Australian Prudential Regulation Authority v Garrett (Contempt Hearing) - [2024] FCA 482

FEDERAL COURT OF AUSTRALIA
Australian Prudential Regulation Authority v Garrett (Contempt Hearing) [2024] FCA 482

File number: NSD 741 of 2023

Judgment of: LEE J

Date of judgment: 3 May 2024

Catchwords: CONTEMPT OF COURT – application by Australian Prudential Regulation Authority seeking an order that the respondent be punished for contempt – where respondent is associated with non-legal “banking” entities – where respondent ordered to cease unlawfully conducting a “banking business” within the meaning of the Banking Act 1959 (Cth) – where respondent failed to comply with orders by continuing to operate a “banking business” – consideration of relevant principles – breach of orders – contempt established – orders made

Legislation:
Banking Act 1959 (Cth)

Federal Court of Australia Act 1976 (Cth) s 31

Federal Court Rules 2011 (Cth) r 42.02

Cases cited:
Alexander v Crawford [2003] NSWSC 426

Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98

Australian Competition and Consumer Commission v Hughes [2001] FCA 38

Australian Competition and Consumer Commission v INFO4PC.Com Pty Ltd [2002] FCA 949; (2002) 121 FCR 24

Australian Prudential Regulation Authority v Garrett (Contempt Application) [2024] FCA 235

Australian Prudential Regulation Authority v Garrett [2023] FCA 956

Hearne v Street [2008] HCA 36; (2008) 235 CLR 125

Humane Society International Inc v Kyodo Senpaku Kaisha Ltd [2015] FCA 1275; (2015) 238 FCR 209

Kazal v Thunder Studios Inc (California) [2017] FCAFC 111; (2017) 256 FCR 90

Matthews v ASIC [2009] NSWCA 155

Re Colina; Ex parte Topohey [1999] HCA 57; (1999) 200 CLR 386

Re Group Pty Ltd v Kazal (No 4) [2017] FCA 1084

Siminton v Australian Prudential Regulation Authority [2008] FCAFC 89; (2008) 168 FCR 140

Titan Support Systems Inc v Nguyen (No 2) [2015] FCA 359

Witham v Holloway (1995) 183 CLR 525

Division: General Division

Registry: New South Wales

National Practice Area: Commercial and Corporations

Sub-area: Commercial Contracts, Banking, Finance and Insurance

Number of paragraphs: 26

Date of hearing: 3 May 2024

Counsel for the applicant: Ms S Foda

Solicitor for the applicant: Dentons

Counsel for the respondent: The respondent appeared via audio visual link

ORDERS

NSD 741 of 2023

BETWEEN:
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Applicant

AND:
ANDREW MORTON GARRETT

Respondent

ORDER MADE BY:

LEE J

DATE OF ORDER:

3 MAY 2024

THE COURT ORDERS THAT:
1.Pursuant to s 31 of the Federal Court of Australia Act 1976 (Cth) and r 42.02 of the Federal Court Rules 2011 (Cth) the respondent, Mr Andrew Morton Garrett, be convicted on the charge of contempt in the statement of charge filed by the applicant (APRA) on 21 September 2023.
2.Mr Garrett pay a fine in the sum of $10,000 to be suspended for a period of 18 months from the date of these orders, conditional upon Mr Garrett’s compliance with the Orders and Penal Notice dated 14 August 2023.
3.Mr Garrett pay APRA’s costs of and incidental to the proceeding.

Note: Entry of orders is dealt with in…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] FCA 482
Decision Date: 3 May 2024

CaseChat Overview and Summary

In the case of Australian Prudential Regulation Authority v Garrett, the Australian court was presented with an application by the APRA seeking to punish the respondent, Mr Andrew Morton Garrett, for contempt. Mr Garrett was associated with non-legal banking entities and had been ordered to cease unlawfully conducting a banking business in accordance with the Banking Act 1959. Despite these orders, Mr Garrett continued to operate the business, leading to this contempt hearing.

The central legal issue before the court was whether Mr Garrett's actions constituted contempt of court by failing to comply with the orders given. The court had to consider the principles of contempt of court and assess whether the respondent's continued operation of the banking business was a breach of the orders, thereby establishing contempt.

The court found that Mr Garrett had indeed breached the orders by continuing to conduct the banking business, despite being explicitly ordered to cease. The court held that this constituted contempt of court. As a result, Mr Garrett was convicted of contempt and ordered to pay a fine of $10,000, which was suspended for 18 months on condition of his compliance with the orders and a penal notice. Additionally, Mr Garrett was ordered to pay the APRA's costs of the proceeding.

Orders

Orders of the court

1. Pursuant to s 31 of the Federal Court of Australia Act 1976 (Cth) and r 42.02 of the Federal Court Rules 2011 (Cth) the respondent, Mr Andrew Morton Garrett, be convicted on the charge of contempt in the statement of charge filed by the applicant (APRA) on 21 September 2023.

2. Mr Garrett pay a fine in the sum of $10,000 to be suspended for a period of 18 months from the date of these orders, conditional upon Mr Garrett’s compliance with the Orders and Penal Notice dated 14 August 2023.

3. Mr Garrett pay APRA’s costs of and incidental to the proceeding.

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

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Needless to say, I have explained to Mr Garrett that, in the event that he does act contrary to the Orders, not only will the condition upon which the fine has been imposed be satisfied, but the Court would look very seriously on the repetition of such conduct in all the circumstances.F CONCLUSION I will make the following orders. 1. Pursuant to s 31 of the Federal Court of Australia Act 1976 (Cth) and r 42.02 of the Federal Court Rules 2011 (Cth) the respondent, Mr Andrew Morton Garrett, be convicted on the charge of contempt in the statement of charge filed by the applicant (APRA) on 21 September 2023.2. Mr Garrett pay a fine in the sum of $10,000 to be suspended for a period of 18 months from the date of these orders, conditional upon Mr Garrett’s compliance with the Orders and Penal Notice dated 14 August 2023.3. Mr Garrett pay APRA’s costs of and incidental to the proceeding.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number:	NSD 741 of 2023
Judgment of:	LEE J
Date of judgment:	3 May 2024
Catchwords:	CONTEMPT OF COURT – application by Australian Prudential Regulation Authority seeking an order that the respondent be punished for contempt – where respondent is associated with non-legal “banking” entities – where respondent ordered to cease unlawfully conducting a “banking business” within the meaning of the Banking Act 1959 (Cth) – where respondent failed to comply with orders by continuing to operate a “banking business” – consideration of relevant principles – breach of orders – contempt established – orders made
Legislation:	Banking Act 1959 (Cth) Federal Court of Australia Act 1976 (Cth) s 31 Federal Court Rules 2011 (Cth) r 42.02
Cases cited:	Alexander v Crawford [2003] NSWSC 426 Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 Australian Competition and Consumer Commission v Hughes [2001] FCA 38 Australian Competition and Consumer Commission v INFO4PC.Com Pty Ltd [2002] FCA 949; (2002) 121 FCR 24 Australian Prudential Regulation Authority v Garrett (Contempt Application) [2024] FCA 235 Australian Prudential Regulation Authority v Garrett [2023] FCA 956 Hearne v Street [2008] HCA 36; (2008) 235 CLR 125 Humane Society International Inc v Kyodo Senpaku Kaisha Ltd [2015] FCA 1275; (2015) 238 FCR 209 Kazal v Thunder Studios Inc (California) [2017] FCAFC 111; (2017) 256 FCR 90 Matthews v ASIC [2009] NSWCA 155 Re Colina; Ex parte Topohey [1999] HCA 57; (1999) 200 CLR 386 Re Group Pty Ltd v Kazal (No 4) [2017] FCA 1084 Siminton v Australian Prudential Regulation Authority [2008] FCAFC 89; (2008) 168 FCR 140 Titan Support Systems Inc v Nguyen (No 2) [2015] FCA 359 Witham v Holloway (1995) 183 CLR 525
Division:	General Division
Registry:	New South Wales
National Practice Area:	Commercial and Corporations
Sub-area:	Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs:	26
Date of hearing:	3 May 2024
Counsel for the applicant:	Ms S Foda
Solicitor for the applicant:	Dentons
Counsel for the respondent:	The respondent appeared via audio visual link