FEDERAL COURT OF AUSTRALIA

CONTEMPT OF COURT Ð nature of contempt Ð the protection accorded to witnesses by the law of contempt Ð effect of mixed motives on penalty, but not liability Ð whether these principles apply to parties as well as witnesses Ð extent of the protection accorded to parties Ð whether contempt may be committed by a threat to exercise a legal right or by its exercise Ð discussion of Ôimproper pressureÓ on a party Ð attempt to exact a reprisal against a witness or party Ð effect of the taking of some action having an actual tendency to interfere with the administration of justice with the intention of so interfering, whether or not the action would otherwise be improper Ð whether, if such an intention is not shown, the impropriety of any pressure is the crucial issue Ð onus of proof Ð criminal nature of contempt proceeding Ð whether directors were involved in an act of contempt by their company Ð circumstances in which a contemnorÕs mixed motives and provocation given by the applicant justified the Court in making no order, leaving the contemnor simply to bear its own costs.

Federal Court of Australia Act 1976, s 31(1)

Re Read and Huggonson (St JamesÕs Evening Post Case) (1742) 2 Atk 469; 26 ER 683 referred to

Ambard v Attorney-General for Trinidad and Tobago [1936] AC 322 referred to

Solicitor-General v Radio New Zealand Ltd [1994] 1 NZLR 48 referred to

Australasian Meat Industry EmployeesÕ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 referred to

Director General of Fair Trading v Pioneer Concrete (U.K.) Ltd [1995] 1 AC 456 referred to

Victoria v The Australian Building Construction EmployeesÕ and Builders LabourersÕ Federation (1982) 152 CLR 25 referred to

Hinch v Attorney-General for Victoria (1987) 164 CLR 15 referred to

HarrisonÕs Case (1638) Cro Car 503;79 ER 1034 referred to

Morris v Crown Office [1970] 2 QB 114 referred to

R v Hill [1986] Crim LR 457 referred to

R v Powell (1993) 98 Cr App Rep 224 referred to

Re Goldman [1968] 3 NSWR 325 referred to

R v MacDonald [1994] 1 VR 414 referred to

Attorney-General v Butterworth [1963] 1 QB 696 applied

Morris v Wellington City [1969] NZLR 1038 applied

R v Taffs [1991] 1 NZLR 69 referred to

Chapman v Honig [1963] 2 QB 502 referred to

Moore v Clerk of Assize, Bristol [1971] 1 WLR 1669 referred to

Regina v Toney [1993] 1 WLR 364 referred to

Meissner v The Queen (1995) 184 CLR 132 referred to

Smith v Lakeman (1856) 26 LJ Ch 305 referred to

Lane v Registrar of the Supreme Court of NSW (1981) 148 CLR 245 referred to

Brambles Holdings Ltd v Trade Practices Commission (No 2) (1980) 44 FLR 182 referred to

Attorney-General v Times Newspapers Ltd [1974] AC 273 discussed

In Re Mulock (1864) 3 Sw & Tr 599; 164 ER 1407 referred to

Attorney-General v Hislop [1991] 1 QB 514 applied

Harkianakis v Skalkos (1997) 42 NSWLR 22 applied

Willshire-Smith v Votino Bros Pty Ltd (1993) 41 FCR 496 referred to

Pelechowski v Registrar, Court of Appeal (1998) 72 ALJR 711 applied

Witham v Holloway (1995) 183 CLR 525 applied

MARK ALFRED CLARKSON v THE MANDARIN CLUB LIMITED & ORS

NG 215 of 1997

Burchett J

Sydney

23 December 1998

THE COURT ORDERS THAT:

1.         There be no order against the respondent company except that it bear its own costs and that it pay the applicantÕs costs thrown away by the adjournments granted on 4 December 1997 and 1 April 1998;

2.         The application be dismissed as against the second and third respondents, but with no order as to their costs.

Note:               Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

If I commence these reasons by writing that they relate to a charge of contempt of court, I shall give no idea of the complex issues of motivation and behaviour upon which judgment must be given. But the matter does relate to a charge of contempt of court, which, by s 31(1) of the Federal Court of Australia Act 1976, this Court is expressly empowered to punish, and therefore I shall begin by stating those principles of the law of contempt that are relevant.

The doctrine of contempt of court covers a broad spectrum of actions that, if permitted, might impede the courts in their role of doing justice in a society ruled by law. Those actions are not identified, despite the suggestive expression Òcontempt of courtÓ and Lord HardwickeÕs phrase (in Re Read and Huggonson (St JamesÕs Evening Post Case) (1742) 2 Atk 469 at 471; 26 ER 683 at 684) Òscandalizing the courtÓ, by their tendency to affront the dignity of a judge. Or even, as Lord Atkin made clear in Ambard v Attorney-General for Trinidad and Tobago [1936] AC 322 at 335, by their involving a quite direct attack on the way justice has been administered in a particular case. In a democracy, that must be allowable. What marks a contempt of court is its effect on the ability of the courts to uphold the rights of persons and enforce the law: see Solicitor-General v Radio New Zealand Ltd [1994] 1 NZLR 48 at 53, per Eichelbaum CJ and Greig J. So, without attempting to be exhaustive, actions as different as disobedience of an injunction or disregard of an undertaking (see Australasian Meat Industry EmployeesÕ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 106-107; Director General of Fair Trading v Pioneer Concrete (U.K.) Ltd [1995] 1 AC 456), the publication of material prejudicial to a court hearing (see Victoria v The Australian Building Construction EmployeesÕ and Builders LabourersÕ Federation (1982) 152 CLR 25 at 56, per Gibbs CJ; Hinch v Attorney-General for Victoria (1987) 164 CLR 15), disturbance of proceedings in court (see the fascinating report of HarrisonÕs Case (1638) Cro Car 503; 79 ER 1034; Morris v Crown Office [1970] 2 QB 114), interference with judge, jury or counsel (see R v Hill [1986] Crim LR 457; R v Powell (1993) 98 Cr App Rep 224 at 228; Re Goldman [1968] 3 NSWR 325; R v MacDonald [1994] 1 VR 414), or interference with a witness (a topic to which I shall turn shortly), may each be a contempt of court because each may obstruct the course of justice.

The present case is more unusual. It concerns the applicantÕs suspension from membership of the club conducted by the respondent company, which was a reprisal, he says, for his having sought, and sought with some success, a determination by this Court of his rights as against the club. If the allegation were shown to be true, would such a reprisal be a contempt? The argument that it would relies heavily on cases where attempts were made to deter witnesses from giving evidence, or to punish them for having done so. Mr Clarkson claims that the protection the courts have given to witnesses should also be extended to parties.

A leading authority dealing with the application of the law of contempt to witnesses is Attorney-General v Butterworth [1963] 1 QB 696. There, a branch delegate and treasurer of a union gave evidence in the Restrictive Practices Court in a case in which a restraining order was made against the union. Some of its members took strong exception to this evidence, and after the case was over, resolutions were passed purporting to deprive him of his offices in the union. Proceedings were brought against the members involved, three of whom were found to have acted partly from a desire to punish the witness for his evidence, although that was not their predominant motive, and partly from a lack of confidence in him as a suitable person to hold office, while the predominant motive of three others was to punish him for the evidence he gave. Lord Denning MR said (at 719):

ÒIt may be that there is no authority to be found in the books, but if this be so, all I can say is that the sooner we make one the better. For there can be no greater contempt than to intimidate a witness before he gives his evidence or to victimise him afterwards for having given it. How can we expect a witness to give his evidence freely and frankly, as he ought to do, if he is liable, as soon as the case is over, to be punished for it by those who dislike the evidence he has given? Let us accept that he has honestly given his evidence. Is he to be liable to be dismissed from his employment, or to be expelled from his trade union, or to be deprived of his office, or to be sent to Coventry, simply because of that evidence which he has given? I decline to believe that the law of England permits him to be so treated. If this sort of thing could be done in a single case with impunity, the news of it would soon get round. Witnesses in other cases would be unwilling to come forward to give evidence, or, if they did come forward, they would hesitate to speak the truth, for fear of the consequences. É I have no hesitation in declaring that the victimisation of a witness is a contempt of court, whether done whilst the proceedings are still pending or after they have finished.Ó

Lord Denning MR added (at 723) a comment on the motive which can fix a respondent with liability:

ÒBut when the act is done with mixed motives, as indeed the acts here were done, what is the position? If it is done with the predominant motive of punishing a witness, there can be no doubt that it is a contempt of court. But even though it is not the predominant motive, yet nevertheless if it is an actuating motive influencing the step taken, it is, in my judgment, a contempt of court. I do not think the court is able to, or should, enter into a nice assessment of the weight of the various motives which, mixed together, result in the victimisation of a witness. If one of the purposes actuating the step is the purpose of punishment, then it is a contempt of court in everyone so actuated.Ó

Donovan LJ, in the course of a concurring judgment, made some remarks (at 727) concerning those respondents who were actuated by punishment of the witness as a motive, but not as a predominant motive. His Lordship said:

ÒThis seems to me to be no ground of distinction so far as the offence itself is concerned. Each had the motive of punishment, and I think it immaterial whether there were other motives of greater or less priority in their minds. I agree with what the Master of the Rolls has said upon this point. It does, however, have a bearing upon penalty.Ó

Pearson LJ agreed with both the other judgments.

A case in some respects similar was decided a few years later in New Zealand Ð Morris v Wellington City [1969] NZLR 1038. In that case, an employee was dismissed by his employer as punishment for having given evidence for the plaintiff in a claim against the employer. A finding of liability for contempt was made by Wild CJ and McGregor J on the basis, as Wild CJ put it at 1043, that the dismissal Òwas actuated in part by the purpose of punishing Morris for giving evidence against the Council.Ó His Honour had stated the principle (at 1040) as being that Òit is a contempt of Court to penalise a witness in regard to his employment or office if that is done with the purpose of punishing him for having given evidence in the sense he did, or if that purpose is one of those actuating the step taken.Ó In another New Zealand case, R v Taffs [1991] 1 NZLR 69, the Court of Appeal, in a judgment delivered by Cooke P, as Lord Cooke then was, dealt with a threat, made before a witness was called, to humiliate him publicly if he gave certain evidence. Cooke P said (at 73):

ÒOn balance we think it right to follow [R v Kellett [1976] QB 372] in New Zealand and hold that threats or other improper pressure intended to lead a potential witness not to give evidence or to alter his proposed evidence transgress s 117 [a provision of New Zealand criminal law penalising attempts to obstruct the course of justice], no matter whether or not the person uttering the threats or applying the other pressure believes that the proposed evidence would be false. It will always be for the jury or other tribunal of fact to determine whether what was said was meant as a threat or other form of improper pressure.Ó

The last case, of course, was not concerned with contempt of court, but with a criminal offence which quite closely parallels contempt of court.

Shortly after the decision of the Court of Appeal in Attorney-General v Butterworth, Chapman v Honig [1963] 2 QB 502 came before that court. Chapman v Honig was not a motion to punish for contempt, but a proceeding in which damages were sought on the basis that a contempt had been committed when a witness who was a tenant was evicted for giving evidence on behalf of another tenant. The Court of Appeal held by majority (Pearson and Davies LJJ, Lord Denning MR dissenting) that no such action lay. But the decision does not seem to me to represent any retreat from Attorney-General v Butterworth. Pearson LJ pointed out that the landlord was lawfully entitled to evict his tenant, but he did not suggest this provided a ground for denying that an eviction motivated by a desire to punish a witness for having given evidence would be a contempt of court; indeed, he quoted (at 518) the statement of Donovan LJ in the earlier case:

ÒThe respondents were within their legal rights in seeking to relieve [the witness] from his honorary posts. But if the object of doing so was not merely to exercise that right for the good of the branch [of the union] but to punish him for the evidence which he gave before the Restrictive Practices Court, and if the taking of such revenge was calculated to interfere with the administration of justice, then it will be no answer for the respondents to say that, while intending to punish [the witness], still they had no intention of interfering with the administration of justice.Ó

Neither Pearson LJ nor Davies LJ expressed any disagreement with this statement of the law. In any case, in the subsequent decision of the Court of Appeal in Moore v Clerk of Assize, Bristol [1971] 1 WLR 1669, the authority of Attorney-General v Butterworth was asserted quite expressly. After referring to that case, Lord Denning MR said at 1670, with the agreement of Edmund Davies and Megaw LJJ:

ÒThe court will always preserve the freedom and integrity of witnesses and not allow them to be intimidated in any way, either before the trial, pending it or after it.Ó

Moore was a case of a physical threat made after evidence had been given.

The question whether an attempt to influence a witness by Òa threat to do an otherwise lawful act or to exercise a legal rightÓ may be unlawful has also been considered in England in the context of a prosecution for an attempt to pervert the course of justice: Regina v Toney [1993] 1 WLR 364 at 370. The Court of Appeal, in a judgment delivered by Lloyd LJ, held that it may be, on the ground (stated at 368) that the Ògist of the offence lies in telling a potential witness what he should or should not say with the intention of influencing his evidence, not in the means adoptedÓ. After pointing out that, in the great majority of cases, perverting the course of justice by interfering with a witness involves the use of unlawful means Òsuch as threats, bribery or improper pressureÓ, his Lordship added (at 370):

ÒThe use of unlawful means is not however an essential ingredient in the offence.Ó

This passage was referred to with approval by Dawson J in Meissner v The Queen (1995) 184 CLR 132 at 158, and is not inconsistent with the view stated by the majority in that case (Brennan, Toohey and McHugh JJ) at 142-143, although their Honours pointed out that Lloyd LJ also used language going somewhat further, with which they did not agree. His Lordship appeared to suggest that an attempt to persuade a witness not to commit perjury, if made by a threat to do an otherwise legal act or exercise a legal right, would constitute an attempt to pervert the course of justice. That could not be correct, and could not really have been what Lloyd LJ meant, having regard to his reasoning in the immediately preceding passage at 369-370.

Questions have, however, been raised as to the extent to which these principles may be extrapolated to cases involving threats, not to witnesses as such, but to parties. It may be accepted that there are various situations in which various kinds of pressure - for example, commercial pressure in a case involving commercial activities - may quite properly be brought to bear on a party with a view to the settlement of litigation. See the discussion in the Report on Criminal Law Ð Offences relating to Interference with the Course of Justice of the Law Commission (under the chairmanship of Kerr J) printed by order of the House of Commons 7 November 1979, paras 3.42-3.48, 3.74-3.75, and in Report No. 35 Contempt (1987) of the Australian Law Reform Commission, para 191. But in an early case, Stuart V-C had no doubt that a threat by a plaintiff in a civil proceeding that the defendant would be indicted for serious criminal offences if he maintained his defence Òwas a threat for the purpose of intimidating him as a suitor, and, therefore, whether it had had that effect or not, it was unquestionably a contempt of courtÓ: Smith v Lakeman (1856) 26 LJ Ch 305 at 306. See also Brambles Holdings Ltd v Trade Practices Commission (No 2) (1980) 44 FLR 182 at 194; Re Goldman at 327, per Sugerman A-P, who included Òpunitive conduct directed against parties to litigationÓ in a statement of conduct that may amount to contempt.

Whether the law of contempt shields a party against improper pressure in connection with proceedings in a court was considered by the House of Lords in Attorney-General v Times Newspapers Ltd [1974] AC 273. In that case, while litigation was pending against a drug company which had marketed the drug Thalidomide for some time before it was found to be implicated in the birth of deformed children, there were published and threatened to be published in a newspaper articles having, it was claimed, a tendency to subject the defendant in the proceedings to improper pressure. In this context, Lord Reid said (at 297-298):

ÒSo I would hold that as a general rule where the only matter to be considered is pressure put on a litigant, fair and temperate criticism is legitimate, but anything which goes beyond that may well involve contempt of court.Ó

And he added (at 301):

ÒNo-one denies that it would be contempt of court to use improper pressure to induce a litigant to settle a case on terms to which he did not wish to agree.Ó

Lord Simon of Glaisdale referred (at 318) to a case (In Re Mulock (1864) 3 Sw & Tr 599; 164 ER 1407) where a petitioner in a divorce suit was threatened with publication of Òthe full truthÓ unless her petition were withdrawn, and she was held to have Òthe right to approach [the] court, free from all restraint or intimidationÓ, as Òa right that belongs to all suitorsÓ. His Lordship said (at 318-319):

ÒThus, if the chairman of a social club threatened a judge with expulsion unless a certain forensic result ensued, it would, in my opinion, unquestionably be contempt of court. So, too, if an employer threatens a witness or a juryman with dismissal, whether before, pending or after trial ... . Similarly, in general, with any private pressure on a litigant to deter him from exercising his legal rights. The only difference is that private pressure on a litigant (in contradistinction to violence or bribery or public execration) might sometimes be justifiable, while private pressure on the tribunal or witness never would be so. The justification for private pressure on a litigant might be such a common interest that fair, reasonable and moderate personal representations would be appropriate.Ó

Lord Simon of Glaisdale also expressed (at 314) his general agreement with the views on the law of contempt set out in the speech of Lord Diplock. Lord Diplock stated (at 309) a requirement of the due administration of justice as being Òthat all citizens should have unhindered access to the constitutionally established courts of criminal or civil jurisdiction for the determination of disputes as to their legal rights and liabilitiesÓ, and he added:

ÒContempt of court is punishable because it undermines the confidence not only of the parties to the particular litigation but also of the public as potential suitors, in the due administration of justice by the established courts of law.Ó

Attorney-General v Times Newspapers Ltd was considered by the Court of Appeal in Attorney-General v Hislop [1991] 1 QB 514, the background to which included the notorious ÒYorkshire RipperÓ murders. During the pendency of proceedings brought by the murdererÕs wife against a magazine which imputed complicity to her, a very inflammatory article was published, as Nicholls LJ said at 530, Òwith the intention of deterring Mrs Sutcliffe from pursuing her claimsÓ. His Lordship said (at 531):

ÒContempt of court is interference with the due administration of justice. In the present case the vice in the articles was not dependent on the truth or falsity of the allegations against Mrs Sutcliffe. The essential vice lay in the purpose for which, the intention with which, these serious allegations were made. É The fact that Mr Hislop believed the allegations he made against Mrs Sutcliffe were true, and the further fact that if sued for libel he intended to plead justification as a defence, cannot justify publication of the allegations when the purpose was to put pressure on Mrs Sutcliffe and deter her from pursuing her existing action to trial.Ó

In Harkianakis v Skalkos (1997) 42 NSWLR 22, the Court of Appeal of New South Wales has recently had to consider whether the publication of certain scurrilous articles in newspapers had a tendency to interfere with the course of justice in pending proceedings by subjecting the claimant to improper pressure to discontinue or settle those proceedings. Mason P (with whom Beazley JA agreed) examined the whole subject elaborately. He said (at 28) that the Òcases have recognised a category of criminal contempt in which improper pressure is placed on a party to court proceedings through the public dissemination of materialÓ; and that Ò[t]he gravamen of this particular type of contempt is the potential interference in the litigantÕs freedom to conduct the litigation as he or she chooses.Ó On an issue raised in some of the English cases to which I have referred, his Honour said (at 30):

ÒPressure may be actual or threatened, conditional or unconditional. What is done (or threatened) may be lawful or unlawful conduct. The mere fact that something that is lawful is threatened does not mean that the pressure is necessarily proper. Were it otherwise, a threat to report a legal practitioner to a professional disciplinary body (cf In Re Martin, the Times, 23 April 1986) or to commence a prosecution (cf Smith v Lakeman) could not constitute a contempt. Yet it clearly may.Ó

Mason P went on (at 32) to refer to Òthe lawÕs concern É to protect from improper interference the litigantÕs freedom to choose whether or not to initiate, continue or discontinue legal proceedingsÓ. He cited as relevant to this aspect of the law of contempt the decision of the High Court in Meissner v The Queen, which arose out of a prosecution for attempting to pervert the course of justice. Mason P pointed out that the actus reus required to be proved for that offence is the same as for contempt, and he said:

ÒThe High Court held that, when the means used to influence the guilty plea of an accused person were improper and resulted in the choice not being a free one, such conduct had a tendency to pervert the course of justiceÓ.

In a passage with which Mason P expressed his agreement (at 25), Powell JA said (at 61):

ÒWhile, in the case of a newspaper company, the directors will not normally be held responsible for a contempt by publication, it seems to me that if they, or any of them, actually involve themselves, or involves himself, in publication, there is no reason in logic why they, or he, should not be held liable for any contempt of court which might be committed.Ó

The expression Òimproper pressureÓ or Òimproper interferenceÓ, used in some of these authorities to identify cases where contempt is committed by an attempt to influence or deter a party, has the disadvantage of a degree of imprecision. How much this is a problem for the law of contempt, as a practical matter, may be a subject for debate. As I understand the authorities, if some action having an actual tendency to interfere with the administration of justice (including the deterrence of a party) is taken with the intention of so interfering, whether or not it would otherwise be an improper or a proper action, that tendency and that intent may be enough to establish a contempt of court. But, as Mason P pointed out in Harkianakis (at 28), intention to interfere with the due administration of justice is not necessary to constitute a contempt. Where such an intention is not shown, the question whether any pressure was or was not improper may be the crucial issue. Thus, in Willshire-Smith v Votino Bros Pty Ltd (1993) 41 FCR 496, a case in which (as appears at 506) there was no intention to interfere with the due administration of justice, but what was done had that tendency, OÕLoughlin J said (at 505):

ÒThe correct test is to determine whether the conduct complained of amounted to improper pressure to induce a litigant to withdraw from proceedings or to settle them on terms that he regarded as inadequate.Ó

In the context of the exercise by an alleged contemnor of a right, such as a right to give notice under a lease or to remove an office-holder from an office, it seems to me that the debate may too easily confuse the issues of impropriety and intent. It will, in cases of this nature, be the intent which will make the action improper: see Attorney-General v Butterworth at 723, 726, 727; Attorney-General v Hislop at 531; Meissner v The Queen at 142-143, 148-149, 158; Lane v Registrar of the Supreme Court of New South Wales (1981) 148 CLR 245 at 258.

I turn to the circumstances of the proceeding in this court in relation to which the respondents are alleged to have committed contempt. That proceeding was instituted on 21 March 1997 by the applicant Mr Clarkson against The Mandarin Club Limited, as well as two other companies not relevant to the present matter. Mr Clarkson had been for some time a member of the Mandarin Club, a club conducted by the company. His claim arose out of the drawing of prizes for a special promotion in connection with a gambling game known as Club Keno. When the prizes were drawn, according to Mr Clarkson, he was a winner, but he was passed over unjustifiably in his temporary absence from the club premises. The company entered an appearance on 9 April 1997, and the proceeding was settled very promptly pursuant to a Deed of Release, a notice of discontinuance being filed on 16 April 1997. The Deed of Release, executed in April 1997, presumably on or about 16 April 1997, involved the two other companies that were sued, one Jane Wong, The Mandarin Club Limited and Mark Alfred Clarkson. It is unnecessary to set out all its terms, but it recited the drawing of prizes on 6 March 1997; that the first ticket drawn was in the name of Wong and the second ticket drawn was in the name of Clarkson; that neither of these persons was present at the time of the draw and a third ticket was drawn, the prize being awarded to the holder of that ticket; that a dispute had arisen, and Mr Clarkson had commenced the proceedings; and that it had been agreed between the parties, without any admission of liability, to settle their differences on the terms set out in the Deed. The Deed then provided Òthat in consideration of the covenants herein and payment of the sum of $1500 by the Releasees [of whom the respondent company was one] to Clarkson and $1000 by the Releasees to Wong (the receipt whereof is hereby acknowledged)Ó the parties (inter alia) entered into the mutual releases contained in the Deed, it being agreed that the proceedings would be discontinued on the basis of the parties bearing their own costs. There was a covenant, headed ÒCONFIDENTIALITYÓ, in the following terms:

ÒThe terms of this Deed shall not be disclosed directly or indirectly by any of the parties in whole or part.Ó

Very soon after the conclusion of this case, within less than three weeks, Mr Clarkson was involved in events from which the immediate occasion of the present proceeding directly springs Ð whether by way of cause or pretext. Mr Clarkson, who appeared before me in person (I was told he has a law degree), referred to himself in an affidavit as a ÒdeipnosophistÓ, that is to say, an expert in dining and conversation, adopting a description which derives from The Deipnosophists, a work of the third century AD by the Greek Athenaeus. As doubtless Mr Clarkson well knows, The Deipnosophists is a source of much of our knowledge of Roman cuisine and banqueting customs, as well as of one of the most entertaining stories of a drunken revel to have come down to us from antiquity. It records how, at Agrigentum in Sicily, a party of youthful roisterers in a house from which their elders were absent, becoming excessively bibulous, and swaying uncontrollably in their intoxication, imagined themselves at sea in a storm-tossed trireme about to sink. So they began to lighten ship by jettisoning the furniture and bedding into the street. The amused citizens of Agrigentum always afterwards called the house ÒThe TriremeÓ! There is no suggestion that Mr Clarkson was affected to any similar extent by his potations, but the central incident of this case followed his drinking at a bar of the club on the night of Saturday the 3^rd to Sunday the 4^th May 1997 up to about the hour of 2-15am on the Sunday, and concerned three bottles of red wine. He claims that he acted in jest; however, the nature of the jest is obscure, and like the actions of the young men at Agrigentum, perhaps it had a Bacchic explanation.

What Mr Clarkson did was the subject of a report written at the time by one of the clubÕs security officers, Terry Akai. He wrote:

ÒAT ABOUT 2:16AM SUNDAY MORNING, I, TERRY AKAI, WAS PATROLLING GROUND FLOOR AND WORKING MY WAY UP TO MEZ FLOOR. I SAW MARK CLARKSON PICK UP THREE BOTTLE [SIC] OF WINE FROM BEHIND THE BAR. EACH BOTTLE COST AROUND $30:00 EACH ROUGHLY. JOHN THE BARMAN WAS WALKING DOWN THE STAIRS TO SEE NIGHT MANAGERS OR SOMEBODY? I APPROACHED HIM AND ASK WHAT WAS HE DOING? HE REPLIED, IÕM ONLY JOKING. WITHOUT ME BEING THERE HE COULD HAVE GOT AWAY WITH IT, WITHOUT JOHN THE BARMAN KNOWING THAT THREE BOTTLES OF WINE COULD HAVE GONE MISSING. I REPORTED THE INCIDENT TO THE MANAGERS ON DUTY, TAILOR WONG AND BRADLY TWEEDALE.Ó

It should be said at once that other persons were present, and that the evidence indicates Mr Clarkson was attempting to play some prank on the barman. This is what was referred to in the reply recorded at the time, ÒIÕm only joking.Ó Mr Clarkson was not attempting to misappropriate the wine. In saying that, I am conscious of the onus of proof in a case in which contempt of court is charged. The standard of proof of every element of the charge is proof beyond reasonable doubt. As Gummow J said in Pelechowski v Registrar, Court of Appeal (1998) 72 ALJR 711 at 712, the decision of the High Court in Witham v Holloway (1995) 183 CLR 525 Òstands for the proposition that the differences upon which a distinction between civil and criminal contempt has in the past been based are largely illusory and that all proceedings for contempt are realistically to be seen as criminal in nature. In that case, the consequence was that the charges were to be proved beyond reasonable doubt.Ó In Witham v Holloway (at 534), after stating that Òall charges of contempt must be proved beyond reasonable doubtÓ, Brennan, Deane, Toohey and Gaudron JJ added:

ÒHowever, to say that proceedings for contempt are essentially criminal in nature is not to equate them with the trial of a criminal charge. There are clear procedural differences, the most obvious being that criminal charges ordinarily involve trial by jury, whereas charges of contempt do not. There is no basis, in our view, for importing into the law of contempt the nineteenth century rules which allowed a verdict of guilty, given in a jury trial, to be quashed on appeal, but did not permit of an order for retrial. Moreover, the issue, so far as contempt is concerned, is not whether there should be a retrial, but whether there should be a rehearing.Ó

(The last part of this passage relates to an issue peculiar to that case, but I have quoted the whole passage because of the light it throws on the nature of the proceeding with which I have to deal.)

Accordingly, if the charges of contempt are to be made out, any facts supporting them must be found beyond reasonable doubt. I have not made and shall not make such findings except on that basis. However, there is simply no reason to doubt the applicantÕs version of this incident. He said he was going to tease the barman about this particular wine, and no other reason for his actions emerges. His uncontradicted evidence was that Òafter the bar had closed there was always a security guard up on the mezzanine floor [the relevant floor] as there was on this occasionÓ; also that Òonce the bar is closed it was practice for a security guard to go up and to supervise whoever was left there finishing their drinks, and indeed, to conduct them downstairs after a suitable time.Ó It is common ground that the incident occurred as the bar was about to close; indeed the barman was only absent for a few moments to get the key. The penalty ultimately inflicted upon Mr Clarkson (to which I shall come) is not consistent with the Board of Directors of the respondent entertaining any view that he proposed to steal the wine; had they drawn that conclusion, they would undoubtedly have expelled him from the club.

Mr AkaiÕs report received prompt attention. On 9 May 1997, a letter was written on behalf of the Board of Directors of the respondent company to Mr Clarkson giving him notice to attend a meeting of the Board Òconvened to consider [his] membership of the ClubÓ on 5 June 1997. The letter continued:

ÒYou are no doubt aware of an incident reported to senior staff which has caused concern. The nature of the complaint is that at about 2.15am on Sunday morning 4^th May, 1997 you were observed behind the mezzanine bar of the ClubÕs premises in possession of three bottles of wine.

You are invited to provide to the Board for its consideration, any written explanation which you may have in connection with [the] matter of complaint or alternatively to appear before the Board at the meeting mentioned above where you will be given the opportunity of orally explaining your actions in the Club premises.Ó

It will be observed that the letter refers only to the one incident.

Mr Clarkson wrote back promptly on 11 May 1997. His letter is a long one, and it is not necessary to reproduce it all. It sought details of the report and complaint referred to. It included the assertion that Ò[t]he only wine I could be considered to have been in possession of was that imbibed earlier in the eveningÓ. It specifically called for clarification as to whether he was accused of Òattempting to steal the wineÓ, and suggested that, if so, the matter Òshould be reported to the police so that the whole of the circumstances surrounding this incident and its aftermath can be the subject of a more formal police investigationÓ. Mr ClarksonÕs letter continued:

ÒAfter I trounced The Mandarin Club Ltd and The Wong Family in the recent proceedings in the Federal Court of Australia I was told to expect some reprisals.

As I consider that a man is often judged by the quality of his enemies I feel humiliated and diminished by the challenge I am now presented with. I am disappointed that you think so little of me that you would send such clumsy assassins so poorly armed.

The great General Sun Tsu in compiling The Art of War did not deal with an enemy who despite occupying the swamp to your high ground still persists in attacking. Perhaps he thought the position unworthy of advice.

It is settled law that a reprisal exacted against a successful litigant in civil proceedings is a Contempt of Court and that that contempt is criminal in nature. ÉÓ

To this letter, the respondent company sent no reply. It sought legal advice, and its solicitor advised it in writing not to reply, but simply to proceed with the meeting scheduled for 5 June. However, the solicitor, a Mr Adams, not the solicitor who originally acted for the respondent company in the Federal Court proceedings, apparently changed his mind. He decided to send to Mr Clarkson by facsimile a letter dated 28 May 1997, enclosing a copy of a club rule permitting the Board, after due notice, Òif any member shall in the opinion of the Board be guilty of conduct deemed by the Board to be unbecoming of a memberÓ, to suspend or expel that member by resolution of the Board. Otherwise, the letter added little to what had already been written in the companyÕs letter of 9 May. It did state:

ÒI note your comments in relation to the incident. I am writing to you to make you aware of the fact that the complaint against you is in relation to you being behind the bar on the morning mentioned. The Board meeting to which you have been called, is to determine whether your conduct on that occasion is conduct unbecoming of a member.Ó

Although it seems likely that Mr Adams is mistaken in thinking this letter was sent (Mr Clarkson denies receiving it; he never replied to it, which in this case would be curious if he had received it; other facsimiles sent by the solicitor were confirmed by post, which this admittedly was not; and the solicitor could not say he had advised his client either of his change of mind or that he had transmitted the facsimile), I think the principal significance of the letter is the indication it gives of the nature of what was alleged against Mr Clarkson. In response to a direct challenge upon the question whether attempting theft of the wine was suggested, the solicitor for the respondent company replied, or proposed to reply, Òto make [Mr Clarkson] aware of the fact that the complaint against [him] is in relation to [him] being behind the bar on the morning mentionedÓ.

The meeting called for 5 June duly took place. Those present included the second respondent Denis Wong, the chairman of the company, and the third respondent Geoffrey Wong, who was not a director but attended as secretary. Mr Clarkson did not attend. Mr Adams was present, although he arrived late. The minute records:

ÒSolicitor Jim Adams was present to oversee proceedings regarding Mark Clarksons [sic] meeting of the Board. Due to his non appearance at the meeting, our solicitor reccommended [sic] a 12 month suspension effective immediately. This was approved by the Board.Ó

None of the directors gave evidence before me, but Mr Adams and an accountant, Jackson Wong, who was also in attendance, did give evidence. Mr Jackson Wong, who had been associated with the club for four or five years, did not know of any other person who had had his membership suspended. In fact, there was no evidence that any other person had ever been suspended in the history of the club. The Executive Manager of the club, Mr Gibson, was unable to refer to any other case where the question of suspension or cancellation of a memberÕs membership had been brought before the Board of Directors or where any other person had been warned about being behind the bar. Until the question was raised in relation to Mr Clarkson, it had been common for members to go behind the bar for the purpose of using a telephone. Mr Jackson Wong denied that the Club Keno matter was discussed at all at the meeting. He said:

ÒWell, there wasnÕt much discussion. It was just that what was on was prepared by the solicitor. É [I]t was decided that there was no attendance [ie by Mr Clarkson] and there was a recommendation Ð and I canÕt remember if it was by the Board or the solicitor Ð that a suspension be voted upon.Ó

He said:

ÒI know the Board was concerned with people going behind the barÓ.

He also said that it was the solicitor who Òrecommended that the Board had the power under the Articles to suspend Mr Clarkson. É I believe it was Mr AdamsÕ suggestion.Ó

Mr Adams was quite definite: ÒCertainly amongst the Board members my recollection is there was no discussion.Ó He said it was correct that he read two reports to the Board and asked them for a discussion; that they asked what to do; and that he Òrecommended suspending the membership for 12 months, they all said yea, [he] wrote up the minutes, and that was the end of thatÓ. It took a Òmatter of minutesÓ.

The reference to Òtwo reportsÓ is noteworthy. There had been a report dated 25 April 1997 of an incident, which had not been mentioned in the letter to Mr Clarkson from the company or in the letter drafted by the solicitor. This other incident occurred about a week earlier than the one involving the three bottles of wine, and very shortly after the settlement of the Club Keno case. It will be recalled that a clause of the Deed of Release specifically provided for the confidentiality of that settlement. However, rumours circulated in the club that Mr Clarkson had lost the case, rumours which he attributed to the club management. His reaction was to tape three cheques relating to the settlement to a sign behind the bar. The cheques were returned to Mr Clarkson, whereupon he attempted to put them on the sign again, but the barman prevented him. The evidence is that the barman was reprimanded by the club Manager for permitting it to happen in the first place.

The applicant brings his motion to punish the respondents for contempt against the company, its chairman Denis Wong and its secretary Geoffrey Wong. The matter was brought before the Court by notice of motion filed under the number of the original action. No objection was taken to the form of the proceedings.

The charge against the first respondent, the company, was:

ÒTHAT the first respondent acting in concert together with the second and third respondents and others unknown did exact a reprisal against the applicant for being the successful litigant in the civil proceedings settled between the applicant AWA Limited and The Mandarin Club Limited by suspending on 5 June 1997 the membership of the applicant of the Club for 12 months.Ó

The fundamental question of fact to be determined is whether, in resolving to suspend the applicantÕs membership, the Board of Directors, being the mind of the company, had the intention of exacting a reprisal in respect of the applicantÕs proceeding in the court against the company. On the authorities I have discussed, this need not have been the only matter actuating the decision, or even the dominant matter. But if other matters played a part in motivating the action of the company, that might be very relevant in relation to the appropriate penalty.

I have come to the conclusion, beyond reasonable doubt, that a real motivating factor in the decision to suspend Mr ClarksonÕs membership was the desire and intention to exact a reprisal against him for bringing the proceeding which he brought in this court against the company so shortly before he became the first person known to have been thus dealt with by the Board. I find it very significant that the minute of the Board attributed the decision to the recommendation of the solicitor. While the solicitor might be asked for guidance on questions of power and procedure, the policy decision was very much a matter for the Board, particularly as no such decision had ever been taken before. I think the attempt to shift responsibility to an independent person is a strong indication of uneasiness. It is simply not believable that there would have been no discussion by members of the Board about this unique decision, particularly having regard to the open display of the cheques in the club. The only possible conclusion from the evidence is that this discussion took place prior to the Board meeting, so that the decision was cut and dried. At most, the effect of anything the solicitor said was limited to reducing the penalty from cancellation of membership, or an even longer suspension.

Despite the blandness of the solicitorÕs letter, suggesting he understood the complaint, at the time, to relate simply to the applicantÕs presence behind the bar, counsel put an argument that the directors were entitled to think the applicant was attempting to steal the wine. Mr Clarkson, by his letter, had sought directly for notice of any such allegation, and none had been given. A penalty of suspension rather than cancellation of membership is quite inconsistent with the Board holding the view that an attempt to steal the companyÕs wine had occurred. But once that is recognized, and however serious a view may be taken, in general, of the presence of a member of a club behind one of its bars, inescapably, regard must have been had to the previous common practice at this particular club, to the presence of other people at the time, and to the applicantÕs statement at once that he was Òonly jokingÓ. It is in itself significant that he was not asked by the Executive Manager, or anyone else, simply to explain the joke, nor was he warned that the clubÕs procedures with respect to the use of the telephone would be changed for the future, but instead was proceeded against in the most formal manner. Indeed, Mr Gibson appears to have had some appreciation that proper procedure would require more to be done than had been done, so he initially asserted Mr Clarkson had been warned after the earlier incident that he would be ÒcitedÓ if he went behind the bar again Ð an allegation which was later unqualifiedly withdrawn.

Finally, despite the terms of Mr AdamsÕs letter, in cross-examination by Mr Clarkson, he himself denied that Òmerely being behind the bar was enough to warrant and allow suspensionÓ.

Before the hearing concluded, the period of Mr ClarksonÕs suspension ran out. There was some evidence of an attempt by him to renew his membership through an intermediary. I do not propose to go into the detail of that matter, which relates to events long after those with which the charge of contempt is concerned. I do not draw any inferences adverse to the club, both for that reason, and also because the circumstances were not fully explored. Nor do I think that any inferences adverse to Mr Clarkson really assist in elucidating the problems with which I have to deal. Counsel for the company, in his final submissions, said that it would be open to me Òto infer that that was an attempt to procure exactly what it did procure, to embarrass the Club in these proceedings, I donÕt put it any further than that.Ó

While I have reached a conclusion adverse to the company as to what was its motive in part, I am also satisfied that a significant additional motive for the decision of the Board was its irritation with Mr Clarkson over the incident of the taping up of the cheques in the club. That was not only contrary to the terms of the confidentiality agreement reached between the parties to the action in this court; it was also a symbolic act of triumphalism, by which the applicant provocatively ÒcrowedÓ over the club. To make matters worse, his reply to the BoardÕs initial letter was couched in terms which, as he himself acknowledged during his cross-examination, with ready insouciance, were and were intended to be inflammatory.

Before considering further what order is appropriate as against the respondent company, I turn to the position of the two individual respondents, Denis Wong and Geoffrey Wong. The charge against Denis Wong is that he Òdid exact a reprisalÓ of the same kind as that alleged against the company Òby convening as Chairman of Directors a meeting of the Directors of [the company] to consider the membership of the applicant and thereafter inciting and persuading the Directors of [the company] to resolve to suspend the membership of the applicantÓ. The charge against Geoffrey Wong again relates to the same matter, but specifies as the actus reus Òpreparing as Secretary and General Manager of [the company] documents tabled at a meeting of the Directors of [the company] to consider the membership of the applicant knowing those documents to be false and misleading and thereafter inciting and persuading the Directors É to resolve to suspend the membership of the applicantÓ. I accept the submissions made on their behalf that it would be impossible to find beyond a reasonable doubt that either of them was guilty of these specific charges. There is simply no evidence of the relevant Òinciting and persuadingÓ, or that Geoffrey Wong actually prepared the relevant documents. I have already noted what Powell J said (with the agreement of Mason P) in Harkianakis concerning directors involving themselves in the commission by their company of an act of contempt, but, a charge of contempt being a proceeding of a criminal character, I think the applicant must be held precisely to the allegation he has made: cf. Lane v Registrar of Supreme Court at 257. Accordingly, the charges should be dismissed as against the individual respondents. However, in all the circumstances, I do not think I should make an order for costs in favour of those respondents. First, they joined with the respondent company in its defence; secondly, their involvement in the companyÕs act of contempt was certainly a factor attracting the charges made against them, even though those charges were inappropriately framed; and thirdly, they, together with the respondent company, increased the cost of the proceeding, and its inconvenience to the applicant, by adjournments for which they were responsible. Accordingly, I think the proceeding should be dismissed as against the individual respondents, but without any order as to costs.

That brings me back to the respondent company. Having regard to Mr ClarksonÕs own contribution to the step it took against him, and to the fact that this step was motivated only partly by a desire to achieve a contemptuous intention, I have concluded that it will be sufficiently penalised by being left to bear its own costs of the proceeding, and that it is unnecessary for me to make any order against it other than in respect of the costs thrown away by the adjournments which it forced upon the applicant. Those costs it must pay, including the costs reserved by Lockhart J on 4 December 1997.

Associate:

Dated:             23 December 1998