.

The Tribunal agreed with Ms Tong that the IJF decision dated 4 April 2010 should be annulled on the grounds that was not given any chance to be present/represented at the opening and testing of her B sample.

 

 

 

CAS decides on 2 year ban for Contador

The Court of Arbitration for Sport has decided that Alberto Contador Velasco, 3 time winner of the Tour de France, is guilty of an anti-doping violation, stripped him of a number of results, including the 2010 Tour de France victory, and given him a 2 year ban, back dated to August 2010.

On 21 July 2010, at the 2010 Tour de France, Mr Contador tested positive for a tiny amount of clenbuterol (a prohibited substance under the 2010 WADA Prohibited Substances List, listed as “Other Anabolic Agent”) from a urine test following a rest day after stage 16. Mr Contador believed that he may have eaten contaminated meat, leading to the result.

The process was submitted to the Comite Nacional de Competicion y Disciplina Deportive (CNCDD) of Real Federacion Espanola de Ciclismo (RFEC). In January 2011, the Spanish examining judge of the RFEC considering the anti-doping violation proposed, rejected by Mr Contador, a 1 year ban, (reducing the 2 year ban to 1 year on the basis of no significant fault or negligence). Subsequently, on 14 February 2011, the CNCDD acquitted Mr Contador, concluding:

  1. It was most probable that the result was due to eating contaminated meat. The low controls on meat production in Spain, plus the very low concentration of clenbuterol in Mr Contador’s body, suggested no voluntary doping. Mr Contador, in eating meat, even exercising maximum prudence, did not know/suspect that he was eating meat contaminated with a prohibited substance. This was not negligent behaviour.
  2. The extremely small amount of clenbuterol had not enhanced the athlete’s performance.

The UCI and WADA each appealed the RFEC decision to the Court of Arbitration for Sport (CAS). The appeals were consolidated and heard on 21-24 November 2011.

The UCI and WADA, separately, argued as follows:

  1. UCI met its burden of proof by establishing to “more than comfortable satisfaction” that Mr Contador had committed an anti-doping violation as the A and B samples presented a prohibited substance.
  2. Mr Contador is responsible for ensuring no prohibited substance enters his body. Mr Contador has the burden of proof to establish how a prohibited substance was in his body, and that he bears no fault or negligence (to avoid any sanction), or that he bears no significant fault or negligence (to reduce the sanction).
  3. Mr Contador must establish, on the balance of probabilities, that the contaminated meat was the source of the clenbuterol. UCI says he has not met this burden in this instance.
  4. The evidence, here, was more consistent with the clenbuterol being a result of a blood (doping) transfusion, and/or food supplements. The evidence suggests that the contaminated meat was not the source of the clenbuterol, rather it was more to be a result of doping practices.

Mr Contador argued as follows:

  1. On the balance of probabilities, the prohibited substance came from contaminated meat. Accordingly, Mr Contador bore no fault or negligence.
  2. The UCI and WADA theories re blood transfusion, and/or food supplements, should be rejected.
  3. If CAS disagrees with this view, then Mr Contador’s results following the 14 February 2011 RFED decision should not be set aside.

The CAS Panel advised the parties that it would hear from the many experts in expert’s’ conferences, where all experts dealing with the same issue were present.

The issues to be decided by the CAS Panel were:

  1. Did Mr Contador establish, to the required standard of proof, how the prohibited substance entered his system?
  2. If Mr Contador could establish, to the required standard of proof, how the prohibited substance entered his system, does he, in those circumstances, bear no fault or negligence or no significant fault or negligence?
  3. If required, what sanction should be imposed (how long a suspension? when should that start? which results would be disqualified? …. ).

The Panel concluded that the athlete bears the burden of proof to establish how the prohibited substance entered his system, and that he bears no fault or negligence or no significant fault or negligence, on the balance of probabilities.

In relation to the meat contamination theory, though satisfied that Mr Contador ate meat at the relevant time, and that it was a possibility that the meat was contaminated, the Panel was not prepared to conclude from a mere possibility that the meat was contaminated that an actual contamination had occurred.

In relation to the blood transfusion theory, the panel gave no weight to the “tainted environment”, or “in bad company” argument (ie that athletes in his team had, in the past, been involved in doping). On the basis of the evidence, the Panel concluded that the athlete’s blood parameters could not establish a blood transfusion. The Panel looked at a number of technical parameters, and ultimately concluded that although the blood transfusion theory is a possible explanation for the clenbuterol test result, in light of all the evidence, it was unlikely to have occurred.

The panel concluded, from the material before them, including that Mr Contador took supplements in considerable amounts, that athletes had frequently tested positive because of contaminated supplements, then the food supplement theory was a more likely possibility. Ultimately, however, the Panel did not conclude that this had occurred on the balance of probabilities.

The panel confirmed that, albeit that there were theories before it as to the cause of the clenbuterol test result, the burden of proof to establish how the prohibited substance entered his system, and that he bears no fault or negligence or no significant fault or negligence did not shift from the athlete. Accordingly, it found that Mr Contador has committed an anti-doping violation.

As there was no basis to reduce the usual penalty, Mr Contador was suspended for a period of 2 years.

As to the start date for the suspension, the Panel applied the discretion available where there had been substantial delays in the hearing process not attributable to the athlete, and concluded that Mr Contador’s suspension should be back dated to August 2010 on the following factors in particular:

  1. the failure by UCI and WADA to put material before RFEC;
  2. the CAS proceedings lasting over 9 months;
  3. the CAS proceedings being extended due to the athlete having to answer complex submissions in relation to the blood doping theory;
  4. the provisional suspension between August 2010 and Mr Contador’s acquittal on 14 February 2011.

The Panel, however, against Mr Contador’s submissions, concluded that Mr Contador’s results from the 2010 Tour de France and after were thereby disqualified

Cielo & ors v CBDA (the Brazilian National Swimming Federation)

In Cielo & ors v CBDA (the Brazilian National Swimming Federation), the Court of Arbitration for Sport was again considering the penalty to be applied in relation to athletes who registered positive anti-doping test results, where the cause was found to be an inadvertent ingesting of prohibited substances, from taking of contaminated supplements.

4 Brazilian swimmers had positive test results for Furosemide (a diuretic, on the prohibited list as a masking agent) at a Brazilian national swimming event (Maria Lenk) in May 2011. Each athlete accepted the A Test and waived the B sample analysis. The athletes had taken caffeine tablets, with the benefit of medical advice (caffeine is not a prohibited substance under the FINA Rules.) There was evidence from Mr Cielo (undisputed) that about 90% of elite male freestyle swimmers take caffeine at swimming events. The athletes, and team doctor, had taken extreme care in relation to the pharmacy, and taking of the caffeine tablets, without problem, for some months. At the Maria Lenk, in May 2011, however, all 4 had positive results. Ultimately, it was determined that the cause of the adverse test results was the contamination of the caffeine capsules by Furosemide. (There was evidence of an unusual, one-off, error, at the pharmacy.)

FINA agreed that the 2 pre-conditions for reduced penalty had been met:

  1. that the athletes had established how the Specified Substance entered their bodies;
  2. that the athletes had shown that the Specified Substance was not intended to enhance performance or mask the use of a performance enhancing substance.

The Tribunal concluded:

  1. The taking of caffeine was to be treated as a “supplement” rather than a “medication”.
  2. The degree of “fault” in this case was at the very lowest end of the spectrum contemplated by the FINA Rules/WADC. (It was difficult, the Tribunal concluded: “to see what, if anything,  else the athletes could have done reasonably or practically to avoid the positive test results”.)
  3. Under the FINA Rules/WADC, however, the defence of No Fault or Negligence was not available (see the detailed discussion of the relevant rules applying to this case).
  4. Accordingly, the Tribunal concluded the appropriate sanction to be a Warning.
  5. (In relation to 1 athlete, a previous sanction had been imposed. Rejecting an argument that a principle of proportionality ought to apply, the Tribunal imposed the minimum sanction of 1 year, and then, having regard to his waiving the B sample, exercised its discretion to start the 1 year from the date of his sample collection.)

Lance Armstrong: The next of the non-analytical positive cases?

The attached letters between USADA and Lance Armstrong’s legal team are the first formal step in the anti-doping prosecution by USADA. The process will be, potentially, the most important case to date due to  the athlete involved, but equally, the most important to date “non-analytical positive” (prosecution of an anti-doping violation in the absence of a failed test).

Lance’s response to USADA’s charging letter, the initial step prior to the review board process (an athlete protection mechanism designed to require USADA to establish a sufficient basis for the process to proceed to a hearing) was generally as follows:

1. USADA fails to disclose the proposed witnesses or their evidence, Armstrong is unable to know/answer the charges made against him. USADA is treating the review board as a rubber stamp, effectively seeking to deny Armstrong the protection of that review board process.

2. USADA has obtained evidence wrongly, in trading concessions/reduced penalties, etc, (the “jailhouse snitch”argument), for evidence, and in obtaining evidence leaked from the now-discontinued grand jury process.

3. The only 2 identifiable claims against Armstrong (the Swiss lab tests from 2001 where the lab director has since denied the tests were sufficient to found a violation, and USADA providing, raw data only, no expert analysis, 2009/2010 blood test results, which show no abnormality and which were published on Armstrong’s own website at the time as proof of the opposite) have no merit.

4. Most of the material is outside the 8 year limitation period.

USADA, conversely, says that it has ten-plus witnesses, who will say that Armstrong doped, trafficked, and participated in a conspiracy.

The process is likely, in my view, to showcase the critical justice issues that are thrown up in this key area of “non-analytical positives”. The likelihood is that Lance will challenge, in the USA courts, the level of acceptable proof against an athlete charged on the basis of evidence, not including a failed test, and the USADA/Court of Arbitration for Sport regime generally.

About time.

Landholder Acquisition Changes to Duties Act 2000 (Vic)

The Duties Amendment (Landholder) Act 2012 (Vic) has introduced new landholder duty provisions into the Duties Act 2000, in relation to acquisitions of interests in certain land holding entities, replacing the land rich duty provisions which have existed in Victoria since 1987. From 1 July 2012, acquisitions of interests in “landholders” (a company or unit trust scheme that has land holdings in Victoria with an unencumbered value of $1 million or more) are chargeable with duty at the rates applicable to land transfers.

Civil Dispute Resolution Act 2010 (Cth)

The Civil Dispute Resolution Act 2010 (Cth) was passed on 24 March 2011 by the Commonwealth parliament, likely to come into operation in the next month. The Act relates to certain proceedings in the Federal courts. The Act:

  • requires civil litigants to take “genuine steps” to resolve their disputes prior to filing proceedings in court unless those litigants have sufficient reasons for not doing so or the relevant proceedings are “excluded proceedings”
  • requires both parties to file a “genuine steps statement”
  • requires lawyers acting for persons to whom the Act applies to advise their client of the genuine steps statement requirement, and assist them to comply with that requirement
  • gives the court power to have regard to a party’s compliance with the genuine steps requirements when exercising its general powers and functions and in exercising its discretion to award costs

Part 4 of the Act excludes certain proceedings from the genuine steps requirement, including proceedings relating to:

  • civil penalty provisions
  • criminal offences
  • decisions of certain Tribunals
  • appeals
  • Subpoenas, warrants

 

 

 

Civil Procedure Act 2010 (Vic)

 

The Civil Procedure Act 2010 (Vic) came into operation on 1 January 2011. The “overarching purpose” of the Act is the” just, efficient, timely and cost-effective resolution of disputes”. The Act provides that courts are to give effect to this purpose in interpreting and exercising their powers and functions in the conduct of civil proceedings. The Act creates “overarching obligations”, applying to all parties, lawyers, insurers, funders and expert witnesses, including:

 

  •          acting honestly at all times (section 17);
  •          only pursuing claims and defences that have a proper basis, on the factual and legal material available at the time (section 18);
  •          only taking steps reasonably believed to be necessary to resolve the dispute (section 19);
  •          co-operating with other parties (section 20);
  •          not misleading or deceiving (section 21);
  •          using reasonable endeavours to resolve a dispute by agreement (section 22) or narrowing issues (section 23);
  •         using reasonable endeavours to ensure costs are reasonable and proportionate to the complexity or importance of the issues, and the amount in dispute (section 24).

 

 

Krstic v State Trustees Ltd [2012] VSC 344

In Krstic, Mark Stefan & Krstic, Nicholas Thomas v State Trustees Limited (ACN 064 593 148) (who is sued as the executor of the will and estate of Peter Krstic, deceased)  [2012] VSC 344, the Supreme Court (McMillan J) was considering the interpretation of two clauses in a will (relating to contingent gifts). Her Honour reviewed the principles to be applied to the construction of a will:

A detailed and succinct summary of the principles is set out in Fell v Fell.  Prima facie, the written words in the will must be given their ordinary meaning, with the Court making a determination of the issue by reference to the words used by the testator in the will, having regard to any established rules of construction and construing a ‘will as trained legal minds would do’.

 

 

Alabakis v Alabakis [2012] VSC 437

In Alabakis v Alabakis [2012] VSC 437, the Supreme Court (Macaulay J) was considering a Testator’s Family Maintenance claim by a daughter of the deceased’s second marriage, where the deceased was survived by his second wife, her daughter, three children from his first marriage, and two stepchildren. The plaintiff was the only child to receive nothing under the Will (though she had earlier received a substantial land gift).

Macaulay J adopted the principles set out by Hargrave J in McCann v Ward & Burgess [2012] VSC 63:

  1. Section 91 of the Administration and Probate Act 1958 (Vic)gives the court power to make an order for provision out of the estate where:
    1. the deceased had responsibility to make provision for the proper maintenance and support of the applicant; and
    2. the court is of the opinion that the will of the deceased does not make adequate provision for the proper maintenance and support of the applicant for the order.
  2. Whether the will makes adequate provision for the proper maintenance and support of the applicant is to be assessed by “‘by a consideration of the facts existing and the eventualities which might reasonably have been foreseen at the date of the testator’s death”.
  3. The court is to consider the matters set out in Section 91(4) (e)-(p) in considering the jurisdictional questions and the amount of any order.
  4. In determining the questions, the court must consider: “what provision a wise and just testator would have thought it was his or her moral duty to make for the applicant”.
  5. The testator is imputed to have been, at the time of death: “fully aware of all the relevant circumstances, including reasonably foreseeable eventualities existing at the date of death, whether or not actually known to the testator”.
  6. Should the two jurisdictional requirements be made, the court is to assess what order for further provision should be made, by reference to the state of facts as at the hearing date.
  7. The court should not transgress unnecessarily upon the testator’s freedom of testation but should proceed: “rather carefully and conservatively according to current community perceptions of the provision which would be made by a wise and just” testator.
  8. However, where an order for further provision will not unduly prejudice other beneficiaries for whom the deceased had a responsibility to make provision, the court adopts a reasonably generous approach, such that any further provision: “should be sufficient to free the mind from any reasonable fear of any insufficiency as age increases and strength may gradually fail”. Further: “where the size of the estate permits and there will be no serious prejudice to the rights of other beneficiaries, the court may order further provision beyond the immediate and likely future needs of the applicant”, providing a “nest egg” to guard against unforseen events.
  9. No inflexible approach can be taken in assessing the two jurisdictional questions or the amount of any order to be made for further provision, as each case will depend on its own facts.

In this case, His Honour concluded that the deceased did have a responsibility to make provision for the plaintiff. Ultimately, taking into account the financial resources and needs of the plaintiff, the second wife, and the other children, and the size and nature of the estate, His Honour concluded that the plaintiff was entitled to a further provision of $475,000.

XZTT and Anti-Doping Rule Violation Panel [2012] AATA 728 (23 October 2012)

In XZTT and Anti-Doping Rule Violation Panel[2012] AATA 728 (23 October 2012), the Administrative Appeals Tribunal of Australia was consideringa cyclist’s appeal against two decisions by ASADA’s Anti-Doping Rule Violation Panel (ADRVP)  to make entries into the Register of Findings under the National Anti-Doping Scheme (the NAD Scheme).

 

In October 2010, the athlete (un-named) tested positive to benzoylecgonine (principal metabolite of cocaine) a race in China. Under the 2009 WADA Code, the use of cocaine is only prohibited in-competition, however the presence of the metabolite in a sample taken during a subsequent competition is an anti-doping violation. The amount detected in the sample was lower than the usual usual cut-off for a positive finding for cocaine. Article 7.2 of the 2009 WADA Code requires that an athlete be notified of the positive test result, and separately, given the right to have the B sample tested, “promptly “ (within 7 days). The athlete was not advised of the positive test for 4½ months. The race occurred on 23 October 2010, the UCI received the lab results on the A sample on 4 November 2010, but did not notify the athlete (who continued to compete). The athlete was first notified by the UCI, on 25 March 2011.

 

In the 25 March 2011 notice, the UCI:

  1. notified the athlete of an adverse analytical finding from the A sample;
  2. advised that he was provisionally suspended, “pending a hearing”;
  3. giving the athlete the option to have the B sample tested.

The B sample confirmed the presence of benzoylecgonine. Two weeks later the UCI wrote to XZTT to “confirm the presence of the Cocaine and to advise that the UCI would be writing to CA (Cycling Australia) to request CA to open disciplinary proceedings.” On 30 May 2011, the General Manager, Anti-Doping Programs and Legal Services ASADA, advised that the matter would be referred to the ADRVP for consideration. The athlete was invited to make submissions in response to the notice. The athlete denied using a prohibited substance, and, further, argued that the UCI had breached its own rules considerably. Two 2 months later, the ADRVP advised the athlete that the panel had made two adverse findings against him. The Cyclist appealed to the AAT.

 

The Tribunal concluded:

  1. The two decisions by the ADRVP to make an entry in the Register of Findings under the NAD Scheme were set aside.
  2. The ADRVP decisions to make an entry in the Register of Findings were based were findings of a “possible” violation. As a matter of law, such a finding was not open to the ADRVP. For an entry placed on the Register of Findings, the ADRVP must first make a ‘finding’ as defined under clause 1.05 of the NAD Scheme, ie “a finding …. that an athlete or support person has committed an anti-doping rule violation”.
  3. The matters were to be remitted to the ADRVP.

 

The Tribunal indicated, further , that in relation to the ADRVP re-consideration, certain mitigating factors might properly be taken into account by the ADRVP:

[235] Included in the factors the ADRVP may wish to take into account in mitigation are those that: (a) from 25 March 2011 until the date of the Tribunal’s decision XZTT remained subject to a provisional suspension that has prevented him from participating in all professional cycling events; (b) that despite the requirements of the WADC and the UCI Anti-Doping Rules, XZTT experienced gross breaches of his entitlement to have the allegations against him dealt with in a timely way; (c) that XZTT did not contribute to the delays in any way; (d) that XZTT entered into a commercially disadvantageous contract, which included a provision to the effect that if he were to be found to have breached anti-doping rules his contract would be terminated and which he would not have entered into but for the delay in the UCI in notifying him of his testing results; (e) that the finding of a violation on his part for ‘use’ In-Competition of cocaine has been set aside by the Tribunal; and (f) that the amount of metabolite of cocaine detected in XZTT’s samples was below the threshold normally accepted as establishing a positive finding for use of cocaine and could not have affected his performance.

Australian Football League & ESP Merchandise Pty Ltd v Hard On Sport Pty Ltd & David Sumiga

In Australian Football League & ESP Merchandise Pty Ltd v Hard On Sport Pty Ltd & David Sumiga [2012] VSC 475, the Supreme Court (Vickery J) was considering an application to set aside an Anton Piller order,  relating to the open sale by the defendants of AFL football merchandise without AFL authority.

The AFL and its licensee (ESP) claimed that the defendants in selling AFL merchandise without AFL authority:

  1. infringed the AFL’s copyright in AFL photographs;
  2. infringed the AFL’s trade mark rights in unauthorised AFL memorabilia, including guernseys, shorts, boots, names (including “AFL”, AFL club names, club nicknames, logos, images of the AFL premiership cup, the Brownlow medal, and the Norm Smith medal), posters, cards, photographs, etc;
  3. knowingly (or in a recklessly indifferent manner) induced AFL players to sign memorabilia without the AFL’s authorisation such that those players were breaching their contractual obligations to the AFL (and, in some instances, to ESP);
  4. misrepresented that unauthorised AFL memorabilia was, in fact, authorised by the AFL;
  5. were passing off unauthorised AFL memorabilia as authorised by the AFL.

No defence was made in relation to the copyright claim. (Section 10 of the Copyright Act 1968 (Cth) includes a photograph as “artistic work” whether the work is of artistic quality or not.

No defence was made in relation to the trade marks claim under Section 20 and 120 of the Trade Marks Act 1995 (Cth). The defendant, however, referred to Arsenal Football Club PLC v Reed . In that case, an unauthorised vendor sold Arsenal memorabilia outside the Arsenal ground. At trial, the court had found the vendor’s use of trade marked items as not being an indication of the origin of the goods sold, but rather, being a sign depicting club loyalty or affiliation. That decision, His Honour noted, was, however, overturned on appeal. Vickery J noted that the point remained arguable in Australia, but any defendant would face the persuasive precedent of the UK Court of Appeal.

The plaintiffs claimed that the defendants, breach of Section 18 of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)) misrepresented that unauthorised AFL memorabilia was, in fact, authorised by the AFL. His Honour concluded, on the evidence as it stood when the Anton Piller order was made, was “sufficiently compelling” to make the order. Similarly, His Honour concluded that case in relation to the defendants passing off unauthorised AFL memorabilia as authorised by the AFL, the evidence as it stood when the Anton Piller order was made was, also, sufficiently strong to make the order.

In relation to the inducing breach of contract claim, His Honour concluded that, in this instance, the evidence was not sufficiently strong (on this basis) to justify the issue of a search order, noting:

  1. the gravamen of the tort of inducing breach of contract is intention;
  2. in relation to the knowledge of the relevant contract, the question will always be whether the alleged wrongdoer had sufficient knowledge of its terms to appreciate that his conduct, if acted upon, would result in an interference with the contractual rights of the other party to the contract.

His Honour further noted that there was some argument in relation to the interpretation of the player’s obligations under the CBA in this respect.

Vickery J, in deciding whether AFL had made sufficient disclosure in obtaining the original order, reviewed the legal principles underlying the grant of Anton Piller order, noting the court’s emphasis, in Anton Piller KG v Manufacturing Processes Ltd, to the effect that such an order was at the “extremity” of the court’s powers, and that “such orders would rarely be made, and only where there was no alternative way of ensuring that justice was done to the applicant”. His Honour observed that it was “in recognition of the extraordinary nature of this remedy” that certain protections were built into the court’s Practice Note, the standard of proof, and the common law supporting the order.

His Honour reviewed the authorities in relation to the obligation on the plaintiff seeking an ex parte remedy to disclose all matters relevant to the exercise of the court’s discretion. In this instance, the defendants said that the plaintiff had not given full, frank disclosure in relation to:

  1. the plaintiff’s examination of the defendant’s Facebook page;
  2. the open, public, nature of the defendants’ business;
  3. signed items (approx 120-130) by the AFL Chairman (Vickery J concluded that would be potentially relevant to the inducing breach of contract claim);
  4. the AFL memorabilia market being widespread (approx 30-50 participants, over 20,000 items for sale on eBay);
  5. the plaintiff’s affidavit evidence being based on information from a commercial competitor of the defendants;
  6. arguments that (relating to inducing breach of contract claim) that there is no explicit prohibition on players signing memorabilia, and/or past players not being party to the current Collective Bargaining Agreement (Vickery J concluded that would be potentially relevant to the inducing breach of contract claim).

Ultimately, however, His Honour did not conclude that the omissions should lead to the Anton Piller order being discharged altogether, but rather, it should be discharged only in relation to those items based on the inducing breach of contract claim alone.

His Honour considered the following in relation to whether to extend the injunction and the balance of convenience:

  1. There was a strong prima facie case in relation to the causes of action pressed by the plaintiffs.
  2. Release of signed grand final jumpers into the market would have a devastating effect on the likely revenues to be gained from the AFL’s Premier memorabilia Program. Official AFL Memorabilia would be affected indirectly, the presence of unauthorised AFL memorabilia in the market would harm sales and revenue which ought to flow to the plaintiffs, and AFL clubs. AFL supporters buying memorabilia, knowing that funds will go back to the game and their AFL club are misled when they purchase unofficial memorabilia. Consumers do not easily recognise unauthorised AFL memorabilia. The unauthorised AFL memorabilia products would turn up on eBay, etc, sales of these products would likely be undocumented, evidence against the defendants would be lost. Accordingly, if an injunction was not granted, the plaintiffs would be at risk of serious damage that could not be compensated by damages.
  3. On the evidence, the defendants would be likely to continue to infringe the property rights of the plaintiffs if not restrained.
  4. Against this, the defendants would lose profits from supplying merchandise in the lead up to Christmas.  Further, the defendants would be unable to compete with competitors.
  5. The trial is set down for speedy hearing, commencing on 3 December 2012. In combination with the plaintiffs’ undertaking as to damages, the defendants would be protected.

On this basis, His Honour extended the injunction restraining the defendants from selling AFL memorabilia until further order.

470 St Kilda Road P/L (ACN 006 075 341) v Reed Constructions Australia P/L (ACN 003 340 341) & Philip Martin

n 470 St Kilda Road P/L (ACN 006 075 341) v Reed Constructions Australia P/L (ACN 003 340 341) & Philip Martin, Vickery J was reviewing an adjudication determination, where the Principal had argued that a statutory declaration provided by the Contractor was patently false. His Honour reviewed the authorities in relation to several questions, including:

  1. The Principal argued that the Act implies a duty of “good faith” into the making of a payment claim. His Honour concluded, consistent with authority albeit seemingly contrary to other obiter statements, that there is “good faith” pre-condition to valid payment claim under the statutory regime created by the Act.
  2. The Principal argued that compliance with the adjudication application time limits provided in s 18(3) of the Act a basic and essential condition of validity. His Honour concluded that this was a factual issue for the adjudicator, not reviewable as a “basic and essential condition”. His Honour concluded that the adjudicator’s determination on compliance with the adjudication time limit was not reviewable in the present case.
  3. The Principal argued that the failure of the Contractor to provide a (non-false) statutory declaration had the effect that the payment claim was not valid under the Contract. His Honour concluded that the adjudicator’s assessment of the correct factual position (in this case, the Contractor’s statutory declaration was contradicted by 5 statutory declarations provided by the Principal)  Whether finding by adjudicator that payment claim valid reviewable), even if an error of fact, did not constitute an error of law that was reviewable.
  4. His Honour then considered the requirement that an adjudicator provide reasons pursuant to Section 23 of the Act, and concluded, in the present case, that the reasons, albeit brief, were sufficient.

UCI v Alex Rasmussen & Denmark NOC &SF

In UCI v Alex Rasmussen & Denmark NOC &SF, the Court of Arbitration for Sport was reviewing the Demark NOC and Sports Federation’s decision in favour of cyclist, Alex Rasmussen, in relation to a claimed failure to comply with location notification obligations. The WADA Rules (and the Denmark Association rules) make a combination of three missed tests and/or filing failures within 18 months constitutes an anti-doping rule violation. The Rules require athletes to provide/keep updated, their “whereabouts” for the purpose of out-of-competition testing. Rasmussen had failed to keep his whereabouts updated in in February 2010, during 3rd quarter 2010, and (this was a disputed breach) on 28 April 2011. In relation to the 28 April 2011 filing failure, the breach had not been notified by UCI to Rasmussen within 14 days, as required under the IST (International Testing Standard). The Tribunal concluded that the UCI failure 2011 to notify Rasmussen within 14 days did not prevent UCI from recording it as a missed test, on a number of grounds, including that

a departure from the IST can invalidate the finding of an anti-doping rule violation only in the event that the particular anti-doping  rule violation had been caused by the departure itself. The Tribunal reduced the period of suspension form 2 years to 18 months (relating to degree of guilt), and determined that the suspension start from October 2011, when ineligibility was first imposed.

Braceforce Warehousing Limited v Mediterranean Shipping Company (UK) Limited

In Braceforce Warehousing Limited v Mediterranean Shipping Company (UK) Limited [2009] EWHC 3839 (QB) Ramsey J (Sir Vivian Ramsey, the judge in charge of Technology and Construction, Queens bench Division), was considering arguments in relation to the commencement of an expert determination over defects in a warehouse the subject of an Agreement to Lease. Just before the 6 year limitation period (dating from the agreement) was to expire, the parties had exchanged letters in relation to extending the limitation period and appointing the expert.

His Honour observed that the Limitation Act did not seem to apply to expert determination (His Honour did not need ultimately to resolve this). Ultimately, His Honour concluded that Mediterranean’s letter proposing an expert for agreement, and advising that failing agreement it would apply to appointing body for an appointment, had commenced the expert determination procedure sufficient to stop any limitation period applying (if, in fact, a limitation period did apply in relation to expert determination).

His Honour, then, in addressing the appropriate forum where two valid sets of proceedings had been commenced, referred to the following passage from the speech of Lord Mustill in the House of Lords in Channel Tunnel Group v Balfour Beatty ….

Having made this choice I believe that it is in accordance not only with the presumption exemplified in the English cases cited above that those who make agreements for the resolution of disputes must show good reasons for departing from them, but also with the interests of the orderly regulation of international commerce that, having promised to take their complaints to the experts and if necessary to the arbitrators, that is where the appellant should go. The fact that the appellants now find their chosen method too slow to suit their purpose is, to my way of thinking, quite beside the point.

His Honour concluded:

This is a case where the Part 8 proceedings have been brought to prevent the expert determination continuing on grounds of lack of jurisdiction and I have rejected that application. The general position is that parties should be held to the terms of their contracts, but the court retains a discretion in each case. I am not persuaded in this case that the existence of the protective proceedings in court or the fact that, as in the Channel Tunnel case, the claimant now finds the chosen method of dispute resolution unsuitable, are factors which are so persuasive that they should outweigh the principle that the parties should be held to the agreed method of dispute resolution in accordance with clause 24 of the Agreement (emphasis added) .

This decision is modern high-level authority for the principle that, In cases where an expert determination clause is contained in an agreement, but one party then decides it prefers the proceedings to be litigated, the courts will require strong grounds to persuade them from the presumption that the parties should be held to their agreement.

Owners Corporation Strata Plan 72535 v Brookfield [2012] NSWSC 712

No Duty of Care owed by Builder to Owners Corporation

In Owners Corporation Strata Plan 72535 v Brookfield [2012] NSWSC 712, the NSW Supreme Court (McDougall J) reviewed the evolving law in relation to duty of care owed by a builder to future owners, with whom the builder has no contract. McDougall J concluded that the builder of a strata development in Terrigal did not owe a duty of care to the owners corporation in relation to defects in the common property. His Honour concluded that, on the basis that the apartments were residential building work (taken as at the time the building contract was entered into), and therefore the statutory warranties applied.

His Honour considered that Bryan v Maloney did not support a duty of care in this instance, for 3 reasons:

  1. The Owners Corporation had the benefit of the statutory warranties. The courts should be slow to substitute its view as to the extent that a builder is to be liable to a subsequent owner, quoting the dissenting view of Brennan J in Bryan v Maloney:

It would be anomalous to have claims relating to the condition of the building by an original owner against the builder determined by the law of contract if the relief claimed by the remote purchaser against the builder would be determined by the law of tort. Such a situation would expose the builder to a liability for pure economic loss different from that which he undertook in constructing the building and would confer a corresponding right on the remote purchaser which the purchaser had not sought to acquire from the vendor (45). It would be tantamount to the imposition on the builder of a transmissible warranty of quality. In some jurisdictions, Parliament has provided such a remedy by statute. The social question whether building costs should be inflated to cover the builder’s obligation under such a transmissible warranty in an appropriate question for parliaments to consider but, in the absence of compelling legal principle or considerations of justice reflecting the enduring values of the community, the courts should not decide to extend remedies not hitherto available to remote purchasers of buildings without considering the cost to builders and the economic effect of such an extension. Those are questions which the courts are not suited to consider. The extension of remedies in that direction is properly a matter for Parliament

  1. Proximity, important in the determination in Bryan v Maloney, was later discarded by the majority in Woolcock Street.
  2. In Bryan v Maloney, the builder had owed a duty of care to Mrs Maloney’s predecessor.

His Honour noted that Woolcock Street had relied on “vulnerability” in relation to duty of care, and the availability of statutory warranties to the Owners Corporation. McDougall J further noted the potential cost if such a duty of care existed.

Thiess Pty Ltd & Anor v Arup Pty Ltd & Ors [2012] QSC 185

In Thiess Pty Ltd & Anor v Arup Pty Ltd & Ors [2012] QSC 185, (10 July 2012), the Queensland Supreme Court (Applegarth J) was considering the terms of a Collaborative Consultancy Agreement (CCA) in relation to the Airport Link, Northern Busway (Windsor to Kedron) and East-West Arterial Gateway Projects, between Thiess John Holland (TJH) and Parsons Brinkerhoff Australia (PBA). TJH had engaged PBA as consultants for the design of the project. His Honour was asked to resolve whether, under the CCA, certain values of multipliers specified in the CCA were values agreed between the parties or were subject to audit by the Collaborative Agreement Auditor. His Honour concluded in favour of PBA, that the values were agreed between the parties and not subject to audit by the Collaborative Agreement Auditor.

His Honour considered the interpretation principles, reasoning as follows:

The proper interpretation of the contract is not determined in this case simply by competing contentions about which interpretation is the “more commercially sensible” construction. It is determined by the words of the agreement that were chosen by the parties, and the structure of Schedule 7.

His Honour reasoned in relation to the request for rectification:

These and other authorities appear to support the following propositions:

  1. The actual intention of each party is relevant in deciding whether they had the alleged common intention.
  2. The actual intention must have been disclosed.
  3. In determining whether there was the alleged common intention and the terms of the “prior consensus”, a Court is not confined to communications between the parties and their conduct from which the relevant intention may be inferred. Evidence of their subjective intention, including statements about their understanding of what was agreed, is admissible, and in some circumstances may be decisive.
  4. Where, however, the evidence given by a party about his or her subjective intention is inconsistent with the terms of their correspondence and/or conduct it may carry little weight.
  5. The existence or otherwise of a “common intention” (or prior consensus or prior concluded agreement) is determined on the basis of an objective assessment of the parties’ communications and conduct. Whilst evidence from a party about his or her subjective intention is admissible as to whether the alleged consensus was reached, the question of whether such a consensus existed and continued involves an objective assessment. The authorities suggest that the test is what an objective observer would have thought the intentions of the parties to be. In this regard, it is not the inward thoughts of the parties which matter but whether the alleged intention has been objectively manifested. To adopt the words of Street J, the intention on each side must be manifested “by some act or conduct from which one can see that the contractual intention of each party met and satisfied that of the other. On such facts there can be seen to exist objectively a consensual relationship between the parties.”

TJH had argued that there was a reasonable expectation that the multiplier was a genuine or reasonable estimate and that PBA had been acting in good faith in originally proposing them, and further, that it had a reasonable expectation of an auditor’s examination, and that if there was to be no such examination PBA would have disclosed this to TJH. His Honour summarised the cases:

[215] Silence or non-disclosure of information can be misleading or deceptive in various circumstances….. Whether silence constitutes misleading or deceptive conduct depends on all the relevant circumstances, and it is dangerous to essay any principle by which they might be exhaustively defined. However, “unless the circumstances are such as to give rise to the reasonable expectation that if some relevant facts exists it would be disclosed, it is difficult to see how mere silence could support the inference that the fact does not exist” …… Asking whether a reasonable expectation of disclosure exists is an aid to characterising non-disclosure as misleading or deceptive and has been described as a practical approach to the application of the prohibition in s 52.

[216] Sometimes a reasonable expectation of disclosure will not exist because parties to a commercial negotiation are not expected to disclose information which is confidential, and the starting point for their negotiations is the caveat emptor doctrine. On other occasions, a reasonable expectation of disclosure will exist because of the nature of the relationship, or because positive conduct or statements in the course of negotiations imply that a certain fact or matter exists or does not exist. A failure to qualify a statement made earlier in negotiations may be misleading or deceptive in the circumstances. Where, however, this is not the case, the reasonable expectation of disclosure of a certain fact must be found elsewhere. In this case, TJH seeks to source it by reference to the negotiation and entry into the Pre-Bid Agreement and the parties’ subsequent negotiations in relation to the commercial framework and the terms of Schedule 7, as pleaded in paragraph 85 of the second further amended defence and counterclaim. Whether conduct is misleading or deceptive or likely to mislead or deceive must be assessed on the basis of these facts and all the relevant circumstances.

Ultimately, His Honour concluded that there was no misleading and deceptive conduct in this instance, concluding that PBA should have the declaratory relief it sought.

 

 

 

Napolitano v State Trustees Ltd [2012] VSC 345

In Napolitano v State Trustees Ltd [2012] VSC 345, a nephew by marriage sued the executor under Part IV of the Administration and Probate Act claiming that his uncle had a responsibility to make provision under his will for his proper maintenance and support.  He asks the Court to order that provision be made for him. The executor asked for summary judgment, saying that nothing in the nephew’s affidavit is capable of showing that his uncle had a responsibility (conveniently spoken of in this field of the law as a moral responsibility on a wise and just testator) to make provision for him, and therefore the jurisdictional threshold for a Court’s intervention under the Act is not met. Mukhtar J concluded that where all the evidence is in, and (as happened here) the Court had able and extensive submissions from both counsel with reference to authorities  as would be expected at the trial, then on a summary judgment application the Court is performing the similitude of the trial function.  It is not so much assessing the prospects, but the actual merits. In this case, the evidence of the nature, quality and elements of the relationship between Antoine and the deceased is too imprecise, and falls well short of the types of relationship as between nephews or nieces and their aunts or uncles which might be recognised as giving rise to a responsibility to make provision for maintenance and support.

“Cases in this Court where successful claims have been made by, for example, a niece from an aunt have demonstrated strong facts are needed to show that the aunt or uncle were like de facto mothers or fathers or had otherwise played a part in the life of a niece of nephew so as to give rise to a responsibility.  It requires a demonstration at least that the deceased has taken, in the many ways possible in life, some responsibility for the child’s care, upbringing and development or welfare….

….The Court’s discretionary power under s 91 of the Administration and Probate Act is cast in very broad terms.  But it is important to remember that Courts do not intervene just because it would have been nice or good of a testator to give a benefit.  An uncle ought to be able to develop a relationship with a nephew without apprehending the law might impose a responsibility to provide for him.  That is why Courts have found it convenient and useful to resort to the concept of a moral duty and a moral claim in deciding whether provision should be made to a claimant….. The test is “whether and if so what provision a wise and just testator would have thought it his moral duty to make in the interests of the claimant” having regard to community standards….”

 

 

 

 

Skilled Group Ltd v CSR Viridian Pty Ltd & Anor [2012] VSC 290

In Skilled Group Ltd v CSR Viridian Pty Ltd & Anor [2012] VSC 290 (4 July 2012), Vickery J was considering a claim by Skilled Group for  monies due by way of a restitutionary quantum meruit for engineering work it performed , under a subcontract that was never executed between Skilled and Pilkington, at a glass manufacturing plant in Dandenong owned by CSR. Skilled said that no concluded subcontract had been made between Skilled and Pilkington because, the parties had never agreed on two essential terms of the proposed subcontracts, namely the dates for practical completion and the proposed milestone dates for the purposes of calculation of liquidated damages.

His Honour noted previous cases where, though no contract had been executed, by the parties proceeding to perform  the work, a contract had been formed. In relation to the formation of a contract, His Honour said:

94 In any determination as to whether a binding contract exists, it is the objective intent of the parties, as revealed in the factual context, that is the paramount consideration. The fact of agreement and its content is to be determined by the communications between the parties considered objectively. It is also legitimate to consider the factual context in which the communications took place. Regard may also be had to communications between the parties subsequent to the date of the alleged contract, at least to the extent to which those communications may inform the meaning of the language used by the parties in earlier exchanges between them which evidenced the fact of agreement and its content and defined the commercial context.

95 The subjective intention of the parties, as it may be expressed, for example in internal memoranda, or statements made by individuals as to as to subjective intention in the course of giving evidence, is generally inadmissible. However, in some circumstances such expressions of intention may amount to admissions and be admissible on that basis. However, care needs to be exercised in determining the content of any such admission.

His Honour considered the so-called “fourth class” of cases discussed in Masters v Cameron, where parties are content to be bound immediately and exclusively by the terms which they had agreed upon while at the same time expecting to make a further contract in substitution for the first contract, containing, additional negotiated terms, referring to Lord Loreburn, in Love & Stewart v S Instone & Co:

 

It was quite lawful to make a bargain containing certain terms which one was content with, dealing with what one regarded as essentials, and at the same time to say that one would have a formal document drawn up with he full expectation that one would by consent insert in it a number of further terms. If that were the intention of the parties, then a bargain had been made, none the less that both parties felt quite sure that the formal document could comprise more than was contained in the preliminary bargain.

 

 

His Honour concluded:

 

In my opinion, the parties reached agreement in this case in conformity with the fourth limb of Masters v Cameron as described by the High Court in Sinclair Scott. Their conduct clearly manifested an intention to elevate their commercial relationship beyond the clutches of the third class. …. By early May 2008 the parties reached finality in arranging all the terms of their bargain and intended to be immediately bound to the performance of those terms. At the same time the parties proposed to make a further contract in substitution for the first contract, containing negotiated additional terms relating to dates for practical completion of the three Sub-contracts and agreed milestone dates, upon which it was intended that the Sub-contracts would be formally executed……. 117 The factual analysis I have described, involving as it does the application of the fourth limb of Masters v Cameron, also goes to explain the negotiations between the parties which continued from early May 2008 as to dates for practical completion and milestone dates. What the parties were not about during this period was negotiating towards a set of original binding Sub-contracts, for by early May 2008 they were already bound to a concluded, but limited suite of bargains. What they were about was the negotiation of a new set of Sub-contracts in substitution for the already binding ones. The fact that the parties continued to negotiate for an alternative regime of dates, and this continued beyond early May 2008, had no bearing on the concluded bargains which were already in place. ……

 

In the light of the conduct described, I find it irresistible to conclude otherwise than implied contracts on the terms of the three Sub-contracts are to be inferred from the evidence and that these implied contracts operated to govern the Skilled works on the Project from the outset of their engagement.

 

His Honour concluded, therefore, that concluded subcontracts had been formed. Though no longer required, His Honour further concluded that, were it not possible to imply the existence of binding agreements, Skilled would have been estopped from denying the existence of the agreements as reflected in the three subcontracts.

 

 

Ipex ITG Pty Ltd (In liquidation) & Takapana Investments Pty Ltd v State of Victoria [2012] VSCA 201

In Ipex ITG Pty Ltd (In liquidation) & Takapana Investments Pty Ltd v State of Victoria [2012] VSCA 201, the Victorian Court of Appeal was considering a claim by an unsuccessful tenderer for a contract for the provision of ‘system integration services’ for the Parliament of Victoria. An evaluation plan had been prepared  but not distributed to tenderers. Ipex’s tender had been assessed as not demonstrating a good understanding of what Parliament was seeking under the project, and not representing value for money albeit that its tender price was low (Ipex’s tender price was around $2.8 million compared to the winner’s price around $7.8 million), and removed from further consideration.

 The trial judge held, and on appeal it was common ground, that there was a binding contract (‘the tender process agreement’) between Ipex and the respondent the express terms of which were contained in the Request for Tender (RFT). Ipex’s primary claim was for damages for breach of that contract.

 The Court of Appeal concluded:

  1. The method of evaluation identified in the RFT was, in fact, followed by the government.
  2. The requirement that price be kept out of the process until the “final decision point” was followed in that the price comparisons were left until the already assembled qualitative assessment and price comparisons were available to the evaluation team. (Even if this was wrong, this should be read in the context of the government not being bound to accept any tender.)
  3.  The evaluation, albeit involving subjective business judgments, had been objectively evaluated. This was not to be a “purely arithmetic exercise”.
  4. The trial judge had correctly assessed the misleading and deceptive conduct case, being based on the dismissal of the breach of contract claims, that claim being based on the same claimed departures from the RFT case.

 

 

 

 

 

Abakis v Abakis [2012] VSC 437

In Abakis v Abakis [2012] VSC 437, the Supreme Court (Macaulay J) was considering a Testator’s Family Maintenance claim by a daughter of the deceased’s second marriage, where the deceased was survived by his second wife, her daughter, three children from his first marriage, and two stepchildren. The plaintiff was the only child to receive nothing under the Will (though she had earlier received a substantial land gift).

Macaulay J adopted the principles set out by Hargrave J in McCann v Ward & Burgess [2012] VSC 63:

  1. Section 91 of the Administration and Probate Act 1958 (Vic)gives the court power to make an order for provision out of the estate where:
    1. the deceased had responsibility to make provision for the proper maintenance and support of the applicant; and
    2. the court is of the opinion that the will of the deceased does not make adequate provision for the proper maintenance and support of the applicant for the order.
  2. Whether the will makes adequate provision for the proper maintenance and support of the applicant is to be assessed by “‘by a consideration of the facts existing and the eventualities which might reasonably have been foreseen at the date of the testator’s death”.
  3. The court is to consider the matters set out in Section 91(4) (e)-(p) in considering the jurisdictional questions and the amount of any order.
  4. In determining the questions, the court must consider: “what provision a wise and just testator would have thought it was his or her moral duty to make for the applicant”.
  5. The testator is imputed to have been, at the time of death: “fully aware of all the relevant circumstances, including reasonably foreseeable eventualities existing at the date of death, whether or not actually known to the testator”.
  6.  Should the two jurisdictional requirements be made, the court is to assess what order for further provision should be made, by reference to the state of facts as at the hearing date.
  7. The court should not transgress unnecessarily upon the testator’s freedom of testation but should proceed: “rather carefully and conservatively according to current community perceptions of the provision which would be made by a wise and just” testator.
  8. However, where an order for further provision will not unduly prejudice other beneficiaries for whom the deceased had a responsibility to make provision, the court adopts a reasonably generous approach, such that any further provision: “should be sufficient to free the mind from any reasonable fear of any insufficiency as age increases and strength may gradually fail”. Further: “where the size of the estate permits and there will be no serious prejudice to the rights of other beneficiaries, the court may order further provision beyond the immediate and likely future needs of the applicant”, providing a “nest egg” to guard against unforseen events.
  9. No inflexible approach can be taken in assessing the two jurisdictional questions or the amount of any order to be made for further provision, as each case will depend on its own facts.

In this case, His Honour concluded that the deceased did have a responsibility to make provision for the plaintiff. Ultimately, taking into account the financial resources and needs of the plaintiff, the second wife, and the other children, and the size and nature of the estate, His Honour concluded that the plaintiff was entitled to a further provision of $475,000.

Rear-vision helmet

I plan to try criterium racing. Should I remove my helmet mirror for style reasons or use it during the first few races for safety? — Mike Hanson, IL

You’re gorgeous, Mike. A true piece of art. Most people would rely on conventional wisdom and say that running a mirror at a crit would be the equivalent of announcing at the start line, “Get within 5 feet of me and you’re going down.” But the stunning fact that you even conceive of helmet-mirror crit style suggests you might be flying somewhere above the constraints of convention. That earns you the Style Man Seal of Crit-Mirror Approval—as long as you win. If there’s any chance you’ll be anything other than first by 27 points, then you gotta settle in and be part of the pack, in which case, it’s not what’s behind you that matters—it’s what’s going on up the road. You don’t need a mirror; you need an LT like the guys whipping your ass.

Italian supreme

I am 14, from LA. My father is Italian and my mother is Japanese. My father brags about Italian this and Italian that (it makes Mom sick), but he rides a Bianchi with Shimano Ultegra! I’m afraid if coolness is hereditary, I’m only halfway there. — Pietro, CA

In claiming his love for all things native to him yet riding Shimano, your dad’s being a supreme Italian—completely confused and nonsensical, and thus hip beyond logic. Study the man. Anyway, I have a hard time feeling sorry for you. You’re a Sony digi-cam designed by Gio Ponti shooting footage of Thora Birch. Get yourself a black Comme des Garcons suit, a Prada tie and a pair of flip-flops and do some damage.

Trek 5200

At the end of last season, I bought a new Trek 5200 with Zipp wheels. Suddenly, guys who once liked me were razzing me like I’m miserable yuppie scum. Why do cyclists judge each other based on gear? — David-Michael Hansen, CA 

Let’s consider the evidence here:

1. You have a Trek 5200
2. It has Zipp wheels
3. Your name is David-Michael

Obviously you are miserable yuppie scum. Your only chance at a life with true style is to be who you are to the fullest. Stop trying to keep one toe in the real world. Upgrade the Trek to a 5900 with a one-off paint job and seal the deal with $3,500 German Lightweight or ADA all-carbon wheels. You’ll never ride like Lance but you, my disgusting friend, can buy like Lance. Earn respect with pure and absolute purchasing power.

By the way, we don’t judge people by what gear they own; just those whose gear owns them.

Lycra bike shorts

I can’t really wear those skintight Lycra bike shorts, and the last time I priced baggies, they were out of my financial range. A friend of mine suggested buying some padded underpants and wearing those under my regular shorts. Do those really work? Or do they rub the wrong way? 

What you’re telling me here is that you’re not only fat, you’re broke and fat. Condoning (never mind encouraging) a bunch of fat people in padded underpants is just not a socially responsible thing to do. Here’s a better plan:

1. Get a job.
2. With your first paycheck, buy a pair of good Lycra riding shorts, preferably Assos or Castelli.
3. Tape them to the door of your, I’m guessing, sizeable refrigerator.
4. Keep working hard and, every time you see those shorts taped to the fridge, think of how big and flabby your butt is.
5. In a month or two you should be trim enough to sport a pair of Lycra shorts. You’ll also be slim and sexy enough to ditch your so-called “underpants” and get something proper to wear beneath your new wardrobe.

Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2011] VSC 477

In Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2011] VSC 477 (23 September 2011), His Honour Mr Justice Macaulay was considering, among other things, whether documents brought into existence for the purpose of an adjudication under the Building and Construction Industry Security of Payments Act 2002 (Vic) could attract litigation privilege. His Honour considered whether the statutory adjudication process was an “Australian proceeding” for the purposes of Section 119 of the Evidence Act 2008 (Vic)., and concluded that he should prefer a wider interpretation of the words. At paragraphs 48-50:

48 I agree …… that, because an adjudicator is not bound to apply the laws of evidence, such a person does not qualify as an ’Australian court‘ on that basis. But, is an adjudicator authorised by the Security of Payment Act to ‘hear, receive and examine evidence’? In considering whether, as a matter of statutory interpretation an adjudicator meets that description I am to prefer a construction that promotes the purpose or object of the Evidence Act……… Assuming, as I do, that the regime of privilege is intended to ensure fairness between participants in the conduct of litigious processes, I would not give that expression a narrow meaning …..
49 The adjudication occurs in a patently adversarial setting. It is determined upon the basis of evidence presented in documentary form, and upon written submissions. …… Despite the fact that the adjudication may not ultimately determine the parties’ rights if, in a subsequent court proceeding, the parties’ entitlements are litigated, the adjudication result is enforceable at law and is binding upon the parties unless and until a subsequent court order changes that outcome. I think that the nature of adjudications is such that preserving the confidentiality of communications, made for the dominant purpose of enabling the provision of legal services to participants in the adjudication, would promote the object of fairness for and between those participants.
50 Bearing those matters in mind, I conclude that the provisions of the Act I have summarised above do authorise the adjudicator to ‘hear, receive and examine evidence’ as I would construe that expression. I therefore construe the definition of ‘Australian court’ to embrace an adjudicator under the Security of Payments Act and an adjudication as an ‘Australian proceeding’ within the meaning of s119 of the Evidence Act.
………

Director of Housing of State of Victoria v StructX Pty Ltd (trading as Bizibuilders) [2011] VSC 410

In Director of Housing of State of Victoria v StructX Pty Ltd (trading as Bizibuilders) [2011] VSC 410, Vickery J (the Judge in Charge of the Technology and Construction List) was considering an adjudication determination and the meaning of “in the business of building residences”.

“Structx” was a builder, constructing homes in Hamilton, for the Director of Housing of the State of Victoria. The Director sought to have the determination quashed on the grounds that :
1. the relevant contract was a domestic building contract and the Director was/is not in the business of building residences (Section 7(2)(c) of the Act);
2. the adjudicator erred in finding that there was no Payment Schedule (on the basis, contested by the Director) that the Superintendent’s Representative lacked authority to issue payment schedules;
3. the adjudicator erred in finding that the Payment Schedule had to be in the form prescribed by the contract (Section 15(2)(d) of the Act).

The Contract was an amended AS2124 General Conditions of Contract form of contract.
His Honour concluded:
1. (Referring to his earlier decision in Grocon Constructors Pty Ltd v Planit Cocciardi Joint Venture (No 2) ), where His Honour had said:
They [adjudicators appointed under the Act] are clothed with legal authority to make a binding determination for the purposes of the Act which affect the statutory rights or obligations of persons or individuals who are claimants for progress payments under the Act or who are respondents to such claims.
His Honour concluded, at paragraphs 17-19:
As such they are amendable to certioriari. However, an adjudicator appointed under the Act does not constitute an inferior court within the court hierarchy…..

As observed in Craig, an adjudicator is therefore exposed to fall into jurisdictional error in a broader range of circumstances than a court.

In the present case, I do not consider that the exception provided by s 7(2)(b) of the Act was intended to confer on an adjudicator the power to decide jurisdiction founded on questions of law or mixed questions of law and fact, which includes the power to decide the question wrongly, without attracting prerogative relief.

Accordingly, the adjudicator’s decision in this respect was/is open to certiorari. His Honour then went on to conclude that the Director was not “in the business of building residences” within the meaning of s 7(2)(b) of the Act, and for this reason the proviso did not operate to exempt the Construction Contract from the operation of the Act. In this respect, the adjudicator erred, and certiorari could be issued.

2. As to the adjudicator’s determination that the Superintendent’s Representative lacked authority to issue payment schedules, His Honour concluded that the purpose of the letter containing the Director’s delegation of authority (relied on by builder as not giving that authority, and accepted by the adjudicator) was to nominate a Superintendent’s Representative for the purposes of the Construction Contract, not the Act, it did not purport to limit the Director’s delegation of authority to the matters set out, nor was it evidence that the architect did not have authority to issue a payment schedule under the Act. In this respect, the adjudicator erred, and certiorari could be issued.
3. The Adjudicator also found that the payment schedule was invalid, because it was not in any prescribed form. Section 15(2)(d) of the Act provides that a payment schedule “must be in the relevant prescribed form (if any)”, however, there are no forms for payment schedules prescribed by regulation. The Adjudicator fell into further error on the face of the record, and on this ground certiorari should also issue.
4. In failing to take into account the payment schedule and the Director’s submissions founded upon it, as required by s 23(2)(d), the Adjudicator fell into further error on the face of the record, and certiorari should issue on this ground.
5. Further, in failing to take into account the payment schedule and the Director’s submissions founded upon it, the Adjudicator did not afford procedural fairness to the Director. This amounted a substantial denial of the measure of procedural fairness required under the Act. On this ground too, an order in the nature of certiorari should be made.
His Honour then considered jurisdictional error, discussed by the High Court in Craig v South Australia, and more recently in Kirk v Industrial Court (NSW). His Honour concluded that the authority of the Supreme Court to quash an adjudication determination where jurisdictional error has occurred has been reinforced by Kirk.

His Honour quashed the adjudication determination (and made the declaration sought by the Director to the effect that the Director is not in the business of building residences within the meaning of s 7(2)(b) of the Act).

Ipex ITG Pty Ltd (in liq) v State of Victoria [2010] VSC 480 (29 October 2010)

In Ipex ITG Pty Ltd (in liq) v State of Victoria [2010] VSC 480, the Supreme Court (Sifiris J) was considering a claim by an unsuccessful tenderer that the Victorian government had breached its contractual duty in relation to the evaluation of tenders for the Parleynet project in 2003. His Honour reviewed the authorities and concluded:
1. Each tender must be considered on its own facts, including the tender and/or related documents, and the relevant context and circumstances, to determine whether there is any intention to create an immediately binding contract as to process.
2. The courts have been more inclined towards finding a contract had been made in relation to the “tender process” where a timeline and detailed process, including evaluation criteria, are set out in the tender documents in a way consistent with such a promissory obligation to follow that timeline and process.
3. In this instance, the RFT was intended to be a legally binding contract as to process, including detailed evaluation criteria , rather than simply a document that provided relevant information. The RFT contained detailed evaluation criteria that Parliament said “will” or “must” be applied, suggesting a “commitment, promissory in nature, to abide by a process particularly in relation to the evaluation of tenders”.
His Honour concluded that, in this case, there had been no breach of that tender process contract.

In Asian Pacific Building Corporation Pty Ltd v Aircon Duct Fabrication Pty Ltd & Ors [2010] VSC 300 (1 July 2010)

In Asian Pacific Building Corporation Pty Ltd v Aircon Duct Fabrication Pty Ltd & Ors [2010] VSC 300 (1 July 2010), Justice Vickery (the Victorian Supreme Court Judge in Charge of the Technology and Construction List) was considering whether an adjudicator, in the absence of a response by the respondent, had adopted the claimant’s submissions as to value without making his own assessment, had erred. His Honour said:

12 I respectfully adopt the view tentatively expressed by Hodgson JA in relation to the New South Wales Act [1] in Coordinated Construction Co Pty Ltd v J M Hargreaves (NSW) Pty Ltd, [2] as re-stated by Brereton J in Pacific General Securities Ltd & Anor v Soliman & Sons Pty Ltd & Ors: [3]

[T]he adjudicator’s duty is to come to a view as to what is properly payable, on what the adjudicator considers to be the true construction of the contract and the Act and the true merits of the claim, and while the adjudicator may very readily find in favour of the claimant on the merits of the claim in the absence of a payment schedule or adjudication response, or if no relevant material is advanced by the respondent, the absence of such material does not entitle the adjudicator simply to award the amount of the claim without addressing its merits, which as a minimum will involve determining whether the construction work identified in the payment claim has been carried out, and what is its value.

13 The fundamental determination to be made by an adjudicator as to whether the construction work identified in the payment claim has been carried out, and what is its value, is derived from the provisions of the Act.

His Honour concluded that such a failure by the adjudicator would invalidate the determination:

21 A failure to conduct an adjudication of a payment claim, which requires as a minimum a determination as to whether the construction work the subject of the claim has been performed and its value (or whether the goods and services have been supplied and their value) is a failure to comply with a basic and essential requirement of the Act.

22 The absence of relevant material from the respondent, or the presentation of material in an incoherent fashion, does not entitle an adjudicator to simply award the amount of the claim without addressing its merits, namely, as a minimum, determining whether the construction work identified in the payment claim has been carried out, and what is its value.

23 Accordingly, there will not be a valid adjudication of a payment claim, within the meaning of the Act, if all the adjudicator does is reject the respondent’s contentions. As Brereton J said in Pacific General:[4]

… By allowing a claim in full just because a respondent’s submissions are rejected, without determining whether the construction work the subject of the has been performed and without valuing it – would bespeak of a misconception of what is required of an adjudicator. In traditional terms, it would be jurisdictional error resulting in invalidity.

24 In Plaza West Pty Ltd v Simon’s Earthworks (NSW) Pty Ltd [5] Hodgson JA, in explaining Firedam Civil Engineering Pty Ltd v KJP Constructions Pty Ltd [6] said:

Further, it appears that in Firedam the adjudicator, having decided the respondent’s submissions should be disregarded, simply adopted the amount specified by the claimant in the payment claim. If so, that would be a failure to perform the task required of determining the amount of the progress payment (if any) to be paid, having regard to the consideration[s] in s 22(2).[7]

25 Thus, putting the matter in terms of jurisdiction, the authority to validly adjudicate a payment claim is an authority which only may be exercised if the basic and essential functions required by the Act are undertaken by an adjudicator, namely and as a minimum, determining whether the construction work identified in the payment claim has been carried out, and what is its value (or determining whether the goods and services identified in the payment claim have been supplied and their value).

(emphasis added)

Brakoulias v Karunaharan (Ruling) [2012] VSC 272 (20 June 2012)

The case related to the construction of section 59 of the Wrongs Act, and whether a statutory defence for medical practitioners in common law negligence existed. Mr Justice Macaulay concluded that it did. Toula Brakoulias was a 50 year woman who was placed on Reductil by her doctor, Dr Karunaharan, for weight loss. Four months after being placed on the drug, Mrs Brakoulias had a cardiac arrest, was deprived of oxygen for 26 minutes, and suffered serious and long term injuries. Mrs Brakoulias said that Dr Karunaharm was negligent in prescribing her the medication. Liability was the only issue. The proper construction of section 59 was considered for the first time by the Supreme Court of Victoria. Counsel for both parties put forward a series of arguments regarding the parties’ legal burden depending on the different constructions of section 59. His honour concluded that there were three possible approaches to the section; the exclusive standard approach, the evidentiary burden approach, and the defence approach, which he chose.

Laing O’Rourke Australia Construction v H&M Engineering & Construction [2010] NSWSC 818

In Laing O’Rourke Australia Construction v H&M Engineering & Construction [2010] NSWSC 818 (28 July 2010), the Supreme Court of New South Wales affirmed the requirement for adjudicators to act in good faith and to provide natural justice by properly considering all of the material before them when making determinations under the Building and Construction Industry Security of Payment Act 1999 (NSW). Emphasis was placed on the importance of parties to provide relevant and material documents such as statutory declarations or expert reports in support of their submissions, as these should be considered by adjudicators when making their determination. The Court also indicated that it is possible, and appropriate, to include additional documentary evidence in an adjudication response which expands on and supports the reasons set out in the payment schedule.

Chase Oyster Bar v Hamo Industries [2010] NSWCA 190

In Chase Oyster Bar Pty Ltd v Hamo Industries Pty LTD [2010] NSWCA 190 (24 September 2010), the NSW Court of Appeal was considering the validity of an adjudicator’s determination of an application which did not comply with section 17(2)(a), (claimant’s duty to notify intention to apply for adjudication within 20 days after due date for payment). This requirement had not been identified by Hodgson J as a “basic and essential requirement” in Brodyn. The Court of Appeal concluded that the failure to comply with Section 17(2)(a) resulted in a jurisdictional error, and was therefore invalid. (This seemingly extends the range of matters that, following Brodyn, would be sufficient for a determination to be invalid.)

Seabay Properties Pty Ltd v Galvin Properties Pty [2011] VSC 183

In Seabay Properties Pty Ltd v Galvin Properties Pty [2011] VSC 183, the Judge in charge of the Technology and Construction List, Vickery J, was considering, among other things, whether liquidated damages were to taken into account by an adjudicator in determining the amount payable under a payment claim. His Honour concluded in this respect:

…. In my opinion, the Adjudicator was correct in determining that Seabay’s claim for liquidated damages against Galvin should have been treated as an “excluded amount” and excluded from the adjudication determination made in relation to Galvin’s Payment Claim ….. claimed under the Act.

Director of Housing of State of Victoria v StructX Pty Ltd (trading as Bizibuilders) [2011] VSC 410

In Director of Housing of State of Victoria v StructX Pty Ltd (trading as Bizibuilders) [2011] VSC 410, Vickery J (the Judge in Charge of the Technology and Construction List) was considering an adjudication determination and the meaning of “in the business of building residences”.

“Structx” was a builder, constructing homes in Hamilton, for the Director of Housing of the State of Victoria. The Director sought to have the determination quashed on the grounds that :
1. the relevant contract was a domestic building contract and the Director was/is not in the business of building residences (Section 7(2)(c) of the Act);
2. the adjudicator erred in finding that there was no Payment Schedule (on the basis, contested by the Director) that the Superintendent’s Representative lacked authority to issue payment schedules;
3. the adjudicator erred in finding that the Payment Schedule had to be in the form prescribed by the contract (Section 15(2)(d) of the Act).

The Contract was an amended AS2124 General Conditions of Contract form of contract.
His Honour concluded:
1. (Referring to his earlier decision in Grocon Constructors Pty Ltd v Planit Cocciardi Joint Venture (No 2) ), where His Honour had said:
They [adjudicators appointed under the Act] are clothed with legal authority to make a binding determination for the purposes of the Act which affect the statutory rights or obligations of persons or individuals who are claimants for progress payments under the Act or who are respondents to such claims.
His Honour concluded, at paragraphs 17-19:
As such they are amendable to certioriari. However, an adjudicator appointed under the Act does not constitute an inferior court within the court hierarchy…..

As observed in Craig, an adjudicator is therefore exposed to fall into jurisdictional error in a broader range of circumstances than a court.

In the present case, I do not consider that the exception provided by s 7(2)(b) of the Act was intended to confer on an adjudicator the power to decide jurisdiction founded on questions of law or mixed questions of law and fact, which includes the power to decide the question wrongly, without attracting prerogative relief.

Accordingly, the adjudicator’s decision in this respect was/is open to certiorari. His Honour then went on to conclude that the Director was not “in the business of building residences” within the meaning of s 7(2)(b) of the Act, and for this reason the proviso did not operate to exempt the Construction Contract from the operation of the Act. In this respect, the adjudicator erred, and certiorari could be issued.

2. As to the adjudicator’s determination that the Superintendent’s Representative lacked authority to issue payment schedules, His Honour concluded that the purpose of the letter containing the Director’s delegation of authority (relied on by builder as not giving that authority, and accepted by the adjudicator) was to nominate a Superintendent’s Representative for the purposes of the Construction Contract, not the Act, it did not purport to limit the Director’s delegation of authority to the matters set out, nor was it evidence that the architect did not have authority to issue a payment schedule under the Act. In this respect, the adjudicator erred, and certiorari could be issued.
3. The Adjudicator also found that the payment schedule was invalid, because it was not in any prescribed form. Section 15(2)(d) of the Act provides that a payment schedule “must be in the relevant prescribed form (if any)”, however, there are no forms for payment schedules prescribed by regulation. The Adjudicator fell into further error on the face of the record, and on this ground certiorari should also issue.
4. In failing to take into account the payment schedule and the Director’s submissions founded upon it, as required by s 23(2)(d), the Adjudicator fell into further error on the face of the record, and certiorari should issue on this ground.
5. Further, in failing to take into account the payment schedule and the Director’s submissions founded upon it, the Adjudicator did not afford procedural fairness to the Director. This amounted a substantial denial of the measure of procedural fairness required under the Act. On this ground too, an order in the nature of certiorari should be made.
His Honour then considered jurisdictional error, discussed by the High Court in Craig v South Australia, and more recently in Kirk v Industrial Court (NSW). His Honour concluded that the authority of the Supreme Court to quash an adjudication determination where jurisdictional error has occurred has been reinforced by Kirk.

His Honour quashed the adjudication determination (and made the declaration sought by the Director to the effect that the Director is not in the business of building residences within the meaning of s 7(2)(b) of the Act).

Research Favours Use of Dispute Review Boards on Major Projects

The use of a Dispute Review Board (DRB) on major projects has substantial support on projects worldwide and in Australia. Several major world-wide standard form agreements now include DRB clauses. The statistics on the minimal number of disputes coming out of projects with a DRB is compelling. A number of academic studies have been published in this area. The substantive conclusion from the above is that DRBs are used widely on major projects, with great success in reducing construction contract disputes.

Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2011] VSC 477

In Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2011] VSC 477 (23 September 2011), His Honour Mr Justice Macaulay was considering, among other things, whether documents brought into existence for the purpose of an adjudication under the Building and Construction Industry Security of Payments Act 2002 (Vic) could attract litigation privilege. His Honour considered whether the statutory adjudication process was an “Australian proceeding” for the purposes of Section 119 of the Evidence Act 2008 (Vic)., and concluded that he should prefer a wider interpretation of the words. At paragraphs 48-50:

48 I agree …… that, because an adjudicator is not bound to apply the laws of evidence, such a person does not qualify as an ’Australian court‘ on that basis. But, is an adjudicator authorised by the Security of Payment Act to ‘hear, receive and examine evidence’? In considering whether, as a matter of statutory interpretation an adjudicator meets that description I am to prefer a construction that promotes the purpose or object of the Evidence Act……… Assuming, as I do, that the regime of privilege is intended to ensure fairness between participants in the conduct of litigious processes, I would not give that expression a narrow meaning …..
49 The adjudication occurs in a patently adversarial setting. It is determined upon the basis of evidence presented in documentary form, and upon written submissions. …… Despite the fact that the adjudication may not ultimately determine the parties’ rights if, in a subsequent court proceeding, the parties’ entitlements are litigated, the adjudication result is enforceable at law and is binding upon the parties unless and until a subsequent court order changes that outcome. I think that the nature of adjudications is such that preserving the confidentiality of communications, made for the dominant purpose of enabling the provision of legal services to participants in the adjudication, would promote the object of fairness for and between those participants.
50 Bearing those matters in mind, I conclude that the provisions of the Act I have summarised above do authorise the adjudicator to ‘hear, receive and examine evidence’ as I would construe that expression. I therefore construe the definition of ‘Australian court’ to embrace an adjudicator under the Security of Payments Act and an adjudication as an ‘Australian proceeding’ within the meaning of s119 of the Evidence Act.

Cielo & ors v CBDA (the Brazilian National Swimming Federation)

In Cielo & ors v CBDA (the Brazilian National Swimming Federation), the Court of Arbitration for Sport was again considering the penalty to be applied in relation to athletes who registered positive anti-doping test results, where the cause was found to be an inadvertent ingesting of prohibited substances, from taking of contaminated supplements.

4 Brazilian swimmers had positive test results for Furosemide (a diuretic, on the prohibited list as a masking agent) at a Brazilian national swimming event (Maria Lenk) in May 2011. Each athlete accepted the A Test and waived the B sample analysis. The athletes had taken caffeine tablets, with the benefit of medical advice (caffeine is not a prohibited substance under the FINA Rules.) There was evidence from Mr Cielo (undisputed) that about 90% of elite male freestyle swimmers take caffeine at swimming events. The athletes, and team doctor, had taken extreme care in relation to the pharmacy, and taking of the caffeine tablets, without problem, for some months. At the Maria Lenk, in May 2011, however, all 4 had positive results. Ultimately, it was determined that the cause of the adverse test results was the contamination of the caffeine capsules by Furosemide. (There was evidence of an unusual, one-off, error, at the pharmacy.)

FINA agreed that the 2 pre-conditions for reduced penalty had been met:

  1. that the athletes had established how the Specified Substance entered their bodies;
  2. that the athletes had shown that the Specified Substance was not intended to enhance performance or mask the use of a performance enhancing substance.

The Tribunal concluded:

  1. The taking of caffeine was to be treated as a “supplement” rather than a “medication”.
  2. The degree of “fault” in this case was at the very lowest end of the spectrum contemplated by the FINA Rules/WADC. (It was difficult, the Tribunal concluded: “to see what, if anything,  else the athletes could have done reasonably or practically to avoid the positive test results”.)
  3. Under the FINA Rules/WADC, however, the defence of No Fault or Negligence was not available (see the detailed discussion of the relevant rules applying to this case).
  4. Accordingly, the Tribunal concluded the appropriate sanction to be a Warning.
  5. (In relation to 1 athlete, a previous sanction had been imposed. Rejecting an argument that a principle of proportionality ought to apply, the Tribunal imposed the minimum sanction of 1 year, and then, having regard to his waiving the B sample, exercised its discretion to start the 1 year from the date of his sample collection.)

Altain Khuder LLC v IMC Mining Inc & IMC Mining Solutions Pty Ltd [2011] VSC 1

In Altain Khuder LLC v IMC Mining Inc & IMC Mining Solutions Pty Ltd [2011] VSC 1, the Victorian Court of Appeal (Croft J, His Honour is, himself, an experienced international arbitrator) considered the procedures and principles relating to resisting enforcement on the basis of the defences or grounds for resting enforcement under the International Arbitration Act 1974 (Cth) and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ( the “New York Convention”) 1958.

WADA & FIFA v. Cyprus Football Association (CFA), Carlos Marques & ors

In WADA & FIFA v. Cyprus Football Association (CFA), Carlos Marques & ors, the Court of Arbitration for Sport was considering several appeals. A coach had administered, openly, “supplements” to his soccer players, which later proved to be contaminated. Two players later tested positive for Oxymesterone. The 2 players sought reductions to their penalty on the basis of “no significant fault or negligence”. Those 2 players also assisted in the anti-doping process, and sought a penalty reduction in relation to that assistance. The coach was given a 4 year sanction for “administering” a prohibited substance. “Other players” were heard to have taken those supplements, but were not tested. WADA sought sanctions against those “other players”, on the basis of evidence rather than tests (ie non-analytical positives). The Panel concluded:

  1. The 2 players were not entitled to a reduction of sanction, in these circumstances, on the basis of “no significant fault or negligence”. The cases all require exceptional circumstances for this reduction (and, in this case, they had been “very negligent”).
  2. The 2 players were, however, entitled to a reduction of sanction, in these circumstances, on the basis that they had “assisted” in the anti-doping process.
  3. The coach’s 4 year sanction was confirmed.

WADA had not discharged its burden of proof to the comfortable satisfaction of the Panel, in relation to the “other players” (ie non-analytical positives).