Telama and Telama & Ors

[2018] FamCA 513

FAMILY COURT OF AUSTRALIA

TELAMA & TELAMA AND ORS [2018] FamCA 513

FAMILY LAW – CONTEMPT – DISMISSAL – Where the husband seeks that the wife and three respondent lawyers be dealt with for contempt by reason of a breach of the implied undertaking – Where the second respondent seeks to have the husband’s contempt application dismissed or struck out – Where the husband’s application does not disclose a prima facie case – Where the contempt application against all respondents is dismissed.

FAMILY LAW – COSTS – Application by the respondents for indemnity costs – Where the wife is awarded solicitor and client costs – Where the other respondents are awarded costs on a party and party basis.

Family Law Rules 2004 (Cth) r 24.10

Colgate-Palmolive Co v Cussons Pty Limited (1993) 118 ALR 248
Hearne v Street (2008) 235 CLR 125

APPLICANT: Mr Telama

1st RESPONDENT: Ms Telama

2nd RESPONDENT: Mr Kirk

3^rd RESPONDENT: Ms Patterson

4^th RESPONDENT: Mr Dixon

FILE NUMBER: SYC 1450 of 2008

DATE DELIVERED: 13 July 2018

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

HEARING DATE: 26 June 2018

REPRESENTATION

THE APPLICANT: In person

THE 1ST RESPONDENT: In person

COUNSEL FOR THE 2^ND AND 4^TH RESPONDENTS: Mr Cheshire SC

SOLICITOR FOR THE 2^ND AND 4^TH RESPONDENTS: Lander & Rogers

SENIOR COUNSEL FOR THE 3^RD RESPONDENT: Mr McLure SC

JUNIOR COUNSEL FOR THE 3^RD RESPONDENT: Mr Prince

SOLICITOR FOR THE 3^RD RESPONDENT: Sparke Helmore

Orders

1. That the Amended Contempt Application filed by the husband on 19 December 2016 be dismissed.

2. That the Amended Application in a Case, seeking to join Ms Patterson and Mr Dixon as respondents to the application, filed by the husband on 16 October 2017, be dismissed.

3. That the husband pay the costs of the wife, incurred in relation to the Contempt Application filed 12 September 2016 and the Amended Contempt Application filed 19 December 2016, on a solicitor and client basis.

4. That the husband pay the costs of Mr Kirk incurred in relation to the Contempt Application filed 12 September 2016 and the Amended Contempt Application filed 19 December 2016, on a party and party basis.

5. That the husband pay the costs of Ms Patterson in relation to the Application in a Case filed 30 March 2017; the Amended Application in a Case filed 16 October 2017; the Application in a Case filed 5 February 2018; the Amended Application in a Case filed 8 May 2018 and the Response to an Application in a Case filed 15 May 2018, on a party and party basis.

6. That the husband pay the costs of Mr Dixon in relation to the Amended Application in a Case filed 16 October 2017; the Application in a Case filed 5 February 2018; the Amended Application in a Case filed 8 May 2018 and the Response to an Application in a Case filed 15 May 2018, on a party and party basis.       

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Telama & Telama and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1450 of 2008

Mr Telama

Applicant

And

Ms Telama

First Respondent

And

Mr Kirk

Second Respondent

And

Ms Patterson

Third Respondent

And

Mr Dixon
Fourth respondent

REASONS FOR JUDGMENT

1. This matter comes before the Court on an application by Mr Telama (“the husband”) to review a decision of Senior Registrar Campbell made on 29 January 2018. Thus the matter proceeds as a hearing de novo.

2. This is not a matter, as is usual, where the proceedings are between the husband and the wife arising out of their relationship. Rather, the application filed by the husband is an application that Ms Telama (“the wife”) and three legal practitioners be dealt with for contempt.

3. It is necessary to provide a brief explanation of the proceedings and the parties.

4. The husband and the wife have litigated in the Federal Circuit Court and the Family Court since 2008. There are currently no substantive proceedings between them in either court. However, a substantial body of material has been filed in those proceedings. Included in that material is affidavit evidence of the husband in relation to the beneficial ownership of a company, N Pty Ltd.

5. In 2011, proceedings were instituted in the Federal Court between X1 Pty Ltd and X2 Pty Ltd (“X”) as applicants and, relevantly, Mr A and Mr G as respondents (“the X proceedings”). An issue in the X proceedings is the nature of the interest of Mr A and Mr G in N Pty Ltd.

6. The three legal practitioners against whom the husband moved in the Contempt Application are Mr Kirk and Mr Dixon who were solicitors for X, and Ms Patterson who was one of the Counsel briefed on behalf of X.

7. The husband was not a party to the X proceedings but was a witness.

8. It is not in dispute that portions of affidavits sworn by the husband in the Family Law proceedings were admitted into evidence in the X proceedings in the Federal Court.

9. On 11 March 2016, the husband filed a Contempt Application in the Federal Circuit Court (“FCC”) naming the wife and Mr Kirk as respondents. That application was amended on 25 July 2016.

10. Mr Kirk, the second respondent, is a solicitor for X in the Federal Court proceedings.

11. The gravamen of the Contempt Application is the husband’s allegation that, in the Federal Court proceedings, the wife and Mr Kirk impermissibly used material from the Family Law proceedings, in breach of the implied undertaking to use documents filed in a court only for the purpose of the proceedings in which they are filed (“the implied undertaking”). It is not in dispute that, because the documents were filed in the Family Court, a breach of the implied undertaking constitutes contempt of the Family Court.

12. That Contempt Application was withdrawn before the FCC on 9 August 2016. The respondents sought costs and filed written submissions.

13. On 12 September 2016, the husband filed a second Contempt Application in the Family Court. The terms of the application were the same as the first application and the respondents were the wife and Mr Kirk.

14. On 19 December 2016, the husband filed an amended Contempt Application which is the application presently before the Court. The respondents are the wife and Mr Kirk. The application particularises the alleged contempt in the following terms:

    Breach of the implied undertaking that documents filed in a Family Court matter are to be used for the strict purpose of those proceedings only and not for any other purpose. See attached Paragraphs 1-30.

15. Attached to the amended Contempt Application was a document in the form of a pleading which sets out the husband’s case (“the pleading”).

16. On 30 March 2017, the husband filed an Application in a Case seeking to join Ms Patterson as the third respondent to the Contempt Application.

17. On 16 October 2017, the husband filed an amended Application in a Case seeking to join Ms Patterson and Mr Dixon as respondents to the contempt proceedings.

18. On 25 January 2018, solicitors for Mr Kirk filed an application seeking to have the Contempt Application struck out as an abuse of process or, in the alternate, summarily dismissed.

19. Thus, the applications before the Senior Registrar were the husband’s Application in a Case seeking to join Ms Patterson and Mr Dixon to the contempt proceedings, and the application of Mr Kirk seeking that the Contempt Application be struck out or dismissed.

20. The Senior Registrar ordered that the Contempt Application be struck out and dismissed pursuant to Rule 24.10 of the Family Law Rules 2004 (Cth).

21. On 29 January 2018 the husband wrote to each of the four respondents stating:

    On the direction of Registrar Campbell this morning, I will be filing four fresh applications against each of you individually in the Family Court tomorrow.

    Would you please confirm by return email if you would instead like the relevant documents to be served on your nominated legal representative.

22. On 5 February 2018, the husband filed an Application in a Case to review the orders of the Senior Registrar.

23. On 26 February 2018, Ms Patterson filed an application for costs.

24. Before me, the issues to be determined were:

    ·    The application of the husband to join Ms Patterson and Mr Dixon as respondents to the Contempt Application;

    ·    Mr Kirk’s application to strike out or dismiss the Contempt Application; and

    ·    Mr Kirk’s and Ms Patterson’s application for costs.

25. Before me, the husband appeared for himself. The wife appeared for herself. Mr Cheshire SC appeared for Mr Kirk and Mr Dixon. Mr McLure SC with Mr Prince appeared for Ms Patterson.

26. In the course of submissions, all parties were asked to address the question of costs in the event that the husband’s application was not successful and each made submissions. Each of the respondents sought indemnity costs.

27. Before me, it was not submitted that the implied obligation did not apply in the circumstances of this case.

28. On behalf of the second and fourth respondents, Senior Counsel (whose submissions were adopted by Senior Counsel for Ms Patterson) submitted that:

    ·    On the face of the husband’s application, no prima facie case for contempt is made out.

    ·    That the proceedings are an abuse of process.

29. Senior Counsel submitted that, if the first ground were accepted and the Contempt Application was struck out, then the second ground is relevant to the issue of costs and, in particular, indemnity costs.

30. The relevant history of the proceedings is set out in two affidavits of Mr H (solicitor for Mr Kirk) sworn on 23 January 2018 and 20 June 2018, and two affidavits of Mr Kirk sworn on 14 March 2017 and 25 January 2018.  The history is not in dispute and the relevant matters are repeated here. 

Factual background

1. The X proceedings were filed in the Federal Court in August 2011. X asserted that Mr A and Mr G conspired with the husband to purchase land at an undervalue, to the detriment of X.

2. On 1 May 2013, Mr Kirk caused a subpoena to be issued by the Federal Court, directed to the husband, seeking the production of documents relevant to the alleged transaction. The husband did not produce any documents in compliance with the subpoena.

3. A further subpoena was issued to the husband on 11 March 2014 seeking specified documents relating to the husband’s dealings with Mr A and Mr G. The husband told the Federal Court that he had no such documents.

4. On 3 June 2014, in the course of a hearing in the Federal Court, Mr A tendered a witness statement of the husband. Relevantly, the husband stated:

   12.In about mid November 2008, [Mr G] contacted me and informed me that he was aware that a property development project (being Lot …) which was under contract to another purchaser was showing signs that the contract would not settle for reasons which I later understood related to the inability of the intended purchaser to obtain finance.

   …

   108.In July 2010, whilst this property syndication business opportunity was under active consideration, my former wife made an application to the Family Court for the entire project to be transferred into her name in satisfaction of a lump sum child support and spousal maintenance order that she was seeking, even though my property division orders had been finalised in December 2008.

   …

   111.I deposed that [Mr G] and [Mr A] each held a one third interest in the company as that was close enough to my best expectation of how matters might take place.

   112.The Family Court matter did not go to trial and was settled via Consent Orders.

5. Thus, those representing X were alerted to the existence of an earlier affidavit of the husband dealing with the issues before the Federal Court and apparently contradictory to the statements given earlier by the husband in the Federal Court to the effect that Mr A and Mr G did not hold any interest in Lot ...  

6. In anticipation of the cross-examination of the husband in the Federal Court proceedings, Mr Kirk attempted to obtain a copy of the affidavit sworn by the husband in the Family Court proceedings by seeking leave to issue a subpoena to the husband. The subpoena sought the production of:

   All documents reflecting a representation, statement, deposition or affidavit to the effect cited in paragraph 111 of your statement given under oath on 2 June 2014 in these proceedings, namely:

   “I deposed that [Mr G] and [Mr A] each held a one third interest in the company as that was close enough to my best expectation of how matters might take place.”

   Including, but not limited to, any such representation, statement, deposition or affidavit given in proceedings SYC1450/2008 being legal proceedings between yourself and your former wife …

7. In the Federal Court, a Justice gave leave for the subpoena to be issued on 11 June 2014. In granting leave, the Honourable Justice said:

   This court is not interested in the private matters of [Mr Telama], with the exception of the extent to which he deposed in previous documentation that [Mr G] and [Mr A] each held a one-third interest in [N Pty Ltd]. And it may very well be that the affidavit can be redacted or otherwise, but I think it’s important, this document, which is relevant, should be obtained from [Mr Telama], so I’m prepared to grant leave.

8. By way of letter dated 17 June 2014, the husband raised no objection to production on the basis of the implied undertaking but responded:

   I do not hold any documents covered by the subpoena. At the conclusion of the Family Court proceedings referred to in the subpoena which was around September 2010, I destroyed all documents in my possession relevant to that litigation other than the final orders.  

9. There was further correspondence in which Mr Kirk advised the husband that he should contact the solicitors who had acted for him in the Family Law proceedings to obtain copies of the documents. The husband responded that such documents were in the possession of the solicitors and not within his custody or control.

10. On 8 July 2014, Mr Kirk caused a letter to be written to the wife asking her to provide a copy of the husband’s Family Law affidavit. The husband asserts that letter was settled by Ms Patterson.

11. The wife telephoned Mr Kirk and advised that she held various documents which he was invited to inspect. Mr Kirk and Mr Dixon attended at the wife’s residence and she gave them a box of documents. The solicitors prepared a schedule of the documents. Mr Kirk deposed that the documents were inspected only by them and counsel. It is not in dispute that the documents included affidavits and other documents filed in the Family Law proceedings.

12. On 24 July 2014, the Federal Court gave leave to issue a subpoena to the wife to produce the documents. On 7 August 2014, general access to the documents produced by the wife was granted.

13. Additionally, the Honourable Justice of the Federal Court requested that the Registrar of the Federal Court obtain the file of the Family Court. The file was made available.

14. There is no evidence that any of the material produced by the wife was tendered in the Federal Court.

15. Against that factual background, it is necessary to consider whether the Contempt Application discloses a prima facie case.  

Does the application disclose a prima facie case?

1. In order to answer this question, it is necessary to consider the nature and scope of the implied undertaking commonly referred to as the “Harman obligation”.

2. The scope of the implied undertaking was described by the High Court of Australia in Hearne v Street (2008) 235 CLR 125 (at 155) by Hayne, Heydon and Crennan JJ in the following broad terms:

   96. Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include documents inspected after discovery, answers to interrogatories, documents produced on subpoena, documents produced for the purposes of taxation of costs, documents produced pursuant to a direction from an arbitrator, documents seized pursuant to an Anton Piller order, witness statements served pursuant to a judicial direction and affidavits. [Emphasis added; Footnotes omitted]

3. It is not in dispute that the implied undertaking also binds third parties who come into possession of the relevant documents.

4. Because four separate respondents are named in the application, it is necessary to consider the case stated against each of them individually.

The Wife

1. As against the wife, the husband told the Court that he did not “have a beef” with her “because she did not know precisely what she was doing in a legal sense” and that he had no objection to her being “fully released from the proceedings”.

2. If I am in error in construing the husband’s statement as a withdrawal of the application against the wife, I will consider whether a prima facie case has been made out against her.

3. The pleading, in relation to the wife, asserts:

   8.On 9 July 2014, [the wife] contacted [Mr Kirk] and advised him that she held documents from the Family Court Proceedings that were relevant to the Federal Court Proceedings and invited [Mr Kirk] to her residence to collect the documents.

   …

   15.On 7 August 2014, upon request from [the wife], [Mr Kirk] provided certain of the Documents to the Federal Court of Australia in answer to the subpoena that had been issued to [the wife].

   …

   As against [the wife]

   17.At all relevant times, [the wife] knew that the Documents listed in paragraph 10 that she provided to [Mr Kirk] had been filed with or disclosed to the Court in connection with the Family Court Proceedings.

   18.By her participation in the Family Court Proceedings, [the wife] gave an implied undertaking to the Court (now accepted as an obligation of substantive law) not to use affidavits, financial statements or documents produced under subpoena for any purpose not directly connected with the conduct of the Family Court Proceedings.

   19.At  all relevant times, [the wife] knew that she owed confidentiality obligations to [the husband] pursuant to paragraph 17 of the Binding Child Support Agreement dated 2 April 2013 between herself and [the husband].

   20.In providing the Documents to [Mr Kirk] on 10 July 2014, [the wife] committed a contempt of court.

4. Given the husband’s concession before me that the wife was not aware of her legal obligations (whatever those obligations might be) in relation to the Family Court documents, the only assertion against the wife which is to be considered is the bare assertion in paragraph 8 that the wife provided documents to Mr Kirk.  

5. There is no assertion that the wife “used” the documents for any purpose connected with the Federal Court proceedings.

6. Accordingly, no prima facie case could be found against the wife and the proceedings against her will be dismissed.

Mr Kirk

1. In relation to Mr Kirk, the pleading, relevantly, asserts:

   24.[Mr Kirk] knew that the document he had requested on 8 July 2014 from [the wife] in paragraph 7 was a document that had been filed in relation to the Family Court Proceedings, because he identified this document as such.

   25.Upon receipt and review of the Documents and at all relevant times thereafter, [Mr Kirk] knew that the Documents that he had obtained from [the wife] on 10 July 2014 were documents that had been filed in the Family Court Proceedings or otherwise produced pursuant to the Family Court Proceedings, because each of the Documents carried the Family Court case number SYC1450/2008 and an identifying stamp stating “Family Court of Australia, Filed [date], Sydney Registry, 97-99 Goulburn Street, Sydney”.

   26.From 10 July 2014 onwards, [Mr Kirk] reviewed, catalogued and summarised the Documents for use in connection with the Federal Court proceedings.

   27.At all relevant times, [Mr Kirk] knew, or should have known, that [the wife] owed an implied undertaking to the Court, (now accepted as an obligation of substantive law) that the Documents were to be used for the strict purpose of the Family Court Proceedings only and not for any other purpose, and that a breach by her of this implied undertaking would constitute a contempt of court.

   28.At all relevant times, [Mr Kirk] knew, or should have known, that the implied undertaking outlined in the previous paragraph also binds third parties who receive and use the Documents in the knowledge of their nature and background as documents that had been filed in a Court proceeding.

   29.In obtaining the Documents from [the wife] on 10 July 2014, and by virtue of his further use of the Documents in reviewing, cataloguing and summarising them and using them in connection with the Federal Court proceedings, [Mr Kirk] committed a contempt of court.

1. I do not accept that Mr Kirk’s “reviewing, cataloguing and summarising” of the documents, after receiving them from the wife, constitutes “use” of the documents for the purpose of the Federal Court proceedings.

2. It is further alleged in the pleading that Mr Kirk “provided certain of the Documents to the Federal Court of Australia in answer to the subpoena that had been issued to the wife”.

3. I do not accept that, in assisting the wife to comply with a subpoena that had been issued to her to produce documents, Mr Kirk “used” the documents in the proceedings.

4. It is not alleged that Mr Kirk did any other act which constituted the “use” of the documents in the Federal Court proceedings.

5. No prima facie case could be found against Mr Kirk and the application against him as a respondent will be dismissed.

Ms Patterson

1. In relation to Ms Patterson, the pleading asserts:

   13.[Mr Kirk] [or his staff] passed the Documents to [Senior Counsel] and [Ms Patterson] who then in turn used the Documents in relation to the Federal Court Proceedings.

2. There is no other reference to Ms Patterson in the pleading.

3. The application to join Ms Patterson does not particularise any charge against her or otherwise contain any statement of the charge against her. The pleading makes no allegation as to Ms Patterson having acted in disregard of her obligations to the court. However, more importantly, a bare statement that two people “used” documents “in relation to the Federal Court proceedings” could not sustain a charge against one of them in the absence of a charge specifying what was done by each of them.

4. No prima facie case could be found against Ms Patterson and the application to join her as a respondent will be dismissed.

Mr Dixon

1. In relation to Mr Dixon, the pleading asserts:

   7.On 8 July 2014, [Mr Kirk] wrote to [the wife] with a “Request for [the husband’s] Affidavit” being a specific affidavit sworn in the Family Court Proceedings, and asking if [the wife] could “assist us in providing us (or requesting your former lawyers to provide us) with a copy of the relevant statement or affidavit from [the husband]”

   Particulars

   Letter from [Mr Kirk] and [Mr Dixon] to [the wife] dated 8 July 2014.

   …

   9.On 10 July 2014, [Mr Kirk] and [Mr Dixon] attended [the wife’s] residence and collected … 15 documents that had been filed in the Family Court Proceedings or alternatively obtained under subpoena (herein the “Documents”) and two other documents.

2. There is no further reference to Mr Dixon in the pleading and the application to join Mr Dixon does not particularise any case against him or otherwise contain any statement of the charge against him.

3. A mere allegation that Mr Dixon co-wrote a letter to the wife and “collected” documents from the wife cannot sustain a charge that he “used” the documents in connection with the Federal Court proceedings.

4. No prima facie case could be found against Mr Dixon and the application to join him as a respondent will be dismissed.

5. Having found that no prima facie case could be found against any of the respondents or proposed respondents, it is not necessary that the submissions in relation to the alleged abuse of process be considered in the context of the application for dismissal.

6. However, those submissions are relevant in relation to the issue of costs.

Costs

1. All four respondents seek costs on an indemnity basis. The husband concedes that, if his applications are dismissed, then costs should follow but he argues that those costs should be assessed on a party and party basis.

2. In Colgate-Palmolive Co v Cussons Pty Limited (1993) 118 ALR 248, at 256 to 257, Sheppard J set out the following principles or guidelines relating to the award of indemnity costs:

   4. In consequence of the settled practice which exists, the court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the court in departing from the usual course. That has been the view of all judges dealing with applications for payment of costs on the indemnity or some other basis whether here or in England. The tests have been variously put. The Court of Appeal in Andrews v Barnes (39 Ch D at 141) said the court had a general and discretionary power to award costs as between solicitor and client “as and when the justice of the case might so require”. Woodward J in Fountain Selected Meats appears to have adopted what was said by Brandon LJ (as he was) in Preston v Preston ([1982] 1 All ER at 58) namely, there should be some special or unusual feature in the case to justify the court in departing from the ordinary practice. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at 8) in Tetijo: “the categories in which the discretion may be exercised are not closed”. Davies J expressed (at 6) similar views in Ragata.

   5. Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152 evidence of particular misconduct that causes loss of time to the court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724(Court of Appeal); Crisp v Kent (SC(NSW)(CA), 27 Sept 1993, unreported) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records). Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis. The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.

   6. It remains to say that the existence of particular facts and circumstances capable of warranting the making of an order for payment of costs, for instance, on the indemnity basis, does not mean that judges are necessarily obliged to exercise their discretion to make such an order. The costs are always in the discretion of the trial judge. Provided that discretion is exercised having regard to the applicable principles and the particular circumstances of the instant case its exercise will not be found to have miscarried unless it appears that the order which has been made involves a manifest error or injustice.

3. Different considerations apply to the wife’s application for costs on the one hand, and the application of the other respondents on the other. I propose to deal with those applications separately.

The wife’s application for costs

1. It was clear from the husband’s statements made on 26 June 2018 that he did not regard the wife as having committed a contempt of court.

2. The transcript records the following exchanges:

   HER HONOUR:   Thank you.  [Mr Telama], can I ask you to address two things.  Firstly, anything that you wish to say in reply to the submissions that have been made and secondly, anything that you wish to say in relation to the issue of costs.

   [MR TELAMA]:   Sure.  Certainly, your Honour.  Look, just let me deal with one issue at the outset and I do wish to make the point that even though I’ve been in this court for over ten years now, I don’t harbour any ill will towards the conduct of [Ms Telama] in relation to this episode.  She is not a legally qualified person who merely did what she was told by a senior legal practitioner who made contact with her.  So I do wish to state that I do have sympathy with the position of her and I think it’s important that I put that on the record.

   HER HONOUR:   But you maintain your application that she be dealt with for contempt.

   [MR TELAMA]:   Correct. …

3. And later:

   [MR TELAMA]: … I have been appalled by the conduct of the legal practitioners involved here and that’s why I made the point earlier that I don’t necessarily have a beef with [Ms Telama] because she did not know precisely what she was doing in a legal sense.

   HER HONOUR:   And can I ask you why you’re continuing to pursue an application against her?

   [MR TELAMA]:   Your Honour, I did feel myself being criticised by taking action against some but not all of the people involved in the contempt.  Rightfully or wrongfully, but that was the means and I would be more than happy if this matter does proceed to a full hearing, with your permission, for [Ms Telama] to be fully released from the proceedings.  As I say, I have no beef against her and I can’t see that – and as disclosed in her affidavit that she referred to, 16 February 2017, I think it was, she had no idea what she was doing constituted a breach of any legal provision whatsoever.  And I fully believe what she says to be true. 

4. There was no necessity for the wife to be joined as a party to the proceedings. There is no allegation that she used the relevant documents in the Federal Court proceedings. The husband, himself, did not believe that the wife was in contempt and was content for her to be removed as a respondent.

5. She should never have been involved in the proceedings and such costs as she has incurred, during the period that she had legal representation, should be paid by the husband.

6. The orders will provide that the husband pay the wife’s costs on a solicitor and client basis.

The costs of the Second, Third and Fourth Respondents

1. On behalf of the second, third and fourth respondents, it is argued that the conduct of the husband, as is demonstrated from correspondence, justifies the making of an order for indemnity costs.

2. It is necessary to set out the correspondence in order to understand that submission.

3. On 18 July 2016 the solicitors for Mr Kirk wrote to the husband in the following terms:

   We refer to the application as filed by you in the Federal Circuit Court of Australia on 11 March 2016.  The application seeks relief against [the wife] and [Mr Kirk].  The matter is listed for first directions on 9 August 2016 at 2.15 pm.

   Part C of the application requires that the applicant provide details of the alleged contempt including particulars of:

   1.the act or omission that is alleged to constitute a contempt;

   2.whether it is alleged that there has been more than one act of contempt and if so, details of each allegation;

   3.the order or undertaking that it is alleged has been breached;

   4.how it is alleged that the respondent(s) were subject to the order or undertaking;

   5.the time, date and place of the breach of the order or undertaking by the respondents that gives rise to each alleged act of contempt; and

   6.all further particulars of the allegation(s).

   The particulars of the application are required in order that any respondent to the application may properly know the specifics of the allegation made against them.

   The application, as filed, fails to provide any of the necessary particulars. Rather, the application makes a broad allegation of breach of an implied undertaking and thereafter relies upon the affidavit filed in support of the application. Reference is made within the affidavit to section 112AP of the Family Law Act, 1975, but it is not evident precisely how this section is said to relate to any conduct which gives rise to an alleged contempt or which respondents is said to have engaged in such conduct.  Further reference is made in the affidavit to an alleged inducement (in breach of a purported duty seemingly) leading to a breach by [the wife].  However no particulars are provided to establish what duty arose or what act or omission constituted the inducement.

   In light of the very serious nature of this application it is essential that full particulars of the allegations made against each of the respondents be set out in full detail within the application and not merely by vague references in an affidavit filed in support.  The respondents are not required to speculate as to the precise nature of the allegations made against them.

   We require that you provide us with full details and particulars of the allegations in accordance with the requirements of Part C of the application.  In light of the pending directions listing we require that such particulars be provided by no later than 29 July 2016 in order that the respondents may fully consider their position and seek any appropriate evidentiary orders for the conduct of the proceedings to hearing.

4. There is no doubt that the husband was thereby alerted to what the lawyers for Mr Kirk saw as the defects in his application.

5. On 1 August 2016 the husband forwarded to the solicitors for Mr Kirk an amended Contempt Application which had been filed on 25 July 2016, which was later withdrawn on 9 August 2016.

6. On 7 November 2016 the husband filed written submissions in relation to costs stating, inter alia:

   I made contact with [Mr Kirk] in mid 2016 to reach an agreed settlement to the matters that are the subject of the application.  [Mr Kirk] refused to engage in any such dialogue.

7. On 19 July 2017 the solicitors for Ms Patterson wrote to the husband stating, inter alia:

   As you are no doubt aware, the implied undertaking you contend was breached by our client is an undertaking not to use documents created for use in the Family Proceeding in other proceedings, such as the Federal Proceeding, unless those documents were received into evidence in the Family Proceeding or leave is granted by the second court. The implied undertaking extends to third parties who come into possession of documents by reason of their involvement in the proceeding in which they were created.

   The Contempt Application you propose to bring against our client is doomed to fail for the following reasons:

   (a)our client did not at any time act in the Family Proceeding and only came into possession of some or all of the Documents by reason of her involvement in the unrelated Federal Proceeding, such that she arguably owed no undertaking to the Family Court;

   (b)on or about 2 June 2014 you prepared a statement of evidence in the Federal Proceeding in which you stated:

   I deposed that [Mr G] and [Mr A] each held a one‑third interest in the company as that was close enough to my best expectation of how matters might take place

   (c)by giving that evidence, you necessarily laid open to scrutiny the Affidavit and any other statement to the effect just recited and given by you in the Family Proceeding;

   (d)at least some of the relevant evidence you contend was later used in the Federal Proceeding and which you contend grounds the breach of the implied undertaking appears to have been received into evidence in the Family Proceeding and was thus not protected by the implied undertaking;

   (e)the difficulty you face in seeking to enforce the implied undertaking after that point was compounded by you stating in open court in the Federal Proceeding the crucial substance of the evidence given in the Family Proceeding;

   (f)in any event, our client did not ‘use’ any or all of the documents in any relevant sense in the period 10 July to 7 August 2014;

   (g)our client did not ‘use’ any or all of the Documents in any relevant sense until she came into possession of them through lawful means (that is, after production on subpoena issued with leave of the Court) and it is well recognised the undertaking ‘must yield to inconsistent statutory provisions and to the requirements of curial process in litigation’;

   (h)it is arguable our client did not ‘use’ any or all of the Documents at all in circumstances where she was not directly responsible for their tender in the Federal Proceeding;

   (i)to the extent they were used at all, the Documents were redacted and used solely for the purpose of challenging evidence you had given in the Federal Proceeding after you had laid open to scrutiny the evidence previously given by you in the Family Proceeding, such that those of the Documents that were used were used for a proper and legitimate purpose (that is, ensuring justice was done by testing inconsistent evidence given by you in different proceedings);

   (j)as noted by [the Honourable Justice], the redacted material was highly relevant to issues in the Federal Proceeding and the disclosure of that material arose by reason of your reference to your evidence in the Family Proceeding in the Federal Proceeding; and

   (k)It is now far too late to restrain the use of the Documents by any party, such that the Contempt Application is inutile.

   In short, to the extent that our client owed any undertaking to the Family Court in respect of some or all of the Documents, any use by her of that material was condoned by the Federal Court, and was at all times for a proper, limited and legitimate purpose. Your proposed application for contempt against our client therefore will fail.

   Should you proceed with the Joinder Application and subsequent Contempt Application against our client, we will rely on this correspondence in applying for an order that you pay our client’s costs, pursuant to section 117(2) of the Family Law Act. Further, given the hopeless and egregious nature of both the Joinder Application and the Contempt Application, we will apply for an order that our client’s costs be paid on the indemnity basis.

   Please confirm the Joinder Application will be withdrawn as soon as possible and that the Contempt Application will not be pursued against our client.

8. The husband replied to that letter in the following terms:

   The characterisation of the case against your client contains a number of critical omissions of fact.

   Your statements in paragraph 8 are wrong in almost every respect.

   I decline the invitation to withdraw the Joinder Application and the related Contempt Application.

   The conduct of your client, and that of the other two respondents, is a matter worthy of consideration at trial in the Family Court.

   I am nowhere near as concerned about the liability for costs as your client should be regarding the professional implications of an adverse judgment against her.

   I have indicated to the other respondents my willingness to discuss an alternative course of action to proceeding to trial, and that same position is extended to your client.

9. On 15 December 2016, the husband wrote to Mr Kirk’s solicitor stating, inter alia:

   I reiterate my previous communication to [Mr Kirk] that I believe it preferable to finalise the matter by conciliation and agreement, rather than proceed to trial with the significant costs and professional risks that an adverse judgment may involve.

10. On 29 July 2017, the husband wrote to Ms Patterson’s solicitor stating that he would settle the matter on the basis of:

    A.An apology

    B.A modest payment contributed by [Ms Patterson], [Mr Kirk] and [the wife] in proportions agreed as between the three of them as compensation for the aggravation and hurt caused by the actions of the respondents

    C.A release given by me in the form of an agreement to take no further action (e.g. with the NSW Bar Association)

    D.A mutual confidentiality agreement

1. On 25 August 2017, the husband wrote a further email stating, “The amount in B would be $20,000 up until 5pm on the day before the Joinder Application is heard, and $100,000 thereafter”.

2. On 30 October 2017, the husband wrote to Mr Dixon’s solicitor stating:

   I have always made it clear to [Mr Kirk] and [Ms Patterson] that I would prefer to resolve the matter prior to it going to trial and before an adverse judgment against you all.

3. On 6 February 2018 the husband wrote an email to the solicitors for Ms Patterson stating, inter alia:

   The tone and content of the email received by you last Tuesday (as well as a similar communication received from [the solicitors for [Mr Kirk] and [Mr Dixon]) have done nothing other to strengthen my resolve to have the four respondents brought before the Court and made accountable for their actions.

   Make no mistake that the time will come, and the consequences of this tawdry episode will be serious for the respondents.  Not only will the Court evaluate the alleged contempt of court, but of interest to it will also be the circumstances whereby [Mr Kirk], [Mr Dixon] and [Ms Patterson]:

   1/ Placed [the wife], a member of the public with no legal training and no legal representation, in the position of committing a contempt of court 

   2/ Deliberately breached their responsibilities in the Federal Court proceedings not to have made available documents obtained from [the wife] to the other parties to those proceedings

   3/ Have each shown no sense of contrition but have instead vigorously defended their actions in various forums

   4/Are each legal practitioners who were aware, or should have been aware, of the legal consequences of their actions, and sought at various stages to conceal the nature of their actions from the Federal Court and other parties to the Federal Court proceedings

   The consequences of an adverse finding will be serious and may ultimately involve:

   1/A public finding of contempt of court that will remain on the public record forever as a classic textbook precedent case around the legal relevant principles

   2/Serious damage to the professional reputation of [Mr Kirk], [Mr Dixon] and [Ms Patterson]

   3/A potentially significant fine imposed by the Family Court

   4/A reference to professional bodies for further disciplinary action

   5/A suspension or cancellation of the practising certificates of each of [Mr Kirk], [Mr Dixon] and [Ms Patterson]

   6/Material levels of costs expended in defending the case

   I will provide you a further opportunity until 4pm on Friday 9 February to propose in writing a basis for finalisation of this matter, either for [Ms Patterson] alone or covering all respondents if you choose to engage with them and/or their legal representatives, beyond which point there will be no further dialogue until the allocated Family Court date before Justice Rees on 26 June 2018.

4. On 6 February 2018 the solicitors for Ms Patterson responded to the husband’s correspondence stating, inter alia, “We also ask that you refrain from making threats of the kind outlined in paragraphs numbered 1 to 6 at the end of your email, below.”

5. The husband responded to that email stating:

   I wouldn’t actually characterise the paragraphs 1 to 6 as threats, but instead as the reasonably foreseeable consequences of the very deliberate actions of the respondents in July 2014…

6. On 9 February 2018 the husband wrote a letter to the solicitors for Mr Kirk stating, inter alia:

   This is a serious matter which will now come to the attention of Justice Rees in June.  I regard the alleged actions of the respondents as deplorable and there is every chance that her Honour will also be alarmed by the facts of the case.

   Based on past experience, I have little expectation of your clients taking any action to bring this matter to a close, but now is most certainly an appropriate point in time for the respondents to reconsider their positions in relation to the proceedings.

7. On 11 February 2018 the husband wrote an email to the solicitor for Mr Dixon stating, “Any time you wish to discuss avoiding a professional catastrophe for your clients, especially for [Mr Dixon], you just come back to me.”

8. On 23 February 2018 the husband forwarded to Mr Dixon an email which stated, “The LPCC has been in contact with me. Worthwhile thinking about as this issue is not going away.” I assume that the reference is to a Legal Practitioner’s Conduct Committee.

9. A few minutes later the husband sent a further email to Mr Dixon which stated, “I will respond to the LPCC on Sunday night unless you suggest otherwise.”

10. On 3 June 2018, the husband wrote to the solicitors for the respondents in the following terms:

    … it would be well worthwhile for the respondents in Family Court contempt of court proceedings SYC1450/2008 to consider bringing the matter to a conclusion as well, particularly before the matter is heard before Justice Rees on 26 June 2018, after which point it will become difficult for the matter to be discontinued.

    I confirm that I will settle the matter on the basis outlined on 29 July 2017 to [Ms Patterson’s] legal representatives, with such offer to settle remaining open until 8 June 2018.

11. On behalf of the respondents, it was submitted that the only possible interpretation of the husband’s correspondence is that he was attempting to obtain a financial benefit from the three lawyer respondents in return for his not prosecuting the contempt applications.

12. No other interpretation or explanation was given by the husband.

13. Thus, it was submitted, the husband prosecuted the proceedings against the lawyer respondents for an “ulterior motive”.

14. The husband, in the pleading, set out the remedies he sought as follows:

    (a)a fine

    (b)a good behaviour bond

    (c)a temporary restriction on [Mr Kirk’s] ability to practice

    (d)a written apology to the Court

    (e)a written apology to [the husband]

    (f)payment of costs

15. Whilst I accept that the husband’s attempt to negotiate a settlement of the contempt proceedings was misguided, I accept that his primary motive was to see the lawyers brought to account.

16. In submissions, the husband said, in relation to the submission that he was improperly motivated:

    Now, the third and final matter that I will come to is the matter of the conduct of mine that has been alleged by [Mr Cheshire].  And I will say, at the outset, I have been extremely upset by this.  As you will, there are my five or six boxes of matters in the Family Court.  This has not been a happy place for me for over a decade now, your Honour, and to see parties – experienced legal practitioners – run roughshod over my rightful entitlement to privacy of those documents and, indeed, their professional obligations as officers of the court to act within the Rules and a first-year law student will know exactly the restrictions that the Harman undertaking applies in litigation.  And these are experienced litigation lawyers.  They know exactly the rules and they decided that given everything else was too hard, that they would follow what I think was a, you know, unfair measure.  So I have been very, very upset by this.  I have been appalled by the conduct of the legal practitioners involved here and that’s why I made the point earlier that I don’t necessarily have a beef with [Ms Telama] because she did not know precisely what she was doing in a legal sense.

17. I am mindful of the fact that at all times, the settlement proposed by the husband involved an apology and not only the payment of money.

18. The husband will pay the costs of Mr Kirk, Ms Patterson and Mr Dixon on a party and party basis.

I certify that the preceding one hundred and eight (108) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 13 July 2018.

Associate: 

Date:  13 July 2018