CITATION: Street & Ors v Hearne & Anor [2007] NSWCA 113 This decision has been amended. Please see the end of the judgment for a list of the amendments.
FILE NUMBER(S): 40692/2006
HEARING DATE(S): 03/05/2007
JUDGMENT DATE: 17 August 2007
PARTIES: A1: Joan Street A2: Ros Dwyer A3: Michael Hesse A4: Glen Eight Pty Ltd A5: Susan Hesse A6: Robert Simkin A7: Glen Frederick Billington A8: Fiona Billington R1: Peter Hearne R2: David Tierney
CATCHWORDS: CONTEMPT OF COURT – implied undertaking by litigant not to use documents served by opposite party except for proper purposes of the litigation – whether binding on servants and agents of litigant. CONTEMPT OF COURT – breach of undertaking to Court – civil or criminal – distinction. CONTEMPT OF COURT – appeal from acquittal – whether competent. CONTEMPT OF COURT – third parties who aid and abet breach of injunction or undertaking – civil or criminal. APPEAL – Acquittal on charge of contempt – whether appeal competent.
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Street v Hearne [2007] NSWCA 113
Case
[2007] NSWCA 113
Decision Date
CaseChat Overview and Summary
The appeal concerned allegations of contempt of court brought by the appellants, Street & Ors, against Mr Hearne and Mr Tierney. The dispute arose from the transmission of documents, specifically an affidavit and a noise impact assessment report, which had been filed in separate proceedings (the Main Proceedings). The appellants contended that Mr Hearne and Mr Tierney had used these documents for a purpose unrelated to the Main Proceedings, thereby breaching an implied undertaking to the court. The matter was heard in the Court of Appeal of New South Wales.
The primary legal issues before the Court of Appeal were whether the appeal from the acquittal of Mr Hearne and Mr Tierney by Gzell J was competent, and whether the implied undertaking that arises in litigation, in respect of documents served by one party on another, extended to servants and agents of a litigant and applied to the specific documents in question. The court was also required to consider the distinction between civil and criminal contempt in the context of the appeal's competency.
The Court of Appeal held that the appeal was competent, finding that the contempts alleged were civil in nature. The court affirmed that the implied undertaking, which is an obligation imposed by law rather than a voluntary promise, applies to documents such as witness statements and expert reports that are produced for the purposes of litigation. The court reasoned that this undertaking extends to the acts or omissions of a corporation's servants and agents acting in that capacity, and that a breach by such individuals could constitute contempt.
The Court of Appeal upheld the appeal, setting aside the orders of Gzell J. In their place, the court adjudged Mr Hearne and Mr Tierney guilty of contempt in relation to the first charge. The notices of motion were remitted to Gzell J for a hearing on penalty and to determine costs for the initial hearing. Mr Hearne and Mr Tierney were ordered to pay the costs of the appeal and were granted certificates under the Suitors Fund Act 1951 (NSW) for those costs.
Orders
Orders of the court
(1) Appeal upheld;
(2) Orders of Gzell J set aside, and, in lieu thereof, orders adjudging Mr Hearne and Mr Tierney guilty of the contempt in the first charge in the Statements of Charge;
(3) Notices of Motion remitted to Gzell J for hearing as to penalty, and to determine the appropriate orders for the costs of the first hearing;
(4) Mr Hearne and Mr Tierney to pay the costs of the appeal;
(5) Mr Hearne and Mr Tierney to have certificates under the Suitors Fund Act 1951 (NSW) for the cost of the appeal
Background
Background to the litigation
The appellants contended that Mr Hearne and Mr Tierney breached the implied undertaking and committed contempt of court by transmitting, to the Minister for Tourism, Sport and Recreation, The Hon Sandra Nori MP, and Mr Marcus Schintler of her office, extracts from an affidavit by one of the appellants, Mrs Hesse, sworn on 30 June 2005, and a “noise impact assessment report” by Dr R Tonin, dated 26 May 2005. The appellants contended that Mr Hearne and Mr Tierney transmitted these documents (which had been filed in the Main Proceedings) for a purpose unconnected with the Main Proceedings.The facts relied on by the appellants Mr Hearne was the managing director and chief executive officer of LPS. Mr Tierney was “strategic advisor” to Multiplex Developments Australia Pty Ltd (“Multiplex”). Multiplex was Metro’s ultimate holding company. Mr Tierney was involved on behalf of the respondents in the activities at Luna Park development and in negotiations with the Minister. On 5 April 2005, the appellants, by summons issued out of the Equity Division of the Supreme Court, commenced the Main Proceedings. On 15 April 2005, White J made orders for the filing of experts’ reports and further affidavits. Dr Tonin’s expert report was filed on 27 May 2005. On 1 July 2005, the matter was listed for trial on 31 October 2005 and set down for hearing for 10 days. White J gave leave for Mrs Hesse to be joined as a fifth plaintiff and, in accordance with his Honour’s directions, Mrs Hesse’s affidavit, sworn on 30 June 2005, was filed on 4 July 2005 and served on LPS. On 25 July 2005, Mr Hearne transmitted by email extracts from Mrs Hesse’s affidavit and Dr Tonin’s report to the Minister and Mr Schintler. The email stated that “copy of section [sic] of affidavit of one of the plaintiffs and their acoustic report commenting on the reduction of the mechanical noise of the Ranger ride …” was attached. The Ranger was one of the offending rides in Luna Park, the subject of the Main Proceedings. Mr Hearne also transmitted, as part of the attachments to the 25 July 2005 email, an article from the Daily Telegraph dated 18 April 2005. The article referred to proceedings in the Supreme Court by the appellants against “the amusement park” and stated: “[t]he court is likely to decide in July whether to grant the residents’ injunction order to close down five rides”. The article referred, in fairly disparaging terms, to allegations made by local residents about the noise from Luna Park and how it interfered with their lives. On 25 July 2005, Mr Hearne asked the Minister to consider introducing legislation to amend the Luna Park Site Act 1990 (NSW) so as to ensure that the operations of Luna Park would be protected against the complaints that were the subject of the Main Proceedings, and any future complaints about noise from Luna Park. On 21 September 2005, Mr Hearne received a draft of the Luna Park Site Amendment (Noise Control) Bill 2005 (NSW). The Bill provided for a maximum noise level at Luna Park. According to the Explanatory Note to the Bill, the proposed legislation:“protects past noise emissions from legal proceedings and other noise abatement action, regardless of the noise level of those emissions, and provides that any such emission is not to be taken to have constituted a public or private nuisance.”Implicitly, one of the objects of the Bill was to bring to an end, retrospectively, the appellants’ claim in the Main Proceedings based on noise nuisance.
Evidence
Evidence Before The Court
The appellants abandoned their claim based on noise nuisance but amended their pleadings so as to assert breaches of the Trade Practices Act 1974 (Cth) and Crown Lands Act 1989 (NSW) in ways which (according to Mr Alexis SC, who, together with Ms Sibtain, appeared for the appellants) continue to make the noise levels at Luna Park relevant to the Main Proceedings.The additional evidence relating to the competency of the appeal Sub-sections (5) and (6) of s 101 were inserted in the Supreme Court Act 1970 (NSW) by the Courts Legislation Amendment Act 1996 (NSW), which came into force on 2 May 1997. These sub-sections provide:“(5) An appeal lies to the Court of Appeal from any judgment or order of the Court in a Division in any proceedings that relate to contempt (whether civil or criminal) of the Court or of any other court.(6) Subsection (5) does not confer on any person a right to appeal from a judgment or order of the Court in a Division in any proceedings that relate to criminal contempt, being a judgment or order by which the person charged with contempt is found not to have committed contempt.” Mr Parker SC, who, together with Mr Baird, appeared for the respondents, relied on these sub-sections in submitting that the appeal was incompetent. The basis of his argument on this issue was that the charges brought against the respondents, and upon which they were acquitted by Gzell J, related to “criminal contempt” for the purposes of s 101(6) of the Supreme Court Act 1970 (NSW) and accordingly, by s 101(6), no appeal lies. Mr Parker relied on additional evidentiary material that he tendered on appeal (and which was admitted) solely for the purposes of the competency argument. This additional material predated the commencement of the contempt proceedings. Mr Parker drew attention to a letter dated 2 March 2006 written by Wise Legal, the appellants’ solicitors, to Clayton Utz, who were the solicitors on record acting for LPS in the Main Proceedings. The letter commenced:“We are instructed to write to you in relation to certain conduct of Mr P Hearne, as a director of the first defendant and Mr D Tierney, as a director of the ultimate holding company of the second defendant, assuming that your firm acts for them. If our assumption is incorrect, would you kindly let us know, so that we may write to them directly.” Wise Legal’s letter referred to the conduct of Mr Hearne and Mr Tierney (the subject of the contempt charge) and contended that both had committed contempt of court. The letter ended by asking whether Clayton Utz could advance any reason why the appellants should not file a notice of motion to have the court deal with Mr Hearne and Mr Tierney for contempt. Clayton Utz replied by letter dated 9 March 2006. They wrote:“Your letter refers to conduct carried out on behalf of Luna Park Sydney Pty Ltd by its officers or agents, Mr Peter Hearne and Mr David Tierney. Accordingly, we are instructed to respond to your letter on behalf of Luna Park Sydney Pty Ltd.We do not have instructions to act on behalf of either Mr Hearne or Mr Tierney in their individual capacities.”
Decision
Reasons for decision
I accept of course that, an undertaking by a corporation extends to the acts or omissions of the corporation’s servants and agents acting in that capacity. I also accept that, if Mr Hearne or Mr Tierney, in acting on behalf of LPS, cause LPS to breach the implied undertaking, the appellants would have a remedy against LPS. Should that occur, the question whether the appellants would have a remedy against Mr Hearne or Mr Tierney would, still, be undecided. Moreover, should Mr Hearne or Mr Tierney breach the implied undertaking otherwise than as a servant or agent or director of LPS, the appellants’ rights against LPS would be cold comfort.Conclusion as to the competency of the appeal Taking all the relevant matters into account, I am not persuaded that the prima facie inference as to the civil nature of the contempts alleged has been rebutted. In my view, those contempts should be regarded as civil in nature. It follows, in my view, that the appeal is competent.The nature of the implied undertaking In Hamersley Iron Pty Ltd v Lovell (1998) 19 WAR 316 (“Hamersley”), I made some comments regarding the history and purpose of the implied undertaking that arises in respect of discovered documents. I do not propose to repeat what I there said but I draw from my reasons in that case the following propositions: I would emphasise that the implied “undertaking”, so called, is in reality an obligation imposed by law under recognised circumstances. The word “undertaking” in this context is merely an historical label. There is no undertaking of a voluntary kind. The applicability of the “implied undertaking” to the Tonin report and the Hesse affidavit In Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509, McPherson J (as his Honour then was) said (at 510) that he was “in no doubt” that the implied undertaking was applicable to witness statements as it was to any other document produced by one side to the other for the purposes of litigation. He said (at 511):“A document of this kind [a witness statement], delivered as it was for a particular purpose, may not be used for another purpose. That is an aspect of a general principle not confined to documents delivered for the purpose of litigation.” In Ainsworth v Hanrahan (1991) 25 NSWLR 155 (at 166), Kirby P (as his Honour then was) approved Central Queensland Cement. His Honour held that the implied undertaking is applicable to answers to interrogatories. In Abigroup Ltd v Akins (1997) 42 NSWLR 623, Bainton J (at 627 to 628) reviewed the authorities dealing with the issue and concluded that the principles relating to implied undertakings apply to documents or the contents of witness statements ordered to be filed and served under the rules of court or court practice. His Honour referred to a number of authorities that supported this proposition. See also Moage Ltd (in liq) v Jagelman (2002) 43 ACSR 173 at 175 to 176, [11] per Gzell J (where his Honour also conducted a review of the authorities) and Cowell.