FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v World Netsafe Pty Ltd [2003] FCA 1501

PRACTICE & PROCEDURE – contempt – where respondent found guilty of breaches of court orders – mitigating factors – whether there is power to imprison as well as fine – appropriate penalties

COSTS - whether there is an established practice that costs on a successful contempt application should be ordered on an indemnity basis – where contemnor successfully defends nine of eleven charges, whether contemnor entitled to some or all of his costs – appropriate costs order where there has been some failure and some success by each side

Trade Practices Act 1974 (Cth)

Federal Court Act 1976 (Cth) s 31, s 43

Judiciary Act 1903 (Cth) s 24

Federal Court Rules O 40 r 6

AMIEU v Mudginberri Station Pty Ltd (1986) 161 CLR 98 followed

Pelechowski v The Registrar, Court of Appeal [1999] HCA 19; (1999) 198 CLR 435 followed

DCT v Hickey (1999) ATC 5,124 cited

Adlam v Noack [1999] FCA 1606 cited

ASIC v Matthews (1999) 32 ACSR 404 cited

ASIC v Reid [2002] FCA 84 cited

ACCC v Goldstar Corporation Pty Ltd [1998] FCA 1441 cited

ACCC v Info4PCCom Pty Ltd (2002) 121 FCR 24 cited

Attorney-General v Times Newspapers Ltd [1992] 1 AC 191 mentioned

ACCC v Hughes (2001) ATPR 41-807 cited

Gallagher v Durack (1983) 152 CLR 238 followed

Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd (2003) 196 ALR 350 followed

Newman v R [2002] FCAFC 136 followed

ACCC v Purple Harmony Plates Pty Ltd No. 3 (2002) 196 ALR 576 mentioned

In the Will of Mary Johnson (1907) 24 WN (NSW) 124 mentioned

Evenco Pty Ltd v Amalgamated Society of Carpenters, Joiners, Bricklayers and Plasterers of Australasia Union of Employees, Queensland and Anor [1999] QSC 77 mentioned

Hinch v Attorney-General for the State of Victoria (1987) 164 CLR 15 followed

McIntyre v Perkes (1988) 15 NSWLR 417 mentioned

Peco Holdings Inc v Voss [2002] VSC 319 mentioned

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v WORLD NETSAFE PTY LTD (ACN 087 515 848) and TERENCE BUTLER

No Q 297 of 1999

SPENDER J

BRISBANE

16 DECEMBER 2003

THE COURT ORDERS THAT:

1.                  In respect of the first contempt:

(i)                  Terence Butler pay a fine of $1,000, within 28 days to the District Registrar, Queensland Registry, Federal Court of Australia.

(ii)                Terence Butler be imprisoned for one month.

(iii)              A warrant for Mr Butler’s committal to prison issue.

(iv)              The warrant lie in the Registry with the intent that it not be executed provided that Mr Butler:

causes the notice in the form of Schedule B to the orders made by the Federal Court on 8 December 2000 to be published in the manner specified in the order on the website http://www.worldnetsafe.com.au for a continuous period of six months from the date which is fourteen days from the date of this order.

2. On the second contempt:

(i)                  Terence Butler pay a fine of $1,000, within 28 days to the District Registrar, Queensland Registry, Federal Court of Australia.

(ii)                Terence Butler be imprisoned for one month.

(iii)               A warrant for Mr Butler’s committal to prison issue.

(iv)              The warrant lie in the Registry with the intent that it not be executed provided that Mr Butler:

causes a copy of the notice in the form of Schedule B to the orders made by the Federal Court on 8 December 2000, and a copy of the list of names and addresses of the persons to whom it was sent by the postal service, to be sent to the ACCC within fourteen days of today’s date.

3. The ACCC pay one-third of the costs of the respondent Terence Butler on the notice of motion for committal for contempt, to be assessed on a party and party basis, and to be taxed if not agreed.

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

REASONS FOR JUDGMENT

1                     I am presently concerned with the final two aspects of long-running litigation between the Australian Competition and Consumer Commission (“the ACCC”), World Netsafe Pty Ltd (“World Netsafe”) and Terence Butler. Those issues are first, the penalty that is appropriate to be imposed in respect of two counts of contempt of court which I have held have been established, and second, the costs of the motion by the ACCC to commit Mr Butler for contempt.

2                     On 6 March 2003 I delivered reasons for judgment concerning the application by the ACCC seeking orders that Mr Terence Butler be committed to prison for his alleged contempt of interlocutory orders made by Cooper J on 27 January 2000 and final orders which I made on 8 December 2000, for contraventions of the Trade Practices Act 1974 (Cth). My reasons for judgment of 8 December 2000 concern orders that the Court made in relation to conduct involving the marketing of an electronic card, the World Netsafe ATTM Card. Mr Butler was the sole shareholder and director of World Netsafe Pty Ltd. I held that two central aspects of the scheme which World Netsafe marketed, and with which Terence Butler was intimately concerned, involved contraventions of the Act. The first was that the scheme was a referral or pyramid selling scheme, and the second concerned misrepresentations about what the card could do. On 8 December 2000 I made extensive orders concerning the conduct of World Netsafe and Mr Butler.

3                     On 1 November 2001 the ACCC filed a statement of charge pursuant to O 40 r 6 of the Federal Court Rules. An amended statement of charge was filed on 12 April 2002. Counts 1 to 6 of that statement of charge alleged a failure by Mr Butler to make refunds of moneys paid by specific persons who participated in the scheme, as required by par 10 of my orders of 8 December 2000. Counts 7 and 8 of the amended statement of charge set out specific conduct allegedly in contravention of par 1 of orders of Cooper J of 27 January 2000.

4                     Count 9 of the amended statement of charge set out a breach of par 6 of my orders of 8 December 2000, which breach was admitted by Mr Butler. That order was:

‘The First and Second respondents at their expense maintain the websites:

(a)         http://www.worldnetsafe.com; and

(b)         http://www.worldnetsafe.com.au

and publish on the whole of the home page thereon the Notice at Schedule B (“the Notice”), as an htm page into the frameset of the homepage of World Netsafe in the same dimensions and layout as specified by the Applicant so that the htm page dominates the whole page of the homepage, providing a hotlink thereon to the web address http://www.accc.gov.au continuously for 6 months commencing forthwith.’

5                     Count 10 of the statement of charge was based on par 7(b) of my orders of 8 December 2000, which order relevantly was:

‘The First and Second Respondents at their expense publish the Notice by forwarding it forthwith:

(a)         by electronic mail transmission to all past and current members of the World Netsafe Scheme whose electronic mail address is known to the respondents, including to those persons who have an electronic mail address containing the symbols “@worldnetsafe.com”, each such message being simultaneously sent in the same electronic mail transmission to the Applicant at http://www/bnecompl@accc.gov.au; and

(b)         by the postal service to all past and current members of the World Netsafe Scheme, a copy of the notice and a list of the names and addresses of the persons to whom it was sent being served immediately thereafter upon the Applicant.’

6                     This claimed breach does not allege a failure to send the notice by post to all past and current members of the World Netsafe Scheme, but is based on a claimed failure to serve immediately thereafter upon the ACCC a copy of the notice and the list of the names and addresses of the persons to whom it was sent.

7                     Count 11 of the amended statement of charge alleges a breach of par 12 of my orders of 8 December 2000. The second part of the statement of charge deals with Mr Butler’s culpability for breaches by the first respondent, World Netsafe, of the orders of Cooper J.

8                     For the reasons which I published on 6 March 2003, I held that the ACCC had proved beyond reasonable doubt the contempts alleged against Mr Butler in Counts 9 and 10 of Part 1 of the statement of charge. I dismissed the other counts in the statement of charge, including the contempts alleged in Part 2 of the statement of charge. In respect of the two counts in which Mr Butler has been adjudged to be in contempt, the first is the consequence of Mr Butler’s admission that, in contravention of par 6 of my order of 8 December 2000, he failed to maintain a website publishing a corrective notice in a specified form for a continuous period of six months. The second adjudication of contempt lies in the finding that, in contravention of par 7 of my orders of 8 December 2000, Mr Butler failed to serve upon the applicant: (a) a copy of the corrective notice he was to send forthwith to all past and present members of the World Netsafe Scheme; and (b) a list of all the persons to whom the corrective notice was sent, immediately after the taking of such steps.

PENALTY

9                     The parties are not in dispute as to the principles which the Court should apply in making a decision upon penalty. I set out those agreed relevant principles:

10                  In AMIEU v Mudginberri Station Pty Ltd (1986) 161 CLR 98 “AMIEU v Mudginberri”), Gibbs CJ, Mason, Wilson & Deane JJ said, at 107:

… the underlying rationale of every exercise of the contempt power … [is] that it is necessary to uphold and protect the effective administration of justice. Although the primary purpose in committing a defendant who disobeys an injunction is to enforce the injunction for the benefit of the plaintiff, another purpose is to protect the effective administration of justice by demonstrating that the court’s orders will e enforced. As the authors of Borrie and Lowe’s Law of Contempt, 2^nd ed (1983) say at p.3:

“If a court lacked the means to enforce its orders, if its orders could be disobeyed with impunity, not only would individual litigants suffer, the whole administration of justice would be brought into disrepute.”

11                  In Pelechowski v The Registrar, Court of Appeal (1999) 198 CLR 435, the judgments of McHugh and Kirby JJ (who, in dissent, were the only judges to consider the rationale of the contempt power) were to similar effect. McHugh J said at 463:

In considering the appropriateness or otherwise of a sentence imposed for a contempt of court, it must always be borne in mind that the jurisdiction to commit for contempt exists so that the authority of the courts of law can be maintained. If breaches of the orders of the courts were regarded as of little moment, respect for and observance of the law would inevitably deteriorate and, ultimately, pose a threat to social order.

See also Kirby J at 484 – 485.

12                  So, too, in DCT v Hickey (1999) ATC 5,124 at par 35, Carr J observed:

Any contempt of court is serious. The seriousness transcends matters such as the personal dignity of the judiciary, or the rights [of a particular] litigant in this Court. The offence involves interferernce with the effective administration of justice, by impeding and perverting its course … Contempt of court is a matter of basic public significance. Unless the laws of contempt are properly enforced our whole system of justice is at risk.

13                  Similarly, in Adlam v Noack [1999] FCA 1606, Mansfield J said at par 16:

Contempt of court is a serious matter. If parties to litigation do not obey orders of the court, that strikes at the system of administration of justice. It impedes the just resolution of issues between the parties. It must be punished in a significant way.

14                  There is a wide range of penalties open to the court: ASIC v Matthews (1999) 32 ACSR 404 (“Matthews”) at par 29. Recently, in ASIC v Reid [2002] FCA 84 (“Reid”), Kenny J said, at par 30:

The Court has power … to impose a term of imprisonment, to fine, to make costs orders, or to punish the contempt by a combination of these means …

15                  The court may also suspend, on condition, any sentence of imprisonment that it might impose: ACCC v Goldstar Corporation Pty Ltd [2998] FCA 1441; and Matthews .

16                  Considerations which are relevant in deciding what is the appropriate penalty include:

(a)           The relative seriousness of the contempt, which is determined by the extent to which the contemnor appreciated that a contempt was being committed: ACCC v Info4PCCom Pty Ltd (2002) 121 FCR (“Info4PCCom”) at par 144.

(b)          Whether the contemnor subjectively intended to disobey the order: Attorney-General v Times Newspapers Ltd [1992] 1 AC 191 at 218; ACCC v Hughes (2001) ATPR 41-807 (“Hughes”) at par 20; and Info4PCCom.

(c)           The importance of bringing home to the contemnor the seriousness of the contempt: Hughes at par 24; Info4PCCom at par 139.

(d)          Whether the contemnor has offered any explanation or apology for his conduct: Gallagher v Durack (1983) 152 CLR 238, per Gibbs CJ, Mason, Wilson and Brennan JJ at 245.

(e)           An acknowledgment by the contemnor that a contempt was committed may be a mitigating factor: Matthews at par 25 and par 29.

17                  The second respondent contends that there are some additional factors that should also be taken into account when considering the penalty. Following the judgment of Tamberlin and Goldberg JJ (with whom Moore J agreed), it was contended on his behalf that an attempt by the contemnor to comply with the order in question is ‘a matter both relevant and important to take into account in considering the question of penalty.’: Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd (2003) 196 ALR 350 (“CRMEU v BHP”) at par 47. Secondly, again following CFMEU v BHP, it was contended that partial compliance by the contemnor with the order in question may have ‘considerable importance’ as a “significant step” in that ‘it does reflect respect for the court’s order and a readiness to comply’ at par 48. As always, in assessing the seriousness of a contempt, the practical consequence of the contemnor’s failure to comply and its effect upon the effective administration of justice in the case in question is a relevant factor.

18                  I turn now to consider the two instances of contempt found. In respect of both instances Mr Butler, in written submissions on his behalf, acknowledged the seriousness of the contempt constituted by his failure fully to comply with Order Number 6 and Order Number 7 that I made on 8 December 2000. In each case:

‘He unreservedly accepts the authority and jurisdiction of this Honourable Court and unreservedly apologises to this Honourable Court for his failure to so comply.’

19                  In respect of the first found contempt, Mr Butler pleaded guilty. It is accepted that a guilty plea should be treated as a mitigating factor, and a plea of guilty should attract ‘a significant discount to the sentences that might have been imposed in their absence.’: Newman v R [2002] FCAFC 136 at par 18, per Spender, O’Loughlin and Dowsett JJ. Here the plea of guilty was timely; the apologies, it has to be said, are belated, if fulsome. I do not ignore the fact that they were proffered eleven days after the receipt of the outline of submissions on penalty by the ACCC, in which Mr Butler was criticised for having failed to provide an apology or any explanation for his conduct. Notwithstanding the lateness of the apologies, the weight I attach to them is more than would otherwise be the case if they had not been made subsequent to a timely plea of guilty in respect of one of the counts.

20                  It has never been suggested by the ACCC that Mr Butler was in breach of subparagraph 6(a) of the orders of 8 December 2000. It is submitted on Mr Butler’s behalf that the non-compliance with subparagraph 6(b) of my orders is a consequence of Mr Ferguson, a website designer employed by World Netsafe prior to that company ceasing business, being told by Mr Butler to do ‘whatever was necessary to make sure that he complied’ with Order Number 6; that as a consequence Mr Ferguson, in about March 2001, made an estimation of the costs of complying with subparagraph 6(b), which he then erroneously thought was in the order of $700, and that on telling this to Mr Butler seeking his instructions, was told that Mr Butler could not afford this. Some of the explanations by Mr Butler to the ACCC’s solicitors in January 2001 are partially correct, but the balance of it is not. I am quite satisfied that Mr Butler decided not to comply with subparagraph 6(b) of my order of 8 December 2000 because he believed that compliance costs of about $700 (although a high and erroneous estimate) was too expensive.

21                  Concerning the failure to comply with Order Number 7, Mr Ferguson says that he delivered a list containing ‘inaccurate, unreliable or incomplete’ details of World Netsafe’s past and current members to the solicitors for the ACCC in or about late February 2001; that he subsequently instructed DDM, a mailing company, to use the list as a basis for doing a mail-out, which was completed in ‘early to mid March 2001.’ Mr Ferguson says that ‘Once the mail out had been completed [he] told Mr Butler that order number 7 had been satisfied’, but he now realises that he had not done everything necessary to satisfy order number 7, as he did not ‘appreciate the significance of the word “thereafter”.’ Had he appreciated that significance, the list that would have been given to the applicant’s solicitors would have been the same as the list given to them in late February 2001.

22                  The difficulty with this account is that Mr Butler wrote a letter to the ACCC’s solicitors dated 19 March 2001 in which he advised:

‘Mail out of the Notice to Members has commenced and is being executed by DDM Communications in Newstead. We anticipate that this will be completed this week, a copy of the notice and a complete list of names and addresses will be delivered to your offices immediately once complete.’

23                  It was submitted on Mr Butler’s behalf that the chronology referred to by Mr Ferguson was erroneous, and that the mail out referred to in Mr Butler’s letter of 19 March 2001 had not been completed as Mr Ferguson had said, but was then in the process of completion. Even if this were true, it is plain that Mr Butler was obliged to supply to the ACCC the list of members to whom the DDM Communications had sent the notice, and that on any view of the evidence this had not been done. The same applies in relation to the copy of the corrective notice, although it cannot be suggested that the ACCC was unaware of the terms of the notice that was in fact sent.

24                  In respect of each count, it is relevant that Mr Butler has no previous criminal convictions, and has not previously been found guilty of contempt of any court. I am satisfied that each of the two counts of contempt was the result of a deliberate decision by Mr Butler, and that he formed the view that compliance with the terms of the order was either unnecessary because compliance was trivial, or because the modest expense of compliance was thought to be too expensive by him. The seriousness of those contempts, nonetheless, is considerably lower than the other contempts which the ACCC alleged against him.

APPROPRIATE PENALTY

25                 I am not here concerned with the situation similar to that before Nicholson J in Info4PCCom (supra), where a company had failed to comply with an order restraining it from advertising, continuing to advertise, or accepting orders for computers or upgrades to computer systems. Advertisements continued for some six days after service of the order on the company. Nicholson J concluded that the breach was relatively close to the lower end of seriousness, and fined the company $2,000.

26                 Nor is this a case, in my opinion, similar to ACCC v Purple Harmony Plates Pty Ltd No. 3 (2002) 196 ALR 576 where a company had been restrained from publishing material concerning the benefits of certain products on 6 August 2001, and was required to put a corrective notice on the company’s website. Notwithstanding those orders, publication continued, including publication on a new website, until about 24 October 2001. The company was fined $20,000 and two natural persons $10,000 each. The fines were not paid. In respect of one of them, Ms Glover, Goldberg J found that there were mitigating circumstances in that she had ‘apologised unreservedly’ and ‘made disclosure of her assets’ which showed an inability to pay the fine. Ms Glover was sentenced to one month’s imprisonment, suspended, should Ms Glover take all necessary steps to secure the transfer of the registration of the domain name for the company’s website from the company to the Commission. The other natural contemnor, Mr Lyster, was found by Goldberg J to be ‘quite unrepentant’ and to have ‘shown no remorse for his contempt.’ Mr Lyster was sentenced to imprisonment for one month, the warrant of committal not to be executed unless Mr Lyster failed to comply with orders for the transfer of the Domain name to the Commission, and restraining him from making certain representation for two years.

27                 It was submitted on behalf of the ACCC:

‘Given the outstanding orders requiring the Second Respondent to pay refunds, there seems little point in imposing a fine by way of penalty for the contempts. While it would usually be appropriate for a costs order to form part of the punishment, that same consideration may suggest that such an order should not be made. Imprisonment for a short period is an appropriate punishment, and the remaining question is whether the imprisonment should be suspended on condition that the Second Respondent now comply with the orders.’

28                  Counsel for Mr Butler submitted:

‘Having regard to nature of the contempts found to have been committed by Mr Butler, and the mitigating circumstances outlined above, a fine of no more than a few thousand dollars would ordinarily be the appropriate punishment. Mr Butler is capable of paying a fine of that magnitude with the financial assistance of some of his relatives. There is no reason to think that the embarrassment of having to seek such assistance will not achieve the purpose of bringing home to Mr Butler the seriousness of his contempts.’

29                  The ACCC contends that there is utility, still, in requiring compliance with the orders which founded the contempt findings. For Mr Butler, it was said:

‘Mr Butler is not opposed to this if the Court considers that it is appropriate; but submits that he should be sentenced to pay a fine, rather than to a term of imprisonment, and that the payment of the fine should be suspended …’

on condition that he comply with those orders.

30                  I consider that the Court has power to impose a fine and to impose a term of imprisonment, suspended on Mr Butler complying, within a specified time, with the requirements of the orders, the breach of which founds the contempts that have been proved. I earlier noted the observations of Kenny J in Reid (supra), at par 30:

‘The Court has power … to impose a term of imprisonment, to fine, to make costs orders, or to punish the contempt by a combination of those means.’

31                  Section 31 of the Federal Court Act 1976 (Cth) (“the Act”) provides:

‘Subject to any other Act, the Court has the same power to punish contempts of its power and authority as is possessed by the High Court in respect of contempts of the High Court.’

Section 24 of the Judiciary Act 1903 (Cth) provides:

‘The High Court shall have the same power to punish contempts of its power and authority as is possessed at the commencement of this Act by the Supreme Court of Judicature in England.’

32                  There is no doubt that the Supreme Court of Judicature in England had the power to imprison for contempt, and I am satisfied that there was also a power in the Supreme Court of Judicature to fine for civil contempt for wilful disobedience. In AMIEU v Mudginberri (supra), the High Court said at p 113:

‘It is immaterial that the existence of the power to impose a fine for wilful disobedience may not have been explicitly recognised in 1903.’

33                  I am satisfied that I have the power, in respect of contempt, both to order a term of imprisonment and to impose a fine. Having regard particularly to the submissions made by the parties as to penalty set out above in respect of the two counts of contempt found established by the Court beyond reasonable doubt, I make the following orders.

34                  In respect of the first contempt:

(v)                Terence Butler pay a fine of $1,000, within 28 days to the District Registrar, Queensland Registry, Federal Court of Australia.

(vi)              Terence Butler be imprisoned for one month.

(vii)             A warrant for Mr Butler’s committal to prison issue.

(viii)           The warrant lie in the Registry with the intent that it not be executed provided that Mr Butler:

causes the notice in the form of Schedule B to the orders made by the Federal Court on 8 December 2000 to be published in the manner specified in the order on the website http://www.worldnetsafe.com.au for a continuous period of six months from the date which is fourteen days from the date of this order.

35                  On the second contempt:

(ix)              Terence Butler pay a fine of $1,000, within 28 days to the District Registrar, Queensland Registry, Federal Court of Australia.

(x)                Terence Butler be imprisoned for one month.

(xi)              A warrant for Mr Butler’s committal to prison issue.

(xii)             The warrant lie in the Registry with the intent that it not be executed provided that Mr Butler:

causes a copy of the notice in the form of Schedule B to the orders made by the Federal Court on 8 December 2000, and a copy of the list of names and addresses of the persons to whom it was sent by the postal service, to be sent to the ACCC within fourteen days of today’s date.

COSTS

36                  The ACCC submits that it should be awarded all of its costs on an indemnity basis. It submitted that this would accord with what it says has been the “established practice” since 1907, when Street J in In the Will of Mary Johnson (1907) 24 WN (NSW) 124 said:

‘As to the costs, the respondent is in contempt and the usual result must follow. The order will be that … the respondent do pay the applicant’s cost of this application … as between solicitor and client.’

37                  The ACCC submits that notwithstanding that the ACCC did not make out all of the counts of contempt it alleged, the Court nonetheless should decline to apportion costs. Alternatively, the Court might order Mr Butler to pay the costs of and incidental to Counts 9 and 10 on an indemnity basis and make no order as to costs in relation to some or all of the other counts. Or in the further alternative, the Court may order Mr Butler to pay the costs of and incidental to Counts 9 and 10 on an indemnity basis, and order the ACCC to pay the costs of and incidental to some (or all) of the other counts. An example of the latter possibility is the judgment of Evenco Pty Ltd v Amalgamated Society of Carpenters, Joiners, Bricklayers and Plasterers of Australasia Union of Employees, Queensland and Anor [1999] QSC 77 (“Evenco”) per Chesterman J. In that case the plaintiff succeeded in establishing one of three alleged contempts. Chesterman J ordered the defendants to pay the plaintiff’s costs in relation to the one contempt proved, on a solicitor and own client basis, and ordered the plaintiff to pay the defendant’s costs of successfully defending the other two allegations on a party and party basis.

38                  For Mr Butler it was submitted that Mr Butler should have his costs of defending the charges, other than Counts 9 and 10 in Part 1 of the statement of charge. He should also have his costs of successfully resisting the application to amend the statement of charge. Mr Butler concedes that the applicant is entitled to its costs in respect of Counts 9 and 10 on a party and party basis.

39                  Such an approach, it was submitted, was in accordance with the approach adopted by Chesterman J in Evenco (supra) and consistent with the High Court’s judgment as to costs in Hinch v Attorney-General for the State of Victoria (1987) 164 CLR 15 (“Hinch”) at 89-90:

‘Notwithstanding that a contempt may be described as a criminal offence, the proceedings do not attract the criminal jurisdiction of the court to which the application is made. On the contrary, they proceed in the civil jurisdiction and attract the rule that ordinarily applies in that jurisdiction, namely, that costs follow the event. There are many instances of the application of this rule to cases of contempt of court in this Court, including Consolidated Press Ltd v McRae (1955) 93 CLR 325, John Fairfax & Sons Pty Ltd v McRae (1955) 93 CLR 351, James v Robinson (1963) 109 CLR 593 and Doyle v The Commonwealth (1985) 156 CLR 510; see also R v Taylor; Ex parte Roach (1951) 82 CLR 587.’ (Emphasis added) [par 60 Resp Subs]

40                  In my judgment, there is no ‘established practice’ that a successful applicant in contempt proceedings is entitled to an indemnity costs order. After a detailed review of the then available authorities, Samuels JA in McIntyre v Perkes (1988) 15 NSWLR 417 said at 426-7, of a suggested rule of law or settled practice for solicitor client costs:

‘I do not consider that any such rule or practice can be discerned in the Australian cases, unless it be on occasions where no penalty by fine or by other means is imposed.’

Rodgers, then a JA, said at 434:

‘… As Samuels J has convincingly demonstrated, there is no “normal rule” of the kind referred to by counsel for the respondent. The Court has a complete discretion …’

41                  On the other hand, there is an unreported judgment of Gillard J of 9 August 2002 in Peco Holdings Inc v Voss [2002] VSC 319. His Honour in his reasons for judgment discusses decisions, including McIntyre v Perkes (supra) and concludes in par 90:

‘In my opinion, whilst there is no normal or binding rule with respect to the question, the practice in this state has been to order a contemnor to pay costs on a solicitor client basis as a general rule.’

42                  The power to make an order for costs in the present proceedings is conferred on this Court by s 43(2) of the Act:

‘Except as provided by any other Act, the award of costs is in the discretion of the Court or Judge.’

43                  Moore J in CFMEU v BHP said, at par 6:

‘It is at least clear, following McIntyre v Perkes (1988) 15 NSWLR 417 (see Samuels JA at 424-8 and Rodgers AJA at 434-6) (which involved a comprehensive review of the authorities including some suggesting the existence of a rule), that there is no general principle or rule of law in contempt cases that a successful applicant or successful prosecutor is routinely awarded costs on an indemnity basis; see also to the same effect in this court, Adlam v Noack [1999] FCA 1606; BC9907694 per Mansfield J at [29], LED Builders Pty Ltd v Eagle Homes Pty Ltd [1999] FCA 1213; BC9905513 per Lindgren J at [64]-[65]. Indeed as is the conventional practice in most cases, costs are routinely awarded in contempt cases on a party and party basis. …’

44                  The question of the appropriate order for costs in the present case is one of some difficulty. Mr Butler has been found guilty of two of eleven contempts alleged in Part 1 of the statement of charge. I referred earlier specifically to the observations of the High Court in Hinch (supra), to the effect that contempt proceedings in the civil jurisdiction ‘attract the rule that ordinarily applies in that jurisdiction, namely, that costs follow the event.’

45                  In my opinion, it would not be a fair or just exercise of the wide discretion conferred by s 43 of the Act to award costs to the ACCC and award no costs to Mr Butler. Mr Butler has incurred significant legal expenses in defending the charges made against him by the ACCC, and was mainly successful. Not all of the reasons for his success redound terribly to Mr Butler’s credit, but the fact of the matter is, a win is a win.

46                  One possible order would be to give the ACCC its costs in respect of the two counts on which it was successful, and Mr Butler his costs in relation to the nine counts which he successfully defended. The taxation of such orders would be of some difficulty, but in my opinion suffers from the more important difficulty that it would fail to give effect adequately to the rationale of the jurisdiction to commit for contempt, which is to vindicate the maintenance of the authority of the courts of law. Deliberate disobedience to the orders of the Court is a serious matter, calling for punishment in a significant way, and the question of what is an appropriate costs order in all the circumstance cannot be ignored as an irrelevant factor on the question of punishment.

47                  Doing the best I can to weigh the competing considerations relevant to the power to award costs in s 43 of the Act, rather than make competing costs orders, I order that the ACCC pay one-third of the costs of the respondent Terence Butler assessed on a party and party basis, to be taxed if not agreed.

Associate:

Dated: 16 December 2003