Kimberley College Ltd v Jennifer Thomson Ors
[2023] QSC 294
•4 DECEMBER 2023
QUEENSLAND COURTS AND TRIBUNALS
TRANSCRIPT OF PROCEEDINGS
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SUPREME COURT OF QUEENSLAND
CIVIL JURISDICTION
HINDMAN J
No 3151 of 2019
KIMBERLEY COLLEGE LTD Plaintiff
and
JENNIFER THOMSON and OTHERS Defendants
BRISBANE
9.14 AM, MONDAY, 4 DECEMBER 2023
DAY 1
JUDGMENT
Any rulings in this transcript may be extracted and revised by the presiding Judge.
WARNING: The publication of information or details likely to lead to the identification of persons in some proceedings is a criminal offence. This is so particularly in relation to the identification of children who are involved in criminal proceedings or proceedings for their protection under the Child Protection Act 1999, and complainants in criminal sexual offences, but is not limited to those categories. You may wish to seek legal advice before giving others access to the details of any person named in these proceedings.
HER HONOUR: In March of 2019, the plaintiff commenced civil proceedings against the defendants, seeking to recover approximately $3 million as damages, or for restitution, in relation to allegations of misappropriation that spanned 2012 to 2018, while the defendants were employed at Kimberley College.
The first defendant was formerly the principal at Kimberley College, run by the plaintiff. The other defendants are members of the first defendant’s family, who also worked at the college. The matters underlying the dispute between the parties, the civil proceeding and the criminal proceeding, which I will come to, have each attracted significant public attention since coming to light in approximately 2018.
Arising out of the same allegations against the defendants, criminal proceedings were commenced against each of the first to fourth defendants in September of 2019. Those charges were later dropped and fresh charges laid in July 2021. There seems to be no dispute between the parties that the fresh charges are just a more focused set of charges, arising out of the same general allegations that had been previously brought and dropped.
The first to third defendants have had their charges committed for trial in the District Court, that having occurred on the 13th and 14th of November 2023. The charges against the fourth defendant will be dealt with summarily, and there are no criminal charges against the fifth defendant.
In the civil proceeding, there have been various pleading disputes, but the pleadings have now closed. Defences were initially filed by the defendants in the civil proceeding in May 2020 when the first set of criminal charges were current. Whilst separate defences have been filed on behalf of each defendant, they are in not dissimilar terms. Despite the existence of the criminal charges, the defendants have each engaged, in a substantive way, with the allegations made against them. In light of the criminal charges, it would not have been unusual for the defendants to have not responded substantively to the allegations made, and to instead have made a claim of privilege against self-incrimination. A Court ordered variation to the usual civil pleading rules could have been obtained in order to permit such a pleading to be compliant and permissible. Instead, in general terms, the allegations of misappropriation by the defendants are either not admitted on the usual knowledge ground, or are denied, including denials which advance positive reasons for the denial. For example, that a certain movement of monies was authorised in a particular way.
The civil proceeding has now advanced to a stage where the plaintiff has completed disclosure and has compiled, insofar as it is able to, its evidence-in-chief. It has filed affidavits of evidence-in-chief. Of course, there is the possibility that there may be non-cooperative witnesses who might be subpoenaed for the plaintiff at trial. But subject to that qualification, the plaintiff’s case is otherwise presently ready for trial.
The plaintiff’s case is strongly reliant upon the recollection of witnesses associated with Kimberley College, to a large degree; there being a lack of relevant records available to it. In that respect, each party blames the other for that state of affairs about the documents, but that is not a dispute for me to resolve now. But it can be
expected that in both the civil and the criminal proceedings, the outcome will be heavily reliant upon witness recollection.
In that respect, something should be said about the competing witnesses. It appears plain, from the defendants’ pleadings in the civil proceeding, that the defendants believe that the allegations made against them have been made by persons associated with Kimberley College, who the defendants say, have in fact, engaged themselves in misconduct. In a simplified way, it seems to be suggested by the defendants, that what they consider the ill-founded complaints of misconduct against them, are part of a scheme by those other persons to deflect attention from their own misconduct. Thus, it appears likely that there will be significant credit issues between the witnesses for the plaintiff and the prosecution on the one hand, and the witnesses for the defendants on the other. The acrimonious relationship between those two groups of witnesses and their lack of independence, is an important factor to bear in mind when it comes to the reality of there being two sets of proceedings on foot, civil and criminal, one of which will need to proceed first.
On the other hand, in terms of readiness for the civil trial, the defendants have not yet completed disclosure, and have not filed any affidavits of evidence-in-chief. The civil proceeding has progressed as far as the defendants are willing to go, without the issue of a stay of the civil proceeding being determined.
I think that there can be no criticism about the timing of the application for the stay. It was entirely appropriate for the defendants to progress the civil proceeding as far as they considered they could, before making an application for a stay of the civil proceeding. The next steps that would be required to progress the civil proceeding would be for the defendants to complete disclosure and put on affidavits of evidence-in-chief. Or alternatively, if there were not orders for affidavits of evidence-in-chief, to set the matter down for trial, at which time, during the trial, the defendants’ evidence would, of course, be revealed.
Insofar as disclosure is concerned, by the defendants, relevantly to this application, there are really two possibilities. The defendants’ disclosed documents might disclose documents which support the defendants’ positive defence. Or the process of disclosure may disclose that the defendants do not have documents which support the defendants’ positive defence. Either way, that is not information known and they are not documents accessible to the prosecution in the criminal proceedings, from the defendants, where the defendants are under no obligation of disclosure.
Insofar as affidavits of evidence-in-chief are concerned, as I have noted, these would not necessarily need to be ordered to be provided, but in the interests of case management, often would be. These affidavits may or may not be consistent with, or supportive of, the defendants’ pleaded positive defence. Bearing in mind the role of pleadings is distinct from evidence, the completion of this step, whether in advance of the civil trial or at the civil trial, would likely bring to light information not known or able to be known by the prosecution in the criminal proceedings.
Whilst the pleadings are presently closed in the civil proceeding, that occurred in May of 2023, and that does not prevent any party, before any request for trial date is filed, from amending those pleadings, although, some types of amendments, of
course, do require the Court’s leave. No party has committed to the current pleadings being the final pleadings that will be taken to the civil trial.
In light of the progress of the civil proceeding to date, I perceive the interaction between the civil proceeding and the criminal proceedings as follows. First, the defendants have not, in the civil proceeding, claimed privilege against self-incrimination, and have instead, entered into the arena, substantively responding to the allegations of misappropriation, including by way of the assertion of somewhat particularised positive defences.
Second, those substantive responses, presently included in the civil proceedings, are open to be amended, with and without leave.
Third, those pleadings are open Court documents. No orders have been made restricting any persons to access the same.
Fourth, accordingly it can be assumed that the prosecutor in the criminal proceedings will obtain those pleadings, and in that way, have information available that might not otherwise have been available, which provides some notice of the defence that the defendants might advance in the criminal proceedings.
Fifth, that information might allow the prosecutor in the criminal proceedings to further particular lines of investigation, but it does not permit the prosecutor to obtain disclosure from the defendants, or to access any type of statement, sworn or otherwise, from the defendants or the defendants’ witnesses.
Sixth, the witnesses for the prosecution in the criminal proceedings are likely to significantly overlap with the plaintiff’s witnesses in the civil proceeding. There is no realistic way in which witnesses from one matter could be quarantined from participating in the other proceeding.
Seventh, as I have already noted, the relationship between certain of the plaintiff and prosecution witnesses, and the defendants’ witnesses is acrimonious, with allegations of wrongdoing going both ways. Those type of witnesses are not, in truth, independent, and in colloquial terms, have skin in the game, at least for reputational reasons.
Eighth, insofar as the defendants’ defence in the civil proceeding is a positive defence about authorisation, any disclosure or other evidence produced by the defendants would likely need to be put to the plaintiff’s relevant witnesses in advance, to obtain instructions upon and respond. The civil proceeding could not be run fairly without that occurring.
Ninth, that may diminish the defendants’ forensic advantage it would have in any criminal proceedings, of being able to confront prosecution witnesses with such evidence or cross-examination, for the first time during the criminal trial. Tenth, further insofar as the defendants may have some other or different, or alternate ground for defending the civil proceeding, that would need to be the subject of disclosure and other evidence. The defendants are not finally bound to the position they have presently advanced in the pleadings in the civil proceeding.
The main point that the plaintiff raises to resist a stay in those circumstances is that the defendants, by their conduct in the civil proceeding and elsewhere, have waived any right to claim privilege against self-incrimination. And thereby, there is no real risk of prejudice to the defendants if the civil proceeding is permitted to proceed in advance, or at the same time as the criminal proceedings. In that respect, the plaintiff refers to the defences that have been filed in the civil proceeding, itself. And outside of that proceeding, it refers to the Fair Work Commission proceedings, which were proceedings, not brought by the first defendant, but by other of the defendants, before any criminal proceedings commenced. There being no indication at that time on the evidence, that any criminal proceedings at that time were likely. In the proceeding in, what was then the Federal Circuit Court, there is of course, the decision of Judge Jarrett, whereby he determined not to stay that proceeding brought by the first defendant. I do not think, in respect of that proceeding, that it was inevitable that the College would raise issues relevant to the criminal proceedings. And then, once it did, the first defendant did seek a stay of that proceeding. When the proceeding was not stayed, there was an appeal that was ultimately discontinued. But I would not take from that, that the first defendant will necessarily progress that proceeding, in light of the criminal proceedings also on foot. I also note, in respect of that decision, what Judge Jarrett said in his judgment, and it may be that it is considered more appropriate to have the Supreme Court determine the issue here, and there be a second stay application in the Federal jurisdiction. Or it may be that the first defendant might even abandon the claim if a stay was not ultimately given.
The other matter outside of the civil proceedings, that the College points to, is statements made to the media by the defendants and the second defendant’s blog, in which statements have been made against the allegations of misconduct made against the defendants.
Turning to the law, the law, in respect of the stay application, does not appear contentious between the parties. The defendants’ outline of submissions, dated 19 November 2021 sets out the relevant principles at paragraphs 8 to 15. The plaintiff’s written outline of argument, filed 23 November 2021, at paragraphs 5 to 6, and the plaintiff’s outline of argument, dated 24 October 2022, at paragraphs 7 to 14 and 17 to 19 encompass the relevant principles.
I have also been provided with a helpful recent case, summarising the relevant principles in ACCC v Meta Platforms, Inc (No 2) [2023] FCA 1234, which particularly, from paragraphs 20 to 24, summarises the relevant principles, albeit in the Federal Court context. I accept that the starting position is that the plaintiff is entitled to have the civil proceeding progress in the ordinary way, and it is for the defendants to prove that it is just and convenient for that right to be interfered with.
Ordinarily, it will only be just and convenient to interfere if there is a real likelihood of causing injustice in the criminal proceedings. And once that threshold is met, the competing prejudice to the parties should be weighed, depending on whether a stay is granted or not. It is then that weighing exercise that determines where the interests of justice lie.
Turning then to the application of the law to these facts. Having regard to those matters, I do consider that there is a real risk that the defendants would suffer
prejudice if the civil proceeding was permitted to proceed further than it has already proceeded to date. That the defendants have entered into the arena in particular ways, does not mean that all claims to privilege against self-incrimination can no longer be made. Or that the defendants should not have the advantage in the criminal proceedings of putting the prosecution to proof, without the further disclosure of their defence and evidence.
The issue of prejudice here is complicated by the fact of the defences to the civil proceedings, and the other proceedings in which the defendants have engaged, and the public statements that the defendants have made. But it would be too simplistic to conclude that those steps are sufficient to waive all rights to privilege against self-incrimination. That something might have already been said, does not necessarily mean then, that everything is required to be said.
The risk of prejudice to the defendants in the criminal proceedings, if no stay is granted, is real, and it is therefore appropriate to consider the competing prejudices that would arise if a stay is or is not granted, to determine where the interests of justice lie.
So turning then to the competing prejudices.
First, the prejudice to the defendants if a stay is not granted. As I have identified above, I consider that there is a real risk of prejudice to the defendants, by requiring them to disclose in the civil proceeding, any currently non-pleaded relevant matter or defence, to disclose documents, and to otherwise produce evidence, whether that be in advance of or at the civil trial. To so require would undermine the defendants’ criminal right to silence, and to have the prosecution prove its case to the required standard.
It does also, although I think to a lesser degree in this case, give rise to risks of first, the fabrication of evidence, in whichever trial comes second. And second, interference with witnesses, who might be called in both trials. Noting what I have said about the acrimony between the witnesses in both camps, mutual allegations of misconduct, and the lack of the independent or of witnesses who may seek to advocate their position, that is particularly relevant.
The risk of prejudice is heightened, and not able to be dealt with by way of court suppression type orders, where the overlap in the plaintiff and prosecution witnesses is significant, as it is, here.
There are other prejudices, which I consider the defendants will suffer, if the requested stay is not granted. Although, to my mind, they are of lesser weight. First, it is prejudicial for the defendants to be required to deal with the civil and criminal proceedings simultaneously. These are individuals not shown to be of unlimited or significant means. With the charges against the first to third defendants recently committed, whilst there may now be a short lull in the criminal proceedings while the indictment is prepared, if both matters proceed, significant work would be required to be done in both matters over the next 12 months. The defendants have submitted that they have limited funds to defend the proceedings. That is not supported by
particularly compelling evidence, but it is a submission and a factor which I give some weight.
Second, the allegations have attracted significant media attention. It is not for me to determine which parties are the cause of that, or their underlying motivations. It is sufficient to note that such publicity may reach and influence potential jurors, possibly in a way adverse to the defendants. While the criminal trial process will attempt to weed out such problems, including by way of the provision of directions, which it should be assumed that the jury will abide, this does remain a prejudice that weighs in the defendants’ favour. It is particularly so in this case, where if both matters proceed now, there is a possibility that both trials would not be separated in time, by any significant period. On my best estimates, a civil trial might, realistically, be held in 2024, and a criminal trial in 2025.
In respect of the prejudice to Kimberley College, if the stay is granted, undoubtedly, further delay in the civil proceeding may prejudice the plaintiff. In that respect, memories of relevant witnesses may be affected, although I note that is likely to affect both sides of the civil dispute, and is to be tempered by the fact that the criminal proceedings will be progressing, essentially involving the same witnesses.
Second, I appreciate that the plaintiff is concerned to bring matters to finality, to bring the media publicity to an end. But the media publicity will surround the criminal proceedings, regardless and is probably likely to garner more attention.
Third, there is no evidence that a delay in the resolution of the proceeding will adversely affect the recoverability of any civil judgment obtained.
Fourth, there is no evidence that delay in the resolution of the civil proceeding and the subject recovery of any judgment ultimately obtained, will financially adversely affect the College in a significant way. The College, in its submissions and materials, seems far more concerned about reputational damage as distinct from the delay and recovering any particular judgment sum.
Fifth, in respect of reputational damage, it needs to be kept in context in circumstances where the plaintiff has put its position on the dispute in the public domain. It is not as if it has stood by silent, and not had the opportunity to put its position. It has done so by the civil proceeding. It is in a different position to say, for example, a defendant who claims privilege against self-incrimination, and therefore does not have their side of the dispute in the public arena, and so will be most interested in having the proceeding advanced to resolution.
Sixth, the plaintiff has a concern that the allegedly misappropriated funds were received by way of government grants, and that it has an obligation to account for those monies, and pursue any impropriety in respect of them. No criticism could be made of the plaintiff, if a stay were granted by the Court. The plaintiff, by its opposition to the stay application, and otherwise in preparing for its case for trial, has acted in accordance with any such obligation it has.
Any stay will be granted by the Court according to law, over the plaintiff’s objection. That is not a matter that favours there being no stay. There are some other issues that
have been raised by the parties, that I would consider are not determinative of the stay application, because ultimately, I think the application will turn on the factor of the accused’s rights to a manifestly fair criminal trial. But I will just mention them.
The first is the delay that has been suffered in the civil proceeding to date. Both parties noted the length of the delay to date in the civil proceeding, which was commenced in 2019. The defendants attribute the delay to the plaintiff. The plaintiff says not all the delay is its fault, and says the defendants have been responsible for the delay. I consider this a neutral factor in the stay application, and do not intend to descend into any attempt to determine fault for the delays suffered to date.
Delay in this case, cuts both ways. There has already been a lengthy delay in the resolution of the civil proceeding. Some of the allegations go back as far as 2012. Memories may have already significantly faded. Documents may already be missing. But the ongoing criminal proceedings means the delay occasioned by any further delays, by reason of a stay, does not mean that the underlying matters are out of mind. And the plaintiff, and one presumes the defendants, have been working in both forums to prepare their cases to date.
The second is the nature of the defendants’ obligations to the plaintiff. I do accept the fact that the allegations arise in the context of a relationship, where the defendants owed fiduciary duties to the plaintiff, is relevant to whether it is in the interests of justice to grant a stay. Here, that factor slightly favours no stay being granted. But in my view, it is not of great weight, and not determinative.
So then the outcome of the application. This would have been a relatively straightforward application for a stay, if when confronted with the civil proceeding, the defendants had not engaged in a detailed defence pleading, and had instead sought and obtained dispensation from the pleading rules, on the basis of claims for self-incrimination, or had claimed privilege in a defence pleading. But despite the defendants’ engagement in the substantive issues, both in the civil proceeding, itself, and in other forums, I am satisfied that to require the defendants to take further steps in the civil proceeding does expose the defendants to a real risk of prejudice in the conduct of the criminal proceedings.
Whilst all parties, whilst the litigation is ongoing, are likely to suffer reputational and other ill-effects that arise in well publicised litigation, the liberty of the defendants is at risk in the criminal proceedings. The prejudice to the defendants in permitting the civil proceeding to progress in the ordinary way, outweighs the prejudice to the plaintiff in staying the civil proceeding, to allow the criminal proceedings to first be finalised.
Whilst in some cases, it may be possible for both to progress at the same time, minimising the prejudice to the defendants by making restricting type orders in the civil proceeding, in my view, this is not one of those cases. The overlap of the prosecution and plaintiff’s witnesses, and the desirability of having matters determined in open Court, particularly where there is public interest in same, loom large in persuading me that the civil proceeding has progressed as far as it should, until the criminal proceedings are finalised, based on the present status of the matters.
It is possible that the defendants’ conduct from here, of the criminal proceeding, or proceedings in other jurisdictions, for example, by way of the production of evidence, may alter the proper assessment of prejudice in the future. An application to lift or vary the stay of the civil proceeding could be made, potentially, based on the future conduct of the defendants. But for the moment, I am satisfied that the interests of justice require the stay of the civil proceeding.
It might be that if there is a real risk of certain witnesses being not available for the civil trial, that an application could be made to have their evidence taken in advance. But any such proposal, and the risk of prejudice to either party in that case, would have to be assessed on the merits at the relevant time. So I intend to grant the application for a stay of the civil proceeding, but on the basis that there be liberty to apply. I understand the position as to costs to be, that if the application was successful, that it is appropriate that costs be reserved.
MR MORRIS: That’s the position.
MR MURDOCH: That’s so, yes.
HER HONOUR: Okay. Does somebody – would like to send an order that I can sign in chambers in due course?
MR MORRIS: I was waiting for my learned friend to volunteer.
HER HONOUR: Your – it’s your application.
MR MORRIS: Yes. Yes.
HER HONOUR: I think you have to volunteer.
MR MORRIS: I will arrange that – for that to be done today.
HER HONOUR: Okay. Thank you.
MR MORRIS: Thank you. I also owe your Honour an apology for depriving you of the pleasure of the two week trial that was going start today.
HER HONOUR: I have made it up with a five day personal injuries trial starting today, so.
MR MORRIS: I’ll feel less guilty, then.
HER HONOUR: Thank you. Adjourn the Court.
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