Anderson v Hassett

[2007] NSWSC 1310

CITATION:	Anderson v Hassett [2007] NSWSC 1310 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	9 & 16 November 2007
JUDGMENT DATE :	19 November 2007
JURISDICTION:	Equity Division Expedition List
JUDGMENT OF:	Brereton J
DECISION:	Application dealt with pursuant to UCPR r 40.7(4) notwithstanding that order with notice to party bound endorsed had not been served personally. Further service of motion dispensed with. Held, it is not necessary to establish that any failure to comply with an order was accompanied by a specific intention to disobey the court’s order; failure to comply is contempt unless it is casual, accidental or unintentional. Defendant adjudged guilty of contempt.
CATCHWORDS:	CONTEMPT – Civil contempt – failure to comply with order of court for production of documents – where defendant present in court when order made – personal service of order with notice to party bound endorsed dispensed with – where contempt motion served on defendant’s receptionist – where no objection to sufficiency of service – personal service of motion dispensed with – whether plaintiff must prove specific intent to disobey order of court – whether breaches established – whether no more than casual, accidental or unintentional
LEGISLATION CITED:	(NSW) Civil Procedure Act, s 14 (NSW) Supreme Court Rules, Pt 55 r 9 (NSW) Uniform Civil Procedure Rules 2005, r 40.7(1), (3), (4)
CASES CITED:	Athens v Randwick City Council (2005) 64 NSWLR 58; [2005] NSWCA 317 Attorney-General v Butterworth [1963] 1 QB 696 Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98; 66 ALR 577 Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 Farahbakht v Midas Australia Pty Ltd [2006] NSWSC 1322 Kirkpatrick v Kotsis [2004] NSWSC 1248 Lade & Co Pty Ltd v Black [2006] 2 QdR 531 Lane v Registrar of the Supreme Court of New South Wales (1981) 148 CLR 245 Meissner v The Queen (1995) 184 CLR 132 Re Mileage Conference Group of the Tyre Manufacturers’ Conference Ltd’s Agreement [1966] 1 WLR 1137; [1966] 2 All ER 849 R v Rogerson, Nowytarger & Paltos (1992) 174 CLR 268 Registrar of the Supreme Court, Equity Division v McPherson [1980] 1 NSWLR 688 Seldon v Wilde [1911] 1 KB 701 Stancomb v Trowbridge Urban District Council [1910] 2 Ch 190 Witham v Holloway (1995) 183 CLR 525
PARTIES:	Thomas James Anderson (plaintiff) James Trevor Hassett (defendant)
FILE NUMBER(S):	SC 1331/06
COUNSEL:	G A Rich (plaintiff) M R Lawson (defendant)
SOLICITORS:	Malcolm McDonald & Co (plaintiff) Hassetts Solicitors (defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EXPEDITION LIST

BRERETON J

Monday, 19 November 2007

1331/06 Thomas James Anderson v James Trevor Hassett

JUDGMENT

1 HIS HONOUR: The defendant James Trevor Hassett, a solicitor, is the executor of the estate of the late Thomas Walter Malcolm Anderson, who died on 5 January 1983 leaving a Will dated 4 May 1982 probate of which was granted to Mr Hassett on 13 May 1983. The plaintiff Thomas James Anderson, a grandson of the deceased, is a beneficiary of the estate, the only undistributed asset of which is real property at 24 Nineteenth Street, Warragamba. On 21 June 2006, Windeyer J made orders that an account be taken, by a Registrar, of all moneys received and disbursed by Mr Hassett in respect of the property comprised in the estate and his dealings and transactions therewith, and:

3. Order that the defendant file and serve within 28 days an account verified by affidavit setting out full particulars including assets distributed and undistributed in relation to the estate and including the following:

(a) all payments disbursed by the defendant;

(b) all moneys received;

(c) all assets and liabilities in respect of the estate;

(d) all moneys obtained and disbursed by the defendant in respect to the mortgage to Community First Credit Union registered number 2361971 (“the mortgage”).

4. Order that the defendant produce to the court within 35 days all invoices, receipts, bank statements, passbooks, mortgage documents, correspondence and all other documents produced or acquired in relation to:


(a) all property or assets of the estate; and

(b) all payments made by or on behalf of the estate; and

(c) all liabilities of the estate; and

(d) the mortgage.


…

9. Grant leave to approach either the Registrar in Probate or the Registrar in Equity to ascertain where the earliest date for accounts could be obtained and then to apply to the appropriate Registrar for directions.

…

11. Note the undertaking given to the Court by the defendant that after the taking of accounts he will transfer the property known as 24 Nineteenth Street, Warragamba as to one half to the plaintiff and as to the other half to the legal personal representative of the late Leone Veronica Anderson subject to any claim by him that may be determined as a result of the taking of accounts in relation to expenses properly paid against the property.

2 By notice of motion filed on 2 July 2007, the plaintiff charges that Mr Hassett is guilty of contempt of court, in that he has failed and/or refused to comply with order 4. There is some ambiguity in the motion as to whether it is brought pursuant to (NSW) Supreme Court Rules 1970, Pt 55 (which relates to criminal contempt), or (NSW) Uniform Civil Procedure Rules 2005, Pt 40 (which relates to civil contempt). Mr Lawson, who appeared for Mr Hassett, submitted that the charge was one of civil contempt, the allegation being one of failure to comply with an order of the Court, and the charge not alleging wilful or contumacious contempt. On the other hand, there is authority for the view that any contempt by an officer of the Court is a criminal contempt [Seldon v Wilde [1911] 1 KB 701; Australian Meat Employees Union v Mudginberri Station Pty Ltd (1986) 66 ALR 577, 584], as is a wilful or contumacious disobedience of an order [Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483, 489 (Barwick CJ), 499-500 (Windeyer J); Mudginberri, 584]. However, in practice the distinction is no longer significant [cf Mudginberri, 585], and in proceedings for civil contempt, as for a criminal contempt, the criminal standard of proof which requires proof beyond reasonable doubt is applicable, although proceedings for contempt are not attended by all the procedural incidents of a criminal trial [Witham v Holloway (1995) 183 CLR 525; Kirkpatrick v Kotsis [2004] NSWSC 1248, [5]; Athens v Randwick City Council (2005) 64 NSWLR 58; [2005] NSWCA 317]. The hearing was conducted substantially as a summary criminal trial, subject to the modifications permitted by Athens v Randwick in that the plaintiff was offered the opportunity – which was not exercised – of an address in reply.

3 The issues are:

· To amount to contempt, is it necessary not only that the relevant act or omission be intentional, but that it be accompanied by an intention to disobey the court’s order?

· Have the formal requirements for service of notice of the order and the application been satisfied?

· What obligations were imposed by the order, properly construed?

· Is breach established, and if so was it other than casual, accidental or unintentional?

Must an intention to disobey be proved?

4 On behalf of Mr Hassett, Mr Lawson submitted that to be a contempt it was necessary not only that the relevant act be intentional, but that it be accompanied by an intention to disobey the court’s order. For this purpose reliance was placed in particular on the judgment of Jerrard JA in Lade & Co Pty Ltd v Black [2006] 2 QdR 531, to the effect that “while establishing breach of an order or undertaking is simply a matter of fact, establishing contempt of it is a matter of attitude or state of mind, and always has been”. However, although concurring in the ultimate result, in that view his Honour was in dissent; Keane JA and Jones J were both of the view that proof of a specific intent to disobey the order of the Court was not necessary. The judgment of the High Court in Mudginberri is to the same effect (at 586-88):

In Morgan Windeyer J considered, at pp 499–500, that this conclusion was inconsistent with the comments of Lord Lindley in Seaward v Paterson and Lord Atkinson in Scott , at pp 497–500. … . Subsequently in his judgment (at pp 502–3), Windeyer J indicated a view that wilful conduct would not constitute contempt unless it was also “contumacious”. In support of that view, his Honour cited (at p 503) Fairclough v Manchester Ship Canal Co [1897] WN 7; 41 SJ 225 and Worthington v Ad-Lib Club Ltd [1965] Ch 236.

However, the position has been illuminated by the decisions since Morgan . It can now be seen that Cross J's interpretation in Phonographic Performance of the word “wilfully” in O 42, r 31 of the Rules of the Supreme Court, 1883 accorded with a proper understanding of what had been said by the English Court of Appeal in Fairclough where the court contrasted “casual, or accidental and unintentional disobedience” with what was required in a case where “it is sought to commit a private individual to prison for contempt” or “to sequestrate the property of a company upon the ground of disobedience” (see, for example, Steiner WLR at pp 991–2; All ER at p 390; Mileage Conference , WLR at pp 1161–2; All ER at pp 861–2; and Flamingo , at p 260). In Steiner Stamp J imposed a fine upon the defendants as punishment for a contempt constituted by breach of an undertaking to the court in a case which was not one which it was “possible to regard as an obstinate disregard” of the undertaking but which was “simply a case of a failure by the company, for no excuse whatever, to carry out the terms of its undertaking” (WLR at p 992; All ER at p 390). In the course of his judgment, Stamp J pointed out (WLR at pp 991–2; All ER at p 390) that the Court of Appeal in Fairclough , in expressing the view that it was necessary, in such cases, that the court's “order has been contumaciously disregarded”, was using the word “contumaciously” in the narrow sense of “wilfully”. Stamp J expressed the conclusion, in support of which he cited the judgments of Chitty J in Attorney-General at the Relation of the Leyton (Essex) Urban District Council v Walthamstow Urban District Council (1895) 11 Times LR 533 and Warrington J in Stancomb v Trowbridge Urban District Council [1910] 2 Ch 190, that any “disobedience which was worse than casual, accidental or unintentional must be regarded as wilful”. His Lordship had earlier indicated that, if the effect of the decision of Stirling J in Worthington was that “nothing short of stubborn opposition to the terms of an order or undertaking amounted to wilful disobedience so as to be punishable by proceedings for attachment”, he was not prepared to follow it. In that regard, it is of interest to note that in Mileage Conference (WLR at p 1162; All ER at pp 861–2) the members of the Restrictive Practices Court, who included Megaw J as President and McVeigh LJ, suggested that the approach of Stirling J in Worthington , which they rejected, had resulted from the fact that the only report of Fairclough which had been cited to Stirling J had been “the abbreviated eight-line report in the Weekly Notes and not the fuller and better report in the Solicitors Journal “ and that Windeyer J, in Morgan , had likewise referred only to the report of Fairclough in the Weekly Notes when citing that case and Worthington in support of the proposition that conduct which was “wilful, but not contumacious”, was not punishable by fine or sequestration. In Mileage Conference , the members of the Restrictive Practices Court (WLR at p 1162; All ER at p 862) accepted as correct the view of the law expressed by Warrington J in Stancomb (at p 194), namely, that it is no answer to proceedings for contempt “to say that the act was not contumacious in the sense that, in doing it, there was no direct intention to disobey the order”. Thus, it would suffice that the relevant act or omission was wilful even if, in a case where the breach was constituted by an act or failure to act by a servant or agent, the act or omission of the servant or agent was “through carelessness, neglect, or even in dereliction of his duty” (per Warrington J in Stancomb , at p 194). In Mileage Conference itself, substantial fines were imposed on companies for contempt by breach of undertaking which was not merely non-contumacious but was committed reasonably on legal advice.

The correctness of the approach outlined in the preceding paragraph was endorsed by the House of Lords in Heatons Transport , at p 109; their Lordships explicitly citing Steiner and Mileage Conference as precedents for the imposition of a fine in a case of disobedience to an order which is more than casual, accidental or unintentional. This endorsement was evidently based on the reasoning in the decisions to which we have referred, including an appreciation of the unsatisfactory consequences which would flow from the adoption of the view that there is no power to fine in such cases. To those reasons we would add the comment that lying behind punishment for a contempt which involves wilful disobedience to a court order, is the very substantial purpose of disciplining the defendant and vindicating the authority of the court. In our view the reasons supporting the recent decisions are compelling and they should be accepted by this court. It follows that a deliberate commission or omission which is in breach of an injunctive order or an undertaking will constitute such wilful disobedience unless it be casual, accidental or unintentional. It is immaterial that the existence of the power to impose a fine for wilful disobedience to a court order may not have been explicitly recognized in 1903.

5 This is consistent with the position in respect of truly criminal contempts. For reasons that I endeavoured to explain in Farahbakht v Midas Australia Pty Ltd [2006] NSWSC 1322, [32]-[38], it is sufficient to establish that the acts of the alleged contemnor were intentional and were calculated to interfere with the course of justice, and unnecessary to establish a specific intention to interfere with the proper administration of justice. Authority binding on this Court – particularly the judgment of the Court of Appeal in Registrar of the Supreme Court, Equity Division v McPherson [1980] 1 NSWLR 688, 700 (Moffitt P and Hope JA), together with statements by the High Court in Lane v Registrar of the Supreme Court of New South Wales (1981) 148 CLR 245, 285 (Gibbs CJ, Mason, Murphy, Wilson and Brennan JJ) and the observations in Meissner v The Queen (1995) 184 CLR 132, 144 and the statement of Mason CJ in R v Rogerson, Nowytarger & Paltos (1992) 174 CLR 268, 278 that “The relevant intent was one to achieve the result which, in the circumstances of that case, amounted to the perversion of the course of justice alleged” – prefers the view of Donovan LJ in Attorney-General v Butterworth [1963] 1 QB 696 (to the effect that an intention to interfere with the proper administration of justice was not an essential ingredient of the offence, and it was enough if the action complained of was inherently likely so to interfere), over that of Lord Denning in the same case (that the requisite intent involved a purpose of deterring a witness from giving evidence or influencing the witness to give it in a sense different from that it would otherwise have taken).

6 The statement in Mudginberri (at 113) that a deliberate commission or omission which is in breach of an injunctive order or an undertaking will constitute such wilful disobedience unless it be casual, accidental or unintentional does not require proof of a specific intent but permits an alleged contemnor to show by way of exculpation that the default was “casual, accidental or unintentional”; as Warrington J explained in Stancomb v Trowbridge Urban District Council [1910] 2 Ch 190, which was cited with approval by the High Court in Mudginberri:

In my judgment, if a person or a corporation is restrained by injunction from doing a particular act, that person or corporation commits a breach of the injunction, and is liable for process for contempt, if he or it in fact does the act, and it is no answer to say that the act was not contumacious in the sense that, in doing it, there was no direct intention to disobey the order. I think the expression “wilfully” in Order XLII, r.31, is intended to exclude only such casual, accidental or unintentional acts as are referred to in Fairclough v Manchester Ship Canal Co.

7 As the High Court pointed out in Mudginberri, in Re Mileage Conference Group of the Tyre Manufacturers’ Conference Ltd’s Agreement [1966] 1 WLR 1137, 1161–2; [1966] 2 All ER 849, 861–2, a breach of an undertaking which was not merely non-contumacious but was committed reasonably on legal advice was punished as a contempt. Another, recent, illustration that misconstruction of an order by a party bound by it is not an excuse for failing to comply with it is Athens v Randwick City Council (2005) 64 NSWLR 58.

8 Accordingly, it is not necessary for the plaintiff to establish that any failure to comply with the order was accompanied by a specific intention to disobey the court’s order. Proof of failure to comply is sufficient.

Have the formal requirements for service of notice of the order and the application been satisfied?

9 Mr Hassett was present in court when the relevant order was made by Windeyer J and, on his own evidence, agreed to it. A sealed copy was sent to him by facsimile transmission and by pre-paid post on 2 August 2006. Neither bore the notice to party bound required by UCPR, r 40.7(3), nor was the order served personally on Mr Hassett, as required by UCPR, r 40.7(1). However, UCPR, r 40.7(4) provides that where a party bound has notice of a judgment by being present when the judgment is given, or by being notified of the terms of the judgment by telephone, telegram or otherwise, it may be enforced without service in accordance with r 40.7(1) and (3). As Mr Hassett was in court when the order was made, and on his own evidence agreed to it, and was notified of its terms by facsimile and post, and takes no point about sufficiency of notice of the order, I will accede to the application to deal with the matter pursuant to UCPR, r 40.7(4), notwithstanding that service of the order has not been effected in accordance with r 40.7.

10 The notice of motion was not served personally on Mr Hassett as required by SCR, Pt 55 r 9, but delivered to a receptionist at his office. However, as he has appeared to oppose the application, and takes no point about adequacy of service, I am prepared to dispense, pursuant to (NSW) Civil Procedure Act 2005, s 14, with further service of the motion.

What obligations were imposed by the order, properly construed?

11 It is first necessary to consider what was the obligation imposed by the order. In construing the order for this purpose, it is permissible to resort to its context, for example any reasons for judgment (not applicable here), and in particular the other orders made at the same time [cf Athens v Randwick]. Plainly enough, order 4 was intended to operate in aid of the taking of accounts, and the resolution of the one remaining matter which precluded transfer of the property to the beneficiaries – namely ascertainment under Order 11 of the amount if any that Mr Hassett was entitled to recoup – by requiring production of the documents which might evidence the accuracy or otherwise of the accounts he was to provide pursuant to order 3.

12 The order required that Mr Hassett produce to the court within 35 days of 21 June 2006 – on which date the order was made – all documents (some examples being specified) “produced or acquired in relation to” four specified subject matters. The word “acquired” must mean “acquired by you” – the person to whom the order was addressed; it could not sensibly be read a requiring production of documents acquired by others. In that context, “produced” means created, or generated, by you”. Accordingly, one characteristic of a relevant document caught by the order is that it have been created or generated or acquired by Mr Hassett.

13 The phrase “in relation to” connects the words “produced or acquired” with the four specified subject-matters (a) to (d) that follow, and requires a nexus between the creation or acquisition of the document by Mr Hassett on the one hand, and one or more of the four specified subject matters on the other. In my view it is insufficient that the document relate to one or more of those subject matters; it is its creation (production) or receipt (acquisition) by Mr Hassett, rather than its contents, that must relate to one or more of those subject matters if the document is to be caught by the order.

14 Although the order does not explicitly say so, in my view it must also be construed as limited to documents in Mr Hassett’s possession, custody or power, either at the time of making the order or at the time of production to the court pursuant to the order.

15 Accordingly, in order to prove the contempt alleged, the plaintiff must establish, beyond reasonable doubt,

· that at the relevant time (between 21 June and 26 July 2006) Mr Hassett had in his possession, custody or power, documents that he had created or received in connection with one or more of the four subject matters (a) to (d) specified in the Order, and

· that he did not produce such documents to the court by 26 July 2006.

Is breach established, and if so was it other than casual, accidental or unintentional?

16 Did Mr Hassett between 21 June and 26 July 2006 have in his possession etc documents that he had created or received in relation to one or more of the four specified subject matters, and fail to produce them by 26 July in compliance with the Order?

17 The plaintiff’s case proceeded largely on the basis that Mr Hassett had produced nothing in answer to the order and that the contempt was thereby proved. That approach was plainly misconceived; because it overlooked the necessity to establish that there were at the relevant time in Mr Hassett’s possession custody or power documents that fell within the terms of the order. It was only in closing submissions that any attempt was made to articulate what documents had been in Mr Hassett’s possession custody or power. Eventually, the plaintiff submitted that the Court should be satisfied to the requisite standard that the following relevant documents or classes of documents were in Mr Hassett’s possession custody or power:

· Credit union statements of Community First Credit Union in respect of accounts in Mr Hassett’s name;

· A list of rates charged and paid in respect of the Warragamba property, which became DX02;

· Council and water rate notices in respect of the Warragamba property;

· Bank statements of accounts in Mr Hassett’s name;

· Handwritten notes made by Mr Hassett of payment of rates and legal costs in respect of the estate, to which he referred in his oral evidence.

18 Mr Hassett has been administering the estate since probate was granted in 1983. That the administration of a relatively simple estate had been protracted for almost a quarter of a century is but the first remarkable – though for present purposes essentially irrelevant – feature of the case.

19 The next feature – also somewhat remarkable – is that on 6 August 1996 Mr Hassett mortgaged the Warragamba property to Community First Credit Union – from which he already held an unsecured loan of $25,000 for the purposes of purchasing a motor vehicle – to secure advances to himself of a further $25,000, which he says was to reimburse expenditure which he had made from his own pocket for the benefit of the estate, in particular by paying the council and water rates. Subsequently he made further borrowings from the Credit Union for his private investment purposes; he offered additional security to the Credit Union for those advances, but they were also secured by the Warragamba mortgage. Mr Hassett serviced the Credit Union loans and ultimately refinanced using other security, discharging the Warragamba mortgage on or about 8 April 1998.

20 Between May 2002 and May 2004, the Legal Services Commissioner and/or the Law Society investigated a complaint made by the plaintiff’s solicitors on behalf of the plaintiff in relation to Mr Hassett’s administration of the estate, and there was correspondence between Mr Hassett, the Law Society and the Legal Services Commissioner with reference, inter alia, to the rates.

21 On 31 May 2004, an order was made in proceedings 106953/04 that Mr Hassett verify, file and pass accounts. On 9 July 2004, he made an affidavit verifying accounts, purportedly accounting for his administration and identifying a total of six disbursements from the estate – two payments of legal costs to himself, payment of a valuation fee, a funeral account, a single payment of council rates to the Shire Council, and another payment for council rates to the Sheriff. Those accounts did not refer, at all, to the Credit Union mortgage.

22 Windeyer J made the orders to which I have referred on 21 June 2006. Mr Hassett says that the orders were made upon insistence of counsel for the plaintiff, in circumstances where Mr Hassett had said that he did not believe that he had any more documents, but counsel pressed for such an order so that there was an obligation to produce any more that he might find, and Mr Hassett responded to the effect that he was content for the order to be made on that basis and would make a further search. This assertion of Mr Hassett was easily able to be challenged and contradicted if it were incorrect; there was no challenge to or contradiction of it, and I therefore accept it.

23 Mr Hassett says that after the order was made, he made a further search and located an additional document – so far as he recalls another copy of a receipt – which he then forwarded to the court by mail, but he was very vague and imprecise about this. The court file contained no record of any such letter, and Mr Hassett has not put into evidence any copy, which one might expect to be found on his correspondence file. However, the plaintiff has not adduced evidence of any search in the Exhibits Office to ascertain whether any documents are held there. Mr Hassett did forward to the court the original Certificate of Title in respect of the Warragamba property.

24 Mr Hassett says that there had never been extensive documentation relating to the estate. He says that, some time prior to 21 June 2006, he had produced one document – as best he recalls, a copy of a receipt for a valuation – in answer to a notice to produce served by the plaintiff on or about 26 April 2006. It is somewhat remarkable that an administration of 23 years produced so slight a documentary record.

25 On 29 September 2006, pursuant to Order 3 made by Windeyer J, Mr Hassett swore and filed a further affidavit of accounts, which on this occasion specified a total of 59 payments of water rates, Council rates and insurance in respect of the Warragamba property. Each payment is identified by date, payee, nature and precise amount. The accounts also included a detailed transaction-by-transaction account of movements on the credit union loans, and calculations of insurance payments in respect of the Warragamba property which bear the indicia of a reconstruction rather than production from primary records. These accounts were prepared by an accountant instructed for that purpose by Mr Hassett, Mr Peter Leisch, to whom he provided documents the requisite documents, sometime after 21 June and before 26 July 2006, to facilitate their preparation; after preparing the accounts, Mr Leisch returned such documents as he had been provided, to Mr Hassett.

26 After receipt of the present notice of motion, which was served on 9 July 2007, Mr Hassett conducted a further search of his offices and was unable to locate any further documents. Nor was he able to locate any of those returned by Mr Leisch.

27 Mr Hassett deposed that he did not have in his care, custody and control any documents the subject of order 4 and is not aware of ever having had such documents other than those previously produced. In his affidavit sworn 28 September 2007, Mr Hassett deposed:

6. I have produced all invoices, receipts, bank statements, passbooks, mortgage documents, correspondence and all other documents produced or acquired in relation to:
(a) all property and assets of the deceased’s estate;
(b) all payments made or on behalf of the estate;
(c) all liabilities of the estate; and
(d) the mortgage referred to in order 3(d) of the orders.
7. I say that I have produced all documents, described in the order 4, that were in my care, custody and control to the court on two occasions.

8. I produced some of the documents to the court in answer to a notice to produce served upon me on or about 26 April 2006 by the plaintiff. I produced original documents to the court in answer to the notice to produce on a date that I do not recall, but prior to 21 June 2006.

…
9. After the orders were made on 21 June 2006 I returned to my office and searched for any documents that fell within the ambit of order 4. I did locate some documents that fell within order 3. I produced all of the original documentation that I then found to the court within the 35 days allowed by the orders.

28 In cross-examination, it emerged that on the first occasion (prior to 21 June 2006), he did not produce “original documents”, but a single copy document, and on the second occasion found and forwarded to the court not “some documents”, but one copy document. In his oral evidence he said that he has moved premises many times and that documents are lost or misplaced in that process. He believes that he must still have some documents – in particular his Credit Union statements and related documents – somewhere, but is unable to locate them. If this is astonishing – given that his administration of the estate has generated disciplinary complaints and investigations as well as this litigation against him – even moreso is his evidence that he has lost further documents in the course of moving his offices, including two security packets of wills and title deeds of other clients.

29 By the conclusion of Mr Hassett’s cross-examination on 7 November, he said that he believed that he would still have in his correspondence file – which remarkably was not in court – certain handwritten notes of expenses made by him, and rate notices. On his application, the proceedings were adjourned part heard for seven days, to enable him to obtain and further inspect his correspondence file – notwithstanding that, when the proceedings were set down, time was allowed, at his request, for him to conduct a thorough review of his file. Upon resumption of the hearing he said that examination of his correspondence file revealed no such handwritten notes, nor any original or copy rate notices, but he had located a list of Council rates levied and paid, as to the provenance of which he was uncertain; that list became DX02. He confirmed that he retained the correspondence with the Law Society and the Legal Services Commissioner, but that it did not annex rate notices or like documents; while he did not put that correspondence into evidence, neither did the plaintiff endeavour to do so.

30 For a solicitor answering a contempt charge, I thought Mr Hassett’s evidence was surprisingly general and careless. In circumstances where at a pre-trial directions hearing he had sought time for the express purpose of permitting him to canvass his files in detail, it was even more surprising that he had not apparently done so, at least in respect of his “correspondence file”, which is precisely where one would have expected any relevant documents to be found. The circumstance that he was unable to find documents in respect of an estate that he was administering – and, as it transpired – had apparently misplaced many other documents – is truly astonishing. So, at least at first sight, is the manner in which he as an executor mortgaged the Warragamba property supposedly to reimburse himself, and then serviced and repaid the loan, and allowed the Warragamba property to secure not only that loan but another loan for his separate purposes entirely unconnected with the estate. However, this is not a suit for breach of trust, but a proceeding for contempt, and the issue is whether the plaintiff has proved beyond reasonable doubt the elements of that contempt. On the construction of the order which I prefer, it is insufficient to prove that Mr Hassett has not produced documents in the four classes specified in the order to the court. The plaintiff must prove at least that such documents were at the relevant time in his possession, custody or power, and that their creation or receipt bore the requisite relationship to one or more of the four classes.

31 For the plaintiff, Mr Rich submitted that once it was established that relevant documents had once been in Mr Hassett’s possession custody or power, the Court could only find that they were not so at the relevant time if it accepted Mr Hassett’s evidence to the effect that he had lost them. I disagree; once the issue was raised, the onus of proving that they remained in Mr Hassett’s possession at the relevant time was one which the plaintiff had to discharge beyond reasonable doubt and while proof of prior possession might found an inference of ongoing possession in the absence of further evidence, no more than an evidentiary onus fell upon Mr Hassett to raise an issue that he had since lost them; far from him having to persuade me, even on balance of probabilities, that they had been lost, the plaintiff has to convince me, beyond reasonable doubt, that they had not.

32 The Credit Union Statements. The Credit Union dispatched regular statements of account to Mr Hassett. His receipt of those statements was connected with the Warragamba mortgage, at least for the duration of that mortgage. Mr Hassett says that by mid 2006 he could no longer find those statements, but obtained copies from those produced to the Court by the Credit Union in or about July 2006 in answer to a subpoena issued by the plaintiff, which included statements for and after the period of the duration of the mortgage. Such copy statements were evidently in Mr Hassett’s possession or power at the relevant time, because only by reference to them could the accounts of September 2006, insofar as they contain detailed lists of transactions on the credit union loans, have been prepared. Either Mr Hassett himself had the copies by 26 July, or his accountant had them; in either case they were in Mr Hassett’s possession custody or power. He did not produce them pursuant to the Order.

33 Mr Hassett advanced several answers to the allegation that failure to produce the copy statements was a breach of the Order. I am quite unable to accept that the order should be construed as not requiring production by Mr Hassett of documents which had otherwise been produced to the Court. The plain purpose of the order was to require production of documents which would enable Mr Hassett’s accounts to be tested or verified, and there is simply no basis for supposing that the Order excluded copy statements that he relied on to prepare his accounts made from documents produced to the Court from another source. Nor is it justification that the copy statements may have been forwarded to the accountant; they remained in Mr Hassett’s power.

34 In this respect, I am satisfied beyond reasonable doubt that in breach of the Order, Mr Hassett failed to produce by 26 July 2006 the copy statements of account from the Credit Union that he then had in his possession, custody or power.

35 I am satisfied that this breach was not casual, accidental or unintentional in the relevant sense. The circumstance that the documents in question had otherwise been produced to the court, and that those in Mr Hassett’s control were copies of what had been produced by the Credit Union to the court, might have lent some support to the view that the breach was one of that character. However, in the context of these proceedings, one of the crucial purposes of obtaining production of documents was to establish what documentary evidence Mr Hassett had to verify his claimed expenditure on behalf of the estate. An executor ordered to produce documents in that context – and a fortiori one who is a solicitor – ought to have appreciated that the documents upon which he relied to prepare his accounts would not cease to be required just because originals had been produced on a third party subpoena.

36 DX02 – the list of rates. As I have recorded, following the adjournment, Mr Hassett produced a list of rates levied and paid, which became DX02. Although he was uncertain as to its provenance, as I am not persuaded to reject his evidence that he forwarded rate notices upon receipt to the Andersons, and from the reference on it to the “Assessment No.”, and its contents, I infer that it was obtained from the Council, and is a summary provided by the Council of rates charged and paid over the period 1983 to 2003. It was likely created by the Council on or about 21 May 2003 (to which date the balance on one of the documents runs). It was acquired by Mr Hassett for the purpose of evidencing the amounts he had paid for rates on the Warragamba property, to found his claim against the estate in respect of rates paid by him on behalf of the estate. The document was therefore acquired by him in relation to payments made by him by or on behalf of the estate. It was not produced in compliance with the Order.

37 I do not accept that the Order should be construed as limited to primary documents; there is nothing in its terms that would justify so narrow a reading. It includes “bank statements”, and DX02 is not dissimilar to a statement. Nor do I accept that it had been produced, in the form of the entries in the affidavit of accounts that were derived from it. A subpoena requires production of documents, not the information contained in them, and filing an affidavit containing information derived from a document is not production of the document itself.

38 Accordingly, I am satisfied beyond reasonable doubt that in breach of the Order, Mr Hassett failed to produce by 26 July 2006 the document which now comprises DX02, which he then had in his possession, custody or power.

39 I do not accept that this breach was casual, accidental or unintentional in the relevant sense. Mr Hassett said repeatedly that he had not thought that the rates were relevant – as he considered the rates a matter separate from the estate, which he was pursuing against the Andersons, whereas they were interested in the Credit Union mortgage – and even suggested that he thought he paid the rates not on behalf of the estate, but on behalf of the beneficiaries. This is spurious, and all the more so when he reimbursed himself out of the estate. Particularly in the context of the orders as a whole – including Order 3 and Order 11 – it ought to have been plain that the rates constituted a very substantial part of the expenditure side of the estate accounts, which Mr Hassett sought to charge against the estate. The fundamental purpose of the taking of the accounts was to ascertain to what extent he was or had been entitled to be reimbursed out of the estate. Whether he had paid the rates and if so how much was central to any such inquiry. To borrow the words of Hodgson JA in Athens v Randwick City Council, [31], in the context of the proceedings, and the orders made on 21 June 2006, the order was expressed in terms such that Mr Hassett knew or plainly ought to have known that he was required to produce documents he acquired in connection with payment of rates in respect of the Warragamba property.

40 The rate notices. Although there seemed a strong inference that rate notices must have been available for the purpose of preparation of the September 2006 accounts, and Mr Hassett at one stage said that he believed that he may have rate notices on his “correspondence file”, he maintained that he sent such notices, upon receipt, to the Andersons. This could easily have been challenged and contradicted if it were untrue, but there was no such challenge or contradiction, and I am not satisfied to the requisite standard that Mr Hassett was not telling the truth in this respect. Moreover, the existence of the list of payments now comprising DX02 is significant support for the view that he no longer had rate notices and had to reconstruct what payments he had made and obtain information from the Council in the form of DX02. So too is the apparent reconstruction of insurance payments, as appears in the September 2006 accounts. While there must have been some similar source of information about water rates, it is not established beyond reasonable doubt that that information could not have been obtained orally over the telephone from Sydney Water.

41 I am therefore not satisfied beyond reasonable doubt that at the relevant time Mr Hassett had in his possession, custody or power Council or water rate notices in respect of the Warragamba property.

42 Mr Hassett’s bank statements. Mr Rich submitted that Mr Hassett’s own bank statements would evidence payments made by on behalf of the estate of rates “out of his own pocket”. That is so only if the payments were made by cheque, which the evidence does not establish. Nor does the evidence begin to establish that in 2006 he had in his possession bank statements for the relevant period. Nor was his receipt of any such statements “in relation to payments made on by or behalf of the estate”; the requisite nexus between the acquisition of the statement and estate expenditure is not established.

43 I am not satisfied to the requisite standard that during the relevant period Mr Hassett had in his possession custody or power bank statements acquired by him in relation to payments made on by or behalf of the estate.

44 The handwritten notes. In the course of his cross-examination, Mr Hassett said that in order to prepare the May 2004 accounts, including his legal costs, he had reference to some handwritten notes which he had on his correspondence file. Those notes were, according to him, used for the preparation of those accounts. They were created by him in connection with estate expenditure, and were plainly documents created in relation to payments made by or on behalf of the estate. Remarkably, Mr Hassett claimed that they were not documents, but “handwritten notes”; such notes are of course documents. However, over the adjournment, he was unable to locate or produce these notes. I am unpersuaded that he has misplaced them since June 2006 – the belated production of DX02 tells against him having resorted to deliberate destruction of relevant documents. Once again, the plaintiff did not attempt to call for, inspect or tender his correspondence file, which may have revealed their existence.

45 I am not satisfied to the requisite standard that the handwritten notes were in his possession custody or power between 21 June and 26 July 2006.

46 The Law Society/Legal Services Commissioner correspondence. Mr Hassett conceded that he retained in his possession the correspondence between him and the Legal Services Commissioner and the Law Society. He admitted that that correspondence included reference to payment of rates in respect of the Warragamba property. I am satisfied beyond reasonable doubt that Mr Hassett had at the relevant time in his possession original or copy correspondence of the Legal Services Commissioner and/or the Law Society which referred inter alia to the payment of rates. However, the payment of the rates was not the occasion, cause or reason for the creation or receipt of that correspondence, which was generated by the disciplinary complaint.

47 Accordingly, I am not satisfied that the correspondence with the Legal Services Commissioner and the Law Society, though in Mr Hassett’s possession custody or power during the period 21 June to 26 July 2006, was “produced or acquired [by him] in relation to” payments made by Mr Hassett by or on behalf of the estate. Ultimately, the plaintiff did not include this correspondence in the classes of relevant documents.

Conclusion

48 It is not necessary for the plaintiff to establish that any failure to comply with the order was accompanied by a specific intention to disobey the court’s order; failure to comply is contempt unless it is casual, accidental or unintentional.

49 In order to prove the contempt alleged, the plaintiff must establish, beyond reasonable doubt,

· that at the relevant time (between 21 June and 26 July 2006) Mr Hassett had in his possession, custody or power, documents that he had created or received in connection with one or more of the four subject matters (a) to (d) specified in the Order, and

· that he did not produce such documents to the court by 26 July 2006.

50 I am satisfied beyond reasonable doubt that in breach of the Order, Mr Hassett failed to produce by 26 July 2006 the copy statements of account from the Credit Union that he then had in his possession, custody or power, and that that breach was not casual, accidental or unintentional.

51 I am satisfied beyond reasonable doubt that in breach of the Order, Mr Hassett failed to produce by 26 July 2006 the document which now comprises DX02, which he then had in his possession, custody or power, and that that breach was not casual, accidental or unintentional.

52 I am not satisfied that at the relevant time Mr Hassett had in his possession, custody or power Council or water rate notices in respect of the Warragamba property.

53 I am not satisfied that during the relevant period Mr Hassett had in his possession custody or power bank statements acquired by him in relation to payments made by or on behalf of the estate.

54 I am not satisfied that the handwritten notes were in his possession custody or power between 21 June and 26 July 2006.

55 I am not satisfied that the correspondence with the Legal Services Commissioner and the Law Society, though in Mr Hassett’s possession custody or power during the period 21 June to 26 July 2006, was “produced or acquired [by him] in relation to” payments made by Mr Hassett by or on behalf of the estate.

56 Accordingly, pursuant to Civil Procedure Act, s 14, I dispense with further service of the motion. I find Mr Hassett guilty of contempt of Court, in that in contravention of order 4 made on 21 June 2006, he failed to produce to the court by 26 July 2006 the copy statements of account from the Credit Union, and the document which now comprises DX02, which were then in his possession, custody or power.

57 I will hear the parties on penalty.

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18/12/2007 - Typographical errors - Paragraph(s) 9 & 12