District Council of Coober Pedy v Naumovic (No 2) - [2020] SASC 159

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
DISTRICT COUNCIL OF COOBER PEDY v NAUMOVIC (No 2)
[2020] SASC 159
Judgment of The Honourable Justice Stanley
25 August 2020
COURTS AND JUDGES - CONTEMPT - PUNISHMENT AND ENFORCEMENT - PUNISHMENT - ORDER - NATURE OF PUNISHMENT
COURTS AND JUDGES - CONTEMPT - PARTICULAR CONTEMPTS - DISOBEDIENCE OF ORDERS OF COURT - INJUNCTIONS
COURTS AND JUDGES - CONTEMPT - PARTICULAR CONTEMPTS - DISOBEDIENCE OF ORDERS OF COURT - ORDERS RELATING TO DOCUMENTS
In this matter the Court found the defendant, George Naumovic, in contempt of Court by using restricted information in contravention of an order made by Judge Dart. The contempt consisted of the use of that information in drafting pleadings in an action in the Magistrates Court against the District Council of Coober Pedy and a former member of the council.
The defendant was found guilty of a single charge of contempt. Of the ten particulars alleged, two were found proved.
Held:
1. The Court’s power to deal with a contemnor for his or her contempt is not subject to the provisions of the Sentencing Act 2017 (SA) but is at large.
2. The conduct of the defendant is not at the upper end of the range in terms of seriousness of the contempt. The Council has not made out the aggravating factor to the contempt by the reason of the defendant giving deliberately untruthful evidence.
3. The penalty is fixed on the basis that the defendant was wilfully blind to the use made by Ms Walsh, his agent, of the restricted information in drafting the impugned pleadings.
4. The appropriate penalty to impose is a fine of $5000, however it is not to be paid to the Council.
5. It is appropriate any costs be awarded on an indemnity basis, having regard to the nature of contempt proceedings.
6. The Council should recover from the defendant 20 per cent of its costs on an indemnity basis, to be agreed or taxed, as it was only partially successful. The defendant was self-represented apart from the hearing on penalty and is only entitled to recover from the Council 80 per cent of any disbursements and out of pocket expenses of the trial.
Sentencing Act 2017 (SA); Local Government Act 1999 (SA) s 145, referred to.
Pelechowski v Registrar, Court of Appeal (1999) 198 CLR 435; Witham v Holloway (1995) 183 CLR 525; von Doussa v Owens (No 3) (1982) 31 SASR 116, discussed.
Hughes v Australian Competition and Consumer Commission (2004) 247 FCR 277; Nicholls v Director of Public Prosecutions (1993) 61 SASR 31; Wood v Staunton (No 5) (1996) 86 A Crim R 183; Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494; Hannaford v HH (No 2) (2012) 203 FCR 501; Degman Pty Ltd (in liq) v Wright (No 2) [1983] 2 NSWLR 348; Australian Competition and Consumer Commission v Hughes [2001] FCA 38; Viscariello v Legal Profession Conduct Commissioner (No 2) [2017] SASCFC 152, considered.

DISTRICT COUNCIL OF COOBER PEDY v NAUMOVIC (No 2)
[2020] SASC 159

STANLEY J: In this matter the Court found the defendant, George Naumovic, in contempt of Court by using restricted information in contravention of an order made by Judge Dart. The contempt was constituted by the use of that information in drafting pleadings in an action in the Magistrates Court against the District Council of Coober Pedy (the Council) and a former member of the Council for misfeasance in public office and defamation.
Mr Naumovic was found guilty of a single charge of contempt. Of the 10 particulars alleged in the charge the Court found two proved.
I must now impose penalty for Mr Naumovic’s contempt.
The range of penalties available to the Court in punishing for contempt range from an order for payment of legal costs for a wilful breach of an order or undertaking to committal to prison for an indefinite period of time.[1]
[1] Hughes v Australian Competition and Consumer Commission [2004] FCAFC 319 at [55], (2004) 247 FCR 277 at 292-293.
The Court’s power to deal with a contemnor for his or her contempt is not subject to the provisions of the Sentencing Act 2017 (SA) but is at large.[2]
[2] Nicholls v Director of Public Prosecutions [1993] SASC 3964, (1993) 61 SASR 31 at 42-42 and 43.
The factors relevant to sentencing for contempt include:
1.the seriousness of the contempt;
2.whether contemnors are aware of the consequences for themselves for the conduct;
3.the actual consequences of the contempt on the relevant trial or inquiry;
4.whether the contempt was committed in the context of serious crime;
5.the reason for the contempt;
6.whether the contemnor has received any benefit by indicating an intention to give evidence;
7.whether there has been any apology or public expression of contrition;
8.the character and antecedents of the contemnor;
9.general and personal deterrence; and
10.denunciation of the contempt.[3]
[3] Wood v Staunton (No 5) (1996) 86 A Crim R 183 at 185; Louis Vuitton Malletier SA v Design Elegance Pty Ltd [2006] FCA 83 at [25], (2006) 149 FCR 494 at 501-502; Hannaford v HH (No 2) [2012] FCA 560 at [27], (2012) 203 FCR 501 at 506-507.
The approach to sentencing for contempt is set out in the reasons of Kirby J in Pelechowski v Registrar, Court of Appeal[4] in the following terms:[5]
In approaching this submission, it is essential to remember a number of general propositions which govern punishment for contempts of the kind in question here where the punishment is not limited by statute but is at large. In determining the order which is appropriate to the contempt found, the Court must take into account those general principles which govern the sentencing of persons convicted of criminal offences which are apt to the peculiar character of contempt. The underlying purpose of the law on this form of contempt is to vindicate the due administration of justice. Contempts of the kind illustrated in this case may be technical, wilful but without a specific intent to defy the authority of the Court and contumacious. In the last category a serious act of deliberate defiance of judicial authority is evidenced.
Conceding that such categories of contempt may sometimes overlap, in a case of a technical contempt, where the contemnor has offered an apology which the Court accepts, it will sometimes be sufficient to make a finding of contempt coupled with an order for the payment of costs. Where a wilful contempt is shown, in the sense of deliberate conduct but without specific intent to defy judicial authority, a finding of contempt and an order for the payment of costs may not be sufficient. In such a case, a fine (and sometimes more) may be needed to vindicate the authority of the court. But in a case of contumacious defiance of a court's orders and authority, it will frequently be appropriate for a custodial sentence to be imposed as a response to an apparent challenge to the authority of the law.
Unless courts are seen to respond firmly to deliberate defiance of their orders, their effectiveness in the authoritative determination of disputes of law would be undermined. And if they were not effective, “serious and lasting damage to the fabric of the law may result”. Obviously, the culpability of the contemnor is relevant to the order which must be made. The contemnor must then be punished in an emphatic way. He or she must be deterred effectively from any temptation to re-offend. However, the focus of attention is not solely on the contemnor. It is also addressed to the community at large and to any others who might consider acting in a similar manner.
[citations omitted]
[4] [1999] HCA 19, (1999) 198 CLR 435.
[5] [1999] HCA 19 at [147]-[149], (1999) 198 CLR 435.
Submissions
The Council submits that the defendants conduct is at the upper end of the range in terms of the seriousness of the contempt. Not only was the contempt a wilful disregard of the order of Judge Dart, but the offending conduct is aggravated because the defendant’s evidence was not entirely truthful. In addition, the Court must fix a penalty which reflects not only the seriousness of the defendant’s conduct but is necessary and sufficient to deter others from disobeying orders of the Court and defying its authority. The penalty also must be sufficient to vindicate the Court’s authority.
Nonetheless, the Council does not seek an order for imprisonment. It does seek the imposition of a daily fine.
The defendant submits that the contempt was not wilful, contumacious or contumelious. Accordingly, the contempt is not at the upper end of the range of seriousness. He was not aware of the extent of the consequences of his conduct and had limited insight about its effects on the administration of justice when he signed the amended statement of claim containing the impugned pleadings. These pleadings were drafted in the context of his pursuit of the Council and certain individuals for its maladministration. He claims to have acted in the public interest. Nonetheless, he accepts that the contempt was an unacceptable affront to the Court and its orders. He apologised to the Court and the impugned pleadings have been struck out. He has undertaken, through his counsel, to amend the affected paragraphs from the amended statement of claim. In the circumstances, there is no basis for the Court to impose a daily fine. He has effectively purged his contempt. He is a person of good character who has served the Coober Pedy community for many years and is a pensioner with modest assets.
Consideration
I do not accept that the contempt in this case was at the upper end of the range of seriousness. On the basis of my findings on the charge of contempt, I am satisfied that the contravention of the order made by Judge Dart was deliberate and in that sense wilful. I find it was a decision of the defendant’s agent, Ms Walsh. While that finding does not excuse the contemnor, it is relevant to his degree of culpability. While the Council highlights findings I have made in relation to unsatisfactory features of the defendant’s evidence, I did not go so far as to find that his evidence was deliberately untruthful. While there were unsatisfactory aspects to his evidence, I do not consider the Council has established the existence of an aggravating factor to the contempt by reason of him giving deliberately untruthful evidence.
I fix penalty on the basis that the defendant was wilfully blind to the use made by Ms Walsh of the restricted information in drafting the impugned pleadings. I accept that the contempt occurred in the context of the defendant pursuing claims against the Council involving alleged maladministration or worse. I make clear that I am in no position to judge whether there is any truth in the allegations that the defendant has and wishes to ventilate. Moreover, I emphasise that his motives neither justify nor mitigate the contempt. While the defendant submits his conduct was in the public interest, he was pursuing a private claim for damages and disobedience of Court orders is not in the public interest. The Court must always be scrupulous in maintaining its authority and ensuring compliance with its orders. In that regard, the exercise of the contempt power is an important aspect of the administration of justice. In fixing penalty the Court must exercise its coercive power not only to indicate its authority in relation to this matter but to deter others from thinking that Court orders can be disobeyed with impunity.
In this case I sentence Mr Naumovic on the basis that he is otherwise of good character and, by the apology he delivered to the Court, which I accept, he has demonstrated his contrition and remorse. I also note that the pleadings in the Magistrates Court proceedings have been struck out to delete the pleas that I have found were in contempt of Court. To that extent the defendant has substantially purged his contempt.
In all the circumstances I consider that the appropriate penalty to impose is a fine.
Mr Naumovic is 60 years of age. He lives in Coober Pedy. He is a disability support pensioner. He receives about $1,100 per fortnight pursuant to Job Seeker. This is double the income he received from the pension prior to COVID‑19. He has a mortgage repayment of $125 per week. He and Ms Walsh live in a shed on the property he owns. He has little equity in the property. In fixing penalty, I have regard on the one hand to his limited means and on the other hand the need for denunciation by the Court of the contempt.
I would impose a fine of $5,000. I will hear submissions on the question of time to pay. Like Wells J in von Doussa v Owens (No 3)[6] I would not want it to be thought that this penalty necessarily sets a precedent, rather, I regard it as a warning for the future and, if any similar cases of contempt arise, I think the Court would consider greater penalties.
[6] (1982) 31 SASR 116 at 120.
The Council seeks an order that the fine should be paid to it pursuant to s 145 of the Local Government Act 1999 (SA) (Local Government Act). Section 145 provides:
All fines, penalties and forfeitures recovered in proceedings commenced by a council, an employee of a council, or a subsidiary, (or by a person acting under a delegation from, or on behalf of, a council, an employee of a council, or a subsidiary), before a court for an offence committed within an area against this or another Act, or against a regulation or by-law made under this or another Act, must, except where otherwise provided, be paid to the council of the area.
I do not accept this submission. The obligation under s 145 is to pay fines et cetera recovered in proceedings commenced by a council before a court for an offence committed within an area against the Local Government Act or another Act. The difficulty for the Council’s submission is that proceedings for contempt are not proceedings in relation to an offence committed under an Act. Neither does the evidence establish that the contempt was committed in the Council area.
The nature of contempt was described in Witham v Holloway[7] by McHugh J in the following terms:[8]
The phrase "contempt of court" dates from at least the twelfth century. While it was not until the seventeenth century that the courts drew a distinction between civil and criminal contempts, the existence of the distinction has been firmly established since the middle of the last century. The distinction has been acknowledged or assumed in a number of decisions in this Court. Criminal contempts are acts or omissions that have a tendency to interfere with or undermine the authority, performance or dignity of the courts of justice or those who participate in their proceedings. Although criminal contempts take many forms, their characteristic attribute is an interference with the due administration of justice either in a particular case or as part of a continuing process. Defiance of the court or its procedures, publication of matters scandalising the court, actions calculated to prejudice the fair trial of a pending case, threats to parties or witnesses and misconduct within the court are examples of criminal contempts. Civil contempts, on the other hand, are concerned with failures to comply with judgments or orders of the courts. But civil and criminal contempt overlap. Thus, disobedience to the order of a court constitutes criminal contempt when the disobedience is contumacious. Defiance of the court's order renders criminal what would be otherwise civil contempt. Where noncompliance with a judgment or order goes beyond mere breach and involves misconduct, civil contempt also has "a penal or disciplinary jurisdiction [that is] exercised by the court in the public interest".
[citations omitted]
[7] [1995] HCA 3, (1995) 183 CLR 525.
[8] [1995] HCA 3, (1995) 183 CLR 525 at 538-539.
Proceedings for contempt are not an offence against an Act, whether the Local Government Act, the Supreme Court Act or any other legislation within the meaning of s 145. In the Supreme Court proceedings for contempt are brought in the Court’s inherent jurisdiction. The Court exercises its coercive power in the administration of justice. While contempts may be criminal or civil, a contempt of Court is not properly understood as an offence.
Absent the power conferred by s 145 there is no other power pursuant to which the Court could order that the fine be paid to the Council. I would not make the order sought by Council.
Costs
The Council seeks an order for costs on an indemnity basis. The defendant opposes an order for indemnity costs. He submits that the Council alleged 10 instances of contempt but proved only two. In the circumstances he submits that any costs awarded should proportionately be granted on a ratio of 80:20 in his favour. In the alternative, there should be no order as to costs.
The Council has been compelled to bring proceedings for contempt in order to enforce its rights which have already been adjudicated upon by Judge Dart. In those circumstances, it is appropriate that it ought to have its costs on an indemnity basis.[9] In this case the Council has been only partially successful. I consider it appropriate that it should recover from the defendant 20 per cent of its costs on an indemnity basis to be agreed or taxed. Apart from the hearing on penalty the defendant was self-represented. He is entitled to recover from the Council 80 per cent of any disbursements and out of pocket expenses of the trial.[10]
[9] Degman Pty Ltd (in liq) v Wright (No 2) [1983] 2 NSWLR 348 at 358; Australian Competition and Consumer Commission v Hughes [2001] FCA 38 at 29.
[10] Viscariello v Legal Profession Conduct Commissioner (No 2) [2017] SASCFC 152 at [17]-[18].
Conclusion
I impose a fine of $5,000 as penalty for Mr Naumovic’s contempt. The Council should recover from the defendant 20 per cent of its costs on an indemnity basis to be agreed or taxed. The defendant is entitled to recover from the Council 80 per cent of any disbursements and out of pocket expenses of the trial.