Kelly v Hilton [No 5]
[2024] WASC 343
•19 SEPTEMBER 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: KELLY -v- HILTON [No 5] [2024] WASC 343
CORAM: SEAWARD J
HEARD: 8 NOVEMBER 2023 & 29 NOVEMBER 2023
DELIVERED : 19 SEPTEMBER 2024
FILE NO/S: CIV 2228 of 2020
BETWEEN: ALLAN JOHN KELLY
First Plaintiff
ALLAN JOHN KELLY AS TRUSTEE FOR THE KELLY FAMILY TRUST
Second Plaintiff
XGS PTY LTD AS TRUSTEE FOR THE KELLY SUPERANNUATION FUND
Third Plaintiff
DEBNAL PTY LTD
Fourth Plaintiff
AND
JOHN CHARLES HILTON
Defendant
Catchwords:
Motion for committal for criminal contempt of court - Purge application - Breaches of the Harman undertaking - Communication of documents provided under compulsion to regulatory authorities and third parties - Whether the communications were for the purpose of the substantive proceedings - Whether the plaintiff committed charges of contempt - Whether the contempts were civil or criminal - Whether the contempts were contumacious - Whether there was deliberate defiance - Whether the facts demonstrating each contempt have been established beyond reasonable doubt - Whether there has been interference with the administration of justice
Legislation:
Rules of the Supreme Court 1917 (WA) O 26 r 8, O 55 r 4
Supreme Court Act 1935 (WA) Pt VI
Result:
Criminal contempt committed in relation to charges 2, 3, 4, 6, 7, 8, 9, 10, 11, 12, 13 and 15
Civil contempt committed in relation to charge 16
Civil contempt committed in relation to items 6A, 6C, 6D, and 6F
Category: B
Representation:
Counsel:
| First Plaintiff | : | S Penglis SC & S B Nadilo |
| Second Plaintiff | : | S Penglis SC & S B Nadilo |
| Third Plaintiff | : | S Penglis SC & S B Nadilo |
| Fourth Plaintiff | : | S Penglis SC & S B Nadilo |
| Defendant | : | G D Cobby SC & D J Pratt |
Solicitors:
| First Plaintiff | : | HHG Legal Group |
| Second Plaintiff | : | HHG Legal Group |
| Third Plaintiff | : | HHG Legal Group |
| Fourth Plaintiff | : | HHG Legal Group |
| Defendant | : | Bennett |
Cases referred to in decision:
Andrew Koh Nominees Pty Ltd v Pacific Corporation Ltd (No 2) [2009] WASC 207
Ashby v Slipper (No 2) [2016] FCA 550
Attorney-General v Butterworth [1963] 1 QB 696
Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1985) 9 FCR 194
Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98
Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483
Bailey v Australian Broadcasting Corporation [1995] 1 Qd R 476
Bastiaan v Nine Entertainment Co Holdings Ltd (2022) 405 ALR 50; [2022] FCA 60
Brambles Holdings Ltd v Trade Practices Commission (1980) 44 FLR 182
C v M [2011] WASC 175
Clarkson v The Mandarin Club (1998) 90 FCR 354
Clipsal Australia Pty Ltd v ACN 134 468 205 [2017] FCA 1584
Commercial Bank of Austral Ltd v Preston [1981] 2 NSWLR 554
Connolly v Dale [1996] QB 120
Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2015] HCA 21; (2015) 256 CLR 375
Construction, Forestry, Mining and Energy Union v Grocon Constructors (Victoria) Pty Ltd (2014) 47 VR 527
Esso Australia Resources Limited v Plowman (1995) 183 CLR 10
Farahbakht v Midas Australia Pty Ltd [2006] NSWSC 1322
Findex Group Limited v iiNet Ltd [2019] NSWSC 1198
Gregory v Philip Morris Ltd (1987) 74 ALR 300
Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [No 2] [2023] WASCA 108
Harkianakis v Skalkos (1997) 42 NSWLR 22
Harman v Secretary of State for the Home Department [1983] 1 AC 280
Hearne v Street (2008) 235 CLR 125
Kazal v Thunder Studios Inc (California) and Anor (2017) 350 ALR 216
Khoury v Kirwan (No 4) [2021] VSC 333
Lazarevic v The State of Western Australia [2007] WASCA 156
Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2022] WASCA 67
North East Equity Pty Ltd v Goldenwest Equities Pty Ltd [2008] WASC 190
Northbuild Constructions Pty Ltd v Discovery Beach Project Pty Ltd (No 4) [2011] 1Qd R 145
Pang v Bydand Holdings Pty Ltd [2011] NSWCA 69
R, on the application of John Patrick Davey v Silverstein [2020] VSCA 233
Re Coroner's Court of Western Australia; Ex parte Porteous (2002) 26 WAR 483
Re Smauel Goldman [1968] 2 NSWR 325
Resolute Ltd & Anor v Warnes [2000] WASCA 359
Smith v Lakeman (1856) 26 LJ Ch 305
Treasury Wine Estates Pty Ltd v Maurice Blackburn Pty Ltd (2020) 282 FCR 95
Websyte Corporation Pty Ltd v Alexander [2012] FCA 69
Witham v Holloway (1995) 183 CLR 525
Y and Z v W (2007) 70 NSWLR 377
Yuan v Huang (No 2) [2023] NSWSC 1618
Table of Contents
Overview
Facts
Legal principles - contempt
Has Mr Kelly committed the charges of contempt alleged in the Committal motion concerning breaches of the Harman undertaking?
Legal principles - Harman undertaking
Charges 2, 3, 4, 6, 11, 12, 13 and 15
Charges 1, 5, 7, 8, 9, 10 and 14
Charge 1
Charges 5 and 14
Charges 7 and 8
Charges 9 and 10
Were Mr Kelly's breaches of the Harman undertaking contumacious?
Legal principles
Why Mr Hilton says Mr Kelly's conduct was contumacious
Mr Kelly's explanation for the communications
Mr Kelly's credit
Mr Kelly's state of mind
Anger and frustration
Vindication
Relevance of anger, frustration and vindication
Was Mr Kelly's conduct deliberately defiant?
Has Mr Kelly committed the remaining charges of contempt alleged in the Committal motion?
Charge 16
The charge
The relevant facts and Mr Kelly's explanation
Did Mr Kelly fail to comply with the confidentiality requirements?
Is the failure a civil or a criminal contempt?
Charges 17, 18 and 19
Charges
Legal principles
Did Mr Kelly interfere with the administration of justice?
Charges 20 and 21
Charges
Legal principles
Content of the messages and Mr Kelly's knowledge of who would be potential witnesses
Did Mr Kelly interfere with the administration of justice?
Has Mr Kelly committed any of the remaining instances of contempt concerning a breach of the Harman undertaking referred to in the Purge application?
Purge items 6A, 6C, 6D and 6F
Purge items 9, 10, 11, 13, 15, 17, 18, 19, 20, 21 and 22
Item 9
Items 10, 11, 13 and 15
Items 17 and 18
Item 19
Items 20 and 21
Item 22
Conclusion
Schedule 1
Schedule 2
SEAWARD J:
Overview
Between May 2017 and March 2019, Allan John Kelly was the Managing Director of Riversgold Limited (Riversgold), a company engaged in mining activities. In 2017, Riversgold acquired Cambodia Gold Pty Ltd (Cambodia Gold), another company engaged in mining activities, from John Hilton. On 15 March 2019, Mr Kelly announced his resignation as Managing Director and Chief Executive of Riversgold.
After his resignation, Mr Kelly came into possession of information which, in his view, confirmed suspicions and concerns he held regarding the conduct of Mr Hilton and the acquisition of Cambodia Gold. Mr Kelly then commenced proceedings in this court regarding that conduct.[1]
[1] Mr Kelly brings these proceedings in both his personal capacity and on behalf of the other named plaintiffs. It is not necessary to have regard to those other plaintiffs in these reasons.
During those proceedings, Mr Kelly came into possession of documents provided by Mr Hilton under compulsion. Mr Kelly communicated some of these documents, and information derived from these documents, to third parties.
This conduct has resulted in two applications being made to this court:
(1)Mr Hilton's notice of motion for committal of Mr Kelly for criminal contempt of court pursuant to O 55 r 4 of the Rules of the Supreme Court 1917 (WA) (Committal motion);[2]
(2)Mr Kelly's chamber summons for orders dealing with breaches of the implied (Harman) undertaking (Purge application);[3]
[2] Amended Notice of Motion for Committal of the First Plaintiff for Criminal Contempt of Court pursuant to Order 55 rule 4, dated 21 September 2023.
[3] First Plaintiff's Amended Chamber Summons for Orders Dealing with Breach of Implied (Harman) Undertaking, dated 31 October 2023.
In the Committal motion, Mr Hilton alleges that Mr Kelly has committed 21 counts of criminal contempt of court and seeks orders that Mr Kelly be committed to prison or otherwise dealt with in such manner as the court may direct.
The allegations of contempt in the Committal motion fall into three categories:
(a)15 charges of a contumacious breach of the Harman undertaking;
(b)one charge of a breach of the statutory obligation of confidence in s 71(1) of the Supreme Court Act 1935 (WA) concerning a mediation conference amounting to an interference in the administration of justice; and
(c)five other charges of conduct amounting to interference in the administration of justice.
In the Purge application, Mr Kelly seeks an order that he be discharged from punishment for 29 breaches of the Harman undertaking, or alternatively that he be punished for his breaches of the Harman undertaking by way of an order that Mr Kelly pay Mr Hilton's costs of and incidental to the Purge application on an indemnity basis.
There is a partial overlap of the charges identified in the Committal motion and the instances specified in the Purge application. Of the 21 charges in the Committal motion, 16 are also included in the Purge application, all being breaches of the Harman undertaking.[4] The Purge application has an additional 15 instances of possible breaches of the Harman undertaking identified.
[4] Two of the items in the Purge application cover four of the charges in the Committal.
Mr Kelly admits nine of the Committal motion charges concerning a breach of the Harman undertaking and a further four of the items in the Purge application as being civil contempts of court, but not criminal contempts of court. Mr Kelly does not admit the remaining charges in the Committal motion.
Schedule 1 to these reasons lists each of the committal charges, the particulars of each, and identifies the corresponding item number in the Purge application. Schedule 2 to these reasons lists the additional items in the Purge application that are not in the Committal motion. Those items marked with an asterisk in each schedule are admitted by Mr Kelly as being a civil contempt of court.
These two applications raise the following issues:
(1)Has Mr Kelly committed the charges of contempt alleged in the Committal motion concerning breaches of the Harman undertaking?
(2)If so, has Mr Kelly committed a civil or criminal contempt? This issue involves considering whether each contempt was contumacious.
(3)Has Mr Kelly committed the remaining charges of contempt alleged in the Committal motion?
(4)Has Mr Kelly committed any of the remaining instances of contempt concerning breaches of the Harman undertaking referred to in the Purge application?
(5)Has Mr Kelly purged each contempt or, alternatively, what is the appropriate penalty for each contempt?
These reasons address issues 1 - 4. The question of whether each contempt has been purged or, alternatively, the appropriate penalty, will be the subject of a further hearing and submissions from the parties in light of the findings I have made in relation to issues 1 - 4.
For the reasons set out below, I am of the view that Mr Kelly:
(a)has committed criminal contempt in the form of contumacious breaches of the Harman undertaking as alleged in charges 2, 3, 4, 6, 7, 8, 9, 10, 11, 12, 13 and 15 of the Committal motion;
(b)has committed a civil contempt by sending an email which revealed information disclosed in a court ordered mediation conference as alleged in charge 16 of the Committal motion;
(c)has not committed contempt by communicating with regulatory authorities for the purpose of seeking to have the authorities take adverse action against Mr Hilton as retribution for his defence of the substantive proceedings as alleged in charges 17 to 19 of the Committal motion;
(d)has not committed contempt by sending messages which were intended or calculated to discourage or dissuade potential witnesses from giving evidence in the substantive proceedings as alleged in charges 20 to 21 of the Committal motion; and
(e)has committed civil contempt in the form of breaches of the Harman undertaking as identified in items 6A, 6C, 6D and 6F of the Purge application.
Facts
The background facts are not in dispute and I find that the following occurred.
On 15 December 2020, Mr Kelly commenced the substantive proceedings by writ of summons indorsed with a statement of claim. In the substantive proceedings, Mr Kelly alleges that:
(a)Mr Kelly first met Mr Hilton in November 2016, at which time Mr Kelly was employed as the Managing Director of Doray Minerals Ltd.
(b)At their first meeting certain representations were made by Mr Hilton to Mr Kelly about what Mr Hilton described as gold tenements in Cambodia[5] which had been applied for by a company called Brighton Mining Group Limited (Brighton), which Mr Hilton said he controlled. These representations were repeated, and further representations were made by Mr Hilton to Mr Kelly about the Cambodian gold tenements between November 2016 to June 2017. Relevantly, those representations were to the effect that:
[5] Also referred to as the 'Kang Roland South' and 'Antrong' Licence areas.
(i)the Cambodian gold tenements had been applied for by Brighton;
(ii)the Cambodian gold tenements were 'about to be granted' by the Cambodian government;
(iii)Mr Hilton had negotiated a joint venture term sheet with an Australian mining company active in Cambodia, Emerald Resources Limited (Emerald Resources), with respect to the Cambodian gold tenements pursuant to which Emerald Resources would manage and fund exploration on those gold tenements;
(iv)it was appropriate to ascribe to the Cambodian gold tenements a value in the order of AUD $4.5million;
(v)Brighton had obtained environmental approval from the Cambodian government, via the Cambodian Ministry of Environment for a project on part of the Cambodian gold tenements;
(vi)Cambodia Gold had made an application to the Cambodian Ministry of Mines and Energy for an exploration licence in respect of the Cambodian gold tenements via its local subsidiary company. Further, Cambodia Gold, via its local subsidiary, would be the holder of the exploration licences and ultimately the Cambodian gold tenements, once the applications were granted; and
(vii)representatives of Emerald Resources had attended a meeting with the Cambodian Ministry of Mines and Energy during which Emerald Resources had pledged its support for Cambodia Gold in respect of its application for the Cambodian gold tenements.
(c)As a consequence of the representations made by Mr Hilton to him, Mr Kelly resigned as the Managing Director of Doray Minerals Ltd and agreed, in effect, to partner with Mr Hilton in the formation of a new company, which would hold the merged assets of a company controlled by Mr Kelly with the gold tenements in Cambodia which Mr Hilton said he controlled.
(d)In the period to June 2016, Mr Kelly became the Managing Director of this new company, which came to be known as Riversgold. Mr Kelly also agreed to subscribe for shares in Riversgold.
(e)In September 2017, Riversgold acquired Cambodia Gold from Mr Hilton, and by so doing purported to acquire the Cambodian gold tenements. Riversgold was then listed on the ASX in October 2017.
(f)In March 2019, Mr Kelly resigned from Riversgold and a dispute subsequently arose between Mr Kelly and Riversgold in relation to Mr Kelly's entitlements following his resignation.
(g)In late March 2020, Mr Kelly became aware of information that he felt confirmed the suspicions he held that the Cambodian gold tenements would not ultimately be granted to Cambodia Gold, and thus be held by Riversgold.
(h)Around late March 2020, Riversgold was continuing to make statements to the ASX about the status of the Cambodian gold tenements which Mr Kelly considered were misleading as they did not disclose material price sensitive information available to it.
(i)In July and August 2020, Mr Kelly wrote to the ASX, ASIC and WAPOL regarding his concerns with the market announcements made by Riversgold and Mr Hilton's involvement in the subject matter of those announcements.
Mr Kelly pleads that the representations were made by Mr Hilton to Mr Kelly in the course of trade or commerce and were misleading or deceptive. In short, Mr Kelly's case is that Cambodia Gold had never applied for the Cambodian gold tenements; Cambodia Gold never held the Cambodian gold tenements; that Mr Hilton and Cambodia Gold never had a joint venture agreement with Emerald Resources and accordingly, Riversgold (and Mr Kelly) were misled into purchasing Cambodia Gold. Mr Kelly seeks damages or a compensation order under s 236 and s 237 of the Australian Consumer Law and the Australian Consumer Law (WA).
Mr Hilton filed his defence on 15 February 2021 and a reply was filed in March 2021. In September 2021, the matter was entered into the CMC list to be case managed by Strk J.
Mr Kelly then requested further and better particulars of the defence, which were provided on 19 August 2021. These further and better particulars referred to a letter from the Ministry of Mines and Energy to Cambodia Gold dated 4 April 2017 (MME Letter).[6] By letter dated 24 August 2021, Mr Kelly requested that Mr Hilton produce copies of the documents referred to in the further and better particulars for inspection. The documents, including the MME Letter, were produced on 31 August 2021 in accordance with the requirements of O 26 r 8(2) of the Rules of the Supreme Court 1971 (WA) (RSC).[7]
[6] Affidavit of Allan John Kelly sworn 14 April 2023 (Exhibit 8) Annexure AJK-22; Affidavit of John Charles Hilton sworn 10 August 2023 (Exhibit 3), [3] and Annexure JCH-1.
[7] Exhibit 3, [4] - [6] and JCH-2-JCH-4.
On Mr Kelly's case, the MME Letter is significant as it shows that Cambodia Gold had not applied for the Cambodian gold tenements as Mr Hilton represented, because the MME Letter states that the area was not yet open for application.
On 6 April 2022, Strk J made an order requiring the parties to provide discovery on affidavit of various categories of documents. Mr Hilton filed an affidavit of discovery sworn 26 July 2022 and discovered and produced for inspection 2143 documents. Mr Hilton provided the documents the subject of that affidavit to Mr Kelly in tranches in June and July 2022.[8] These discovered documents included a draft terms sheet sent by email on 15 May 2020 by Michael Davey of Riversgold to Mr Hilton (Draft Terms Sheet).
[8] Exhibit 3, [8].
On Mr Kelly's case, the Draft Terms Sheet is significant as it proposes that Riversgold become the owner of Granite Gold Pty Ltd (Granite Gold), another company controlled by Mr Hilton, on the basis that Granite Gold had applied for licences covering the same area as the Cambodian gold tenements purportedly applied for and to be held by Cambodia Gold.
By order 4 made on 25 November 2021, Strk J referred the parties to mediation pursuant to Part VI of the Supreme Court Act 1935 (WA) (Supreme Court Act).[9] The mediation conference occurred on 9 February 2022.[10]
[9] Affidavit of Shemali Marianne Samaraweera sworn 21 September 2023 (Exhibit 7), SMS-1.
[10] Exhibit 7, [7] - [8], SMS-2.
On 19 October 2022, Emerald Resources released an ASX announcement that it had entered into an agreement with a different company (unrelated to Riversgold, Cambodia Gold and Granite Gold) to develop the land the subject of the Cambodian gold tenements.[11]
[11] Exhibit 8, AJK-39.
Legal principles - contempt
In the Committal motion, Mr Hilton seeks orders that Mr Kelly has committed 21 charges of criminal contempt of court. Contempt of court is a common law offence preserved by s 7 of the Criminal Code (WA). Mr Kelly admits some, but not all, of these charges, but only as instances of a civil contempt of court.
There remains a distinction between civil and criminal contempt of court. Whilst the differences upon which the distinction is based have been described as illusory in significant respects,[12] the distinction was summarised in Witham v Holloway as follows:[13]
In general terms, the distinction between civil and criminal contempt is that a civil contempt involves disobedience to a court order or breach of an undertaking in civil proceedings, whereas a criminal contempt is committed either when there is a contempt in the face of the court or there is an interference with the course of justice. However, disobedience or breach of an undertaking amounts to a criminal contempt if it involves deliberate defiance or, as it is sometimes said, if it is contumacious.
[12] Witham v Holloway (1995) 183 CLR 525, 534.
[13] Witham v Holloway (1995) 183 CLR 525, 530.
Whether the contempt is criminal or civil in nature, the underlying rationale of the court's power to find a person in contempt and to deal with the person for that contempt, is to uphold and protect the effective administration of justice.[14]
[14] Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98, 107.
A contempt proceeding takes place as a civil hearing and in accordance with the civil procedure rules of the court.[15] However, for any allegation of contempt, whether it be a civil or a criminal contempt, the onus of establishing the conduct which amounts to a contempt lies on the person alleging the contempt, and the facts demonstrating that the contempt has been committed must be established on admissible evidence beyond reasonable doubt.[16]
[15] Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2015] HCA 21; (2015) 256 CLR 375 [40]; Witham v Holloway (1995) 183 CLR 525, 534.
[16] Witham v Holloway (1995) 183 CLR 525, 535.
A breach of a court order or undertaking will constitute a civil contempt unless the breach was contumacious.[17] A breach will be contumacious where the disobedience or contravention involves deliberate defiance.[18] Contumacy is to be distinguished from what is sometimes described as a wilful breach. A wilful breach is one which goes beyond a casual, accidental or unintentional breach, but does not have the additional element of defiance.[19] Prior to considering whether a breach is contumacious, it is first necessary to determine whether a civil contempt has occurred.
Has Mr Kelly committed the charges of contempt alleged in the Committal motion concerning breaches of the Harman undertaking?
Legal principles - Harman undertaking
[17] Witham v Holloway (1995) 183 CLR 525, 530.
[18] Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98, 108 ‑ 109; Pang v Bydand Holdings Pty Ltd [2011] NSWCA 69 [74] (Beazley JA), [167] (Lindgren AJA); Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483, 489 (Barwick CJ); Construction, Forestry, Mining and Energy Union v Grocon Constructors (Victoria) Pty Ltd (2014) 47 VR 527 [146] ‑ [152].
[19] Pang v Bydand Holdings Pty Ltd[2011] NSWCA 69 [73] (Beazley JA); Construction, Forestry, Mining and Energy Union v Grocon Constructors (Victoria) Pty Ltd (2014) 47 VR 527 [146] - [152].
The legal principles regarding what is commonly known as the Harman undertaking or obligation[20] are not in dispute. In Hearne v Street the High Court described the undertaking as follows:[21]
Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence.
[20] Derived from Harman v Secretary of State for the Home Department [1983] 1 AC 280 (Harman).
[21] Hearne v Street (2008) 235 CLR 125 [96] (Hayne, Heydon and Crennan JJ).
The undertaking applies to a range of material, including discovered documents, answers to interrogatories and documents produced on subpoena.[22] It also extends to the information contained in such documents.
[22] Hearne v Street (2008) 235 CLR 125 [96].
Although traditionally described as an implied undertaking, properly understood it is a substantive legal obligation arising from the circumstances in which material is generated and received.[23] The obligation is owed to the court and for that reason a breach of the obligation can constitute a contempt of court.[24]
[23] Hearne v Street (2008) 235 CLR 125 [106] - [108].
[24] Hearne v Street (2008) 235 CLR 125 [106].
The rationale of the Harman undertaking is grounded in, and exists to serve, the interests of justice by promoting the efficacy of the compulsory processes of the court so as to achieve justice according to law in the proceedings.[25]
[25] Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [No 2] [2023] WASCA 108 [67] - [70].
In order for a person to be held liable for contempt arising from a breach of the Harman undertaking it is not necessary that the alleged contemnor had knowledge of the implied undertaking or understood the legal consequences of their conduct.[26] Rather, it is necessary to demonstrate that:
(a)the documents or information were provided to the alleged contemnor pursuant to the compulsive processes of the court; and
(b)the alleged contemnor provided the documents or information to third parties for a purpose other than the litigation in the substantive proceedings.
[26] Hearne v Street (2008) 235 CLR 125 [112] - although a lack of such knowledge may be relevant to penalty.
If the above are demonstrated, the onus then falls on the alleged contemnor to demonstrate that the disclosure was casual, accidental or unintentional.[27]
[27] Khoury v Kirwan (No 4) [2021] VSC 333 [108].
The use that may be made of the documents has been variously described and explained in the authorities. Chesterman JA in Northbuild Constructions Pty Ltd v Discovery Beach Project Pty Ltd (No 4)[28] helpfully summarised the language used in the key authorities in this regard.
[28] Northbuild Constructions Pty Ltd v Discovery Beach Project Pty Ltd (No 4) [2011] 1Qd R 145 [24] ‑ [50].
The High Court was not called upon in Hearne v Street to consider the precise scope of this aspect of the undertaking. However, the undertaking was described by the plurality as being not to use a document for, 'any purpose other than that for which it was given'.[29] Gleeson CJ described the undertaking as being not to use the documents 'other than for purposes of the proceedings' in question.[30]
[29] Hearne v Street (2008) 235 CLR 125 [96] (Hayne, Heydon and Crennan JJ).
[30] Hearne v Street (2008) 235 CLR 125 [5] (Gleeson CJ).
The language of 'collateral' or 'ulterior' purpose was used in other authorities, for example in Harman, where Lord Diplock described the question in the appeal as being:[31]
… whether it is the duty of the solicitor of one party to civil litigation, who in the course of discovery in that litigation has obtained possession of copies of documents belonging to the other party to the litigation, to refrain from using the advantage enjoyed by virtue of such possession for some collateral or ulterior purpose of his own not reasonably necessary for the proper conduct of the action on his client's behalf …
[31] Harman [1983] 1 AC 280, 302.
See also Mason CJ (with whom Dawson and McHugh JJ agreed) in Esso Australia Resources Limited v Plowman.[32]
[32] Esso Australia Resources Limited v Plowman (1995) 183 CLR 10, 32.
After reviewing the relevant authorities, Chesterman JA concluded: [33]
[38]One gleans from this review of some of the authorities that what a party to litigation may not do with documents produced pursuant to compulsive processes is to utilise them for purposes "unconnected" with the litigation; or "unrelated" to it; or for a purpose "not reasonably necessary for the conduct of the litigation."
[39]The scope of the undertaking is, I think, not entirely accurately expressed in the narrower phrase; "for the purposes of that action" or "use in the action in which they are disclosed".
[40]The wider designation has the support of Mason CJ in Esso and Kirby P in Ainsworth as well as Lord Diplock in Harman. The undertaking will not be broken unless the disclosure which is impugned can be seen to be for a "collateral purpose", or an "ulterior purpose". Both terms indicate some disconnection between the proper conduct of the proceedings or litigation, and the use to which the documents are put.
…
[50]The scope of the undertaking may be better expressed by saying that documents produced on discovery or other compulsive process may only be used for a purpose connected with or related to the determination of the dispute in which the parties are engaged and to assist in the resolution of which the documents were required. Such a formulation extends to the determination of disputed rights other than by trial.
[33] Northbuild Constructions Pty Ltd v Discovery Beach Project Pty Ltd (No 4) [2011] 1Qd R 145.
Whilst the above conclusions were obiter, they were adopted by Ward CJ in Equity (as her Honour then was) in Findex Group Limited v iiNet Ltd.[34]
[34] Findex Group Limited v iiNet Ltd [2019] NSWSC 1198 [47].
However, it is not necessary for the purposes of the Committal motion or the Purge application to finally resolve the width of the undertaking or the various uses to which documents subject to the undertaking may be put. Mr Kelly's case is that each communication where a breach is not admitted was made for a purpose related to the substantive litigation.[35] There is no claim of a broader purpose that falls within the scope of the undertaking. The question which arises is whether, as a matter of fact, each communication was made for a purpose related to the substantive litigation. The answer to that question involves a consideration of each individual disclosure and Mr Kelly's evidence as to the purpose of that disclosure.
Charges 2, 3, 4, 6, 11, 12, 13 and 15
[35] First Plaintiff's Submissions for Orders Dealing with Breach of Harman Obligation, dated 31 October 2023, [44]; First Plaintiff's Closing Written Submissions as to Defendant's Application for the Committal of the First Plaintiff for Criminal Contempt and as to the First Plaintiff's Purge Application, dated 20 November 2023, [77].
Each of these charges relate to communications between Mr Kelly and various regulatory authorities (being ASIC, the ASX and the Western Australian Police). It is alleged that in each communication Mr Kelly provided the regulatory authorities with the MME Letter, the Draft Terms Sheet or documents provided by Mr Hilton by way of discovery (or information obtained from these documents).
Each of these charges correspond to the following items in the Purge application: 6B, 1, 4, 2, 6, 5, 3, and 6G.
Charge 2 concerns a one-page email sent by Mr Kelly to officers of the Western Australian Police on 17 October 2021.[36] The subject line of the email is 'John Hilton Fraud' and the email provides an update on Mr Kelly's case against Mr Hilton. The email makes reference to Mr Hilton filing his defence, and Mr Kelly asking Mr Hilton to provide further information in relation to this defence, and being provided in late August with a copy of the MME Letter (which is then attached). The email goes on to explain why Mr Kelly considers the MME Letter to be significant, and concludes as follows:
I am therefore again asking for your assistance in pursuing this matter, in light of the recent information.
[36] Exhibit 9, AJK-65.
Charge 3 concerns an email sent by Mr Kelly to officers of the ASX on 9 July 2022.[37] The subject line is 'Riversgold Limited'. The email attaches a six-page letter to the ASX which refers to the MME Letter as well as other discovered documents. The second paragraph of the letter to the ASX provides as follows:
As a result of the discovery process relating to the above legal proceedings, I have become aware of further material information previously withheld by Mr Hilton.
[37] Exhibit 8, AJK-37.
The letter to the ASX goes on to detail Mr Kelly's complaints regarding the conduct of Mr Hilton and Riversgold and to refer in detail to correspondence and other events. The letter concludes as follows:
I have multiple documents to support each of the statements made above and look forward to your response and action finally being taken in relation to this multi-million dollar fraud.
Charge 4 concerns an email sent by Mr Kelly and addressed to an ASIC 'Misconduct & Breach Reporting' analyst on 18 July 2022.[38] The subject line of the email is 'Your Report of Misconduct with ASIC'. The email attaches a six-page letter to ASIC, which is essentially the same letter sent to the ASX on 9 July 2022, with the same reference to the discovery process.
[38] Exhibit 8, AJK-34.
Charge 6 concerns a further email sent by Mr Kelly to officers of the ASX on 26 September 2022.[39] The subject line of the email is 'Riversgold Limited'. The email attaches a five-page letter to the ASX which again makes reference to the MME Letter and other discovered documents. The opening paragraphs of the letter provide as follows:
Further to my previous correspondence to ASX (and ASIC), I advise that, as a result of the discovery process relating to current legal proceedings between myself and John Hilton of Greenwich Equities, I have become aware of further material information previously withheld by Mr Hilton relevant to the 2017 purchase of Cambodia Gold Pty Ltd ("CGPL") by Riversgold Limited ("Riversgold").
I have also become aware of further information relating to the March 2020 release of new licence areas by the Cambodian Ministry of Mines and Energy (MME).
I also note that I have not received any acknowledgment of my previous email and letter to you and Shannon Nicholson on 9 July 2022.
[39] Exhibit 8, AJK-38.
The letter concludes as follows:
I have multiple documents to support my allegations but I will not send them to you unless I get a response to this letter.
I look forward to your prompt (or any) response.
Charge 11 concerns an email sent by Mr Kelly to officers of the Western Australian Police on 16 October 2022.[40] The subject line of the email is 'John Hilton Fraud'. The email is one and a half pages in length and provides an update on the proceedings with Mr Hilton. The email refers to the discovery process and having received Mr Hilton's discovered documents. The email then goes on to identify various items that 'came out of the discovery process' and makes reference to the MME Letter and the Draft Terms Sheet.
[40] Exhibit 8, AJK-40.
Charge 12 concerns an email sent by Mr Kelly to officers of ASIC on 21 October 2022.[41] The subject line of the email is 'Riversgold Limited' and the email refers to and attaches the Emerald Resources ASX announcement. The email goes on to outline Mr Kelly's claims in relation to Mr Hilton's conduct and makes reference to the Draft Terms Sheet. The email concludes as follows:
Hilton, current Riversgold CEO Julian Ford and Jay Klopper (sole Director and shareholder of Granite Gold Pty Ltd), amongst others, conspired to defraud Riversgold shareholders not once, but twice: firstly as part of the 2017 IPO; and later, in 2020, when they proposed purchasing Granite Gold Pty Ltd from Hilton and Klopper "just in case" it was granted the tenements that Riversgold paid Hilton for in 2017.
[41] Exhibit 8, AJK-36.
Charge 13 concerns an email sent by Mr Kelly to officers of the ASX also on 21 October 2022.[42] The email is largely identical to the email the subject of charge 12.
[42] Exhibit 8, AJK-39.
Charge 15 concerns an email by Mr Kelly to officers of the Western Australian Police also sent on 21 October 2022.[43] The email forwards the email the subject of charge 11, and attaches copies of the Emerald Resources ASX announcement and the Draft Terms Sheet accompanied by the following text:
Hot off the press …
These are the "projects" Hilton sold to Riversgold for $6.4 million in 2017, but didn't exist.
Hilton tried the same thing again in March 2020, when they were finally released, but they were granted to someone else in July 2020.
[43] Exhibit 9, AJK-75.
Mr Kelly's evidence is that he sent this email after he became aware of the Emerald Resources ASX announcement.[44]
[44] ts 8/11/2023, 192.
Mr Kelly admits that he breached the Harman undertaking by sending the communications to the regulatory authorities which are the subject of charges 2, 3, 4, 6, 11, 12, 13 and 15 of the Committal motion. Mr Kelly further accepts that each of these communications constitutes a civil contempt.[45]
[45] First Plaintiff's Outline of Submissions as to Defendant's Application for committal of the First Plaintiff for Criminal Contempt dated 6 November 2024, [18].
Having had regard to the evidence and submissions before me, I am satisfied beyond reasonable doubt of the following:
(a)Mr Hilton provided the documents particularised in each charge to Mr Kelly in the course of the substantive proceedings. Mr Hilton was compelled to provide those documents pursuant to O 26 r 8(2) RSC and/or the order for discovery made by Strk J on 6 April 2022.
(b)Mr Kelly was aware that the particularised documents were obtained from Mr Hilton in the substantive legal proceedings;
(c)Mr Kelly made each of the communications to the regulatory authorities referred to in the Committal charges;
(d)In making those communications, Mr Kelly provided the regulatory authorities with the particularised documents, or information derived from the particularised documents, for a purpose other than the litigation in the substantive proceedings; and
(e)Mr Kelly did not have the leave of the court to provide the particularised documents to the regulatory authorities and/or had not obtained a discharge from his obligations under the Harman undertaking from the court.
I am therefore satisfied beyond reasonable doubt that Mr Kelly committed a civil contempt as alleged in charges 2, 3, 4, 6, 11, 12, 13 and 15.
Charges 1, 5, 7, 8, 9, 10 and 14
Each of these charges relate to communications between Mr Kelly and individual third parties. It is alleged that in each communication Mr Kelly provided third parties with the MME Letter and/or documents provided by Mr Hilton by way of discovery, and/or information obtained from these documents. Mr Kelly does not admit these charges.
There is no dispute, and I am satisfied beyond reasonable doubt, that:
(a)Mr Hilton provided the documents particularised in each charge to Mr Kelly in the course of the substantive proceedings. Mr Hilton was compelled to provide these documents pursuant to O 26 r 8(2) RSC and/or the order for discovery made by Strk J on 6 April 2022.
(b)Mr Kelly was aware that these documents were obtained in the substantive legal proceedings;
(c)Mr Kelly made each of the communications to the third parties referred to in the Committal charges;
(d)In making those communications, Mr Kelly provided the third parties with the particularised documents, or information derived from the particularised documents; and
(e)Mr Kelly did not have the leave of the court to provide the particularised documents or information to the third parties and/or had not obtained a discharge from his obligations under the Harman undertaking from the court.
The issue raised by these charges is the purpose for which the communication the subject of each charge was made. Mr Hilton says that each communication was not made for a purpose related to the proceedings and therefore a breach of the Harman undertaking has occurred. Mr Kelly says that each communication was made for a purpose related to the substantive proceedings. It is therefore necessary to consider each communication and determine the purpose of each.
Charge 1
The content of the message and Mr Kelly's explanation
Charge 1[46] concerns a LinkedIn message sent by Mr Kelly to Richard Stanger on 31 August 2021.[47] Attached to that message was a screenshot of the MME Letter. The text of the message read as follows:
Just received this from Hilton's lawyers!
He knew he had nothing April 17!
[46] This charge corresponds with item 16 of the Purge application.
[47] Exhibit 8, [93] and AJK-49 and Exhibit 2, p 137 - 138.
Mr Stanger responded as follows:
Interesting
I remember the ministry asked me who in that company
Looks as though you won?
Mr Stanger is a contact of Mr Kelly in Cambodia who provides services to mining exploration companies with interests in Cambodia. Mr Kelly first came to know of Mr Stanger around August 2017 and first met Mr Stanger in April 2018.[48]
[48] Exhibit 8, [91].
Mr Kelly's evidence is that he knew Mr Stanger as a person with a longstanding relationship with the Ministry of Mines and Energy and that he was involved in assisting Mr Hilton with Brighton's interests in the exploration licences previously held by Summer Gold and Sun Hill.[49]
[49] Exhibit 8, [92].
Mr Kelly's evidence is that he sent the screenshot of the MME Letter to Mr Stanger because Mr Stanger had a good understanding of how the Cambodian mining system worked, and a strong relationship with the Ministry of Mines and Energy. Mr Kelly's evidence is that he hoped Mr Stanger would give his view on what the MME Letter meant.[50]
[50] Exhibit 8, [94].
In cross-examination, Mr Kelly accepted that there was no request for information in the LinkedIn message and he did not ask Mr Stanger in the LinkedIn message for his view on what the MME Letter meant.[51] In cross-examination Mr Kelly also accepted that there was no basis for his hope that Mr Stanger would give his view.[52]
What was the purpose of the message and has there been a breach of the Harman undertaking?
[51] ts 8/11/2023, 177 - 178.
[52] ts 8/11/2023, 178.
I must be satisfied, beyond reasonable doubt, that Mr Kelly did not send the LinkedIn message to Mr Stanger for the purposes of the substantive proceedings. I am not satisfied of this beyond reasonable doubt for the following reasons.
Mr Hilton submits that Mr Kelly's explanation for sending the message is baseless and ought not be accepted. Mr Hilton submits that given Mr Kelly does not ask Mr Stanger any questions in the message or request any information from Mr Stanger, he could have no hope that Mr Stanger would give his view on what the MME Letter meant.
I accept that when the message is read in isolation the lack of any express question or request for information may tend to suggest that the message was not sent for any purpose connected with the proceedings, but rather to boast that Mr Kelly has obtained a document that he considers supports his case.
However, I accept Mr Kelly's submission that the document must be read in its context, which includes the nature of the relationship between Mr Kelly and Mr Stanger, and the history of communications between them. Those communications, as revealed in Exhibit 2, demonstrate that Mr Kelly and Mr Stanger had been communicating since 2018 regarding the underlying issues and facts the subject of the litigation, and then later the litigation itself. In some of those communications, Mr Kelly would ask Mr Stanger questions about underlying factual matters, or how Mr Kelly might go about obtaining information or documents.[53] The most recent set of exchanges prior to the 31 August 2021 message occurred on 25 August 2021 where Mr Kelly had asked Mr Stanger some questions.[54] The messages continued after 31 August 2021.
[53] See, for example, messages on 20 July 2019 (Exhibit 2, p 89); 3 January 2020 (Exhibit 2, p 91); 8 January 2020 (Exhibit 2, p 95); 31 March 2020 (Exhibit 2, p 101); 2 March 2021 (Exhibit 2, p 109 - 110); and 11 March 2021 (Exhibit 2, p 114 - 115).
[54] Exhibit 2, p 135 - 136.
One of the underlying factual issues the subject of some of the messages was Mr Kelly needing to show proof that there was no chance of the Cambodian licences being granted and Mr Hilton knew this,[55] and needing something official from the Ministry of Mines and Energy for the Supreme Court and ASX.[56]
[55] Exhibit 2, p 109.
[56] Exhibit 2, p 125.
The uncontested evidence before the court was Mr Kelly knew Mr Stanger as a person with a longstanding relationship with the Ministry of Mines and Energy and that he was involved in assisting Mr Hilton in the past. This appears to be consistent with the content of the LinkedIn messages in Exhibit 2.
Some of the messages refer to plans for Mr Kelly and Mr Stanger to meet in person. It is not clear if those meetings eventuated.
In light of this context and information, another explanation for the message in charge 1 was that Mr Kelly and Mr Stanger had been engaging in electronic communications for some years about the factual matters underlying the substantive proceedings, and then later about the proceedings once commenced. In many of those communications Mr Kelly asked Mr Stanger questions or for information.
In the present case, Mr Stanger did not simply respond to the message by acknowledging receipt, but rather he also provided a substantive comment or further information relating to the MME Letter.
Against that backdrop, I cannot exclude as a possible purpose for the 31 August 2021 message that it was a continuation of past exchanges between Mr Kelly and Mr Stanger, and that whilst the wording may be unclear, that Mr Kelly was providing the communication for the purposes of obtaining Mr Stanger's views as to meaning of the MME Letter for use in the substantive proceedings.
In these circumstances, I am not satisfied beyond reasonable doubt that the LinkedIn message was sent for a purpose unrelated to the substantive proceedings, notwithstanding Mr Kelly's answer in cross‑examination that he had no basis for his hope that Mr Stanger would provide his view on the meaning of the MME Letter. I therefore do not find that Mr Kelly breached the Harman undertaking in relation to this message.
Charges 5 and 14
The content of the emails and Mr Kelly's explanation
Charges 5 and 14[57] each concern emails sent by Mr Kelly to Graham Moir on 25 September 2022.[58] Mr Moir provides logistical and other services to mining exploration companies with interests in Cambodia. Mr Kelly's evidence is that he was introduced to Mr Moir in August 2017, but they have never met in person.[59]
[57] These charges correspond with items 12 and 14 of the Purge application.
[58] The date of charge 14 was amended on 8 November 2023: ts 08/11/23, 160.
[59] Exhibit 8, [87].
Charge 14 concerns an email sent by Mr Kelly at 4.51 pm on 25 September 2022 in which Mr Kelly referred to information obtained from the Draft Terms Sheet. The text of the email is as follows:[60]
Also just found out he tried to do another deal with Riversgold in May 2020, at the time Zhang was getting the new licences.
He convinced riversgold he might get them via Granite gold. So they were going to buy that company off him too!
[60] Exhibit 8, AJK-46.
Charge 5 concerns an email sent by Mr Kelly to Mr Moir later on 25 September 2022, this time at 6.17 pm. In this email Mr Kelly attached a copy of the Draft Terms Sheet and the associated covering email. The text of that email is as follows:[61]
Another dodgy deal for non-existent projects.
This was between the MME release and the grant to Zhang.
[61] Exhibit 8, AJK-47.
Mr Kelly's evidence was that he had sent emails to Mr Moir between October 2021 and November 2022. In some of those emails, Mr Kelly asked Mr Moir to translate documents in Cambodian for him that had been provided in the litigation, including the MME Letter.[62]
[62] Exhibit 8, [88].
Mr Kelly's evidence is that he told Mr Moir about the Draft Terms Sheet, and provided him with a copy, in confidence because he considered it to be a significant document in the substantive proceedings and he wondered if Mr Moir could tell him anything about the document, given Mr Moir's knowledge of Cambodian mining practices.[63]
[63] Exhibit 8, [88(d)].
Mr Kelly also refers to the subject line of the email the subject of charge 5, which is 'Fwd: what do you make of these ???'.
In cross-examination, Mr Kelly accepted that he did not ask Mr Moir for any information about the Draft Terms Sheet in the emails.[64] Mr Kelly's evidence was then:
[64] ts 8/11/23, 218.
You just sent those to him so that he would know about that, didn't you?---No, it was in response to his email further down.
AJK47?---No. He said to me - I saw what he produced claiming to be applications.
And you gave the answer:
Just found out he tried to do another deal with Riversgold.
?---Yes.
Now, you didn't ask him any information for the use in these proceedings though, did you?---No.
That wasn't the point of telling him about these things, was it?---No, it wasn't.
It was just so Mr Moir would know about them, isn't it?---It was part of a discussion about the Cambodian tenements that we had been having over a while.
But not for use in these proceedings?---It was connected to these proceedings.
Well, did you ask him anything about them?---I was talking about the Cambodian tenements in general through 2020, 2021, 2022.
What was the purpose of the emails and has there been a breach of the Harman undertaking?
I must be satisfied, beyond reasonable doubt, that Mr Kelly did not send the emails to Mr Moir for the purposes of the substantive proceedings. I am not satisfied of this beyond reasonable doubt for the following reasons.
I accept Mr Kelly's submission that consider that the emails should be read together as they are part of the one broader conversation between Mr Kelly and Mr Moir on 25 September 2022 consisting of a total of seven email messages. The emails the subject of charges 5 and 14 are the last two emails sent on 25 September 2022. Some of the earlier emails are also dealt with as part of the Purge application.[65]
[65] Item 13.
In the earlier emails, Mr Kelly sends Mr Moir a document described as a receipt. Mr Kelly asks Mr Moir if he has any idea what the document is, and Mr Moir provided his view and offers to get the document translated and attaches a rough translation.[66] The document the subject of the emails was a document discovered by Mr Hilton. In the emails Mr Kelly and Mr Moir discuss what the receipt is, and their view that it does not constitute a receipt for a licence application fee.
[66] Exhibit 8, AJK-45.
Whilst the email the subject of charge 14 then follows those discussions, and is included in the same email chain, it does not relate to the receipt document and Mr Kelly instead raises a new topic for discussion, being providing information about the Draft Terms Sheet.
Mr Hilton submits that Mr Kelly's explanation for sending the emails should be rejected as neither email contains a question or a request for a translation or information. Further, the email the subject of charge 14 only contains a comment as to what Mr Kelly considers the Draft Terms Sheet shows.
Read on its own, the email sent at 4.51 pm does not ask Mr Moir for assistance with understanding the Draft Terms Sheet or obtaining a translation. It also introduces a new topic from the earlier emails, and one interpretation is that Mr Kelly is simply telling Mr Moir about the Draft Terms Sheet, or perhaps bragging about it.
However, the email forms part of a broader exchange of communications between Mr Kelly and Mr Moir in 2021 and 2022 in which Mr Kelly seeks Mr Moir's assistance in translating discovered documents and understanding not only their text, but what each means in the context of Mr Kelly's case in the litigation.[67] Whilst these emails are not written in a formal style, this is consistent with the long‑standing nature of the relationship between Mr Kelly and Mr Moir. I also note that Mr Kelly is not a lawyer.
[67] Exhibit 8, [88] and AJK-43 ‑ AJK-48.
When the email sent at 4.51 pm is read against this background; in the context of the other emails sent on 25 September 2024 and with the email sent at 6.17 pm, which attaches the Draft Terms Sheet and includes the subject line 'Fwd: what do you make of these???', I cannot exclude the inference that a purpose of the emails was to seek Mr Moir's opinion as to what the Draft Terms Sheet meant for the purposes of the substantive proceedings.
In these circumstances, I am not satisfied beyond reasonable doubt that the emails the subject of charges 5 and 14 were sent for a purpose unrelated to the substantive proceedings, notwithstanding Mr Kelly's somewhat confusing answers in cross-examination about whether the email was asking for information for use in the proceedings. I therefore do not find that Mr Kelly breached the Harman undertaking in relation to these emails.
Charges 7 and 8
The content of the messages and Mr Kelly's explanation
Charges 7 and 8[68] concern two Skype messages sent by Mr Kelly to Heng Pheng on 16 October 2022.
[68] These charges correspond with item 7 of the Purge application.
Mr Pheng is a Cambodian lawyer who resided in Cambodia. Mr Pheng was engaged by Mr Hilton from around July 2016 to advise companies associated in some way with Mr Hilton in relation to the Cambodian gold mining prospects the subject of the substantive proceedings.[69]
[69] Exhibit 3, [27] - [28].
Mr Kelly's evidence is that he was told by Mr Hilton in July or August 2017 that Mr Pheng was Mr Hilton's 'contact on the ground' in Cambodia. Mr Kelly then had regular and direct dealings with Mr Pheng whilst Mr Kelly was the managing director of Riversgold, as Mr Pheng acted for Cambodia Gold and then Riversgold. Mr Kelly's evidence is that in 2018 Mr Pheng was paid a monthly retainer by Riversgold.[70]
[70] Exhibit 8, [60] - [61].
Charge 7 concerns a Skype message sent by Mr Kelly to Mr Pheng at 5.01 pm on 16 October 2022. In that message Mr Kelly attaches a screen shot of the MME Letter accompanied by the following text:[71]
You forgot to mention this one???
[71] Exhibit 3, JCH-10.
Charge 8 concerns a further Skype message sent by Mr Kelly to Mr Pheng at 5.15 pm on the same day. In that message Mr Kelly attaches a screen shot of the Draft Terms Sheet, without any accompanying text.[72]
[72] Exhibit 3, JCH-10.
Mr Pheng did not respond to either message. Mr Kelly deleted both messages 'pretty much straight away' after he sent them, although he cannot recall precisely when.[73] In his affidavit evidence, Mr Kelly deposed that he deleted the messages as he considered he had made a mistake in contacting Mr Pheng, given his association with Mr Hilton.[74] In cross-examination, Mr Kelly said that was only part of the reason, and he also deleted the messages because he realised it was wrong to send the discovered documents.[75]
[73] ts 08/11/2023, 182, 185, 189.
[74] Exhibit 8, [67] - [68]; ts 8/11/2023, 182.
[75] ts 8/11/2023, 183.
Mr Pheng forwarded a copy of Mr Kelly's messages to Mr Hilton on 20 or 21 October 2022.[76]
[76] Exhibit 3, [29].
Mr Kelly's evidence in his first affidavit was that he sent the first Skype message out of anger and frustration because Mr Pheng had not provided him with a copy of the MME Letter when Mr Pheng was acting for Riversgold. Mr Kelly's evidence was that he wanted Mr Pheng to know that he was aware of the MME Letter which had not been disclosed to Mr Kelly.[77]
[77] Exhibit 8, [63].
Mr Kelly's evidence was that he also sent the second Skype message out of anger and frustration. Mr Kelly's evidence was that he wanted to see what Mr Pheng's response would be and whether Mr Pheng would tell Mr Kelly more information about any applications for mining exploration licenses that may have been submitted by Granite Gold. Mr Kelly considered that, given Mr Pheng's association with Mr Hilton, Mr Pheng might have been involved in preparing any applications for mining exploration licences that may have been submitted by Granite Gold's Cambodian subsidiary.[78]
[78] Exhibit 8, [64] - [65].
In Mr Kelly's second affidavit, he deposes that following additional searches he located some additional Skype messages with Mr Pheng.[79] Those messages include one message from Mr Pheng on 13 April 2018 where Mr Pheng says, 'Hi how are you Allan?'. The next message is from Mr Kelly on 12 August 2021, where Mr Kelly attaches a screenshot of a document and says:[80]
When are you going to tell riversgold that the Antrong licences were awarded to Zhang in July last year ?? Before or after emerald announce their JV over them!?
[79] Exhibit 9, [60] - [61].
[80] Exhibit 9, AJK-81.
The next message was sent by Mr Kelly on 29 October 2021, where Mr Kelly attaches a screenshot of a document with the text, 'Lol!' and finally on 21 October 2022, Mr Kelly sent a message attaching a screenshot of the Emerald Resources joint venture announcement. None of these messages were responded to.[81]
[81] Exhibit 9, [60] and AJK-81.
In Mr Hilton's affidavit there is a further Skype message from Mr Kelly to Mr Hilton on the following Friday 21 October 2022, where Mr Kelly sent a screen shot of the ASX announcement by Emerald Resources and accompanying disparaging text.[82]
[82] Exhibit 3, JCH-10.
In cross-examination Mr Kelly accepted that he sent the message at 5.01 pm because he wanted Mr Pheng to know that he was aware of the MME Letter. Mr Kelly's evidence as to why he sent the message was as follows:[83]
And you deny it was sent to intimidate Mr Pheng by saying that you knew what he had done?---No, I didn't - I didn't do it for that reason.
Just to let him know?---Yes.
What was the point of that?---I had sent him a message about a year earlier asking him when he was going to tell Riversgold that the license had been granted to someone else, and I was aware that Emerald were negotiating a JV. And then this was, I guess, my proof that what I had asked him 12 months ago was true.
[83] ts 8/11/2023, 182.
Mr Kelly then accepted that he did not ask Mr Pheng about the MME Letter for the purposes of the substantive legal proceedings.[84]
[84] ts 8/11/2023, 182.
In relation to the message containing the first page of the Draft Terms Sheet, Mr Kelly accepted in cross-examination that he did not ask Mr Pheng any questions about the document.[85]
What was the purpose of the messages and has there been a breach of the Harman undertaking?
[85] ts 8/11/2023, 180.
I must be satisfied, beyond reasonable doubt, that Mr Kelly did not send the two Skype messages to Mr Pheng for the purposes of the substantive proceedings. I am satisfied of this beyond reasonable doubt for the following reasons.
I accept that the Skype messages the subject of charges 7 and 8 should be read together, as they were sent on the same day and are part of the one communication.
Mr Kelly submits that the first message was sent for the purpose of obtaining information from Mr Pheng as to why Mr Pheng had not told him about the MME Letter previously. Further, when the two messages are read together, Mr Kelly submits that the purpose of the second message is to seek information about the Draft Terms Sheet. Mr Kelly submits that he sent the message to elicit information from Mr Pheng as someone who was involved in, and had knowledge about, the matters in dispute in the substantive proceedings. Mr Kelly submits that it was reasonable for him to seek information about the Draft Terms Sheet from Mr Pheng, as given his previous association with Mr Hilton, Mr Pheng may have been involved in preparing the mining applications that were submitted by Granite Gold. I do not accept this submission.
On their face, neither message is sent for the purpose of obtaining information or assistance for use in the substantive proceedings. Each is simply letting Mr Pheng know that Mr Kelly is aware of both the MME Letter and the Draft Terms Sheet. Mr Kelly does not at any point ask Mr Pheng any questions about the MME Letter or the Draft Terms Sheet in the messages.
Mr Kelly submits that he was not cross-examined on his evidence that he sent the messages to elicit information from Mr Pheng as someone who was involved in, and had knowledge about, the matters in dispute in the substantive proceedings. I do not consider that any such cross-examination was required in this case.[86] Mr Kelly was on notice that his evidence as to the purpose of sending the messages was in dispute. That notice is evident from the inclusion of these charges in the Committal motion and the allegation that the messages were a breach of the Harman undertaking.
[86] See Lazarevic v The State of Western Australia [2007] WASCA 156.
Mr Kelly's evidence is that he sent both messages out of anger and frustration, which I accept for the reasons set out at [193] - [205] of these reasons. Mr Kelly's evidence is that he sent the message with the MME Letter for the purpose of letting Mr Pheng know that Mr Kelly was now aware of the letter. Mr Kelly accepted that he did not send this message for the purposes of the substantive legal proceedings. In the second message attaching the Draft Terms Sheet, Mr Kelly does not ask Mr Pheng any questions or request any assistance or information.
The plain text and tone of the messages is consistent with Mr Kelly's evidence that he sent the messages out of anger and frustration.
The meaning derived from the plain text of the messages is also supported when the messages are considered in the context of the history of the relationship between Mr Pheng and Mr Kelly, and the other Skype messages sent between them.
Mr Pheng was engaged by Mr Hilton to provide him with legal advice, before later also being engaged by Riversgold. There is no evidence of any independent relationship between Mr Kelly and Mr Pheng. Further, Mr Kelly did not have a history of an exchange of correspondence with Mr Pheng where he asked him questions or sought information from him for the purposes of the substantive legal proceedings. The messages were unsolicited. In this respect, the relationship between Mr Pheng and Mr Kelly was materially different to the relationship between Mr Kelly and both Mr Stanger and Mr Moir. Whilst Mr Kelly did identify two past Skype messages, none of these suggest an ongoing line of communication and discussion of this type.
It is also relevant (although not determinative) that, unlike Mr Stanger and Mr Moir, Mr Pheng does not respond to any of these messages or provide any information or assistance or views as to the documents.
In addition, Mr Kelly admitted deleting both messages 'pretty much straight away' after he sent them, although he cannot recall precisely when. Mr Kelly's original explanation for deleting the messages was because he realised he had done the wrong thing in sending the messages given Mr Pheng's association with Mr Hilton as Mr Pheng would be likely to tell Mr Hilton about the messages. In cross-examination, Mr Kelly said that he also deleted the messages because he realised it was wrong to send the discovered documents. Whatever the precise reason, this behaviour is inconsistent with the purpose of the messages being to obtain information and assistance for use in the substantive litigation.
I do not accept Mr Kelly's evidence that the purpose of the messages was to attempt to obtain information for use in the substantive proceedings. That evidence is inconsistent with the plain text and tone of the messages; the nature of the relationship between Mr Kelly and Mr Pheng; the lack of any history of obtaining or requesting information from Mr Pheng for the purposes of the substantive proceedings; the other messages sent by Mr Kelly to Mr Pheng; Mr Kelly's admission that he sent the message out of anger and frustration; the conduct of Mr Kelly immediately after sending the messages, and the concessions made by Mr Kelly in cross-examination.
In these circumstances, I am satisfied beyond reasonable doubt that the messages the subject of charges 7 and 8 were not sent for a purpose related to the substantive proceedings. I therefore find that Mr Kelly breached the Harman undertaking in relation to these messages.
Charges 9 and 10
The content of the messages and Mr Kelly's explanation
Charges 9 and 10[87] concern two text messages sent by Mr Kelly to Jay Klopper. The Committal motion refers to these messages being sent in September 2022. In his second affidavit, Mr Kelly deposes that whilst he originally believed the messages were sent in September 2022, he now believes he sent them on 16 October 2022, on the same day the Skype messages were sent to Mr Pheng.[88]
[87] These charges correspond with item 8 of the Purge application.
[88] Exhibit 9, [63].
Mr Klopper was a friend of Mr Kelly from university and first introduced Mr Kelly to Mr Hilton.[89] Mr Klopper was engaged by Mr Hilton as a geologist to assist two companies associated with Mr Hilton in relation to the Cambodian gold mining prospects.[90]
[89] Exhibit 8, [69]; ts 8/11/2023, 182 - 183.
[90] Exhibit 3, [31].
Charge 9 concerns a text message sent by Mr Kelly to a number he thought belonged to Mr Klopper. Mr Kelly attached a screenshot of the Draft Terms Sheet accompanied by the following text:[91]
WTF? Selling one worthless company is pretty good, but trying to sell a second one is extraordinary.
[91] Exhibit 8, [70].
Charge 10 concerns a further text message sent by Mr Kelly to the same number. Mr Kelly attached a screenshot of the MME Letter accompanied by the following text:[92]
you didn't think to provide this as part of the IPO DD process??
[92] Exhibit 8, [71].
Mr Klopper did not respond to either text message, and Mr Kelly was not aware of whether they were received by Mr Klopper.[93] Mr Kelly deleted both messages 'pretty much straight away' after he sent them, although he cannot recall precisely when.[94] In his affidavit evidence, Mr Kelly deposed that he deleted the messages as he considered he had made a mistake in contacting Mr Klopper, given his association with Mr Hilton.[95] In cross-examination, Mr Kelly said that he deleted the messages because he realised it was wrong to send the discovered documents.[96]
[93] ts 8/11/2023, 184.
[94] ts 08/11/2023, 182, 185, 189.
[95] Exhibit 8, [72] and [76]; ts 8/11/2023, 202.
[96] ts 8/11/2023, 184.
Mr Kelly's affidavit evidence is that he sent these text messages to Mr Klopper out of anger and frustration as he was angry with Mr Klopper given their long-standing relationship. Mr Kelly's evidence was that he hoped that Mr Klopper could explain to Mr Kelly why he was not mentioned in the Draft Terms Sheet given that, according to the ASIC register information, Mr Klopper was the sole Director and Shareholder of Granite Gold. Mr Kelly's evidence was that he wondered if Mr Klopper actually knew about the Draft Terms Sheet.[97] In cross-examination, Mr Kelly accepted that he did not ask Mr Klopper this question.[98]
[97] Exhibit 8, [73] - [74].
[98] ts 8/11/2023, 183.
Prior to these two messages, Mr Kelly had not spoken to Mr Klopper since 2019.[99] There were no other messages between the two of them.[100]
What was the purpose of the messages and has there been a breach of the Harman undertaking?
[99] ts 8/11/2023, 184.
[100] ts 8/11/2023, 184.
I am satisfied beyond reasonable doubt that both these messages were sent to Mr Klopper on 16 October 2021, on the same day as the messages sent to Mr Pheng. I consider it appropriate to read the two messages together, given they were sent on the same day.
Mr Hilton submits that the position in relation to the text messages sent to Mr Klopper is essentially the same as those sent to Mr Pheng. Mr Kelly agrees that a comparison may be drawn between the communications with Mr Pheng and Mr Klopper.
I must be satisfied, beyond reasonable doubt, that Mr Kelly did not send the two text messages to Mr Klopper for the purposes of the substantive proceedings. I am satisfied of this beyond reasonable doubt for the following reasons.
Mr Kelly submits that, as with the communications to Mr Pheng, both messages were sent for the purpose of eliciting information from a person involved in, and who had knowledge about, the very matters in issue in the substantive proceedings. I do not accept this submission.
Mr Kelly submits that the history of the friendship between Mr Kelly and Mr Klopper and his concern that Mr Klopper conspired with Mr Hilton to defraud Riversgold shareholders supports his submission as to the purpose of the messages.
On their face, neither message is sent for the purposes of obtaining information or assistance for use in the substantive litigation. Mr Kelly relies on the text of the first message, being 'WTF?', as demonstrating that the purpose of this message was to ask Mr Klopper to explain the document and the situation as a whole, and in particular how it was that Mr Hilton appeared to be trying to sell another company to Riversgold, namely Granite Gold. In relation to the second message, Mr Kelly relies on the text itself, in which he asked Mr Klopper why the MME Letter had not been provided at the time of the IPO process.
I do not accept Mr Kelly's submission. Whilst each text message does ask Mr Klopper a question, the text of each message is accusatory in tone and the questions are rhetorical in nature.
Mr Kelly submits that he was not cross-examined on his evidence that he sent the messages to elicit information from Mr Klopper as someone who was involved in, and had knowledge about, the matters in dispute in the substantive proceedings. I do not consider that any such cross-examination was required in this case.[101] Mr Kelly was on notice that his evidence as to the purpose of sending the messages was in dispute. That notice is evident from the inclusion of these charges in the Committal motion and the allegation that the messages were a breach of the Harman undertaking.
[101] See Lazarevic v The State of Western Australia [2007] WASCA 156.
Mr Kelly has admitted that he sent both messages out of anger and frustration which I accept for the reasons set out at [193] - [205] of these reasons.
The tone and rhetorical nature of the text messages is consistent with Mr Kelly's evidence that he sent both messages out of anger and frustration.
The tone and rhetorical nature of the text messages is also consistent with the history of the relationship between Mr Klopper and Mr Kelly, and the lack of any other messages sent between them. Whilst Mr Kelly and Mr Klopper had known each other since university, it was Mr Klopper who introduced Mr Kelly to Mr Hilton, and Mr Klopper was a director of Granite Gold. Mr Kelly had not spoken to Mr Klopper since 2019, approximately three years before the text messages were sent.
As with Mr Pheng, Mr Kelly did not have a history of an exchange of correspondence with Mr Klopper where he asked him questions or sought information from him for the purposes of the substantive legal proceedings. In this respect, whilst Mr Kelly and Mr Klopper may have known each other since university, the relationship between the two was materially different to the relationship between Mr Kelly and both Mr Stanger and Mr Moir. Mr Kelly was not even aware if the number he used was Mr Klopper's number.
Mr Hilton also relies on the email sent by Mr Kelly to officers of the ASX one week later on 21 October 2022 (the subject of charge 13). In that email, Mr Kelly states as follows regarding Mr Klopper:[102]
Hilton, current Riversgold CEO Julian Ford and Jay Klopper (sole Director and shareholder of Granite Gold Pty Ltd), amongst others, conspired to defraud Riversgold shareholders not once, but twice: firstly as part of the 2017 IPO; and later, in 2020, when they proposed purchasing Granite Gold Pty Ltd from Hilton and Klopper "just in case" it was granted the tenements that Riversgold paid Hilton for in 2017.
[102] Exhibit 8, AJK-39.
This email is not consistent with Mr Kelly's explanation that he sent a text message to Mr Klopper to obtain information for use in the substantive proceedings. Rather, it is consistent with Mr Kelly sending a text message out of anger and frustration to Mr Klopper and is consistent with the text, tone and rhetorical nature of the messages.
It is also relevant (but not determinative) that Mr Klopper does not respond to any of these messages or provide any information or assistance or views as to the documents.
In addition, Mr Kelly admitted to deleting the messages 'pretty much straight away' after he sent them, although he cannot recall precisely when. Mr Kelly's original explanation for deleting the messages was because he realised he had done the wrong thing in sending the messages given Mr Klopper's association with Mr Hilton as Mr Klopper would be likely to tell Mr Hilton about the messages. In cross-examination, Mr Kelly said that he also deleted the messages because he realised it was wrong to send the discovered documents. Whatever the precise reason, this behaviour is inconsistent with the purpose of the messages being to obtain information and assistance for use in the substantive proceedings.
In these circumstances, I do not consider the text messages are genuinely seeking information for use in the substantive proceedings. Rather, they are text messages demonstrating that Mr Kelly is aware of the MME Letter and the Draft Terms Sheet and are rhetorically asking why Mr Klopper did not tell Mr Kelly about these at the time.
I do not accept Mr Kelly's evidence that the purpose of the messages was to seek to obtain information for use in the substantive proceedings. It is inconsistent with the plain text and tone of the messages; the nature of the relationship between Mr Kelly and Mr Klopper; the lack of any history of obtaining or requesting information from Mr Klopper for the purposes of the substantive proceedings; Mr Kelly's admission that he sent the message out of anger and frustration; the conduct of Mr Kelly immediately after sending the messages, and the concessions made by Mr Kelly in cross‑examination.
In these circumstances, I am satisfied beyond reasonable doubt that the messages the subject of charges 9 and 10 were not sent for a purpose related to the substantive proceedings. I therefore find that Mr Kelly breached the Harman undertaking in relation to these emails.
Were Mr Kelly's breaches of the Harman undertaking contumacious?
Legal principles
I have found that Mr Kelly breached the Harman undertaking in relation to his communications with the regulatory authorities (charges 2, 3, 4, 6, 11, 12, 13 and 15), Mr Pheng (charges 7 and 8) and Mr Klopper (charges 9 and 10).
The next issue to consider is whether those breaches were contumacious. A breach will be contumacious where the disobedience or contravention involves deliberate defiance.[103] Contumacy is to be distinguished from what is sometimes described as a wilful breach. A wilful breach is one which goes beyond a casual, accidental or unintentional breach, but does not have the additional element of defiance.[104]
[103] Witham v Holloway (1995) 183 CLR 525, 530; Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98, 108 - 109; Pang v Bydand Holdings Pty Ltd [2011] NSWCA 69 [74] (Beazley JA), [167] (Lindgren AJA); Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483, 489 (Barwick CJ); Construction, Forestry, Mining and Energy Union v Grocon Constructors (Victoria) Pty Ltd (2014) 47 VR 527 [146] - [152].
[104] Pang v Bydand Holdings Pty Ltd[2011] NSWCA 69 [73] - [74] (Beazley JA); Construction, Forestry, Mining and Energy Union v Grocon Constructors (Victoria) Pty Ltd (2014) 47 VR 527 [146] - [152].
In the Full Federal Court, in Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd,[105] Smithers and Northrop JJ held:
It is appropriate for the contempt before the Chief Judge to be regarded as involving an element of contumacious conduct. Contumacy is perverse obstinate resistance to authority; see the Shorter Oxford Dictionary. Deliberate determination to defy the court for reasons founded upon Union policy in which it is sought to establish immunity from the law would seem to be within this concept of contumacy.
[105] Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1985) 9 FCR 194, 207.
In the High Court, in Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd,[106] Gibbs CJ, Mason, Wilson and Deane JJ concluded that wilful disobedience of a court order which amounted to 'public defiance' could convert what would otherwise be a civil contempt into a criminal contempt.
[106] Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98, 108.
A finding of contumacy may require consideration of the state of mind of the contemnor. As outlined by the Full Court of the Federal Court in Kazal v Thunder Studios Inc (California) and Anor:[107]
Aggravation by way of conduct and a state of mind found to be contumacious can be seen to be on a sliding scale. For example, it may range from deliberate and wilful defiance, to an unsuccessful attempt to get around a prohibition, to an unsuccessful attempt to comply with a prohibition. Proven recklessness or carelessness may be seen not to be contumacious at all. This process of characterisation is inevitably driven by close attention to what was done. This includes what can be said about state of mind able to be ascertained from all of the evidence, including by way of inference.
[107] Kazal v Thunder Studios Inc (California) and Anor (2017) 350 ALR 216 [106], cited with approval in Clipsal Australia Pty Ltd v ACN 134 468 205 [2017] FCA 1584; Yuan v Huang (No 2) [2023] NSWSC 1618.
In addition to elevating a failure to comply with a court order or undertaking from a civil contempt to a criminal contempt, contumacy is also relevant to penalty.[108]
[108] Kazal v Thunder Studios Inc (California) and Anor (2017) 350 ALR 216 [105].
I am required to be satisfied beyond reasonable doubt that the breaches of the Harman undertaking were contumacious. The burden of proof lies on Mr Hilton in this regard.
Why Mr Hilton says Mr Kelly's conduct was contumacious
Mr Hilton submits Mr Kelly's conduct is properly characterised as contumacious, as at all material times Mr Kelly was aware of the Harman undertaking and nonetheless proceeded to make the disclosures which breached the Harman undertaking.
Mr Hilton also submits that Mr Kelly's explanation for his breaches of the Harman undertaking should not be accepted for the following broad reasons:
(a)Mr Kelly was willing to lie to avoid disclosure of his breaches, and therefore his evidence should be rejected except where it is contrary to his own interests or corroborated by contemporaneous documents; and
(b)Mr Kelly's evidence that he was angry and frustrated on the occasion of each breach, such that he did not have the Harman undertaking in his mind, is incredible and should be rejected. Further, it is not relevant.
Mr Kelly's explanation for the communications
Mr Kelly's evidence in relation to his reasons for sending the communications to Mr Pheng and Mr Klopper is set out earlier in these reasons.
In relation to his communications with the regulatory authorities, Mr Kelly gave evidence that he had been communicating with officers from the ASX, ASIC and the WA Police between July 2020 and November 2020 outlining his concerns about the conduct of both Mr Hilton and Riversgold in relation to the Cambodian gold tenements.[109] However, none of the regulatory authorities had taken any action.
[109] Exhibit 8, [13] - [19].
Mr Kelly commenced the substantive proceedings in December 2020. Mr Kelly continued engaging in email communications with ASIC, ASX and WA Police after commencing the substantive proceedings. These communications occurred throughout 2021 and 2022. Mr Kelly's evidence is that he was told by the regulatory authorities that if he had any further evidence of misconduct, he should provide it to ASIC.[110]
[110] Exhibit 9, [9], [11] - [12], [33] - [34].
The exchange continues as follows:
Morgan Hart
Certainly doesn't look like a licence.
Allan Kelly
Yep, he applies for Antrong on 2 March 2017 and got the letter from the MME on 4 April, then lied through the whole riversgold dd/ipo process…
Mr Kelly deposes that he sent Mr Hart the MME Letter because of their earlier conversation at the 'Diggers and Dealers' conference. Mr Kelly's evidence is that he wanted to see if Mr Hart shared his understanding of the meaning and intent of the MME Letter given Mr Hart's familiarity with Cambodia and the area in question.[229] Mr Kelly was not cross-examined on this evidence.
[229] Exhibit 9, [48].
An exchange of LinkedIn messages then continues intermittently until February 2022. Those messages largely address whether Cambodian approval of the Emerald Resources joint venture has occurred and when public announcement of the joint venture will occur and whether the Emerald Resources joint venture ASX announcement assists Mr Kelly's case. Mr Kelly also provides a screenshot of a newspaper article regarding the substantive proceedings.
Item 18 consists of a LinkedIn message sent by Mr Kelly to Mr Hart on 10 February 2022 in which Mr Kelly says:[230]
Face to face with Hilton yesterday. He still thinks he has something.
[230] Exhibit 9, AJK-78.
Mr Hart responds, 'That's crazy'.
Item 18 was sent shortly after the mediation conference held on 9 February 2022. Mr Kelly deposes that he did not consider at the time that he was telling Mr Hart anything that was confidential, and it did not occur to Mr Kelly that he was doing anything wrong.[231]
[231] Exhibit 9, [49] - [50].
I am not satisfied beyond reasonable doubt that item 17 was not sent for the purposes of the substantive proceedings. The LinkedIn messages form part of a broader exchange of electronic communications between Mr Kelly and Mr Hart regarding the role of Emerald Resources in developing the land the subject of the Cambodian gold tenements and the extent of any involvement of Emerald Resources with Cambodia Gold or Mr Hilton. These communications followed an earlier in-person discussion. In this context, I am not satisfied beyond reasonable doubt that discussing the MME Letter, and what it means in that broader context, is not for the purposes of the substantive proceedings.
In relation to item 18, I have set out above in relation to charge 16 of the Committal motion the law in relation to confidentiality surrounding court ordered mediation conferences. Item 18 in the Purge application makes reference to the mediation conference. However, the text of item 18 is at a very high level of generality. The message does not refer specifically to anything said or done; or any particular communication; or any admission made in the mediation conference. Item 18 is of a different level of specificity than the email the subject of charge 16 of the Committal motion. Given its text, I am not satisfied beyond reasonable doubt that item 18 constitutes a breach of the confidentiality requirements for mediation conferences under Part VI of the Supreme Court Act.
I therefore do not find that Mr Kelly breached the Harman undertaking in relation to item 17 or the confidentiality requirements in Part VI of the Supreme Court Act in relation to item 18.
Item 19
Item 19 is an email from Mr Kelly to Brad Jones dated 18 August 2022.[232]
[232] Exhibit 9, AJK-80.
Mr Jones is an old friend of Mr Kelly who had worked with the ANZ bank for many years. Mr Jones also worked for other financial institutions in South East Asia, including in Cambodia.[233]
[233] Exhibit 9, [52].
In the email Mr Kelly explains that he wants to get Mr Jones' thoughts on a letter. Mr Kelly indicates that he first needs to give Mr Jones some background and goes on to explain the factual background to the litigation from his perspective and explains that in the discovery process Mr Hilton has provided a letter sent by Cambodia Gold to the Ministry for Mines and Energy requesting a meeting. That letter mentions the ANZ.[234] Mr Kelly's email says that he will provide the original document in Khmer and a translated version (although they are not attached to this email and Mr Kelly cannot recall if they were ever provided)[235] and says that he is, 'interested in [his] thoughts.'.
[234] Being document HIL.006.001.0560.
[235] Exhibit 9, [53].
On 21 August 2022, Mr Jones sent an email in response with his thoughts on Mr Kelly's email, including explaining that the ANZ operating in Cambodia at that time was a joint venture called ANZ Royal. Mr Jones offers to put Mr Kelly in contact with reputable people in Cambodia to assist in giving Mr Kelly facts but seeks clarification from Mr Kelly as to his objectives so he can provide more targeted advice.
I am not satisfied beyond reasonable doubt that this email was not sent for the purposes of the substantive proceedings. In the email Mr Kelly seeks assistance from Mr Jones in finding out information about the involvement of the ANZ (if any) in Cambodia Gold's claimed joint venture. Mr Jones is known to Mr Kelly and has experience with both the ANZ and in financial institutions in South East Asia. This information is relevant to a discovered document. I am not satisfied beyond reasonable doubt that this is a collateral purpose to the purposes of the substantive proceedings. I therefore do not find a breach of the Harman undertaking in relation to item 19.
Items 20 and 21
Items 20 and 21 consist of two separate in person discussions between Mr Kelly and Marion Bush and Mr Kelly and Jennifer Rezos in or about July or August 2022. Ms Bush and Ms Rezos are colleagues of Mr Kelly who work with Mr Kelly at Miramar Resources Ltd.[236] Ms Bush is a board member of Miramar,[237] and Ms Rezos is a lawyer.[238]
[236] Exhibit 9, [56].
[237] Exhibit 9, [64(d)].
[238] Exhibit 9, [64(g)].
Mr Kelly deposes that when he received the Draft Terms Sheet he struggled to understand what the document meant, and shortly after receiving it he showed a printed copy to Ms Bush and Ms Rezos for the purpose of confirming his understanding of what it meant. Mr Kelly showed the Draft Terms Sheet to Ms Bush at Miramar's offices, and Mr Kelly showed a copy to Ms Rezos at a café.[239] Mr Kelly was not cross-examined on his affidavit evidence.
[239] Exhibit 9, [56] - [58].
There is no evidence before me as to why Mr Kelly chose to discuss the Draft Terms Sheet with Ms Bush and Ms Rezos in particular, and whether they had any particular skills and expertise in this area. However, given their occupations and place of work, I cannot exclude the inference that each may have experience in reading documents similar to the Draft Terms Sheet and therefore may have been able to assist Mr Kelly in understanding the document.
In these circumstances I am not satisfied beyond reasonable doubt that these two conversations were not for the purposes of the substantive litigation. Mr Kelly's evidence is that he asked Ms Bush and Ms Rezos for assistance in understanding the Draft Terms Sheet which is a discovered document. Both work for a mining company, one is a board member and the other a lawyer. I am not satisfied beyond reasonable doubt that this was not for the purposes of the substantive proceedings. I therefore do not find a breach of the Harman undertaking in relation to items 20 and 21.
Item 22
Item 22 consists of various unparticularised discussions between Mr Kelly and friends, family, colleagues and a health professional. Mr Kelly deposes that he has spoken to various named individuals about the substantive proceedings for the purpose of seeking support and to unburden himself of the considerable strain involved.[240]
[240] Exhibit 9, [64].
Mr Kelly deposes that he cannot now recall the specific occasions or dates on which he had these discussions, nor the details of exactly what he said to these individuals. However, Mr Kelly's evidence is that it is 'probable' that he raised with some or all of these individuals, in general terms, various documents obtained from Mr Hilton including the MME Letter and the Draft Terms Sheet.[241] Mr Kelly does not state that he provided any of the individuals with any of the documents. Mr Kelly was not cross-examined on this evidence.
[241] Exhibit 9, [65].
It is understandable that litigation can be stressful and that those involved may need to talk to others in their life to assist in relieving that stress. However, when having these discussions regard must still be had to the Harman undertaking, and the need to have these discussions at a level of generality that ensures compliance with the undertaking.
In the present case, there is only limited evidence as to the content of the discussions falling within item 22. Mr Kelly is unable to recall not only the specific occasions or dates upon which he held these conversations, but also the details of exactly what he said to these individuals. Whilst Mr Kelly's evidence is that it is 'probable' that he referred to documents which were obtained under compulsion, absent specific dates and details of each conversation, including the precise documents or information discussed, I cannot be satisfied beyond reasonable doubt that a breach of the Harman undertaking has occurred, or on how many occasions.
I therefore do not find a breach of the Harman undertaking in relation to item 22.
Conclusion
I am satisfied beyond reasonable doubt that Mr Kelly:
(a)has committed criminal contempt in the form of contumacious breaches of Harman undertaking as alleged in charges 2, 3, 4, 6, 7, 8, 9, 10, 11, 12, 13 and 15 of the Committal motion;
(b)has committed civil contempt by sending an email which revealed communications between the Mr Hilton and Mr Kelly during a court ordered mediation conference as alleged in charge 16 of the Committal motion; and
(c)has committed civil contempt in the form of breaches of Harman undertaking as identified in items 6A, 6C, 6D and 6F of the Purge application.
I will hear further from the parties in relation to the appropriate orders to programme a further hearing to consider whether Mr Kelly has purged his contempt and/or an appropriate penalty.
Schedule 1
Committal Charges
* indicates the charges that are admitted by Mr Kelly to the civil standard.
| Committal Charge No | Purge Item No | Charge |
| 1 | 16 | The first plaintiff is guilty of a criminal contempt by reason of his conduct on 31 August 2021 at 7.04pm, in sending a message via LinkedIn to Richard Stanger which contained a photograph of a letter from the Minister of Mines and Energy to Cambodia Gold Pty Ltd dated 4 April 2017 which had been produced by the defendant under compulsion in these proceedings in breach of the first plaintiff's obligation to the Court not to use documents produced by the defendant under compulsion, in whole or in part, or the information contained in them, for any purpose not directly connected with the conduct of the proceedings. |
| 2 * | 6B * | The first plaintiff is guilty of a criminal contempt by reason of his conduct on 17 October 2021 at 9.10am, in sending an email to Paul Dowson and Tony Vesperman of the Western Australian Police which attached a copy of and contained information derived from a letter from the Minister of Mines and Energy to Cambodia Gold Pty Ltd dated 4 April 2017 which had been produced by the defendant under compulsion in these proceedings in breach of the first plaintiff's obligation to the Court not to use documents produced by the defendant under compulsion, in whole or in part, or the information contained in them, for any purpose not directly connected with the conduct of the proceedings. |
| 3 * | 1 * | The first plaintiff is guilty of a criminal contempt by reason of his conduct on 9 July 2022 at 2.56pm, in sending an email to Shannon Nicholson and Jessica Coupe of the Australian Stock Exchange attaching a letter from the first plaintiff to Ms Coupe dated 9 July 2022 which letter: (a) contained information derived from the discovered documents; alternatively (b) contained at page 3 information derived from the MME Letter, which documents had been produced by the defendant under compulsion in these proceedings the disclosure of which information was a breach of the first plaintiff's obligation to the Court not to use documents produced by the defendant under compulsion, in whole or in part, or the information contained in them, for any purpose not directly connected with the conduct of the proceedings. |
| 4 | 4 | The first plaintiff is guilty of a criminal contempt by reason of his conduct on 18 July 2022 at 8.19am, in sending an email to Matthew Hynes of the Australian Securities and Investments Commission attaching a letter from the first plaintiff to Matthew Hynes dated 18 July 2022 which letter at page 3 contained information derived from a letter from the Minister of Mines and Energy to Cambodia Gold Pty Ltd dated 4 April 2017 which had been produced by the defendant under compulsion in these proceedings in breach of the first plaintiff's obligation to the Court not to use documents produced by the defendant under compulsion, in whole or in part, or the information contained in them, for any purpose not directly connected with the conduct of the proceedings. |
| 5 | 12 | The first plaintiff is guilty of a criminal contempt by reason of his conduct on 25 September 2022 at 6.17pm, in sending an email to Graham Moir attaching copies of documents HIL.001.002.2869 and HIL.001.002.2870 which documents had been produced by the defendant under compulsion in these proceedings in breach of the first plaintiff's obligation to the Court not to use documents produced by the defendant under compulsion, in whole or in part, or the information contained in them, for any purpose not directly connected with the conduct of the proceedings. |
| 6 * | 2 * | The first plaintiff is guilty of a criminal contempt by reason of his conduct on 26 September 2022 at 2.47pm, in sending an email to Shannon Nicholson and Jessica Coupe of the Australian Stock Exchange attaching a letter from the first plaintiff to Jessica Coupe dated 26 September 2022 which letter: (a) contained information derived from the discovered documents; alternatively (b) contained information: a. at page 2 derived from HIL.001.002.0225, HIL.006.001.0560 and the MME Letter (HIL.010.001.0127); and b. at pages 3-4 derived from HIL.001.002.2869 and HIL.001.002.2870, which documents had been produced by the defendant under compulsion in these proceedings the disclosure of which information was a breach of the first plaintiff's obligation to the Court not to use documents produced by the defendant under compulsion, in whole or in part, or the information contained in them, for any purpose not directly connected with the conduct of the proceedings. |
| 7 | 7 | The first plaintiff is guilty of a criminal contempt by reason of his conduct on 16 October 2022 in sending a message via Skype to Heng Pheng at 5:01pm which contained a screenshot of a letter from the Minister of Mines and Energy to Cambodia Gold Pty Ltd dated 4 April 2017 which had been produced by the defendant under compulsion in these proceedings in breach of the first plaintiff's obligation to the Court not to use documents produced by the defendant under compulsion, in whole or in part, or the information contained in them, for any purpose not directly connected with the conduct of the proceedings. |
| 8 | 7 | The first plaintiff is guilty of a criminal contempt by reason of his conduct on 16 October 2022 at 5:15pm in sending a message via Skype to Heng Pheng which contained a screenshot of HIL.001.002.2870 which document had been produced by the defendant under compulsion in these proceedings in breach of the first plaintiff's obligation to the Court not to use documents produced by the defendant under compulsion, in whole or in part, or the information contained in them, for any purpose not directly connected with the conduct of the proceedings. |
| 9 | 8 | The first plaintiff is guilty of a criminal contempt by reason of his conduct in or around September 2022 in sending a text message to Jay Klopper which contained a screenshot of HIL.001.002.2870 which document had been produced by the defendant under compulsion in these proceedings in breach of the first plaintiff's obligation to the Court not to use documents produced by the defendant under compulsion, in whole or in part, or the information contained in them, for any purpose not directly connected with the conduct of the proceedings. |
| 10 | 8 | The first plaintiff is guilty of a criminal contempt by reason of his conduct in or around September 2022 in sending a text message to Jay Klopper which contained a screenshot of a letter from the Minister of Mines and Energy to Cambodia Gold Pty Ltd dated 4 April 2017 which document had been produced by the defendant under compulsion in these proceedings in breach of the first plaintiff's obligation to the Court not to use documents produced by the defendant under compulsion, in whole or in part, or the information contained in them, for any purpose not directly connected with the conduct of the proceedings. |
| 11 * | 6 * | The first plaintiff is guilty of a criminal contempt by reason of his conduct on 16 October 2022 at 9.41pm, in sending an email to Paul Dowson and Tony Vesperman of the Western Australian Police which email contained information derived from the MME Letter, HIL.001.002.2869 and HIL.001.002.2870 which had been produced by the defendant under compulsion in these proceedings in breach of the first plaintiff's obligation to the Court not to use documents produced by the defendant under compulsion, in whole or in part, or the information contained in them, for any purpose not directly connected with the conduct of the proceedings. |
| 12 * | 5 * | The first plaintiff is guilty of a criminal contempt by reason of his conduct on 21 October 2022 at 6.09pm, in sending an email to Matthew Hynes and Ms Krystal Fung of the Australian Securities and Investments Commission referring to information derived from and attaching copies of documents HIL.001.002.2869 and HIL.001.002.2870 which documents had been produced by the defendant under compulsion in these proceedings in breach of the first plaintiff's obligation to the Court not to use documents produced by the defendant under compulsion, in whole or in part, or the information contained in them, for any purpose not directly connected with the conduct of the proceedings. |
| 13 * | 3 * | The first plaintiff is guilty of a criminal contempt by reason of his conduct on 21 October 2022 at 2.59pm, in sending an email to James Rowe and Shannon Nicholson of the Australian Stock Exchange referring to information derived from documents HIL.001.002.2869 and HIL.001.002.2870 which documents had been produced by the defendant under compulsion in these proceedings in breach of the first plaintiff's obligation to the Court not to use documents produced by the defendant under compulsion, in whole or in part, or the information contained in them, for any purpose not directly connected with the conduct of the proceedings. |
| 14 | 14 | The first plaintiff is guilty of a criminal contempt by reason of his conduct on 25 September 2022 at 4.51pm, in sending an email to Graham Moir referring to information derived from documents HIL.001.002.2869 and HIL.001.002.2870 which documents had been produced by the defendant under compulsion in these proceedings in breach of the first plaintiff's obligation to the Court not to use documents produced by the defendant under compulsion, in whole or in part, or the information contained in them, for any purpose not directly connected with the conduct of the proceedings. |
| 15 * | 6G * | The first plaintiff is guilty of a criminal contempt by reason of his conduct on 21 October 2022 at 2:33pm, in sending an email to Paul Dowson and Tony Vesperman of the Western Australian Police which email attached copies of documents HIL.001.002.2869 and HIL.001.002.2870 which had been produced by the defendant under compulsion in these proceedings in breach of the first plaintiff's obligation to the Court not to use documents produced by the defendant under compulsion, in whole or in part, or the information contained in them, for any purpose not directly connected with the conduct of the proceedings. |
| 16 * | 6E * | The first plaintiff is guilty of a criminal contempt by reason of his conduct on 9 April 2022 at 11:01am in sending an email to Paul Dowson of the Western Australian Police which email disclosed details of communications between the first plaintiff and the defendant during the course of a Court ordered mediation between them on 9 February 2022, and thereby interfering with the administration of justice. |
| 17 | - | Further or alternatively to charges 4 and 12 above, the first plaintiff is guilty of a criminal contempt by reason of his conduct in making the disclosures to the Australian Securities and Investments Commission the subject of charges 4 and 12 above for the purpose of seeking to instigate the Australian Securities and Investments Commission, taking adverse action against the defendant as retribution for the defendant's defence of these proceedings. |
| 18 | - | Further or alternatively to charges 3, 6 and 13 above, the first plaintiff is guilty of a criminal contempt by reason of his conduct in making the disclosures to the Australian Stock Exchange the subject of charges 3, 6 and 13 above for the purpose of seeking to instigate the Australian Stock Exchange, taking adverse action against the defendant as retribution for the defendant's defence of these proceedings. |
| 19 | - | Further or alternatively to charges 2, 11, 15 and 16 above, the first plaintiff is guilty of a criminal contempt by reason of his conduct in making the disclosures to the Western Australian Police the subject of charges 2, 11, 15 and 16 above for the purpose of seeking to instigate the Western Australian Police taking adverse action against the defendant as retribution for the defendant's defence of these proceedings. |
| 20 | - | Further or alternatively to charges 9 and 10 above, the first plaintiff is guilty of a criminal contempt by reason of his conduct in interfering with the administration of justice by sending text messages to Jay Klopper in or around September 2022 who the first plaintiff knew to be a potential witness in this proceeding and which messages were intended or calculated to discourage or dissuade Mr Klopper from giving evidence in the proceeding. |
| 21 | - | Further or alternatively to charges 7 and 8 above, the first plaintiff is guilty of a criminal contempt by reason of his conduct in interfering with the administration of justice by sending Skype messages to Heng Pheng on 16 October 2022 and 21 October 2022 who the first plaintiff knew to be a potential witness in this proceeding and which messages were intended or calculated to discourage or dissuade Heng Pheng from giving evidence in the proceeding. |
Schedule 2
Additional items - Purge Application
* indicates breaches admitted by Mr Kelly
| No. | Communication | Documents or information used |
| 6A * | Email from Allan Kelly to Sergeant Dowson and Tony Vesperman dated 21 February 2021 | Defence filed in the proceedings on 15 February 2021. |
| 6C * | Email from Allan Kelly to Sergeant Dowson and Tony Vesperman dated 15 December 2021 | Defence filed in the proceedings on 15 February 2021. Letter from Minister of Mines and Energy to Cambodia Gold Pty Ltd dated 4 April 2017 (HIL.010.001.0127). |
| 6D * | Emails from Allan Kelly to Sergeant Dowson dated 3 April 2022 | Information communicated to Allan Kelly by John Hilton during a mediation in the proceedings. Letter from Minister of Mines and Energy to Cambodia Gold Pty Ltd dated 4 April 2017 (HIL.010.001.0127). |
| 6F * | Email from Allan Kelly to Sergeant Dowson dated 17 October 2022 | Letter from Minister of Mines and Energy to Cambodia Gold Pty Ltd dated 4 April 2017 (HIL.010.001.0127). Email from John Hilton to Julian Ford dated 15 May 2020 - Fwd: Draft Agreement - Cambodia Share Sale (HIL.001.002.2869). Document titled 'Binding Term Sheet: Riversgold- Cambodia Gold Share Sale' (HIL.001.002.2870). |
| 9 | Emails from Allan Kelly to Denora Sarin dated 30 August 2022 | Letter from Cambodia Gold Pty Ltd to the Minister, Ministry of Mines and Energy undated (HIL.006.001.0560). Letter from Minister of Mines and Energy to Cambodia Gold Pty Ltd dated 4 April 2017 (HIL.010.001.0127). |
| 10 | Email from Allan Kelly to Graham Moir dated 8 October 2021 - Gday | Letter from Minister of Mines and Energy to Cambodia Gold Pty Ltd dated 4 April 2017 (HIL.010.001.0127). |
| 11 | Email from Allan Kelly to Graham Moir dated 14 August 2022 - Re: Translation | Circular from the Ministry of Mines and Energy on Guidelines for Application of Mineral Exploration License dated 7 October 2016 (HIL.001.002.0225). Letter from Cambodia Gold Pty Ltd to the Minister, Ministry of Mines and Energy (undated) (HIL.006.001.0560). |
| 13 | Emails from Allan Kelly to Graham Moir dated 25 September 2022 - Receipt | Document titled 'Payment Order' issued by the Ministry of Mines and Energy (HIL.006.001.0728). |
| 15 | Emails from Allan Kelly to Graham Moir ending 25 November 2022 - re: Antrong Licences | Email from John Hilton to Julian Ford dated 15 May 2020 - Fwd: Draft Agreement - Cambodia Share Sale (HIL.001.002.2869). Document titled 'Binding Term Sheet: Riversgold- Cambodia Gold Share Sale' (HIL.001.002.2870). |
| 17 | Message sent by LinkedIn messenger from Allan Kelly to Morgan Hart dated 21 October 2021 | Letter from Minister of Mines and Energy to Cambodia Gold Pty Ltd dated 4 April 2017 (HIL.010.001.0127). |
| 18 | Message sent by LinkedIn messenger from Allan Kelly to Morgan Hart dated 10 February 2022 | Information communicated to Allan Kelly by John Hilton during a mediation in the proceedings. |
| 19 | Emails from Allan Kelly to Brad Jones ending 21 August 2022 - re: [External] Cambodia | Letter from Cambodia Gold Pty Ltd to the Minister, Ministry of Mines and Energy (undated) (HIL.006.001.0560). |
| 20 | In person discussion between Allan Kelly and Marion Bush in about July or August 2022. | Document titled 'Binding Term Sheet: Riversgold- Cambodia Gold Share Sale' (HIL.001.002.2870). |
| 21 | In person discussion between Allan Kelly and Jennifer Rezos in about July or August 2022. | Letter from Minister of Mines and Energy to Cambodia Gold Pty Ltd dated 4 April 2017 (HIL.010.001.0127). Document titled 'Binding Term Sheet: Riversgold- Cambodia Gold Share Sale' (HIL.001.002.2870). |
| 22 | In person discussions at various times between Allan Kelly and the persons listed in paragraph 64 of the supplementary affidavit of Allan Kelly sworn 26 October 2023 (Exhibit 9). | Letter from Minister of Mines and Energy to Cambodia Gold Pty Ltd dated 4 April 2017 (HIL.010.001.0127). Document titled 'Binding Term Sheet: Riversgold- Cambodia Gold Share Sale' (HIL.001.002.2870). Email from John Hilton to Julian Ford dated 24 November 2019 - Fwd: Signed Documents (HIL.001.002.2923). Email from John Hilton to Julian Ford dated 28 November 2019 - Re: Allan Kelly Correspondence (HIL.001.002.1761). Email from John Hilton to Julian Ford dated 9 July 2020 - Fwd: FW: RGL - ASX query regarding Cambodia applications (HIL.001.002.2825). Email from John Hilton to Julian Ford dated 21 September 2020 - Fwd: FW: Cambodian "Applications" (Hil.001.002.0258). Email from John Hilton to Darren Jones dated 12 July 2020 - Fwd: Re: FW RGL- ASX query regarding Cambodia applications - draft response (HIL.001.001.5668). Letter from Riversgold Ltd to the ASX dated 13 July 2020 (HIL.006.001.0656). Email from Darren Jones to John Hilton dated 14 July 2020 - RE: RGL - ASX query regarding Cambodia applications (HIL.001.001.0172). Email from John Hilton to Darren Jones dated 14 July 2020 - Fwd: ASX draft reply (HIL.001.001.5708) and attachment (HIL.001.001.5709). Letter from Cambodia Gold Pty Ltd to the Minister, Ministry of Mines and Energy (undated) (HIL.006.001.0560). |
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CH
Associate to Justice Seaward
19 SEPTEMBER 2024
15
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