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Hurd v Zomojo Pty Ltd

Hurd v Zomojo Pty Ltd

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FEDERAL COURT OF AUSTRALIA
Hurd v Zomojo Pty Ltd [2015] FCAFC 148

Citation: Hurd v Zomojo Pty Ltd [2015] FCAFC 148

Appeal from: Zomojo Pty Ltd v Hurd (No 5) [2014] FCA 537

Parties: MATTHEW JOHN HURD and JOHN BARRIE HURD v ZOMOJO PTY LTD (ACN 114 604 269)

File number: VID 528 of 2014

Judges: BESANKO, GILMOUR AND BEACH JJ

Date of judgment: 21 October 2015

Catchwords:
CONTEMPT – appeal against the primary judge’s finding that the appellants were guilty of contempt by contravening court orders – whether the respondent was required to prove the appellants did not act in good faith – whether the respondent proved beyond reasonable doubt that the conduct was not casual, accidental or unintentional – whether the primary judge considered the basis for making a third party liable for aiding or abetting or otherwise causing the contraventions – Federal Court of Australia Act 1975 (Cth) s 31 – Federal Court Rules 2011 (Cth) div 42.2.

PRACTICE AND PROCEDURE – whether the primary judge erred in giving the respondent leave to re-open its case to tender affidavits containing admissions – where appellants had not opened their cases before respondent allowed to re-open – Federal Court Rules 2011 (Cth) r 42.12.

PRACTICE AND PROCEDURE – whether the orders of primary judge were clear, unambiguous and capable of compliance.

PRACTICE AND PROCEDURE – whether the primary judge erred in finding that the absence of an endorsement meant the charges should have been dismissed – where the respondent was not seeking enforcement of the orders by imprisonment or sequestration of property – Federal Court Rules 2011 (Cth) r 41.06.

EVIDENCE – whether affidavits were admissible as admissions to contravening court orders – whether the primary judge erred in failing to take into account the deponents’ right to silence – whether the primary judge erred in failing to reject the affidavits containing the admissions under the Court’s discretion – Evidence Act 1995 (Cth) ss 81, 135, 137.

COSTS – whether the primary judge erred in failing to take into account the appellants’ offer of compromise and Calderbank offer.

Held: Appeal allowed in part.

Legislation: Evidence Act 1995 (Cth) ss 81, 82, 83, 135, 137
Federal Court of Australia Act 1976 (Cth) s 31
Federal Court Rules 1979 (Cth) O 37 r 2
Federal Court Rules 2011 (Cth) rr 1.34, 41.06, 41.08, 41.09, 42.12, 42.13, 42.15
Judiciary Act 1903 (Cth) s 24

Cases cited:
Advan Investments Pty Ltd v Dean Gleeson Motor Sales Pty Ltd & Ors [2003] VSC 201
Australian Competition and Consumer Commission v Goldstar Corporation Pty Ltd [1999] FCA 585
Australian Meat Industry Employees’ Union and Others v Mudginberri Station Pty Ltd (1986) 161 CLR 98
Bilta (UK) Ltd (in liquidation) v Nazir (No 2) [2015] 2 WLR 1168
House v The King (1936) 55 CLR 499
Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705
Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494
Meridian Global Funds Management Asia…

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: [2015] FCAFC 148
Decision Date: 21 October 2015

CaseChat Overview and Summary

The appeal, heard by the Full Court of the Federal Court of Australia, involved Hurd, both John and Matthew, as appellants, and Zomojo Pty Ltd as the respondent. The dispute centred on the appellants’ alleged contempt of court by contravening certain court orders. The primary judge had found the appellants guilty of contempt, leading to the current appeal. The legal issues that the court had to decide included whether the respondent needed to prove that the appellants did not act in good faith, whether the respondent successfully proved beyond reasonable doubt that the conduct was not casual, accidental, or unintentional, and whether the primary judge had correctly considered the basis for holding a third party liable for aiding or abetting or otherwise causing the contraventions. The court also had to determine whether the primary judge erred in allowing the respondent to reopen their case to tender affidavits containing admissions and whether the orders of the primary judge were clear, unambiguous, and capable of compliance.

The court found that there was no error in the primary judge’s order regarding costs. The court did not see any required kind of error in his Honour’s order as to costs. The court also concluded that the declarations of contempt made by Tracey J relating to paragraphs 12, 14, 16, 17, and 18 of Gordon J’s orders of 5 February 2013 should be set aside. However, the court agreed with the reasoning and conclusions concerning Hurd senior in relation to paragraphs 19, 20, and 21 of Gordon J’s orders. The court concluded that the contempt proceedings against Hurd senior were only in respect of accessorial liability concerning the relevant corporate parties’ contempt of Gordon J’s orders. The court found that the appellants had not proved beyond reasonable doubt the knowing and deliberate acts or omissions that brought about or facilitated the impugned conduct amounting to the contempt by the corporate contemnors.

ORDERS:
1. The appeal by Mr John Hurd be allowed in part.
2. The declaration in paragraph 8 and the order in paragraph 10 of the orders made by Tracey J on 19 June 2014 be set aside and in lieu thereof there be the following declaration and order:
8. The Fourth Third Party is guilty of contempt of paragraphs 12, 14, 16, 17, and 18 of the order of the Court made on 5 February 2013.
10. The First to Third and Fifth to Eighth Respondents pay the costs of the Applicant’s interlocutory application dated 7 March 2013, including reserved costs, save for the costs relating to the orders sought by the Applicant against the First to Third Third Parties and the costs relating to the appointment of Rodney McKemmish. The Fourth Third Party is to pay 50% of such costs.
3. There be no order as to the costs of the appeal by Mr John Hurd.
4. The appeal by Mr Matthew Hurd be dismissed.
5. Mr Matthew Hurd pay the respondent’s costs of his appeal.

Orders

Orders of the court

1. The appeal by Mr John Hurd be allowed in part.

2. The declaration in paragraph 8 and the order in paragraph 10 of the orders made by Tracey J on 19 June 2014 be set aside and in lieu thereof there be the following declaration and order:

8. The Fourth Third Party is guilty of contempt of paragraphs 12, 14, 16, 17 and 18 of the order of the Court made on 5 February 2013.

10. The First to Third and Fifth to Eighth Respondents pay the costs of the Applicant’s interlocutory application dated 7 March 2013, including reserved costs, save for the costs relating to the orders sought by the Applicant against the First to Third Third Parties and the costs relating to the appointment of Rodney McKemmish. The Fourth Third Party is to pay 50% of such costs.

3. There be no order as to the costs of the appeal by Mr John Hurd.

4. The appeal by Mr Matthew Hurd be dismissed.

5. Mr Matthew Hurd pay the respondent’s costs of his appeal.

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

The offer did not dictate an exercise of his Honour’s discretion in a particular way. We can see no error of the required kind in his Honour’s order as to costs (House v The King (1936) 55 CLR 499; Norbis v Norbis (1986) 161 CLR 513).Conclusions For these reasons, the appeal by Mr John Hurd should be allowed in part. The declaration in paragraph 8 and the order in paragraph 10 of the orders made by the primary judge on 19 June 2014 should be set aside and in lieu thereof there should be the following declaration and order:8.The Fourth Third Party is guilty of contempt of paragraphs 12, 14, 16, 17, and 18 of the order of the Court made on 5 February 2013.10.The First to Third and Fifth to Eighth Respondents pay the costs of the Applicant’s interlocutory application dated 7 March 2013, including reserved costs, save for the costs relating to the orders sought by the Applicant against the First to Third Third Parties and the costs relating to the appointment of Rodney McKemmish. The Fourth Third Party is to pay 50% of such costs.We have reduced the costs payable by Mr John Hurd in recognition of the fact that the charges against him in relation to the orders in paragraphs 19, 20 and 21 should have been dismissed. As to Mr John Hurd’s appeal, there should be no order as to costs. The appeal by Mr Matthew Hurd should be dismissed and he should pay Zomojo’s costs of his appeal. I have had the considerable advantage of reading the reasons of Besanko and Gilmour JJ. I agree with their exposition of the applicable principles and their reasoning and conclusions concerning the first appellant, Matthew Hurd. But I am unable to agree in their reasoning and conclusions concerning the second appellant, John Hurd (Hurd senior) as to the declarations of contempt made by Tracey J relating to paragraphs 12, 14, 16, 17 and 18 of Gordon J’s orders of 5 February 2013, although I agree in their reasoning and conclusions concerning Hurd senior in relation to paragraphs 19, 20 and 21 of her Honour’s orders. Even though the relevant proceedings against Hurd senior involved a civil contempt, nevertheless each element had to be proved beyond reasonable doubt. The contempt proceedings against Hurd senior were only in respect of what could be described as accessorial liability concerning the relevant corporate parties’ contempt of Gordon J’s orders; Hurd senior was not a party to the proceedings before Gordon J. In those circumstances, what needed to be proved beyond all reasonable doubt was: (a)first, all elements of the contempt of the corporate respondents; and (b)second, the knowing and deliberate acts or omissions of Hurd senior that brought about or facilitated the impugned conduct amounting to the contempt by the corporate contemnors. Here, the actus reus of the contempt by the corporate respondents was by omission. The first question to consider was whether such conduct of the corporate respondents was knowing and deliberate. Whose individual state of mind was to be attributed to the corporate entities for that purpose? Strictly, corporations are mindless. Lord Thurlow in 1778 succinctly expressed the point that a corporation has “no soul to damn, no body to kick”.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Citation:	Hurd v Zomojo Pty Ltd [2015] FCAFC 148
Appeal from:	Zomojo Pty Ltd v Hurd (No 5) [2014] FCA 537
Parties:	MATTHEW JOHN HURD and JOHN BARRIE HURD v ZOMOJO PTY LTD (ACN 114 604 269)
File number:	VID 528 of 2014
Judges:	BESANKO, GILMOUR AND BEACH JJ
Date of judgment:	21 October 2015
Catchwords:	CONTEMPT – appeal against the primary judge’s finding that the appellants were guilty of contempt by contravening court orders – whether the respondent was required to prove the appellants did not act in good faith – whether the respondent proved beyond reasonable doubt that the conduct was not casual, accidental or unintentional – whether the primary judge considered the basis for making a third party liable for aiding or abetting or otherwise causing the contraventions – Federal Court of Australia Act 1975 (Cth) s 31 – Federal Court Rules 2011 (Cth) div 42.2. PRACTICE AND PROCEDURE – whether the primary judge erred in giving the respondent leave to re-open its case to tender affidavits containing admissions – where appellants had not opened their cases before respondent allowed to re-open – Federal Court Rules 2011 (Cth) r 42.12. PRACTICE AND PROCEDURE – whether the orders of primary judge were clear, unambiguous and capable of compliance. PRACTICE AND PROCEDURE – whether the primary judge erred in finding that the absence of an endorsement meant the charges should have been dismissed – where the respondent was not seeking enforcement of the orders by imprisonment or sequestration of property – Federal Court Rules 2011 (Cth) r 41.06. EVIDENCE – whether affidavits were admissible as admissions to contravening court orders – whether the primary judge erred in failing to take into account the deponents’ right to silence – whether the primary judge erred in failing to reject the affidavits containing the admissions under the Court’s discretion – Evidence Act 1995 (Cth) ss 81, 135, 137. COSTS – whether the primary judge erred in failing to take into account the appellants’ offer of compromise and Calderbank offer. Held: Appeal allowed in part.
Legislation:	Evidence Act 1995 (Cth) ss 81, 82, 83, 135, 137 Federal Court of Australia Act 1976 (Cth) s 31 Federal Court Rules 1979 (Cth) O 37 r 2 Federal Court Rules 2011 (Cth) rr 1.34, 41.06, 41.08, 41.09, 42.12, 42.13, 42.15 Judiciary Act 1903 (Cth) s 24
Cases cited:	Advan Investments Pty Ltd v Dean Gleeson Motor Sales Pty Ltd & Ors [2003] VSC 201 Australian Competition and Consumer Commission v Goldstar Corporation Pty Ltd [1999] FCA 585 Australian Meat Industry Employees’ Union and Others v Mudginberri Station Pty Ltd (1986) 161 CLR 98 Bilta (UK) Ltd (in liquidation) v Nazir (No 2) [2015] 2 WLR 1168 House v The King (1936) 55 CLR 499 Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705 Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494 Meridian Global Funds Management Asia…