R v Witt
[2016] VSC 19
•1 February 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2014 4690
IN THE MATTER of an application for contempt of Court made by Alexandra Ann Bennett, Martin Thorburn Jan Talacko and Rowena Kirsten Eve Talacko; and Alexandra Ann Bennett and David John Adams (as Executors of the Estate of Margaret Helen Beatrice Talacko)
| THE QUEEN | Plaintiff |
| v | |
| MICHAEL GEOFFREY WITT | Defendant |
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JUDGE: | J FORREST J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 26 November 2015 |
DATE OF JUDGMENT: | 1 February 2016 |
CASE MAY BE CITED AS: | The Queen v Witt |
MEDIUM NEUTRAL CITATION: | [2016] VSC 19 (Second revision 1 March 2016) |
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CONTEMPT – Client legal privilege – Loss of privilege by commission of fraud – Email from solicitor on record to client – Private correspondence – History of client’s defiance of court orders and authority – Whether conduct of solicitor encouraged further disregard for Court’s orders and authority.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr S Howells Dr M Sharpe | Tolhurst Druce & Emmerson Lawyers |
| For the Defendant | Mr R Meldrum QC Mr J Kewley | Holman Webb Lawyers |
HIS HONOUR:
Introduction
The late Jan Talacko was involved in litigation in this Court for nearly twenty years. He was disingenuous and deceitful. He did everything he could to frustrate the processes of this Court. For much of his litigation he engaged the defendant, Michael Witt, to act as his solicitor.
Mr Witt’s communications with his client would usually have been the subject of client legal privilege. However, as the result of orders made by a judge of this Court (and upheld on appeal), email communications between Mr Witt and Jan Talacko came to light. One email, of 18 July 2009, is the basis for the charges of contempt of court, nominally brought by the Queen, but in practice prosecuted by Jan Talacko’s relatives – Alexandra Bennett, Martin Talacko and Rowena Talacko, as well as Alexandra Bennett and David Adams in their capacity as executors of the estate of Margaret Talacko (Peter Talacko’s widow) – who have been defrauded by his behaviour.
In the originating motion filed 5 September 2014, five charges were brought against Mr Witt for civil contempt of court. By the time the matter came on before me, three charges remained to be determined. One of those (charge five) was withdrawn as it was, in effect, a duplicate of another charge (charge four).
The essence of the two extant charges is that Mr Witt:
(a) disparaged the Court and, in doing so, was bound to prompt Jan Talacko and his family (Judy, Nicky and Peter Talacko) to misunderstand and disregard the law, and the Court and its orders (charge three); and
(b) deliberately chose not to pass on to Jan Talacko’s two sons (Paul and David) orders of the Court which injuncted them from taking any further action pursuant to a scheme developed by Jan and his sons to frustrate the processes of this Court and defraud other members of the family; in effect advising or encouraging Jan Talacko to engage in a policy of avoiding orders of the Court (charge four).
Charge four is admitted by Mr Witt and will be dealt with at a later point in time. Charge three remains in issue and is the subject of these reasons.
Ultimately, I have determined that charge three is not made out and that any penalty will relate solely to charge four.
Background
Much ink has been spilt by judges of this Court setting out the various twists and turns of this extraordinary saga. I will endeavour to avoid repetition. However, in order to understand the nature of the alleged contempt, it is necessary to set out some of the facts, especially those of 2009. I have drawn on a number judgments of this Court in doing so; in particular, those of Kyrou and McDonald JJ.[1]
[1][2009] VSC 349, [4]–[13]; [2015] VSC 287 [7]–[26].
Prior to World War II, Jan Talacko’s parents owned properties in what is now the Czech Republic, Slovakia and Germany. After the war, his parents migrated to Australia. The properties were appropriated by the Czech State.
In 1992, the Czech State began restitution of private property appropriated during the War by the communist government, which ruled from 1948 until 1989. Jan Talacko and his siblings sought to reclaim their parents’ property.
In March 1991, Jan Talacko agreed with his sister Helena, and brother Peter, to share equally in the restored property. It is this agreement which has produced over fifteen years of litigation – which still continues.
Jan Talacko was the only sibling who satisfied the criteria for restitution at that time – he was both resident and citizen of the Czech Republic at the time of making the claim. The properties in the Czech Republic were returned to him in March 1992.
In October 1998, a proceeding was issued in this Court in respect of an agreement reached between Jan Talacko and his siblings (the ‘1998 proceeding’), commenced by Margaret the widow of his brother Peter (as his executor), their three children (Alexander, Martin and Rowena), and Helena (Jan Talacko’s sister), who sued by her litigation guardian, her son (also Jan). The plaintiffs claimed an equitable interest in the properties held by Jan Talacko on the basis that it was agreed that they would share equally in the restitution of the properties.
I should note that in September 1998, a few days before the commencement of the 1998 proceeding, Jan Talacko transferred his interest in the family home in Glenferrie Road, Malvern, to his wife, Judith Talacko. The transfer was registered on 16 October 1998.
The trial of the 1998 proceeding commenced in February 2001 before Ashley J. After openings on 21 February 2001, the parties mediated and ultimately signed terms of settlement on 23 February 2001 (the ‘terms’). The terms required the transfer by Jan Talacko of all rights, title and interest in certain Czech properties to the plaintiffs (or nominees) and that Jan Talacko would not deal with the properties otherwise than in accordance with the terms.
Jan Talacko did not transfer the properties in accordance with the terms. The plaintiffs subsequently reinstated the 1998 proceeding in November 2005.
On 24 April 2008, Osborn J found that Jan Talacko had breached the terms and ordered equitable compensation to the plaintiffs for his breach of fiduciary duties.
On 20 June 2008, Senior Counsel for Jan Talacko had the following exchange with Osborn J:[2]
[2]Talacko v Talacko [2008] VSC 246.
MR BERGLUND: Your Honour, if I can address the question of the spectre of disposition having been raised.
HIS HONOUR: Yes.
MR BERGLUND: The judgment and the injunction was ex parte.
HIS HONOUR: Yes.
MR BERGLUND: My client says that he had no intention of disposing of the assets, and the court said, if he has no intention. But he didn’t say it to the court when the injunction was raised. It was ex parte, and - - -
HIS HONOUR: He can undertake to this court not to dispose of them. There’s no – if he did that that simplifies it all.
MR BERGLUND: That’s right.
HIS HONOUR: If he did that, you would say there would be no reason at all to maintain the Czech proceedings.
MR BERGLUND: No.
HIS HONOUR: Yes, I understand.
MR BERGLUND: Those are the issues, and we ought not to be diverted from the spectre of it being disposed of because it was ex parte. There was no indication that he was intending to dispose of it, they just said, well you know we just want an injunction to restraining him from doing it.
A few months later, in response to an application for a freezing order against Jan Talacko, he swore an affidavit on 9 September 2008, which said:
…My sole intention with respect to the properties is to continue to rehabilitate and modernise them to a comparable state to which they were prior to them being forcibly taken from my parents. I have no intention of selling, disposing, encumbering or in any other way dealing with the properties other than in the normal course of letting some of them out on normal commercial terms where that is permitted…
Contrary to the representations at [17] and [18], and central to the current charges before the Court, was the execution of a donation agreement in May 2009. Jan Talacko transferred his interest in the Czech properties (and other properties in Slovakia and Germany) to his two sons, David and Paul, who, at that time, were alleged to be residents of Prague. The transfer was effected by way of gift.[3]
[3]I note that in Talacko (as executor of Estate of Talacko) v Talacko [2015] VSC 287, McDonald J held that the transfer of the interests in the Glenferrie Road property was voidable given its intent to defraud creditors, pursuant to Property Law Act 1958 (Vic) s 172.
The overseas properties which were the subject of the donation agreement comprised five substantial buildings in the centre of Prague, land in Kbely (a suburb of the Czech capital), horticultural land on the outskirts of that city (in Repy), a forest at Sucha (in what is now the Slovak Republic), and an apartment and adjacent land in Dresden, eastern Germany.
I should mention here McDonald J’s finding in August 2015 that the donation agreement constituted equitable fraud:
I have no hesitation in concluding that the predominant purpose of the first to third defendants in executing the Donation Agreement was to advance the defendants’ own interests by preserving the relevant properties within the Talacko family.[4]
[4]Talacko (as executor of Estate of Talacko) v Talacko [2015] VSC 287, [58].
After becoming aware of the donation agreement, the plaintiffs sought, and were granted, orders by Kyrou J on 11 June 2009 which:
(a) restrained Jan Talacko from taking any further steps in relation to, or dealing in any way with, the properties until 4.15pm on 23 June 2009, or further order; and
(b) ordered him to withdraw any application for transfer of the properties to his sons.
On 23 June 2009, Kyrou J extended these orders until 16 July 2009.
On 13 July 2009, following an application by the plaintiffs for contempt based on non-compliance with the orders of 11 and 23 June 2009, Bongiorno J issued an arrest warrant for Jan Talacko. He was arrested at Melbourne Airport and remanded in custody. He told blatant lies as to his purpose for departing Australia.
The next day, on 14 July 2009, Jan Talacko appeared before Byrne J who dismissed the summons for contempt on a technicality, based on non-compliance with the Supreme Court (General Civil Procedure) Rules 2005. However, Byrne J granted an injunction which prevented Jan Talacko from leaving Victoria until the conclusion of the contempt proceeding.
On 16 July 2009, Kyrou J made orders that restrained Jan Talacko from taking any further steps in relation to the properties (which were the subject of the 11 June 2009 orders). I set out the precise form of orders at [34] below.
On 17 July 2009, the following day, and in a fresh proceeding issued by the plaintiffs against Jan, David, Paul and Judith Talacko (the ‘2009 proceeding’), Kyrou J made orders restraining each of them from registering the transfer of those properties. I set out the precise form of the orders at [35] below.
Despite providing the Court with evidence demonstrating compliance with those orders, Jan Talacko’s Czech attorney had sent a letter dated 17 June 2009 to the real estate registry in Prague providing information required for the purpose of progressing the registration of the transfer.
The second stage of trial in the 1998 proceeding resumed on 7 October 2009 before Kyrou J, and involved the assessment of equitable compensation. On 24 November 2009, his Honour gave judgment against Jan Talacko in the sum of €10,073,818.
Jan Talacko appealed the decisions of Osborn J and Kyrou J. Each was dismissed by the Court of Appeal on 18 March 2011.[5] Regarding Jan Talacko’s conduct in relation to the transfers, the Court of Appeal said:
Jan’s problem is that, no matter how many barriers he may have erected against particular positions taken by the respondents, and no matter how many of their allegations he may have formally denied, he has never by evidence confronted the gravamen of their case. It is that he has received property the title to which has as its foundation nothing better than that he is the child of his parents. But his parents had not one, but three, children. Each of the other two assert a claim, the equal of that of their brother, to a beneficial interest in that property. By contrast, he has failed to advance even the semblance of an argument in support of the proposition that, once due allowance has been made for the trouble and expense he has incurred in the process of effecting the restitution of this property, his beneficial interest in it should trump that of his two siblings, Helena and Peter (or, rather, in the case of Peter, Peter’s descendants) – in other words, the respondents.[6]
[5]Talacko v Talacko [2011] VSCA 71. The High Court refused to grant special leave, see Talacko v Talacko [2011] HCATrans 301.
[6]Ibid [57].
Jan Talacko did not pay the amount ordered by Kyrou J and affirmed by the Court of Appeal. He was declared bankrupt on 7 November 2011 and a sequestration order was made against his estate.
In July 2014, Elliott J concluded that there were reasonable grounds for concluding that a number of documents over which legal privilege was claimed by Jan Talacko were prepared in furtherance of the commission of a fraud. His Honour said, of the email which forms the basis of these contempt charges:
… (6) Document 6 is dated 18 July 2009. It is an email from a lawyer. It relates to steps to be or not to be taken to ensure the transactions the subject of the Transfer Arrangements of May 2009 were able to proceed. It is a document prepared in furtherance of the commission of a fraud.[7]
[7]Talacko v Talacko [2014] VSC 328, [81].
A number of other proceedings (and rulings or judgments) relating to the dispute have been filed and determined in this Court and in the Czech Republic. It is not necessary to refer to those in any detail, save to say that, as things presently stand, the Czech properties remain in the name of Jan’s two sons, Paul and David Talacko – each of whom reside in the Czech Republic.
Orders of Kyrou J made 16 and 17 July 2009
On 16 July 2009, Kyrou J made orders in the 1998 proceeding in which Jan Talacko was the defendant. These orders read as follows:
THE COURT ORDERS THAT:
1. Until 4.15pm on 24 July 2009 or further order, the Defendant be restrained from taking any further steps by himself or by his employees, agents or attorneys for the purpose of or in furtherance of selling, transferring, donating or otherwise dealing with any of the properties listed in Attachment A to this Order (‘Properties’).
2. Until 4.15pm on 24 July 2009 or further order, the Defendant take all such steps as he is able to take to withdraw any application(s) for transfers and any documents relating to applications or transactions that he, or his employees, agents or attorneys have lodged with the Real Estate Registry of the Capital City of Prague in the Czech Republic, or any other like Registry, in respect of any of the Properties.
3. Until 4.15pm on 24 July 2009 or further order, the Plaintiffs are relieved from the most recent Undertakings filed with the Court, namely:
a. Undertaking of Jan Talacko (as litigation guardian for Helena Marie Talacko) dated 26 March 2009;
b. Undertaking of Alexandra Bennett dated 14 May 2009;
c. Undertaking of Martin Talacko dated 27 March 2009;
d. Undertaking of Rowena Talacko dated 27 March 2009; and
e. Undertaking of Margaret Helen Beatrice Talacko dated 14 May 2009,
but only in so far as is necessary for them to make an application and have that application heard in the District Court of Prague seeking similar orders o those in paragraphs 1 and 2 of this Order in the Czech Republic and any appeal against the refusal of such an application.
4. The defendant sign a clean copy of the letter which is exhibit “JET-2” to his affidavit sworn on 26 June 2009 and deliver the original of the signed letter to Holding Redlich by noon on 17 July 2009.
5. The Defendant send a letter to the Cadastral Registrar in Prague both by post and by fax by 5.00pm on 17 July 2009 in which he:
a. requests the Cadastral Registrar not to take any further steps to register the transfers to his sons, David Talacko and Paul Talacko, of the properies listed in the attachment to the letter; and
b. advises that his attorney, Daniela Buresova is not authorised to take any further steps in furtherance of or for the purpose of the registration of the transfers to David Talacko and Paul Talacko of the properties listed in the attachment to the letter,
and that he:
c. attach to the letter the document which is attachment A to this Order; and
d. send by fax a copy of the letter to Holding Redlich by 5.00pm on 17 July 2009....
On 17 July 2009, Kyrou J made orders in the 2009 proceeding as follows:
THE COURT ORDERS THAT:
1.Until 4.15pm on 24 July 2009 or further order, the Secondnamed Defendant, David Talacko and the Thirdnamed Defendant, Paul Anthony Talacko, be restrained from taking any further steps by themselves or their employees, agents or attorneys for the purpose of or in furtherance of the registration of the transfers to them of the properties listed in attachment A to this Order.
2.The Plaintiffs have leave to serve the Second and Thirdnamed Defendants outside of Australia of the following:
(a) the summons filed 17 July 2009;
(b) the affidavit of Howard Roger Rapke sworn 17 July 2009; and
(c) this Order.
3.The Plaintiffs have leave to file by 4.00pm on 22 July 2009 any further affidavits in support of the summons filed 17 July 2009 and to serve such affidavits as soon as possible after filing them.
4.The Plaintiffs’ summons be adjourned to 10.30am on 24 July 2009 before Justice Kyrou.
5. The costs of today are reserved.
6.This order be signed by the Judge pursuant to Rule 60.04 of the Supreme Court (General Civil Procedure) Rules 2005.
INDORSMENT
TAKE NOTICE that you, DAVID TALACKO and PAUL ANTHONY TALACKO, the Second and Thirdnamed Defendants in this proceeding, are served with this Order and that you are liable to imprisonment or to sequestration of your property if you disobey this Order by doing an act which this Order requires you to abstain from doing.
The email
Below is a redacted version of the email sent by Mr Witt in the early hours of 18 July 2009, to his then client, Jan Talacko, and Jan’s wife, Judy Talacko (copying in Nicky and Peter Talacko). The ‘new case’ refers to the 2009 proceeding. The email referred to the orders of Kyrou J set out at [25]–[26] which injuncted Paul and David from disposing of the properties, and reads as follows:
Dear All
…
In the new case the Judge made orders against Paul and David restraining them from trying to progress the transfers. That he felt that he had power and/ or jurisdiction to do this is surprising but nothing surprises me in this case anymore. He also attached a contempt endorsement to these orders.
I have deliberately left Paul and David off this email as I do not want it to be able to be said that they had any notice or knowledge of the orders made against them because for so long as they do not have notice of this then they cannot be in contempt if they do not comply. I therefore strongly advise that no one tells Paul or David anything about this new case other than to warn them to look out for process servers in Prague.
Regards
Michael Witt
The charges
Charge three
Charge three in the originating motion reads as follows:
That Michael Witt an officer of the Court be dealt with for Contempt in the face of the Court namely that on 18 July 2009 he did communicate with his client Jan Emil Talacko and his client’s wife Judith Talacko and their children Peter Talacko and Nicole Talacko in a manner that disparaged the Court in proceeding 7819 of 2009 and was bound to prompt the Defendants in that proceeding to misunderstand and disregard the law and the Court and its Orders and thereby fostered and encouraged contumacious and contumelious disregard of the Court and the law.
The particulars of the charge are as follows:
The email dated 18 July 2009 contained the words “In the new case the Judge made orders against Paul and David restraining them from trying to progress the transfers. That he felt he had power and/ or jurisdiction to do this is surprising but nothing surprises me in this case anymore. He also attached a contempt endorsement to these orders”.
Charge four
Charge four is as follows:
That Michael Witt an officer of the Court be dealt with for Contempt of Court namely that on 18 July 2009 being an officer of the Court he did communicate with his client Jan Emil Talacko and his wife Judith Talacko and their children Peter Talacko and Nicole Talacko and sought to prevent the Second and Third Defendants from being apprised of the Orders made on 17 July 2009 in proceeding 7819 of 2009 and thereby to frustrate the intended effect of those Orders.
The particulars of the charge are as follows:
The email dated 18 July 2009 contained the words “I have deliberately left Paul and David off this email as I do not want it to be able to be said that they had any notice or knowledge of the orders made against them because for so long as they do not have notice of this then they cannot be in contempt if they do not comply. I therefore strongly advise that no one tells Paul or David anything about this new case other than to warn them to look out for process servers in Prague.”
Evidence on the application
Affidavits were filed by David Phelan and Faten Award (acting on behalf of the Talacko relatives), Mr Witt, Daryl Williams QC and Robert Belcher (on behalf of Mr Witt). Mr Williams acted for Jan Talacko between 2005 and 2011; and Mr Belcher was a client of Mr Witt’s since 2002.
Mr Witt also gave viva voce evidence at trial and was cross-examined. Relevant to this charge, he said that:
(a) David Findlay, a partner at the same firm (and a friend of Jan Talacko) was acting for Jan in the 1998 proceeding; Mr Witt commenced acting for Jan in 2005;
(b) he sent the email in question at 5.55 am;
(c) at the time of sending the email, he was aware:
(i) that Jan Talacko had sought to transfer some properties in the Czech Republic to his sons residing in Prague;
(ii) of his client’s instructions to Senior Counsel which resulted in Senior Counsel’s exchange with Osborn J on 20 June 2008 regarding Jan Talacko’s intention to dispose of the properties in question;
(iii) of his client’s intention to avoid judgment creditors (which showed an underlying intention to avoid the Court’s judgment being given effect to); and
(d) he prepared the 9 September 2008 affidavit of Jan Talacko, in which Jan Talacko swore that had no intention of dealing with the properties in question other than on normal commercial terms, where permitted (which was based on his client’s instructions).
In relation to charge three and the contents of the email, Mr Witt said:
(a) ‘perhaps I could have had the language toned down slightly’; and
(b) ‘I’m very embarrassed by the email; I was appalled when I re-read it, when this proceeding came to light, and I am very sorry about it.’
Legal principles
First, in a civil contempt case, the Court is required to assess whether the impugned conduct had the capacity to interfere with, or obstruct, the proper administration of justice in this Court.[8]
[8]Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25.
Second, despite being civil in nature, the onus is on the moving party to prove the charges made against Mr Witt beyond reasonable doubt.[9]
[9]Witham v Holloway (1995) 183 CLR 525; Talacko v Talacko [2009] VSC 387; Grocon Constructors (Victoria) Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] VSC 275.
Third, it is not necessary to prove that Mr Witt intended to interfere, specifically, with the administration of justice; rather, it is sufficient to establish that he deliberately and voluntarily intended to commit the acts or omissions alleged to constitute the contempt.
Fourth, there are established categories of contempt which were identified by the Court of Appeal in Morgan v The State of Victoria,[10] as follows:
[10](2008) 22 VR 237 (‘Morgan’).
(a) disobedience to a judgment or order for the payment of money to a person or into court or breach of an undertaking to make such a payment;
(b) disobedience to a judgment or order requiring a person to do any act other than the payment of money, or to abstain from doing anything or breach of undertaking to the same effect;
(c) failure to comply with a judgment for the delivery of goods or payment of its assessed value;
(d) failure to comply with a judgment for possession of land;
(e) failure by a solicitor to give notice to his or her client of an order for interrogatories or discovery or inspection of documents;
(f) failure of a party to comply with an order for interrogatories or discovery or inspection of documents; and
(g) wilful disobedience by a corporation.[11]
[11]Ibid 258, [110].
Fifth, the categories are not closed; it remains open to the Court to determine whether a novel case constitutes a contempt of court.
Sixth, it is not necessary that a person be a party to a proceeding or the subject of the relevant order to be guilty of contempt. Cases of non-party or non-subject order contempt are rare, but can be found. Whether a third party, not bound by an order of the Court, can be liable for contempt of court by aiding and abetting a breach of that order was considered in an old English case of Seaward v Paterson.[12]
[12][1897] 1 Ch 545 (‘Seaward’).
In Seaward, the plaintiff leased three floors of a property in Fetter Lane, London to the defendant, Paterson. The lease contained a covenant by the defendant that he would not, without the plaintiff’s prior written consent, do, or suffer anything, which may affect the plaintiff’s, and the neighbours’, enjoyment of their properties. A year later, the plaintiff initiated proceedings, seeking an injunction which restrained the defendant from breaching the covenant. The plaintiff alleged that the defendant was using the premises for boxing matches which caused a nuisance to the owners and occupiers of adjoining properties. Permanent injunctive relief was granted, and orders made restraining the defendant, his undertenants, agents and servants from interfering with the full and quiet enjoyment of the property by the plaintiff and neighbouring owners and occupiers of their properties. The plaintiff also claimed that, in addition to the defendant’s breach of covenant, two others – Murray and Sheppard – had assisted the breach. Sheppard was the master of ceremonies. Murray was a Svengali character who regularly attended the matches and was involved in their organisation. Although not bound by the terms of the injunction, both were on notice of the terms of the order at the relevant time.
Paterson and Murray were both found to be in contempt and sentenced to one month’s imprisonment. Sheppard received a lesser sentence of a fortnight’s imprisonment as he was Paterson’s servant.
On appeal, Lindley LJ affirmed the decision and held that the injunction restrained Paterson and his servants and agents. In addition, it could be enforced against Murray, although not a party to the action:
Now, let us consider what jurisdiction the Court has to make an order against Murray. There is no injunction against him – he is no more bound by the injunction granted against Paterson than any other member of the public. He is bound, like other members of the public, not to interfere with, and not to obstruct, the course of justice; and the case, if any, made against him must be this – not that he has technically infringed the injunction, which was not granted against him in any sense of the word, but that he has been aiding and abetting others in setting the Court at defiance, and deliberately treating the order of the Court as unworthy of notice. If he has so conducted himself, it is perfectly idle to say that there is no jurisdiction to attach him for contempt as distinguished from a breach of the injunction, which has a technical meaning ... It has always been familiar doctrine ... that the orders of the Court ought to be obeyed, and could not be set at nought and violated by any member of the public, either by interfering with the officers of the Court, or by assisting those who were bound by its orders.[13]
[13]Ibid 554.
Notwithstanding its age, the principle still holds good. Kaye J in Queen v Hinch:[14] recently said of the decision in Seaward:
It is well established that a person, not directly bound by an order, is guilty of contempt of court if that person, with knowledge of the order, does an act which infringes, or frustrates, the efficacy of the order, and thus interferes with the due administration of justice.[15]
[14][2013] VSC 520.
[15]Ibid [55].
Analysis of the third charge
The gist of charge three is that Mr Witt demeaned the Court and, more importantly, denigrated the Court in the eyes of Jan Talacko – a man who already had scant, if any, regard for the orders or authority of the Court.
As far as I am aware, this charge is novel; it does not fall within any of the established categories of contempt as set out in Morgan. Its novelty is probably due to two factors: the impugned conduct having been recorded in an email, and the disclosure of correspondence which the author assumed would attract lawyer/client privilege.
As may be apparent from the background facts, I accept the proposition advanced by the plaintiffs’ counsel that the conduct of Mr Witt and the contents of the email must be viewed in the context of Jan Talacko’s constant efforts to frustrate the processes of this Court and engage in patently fraudulent conduct.
I also accept that by 18 July 2009, Mr Witt was, or ought to have been, acutely aware of Jan Talacko’s nature and his constant and flagrant disregard of Court orders. In addition, his client’s antipathy towards the Court’s authority, more generally, must also have been known to Mr Witt. In particular, he must have known of his client’s:
(a) breach of terms of settlement; and
(b) transfer of his interests in properties in the Czech Republic to Paul and David in defiance of Court orders, and in circumstances where Jan Talacko or counsel acting on his instructions had given assurances to the Court that he would not do so.
The plaintiffs submitted that the whole email, read in the context of Mr Witt’s relationship with Jan Talacko, was inflammatory and, in effect, encouraged his already recalcitrant client to continue his pattern of avoiding Court processes and the authority of the Court.
It was submitted that Mr Witt, by this time, and in light of the Court’s orders and his knowledge of his client’s propensity to disregard them, ought to have been on notice of the need to emphasise to his client the need for compliance with Court orders, and, more generally, an appreciation of the Court’s authority.
It is important in analysing this charge to distinguish it from charge four, which also emanates from the email. That charge is serious and, as I mentioned earlier, centres on Mr Witt’s decision to quarantine the two sons from any information concerning the 17 July injunction of Kyrou J.
The particulars of charge three demonstrate that it turns upon the implication to be drawn from Mr Witt’s comments concerning the Court’s belief that it had jurisdiction and that ‘nothing surprises me in this case anymore’.
As was conceded by Mr Witt, he was far too close to his client, and, notwithstanding his own knowledge of his client’s mendacity and duplicity, was unable to bring an objective mind to the litigation.
It is trite that a solicitor owes a duty both to his or her client and to the Court. At times delineating the parameters of a solicitor’s duty to the client, and where it intersects with that to the Court, is difficult.
It seems to me that there are three matters which, in determining the outcome of this charge, I must take into account.
First, the common law upholds the right of any person to freedom of speech and expression.[16] Such rights, of course, extend to criticism of judicial decision making. Lawyers and litigants are perfectly entitled to discuss decisions made in the course of litigation in which they are involved. They are entitled to an opinion – and, more to the point, to express an opinion – as to the appropriateness of a judge’s determination, be it in civil or criminal matters. The courts cannot be, and are not, immune from criticism which may extend to robust observations of a particular decision or penalty. As French CJ said in Attorney-General (SA) v Corporation of the City of Adelaide:[17]
… Freedom of speech is a long-established common law freedom. It has been linked to the proper functioning of representative democracies and on that basis has informed the application of public interest considerations to claimed restraints upon publication of information. It is never more powerful than when it involves the discussion and criticism of public authorities and institutions, be they legislative, executive or judicial. An example of its strength in that context is the common law impediment to local authorities and public authorities suing for defamation. The "paramount importance" accorded to freedom of expression and of criticism of public institutions has also played a part in the development of the principles of the law of contempt. It played a part in the reasoning of this Court in Davis v The Commonwealth in the characterisation, for constitutional purposes, of legislation said to be incidental to a substantive head of power. It was also identified as a material consideration in similar reasoning adopted by Mason CJ in Nationwide News Pty Ltd v Wills… [18]
[16]Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39, 52; Davis v Commonwealth (1988) 166 CLR 79, 100; Nationwide News Pty Ltd v Wills (1992) 177 CLR 1, 31; Attorney-General (SA) v Adelaide City Corporation (2013) 249 CLR 1, 31–32 [43] (French CJ); 67–68 [151]–[152] (Heydon J).
[17](2013) 249 CLR 1.
[18]Ibid 31–32 [43]. See also Tajjour v New South Wales; Hawthorne v New South Wales; Forster v New South Wales [2014] HCA 35, [28].
Second, notwithstanding the first proposition there is, in this country, no constitutional guarantee of these rights and there are restrictions on their exercise. As the Chief Justice explained above, the law of defamation is one limitation. Contempt of court is another. There will be times at which criticism of a judicial officer goes beyond the parameters of a legitimate exercise of free speech. Public criticism of a judge may, depending on the circumstances, be inimical to the administration of justice. There are several instances where intemperate and unjustified criticism of the judiciary, in public, has resulted in the laying of contempt charges. However, those cases are, generally speaking, extreme and rare.
One extreme example is that of Attorney-General for the State of Victoria v Rich[19] where the respondent, Hugo Rich, made threatening, abusive and offensive comments to both the trial judge and the prosecutor while on trial for armed robbery and theft in the County Court.
[19][1998] VSC 41, [43] (Citations omitted).
After being placed in the dock for the purpose of his arraignment and empanelment of the jury, Rich refused to be arraigned and threatened to leave the court if a jury was empanelled. He then described the proceedings as ‘a sham and illegal’ and accused the Judge of having resolved to obtain his conviction from day one. Rich referred to the Judge as ‘a silly old dog’ and a ‘rat’.[20]
[20]Ibid [6].
Byrne J of this Court dealt with the charges of contempt. His Honour was satisfied that Rich’s conduct amounted to contempt of court, and said:
In cases such as this where an accused addresses the judge on the bench deliberately in terms which are abusive and offensive or deliberately directs threats to injure or kill counsel, I doubt very much whether this Court should be concerned with an inquiry as to what was the actual purpose of the contemnor.[21]
[21]Ibid [16].
His Honour also said that:
It is apparent from the nature of the acts themselves that they have a tendency to interfere with the course of justice by scandalising the court in the one case and by dissuading or punishing counsel for having performed her duty in the conduct of the trial, on the other.[22]
[22]Ibid.
Third, a court should not lightly characterise a private critical observation of its performance as constituting a contempt of court. This is a necessary corollary of the first proposition. Indeed, any case of contempt needs to be treated cautiously. As Lindley LJ said in Seaward:
I agree with the counsel for the appellant that this case is of importance, and that the Court ought to be very chary in committing people for contempt, particularly in cases of fanciful contempt. The Court, unless it is to become useless, must deal with such questions in the interest of the public, bearing in mind that the greater the power it possesses the more caution it is necessary to use in exercising it…[23]
[23]Seaward [1887] 1 Ch 545, 553.
I accept that the contents of the email impliedly conveyed to the recipients, and particularly Jan Talacko, both dissatisfaction with the orders of Kyrou J, as well as a questioning of the legality of the orders. However, for the following reasons, it did not constitute a contempt of court.
The email was a private communication from Mr Witt to his client and family members which contained observations as to the Court’s ruling. It was not broadcast publicly. Whilst I accept that there may be cases where the contents of a private communication constitute a contempt of court (such as charge four), in my opinion, a comment concerning the correctness of a decision of a Court could not, absent exceptional circumstances, amount to contempt of the Court.
The email did not contain hostile or intemperate criticism of the Court. Indeed many would not raise an eyebrow as to its contents. What distinguishes it here is the context; specifically, the rogue nature of Jan Talacko. But that does not elevate an opaque and, at worst, snide observation to a client, to a contempt of court.
Perhaps Mr Witt ought to have known that the contents of his email would potentially exacerbate Jan Talacko’s disregard for the Court’s authority. However, I think that no comment, no matter how disparaging, would have had any real effect on Jan Talacko. By this stage of the litigation, he was determined to circumvent orders of the Court and it is highly unlikely that advice one way or the other would have any effect upon him.
Mr Witt’s comments do not amount to contempt. There was, in my opinion, no genuine affront to judicial authority and certainly not one which falls within the principles set out above.
Charge 3 should be dismissed.
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