Siminton v Australian Prudential Regulation Authority

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FEDERAL COURT OF AUSTRALIA

Siminton v Australian Prudential Regulation Authority [2006] FCAFC 118

CONTEMPT – whether orders of a superior court must be observed even if order should not have been made or was made without jurisdiction - whether hearing on contempt charges should have been adjourned until principal proceeding was determined – whether the entitlement to rely upon privilege against self-incrimination meant that findings of fact could not be made or inferences drawn – whether single judge failed to give sufficient weight to other matters – where orders served upon the appellant did not bear the notice required by O 37 r 2 of the Federal Court Rules – whether absence of notice meant that orders for committal of the appellant should not have been made – whether there is a power to impose a fine for contempt even if the order does not bear the notice – whether the power of dispensation ought to be exercised – whether respondent could adduce fresh evidence

PRACTICE AND PROCEDURE – application for leave to appeal from order of single judge dismissing motion to set aside orders made ex parte – where grounds of appeal are misconceived – where no evidence that orders obtained improperly

COSTS – appellant only succeeded on point raised by the Court after the hearing of the appeal had commenced

Banking Act1959 (Cth): ss 7, 65A
Federal Court of Australia Act1976 (Cth): ss 23, 28, 31
Federal Court Rules:  O 37 r 2, O 36 r 7
High Court Rules 2004: r 11.04

Cameron v Cole (1944) 68 CLR 571, applied
Wilde v Australian Trade Equipment Co Pty Ltd (1981) 145 CLR 590, cited
R v Ross‑Jones; Ex parte Green (1984) 156 CLR 185, cited
Jackson v Sterling Industries Ltd (1987) 162 CLR 612, applied
Re Modern Woodcraft Pty Ltd (In Liquidation) (1997) 75 FCR 245, applied
Windsurfing International Inc v Sailboards Australia Pty Ltd (1986) 19 FCR 110, applied
Primelife Corporation Limited v Newpark Pty Ltd [2003] VSC 106, considered
Bourke Shire Council v Dwyer (1993) 79 LGERA 185, cited
Australia and New Zealand Banking Group Ltd v Merribee Pastoral Industries Pty Ltd (1998) 84 FCR 367, cited
Miller v Eurovox Pty Ltd [2004] VSCA 211, cited
Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483, cited
Heatons Transport (St Helens) Ltd v Transport and General Workers’ Union [1973] AC 15, cited
Flamingo Park Pty Ltd v Dolly Dolly Creation Pty Ltd (1985) 5 FCR 169, cited
Mudginberri Station Pty Ltd v Australasian Meat Industry Employees Union (1985) 11 FCR 573, cited
Clifford v Middleton [1974] VR 737, applied
Gordon v Gordon [1946] P 99, applied
Takhar v Animal Liberation (SA) Inc [2002] SASC 71, cited
Keith Harris & Co Limited v Bryant (1980) 30 ALR 663, cited
Deverall v Wannunup Development Nominees Pty Ltd (1994) 12 WAR 561, cited
RPS v The Queen (2000) 199 CLR 620

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Details
Case
[2006] FCAFC 118
Decision Date

CaseChat Overview and Summary

The case of Siminton v Australian Prudential Regulation Authority involves an appeal against a decision made by Merkel J, who dismissed a motion by the appellant to set aside ex parte orders made by Sundberg J on 15 December 2005. The respondent, the Australian Prudential Regulation Authority (APRA), had alleged that the appellant was conducting a banking business in contravention of the Banking Act 1959 (Cth) and had used restricted words or expressions in relation to his financial services business. The ex parte orders made by Sundberg J restrained the appellant from carrying on any banking business in Australia, using specific terms related to banking, and dealing with money deposited by the public in his accounts.

The legal issues before the court were whether Merkel J erred in dismissing the appellant's motion to set aside the ex parte orders and whether the appellant had complied with the orders, particularly with regard to the service of the orders on him. The appellant argued that the orders were not properly served on him and that there was reasonable doubt about whether he read or understood the orders. Additionally, the court had to determine whether the appellant's actions fell within the terms of the ex parte orders and whether there were grounds to set aside the orders.

The court considered the evidence provided, which included an affidavit by a senior analyst from APRA stating that he personally served the orders on the appellant. The court noted that the appellant's counsel believed the endorsement was on the order, but there was no evidence in court of the exact form of the order served. The court found that the appellant did not provide sufficient evidence to show that the orders were not served correctly or that he did not understand the orders. Consequently, the court upheld Merkel J's decision and dismissed the appeal.

The final orders of the court were to allow the appeal, set aside certain paragraphs of Merkel J's orders, impose a fine on the appellant, and direct that each party bear their own costs for the motions and the appeal. The application for leave to appeal from Merkel J's order was refused, and the appellant was ordered to pay the respondent's costs for the application.

Orders

Orders of the court

1. The appeal be allowed.

2. Paragraph 2 of the orders of Merkel J made on 10 April 2006 is set aside and in lieu thereof it is ordered:

(a) A fine in the sum of $50,000 be imposed on the appellant in respect of the contempt the subject of charges 1.1 and 1.2 of the statement of charge dated 4 January 2006 and charges 1.1, 1.2, 1.3 and 1.4 of the statement of charge dated 19 January 2006.

(b) The fine be paid to the District Registrar within 60 days or such further time and by such instalments as the District Registrar may allow.

(c) In the event that there is default in payment of the fine or in any instalment, the District Registrar shall apply to a judge of the Court for direction concerning enforcement.

3. Paragraph 4 of the orders of Merkel J made on 10 April 2006 is set aside and in lieu thereof it is ordered each party bear its and his own costs of and incidental to the motions of the appellant dated 29 December 2005 and 19 January 2006.

4. Each party bear its and his own costs of and incidental to the appeal.

1. The application for leave to appeal from the order of Merkel J made on 30 March 2006 dismissing the motion by the applicant to set aside orders made ex parte against him by Sundberg J on 15 December 2005 be refused.

2. The applicant pay the respondent’s costs of and incidental to the application.

Background

Background to the litigation

On 30 March 2006 Merkel J dismissed a motion by the appellant to set aside orders made ex parte against him by Sundberg J on 15 December 2005. The appellant seeks leave to appeal from the dismissal of that motion.BACKGROUND The respondent, the Australian Prudential Regulation Authority (‘APRA’) alleged that from January 2004 the appellant:·carried on a banking business in the course of which members of the public deposited money with him in contravention of s 7 of the Banking Act1959 (Cth) (‘the Act’), ·assumed or used restricted words or expressions (‘bank’ and ‘banking’) in relation to his financial services business in contravention of the Act, ·failed to hold money deposited with him by members of the public in a secure manner and used that money for his own private purposes, and refused to return money to people who had deposited money with him. Part of this conduct was alleged to have occurred by the operation by the appellant of a website for the ‘Principality of Camside’. The website included a section relating to ‘Terra Nova Cache’, which was said to be ‘Camside’s new bank’. On 14 December 2005 APRA filed an application in the Court seeking interim, interlocutory and final relief against the appellant. On 15 December 2005 Sundberg J, on the application by APRA for interim relief, made orders on an ex parte basis which provided, inter alia, that:“1.Until further order, the Respondent, whether by himself, his servants or agents or otherwise, be restrained from:(a)carrying on any banking business in Australia in contravention of section 7 of the Banking Act 1959 (Cth) (the Banking Act);(b)assuming or using the words ‘bank’, ‘banker’ or ‘banking’, or any words or phrases of like import, in relation to its business in contravention of section 66 of the Banking Act; and(c)advertising, representing or stating that it will carry on banking business.2.Until further order, the Respondent, whether by himself, his servants or agents or otherwise, be restrained from:…(b)dealing with, withdrawing or disposing of, or giving any instructions in relation to the disposition or transfer of, all or any part of the moneys standing to the credit of the Respondent and/or his nominee in any account (whether held alone, jointly or in conjunction with any other person, including any accounts or property in the name of the Principality of Camside or the Terra Nova Cache) in any bank, building society or other financial institution and, without limiting the generality of the foregoing, the following account:Commonwealth Bank of Australia·Account Name: Principality of Camside·Account Number 3162 1027 8861;…SAVE THAT nothing in this Order shall prevent the Respondent from:(d)paying his ordinary and usual living expenses up to a maximum amount of $500 per week, to be drawn first from any cash or bank account held by the Respondent other than the Commonwealth Bank of Australia account 3162 1027 8861; or(e) paying legal costs reasonably incurred in this proceedingor from paying such further sums as may be agreed in writing by the Applicant or permitted by further order of the Court.3.Subject to the right of the Respondent to object to producing any information or document on the ground that to do so may tend to incriminate him, the Respondent, on or before 22 December 2005, make and swear, and file and serve, a full and sufficient affidavit setting out: [details of cash in his name or under his control].…5.Within two days of this order being served upon him, the Respondent cause to be published on the first page that a user views when he or she accesses:(a)any current, proposed or future internet site that uses the names ‘Principality of Camside’, ‘Terra Nova Cache’ or any derivation thereof; and(b) any other internet site controlled by the Respondent;a notice in the form set out in Schedule 1 hereto.”The notice in Schedule 1 stated, inter alia, that Terra Nova Cache and the Principality of Camside were not authorised to carry on banking business in Australia or to receive moneys on deposit or lend moneys. Jurisdiction to make such orders is found in s 65A of the Act and s 23 of the Federal Court of Australia Act1976 (Cth).

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

NORTH, GOLDBERG AND WEINBERG JJ

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: NORTH, GOLDBERG AND WEINBERG JJ

Order 37 r 2 of the Federal Court Rules provides:“Service before committal or sequestration2(1)Subject to the Rules, an order shall not be enforced by committal or sequestration unless -(a)the order or a certified or office copy thereof is served personally on the person bound; and(b)if the order requires the person bound to do an act within a specified time, the order or a certified or office copy thereof is so served before that time expires.(2)Subject to the Rules, where the person bound by an order is a corporation or organisation the order 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 -(a)the order or a certified or office copy thereof is served personally on the officer; and(b)if the order requires the person bound to do an act within a specified time, the order or a certified or office copy thereof is so served before that time expires.(3)An order or a certified or office copy thereof 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 -(a)where the order requires the person bound to do an act within a specified time, the person bound refuses or neglects to do the act within that time; or(b)where the order requires the person bound to abstain from doing an act, the person bound disobeys the order.(4) Subject to the Rules, where -(a) an order requires the person bound to do an act; and(b)another order specifies the time in which the act is required to be done,each order or a certified or office copy thereof shall be served on the person bound before the expiry of that time as so abridged or extended.(5)Where a person liable to committal or sequestration of his property by way of enforcement of a judgment or order has notice of the judgment or order -(a)by being present when the judgment is pronounced or when the order is made; or(b)by being notified of the terms of the judgment or order whether by telephone, telegram or otherwise,the judgment or order 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.(6) The Court may dispense with service under this rule.” Counsel for the appellant said that he believed that the endorsement was on the order. Counsel for the appellant then continued a submission that Merkel J should have found there was reasonable doubt about whether the appellant read or understood the order of Sundberg J. Submissions were made as to whether the acts committed by the appellant fell within the terms of the order of Sundberg J. North J then asked whether there was in Court a copy of the affidavit of service of the order of Sundberg J on the appellant. He asked whether an order was ever taken out with the endorsement required by O 37 r 2 of the Federal Court Rules. The only evidence before this Court as to the form of the order that was served on the appellant was in par 5 of an affidavit by Mathew Wyllie, a senior analyst employed by APRA sworn on 22 December 2005 in which he said:“On Friday 16 December 2004 I personally served a copy of the orders made by the Honourable Justice Sundberg on 15 December 2005 (the Orders) on the Respondent. I did so by attending at 15 Olwen Street, Nunawading. I knocked on the front door a number of times and obtained no answer. I went around to the back door and heard a person talking on the telephone then went to the back door, which was open, and I saw the Respondent in bed talking on the telephone. I recognised the Respondent from his photograph on the website of the Principality of Camside. I said “Hello David” and he responded. I asked him to come to the door and he came to the door. I introduced myself and handed him an envelope bearing the APRA crest containing the Orders.”