P F T McGirr v D Xenos - [2006] NSWLEC 60

No judgment structure available for this case.

Reported Decision: 144 LGERA 172

Land and Environment Court

of New South Wales

CITATION: P F T McGirr v D Xenos [2006] NSWLEC 60

PARTIES:
APPLICANT:
P F T McGIRR
RESPONDENT:
D Xenos

FILE NUMBER(S): 31412 of 2003

CORAM: Bignold J

KEY ISSUES: Contempt :- Alleged failures to comply with Court’s Consent Orders—objection to competency of the Contempt Motion because of failure to comply with Rules of Court.

LEGISLATION CITED: Supreme Court Rules 1970 (SCR), Part 42 Rule 8 and Part 55 Rule 13

CASES CITED: Australian Meat Industry Employee’s Union v Mudginberri Station (1986) 161 CLR 98;
Bourke Shire Council v Dwyer (1993) 79 LGERA 185;
Clifford v Middleton (1974) VR 737;
Doyle v The Commonwealth (1985) 156 CLR 510;
Gordon v Gordon (1946) P99;
Iberian Trust Ltd v Founders Trust and Investment Co Ltd (1932) 2 KB 87;
Miller v Eurovox Pty Ltd (2004) VSCA 211;
Primelife Corp Ltd v Newpark Pty Ltd (2003) VSC 106;
Stancomb v Trowbridge Urban Council (1910) 2 Ch 190;
Westpac Banking Corporation v Maher (1995) BC 9502504;
Witham v Holloway (1995) 183 CLR 525

DATES OF HEARING: 11/08/2005, 15/08/2005, 17/08/2005, 02/09/2005

DATE OF JUDGMENT:
02/17/2006

LEGAL REPRESENTATIVES:
APPLICANT:
Mr P W Larkin, Barrister
SOLICITORS
McGirr James Hall and Associates
RESPONDENT:
Mr T S Hale SC and Mr M S White, Barrister
SOLICITORS
Diamond Peisah & Co

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

BIGNOLD J

17 February 2006

31412 of 2003 PAUL FRANCIS TAYLOR MCGIRR v DIONISIOS XENOS
JUDGMENT

HIS HONOUR

A. INTRODUCTION

1 By Notice of Motion filed 23 February 2005 the Applicant sought orders that the Respondent be found guilty of contempt of Court for failing to comply with Consent Orders made by the Court on 20 May 2004, and be punished “by committal to prison and/or sequestration of property and/or by way of fine”.

2 Although the Respondent has defended the Contempt Motion on the merits, his principal defence has been to raise technical objection to the Contempt process on the grounds that there has been non-compliance with the requirements of Part 42 Rule 8 of the Supreme Court Rules 1970 (SCR) (which apply to this Court by virtue of Part 6 Rule 1(1) and (5) of the Land and Environment Court Rules).

3 It appears to be accepted by the Applicant that there has been a relevant non-compliance with SCR Part 42 Rule 8 inasmuch as there was no personal service on the Respondent of a minute of the Courts Orders and more particularly, that there was no service of such a minute bearing the penalty notice prescribed by Part 42 r 8(3).

4 However, the Applicant seeks to answer the Respondent’s technical objection in the two discrete ways—firstly he relies upon the dispensing power vested in the Court by Part 42 r 8(6) and secondly he submits that the requirements of Part 42 r 8 do not apply to a case involving the punishment of the contemnor by the imposition of a fine (rather than enforcement by attachment (imprisonment) of the contemnor or by sequestration of his property).

5 The Respondent’s reply to the Applicant’s submission emphasised that it was not open to the Applicant belatedly to seek to make out a case based upon “wilful disobedience” in the context of the exclusive manner in which the Applicant had prosecuted the contempt Motion, namely by way of enforcement action pursuant to Part 42 of the SCR in contradistinction to action for punishment by way of the imposition of a fine pursuant to Pt 55 r 13 of the SCR (which Part is also adopted by this Court’s Rules of Court).

6 As will later appear, my adjudication on the Respondent’s objection to the Contempt process initiated by the Applicant is necessarily influenced and contextualised by the manner in which the Contempt Motion has been prosecuted. This will require a detailed consideration of the litigation history. However, I can say at the outset that the ultimate trial of the Contempt Motion has been occasioned by the parties’ dispute over the costs of the Motion in circumstances where the works required by the Court’s Orders made on 20 May 2004 to be undertaken by the Respondent had already been undertaken, (either before or more completely during the currency of the Motion) upon the ultimate failure of settlement negotiations including the legal brinkmanship indulged in by the parties and their respective lawyers in this unfortunate litigation.

B. THE HISTORY OF THE CONTEMPT MOTION

7 On 23 February 2005, the Applicant filed a Notice of Motion claiming the following relief:

1. That the Respondent be found guilty of contempt of this Court for failing to comply with Orders 4, 5, 6, 8 and 10 made by the Honourable Justice Talbot on 20 May 2004.

2. That the Respondent be punished for disobeying Orders 4, 5, 6, 8 and 10 made on 20 May 2004, by committal to prison and/or sequestration of property and/or by way of fine.

3. That leave be granted to issue a writ of sequestration.

4. Further or alternatively, that the Applicant be appointed to take all such steps and do all such things as may be necessary (including the employment of builders and contractors) to ensure compliance with the Orders made on 20 May 2004.

5. That the Respondent pay the Applicant’s costs and expenses incurred pursuant to the preceding direction.

7. An order pursuant to s.8 of the Encroachment of Buildings Act 1922, vesting in the Applicant the easements required by Order 8 made on 20 May 2004.

8. Further or alternatively, that the respondent be committed to prison until he registers the easements referred to in Order 8 made on 20 May 2004.

9. That the Respondent pay the costs of and incidental to this notice of motion, on an indemnity basis.

8 The Notice of Motion was supported by an affidavit sworn by the Applicant. Paragraphs 2 to 4 (inclusive) refer to the circumstances in which this Court made Consent Orders on 20 May 2004 in class 3 proceedings brought by the Applicant as the “encroaching owner” under the Encroachment of Buildings Act 1922 against the Respondent as the “adjacent owner” in respect of an encroachment extending across the common boundary of the parties’ respective residential properties situate at Longueville. A copy of the Court’s Consent Orders is annexed hereto and marked “A”. (It is apparent that the Consent Orders gave effect to the settlement reached by the parties by way of compromise which settlement included relief that prima facie could not be founded in the remedies available under that Act. This underlying feature of the Consent Orders which the Contempt Motion seeks to enforce was not satisfactorily explored at the hearing.)

9 The Applicant’s affidavit annexes copies of correspondence between the Applicant’s Solicitors (the Applicant as Principal of the firm of Solicitors acted for himself in the litigation) and the Respondent’s Solicitors. The earliest correspondence was the Applicant’s letter dated 18 October 2004 (some five months after the Consent Orders were made) in which it was asserted that the Consent Orders “required that certain works be completed within two months” and that “the works have not yet been completed”. The Applicant indicated that “in the interests of avoiding further litigation” he was prepared to consent to an extension of time within which the works were to be completed and enclosed draft orders appropriately varying the Consent Orders.

10 No reply was received to this correspondence but on 16 December 2004, the Respondent’s Solicitors wrote to the Applicant, noting that the Respondent had been informed by the Department of Lands that a caveat had been lodged by the Applicant on the Respondent’s title, and asserting that the Applicant was not entitled to lodge a caveat based upon the Consent Orders until the required payment of $5,000 had been made. Immediately thereafter, the Applicant tendered the amount of $5,000 (as referred to in Order 8 of the Consent Orders thereby enlivening the obligation imposed by that Order for the required easements to be registered within 7 days).

11 By Further letter dated 18 January 2005, the Respondent’s Solicitors called upon the Applicant to withdraw the caveat and advised that the Respondent had granted an easement to drain water to the owner of property situate at No 18 Kenneth Street, Longueville (two properties removed from the Applicant’s property situate at No 14 Kenneth Street).

12 By letter dated 15 January 2005, the Applicant asserted he had a caveatable interest and advised that he had no objection to the proposed easements “unless it prejudices our right to have the easements granted by the Consent Orders registered”. It appears that the existence of the caveat and the grant of the easements to another neighbour have combined to create a further dispute between the parties constituting an impasse to the creation of the easements to drain water in favour of the Applicant’s land that was required by Order 8 of the Consent Orders. That dispute has continued throughout the litigation history and its resolution did not fall within the compass of the disputed Contempt Motion, and hence was not capable of being resolved at the trial on that Motion.

13 It was in that letter that the Applicant first made the following assertion of contempt of Court by the Respondent:—

due to matters relating to the drainage which is yet to be completed, consequently the interest in the property which you claim has yet to materialize

Similarly, underlying the Consent Orders was a binding inter-partes agreement to settle the former litigation. Your client is in breach of that agreement for the same reasons that he is in contempt of Court. It is not open to your client to rely upon his breaches of the agreement to avoid creation of the easements required to be registered under that agreement.

14 The Respondent’s Solicitor’s letter of 20 January 2005 included the following response:

There is no issue that the easement that our client is required to provide your property in accordance with Order 8(b) will be carried out by our client. The delay in finalizing the works has been attributable to difficulties with the builder.

15 Reverting to the body of Applicant’s affidavit, par 5 states:

Subsequent to the making of the Orders by the Court, certain works have been carried out on the Retaining Wall.

16 Paragraph 6 of the Affidavit exhibits a number of colour photographs taken by the Applicant on 19 January 2005 which are described in the affidavit as follows:

no granular filling in the gap….and no drainage pipes had been installed behind the retaining wall and there were no weep holes in the retaining wall

17 Par 13 of the Affidavit states that no easement for support or for drainage has been registered by the Respondent.

18 The Contempt Motion was supported by a Statement of Charge alleging specific “failures to comply with” the Consent Orders. A copy of the Statement of Charge is annexed hereto and marked “B”.

19 Although later in the litigation history the Applicant filed an amended Statement of Charge alleging three further “failures to comply” with the Consent Orders (in addition to the allegations contained in the original Statement of Charge) on the hearing of the Contempt Motion, none of these three additional allegations was pressed. Accordingly, there is no need to refer to the contents of the Amended Statement of Charge.

20 The allegations of “failure to comply with” the Consent Orders concern the following orders—

21 The Statement of Charge alleged two separate “failures to comply” with respect to each of Orders 4, 5, 6(a) and (c) and 8, namely:

22 I interpose to note that on the hearing of the Contempt Motion, the Applicant did not press the charges of “ongoing” failure to comply with Orders 4, 5 and 6(a), (being charges 2, 4 and 6) because the Applicant accepted that there had been subsequent compliance by the Respondent with the relevant requirements of those orders by either doing the works that were actually required, or by doing substitute works (which the Applicant accepted as satisfactory).

23 One consequence of the Applicant’s acceptance of the works undertaken by the Respondent is that there can no longer be any coercive object or purpose in the Applicant’s pressing the Contempt Motion in respect of those allegations of past (but not present or ongoing) failures to comply with the Consent Orders. (There is a coercive object in respect of the ongoing failure to register the required easements.) This raises the obvious question as to why the Applicant pressed on with the Contempt Motion in respect of those past (but no longer continuing) failures? Whereas a theoretical answer (reflecting more recent decisions of the High Court of Australia eg Australian Meat Industry Employee’s Union v Mudginberri Station (1986) 161 CLR 98; and Witham v Holloway (1995) 183 CLR 525) would accommodate the possibility of a punitive object or purpose (or one vindicating the Court’s authority), this clearly was not the object or purpose of the Applicant in bringing the Contempt Motion or in ultimately prosecuting it, as is emphatically revealed in the following extract from the Transcript of the interlocutory hearing before McClellan CJ on 28 July 2005 recording an exchange between his Honour and Mr Larkin, Counsel for the Applicant:

HIS HONOUR: But Mr Larkin surely your client realised the extent to which he was upping the ante to use a colloquial expression by bringing a motion for contempt as opposed to coming back here and saying to a judge, this isn’t working out. He would have known that wouldn’t he?

LARKIN: Well if we’d have come back and said this isn’t working out, what result would we have achieved?

HIS HONOUR: I think you probably would have ended up before someone like me and you would have achieved exactly the same result, wouldn’t you?

LARKIN: But the costs that have been incurred would have been incurred in the same way because as my friend says the defects as to part were latent, as to part--

HIS HONOUR: Well that’s a different point.

LARKIN: I’m absolutely certain that we would not have achieved a different outcome or a different passage of time. All that would have happened is we would be here needing to have some vehicle for the resolution of the issues that are still at issue between us and may I remind you that on the first occasion that we appeared, and at all times since, we have said that we have no independent desire, and I say it today, we have no independent desire to obtain a finding of contempt or any punishment of contempt beyond getting the works completed and getting our costs of the exercise paid. We said that on the very first occasion . It’s true that we chose the vehicle of a contempt proceeding. After five pieces of correspondence we were well entitled to do that. There was a clear serious and long standing breach of the Court’s orders. It’s true that we chose that vehicle. We said at the first—[my emphasis]

24 That the true and only purpose of the Applicant pressing on with the Contempt Motion after the point had been reached following a sustained series of interlocutory hearings before McClellan CJ (commencing on 16 March 2005 and concluding on 28 July 2005) all of which had been directed to settling the dispute by securing compliance with the Consent Orders, was the Applicant’s desire to obtain a costs order against the Respondent in circumstances where the Applicant’s claim to costs had by that date escalated to some $87,000 and where the Respondent was disputing that claim and in particular, its quantum (having initially offered to pay some $14,000).

25 That the disputed question of costs was the true cause for, and the goal and stakes of, the prosecution of the Contempt Motion after the interlocutory hearing before McClellan CJ on 28 July 2005 is further demonstrated by the following exchange between his Honour and the parties’ Counsel recorded in the following extract from p 17 of the Transcript of the interlocutory hearing held on 28 July 2005:

HIS HONOUR: You see an alternative for me is just to say you get an order for costs.

LARKIN: Yes well we’re content with that, we’ll accept that

GALASSO: If we’re going down the path, one alternative, and I don’t mean it in any other way than is your Honour needs to hear and determine the motion for contempt because if ultimately there’s no contempt found then that disposes of costs, in fact I start sending bills.

HIS HONOUR: It may not dispose of costs.

…………

………….

HIS HONOUR: Well I can’t spend any more time on this case today so the question is how we deal with it.

LARKIN: We are content for an ordinary assessment.

HIS HONOUR: Well Mr Galasso is not. He says there needs to be a debate about whether or not you get an order--

GALASSO: Well the difficulty is Mr Larkin is content for an assessment but he’s still maintaining a position that he wants an order finding contempt.

HIS HONOUR: No I think what he is saying that he wants an order for costs based upon a finding that but for what has happened there would have been a contempt.

LARKIN: And we want the current minor things also completed.

26 On 28 July 2005, McClellan CJ adjourned the proceedings to 10 August 2005. It was at this point that the parties fully engaged in their tactics of legal brinkmanship.

27 In a flurry of exchanged correspondence (all dated 1 August 2005) there was a dispute as to whether the adjourned hearing on 10 August 2005 was to deal with the question of costs alone or whether it was to deal with the Contempt Motion, there was the question whether the Contempt Motion was to be withdrawn or pressed and there was a dispute as to whether the adjourned hearing date would need to be vacated if there was a need for a full hearing on the Contempt Motion. Included in one of the Applicant’s letters was the following statement:

However, we confirm our Counsel’s advice to the Court that our client was not primarily interested in the contempt proceedings provided your client carried out the terms of the Court Order and paid our client’s costs.

We believe our open offer makes our client’s stance abundantly clear in this regard.

28 In addition to the flurried exchange of correspondence on 1 August 2005, a few days later the parties’ Solicitors also engaged in a flurry of correspondence concerning the terms of the easements for support and to drain water required to be created by the Court’s Consent Orders. The inconclusive results of this exchange of correspondence appeared to be caused by the continuing dispute as to whether the easement to drain water required to be granted in favour of the Applicant would be compromised (as the Applicant contended but the Respondent denied) by the creation of an easement to drain water over the Respondent’s property in favour of an adjoining neighbour (two properties removed and downstream (in terms of drainage) from the Applicant’s property).

29 Included in that most recent exchange of correspondence was a further open offer by the Applicant for the case to be settled in accordance with draft terms provided by the Applicant (which terms included an order that the Respondent pay the Applicant’s costs of the Contempt Motion in the sum of $60,000).

30 This prompted the following response from the Respondent’s Solicitors, including their drawing attention to the failure of the Contempt Motion to comply with SCR Pt 42 r 8(3):

As you know, our client from the commencement of your client’s Motion for contempt has pleaded not guilty. Our client maintains the not guilty plea to the charge of contempt. To date, there has been no finding of contempt. On that basis, we do not see how it can be said that your client might obtain an order for costs in respect of the Motion for contempt,

We note the matter is listed for Wednesday, 10 August 2005 before Justice McClellan to argue costs. We will be contending that in the absence of any finding of contempt, it is not open to the Court to adjudicate and make an order as to costs.

Our advice from Senior Counsel is that due to your client’s failure to comply with Supreme Court Rule Part 42 Rule 8(3), the Motion for contempt will most likely be dismissed with costs. There are many other grounds upon which our client will rely upon in resisting the Motion for contempt.

As your are no doubt aware, contempt proceedings are criminal in nature. Our client proposes to defend any such contempt proceedings on that basis. Our client is, of course, not obliged to identify the evidence upon which he will rely. You must not therefore assume that in any contempt proceedings our client will be reading the Affidavits already filed and will be entitled to lead such evidence without notice to you as he might be advised.

Furthermore since the Rules of Evidence will be strictly applied, we shall be taking objection to most of your client’s affidavit evidence.

We would have thought that the hearing of the Motion for contempt would take two days or more. Given Justice McClellan’s involvement in trying to mediate and resolve this dispute, it would seem that he could not hear the Motion for contempt.

For the foregoing reasons, we do not understand what is proposed to be achieved on Wednesday, 10 August 2005 when the matter comes before the Court.

12 noon, Tuesday, 9 August 2005

31 Before the adjourned hearing came on before McClellan CJ, the Respondent filed and served upon the Applicant a written outline of submissions. Those submissions raised as fatal to the Contempt Motion the Applicant’s failure to comply with the requirements of SCR Pt 42 r 8(3). The matter came before McClellan CJ on 10 August 2005 and on 11 August 2005 when despite further urgings by his Honour for the parties to settle their dispute, it became apparent that it would be necessary for the Court to adjudicate upon the disputed Contempt Motion, his Honour disqualified himself from the case. It was in these circumstances that the Contempt Motion came to be heard by me, commencing on that very day, when the Respondent pleaded not guilty to the Contempt charges. The course the trial took was that the parties agreed that I should first hear and determine whether there had been a Contempt of Court committed by the Respondent. Accordingly, the Applicant presented his case and the Respondent did not go into evidence. Instead, the Respondent put to the forefront of his address the failure of the Contempt Motion to comply with the requirements of SCR Pt 42 r 8 and submitted that on that account the Contempt Motion should be dismissed with costs. Senior Counsel for the Respondent invited me to determine the Respondent’s objection to the competency of the Contempt process without proceeding to adjudicate upon the merits of the Contempt Motion.

C. THE RESPONDENT’S OBJECTION TO THE COMPETENCY OF THE CONTEMPT MOTION

32 As earlier mentioned, Part 42 of the SCR is included among a number of the Parts of those Rules that are adopted by the Rules of this Court: vide Part 6, Rules 1(1) and (5) and see also the Land and Environment Court Act 1979, s 20(4). Part 42 of the SCR is one of a number of series of Parts (42 to 49 inclusive) dealing with the enforcement of judgments and orders.

33 Part 42 Rules 6 and 8 relevantly provide as follows:

(3) ……………….

(4) ……………….

(1) Subject to the rules, a judgment shall not be enforced by committal or sequestration unless—

(2) Subject to the rules, where the person bound by a judgment is a corporation the judgment shall not be enforced by committal of an officer of the person bound or by sequestration of the property of an officer of the person bound unless, in addition to service under subrule (1) on the person bound—

(3) A minute of a judgment served under this rule must bear a notice (naming the persons concerned) that the person served is liable to imprisonment or to sequestration of property if—

cf RSC (Rev) 1965 O 45 r 7(4)

(4) ………………..

cf RSC (Rev) 1965 O 45 r 7(5)

34 As I have earlier stated, the Applicant has not disputed the fact asserted by the Respondent that the Respondent was not personally served with a Minute of the Court’s Consent Orders made on 20 May 2004 bearing the penalty notice warning of his liability to imprisonment or to sequestration of his property if he refused or neglected to do the acts that he is bound by the order to do.

35 Indeed, there is no evidence in the present case that the Respondent was personally served with a sealed copy of the Court’s orders (with or without the endorsement of the penalty notice) either at any time or in particular within the times that the Consent Orders specified the various acts to be done. Accordingly, in addition to the undisputed failure to comply with Part 42 Rule 8(3) (the penalty notice requirement), there is the further failure to comply with Part 42 Rule 8(1) (service before the expiry of the specified time). Failure to comply with each of the English Rules counterparts to Part 42 Rules 8(1) and 8(3) was held to be fatal to the Contempt Motion in Iberian Trust Ltd v Founders Trust and Investment Co Ltd (1932) 2 KB 87.

36 Rather, as earlier noted, the Applicant seeks to rely upon Pt 42 r 8(6) (on the basis of the Applicant’s evidence that the Respondent was in Court (having together with his Counsel, signed the handwritten draft of the Consent Orders) when Talbot J made the Consent Orders on 20 May 2004 and in the alternative upon the argument that Pt 42, Rules 8(1) and 8(3) “only restrict the enforcement of a judgment by committal or sequestration and do not prevent the court from enforcing its judgment by the imposition of a fine”. It was for these reasons that the Applicant submitted that the Respondent’s objection to the competency of the Contempt Motion did not preclude the Court from holding that the contempt as alleged was proved.

37 The cases cited in support of the Respondent’s argument that the Consent Orders are not enforceable because of the non-compliance by the Applicant with Part 42 r 8, uniformly affirm the necessity for strict observance of the rules and procedures applicable to proceedings for attachment and committal where the liberty of a person is placed in jeopardy.

38 In his judgment in Clifford v Middleton (1974) VR 737 upon which the Respondent relies, Kaye J surveys many of the earlier English authorities, including the decision of the English Court of Appeal in Gordon v Gordon (1946) P 99 where Greene MR stated at p 103:

Attachment and committal are very technical matters, and as orders for committal or attachment affect the liberty of the subject such rules as exist in relation to them must be strictly obeyed. However disobedient the party against whom the order is directed may be, unless the process of committal and attachment has been carried out strictly in accordance with the rule he is entitled to his freedom.

39 In Middleton Kaye J at 739 said:

Hall & Co v Trigg

Re Bramblevale Ltd

Comet Products U.K. Ltd. v. Hawker Plastics Ltd

Oswald on Contempt,

Re Tuck

Murch v. Loosemore

Gordon v. Gordon

Taylor v. Whelan

40 The more recent decisions of the High Court of Australia in Doyle v The Commonwealth (1985) 156 CLR 510 and Witham v Holloway entirely vindicate Kaye J’s analysis of the “penal” and “criminal” nature of attachment proceedings.

41 The decision of Kaye J in Middleton has been consistently followed in later Victorian decisions: for example see Westpac Banking Corporation v Maher (1995) BC 9502504; Primelife Corp Ltd v Newpark Pty Ltd (2003) VSC 106; and Miller v Eurovox Pty Ltd (2004) VSCA 211.

42 In Westpac Banking Corporation, Nathan J, speaking of the Victorian Rule requiring the endorsement of the penalty notice on the sealed order of the court said:

shall be endorsed with a notice naming the person served, that the person served is liable to imprisonment and to sequestration of property

43 In so concluding, Nathan J referred to the decision in Middleton and to the decision of Holland J in the NSW Supreme Court in Drummoyne Municipal Council v Lewis (1974) 1 NSWLR 655. The latter decision is cited by Ritchie’s Supreme Court Procedure at par 42.8.1 in support of this proposition:

However the court insists that the procedure for committal is strictly observed.

44 In Lewis, after concluding that the conduct of the defendants amounted to a disobedience of the Court’s orders, Holland J at 657 went on to observe “However, it is another question whether the plaintiff is entitled to have the orders enforced”. His Honour thereafter referred to Part 42 of the SCR noting that “it contains the rules upon which judgments may be enforced”. After reciting Rule 8 his Honour continues at 657/658:

This rule was not complied with in the present case. The council contented itself with writing a number of letters to the defendants stating that orders had been made in accordance with paragraphs in the summons which were referred to. The letters told the defendants that, if the orders were disobeyed, proceedings would be taken for contempt of court. At one stage, the defendants were told by such letters that an application would be made for their attachment.

A minute of the orders that were made was not served upon the defendants at all until the notice of motion was taken out and on that occasion, it is admitted by the defendants that they were served with an office copy of the orders, together with the notice of motion.

(6) Where a person liable to committal or sequestration of his property by way of enforcement of a judgment has notice of the judgment—(a) by being present when the judgment is directed to be entered or when the order is made; or (b) by being notified of the terms of the judgment whether by telephone, telegram or otherwise, the judgment may be enforced by committal of that person or by sequestration of his property notwithstanding that service has not been effected in accordance with this rule

imprisonment

It seems to me that these rules are so framed and the power of the Court so far reaching that the Court itself has a duty to see that the rules are obeyed, unless there are good grounds for disregarding them in a particular case. If they had been obeyed in the present case, I would have had no hesitation making an order committing the defendants for disobedience of the judgment, but I do not see any sufficient reason in the present case for permitting the rules to be disregarded.

45 In PrimelifeCorp, Nettle J had to determine a disputed Contempt Motion seeking the punishment of the defendant for failing to comply with a court order requiring him to attend for examination. One of the defences raised against the Contempt Motion was the failure of the order alleged to have been disobeyed to be endorsed with the required penalty notice. Upholding that objection, Nettle J said at par 31:

Re Modern Woodcraft Pty

46 Having so concluded, his Honour next proceeded to consider whether “it was appropriate to impose any other penalty or sanction on the defendant for his failure to comply with the order”.

47 After observing that the court had power to impose a fine for contempt of court in the case of civil contempt if it is thought appropriate to do so his Honour noted that in “Williams Civil Procedure in Victoria” it is said that a fine may not be imposed if the order served is not endorsed with the penalty notice. His Honour said at pars 34 and 35:

Although the rule does not refer to fines, and it would appear that the sanctions of committal and fine are used in contradistinction in O 75.11 of the Rules, the thought seems to be that there is not power to fine unless there is power to commit. Hence, if committal is prohibited by r66.10(3), so too must be the imposition of a fine.

As a matter of fairness that view has a degree of appeal about it. It is difficult to see why a subject should any more readily be subjected to a fine than to committal or sequestration without the warning for which r66.10(3) provides. But a different view of the matter has been taken in New South Wales and in the Federal Court and I think that I should follow it. With some diffidence I conclude that there is power to fine even if an order has not been indorsed in accordance with the rule.

Bourke Shire Council v Dwyer

48 In Eurovox, Vincent JA in the leading judgment of the Victorian Court of Appeal referred to Nettle J’s decision Primelife concerning the power of the Court to impose a fine for contempt where the order served did not include the penalty notice. After reciting the passage from Nettle J’s judgment that I have earlier cited, Vincent JA said at par 38:

Whilst his Honour’s concern about the possible unfairness of this approach is understandable, it is apparent, in my view, that a clear distinction is made in the Rules between the penalties of committal and sequestration on the one hand, and the imposition of a fine on the other. Order 66.10 is applicable only to the enforcement of orders by sequestration or committal. Under O 75.11 contempt may be punished, in the case of a natural person, by committal to prison or a fine or both. It does not seem to me that the absence of the endorsement required, if the order is to be enforced by possible imprisonment, would remove the power of the Court to impose a fine.

49 In my judgment, the failure of the Applicant to serve on the Respondent a sealed order within the times specified in the Court’s Consent Orders containing the required penalty notice involving non-compliance with Part 42 Rules 8(1) and (3) entirely sustain the Respondent’s legal objection to the competency of the Contempt Motion with the result that Part 42 r 8(1) precludes enforcement of the Court’s Consent Orders by committal or sequestration.

50 This result is subject to my adjudication upon the Applicant’s argument based upon two separate grounds, that non-compliance with Part 42 Rules 8(1) and (3) is not fatal to the Contempt Motion.

51 The first ground for the Applicant’s argument is founded on Part 42 Rule 8(6). In support of this ground, the Applicant relies upon the judgment of Powell J in Fullerton v Gardiner (31 October 1978) being one of the Practice Decisions included in Ritchie’s Supreme Court Procedure.

52 In that case, Powell J referred to Part 42 Rule 8(6) as conferring upon the Court the “discretion to proceed” notwithstanding that service of the Court’s order sought to be enforced by committal or sequestration had not been effected in accordance with the Rule.

53 Citing Lewis (where Holland J had likewise interpreted Rule 8(6) as conferring a discretion), Powell J stated that “the discretion is one which will normally be exercised sparingly, and only if there are good grounds”. In the event, his Honour exercised the discretion conferred by Rule 8(6) giving the following reasons:

This, however, seems to be a case in which the discretion should be exercised, for it is clear that the plaintiff not only knew of, and consented to, the terms of the injunction presently under consideration, but was present in court when the formal orders were made. Further, it is clear, even if I accept his evidence in its entirety, that the plaintiff appreciated, at the very least, that if he assaulted the defendant he would be in breach of the injunction, that he appreciated that any attempt to remove the child from the defendant’s care would be wrong, and, finally, that he appreciated that if he acted in defiance to the order of the court he would render himself liable to some form of penalty, which penalty, so he thought, would take the form of a fine of a bond to be of good behaviour.

54 The Applicant relies on his evidence that the Respondent was in Court when Talbot J made the Consent Orders on 20 May 2004, having earlier in the day, together with his Counsel, signed the handwritten draft form of those orders. It may safely be assumed that it was that handwritten draft that was handed to Talbot J when he propounded the Consent Orders (and the typed minute of those orders would have been issued subsequently by the Registrar).

55 The Applicant also relies upon the fact that the correspondence passing between the parties’ Solicitors and the Respondent’s affidavit filed in the proceedings (parts of which the Applicant tendered in his case), clearly demonstrated that the Respondent was aware of the Consent Orders.

56 But as I have earlier noted, the first allegation made by the Applicant of the Respondent being in Contempt of Court occurred in the Applicant’s letter dated 15 January 2005 (being a date after the expiry of all of the times specified in the Consent Orders for either the carrying out of physical works or the registration of the required easements). But more importantly, for present purposes, there is nothing in those documentary materials or in the circumstances in which Talbot J on 20 May 2004 made the Consent Orders which remotely warned the Respondent of his liability to imprisonment or sequestration if he refused or neglected to do the required acts within the times specified by the Consent Orders.

57 The absence of the penalty notice and the lack of precise warnings of the risk of imprisonment in the substitutionary communications given to the contemnor in Lewis, were held to be crucial procedural deficiencies.

58 In my judgment, the Applicant has not made out a case of special circumstances that would justify the Court to exercise the discretion conferred upon it by Rule 8(6) of Part 42.

59 The circumstances of the present case are very far removed from the circumstances (including the knowledge of the contemnor of the likely consequences of his disobeying the order) which inclined Powell J in Fullerton to exercise the discretion conferred by Rule 8(6).

60 Accordingly, the first ground of the Applicant’s argument must be rejected.

61 The second ground for the Applicant’s argument that non-compliance with Part 42 Rules 8(1) and (3) is irrelevant to the Court’s power to punish contempt by the imposition of a fine finds support in the Victorian decisions in Primelife and Eurovox where in each case, having held that the failure of the served orders to include the requisite penalty notice, although precluding the enforcement of the order by attachment or sequestration did not exclude the Court’s power to punish the contemnor by the imposition of a fine.

62 In Primelife, Nettle J reached that conclusion with “some diffidence” and in Eurovox, although Vincent JA thought that the question was “not clear”, he held the answer to emerge from the “clear distinction made in the Rules between the penalties of committal and sequestration on the one hand and the imposition of a fine on the other”. (His Honour was there referring to Orders 66.10 and Order 75.11 of the Victorian Court Rules which are similar to SCR Part 42 Rule 8(3) and Part 55 Rule 13.)

63 Senior Counsel for the Respondent submitted that the Victorian decisions turned on the Victorian Rules and the facts of the cases where it was obvious that each proceeding had sought the punishment of the contemnor for a past breach of court orders (which breach was incapable of being remedied by coercion). Accordingly, so it was submitted for the Respondent, the Victorian decisions are to be understood as examples of the Court considering the question of punishment for a contempt of Court by virtue of disobedience of Court orders. They were not cases involving the enforcement of Court orders by the Contempt process.

64 For these reasons, the Respondent submitted that the Victorian cases were distinguishable from the present case where the Applicant’s Contempt Motion from first to last has been for the enforcement of the Court’s Consent Orders by coercing the Respondent to do the acts that the orders required to be done by him.

65 The Respondent submitted that Applicant’s belated attempt to invoke the Court’s power to punish by way of fine, the Respondent as a contemnor, was nothing more than an opportunistic attempt to avoid the failure of the Applicant’s Contempt Motion on account of the Applicant’s failure to comply with Part 42 Rules 8(1) and (3).

66 Moreover, as I have earlier noted, the Respondent submitted that it is not now open to the Applicant, having regard to the manner in which the Contempt Motion has been prosecuted by him to attempt to convert the Contempt Motion for the enforcement of the Consent Orders into a Motion for the punishment of the Respondent.

67 This was because such a belated opportunistic forensic manoeuvre was both procedurally unfair, particularly in the context of contempt proceedings (inasmuch as the Applicant had consistently presented the Contempt Motion as the means of enforcing the Consent Orders by seeking the coercive remedies of imprisonment and sequestration) and substantively unfounded (inasmuch as no case of “wilful” disobedience on the part of the Respondent sufficient to justify punishment by fine, had been sought to be made out).

68 Notwithstanding some ambiguity in the content of the Applicant’s Contempt Motion (as set out in par 7 of these reasons), the purpose and object of that Motion that has been consistently declared by and on behalf of the Applicant (both in and out of this Court) has always been to coerce the Respondent to comply with the Consent Orders.

69 As originally presented, the clear object of the Contempt Motion was to enforce the Consent orders rather than to punish the Respondent.

70 Although as a result of action taken by the parties in accordance with the interlocutory hearings conducted by McClellan CJ, the position had been reached by the end of July 2005 where the physical works required to be done, were generally completed to the Applicant’s general satisfaction, continuing dispute over the question of costs and the registration of the required easements in favour of the Applicant’s land had driven the parties to engage in a contested trial on the Contempt Motion, the purpose and object of the Motion did not materially change (from being coercive and remedial to being punitive) except that a chief stake had become the very considerable legal costs that had been incurred in the proceedings.

71 In these circumstances, I think that the Respondent’s submission should be accepted that it is simply not open to the Applicant to unilaterally change the essential complexion of the Contempt Motion in a belated and desperate attempt to overcome the fatal consequences for the Applicant’s Contempt Motion (by way of enforcement of the Consent Orders) caused by procedural failures in terms of Part 42 Rules 8(1) and (2).

72 Of course this conclusion does not involve any questioning of the existence of the power of the Court “in some circumstances to imprison or fine by way of punishment for civil contempt” (per McHugh J in Witham at 542). Rather, it is simply to say that punishment of the Respondent for contempt was never an object of the Applicant’s Contempt Motion, until that Motion was perceived at the end of the trial to be foundering on the Applicant’s failure to comply with Part 42 Rules 8(1) and (3). (It may have been a different matter if the Applicant had sought leave to amend the Contempt Motion to make it clear that he was seeking the punishment of the Respondent for his past failures to comply with the Consent Orders, but any such application would have needed to be made well in advance of the trial of the Motion so that the Respondent would know the case he had to meet at trial.)

73 For the Applicant to seek to salvage his case on the Contempt Motion (to obtain a costs order against the Respondent and some coercive remedy in respect of the Respondent’s obligation to create and register the required easements) by making a bare or theoretical reference or appeal to the power of this Court to impose a fine by way of punishment for civil contempt, without having attempted to make out a case that such a judicial response would be appropriate in this case, is a disingenuous attempt to obtain a finding of contempt on the basis of a procedurally flawed contempt process.

74 Finally, I would note that the circumstances of the present case (especially in terms of the conduct of the Respondent) bear no relationship to the Primelife and Eurovox cases. Likewise they are very different from the facts in Bourke Shire Council v Dwyer (the decision of Talbot J cited and followed by Nettle J in Primelife) where his Honour, having found the contemnor guilty of a charge of contempt (to which the defendant had pleaded guilty) held that the failure to serve a copy of the Court orders bearing the endorsement of the penalty notice prescribed by Part 42 Rule 8(3) “was not an impediment to imposing a monetary penalty”.

75 The reasons for the imposition of a fine in that case were stated by his Honour at 186/187 as follows:

Section 23 of the Land and Environment Court Act 1979 (NSW) enables this Court to make orders of such kind as the Court thinks appropriate.
The rationale of the power of the Court to punish for contempt is that it is necessary to uphold the effective administration of justice by the Court.

In the present case, the disobedience of the Court's orders by the respondent is accompanied by public defiance. The disobedience was not casual, accidental and unintentional. It is in the public interest that a contempt of this character should be punished.

The orders of the Court have been held up to ridicule and the Court is not prepared to tolerate that behaviour.
The respondent is convicted of contempt as charged and fined the sum of $1,500.

76 Finally, I should mention in this context that at the trial on the Applicant’s Contempt Motion, the evidence of contempt by the Respondent of the Court’s consent orders did not seek to establish anything other than the fact that the physical works required to be undertaken by the Respondent within the times specified (generally two months from the date of the Consent Orders) had not been completed within those specified times and likewise that the easements required to be created and registered by the Respondent within the specified time (within 7 days of payment by the Applicant of the sum of $5,000) had not been created and registered within that specified time. In short, there was nothing in the Applicant’s evidentiary case that suggested that the failures by the Respondent to do the required acts within the specified times were caused by any defiance, obduracy or contumacy on the part of the Respondent or indeed by any “wilfulness” on his part other than in the sense of that term adopted by Warrington J in Stancomb v Trowbridge Urban Council (1910) 2 Ch 190 at 194:

wilfully

Fairclough v. Manchester Ship Canal Co. [[1897] W.N. 7.]

Mudginberri Station

77 For all of the foregoing reasons I would upheld the Respondent’s objections to the competency of the Contempt Motion based upon the Applicant’s failure to comply with Part 42 Rules 8(1) and (3) and I would reject the Applicant’s argument that the Contempt Motion is nonetheless viable and sufficient to support a finding of contempt because of the existence of the power of the Court to punish by fine a civil contempt.

78 In my opinion, a finding of contempt by the Respondent is not supportable outside the ambit and context of the Applicant’s Contempt Motion. That Motion sought the enforcement of the Court’s consent orders by the coercive remedies of imprisonment of the Respondent and sequestration of his property. Because of the Applicant’s failure to comply with Part 42 Rule 8(1) and (3) the consent orders are not enforceable in the manner claimed in the Contempt Motion.

79 Having regard to the exclusive manner in which the Applicant has consistently presented and ultimately prosecuted the Contempt Motion as a means of enforcing the Consent Orders, it is not open to the Applicant at the conclusion of the trial to seek to radically revamp the Contempt Motion as one seeking punishment of the Respondent by the imposition of a fine. Although in appropriate circumstances this Court undoubtedly possesses the power to punish by fine civil contempt (and has often exercised that power), this case is not such an appropriate case. The Applicant never has sought to make out such a case against the Respondent, and his belated attempt to invoke the power in order to support a finding of contempt to secure the benefit of a Costs Order is both procedurally unfair to the Respondent and substantively unsupportable by virtue of the nature of the Applicant’s case presented at the trial on the Contempt Motion.

D. CONCLUSIONS AND ORDERS

80 Although the parties at the trial invited me to consider only the question whether the charges of contempt were proved, having upheld the Respondent’s legal objection to the competency of the Applicant’s Contempt Motion (which was the principal stance taken by the Respondent at the trial in support of his plea of not guilty) and having rejected the Applicant’s attempts to overcome that objection, it is appropriate to give effect to those conclusions by dismissing pars 1, 2, 3 and 8 of the Contempt Motion.

81 In view of those conclusions, it is not necessary or appropriate for me to adjudicate upon charges of Contempt prosecuted by the Applicant at the trial.

82 This means that other claims in the Applicant’s Notice of Motion (not relevant to the charges of Contempt) remain outstanding. If the Applicant wishes to pursue them, he has liberty to restore the outstanding claims to the List Judge on three days’ notice. However, it is to be hoped that this will not be necessary and that good sense will prevail between the parties.

83 Although the Respondent has succeeded in his legal objection to the competency of the Contempt Motion and has obtained an order dismissing those claims in the Applicant’s Notice of Motion charging the Respondent with Contempt, I do not think that there should be any costs order made in his favour despite that considerable success. There are a number of reasons supporting this conclusion as to how the costs discretion vested in the Court should be exercised.

84 First and foremost, the Respondent should have raised the legal objection much earlier in the proceedings. It did not emerge until the parties prepared for the adjourned hearing before McClellan CJ on 10 August 2005. Before that, there had been multiple interlocutory hearings conducted by McClellan CJ between 16 March 2005 and 28 July 2005 when his Honour was urging the parties to settle and was giving directions to secure the completion of outstanding physical works required to be undertaken by the Respondent in terms of the Consent Orders. Costs were escalating during these interlocutory processes (many of which involved expenses incurred in obtaining the services of various experts to examine the works that had been undertaken and to agree upon a course that would see the completion of the required works (or satisfactory substitute works).

85 After the parties had locked themselves into the trial on the Contempt Motion, the Respondent’s legal objection to the competency of the Contempt Motion could, and should, have been taken in advance of the conduct of the trial on the Contempt Motion (taking at least two days).

86 Finally, there is the fact that in large measure, the Respondent may be said to have brought the proceedings on his own head (although an alternative course of action was available to the Applicant to restore the matter to the Court pursuant to the leave reserved in the Consent Orders).

87 Finally, there is the regrettable fact that both parties have incurred extravagant costs, largely because of the manner in which they have conducted themselves, throughout the litigation history.

88 The costs collectively expended are grossly disproportionate to the practical problems that emerged in the implementation of the Court’s mandatory orders.

89 Accordingly, I make the following orders—

1. Each of the claims made in pars 1, 2, 3 and 8 of the Applicant’s Notice of Motion filed on 23 February 2005 be dismissed.

2. If the Applicant wishes to pursue the remaining claims in his Notice of Motion, he has liberty to restore the matters to the List Judge on three days’ Notice.

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Citations

P F T McGirr v D Xenos [2006] NSWLEC 60

Most Recent Citation

Owners Strata Plan 37762 v Pham [2007] NSWLEC 252

Cases Citing This Decision

1

Owners Strata Plan 37762 v Pham and Ors [2007] NSWLEC 252

Cases Cited

6

Statutory Material Cited

1

Hearne v Street [2008] HCA 36

Witham v Holloway [1995] HCA 3

Hearne v Street [2008] HCA 36

CITATION:	P F T McGirr v D Xenos [2006] NSWLEC 60
PARTIES:	APPLICANT: P F T McGIRR RESPONDENT: D Xenos
FILE NUMBER(S):	31412 of 2003
CORAM:	Bignold J
KEY ISSUES:	Contempt :- Alleged failures to comply with Court’s Consent Orders—objection to competency of the Contempt Motion because of failure to comply with Rules of Court.
LEGISLATION CITED:	Supreme Court Rules 1970 (SCR), Part 42 Rule 8 and Part 55 Rule 13
CASES CITED:	Australian Meat Industry Employee’s Union v Mudginberri Station (1986) 161 CLR 98; Bourke Shire Council v Dwyer (1993) 79 LGERA 185; Clifford v Middleton (1974) VR 737; Doyle v The Commonwealth (1985) 156 CLR 510; Gordon v Gordon (1946) P99; Iberian Trust Ltd v Founders Trust and Investment Co Ltd (1932) 2 KB 87; Miller v Eurovox Pty Ltd (2004) VSCA 211; Primelife Corp Ltd v Newpark Pty Ltd (2003) VSC 106; Stancomb v Trowbridge Urban Council (1910) 2 Ch 190; Westpac Banking Corporation v Maher (1995) BC 9502504; Witham v Holloway (1995) 183 CLR 525
DATES OF HEARING:	11/08/2005, 15/08/2005, 17/08/2005, 02/09/2005
DATE OF JUDGMENT:	02/17/2006
LEGAL REPRESENTATIVES:	APPLICANT: Mr P W Larkin, Barrister SOLICITORS McGirr James Hall and Associates RESPONDENT: Mr T S Hale SC and Mr M S White, Barrister SOLICITORS Diamond Peisah & Co