FEDERAL COURT OF AUSTRALIA Energizer Australia Pty Ltd v Remington Products Australia Pty Ltd (No 4) [2008] FCA 846 PRACTICE AND PROCEDURE – contempt charge against a corporation – direction that the corporation file its evidence in advance of the hearing – whether direction should be set aside Constitution, s 71 Federal Court of Australia Act 1976 (Cth), s 31 Federal Court Rules, O 10 r 1, O 35 r 7, O 40 r 5, O 40 r 7 Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (1999) 163 ALR 465 distinguished Australian Competition and Consumer Commission v FFE Building Services Pty Ltd (2003) 130 FCR 37 cited Australian Competition and Consumer Commission v Info4pc.com Pty Ltd (2002) 121 FCR 24 referred to Australian Securities and Investments Commission v Reid [2006] FCA 699 referred to Dietrich v The Queen (1992) 177 CLR 292 cited Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 referred to Witham v Holloway (1995) 183 CLR 525 discussed ENERGIZER AUSTRALIA PTY LTD v REMINGTON PRODUCTS AUSTRALIA PTY LTD NSD 2354 OF 2007 SACKVILLE J 5 JUNE 2008 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2354 OF 2007 BETWEEN: ENERGIZER AUSTRALIA PTY LTD Applicant AND: REMINGTON PRODUCTS AUSTRALIA PTY LTD Respondent JUDGE: SACKVILLE J DATE OF ORDER: 5 JUNE 2008 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Paragraph 1 of the applicant's amended notice of motion, filed on 29 May 2008, be heard and determined prior to the hearing of paragraphs 2 and 3 of that motion. 2. Paragraph 4 of the respondent's amended notice of motion, filed on 29 May 2008, be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2354 OF 2007 BETWEEN: ENERGIZER AUSTRALIA PTY LTD Applicant AND: REMINGTON PRODUCTS AUSTRALIA PTY LTD Respondent JUDGE: SACKVILLE J DATE: 5 JUNE 2008 PLACE: SYDNEY REASONS FOR JUDGMENT BACKGROUND 1 The applicant filed a motion on 7 February 2008 seeking orders that the Court find the respondent guilty of the charge of contempt of court specified in the attached statement of charge. The specific conduct alleged to constitute contempt of court is that: 'Contrary to the terms of Order 5 [made by Moore J on 14 December 2007 in proceedings between the applicant and the respondent] on and since 23 January 2008 the respondent represented in trade or commerce that or to the effect that Current Varta High Energy AA or AAA Batteries last as long as Energizer or Duracell [Batteries].' 2 Order 5 of the Orders made by Moore J on 14 December 2007 provides that: '…on and from 23 January 2008 the Respondent whether by its servants or agents or otherwise be permanently restrained from making any representation in trade or commerce that or to the effect that Current Varta High Energy AA or AAA Batteries last as long as Energizer or Duracell.' 3 On 29 May 2008, the applicant filed an amended motion which adds further particulars to the allegation of contempt, but the further particulars do not alter the charge itself. 4 At a directions hearing held on 27 March 2007, I made certain directions by consent. Among these was Order 2, which required the respondent/contemnor to file any evidence in answer to the contempt motion by 15 May 2008. 5 The respondent has now filed a motion which, as amended, seeks the following relief: '3. Order 2 of the orders of the Federal Court constituted by Sackville J made on 27 March 2008 be vacated. 4. Paragraph 1 of the applicant's notice of motion (re contempt charge) dated 7 February 2008 (Contempt Motion) be heard and determined prior to the hearing and determination of paragraphs 2 and 3 of that motion.' The motion also seeks other relief but this judgment deals only with the relief sought in paras 3 and 4 set out above. PARAGRAPH 4 OF THE MOTION 6 Paragraph 4 of the respondent's motion seeks an order, in effect, requiring the Court to determine whether the applicant has established the charge of contempt before proceeding to consider the imposition of any penalty. An order to this effect is consistent with the 'two-stage approach' to contempt applications outlined in the authorities: see Forge v Australian Securities and Investments Commission (2004) 213 ALR 574, at 664-666 [416]-[427], esp at [425], per McColl JA, with whom Handley and Santow JJA agreed. Moreover, the applicant did not object to such an order being made. Accordingly, as I indicated at the hearing, I propose to make an order in terms of para 4 of the motion. PARAGRAPH 3 OF THE MOTION Applicant's Submissions 7 Ms Baird, who appeared for the respondent, acknowledged that Order 2 made on 27 March 2008 had been made by consent, in advance of the applicant filing its evidence in chief. She also acknowledged that the respondent had erred in consenting to Order 2. She submitted, however, that the Court should set aside the order pursuant to Federal Court Rules ('FCR'), O 35 r 7(1), which confers power on the Court to set aside an order before it has been entered. (See, too, O 35 r 7(2)(c)). 8 Ms Baird accepted that the respondent, being a corporation, cannot invoke the privilege against self-incrimination: Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477. Thus she accepted that Order 2 could not be set aside on the ground that an order requiring a respondent in criminal or civil penalty proceedings to file and serve evidence prior to the hearing could detract from the privilege against self-incrimination: cf Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (1999) 163 ALR 465; Australian Competition and Consumer Commission v FFE Building Services Pty Ltd (2003) 130 FCR 37. 9 Ms Baird contended, however, that I should exercise my discretion, whether pursuant to FCR, O 35 r 7(1) or O 10 r 1 (which allows the Court to give directions as to the filing of affidavits and the giving of evidence at the hearing), to allow the respondent to file its evidence after the applicant closes its case at the hearing. She relied on the principle that proceedings for contempt are criminal in nature and must be proved beyond reasonable doubt: Witham v Holloway (1995) 183 CLR 525, at 534, per Brennan, Deane, Toohey and Gaudron JJ. According to Ms Baird, this principle supports the proposition that, as a matter of procedural fairness, a party against whom contempt charges are brought by reason of alleged contraventions of orders of the Court should have the opportunity of testing the evidence against it before having to decide whether or not to give evidence. This was said to be so for the following reason: 'Once affidavits are filed and served, the opportunity arises for the applicant to use and rely on that material in the applicant's case. The applicant may also be able to use the material in dealing with any "no case" submission that the respondent may seek to make at the close of the applicant's case. This potential for use of the respondent's affidavit evidence may limit the respondent's entitlement to make a no case submission, and to require the applicant to prove its case before electing whether to go into evidence.' Reasoning 10 In Australian Competition and Consumer Commission v Info4pc.com Pty Ltd (2002) 121 FCR 24, RD Nicholson J summarised (at 27[2]) the nature of contempt proceedings in the Federal Court as follows: 'The jurisdiction of the Court to punish contempts arises from s 31 of the Federal Court of Australia Act 1976 (Cth). It has by virtue of that section such power and authority as is possessed by the High Court in respect of contempts of that court. The section therefore does not create an offence of contempt but is declaratory of an attribute of judicial power of the Commonwealth vested in federal courts by s 71 of the Constitution of the Commonwealth: Re Colina; Ex parte Torney (1999) 200 CLR 386 at 395 [16] per Gleeson CJ and Gummow J. Contempt of court is a distinctive offence attracting remedies which are sui generis: Morris v Crown Office [1970] 2 QB 114 at 129 referred to by the High Court in Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 115.' 11 In Witham v Holloway, the joint judgment stated (at 530) that in general terms the distinction between civil and criminal contempt is that: 'a civil contempt involves disobedience to a court order or breach of an undertaking in civil proceedings, whereas a criminal contempt is committed either when there is a contempt in the face of the court or there is an interference with the course of justice.' However, while recognising that the distinction was of long standing, their Honours regarded it as unconvincing. In particular, they thought (at 533) that there was considerable difficulty with the notion that in some cases the purpose or object of contempt proceedings is 'punitive' and in others the purpose is 'coercive or remedial'. Their Honours pointed out that proceedings for breach of a court order have the effect of vindicating judicial authority, as well as a remedial or coercive effect. 12 The joint judgment held (at 534) that all charges of contempt must be proved beyond reasonable doubt: 'The differences upon which the distinction between civil and criminal contempt is based are, in significant respects, illusory. They certainly do not justify the allocation of different standards of proof for civil and criminal contempt. Rather, the illusory nature of those differences and the fact that the usual outcome of successful proceedings is punishment, no matter whether primarily for the vindication of judicial authority or primarily for the purpose of coercing obedience in the interest of the individual, make it clear as Deane J said in Hinch [v Attorney-General (Vic) (1987) 164 CLR 15, at 49], that all proceedings for contempt "must realistically be seen as criminal in nature"'. 13 The decision in Witham v Holloway does not mean that contempt proceedings are to be assimilated to criminal proceedings for all purposes. In Witham v Holloway itself, the joint judgment recognised (at 534) that: '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.' Their Honours held, on the basis of this reasoning, that the Court had power to order a retrial of contempt charges even though there was no power at common law to order a retrial after a guilty verdict at a jury trial had been quashed on appeal. 14 This aspect of the reasoning of the High Court was emphasised by Lander J in Australian Securities and Investments Commission v Reid [2006] FCA 699. In that case, his Honour held that the principle in Dietrich v The Queen (1992) 177 CLR 292, which allows an indigent accused in serious criminal proceedings to apply for a stay if legal representation is not provided, does not apply to proceedings for contempt of court. As Lander J pointed out, the procedure in contempt proceedings in the Federal Court is governed by FCR, O 40. In particular, O 40 r 7 requires evidence in support of a charge to be given by affidavit unless the Court directs otherwise, while O 40 r 5(1) requires an allegation that contempt has been committed in connection with a proceeding in the Court to be made by motion on notice in the proceeding. Neither of these procedural requirements applies in criminal proceedings. 15 Ms Baird did not suggest that the respondent was entitled as of right to delay putting on its evidence (if any) until after the applicant's case in chief had closed. Her contention was that the Court, in the exercise of the discretion conferred by the FCR, should give the respondent the opportunity to test the evidence against it before having to decide whether or not to make a 'no-case' submission and whether or not to put on evidence. 16 Ms Baird acknowledged that she had found no authority holding that it was inappropriate, in the circumstances of the present case, to direct that the respondent contemnor file in advance of the hearing any affidavits on which it intends to rely. However, she cited ACCC v Amcor, a decision of mine, in support of her contention. 17 In ACCC v Amcor, the issue was whether, in civil penalty proceedings brought by the ACCC, the Court should order the individual respondents to file and serve their statements of evidence prior to trial. I held that such orders were consistent with the rationale underlying the privilege available to the respondents to refuse to provide information that might expose them to a civil penalty. However, I relied (at 470-471 [20]-[22]) on an alternative ground, as follows: 'If, contrary to my views, the issue is one to be determined in the exercise of the Court's discretion, I would not be prepared to make the orders sought by the ACCC. In my opinion, it would be unfair, in the circumstances of the present case, to require the individual respondents to file statements of evidence in advance of the trial. As I have said, the ACCC alleges that each of the individual respondents was knowingly involved in a contravention by one of the corporate respondents. Having regard to the fact that the ACCC seeks substantial pecuniary penalties against each of them, I think that they should have the opportunity not only of examining, but testing the evidence against them, before having to decide whether or not to give evidence. For reasons I have explained, there is a real risk that, if the individual respondents file statements explaining the extent of their knowledge of their participation in relevant events, the ACCC is likely to be able to bolster the case against them. … In my view, there is no convincing reason why the ACCC should have such a forensic advantage in a case in which, after all, it seeks to recover penalties against individual respondents for alleged contraventions of Commonwealth law. The only disadvantage to the ACCC in the course that I think should be followed, is that the cross-examiner will not have the respondents' statements of evidence in advance of the opening of their respective cases. Each individual respondent is content to provide a written statement of evidence on the opening of his case, should he decide to give evidence. If any individual respondent does give evidence, the ACCC of course will be entitled to cross-examine him and, if appropriate, to tender evidence in reply. Since the statements of evidence to be relied on by Amcor and Visy are to be filed before the hearing and since they are to provide discovery (the privilege against exposure to a penalty not applying to a corporation …), any disadvantage to the ACCC is very likely to be minimal. Should the statements of any of the individual respondents raise important matters that could not reasonably have been anticipated by the ACCC, an appropriate application could be made and would be dealt with on its merits.' 18 Initially, I was attracted to the submission that ACCC v Amcor lends support to the respondent's contention that it ought not to be directed to put on its affidavit evidence prior to the hearing of the contempt charge. However, on reflection, it is clear that the decision in ACCC v Amcor was based on considerations that do not apply in the present case: · the issue in ACCC v Amcor concerned the position of individual respondents, not corporate respondents; · there was no dispute in ACCC v Amcor that the corporate respondents were not entitled to invoke the privilege against self-incrimination and that they should be directed to put on their affidavit evidence in advance of the hearing; · by contrast, the individual respondents were entitled to rely on the privilege against self-incrimination, including the privilege against being required to make discovery of real evidence of an incriminating character; and · a finding was made in ACCC v Amcor that the filing of statements by the individual respondents was likely to bolster the case against them. 19 In the present case, the respondent, unlike the individual respondents in ACCC v Amcor, is not entitled to invoke the privilege against self-incrimination in any of its manifestations. Like the corporate respondents in ACCC v Amcor, the respondent in the present case can be compelled to provide discovery of documents relevant to the issues in the proceedings. It is to be borne in mind that one reason for not extending the privilege to corporations is because: '[i]t has a disproportionate and adverse impact in restricting the documentary evidence which may be produced to the court in a prosecution of a corporation for a criminal offence: EPA v Caltex, at 504, per Mason CJ and Toohey J. 20 Moreover, it has not been suggested in this case that a direction requiring the respondent to file any evidence on which it intends to rely in advance of the hearing would be likely to bolster the case against it. Nor has it been suggested by Ms Baird that any particular evidence that might be filed by the respondent is likely to put it at any disadvantage in making a no-case submission at the conclusion of the applicant's case. In ACCC v Amcor, counsel for the ACCC frankly conceded that the object of seeking orders requiring the individual respondents to file their affidavits in advance of the hearing was to make it easier for the ACCC to establish the case against them. No such concession has been sought or obtained in the present case. 21 In these circumstances, I do not think that the respondent has made out its contention that I should, on discretionary grounds, vacate Order 2 made on 27 March 2008. In my opinion, the order creates neither injustice to the respondent nor any significant risk of injustice to it. On the contrary, the order will assist in the orderly conduct of the proceedings and eliminate, or at least substantially reduce, the chances of the hearing being disrupted or delayed because of the need for the applicant to be given time to investigate or assess evidence it sees for the first time during the trial. 22 I therefore do not propose to vacate Order 2. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville. Associate: Dated: 5 June 2008 Counsel for the Applicant: Mr D Kell Solicitor for the Applicant: Gilbert and Tobin Counsel for the Respondent: Ms J Baird Solicitor for the Respondent: Deacons Date of Hearing: 29 May 2008 Date of Judgment: 5 June 2008