Australian Securities and Investments Commission v Reid (No 1) [2006] FCA 699

FEDERAL COURT OF AUSTRALIA

Australian Securities and Investments Commission v Reid (No 1) [2006] FCA 699

PRACTICE AND PROCEDURE – application for adjournment based on Dietrich principle – contempt proceeding – nature of contempt proceeding is civil not criminal even though contempt is criminal – Dietrich principle cannot apply – application refused.

Dietrich v The Queen (1992) 177 CLR 292 cited Witham v Holloway (1995) 183 CLR 525 followed New South Wales v Canellis & Ors (1994) 181 CLR 309 applied McGibbon v Linkenbagh (1996) 41 ALD 219 cited Australian Competition and Consumer Commission v Leelee Pty Ltd [1999] FCA 1121 cited Nguyen v Minister for Immigration and Multicultural Affairs (2000) 101 FCR 20 cited Commissioner of Taxation (Cth) v La Rosa (2002) 196 ALR 139 cited Rivera v United States of America [2004] FCAFC 154 cited Vranic v Chief Executive Officer Centrelink [2004] FCA 1511cited AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v MAXWELL JOHN REID VID 3023 of 1992 LANDER J 8 JUNE 2006 ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VID 3023 OF 1992

BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

APPLICANT

AND: MAXWELL JOHN REID

RESPONDENT

JUDGE: LANDER J

DATE OF ORDER: 8 JUNE 2006

WHERE MADE: ADELAIDE

THE COURT ORDERS THAT: 1. The respondent's application for a stay of proceedings is refused. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VID 3023 OF 1992

BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

APPLICANT

AND: MAXWELL JOHN REID

RESPONDENT

JUDGE: LANDER J

DATE: 8 JUNE 2006

PLACE: ADELAIDE

REASONS FOR JUDGMENT 1 The applicant commenced these proceedings by notice of motion on 17 November 2003 seeking the following orders: '1. that the respondent be committed to prison or otherwise punished for contempt of Court for contravening the order of the Honourable Justice Jenkinson made on 10 March 1992 that the respondent be prohibited, pursuant to section 230 of the Corporations Law, until 10 August 2036 from managing a corporation; or in the alternative 2. that the warrant ordered by the Honourable Justice Kenny on 12 February 2002 to lie on the Court file be executed; or in the alternative 3. that the respondent be committed to prison or otherwise punished for contempt of Court in respect of his breach of the undertaking provided by him to the Honourable Justice Kenny on 8 October 2001 that he would not be involved in the management of a company in any form at all in the future; 4. that the respondent pay the applicant´s costs of and incidental to this motion on an indemnity basis; and 5. such further or other orders as the Court deems appropriate.' 2 Accompanying the notice of motion, as required under O 40 r 6 of the Federal Court Rules, was the Statement of Charge which claimed that the contempt committed by the respondent was wilful and contumacious insofar as: '1. in breach of paragraph 1 of the order of the Honourable Justice Jenkinson of this Court, made on 10 March 1992, wherein the respondent was prohibited from managing corporations until 10 August 2003, the respondent has been involved in the management of the following corporations: 1.1 Battstone Australia Pty Ltd between about 3 March 2003 and 3 June 2003; and 1.2 Australian Marble Pty Ltd between about 1 February 2003 and 14 July 2003; and 2. in breach of an oral undertaking provided to the Honourable Justice Kenny on 8 October 2001 that he would not be involved in the management of a company in any form at all in the future, the respondent has been involved in the management of the following corporations: 2.1 Battstone Australia Pty Ltd between about 3 March 2003 and 3 June 2003; and 2.2 Australian Marble Pty Ltd between about 1 February 2003 and 14 July 2003.' 3 The complete history of this proceeding can be found in my reasons for judgment in Australian Securities and Investments Commission v Reid [2005] FCA 1274. 4 Relevantly, the matter was listed for hearing on 22 November 2004. However, on 18 November 2004 the respondent, who was then represented by a solicitor, applied for an adjournment. I refused the application. On 22 November 2004, who was then unrepresented, applied for a stay of proceedings on the ground that he was indigent and without legal assistance: Dietrich v The Queen (1992) 177 CLR 292 ('Dietrich'). I refused the application and indicated that I would give my reasons at a later date. These are the reasons for my refusal of that application. 5 The procedure which is to be adopted where a party brings contempt proceedings against another party for contempt is regulated by O 40 of the Federal Court Rules and, in particular, O 40 r 7 which provides: '(1) Subject to subrule (2), the evidence in support of a charge shall be by affidavit. (2) The Court may permit evidence in support of a charge to be given otherwise than by affidavit.' 6 The procedure is different from criminal proceedings, where proceedings do not ordinarily go forward on affidavit evidence. 7 The High Court has recognised that contempt proceedings are civil, rather than criminal in nature. In Witham v Holloway (1995) 183 CLR 525 at 534 the High Court, in addressing the standard of proof to be applied in contempt proceedings, indicated that contempt proceedings are essentially criminal in nature. However, the majority indicated that the rights and procedural obligations ordinarily associated with a criminal trial are dispensed with in contempt proceedings, stating (at 534): 'It was submitted by counsel for the appellant that, if contempt proceedings are essentially criminal in nature, there is no power to order a retrial of the charges against the appellant ... However, 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. 8 The Court's reasons show that contempt proceedings, or at least the procedure to be adopted in them, is civil rather than criminal in nature even though a Court may find that a person has committed a criminal contempt. 9 There is a long line of authority to suggest that the principle established by Dietrich as to the use of the Court's inherent power to stay or adjourn proceedings until legal representation is obtained relates only to criminal proceedings. 10 The principle in Dietrich was explained in the joint judgment of Mason CJ, Dawson, Toohey and McHugh JJ in New South Wales v Canellis & Ors (1994) 181 CLR 309 ('Canellis') in the following terms (at 328): '… the principle established by the decision in that case is that a court has jurisdiction to grant an adjournment or order a permanent stay of proceedings at a trial until such time as an indigent person charged with a serious criminal offence is provided with legal representation necessary for a fair trial or resources for such representation.' 11 Referring to that principle, their Honours went on to say (at 328): 'As the majority judgments made clear, that principle is based on, and derives from, the accused's right to a fair trial.