FEDERAL COURT OF AUSTRALIA
Nathan v Burness [2011] FCA 288
Citation: Nathan v Burness [2011] FCA 288 Appeal from: Burness v Nathan [2010] FMCA 495 Parties: KAILAI NATHAN v PAUL BURNESS AND MORGAN GERARD JAMES LANE AS TRUSTEES OF THE BANKRUPT ESTATE OF KAILAI NATHAN and ATTORNEY-GENERAL OF THE COMMONWEALTH File number: VID 530 of 2010 Judge: TRACEY J Date of judgment: 31 March 2011 Catchwords: BANKRUPTCY – examination before a Registrar – failure to answer questions – referral to a Federal Magistrate – jurisdiction to deal with contempt – power to deal with contempt – procedural duties to state contempt clearly and give alleged contemnor sufficient opportunity to defend it – no breach of duties – hearing on penalty – whether denial of natural justice affected outcome of case – no affect – no miscarriage of justice – no manifest excess in penalty Legislation: Bankruptcy Act 1966 (Cth) ss 5, 27, 30, 81, 264, 264A, 264C
Evidence Act 1958 (Cth)
Federal Court of Australia Act 1976 (Cth) s 31
Federal Court Rules O 40
Federal Magistrates Act 1999 (Cth) ss 7, 15, O 3
Federal Magistrates Court Rules r 19.01Cases cited: Ambrose (Trustee), in the matter of Peter Athanasas (Bankrupt) (No 2) [2008] FCA 1016 cited
Antoun v R (2006) 224 ALR 51 cited
Burness v Nathan [2010] FMCA 495 referred to
Clampett v Attorney-General of the Commonwealth (2009) 181 FCR 473 cited, compared
Conway v The Queen (2002) 209 CLR 203 referred to
Coward v Stapleton (1953) 90 CLR 573 applied
House v King (1936) 55 CLR 499 applied
Nathan v Burness [2010] FCA 718 referred to
Re Maher, Maher v Official Trustee in Bankruptcy (1993) 118 ALR 519 considered
Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 applied
Stead v State Government Insurance Commission (1986) 161 CLR 141 applied
Vakuata v Kelly (1989) 167 CLR 568 comparedDate of hearing: 4 November 2010 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 64 Counsel for the Appellant: Mr A Phillips (Pro Bono) Counsel for the Second Respondent: Mr D Star Solicitor for the Second Respondent: Australian Government Solicitor
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 530 of 2010
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA
BETWEEN: KAILAI NATHAN
AppellantAND: PAUL BURNESS AND MORGAN GERARD JAMES LANE AS TRUSTEES OF THE BANKRUPT ESTATE OF KAILAI NATHAN
First RespondentATTORNEY-GENERAL OF THE COMMONWEALTH
Second Respondent
JUDGE:
TRACEY J
DATE OF ORDER:
31 MARCH 2011
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.Order 2, made by the Federal Magistrate, be varied to read: “Mr Nathan be sentenced to imprisonment forthwith for a term expiring on 5 July 2010”.
2.The appeal otherwise be dismissed.
3.The appellant pay the second respondent’s costs of the appeal.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
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- Nathan v Burness [2011] FCA 288
- Case
- [2011] FCA 288
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CaseChat Overview and Summary
Nathan appealed against a decision of the Federal Magistrates Court that he be imprisoned for contempt of court and in breach of the Bankruptcy Act 1966 (Cth). The appeal raises issues concerning the conduct of examinations under section 81 of the Act and how Registrars and judicial officers may deal with persons who refuse to answer questions in the course of such examinations. The primary legal issue before the court was whether the Federal Magistrate had the jurisdiction to deal with the contempt. The court concluded that the Federal Magistrate had the power to deal with the contempt as the power to punish for contempt is inherent in all courts. The court also found that the Federal Magistrate did not breach any procedural duties to state the contempt clearly and give the alleged contemnor sufficient opportunity to defend it. The court concluded that the denial of natural justice did not affect the outcome of the case and that there was no miscarriage of justice or manifest excess in the penalty. The appeal was dismissed, and the appellant was ordered to pay the second respondent's costs of the appeal. The order made by the Federal Magistrate was varied to read that the appellant be sentenced to imprisonment forthwith for a term expiring on 5 July 2010.
Orders
Orders of the court
1. Order 2, made by the Federal Magistrate, be varied to read: “Mr Nathan be sentenced to imprisonment forthwith for a term expiring on 5 July 2010”.
2. The appeal otherwise be dismissed.
3. The appellant pay the second respondent’s costs of the appeal.
Note:
Background
Background to the litigation
The appeal gives rise to a number of important issues concerning the conduct of examinations under s 81 of the Bankruptcy Act 1966 (Cth) (“the Act”) and how Registrars and judicial officers may deal with persons who refuse to answer questions in the course of such examinations. These issues relate to the powers conferred on and the procedures available to Registrars and judicial officers where such problems arise.THE BACKGROUND FACTS By summons dated 10 December 2009 Mr Nathan was required to attend the Federal Magistrates Court to be examined under oath and to produce documents. He was required to attend on 21 January 2010. On that day the return date of the summons was extended to 24 February 2010. Further adjournments followed, the last of which required Mr Nathan to attend for examination on 17 June 2010. On 17 June 2010 Mr Nathan attended before a Registrar of the Federal Magistrates Court. On a number of occasions the Registrar invited Mr Nathan to take a seat in the witness box. On each occasion he failed to respond to the invitation or refused to enter the witness box. The Registrar warned him that, if he refused to participate in the examination, the Registrar would refer the matter to a Federal Magistrate. The following exchange then took place:“THE REGISTRAR: Please take a seat in the witness box.MR NATHAN:That’s it, Registrar. I am not – I refuse to … answer any questions.THE REGISTRAR: Alright. Thank you. What I will do is stand the matter down. I will make enquiries as to the availability of a federal magistrate to hear the matter, and a Court officer will indicate to you the position. I’d ask you to stay in the court, or in the immediate precinct, Mr Nathan. The matter will be referred to a federal magistrate. If you’ve got anything to say then, you can say it to the federal magistrate. Is that understood?MR NATHAN: Yes, Registrar, yes, thank you.” Later in the morning the referred matter was called on before a Federal Magistrate. The Federal Magistrate commenced by advising Mr Nathan that the Registrar had referred the matter to him. The following exchanges then took place:“HIS HONOUR: Yes. The registrar, either way, has referred the matter to me, and I note from the file that there has been a summons issued pursuant to section 81 of the Act. And the registrar tells me that you have refused to take the oath, and to answer questions. Is that right, Mr Nathan?MR NATHAN: Yes, your Honour.HIS HONOUR: It really isn’t open to you to do that. I’ll hear from you why you say you shouldn’t, but I’ll explain to you the provisions of the legislation that seem to me to touch upon this matter. Pursuant to section 264C of the Act, it’s provided, relevantly, that:A person appearing before the court, the registrar or a magistrate for the purposes of being examined under this Act, or appearing as a witness before the court, shall not refuse or fail to be sworn or to make an affirmation –that’s (a)(b) refuse or fail to answer a question which he or she is required to answer by the court, the registrar or the magistrate, as the case may be; or (c) refuse or fail to produce any books that he or she is required by the court, the registrar or the magistrate, as the case may be, or by a summons under this Act to produce.The penalty prescribed is a thousand dollar fine, or imprisonment for six months, or both. That section doesn’t apply if the person has a reasonable excuse, and by subsection (2) it’s provided that:Nothing in the section limits the power of the court to punish persons who are contempt of court (sic), but a person shall not be punished under the section and for contempt of court in respect of the same act or omission.So essentially, the person summonsed has to answer questions, and has to take the oath. So there’s two matters I’d wish to do at this stage. The first is, do you assert that you have an excuse for not answering questions, or for taking the oath?MR NATHAN: Yes, I do, your Honour.HIS HONOUR: And what’s that?MR NATHAN: Well, this so-called bankruptcy has been heard by this court in proceeding number MLG 899 of 2005, before Riethmuller FM, and that petition was dismissed. And the creditor did not appeal that decision.HIS HONOUR: But if my memory serves me well, were there not subsequent proceedings to which you were the subject of a sequestration order?MR NATHAN: Well, it appears to be somewhere in Sydney.HIS HONOUR: Yes?MR NATHAN: Well, to date, I yet to see an order, a valid order, signed and sealed by a magistrate.HIS HONOUR: Well - - -MR NATHAN: There are two different versions of a document floating around, and there are inconsistencies in those orders. And the official receiver was supposed to be in Sydney.…HIS HONOUR: Yes. Well, I note that there is, on the court’s file, a copy of an order made by Barnes FM, which was a sequestration order made against you. Perhaps I should ask counsel, is that the order upon which the bankruptcy is said to stand?MR MAZZEO (COUNSEL FOR THE TRUSTEES): Yes, that’s the order of 7 October 2008.HIS HONOUR: Yes.MR MAZZEO: Your Honour.HIS HONOUR: Well, Mr Nathan, I’m satisfied that that’s an order of the court, so I’m not prepared to accept that as an excuse.MR NATHAN: Well, your Honour, I’m – this is - - -HIS HONOUR: It’s not a matter of what you’re prepared to accept, I’m afraid, Mr Nathan. It’s a matter of what I’m prepared to accept. I’ve no desire to be in any way discourteous to you, but the fact is that you’ve been summoned before the court, and the Act now applies. And if you don’t comply with it, then obviously there will be a requirement upon the court to compel you to comply. And that involves going to gaol, Mr Nathan. It doesn’t involve any discussion very much. Now, I could deal with – under the Act, I can either deal with you for breach of this section, or for breach of – or for contempt of court. There’s nothing prescribed in the Act or regulations that I’m aware of that says how a section 264C breach is dealt with. But since you’re telling me straight up that you won’t do what the registrar is requiring you to do, and since, in my view, you’ve got no valid excuse for doing so - - - MR NATHAN: Your Honour, I’m happy to do whatever it is. But this court shopping, so-called court shopping - - -HIS HONOUR: Well, I think you will need – I understand that Registrar Allaway is prepared to reconvene the examination. So there are two choices. Either you go back, and comply with the registrar’s directions, have yourself sworn or affirmed and answer the questions, and in due course, produce any books that the court requires you to produce. Or, unfortunately, and this would be extraordinarily regrettable from my perspective, the court will have to compel you to do so. A fine won’t do it. The only way in which you can be compelled is by sending you to gaol. And I don’t want to do that. If you wish for some time to consider your position, I’ll give you until 2:15. If you don’t want any time, I’m afraid your options are either to return and conduct yourself properly before the registrar, or for me to deal with you under the section.MR NATHAN: But, your Honour - - -HIS HONOUR: And I’ll be sending you to gaol, Mr Nathan. You needn’t be under any doubt.MR NATHAN: But, your Honour, I mean, if it takes to go to gaol to prove my point, then I will go to gaol, but in the meantime, there is a proceeding. I’m appealing to the County Court about a criminal conviction - - -HIS HONOUR: I’m not interested in any of that, Mr Nathan. You are here before the court to answer a summons before the registrar. Are you going to cooperate with that process or not?MR NATHAN: But as long as I can see a sealed and signed copy of an order - - -HIS HONOUR: No, there’s no “as long as”, I’m telling you to do it.MR NATHAN: Well, that’s – you’re abusing my rights, your Honour. I mean, this is - - -HIS HONOUR: Well, I’m not doing anything of the sort, Mr Nathan. I’m merely applying - - -MR NATHAN: - - - really oppressive.HIS HONOUR: - - - the law to you.MR NATHAN: That’s really oppressive, your Honour.HIS HONOUR: I’ll give you until midday to consider your position, and I direct you to return here at midday. I’ll indicate now, Mr Nathan, that midday, either you – I would strongly suggest that you consider your position. As far as I’m concerned, at midday, either you will indicate that you’re prepared to properly cooperate with the proceedings before the registrar, or I will deal with you pursuant to section 264C.MR NATHAN: I’ve considered my position, your Honour. I’m asking – all I’m asking - - -HIS HONOUR: I’m giving you until midday. Whatever happens, Mr Nathan, I urge you to do so. I really do.MR NATHAN: Well, I can’t pay. I have to see – I can’t understand this word. I’m a witness to my own case? I can’t understand the language.HIS HONOUR: You don’t need to understand it, you’ve just got to do what you’re told, Mr Nathan, I’m afraid.MR NATHAN: Well, that is working with a third world legal system operates, your Honour.HIS HONOUR: No, this is applying the law as it stands, Mr Nathan.MR NATHAN: It’s not, your Honour. I understand English - - -HIS HONOUR: I’m not entering into a debate with you about it, Mr Nathan.MR MAZZEO: Your Honour, could I just take - - -HIS HONOUR: Yes.MR MAZZEO: - - - make one point. If there’s a duty solicitor available, it might be worthwhile - - -HIS HONOUR: If there is, I’ll certainly make him available to see - - -MR MAZZEO: Yes.HIS HONOUR: My associate will investigate that.MR MAZZEO: Thank you, your Honour.HIS HONOUR: My associate will see if there’s a duty solicitor who might assist you, Mr Nathan. I would urge you to take advantage of that opportunity.MR NATHAN: Well, I do understand English very well, your Honour.HIS HONOUR: Of course you do.MR NATHAN: Yes.HIS HONOUR: I’ll see you at midday.”
Evidence
Evidence Before The Court
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Legal Principle Established
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