Kelly v Hilton [No 6] - [2025] WASC 43

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   KELLY -v- HILTON [No 6] [2025] WASC 43
CORAM:   SEAWARD J
HEARD:   10 DECEMBER 2024
DELIVERED          :   14 FEBRUARY 2025
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:

Contempt - Contempt of court - Communication of documents provided under compulsion to regulatory authorities and third parties - Breach of Harman undertaking - Penalty - Appropriate penalty - Purge application

Legislation:

Rules of the Supreme Court 1971 (WA) O 55 r 4, r 7, r 8
Supreme Court Act 1935 (WA) s 16
Sentencing Act 1995 (WA) s 6

Result:

Plaintiff to pay a total fine of $30,000

Category: B

Representation:

Counsel:

First Plaintiff	:	S B Nadilo
Second Plaintiff	:	S B Nadilo
Third Plaintiff	:	S B Nadilo
Fourth Plaintiff	:	S B Nadilo
Defendant	:	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:

Allbeury v Corruption and Crime Commission [2012] WASCA 84; (2012) 42 WAR 425
Attorney General v Morrison [No 3] [2022] WASC 323
Circuit Finance Australia v Sobbi [2010] NSWSC 912
CJ v Flintshire Borough Council [2010] ECWA Civ 393
Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd [2003] FCAFC 13; (2003) 196 ALR 350
Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2015] HCA 21; (2015) 256 CLR 375
Dental Board of Australia v Traianou [2011] WASC 293
Gap Constructions Pty Ltd v Vigar Pty Ltd [2011] NSWSC 1061
Hamersley Iron Pty Ltd v Lovell (1998) 19 WAR 316
Hamersley Iron Pty Ltd v Lovell (Unreported, BC9803318, 16 July 1998)
Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [No 2] [2023] WASCA 108
Kazal v Thunder Studios Inc (California) [2017] FCAFC 111; (2017) 256 FCR 90
Kelly v Hilton [No 5] [2024] WASC 343
Khoury v Kirwan (No 4) [2021] VSC 333
Pacific Basin Exploration Pty Ltd v XLX (NL) [1985] WAR 11; (1984) 2 IPR 489
Peterson v Ceccon [2023] WASC 488
Peterson v Ceccon [No 2] [2024] WASC 387
Porter v Steinberg [No 2] [2019] WASC 473
R v T [2022] WASCA 34; (2022) 58 WAR 77
State of Western Australia v Rayapen [2023] WASCA 55
The State of Western Australia v Galati [No 4] [2017] WASC 162
United Telecasters Sydney Ltd v Hardy (1991) 23 NSWLR 323
Wood v Staunton [No 5] (1996) 86 A Crim R 183
Yap v Matic [No 7] [2023] WASC 55

SEAWARD J:

Introduction

In Kelly v Hilton [No 5] (liability reasons),[1] I considered two applications regarding the conduct of Mr Allan John Kelly…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2025] WASC 43
Decision Date: 14 FEBRUARY 2025

CaseChat Overview and Summary

In Kelly v Hilton [No 6], the dispute involved a breach of a Harman undertaking, a type of confidentiality order in Australian court proceedings. The case was heard in the Supreme Court of Western Australia. The primary issue before the court was to determine the appropriate penalty for the defendant, Hilton, who had breached the Harman undertaking by communicating documents provided under compulsion to regulatory authorities and third parties.

The court considered various factors in determining the penalty, including the nature of the breach, the defendant's understanding of the Harman undertaking, and the steps taken to mitigate the breach. The defendant had acted hastily and did not fully comprehend the implications of the Harman undertaking; had they understood it properly, they would have acted differently. Hilton took immediate steps to prevent further publication of the documents once notified of the plaintiff's objection and provided an apology to the court.

The court concluded that no further penalty should be imposed on Hilton, following the precedent set in Pacific Basin Exploration Pty Ltd v XLX (NL), where similar circumstances resulted in no further penalty. The court found that Hilton's actions, while in breach of the Harman undertaking, did not result in significant damage and were mitigated by the prompt actions taken to stop the further publication of the documents.

The court made no further orders, considering the circumstances and the actions taken by Hilton to address the breach.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

In Pacific Basin Exploration Pty Ltd v XLX (NL),[29] the contemnor (a director of the defendant) sent an expert report prepared using material produced under discovery in court proceedings (and subject to an undertaking of confidentiality by the defendant's counsel) to several stock exchanges and the Financial Times. When the contemnor was notified by the plaintiff that they objected to the disclosure, the contemnor took immediate steps to notify those entities to ensure there was no further publication of the expert report. The court ordered that there be no further penalty imposed on the contemnor. Factors relevant to this decision included that the contemnor sent the disclosures in haste and did not fully understand the Harman undertaking; had the contemnor properly understood, he would have acted differently; the contemnor provided an apology to the court and took immediate steps to stop the further publication of the expert report such that no damage was suffered.[29] Pacific Basin Exploration Pty Ltd v XLX (NL) [1985] WAR 11; (1984) 2 IPR 489. The parties also referred the court to a number of penalty decisions which do not concern a failure to comply with the Harman undertaking, but rather a failure to comply with orders of the court or undertakings given. Various examples exist of this nature see, for example, Peterson v Ceccon,[30] Peterson v Ceccon [No 2],[31] Yap v Matic [No 7],[32] R v T,[33] Gap Constructions Pty Ltd v Vigar Pty Ltd,[34] Attorney General v Morrison [No 3].[35][30] Peterson v Ceccon [2023] WASC 488.[31] Peterson v Ceccon [No 2] [2024] WASC 387.[32] Yap v Matic [No 7][2023] WASC 55.[33] R v T [2022] WASCA 34; (2022) 58 WAR 77.[34] Gap Constructions Pty Ltd v Vigar Pty Ltd [2011] NSWSC 1061.[35] Attorney General v Morrison [No 3] [2022] WASC 323. In R v T,[36] the Court of Appeal considered an appeal from a sentence imposed under the Family Law At 1997 (WA) following a finding of guilt on 14 counts of contempt. These counts concerned transferring money and otherwise dealing with property contrary to an interim property order and an injunction restraining the appellant from dealing with certain property. A global sentence of three years ten months imprisonment was set aside as being disproportionate to the offending conduct when considered as a whole and therefore unreasonable or plainly unjust. A term of imprisonment of two years and three months imprisonment was substituted. Factors relevant to the sentencing process included the sustained and persistent defiance of the authority of the Family Court over a period of approximately three years; the motive for the offending behaviour being to frustrate the respondent's application for property orders and to render the exercise of the court's powers futile; the use of false entries in the bank records in an attempt to obfuscate and confuse; the lack of any attempts, even after conviction, to purge the contempts; the lack of any mitigating factors of significance save for the appellant's prior to good character; and the importance of general and personal deterrence. [36] R v T [2022] WASCA 34; (2022) 58 WAR 77.