Fitz-Gibbon v Wily

[1999] HCATrans 128

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S142 of 1998

B e t w e e n -

PETER GERALD FITZ‑GIBBON

Applicant

and

HUGH JENNER WILY

Respondent

Application for special leave to appeal

GUMMOW J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 14 MAY 1999, AT 2.55 PM

Copyright in the High Court of Australia

MR P.E. KING:   I appear with MR M.J. WATTS, for the applicant.  (instructed by Searle & Associates)

MR J.K. CHIPPINDALL:   I appear for the respondent, your Honours.  (instructed by Michell Sillar)

GUMMOW J:   Yes, Mr King.

MR KING:   Your Honours, the question raised by this matter is whether the common law standard of proof beyond reasonable doubt applies to civil proceedings which are criminal in nature, generally, and - - -

GUMMOW J:   Well, I know that that sounds rather grand, but do we not have to start with the order that was sought and obtained before Justice Hill?

MR KING:   We do.  That is the case.  The order that was sought and obtained were the orders set out in the application.  If your Honours go to the materials at page 5 – and the application did not, in fact, appear in the application book, but this is the application upon which the applicant moved, the respondent here.  His first order was an:

Order pursuant to Section 30(5) –

and, your Honours, section 30(5) appears in the materials at page 8 - - -

GUMMOW J:   Yes.  So, it is an application under section 30?

MR KING:   That is right.  If your Honours go to section 30(5) your Honours will see that it confers power upon the court, in certain circumstances, to:

order the person who has failed to comply with the order, direction –

of a trustee, to do so and –

if it thinks fit, make an immediate order for the committal to prison of that person.

Now, in the application an order to the effect was sought both under section 30(5)(d).  That is paragraph 3 of the application at page 6 of the materials, and at paragraph - - -

GUMMOW J:   No, no, there were several orders sought, were there not?

MR KING:   That is so.  Paragraph 2, a similar order for committal to gaol under section 78(1)(d) and (f).

HAYNE J:   Neither 2 nor 3 was made, was it?

MR KING:   No, that is right.

HAYNE J:   What was made was an order under 1?

MR KING:   That was so, yes.  Your Honours, this case – - -

GUMMOW J:   That was just in the form of a mandatory injunction, really.

MR KING:   When this matter came on for hearing before - - -

GUMMOW J:   “Hand it over within three days”, was it not, what all 1 is about?

MR KING:   Yes.

GUMMOW J:   What happens then is another question.

MR KING:   That is right.  Now, when the matter - - -

GUMMOW J:   It needs another order.

MR KING:   That is right.  When the matter came on for hearing before the trial judge, the counsel for the applicant here frankly stated to his Honour that his client “will not be handing over the specified property referred to in the direction of the trustee”.  The direction of the trustee can be found - - -

HAYNE J:   The whole defence being, he did not have it; never had it and, at most, he might have had - - -

MR KING:   No, he did not have it but he had lost it and that a former friend of his had informed on him to the trustee, they having a certain relationship which had fallen apart, had led to the complaint being made and the order being made by the trustee.  The demand by the trustee lawfully made by him, and that was not disputed, appears in the judgment of the trial judge at page 3 of the application book at the bottom.

HAYNE J:   Is your proposition that an order handed over within three days was, in the context of this case, an order in the nature of disposing of a proceeding in the nature of a criminal proceeding?

MR KING:   That is exactly right.  Now, when the matter - - -

HAYNE J:   Why?

MR KING:   For this reason, that – the question is how to classify the nature of the proceedings themselves, that is the question, and the way in which the Full Court approached that question appears at page 44 of the application book.

GUMMOW J:   Line 31, it seemed to me, when I read it, on page 44, to be your point.

MR KING:   Yes, that is right.  That is it, line 31 and following.  What their Honours were doing there was distinguishing the decision of this Court which set forth the common law principle in relation to civil proceedings of a criminal nature in Witham v Holloway.  Their Honours said:

However, the order which his Honour made –

and those words “the order” are important from our point of view –

and the primary issue before him did not concern an issue of punishment, nor did it deal with any issue of contempt.  The primary issue before his Honour and the one on which he made his findings was whether the appellant had failed to comply with a direction of the respondent and whether he should be ordered to comply with that direction.

Just pausing there, your Honours, the issue before the learned trial judge was not that at all because the basic facts, the elements of the offence so called, were conceded.  It was acknowledged that the trustee had given a direction.  It was acknowledged the direction was lawful.  It was acknowledged that the applicant was a bankrupt.  It was acknowledged that he had failed to hand up the goods.  The one issue and the only issue before the trial judge was whether, in fact, it was impossible for him to do so and whether, in fact, he could – that is, whether he could do so. 

That was important for this reason:  under section 30(5) the word “may” appears, and the judge could have done one of three things in those circumstances, having heard the evidence.

HAYNE J:   But is the standard of satisfaction of the tribunal to be gauged by reference to what is sought or by reference to what order the tribunal makes?

MR KING:   By what is sought.

HAYNE J:   Why?  What authority or principle do you pray in aid that it is not what the court does but what is sought by the party?

MR KING:   The best exemplification of that conclusion, your Honour, is found in the judgment of the Full Court in the decision of Microsoft Corporation v Marks, the decision of Justices Beaumont, Lindgren and Lehane.  Your Honours, the material in that regard can be found in the Practice Note 3 materials at page 35.  This was a case in which the question of competency which his Honour Justice Beaumont dealt with related to whether the proceedings themselves should be classified as civil or criminal, and in subparagraph (ii) of the headnote it is noted this:

A proceeding should be classified as civil or criminal when it is commenced.

And at page 115 - - -

HAYNE J:   Yes.  For what purpose is one classifying?

MR KING:   Well, in that case it was for the purpose of determining whether there was a right of appeal or not.

HAYNE J:   Just so.

MR KING:   The argument being put against the applicant was that the proceedings were criminal and there was no right of appeal under section 24 of the Federal Court Act.

HAYNE J:   And is not the process of classification radically different in the present case?

MR KING:   Not at all, because if your Honour goes to page 115 of the judgment, there appears this at about – page 37 of the materials.  Obviously, extracts only have been provided, your Honours, to save paper.

GUMMOW J:   Yes.

MR KING:   At about line 21:

For completeness, it should be noted here that in Morgan, Barwick CJ said that when an order had been contumaciously disobeyed, civil proceedings for the “contempt of procedure” involved could be also proceedings for criminal contempt.  But, as McHugh J observed in Witham, there are difficulties with this approach, and it may be no longer open. 

Now, I will come back to the passage that is there cited in a moment because it raises another issue.

GUMMOW J:   This grew out of a contempt application, this Microsoft litigation.

MR KING:   That is so.

GUMMOW J:   There was an order and a contempt motion for it.

MR KING:   That is right.  At line 40, this is what his Honour said:

If, as I think, the test for appellability should be one of substance, the question arises when that ought to be determined.  It should, in my view, consistently with the uniform policy applied in Witham in terms of the standard of proof, be decided at the time of the institution of the contempt proceedings.  For reasons similar to those given by McHugh J above, any other approach is likely to encounter difficulties in its application.  A proceeding should be classified as civil or criminal when it is commenced.

Now, that was the view of the Full Court there, and Justice McHugh, in Witham v Holloway, which is a case analogous to - - -

GUMMOW J:   We know all about Witham v Holloway. 

MR KING:   - - - not precisely similar to, but analogous to the present matter – said this, and I do not need to take your Honours to Witham v Holloway because Justice Beaumont sets out the relevant passage at page 37 of the materials.  His Honour said this:

To attempt to confine the criminal standard to those cases where the object of the proceedings is purely punitive is a course fraught with practical difficulties.  In many cases of civil contempt, the proceedings may be brought for the purpose of coercing the contemnor as well as punishing that person…  It would border on the absurd to have the punitive aspect of the contempt decided on the criminal standard and the coercive aspect decided on the civil standard.  In other cases of civil contempt, an application may seek an order for committal simply to coerce the contemnor to comply with the order or judgment.  However, after the proceedings have commenced, the applicant may become aware of the contemnor’s inability to comply with the order and wish to have the contemnor punished.

And his Honour goes on to say in that circumstance you cannot convert proceedings which are civil in nature into criminal and, of course, the obverse applies.

Now, if it is correct, contrary to the decision of the Full Court, that the time and relevant material upon which one classifies proceedings is at the outset of the proceedings and by reference to the nature of the initiating process and not by a reference to the orders that have been picked out and ultimately made, then in the present case there can be no doubt, in my respectful submission, that the proceedings were civil proceedings, criminal in nature.  The test, of course, your Honours - - -

GUMMOW J:   I just do not understand that.

MR KING:   Well, that was the phrase used by this Court in Pelechowski.

GUMMOW J:   I know about that phrase but I do not understand what it has to do with case and this order.

MR KING:   Well, because, if one applies the dictum that the Judges applied in Witham v Holloway, that - - -

GUMMOW J:   We are talking in another universal discourse.

MR KING:   It is best, your Honour, instead of using my words, that I take your Honours to the material.  At page 14 of the material, page 534 in Witham v Holloway, this appears, at about line 4:

Moreover and, perhaps, of more importance, nothing is achieved by describing some proceedings as “punitive” and others as “remedial or coercive”.  Punishment is punishment, whether it is imposed in vindication or for remedial or coercive purposes.  And there can be no doubt that imprisonment and the imposition - - -

GUMMOW J:   What happen in Witham v Holloway?  There was an order made, was there not?

MR KING:   That is right.

GUMMOW J:   Of contempt.

MR KING:   That is right.  But the question - - -

GUMMOW J:   The appellant was held in contempt.

MR KING:   That is right.  But the question that is presently critical - - -

GUMMOW J:   The question was what criterion to apply in evaluating the evidence going to that issue of whether there had been a contempt of the orders.

MR KING:   Your Honour, there is no doubt that the proceedings before his Honour where proceedings in which the applicant sought, amongst other things, an order for imprisonment as a result of a failure of the bankrupt to comply with the direction of the trustee, lawfully made.

GUMMOW J:   Look, we have all been in bankruptcy on many occasions when trustees come in and they want a Wagnerian solution to things but in their heart they know they are not going to get one.

HAYNE J:   And if they do not, they are soon told.

MR KING:   In this case, there was some needle going on in the background and there was a very nasty set of circumstances and there was a relationship that had broken down and somebody complained to get back at somebody else.  It does not matter, that is irrelevant.

GUMMOW J:   There was a nasty conflict of fact, we all understand that.

MR KING:   Now, at page 10 of the application book, your Honours, his Honour noted that in the application the Trustee sought two orders.  One of those was committal to prison.  Now, what had happened in the action, your Honour:  after counsel for the applicant stood up at the start of the proceedings and said, “We will not be complying with the Trustee’s order.  Let us make this very clear what this case is about”, the learned judge - - -

GUMMOW J:   “Because we cannot”.

MR KING: “Because we cannot”.  The learned judge then - - -

GUMMOW J:   And in the end that was not accepted.

MR KING:   That was disbelieved.  He was disbelieved on that.  The learned judge indicated at the outset, “Well, I won’t be making an order for imprisonment”.  But paragraphs 2 and 3 of the application were not withdrawn.  They remain in issue throughout the case.  The truth is that his Honour had a discretion.  He could have believed him and rejected the case as unreasonable, using the word “may”, notwithstanding satisfaction of all the necessary elements of the offence; he could have disbelieved him, as he did, and imprisoned him or he could have taken the futile way and just simply made the same order as the Trustee, knowing it was not to be complied with.

So, it really was not a solution to the facts of the case at all.  That perhaps says something about the injustice of the matter because the matter stands in that state even now.  But the real question was - the question of law, we respectfully submit, is whether the Full Court was correct to classify the proceedings by a reference to the order made as just a mere delivery up or by a reference to the nature of the application itself and the orders sought, as the court in Microsoft indicated was the appropriate course, and Justice McHugh likewise.

HAYNE J:   Can the question be put this way:  the trial judge had to answer the question, “Am I persuaded to make this order?   Am I persuaded to make this order, both on questions of law and questions of fact?”  If that is the true question, why is the standard of satisfaction not determined or gauged by reference to the order that is made?

MR KING:   Because it is unfair and unjust, I respectfully submit, to ask someone to come to court to prove a case on differing standards depending upon the view the judge takes of the issues and the orders that are to be sought and at the election of one party or the other.

GUMMOW J:   Yes, but the application by the Trustee was otherwise dismissed.

MR KING:   That is right.  But that - - -

GUMMOW J:   Order 4.

MR KING:   That is correct.  But, of course, that did not resolve, with the greatest respect, the issue as to the nature of the proceedings before the judge.  The judge, in one sense, took the weak way out.  He made exactly the same direction as the Trustee himself had made knowing, according to the statement made to him, that it could not be or would not - - -

GUMMOW J:   I do not think this judge takes the weak way out at all.

HAYNE J:   I am not sure that that submission should be made in those terms of any judge in any circumstance.

GUMMOW J:   That is right.

MR KING:   I withdraw it, your Honour.  “Futile” perhaps is the better way to put it, because the truth was that the applicant had made it very clear and honestly stating what his position was.  Now, the judge did not believe him and, of course, the judge had a duty to do that and had a duty to decide that question. 

Now, your Honours, it really comes back to whether or not the Full Court could properly classify the matter by reference to the orders made or by reference to the nature of the application.  Now, I have made a submission about that.

Your Honours, the Chief Justice Sir Garfield Barwick, in the matter of Morgan which is found in the materials - - -

GUMMOW J:   Well, that is another contempt application.  I remember it well.

MR KING:   Yes, that is so, your Honour.  Well, on the question of classification, which is obviously where I am tripping up on this particular aspect of the case, in Witham v Holloway, their Honours said if the matter involves an issue of punishment then the proceedings are properly to be classified as criminal in nature and involve a criminal standard.  That, we say, is really the issue here.  The judge could have adopted any one of the various possibilities that I have referred to in section 30(5)(c) or (d); he adopted one, not the other.

Your Honours, Justice McHugh disagreed with the views of Chief Justice Barwick in Witham v Holloway and his Honour said that the question of converting from civil to criminal had to be dealt with at the outset of proceedings and not at the conclusion, and at no other time.  Proceedings could not be converted one way or the other.  We respectfully submit that is the appropriate and proper course.

Now, your Honours, the next question was the exception and the words of exception, “proceedings for an offence” under section 34A.  The Full Court, at page 45, lines 22 to 29, held that the word “proceedings” meant criminal prosecution, and we respectfully submit there is no warrant for that in the statute, 34A, and that the word “offence” meant a criminal prosecution for a criminal offence.  In my respectful submission, there is no basis for that as well.

We respectfully submit it is a strange result for the Full Court to classify the phrase, the exception in 34A, “proceedings for an offence” by reference to “proceedings” at the outset and to classify the nature of the matter before his Honour the trial judge by reference to the orders made.  It is, we would respectfully submit, an inconsistent position, and we would respectfully submit, in error.

We have identified the cases which adopt a contrary view:  Clyne v Bowman, Justice Yeldham; Justice Hardi Boys in Zimmerman; the High Court in Walsh v Sainsbury, referred to by Justice Yeldham, and in Hinch v The Australian Consolidated Press “an offence” was construed in similar terms to that to which we put here.

There is only one other issue and that is section 140 of the Evidence Act which is an argument my friend raises, a fresh argument.  He relies on In Re Lindsay in the Family Court.  We would respectfully submit that that decision is inconsistent with Witham v Holloway and that it is a case where the accused was not represented and a case of a statutory contempt, similar to the present matter, and ultimately ought to be overruled.  Those are our submissions.

GUMMOW J:   Yes, thank you, Mr King.  We have no need to call on you, Mr Chippindall.

A judge of the Federal Court of Australia made an order under section 30(5)(c) of the Bankruptcy Act that the present applicant comply with the requirement of the trustee, the present respondent, that he deliver to the trustee a gold Rolex watch within seven days of service of a sealed copy of the order.  In the application other relief had been sought by the trustee under paragraph (d) of section 30(5), including an order that the present applicant be punished for contempt, but the application for this relief was dismissed in the orders made by the judge.  The Full Court of the Federal Court dismissed an appeal.  We see no reason to doubt the correctness of that dismissal by the Full Court.  Accordingly, the application for special leave is refused.

MR CHIPPINDALL:   I seek an order for costs.

GUMMOW J:   Yes.  It is refused with costs.

AT 3.16 AM THE MATTER WAS CONCLUDED