Australia & New Zealand Banking Group Ltd v Fairlie Investments

[1990] FCA 595

JUDGMENT No. ..s"3SS/.??- I <.

IN THE FEDERAL COURT OF AUSTRALIA )

NEW SOUTH WALES DISTRICT REGISTRY ) NO NG 92 OF 1990

GENERAL DIVISION 1

BETWEEN:  AUSTRALIA & NEW ZEALAND BANKING GROUP
LTD

AND :	AN2 EXECUTORS & TRUSTEE COMPANY LIMITED
AND :	ANZ FUNDS MANAGEMENT LIMITED Applicants
AND :	FAIRLIE INVESTMENTS LIMITED First Respondent
AND:	WALLACE HENRY BROOKS Second Respondent

HILL J	RECEIVED
SYDNEY
FEDERAL COURT OF
26 JUNE 1990	AUSTRALIA
PRINCIPAL

EXTEMPORE REASONS FOR JUDGMENT

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The applicants, the Australian and New Zealand Banking Group Limited, AN2 Executives and Trustee Company Limited and AN2 Funds Management Limited, move the Court for	i
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orders that each of the respondents, Fairlie Investments	:
Limited and Wallace Henry Brooks be punished for contempt.
It is charged that on 26 February 1990 certain orders were made by Sheppard J in the following terms:

Order 4:

"Each o f the first respondent (by i t s

proper o f f i c e r ) and the second respondent,

within 5 days o f the service o f t h i s

Order, deliver t o the applicants'

so l ic i tor an a f f i dav i t showing: (a ) whether and i f so for what period or periods o f time that respondent has or has had i n i t s or h i s possession, custody or

control the original o f any o f the

l e t t e r s ; (b) whether and i f so for what period or periods o f time that respondent has or has had i n i t s or h i s possession, custody or control o f any reproduction or copy or extract o f any o f the l e t t e r s ;

( c ) the f u l l name and address (so far a s

known t o that respondent) o f each person t o whom that respondent has delivered or caused t o be delivered or caused t o be delivered or disseminated or caused t o be disseminated any o f the l e t t e r s or any reproduction or copy thereof or extract-

therefrom; and ( d ) the f u l l name and

address (so f a r a s known t o that respondent) o f any person t o whom that res~ondent has communicated or caused t o be communicated the whole or any part o f the contents o f any o f the l e t t e r s or any information contained i n any o f the l e t t e r s . "

Order 5 i s i n the following terms:

"Each o f the respondents, within 5 days o f the service o f t h i s Order, deliver up t o the applicants or their sol ici tors any original or reproduction or copy o f or extract from any l e t t e r s which i s or are in' the possession, custody or control o f

record containing or comprising or	the respondents and any document or other
including the whole or any part o f the contents o f any o f the l e t t e r s or any information contained i n any o f the l e t t e r s . "
I t i s further charged that each o f the respondents

was served by substituted service, with copies o f the Orders but that neither the f i r s t nor second respondent complied with the Orders by 5 March 1 9 9 0 on which day Anton Pillar Orders were made authorising certain persons t o enter the premises o f

the second respondent and that when those Orders were executed, documents meeting the description of documents described in the original Orders of Sheppard J were found which had not been delivered by the first respondent to the applicant.

Accordingly, the contempt charge is said to consist

of:

Failure to deliver to the applicants solicitors by 5 March 1990 or by 16 March 1990 an affidavit complying with said Order 4 made by Sheppard J. Failure to deliver to the applicants or their solicitors by 5 March 199 or 16 March 1990 or at all prior to 6 April 1990 any letters in compliance with Order 5 made by Sheppard J, such letters being those listed in the schedule to the applicants1

amended application.

The proceedings between the parties were commenced in December 1989 when the applicants sought injunctive relief against the respondents as well as a return of letters which were listed and described in the schedule to the application.

By a Further Amended Statement of Claim filed on 1 June 1990, it is inter alia alleged that the second respondent wrongfully induced a Mr O'Meara to prepare and sign on the letterhead of A N 2 Trustees these letters. It is alternatively alleged that in some way, documents whether the original letters or otherwise, were "fabricated" so as to alter the true nature and effect of those letters. The allegation is apparently that the respondents had used the letters or reproductions or copies of them by sending them to a number of persons in breach of the provisions of the Trade Practices Act or the Fair Trading Act.

The Orders made by Sheppard J were interlocutory orders made by His Honour in the course of the proceedings. The parties are in agreement that the respondents had filed an affidavit in compliance with Order 4 as at 6 April 1990 which affidavit, save as to time, complied in all respects with the Order.

It is further agreed that as at 6 April, the second

respondent had in his possession documents falling within the

Sheppard J which documents had not then been delivered up to	class of letters described in the schedule to the Orders of
the applicants or their solicitors in accordance with Order 5.
The applicants adduced evidence from Mr Moulis that on 30 March 1990, in purported compliance with Order 5, certain documents had been delivered to his office. Mr Moulis is the solicitor for the applicants. Mr Moulis also deposed that on Friday 6 April 1990, he went to the premises of the second respondent in Bellingen where he first spoke to Mrs Brooks the wife of the second respondent and handed her a copy of the Anton Pillar Order.
Thereafter, M r Brooks closed the door and later advised Mr Moulis that Mr Lightfoot, the solicitor for the respondents was on the telephone. Mr Moulis spoke to Mr Lightfoot and after this conversation the door was again closed. Ultimately, Mrs Brooks opened the door and showed Mr Moulis into the home of the second respondent. According to Mr Moulis ' evidence, he proceeded, it would seem by accident, into Mr Brooks' bedroom where Mr Brooks was in the course of dressing. According to Mr Moulis, Mr Brooks then introduced himself to Mr Moulis and showed Mr Moulis a briefcase approximately 12 inches wide which had upon it airline stickers.

According to Mr Moulis, Mr Brooks then said:

"You w i l l f i n d i n t h i s b r i e f c a s e a l l the documents

de sc r ibed i n the Order you have j u s t s e rved . "

Mr Brooks then handed to Mr Moulis the briefcase

and said:

" L a s t Sa turday , 31 March 1990, I r e t u r n e d

t o A u s t r a l i a from the Uni ted S t a t e s o f

America. I had th is b r i e f c a s e w i t h me and

the documents it c o n t a i n s . M y s o l i c i t o r

t e l l s me t h a t I shou ld l e t you have

a c c e s s t o a l l the documents i n this

b r i e f c a s e . "

Mr Moulis then proceeded to another room where the

contents of the briefcase were emptied on to the floor and sorted out. Mr Moulis was accompanied by both officers of the applicants and it would seem, by a police officer.

In due course, Mr Moulis collected together a bundle of documents which satisfied the description in Order 5 of Sheppard J's Orders.

It is unnecessary to describe further the events of that day as deposed to by Mr Moulis.

For the respondents evidence was adduced inter alia from Mr Lightfoot who deposed that the second respondent advised him that he needed to travel overseas on and from February 20 to confer with business associates and clients. Mr Lightfoot said in his affidavit that on 28 February 1990 he

spoke to the second respondent by telephone and that the

second respondent had informed Mr Lightfoot that he was at

that time in Germany conducting a financial business dealing.

The affidavit proceeds:

" I informed him o f t h e terms o f t h e

Court 's Orders No 1-5 made on t h e 26 th

February, 1990 and made arrangements f o r

t h e l a t e r f a c s i m i l e t ransmiss ion t o him o f

t h e Statement o f Claim and sought h i s

f u r t h e r i n s t r u c t i o n s upon r e c e i p t o f t h a t

document. "

It would seem to be common ground that for whatever

reason, the later facsimile transmission went astray and was

not received by the second respondent.

According to Mr Lightfoot, on 15 March 1990 he

received instructions from the second respondent while he was in the United States of America to deliver to the applicants certain documents and on 27 March received these documents from the second respondent with instructions to return them to the applicants.

Mr Brooks in his affidavit of 22 May 1990 (a re- swearing apparently of an affidavit of 11 May 1990) deposed that he had departed Australia on 20 February 1990 and had not returned until 31 March 1990, in which period he was involved in extensive business and negotiations in various countries of the world. According to Mr Brooks, the first knowledge he had of the Court's Order was as a result of a telephone call on 28 February from Mr Lightfoot. According

proceeded along the following lines:	to Mr Brooks' evidence on affidavit, the conversation	Mr Lightfoot said words to the effect,
"Wal ly , the Bank h a s ob ta ined from the
Federal  Court i n Sydney i n t e r i m
r e s t r a i n i n g  o r d e r s a g a i n s t you and the
Company  i n r e l a t i o n t o a n y letters from
the  Bank i n y o u r p o s s e s s i o n . I t i s an
o r d e r o f the Court  u n t i l 1st March 1990
and  i n a d d i t i o n we need t o f i l e an
a f f i d a v i t .  Don't send o r show anyone
t h o s e letters.  There a r e about 90 pages
o f documents  - I c a n ' t f a x a l l t o you,
o n l y the Orders and  the S ta t emen t o f Claim
f o r  you t o r e a d . I need some d e t a i l e d
i n s t r u c t i o n s . "
I  ( M r Brooks) said, "Okay" and gave him
the fax number.

Mr Brooks further deposes to a conversation with Mr Lightfoot on 15 March where Mr Lightfoot apparently requested Mr Brooks to send to Australia the relevant letters. According to Mr Brooks these letters were forwarded by express mail to Mr Lightfoot. By his own account the only letters he had in his possession were those forwarded.

In cross-examination, Mr Brooks denied strenuously Lightfoot's affidavit, informed Mr Brooks of the terms of the

that Mr Lightfoot had, in accordance with paragraph 5 of Mr

Court's Order. He was unable, he said, to recall the date of the telephone call or indeed to recollect the conversation save that he knew that Mr Lightfoot had mentioned that the court proceedings were current and told him that certain documents would be needed. Mr Brooks denied having seen, at least until very recent times, a copy of the Orders made by Sheppard J and indeed was unable to recollect having been given a copy. There was evidence that Mr Brooks had been

I	served with a copy on 6 April 1990.
Mr Brooks also strenuously denied the narration of events given by Mr Moulis. According to Mr Brooks, he had met with the four men who had come to execute the Anton Pillar Order, not in the bedroom but in the rumpus room. One of them, he was unsure which, had said words to the effect, " W e
have come t o possess through the court c e r t a i n documents which
you may have i n your possession". To this M r Brooks said,
"Yes". He was shown either then or perhaps before a copy of
the Anton Pillar Order.

Mr Brooks then said, according to his oral evidence,

"These are a l l the f i les I have i n m y possession r e l a t i n g t o the ANZ" and pointed to a filing cabinet and brought out a

briefcase. The briefcase in question was presumably the 12-inch briefcase to which reference has previously been made.

Mr Brooks said, "That b r i e f c a s e i s where i f there i s anything

i t w i l l b e . I use i t a s a f i l e . This i s where you w i l l f ind

the documents you require i f there i s anything. "

Mr Brooks especially denied that he had said to Mr Moulis that he had had the briefcase with him in his visit overseas. Rather, Mr Brooks said he had another briefcase which also had airline stickers upon it that was only six inches in width and that he had this smaller briefcase with him on his overseas trip. The parties seem to be in agreement

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that thereafter Mr Brooks was co-operative as well as being
talkative.

Mr Moulis was cross-examined. He had sworn an affidavit in reply in which he had given what was said to be a different version of the conversation in the bedroom to the one I have already narrated. In the second affidavit the conversation is said to have proceeded as follows:

I (being Mr Moulis) said, " M r Brooks, I

would l ike t o i n s p e c t t h e c o n t e n t s o f t h i s

b r i e f c a s e " . I pointed to a briefcase which had international airline stickers on it. Mr Brooks said, " Y e s , I thought

you m i g h t . I had t h e b r i e f c a s e , and t h e

documents i n i t , w i t h me on m y r e c e n t

o v e r s e a s t r i p . I r e t u r n e d t o A u s t r a l i a

l a s t Sa turday . "

According to Mr Moulis' affidavit, Mr Brooks then "unlocked" the briefcase and handed it to Mr Moulis. It was put to Mr Moulis that Mr Brooks had shown him at the same time the smaller briefcase and had made it clear that it was the smaller briefcase that was carried overseas rather than the larger briefcase. Mr Moulis denied this.

The parties are in agreement that the proper
standard of proof for a finding of contempt based on
disobedience of orders made by the court is the civil standard

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but this standard may vary in accordance with the gravity of the facts to be proved and the consequences likely to follow: Briginshaw v Briainshaw, (1938) 60 CLR 336; New South Wales Eau Cor~oration v Peek, [l9871 10 NSWLR 72, applying Australasian Meat Industrv EmDlovees' Union v Mudainberri

Station Ptv Limited (No 2) (1985) 9 FCR 194; 61 ALR 635.

It is also not in dispute that for contempt to be shown, it must be proved that the omission to comply with the Order constituted wilful disobedience and was not casual, accidental or unintentional in the sense that those words are used in Australasian Meat Industrv E ~ D ~ o Y ~ ~ s Union v Mudainberri Station Ptv Limited supra. It is critical in the present case, therefore, to determine two factual matters: first, whether on 28 February 1990 Mr Lightfoot did in fact advise Mr Brooks not merely that the Orders had been made by Sheppard J but as to the terms of those Orders as deposed to by Mr Lightfoot and as denied by Mr Brooks.

One of the difficulties in this case has been that the parties came to court this morning not with a view to litigating the contempt proceeding but for another purpose altogether. In the result, Mr Lightfoot was not called to give evidence. However, his affidavit was read and in my view must be taken to mean what it says. Mr Lightfoot clearly deposes that he did inform Mr Brooks of the terms of the Court's Orders and I see no reason why I should disbelieve that. Had the respondents desired to call Mr Lightfoot, it

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presumably would have been open for them to do so, although I draw no adverse inference against the respondents for their failure so to do.

The second matter of significance is whether Mr Brooks did in fact have the documents with him in Europe when he had the conversation with Mr Lightfoot on 28 February 1989. The significance of this matter is that Mr Brooks deposed that he was unaware of what documents he had at home and indeed unaware whether he had any documents meeting the descriptions contained in Sheppard J's Orders. Although he had been back in Australia some days before 6 April 1990, he had, he deposed, been busy with other things. Mr Brooks said that his wife would have been unaware of where the documents were or indeed of his business affairs generally.

To determine this question I have to decide,

therefore, whether I accept the account of Mr Moulis,

briefcase had been with Mr Brooks during his overseas trip, or

containing as it does the statement by Mr Brooks that the

whether I accept the evidence of Mr Brooks which is to the contrary. Mr Moulis gave his evidence confidently and was not in my view in any way shaken by cross-examination I see no reason why I should not accept his evidence.

Mr Brooks on the other hand seemed consistently keen

not to answer the specific questions which were asked of him.
He appeared to be endeavouring to determine, before answering,
the purpose of various questions put to him and seemed very
keen to give answers that were not appropriate responses to
the questions or proffering statements which appeared to be of
assistance to his case. I accept that Mr Brooks is no longer
a young man and that his memory may not always be reliable.
However, I am of the view that the account of the events of 6
April given by Mr Moulis is substantially accurate and in
particular that Mr Brooks did say to Mr Moulis that he had the
briefcase with him on his overseas tour.

There is of course the possibility that Mr Brooks was, for some reason unclear to me, not telling the truth when he said to Mr Moulis that he did have the briefcase with him on his overseas tour. That is, however, so unlikely a possibility that I would reject it. I find that on the standard of proof to which I have referred, Mr Brooks did in fact have with him overseas the relevant briefcase and the documents contained in it and that his account given in

evidence is not reliable.

It follows, therefore, that on the evidence Mr Brooks was advised of the terms of the Order, had with him documents which fell within the terms of the Order, forwarded some documents back to his solicitors in Sydney but retained others being the documents which were ultimately discovered on the execution of the Anton Pillar Order. In my view these facts therefore show that Mr Brooks, and through him the first respondent, have disobeyed the Orders of Sheppard J and it seems to me that it could not be said that such disobedience is in any relevant sense casual, accidental or unintentional.

If by casual is meant substantial compliance with the spirit but not with the letter of the Order, as was suggested by counsel for the respondent, it is hard to see that in the present circumstances Mr Brooks has complied even with the spirit of the Order by retaining documents which he clearly had in his possession with him at the time he was advised of the terms of the Order. It can only be assumed

that for whatever reason the breach was intentional. It of

course cannot be said it was accidental.

Accordingly I find that both of the respondents are guilty of the contempt charged. The question of penalty now arises.

I certify that this and the

preceding thirteen (13) pages
are a true copy of the Extempore
Reasons for Judgment herein of his
Honour Mr Justice Hill.

Associate: P&*

Date: 26 June 1990

Counsel and Solicitors	Mr R C McDougall instructed by
for Applicant:	Messrs Dunhill Madden Butler
Counsel and Solicitors	M r R K Eassie instructed by
for Respondent:	Messrs Lightfoot Hagan & Associates
Dates of Hearing:	26 June 1990
Date Judgment Delivered:	26 June 1990.