Ryan v Novartis Animal Health Australasia Pty Ltd
[2014] FCCA 1242
•24 June 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| RYAN v NOVARTIS ANIMAL HEALTH AUSTRALASIA PTY LTD | [2014] FCCA 1242 |
| Catchwords: CONTEMPT OF COURT – Criminal contempt – penalty. |
| Legislation: Federal Circuit Court of Australia Act 1999, ss.15, 17 |
| Cases Cited: Ryan v Novartis Animal Health Australasia Pty Ltd [2013] FCCA 1487 Australasian Meat Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494 Australian Competition & Consumer Commission v Goldstar Corporation Pty Ltd [1998] FCA 1441 Pattison (Trustee), in the matter of Bell (Bankrupt) v Bell [2007] FCA 137 Connect TV Pty Ltd v All Rounder Investments Pty Ltd (No.4) [2013] FCA 393 Construction, Forestry Mining and Energy Union v Director, Fair Work Building Industry Inspectorate (No.2) (2013) 209 FCR 464 |
| Applicant: | MEAGHAN RYAN |
| Respondent: | NOVARTIS ANIMAL HEALTH AUSTRALASIA PTY LTD (ACN 076 745 198) |
| File Number: | SYG 498 of 2013 |
| Judgment of: | Judge Cameron |
| Hearing date: | 26 May 2014 |
| Date of Last Submission: | 26 May 2014 |
| Delivered at: | Sydney |
| Delivered on: | 24 June 2014 |
REPRESENTATION
The Applicant appeared in person.
| Counsel for the Respondent: | Ms M. Painter SC |
| Solicitors for the Respondent: | FCB Workplace Law |
ORDERS
The applicant have leave to file a Notice of Discontinuance within twenty-eight days.
The respondent have liberty to apply within fifty-six days in relation to costs should the matter not be discontinued within twenty-eight days.
The applicant be fined $10,000 for contempt.
Payment of the fine ordered in order 3 be suspended for so long as the applicant does not contact, directly or indirectly, any of the persons listed in schedule 1 to the orders made by Judge Lloyd-Jones on 31 July 2013 as amended by order 1 of the orders made by Judge Cameron on 25 October 2013.
Orders 3 and 4 be wholly discharged at the conclusion of a two year period commencing upon the pronouncement of these orders if, during that period, the applicant has not contacted, directly or indirectly, any of the persons listed in schedule 1 to the orders made by Judge Lloyd-Jones on 31 July 2013 as amended by order 1 of the orders made by Judge Cameron on 25 October 2013.
The respondent have liberty to apply for variation of orders 4 and 5 if, in the two year period commencing upon the pronouncement of these orders, the applicant contacts employees of the respondent not listed in schedule 1 to the orders made by Judge Lloyd-Jones on 31 July 2013 as amended by order 1 of the orders made by Judge Cameron on 25 October 2013.
The applicant pay the respondent its costs of the contempt proceeding fixed in the amount of $10,714.50.
The applicant pay the respondent its costs of and incidental to the injunctions ordered by the Court in July 2013 fixed in the amount of $4,287.50.
| FEDERAL CIRCUIT COURT AT SYDNEY |
SYG 498 of 2013
| MEAGHAN RYAN |
Applicant
And
| NOVARTIS ANIMAL HEALTH AUSTRALASIA PTY LTD ACN 076 745 198 |
Respondent
REASONS FOR JUDGMENT
(As Corrected)
Introduction
In this proceeding the applicant, Ms Ryan, has alleged that the respondent (“Novartis”) unlawfully dismissed her from its employment because she had exercised certain workplace rights protected by the Fair Work Act 2009.
On 3 October 2013, following an application in a case filed by Novartis, I found that a prima facie case had been made out that Ms Ryan was guilty of contempt of this Court because she had acted in breach of orders made by Judge Lloyd-Jones on 25 July 2013 and 31 July 2013 in the manner particularised in the reasons published that day: Ryan v Novartis Animal Health Australasia Pty Ltd [2013] FCCA 1487. On 25 October 2013 Ms Ryan pleaded guilty to the charges of contempt made against her by Novartis and in respect of which I had found she had a case to answer.
On 14 February 2014 Ms Ryan filed an application in a case seeking orders that she discontinue the proceeding and that there be no order as to costs.
These reasons concern:
a)the punishment to be imposed on Ms Ryan for her contempt of this Court;
b)what, if any, costs will be awarded to Novartis in respect of its applications in a case for the injunctions and in respect of Ms Ryan’s contempt of court; and
c)the disposition of the matter generally.
Background
Ms Ryan commenced this proceeding on 13 March 2013. On 25 June 2013 Judge Lloyd-Jones ordered that a litigation guardian be appointed to manage Ms Ryan’s case, that no further steps be taken in the proceeding until a guardian was appointed and that the Registrar of the Court make enquiries of the NSW Bar Association and the NSW Law Society to identify a person who would be willing to be Ms Ryan’s litigation guardian. Those enquiries were unsuccessful and no litigation guardian was appointed then or has been appointed subsequently.
On 25 July 2013 Novartis filed an application in a case seeking, amongst other things, orders restraining Ms Ryan from communicating with any of its employees, officers or contractors. That day Judge Lloyd-Jones made orders restraining Ms Ryan from directly or indirectly contacting the seventy-two people listed in sch.1 to those orders until a litigation guardian was appointed to conduct the proceeding on her behalf. In the affidavit of Matthew Nicholas Robinson affirmed on 24 July 2013 it had been stated that some of the individuals were potential witnesses in the proceeding.
On 31 July 2013 his Honour made further orders continuing to restrain Ms Ryan from directly or indirectly contacting those seventy-two people.
Ms Ryan did not appear in court on 25 or 31 July 2013.
On 5 September 2013 Novartis filed its application in a case seeking findings that Ms Ryan was guilty of contempt of court for making contact with certain individuals listed in the schedules to the orders made by Judge Lloyd-Jones.
On 3 October 2013 I found that the two sets of orders made by Judge Lloyd-Jones had been served on Ms Ryan and that Ms Ryan had not only known that she had been ordered to not communicate with the persons listed in the schedules to those orders, but also that serious and penal consequences might result if she did so. I found that Novartis had made out a prima facie case that Ms Ryan was guilty of contempt of this Court by acting contrary to his Honour’s orders. The matter then stood over to 25 October 2013 for directions concerning a further hearing so that Ms Ryan might have an opportunity to make her defence to the allegations of contempt.
On 25 October 2013 Ms Ryan appeared and, as noted earlier, pleaded guilty to the charges of contempt that Novartis had made against her and in respect of which a prima facie case had been found. She also apologised to the Court for her conduct, stating that she had intended no disrespect. On that occasion Ms Ryan also sought to explain or minimise the gravity of her actions by stating that she had been traumatised by actions taken by Novartis and that her poor mental state had been caused by Novartis’s actions. Ms Ryan said that her breach of the orders had partly been motivated by reasons associated with her participation in an anti-bullying campaign mounted by an organisation with which she was associated. She said that she had hoped to gain support for that campaign by making contact with her former colleagues at Novartis. She also said that an American law firm had contacted her and she thought that communicating with her former colleagues at Novartis might assist in the establishment of a class action against Novartis in which the American attorneys would represent her and others who might seek to participate. She also said that her communications had been in self-defence because she felt that the actions of Novartis and its legal representatives had been “inhumane”. Ms Ryan conceded that her actions had not been well-considered and she undertook not to contact Novartis in the future, which I took to be a reference to the various individuals referred to in Judge Lloyd-Jones’s orders.
On 14 February 2014 Ms Ryan applied to discontinue this proceeding because she had been unable to secure a litigation guardian. On that day orders were made listing the matter for hearing in relation to:
a)Ms Ryan’s application in a case; and
b)the question of what penalties the Court might impose in relation to the forty-four counts of contempt to which Ms Ryan had pleaded guilty on 25 October 2013.
Criminal contempt and considerations relevant to penalty
In most cases, disobedience of a court’s orders will be treated as civil contempt, engaging the court’s coercive powers to secure compliance with its orders by imprisoning or sequestrating the assets of a contemnor until the contempt is purged: Australasian Meat Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98. However, if wilful disobedience with orders is sufficiently contumacious, it is criminal contempt which renders the contemnor liable to conviction as well as to a fine, a term of imprisonment or both. This is such a case. The documents relied on by Novartis and referred to in my reasons of 3 October 2013 indicated that:
… Ms Ryan not only knew that she had been ordered not to communicate with the persons listed in the schedule to Judge Lloyd-Jones’s Orders but that she also knew that serious and penal consequences might result if she breached them. The documents also indicate that Ms Ryan deliberately ignored his Honour’s orders despite knowing what they relevantly required. … (at [21])
As Ms Ryan pleaded guilty to the charges of contempt and thereby admitted the conduct alleged against her, it therefore remains to determine what penalty or penalties are appropriate to impose on her.
In Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494 the following factors were identified as relevant to penalty in cases of criminal contempt:
a)the contemnor’s personal circumstances;
b)the nature and circumstances of the contempt;
c)the effect of the contempt on the administration of justice;
d)the contemnor’s culpability;
e)the need to deter the contemnor and others from repeating contempt;
f)the absence or presence of a prior conviction for contempt;
g)the contemnor’s financial means;
h)any genuine contrition on the contemnor’s part and whether a full and ample apology has been made; and
i)a term of imprisonment should be imposed only in the most serious criminal contempt cases and is a “last resort”.
Evidence
In an affidavit affirmed on 14 March 2014 Katharine Charlotte Eather, one of Novartis’s solicitors, deposed that even after the hearing of the contempt application on 13 September 2013, and until shortly before the directions hearing on 25 October 2013, Ms Ryan had continued to communicate with Novartis employees, including persons named in the schedules to Judge Lloyd-Jones’s orders. For instance, on 11 October 2013 Ms Ryan sent an email to Brian Cassar, a person identified in the schedules to Judge Lloyd-Jones’s orders and on 23 October 2013 she sent a further email to a number of people identified in the schedules to the orders. Ms Eather also deposed to some argumentative comments which Ms Ryan had posted on her LinkedIn page. Documents exhibited to Ms Eather at the time she affirmed her affidavit were admitted into evidence at the penalty hearing and evidenced the communications to which she had referred.
In a further affidavit, affirmed on 5 May 2014, Ms Eather deposed to a complaint against Novartis under the Anti-Discrimination Act 1977 (NSW) which Ms Ryan had filed with the NSW Anti-Discrimination Board (“NSW ADB”) on 3 October 2013. The claims made in that complaint are similar in substance to the ones made in this proceeding. At the hearing of this aspect of this matter Ms Ryan confirmed that her NSW ADB complaint remained on foot.
Submissions
Novartis submitted that Ms Ryan’s breaches had been serious, flagrant and contumacious and that no extenuating circumstances adequately explained them. It submitted that the imposition of a significant penalty was necessary to vindicate the Court’s authority and to deter others from engaging in similar conduct.
It also submitted that Ms Ryan’s complaint to the NSW ADB was no more than an attempt to escape this Court’s powers to enforce its orders by taking the complaint to a forum which has no power to punish behaviour which, in a forensic setting, would amount to contempt. In that context, Novartis submitted that it was appropriate to impose a fine on Ms Ryan but that it was also appropriate to wholly suspend its exaction if she refrained from contacting any of its employees for a period of two years.
Although not expressed in these terms, it appears that Novartis was submitting that:
a)Ms Ryan’s contrition was less than complete and that she had sought to justify her contravening behaviour;
b)away from the supervision of this Court Ms Ryan might again seek to contact its employees;
c)if Ms Ryan discontinued this proceeding and pursued her complaint with the NSW ADB, Judge Lloyd-Jones’s orders would no longer operate and she would be pursuing her claim in a forum which would not have the power to make orders similar to those made by Judge Lloyd-Jones; and
d)any punishment which the Court might impose should aim to prevent the contravening conduct from being repeated.
Ms Ryan submitted that on 24 October 2013, having been given some advice, she came to understand the significance of her actions and stopped making contact with individuals specified in the schedules to Judge Lloyd-Jones’s orders. Novartis did not contest the latter submission. Ms Ryan also submitted that she had intended her LinkedIn page to be private and, in any event, had removed the material to which Novartis had taken exception. Ms Ryan conceded that she had made errors of judgment.
Ms Ryan argued that punishment for contempt was unnecessary and that a fine would be excessively burdensome on her as she had few financial resources. She also submitted that a penalty ought not be imposed because she was seeking to discontinue the proceeding and thus would not need to be restrained from contacting potential witnesses.
Discussion – discontinuance
Under ordinary circumstances Ms Ryan would have been free to discontinue without leave by filing a Notice of Discontinuance, however, leave has been necessary because a discontinuance would terminate the operation of Judge Lloyd-Jones’s interlocutory orders. Novartis does not oppose the discontinuance and has also indicated that it does not seek its costs of the Fair Work Act claims against it.
As Novartis does not seek costs in relation to the Fair Work Act claims, there will be no costs order consequent upon any discontinuance which is effected within twenty-eight days. Novartis will have liberty to apply within fifty-six days in relation to costs should the matter not be discontinued within twenty-eight days.
At the penalty hearing the possibility of postponing the discontinuance for two years was discussed but I have reconsidered that suggestion and concluded that granting Novartis liberty to apply as discussed below will achieve the same result and avoid the necessity for action to conclude the proceeding being taken two years hence, which is likely to be inconvenient.
Discussion - penalty
Ms Ryan’s personal circumstances
Judge Lloyd-Jones’s reasons for making the orders of June and July 2013 for the appointment of a litigation guardian for Ms Ryan have not been reduced to writing but I infer that his Honour was of the opinion that Ms Ryan suffered from psychological problems which made it impractical for her to conduct her case. Nevertheless, no medical evidence is before the Court which sheds light on why Ms Ryan breached his Honour’s orders restraining her from contacting the persons identified in the schedules to those orders. Consequently, there is no basis to conclude that those breaches can be explained or excused because of a psychological disorder suffered by Ms Ryan at the relevant time.
Presently, it appears that Ms Ryan is unemployed and works as a volunteer for an organisation called Angels Goal. In a statutory declaration made on 28 January 2014, the General Manager of Angels Goal declared that he would employ Ms Ryan in an administrative role when financial circumstances permitted. Annexed to Ms Ryan’s affidavit filed on 14 February 2014 were documents from Centrelink indicating that she has been receiving the Newstart allowance of approximately $470 per fortnight.
Nature and circumstances of the contempt
Details of the contraventions were set out in my reasons of 3 October 2013 and it is not necessary to repeat them here. It is sufficient to observe that Ms Ryan knew what she was ordered not to do and did it anyway.
Effect of the contempt on the administration of justice
All contempts challenge the authority of the courts and thus tend to undermine public confidence in the effective administration of justice. Although the effect and knowledge of Ms Ryan’s contempt were limited to a group of people which was not particularly large, that does not much reduce the gravity of the offence.
Ms Ryan’s culpability
There is no doubt that Ms Ryan conducted herself as alleged and she has not suggested that she did not know what she was doing.
Contrition and apology
On two occasions Ms Ryan has apologised to the Court and done so in terms which satisfy me that her apology is genuine. The impression I have gained is that although Ms Ryan knew that what she was doing was wrong, she did not appreciate the significance of her acts. So much can be inferred from the explanation she provided to the Court for her actions. I think it likely that if the contempt application had not been made Ms Ryan would have continued to defy the Court’s authority. Indeed, the events deposed to by Ms Eather in her affidavit affirmed on 14 March 2014 demonstrate that Ms Ryan continued to act in defiance of the Court’s authority as late as 23 October 2013. I infer that it has only been the bringing of the contempt proceeding which has made it apparent to Ms Ryan how seriously court orders should be taken.
It should be noted that none of the explanations given by Ms Ryan excuse her conduct; if she believed that there was a basis for Judge Lloyd-Jones’s orders to be set aside then she should have made application to the Court accordingly. Until set aside, Ms Ryan was obliged to observe those orders regardless of what she felt she ought to be able to do.
Deterrence
While Ms Ryan’s expressions of contrition satisfy me that specific deterrence is not necessary, general deterrence needs to be considered in order that the Court’s disapproval of Ms Ryan’s conduct should be marked and a penalty serve as a warning to others not to behave similarly.
Prior conviction for contempt
It was not suggested that Ms Ryan has previously been found guilty of contempt.
Penalty
Ms Ryan’s contempt was serious. She breached Judge Lloyd-Jones’s orders on several occasions and in many respects although she knew what they required of her. Ms Ryan was willing to bring her claim to this Court to seek relief, and would presumably have expected Novartis to abide with any order adverse to it, but when the Court made orders she disliked she disregarded them. Ms Ryan explained why she thought, at the time at least, she was justified in defying the Court and doing as she pleased but her explanation identified no valid excuse.
Ms Ryan is an educated and apparently intelligent woman and I find it difficult to understand her behaviour. As I said earlier, I can only conclude that she had no appreciation of the seriousness of her conduct. It appears that once this was brought home to her by some advice she received, she ceased the behaviour in question and apologised to the Court. While I accept Ms Ryan’s apology as genuine, I do not think that she really regrets her actions except to the extent that they have exposed her to punishment for contempt.
I have concluded that Ms Ryan should be fined $10,000.
Section 17 of the Federal Circuit Court of Australia Act 1999 (“FCCA Act”) provides the Court with the same power to punish contempts of its authority as the High Court has to punish contempts of its authority. Should a sentence of imprisonment be the appropriate punishment, the Court has power to suspend that sentence: AMIEU v Mudginberri; Australian Competition & Consumer Commission v Goldstar Corporation Pty Ltd [1998] FCA 1441; Pattison (Trustee), in the matter of Bell (Bankrupt) v Bell [2007] FCA 137; Connect TV Pty Ltd v All Rounder Investments Pty Ltd (No.4) [2013] FCA 393. I have not been taken to any case in which a fine imposed for contempt was suspended, however, by virtue of s.15 of the FCCA Act, in matters in which it has jurisdiction the Court has power to make such orders as it thinks appropriate. Further, it was said in AMIEU v Mudginberri that:
Contempt of court is a distinctive offence attracting remedies which are sui generis … (reference omitted) (at 115 per Gibbs CJ, Mason, Wilson and Deane JJ)
I conclude that I have power not only to suspend a sentence of imprisonment for contempt of court but also to suspend payment of a fine imposed for such conduct.
I accept that Ms Ryan did not, until the last moment, realise the significance of her actions and I believe that if she had, she would not have acted as she did. I also note that it was not suggested that Ms Ryan had been convicted of contempt at any time in the past. Consequently, I conclude that payment of the fine should be suspended, subject to appropriate conditions.
I believe that Ms Ryan has found it difficult to integrate her new-found respect for the Court with her opinions and beliefs regarding Novartis and its interactions with her. In those circumstances, and given the nature of the contempt in question and the existence of the NSW ADB complaint, I consider it appropriate that payment of the fine to be imposed on Ms Ryan be suspended on condition that for a period of two years she continue to observe the requirements of Judge Lloyd-Jones’s order of 31 July 2013, as amended by me on 25 October 2013, to not contact directly or indirectly the persons listed in sch.1 to that order.
Further, if, during that period, Ms Ryan starts to contact other Novartis employees, I grant Novartis liberty to apply to vary the conditions of the suspension.
Costs
Novartis’s application in a case was brought in reliance on the Court’s statutory power to punish contempt and concerned the authority of the Court’s orders. Contrary to Novartis’s submissions, it was not an application governed by the Fair Work Act and so costs may be ordered in the usual manner: Construction, Forestry Mining and Energy Union v Director, Fair Work Building Industry Inspectorate (No.2) (2013) 209 FCR 464. In the context of proceedings for criminal contempt, the usual order is that the contemnor pay the costs of the applicant in the contempt application on an indemnity basis: Connect TV v All Rounder Investments at [43]. In my view such an order would be appropriate in this case. However, Novartis has only sought its costs in accordance with the Court’s most recent scale in an amount of $10,714.50. The scale applicable to this matter was the one which applied at the time the proceeding was commenced, not any subsequent one, and so the applicable scale amount would be slightly less than the amount claimed. However, as Ms Eather deposed to Novartis’s costs exceeding scale, and because an order for indemnity costs would ordinarily be appropriate, I will award Novartis $10,714.50 for its costs of the contempt proceeding.
Novartis also sought its costs of obtaining the injunctions from Judge Lloyd-Jones, in the amount of $6,048.50, again calculated according to the most recent scale and in circumstances where Ms Eather deposed to its costs being greater. Those costs were sought on the basis that they were incurred as part of the contempt proceeding and should thus be awarded on the same basis. In my view that is not correct. The injunctions ordered by Judge Lloyd-Jones were, in my view, part of the Fair Work Act proceeding and Ms Ryan’s subsequent disobedience of them does not alter that character. Consequently, this aspect of the costs application does fall to be determined in accordance with s.570 of the Fair Work Act which, relevantly, provides that costs are not to be awarded unless a party incurs expense by reason of the other party’s unreasonable act or omission.
Although Judge Lloyd-Jones’s reasons for ordering the injunctions sought by Novartis in July 2013 have not been reduced to writing, given the nature of the orders and the conduct enjoined, the appropriate inference is that Ms Ryan’s conduct which led to the making of those orders was unreasonable. A consideration of Leanne Fay Marran’s affidavit filed in court on 25 July 2013 demonstrates the correctness of that inference. I therefore conclude that s.570 of the Fair Work Act does not prevent the Court from awarding Novartis its costs of obtaining the injunctions and I further conclude that such an award should be made.
However, the award will be somewhat less than the amount sought. First, the scale which applied at the time the proceeding commenced should be used. Secondly, Novartis seeks its costs of the preparation of the relevant application in a case as item 2 of the scale but item 3 is the appropriate item. When that correction is made and the correct scale amounts applied, the appropriate scale amount is $4,287.50 and there will be an award in that amount.
I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of Judge Cameron
Associate:
Date: 24 June 2014
CORRECTIONS
Cover sheet and Orders: Page 2, Counsel for the Respondent – insert “SC” after Painter.
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