National Mutual Holdings Pty Ltd v The Sentry Corporation
[1990] FCA 244
•30 May 1990
JUDGMENT No. .~.k!.../....?!?..-
IN THE FEDERAL COURT OF AUSTRALIA )
)
VICTORIA DISTRICT REGISTRY 1 V. No. G.173 of 1987 ) GENERAL DIVISION ) BETWEEN :
NATIONAL MUTUAL HOLDINGS PTY. LTD.
ACC HOLDINGS LIMITED, ACC FINANCIAL MANAGEMENT LIMITED,
ACC LIFE LIMITED, ACC GENERAL INSURANCE LIMITED
AND AUSTRALIAN CASUALTY COMPANY LIMITED
Applicants
and
THE SENTRY CORPORATION AND
PEAT MARWICK MITCHELL & CO (A FIRM)
Respondents
and
PEAT MARWICK MITCHELL & CO (A FIRM)
Cross-Applicant
and
NY AND
CHARLES PATOUT DUCEY
A. In the motion by Sentry Insurance a Mutual Company (Siamco) and Charles Patout Ducey (Ducey) dated 28 May
1990:-
1. The order made on 23 May 1990 loining Slamco and Ducey as cross-respondents be discharged. 2. The other orders sought are refused 3. The costs of the motion are reserved. B. In the motlon by Peat Narwick Mitchell and Co. (a firm) (Peat Marwick Australia) dated 23 Nay 1990:-
1. That until further order "SIANCO", by itself, its servants and agents be restrained wlthin the Commonwealth of Australia from taking or causing to be taken or requiring or participating in the taking of any oral deposition from, or requiring the production of documents by, the persons named or any of the persons named in the attached Notice or any similar Notlce for the purposes of or in connection with Civil Actlon No. 88-CV-421 in the Clrcuit Court of Wisconsin, Portage County ("the Wisconsin action"), provided that nothing in this order shall prevent SIAKCO from making an COURT : NORTHROP J. DATE : 30 MAY 1990 PLACE: MELBOURNE
AUSTRALIA
MINUTES OF ORDER
THE COURT ORDERS THAT: 'Q?$
application inter partes to any Court having
jurisdiction in the State of New South Wales for an order pursuant to any statute and or any letters rogatory in respect of the taking of evidence for the purposes of the Wisconsin action.
2. The other orders sought are refused.
3. The costs of the motion are reserved.
C. That Peat Narwick Australia and Siamco each have leave, insofar as leave is required, to appeal from the orders
A & B hereof, any appeal to be filed and served within
21 days after the reasons for judgment in writing have
been supplied to them.
D.
Leave to be granted to the National Mutual Holdings Group to have liberty to apply.
NOTE: Settlement and entry of orders is dealt wlth in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)
VICTORIA DISTRICT REGISTRY ) V. NO. G.173 of 1987 ) GENERAL DIVISION ) BETWEEN:
NATIOKAL MUTUAL HOLDINGS PTY. LTD.,
ACC HOLDINGS LIMITED, ACC FINANCIAL MANAGEMENT LIMITED,
ACC LIFE LIMITED, ACC GENERAL INSURANCE LIMITED
AND AUSTRALIAN CASUALTY COMPANY LIMITED
Applicants
and
THE SENTRY CORPORATION AND
PEAT MARWICK MITCHELL & CO (A FIRM)
Respondents
and
PEAT MARWICK MITCHELL & CO (A FIRM)
Cross-Applicant
THE SENTRY CORPORATION
SENTRY INSURANCE MUTUAL COMPANY AND
CHARLES PATOUT DUCEY
Cross-Respondents
COURT : NORTHROP J. DATE : 30 MAY 1990 PLACE : MELBOURNE
REASONS FOR JUDGMENT
In these reasons, the first respondent, The Sentry Corporation, is referred to as "Sentry", the second respondent, Peat Marwick Mitchell & Co. (A Firm), 1s referred to as Peat Marwick, Australia, and Sentry Insurance a Mutual Company, the parent company of Sentry, is referred to as Siamco. On 18 May 1990, the Court as presently constituted, made a number of orders including an order that the
proceeding, being the cross-claim by Sentry against Peat marwick Australia be stayed untll further order or untll Siamco undertakes to the Wisconsin Court, a Circult Court, to take no procedural or other step in the proceedings in that Court agalnst Peat Marwick Australia pending the hearlng and determination of these proceedings. At the same time the Court gave oral reasons for making that order. Those reasons have been produced in writing and handed to the legal representatives of the partles on 2 8 May 1990. Those reasons should be read for a proper understanding of the reasons about to be given. On 2 8 May 1990, the Court was informed by counsel for Sentry that Sentry had made application for leave to appeal against that order but it must be remembered that the order has effect until set aside or stayed.
On 2 3 May 1990, the Court, on the ex-parte
application of Peat Marwick Australia, made a number of
orders including an interim injunction restraining Siamco, from taking oral depositions of named persons being partners or employees of Peat Marwick Australia from requiring them to
wlth the preparation of affidavits for use in the legal produce documents used for the purpose of or in connection proceedings in the Wisconsin Circuit Court. Other orders made in relation to Siamco and Mr C. Patout Ducey being jolned as cross-respondents "for the purposes of this Notice of Motion", lnjunctlons restrainlng Siamco and its legal
-- representatlves from inspecting the documents produced by Peat Marwick Australia to Sentry "or on discovery or otherwise in these proceedings", the giving of notice to
Siamco and that the hearing of the motion, notice of which is dated 23 May 1990, would be heard on 28 May 1990.
For the purpose of record and ease of reference, a copy of the order is annexed as a Schedule A to these reasons. Notice of the order made on 23 May 1990 and the motion of 23 May 1990 was given to Slamco in conformity wlth the order. On 28 May 1990 Siamco and Ducey, pursuant to leave granted by the Court, entered a conditional appearance under 0.9 r.6 of the Federal Court Rules.
At the same time they were glven leave to file a notlce of motion under 0.9 r.7 seeking orders discharging the orders made on 23 Nay 1990. They were represented by senior counsel. Thus, on 28 May 1990 there was before the Court a motlon by Peat Marwick Australia seeking order 1, and until further order, orders in the form similar to paragraphs 2(a) and 2(b) of the orders made on 23 May 1990 and an order numbered 3 in the notice of motion of 23 Nay 1990 and being as follows:-
"3. A declaration that the taking of oral depositions in the State of New South Wales by any person in purported compliance wlth the attached Notice or any slmilar Notice would:
(a)
be Illegal as being contrary to Sectlon 20 of the Oaths Act 1900 (NSW);
(b)
constitute an abuse of the process of this Honourable Court; and/or
(C) constitute a contempt of this Honourable
Court."
In addition, there was before the Court the motion by Siamco and Ducey seeking a number of orders including the following:-
"1. An order that the order made on 2 3 May 1990 joining SIAMCO and Ducey as cross respondents be discharged. 2 . An order that the order made on 2 3 May 1990 giving leave to serve SIAMCO and Ducey in the United States be discharged.
3. An order setting aside the servlce of the
originating process.
4. Alternatively, or additionally to orders 2 and
3 above, an order that the conditional
appearance filed by SIAMCO and Ducey does not have the effect, for all or any purposes, of an unconditional appearance."
As a first step, it 1s necessary to consider the orders sought by Siamco. Counsel for Siamco made submissions based on the non-compliance wlth the Federal Court Rules relating to the adding of partles to the existing proceedings and service of originating process outside the Commonwealth of Australia. There is much force in those submissions and they have particular relevance to the orders sought numbered
on those contentions. Order 1 of the order made on 2 3 May 1 and 3 but it is not necessary to express any final opinion 1990 is ambiguous and in any event serves no useful purpose. Order 3 seeks a declaration. The maklng of a declaration is discretionary. In any event, the Court would not make the declaration sought. A declaration that specified conduct is illegal and would constitute an indictable offence is rarely, .. if ever, made if for no other reason than a different onus of proof applies in civil proceedings to that in criminal proceedings. The other declarations sought are not necessary and would not add anything to any injunction that might be granted. Nevertheless, a consideration of these matters may be relevant in considering whether injunctions should be granted.
In all the circumstances, even though service on Siamco was affected pursuant to the order of the Court, the Court orders that order 1 of the order made on 2 3 May 1990 joining Siamco and Ducey as cross-respondents be discharged, and that order 1 as sought in the motion by Peat Marwick be refused. Further, it is ordered that the declarations are sought in order 3 of the motion by Peat Marwlck Australla be refused.
In considering whether to grant the injunction sought by Peat Marwick Australia, it is important to note that the conduct sought to be restrained is conduct withln Australia and conduct within the jurisdiction of the Federal Court of Australia. At the instigation of Siamco, persons
out in the notices of depositions attached to the order made are to come within Austalia and to engage in the conduct set on 2 3 May 1990. If that conduct constitutes a contempt of the Federal Court of Australia, that Court has a statutory ~urisdiction to punish that contempt. Section 31(1) of the Federal Court of Australla Act 1976 provides:-
"31(1) Subject to any other Act, the Court has
the same power to punish contempts of its power and authority as is possessed by the High Court in respect of contempts of the High Court and, where
the contempt relates to the exerclse of jurisdiction in a Division of the Court, the ]urisdlction to punish that contempt shall be
exercised in that Divlsion of the Court.
Under 5.24 of the Judiciary Act 1904, the High Court of Australia has the same power to punish contempts of its power and authority as was possessed in 1903 by the Supreme Court of Judicature in England.
In an appropriate case, the Federal Court has power to restrain conduct whlch could constitute a contempt. This power is an incidental and necessary power of the Federal Court, whlch is a statutory Court. Generally see Parsons v Martin (1985) 5 F.C.R. 235 in a joint ludgment of the Chief Justice, Sir Nigel Bowen and Justlces Northrop and Toohey at
"The Court of Petty Sessions is of course a creature of statute. So too is the Supreme Court of Western Australia through its jurisdiction, as spelled out In Pt I11 of the Supreme Court Act 1935 (WA), 1s largely tled to the lurisdictlon of the superior courts in England as at 1861.
In its strict sense the term "]urisdiction"
means :
". . . the authority which a court has to declde
matters that are litigated before it or to take cognisance of matters presented in a formal way for its decision." (Halsburyrs
Laws of England (4th ed, 19751, v01 10, par
715. l
The expression "~nherent jurlsdiction" has come to be used, not so much to refer to the authority of the court to decide matters before it but rather to descrlbe the power which a court may have, independent of statutory authority, express or implied.
In Australia, with its federal system, there 1s in truth no court of unlimited jurisdiction though the term continues to be used. Thus in Walsh v Giumelli [l9751 WAR 114 at 116 the Full Court referred to the jurisdiction, powers and authority of magistrates sltting in Petty Sessions and said:
"But their jurisdiction is statutory, and they have no inherent jurisdictlon such as is possessed by superior courts of unlimited jurisdiction."
In Smith v Brown [l9781 WAR 157 at 159, Burt CJ reiterated:
"The jurlsdiction of courts of petty session is entirely statutory. They have no inherent jurisdictlon."
In R v Forbes; Ex parte Bevan (1972) 127 CLR 1 at 7 Menzies J spoke of inherent jurisdiction as "the power which a court has slmply because it 1s a court of a particular description". He added:
"Inherent jurisdiciton is not something derived by implication from statutory provisions conferringparticular jurisdlction; if such a provlsion is to be considered as conferring more than is actually expressed that further jurisdictlon is conferred by implication according to accepted standards of statutory construction and it would be inaccurate to describe it as "inherent jurisdiction", which, as the name indicates, requlres no authorising provlsion. Courts of unlimited jurisdiction have ' lnherent jurisdlction'".
In our opinion a court exercising jurisdiction conferred by statute has powers expressly or by
implication conferred by the legislation which
governs it. This is a matter of statutory construction. We are of opinion also that it has in addition such powers as are incidental and necessary to the exercise of the jurlsdiction or the powers so conferred.
In view of the way in whlch the phrase "inherent jurisdiction" is used in many of the cases, it seems advisable generally to avoid the use of it to refer to this incidental and necessary power of a statutory court."
In an appropriate case, the Federal Court should
not wait until a contempt has been committed. At that stage,
the damage has been done. An injunction may be granted to prevent that conduct before it is engaged in. If, after notice of the injunction the person enjoined engages in the proscribed conduct, that action itself constitutes a contempt of court and can be punished accordingly.
In the present case, Siamco is proposing to engage in conduct whlch Peat Marwlck Australia contends would constitute a contempt of Court. An interlm injunction was granted. ~t the same time orders were made directing that Siamco be given notice of the motion seeking the injunctions generally. The notice was given. Siamco could ignore the notice. If it dld, the motion could be heard in its absence and orders could be made. If, after notice of the orders, Siamco directed persons to engage in the proscribed conduct in Australia, Siamco would be in contempt of Court as well as its servants and agents who engaged in the proscribed conduct within Australia. Alternatively, Siamco could appear on the hearing of the motion and oppose a granting of the injunctions and other orders sought. By so doing, Siamco is
made by the National Mutual group of companies. It would not made a party to the proceedings belng the application appear to oppose the motion and for no other purpose.
In the present case, Siamco appeared and opposed
the motions. In hearlng the motion the Court is exercising its incidental and necessary power. In order to appear and make submissions, Siamco was required to enter an appearance. For these reasons the orders numbered 3 and 4 in the notice of motlon by Slamco, are refused.
The Court now considers the injunctions sought in the motlon by Peat Marwick Australia. At the beginning of the argument, counsel for Peat Marwick announced that they no longer sought an order against Mr Ducey and that they did not seek the continuation of the injunction contained in order 2(b) of the order of 23 May 1990. That order related to the production, Inspection and the copying by servants or agents of Siamco of the documents described as:-
"All documents within the possession, custody or control of Peat Marwlck Australia which have been produced by Peat Marwick Australia to Sentry in
discovery, or otherwise, in connection with the
lawsult in the Federal Court of Australia, General Divlsion, Victorla District Registry, styled National Mutual Holdings Pty. Ltd. et a1 v The Sentry Corporation et al, No. VG173 of 1987".
The Court was informed from the bar table that agreement had been reached between Peat Marwick Australia and Siamco on thls matter and pursuant to that agreement those documents were in the process of being inspected by servants
or agents of Siamco. Accordingly order 2(b) of the order of 23 nay 1990 lapses. The only issue to be determined is whether an injunction in the form of order 2(a) of the order of 23 May 1990 should be made to remain in operation "until further order". On 28 Hay 1990 that order was continued until the hearing and determination of the motions then before the Court. For ease of reference, the Injunction sought is that
until further order:-
"SIAMCO, by itself, its servants and agents be restrained wlthin the Commonwealth of Australia from taklng or causing to be taken or requiring or participating in the taking of any oral deposition from, or requiring the production of documents by, the persons named or any of the persons named in the attached Notice or any similar Notice for the purposes of or in connection with Civil Action No. 88-CV-421 in the Circuit Court of Wisconsin, Portage County ("the Wisconsin actlon"), provided that nothlng in this order shall prevent SIAMCO from making an application inter partes to any Court having jurisdiction in the State of New South Wales for an order pursuant to any statute and or any letters rogatory in respect of the taking of evidence for the purposes of the Wisconsin actlon"
The notice attached to the order llsts the persons who are sought to be examined on oath.
It wlll be remembered that as part of the pre-trial procedures in the Clrcuit Court of Wisconsin, a party has the right to obtain discovery and depositions from an opposing party. The procedure is illustrated by reference to Chapter 804 of the statute presently in force wlth respect to the Circuit Court of Wisconsin. That Chapter 1s headed "Civil
provides:
Procedure - Depositions and Discovery" and section 804.01(1)
"(1) Discovery methods. Parties may obtain discovery by one or more of the following methods: depositions upon oral examination or written questions; written interrogatories; production of documents or things or permission to enter upon land or other property, for inspection and other purposes; physical and mental examinations; and requests for admission. Unless the court orders otherwise under sub. ( 3 ) , the frequency of use of these methods is not limited."
Section 804.01(3) makes provision for what is described as "protective orders". These are orders which the Court in Wisconsin may make and are illustrated by settlng out part of s.804.01(3):-
"(3) Protective orders. (a) Upon motion by a party or by the person from whom discovery is sought, and for good cause shown, the court may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, lncluding but not llmited to one or more of the following:
1. That the discovery not be had;
2. That the discovery may be had only on specified terms and conditions, Including a
designation of the tlme or place;
3. That the discovery may be had only by a method of dlscovery other than that selected by the party seeking discovery;
4. That certain matters not be lnquiried into,
or that the scope of the dlscovery be limited to
certain matters;
5. That discovery be conducted with no one
present except persons designated by the court;
6. That a deposition after being sealed be
opened only by order of the court;
7. That a trade secret, as defined in
development, or commercial information not be s.134.90(l)(c), or other confidential research, disclosed or be disclosed only in a designated
way;8. That the parties simultaneously flle
specified documents or Information enclosed in
sealed envelopes to be opened as directed by the
court. "
A reference to Chapter 804 illustrates that
depositions of persons are taken on oath; they can be
enforced by contempt of court proceedings and any part of the depositions may be used as evidence in the trial of an action or the hearing of a motion. Discovery by depositions of this kind is foreign to the procedures of the Federal Court. Under these provisions a person may be in substance cross-examined in an attempt to flnd material which may be used at a trial or on the hearing of a motion and answers given on deposition may be used at the trial as well as evidence found as a result of the depositions. Not all the answers given must be used as evidence.
For the purpose of determining the issue before the court, it is important to remember the nature of depositions in the pre-trlal procedures in the Circuit Court of Wisconsin; the fact that the depositions are being sought with respect to the motion by Peat Marwick Australia to be removed as a defendant to those proceedings, and that it is true that to that extent depositions arise as a result of action taken by beat Marwick Australia in the proceeding in the Wisconsin Court.
Nevertheless it must not be forgotten that Peat Marwick Australia was joined as a defendant to those
proceedings in the circumstances outlined in the reasons
given for the orders made on 18 May 1990. Further it must be
remembered that the cross-claim by Sentry against Peat Marwick at present is stayed so that it can be said that no proceedings are presently pending between Sentry and Peat Marwick. The court has regard to all those matters and also to the fact that the proceedings between the National Mutual Group of Companies are pending against Sentry and Peat Narwick Australia and that the trlal of that actlon is due to commence on 15 October 1990. Further, although the deposltlons may be used at the hearing of the motion by Peat Narwick Australia in the Wlsconsln Court, there appears to be no reason why they could not be used at the hearing of the trial itself.
Proceedings which have occurred in the Circuit Court of Wisconsin and the Court of Appeals of Wisconsin are referred to in the reasons for judgment given on 18 Nay 1990 and are not repeated. On 22 Nay 1990 Wisconsin time, whlch for practical purposes, corresponds to 2 3 May 1990 in Australia, the Circuit Court made a number of orders. At the time of making those orders, Siamco knew of the existence of the order of the Federal Court of 23 Nay 1990, and reference to those orders was made to the Wisconsin Circuit Court.
Those orders were many and lengthy and many of them
can be summarized. The Wisconsin Court denied a motion by
Peat Marwick Australia that oral depositions in Australia be
prohibited until the Court determined the motions to dismlss the amended complaint and to stay the action against Peat Narwick Australia. The Court denled the request by Peat Narwick Australia to stay the deposltlons untll the
determination of the pending appeal to the Court of Appeals of Wlsconsln. These are examples of the seeklng of protection order referred to earlier in these reasons. The court ordered that oral depositlons be conducted at the offices of Philllps Fox at Sydney wlth solicitors for Sentry and that nine persons, including partners and emplyees at Peat narwlck Australia attend at specifled tlmes commencing at 9.00am on 4 June 1990:-
For the purpose of giving their oral depositions in this matter as provided by Chapter 804, Wisconsin Statutes".
One of the person so described or so directed to attend was George Henry Bennett a partner of Peat Marwick Australia. The following orders were also made:--
"5. That such depositions shall be taken before either John Schindhelm or Vicky L. Berna, Milwaukee, Wisconsin, court reporters, who shall record such testimony by stenographic means.
6. That John Schindhelm or Vicky L. Berna, and either of them, is hereby authorized, commissioned and directed by this Court, pursuant to S.804.03(2), Wls. Stats., to administer the oath to each deponent at the time of his or her deposition.
That George Henry Bennett shall bring with him and produce at the commencement of his deposition,
7 .
any and all documents (as defined by Wisconsin Statutes S.804.09(1)), notes, correspondence or other writings referred to or used by Mr Bennett in making his affidavits dated March 23, 1990, and April 18, 1990, on flle herein.
8. That the scope of examination in the above oral depositions shall be limited to issues of jurisdictional fact raised by PM-Australia's pending motion to dismiss plaintiff's amended complaint; provided, however, that in the event the Court of Appeals modifles its orders to permit
discovery with respect to the pending motions of PM-~ustralia as to real party in interest or to stay this proceeding, then such subjects shall also be permitted within the scope of the above oral depositlons."
An order was made about the lnspectlon of documents about which there is at present no dispute. Finally, the Wisconsin Court declined an order to show cause brought by Siamco, and I quote:-
"To preliminarily enloln Peat Marwick Australia and
find Peat Marwick in contempt."
Peat Marwlck Australia sought leave from the Court of Appeals Wisconsin to appeal from some of the orders of the Circuit Court made on 22 May 1990. But on 25 May the Court of Appeals ordered that:-
"The petition for leave to appeal and the motion
for stay of the trial courts order are denied."
The Court of Appeals gave the following reasons for the orders so made, and I quote:-
"KPMG Peat Marwick of Australia petitions for leave to appeal at the trial courts non-final order allowing Sentry Insurance A Mutual Company to proceed with noticed oral depositions, in Australia, of PM-Australia employees. PM-Australia
also moves to stay the trial court's orders. Our orders of May 15 and 16, 1990 in appeal no. 90-1055, permitted SIAMCO to conduct discovery on the limited issue of the trial court's jurisdiction over PM-Australia. We did not Intend that order to llmit SIAMCOts choice of discovery methods.
Because the trial court's order did nothlng more than implement the terms of our orders, we conclude that PM-Australia has not satisfled the criteria for granting leave to appeal. Our declsion does not deprive PM-Australia of a remedy because it has the option of seeking a protective order in Australia."
The use of the words, "protective order in
Australia" in those reasons is of interest. The phrase "protective order" is not in common use in Australia in Australian legal terminology, but is in common use in Wisconsin; see for example, Statute 004.01(3) set out earlier in these reasons. The use of those words suggests that the Court of Appeals was aware of the orders of the Federal Court of 23 May 1990 and was an indication that the Court of Appeals was making no comment on those proceedings. This is consistent with the comity of courts and the Federal Court makes no comment on the proceedings in the Circuit Court of Wisconsin or in the Court of Appeals of Wisconsin.
On this material, the Court finds that Siamco intends to pursue the oral despositions in Australia in conformity with the orders numbered 5, 6, 7 and 8 of the order of the Wisconsin Court of 22 May 1990. As part of the obtaining of those depositions, named persons have been authorized by that Court to administer an oath in New South Wales, Australia. It must be remembered also that the claim by Siamco against Peat Marwick Australia extends beyond the
is made clear by a reference to paragraph 43 of the amended cross-claim by Sentry against Peat Marwick Australia. This complaint by Siamco as setout in the reasons given on 18 Nay
1990. That paragraph is reproduced:-
"43. As a result of this breach by (Peat Marwick Australia), SIAMCO has been damaged in an amount to be determined at trial, but no less than the auditing fees paid to Peat Marwick and/or Peat Marwick Australia during the relevant period, plus the reduced value of SIAMCO's 100% stock holding in Sentry brought about by the costs incurred and to be incurred
by Sentry and the contingent liability of Sentry to National Mutual by reason of the
pendency of the ~ustralian lawsuit."
The lawsuit referred to 1s the whole of proceeding V. No. G.173 of 1987 in the Federal Court. Not merely the cross-claim by Sentry v Peat Marwick Australia. The Court holds that the depositions sought could extend to questions relating to many of the issues arising in the lawsuit pending in the Federal Court and that the documents required to be produced under order number 7, could extend to documents prepared for the purpose of litigation within the lawsuit.
The question is, therefore, does conduct of that kind in the circumstances of this case constitute a contempt of Court? A related factor is whether the administering of oaths in New South Wales under order 6 is lawful, although no final opinion can be expressed on that matter. The type of contempt of Court alleged here in an interference with the administration of justice. This type of contempt was discussed by the High Court in the State of Victoria v
Australian Building Construction Employees and Builders Labourers Federation 1982 152 C.L.R. 25. There proceedings were pending in the Federal Court of Australia seeking the deregistratlon of the federation as an organisation under the Conciliation and Arbitration Act 1904. A Royal Commission had been appointed to enquire into certain activities of the federation, which activities could overlap with activities relevant to the proceeding in the Court. The Federation applied to the Federal Court for injunctions restraining the Royal Commissioner from continuing to conduct the Royal Commission into the hearing and determination of the Federal Court proceedlngs. The trial Judge refused to grant the injunctions. On appeal, a Full Court of the Federal Court granted the injunction. The Hlgh Court allowed an appeal from the judgment of the Full Court and set aside the injunction. In the High Court the Chief Justice Sir Harry Gibbs, sald at p.56:-
"There is contempt of court of the kind relevant to the present case only when there is an actual interference with the administration of lustice, or "a real rlsk, as opposed to a remote possibility" that justlce will be interfered wlth: cf. Attorney-General v. Times Newspapers Ltd. [l9741 A.C. at p.299. The essence of this kind of contempt is a "real and definlte tendency to prejudice or embarrass pending proceedlngs": John Fairfax & Sons Pty. Ltd. v. McRae (1955) 93 C.L.R.
351, at p.372. The law as to contempts of court of the kind now under consideration reflects two conflicting principles of public policy: on the one hand, the need to safeguard the proper administration of justlce and on the other the protection of freedom of speech (and this principle must extend to freedom of inquiry). This question has recently been discussed in Attorney-General v. Times Newspapers Ltd, although slmilar views had earlier been expressed in New South Wales: Ex parte Bread Manufacturers Ltd; Re Truth and
pp.249-250; Ex parte Dawson; Re Consolidated Press Sportsman Ltd. (1937) 37 S.R. (N.S.W.) 242, at [l9611 S.R. (N.S.W.) 573, at p.575. The law strikes a balance; in the Interest of the due adminlstration of lustice it will curb freedom of speech, but only to the extent that is necessary to prevent a real preludice to the adrninlstration of justlce."
In this context, the same applies in relation to action belng taken pursuant to an order of a foreign court, where that action is to be taken in Australia, and for the present purposes that action is to be treated in the same way
as the actlon belng taken by the royal commission in the
Builders Labourers Federation case.
At page 60 of the same report, the Chief Justice
"The conclusion reached by the Federal Court was that the adverse effect of the continued public proceedings of the royal commissions upon the judicial proceedings in that court outweighed the public interest involved in having the proceedings of the Commissions continued in publlc. If their Honours considered that they had a discretion to welgh one consideration against another, and to make a discretionary judgment as to whether a contempt had been committed or was llkely to be committed, they were mistaken. The balancing of interests which is mentioned in Attorney-General v. Times Newspapers Ltd. 119741 A.C., at pp.294, 296, 301, 319, is done by the law in formulating the principle to be applied, and not by the court in decidlng a particular case. The resulting
principle requires that the court be satisfied that
there is a real risk that the material alleged to be a contempt will Interfere with the administration of justice in pendlng proceedings before it can hold that a contempt has been committed or 1s threatened. The discretion of the court lies in dealing wlth a contempt, not in declding whether a contempt has been committed. The jurisdiction to punish as a contempt something otherwise lawful is exceptional and drastic and must be exercised wlth great care. The court must,
I£ possible, be even more cautlous in granting an Injunction to restrain an apprehended contempt. In my opinion it has not been shown that there is a real rlsk that the conduct of the inquiry by Mr Winneke in public would interfere in any way wlth the administration of justice in the proceedings in the Federal Court."
Those principles are to be applied in the present case. The Hlgh Court expressed similar views in Pioneer Concrete Vlctoria Pty Limited v Trade Practices Commission 1982 152 C.L.R. at p.460. This case illustrates that a contempt may exist even where a power conferred by statute is
belng exercised. At pages 467 to 468 the Chief Justice
"The second argument submitted on behalf of the appellants is that the power glven by s.155 permits interference with pending judicial proceedings. No doubt it is right to say that the power conferred by the section might in some cases be used so as improperly to interfere with judicial proceedings. I incline to think that if the power were used to assist a party in proceedings already pending, in a way that would give such a party advantages which the rules of procedure would otherwise deny him, there would be a contempt of court. As at present advised I would agree with the decision in Brambles Holdings Ltd v. Trade Practices Commission [No. 21 (1980) 44 F.L.R. 182; 32 A.L.R. 328. However not every investigation into facts which are the subject of pending proceedings constitutes a contempt of court: see Victoria v. Australian Building Construction Employees' and Builders Labourersr Federation (1982) 152 C.L.R. 25, and the authorities there discussed. In the present case it was not shown that the person who gave the notice had any lntentlon to interfere with the course of justice, or that there was a real risk that the exerclse of the powers under s.155 would in the circumstances have that effect. The power is a drastic power and is capable of abuse and must be exercised wlth care. However it was not shown that its exercise in the present case would amount to a contempt of court."
In my opinion, the taking of the depositions by interference with the administration of justice, namely that
Siamco referred to in the present case would constitute a
real risk, as opposed to a remote possibility, of an
thls pendlng proceedings in the Federal Court in matter VG The relevant facts have been set out earller. A party and its employees to that pending proceeding are sought to be examined on oath in Australia, under threat if the oath
1s refused to be given, or quest~ons are refused to be answered by those persons, of being in contempt of the
Wisconsin Clrcuit Court. The questions are directed to the Issue of whether that Court has jurisdiction against Peat Marwick Australia in a complaint whlch is based on the outcome of the proceedings in the Federal Court. Documents are to be produced in relatlon to affidavits in the Wisconsin Court, but in all probability are relevant and may have been prepared for the
litigation in the Federal Court. The persons sought to be examined on oath are involved in the preparation of the case in the Federal Court. All of the facts set out above support, in my opinion, the view that the proposed conduct would constitute a contempt of thls court.
Further, in my opinion, this is a case where an
injunction should be granted to restrain the apprehended
contempt. This conclusion is sufficient to justify the granting of the Injunction sought, but, in view of the submissions made, some brief observations are made on the question of the administering of oaths in New South Wales.
It does not seem to be disputed that if before 1973
the persons authorised by the Wisconsin Circuit Court to
administer the oaths in New South Wales for the purposes of taking depositions so administered the oath they would have been gullty of an offence under the Oaths Act 1900 of New South Wales. Sub-section 20 of that act then, and still does, provide as follows. I quote:-
"20(1) It shall not be lawful for any justice of the peace or other person to administer or cause or allow to be received any oath or affidavit touching any matter or thing whereof such justice or other person has not jurisdiction or cognisance by some Act or Imperial Act in force at the time being."
The provisions of sub-section 2 make exceptions to that requirement that none of those exceptions are relevant for present purposes. Until 1988 an Imperial Act, namely Foreign Tribunals Evidence Act 1856, empowered an appropriate Court in New South Wales to lend its aid to obtain evidence for use in a foreign court. The relevant parts of section 1 of that Act are set out:-
"1. Where, upon an application for this purpose, it is made to appear to any court or judge having authority under this Act that any court or tribunal of competent jurisdiction in a foreign country,
pending, is desirous of obtaining the testimony in before which any civil or commercial matter is relation to such matter of any witness or witnesses within the lurisdiction of such first-mentioned court ... ~t shall be lawful for such court or judge to order the examination upon oath, upon Interrogatories or otherwise, before any person or persons named in such order, of such witness or witnesses accordingly; and it shall be lawful for the said court or judge, by the same order, or ... by any subsequent order, to command the attendance of any person to be named in such order, for the purpose of being examined, or the production of any writings or other documents to be mentioned in such order. ..."
No question of a breach of section 20 of the Oaths Act arose where oaths were admlnlstered under the authority of an order made under that section. Authorities show, however, that the power to make orders under section 1 of the Imperial Act was limited to cases where the evldence was to be used at a trial and did not extend to cases of pre-trial investigations such as depositions or discovery by depositions. See Radio Corporation of America v Rawland 1956 1 Queens's Bench 618 and, in particular, Mr Justice Devlin at pages 643 to 648. A short passage from the judgment of the Chief Justice, Lord Goddard, at page 649 summarises the
Secondly, it seems to me perfectly clear from the passage in the judgment of Judge Igoe to which Devlin J. has referred, that this is merely an attempt to get evidence in the course of discovery proceedings whlch are known to the American courts
- and are also known to the Canadian courts - which
are a sort of pre-trial before the maln trial. It is an endeavour to get in evidence by examining people who may be able to put the parties in the way of getting evidence. That is mainly what we should call a "fishing" proceeding which is never allowed in the English courts, and I think that that of itself would be a complete objection and
order ." ought to -justify this court in refuslng to make the
See also RIO Tinto Zinc Corporation v Westinghouse Electric Corporation 1989 Appeals Cases 547 per Lord Wilberforce at pages 609 to 610. As at present advised, I would decline to follow the opinion of Mr Justice Clarke expressed in application of Forsyth re Cordova v Phillips Roxanne Laboratories inc. 1984 2 New South Wales Law Reports 327. There his Honour declined to follow the strict view expressed in the Radio Corporation case and in the Rio Tinto Corporalton case, and held that an order could be made under section 1 of the Foreign Tribunals Evidence Act if one of the purposes were to obtain evidence for trial.
In 1988 the Evidence Act 1898 New South Wales was amended by the Evidence (Evidence on Commission) Amendment Act 1988 to insert provisions similar to those contained in section 1 of the Imperial Act. As a result, any application for an order for evidence to be obtained in the State of New South Wales for use in a forelgn court can be brought under part 9, comprising sections 72 to 80 - sections 70 to 80 of the Evidence Act New South Wales.
For present purposes, it 1s sufficient to say that in the Imperial Act the word, testimony, is used, while in the New South Wales Act, the word, evidence, is used. Apart fromthat, the provisions are sufficiently similar to suggest that the power to make an order will be held to be limited to evidence to be used at the trial, not the obtaining of
which in any event, may be used to obtain further evidence to depositions which may or may not be used at the trial, and be used at the trial.
I do not need to decide that question here. It is
sufficient to note that the proviso to the injunction to be granted permits Siamco to make .application under part 9 of the New South Wales Evidence Act. The reason for this excursion is necessary because in 1973 the Oaths Act New South Wales was amended by the insertion of sectlon 26B. That sections provides, and I quote:-
"26B(1) In this section "foreign authority" means a court, judge, person or body authorised by the law of a place outside New South Wales to take or receive evidence in that place.
(2) or the purpose of proceedings (other than criminal proceedings) before a foreign authority, the foreign authority, or a person authorised by the foreign authority to take and receive evldence in New South Wales, may administer an oath to a person in New South Wales for the purpose of taking and receiving that evidence subject, in the case of a foreign authority that 1s not a court or judge, to the consent of the Chief Justice of the Supreme Court belng first obtained."
In the present case, it seems to be accepted by the partles that the Wisconsin Court is a "foreign authority" under that section which has authorized a person "to take and receive evidence in New South Wales." Further, it seems to be accepted by the parties that the persons so authorized "may administer an oath to a person in New South Wales for the purpose of taking and receiving that evldence" that having to obtaln the consent of the Chief Justice of the
Australia contended that having regard to the listing - for Supreme Court of New South Wales. Counsel for Peat Marwick the history of the legislation including the existence of the Imperlal Act and the provisions of the now Evldence Act of New South Wales, the word, evldence, appearing in sectlon 26B of the Oaths Act should be limited to evidence to be used at the trial of an action, or on motion, and in thls case the Wisconsin Court and should not include the taking of
depositions as part of any pre-trial discovery relating to that trlal or that motlon. Counsel for Siamco contended that no such llmitatlon should be lmplied and the section was not limited to proceedings in the foreign court. On its face, the section applies to other persons or bodies authorized to take or receive evldence in the foreign place. A royal commission or a board of inquiry could be such a body; a body which is not a court but exercising investigative powers.
In those circumstances, it is contended, the protection is given by the fact that there the consent of the Chlef Justlce has first to be obtained. It is contended further that in those circumstances, the word "evidence" should be given a wide meaning so as to include depositions of the type here in question. Counsel for Peat Marwick Australia contended further that a person could not be compelled in New South Wales to take an oath sought to be administered in conformity with section 268. This may be correct, but a person who refuses to take the oath or to
which authorized the person to administer the oath. answer questions might be in contempt of the foreign court For present purposes it is sufficient to say that questions arise in the construction and application of sectlon 26B of the Oaths Act New South Wales. It is not necessary to answer those questions in determining this motion and no views are expressed on those questions. In the result, an injunction wlll be granted. It will be expressed to operate until further order.
This is not a case where Peat Marwick Australia should be required to give the usual undertaking as to damages. In some respects the injunction is a final order insofar as Siamco 1s concerned, even though it could, in the future move the Court for the discharge or variation of the in~unction. In some respects the injunction is in the nature of an interlocutory order, since it is expressed to be untll further order.
To remove any doubt, this is a case where the Court should glve leave insofar as it may be necessary, to Peat Marwick Australia and to Siamco to appeal agalnst the orders made. Leave to so appeal will be granted but any notlce of appeal must be filed within 21 days after the date these reasons are provided in writing to the parties. The cost of the motions should be reserved.
Orders made accordingly.
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