FEDERAL COURT OF AUSTRALIA

Pennicott Wilderness Journeys Pty Ltd v Tasmanian Cruises

and Charters Pty Ltd (in liquidation) [2013] FCA 966

THE COURT ORDERS THAT:

1.    A fine of $15,000 is imposed on Ms Jeffrey for contravention of paragraphs 1, 3 and 7 of the Order of the Court made on 23 August 2012.

2.    A fine of $25,000 is imposed on Mr Pearce for contravention of paragraphs 1, 3 and 7 of the Order of the Court made on 23 August 2012.

3.    The fines referred to in paragraphs 1 and 2 above are to be paid to the Tasmania District Registrar of the Court on or before 22 November 2013. Failing the payment of those fines by that day, Mr Pearce is sentenced to a term of 25 days in imprisonment in default and Ms Jeffrey be sentenced to a term of 15 days imprisonment in default.

4.    Mr Pearce and Ms Jeffrey pay the applicant’s costs of the amended application on a party/party basis save that the costs in relation to the hearing on 6 and 7 August 2013, 23 September 2013 and the preparation of final written submissions be paid on an indemnity basis.

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

REASONS FOR JUDGMENT

(Revised from transcript)

1    These reasons for judgment should be read in conjunction with the reasons for judgment of the Court in Pennicott Wilderness Journeys Pty Ltd v Tasmanian Cruises and Charters Pty Ltd (in liquidation) [2013] FCA 932. The following reasons deal with the quantum of penalties and the appropriate costs orders to be made in this interlocutory proceeding which arises out of the respondent’s failure to comply with certain consent orders made in August 2012.

Penalties

2    It is accepted by all counsel, and the Court agrees, that the breaches of the consent order are not sufficiently serious to warrant the imprisonment of Mr Pearce or Ms Jeffrey. It is appropriate to impose pecuniary penalties, with imprisonment following only as a consequence of failure to pay those penalties.

3    The financial penalties should be sufficient to give due weight to specific and general deterrence and to reinforce the concept that breach of court orders should not be seen as part of the price of doing business. Although the assessment of penalty is an inexact science, the Court considers the appropriate penalties to reflect the current transgressions are as follows:

    for Mr Pearce, $25,000; and

    for Ms Jeffrey, $15,000.

4    The penalties would have been higher but for the relatively brief period during which Mr Pearce and Ms Jeffrey were in breach of the Court’s orders. They also would have been higher but for the absence of any previous conduct of the type giving rise to the penalties ordered in this proceeding. Further, the Court has taken into account, to a lesser extent, the contrition of Mr Pearce and Ms Jeffrey, communicated through their counsel this afternoon albeit belatedly.

5    The Court does not consider that the conduct of Ms Jeffrey and Mr Pearce was contumacious so as to amount to criminal contempt. Their conduct was largely based on a forlorn hope that the respondent could regularise its affairs in time for its compliance with the Court’s orders, apart from Order 7. The conduct was also based on Mr Pearce’s misguided but genuinely held belief concerning the respondent’s compliance with Order 7.

6    The Court rejects the submission that Ms Jeffrey was as culpable as Mr Pearce for the breaches of the consent order. Mr Pearce was the chief actor on behalf of the respondent whose conduct led to the breaches of the consent order.

7    In setting the penalties, the Court has had regard to the particular circumstances of this matter. Each case of contempt must be determined on its own facts. Precedents dealing with other contempts and different factual situations are of limited assistance.

Costs

8    Counsel for Pennicott submitted that their client should be awarded costs on an indemnity basis. In matters such as the present, so much is the usual course; see Plastec Australia Pty Ltd v Plumbing Solutions and Services Pty Ltd (No 4) [2012] FCA 657 at [36] per Logan J. There, his Honour said:

As to costs, the usual, but not mandatory order in a case such as the present is for an applicant to have its costs on an indemnity basis. There are good reasons for that being a usual order being associated with the public interest served by the Court having drawn to its attention what comes to be a proved contempt.

See also Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 234 per Sheppard J.

9    During the course of the two day hearing in Hobart, the Court expressed concern about the relevance of some of the cross-examination by counsel for Pennicott. It twice remarked that such cross-examination appeared to be wasteful of time and that its occurrence may impact on any application for indemnity costs. On a more mature reflection on the totality of the evidence, I do not consider that the questions which the Court took exception to at the time should, as a matter of fairness, preclude an application for indemnity costs. However, I reject the contention that a previous costs order made against the respondent should be paid personally by Mr Pearce and/or Ms Jeffrey. Those orders were made against the respondent prior to it going into liquidation and are part of the debts of the respondent in liquidation. I also consider that the award of indemnity costs should relate only to the hearing before the Court on 6 and 7 August 2013 and 23 September 2013, together with the preparation of closing written submissions and the preparation associated with those hearing days. The amended interlocutory application involved various other steps, including a failed application for leave to proceed against the respondent in liquidation, that were not solely relevant to the two individuals the subject of the Court’s current consideration. The Court will make an order that Mr Pearce and Ms Jeffrey pay the applicant’s costs of the amended interlocutory application on a party and party basis, with costs in relation to the matters set out earlier in this paragraph to be paid on an indemnity basis.

Associate:

Dated:    24 September 2013