AGL Energy Limited v Hardy

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FEDERAL COURT OF AUSTRALIA

AGL Energy Limited v Hardy [2017] FCA 420

File number: VID 176 of 2017
Judge: O’CALLAGHAN J
Date of judgment: 26 April 2017
Catchwords: CONTEMPT OF COURT – search order made pursuant to r 7.43 of the Federal Court Rules 2011 (Cth) – order concerned predominantly with electronic documents – respondent refused to permit search party to enter premises – whether respondent guilty of contempt of court – whether order clear, unambiguous and capable of compliance
Legislation:

Federal Court of Australia Act1976 (Cth), s 31

Federal Court Rules 2011 (Cth), rr 7.42, 7.43, 7.45 42.02(d)
Cases cited:

Advan Investments Pty Ltd v Dean Gleeson Motor Sales Pty Ltd [2003] VSC 201

Australian Competition and Consumer Commission v ACN 117 372 915 (in liq) [2015] FCA 1441

Hurd v Zomojo Pty Ltd [2015] FCAFC 148

ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248

Kirkpatrick v Kotis (2004) 62 NSWLR 567

Sydney Medical Service Co-operative Ltd v Lakemba Medical Services Pty Ltd (No 2) [2016] FCA 1188

Universal Music Australia Pty Ltd v Sharman Networks Ltd (2006) 150 FCR 110

Biscoe P, Freezing and Search Orders: Mareva and Anton Piller Orders (2nd ed, LexisNexis Butterworths Australia, 2008)

Practice Direction (Mareva Injunctions and Anton Piller Orders) [1994] 1 WLR 1233

Date of hearing: 27 March 2017
Registry: Victoria
Division: Fair Work
National Practice Area: Employment and Industrial Relations
Category: Catchwords
Number of paragraphs: 106
Counsel for the First Prospective Applicant: Mr CJ Murdoch QC
Solicitor for the First Prospective Applicant: Minter Ellison
Counsel for the First Prospective Respondent: Mr EP White and Ms R Shann
Solicitor for the First Prospective Respondent: Slater and Gordon Lawyers
Table of Corrections
2 May 2017 In the heading to page 16 of the Annexure, the First Prospective Respondent’s street address has been redacted.

ORDERS

VID 176 of 2017
BETWEEN:

AGL ENERGY LIMITED (and others named in the Schedule)
First Prospective Applicant
AND: GREGORY THOMAS HARDY (and another named in the Schedule)
First Prospective Respondent

JUDGE:

O’CALLAGHAN J

DATE OF ORDER:

26 APRIL 2017

THE COURT ORDERS THAT:

1.Gregory Thomas Hardy is guilty of contempt of court, in that on 2 March 2017, after being served with the Search Order made by the Court on 28 February 2017, he failed to comply with paragraph 11 of that order by refusing to permit members of the Search Party to enter the Premises so that they could carry out the search and other activities referred to in the order.

2.The hearing of the interlocutory application dated 9 March 2017 be held over for a penalty hearing on 30 May 2017.

3.On or before 10 May 2017, Mr Hardy file and serve any affidavit or affidavits and any written submission on which he intends to rely in respect of penalty.

4.On or before 24 May 2017, AGL Energy Limited, AGL Loy Yang Pty Ltd and AGL Loy Yang Marketing Pty Ltd file and serve any affidavit or affidavits and any written…

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Details
Case
[2017] FCA 420
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, AGL Energy Limited sought an order for the contempt of court by Gregory Thomas Hardy. The dispute arose from Hardy's refusal to allow a search party to enter premises to execute a search order made by the Court. The search order, primarily concerning electronic documents, was issued under rule 7.43 of the Federal Court Rules 2011 (Cth). Hardy's refusal to comply with the order led to allegations of contempt. The primary legal issue the Court had to resolve was whether the terms of the search order were clear, unambiguous, and capable of compliance, and whether Hardy's refusal to permit the search party entry constituted a breach of the order. The Court also had to consider whether Hardy was aware of the order's terms and whether his actions amounted to contempt of court.

The Court found that the search order was clear and unambiguous, and capable of compliance. It noted that Hardy's refusal to allow the search party to enter the premises was not justified under any of the circumstances outlined in the order. The Court held that the order did not entitle Hardy to refuse access until he had read and understood all the documents served with the order, but rather required him to permit entry to the search party to carry out the search unless specific conditions were met. Since Hardy refused entry without justification, the Court concluded that he breached the order. The Court rejected Hardy's arguments that the order was unclear or ambiguous, finding that it left no reasonable doubt that Hardy was required to allow the search party entry. As such, Hardy was found guilty of contempt of court for his failure to comply with the search order. The Court scheduled a penalty hearing and set deadlines for the submission of affidavits and written submissions by both parties.

Orders

Orders of the court

1. Gregory Thomas Hardy is guilty of contempt of court, in that on 2 March 2017, after being served with the Search Order made by the Court on 28 February 2017, he failed to comply with paragraph 11 of that order by refusing to permit members of the Search Party to enter the Premises so that they could carry out the search and other activities referred to in the order.

2. The hearing of the interlocutory application dated 9 March 2017 be held over for a penalty hearing on 30 May 2017.

3. On or before 10 May 2017, Mr Hardy file and serve any affidavit or affidavits and any written submission on which he intends to rely in respect of penalty.

4. On or before 24 May 2017, AGL Energy Limited, AGL Loy Yang Pty Ltd and AGL Loy Yang Marketing Pty Ltd file and serve any affidavit or affidavits and any written submission on which they intend to rely in respect of penalty.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Paragraph 24 prescribed a specific objection procedure for claiming the privilege against self-incrimination or civil penalty privilege in response to a purported exercise of the powers and discretions provided for in paragraph 23: paragraph 24(a)(i), (ii). Paragraph 24 is consistent with the procedure prescribed by s 128A of the Evidence Act 1995 (Cth), which further prescribes the process for determination of a claim made in accordance with that provision. Were such an objection to have been made by Mr Hardy, paragraph 24(b) would have required him to do certain things, namely to:(1)disclose so much of the information required to be disclosed to which no objection was taken; and(2)prepare an affidavit containing so much of the information required to be disclosed to which objection was taken, and deliver it to the Court in a sealed envelope; and(3)file and serve on AGL a separate affidavit setting out the basis for the objection.ISSUES AND EVIDENCE It was common ground between the parties that in order to prove a civil contempt constituted by a breach of a court order, the moving party must prove beyond reasonable doubt that:(1)the relevant order was made by the Court;(2)the terms of the order are clear, unambiguous, and capable of compliance;(3)the order was served on the alleged contemnor; (4)the alleged contemnor had knowledge of the terms of the order; and(5)the alleged contemnor breached the terms of the order.(See Advan Investments Pty Ltd v Dean Gleeson Motor Sales Pty Ltd [2003] VSC 201; cited with approval by the Full Court in Hurd v Zomojo Pty Ltd [2015] FCAFC 148 at [28] per Besanko and Gilmour JJ (Beach J agreeing at [164]), by Flick J in Sydney Medical Service Co-operative Ltd v Lakemba Medical Services Pty Ltd (No 2) [2016] FCA 1188 at [13] and by Moshinsky J in Australian Competition and Consumer Commission v ACN 117 372 915 Pty Ltd (in liq) [2015] FCA 1441 at [51].) It was also not disputed that a person who refuses to comply with a search order is in contempt of court. Mr Hardy conceded that the search order was made and that it was served on him at about 9.00 a.m. on 2 March 2017. Items (1) and (3) above are therefore not in dispute. Mr Hardy put in issue items (2), (4), and (5). He submitted that: (1)certain terms of the search order were unclear, ambiguous and incapable of compliance;(2)the evidence did “not exclude the reasonable possibility that Mr Hardy did not know the terms of the search order – i.e. that he did not know what was required of him” (Mr Hardy’s written submissions at [52]); (3)he did not breach the search order. Mr Marquet was cross-examined by counsel for Mr Hardy. But counsel did not challenge his evidence about the circumstances in which Mr Hardy declined to allow the search to occur. Mr Marquet deposed to the following facts, set out at [47] to [57] below, each of which I am satisfied beyond reasonable doubt occurred. Shortly after 9:00 a.m. on 2 March 2017, Mr Marquet attended the premises with the other members of the search party. Mr Marquet served the order and the documents required to be served with the order on Mr Hardy. The other documents were the application for the search order filed on 27 February 2017; Mr Williams’ affidavit date 27 February 2017; the applicants’ written submissions in support of the order dated 28 February 2017; a draft originating application; the Rules of the CFMEU Mining and Energy Division; and the transcript of the hearing before me on 28 February 2017: see the affidavit of Mr Williams sworn 9 March 2017. The documents were contained in two lever arch folders. Mr Hardy invited Mr Marquet to enter the premises for the purpose of explaining the terms of the order, which he did. The other members of the search party remained outside.

Decision

Reasons for decision

Contrary to Mr Hardy’s submission, paragraph 14(b) of the order did not entitle Mr Hardy to refuse access until he had read and understood all of those documents. That subparagraph is directed squarely to Mr Hardy understanding, with the assistance of the independent lawyer, if necessary, the terms of the order, not the other documents. During the time provided for in paragraph 15, Mr Hardy was entitled to refuse entry to anyone other than the independent lawyer, for the purposes of seeking legal advice, seeking discharge or variation of the order or dealing with documents subject to legal professional privilege. Had two hours been an insufficient time for Mr Hardy to consider his position as to whether to seek discharge or variation of the order, plainly the independent lawyer was empowered by paragraph 15 to extend that time. Had the independent lawyer refused that request for some reason, Mr Hardy would well have understood that he could approach the Court to request a variation to the terms of the order accordingly, by telephoning my chambers. But an understanding of each of the documents served with the order was not a precondition to the obligation under paragraph 11 to permit entry to the search party.CONCLUSION In accordance with the terms of the order, Mr Hardy was required by paragraph 11 to allow the search party entry to the premises to carry out the search and other activities referred to in the order unless a circumstance provided for in the order entitled him to refuse. For the reasons given above, only paragraphs 13, 14 and 15 supplied bases for refusing entry to the premises. None of those paragraphs is relevant here, for reasons I have explained. Had Mr Hardy permitted entry, paragraphs 18, 19, 20 (subject to 21), 22 and/or 23 (by reference to paragraph 24) may have supplied bases for constraining search and removal. However, because he refused entry, such questions did not then arise, and they are not relevant now to the single charge of contempt in respect of Mr Hardy’s refusal to comply with paragraph 11. In any event, for the reasons I have given above, the paragraphs of the order about which Mr Hardy complains are not, in my view, unclear, ambiguous or incapable of compliance. The evidence establishes beyond reasonable doubt that Mr Hardy refused the search party entry to the premises when he had no entitlement under the order to do so. It follows that Mr Hardy breached paragraph 11 of the order.

Ratio Decidendi

Legal Principle Established

Mr Hardy’s principal submission in support of the proposition that he did not commit a contempt, by refusing to permit the search party to enter the premises so that they could carry out the search and other activities referred to in the order as required by paragraph 11 of the order, is that certain terms of the order (but not paragraph 11) are unclear, ambiguous and incapable of compliance. His other submissions – that the evidence does not exclude the reasonable possibility that he did not know the terms of the search order, and that he did not breach it – largely stand or fall on that principal submission. So much is clear from both the written and oral submissions made to the Court by counsel on Mr Hardy’s behalf.CONSIDERATIONWhether the terms of the order are clear, unambiguous, and capable of compliance There is no dispute between the parties about the applicable legal principles. Search orders, like any other injunction, “should be granted in clear and unambiguous terms which leave no room for the person to whom they are directed to wonder whether or not their future conduct falls within the scope of the injunction”: ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 at 259 per Lockhart J. Further, “the Court approaches the question of whether the order is ambiguous on the basis that the recipient is expected to try to understand it and obey it”: Kirkpatrick v Kotis (2004) 62 NSWLR 567 at 578, [55] per Campbell J. But an order will not be incapable of founding a charge of contempt “merely because it leaves a respondent with room to wonder whether future conduct falls within it. At least where the true construction of the order is one which ought fairly to have been in the contemplation of the person to whom the order was directed … the Court which entertains the charge of contempt will be required to determine that construction”: Universal Music Australia Pty Ltd v Sharman Networks Ltd (2006) 150 FCR 110 (Universal Music) at [38] per Branson J. Counsel for Mr Hardy submitted, by way of summary, that the order was unclear, ambiguous and incapable of compliance because it:(1)contained internally contradictory paragraphs; and(2)provided Mr Hardy with “important safeguards which the order state[d] he [could] assert to prevent or limit the search but provide[d] impossible means to activate them in circumstances of a search entirely focussed on electronic documents”. A number of the submissions made on Mr Hardy’s behalf in support of these propositions laboured under the misapprehension that many of the matters contemplated by the order to be done after the search party was permitted to enter the premises (something that did not occur in this case) were required to occur within the two to three hour “windows” provided for in paragraphs 3 and 15 of the order. Counsel submitted, for example, that the removal and search orders contained in paragraph 23 of the order, and the provision entitling Mr Hardy to prepare an affidavit containing information required to be disclosed to which he took objection under paragraph 24, required Mr Hardy’s compliance within “the two or three hours on the morning of [2 March 2017]”. Mr Hardy’s counsel submitted that “the practicality of compliance during the time the Court is here concerned with, is virtually nil”.