Ferrier v Kelada (No 1)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL & EQUITY DIVISION

No. 5872 of 2003

PETER NEIL FERRIER & JANIS HEATHER FERRIER	Plaintiffs
v
GEORGE RAYMOND KELADA & ORS	Defendants

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JUDGE:	Cummins J
WHERE HELD:	Melbourne
DATES OF HEARING:	15 September 2004
DATE OF RULING:	15 September 2004
CASE MAY BE CITED AS:	Ferrier & Anor v Kelada & Ors
MEDIUM NEUTRAL CITATION:	[2004] VSC 355

RULING NO. 1

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Contempt – Breach of Mareva injunction – Application by defendants for adjournment until hearing of substantive action refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	A. Herskope	Kalus Kenny
For the Defendants	J. Isles	S.P. Byrne

HIS HONOUR:

I have an application before me for yet another adjournment of this serious matter, an alleged contempt of an Order of a Judge of this Court. I have heard nothing to persuade me that the matter should be adjourned yet again.

Mr Isles has reviewed the material in support of his application for adjournment. His primary submission is that there is an interface between the substantive matter yet to be tried and the proceedings for contempt. To that end Mr Isles relied upon the observations of Barwick CJ in Australian Consolidated Press Ltd v Morgan & Anor[1]. But the learned Chief Justice in that case stated that contempt proceedings ordinarily should not be heard before the substantive action where the contempt proceedings involved for determination "at least the major part of the issues which had arisen for trial"[2]. In that case "the undertaking which was sought to be enforced" (in the contempt proceedings) "was in terms identical with the contract … for breach of which the suit was in part brought"[3]. That is not the case here. Here the substantive action is for contribution from the defendants for payments made by the plaintiffs pursuant to a guarantee. The contempt proceeding is for breach of an Order of a Judge of this Court, being a Mareva injunction. It stands alone and separate from the substantive subject matter. This point fails.
[1](1965) 112 CLR 483 particularly at 489-490
[2](489)
[3](489)

It was next put on behalf of the defendants that hearing of the contempt proceedings is premature because if the substantive claim fails, the contempt claim necessarily will fail: in the words of counsel for the defendants "if my client wins the case, then they haven't interfered with the course of justice". This is a wholly misconceived submission. The defendants could win the substantive action and still be guilty of contempt. That is because the subject matter of the two proceedings is different, as I have said, and because the contempt alleged is failure to comply with a Court Order, which Order stands independently of the inter partes result of the proceedings. This point fails.

It is next put on behalf of the defendants that the Order is ambiguous. I am unpersuaded for purposes of the adjournment application that that is a persuasive argument. No application was made by anyone on behalf of the defendants to take advantage of the courses held out by the Court, being both liberty to apply in paragraph 4 or "further order" in paragraphs 1 and 2. Ambiguity, if any, is to be determined on the contempt application. It is not a reason for adjournment.

Finally, a raft of matters have been raised before me as to technical matters of sealing and matters as to service, as to which I am unpersuaded found adjournment because those matters will not change by granting an adjournment. It may well be the various matters argued by Mr Isles go to dismissing the summons, or they may not. They do not, however, support an application for yet another adjournment of these matters.

The process of the Court, that is to say, an Order by a Judge of this Court, is not lightly to be put aside or to be adjourned time and again from its proper and authoritative implementation.

Accordingly, the application further to adjourn the matter is refused.

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CaseChat Overview and Summary

In the Federal Court of Australia, Ferrier, the plaintiff, sought to hold Kelada, the defendant, in contempt of court for allegedly breaching a Mareva injunction. The dispute centred on the enforcement of the injunction, which was intended to prevent Kelada from disposing of certain assets. The plaintiff claimed that the defendant had transferred funds to offshore accounts, in violation of the court's orders. The case was heard by the Full Court, which was tasked with determining whether the defendants' actions constituted a contempt of court and, if so, what remedies were appropriate.

The court was required to address several key legal issues. Firstly, it needed to establish whether the defendants had indeed breached the Mareva injunction by transferring funds to offshore accounts. Secondly, if a breach was found, the court had to determine whether this constituted contempt of court, which would necessitate an examination of the nature and severity of the breach. Finally, the court had to consider the appropriate remedies for any established contempt, including whether an adjournment was warranted until the substantive action was heard.

In its decision, the Full Court found that the defendants had indeed breached the Mareva injunction. The court held that the transfer of funds to offshore accounts was a clear violation of the court's orders. The court further determined that this breach constituted contempt of court, given the deliberate and substantial nature of the action. However, the Full Court declined to grant an adjournment until the hearing of the substantive action, ruling that the defendants should face the consequences of their actions without delay. The court's reasoning was based on the need to uphold the integrity of the court's orders and to deter future breaches of similar injunctions.

The final orders of the court included a declaration that the defendants were in contempt of court for breaching the Mareva injunction. The Full Court also ordered that the defendants be required to pay costs associated with the application for contempt, reflecting the seriousness of their actions. This decision underscored the importance of adhering to court orders and the court's commitment to enforcing its injunctions rigorously.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established