Alpass v Hession
[2017] VSC 748
•11 December 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2016 04581
| ALAN DUDLEY ALPASS (in his capacity as receiver of the law practice known as ‘Hardy’s Lawyers’) | Plaintiff |
| v | |
| ROBERT ANTHONY BRENDON HESSION | Defendant |
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JUDGE: | DERHAM AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 30 November 2017 |
DATE OF JUDGMENT: | 11 December 2017 |
CASE MAY BE CITED AS: | Alpass v Hession |
MEDIUM NEUTRAL CITATION: | [2017] VSC 748 |
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CONTEMPT OF COURT – Practice and procedure – Non-compliance with order to attend for oral examination under Order – Order not endorsed pursuant to r.66.10(3) Supreme Court (General Civil Procedure) Rules2015 – Significance of non-endorsement of Order – Necessary that formalities associated with order be strictly satisfied – Whether non-compliance with r 66.10(3) should be dispensed with – No dispensation – Whether and if so what penalty should be imposed for admitted contempt – Clifford v Middleton [1974] VR 737 739; CFMEU v Grocon (2014) VR 527; Miller v Eurovox Pty Ltd [2004] VSCA 211; Primelife Corporation Ltd v Andrejic [2003] VSC 106, referred to.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S Ginsbourg | Alpass & Associates |
| For the Defendant | Mr C P Thomson | Tony Hannebery Lawyers |
TABLE OF CONTENTS
Introduction......................................................................................................................................... 1
Background Facts............................................................................................................................... 1
Plaintiff’s submissions...................................................................................................................... 3
Defendant’s submissions.................................................................................................................. 6
Contempt principles........................................................................................................................ 10
Rule 66.10(3) indorsement.............................................................................................................. 12
Sentencing principles...................................................................................................................... 17
Consideration.................................................................................................................................... 18
Penalty.......................................................................................................................................... 21
Conclusion......................................................................................................................................... 23
HIS HONOUR:
Introduction
The plaintiff applies by summons for the punishment of the defendant for contempt of Court.[1] The contempt of Court charged against the defendant is that he failed to appear for examination on 8 March 2017 at 10:30am in breach of orders made by the Honourable Associate Justice Lansdowne on 24 November 2016 requiring the defendant to so appear.
[1]Summons filed 23 June 2017.
The plaintiff seeks orders that the defendant be committed and punished for contempt of Court, that he pay the plaintiff’s costs of this proceeding and for such other orders as the Court thinks fit.[2]
[2]By order made on 21 September 2017 pursuant to r 77.05 of the Rules, the hearing and determination of the proceeding was referred to me by the Honourable Justice J Forrest.
Background Facts
The defendant was formerly a solicitor and the principal of the law practice known as Hardy’s Lawyers (‘Hardy’s’). On 15 February 2016, the plaintiff was appointed as receiver of Hardy’s under s 341 of the Legal Profession Uniform Law Application Act 2014 (‘Uniform Law’).
At the time of the plaintiff’s appointment, there was a deficiency in Hardy’s trust account which, based on the plaintiff’s investigation and on the report of a forensic accountant, appeared to exceed $600,000.00. On 31 August 2016 the plaintiff wrote to the defendant requiring him, under s 348(1) of the Uniform Law, to provide access within 21 days, to documents and information relating to the affairs of Hardy’s as specified in the letter.[3] He received no response. On 7 October 2016 the plaintiff again wrote to the defendant requiring a response to his earlier letter within seven days.[4] He again received no response.
[3]The letter was written to the defendant’s supposed residential address at 7 Winterton Drive, Wheelers Hill. There is some evidence that suggests he may have not been living at that address at the time.
[4]Ibid.
On 24 November 2016, application was made to this Court for orders pursuant to s 349(1) of the Uniform Law. On that day Lansdowne AsJ ordered, pursuant to s 349(1) of the Uniform Law, that “Anthony Brendan Hession appear on 8 March 2017 at 10:30am in Court 3, Ground Floor, 436 Lonsdale Street, Melbourne (and on the following day, if required) for examination in relation to the regulated property of the law practice known as ‘Hardy’s Lawyers’”. The order was not indorsed as required by r 66.10(3) of Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’).
The defendant was personally served with a copy of this order on 29 November 2016 at the Pinewood Shopping Centre, Blackburn Road, Blackburn (Mt Waverley) in Victoria.[5]
[5]Affidavit of Wilhelmus Wintels, sworn 1 December 2016. The affidavit refers to the shopping centre being in Blackburn, whereas it is in Mt Waverley.
The defendant did not attend on 8 March 2017 as required by the order of Lansdowne AsJ. The matter was referred to the Common Law Division Practice Court where the Honourable Justice McMillan issued a warrant for the defendant’s arrest pursuant to r 66.06(2)(a) of the Rules.
The Sheriff executed the warrant on Friday 19 May 2017 and the defendant was brought before McMillan J on that day. Her Honour remanded the defendant into custody until further order. Her Honour listed the examination the subject of the order made by Lansdowne AsJ for hearing on Tuesday 23 May 2017. The order made by McMillan J shows that counsel for the defendant made an oral application for the defendant to be bailed pending the return date for the plaintiff’s examination. That application was refused. The examination was referred to Judicial Registrar Matthews for hearing and determination pursuant to r 84.03 of the Rules. The examination took place on 23 and 24 May 2017 before Matthews JR and was then adjourned to a date to be fixed. The result was the defendant remained in custody for about 6 days.
The summons for the defendant to be dealt with for contempt was adjourned on a number of occasions because of the illness of the defendant. The defendant filed an appearance in person on 7 August 2017.[6] Ultimately, on 19 September 2017 directions were made for the defendant to file points of defence and for the plaintiff to file and serve a written outline of submissions and a list of authorities, for the defendant to do the same and for the hearing to be listed for 30 November 2017. The defendant gave notice of appointment of a solicitor on 19 September 2017.
[6]Giving as his address 4 Llewelyn Court, Noble Park Vic 3174 and an email address for service, notwithstanding that he maintains he has been living in his motor vehicle in a car park.
At the outset of the hearing I pointed out to counsel appearing that the order of Lansdowne AsJ upon which the application for contempt depended was not indorsed as required by r 66.10(3) of the Rules. I referred the parties, for convenience, to the decision of Nettle J in Primelife Corporation Ltd v Andrejic.[7]
[7][2003] VSC 106 (‘Primelife’).
In their written outlines of submission, filed as required by orders of the Court, neither party had adverted to this requirement or the fact that the order of Lansdowne AsJ did not include the indorsement. I accordingly stood the matter down to allow counsel to consider what submissions should or could be made.
Plaintiff’s submissions
Counsel for the plaintiff submitted that I should exercise the Court’s power to dispense with compliance with r 66.10(3) of the Rules for three reasons:
(a) the defendant was an experienced solicitor and should be taken to be well aware of the consequences of non-compliance with an order of the Court;
(b) in a letter accompanying service of a copy of the order of Lansdowne AsJ it was stated, amongst other things:
Please also note that in the event you do not attend the Court in accordance with this Order then we put you on notice that we will be seeking that the Court makes an order for you to be arrested and immediately brought before the Court.[8]
(c) the seriousness of the matter the subject of the order of Lansdowne AsJ. It was submitted that the circumstances disclosed in the affidavit in support of the originating motion showed that this matter was quite distinct and different to the circumstances disclosed in the examination of a debtor which was the subject of the decision of Nettle J in the Primelife[9] decision. Moreover, the affidavit in support of the application for the examination order, which was personally served on the defendant in the car park of the Pinewood Shopping Centre, support the inference that the defendant’s failure to attend Court on 8 March 2017 was part of a continuing course of conduct which amounted to a deliberate refusal to co-operate with the receiver and not a mere momentary oversight.
[8]Exhibit WW-1 to the affidavit of Wilhelmus Wintels sworn 1 December 2016. The statement was underlined for emphasis.
[9][2003] VSC 106.
Counsel for the plaintiff addressed a number of authorities relevant to both the submission that compliance with r 66.10(3) of the Rules should be dispensed with and to the matters relevant to the alleged contempt. These included Rogerson v Tchia[10] where the Full Court of the Supreme Court of the Northern Territory found no error in the exercise of discretion by the primary judge in dispensing with compliance with the indorsement because ‘there could be no possible prejudice’ to the alleged contemnor (the appellant, who was a solicitor) by the failure.[11] He also referred to Morgan v State of Victoria[12] where the Court of Appeal reviewed the authorities relating to attachment and committal for contempt and the requirement for orders to be indorsed under r 66.10(3) of the Rules. In that case Nettle and Ashley JJA referred to and followed Justice William Kaye in Clifford vMiddleton,[13] to which I refer below, in relation to the existence of the power to dispense with the requirement of r 66.10(3) of the Rules to indorse the order.
[10](1995) 123 FLR 126.
[11]Ibid 131, 141.
[12](2008) 22 VR 237 (‘Morgan’).
[13][1974] VR 737.
The plaintiff also submitted that the contempt should be converted to a criminal contempt for two reasons. Firstly, the available evidence supports the conclusion that the breach was contumacious. The defendant failed to comply with his obligation towards the receiver until he was taken into custody. Secondly, the purpose of the contempt application in this case is to punish rather than to achieve compliance with the order.[14]
[14]See CFMEU v Grocon (2014) 47 VR 527 [144].
The plaintiff submitted the following factors are relevant to the seriousness of the offence:
(a) the defendant is, or was, a legal practitioner and should therefore be held to the highest standards of behaviour;[15]
[15]R v Witt (No 2) [2016] VSC 142 [134] (J Forrest J) (‘Witt No 2’); Legal Services Board v Forster (No 3) [2012] VSC 640 [15] (Emerton J) (‘Forster No 3’).
(b) the defendant’s failure to appear frustrated the plaintiff’s performance of his statutory role as receiver of Hardy’s;
(c) after failing to appear, the defendant made no attempt to contact the authorities for more than two months, after which he was located and taken into custody;
(d) the defendant has pleaded guilty;
(e) the defendant has already spent six days in custody (19 May to 24 May 2017) which should be taken in to account in determining the appropriate punishment;
(f) the defendant’s inability to pay a fine, as asserted in his counsel’s submission, renders a fine an inappropriate penalty.[16]
[16]LIV v Telfer [2007] VSC 535 [17]–[19] (Harper J).
The plaintiff asserted that whilst the defendant’s poor mental and physical health might be a mitigating factor,[17] there is no satisfactory evidence to substantiate the matters asserted by defendant’s counsel in his submissions, let alone to assist the Court in determining what weight to give to those matters.
[17]See for eg R v Verdins (2007) 16 VR 269.
In these circumstances, the plaintiff submitted that the appropriate penalty is a term of imprisonment to be served immediately. The plaintiff also submits that the Court should not consider itself bound by current sentencing practice to wholly suspend any terms of imprisonment. Current sentencing practice does not set boundaries on what a Court should reasonably impose as a sentence.[18] The sentences imposed in Witt No 2[19] and Forster No 3[20] were lenient, being suspended sentences. The need to denounce breaches of Court orders, and deter others from such conduct, calls for an immediate custodial sentence in this case.
[18]DPP v Dalgleish [2017] HCA 41 [82] (Kiefel CJ, Bell and Keane JJ).
[19][2016] VSC 142.
[20][2012] VSC 640.
Defendant’s submissions
Counsel for the defendant submitted that this was not an appropriate case in which to dispense with the requirement of r 66.10(3) of the Rules. The plaintiff must be taken to have known of the absence of any indorsement under that rule in the order of Lansdowne AsJ. Reference was made to the cautionary remarks of Nettle J in Primelife where it was said:[21]
It was urged on me on behalf of the plaintiff that I should exercise the power to dispense with the requirement for the indorsement, but I am not disposed to do so. In my opinion, I should follow the approach adopted by Kaye J in Clifford v Middleton.[22]Attachment proceedings being penal and affecting the liberty of the subject warrant the utmost strictness in procedure and proof. The purpose of the indorsement is to warn the party of the consequences which might befall him should he fail to perform the act directed. It is not to be dispensed with in a case like this whether or not it would have been read.
[21][2003] VSC 106 [31].
[22][1974] VR 737, 739.
The defendant also submitted that there was no evidence that the defendant had received the letters that preceded the application for his examination pursuant to s 349(1) of the Uniform Law. It was submitted that at this time the defendant was in fact living in his car and not at the address to which the letters were sent.
In his points of defence, the defendant concedes that he failed to appear as required by the order of Lansdowne AsJ on 8 March 2017 and thereby committed the contempt of Court.[23] He was bankrupt at the time, in poor health and living in his motor vehicle in a Mt Waverley car park. He admits that he was served with the summons on 29 November 2016 but in the chaos surrounding his life he forgot about having to appear in Court. He apologises for this contempt.
[23]Defence filed 13 November 2017.
His points of defence also say:
(a) when he was arrested on 19 May 2017, he was remanded into the Metropolitan Remand Centre. Whilst in that centre he developed gastroenteritis and was confined in a cell by himself;
(b) he was an inpatient of the Monash Medical Centre between 5 July and 16 August 2017 where he was treated for a left pleural effusion with a left VATS procedure complicated haemopneumothorax requiring draining by a cardiothoracic surgeon;.
(c) he has also been diagnosed with ischaemic cardiomyopathy, paroxysmal atrial flutter, peripheral neuropathy, depressive disorder, gout and sleep apnoea.
Apart from the points of defence that have been filed, copies of medical reports were tendered without objection.[24] Otherwise the defendant has filed no evidence in answer to the charge. He has given instructions to his counsel who, from the bar table, told the Court that he is still living in his motor vehicle and is in receipt of a Newstart allowance of $575 per fortnight.[25] He has unsuccessfully applied for a disability support pension. Maintaining his car and mobile phone takes much of his income. He is afraid to sleep in boarding houses because of the violence surrounding the illicit drug users who are the other tenants in such facilities. He relies on charity for much of his food. He goes to a public swimming pool or the Salvation Army to have a shower.
[24]The medical evidence is attached to an email from counsel for the defendant dated 28 November 2017 and attached letters dated 14 February 2017, 17 March 2017, 15 May 2017, 23 June 2017 and 28 July 2017 from various medical providers and a Medication List from Monash Health dated 15 August 2017. The defendant’s current medications include perindopril 2.5mg mane, furosemide 80mgbd, eplerenone 25mg mane, bisoprolol 2.5mg mane, pantoprazole 40mg nocte, thiamine 100mg daily, allopurinol 200 mg mane, escitalopram 10mg mane, oxazepan 15mg nocte and mirtazapine 30mg nocte.
[25]As a part of the plaintiff’s submissions, it was accepted that the defendant did not have the means to pay a fine.
Counsel for the defendant also referred to the factors identified by J Forrest J in Witt No 2,[26] to which I refer below. He submitted that the contempt was not intentional nor calculated to interfere with the course of justice, nor deliberately defiant. He said it would be speculative to conclude that the breach was anything more than casual, accidental or unintentional.[27] The defendant was in poor health and it was submitted from the bar table, without there being any evidence, that when he received the summons (served on him in the car park at the Pinewood Shopping Centre)[28] he put the summons in the pouch behind the front seat of his car and, in effect, forgot about it. His counsel acknowledges on his behalf that he should have answered the summons but at the time he was fully occupied in trying to survive.
[26][2016] VSC 142.
[27]Referring to the observations in CFMEU v Grocon (2014) VR 527 [140].
[28]Affidavit of Wilhelmus Wintels sworn 1 December 2016 [1].
Counsel for the defendant also submitted that although he may have still held a practising certificate in March 2017, he was bankrupt and living in his car. He concedes that whilst lawyers owe a higher duty to the Court than members of the general public, his case can be distinguished from those of Witt No 2[29] and Forster No 3.[30] They were solicitors who sent contemptuous emails in the course of litigation.
[29][2016] VSC 142.
[30][2012] VSC 640.
It was also submitted that the contempt was unintentional in nature and in its effect it merely delayed the conduct of the examination the subject of the order by about 10 weeks. It otherwise did not interfere with the course of the administration of justice.
Counsel for the defendant referred especially to the poor mental and physical health of the defendant at or about the time for compliance with the order of Lansdowne AsJ. He referred to a letter from Dr Melita Kenealy, Haematologist of the Cabrini Haematology and Oncology Centre, dated 14 February 2017. He submitted that the defendant’s mental and physical condition at that time gave insight into his state of mind just before the contempt. The diagnosis of the defendant in that letter is:
1.MPN, unclassifiable[31] – persistent basophilia and new thrombocytosis with molecular abnormalities, for monitoring.
2.Significant cardiomyopathy, past ETOH abuse and renal impairment.[32]
3.Depression and significant social and financial issues.
[31]Probably a reference to myeloproliferative neoplasms.
[32]ETOH is an acronym for ethyl alcohol. ETOH abuse is shorthand for alcohol abuse.
The text of the letter is also, counsel for the defendant submitted, revealing:
Robert is really struggling socially. His marriage has broken up and he tells me he has been living out of his car the last few months. I am not sure of all the underlying details but that is certainly a major concern for his mental and general health. He has lost an enormous amount of weight. This may have stabilised. He is taking Zoloft for depression and he tells me he has seen a psychiatrist but he was fairly fragile today. He tells me he has had no more infections. I do not think he is eating well and I have encouraged him to take a multivitamin to supplement.
He has a new thrombocytosis with a platelet count of 742 and a persistent basophilia. His haemoglobin is 118 which is a little lower than previous. He continues on Prodaxa which I am comfortable with and he does not look iron deficient with an NCV of 89 but this will also need to be monitored.
Nine days after the contempt, on 17 March 2017 the defendant saw a cardiologist, Dr Srivastava who detailed eight different health issues. These included non‑ischaemic dilated cardiomyopathy, paroxysmal atrial flutter, hypertension, dyslipidaemia and other conditions. It was submitted by counsel for the defendant that he was clearly distracted by the significant health and mental issues in his life and that bears upon his culpability.
As to general and specific deterrence, counsel submitted that general deterrence has less significance in this case because of the defendant’s depression and other serious health issues. He is not a suitable vehicle for making an example to others. Specific deterrence is of little relevance because of his acceptance that he committed a contempt of Court, the six days that he was remanded in custody after his arrest and the fact that he plainly has taken very seriously the application by the plaintiff to punish him for his contempt. He has no prior criminal convictions of any kind that have been cited to the Court. He lives in what the defendant’s counsel submitted were pathetic circumstances. His marriage is over as is his career and his health is deplorable. He is a bankrupt and his only assets are an old car and a phone. He apologises humbly to the Court. His plea of guilty indicates remorse and should be taken into account as a mitigating factor.
His time in custody should be a sufficient denunciation of the contempt. It is almost nine months since the contempt was committed. At the time of the hearing the defendant was in the Dandenong Hospital and his counsel informed the Court that he had pneumonia. He has committed no other offences since the contempt.
The defendant throws himself upon the mercy of the Court, submits that he has been punished sufficiently by his incarceration between 19 May 2017 and 24 May 2017 and is not in a position to pay the costs that might be ordered against him.
Contempt principles
Part 3 of Order 75 sets out the procedure for an application to deal with a person for contempt of Court. Rule 75.06 of the Rules provides that where a contempt is committed by a party in relation to a proceeding in the court the application shall be made by summons in the proceeding, as has occurred in this case.
Rule 66.06 of the Rules provides that where a person defaults in attendance in compliance with an order of the Court for the purpose of giving evidence or for the production of a document, or for any other purpose, the Court may make an order for the issue of a warrant to the Sheriff for the arrest of the person, and for his production before the Court, for the persons detention in custody in the meantime, and for the payment of costs. The defendant was arrested by the Sheriff pursuant to such a warrant on 19 May 2017. He remained in custody for 6 days.
Part 4 of Order 75 of the Rules applies where a respondent is guilty of contempt of Court. By r 75.11(1) of the Rules, where the respondent is a natural person the Court may punish for contempt by committal for prison or fine or both. Further, when the Court imposes a fine, it may commit, or further commit, the respondent to prison until the fine is paid (r 75.11(3)) and the Court may make an order for punishment on terms, including a suspension of punishment (r 75.11(4)). Thus the Court has wide powers. It may imprison (or impose a suspended sentence) or fine a contemnor.[33]
[33]Scott v Evia [2007] VSC 15 [45]-[50], [70]; Grocon v CFMEU (No.2) [2014] VSC 134 [102]; Witt No 2 [2016] VSC 142 [88]–[89].
In a civil contempt case, the Court is required to assess whether the impugned conduct had the capacity to interfere with, or obstruct, the proper administration of justice in this Court.[34] A contempt of court may be committed by a party acting in a way which may frustrate the administration of justice. Despite being civil in nature, the onus is on the moving party to prove the charges made against the defendant beyond reasonable doubt.[35] It is not necessary to prove that the defendant intended to interfere, specifically, with the administration of justice; rather, it is sufficient to establish that he deliberately and voluntarily intended to commit the acts or omissions alleged to constitute the contempt.[36]
[34]Victoria v Australian Building Construction Employees’ and Builders Labourers’ Federation (1982) 152 CLR 25; R v Witt [2016] VSC 19 [44] (‘Witt No 1’).
[35]Witham v Holloway (1995) 183 CLR 525; Talacko v Talacko [2009] VSC 387; Grocon Constructors (Victoria) Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] VSC 275; Witt No 1 [2016] VSC 19 [45].
[36]Witt No 1 [2016] VSC 19 [46].
In relation to the contention by the plaintiff that the defendant should be dealt with for criminal contempt, there was no issue that a convenient summary of the grounds for doing so are as set out in the reasons of the Court of Appeal in CFMEU v Grocon:[37]
The common law has for centuries recognised a distinction between civil and criminal contempt in the context of breach of court orders.[38] Circumstances have been identified which have led to what would otherwise be a civil contempt being treated as a criminal contempt. Initially, focus was placed upon the circumstances of the breach. If it was both deliberate and contumacious, it would be a criminal contempt. More recently, though not without criticism, a second circumstance has been identified — that is, where the purpose or object of the contempt charge is to punish the alleged contemnor, rather than being to achieve compliance with the court’s order.
[37] (2014) 47 VR 527 [144].
[38]In Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98, 106, the plurality traced the distinction back to the 17th century, and noted that it had been repeatedly recognised in judgments of the High Court.
Although the categories of contempt are not closed, the Court of Appeal in Morgan[39] identified a number of established categories, including disobedience to a judgment or order requiring a person to do any act.
[39](2008) 22 VR 237 [110].
Rule 66.10(3) indorsement
Rule 66.10(1) of the Rules provides that a judgment shall not be enforced by committal or sequestration unless a copy of the judgment is served personally on the person bound and if the judgment requires the person bound to do an act within a fixed time, the copy of the judgment is so served a reasonable time before that time expires.[40]
[40]Rule 66.01 defines judgment to include order.
Rule 66.10(3) of the Rules then provides that a copy of the judgment ‘served under this Rule’ shall be indorsed with a notice, naming the person served, that the person served is liable to imprisonment or to sequestration of property if–
(a) where the judgment requires the person bound to do an act within a fixed time the person bound refuses or neglects to do the act within that time; or
(b) where the judgment requires the person bound to abstain from doing an act, the person disobeys the judgment.
Thus the Rules require the presence of an indorsement pointing out the serious potential consequences that may follow a breach of an order of the kind present here in order, amongst other things, to emphasize the seriousness with which such conduct can be expected to be viewed, and, specifically, that a sentence of imprisonment or the sequestration of property may follow.[41]
[41]Miller v Eurovox Pty Ltd [2004] VSCA 211 [30] (Vincent JJA, Batt and Buchanan JJA agreeing) (‘Miller v Eurovox’).
In CFMEU v Grocon, the Court of Appeal said of the requirement for the indorsement:[42]
It has long been recognised that a party will not be attached for disobedience of a mandatory order unless that party has been served with a copy containing the required endorsement. That is because attachment proceedings, being penal and affecting the liberty of the subject, are of a criminal character. Accordingly, the utmost strictness in procedure and proof is demanded.[43]
[42](2014) 47 VR 527 [307].
[43]Clifford v Middleton [1974] VR 737, 739 (Kaye J); Re Bramblevale Ltd [1970] Ch 128.
In Clifford vMiddleton,[44] Justice William Kaye reviewed a number of authorities regarding proceedings for attachment and said:
Attachment proceedings, being penal and affecting the liberty of the subject, are of a criminal character, so that the utmost strictness in procedure and proof is demanded… An application to attach a party arising out of disobedience of the Court’s order which, if it requires him to perform an act, must be endorsed with a memorandum in the form or to the effect prescribed…The purpose of the endorsement is to warn the party of the consequences which might befall him should he fail to perform the act directed. It follows that a party will not be attached for disobedience of a mandatory order unless he has been served with a copy of the order, although personal service may be dispensed with if it is shown that he has evaded service…[45]
In my opinion, the power to relieve a party from the consequences of non- compliance with the Rules of the Court where the liberty of the subject is in jeopardy should not be exercised unless the evidence shows that the requirements of and purpose for the particular rule have been fulfilled in a manner otherwise than in the form provided.”[46] (Citations and footnotes omitted.)
[44][1974] VR 737.
[45]Ibid 739.
[46]Ibid 741; cited with approval by Vincent JA in Miller v Eurovox [2004] VSCA 211 [32]–[33], who went on to state ‘Whatever may be the theoretical differences between proceedings for attachment and those for committal for contempt of court, they can have no practical consequence in the present context’.
In Primelife,[47] Nettle J had before him an application pursuant to rule 75.05 of the Rules for orders for the punishment of Zlatko Andrejic for contempt of court. The contempt charged was a failure to comply with an order that he attend to be examined as to the means available to him to satisfy a judgment for costs previously given in the proceeding in favour of the plaintiff. One of the defences was that the order was not indorsed in accordance with rule 66.10(3) of the Rules, so Andrejic’s failure to comply with the order could not be visited with committal or sequestration.[48]
[47][2003] VSC 106.
[48]Ibid [28].
Nettle J applied the approach of Justice William Kaye in Clifford vMiddleton,[49] and concluded that the requirement for the indorsement ‘is not to be dispensed with in a case like this whether or not it would have been read’.[50] He went on to consider whether it was appropriate to impose any other penalty or sanction on the Andrejic for his failure to comply with the order. He said:[51]
The court has power to impose a fine for contempt of court in the case of a civil contempt, if it is thought appropriate to do so.[52] But it is said in Williams Civil Procedure in Victoria that a fine may not be imposed if the order served is not indorsed in accordance with Rule 66.10(3).[53] Although the rule does not refer to fines, and it would appear that the sanctions of committal and fine are used in contradistinction in Rule 75.11 of the Rules, the thought seems to be that there is no power to fine unless there is power to commit. Hence, if committal is prohibited by Rule 66.10(3), so too must be the imposition of a fine. …
As a matter of fairness that view has a degree of appeal about it. It is difficult to see why a subject should any more readily be subjected to a fine than to committal or sequestration without the warning for which Rule 66.10(3) provides. But a different view of the matter has been taken in New South Wales and in the Federal Court[54] and I think that I should follow it. With some diffidence I conclude that there is power to fine even if an order has not been indorsed in accordance with the rule.
[49][1974] VR 737.
[50][2003] VSC 106 [31].
[51]Ibid [34]–[35].
[52]Phonographic Performance Ltd v Amusement Caterers (Peckham) Ltd [1964] 1 Ch 195 at p.201, (per Cross J), Australian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at p.101
[53]Williams, Civil Procedure in Victoria [66.01.55].
[54]See Windsurfing Inc v Sailboards Pty Ltd (1986) 19 FCR 110 113 (Burchett J) and Bourke ShireCouncil v Dwyer (1993) 79 LGERA 185 186 (Talbot J).
In Miller v Eurovox, the Court of Appeal referred to these observations and added:
Whilst his Honour’s concern about the possible unfairness of this approach is understandable, it is apparent, in my view, that a clear distinction is made in the Rules between the penalties of committal and sequestration on the one hand, and the imposition of a fine on the other. Order 66.10 is applicable only to the enforcement of orders by sequestration or committal. Under Order 75.11 contempt may be punished, in the case of a natural person, by committal to prison or a fine or both. It does not seem to me that the absence of the endorsement required, if the order is to be enforced by possible imprisonment, would remove the power of the Court to impose a fine.[55]
[55][2004] VSCA 211 [38] (Vincent JA).
It is thus clear that in Victoria the Court may impose a fine pursuant to r 75.11 of the Rules even where the indorsement on the order required by r 66.10(3) of the Rules is lacking.
The question then is whether I should dispense with the requirement for the indorsement as submitted by the plaintiff. The grounds advanced in support of dispensation were threefold. First, that the defendant was an experienced solicitor and should be taken to be well aware of the consequences of non-compliance with an order of the Court; second, in the letter accompanying service of a copy of the order of Lansdowne AsJ there was a warning; and third, the seriousness of the matter the subject of the order of Lansdowne AsJ and the submission that the documents served on him support inference that he deliberately refused to attend the examination the subject of the Court’s order.
The Court’s approach to any dispensation of the requirement for the indorsement must start with an appreciation of the seriousness of proceedings for contempt. They are of criminal character and being penal may affect the liberty of the subject. They require the utmost strictness in procedure and proof. This means that a dispensation from the requirement for the indorsement requires admissible evidence that establishes beyond a reasonable doubt that the defendant was well aware of his obligations under the order and the consequences of breaching it. The Court of Appeal noted in Morgan[56] that any judge asked to exercise the power should hasten slowly, and bear in mind that committal is a technical matter and because it affects the liberty of the subject, the rules must be strictly obeyed. Their Honours went on:
Compliance may not be waived unless the judge is satisfied beyond reasonable doubt by admissible evidence that the person charged with the order was well aware of his or her obligations under the order and the consequences of breaching it. Even then, the judge is not bound to waive compliance and, ordinarily, it will require something more to persuade him or her that justice requires dispensing with strict compliance.
[56](2008) 22 VR 237 [132] (Nettle and Ashley JJA).
The three matters advanced by the plaintiff to support dispensation with the requirement to indorse the order, as required by r 66.10(3) of the Rules, do not in my opinion satisfy the requirement for proof beyond a reasonable doubt.
The only evidence as to the experience of the defendant is in the affidavits submitted to the Court in support of the order for his examination. It appears that –
(a) the defendant had been, at the time of the service of the order, a sole practitioner of Hardy’s from 1 September 1997 to 31 October 2013;
(b) Hardy’s areas of practice were family law, estates and conveyancing;
(c) The defendant was made bankrupt in November 2013 and on 30 June 2014 another solicitor with a full practicing certificate with trust account authorisation became the sole practitioner of Hardy’s.
Apart from these matters, there is no evidence as to his experience or knowledge of the consequences of non-compliance with orders of the Court of this kind. It is not clear when the defendant ceased to work in the law practice of Hardy’s. But the clear inference is that it was a considerable time before the order was made. There is medical evidence, on the other hand, that the defendant’s mental and physical health at the time of service of the order was seriously and materially adversely affected and that he was living (or sleeping) in his motor vehicle in a car park.
Although it is open to conclude that as a solicitor and officer of the Court, the defendant should have known, or could be taken to know, the potential consequences of non-compliance with the order, as Justice Angel apparently did in Rogerson v Tchia at first instance,[57] that by itself is not a sufficient basis to establish proof beyond a reasonable doubt so as to dispense with the indorsement requirement in the circumstances of this case.
[57]See Rogerson v Tchia (1995) 123 FLR 126, 131.
The second ground for dispensation is the warning in the letter accompanying service of the order. That warning is of a different character from the indorsement. The letter provided only a warning that in the event the defendant did not attend the Court in accordance with the Order, then the plaintiff will seek an order for the defendant to be arrested and immediately brought before the Court. That happened and was done pursuant to the provisions of r 66.06(2) of the Rules. It is quite distinct from the indorsement required by r 66.10(3)(a) of the Rules.
The third ground is the seriousness of the matter the subject of the examination, and the notice that the defendant had about the subject matter of the examination from the affidavit of the plaintiff served on him in November 2016. In particular, that a deficiency in the trust account of Hardy’s of over $600,000.00 had been identified. Clearly obtaining information as to the deficiency is a matter of great importance to the clients of the firm affected and to the administration of justice. It also provides some, albeit limited, support for an inference that he knew of the subject of the examination and deliberately avoided it. In this regard it is somewhat equivocal, however, because having lost his law practice, his solvency and his place of living, he must have known he was facing legal trouble of some kind. These matters do not, to my mind, excuse the failure to indorse the order with the warning required by r 66.10(3) of the Rules. What it does is provide a reason for punishment once punishment is otherwise warranted.
For these reasons I consider that there is not a sufficient basis to exercise the discretion to dispense with the requirement for the endorsement under r 66.10(3) of the Rules.
If I am wrong in this conclusion, however, for the reasons which follow I consider that punishment by imprisonment is not warranted in this case in any event.
Sentencing principles
The principles applicable to any sentence of the defendant for contempt were not in dispute. In Witt No 2, J Forrest J summarised the principles relating to sentencing for contempt in the following terms:[58]
[58][2016] VSC 142 [92]–[93]; See also the matters identified by Osborn J in DPP v Johnson [2002] VSC 583 and Forster No 3 [2012] VSC 620 [9] (Emerton J).
It is accepted that the Sentencing Act 1991 (Vic) does not apply to the imposition of penalty for a contempt of court.[59] However, as a matter of common sense, the relevant principles for sentencing (including those laid down by the Sentencing Act) should be taken into account, where relevant, to the imposition of a penalty.[60]
[59]Varnavides v VCAT (2005) 12 VR 1 [17]–[18].
[60]Grocon v CFMEU (No 2) [2014] VSC 134 [77]–[78].
There are a number of decisions of this Court and the Federal Court dealing with the imposition of penalties for contempt. From those cases, the following are the relevant considerations:
·the nature and circumstances of the contempt (including the objective seriousness of the contempt);
·the effect of the contempt on the administration of justice;
·the contemnor’s culpability as judged by his or her state of mind and intention at the time of the contempt;
·general and specific deterrence;
·the previous good character of the contemnor (including the absence or presence of a prior conviction for contempt;
·the contemnor’s personal circumstances and financial means;
·whether the contemnor has exhibited contrition and made an apology;
·denunciation of the contempt; and
·the passage of time since the occurrence of the contempt.[61]
[61]See DPP v Johnson [2002] VSC 583 [55]–[60]; R v Age Co Ltd [2008] VSC 305 [22]; Alfred v CFMEU (No 2) [2011] FCA 557 [14]; Bovis Lend Lease Pty Ltd v CFMEU (No 2) [2009] FCA 650; Grocon v CFMEU (No 2) [2014] VSC 134 [77]–[78].
Section 5 of the Sentencing Act 1991 sets out sentencing guidelines. It lists the only purposes for which sentences may be imposed, including, most relevantly to this matter, to punish the offender to an extent and in a manner which is just in all the circumstances, to deter the offender or other persons from committing offences of the same or similar character and to manifest the denunciation by the Court of the type of conduct in which the offender engaged.
Consideration
The defendant has pleaded guilty to the charge of contempt, in the sense that he concedes that he failed to appear as required by the order of Lansdowne AsJ on 8 March 2017 and thereby committed a contempt of Court. That means that he concedes that his failure to abide the order was ‘wilful’. That in turn means that he deliberately and voluntarily intended to commit the acts or omissions alleged to constitute the contempt, namely failing to appear to be examined as ordered.
Despite this somewhat inevitable logic, the defendant points to material, unsupported by affidavit, of the circumstances in which he failed to attend to be examined as ordered which amount to a plea of negligence or carelessness rather than wilfulness. The material that has been admitted into evidence (without objection) which supports this, rather than proving it, is the medical evidence submitted and the fact that the defendant was sleeping in his car and was bankrupt.[62] Having regard, however, to the admission made by the defendant in his defence, there should be a finding that the defendant wilfully disobeyed the order of the Court. Nevertheless, the circumstances of his medical condition and living conditions are relevant to his culpability because, despite the absence of direct evidence, the strong inference is that his state of mind and intention at the time of the contempt were redolent of carelessness brought about by ill health and a focus on survival in difficult circumstances.
[62]Counsel for the plaintiff took no issue with the fact that the defendant was living, or sleeping, in his motor vehicle: Transcript, 30 November 2017, p. 5.
There are matters of some importance to the submission by the plaintiff that that the contempt should be converted to a criminal contempt. First, the charge as formulated does not allege that the breach of the Court’s order had been contumacious. Second, the paucity of evidence as to the defendant’s intention.
The plaintiff contended that the available evidence supports the conclusion that the breach was contumacious. That evidence was limited to two facts, first, his failure to comply with the order and, second, his subsequent arrest. In addition, it was said to be appropriate to convert the charge to a charge of criminal contempt because its purpose is to punish rather than to achieve compliance with the order.[63] There is, however, no evidence that his contempt was deliberately defiant or anything other than casual, accidental or unintentional. There is no evidence in this case of a ‘perverse obstinate resistance to authority’[64] or ‘a conscious defiance of the court’s authority’.[65] Nor can it be concluded from the evidence that the defendant not only disobeyed a Court’s order, but did so in a deliberately defiant way.[66]
[63]CFMEU v Grocon (2014) 47 VR 527 [144] (Ashley, Redlich and Weinberg JJA).
[64]Ibid [149]; Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1985) 9 FCR 194, 207 (Smithers and Northrop JJ).
[65]Mosman Municipal Council v Kelly (No 3) (2009) 167 LGERA 91, 110 [72]; CFMEU v Grocon (2014) 47 VR 527 [152].
[66]Australian Consolidated Press vMorgan, (1965) 112 CLR 483, 502; CFMEU v Grocon(2014) 47 VR 527 [156].
By the same token, the defendant has not supported his counsels submissions from the Bar table with any evidence other than medical evidence and the fact that he is bankrupt and living in his car. Of course he is not obliged, and cannot be compelled, to give evidence and his failure to do so must not be used against him. Moreover, there is no place for a Jones v Dunkel[67] inference.[68] But apart from inferences of the kind I have already mentioned, and the concession by the plaintiff that the defendant did not have the means to pay a fine, there is no direct evidence of the other matters that were put in mitigation, such as his income and other living conditions. The absence of evidence to support these submissions is not, however, a matter of great moment in the context of this case, having regard to the medical evidence to which I have referred.
[67](1959) 101 CLR 298.
[68]CFMEU v Grocon (2014) 47 VR 527 [231].
It is self-evident that the plaintiff pursues the defendant in order to punish him. If it is right to conclude that, regardless of the quality of the contemnor’s conduct, the charge is criminal because its purpose or object is to punish and not to coerce the contemnor, then I refer to the observations of the Court of Appeal in CFMEU v Grocon:[69]
The observations made by the plurality of the High Court in Mudginberri (HC), about the purpose of punishment as a basis for distinguishing between a civil and a criminal contempt, draw attention to the punishments which are available in such a case. Irrespective of the extent to which the distinction between civil and criminal contempt constituted by a breach of court orders remains alive, it is now tolerably clear that the types of punishment available for civil and criminal contempts are broadly the same. Certainly, imprisonment can be ordered for civil contempt, albeit, so it is said, not as a punishment, but remedially, by coercing the defendant to do what he or she has refused to do.[70] As has been seen, Mudginberri (HC) held that a civil contempt involving conduct that is wilful, albeit not contumacious, can be visited with a fine, as well as sequestration. In that sense, contempt of court, both civil and criminal, is a ‘distinctive offence attracting remedies which are sui generis …’.[71]
[69](2014) 47 VR 527 [170].
[70]Australian Consolidated Press Ltd vMorgan (1965) 112 CLR 483, 499–500 (Windeyer J).
[71]Mudginberri (HC) (1986) 161 CLR 98, 115, citing Morris v Crown Office [1970] 2 QB 114, 129.
The Court in CFMEU v Grocon[72] also pointed out that r 75.11 of the Rules permits punishment for contempt by committal to prison or fine or both, but the requirements of r 66.10(3) of the Rules have the effect of excluding committal in the absence of the indorsement required by that rule. They then noted:[73]
Although those modes of potential punishment for civil and criminal contempts are the same, two points must be made. First, and importantly, conviction has consistently been held to be available in the case of criminal — but not civil — contempts. That shows a persisting difference in the treatment of civil and criminal contempts constituted by breach of court orders. Second, a finding of criminal contempt is more likely to attract imprisonment and highly likely to result in more severe punishment.[74]
[72](2014) 47 VR 527.
[73]CFMEU v Grocon (2014) 47 VR 527 [173].
[74]Australian Consolidated Press Ltd vMorgan (1965) 112 CLR 483; Vaysman v Deckers Outdoor Corporation Inc (2011) 276 ALR 596, 640 [177]; Jones vAustralian Competition and Consumer Commission (2010) 189 FCR 390.
I have already concluded that I should not dispense with the requirement for the Court’s order to be indorsed as required by r 66.10(3) of the Rules. The absence of that indorsement means that no committal to prison is available. But, as I have said, even if the exercise of my discretion to refuse to give that dispensation has miscarried, this is not a case where it is appropriate to commit the defendant to prison for his admitted contempt, whether the contempt be considered civil or criminal.
Further, considering the matter as if a dispensation from compliance with r 66.10(3) had been given, in my view, having regard to the matters referred to above, it is not appropriate to ‘convert’ the charge into a charge of criminal contempt for several reasons. First, because the charge on which the defendant is brought before the Court is not expressed to be such a charge. Second, because there is no evidence that the defendant’s disobedience to the Court’s order was contumacious. Third, because this is not a case where the defendant should be punished further than has been the case already.
Penalty
There are a number of circumstances that are particularly relevant to any consideration of penalty in this case. First, insofar as the aim of contempt sanctions in civil proceedings is coercive or remedial, there is no longer need for coercion for the defendant to comply with the order of Lansdowne AsJ.[75] The warrant of arrest issued by McMillan J achieved that objective. Second, the objective seriousness of the offence is mitigated by the defendant’s medical conditions and living circumstances at the time of the contempt and since. Third, as counsel for the defendant submitted, specific deterrence is of little relevance in the circumstances. This is particularly because of his acceptance that he committed a contempt of Court, the six days that he was remanded in custody after his arrest and the fact that he has taken very seriously the application by the plaintiff to punish him for his contempt. In short, there is no need for specific deterrence. Whatever the situation before the arrest, since then, or at least since the plaintiff issued the summons charging the defendant with contempt, the defendant has responded to the Court’s processes with reasonable diligence, having regard to his medical problems.
[75][2003] VSC 106 [32]–[33].
Fourth, general deterrence has less significance in this case because of the defendant’s serious health issues. There is no dispute that he lives in pathetic circumstances. His marriage is over as is his career and his health is deplorable. He is a bankrupt and his only assets are said to be an old car and a phone. Fifth, he has no prior criminal convictions of any kind that have been cited to the Court. Sixth, his plea of guilty indicates remorse and he apologises humbly to the Court. These should be taken into account as mitigating factors.
On the other side of the ledger are a number of factors. First, the failure of the defendant to attend the examination when ordered, and the need for the plaintiff to seek and obtain a warrant for his arrest, is likely to have frustrated the plaintiff’s performance of his statutory role as receiver of Hardy’s. There is no particular evidence given of the effect this has had on the Receivership, but it is open to me to conclude that it has caused a waste of time and expense.
Second, the defendant is, or was, a legal practitioner and should therefore be held to the highest standards of behaviour. Third, after failing to appear, the defendant made no attempt to contact the plaintiff for more than two months, after which he was located and taken into custody.
With respect to the last matter, the failure to contact the plaintiff, nothing of any detail is known as to what took place during this period. There is no evidence as to the attempts by the Sheriff to locate the defendant and execute the warrant for his arrest. The private investigator engaged by the plaintiff to serve the defendant, twice, gave no evidence suggesting any difficulty in finding the defendant, and service on both occasions[76] was made in the same car park in Mt Waverley (called Blackburn in the affidavits of service). There is no evidence one way or the other as to any attempt by either party to contact the other.
[76]The Originating Motion, Summons and supporting affidavit on 16 November 2016. The order of 24 November 2016 on 29 November 2016.
Conclusion
I find the charge of civil contempt proven. Because it is not appropriate to ‘convert’ the charge to a criminal contempt, there will be no conviction of the defendant for criminal contempt.
In my view no further punishment of the defendant is warranted in this case. It is of considerable significance to the assessment of whether any penalty should be imposed that the defendant spent six days in custody after execution of the arrest warrant issued by McMillan J. Although this incarceration was not intended as a punishment, but was by way of coercion - to force his attendance at the examination - it undoubtedly had the effect of a punishment. In my view, specific and general deterrence is of no relevance in the present case, for the reasons given above. Then there are these other factors -
(a) the defendant has no known prior convictions;
(b) his personal circumstances and financial means are clearly dismal;
(c) the contempt was committed in March 2017 at a time when the defendant suffered many physical and mental health issues (described above) and it is apparent from the medical reports that he continues to suffer from these conditions;
(d) he admits his contempt and apologises humbly to the Court;
(e) he has no means to pay any fine.
In these circumstances, the pressing of the charge of contempt by the plaintiff is surprising. A desire to punish and make an example of the defendant in the context of the facts of this case seems to me to have been misplaced. The defendant has been punished enough.
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