CONTEMPT OF COURT – appeal from orders made by primary judge on conviction and sentences of imprisonment – where appellant had been found guilty of contempt of freezing orders – where appellant third party to freezing orders – where appeal allowed in part – declarations set aside – matter remitted to the Federal Circuit Court of Australia for retrial
[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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AGLC
Jorgensen v Fair Work Ombudsman [2019] FCAFC 113
Case
[2019] FCAFC 113
Decision Date
CaseChat Overview and Summary
The appeal in Jorgensen v Fair Work Ombudsman concerned the conviction and sentence of Mr Jorgensen for contempt of court in relation to breaches of a freezing order. The Fair Work Ombudsman had alleged that Mr Jorgensen knowingly contravened the freezing order by directing transfers of funds that were not bona fide business expenses. The primary judge found Mr Jorgensen guilty of nine charges of contempt and imposed a sentence of imprisonment. Mr Jorgensen appealed the conviction and sentence on several grounds, including that the primary judge had denied him procedural fairness through excessive interventions during his evidence, and that the sentence was manifestly excessive.
The key legal issues before the court were whether the primary judge had denied Mr Jorgensen procedural fairness through excessive interventions, and whether the sentence imposed was manifestly excessive. The court considered these issues in light of established principles regarding procedural fairness and sentencing. In relation to procedural fairness, the court noted that while the primary judge had intervened extensively during the trial, this did not necessarily amount to a denial of procedural fairness. However, the court found that the primary judge's interventions had compromised Mr Jorgensen's ability to objectively evaluate the evidence. As for the sentence, the court found that while the "head penalty" of imprisonment was not excessive, the requirement that Mr Jorgensen serve a period of "actual custody" was manifestly excessive.
The court allowed the appeal in part, setting aside the declarations of guilt and remitting the matter to the Federal Circuit Court for retrial. The court found that Mr Jorgensen had been denied procedural fairness through the primary judge's excessive interventions, and that the requirement for a period of "actual custody" was manifestly excessive. The court did not address the remaining grounds of appeal relating to the convictions.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
The important point to emphasise at this juncture is that, while the Ombudsman alleged that Mr Jorgensen knew about the freezing order, it was not specifically alleged that Mr Jorgensen knew that the funds transfers that he authorised and directed breached the freezing order. Similarly, while the Ombudsman alleged that the transfers or withdrawals did not fall within the exception in paragraph 10(c) of the freezing order, it was not alleged that Mr Jorgensen knew that the transfers did not fall within that exception. Nor did the Ombudsman allege, in the application at least, that Mr Jorgensen knowingly impeded the administration of justice or knowingly aided and abetted 828 Pty Limited’s failure to comply with the freezing order.THE OMBUDSMAN’S EVIDENCE AND SUBMISSIONS IN THE CIRCUIT COURT Rule 19.02(2)(c) of the Circuit Court Rules provides that an application which alleges that a person has committed a contempt must be “supported by an affidavit setting out the facts relied on”. The Ombudsman’s application was supported by an affidavit sworn by a lawyer employed in the Ombudsman’s office, Mr Samuel Prain. The Ombudsman subsequently filed and relied on another affidavit sworn by Mr Prain. The first affidavit sworn by Mr Prain on 11 October 2017 was a lengthy affidavit which annexed a very large number of documents. Neither of the parties to this appeal took the Court to this affidavit or referred to any part of it in their submissions. That may perhaps have been because, as will be seen, the primary judge also did not expressly or directly refer to any part of this affidavit. The parties also did not include all of the annexures to Mr Prain’s first affidavit in the Appeal Book. In those circumstances, it is unnecessary to refer at length to the contents of Mr Prain’s affidavit or the annexures thereto. It suffices to make the following brief points. First, Mr Prain’s first affidavit contained a detailed chronological account of the underlying proceeding commenced by the Ombudsman in relation to the alleged contraventions of the Fair Work Act by 828 Pty Limited and the making and service of the freezing order against that company. That chronological account was not contentious. There was no dispute that Mr Jorgensen was aware of the freezing order at the time he caused or directed the relevant funds transfers. Second, Mr Prain’s first affidavit annexed a large bundle of bank statements which had been produced on subpoena by Suncorp Bank. The bundle included statements for a number of different bank accounts, including the Yubnub account, the Jorgensen TNT account and the account held in the name Leigh Alan Jorgensen or Leigh Jorgensen Family Trust. The latter account will be referred to in these reasons as the Family Trust account. As was noted earlier, the Ombudsman’s case was that the nine breaches of the freezing order all involved transfers of funds into the Family Trust account. There was no dispute that those funds transfers occurred or that Mr Jorgensen caused them to be made.
Decision
Reasons for decision
On 3 May 2018, the primary judge delivered an ex tempore judgment (the Judgment) in which he found that the Ombudsman had proved each of the nine charges of contempt beyond reasonable doubt and convicted Mr Jorgensen accordingly. The primary judge accepted the Ombudsman’s submission that the contempt charges against Mr Jorgensen required the Ombudsman to prove four elements: that there was a court order in existence; that the terms of the order were clear, unambiguous and capable of compliance; that Mr Jorgensen had knowledge of the order; and that Mr Jorgensen knowingly impeded the administration of justice: Judgment at [46]. His Honour found that the first three elements were “easily met” and that the fourth element was the focus of the trial: Judgment at [47]-[50]. His Honour accepted that it was for the Ombudsman to prove each of the elements beyond reasonable doubt: Judgment at [52]. As for the “exception” in subpara 10(c) of the freezing order, the primary judge proceeded on the basis that it was for Mr Jorgensen to show that there was evidence upon which it could be found that the relevant payments fell within the exception and that once that was shown it was for the Ombudsman to negate the exception beyond reasonable doubt: Judgment at [52]-[53]. It should perhaps be noted, in this context, that the primary judge’s findings in this regard are consistent with the decision of Zammit J in Fortune Holding Group Pty Ltd v Zhang (No 2) [2017] VSC 738 at [31]-[49]; compare Australian Securities and Investments Commission v Sigalla (No 3) [2010] NSWSC 1076 at [46]-[48]. The primary judge then purported to address the question whether the relevant “disposition of assets” occurred in the “ordinary course of business and in the proper course of the business”: Judgment at [54]. That was no doubt a reference to the question whether the relevant withdrawals or transfers fell within the exception in subpara 10(c) of the freezing order. His Honour considered that the answer to that question turned in part on whether the relevant withdrawals were “bona fide business expenses which were properly incurred”: Judgment at [54]. While it is not entirely clear, it would appear that the primary judge accepted that Mr Jorgensen had met his evidentiary onus of adducing evidence that raised a reasonable possibility that the transfers fell within subpara 10(c) of the freezing order and that the question was whether the Ombudsman had discharged its legal burden of proving beyond reasonable doubt that they did not. The primary judge found that the transfers were not the payment of “business expenses bona fide and properly incurred” (Judgment at [54]). His Honour’s reasons for so finding are not, however, entirely clear or easy to understand. His Honour appears to have accepted, or at least proceeded on the basis that, when he made the transfers, Mr Jorgensen was essentially reimbursing or repaying the Family Trust account because funds in the Family Trust account had been used to pay expenses of the Trek North Tours business. His Honour in effect found, however, that any reimbursement or repayment obligations that 828 Pty Limited may have had to the Family Trust arising from the use of funds in the Family Trust account to pay business expenses of Trek North Tours were not business expenses. His Honour reasoned as follows (at [59]-[61]):I do not think that these payments can be categorised as business expenses. A business expense would occur if the Respondent (or the company) were paying a creditor but repaying a family trust who has paid a creditor, is not a business expense itself and certainly not in this case.If one goes through the history of how these payments had been made, it is obvious to me that it does not really matter to the Respondent as to which entity pays the bill as long as, whenever there is too much credit in either of the business accounts that do not have debit or overdraft facilities, there is the minimum amount of debt in any other account for which a debit facility is enabled. That does not mean that the transferring of money becomes the payment of a business expense.I accept the submission of the Applicant that, in such circumstances as obtained in this case, what was created was at the most, a financial obligation, maybe even a legal obligation, on behalf of the business to pay the family trust. Such obligations are not business expenses.
Ratio Decidendi
Legal Principle Established
The fifth ground of appeal relates to the sentence imposed on Mr Jorgensen. Mr Jorgensen contended that the “head penalty” of imprisonment was manifestly excessive because it required a period of “actual custody” to be served. CONSIDERATION – CONVICTION APPEAL Where, as here, an appeal involves grounds involving allegations of apprehended bias or denial of procedural fairness along with other substantive or discrete grounds, the appeal court should first deal with the issues of bias or procedural fairness. That is because those grounds, if made out, would strike at the validity of the trial and require the matter to be remitted for retrial: Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd [2006] HCA 55; 229 CLR 577 at [2] (Gummow A-CJ), [117] (Kirby and Crennan JJ); Royal Guardian Mortgage Management Pty Ltd v Nguyen [2016] NSWCA 88; 332 ALR 128 at [9]-[13] (Basten JA) and [259]-[261] (Ward JA with whom Emmett AJA agreed). If the bias or procedural fairness ground is made out, it may then be inappropriate to determine the remaining grounds of appeal. The appropriate course, then, is to first consider Mr Jorgensen’s fourth ground of appeal which alleged that he was denied procedural fairness. Ground four - Denial of procedural fairness by reason of excessive interventions Mr Jorgensen contended that excessive intervention by the primary judge during the course of his evidence at the trial resulted in or amounted to a denial of procedural fairness. He contended that the primary judge’s interventions undermined or disrupted the orderly elicitation of his evidence and represented such a fundamental departure from the role of a judge in an adversarial trial that it compromised the primary judge’s ability to objectively evaluate the evidence. Mr Jorgensen did not contend that the extent and nature of the primary judge’s interventions supported a finding of apprehended bias: that a fair minded lay observer might reasonably apprehend that the primary judge might not bring, or might not have brought, an impartial mind to the resolution of the question that the judge was required to decide. The issues or concepts of apprehended bias and procedural unfairness by excessive intervention may overlap, but are nonetheless distinct: RPS v The Queen [2000] HCA 3; 199 CLR 620 at [11]; Toth v Director of Public Prosecutions (NSW) [2017] NSWCA 344 at [61]. It appears that Mr Jorgensen did not pursue any claim of apprehended bias because counsel who represented him before the primary judge did not apply for the judge to recuse himself, or otherwise raise any complaint concerning the interventions. It is, however, questionable whether the failure to object in the particular circumstances of this case would have constituted a form of waiver: cf. Vakauta v Kelly [1989] HCA 44; 167 CLR 568 at 572. That is because the interventions occurred throughout the trial and it may in those circumstances have been difficult to identify a particular point in time when objection should have been taken: cf. Nguyen at [31]. The impact or risks associated with the interventions may also not have materialised until the ex tempore judgment was delivered by the primary judge: Nguyen at [32], [255].Relevant principles