IN THE MATTER OF COLLECTION POINT PTY LTD (ACN 079 904 984)

THE COURT ORDERS THAT:

1.         Paragraphs 2 and 3 of the “Statement of Charge” filed on 15 September 2010 be struck out. 

2.         Antonio Bulzomi and ZacXan Pty Ltd file and serve an amended Statement of Charge and any further evidence upon which they intend to rely by 4:00 pm on 5 October 2010.

3.         The Plaintiff file and serve any material in response by 4:00 pm on 8 October 2010.

4.         The Notice of Motion be adjourned until 9:30 am on 11 October 2010.

5.         The instructing solicitor for Antonio Bulzomi and ZacXan Pty Ltd has leave to uplift and take possession of the CD produced pursuant to the Notice to Produce of 28 September 2010.  The CD is not to leave the offices of the instructing solicitor for Antonio Bulzomi and ZacXan Pty Ltd except to return the CD to the Court.

6.         The Plaintiff has leave to access and inspect the CD referred to in paragraph (5) above at the offices of the instructing solicitor for Antonio Bulzomi and ZacXan Pty Ltd.

7.         Antonio Bulzomi and ZacXan Pty Ltd pay the Plaintiff’s costs of today, such costs to be taxed in default of agreement.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE MATTER OF COLLECTION POINT PTY LTD (ACN 079 904 984)

REASONS FOR JUDGMENT

INTRODUCTION

1                          These contempt proceedings were filed on 15 September 2010 by two non-parties, Antonio Bulzomi and ZacXan Pty Ltd (collectively the Bulzomi Interests), against the Plaintiff, Hurkan Ali (Ali). 

2                          On 22 December 2009, orders were made, inter alia, that:

[4]        By no later than 4:00pm 24 December 2009, the plaintiff provide to the Court (and the independent person once they are appointed), and otherwise destroy and confirm on oath:

(a)        the File Maker Pro program and data files of the defendant; and

(b)        the MYOB data files of the defendant.

[5]        By no later than 4:00pm 24 December 2009, the plaintiff provide to the Court and the independent person (once they are appointed), and otherwise destroy and confirm on oath:

(a)        the MYOB data files of Zacxan Pty Ltd; and

(b)        the MYOB data files of T Bulzomi Financial and Legal Services.

[6]        By no later than 4:00pm 24 December 2009, the defendant provide to the Court a copy of:

(a)        the File Maker Pro program and data files of the defendant;

(b)        the MYOB data files of the defendant;

(c)        the MYOB data files of Zacxan Pty Ltd; and

(d)        the MYOB data files of T Bulzomi Financial and Legal Services.

(the December 2009 Order).

3                          The Bulzomi Interests, by Notice of Motion filed on 15 September 2010 and an accompanying Statement of Charge, allege that Ali breached the December 2009 Order as follows:

2.         In breach of the December 2009 Order, … Ali deliberately and intentionally failed to destroy…:

(a)        the MYOB data files of ZacXan Pty Ltd; and

(b)        the MYOB data files of T Bulzomi Financial and Legal Services.

Particulars

[The Bulzomi Interests] refer to:

(a)        the affidavit of Dominic Giovanni Crupi sworn 16 August 2010 in these proceedings;

(b)        the affidavit of Antonio Bulzomi sworn 16 August 2010 in these proceedings;

(c)        the affidavit of Dominic Giovanni Crupi sworn 1 September 2010 in these proceedings;

(d)        the affidavit of Scott Babington sworn 1 September 2010 in these proceedings;

(e)        the fifth affidavit of [Ali] affirmed 24 December 2009;

(f)        paragraph 5 of the sixth affidavit of [Ali] affirmed 14 April 2010;

(g)        paragraphs 35 and 36 of the seventh affidavit of [Ali] affirmed 16 August 2010 and exhibit “AH-3” to that affidavit.

3.         Further, in breach of the December 2009 Order, … Ali deliberately and voluntarily threatened to use:

(a)        the MYOB data files of ZacXan Pty Ltd; and / or

(b)        the MYOB data files of T Bulzomi Financial and Legal Services.

against Antonio Bulzomi as part of the general threats made against him to Messrs Crupi and Babington.

Particulars

[The Bulzomi Interests] refer to:

(a)        the affidavit of Dominic Giovanni Crupi sworn 1 September 2010 in these proceedings; and

(d)        the affidavit of Scott Babington sworn 1 September 2010 in these proceedings.

4                          The Statement of Charge stated that the Bulzomi Interests sought “the relief specified in the accompanying Notice of Motion”.  The Notice of Motion stated “that [Ali] be punished for contempt of Court on the grounds set out in the Statement of Charge dated 15 September 2010 and filed herein”.

5                          The written submissions filed on behalf of the Bulzomi Interests stated that “[Ali’s] contempt in deliberately failing to comply with the [December 2009 Order] should be treated as a serious contempt and punished by the imposition of a custodial sentence (whether suspended or not) together with an appropriate fine.”

6                          At the commencement of the hearing, Counsel for Ali made an oral application for the Notice of Motion to be dismissed or, alternatively, for the charges to be struck out on two grounds:

1.         the charges were not distinctly stated; and

2.         the charges as particularised were incapable of forming a breach of the December 2009 Order.

Counsel for Ali did not pursue the second ground.

RELEVANT LEGAL PRINCIPLES

Power

7                          The law relating to contempt proceedings, after undergoing something of an upheaval in the mid-1990s, is now fairly well settled.  First, the question of power.  The Federal Court of Australia Act 1976 (Cth) (FCA) gives the Federal Court “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”:  s 31 of the FCA.  The High Court, in turn, has the same power under s 24 of the Judiciary Act 1903 (Cth) to punish contempt as was possessed by the Supreme Court of the Judicature in England as of 1903:  Pattison (Trustee), in the matter of Bell (Bankrupt) v Bell [2007] FCA 137 at [43]-[44]. 

8                          Any application for contempt must be commenced strictly in accordance with the Rules:  Spindler v Balog (1959) 76 WN (NSW) 391.  In the Federal Court, O 40 r 5 of the Federal Court Rules provides for a procedure which enables a Court to address the substance of any alleged contempt. 

9                          Before turning to the oral application, two matters must be noted:

1.         the charge being one of contravention of a court order, the contempt is civil, not criminal;

2.         although civil, some attributes of criminal proceedings are engaged including standard of proof beyond reasonable doubt.

see Matthews v Australian Securities and Investments Commission [2009] NSWCA 155 at [154] (per Basten JA) and the authorities cited.

Are the charges distinctly stated?

10                        Ali submitted that neither of the charges (see [3] above) was distinctly stated.  There were two principal complaints. First, that the charges were merely accompanied by particulars that referred to affidavits (see [3] above).  Ali submitted that the facts relevant to the charge, not the evidence upon which they were to be proved, should have been set out.  Secondly, Ali submitted that even if the affidavits were read, they did not identify or support the charge.

11                        I will deal with each charge in turn. 

12                        Counsel for Ali submitted that in framing the first charge (see [3] above), it was incumbent on the Bulzomi Interests to specify with particularity the alleged breaches by identifying the files that had not been destroyed.  In relation to the framing of the second charge (see [3] above), Counsel for Ali submitted it was incumbent on the Bulzomi Interests to specify with particularity (1) the alleged breaches by identifying the files that had not been destroyed and (2) the “threats”. 

13                        Counsel for the Bulzomi Interests submitted that the charges were distinctly stated, consistent with the decision of the High Court in Coward v Stapleton (1953) 90 CLR 573.

The Law

14                        It is trite that no person should be punished for contempt unless the specific charge against the person is distinctly stated and the person has an opportunity of answering the charge:  Coward at 579-580.  In that case, the High Court stated:

Even apart from any such express provision, however, it is a well-recognized principle of law that no person ought to be punished for contempt of court unless the specific charge against him be distinctly stated and an opportunity of answering it given to him: In re Pollard (1868) LR 2 PC 106, at p 120 ; R  v. Foster; Ex parte Isaacs (1941) VLR 77, at p 81.  The gist of the accusation must be made clear to the person charged, though it is not always necessary to formulate the charge in a series of specific allegations: Chang Hang Kiu v. Piggott (1909) AC 312, at p 315.

15                        In the context of the Federal Court, the issue was recently addressed by Tracey J in Bovis Lend Lease Pty Ltd v Construction Forestry Mining and Energy Union (2009) 254 ALR 306 at [55] – [58] where his Honour stated:

[55]      Procedural fairness requires that any person, against whom a charge of contempt of court is levelled, must be confronted with a specific charge and provided with the opportunity of answering it: see Coward v Stapleton [1953] HCA 48; (1953) 90 CLR 573 at 579-580. It is, for this reason, that O 40 r 6 of the Federal Court Rules provides that where an application is made for punishment of an alleged contempt:

“A statement of charge, that is, a statement specifying the contempt of which the accused person is alleged to be guilty, shall be subscribed to, or filed with, the notice of motion or application.”

That obligation will be satisfied if the statement conveys the “gist of the accusation” made so that the person charged is able to understand and, if possible, meet the charge: see Coward v Stapleton at 579-80; Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd [2001] FCA 1758 at [119] (per Merkel J).

[56]      The first charge alleges a failure by the CFMEU to comply with Marshall J’s second order which required the removal of vehicles which were impeding access to the site. The second charge alleges that the CFMEU has contravened the first order made by his Honour by interfering with the passage of persons into and from the site on the 3 days immediately after the order was made.

[57]      In each case the charge seeks to paraphrase the terms of the relevant order and then alleges what it is that the CFMEU failed to do or did in contravention of the relevant order made by Marshall J.  Particulars follow.

[58]      In Concrete Constructions Pty Ltd v Plumbers and Gasfitters Employees’ Union (No 2) (1987) 15 FCR 64 Wilcox J dealt with a complaint that a statement of charge was deficient.  His Honour said (at 73) that:

“The second question is whether the statements of charge sufficiently specify the alleged breaches.  I think that they do.  In each case the charge sets out the relevant orders and then alleges, in positive terms, that the respondent did the enjoined act.  In essence, the complaint is that, the respondent being told to refrain from particular conduct, the respondent in fact committed that conduct.  This is a clear enough allegation.  It is true that, without more, the respondent would not know whether it is the case of the applicant that it carried out some positive act amounting to breach, and if so what act, or whether it is said that there was a contravention by the failure of the respondent to take a positive step necessary to bring to an end the condition of maintaining the ban.  But that is the function of particulars; and in each of these cases particulars were included in the charge.  In relation to omissions it is difficult to do more than to say that no action was taken.  But this is sufficient.  The respondent then knows the case it has to meet and that it will be an answer to that part of the case to show, if it can, either that no positive action was, under the circumstances, required or that it did take the relevant step ... In the case of allegations of positive actions in contravention of an order particulars of a charge should inform the recipient of the substance of the case sought to be made.  It is not necessary to set out the evidence which will establish that case; that will normally be contained in the affidavits.

(Emphasis added.)

16                        Having regard to those authorities, in my view a defendant to a contempt charge is entitled to be apprised not only of the legal nature of the offence charged but also of the particular act, matter or thing alleged as the foundation of the charge:  Johnson v Miller (1937) 59 CLR 467 at 477-478 and at 489-490.  See also Matthews at [40] – [47], [49] – [66] (per Tobias JA) and at [161] – [168] (per Basten JA). 

ANALYSIS AND CONCLUSION

17                        What then is the position here?  In my view, each charge is not distinctly stated.  That conclusion requires explanation.

18                        First, Counsel for the Bulzomi Interests opened the case by submitting that Ali breached the December 2009 Order by retaining a copy of MYOB data files of ZacXan Pty Ltd and T Bulzomi Financial and Legal Services which were later discovered on the execution of an Anton Piller order made by Ryan J on 2 August 2010, being files discovered on a CD found in Ali’s apartment. 

19                        It is true that in the case of the first charge it sets out the relevant order and then alleges, in positive terms, that Ali failed to do the positive act, namely, destroy the MYOB data files.  However, I do not consider that the charge or the particulars to that charge inform Ali of the substance of the case sought to be made.  It does not expressly refer to the CD discovered on the execution of the Anton Piller order.  I accept that the particulars to the charge refer to an affidavit affirmed by Ali on 16 August 2010 in which he deposes to the fact that the CD was found in his apartment and that if he had known about it, he would have destroyed the MYOB files in accordance with the December 2009 Order.  However, I do not consider that a person facing a contempt charge should be left to trawl through affidavits to determine “the legal nature of the offence with which he is charged [and] also … the particular act, matter or thing alleged as the foundation of the charge”:  Miller at 489. 

20                        In Chiltern District Council v Keane [1985] 1 WLR 619 at 622 (cited by Tobias JA in Matthews), Sir John Donaldson MR said, in relation to the particularity required of a charge of contempt, that:

The notice of motion … only stated the grounds of the application to commit in general terms.  It recited the undertaking and the injunction, and then alleged that there had been a breach.  This, on the authorities, is not sufficient.  It has been said in many cases that what is required is that the person alleged to be in contempt shall know, with sufficient particularity to enable him to defend himself, what exactly he is said to have done or omitted to do which constitutes a contempt of court.

(Emphasis added.)

In my view, that is the position here.  The statement of charge recited the order and then alleged there had been a breach.  The precise acts said to constitute the contempt were not stated:  for example, see Matthews at [46] citing McDonnell v Novello [2006] NSWSC 1186 at [26].

21                        Put another way, if you only read the statement of charge, you would not know whether “the particular act, matter or thing alleged as the foundation of the charge” was the failure to destroy anything at all or particular files.  As I have stated, I do not consider that it is appropriate to trawl through affidavits to solve those defects.  However, even if that task was undertaken, the “particular act, matter or thing alleged as the foundation of the charge” would remain indistinct, imprecise or unclear.  That is not sufficient.

22                        The second charge suffers from the same defects that affect the first charge.  In addition, it is by no means clear how unidentified “general threats” to use the MYOB files is a contravention of the December 2009 Order.  Of course, those “general threats” may constitute a particular of the first charge. 

23                        In the circumstances, I would not dismiss the Notice of Motion but I would strike out paragraphs 2 and 3 of the Statement of Charge. 

Associate:

Dated:         28 September 2010