FEDERAL COURT OF AUSTRALIA

Boase v Sullivan Commercial Pty Ltd trading as McGees Property (No 4) [2013] FCA 195

THE COURT ORDERS THAT:

1.    The application is dismissed.

2.    There be no order as to costs.

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

REASONS FOR JUDGMENT

THE APPLICATION

1    The applicant (Mr Boase) seeks an order that the Court direct the Registrar to make application in the proceeding, or to start a proceeding for punishment of contempt by three legal practitioners who were involved in the proceedings representing parties to whom Mr Boase was opposed.

2    The alleged events described by Mr Boase relate to exchanges and conduct which allegedly occurred quite some time ago. This is not a situation of contempt in the face of court or, as will be seen, in my view, of any arguable contempt.

GOVERNING PRINCIPLES

3    By s 31 of the Federal Court of Australia Act 1976 (Cth) (the Act) it is provided that 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. Subsection (2) deals with the jurisdiction of the Court to punish a contempt committed in the face of the Court to be exercised by the Court at the time of the contempt.

4    The reference in s 31 of the Act to the High Court requires consideration of s 24 of the Judiciary Act 1903 (Cth) (the Judiciary Act) which confers on the High Court and, thus, by s 31, the Federal Court, the same power to punish for contempt as was possessed at the commencement of the Judiciary Act by the Supreme Court of Judicature in England. As noted in Menzies v Paccar Financial Pty Ltd [2011] FCA 1161 by Tracey J (at [90]), ‘An allegation that a person should be adjudged in contempt of court is an allegation of the utmost seriousness’.     Because of the seriousness of the charge, the alleged contemnor is entitled to be advised of the specific charge against him or her both under the Rules and in substantive law: Coward v Stapleton (1953) 90 CLR 573 (at 580) and Ali v Collection Point Pty Ltd (2010) 274 ALR 618 (at [14]). It has been held that since contempt of court as a whole is an offence of a criminal character, it is necessary even in cases of civil contempt to prove the offence beyond all reasonable doubt: see In re Bramblevale Ltd [1970] 1 Ch 128 and In the marriage of Davis (1976) 11 ALR 81 (at 82).

5    There are various forms of contempt including relevantly for this application any act done or writing published which is calculated to bring a court or a judge into contempt or to lower its or his or her authority and to undermine public confidence in the administration of justice: R v Gray [1900] 2 QB 36 (at 40). Deliberate and wilful disobedience of a court order, which is amongst the present claims, is such an example.

PROCEDURE

6    The Federal Court Rules 2011 (Cth) (the Rules) encompass different types of contempt. Div 42.1 deals with contempt in the face or hearing of the Court. This has no application to Mr Boase’s complaints. The interlocutory application pursued by Mr Boase is purportedly based on r 42.16 and r 1.40, each of which respectively provide:

42.16    Application or proceeding by the Registrar

(1)    If it is alleged that a person is guilty of contempt of the Court, a party may apply to the Court for an order directing the Registrar to make application in the proceeding, or to start a proceeding, for punishment of the contempt.

(2)    Subrule (1) does not affect any right of a person to make application in the proceeding for, or to start a proceeding for, punishment of contempt.

1.40    Exercise of Court’s power

The Court may, at any stage of the proceeding, exercise a power mentioned in these Rules in the proceeding:

(a)    on its own initiative; or

(b)    on the application of a party, or a person who has a sufficient interest in the proceeding.

7    In relation to Div 42.2 of Pt 42, it is provided in r 42.11 as follows:

42.11    Procedure generally

(1)    If a party alleges that a contempt has been committed by a person in connection with a proceeding in the Court, an application for punishment for the alleged contempt must be made by the party by interlocutory application in the proceeding.

(2)    If it is alleged that a contempt has been committed by a person, but not in connection with a proceeding in the Court, the proceeding for punishment of the alleged contempt must be started by filing an originating application as a substantive proceeding.

8    In substance, Mr Boase seeks an order under r 42.16(1) rather than r 42.16(2) of the Rules. In CT Sheet Metal Works Pty Ltd v Hutchinson (2012) 201 FCR 275, Reeves J considered the corresponding provision under the former Federal Court Rules noting that despite the language of the rule, it was not necessary for the Court at this stage to make a finding that a putative contemnor was actually guilty of contempt of court. As his Honour said (at [29]):

If that were the requirement, it would, among other things, seem to render nugatory any proceedings subsequently taken by the Registrar or, if such proceedings were taken, to involve a pre-judgment of the outcome of those proceedings and, at the same time, give rise to the possibility of inconsistent judgments of the Court if the Registrar's application were to be dealt with by another judge. Instead I consider that, at this stage, I am required to determine whether there is sufficient material before me to justify my ordering the Registrar to take proceedings to prosecute what may appear to be a contempt of court.

9    His Honour continued to note that the Rule contemplated, in any event, a two step process. The first was to assess the materials in the way indicated above but, secondly, to determine whether in the exercise of a discretion there was sufficient reason, in all of the circumstances, to justify the Court ordering the Registrar to pursue proceedings for punishment of possible contempt of court.

10    For reasons which his Honour articulated in that particular case, his Honour declined to exercise a discretion to refer the matter.

11    On the return date of Mr Boase’s interlocutory application, the three practitioners appeared and applied, as they had foreshadowed, for the application to be dismissed on the basis that there was no admissible evidence even arguably capable of supporting an ultimate finding of contempt. I heard their argument in support and Mr Boase in response and reserved.

WHO SHOULD HEAR THE APPLICATION?

12    As a further consideration after the original oral submissions made at the hearing in this matter, my associate emailed the parties raising the question of whether it was appropriate that as the presiding judge in relation to the events the subject of complaint, it was appropriate for me to deal with Mr Boase’s request to refer the question to a registrar for consideration. Of course, no such referral would be made unless it was considered that there was a reasonable basis for such investigation.

13    In Clampett v Attorney-General (Cth) (2009) 181 FCR 473, the Full Court of this Court made clear (at [42]-[48]) that unless there was any particular urgency or other special circumstance, the appropriate course would be for another independent judicial officer to deal with a contempt.

14    Clampett was a case of contempt in the face of the Court. There is no suggestion of any such contempt in this instance, nor was there any urgency about producing reasons for whether or not the matter would be referred to a registrar as the events occurred some time ago. Nevertheless, the propositions in Clampett appear to have been more broadly based than a contempt in the face of the Court.

15    While the matters that are the subject of complaint by Mr Boase related only partly to any particular orders I made as distinct from professional conduct generally, the question was raised as to whether it may be preferable that the consideration of the request made by Mr Boase should be dealt with by another judicial officer.

16    The email continued:

As there was no consideration of this issue raised before his Honour on 5 February 2013, his Honour wished to give the parties an opportunity to express a view one way or another as to whether the request raised by Mr Boase should be dealt with by his Honour or, preferably, by another judicial officer.

17    In response, two of the three practitioners submitted, in relation to the observations on Clampett, that:

5    The Chief Justice considered (at [48]) that the circumstances in that case did not justify the learned Magistrate’s exercise of the discretionary power to punish for contempt, having regard to:

5.1    The speed with which the power was exercised;

5.2    The lack of any balancing of the competing considerations going to the administration of justice;

5.3    The fact that the learned Magistrate had an interest in the matter at hand; and

5.4    The severity of the potential penalty.

6    However, as his Honour has rightly indicated, the circumstances of the instant case are readily distinguishable from those of Clampett in that:

6.1    The instant case is not concerned with the punishment of a contempt in the face of the Court. His Honour therefore does not have the same interest in the alleged contempt as was perceived to be the case in Clampett.

6.2    His Honour is not being called upon to punish for contempt, but to determine whether the allegations of contempt ought to be referred to a registrar of the Court for further consideration.

7    Accordingly, the consideration which weighed against the exercise of the Court’s discretion in Clampett are not present in the instant case.

8    As to the balance of considerations, it is submitted that the proper and efficient administration of justice would be best served by the Application being dealt with by his Honour, as:

8.1    The Application relates to the conduct of the proceedings at hand.

8.2    As the docket judge for those proceedings, his Honour is uniquely familiar with their conduct.

8.3    His Honour is therefore at a distinct advantage over another judicial officer in disposing of this application.

9    As his Honour has rightly identified, the current complaint is analogous to (and largely concerned with) the non-compliance with programming orders made by the Court. In such cases, it is not uncommon for the complaint to be dealt with by the judge making the order.

10    In light of the above, it is submitted that, in the circumstances of the case, the Application ought to be dealt with by his Honour.

18    The third practitioner made no submissions.

19    Mr Boase said:

I have no issue whatsoever with his Honour Justice McKerracher adjudicating on – “that he make an order directing a Registrar under r 42.16 to make application or start a proceeding” (original emphasis)

20    Mr Boase also took the opportunity to make some additional submissions in relation to the nature of contempt generally, specifically emphasising that contempt may extend to conduct ‘without geographic boundaries but which is sufficiently proximate in time and space to the trial of the proceedings … so as to provide a present confrontation to the trial’. There was no trial in these proceedings as the matter was settled but I take the submission of Mr Boase to be that a broad view should be taken of the impugned conduct rather than that which is restricted to conduct seen or heard by the judge.

21    Mr Boase also annexed an extract from the Judicial Commission of New South Wales (which is available on the internet) underlining various passages from that extract, including those dealing with contempt by a breach of an order or undertaking emphasising that ‘contempt by breach of an order or undertaking is regarded as a civil contempt unless it “involves deliberate defiance or, as it is sometimes said, if it is contumacious”’: Witham v Holloway (1995) 183 CLR 525 (at 530). Mr Boase submitted that some of the conduct concerned, of which he raised complaint, was contumacious in the sense of being persistent refusal to obey a court order without good reason.

22    Another matter emphasised by Mr Boase was the common law test of whether the action taken had a tendency to interfere with the administration of justice: Goldman, in the matter of [1968] 3 NSWR 325 (at 327-328). He pointed out that it was not necessary to show actual interference: Harkianakis v Skalkos (1997) 42 NSWLR 22 (at 29). He emphasised cases involving pressure upon parties to proceedings will often require an assessment of whether the pressure was improper: Bhagat v Global Custodians Ltd [2002] NSWCA 160 per Spigelman CJ (at [35]).

23    Mr Boase highlighted that ‘intention’ is sometimes relevant and sometimes important. What needs to be established is an intention to do an act that has a clear objective tendency to interfere with the administration of justice: Prothonotary of the Supreme Court of New South Wales v Katelaris [2008] NSWSC 389 (at [30]).

24    Mr Boase emphasised that wilful breach of an order or undertaking by which a person is bound and of which the person has notice will amount to a contempt regardless of intent. He referred to my statement to one of the practitioners in the course of a directions hearing where I also said words to the effect of ‘We have to move this along’, to which the practitioner responded, ‘Yes your Honour’. Mr Boase referred to the misuse of a document produced under discovery in the sense of the well known rule in Harman v Secretary of State for the Home Department [1983] 1 AC 280. See also Hearne v Street (2008) 235 CLR 125 (at [96]). While previously characterised as an ‘implied undertaking’ to the Court, it is an obligation of substantive law binding third parties who receive documents knowing of their origin.

25    Finally, Mr Boase emphasised that there was a particularly high level of responsibility falling on legal practitioners dealing with a litigant in person, as was the case here.

26    The convenient collection of principles to which Mr Boase referred would not appear to be in dispute.

EVIDENCE

27    The materials relied upon in support of the application for an order under r 42.16 of the Rules are in an affidavit sworn by Mr Boase on 14 January 2013.

28    I was invited to read the affidavit in support of Mr Boase’s application without the practitioners waiving their rights to object to its admissibility. The practitioners referred to portions of the affidavit to make two submissions. The first was that it contained no admissible material upon which the Court could act in any event and, secondly, that it contained no material which, in any event, could amount to a contempt of court.

29    I made it clear that I had declined to examine the affidavit prior to the return date of the application lest it contain (as has been the experience during the substantive proceeding) inadmissible material. I regarded this as being of greater importance on a contempt application given the seriousness of such an application.

30    I examined the affidavit briefly during the course of the hearing. I have now had the opportunity to examine it more closely as invited by all concerned. The content of the affidavit contains a great deal of inadmissible argument and hearsay. Mr Boase says that he never intended that it should be used as ‘evidence’ for a trial but was simply annexing information which ought to be referred to the Registrar.

31    I can understand the submission but in the absence of agreed facts, before such a course could be taken on such a serious matter, I would have to be satisfied that there was sufficient admissible material before me to warrant a referral under r 42.16(1) of the Rules. As will be seen, some of the material is admissible and some of it is agreed. While Mr Boase is aggrieved by various aspects of the now concluded litigation including the conduct of the legal practitioners, that grievance on its own is not sufficient a basis to constitute an arguable contempt. Mr Boase, in pursuing the application, appears not only to misunderstand the concept of contempt of court but also to misunderstand its seriousness.

THE COMPLAINTS

Generally

32    At least two of the five complaints related to conduct in the context of a mediation. As noted above, the proceeding settled last year before the contempt application was filed on a favourable basis to the parties whom Mr Boase represented.

33    The other three complaints for the most part are vague and so lacking in particulars referable to each individual practitioner that, while a copy of them remains on the court record, it does not appear to me to be appropriate to record, verbatim, the detail of the complaints or the names of the practitioners in these reasons.

Specifics

34    In ‘Report No 1’ Mr Boase attaches a joint statement of conferral by expert valuers together with two other documents which are said to have emanated from the respondents’ expert witness. Those documents were sent to the applicants’ experts. The applicants’ experts ‘confirm’ that they have ‘never seen a document of that style’ previously. They refused to use it as a template for any conferral. Mr Boase complains that the conferral document was prepared by the solicitors for the respondents rather than by the expert himself. He complains that the questions raised in the document are ‘very subjective, not objective’.

35    The complaint appears to be that because the conferral statement is drafted by the respondents’ solicitors (an assumption), somehow there was ‘deliberate’ interference with the views which must be independently held by the expert witness. This complaint is difficult to understand. If the applicants’ expert witnesses did not accept that the document constituted a satisfactory basis on which to proceed for conferral, it was open for them say so. It was equally open for Mr Boase to have expressed that view both to his own experts or to the solicitors for the respondents. Presumably they did so.

36    But the underlying complaint appears to proceed on the assumption that experts should prepare their own conferral statements with no assistance from solicitors to define the issues, alternatively, that the issues should be those identified by one party only. The complaint is difficult to follow at all, let alone falling as it is presently framed, well short of a sound basis on which there could arguably be a contempt.

37    A second report, ‘Report No 2’ attaches a statement of claim filed in a Supreme Court proceeding, the content of which was supported, it is said, by an expert who, had he been called, would have given evidence opposed to the expected evidence of the second respondent. Mr Boase recorded two telephone conversations with that expert which were then transcribed. The transcriptions of both conversations were sent to the respondents’ solicitors immediately prior to the first mediation as well as to the expert. The expert reported Mr Boase’s recording of the conversation to the Western Australian Police in consequence of which he was charged with a criminal offence. That charge, I am told by Mr Boase, is no longer pursued. The complaint is that Mr Boase had attended the business premises of the expert concerned with a recording device concealed inside his jacket to record the conversation without alerting the expert. The gravamen of ‘Report No 2’ is that one of the three practitioners (who was nominated) passed on the transcript of the recording in breach of the Surveillance Devices Act 1988 (WA) (SDA).

38    Mr Boase says that there was a failure on the part of the practitioner to make an application under s 31 SDA to seek an order from a Judge pursuant to s 32 that the publication or communication of the private conversation should be made to protect or further the public interest.

39    It is difficult to see how this falls into any category of contempt, if true. Even if there were other statutory breaches involved, on which I make no comment, such a breach stands on its own footing. It is not possible to see how it could be a contempt.

40    ‘Report No 3’ also relates to expert evidence. In substance the complaint is that on 18 May 2011 the Court made orders that on or before 30 June 2011, the applicants provide the respondents to the primary proceedings with a copy of the report or substance of the evidence of any expert witness to be adduced and on or before 29 July 2011, the respondents reciprocate.

41    The orders were varied to extend the dates respectively to 7 July 2011 and 17 August 2011. Assurances were given in Court that there would be compliance with those orders but notwithstanding those assurances, on 25 August 2011 a letter bearing the signature of two of the three practitioners was sent to Mr Boase expressing the view that the majority of its contents were inadmissible for reasons spelt out in some detail over 4.5 pages. While not making any observations as to the correctness of the complaints, I can observe that the letter is entirely customary and consistent with that which might normally be expected in such litigation. Mr Boase, however, submits that ‘it is difficult to believe the letter came from a legal practitioner’. He argues that the letter was nothing more than a tactical diversion ‘to cover the fact that the respondents had not been able to engage a valuer in Perth willing to defend [the valuation report under consideration in the proceeding]’.

42    The letter concerned is entirely unexceptional. The practitioners acknowledge and accept with regret to the Court the delay in providing the expert reports but there is no other indication, let alone evidence in this report, which could possibly support a charge of contempt against the practitioners.

43    Mr Boase also complains that two of the practitioners knew about the ‘close’ relationship between the various experts and ‘ignored this conflict’ in order to obtain a report which would refute the applicants’ expert report. Mr Boase further infers that one practitioner ‘inflated’ the cost of the expert report in the ‘Bill of Anticipated Costs’ provided to him on 11 October 2009. In his affidavit Mr Boase annexes an email sent to one of the respondents’ solicitors on 28 September 2011 where the expert estimated a cost of ‘not more than $4,000’ for providing the valuation yet Mr Boase says that one of the practitioners listed this as ‘$25,000’ in the ‘Bill of Anticipated Costs’. The inference appears to be that the practitioners used an inflated bill of anticipated costs to intimidate and/or put unfair pressure on Mr Boase. I note that the actual ‘Bill of Anticipated Costs’ is not annexed to the affidavit but it would presumably be an estimate of the costs that may be incurred until completion of the matter by the end of trial. Those costs may well exceed an initial valuation report although the differential does appear to be substantial. Generally speaking, a great deal of 'Report No 3' is conjecture.

44    ‘Report No 4’ relates to conduct in the context of the mediation between the parties. Reference to that conduct is privileged and would be inadmissible for most purposes. The purpose of a mediation is to enable parties to explore the possibility of settlement of a matter on a confidential basis where their conduct, statements, actions and admissions would not be used against them in the context of the particular proceeding. This application for contempt has been brought by Mr Boase, rightly or wrongly, within the framework of the existing proceeding.

45    Further, the complaints raised go to the question of delay which, again, may quite fairly give rise to legitimate criticism but does not even arguably constitute a contempt. The essence of the complaint is that a 50 page draft substituted defence was attached to an email first delivered to Mr Boase on the evening before the mediation. The point is made that the draft defence was never anticipated or ordered by the Court but what had been ordered on 31 July 2012 was that the respondents file any amended defence or strike out application within 14 days. The respondents were given a subsequent extension but they were still nearly three months out of time. Mr Boase complains of a ‘long planned and successfully deployed strategy’ of the respondents to never provide a defence as ordered as well as a ‘well laid plan of ambush’. He complains of continual undertakings to file defences which were never performed.

46    Clearly non-compliance with orders and late performance stretching to months is unsatisfactory and inconsistent with obligations under s 37N of the Act to conduct proceedings as quickly, inexpensively and efficiently as possible. I cannot, however, reach any conclusion that it was driven by an intention to ‘bully’ Mr Boase, as he asserts. It certainly explains some of his frustration at the process and illustrates inadequate attention to the Rules of the Court, courtesy to the opponent and courtesy to the Registrar conducting the mediation. I have no way of knowing though (as the mediation was confidential), whether the defence having been delivered so late impeded the satisfactory progress of the mediation. It is well known, as has been recorded elsewhere, that Mr Boase has achieved considerable success in negotiating the outcome of the proceeding in circumstances where it would certainly not be expected that an individual would generally be conducting a representative proceeding on behalf of over twenty other individuals. What the outcome indicates is that the respondents and their legal advisers did attend the mediation and Mr Boase achieved a successful outcome for the group members. Despite the delay in filing the defence, it does appear that the mediation was able to proceed and produce an outcome. In all those circumstances, it seems highly improbable that there is any foundation for a contempt charge in relation to the delay of which Mr Boase complains (accepting for the purposes of the argument that the facts he has raised are correct and do not require qualification or amendment).

47    ‘Report No 5’ also relates to the mediation and the same observations can be made about the privileged nature of those communications. Mr Boase makes the point that the mediation was first scheduled for 24 October 2012. The next mediation was scheduled for 22 November 2012. Again, complaints of ‘very late delivery of a defence’ and ‘ambush’ are raised with the provision of a minute of substituted defence being supplied the night before the mediation. A further aspect of this complaint appears to be that some person unknown to the respondents conveniently redacted documents and such redactions provided defences to the applicants’ claims. There was absolutely no evidence that the legal practitioners concerned were aware of the redactions. ‘Report No 5’ then goes on to deal with a separate complaint. That is that during the six days between the adjourned mediation on 22 November until the resumed mediation on 28 November, documents supplied by the applicant led to the respondents ‘joining’ another party in its defence so as to put ‘significant (sic) more pressure’ on the applicant who, by this stage, was participating in mediation without the benefit of his experienced legal adviser.

48    This complaint is also difficult to understand. It appears to be that in the course of the mediation Mr Boase produced a document which was ‘seized upon’ by the respondents to amend and extend the defence, possibly to include another party. This does not, on its face, in the manner explained by Mr Boase constitute any breaches of mediation protocol. It is a matter of articulating in writing an amendment to a claim consequent on further discovery being given. The prohibition against the use of documents provided in mediation in the proceedings does not preclude the redrafting of a defence on the basis of a new document produced in the mediation. The prohibition against usage of documents produced, prepared or provided in the course of mediation to assist in the resolution of the mediation is not directed to a circumstance in which a document (presumably discoverable) has been produced for the first time by an applicant which the respondent considers makes it evident that there is another defence available to it. The document should have been produced in the first place by the applicants in discovery. Alternatively if it came into their hands later in the piece it should still have been discovered. A late amendment following late discovery is not surprising, let alone contemptuous.

49    Having read the affidavit in support of the present application, I am satisfied that there is both an absence of admissible material on which I could act in any way of my own volition or on which I could direct the Registrar to make an application for contempt. I am far from satisfied that any the matters raised could even arguably constitute contempt of court. That is not to say that one or more of the complaints – if substantiated – and I firmly stress they have not been tested in any sense, would not warrant some form of attention. But the complaints do not raise sufficiently clear characteristics of contempt per se so as to warrant the serious step of exercising the discretion under r 42.16(1).

50    The application must be dismissed.

COSTS

51    The practitioners appearing sought their costs. They had not engaged other practitioners, although one had indicated that if the dismissal on formal grounds were not successful, he would be engaging counsel to represent him. The primary submission of each of the practitioners appearing was that the application should be dismissed on its face. That submission has succeeded.

52    In Freehills, in the matter of New Tel Limited (in liq) ACN 009 068 955 (No 4) [2008] FCA 1085 (at [3]-[8]), I reviewed the competing authorities on the topic of the ‘Chorley exception’. I expressed the view in Freehills (at [9]) that while it may be that the Chorley exception will be revisited by the High Court in due course for the reasons expressed by Parker J in Dobree v Hoffman (1996) 18 WAR 36, for the moment I was and remain bound by Guss v Veenhuizen (No 2) (1976) 136 CLR 47. The Full Court was of the view that the High Court authority on that topic was on point and binding.

53    The ordinary rule is that costs follow the event. I have declined to refer the matter to a registrar as requested by Mr Boase. I have reached that conclusion both on the basis of the reasons set out above and also the submissions raised by the practitioners on their attendance. While the practitioners would ordinarily be entitled to their costs, I do not propose to make that order on this occasion for two reasons. The first reason is that while it is not possible to attribute blame to any particular individual practitioner, it seems nevertheless clear that the delay of which Mr Boase complained in compliance with orders of the Court was unsatisfactory (but, of course, fell well short of constituting a contempt). Had Mr Boase pursued the matter in other ways when the delays were encountered, the practitioners or some of them may have been exposed to costs orders. As it happened, he chose to proceed with the mediation which was an entirely pragmatic and sensible course. It seems to me that he has attained, albeit through much frustration, a satisfactory outcome but should not be penalised with a costs order given the extensive and unexplained delay by the practitioners and their clients in compliance with the Court orders. Secondly, while one would expect that the practitioners would have treated this application by Mr Boase very seriously as responsible officers of the Court, the actual time involved in opposing the application and responding to my request has been quite minimal.

54    In those circumstances, the orders I will make are that:

1.    The application be dismissed.

2.    There be no order as to costs.

Associate:

Dated:    7 March 2013