Thunder Studios Inc (California) v Kazal

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FEDERAL COURT OF AUSTRALIA

Thunder Studios Inc (California) v Kazal

[2016] FCA 1598

File number: NSD 850 of 2014
Judge: RARES J
Date of judgment: 21 December 2016
Catchwords:

CONTEMPT OF COURT – where respondent fails to comply with mandatory order – onus of proof of respondent’s ability to comply with orders – whether onus on applicant to negate or respondent to raise issue or rebut case that respondent failed to use or used best endeavours to comply with order

CONTEMPT OF COURT – bringing improper pressure on party or party’s lawyer involving likelihood of obstruction of or interference with administration of justice – whether publications had capacity to bring improper pressure

DEFAMATION – publication and republication – whether reference to website or display of URL address is capable of being itself republication of contents of website – public display of website or URL address with invitation to visit to “read the full story” – whether such reference or display republished contents to be found on website containing “full story”

DEFAMATION – whether publication only to party’s lawyer or agent capable of amounting to actionable publication – principles of publication and republication of matter complained of

Legislation:

Australian Consumer Law s 18

Competition and Consumer Act 2010 (Cth) Sch 2

Federal Court of Australia Act 1976 (Cth) ss 39, 40

Cases cited:

Blacktown City Council v Wilkie (No 15) (2016) 219 LGERA 1

Buchanan v Jennings [2005] 1 AC 115

Commercial Bank of Australia Limited v Preston [1981] 2 NSWLR 554

Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375

Davies v Beyond Building Systems Pty Ltd [2009] NSWSC 1282

Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575

Duke of Brunswick v Harmer (1849) 14 QB (NS) 185 [117 ER 75]

Harkianakis v Skalkos (1997) 42 NSWLR 22

Hinch v Attorney-General (Vic) (1987) 164 CLR 15

JohnFairfax & Sons Limited v Cojuangco (1988) 165 CLR 346

John Fairfax & Sons Pty Ltd v McRae (1955) 93 CLR 351

Kermode v Fairfax Media PublicationsPty Ltd [2009] NSWSC 1263

R v Grassby (1988) 15 NSWLR 109

State Bank of New South Wales v Currabubula Holdings Pty Ltd (2001) 51 NSWLR 399

Traztand Pty Limited v Government Insurance Office of New South Wales [1984] 2 NSWLR 598

Webb v Bloch (1928) 41 CLR 331

Witham v Holloway (1995) 183 CLR 525

Y and Z v W (2007) 70 NSWLR 377

Dates of hearing: 9 and 21 December 2016
Registry: New South Wales
Division: General Division
National Practice Area: Other Federal Jurisdiction
Category: Catchwords
Number of paragraphs: 118
Counsel for the First and Second Applicants: Mr PW Gray SC with Mr M Polden
Solicitor for the First and Second Applicants: Aitken Lawyers
Counsel for the Second Respondent: Mr R Rasmussen
Solicitor for the Second Respondent: Kiki Kyriacou Lawyers
Table of Corrections
24 February 2017 In paragraph 4, fifth sentence, the word “whom” has been replaced with “which”.
24 February 2017
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Details
Case
[2016] FCA 1598
Decision Date

CaseChat Overview and Summary

The matter of Thunder Studios Inc (California) v Kazal involved a dispute regarding contempt of court and defamation. Thunder Studios Inc, an American film production company, alleged that Adam Kazal, an Australian businessman, had breached court orders and engaged in defamatory conduct against Thunder Studios Inc and its principal, David Singh. The Federal Court of Australia was tasked with determining whether Kazal had committed contempt of court by failing to comply with court orders and whether he had engaged in defamatory conduct through various publications.

The legal issues before the court included whether Kazal had failed to comply with mandatory court orders, the standard of proof required to establish his ability to comply, and the nature of the contempt charge. Additionally, the court had to determine whether certain publications by Kazal constituted defamatory statements and whether they amounted to republication of previously published material. The court also considered whether the requirement for a party to negate or rebut the presumption of failure to comply with orders was on the applicant or the respondent.

The court found that Kazal had committed contempt of court in respect of certain charges, holding him guilty of charges 3, 5, 6, 7, 8, and 9. It was determined that Kazal had breached court orders by displaying material on vans that referenced a website containing defamatory content about David Singh. The court held that these actions constituted contempt of court as they contravened the court's orders prohibiting the publication or display of material that could convey proscribed imputations about Singh. The court also found that Kazal's conduct involving the vans and tweets amounted to defamatory republication.

In conclusion, the court held Kazal guilty of contempt of court and ordered that the matter be stood over for sentencing. The court further directed that Kazal surrender his passports and provided bail conditions, including a requirement to remain in Australia until further order.

Orders

Orders of the court

1. The applicant file and serve any affidavits on which they propose to rely and submissions limited to 10 pages on sentence on or before 14 February 2017.

2. The second respondent file and serve any affidavits on which he proposes to rely and submissions on sentence on or before 21 February 2017.

3. The second respondent be granted bail on condition that on or before 4:00pm on 22 December 2016:

(a) he surrender to the Registrar all passports that he holds and file an affidavit of his compliance with this order;

(b) failing compliance with the requirement to surrender all passports in order 3(a), he provide a surety in the sum of $100,000 in a form acceptable to the Registrar.

4. The interlocutory application be stood over for hearing on sentence to 27 February 2017 at 9:30am and the second respondent personally attend on that occasion.

5. The second respondent, until further order, not leave Australia.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

As was his right, Adam did not give evidence, but there was no formal or other suggestion, in submissions by Adam’s counsel or on the evidence, that he had not been aware of the 11 November 2016 orders at the time they were made and at all times thereafter.The evidence relating to the charges The admissible evidence in support of the charges narrowed considerably after many of Adam’s objections to the hearsay material sought to be led against him caused me to reject that material. The contents of the video referred to in order 3(d) are not themselves in evidence, although there are four screenshots in evidence, taken at various points, in what appears to be a video that lasted for around 2 minutes and 22 seconds.The seven tweets I am satisfied beyond reasonable doubt by Mr MacCallum’s affidavit that Adam published the seven tweets between 15 and 21 November 2016. These consisted of reproductions of emails that Adam had sent to Ms McClymont at The Sydney Morning Herald. None of the seven tweets, 22 posts or other publications complained of made after 11 November 2016, that Adam authored, as will appear, referred directly to Mr David by name. They concentrated on making allegations, first, against Mr Singh and, secondly, directing readers to the website where, in substance, as will appear, they were invited to read all about how Mr Singh engaged in the allegedly heinous conduct that Adam asserted had occurred. In his email of 15 November 2016 that is reproduced on Twitter, Adam told Ms McClymont that he had been breaking news for her upcoming article on:the Corporate Thief David Singh who stole $180 million from my brothers Charif & Tony …He wrote that he had been exercising his legal right to free speech:… by having a van promoting his theft of $180 million drive around the Eastern Suburbs. The email also stated that Ms McClymont might:have heard about [this] as many people have contacted me to voice their support so I expect a good many have contacted the media. The email then referred to a number of matters to do with Mr Singh and allegations relating to him, his wife and Adam’s brothers. Towards its conclusion, the email said:My brother Charif’s website, [which was hyperlinked in the email and was displayed as a hyperlink in the tweet] has all the facts on how Singh defrauded him and participated in a Court case as a witness where he acted as part of a conspiracy to defraud Charif & Tony and lied under Oath about the company and what had occurred prior to the Court action beginning. Charif’s website outlines the history of lies you, Linton Besser and Richard Baker have all written about me and my family in more than 30 malicious articles. The next day, Adam emailed Ms McClymont and posted a tweet that stated that his vans would continue “to expose” Mr Singh and again included a link to his brother Charif’s website that appeared as a hyperlink in the tweet for the ease of a reader to access it. The subsequent five tweets rehearsed the same themes, each of them having a paragraph that specifically stated that Charif’s website, which was always displayed as if it were hyperlinked, “explains all of the detail” or “goes into greater detail” about how Mr Singh was part of a conspiracy to defraud Tony and Charif out of $180 million “as outlined on my vans”, as, for example, he wrote on 19 November 2016.The vans

Decision

Reasons for decision

For these reasons, I find Adam guilty of charge 9.Conclusion I have found Adam guilty of contempt of court in respect of Charges 3, 5 and (to the extent that I have found) 6 and 7, as well as 8 and 9. I will stand the proceedings over to 27 February 2017 for submissions as to sentence on the basis that I presently consider that, having regard to my substantiative findings, a custodial sentence appears, on the material presently before me, to be necessary.

Ratio Decidendi

Legal Principle Established

The applicants alleged that Adam had committed contempt of orders 1 and 3 by “displaying or causing to be displayed words and images on the vans”. They asserted that those words and images fell within the literal words of order 1(b) because they were “capable of making or conveying” any, and indeed, all, of the imputations about Mr David that order 1(b) proscribed. They submitted that the material displayed on the vans was capable of being understood as adopting the contents of the website, which in turn conveyed all of the imputations. The applicants contended that the terms of order 1 prohibited display of material that had the capacity to convey any of the proscribed imputations and that the display on the vans of the invitation to visit the website, coupled with the statements, “All involved to be exposed” or “Read the full story”, had that capacity. They submitted that by consenting to order 1, that operated to prohibit him displaying anything that had the capacity to convey the proscribed content, Adam should be held liable for doing so, as they alleged he had. They argued the material displayed on the vans incorporated the proscribed content by reference. They contended that the omission of the words “or published” from charge 1 was of no consequence because the display of the reference to the website sufficed as a publication. They argued that the display on the vans breached order 3 per se. They argued that it was illusory to distinguish between the meaning and operation of the words “display” and “publish” and their analogues in order 1.Charges 1 and 2 - consideration In my opinion, charge 1 must fail. The charge is framed exclusively by reference to the words “displaying, or … causing to be displayed” in order 1 and is limited to the words and images that appear on the vans themselves. Those words and images do not convey, and in themselves are not capable of conveying, any of the proscribed imputations. The wording of order 1 prevented Adam both from displaying matter and publishing matter. The natural and ordinary meaning of “display” is to exhibit, manifest or present. The words and images on the vans did not expressly or by necessary implication relate to Mr David. The act of publication is different to, but can overlap with, the act of display. But, any meaning or imputation complained of about or concerning Mr David that the applicants relied on could only be conveyed if a person visited the website and downloaded or read the material on it relating to him. This would require a publication to the reader of the, or the relevant parts of the, website, independent of what words and images the vans displayed. Here, charge 1 complained of an act of display of words and images that, in themselves, could not convey any proscribed imputation of or concerning Mr David. I am not satisfied beyond reasonable doubt that the applicants have proved that Adam contravened order 1 or, necessarily, it follows, order 2, on either 18 or 22 November 2016 when he displayed and caused to be displayed on O’Connell Street the words and images on the vans. Charge 1 must be dismissed, as must charge 2, which is dependent on proof of the conduct alleged in charge 1 that I found to be deficient.Adam’s submissions on charge 3