Leaway v Newcastle City Council (No.1)

[2005] NSWSC 696

CITATION:	Leaway v Newcastle City Council (No.1) [2005] NSWSC 696 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	5 July 2005
JUDGMENT DATE :	5 July 2005
JURISDICTION:	Equity
JUDGMENT OF:	Campbell J
DECISION:	Section 82 not used

CATCHWORDS:	PROCEDURE - Supreme Court procedure - power to require admissions to be made - whether appropriate to be used in an application that a party not be heard on the ground that it is in contempt - PROCEDURE - contempt, attachment and sequestration - application to not hear a party found to be in contempt - whether appropriate to use section 82 Supreme Court Act to require admissions in such an application
LEGISLATION CITED:	Fair Trading Act 1987 Supreme Court Act 1970
CASES CITED:	KP Cable Investments Pty Limited v Meltglow Pty Ltd (1995) 56 FCR 189 Permewan Wright Consolidated Pty Ltd v Attorney General (NSW) (1978) 35 NSWLR 365 Witham v Holloway (1995) 183 CLR 525 Young v Jackman (1986) 7 NSWLR 97
PARTIES:	Leaway Pty Limited - Plaintiff Newcastle City Council - First Defendant Daryl Grey - Second Defendant
FILE NUMBER(S):	SC 3694/05
COUNSEL:	D Allen - Plaintiff P W Larkin - First Defendant D Pritchard - Second Defendant
SOLICITORS:	Brooks & Co - Plaintiff Sparke Helmore - First Defendant Spark Helmore - Second Defendant

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY JUDGE LIST

CAMPBELL J

TUESDAY 5 JULY 2005

3694/05 LEAWAY PTY LIMITED v NEWCASTLE CITY COUNCIL & ANOR (NO.1)

JUDGMENT – Ex Tempore (on whether to use the Court’s powers under s.82 Supreme Court Act 1970 in the course of deciding defendants’ allegation that the plaintiff’s application should not be heard because the plaintiff continues to be in contempt of the Land & Environment Court)

1 HIS HONOUR: A short but difficult question has arisen in the course of the application I am presently hearing. The application is one which is made in proceedings in which the plaintiff sues alleging that the distribution of a particular letter by the defendants to the customers of the plaintiff involves misleading and deceptive conduct contrary to section 42 of the Fair Trading Act 1984, and the torts of injurious falsehood and negligence.

2 The remedy which is sought is damages, and an injunction against further distribution. The plaintiff has come to Court today on a notice of motion seeking interlocutory relief preventing the further distribution of the letter of which it complains.

3 The defendants allege that the plaintiff should not be heard on that application, on the ground that the plaintiff continues to be in contempt of the Land and Environment Court. There is evidence before me that on 8 April 2005 the Land and Environment Court, in proceedings brought by the first defendant, formally found a contempt against both the plaintiff and a man involved in its operations, imposed a penalty of $50,000 to be paid jointly and severally by both respondents, with such payment required to be made within 28 days of 8 April 2005.

4 On the present application one of the defendants sought to read an affidavit which contained some material which went to the topic of whether that fine had been paid. Objection was taken by the plaintiff to that evidentiary material.

5 In the course of argument of that objection a question has now arisen as to whether I would exercise the powers of the Court under section 82 of the Supreme Court Act 1970 to enquire whether there is any bona fide dispute about whether the fine has been paid, and, perhaps, require an admission to be made in the event that there is no bona fide dispute. Section 82 provides:

(1) The Court may at any stage of the proceedings:
(a) dispense with the rules of evidence for proving any matter which is not bona fide in dispute, also with such rules as might cause expense and delay arising from any commission to take evidence or arising otherwise; and, without limiting the generality of this power, dispense with the proof of handwriting, documents, the identity of parties or parcels, or of authority, and
(b) require any party to the proceedings, not being a minor or person of unsound mind, to make admissions with respect to any document or to any question of fact; and in case of refusal or neglect to make the admissions may, unless the Court is of opinion that the refusal or neglect is reasonable, order that the costs of proof occasioned by the refusal or neglect shall be paid by that party.
(2) An admission made under paragraph (b) of subsection (1):
(a) shall be for the purpose of the proceedings in which it is made and for no other purpose,
(b) shall be subject to all just exceptions, and
(c) may, with the leave of the Court, be amended or withdrawn.
(3) The Court may give leave for the purposes of paragraph (c) of subsection (2) on terms.

6 The power of the Court to not hear someone who is in contempt of court, in at least some circumstances, is undoubted: Permewan Wright Consolidated Pty Ltd v AttorneyGeneral (NSW) (1978) 35 NSWLR 365; Young v Jackman (1986) 7 NSWLR 97. There may be room for argument about whether that principle takes the form of a bright line rule, or whether it involves an element of discretion: KP Cable InvestmentsPty Limited v Meltglow Pty Ltd (1995) 56 FCR 189 at 206. There are clearly some exceptions to the principle, but there may also be room for argument about precisely what the exceptions to the principle are.

7 Further, there is a question yet to be debated about whether the rule applies so as to enable this Court to decline to hear an applicant who is in contempt of another Court, such as the Land and Environment Court, although not in contempt of this Court, either in relation to any order made in these proceedings, or otherwise.

8 In the present case, it was common ground for the purpose of the application I am now deciding, that it is only a contempt which has not been purged which can result in the contemnor not being heard. Whether the fine has been paid, has been assumed, in this application, to go to whether the contempt found by the Land and Environment Court to have occurred, has been purged.

9 A policy which the Court aims to effect through this rule is one of ensuring that Court orders are obeyed. The effect of the application of that policy is that, as a consequence of the contempt which has been found, (and, perhaps, as a consequence of that contempt being regarded as of the nature which calls for such a consequence to follow) a person is deprived of his ordinary civil right to approach the Court to have a case decided on its merits.

10 In Witham v Holloway (1995) 183 CLR 525, the High Court held that proceedings which seek to impose a penalty for contempt are criminal in their nature, and a criminal standard of proof consequently was required in those proceedings. The High Court also recognised, in that case, that not every aspect of the criminal law was imported into proceedings to impose a penalty for contempt.

11 The defendants’ application, that I decline to hear the plaintiff, is not one which involves any contest about whether a contempt of the Land and Environment Court has been committed – that has already been decided, in a way which binds the plaintiff and first defendant in the present litigation, by the Land and Environment Court itself. Nor does it, in terms, seek to impose a penalty for the alleged contempt of the Land and Environment Court. Rather, it seeks to give effect to what the defendants say is the legal effect of that contempt having been committed and (they say) remaining unpurged. In its practical effect, if the application is successful, something closely akin to a penalty will, in my view, be imposed. Declining to hear a case on its merits involves, to that extent, placing someone outside the scope of the protection of the law's ordinary remedies. That limited access to law is something which, in my view, is sufficiently close to a penalty to require the sort of caution which is appropriate in the Court exercising its remedies in criminal cases. That does not mean that every aspect of the procedure used in deciding whether a contempt has been committed ought apply on an application such as this. However, a fundamental part of the procedure in criminal cases is to require the person who seeks the relief to prove each element of the offence.

12 I bear in mind that the plaintiff in these proceedings is a corporation, which has no privilege against self-incrimination. Thus, were I to enquire of counsel for the plaintiff whether there was a bona fide dispute, he could not use any such privilege as a reason for declining to answer. However, what I am now deciding is whether it would be appropriate to ask that question at all. In my view it would not, as it could result in the defendants not needing to prove all the elements of the case they seek to make.

13 I also bear in mind that one of the items of evidence which has been tendered on the voir dire on the present application is an affidavit sworn on 6 May 2005 by the solicitor for the plaintiff, in which he said that both respondents in the Land and Environment Court proceedings conceded that they have not complied with the order that they pay the $50,000 by 5 pm on 6 May 2005.

14 It is put that I should take that evidence into account in deciding whether to exercise the section 82 power. That evidence deals with the situation nearly two months ago, at a time which was within the 28 days that had been allowed for payment of the fine. It is not a sufficient foundation for an inference that the fine has still not been paid. More fundamentally, though, I do not see the fact that there is some evidentiary basis for believing that there might not be a bona fide dispute about the matter as a reason for exercising the power under section 82 to require admissions, in the very particular, quasi-criminal, circumstances of the present application.

15 For these reasons I decline, in the present application, to exercise the Court’s powers under section 82 to enquire whether there is a bona fide dispute about whether the fine has been paid.

16 Nothing in these reasons detracts from the appropriateness of using section 82 in the course of ordinary civil litigation as part of the Court’s procedural armoury for achieving the just, quick and cheap resolution of the real issues in a case.

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14/07/2005 - Parties incorrectly noted - Paragraph(s) coversheet